Glencore plc

Good day and thank you for standing by. Welcome to the Glencore 2025 Half-Year Results Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star 1 1 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw a question, please press star 1 1 again. Please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Martin Fewings, Head of Investor Relations. Please go ahead.

Thank you. Good morning. Thank you for joining us wherever you are. This morning, from the Glencore side, Gary Nagel, CEO, Stephen Kalman, CFO, and our Chief Operating Officer, Xavier Wagner, will be presenting today. I'll hand over to Gary now.

Thanks, Martin. Good morning, everybody, and good afternoon for those dialing in from other parts of the world. Thank you for joining us for our first half results presentation 2025. The presentation is up on the website. Some of you will have it already. I think Martin sent it out to many of the analysts. And we'll skip straight to slide four, which is a familiar slide to all of you. We kept it the same format, so it allows for easy understanding of our presentation. and our results, and give you our 2025 first half scorecard. We all know this year started off with weaker commodity markets, some economic uncertainty around geopolitics, around tariffs, and we've seen, despite that, a very pleasing financial result for Glencore. Our adjusted EBITDA for the first half of the year, $5.4 billion, made up between our industrial asset business and our marketing business. focusing a little bit on each separately first. The industrial asset business, an adjusted industrial EBITDA of $3.8 billion. And that, despite very low, in particular, coal prices, period on period, we've seen Newcastle coal prices down more than 20%, and we've seen hard-coking coal prices down as much as 33% in the first half of the year versus the first half of last year. So naturally, we would expect to see a a lower just industrial EBITDA. On the positive side, we've had a very, very strong result from our zinc gold business, in particular, the zinc gold business out of Kazakhstan, which has benefited from strong zinc exposure in our Kazakh operations. We've also had a slight disadvantage in the first half of the year, which will come back in the second half of the year. simply because we have a mismatch in the weighting of production of copper in the first half versus the second half. As you would have seen from our production report last week, our copper production is heavily weighted towards the second half of the year. In fact, 60% of that will come out in the second half of the year, and only 40% in the first half. It's a temporary change in weighting, and these are largely expected operational factors which will come back in the second half of the year. Much of it relates to GRADE, one or two other things, and we can do a deep dive into that a little bit later, and Xavier is here who can help a lot with that. We're also very happy to have EBR as part of our reporting suite for the first half of this year. It wasn't part of our reporting suite for the first half of last year. It contributed an adjusted EBITDA of $786 million. And those of you who joined us on our EBR site visit a month ago would have seen the top-class Tier 1 asset that we've now brought into Glencore, the amount of value creation and synergies that we're bringing in. We have a superb operational team there, a very exciting multi-decade, low-cost, high-quality asset in an excellent geography. So that rounds out the highlights and sort of main issues that have impacted our industrial adjusted EBITDA for the first half of the year. Moving on to marketing, a very pleasing result given the type of uncertainty we've seen. And we spoke a bit about this at our previous results presentation where a lot of the uncertainty and volatility within the market is not always something one can capitalize on from a marketing perspective. because these are not structural arbitrage opportunities where things like tariffs are being announced on Monday, changing on Tuesday, and being scrapped on Wednesday. So these are not areas where one can position yourself for an expected arbitrage in the long term. But with that said, we've had a very pleasing marketing result coming in at $1.4 billion adjusted marketing EBIT for the first half of the year. That is annualizing above the middle of the range, our old range, and I'll talk about the new range in a second, that's annualizing above the middle of our old range of $2.2 to $3.2 billion. It's been a challenging energy market conditions. However, the metal side have done particularly well, and in particular, we caught our copper with the very low TCRCs and a very tight concentrate market that's allowed our copper department to have a very healthy Q1 marketing result. With regards to our marketing range going forward, we've had a number of questions for many years around when are we going to adjust the marketing range. Steve's been quite clear that we wanted to make sure that, A, we had moved into a new sort of era of where we're comfortable on the marketing range, and also to have a bit of clarity once we knew that the Viterra earnings were moving out of our marketing business on the sale of Viterra to Bungi. We concluded that sale on the 2nd of July this year, and therefore the marketing earnings come out of that range. So the old range of 2.2 to 3.2, in fact, if you remove the marketing earnings from Viterra, let's call it an average 200 million a year, maybe a bit higher in some years, a bit lower in other years, was ex-Viterra probably 2 to 3 billion. We've now, on an ex-Viterra basis, increased the range from 2.3 to 3.5 billion going forward. So the mid part of the range has now moved up to 2.9 from effectively a 2.5x VATERA, which is a 16% increase in the midpoint of the range. We're very comfortable with that, and we look forward to achieving that profitability in the years ahead. Moving on to – oh, before we move on ahead, on our net debt to adjusted EBITDA, we're coming in slightly over 1, 1.08%. And just to point out, we did close VITERA a few days later than we expected to. That was meant to close just before the year end. It closed on the 2nd of July, as I noted. Had it closed on the 29th or 30th of June, our net debt to adjusted EBITDA would have been one, which is a very comfortable position to be in. Our cash generated by operating activities are very healthy, $4.3 billion. And as we've announced previously, we are repaying our shareholders handsomely. $3.2 billion of announced shareholder returns. We have our base dividend under our very clear and transparent capital framework. And we've also already completed a $1 billion buyback, and we've announced another up to $1 billion buyback to be completed by our annual results. So we are paying back our shareholders for their continued loyalty and very comfortable and happy to be able to make those returns to shareholders. Moving on to slide five, we have announced with our production results last week and a little bit more granular detail today around some organizational reviews that have resulted in approximately a billion dollars of cost savings, sustainable cost savings on an annualized basis across the business versus our 2004 baseline. What we've done is a comprehensive review across our industrial portfolio. We have streamlined our operating structures. We've optimized our departmental management, and we've identified opportunities to support enhanced technical excellence and operational focus across all the businesses that we run. As a result of that, certain changes have been made, including the creation of a combined nickel-zinc department. As you know, there were two separate departments previously. And they also have management oversight over our overall custom mix processing asset portfolio, which has created a lot of synergies and a lot of cost savings for us. I mean, that's just one sort of initiative. There's close to 300 or I think a little over 300 different initiatives and programs on the go. And all of those have led to approximately a billion dollars a year of recurring cost savings across these initiatives and across the entire business. These include optimization and savings of headcount, energy, consumables, contractors, maintenance, admin functions, and the like. And we expect to have at least 50% of that, in fact, quite a bit more than 50% of that achieved and banked during the second half of this year. And we'll have the remainder of that done for the full year of 2026. If you move over to the right-hand side of slide five, You'll see a little bit of split by department and split by level. Starting by the split by level, it is heavily weighted towards the assets where we've got three-quarters of the savings coming out of the assets, but we've obviously corporate and department overheads have kicked in their share. And if we drill down a little bit more on the first wagon wheel on the right-hand side of slide five, most of the savings coming from the coal, copper, and zinc-nickel divisions. with alloys and oil putting in their fair share and corporate as well, streamlining, making use of our technology and ensuring that we save this billion dollars in the business going forward. And with that, I'll turn over to Steve on the financial performance.