Anglo American : YEAR END FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2021

YEAR END FINANCIAL REPORT

for the year ended 31 December 2021

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24 February 2022

Anglo American Preliminary Results 2021

Strong market dynamics and operational performance drive underlying EBITDA of $20.6 billion Financial highlights for the year ended 31 December 2021

• Underlying EBITDA* of $20.6 billion: strong demand and prices, and resilient operational performance
• Profit attributable to equity shareholders of $8.6 billion
• Net debt* of $3.8 billion (0.2x underlying EBITDA): strong cash generation partially offset by investment in growth
• $6.2 billion shareholder return: capital discipline and commitment to return excess cash
• • $2.1 billion proposed final dividend, equal to $1.18 per share final dividend, consistent with our 40% payout policy, and $0.50 per share special dividend
  • $4.1 billion return announced at half year, including $1.0 billion special dividend and $1.0 billion buyback
• Exit from thermal coal operations completed

Mark Cutifani, Chief Executive of Anglo American, said: "In a year of two distinct halves, we recorded strong demand and prices for many products as economies recouped lost ground, spurred by government stimulus. Copper and PGMs - essential to the global decarbonisation imperative - and premium quality iron ore for greener steelmaking, supported by an improving market for diamonds, all contributed to a record financial performance, generating underlying EBITDA of $20.6 billion.

"We generated attributable free cash flow of $7.8 billion due largely to a strong price environment in the first half, which moderated in the second half. Our return on capital employed of 43% was well above our targeted 15% through-the-cycle return, as it should be in times of strong pricing, and we increased our mining EBITDA margin to 56%. We are resolutely committed to capital discipline and to maintaining a strong and flexible balance sheet. At the end of 2021, net debt of $3.8 billion, or 0.2x underlying EBITDA, reflects the strong cash generation of the business, partially offset by our investments in growth. The proposed final dividend of $1.18 per share, in line with our 40% payout policy, in addition to a special dividend of $0.50 per share, will bring our total return to shareholders in respect of 2021 to $6.2 billion (including our share buyback), equal to $4.99 per share.

"We continue to make progress in reducing fatal incidents and our broader safety processes and procedures. Sadly, however, we still lost one colleague in a vehicle incident in Peru. Our total injury frequency rate tracked up marginally, after multiple years of progressive improvement, reflecting the changed operating configurations necessary to manage Covid-19. Our health focus remains on helping keep our people protected from Covid-19. In many ways, the pandemic has proven more challenging in 2021, particularly where vaccination roll-outs have been slower and uptake lower. We have provided significant monetary and other support to accelerate vaccination rates, including by using our own health facilities and encouraging vaccination at the earliest opportunity.

"Our balanced investments are driving margin-enhancing volume growth of 35%(1) over the next decade, including copper from Quellaveco, due to start up mid-year. The large majority of our output and investment capital is focused on future-enabling products - metals and minerals essential for decarbonisation and to meet global consumer demand. Through our integrated technology and sustainability programme, we are well positioned to run the business safely and sustainably, further enhance our competitive position and - disciplined with our capital - deliver value-adding growth as a foundation for future returns."

Year ended	31 December 2021	31 December 2020	Change
US$ million, unless otherwise stated
Revenue(2)	41,554	25,447	63 %
Underlying EBITDA*	20,634	9,802	111 %
Mining EBITDA margin*	56 %	43 %
Attributable free cash flow*	7,803	1,209
Profit attributable to equity shareholders of the Company	8,562	2,089	310 %
Basic underlying earnings per share* ($)	7.22	2.53	185 %
Basic earnings per share ($)	6.93	1.69	310 %
Final dividend per share ($)	1.18	0.72	64 %
Final special dividend per share ($)	0.50	-
Interim and special dividend per share ($)	2.51	0.28
Share buyback per share ($)	0.80	-
Total dividend and buyback per share ($)	4.99	1.00	399 %
Group attributable ROCE*	43 %	17 %

Terms with this symbol * are defined as Alternative Performance Measures (APMs). For more information refer to page 83.

1. Copper equivalent volume growth vs. 2021 copper equivalent production.
2. The comparative figure for 2020 has been restated. See note 2 to the Condensed financial statements for further details.

Anglo American plc Press Release 2021

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Anglo American Preliminary Results

Sustainability performance

Key sustainability performance indicators

Anglo American tracks its strategic progress using KPIs that are based on our seven pillars of value: safety and health, environment, socio-political, people, production, cost and financial. In addition to the financial performance set out above, our performance for the first four pillars is set out below:

					Target
Pillar of Value	Metric	2021	2020	Target	achieved
Safety and	Work-related fatal injuries	1	2	Zero	Not
health					achieved
	Total recordable case	2.24	2.14	Year-on-year reduction	Not
	frequency rate per million				achieved
	hours
	New cases of occupational	16	30	Year-on-year reduction	On track
	disease
	Workforce potentially exposed	30,832	33,253	Year-on-year reduction	On track
	to noise over 85 dBA(1)
	Workforce potentially exposed	1,796	1,994	10% reduction year-on-year	On track
	to inhalable hazards over the
	occupational exposure limit (1)
Environment	Energy consumption	85	81	Improve energy efficiency	On track
	(million GJ)			by 30% by 2030
	GHG emissions - Scopes 1 & 2	14.8	16.1	Reduce absolute GHG	On track
	(Mt CO2e)			emissions by 30% by 2030
	Operational water withdrawals	176.5	197.5	Reduce freshwater	On track
	(million m3)			abstraction in water scarce
				areas by 50% by 2030
	Level 4-5 environmental	0	0	Zero	On track
	incidents
Socio-	Social Way implementation	49 %	23 %	Full compliance with Social	On track
political	(based on updated Social Way			Way 3.0 by end 2022
	3.0 for 2020)(2)
	Local procurement spend	10.0	10.0
	($bn)(3)
	Taxes and royalties ($m)(4)	7,134	3,778
	Jobs supported by Enterprise	147,374	137,777
	and Supplier Development
	(ESD) initiatives
People	Women in management	31%	27%	To achieve 33% by 2023	On track
	Women in the workforce	23%	23%
	Voluntary labour turnover	3.5%	2.8%	< 5%	On track

1. Reflects the number of employees and contractors who work in environments where there is potential for exposure above the exposure limit. All employees and contractors working in such environments are issued with protective equipment to prevent occupational illness.
2. In 2020, we launched a new integrated social performance management system (Social Way 3.0) which has raised performance expectations and has resulted in continued improvement in our social performance. Sites are expected to have implemented the Social Way 3.0 by the end of 2022. While sites are assessed annually against all requirements applicable to their context, for consistency during the transition period, the metric reflects performance against the Social Way foundational requirements.
3. Local procurement spend relates to spend within the country where an operation is located. The basis of calculation has been amended to more closely reflect the Group's financial accounting consolidation, i.e. 100% of subsidiaries and a proportionate share of joint operations, based on Anglo American's shareholding. The prior year comparative has been restated.
4. Taxes and royalties include all taxes and royalties both borne and collected by the Group. This includes corporate income taxes, withholding taxes, mining taxes royalties, employee taxes and social security contributions and other taxes, levies and duties directly incurred by the Group, as well as taxes incurred by other parties (e.g. customers and employees) but collected and paid by the Group on their behalf. Figures disclosed are based on cash remitted, net of entities consolidated for accounting purposes, plus a proportionate share, based on the percentage shareholding, of joint operations. Taxes borne and collected by associates and joint ventures are not included.

• Anglo American plc Press Release 2021

Anglo American Preliminary Results	Sustainability Performance

Safety

Anglo American's most important priority is always safety - keeping our colleagues safe and well. We also look beyond safety, working towards everyone being better off and healthier having worked for Anglo American. This drives our thinking and the commitment to quality of life and sustainable livelihoods across the company. We continue to make progress in reducing fatal incidents and our broader safety processes and procedures. Sadly, however, we still lost one colleague in a vehicle incident on our major project in Peru. Our total injury frequency rate tracked up marginally, after multiple years of progressive improvement, reflecting the changed operating configurations necessary to manage Covid that tend to disrupt planned work routines. The increase in the first half of the year reduced in the second half as we reinforced the importance of these new routines across the business.

On fatal incidents, our Elimination of Fatalities Taskforce has supported a 93% reduction in fatal incidents since 2013 and we are engaging with our non-managed joint operations and our approach to influencing better performance, as they reported three fatal incidents in the year. For us, every loss of life is a tragedy, and we will continue to mobilise our resources across the Group to support our zero harm imperative.

Health

We tackle the threats to health and wellbeing wherever we find them, with separate programmes for physical and mental health - including our Living with Dignity programme to help tackle gender-based and domestic violence; for creating a healthier working environment; and for encouraging healthy lifestyles. We are paying greater attention to psychological safety, intrinsic to embedding a safety-conscious mindset, establishing a steering group to investigate psychological safety issues while also introducing the thinking into an array of other programmes.

Our health focus remains on helping keep our people protected from Covid-19, while sustaining our work to continuously improve our key health measures. The pandemic proved to be more challenging in 2021, particularly in those countries where vaccination roll-outs lagged. We provided significant monetary and other support to accelerate vaccination rates, using our own health facilities and encouraging vaccination at the earliest opportunity, including in many host communities. With the pandemic as a backdrop, we are pleased to have met our three major annual improvement targets for health - for occupational disease, noise exposure and inhalable hazards.

Recognising the link between employee health and broader community wellbeing, in 2021 we completed community health improvement strategies for our operations in support of our Sustainable Mining Plan targets. Building on our extensive Covid-19 support, implementation of these strategies will begin in 2022.

Environment

Our Sustainable Mining Plan (SMP) includes commitments to be a leader in environmental stewardship. By 2030, we aim to: reduce GHG emissions (Scopes 1 and 2) by 30%; improve energy efficiency by 30%; achieve a 50% net reduction in freshwater abstraction in water-scarce areas; and deliver net-positive impacts in biodiversity wherever we operate.

Our environmental performance continues to improve, with no Level 5 or 4 incidents in 2021. This achievement reflects the improvements to our planning and operating disciplines across the business. We launched a 'no repeats' challenge during the year to help us learn from low level incidents and prevent repeats of a similar nature across the business, which has led to improvements in controls, specifically helping to prevent significant incidents.

Energy consumption increased in line with production following the operational shutdowns during the first half of 2020 due to the pandemic. Nevertheless, we achieved an 8% reduction in GHG emissions due to our Copper business in Chile moving to a renewable electricity supply in 2021, thereby reducing its Scope 2 emissions, as well as a reduction in methane emissions from our metallurgical coal mines in Australia.

We have a target to be carbon neutral across our operations by 2040, and an ambition to reduce our Scope 3 emissions by 50%, also by 2040. We are making encouraging progress. In 2020, around one third of the electricity Anglo American used globally was drawn from renewables. Having secured 100% renewable electricity supply across our operations in South America, by 2023 we expect to be drawing 56% of our global grid supply from renewables.

Socio-political

As we grow our business and improve our performance, so our total tax contribution increases, benefiting host countries. Total taxes and royalties borne and collected in 2021 amounted to $7.1 billion, an 89% increase from 2020. We also made further progress with our enterprise and supplier development initiatives, supporting 147,374 jobs in the year - a key component of our SMP goal to support five jobs offsite for every job onsite by 2030.

Anglo American plc Press Release 2021

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