Performance – material or immaterial? intrODuctiOn Delivering real change Our ambitiOn Our aim is to be the leading global mining company, by becoming the investment, the partner and the employer of choice. We will achieve this by continuing to develop our portfolio of world class mining assets; operate an efficient, streamlined business model; embed sustainability and safety in everything we do; and attract and retain the best people. This report provides an overview of how we have delivered against our strategy this year and made a real difference in our host communities. Anglo American 2010 Annual Report Basic Materials United Kingdom Anglo American plc Annual Report 2010 Delivering real excellence Annual Report 2010 Within this report we have included references to find out more information on certain sections, either within the report itself or online. For more information within this report For more in-depth information online visit www.angloamerican.com using this repOrt anD where tO finD Out mOre… 14 OPERATING AND FINANCIAL REVIEW: Key performance indicators Anglo American plc — Annual Report 2010 15 Anglo American plc — Annual Report 2010 MEASURING OUR PERFORMANCE KEY INDICATORS STRATEGIC ELEMENTS Investing In world class assets in the most attractive commodities Total shareholder return (TSR) Share price growth plus dividends reinvested over the performance period. A performance period of three years is used and TSR is calculated annually Return on capital employed (ROCE) Total operating profit before impairments for the year divided by the average total capital less other investments and adjusted for impairments Capital projects and investment Optimise the pipeline of projects and ensure that new capital is only committed to projects that deliver the best value to the Group on a risk adjusted net present value basis Underlying earnings per share Underlying earnings are net profit attributable to equity shareholders, adjusted for the effect of special items and remeasurements and any related tax and non-controlling interests KPI TARGETS We measure performance against the four strategic elements of our strategy through Group-wide targets and improvement measures. Overview Operating and financial review RESULTS AND TARGETS Page 16 Return on capital employed (ROCE) 2010 Underlying earnings per share 2010 24.8% $4.13 Capital projects and investment A summary of the Group’s capital projects and investments can be found on pages 18 to 19 Total shareholder return (TSR) Please refer to the Remuneration report on pages 98 to 109 14.4% 2009 $2.14 2009 Governance Organising Efficiently and effectively Asset optimisation (AO) Sustainable operating profit benefit from optimised performance of the asset base of the core businesses Supply chain Operating profit and capital spend benefits to the Group resulting from centralised procurement from core businesses Page 20 Asset optimisation (AO) 2009 $749 million 2010 $1,548 million Target $1 billion by 2011(1) Supply chain 2009 $445 million 2010 $713 million Target $1 billion by 2011(2) Operating Safely, sustainably and responsibly Work related fatal injury frequency rate (FIFR) FIFR is calculated as the number of fatal injuries to employees or contractors per 200,000 hours worked Lost time injury frequency rate (LTIFR) The number of lost time injuries (LTIs) per 200,000 hours worked. An LTI is an occupational injury which renders the person unable to perform his/her duties for one full shift or more the day after the injury was incurred, whether a scheduled workday or not Energy consumption Improvements in energy efficiency are measured from a 2004 baseline Greenhouse gas (GHG) emissions Reduction in CO2 emissions per unit of production is measured from a 2004 baseline Total water use Total water use includes only water used for primary activities Corporate social investment Social investment as defined by the London Benchmarking Group includes donations, gifts in kind and staff time for administering community programmes and volunteering in company time and is shown as percentage of profit before tax Enterprise development Number of companies supported and number of jobs sustained by companies supported by Anglo American enterprise development initiatives Page 24 Work related fatal injury frequency rate (FIFR) 2009 20 fatalities, 0.010 FIFR 2010 14 fatalities, 0.008 FIFR Target Zero fatal incidents Lost time injury frequency rate (LTIFR) 2009 0.76 2010 0.57 Target Zero incidents – the ultimate goal of zero harm remains Energy consumption 2009(3)(4) 102.1 million GJ total energy used 100.7 million GJ total energy used Target A 15% intensity reduction by 2014 2010 GHG emissions 2009(4) 19 Mt CO2 equivalent 2010 20 Mt CO2 equivalent Target A 10% intensity reduction by 2014 Total water use 2009(4) 125.3 million m3 2010 115.2 million m3 Target Under revision Corporate social investment 2009 $82.5 million, 1.9% of profit before tax 2010 $111 million, 1.3% of profit before tax Enterprise development 2009 Businesses supported: 3,720 Jobs sustained: 12,982 2010 Businesses supported: 9,392 Jobs sustained: 17,200 Target Businesses supported: 3,500 Jobs sustained: 18,000 Financial statements Ore Reserves and Mineral Resources Employing Other information The best people Voluntary labour turnover Number of permanent employee resignations as a percentage of total permanent employees Gender diversity Percentage of women and female managers employed by the Group Voluntary HIV counselling and testing (VCT) Percentage of employees in southern Africa undertaking voluntary annual HIV tests with compulsory counselling support Page 32 Voluntary labour turnover 2009 6.8% 2010 5.3% Voluntary HIV counselling and testing (VCT) 2009 82% 2010 94% Target 95% VCT in high disease burden countries (100% is the long term goal) Gender diversity 2009 12% females, 19% female managers 2010 14 females, 21% female managers (1) (2) $1 bn of sustainable operating profit benefit from core businesses by the end of 2011. $1 bn of operating profit and capital spend benefits from core businesses by the end of 2011. (3) (4) The 2009 figure was revised since the publication of the 2009 Annual Report after amendments in accounting methodologies. It includes operations that have since become independently managed. Includes businesses since divested. pp 14-15 The Anglo American report overall is well connected and this spread demonstrates the explicit link made between the strategic aims of the Group to the KPIs, and provides information regarding targets in place and performance against each KPI. This tabular spread also signposts the reader to the location of further information throughout the report. 36 Integrated thinking in reporting
