1 INTERIM CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE - PowerPoint PPT Presentation

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INTERIM CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018 2

PRESENTED BY DANIE PRETORIUS, CEO ANDRE VAN DEVENTER, CFO 3

Who we are Business overview Operational overview Financial overview In Closing Commodity AGENDA 4

• Started in 1986, listed on JSE in 2012 • Design, manufacture, operate and maintain boring technology • Operations in 23 countries in Africa, South America, Europe and Asia • Motivated by tailor-made solutions, that in turn support our diversifjcation strategy • Trusted partner to blue-chip and mid-size mining companies • A technology company that challenges the status quo WHO WE ARE 5

BUSINESS OVERVIEW 6

Client Innovative tailor made drilling Challenges solutions • Safety Non-Blasting environment • Increased costs • Mobile Tunnel Borer • Productivity decline • Blind Shaft Boring System • Net present • Horizontal Raise Boring value hurdles • Automation/Autonomous drilling • Accessibility • Geotechnical to ore bodies TECHNOLOGY STRATEGY 7

2018 H1 13% 2017 2017 H1 H2 0% 0% 2018 H1 Other Countries 11% 2017 2017 H2 H1 14% 11% Central and North America 2018 2018 H1 H1 42% 34% 2017 2017 2017 2017 H2 H1 H2 H1 45% 41% 44% 45% Africa South America Current Operations New Operations REVENUE GEOGRAPHIC DIVERSIFICATION 8

2018 H1 2017 H1 1% 1% Exploration Exploration 94% 95% 5% 4% Production d ti Production d ti Capital Capital C Capital REVENUE MINING ACTIVITY DIVERSIFICATION 9

2018 H1 2017 H1 Othe Other Other r 4% Iron Ore r 4% Other Other 16% Iron Ore 9% 26 Fe Fe f f F fE fE fE fE E 26 6 37% 23% 79 79 Gold Gold Commodity Commodity 29 Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu u u 35% 32% 29 Copper Copper 1% Platinum 78 4% 1% Platinum 30 0% Chrome C 4% 2% Diamonds d Diamonds 14% 12% Silver / Lead / Silver / Lead / Zinc Zinc REVENUE COMMODITY DIVERSIFICATION 10

2018 H1 2017 H1 <1% 0% Civil & Construction C C Civil & Construction 5% <1% H d Hydroelectricity Hydroelectricity H d Mining Sector Mining Sector 94% 99% REVENUE BUSINESS SECTOR DIVERSIFICATION 11

OPERATIONAL REVIEW 12

2018 2017 LTIFR 2.31 1.62 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 LOST TIME INJURY FREQUENCY RATE 13

FINANCIAL OVERVIEW 14

• Revenue growth in USD terms • New geographies added in current reporting period • Improvement in cash conversion ratio • Suffjcient cash for growth opportunities • Healthy pipeline HIGHLIGHTS FOR THE PERIOD 15

HEPS (ZARc) HEPS (USDc) 120 12 100 10 80 8 60 6 40 4 20 2 0 0 2018 H1 2017 H1 2017 H2 2017 H2 2018 H1 2017 H1 2017 H2 HEADLINE EARNINGS PER SHARE 16

133.4 2019 2018 2019 2020 Total 61.9 2020 2018 2021 and Beyond 2021 and Beyond 101.9 Total 358.2 Million 61.0 200 150 100 50 0 2018 2019 2020 2021 Awarded And Beyond Awaiting adjudication Enquiry received/ possible lead PIPELINE (USD ‘ MILLION) 17

Chrome 24 Cr Cr Cr Cr Cr Cr Cr Cr Cr r 1.6 Silver 0.7 1.9 0.8 47 Coal Zinc 13.1 4.9 7.0 0.3 30 Copper Other 0.4 29 Cu Cu Cu Cu Cu Cu Cu Cu Cu Cu u 10.3 0.2 Other Diamonds Iron Ore 2.2 0.2 0.9 7.6 Gold Platinum Au Au Au Au A Au Au Au Au Au Au Au u u 8.1 2.9 0.3 0.1 12.8 79 C Hydroelectric Water 0.2 H 0.8 Platinum P Pt Pt Pt Pt Pt Pt Pt Pt Pt Pt Pt Pt Pt Pt t t Lithium 0.3 1.0 0.2 78 Nickel 10.8 0.3 3.7 3.8 16.5 Ni 0.9 Polymetallic Polymetal 28 41.1 2019 2018 2020 2019 2021 and beyond 2020 11.6 Total 2018 2021 and Beyond 61.4 Total 114.4 Million 0.3 COMMITTED ORDERS (USD ‘ MILLION) 18

2018 H1 24.5% EBITDA (USD’m) Revenue (USD’m) 70 18 16 60 14 50 12 40 10 30 20 8 6 10 0 0 2018 H1 2018 H1 2017 H2 2017 H2 2018 H1 2018 H1 2017 H1 2 2017 H1 2017 H2 2017 H2 2017 H1 2017 H1 16.5 15.9 15.1 67.4 60.5 60.9 EARNINGS BEFORE INTEREST TAX DEPRECIATION AMORTISATION (USD ‘ MILLION) 19

2018H1 2017 2016 2015 2014 2013 2012 Total Raise bore rigs 128 107 105 98 94 88 88 Utilization % 68% 69% 73% 70% 75% 77% 71% ARPOR* (USD) 109 953 110 937 111 040 120 819 118 215 117 047 108 847 Total Slim rigs 34 34 33 48 45 74 64 Utilization % 69% 77% 55% 35% 54% 54% 51% ARPOR* (USD) 63 802 63 597 74 280 96 761 58 525 50 740 34 293 * Average Revenue Per Operating Rig per month ARPOR SUMMARY PER ANNUM 20

14 12 10 8 6 4 2 0 2018 H1 2018 H1 2017 H1 2017 H1 2017 H2 2017 H2 PROFIT AFTER TAX (USD ‘ MILLION) 21

2018H1 2017 Comment USD 'million USD 'million Assets Continued investment in plant and equipment - USD 7.1 Total non-current assets 143.8 133.2 million Total current assets 96.3 103.7 Working capital ratio fairly fmat compared to 2017 Total assets 240.1 236.9 Equity Equity 152.1 153.0 Non-controlling interest 8.5 8.3 Total equity 160.6 161.3 Liabilities Total non-current liabilities 45.9 47.1 Gearing ratio moved from 2.4% to 10.9% Total current liabilities 33.6 28.5 Current ratio healthy at 2.86 Total liabilities 79.5 75.6 Total equity and liabilities 240.1 236.9 STATEMENT OF FINANCIAL POSITION 22

2018H1 2017H1 2017 USD 'million USD 'million USD 'million Revenue 67.4 60.5 121.4 Cost of sales (43.5) (37.7) (76.8) Gross profjt 23.9 22.8 44.6 Other operating income 2.0 1.2 3.7 Other operating expenses (13.0) (11.9) (23.4) Operating profjt 12.9 12.1 24.9 Investment revenue 0.6 0.4 0.5 Finance costs (1.5) (1.0) (2.9) Share of profjt from equity accounted investment (0.0) (0.0) (0.0) Profjt before taxation 12.0 11.5 22.6 Taxation (2.3) (1.5) (5.1) Profjt for the year 9.7 10.0 17.5 Explanation\Comment Revenue Revenue increased slightly due to additional revenue from new subsidiary Cost of Sales Cost of sales increased in line with increased revenue - fairly fmat gross profjt percentage Profjt for the year Lower utilisation rates and currency effect of the other operating currencies STATEMENT OF COMPREHENSIVE INCOME 23

Revenue Costs Costs 100% 80% 55% 78% 60% 40% 45% 20% 22% 0% Other Operating USD Currencies USD’ million Negative impact on profjt before taxation (1.14) IMPACT OF CURRENCY ON PROFIT BEFORE TAXATION 24

2018H1 2017H1 Comment USD 'million USD 'million Net cash from operating activities 8.7 9.2 Cash conversion ratio increased from 1.04 to 1.10 Net cash from investing activities (14.3) (6.3) Acquisition of Subsidiary Net cash from fjnancing activities (4.3) 14.0 Total cash movement for the period (9.9) 16.9 Cash at the beginning of the period 40.3 20.4 Effect of exchange rate movement on cash balances (2.0) 0.4 Total cash at the end of the period 28.4 37.7 Suffjcient cash for future growth opportunities STATEMENT OF CASH FLOWS 25

120 100 80 60 (USD’m) 40 20 0 Fleet Fleet mix & Fleet mix & 2017H1 Forex 2018H1 expansion utilization -20 Revenue 2017 H1 60.5 Foreign exchange movements 1.7 Fleet expansion 6.1 Fleet mix & utilization (0.9) Revenue 2018 H1 67.4 REVENUE WATERFALL BREAKDOWN (USD ‘ MILLION) 26

Working Capital Breakdown 2018H1 2017 Movement Inventory 24.5 23.9 (0.6) Trade and Other Receivables 43.2 38.2 (5.0) Trade and Other Payables 20.2 20.1 0.1 WORKING CAPITAL BREAKDOWN (USD ‘ MILLION) 27

2018H1 2017H1 2017 15.5% 14.7% 15.3% Return on Capital Employed (EBITDA) 128.8 135.9 126.3 Working Capital Ratio (Days) 10.9% 5.9% 2.4% Gearing Ratio (Net of Cash) BALANCE SHEET RATIOS 28

40 35 30 25 20 15 10 (USD’m) 5 0 -5 -10 -15 2018H1 Cash at beginning of period 40.2 Cash from operation activities 8.7 Net acquisition of property, plant & equipment (4.9) Dividends paid (3.1) Issue of share capital (9.3) Acquisition of subsidiary (1.2) Other (2.8) Cash at end of period 28.4 CASH FLOW WATERFALL (USD ‘ MILLION) 29

2018H1 7.1 million 95.7% 4.3% Expansion Sustainable Plant and Machinery 97% Motor Vehicles 2% IT Equipment 1% CAPITAL SPEND 30

• Solid pipeline • Stable order book • Opportunities with technology • Mobile Tunnel Borer • Blind Shaft Boring System • 94% of income from production IN CLOSING 31