FY2019 ANNUAL RESULTS 28 November 2019 FY2019 SALIENT FEATURES - PowerPoint PPT Presentation

FY2019 ANNUAL RESULTS 28 November 2019

FY2019 SALIENT FEATURES REEF MINED PGM PRODUCTION (5PGE+Au) CHROME CONCENTRATE PRODUCTION 4.63 Mt 139.7 koz 1.29 Mt down 5.1% down 8.2% down 10.9% (FY2018: 4.88 Mt) (FY2018: 152.2 koz) (FY2018: 1.45 Mt) REVENUE OPERATING PROFIT EBITDA US$342.9 m US$24.2 m US$51.6 m down 15.6% down 66.6% down 49.4% (FY2018: US$406.3 m) (FY2018: US$72.5 m) (FY2018: US$101.9 m) PROFIT BEFORE TAX EPS AND HEPS PROPOSED TOTAL DIVIDEND* US 0.75 c US$11.2 m US 4 c / 5 c 23.7% of NPAT down 82.8% down 78.9% (FY2018: US 4 c) (FY2018: US$65.0 m) (FY2018: US 19 c) *includes interim distribution of US 0.5 c 3 MILLION FATALITY FREE SHIFTS DEVELOPING A TIER ONE PROJECT IN ZIMBABWE 2

FY2019 SALIENT FEATURES REEF MINED PGM PRODUCTION (5PGE+Au) CHROME CONCENTRATE PRODUCTION 4.63 Mt 139.7 koz 1.29 Mt down 5.1% down 8.2% down 10.9% (FY2018: 4.88 Mt) (FY2018: 152.2 koz) (FY2018: 1.45 Mt) REVENUE OPERATING PROFIT EBITDA US$342.9 m US$24.2 m US$51.6 m down 15.6% down 66.6% down 49.4% (FY2018: US$406.3 m) (FY2018: US$72.5 m) (FY2018: US$101.9 m) PROFIT BEFORE TAX EPS AND HEPS PROPOSED TOTAL DIVIDEND* US 0.75 c US$11.2 m US 4 c / 5 c 23.7% of NPAT down 82.8% down 78.9% (FY2018: US 4 c) (FY2018: US$65.0 m) (FY2018: US 19 c) *includes interim distribution of US 0.5 c 3 MILLION FATALITY FREE SHIFTS DEVELOPING A TIER ONE PROJECT IN ZIMBABWE 3

FY2019 IN REVIEW INCREASED 3 RD PARTY PRODUCTION increase of 8.7% to 241.1 kt RALLY IN PD, RH AND RU TA I LW I N D S STABLE RECOVERIES PRICES * Mostly in our control PGM recovery at 82.1% (FY2018: 84.1%) increases of 58.0% - Pd, 102.8% - Rh Chrome recovery at 62.0% (FY2018: 66.0%) EBITDA US$51.6 m DECREASED CHROME INCREASED FUEL PRICES PRICES * H E A D W I N D S increase of 12.4% per litre all out of our control decrease of 12.9% in chrome price diesel accounts for 14.3% of on mine costs received VOLATILE EXCHANGE RATE * Year on year change in average market prices weakened by 9.9% 4

PRODUCTION

PRODUCTION - MINING • Revised pit layout has been completed MINING ‒ Over 1.7 Mm 3 extra in pit material moved (Mtpa) 5.2 15.0 • Total reef tonnes mined for FY2019 at 4.6 Mt down from the previous year’s 4.9 Mt 14.0 5.0 5.0 • Stripping ratio of 8.3 m 3 :m 3 13.0 4.9 4.8 • Second Caterpillar 6050 face shovel commenced 4.8 12.0 operations on 15 November 2019 4.6 4.6 11.0 10.7 10.0 4.4 9.0 4.2 8.3 4.2 8.0 7.9 7.5 4.0 7.3 7.0 3.8 6.0 FY2015 FY2016 FY2017 FY2018 FY2019 Reef mined (Mtpa) Stripping Ratio 6

PRODUCTION - PGM • Reduced ROM had a direct effect on PGM volume output PGM PRODUCTION • PGM recoveries down by 2.3% year on year (koz) 160.0 120.0% • Rougher feed grade marginally lower at 1.47 g/t (1.51 g/t) 152.2 • Post year end PGM optimisation completed 140.0 143.6 110.0% 139.7 132.6 120.0 118.0 100.0% 100.0 80.0 90.0% 84.1% 60.0 82.0% 80.0% 79.7% 40.0 70.0% 69.9% 20.0 65.8% - 60.0% FY2015 FY2016 FY2017 FY2018 FY2019 PGM production (kozpa) PGM recovery (%) 7

PRODUCTION - CHROME • Pit redesign had an effect on stockpile development and CHROME PRODUCTION thus ROM grade fed into the plant (Mt) 1.6 120.0% • Curtailed ROM had a direct effect on chrome production • Year on year production down 10.9% to 1.29 Mt 1.4 1.4 100.0% 1.3 1.3 1.2 1.2 80.0% 1.1 1.0 66.0% 64.1% 62.7% 62.0% 0.8 60.0% 58.0% 0.6 40.0% 0.4 20.0% 0.2 PRODUCTION - 0.0% FY2015 FY2016 FY2017 FY2018 FY2019 Third party product Chrome production (Mtpa) Chrome recovery (%) 241.1 kt Tharisa specialty grade Tharisa metallurgical 312.1 kt grade 977.9 kt 8

MARKETS

PGM MARKET • A PGM market dominated by PGM PRICE DEVELOPMENT (USD$/oz) ‒ Palladium rising 41% 3,000 ‒ Rhodium surging 144% • Platinum has languished as market remains in surplus 2,500 ‒ Latest WPIC data suggest 670 koz surplus in 2020 2,000 • Palladium and rhodium demand likely to remain strong 1,500 due to structural demand changes taking place in autocatalytic demand from India, China and Europe as a 1,000 result of tightening emission standards. 500 0 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Platinum Palladium Rhodium Iridium Ruthenium THARISA PRILL SPLIT Ru Ir 14.0% 4.4% Au 0.2% Rh 9.8% Pt 54.9% Pd 16.7% 10

CHROME MARKET • Demand not reflective of low chrome prices 42% METALLURGICAL GRADE CHROME PRICE (US$/t) • Prices need to recover to ensure industry stays sustainable 260 • Logistic issues in South Africa adding to cost pressures for 240 producers 220 • Pipeline between primary product and end stainless steel 200 manufacturers remains balanced 180 160 140 120 100 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 CHINA CHROME IMPORTS 2018 Rest of World Zimbabwe THARISA CHROME SALES 1% Iran 2% 2% 1.7 500 Turkey 1.6 8% 400 Oman 1.2 1.3 1.3 1% Albania 1.2 1.1 300 1% 0.7 200 200 186 158 162 0.2 120 100 FY2015 FY2016 FY2017 FY2018 FY2019 -0.3 0 Chrome sales (includes third party sales) (Mt) South Africa 85% Average 42% chrome price (US$/t) 11

FINANCIAL REVIEW

FY2019 THEMES CO-PRODUCT OPERATIONALLY CASH INVESTING FOR THE DIVIDEND PAYER CONTINUED BENEFITS GENERATIVE FUTURE DISCIPLINED CAPITAL ALLOCATION 13

REVENUE • Benefit of co-production as prices diverged REVENUE CONTRIBUTION EX WORKS BASIS (US$m) • Group revenue decreased by 15.6% year on year ‒ Lower overall sales volumes Third party Platinum 10.5% ‒ Decrease in the chrome price received 19.1% • Chrome contributed US$177.9 million • PGM contributed US$130.1 million • Agency and trading contributed US$34.9 million Palladium 10.4% Metallurgical GROUP REVENUE 28.8% (US$ m) Rhodium 13.8% 450 400 406.3 350 Other PGM elements and 349.4 342.9 300 base metals Specialty 3.3% 250 14.1% 246.8 200 219.6 150 100 50 0 FY2015 FY2016 FY2017 FY2018 FY2019 14

GROSS PROFIT • The major factors contributing to the reduced gross margin GROSS PROFIT AND MARGIN were the lower production levels with the embedded fixed 140.0 4000.0% cost component 35.1 120.0 3000.0% 26.7 122.7 24.8 • An increase in the stripping ratio moving 0.7% more waste 100.0 2000.0% 108.5 17.7 17.5 while producing 5.1% fewer ROM tonnes 80.0 1000.0% • Above inflation pricing pressures such as diesel and 60.0 0.0% 60.4 electricity 54.5 40.0 -1000.0% 43.1 20.0 -2000.0% ‒ Diesel consumption comprises 14.3% of the on-mine cost of production with a 12.4% increase in the average price per litre of - -3000.0% diesel FY2015 FY2016 FY2017 FY2018 FY2019 ‒ Electricity costs, while not being a significant input cost at 6.4% Gross profit (US$ m) Gross profit margin (%) of the on-mine cost of production, increased by 6.8% per kilowatt hour EBITDA • Shared costs allocated 55% to the PGM segment and 45% (US$ m) 140.0 to the chrome segment 120.0 115.6 100.0 101.9 80.0 60.0 40.0 51.6 43.0 29.0 20.0 - FY2015 FY2016 FY2017 FY2018 FY2019 CO-PRODUCTION MODEL 15

COSTS • Cash cost per tonne milled (excluding transport and ON MINE CASH COST OF SALES freight) increased by 11.7% from US$37.5/t to US$41.9/t • On a unit cost basis, the reef mining cost per tonne increased by 17.6% from US$21.0/t to US$24.7/t Overheads Mining 21.5% ‒ This cost per reef tonne was incurred on a stripping 25.3% ratio of 8.3 (m³ waste: m³ reef) ‒ In-pit material of 1.7 Mm 3 excluded from stripping ratio • Chrome selling costs increased marginally by 1.6% from US$62.0/t to US$63.0/t Diesel Labour 14.3% 26.2% Utilities Steelballs Reagents 7.1% 3.1% 2.6% By product basis FY2019 FY2018 All in cost per Pt ounce sold US$/oz 715.7 125.3 All in cost per 42% chrome tonne sold US$/t 146.4 117.4 All in cost includes operating cost, administration costs and capital 16

CASH FLOW • The Group generated net cash from operations of NET CASH FLOWS FROM OPERATING ACTIVITIES US$69.9 million (FY2018: US$89.8 million) (US$ m) 100.0 • Taking into account capex, the free cash flow was US$26.0 million (FY2018: US$49.3 million) 90.0 89.8 • Cash on hand amounted to US$59.2 million (FY2018: 80.0 US$66.8 million) 75.7 70.0 69.9 60.0 50.0 40.0 41.4 30.0 20.0 22.2 US$ millions FY2019 10.0 Cash flow from operating activities 69.9 - Investing cash flows (52.4) FY2015 FY2016 FY2017 FY2018 FY2019 Financing cash flows (22.8) Net increase / (decrease) in cash (5.2) Cash at the end of the period 59.2 OPERATIONALLY CASH GENERATIVE 17

CAPEX • FY2019 capex spend focused on FY2020 CAPEX BUDGET (US$m) ‒ stay in business capex Tailing storage facility ‒ mining fleet additions to optimise the fleet 2.6 Land ‒ ongoing projects aimed at improving recoveries of both purchases PGMs and chrome concentrates 7.8 Mining • Additions to PPE amounted to US$43.9 million of which 34.8 US$27.5 million related to additions to the mining fleet Other • The depreciation charge amounted to US$27.2 million 3.8 (FY2018: US$29.9 million) • Proposed FY2020 capex budget is US$117.2 million of which US$52.8 million is for Vulcan • Negotiations for separate Vulcan financing are ongoing Vulcan 52.8 Processing 15.4 INVESTING FOR THE FUTURE 18