INTERIM FINANCIAL RESULTS PRESENTATION for the six-month period - PowerPoint PPT Presentation

INTERIM FINANCIAL RESULTS PRESENTATION for the six-month period ended 30 June 2018 Belfast project: dam liner installation June 2018

Disclaimer The operational and financial information on which any outlook or forecast statements are based has not been reviewed nor reported on by the group’s external auditors. These forward-looking statements are based on management’s current beliefs and expectations and are subject to uncertainty and changes in circumstances. The forward-looking statements involve risks that may affect the group’s operational and financial information. Exxaro undertakes no obligation to update or reverse any forward-looking statements, whether as a result of new information or future developments. Where relevant, comments exclude transactions which make the results not comparable. These exclusions are the responsibility of the group's board of directors and have been presented to illustrate the impact of these transactions on the core operations’ performance and hence may not fairly present the group’s financial position, changes in equity, results of operations or cash flows. These exclusions have not been reviewed nor reported on by the group’s external auditors. 2

Presentation outline 2 1 Nombasa Tsengwa Mxolisi Mgojo , Chief Executive Officer Executive Head Coal Operations 4 3 Mxolisi Mgojo Riaan Koppeschaar Chief Executive Officer Finance Director 3

Belfast project: community housing July 2018

Safety | aim to zero harm • Safety performance improved through 47% reduction in group LTIFR* over 4.5 years • Zero fatalities in the last 15 months LTIFR 0.19 0.17 - 47% 0.12 0.10 0.09 1 fatality 1 fatality 2014 2015 2016 2017 1H18 * Lost time injury frequency rate per 200 000 man hours worked 5

Macro environment | broadly supportive • Thermal coal prices buoyed by strong % change in market price Chinese demand and supply side reforms 23 Coal (API4) 10 • Robust global steel production continued ( 5) throughout the period Iron ore (62% Fe CFR China US$/t) 3 • TiO 2 market remained resilient 22 TiO2 pigment 2 (US$/t CIF US) 9 • Geopolitical risks and the impact on the 21 Zinc brent crude oil price (LME cash US$/t) 5 • Rising US-China trade tension 1H17 vs 1H18 2H17 vs 1H18 • Relatively stable world real GDP growth Average ZAR/US$ • Strong 1H18 US macro economic data but financial strain on key emerging markets -20% • Weak RSA GDP performance 1Q18 GDP 15.39 13.98 13.21 13.39 12.30 • Mining Charter III discussions are progressing 15.39 13.98 13.20 13.40 12.30 • Constructive relationship with Eskom 1H16 2H16 1H17 2H17 1H18 6

Operational excellence | delivering results Coal production ‘000 tonnes 23 397 + 9.3% 23 083 21 892 21 401 21 395 1H16 2H16 1H17 2H17 1H18 Group core EBITDA R million + 55.4% 3 954 3 748 3 594 3 459 2 545 1H16 2H16 1H17 2H17 1H18 7

Value added | coal operations Value added by coal projects + 34.6% + 24.2% Coal GMEP ECC Coal Nooitgedacht Leeuwpan GG6 Belfast Thabametsi Coal operations operations OI operations FY14 FY18 FY18 FY19 FY20 FY20 FY23 FY23 ROCE (%) 31% 30% Target = 20% FY16 FY17 FY18* FY19* FY20* ROCE - Coal Group Target ROCE 8 * Based on latest internal forecast

Revised dividend policy | higher return to shareholders • SIOC pass through • Coal dividend cover between 2.5 and 3.5 of coal core attributable earnings Cents per share (cps) 1 255 400 410 530 300 85 90 65 FY15 FY16 FY17 Special FY18 dividend Interim Final 9

Belfast project: wet conditions February 2018

SHEC performance | we care Safety and health LTIFR • 0.09 LTIFR is below the target of 0.11 The OHIFR # of 0.34 is 10% above the set  • target of 0.31 -25% 0.16 Target 0.15 • Aim to achieve zero harm 0.12 Target 0.11 0.09 0.09 0.08 Integrated environmental management • All licenses and project authorisations have been received • DMR & DWS conducted compliance 1H16 2H16 1H17 2H17 1H18 inspections and no stoppage notices were issued Community development spend • 15% of total disturbed land rehabilitated R million with the balance provided for 3.3 • Water, CO 2 and energy KPIs are showing a positive trend 18.7 16.2 Community development • Community activity (≈ 19 days) impacted negatively on production • SLP** spend behind by 11% (previously 15%) ESD* SLP** Donations * Enterprise and supplier Development ** Social and labour plans # Occupational Health Injury Frequency Rate  Fatality 11

Volumes | product & sales Tonnage movement Total coal product Million tonnes Million tonnes +3% Product Sales 1H18 vs 2H17 0.9 0.4 0.6 0.1 3.2 • Grootegeluk 3.5 3.9 3.4 1.7 0.9 3.5 4.0 3.9 (Medupi ramp up) • Leeuwpan 0.5 0.1 20.7 19.9 19.2 19.1 18.4 17.4 17.5 (ROM & yield) • NBC (0.6) (0.5) (end of reserves) 1H16 2H16 1H17 2H17 1H18 2H18* 1H19* Commercial Tied Buy-ins • Mafube (0.5) (end of SBL**) Total coal sales • ECC Million tonnes (0.4) -1% (geology & unrest) 4.0 4.1 4.2 3.9 3.8 • Matla 4.1 3.4 (0.4) (0.4) 3.2 3.3 3.5 3.9 (walls - move & closure) 3.5 3.9 4.0 • Export (0.3) (production) 15.9 16.1 15.3 14.8 14.2 14.6 13.8 • Buy-ins 0.5 1H16 2H16 1H17 2H17 1H18 2H18* 1H19* Total 0.8 (0.2) Domestic Tied Export * Based on latest internal forecast (actual figures could vary by ± 5%) ** Springboklaagte Additional information on slides 36 - 39 12

Exports | landscape changing • 7% less exported in 1H18 vs 2H17 Export sales destinations (%) • RB1 down 7% to 26% in 1H18 due to less product 9 11 9 11 13 available mainly from Mafube 9 11 21 23 22 • African and Asian exposure increasing with Europe continuing downward trend • Increased Leeuwpan power station coal volumes 65 63 61 71 61 to India • Average realised export price a function of export product mix 13 9 5 9 4 1H16 2H16 1H17 2H17 1H18 • Stronger API4 prices and strengthening of the R/US$ exchange rate in 1H18 Europe India Other Asia Africa Average realised prices Export product mix (%) $ R/$ 10 17 18 20 20 26 97 100 16 33 84 14 79 50 51 48 49 80 75 79 72 48 73 12 65 65 57 60 54 60 10 32 33 31 31 26 42 40 8 1H16 2H16 1H17 2H17 1H18 FY22* 1H16 2H16 1H17 2H17 1H18 FY22* Average Average API4** Exxaro average RB1 RB3 Power station coal R/US$ rate export price * Based on latest internal forecast ** RB1 export price Additional information on slide 38 13

Operational excellence | own production* and productivity Tonnes improvement +1.3% Million tonnes +5.5% 0.3 23.4 • Steady production improvement year-on-year 1.2 23.1 from 1H16 to 1H18, 1.4% from 2H17 +2.3% • Improved tonnage contribution from Leeuwpan 0.0% 0.5 21.9 and Grootegeluk 21.4 21.4 1H16 2H16 1H17 2H17 1H18 Labour cost** / ROM tonne Rebased to 100 ( 0.0 ) • Labour cost / ROM tonne only increased 2.5% … 104.0 4.0 ( 2.3 ) 0.8 102.5 from 1H16 base to 1H18 through good labour 101.7 cost control and steady improvement in ROM 100.0 output 1H16 2H16 1H17 2H17 1H18 * Own production excluding buy-ins ** Labour cost = Labour cost + Outside services Additional information on slides 40 & 41 14

Operational excellence | cash cost per tonne • Cost per tonne increased by only 6% over 2 years • This is commendable given the inflationary pressures the mining industry is facing • Cost per tonne has remained flat over the last 2 reporting periods • Achieved through a combination of volume and efficiency improvements • The focus of operational excellence is to drive down cost per tonne, thereby protecting our margins Cash cost Rand per tonne 354 353 351 334 320 1H16 2H16 1H17 2H17 1H18 15

Optimisation | capital expenditure Expansion capital profile Sustaining capital profile R million 1H18 2H18* FY19* FY20* FY21* FY22* 1H18 2H18* FY19* FY20* FY21* FY22* - 5% - 9% 622 1 403 1 816 2 197 671 680 Waterberg 807 1 104 1 720 1 304 1 790 1 000 238 645 1 679 518 8 Mpumalanga 315 826 957 747 562 430 Other 37 37 21 21 23 2 048 3 495 2 715 679 680 1 967 2 714 2 072 2 373 1 453 860 10 477 Total 1 122 11 701 March 1 713 2 143 3 603 2 514 856 148 10 977 1 731 1 980 2 745 2 415 2 370 1 676 12 917 guidance * Based on latest internal forecast (actual figures could vary by +/-5%) Additional information on slide 35 16