Afrimat Limited · JSE:AFT
Afrimat — Shareholder Meeting (August 2024)
31 slides from Afrimat's shareholder meeting presentation, Aug 6, 2024
Slide 1: Annual General Meeting
Annual General Meeting 6 August 2024
Slide 2: Disclaimer
Disclaimer Afrimat has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this presentation, including all information that may be defined as 'forward-looking statements'. Forward-looking statements may be identified by wo
Slide 3: Core message
Core message Nimble repositioning, diversification, External economic and market growth by acquisitions and a conditions are impacting HY1 meticulous discipline on integration - performance with a reduction in remain a fundamental strength volumes Company culture and high standard of execution suppo
Slide 4: Why we exist
1 WHY WE EXIST Consciously making a difference through excellence with integrity
Slide 5: The Afrimat Way: Excellence with Integrity
The Afrimat Way Excellence with Integrity 5
Slide 6: What we do
2 WHAT WE DO A leading, empowered mid-tier mining and materials supply company
Slide 7: What we do
What we do Growth through structured diversification Construction Industrial Bulk Future Materials * Minerals Commodities Materials and Metals Aggregates | readymix | Limestone | dolomite | Iron ore | anthracite | Phosphate | rare earth concrete products industrial sands manganese elements ▪ 35 acti
Slide 8: Rationale for and result of diversified structure
Rationale for and result of diversified structure ▪ Smooth growth for more than a Profit history with and without acquisitions decade 600 ▪ Good blend of local and international priced commodities 500 ▪ Exposure to different currencies 1. Glen Douglas 400 and economic cycles 2. Clinker Group Cents 3
Slide 9: Afrimat's moats
Afrimat’s moats 1 2 3 UNIQUE COMPETITIVE RESPECT FOR CAPITAL AND EXECUTION ADVANTAGE ITS ALLOCATION ▪ Culture ▪ Strong balance sheet ▪ Multi-discipline approach to ▪ Unique metallurgy ▪ RONA of 25,6% project execution ▪ Structural cost advantage ▪ Consistent cash generation − Engineering, IT, financ
Slide 10: Delivering consistently
3 DELIVERING CONSISTENTLY Culture of care in all that we do and a thriving entrepreneurial spirit
Slide 11: Core financial discipline to support growth
Core financial discipline to support growth Entrenched diversification Strong cash strategy supported generation by prudent capital allocation Surplus cash supports acquisitions, capex and consistent dividends Continuous measurement against decisions taken 11
Slide 12: Financial highlights – FY2024
Financial highlights – FY2024 Up 23,9% to R6,1 billion 24,0% improvement HEPS – 567,3 cents per Group revenue share 154,0 cents per share 18,9% Final dividend Operating profit margin 15,9% up to 3 004 cents 25,6% Return on net operating Net asset value assets 1,4% 25,3% up to R1,2 billion Net cash f
Slide 13: Exceptional and consistent cash generation
Exceptional and consistent cash generation Net cash from operating activities (R’000) 1,237,005 987 319 CAGR = 19.4% 767 580 736 555 Afrimat has a proven 676 810 track record to turn its acquisitions into meaningful 410 484 406 046 contributors with high 320 339 261 646 cash generation. 243 860 200
Slide 14: Operating profitability
Operating profitability Purposeful diversification Operating margin (%) 28.7 23.7 Maintain strong 19.6 operating margins 18.3 18.2 18.9 through operational 16.3 15.9 14.7 efficiency drive and 13.8 14.0 14.0 12.8 13.1 12.1 diversification 11.1 strategy. 2009 2010 2011 2012 2013 2014 2015 2016 2017 20
Slide 15: Return on net operating assets (RONA)
Return on net operating assets (RONA) RONA % 40.8 32.5 32.5 33.0 Average – 30.9 28,5% 28.9 24.9 25.4 25.6 Key measurement in 24.0 20.7 evaluating success of 18.9 18.1 19.5 19.9 17.7 capital allocation. 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 15
Slide 16: Balance sheet health maintained
Balance sheet health maintained Net debt:equity (%) 35.5 23.8 18.8 19.8 Maintain a strong 15.5 balance sheet Average – 12.1 10,8% enabling acquisitions 10.7 10.2 8.2 5.2 4.7 4.5 3.5 4.0 1.4 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 -4.9 16
Slide 17: Dividend
Dividend Total dividend (cents per share) 194 186 148 150 Consistent dividend payer 117 2.75 x cover 81 70 57 62 50 39 28 16 17 19 13 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 17
Slide 18: Focus
Focus ▪ Continue disciplined approach to financial management and capital allocation ▪ Debt to equity expected to rise >25% temporarily ▪ Consistent management of cash generation 18
Slide 19: Segmental performance
4 SEGMENTAL PERFORMANCE FY2024 (recap) The value of diversification
Slide 20: Operational efficiency project - example
Operational efficiency project - example Savings Cumulative diesel savings Actual Baseline 250000000 • Jenkins - Total saving of 3 067 955 litres • Baseline – 0.66 litres per ton 200000000 • Current – 0.33 litres per ton 9,7 million ℓ • Demaneng – Total saving of 2 124 139 litres saving 150000000 •
Slide 21: Fleet efficiency drive
Fleet efficiency drive ton per machine hour ultimately improves rand per ton Demaneng hauling Nkomati hauling R/ton GD hauling R/ton 16.00 R/ton 16.00 16.00 15.00 15.00 15.00 14.00 14.00 21% improvement 14.00 13.00 13.00 12.00 13.00 12.00 34% improvement 11.00 12.00 11.00 10.00 11.00 10.00 9.00 14%
Slide 22: Bulk Commodities
Bulk commodities Solid performance based on product diversification Revenue Operating profit and margin 3,500 $155 * $119 * $121 * 1,200 35,7% 31,8% 32,4% 3,000 1,000 2,500 800 R’million R’million 2,000 600 1,500 2,958.0 958.0 2,409.0 2,480.0 400 860.0 788.0 1,000 500 200 0 0 Feb '22 Feb '23 Feb '24
Slide 23: Industrial Minerals
Industrial Minerals Delivered disappointing results Revenue Operating profit and margin 18,0% 8,9% 2,5% 580.0 90.0 560.0 80.0 540.0 70.0 60.0 R’million 520.0 R’million 50.0 500.0 85.0 554.0 555.0 40.0 480.0 30.0 460.0 49.0 20.0 440.0 472.0 10.0 14.0 420.0 0.0 Feb '22 Feb '23 Feb '24 Feb '22 Feb '23
Slide 24: Construction Materials
Construction Materials Significant improvement in profitability supported by margin recovery Revenue Operating profit and margin 2,400.0 300.0 9,0% 7,2% 12,4% 2,200.0 2,000.0 250.0 1,800.0 1,600.0 200.0 R’million R’million 1,400.0 1,200.0 150.0 2,213.0 273.0 1,000.0 1,751.0 1,809.0 800.0 100.0 600.0
Slide 25: First 100 days of most recent acquisition integration
First 100 days of most recent acquisition integration ▪ Aggregates • Integration into Construction Materials is progressing well • Efficiency improvements and quick decision-making (that Afrimat brings) is leading to improvements in aggregate sales ▪ Cement • Already experiencing increased productio
Slide 26: Future Materials and Metals
Future Materials and Metals Ramp up of operation in progress Revenue Operating profit and margin 35.0 Feb '22 Feb '23 Feb '24 30.0 0.0 -2.2 25.0 R’million R’million 20.0 -5.0 -11.4 15.0 31.0 -12.9 25.0 10.0 -10.0 5.0 0.0 3.0 Feb '22 Feb '23 Feb '24 -15.0 ▪ SSP plant commissioning and ramp-up ▪ Total
Slide 27: Future outlook
5 FUTURE OUTLOOK An increase in volumes and more acquisition opportunities
Slide 28: Where we are ahead of our closed period (continued)
Where we are ahead of our closed period (continued) ▪ Construction Materials • Volume levels maintained in Q1 • By Q2, the integrated Lafarge quarries increased volumes • Job creation • Integration of acquisition is ongoing with progress being made to reduce losses ▪ Industrial Materials • Suspensio
Slide 29: What we expect for HY2
What we expect for HY2 ▪ Improved local iron ore sales volumes ▪ Increased exports from Nkomati ▪ Iron ore export volumes similar to last year ▪ Progress on Lafarge integration and elimination of losses in cement business 29
Slide 30: Core message
Core message External economic and market Nimble repositioning, diversification conditions are impacting HY1 and growth by acquisitions remain a performance with a reduction in fundamental strength of Afrimat volumes Company culture and high standard of execution supports Group moats 30
Slide 31: Investor relations
Investor relations 23 August 2024 Pre-close webinar September 2024 Trading update Announcement of interim results Andries van Heerden 24 October 2024 Chief Executive Officer and interim dividend 021 917 8853 December 2024 Interim dividend payment Vanessa Rech Keyter Rech Investor Solutions vrech@kri