Impala Platinum Holdings Limited · JSE:IMP
Impala Platinum — Royal Bafokeng Platinum — FY2019 Earnings Presentation
39 slides from Impala Platinum's earnings presentation, 2020
Slide 1: Audited Annual Results for the year ended 31 December 2019
AUDITED ANNUAL 20 RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019 20
Slide 2: Disclaimer
The information presented in this presentation is of a general nature and the forward-looking information, opinions and beliefs of the Company and its affiliates are based on various market related assumptions. Changes in market circumstances after the production of the information may impact on the
Slide 3: Contents
CONTENTS Overview Market review Operational review Financial review Outlook and guidance
Slide 4: Overview
O1 OVERVIEW ROYAL BAFOKENG GP rratingh MORE THAN MINING
Slide 5: Safety, Financial, Operations, Labour and Social highlights
Safety Financial Operations Labour and Social > Regrettably > > 12.5% increase > five-year wage two fatalities 50.4 agreement > 38.1% > > Balance sheet increased by 9.0% 9.2% > > 23.2% optimisation > 1.3% NUM leadership elections 3.91g/t > 86.6% > training > did not empowerment > Review of corporate
Slide 6: RBPlat, BRPM and Styldrift overview
RBPlat BRPM Styldrift > Business in a transitional phase > Weaker production performance > Commercial operating entity • Improved PGM market in 2019 • Complex localised geology at • Ramp-up progression slower than BRPM North shaft Phase III planned due to technical and • Strengthening balance sheet
Slide 7: Environmental and social performance
> Our environmental > R944.5 million > 11.8% in procurement management systems are invested in social and labour from local HDSA businesses aligned to the plans in the last ten years to R1 687.9 million ISO 14001 > 1 000 families live in > 4.1% in the number requirements our employee of women in min
Slide 8: Focus on our strategy continues to drive performance
FOCUS ON OUR STRATEGY CONTINUES TO DRIVE PERFORMANCE 01 02 03 04 \X\LL* SNA N Achieve zero harm Labour stability Optimise volumes Reduce costs Integrating sustainability throughout our operations Maintaining our IMS panel ratio at BRPM Achieving IMS panel ratio at Styldrift Processing flexibility an
Slide 9: Market review
MARKET REVIEW PL 02
Slide 10: Indexed PGM prices (2 January 2019 = 100)
Indexed price (2 January 2019 = 100) > 275 > 225 > 175 > 125 > 75 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 ZAR basket Platinum Palladium Rhodium
Slide 11: Operational review
03 OPERATIONAL REVIEW =< ROYAL BAFOKENG CO iin
Slide 12: Zero harm, competitive resources, sustainable growth, flexibility
1 2 3 4 ZERO COMPETITIVE SUSTAINABLE FLEXIBILITY HARM RESOURCES GROWTH Growth through Styldrift Operational flexibility The safety and health of High grade Merensky and paired with increased through scalable Merensky our employees remains shallow capital efficient Merensky and UG2 and UG2 extraction
Slide 13: Safety performance
2019 FEATURES KEY INITIATIVES Total recordable injury frequency rate > Tragically two fatalities during 2019 > Technology driven safety 12,00 • 1 mining related solutions 10.173 10,00 9.267 8.643 • 1 non-mining related > HERO training, to create 8,00 > Substantial year-on-year • Hope improvement 6.7
Slide 14: Health: TB, HIV and hearing loss
TB incidence rate HIV prevalence rate Administered HIV/AIDS tests 1 000 30,0% 13 000 12 757 765 23,1% 23,0% 23,4% 12 500 12 379 800 631 20,0% 12 000 600 % / 100 000 11 500 Number 416 400 10 924 10,0% 11 000 200 10 500 0 0,0% 10 000 2017 2018 2019 2017 2018 2019 Extensive TB treatment programme > 26.
Slide 15: Mining performance
Description Unit 2018 2019 % Var Total tonnes delivered Built-up head grade (4E) Total development km 35.0 39.1 11.7 4 400 5,0 BRPM BRPM 4 000 BRPM km 28.0 32.3 15.4 4,16 4,21 BRPM 4,01 SD 3 600 4,0 3,77 SD Styldrift km 7.0 6.8 (2.9) 3,45 3 200 SD SD 2 SD 1 600 Total stoping square metres 000m 542 6
Slide 16: Tonnes milled and 4E metals in concentrate
Description Unit 2018 2019 % Var Total tonnes milled 4E metals in concentrate Total tonnes milled kt 3 420 3 847 12.5 4 500 450 BRPM kt 2 299 2 222 (3.3) 401 4 000 3 847 400 Styldrift kt 1 121 1 625 45.0 368 3 420 350 328 Merensky kt 2 997 3 266 9.0 3 500 3 021 300 UG2 kt 423 581 37.4 3 000 UG2 % mi
Slide 17: Labour
Capital labour Description Unit 2018 2019 % Var 4 000 3 636 Total labour No. 9 479 10 059 (6.1) Working cost labour No. 5 843 8 899 (52.3) 3 000 2 659 BRPM No. 4 918 5 093 (3.6) Number Styldrift No. - 2 913 (100.0) 2 000 Central and Shared Services No. 507 485 4.3 1 160 Concentrator No. 418 408 2.4
Slide 18: Cash operating costs
Description Unit 2018 2019* % Var Total cash operating cost R'm 2 788 5 675 (103.6) Cash operating cost/tonne milled R/t 1 213 1 475 (21.6) Cash operating cost/4E oz R/oz 10 468 14 139 (35.1) Cash operating cost/Pt oz R/oz 16 145 21 770 (34.8) *Note: Styldrift commercially operational from 1 January
Slide 19: BRPM key drivers of unit costs
Description Unit 2018 2019 % Var Cash operating cost/tonne milled 1 600 1 361 Total cash operating cost R'm 2 788 3 024 (8.5) 1 213 1 200 1 149 Cash operating cost/tonne milled R/t 1 213 1 361 (12.2) Cash operating cost/4E oz R/oz 10 468 12 562 (20.0) 800 R/t Cash operating cost/Pt oz R/oz 16 145 19
Slide 20: Styldrift key drivers of unit costs
Description Unit 2019 Key drivers of unit costs Styldrift cash operating cost R'm 2 651 Volume Cash operating cost/tonne milled R/t 1 632 > Lower economy of scale benefits due to fewer Cash operating cost/4E oz R/oz 16 504 delivered ounces and lower recovery potential Cash operating cost/Pt oz R/oz
Slide 21: Capital expenditure
Description Unit 2018 2019 % Var Stay-in-business R226 million for 2019 Stay-in-business capital (SIB) R'm 196 226 15.3 capital > 4.0% of total operating cost SIB % of total operating cost % 3.4 4.0 (17.6) Replacement capital R'm 50 101 (102.0) R101 million for 2019 BRPM R’m 50 21 58.0 Replacement >
Slide 22: Styldrift project progress
Description Unit 2018 2019 % Var Section N1 - W 600 level reef footprint Section N4 Capital expenditure Reporting period R’bn 3.21 1.23 61.7 Project-to-date R’bn 11.67 12.87 10.3 Section S1 - W Section N3 Project progress Section N2 Capital development m 7 011 3 450 (50.8) Working cost development m
Slide 23: Styldrift crew performance factors
Key factors impacting on crew performance Overall tip-to-face tramming distance H1 2019 status FY 2019 status 140 Steady Description 120 state Equipped Unequipped Equipped Unequipped sections sections sections sections 100 Sections operating 14 6 6 12 2 80 m 60 Average face length 102m 40 Fl
Slide 24: BRPM volume, quality and cost focus
Volume Quality Cost > Leverage mining volumes > Focus on monitoring and > Organisation redesign for lower supported by robust prices control systems to ensure grade environment > Replace declining South shaft mining best cut > Unlock value through supply Merensky with UG2 > Pre-develop South shaft U
Slide 25: Styldrift volume, quality and cost focus
Volume Quality Cost > Create operational flexibility through > Enhance maintenance and asset > Leverage economy of scale benefits IMS management processes > Optimise fleet replacement strategy > Leverage infrastructure capabilities > Continuous skills development > Unlock value through supply chain
Slide 26: Financial review
04 FINANCIAL REVIEW ROYAL BAFOKENG CO iin
Slide 27: Income statement summary
YoY Description Unit 2019 2018 % change Revenue R’m 7 491.9 3 627.1 106.6 Cost of sales R’m (6 810.6) (3 317.2) (105.3) Gross profit R’m 681.3 309.9 119.8 Other income R’m 267.9 124.0 116.0 Administrative expenses R’m (326.6) (284.0) (15.0) Restructuring costs R’m (10.6) - (100.0) Gain on bargain pu
Slide 28: Headline earnings and earnings per share
YoY Description Unit 2019 2018 % change Attributable comprehensive income R’m 64.1 155.6 (58.8) Profit/(loss) on disposal of PPE and other assets R’m 0.1 (0.3) 133.3 Scrapping and impairment of non-financial assets R’m 58.9 12.8 360.2 Gain on bargain purchase R’m - (118.3) 100.0 Headline earnings R’
Slide 29: Headline earnings bridge 2018 to 2019
R'million 300 700 1 100 1 500 1 900 2 300 2 700 3 100 -500 -100 Headline earnings - 2018 49,8 Revenue - volume increase 2 523.1 Increase in net finance cost (503.6) Impact of increased volume (1 876.8) Restructuring costs (10.6) (473.1) controllable Decrease Increase in admin and other costs 110,3 M
Slide 30: Revenue growth supported by stronger basket price
REVENUE GROWTH SUPPORTED BY STRONGER BASKET PRICE Revenue contribution YoY Description Unit 2019 2018 % change 1,6% 0,3% 6,5% Average basket price R/Pt oz 28 743 21 006 36.8 1,4% 1,7% Average R:US$ exchange rate R:US$ 14.55 13.82 5.3 17,2% 38,4% 2019 Description Unit 2019 2018 2,9% Volume Price (US$
Slide 31: Cost of sales contribution
YoY Cost of sales (excl. depreciation Description Unit 2019 2018 % change and amortisation) contribution Cost of sales R’m (6 810.6) (3 317.2) (105.3) Cost of sales (excl. depreciation and amortisation) R’m (5 726.0) (2 921.7) (96.0) 35% 38% 2019 Depreciation and amortisation R’m (1 095.7) (380.4) (
Slide 32: Segment results: BRPM and Styldrift
RBR BRPM Styldrift operations Description mining mining segment segment segment Operational EBITDA (2015 to 2019) 2019 2 000 Full year ended 31 December 2019 R’ million R’ million R’ million 1 800 298.4 Revenue 7 491.9 4 518.5 2 973.4 1 600 1 599.3 1 400 Cost of sales (6 684.7) (3 432.3) (3 252.4) 1
Slide 33: Cash flow summary
YoY Description Unit 2019 2018 % change Cash generated by operating activities R’m 1 027.6 665.9 54.3 Cash utilised in investing activities* R’m (1 751.8) (3 600.5) 51.3 - Capital expenditure*** R’m (1 695.3) (3 510.9) 51.7 - Styldrift on-reef revenue receipts R’m - 973.4 (100.0) - Maseve acquisitio
Slide 34: Capital allocation framework
Our capital allocation framework is integrated into our strategy, budget, planning and management processes. Assessment Valuation Optimal of financial process funding risk and structure returns measure ongoing impact on: performance of: assessment of: Maximise Manufactured capital Operational Optima
Slide 35: Net debt, liquidity and dividend policy
> Net debt of R491.3 million at year end* • • • > Strong liquidity and funding • • • > Dividend policy • • •
Slide 36: Financial review summary
> Transformative year for > EBITDA of R1 756 million > Capital allocation > Finance focus areas for Royal Bafokeng Platinum • 2020 and beyond • > EBITDA margin of 23.4% • • > BRPM EBITDA of R1 599 • million • • > Styldrift EBITDA of R298 million •
Slide 37: Outlook and guidance
# QS OUTLOOK AND - = GUIDANCE ¥ 6-7, ROYAL BAFOKENG CO iii
Slide 38: Outlook
2) OUTLOOK v Objective of zero harm remains a major focus v Palladium and rhodium expected to remain in deficit in 2020 v Eskom remains a risk to SA supply v Coronavirus impact on demand v Focussed on reaching 230ktpm at Styldrift in third quarter 2020 v Continue with the ongoing drive to reduce cos
Slide 39: 2020 production and cost guidance
> Production is forecast to be between 4.2Mt and 4.5Mt yielding between 450koz and 485koz 4E metals in concentrate > Forecast built-up head grade of 3.90g/t to 4.00g/t (4E) > Total capex for 2020 forecast at approximately R2.2 billion • Expansion capital of R1.5 billion • Replacement capital of R0.3
Royal Bafokeng Platinum — FY2019 Earnings Presentation on 6ix