Aeci Ltd · JSE:AFE
Aeci — Investor Day (November 2024)
53 slides from Aeci's investor day presentation, Nov 28, 2024
Slide 1: Capital Markets Day
WE ARE ONE AECI, FOR A BETTER WORLD Capital Markets Day 28 November 2024
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This document has been prepared and issued by and is the sole responsibility of the management of AECI Ltd (the Company) and its subsidiaries (the Group). This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer
Slide 3: Program for the day
Program for the day Welcome and Introduction 10:00 Safety video 2024 Highlights – what we have delivered 10:10 YTD October 2024 performance update Q&A session 12:00 Lunch Strategy update 12:45 Q&A session Closing remarks 14:15 Networking and General Q&A
Slide 4: Safety video
Safety video 6)
Slide 5: The AECI Group executive team
The AECI Group executive team
Slide 6: 2024 Highlights: What we have achieved
2024 Highlights What we have achieved
Slide 7: Our transformation strategy launched in November 2023
Double EBITDA by 2026 based on 2022 FY results AMBITION Attain a global market position in Mining of #3 by 2030 based on EBITDA Our transformation A high-performance Optimise portfolio Drive operational Globalisation strategy launched in culture underpinned • Product services and functional by passi
Slide 8: Successful interventions delivering benefits
Successful interventions delivering benefits FATALITIES LIFE ALTERING TOTAL INJURIES RECORDABLE INJURY RATE (TRIR) 0 1 2023: 2 (2023: 1) 0.31 (2023: 0.38)
Slide 9: What you will hear today
What you will hear today
Slide 10: AECI culture change journey positions us for sustainable growth
AECI Culture change journey positions us for sustainable growth Culture eats strategy for breakfast (Peter Drucker)
Slide 11: 12
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Slide 12: Delivered 2024 commitment, on track for 2026 EBITDA target
Delivered 2024 commitment | on track for 2026 EBITDA target YTD PROGRESS TARGET VALUE UNLOCK Target R2.4 bn ► R400m EBITDA R2.4bn on track to be HISTORICAL CAGR achieved ORGANIC GROWTH 2026 ► R800m run-rate will be achieved R0.8bn ► c.200 identified 36 months TOTAL EBITDA UPSIDE BY 2025 initiatives
Slide 13: R800m 2024 run-rate delivered
R800m 2024 run-rate delivered Driven by growth, functional and operational excellence Commercial excellence ► Cross selling ► Advanced data-driven pricing models Commercial Growth projects Growth projects excellence ► Expanding value proposition into select new geographies, products and customers /
Slide 14: Delivering manufacturing excellence
Delivering manufacturing excellence | Tangible results benefiting business performance Asset turnaround Facility enhancements Plant optimisation and reliability Mining Explosives Industrial Chemicals ► 28% OEE improvement ► Production throughput ► Boosted SO₂ production by ► Enhanced asset reliabili
Slide 15: Renewable plants commissioned
Renewable plants commissioned| 5% baseline energy requirements replaced R30 million savings per annum | R140 million investment spend Increase operational resilience | enhance competitiveness | aligned to our sustainability goals | position the business for future growth Chempark Plant Sasolburg Pla
Slide 16: Supply chain resilience
Supply chain resilience Ammonia supply stabilised Strengthened ammonia Supply chain Secure supply resilience diversification future supply ► Increased ammonia rail ► Ramped up onshoring ► MOU signed for green capacity and nearshoring activities ammonia by 2028 in key region ► 100 additional wagon fl
Slide 17: AECI Managed Businesses
AECI Managed Businesses
Slide 18: Progressing our portfolio optimisation
Progressing our portfolio optimisation Two divestments already signed SIGNED AND IN CLOSING PROCESS ONGOING PUBLIC ► Prevailing slow macroeconomy ► M&A market muted ► No fire sale ► Interest rate still elevated ► Almost only P/E interest ► Committed to find the best possible buyer and deliver ► Very
Slide 19: AECI Managed Business: improved performance year on year
AECI Managed Business | Improved performance year on year Year to date for the 10 months ended 31 October 2024 - as reported REVENUE EBITDA EBITDA % 5% 56% 3pt R6 097m R347m 6% 2023: R6 414m 2023: R223m 2023: 3% LOSS FROM LOSS FROM WORKING OPERATIONS OPERATIONS (%) CAPITAL (%) (60%) (1pt) 2pts (R7m)
Slide 20: AECI Much Asphalt acquisition and divestment
AECI Much Asphalt acquisition and divestment AT ACQUISITION THE TRANSACTION 2018 2024 Purchase consideration Goodwill recorded Entered an SPA on Purchase consideration R2 047 million R1 531 million 4 November 2024 R1 100 million Locked box structure Net Asset Value Net Asset Value Loan raised effect
Slide 21: AECI Schirm
AECI Schirm Year to date for the 10 months ended 31 October 2024 REVENUE EBITDA EBITDA % 27% 74% 2pt R1 636m (R18m) (1%) 2023: R2 231m 2023: (R70m) 2023: (3%) LOSS FROM LOSS FROM WORKING OPERATIONS OPERATIONS % CAPITAL % 4% (3pts) 1pt (R215m) (13%) 14% 2023: (226m) 2023: (10%) 2023: 13%
Slide 22: AECI Schirm: Regional view
AECI Schirm | Regional view Year to date for the 10 months ended 31 October 2024 Schirm Germany Schirm USA YTD 2024 YTD 2023 % change YTD 2024 YTD 2023 % change Revenue EUR54m EUR84m (35%) EUR28m EUR28m - EBITDA (EUR6m) (EUR8m) 25% EUR5m EUR4m 25% (Loss)/profit from ops (EUR11m) (EUR13m) 15% EUR2m E
Slide 23: AECI Schirm: EBITDA performance since acquisition
AECI Schirm | EBITDA performance since acquisition 2018 2019 2020 2021 2022 2023 YTD 2024 Germany EUR4m EUR5m EUR10m - (EUR6m) (EUR10m) (EUR6m) USA EUR4m EUR5m EUR5m EUR6m EUR7m EUR3m EUR5m Total EUR8m EUR10m EUR15m EUR6m EUR1m (EUR7m) (EUR1m) Excludes PPA items Germany turnaround costs: EUR20m Germ
Slide 24: AECI Schirm: restructure programme required, various options available
AECI Schirm | restructure programme required, various options available 2018 2019 – 2023 2024 Purchase consideration PPE investment in EUR30m Germany working financed with external USA EUR8m EUR134m capital funding debt Germany EUR10m Net Asset Value EUR120m warehouse Goodwill recognition EUR20m Ger
Slide 25: Core Business Performance YTD October 2024
Core Business Performance YTD October 2024
Slide 26: AECI Chemicals outperforms the market
AECI Chemicals| outperforms the market ► Revenue down ▪ Subdued SA chemicals market ▪ Late Agri season ► Solid EBITDA performance ▪ Vigorous cost and margin management ▪ Improved manufacturing efficiencies ► Robust debtor management ► Focus on reduction in inventory ► WCAP at 23% - impacted by trade
Slide 27: AECI Chemical: Disciplined cost management and enhanced operational efficiencies
AECI Chemical | Disciplined cost management and enhanced operational efficiencies Year to date for the 10 months ended 31 October 2024 REVENUE EBITDA (normalised) EBITDA (%) (normalised) (4%) 7% 1pt R7 805m R813m 10% 2023: R8 110m 2023: R760m 2023: 9% PROFIT FROM PROFIT FROM WORKING OPERATIONS OPERA
Slide 28: Accelerated globalisation of the core business
Accelerated globalisation of the core business Diverse geographic presence and commodity portfolio Volume, AN equivalent basis DIVERSE COMMODITY PORTFOLIO Other 15% Diamond 4% PGM 18% Uranium 2% #1 AFRICA Iron ore 1% Rest of Africa Gold 16% #4 Indonesia Copper ▪ Volume contribution – 24% ▪ CAGR – (3
Slide 29: Headwinds behind us, expect to bridge the gap by end 2024
Headwinds behind us| expect to bridge the gap by end 2024 and build run-rate into 2025 EBITDA monthly run rate back on track MONTHLY AVERAGE EBITDA RUN RATE FY 2023 average ► Headwinds faced and resolved during Q3: ▪ Network buy-ins from NH3 Force Majeure ensured supply ▪ Detonator plant constraints
Slide 30: Group Performance YTD October 2024
Group Performance YTD October 2024
Slide 31: AECI Mining: performance influenced by external and internal factors
AECI Mining | performance influenced by external and internal factors Year to date for the 10 months ended 31 October 2024 REVENUE EBITDA (normalised) EBITDA% (normalised) (5%) (9%) (0pt) R15 725m R2 123m 14% 2023: R16 513m 2023: R2 338m 2023: 14% PROFIT FROM PROFIT FROM WORKING OPERATIONS OPERATION
Slide 32: Group finance: Key focus areas
Group finance | Key focus areas Group Effective tax Balance Sheet Optimisation rate Capital Allocation Cost optimisation
Slide 33: Group: Results reflect transitional year
Group | Results reflect transitional year Year to date for the 10 months ended 31 October 2024 – as reported Revenue EBITDA EBITDA (%) (4%) (18%) (2pts) R29 788m R2 518m 8% 2023: R31 098m 2023: R3 072m 2023: 10% PROFIT FROM PROFIT FROM GEARING WORKING CAPITAL (%) OPERATIONS OPERATIONS (%) (29%) (2pt
Slide 34: Group EBITDA reconciliation
Group EBITDA reconciliation | flat year on year performance Normalisation of R755 million strategic execution spend YTD October 2024 YTD October 2023
Slide 35: Group: Normalised
Group | Normalised Year to date for the 10 months ended 31 October 2024 Revenue EBITDA (normalised) EBITDA (%) (normalised) (4%) (1%) 0pts R29 788m R3 272m 11% 2023: R31 098m 2023: R3 297m 2023: 11% PROFIT FROM PROFIT FROM OPERATIONS OPERATIONS (normalised) (normalised) (%) (4%) 0pts R2 286m 8% 2023
Slide 36: Effective tax rate
Effective tax rate Reflects strategy execution Core business^ AECI Group (End state) (Core and Managed businesses) ► Expected FY24 ETR to be ► ETR expected FY24 to be 40% – 43% for FY24 significantly higher than half year driven by: ► Expected going forward to be at 35% -37% ▪ Expected lower profita
Slide 37: 2024: on track to achieving our strategic targets
2024| on track to achieving our strategic targets Baseline (Actual) Actual Actual Full Year Outlook Targets Category KPI 2022 2023 H1 2024 2024 2026 In line with 2023 EBITDA (Rm) 3 570 3 683 1 390 5 600 to 6 300 (normalised basis) In line with 2023 EBITDA margin (%) 10.0% 9.8% 8% 13% to 15% Operatio
Slide 38: Break
WE ARE ONE AECI, FOR A BETTER WORLD Break
Slide 39: Strategy Update
Strategy Update
Slide 40: Double EBITDA by 2026: pipeline of implementable initiatives
Double EBITDA by 2026 | pipeline of implementable initiatives 2024: Optimise and 2025: Hard cost savings 2026: Scale Top-Line realise quick wins and Growth Growth ► Culture roll-out, employee ► Structural cost optimisation ► Deliver market growth engagement and training investment ► Focus on margin
Slide 41: 2026 target: strong initiative pipeline to support delivery
2026 target| strong initiative pipeline to support delivery 2026 target R2.4 bn with initiative pipeline ready to execute Target R2.4 billion 2025 OPPORTUNITIES 2026 OPPORTUNITIES ►Unlock headcount ►Top-line growth in 2026 efficiency (peer existing and new regions benchmark) ►Leveraging product ►His
Slide 42: 2025 Guidance
2025 Guidance Core Group FY2025 Outlook Normalised* EBITDA 20%-25% Growth 5.6 – 6.3 EBITDA (Rbn) Key initiatives and investment FY 2024 Organic growth Continued value unlock 2026 Ambition through TMO 47
Slide 43: Accelerate regional growth: Leverage solid track record
Accelerate regional growth | Leverage solid track record OUR PRODUCT MINING MINING INITIATING DIGITAL OFFERING CHEMICALS EXPLOSIVES SYSTEMS SOLUTIONS Africa APAC LATAM Defend #1 Strengthen to #3 Ramp up ► Leverage mutually beneficial partnerships ► Lihir operations fully commissioned ► Peru acquisit
Slide 44: Our integrated value chain
Our integrated value chain (6) DIGITALLY ENABLED SMART MINING 5 we Il MONITOR & . [ MEASURE MANUFACTURING [8 SUPPLY CHAIN BLAST DESIGN | & EXECUTION ORE DRILLING [PROCESSING WATER & LAND. [RECLAMATION core BESPOKE BOREHOLE QC DATA COLLECTION & BENCHMARKING BULK EXPLOSIVES FLOTATION / DEPRESSANTS / L
Slide 45: Mining explosives: What differentiates us
Mining explosives | What differentiates us Venturing new peaks through our partnering approach We have the skill and the will to solve our customers’ greatest challenges
Slide 46: Mining chemicals: A leader in metallurgical innovation
Mining chemicals | A leader in metallurgical innovation with a proven track record
Slide 47: Strategy Update
Strategy Update
Slide 48: Key Takeaways
Key Takeaways
Slide 49: Thank you
WE ARE ONE AECI, FOR A BETTER WORLD Thank you
Slide 50: Appendix
APPENDIX*
Slide 51: Our investment case
Our investment case 01 02 03 04 05 Industry Strong management Pursuing excellence Disciplined Sustainable leadership team drives to deliver exceptional fiscal approach global growth shareholder value value ► Global leader in ► Strategy execution ► Business ► Balance sheet ► Leveraging resilient expl
Slide 52: AECI Mining
AECI Mining Year to date for the 10 months ended 31 October 2024 – as reported REVENUE EBITDA EBITDA% (5%) (16%) (2pts) R15 725m R1 908m 12% 2023: R16 513m 2023: R2 274m 2023: 14% PROFIT FROM PROFIT FROM WORKING OPERATIONS OPERATIONS (%) CAPITAL (%) (20%) (2pt) (1pt) R1 426m 9% 14% 2023: R1 789m 202
Slide 53: AECI Chemical
AECI Chemical Year to date for the 10 months ended 31 October 2024 – as reported REVENUE EBITDA EBITDA (%) (4%) 9% 1pt R7 805m R804m 10% 2023: R8 110m 2023: R736m 2023: 9% PROFIT FROM PROFIT FROM WORKING OPERATIONS OPERATIONS (%) CAPITAL (%) 13% 1pt 1pt R692m 9% 23% 2023: R615m 2023: 8% 2023: 22%