Sibanye Stillwater Limited · JSE:SSW
Sibanye Stillwater — H1 2022 Earnings Presentation
35 slides from Sibanye Stillwater's earnings presentation, Aug 25, 2022
Slide 1: Operating and financial results - H1 2022
Operating and financial results - H1 2022 A challenging period 25 August 2022
Slide 2: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS The information in this announcement may contain forward-looking statements within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, among others, thos
Slide 3: Agenda
Agenda Safety and ESG Operational results • SA region • US region • Recycling Capital allocation and financial Strategic update performance A complex global backdrop Conclusion Operating and financial results for the six months ended 30 June 2022 2
Slide 4: Health and Safety: collective accountability and responsibility
Health and Safety: collective accountability and responsibility Focus on the Fatal elimination strategy is an imperative for 2022 Independent safety review conducted in early 2022 • Group safety strategy ratified – consistent with global industry standards • Need to "operationalise" and institutiona
Slide 5: 2022 safe production journey
2022 safe production journey Continued improvement in safety trends maintained Group - FIFR Despite efforts two colleagues fatally injured in incidents in Q1 2022 0.20 0.16 0.13 • Driefontein on 19 Jan 2022 & Rustenburg surface on 14 Feb 2022 (H1 2021: 8) 0.15 0.10 Zero fatal incidents in Q2 2022 an
Slide 6: Marikana renewal – a tragic legacy
Marikana renewal – a tragic legacy 10th anniversary of the Marikana Tragedy commemorated 1608 Memorial Trust To further honour the memory of those who passed away: Marikana renewal process launched in 2020 • Honour| Engage | Create Number of beneficiaries Number of graduates covered by Trust at tert
Slide 7: Strategic update
Strategic update Neal Froneman, Chief Executive Officer
Slide 8: 3D strategy designed to harness opportunities and manage in a complex environment
3D strategy designed to harness opportunities and manage in a complex environment 1. STRATEGIC FOUNDATION 2. STRATEGIC ESSENTIALS 3. STRATEGIC DIFFERENTIATORS Ensuring safety and well-being Recognised as a force for good Prospering in every region in which we operate Unique global portfolio of green
Slide 9: A complex global backdrop
A complex global backdrop Intelligent Pandemics advances Multipolarity Adapting Ageing culture and strategy to navigate the grey elephants sharply transforming the world Angry Angry people planet Big squeezes Inequality
Slide 10: A rapidly changing environment shaping green metal demand
A rapidly changing environment shaping green metal demand 2021 2022 Widespread Stuttering Increased Spikes Russia Acceleration economic stimulus recovery commitment in inflation Ukraine to carbon to address in automotive to global with policy conflict neutrality Covid distress production decarbonisa
Slide 11: Well positioned in our North American and European ecosystems
Well positioned in our North American and European ecosystems Global trade and supply chain risk exposed Pandemics Multipolarity Shift to regionalisation of supply chains anticipated through the Grey Elephant analysis • Building on green metals presence established in 2021 in North America and Europ
Slide 12: Securing our position in Keliber
Securing our position in Keliber Keliber is an advanced Lithium Hydroxide project in Finland • Aiming to be the 1st fully integrated European lithium producer with direct access to the European BEV market • Investment to date and estimated funding - Investment to date of €176m for our 50%+1 sharehol
Slide 13: Battery metals – Continued strong EV demand pull
Battery metals – Continued strong EV demand pull Battery electric vehicle (BEV) sales growth continues to outperform BEV sales growth inelastic to battery commodity prices in H1 2022 overall light-duty vehicle (LDV) sales growth. Global BEV sales in H1 800 250 2022 were up 75% year-on-year Cathode a
Slide 14: H1 2022 results – salient features
H1 2022 results – salient features Solid financial performance • Net attributable profit of R12.3bn (US$803m) Net cash position maintained • 0.16x Net cash: Adj EBITDA • Interim dividend declared of 138 SA cps (32.46 US cents per ADR)/ R3.9bn (US$230m) Interim dividend declared • Equivalent to a 7%
Slide 15: Regional results
Regional results Richard Stewart, Head of the SA region Charles Carter, Head of the Americas region Grant Stuart, Head of Recycling operations
Slide 16: SA gold operations – post industrial action build-up progressing well
SA gold operations – post industrial action build-up progressing well Production of 191,683² oz for H1 2022 was 63% lower year-on-year 800 SA gold² – Production, AISC & gold price 2 000 000 due to over 3 months industrial action 600 1 500 000 Fixed cost well managed during strike 400 1 000 000 Gold
Slide 17: Wage negotiations: inflation-linked wage increases are key to sustainability
Wage negotiations: inflation-linked wage increases are key to sustainability Three-month industrial action started on 9 March 2022 after 10 months of negotiations • Associated lockout of employees contributed to safety of employees and communities – little violence and intimidation experienced • Pro
Slide 18: Sustainable wages
Sustainable wages SA gold - Category 4 (Underground) - cumulative CPI vs. cumulative cost to company (CTC) Increase (Base = 2013) 120% • A decade of above inflation 105.9% increases has ensured real increases to deliver a fair wage 100% • Continued above 84.2% inflation increases are not 80% sustain
Slide 19: SA PGM operations – good cost control despite lower volumes
SA PGM operations – good cost control despite lower volumes 8% reduction in H1 production of 823,806 4E oz Adj. EBITDA – second highest ever 31 338 40 000 21 152 Leading cost management offsetting inflationary 20 270 20 205 32 000 pressures despite lower production output 24 000 9 049 6 753 • AISC o
Slide 20: Global PGM cash cost+capex curve
Cash cost and basket Price (R/oz) 10 000 20 000 30 000 40 000 50 000 60 000 - 0 Source: Nedbank Mototolo (AMS) Unki (AMS) 500 Union (SIY) Marula (IMP) BRPM (RBP) 1 000 Sylvania Dumps (SLP) Zimplats (IMP) 1 500 Kroondal (SSW/AMS) 2 000 LDI (IMP) PGM curve (cost including capex) Mimosa (IMP/SSW) Modik
Slide 21: PGM market outlook
PGM market outlook Ukraine-Russian conflict Multipolarity Market balances • Limited impact on PGM supply from Russia, 1 000 • Unavailability of capital equipment could constrain growth 2022 US PGM operations flood impact ~60koz 2E Big 750 squeezes US PGM operation repositioning ~100k+ 2Eoz impact 50
Slide 22: Operational guidance for 2022
Operational guidance for 20224 20224 Production All-in sustaining costs Total capital US PGM operations US$275m - US$285m 445 - 460 koz US$1,380 - 1,425/oz1 (2E mined) (incl. US$70m project capital) US Recycling 700 - 730 koz n/a US$3m (3E) SA PGM operations3 R18,500 - 19,200/4E oz R4,800m (US$320m)
Slide 23: US PGM operations – flood impact, repositioning completed
US PGM operations – flood impact, repositioning completed H1 2022 impacted by extreme weather event • Regional flooding in June 2022 restricted access to the Stillwater mine US PGM – Mined production and AISC 400 2 500 2E PGM koz production • East Boulder mine and metallurgical operations unaffected
Slide 24: PGM Recycling – greenest PGMs globally
PGM Recycling – greenest PGMs globally 361,333 3Eoz fed for H1 2022 -10% reduction PGM recycling, adj. EBITDA and net interest received • Global supply chain constraints and reduced underground concentrate 500 60 for blending • Ongoing US logistic challenges and lower vehicle scrapping rates globall
Slide 25: Capital allocation and financial results
Capital allocation and financial results Charl Keyter, Chief Financial Officer
Slide 26: Disciplined delivery on all constituents of capital allocation framework
Disciplined delivery on all constituents of capital allocation framework • Investing in value accretive operational sustainability • Approved SA project capital – c. R6.3bn (2022 forecast c. R2.1bn) • Cash reserves of R27bn/US$1.7bn exceed targeted R20bn • Provides flexibility and optionality • R3.9
Slide 27: Capital discipline enables superior returns to shareholders and financial optionality
Capital discipline enables superior returns to shareholders and financial optionality Net debt (cash): adjusted EBITDA Normalised earnings and dividends paid 3.0 30 000 12 000 Net debt/(cash): adjusted EBITDA : X times 2.60 2.50 2.40 2.5 25 000 10 000 2.0 20 000 8 000 1.5 1.30 15 000 Rm Rm 6 000 1.0
Slide 28: Income statement for the six months ended 30 June 2022
Income statement for the six months ended 30 June 2022 H1 2022 H1 2021 H1 2022 H1 2021 22% decrease in revenue, attributable to all segments Figures are in millions unless otherwise stated (Rm) (Rm) (US$m) (US$m) Revenue 70,379 89,953 4,570 6,182 SA PGM US PGM U/g US PGM recycling SA gold Cost of sa
Slide 29: Conclusion
Conclusion Neal Froneman, Chief Executive Officer
Slide 30: Conclusion – overcoming H1 2022 challenges and poised for future value
Conclusion – overcoming H1 2022 challenges and poised for future value Challenging Well prepared Robust H1 2022 is for future positioning behind us scenarios • SA gold and US PGM production • Regionalised management structures to deliver on our • Global geopolitical and macro to normalise by Q4 2022
Slide 31: Questions?
Questions? Email: ir@sibanyestillwater.com James Wellsted +27(0)83 453 4014 Henrika Ninham +27(0)72 448 5910 Tickers: JSE: SSW and NYSE: SBSW Chris Law +44(0)792 312 6200 Website: www.sibanyestillwater.com
Slide 32: Appendices
Appendices
Slide 33: Returning dividends to shareholders continue
Returning dividends to shareholders continue • Dividend policy of 25% to 35% of normalised earnings • 35% dividend declaration on H1 2022 normalised earnings Dividend analysis Interim H1 2022 Interim H1 2021 Final H2 2021 Total 2021 full year Rm R11,182 R24,411 R14,472 R38,883 Normalised earnings US
Slide 34: Strategic market development
Strategic market development • Partnership with Heraeus Precious Metals, a EnHywhere: Energy hydrogen anywhere leading provider of precious metals products • Seed investment of EUR 5m (convertible note) • Unique combination and integration and services, including refining and recycling into EnHywher
Slide 35: Verkor – investing in a European battery Giga factory
Verkor – investing in a European battery Giga factory Verkor is a French Gigafactory project aiming to enter the European battery materials market as a manufacturer of low-carbon footprint batteries for application in electric vehicles and large-scale stationary storage markets • During February 202