Northam Platinum Holdings Limited · JSE:NPH
Northam Platinum — FY2020 Earnings Presentation
42 slides from Northam Platinum's earnings presentation, August 2020
Slide 1: Results for the year ended 30 June 2020
RESULTS FOR THE YEAR ENDED 30 JUNE 2020 Page
Slide 2: Disclaimer
DISCLAIMER The presentation comprises the written materials made available together with the related verbal presentation (collectively or individually, as the context may require, the "Presentation") concerning Northam Platinum Limited ("Northam"). By attending the Presentation and/or viewing the Pr
Slide 3: Agenda
AGENDA Key features Paul Dunne Impact of COVID-19 Paul Dunne Our economic contribution Paul Dunne Strategic journey Paul Dunne Operational and projects review Paul Dunne Financial review Alet Coetzee Business outlook Paul Dunne Page
Slide 4: Key features for the year
KEY FEATURES FOR THE YEAR Estimated loss Record revenue Record operating profit of production related to R17.8bn R5.3bn COVID-19 F2019: R10.6bn F2019: R2.4bn 108 685oz 4E Net debt Value returned to Healthy R3.3bn shareholders employee relations Net debt to 46.7% Five year EBITDA: 0.56 ZPLP ownership
Slide 5: How COVID-19 has impacted Northam
HOW COVID-19 HAS IMPACTED NORTHAM Page
Slide 6: How COVID-19 impacted Northam
HOW COVID-19 IMPACTED NORTHAM 108 685oz 4E R1.0bn Health & wellness production losses cost of COVID-19 of our employees Donations to our Capital DMTN community trusts trimming restructuring Northam Platinum Limited Results for the year ended 30 June 2020 Page 6
Slide 7: Why mining is so important
WHY MINING IS SO IMPORTANT 5 897 F2020 8% R3.7bn direct, new, meaningful, equity ownership by sustainable jobs employees and created since 2015 employee spend communities 4% Promotion of Buttonshope of after-tax profits home ownership Conservancy to Toro Employee Trust Empowerment Trust Northam Plat
Slide 8: Job creation
JOB CREATION 18 000 15 953 16 000 15 358 14 000 13 258 12 405 12 000 11 312 10 056 10 000 8 000 6 000 4 000 2 000 0 F2015 F2016 F2017 F2018 F2019 F2020 Permanent Contractors Northam Platinum Limited Results for the year ended 30 June 2020 Page 8
Slide 9: Home ownership
HOME OWNERSHIP Completed to June 2020 New home ownership projects 570 R305m 215 250 New Investment units units homeowners to date Northam Town Mashishing (Lydenburg) Mashishing New homeowner, Zanele Zondi Northam town Northam Platinum Limited Results for the year ended 30 June 2020 Page 9
Slide 10: Strategic journey
NORTHAM PLATINUM LIMITED STRATEGIC JOURNEY smart platinum mining ortham.co.za
Slide 11: Strategic journey
STRATEGIC JOURNEY COVID-19 COVID-19 CAPITAL RAISING AND EMPOWERMENT Zambezi transaction, raising funds through RCF and DMTNs ACQUISITIONS Everest, Zondereinde Western extension, Eland, US recycling operations, Maroelabult assets PROJECT EXECUTION Booysendal complex, Zondereinde Western extension, 2n
Slide 12: Operational and projects review
OPERATIONAL AND PROJECTS REVIEW Page
Slide 13: Safety
SAFETY LTIIR per 200 000 hours worked 1 fatality F2015 to F2020 occurred 2.5 at Zondereinde in December 2.0 1.92 Group 1.65 1.5 LTIIR: 0.78 1.31 1.29 1.29 1.03 16.1% improvement on F2019 1.0 0.82 5 million 0.5 0.54 0.44 0.30 0.31 0.53 0.29 Fatality free shifts 0.18 at Booysendal 0.0 in December F201
Slide 14: Group operational highlights
GROUP OPERATIONAL HIGHLIGHTS F2020 F2019 Total tonnage milled (tonnes) 5 752 404 4 892 110 17.6% Own production: equivalent refined (oz 4E) 515 370 519 954 0.9% Total refined metal (oz 4E) 563 977 571 028 1.2% produced Chrome concentrate produced (tonnes) 782 803 764 528 2.4% Cash cost per equivalen
Slide 15: Zondereinde operations
ZONDEREINDE OPERATIONS F2020 F2019 Variance Unit % Merensky milled tonnes 681 741 815 191 (16.4) Merensky head grade g/t 4E 6.1 6.1 0.0 UG2 milled tonnes 994 383 1 208 637 (17.7) UG2 head grade g/t 4E 4.3 4.3 0.0 Total milled tonnes 1 676 124 2 023 828 (17.2) Average combined head grade g/t 4E 5.0 5
Slide 16: Zondereinde Western extension
ZONDEREINDE WESTERN EXTENSION Northam Platinum Limited Results for the year ended 30 June 2020 Page 16
Slide 17: Zondereinde Western extension
ZONDEREINDE WESTERN EXTENSION F2020 Unit Production ramp up % 70.0 Target steady state PGM production 4E oz pa 50 000 3 Target steady state PGM production date F2025 4 5 Current PGM production 4E oz pa 35 000 Total approved capital expenditure Rm 987 6 3# Actual capital expenditure to date Rm 350 7
Slide 18: Booysendal operations
BOOYSENDAL OPERATIONS F2020 F2019 Variance Unit % Merensky milled tonnes 406 519 397 437 2.3 Merensky head grade g/t 4E 2.2 2.4 (8.4) North UG2 milled tonnes 2 140 812 2 267 503 (5.6) North UG2 head grade g/t 4E 2.8 2.8 0.0 South UG2 milled tonnes 465 810 203 342 129.1 South UG2 head grade g/t 4E 2.
Slide 19: Booysendal South mine
BOOYSENDAL SOUTH MINE Northam Platinum Limited Results for the year ended 30 June 2020 Page 19
Slide 20: Booysendal South mine
BOOYSENDAL SOUTH MINE Northam Platinum Limited Results for the year ended 30 June 2020 Page 20
Slide 21: Booysendal South mine build
BOOYSENDAL SOUTH MINE BUILD F2020 Unit Project completion % 72.1 Target steady state PGM production 4E oz pa 280 000 Target steady state PGM production date year F2023 Current PGM production 4E oz pa 44 212 Total approved capital expenditure Rm 5 590 Actual capital expenditure to date Rm 3 945 • Cen
Slide 22: Eland operations – first profit
ELAND OPERATIONS – FIRST PROFIT F2020 F2019 Variance Unit % Total milled tonnes 1 063 139 - 100.0 Head grade g/t 4E 2.7 - 100.0 PGMs in concentrate – own operations oz 4E 35 123 - 100.0 PGMs in concentrate – external parties oz 4E 1 660 1 051 57.9 Total revenue per Pt oz sold R/Pt oz 37 804 - 100.0
Slide 23: Eland mine
ELAND MINE Northam Platinum Limited Results for the year ended 30 June 2020 Page 23
Slide 24: Eland mine build
ELAND MINE BUILD F2020 Unit Project completion % 18.7 Target steady state PGM production 4E oz pa 150 000 Target steady state PGM production date year F2027 Current PGM production 4E oz pa 35 123 Total approved capital expenditure Rm 2 516 Actual capital expenditure to date Rm 1 200 • Stoping build-
Slide 25: Financial review
NORTHAM PLAT N UM eS es) FINANCIAL REVIEW www.northam.co.za
Slide 26: A record year for the group
A RECORD YEAR FOR THE GROUP Record revenue Record operating profit Record EBITDA R17.8bn R5.3bn R6.0bn F2019: R10.6bn Operating profit margin EBITDA margin 29.8% 33.8% Net debt ZPLP ownership Free cashflow R3.3bn 46.7% R4.0bn Net debt to EBITDA ratio to date 0.56 Northam Platinum Limited Results for
Slide 27: Earnings per share
EARNINGS PER SHARE EPS HEPS Normalised HEPS 800 620.0 cents 800 619.5 cents 800 676.3 cents 700 676.3 620.0 619.5 600 600 600 400 400 500 400 200 200 17.2 15.8 300 270.1 - - 200 -200 -200 82.7 100 -400 (201.5) -400 (200.5) - 2018 2019 2020 2018 2019 2020 2018 2019 2020 Northam Platinum Limited Resul
Slide 28: Revenue
REVENUE 67.3% Sales revenue R million increase in revenue attributable to higher average ZAR basket prices 20 000 17 812.0 18 000 60.8% 16 000 494.8 1 689.4 increase in average 4E basket price 14 000 to USD1 764 (F2019: USD1 097) 12 000 10 649.5 10 000 Sales volumes 8 000 4 978.3 maintained 6 000 10
Slide 29: Cost of sales
COST OF SALES F2020 F2019 Variance R000 R000 % Sales revenue 17 811 971 10 649 506 67.3 Cost of sales (12 510 983) (8 239 481) (51.8) Operating costs (9 931 934) (7 607 161) (30.6) Mining operations (6 857 044) (5 434 933) (26.2) Concentrator operations (1 284 362) (887 089) (44.8) Smelting and base
Slide 30: Statement of profit or loss
STATEMENT OF PROFIT OR LOSS F2020 F2019 Variance R000 R000 % Sales revenue 17 811 971 10 649 506 67.3 Cost of sales (12 510 983) (8 239 481) (51.8) Gross profit 5 300 988 2 410 025 120.0 Share of earnings from associates and joint ventures 16 358 11 153 46.7 Investment income 119 220 56 260 111.9 Fi
Slide 31: Meaningful free cash flow generated
MEANINGFUL FREE CASH FLOW GENERATED R6.4bn R2.4bn R4.0bn cash flow from capital expenditure free cash generated operating activities R3.7bn R1.7bn Free cash will be returned to value returned value returned shareholders this year after year end Northam Platinum Limited Results for the year ended 30
Slide 32: Net debt/EBITDA
NET DEBT/EBITDA F2020 F2019 R000 R000 Cash and cash equivalents 2 160 956 950 315 Domestic medium term notes (5 508 412) (1 814 884) Revolving credit facility − (2 137 193) Net debt (3 347 456) (3 001 762) EBITDA 6 023 379 2 638 513 Net debt to EBITDA ratio 0.56 1.14 Net debt: EBITDA ratio F2020 F20
Slide 33: Debt facilities and DMTN restructuring
DEBT FACILITIES AND DMTN RESTRUCTURING RCF GBF R3.5 billion R500.0 million maturity date September 2024 NATIONAL DMTN CREDIT RATING restructured reaffirmed outlook upgraded to positive Northam Platinum Limited Results for the year ended 30 June 2020 Page 33
Slide 34: Capital allocation and returning value to shareholders
CAPITAL ALLOCATION AND RETURNING VALUE TO NORTHAM SHAREHOLDERS F2020 F2019 Number of Zambezi preference shares held by Northam at year end 53 595 254 4 230 819 Acquired subsequent to year end 21 134 297 − Number of Zambezi preference shares held by Northam 74 729 551 4 230 819 Percentage holding by
Slide 35: Business outlook
smart platinum mining www.northam.co.za
Slide 36: Guidance
GUIDANCE Production from own operations 4E oz Sales 4E oz 650 000 – 670 000 650 000 - 670 000 Capital expenditure Unit cash cost per Pt oz R2.3 – R2.5bn R28 500 – R29 500 Northam Platinum Limited Results for the year ended 30 June 2020 Page 36
Slide 37: Expanding group cash profit margin
EXPANDING GROUP CASH PROFIT MARGIN REVENUE CASH COST CASH PROFIT MARGIN R60 000/Pt oz R29 000/Pt oz R31 000/Pt oz margin 52% CAPEX R2.4 billion Northam Platinum Limited Results for the year ended 30 June 2020 Page 37
Slide 38: Five year production outlook
FIVE YEAR PRODUCTION OUTLOOK Equivalent refined 4E oz production 1 000 000 800 000 600 000 400 000 200 000 0 F2019 F2020 F2021 F2022 F2023 F2024 F2025 Zondereinde Booysendal Eland Northam Platinum Limited Results for the year ended 30 June 2020 Page 38
Slide 39: PGM market review
“A greener, cleaner world needs PGM MARKET REVIEW platinum group metals.” Revenue Rands/Pt oz Total revenue 80 000 Rands/Pt oz sold 60 000 up 78.8% 40 000 20 000 increased loadings - F2017 F2018 F2019 F2020 Spot FY17 FY18 FY19 FY20 Spot 25/8 25 Aug Platinum Palladium Rhodium remains in surplus, Is c
Slide 40: Business outlook
BUSINESS OUTLOOK Health and wellness Driving towards of our employees operational normalisation Growth through Capital allocation project execution and continuing value return to shareholders Northam Platinum Limited Results for the year ended 30 June 2020 Page 40
Slide 41: Questions
QUESTIONS Page
Slide 42: Contact details
CONTACT DETAILS Building 4, 1st Floor Maxwell Office Park Magwa Crescent West Waterfall City Jukskei View 2090 South Africa Leon van Schalkwyk Shareholder information Tel: +27 11 759 6000 Name Northam Platinum Limited Fax: +27 11 325 4795 Share code NHM Email: leon.vanschalkwyk@norplats.co.za ISIN c