Slide 1: Financial Results Presentation for the Year Ended 31 December 2018
OA=CI good chemistry kt i Whitt hha 26 FEBRUARY 2019 Maha thy Aetidtttire He Abt Abate headin: heehee Maud a Why? 015 FINANCIAL RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2018
Slide 2: Agenda
01 PERFORMANCE SUMMARY 02 BUSINESS DRIVERS 03 RESULTS ANALYSED 04 PERFORMANCE BY SEGMENT 05 OUTLOOK AND FOCUS 06 SUMMARY AND OBJECTIVES
Slide 3: Performance Summary
OA=CI good chemistry | ) 2 J puss
Slide 4: Performance Summary
PERFORMANCE SUMMARY 3 › Revenue +26% to R23 314m » Strong performances in Mining Solutions and Chemicals » Pleasing improvement in Food & Beverage » Contribution from acquisitions » Foreign and export revenue increased to 40% of total revenue › EBITDA +21% to R2 631m › Highest ever profit from opera
Slide 5: Safety: TRIR
SAFETY: TRIR 4 FATALITY ON 14 NOV. 0,58 0,50 0,45 0,39 0,35 0,32* 14 15 16 17 18 * Excluding acquisitions
Slide 6: Business Drivers
OA=Cl good chemistry 2 |
Slide 7: Business Drivers: Gold
GOLD good chemistry 6 BUSINESS DRIVERS OA=CI US$/oz Source: GlobalData, FitchSolutions 1 400 1300 1 200 1100 1000 900 800 2015 2016 2017 2018 Ql Q2. Q@ 24 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 4 =—e— Gold (US$/o0z)
Slide 8: Business Drivers: PGMs
BUSINESS DRIVERS OA=CI PGMs good chemistry US$/oz Source: GlobalData, FitchSolutions 2 700 2500 2300 2100 1900 1 700 1500 1300 1100 900 700 500 300 2015 2016 2017 2018 Ql Q2. Q@ 24 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 4 =—e— Platinum (US$/oz) —e— Palladium (US$/oz) —e— Rhodium (US$/oz)
Slide 9: Business Drivers: Cobalt, Copper and Nickel
BUSINESS DRIVERS 8 COBALT, COPPER AND NICKEL
Slide 10: Business Drivers: Coal and Iron Ore
BUSINESS DRIVERS 9 COAL AND IRON ORE
Slide 11: Business Drivers: ZAR/US$ Exchange Rate
BUSINESS DRIVERS 10 ZAR/US$ EXCHANGE RATE Ave. 17 = 13,31 Ave. 18 = 13,23 16 Open Jan 17 = 13,73 Open Jan 18 = 12,31 Close Dec 18 = 14,37 15 14 Ave. 2H18 = 14,16 13 12 Ave. 2H17 = 12,30 11 JAN APR JUL OCT JAN APR JUL OCT DEC 17 17 17 17 18 18 18 18 18 Source: AECI Treasury, Bloomberg
Slide 12: Business Drivers: Brent Crude Oil
BUSINESS DRIVERS 11 BRENT CRUDE OIL US$/bbl Source: AECI Treasury, Bloomberg 90 85 Open Jan 17 = 56,8 Open Jan 18 = 66,80 80 75 70 65 60 55 50 Close Dec 18 = 53,20 45 40 JAN APR JUL OCT JAN APR JUL OCT DEC 17 17 17 17 18 18 18 18 18
Slide 13: Results Analysed
a3 | good chemistry RESULTS ANALYSED
Slide 14: Earnings Analysed
EARNINGS ANALYSED 13 › Profit from operations +27% to R1 999m HEPS 1 045 › EBITDA +21% to R2 631m 959 › HEPS excl. PPA +15% to 1 102c 894 843 » 57c non-cash PPA-related effect 818 791 › Trading margin = 8,6% (’17: 8,5%) › RONA of 16,7% (’17: 17,4%) » Effects of acquisitions › Tax rate 34% (’17: 30%)
Slide 15: HEPS Analysed
HEPS ANALYSED 14 2018 2017 Growth % R millions Excl. acq. Acq. Reported Reported Excl. acq. Acq. Overall Revenue 20 174 3 140 23 314 18 482 9,1 17,0 26,1 Profit from operations 1 868 131 1 999 1 579 18,3 8,3 26,6 Headline earnings 1 157 (54) 1 103 1 012 14,3 (5,3) 9,0 HEPS (cps) 10,96 (0,51) 10,45 9
Slide 16: Cash
CASH 15 4 500 4 5% 41 › Capex = R847m » R328m for expansion projects 4 000 4 0% » R519m for maintenance projects › Net cash working capital outflow of R155m 3 500 3 5% (R358m outflow in ’17) » Growth in Explosives 3 000 3 0% » Customer terms 25 » Acquisitions 2 500 2 5% › Net borrowings of R4 177m 2
Slide 17: Debt Profile
DEBT PROFILE 16 R millions Currency 2020 2021 2022 2023 Total Existing term ZAR 1 100 1 100 DMTN auction ZAR 360 520 880 DMTN private placement ZAR 500 300 800 Term ZAR 200 500 700 Total ZAR 1 660 500 1 320 3 480 Term US$ 12 14 15 20 61 Term EUR 68 68 Total projected repayment ZAR 173 1 861 716 2 72
Slide 18: Performance by Segment
ERB ies OA=CI good chemistry 04 | PERFORMANCE BY SEGMENT
Slide 19: Summary by Segment
SUMMARY BY SEGMENT 18 MINING WATER & PLANT & FOOD & CHEMICALS GROUP SOLUTIONS PROCESS ANIMAL BEVERAGE HEALTH REVENUE REVENUE REVENUE REVENUE REVENUE REVENUE R11 013m R1 376m R4 423m R1 248m R5 266m R23 314m p 13,3% q 5,4% p 73,9% p 4,4% p 47,8% p 26,1% PROFIT PROFIT PROFIT PROFIT PROFIT PROFIT FROM
Slide 20: Contribution Analysis by Segment
CONTRIBUTION ANALYSIS 19 BY SEGMENT Revenue (%) Profit/(loss) from operations (%) 1 -7 22 2 -17 19 29 47 23 5 6 52 69 4 64 13 8 4 8 12 19 6 2018 Outer circle 2017 Inner circle 6 6 Mining Solutions Water & Process Plant & Animal Health Food & Beverage Chemicals Property & Corporate (incl.
Slide 21: Slide 21
Slide 22: Mining Solutions
MINING SOLUTIONS 21 › Stronger performance in copper/cobalt/nickel and coal mining REVENUE R11 013m p 13,3% » Benefited pillar as a whole › Basket of offering for PGM mining industry » Supported volumes in Southern Africa PROFIT FROM OPS R1 274m › Gold mining up overall in rest of Africa p 16,1% › G
Slide 23: Mining Solutions: Revenue by Mineral Mined
MINING SOLUTIONS 22 REVENUE BY MINERAL MINED (%) 7 1 21 5 7 PGMs 1 Gold 22 4 Copper Iron ore Coal 19 20 Diamond Uranium 21 Other 20 8 2018 Outer circle 17 2017 Inner circle 8 19
Slide 24: Business Drivers: Ammonia
AMMONIA good chemistry ZAR Source: AEL us$ 8 000 500 7 000 450 6 000 ZAR ave. 400 . = 5 147,33 - ZARave. (ff “seen__.____.-_..---0--. 5 000 = 4 534,42 350 4000 300 3 000 asd = 330,66 959 2 000 200 JAN MAR MAY JUL SEP NOV JAN MAR MAY JUL SEP NOV JAN MAR MAY JUL SEP OCT 16 16 16 16 16 16 17 17 17 17 1
Slide 25: Mining Solutions: Explosives
MINING SOLUTIONS: EXPLOSIVES 24 › Excellent TP improvement » Weaker ZAR in 2H assisted › Overall bulk explosives volumes +5,2% » Pleasing growth in rest of Africa and Asia Pacific » Disappointing performance in SA › Overall initiating systems volumes -10% › Capital programmes (incl. maintenance) » I
Slide 26: Mining Solutions: Explosives South Africa
MINING SOLUTIONS: EXPLOSIVES 25 SOUTH AFRICA Index Base: 2015 = 100 Cum change 18 = -1,60% Source: Stats SA › Explosives volumes -7% 115 » Optimum Coal in business rescue again 110 » Loss of iron ore contract (’17) 105 › Initiating systems volumes -12% 100 » Sibanye Cooke Shaft closure » Bokoni Mine
Slide 27: Mining Solutions: Explosives Rest of Africa
MINING SOLUTIONS: EXPLOSIVES 26 REST OF AFRICA › Explosives volumes +11% » Copper and cobalt (DRC), gold (Francophone West Africa) and diamond (Botswana) sectors performed well § Lower rainfall in DRC § Growth in Francophone West Africa on the back of new projects § DRC: 6 additional contracts gaine
Slide 28: Mining Solutions: Explosives Asia Pacific
MINING SOLUTIONS: EXPLOSIVES 27 ASIA PACIFIC › Explosives volumes up 48% Indonesia › Good growth y-o-y › Successful transition to new Licensee Partner › Import quotas for AN remain a challenge » BBRI in a good strategic position › Capital replacement programme initiated – contract extensions secured
Slide 29: Mining Solutions: Chemicals
MINING SOLUTIONS: CHEMICALS 28 › Volumes +2,5% » Increased demand for collectors in SA and Central Africa § Growth in specialty collectors § Improved sales to copper mining sector » Flocculant volumes lower § Slow recovery of lost PAM export volumes § Direct route to market strategy in place › Xanth
Slide 30: Water & Process
| OA=CI —{ WATER & PROCESS
Slide 31: Water & Process
WATER & PROCESS 30 South Africa › Loss of 2 major customers – aggressive competitor pricing VOLUME q 18% › Public water – chemicals demand negatively affected by drought conditions › Strong performance in Chemical Processing Division and REVENUE R1 376m Engineering Solutions – 4 desalination plants
Slide 32: Plant & Animal Health
OA=CI good chemistry — PLANT & ANIMAL HEALTH M=sthe =
Slide 33: Plant & Animal Health
PLANT & ANIMAL HEALTH 32 Nulandis › Agricultural sector remains under pressure in SA, other REVENUE R4 423m SADC countries – drought/climate change p 73,9% › No volume growth y-o-y › Some recovery in Western Cape, but water restrictions remain › Delays in planting in summer rainfall regions PROFIT F
Slide 34: Food & Beverage
| OA=CI ——{ FOOD & BEVERAGE
Slide 35: Food & Beverage
FOOD & BEVERAGE 34 › Pleasing growth in dairy, formulated beverages, health and nutrition businesses VOLUME p 2,8% › Favourable product mix › Volumes up in formulated juices REVENUE R1 248m › Introduction of “sugar tax” p 4,4% › Growth in exports to rest of Africa › Investments in facilities for fut
Slide 36: Chemicals
| OA=CI —{ CHEMICALS ‘Dec: Lu
Slide 37: Business Drivers: SA Manufacturing Volumes
BUSINESS DRIVERS 36 SA MANUFACTURING VOLUMES Index Base: 2015 = 100 Cum change 18 = 1,2% Source: Stats SA 115 110 105 100 95 90 85 80 JAN JAN JAN JAN JAN JAN DEC 08 10 12 14 16 18 18 Seasonally adjusted Trend cycle
Slide 38: Chemicals
CHEMICALS 37 Underlying businesses › Excellent overall performance REVENUE R5 266m p 47,8% » Revenue +9% » TP growth >15% › Volumes +8,6% (traded and manufactured) » Local molten sulphur demand and sulphuric acid exports PROFIT FROM OPS R559m » Strong performances in consumer care, paper, industrial
Slide 39: Outlook and Focus
OA=CI good chemistry cy OUTLOOK / ANDFOCUS
Slide 40: Current Pre-operational Mining Projects
CURRENT PRE-OPERATIONAL MINING PROJECTS 39 Development stage South Africa Rest of Africa Indonesia Australia LATAM EXPLORATION 306 1 490 221 3 602 2 225 PREFEASIBILITY 40 71 6 135 135 FEASIBILITY 75 168 41 305 166 CONSTRUCTION 15 29 21 23 50 Total 436 1 758 289 4 065 2 576 Source: Extract – GlobalDa
Slide 41: Outlook and Focus: Mining Solutions
OUTLOOK AND FOCUS 40 Mining Solutions › Well positioned for market and market share growth › Ongoing investment and reinvestment programme to maintain growth » Incl. R200m compliance-related capex at AEL, Modderfontein › Integration of Dinacon acquisition › Digitalisation in mining › Ongoing UBS con
Slide 42: Virtual Reality – Training
VIRTUAL REALITY – TRAINING 41 Full immersive training › Simulates all conditions › Exposes trainee to extreme conditions, without danger › Analyses user behaviour – safety and efficiency enhancements
Slide 43: Augmented Reality – MMU
AUGMENTED REALITY - MMU OA=CI good chemistry
Slide 44: Outlook and Focus Cont.: Water & Process, Plant & Animal Health
reactive to real-time plant needs. OUTLOOK AND FOCUS CONT. 4. Big Data Irrigation (BDI™): THE SOCIAL 43 OF IRRIGATION Mobile application for irr recommendations, based on big data an from GBI™ plots. Water & Process The and › Reviewing go-to market model to enhance capabilities system improve takes
Slide 45: Outlook and Focus Cont.
OUTLOOK AND FOCUS CONT. 44 Food & Beverage › Maintain focus on margins and quality of business › Accelerate export growth › Benefits of investments in new facilities Chemicals › SANS capex for single stage polyester › Much Asphalt » Well positioned for upturn in SA » Infrastructure Fund announced by
Slide 46: Innovation Technology Update
systems and your smartphone. and scientists who provide the growers with 3. SupPlant's Growth-Based Irrigation (GBI™) detailed reports to help them increase their yield.Q INNOVATIONtechnology: UPDATETHE AUTONOMOUS VEHICLE OF 45 IRRIGATION. A closed-loop irrigation system, reactive to real-time plant
Slide 47: Summary and Objectives
OA=CI good chemistry a6 | SJ SUMMARY AND OBJECTIVES
Slide 48: Summary and Objectives
SUMMARY AND OBJECTIVES 47 Pleasing results delivered in ’18, notwithstanding challenges Focus in ’19 Zero Harm Delivery of Schirm and Much Asphalt to expectations Integration and delivery to expectation of Dinacon, Brazil Delivery of capex projects » Explosives (incl. compliance-related) » Mining ch
Slide 49: Disclaimer
DISCLAIMER 48 This document has been prepared and issued by and is the sole responsibility of the management of AECI Ltd (the “Company”) and its subsidiaries. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or s
Slide 50: OA=CI
OA=CI