Impala Platinum Holdings Limited · JSE:IMP

Impala Platinum — FY2015 Earnings Presentation

40 slides from Impala Platinum's earnings presentation, Sep 3, 2015

  1. Slide 1: Annual Results 30 June 2015

    ANNUAL RESULTS 30 June 2015 3 September 2015

  2. Slide 2: Forward Looking Statement

    FORWARD LOOKING STATEMENT Certain statements contained in this presentation other than the statements of historical fact contain forward‐looking statements regarding Implats’ operations, economic performance or financial condition, including, without limitation, those concerning the economic outlook

  3. Slide 3: Agenda

    AGENDA OVERVIEW Terence Goodlace FINANCIAL REVIEW Brenda Berlin MARKET REVIEW Terence Goodlace RESPONSE PLAN Terence Goodlace CONCLUSION Terence Goodlace Annual Results September 2015 3

  4. Slide 4: Overview

    Ne ws Sa? IMPLATS Distinctly Platinum OVERVIEW Terence Goodlace

  5. Slide 5: Safety Performance

    SAFETY PERFORMANCE  FIFR 0.058 per million man‐hours worked Fatal injury frequency rate (per million man hours worked)  TIFR 9.78 per million man‐hours worked 0.087  Regrettable increase in the FIFR despite valuable 0.065 0.058 0.053 improvements in safety 0.043  The Group achieved 6.9 million f

  6. Slide 6: Impact of Section 54s

    IMPACT OF SECTION 54s  Implats remains committed to zero harm and 80 80000 supports work stoppages to manage direct dangers to safety and health 70 70000  We continue to engage with the DMR to 60 60000 highlight the impact of stoppages on safety and productivity/profitability 50 50000 (4E oz) (Num

  7. Slide 7: Financial – Key Features

    FINANCIAL– KEY FEATURES  Revenue increased by 11.9% to R32.5 billion HEPS  Sales volumes improved by 6% to 1 273 000 (1 197 000) platinum ounces 86  Average rand exchange rate weakened 10.4% to R11.44 (R10.36)  Gross profit of R1.6 billion down from R3.2 billion  Gross profit margin declined to

  8. Slide 8: Operational – Key Features

    OPERATIONAL – KEY FEATURES  Gross refined platinum production increased by Platinum production 8.3% to 1 276 000 ounces  Mine‐to‐market output was 15.9% higher at 1 276 1 142 700 ounces of platinum 1 178 133  Strong operational recoveries at Impala 192 Rustenburg and Zimplats in H2 FY2015 followi

  9. Slide 9: Impala

    IMPALA  Achieved stated production target Impala production  Performance impacted by 575  Ramp‐up post industrial action  Safety stoppages  Milled throughput up 48.8% to 9.2 Mt 411 (Pt oz refined (000))  Refined platinum production up 40% to 575 200 ounces  Unit costs up 8.4% to R23 884 ppt o

  10. Slide 10: Impala: Mineable Face Length

    IMPALA: MINEABLE FACE LENGTH Contingency panels have improved to 1.5 per team 25000 22 410 20 498 20 623 19 668 20000 17 800 15000 (Metres) 10000 5000 0 Dec‐11 Dec‐12 Dec‐13 Dec‐14 Jun‐15 Annual Results September 2015 10 OVERVIEW

  11. Slide 11: Zimplats

    ZIMPLATS  Production impacted by precautionary closure of Bimha Mine Zimplats production  Production losses mitigated by: 239.7 190.0  Successful redeployment of 6 out of 8 production fleets  Open pit mining from April 2015 (Pt oz in matte (000))  Continued ramp up of newly developed Mupfuti Mi

  12. Slide 12: Marula

    MARULA  H1 impacted by industrial action and safety Marula production stoppages 78.5  H2 regained momentum with operating metrics 73.6 on track (Pt oz in concentrate (000))  Tonnes milled down 7.4% to 1.66 million  Head grade remained flat at 4.19 g/t  Concentrator recoveries improved from 85.4

  13. Slide 13: IRS

    IRS  Mine‐to‐market platinum production down 1.2% IRS third party production to 567 500 ounces  Lower volumes from Zimplats following temporary 192 closure of Bimha mine  Industrial action and safety stoppages at Marula  Increased production from Mimosa 133 (Pt oz refined (000))  Refined platin

  14. Slide 14: Other Operations

    OTHER OPERATIONS Mimosa Mimosa production  Tonnes milled up 5.4% to 2.59 million (Pt oz in concentrate (000))  Head grade steady at 3.93 g/t 117.4  Concentrator recoveries up to 78%  Platinum in concentrate production up 6.5% to 117 400 ounces  Unit costs down 11% to US$ 1525 110.2  Benefiting

  15. Slide 15: Reserves and Resources

    RESERVES AND RESOURCES Attributable mineral resources of 196 Moz Pt (%) Attributable mineral reserves of 26.4 Moz Pt (%) 4 2 4 5 Zimplats 7 6 Impala Impala 4 6 Afplats Zimplats 48 Marula Two Rivers Two Rivers Imbasa and Inkosi 4 Marula Mimosa 29 Mimosa 15 Attributable mineral resources (Moz) Attribu

  16. Slide 16: Financial Review

    FINANCIAL REVIEW Brenda Berlin

  17. Slide 17: Income Statement

    INCOME STATEMENT  Revenue increased due to R million FY2015 FY2014 % change improved production levels Sales 32 477 29 028 12  Cost of sales increased due to full costs during the ramp‐up Cost of sales (30 849) (25 786) (20)  Saving of R3.8 billion during the Gross profit 1 628 3 242 (50) FY2014

  18. Slide 18: Gross Profit Movement

    GROSS PROFIT MOVEMENT  R1.6 billion negative movement in R5 063 million gross profit impacted by: 8 000  Ramp‐up at full cost 7 000 3 015  Metals purchased volumes offset by change in stock 6 000 1 998 5 000 (Rm) 4 000 3 242 1 564 3 000 2 000 1 947 1 628 421 4 1 000 252 5 716 0 1 467 ‐1 000 Annua

  19. Slide 19: Implats Group Unit Cost

    IMPLATS GROUP UNIT COST 1 293 22 222 1 499 20 555 19 430 (R/Pt oz) Annual Results September 2015 19 FINANCIAL REVIEW

  20. Slide 20: Headline Earnings per Operations

    HEADLINE EARNINGS PER OPERATIONS R million FY2015 FY2014 % change Impala (1 042) (1 374) 24.2 IRS 1 257 1 138 10.5 Zimplats 113 714 (84.2) Marula (340) (185) (83.8) Mimosa 32 82 (61.0) Two Rivers 290 273 6.2 Other (89) (125) 28.8 Headline profit 221 523 (57.7) HEPS (cps) 36 86 (58.1) Annual Results

  21. Slide 21: Headline Earnings Movement

    HEADLINE EARNINGS MOVEMENT  Forex loss of R288 million vs. R101 million in 2014 1500  Commodity price adjustment gain 1 268 1000 of R741 million compared to a loss of R246 million 523 500  HEPS declined 58% to 221 36 cents per share 871 (Rm) 0 1 101 ‐500 ‐1000 1 614 186 ‐1500 Annual Results Septe

  22. Slide 22: Movement in Gross Cash Position

    MOVEMENT IN GROSS CASH POSITION  Operating cash flow impacted by:  Build‐up volumes 8 000  Temporary closure of Bimha 522 7 000 2 325 47  Capital expenditure of R4.5 billion 6 000 5 000 (Rm) 4 305 4 000 3 000 2 597 4 508 2 000 1 000 0 FY2014 Operating Dividends Other Capital FY2015 cash flow rec

  23. Slide 23: Net Debt

    NET DEBT  Net debt of R4.1 billion at 30 June R million FY2015 FY2014 % change 2015 excluding leases Gross cash 2 597 4 305 (40)  Available  R2.6bn, cash Convertible bond (4 812) (4 410) (9)  R3bn, facilities Marula BEE debt (881) (878) Zimplats debt (998) (1 117) 11 Debt excluding leases (6 691

  24. Slide 24: Market Review

    Ne IMPLATS.4U Distinctly Platinum \ \ MARKET. REVIEW Sree RORRENS TS TNS RENN NNN Aaa aan Aare 2A DOES RINGS Nas ERT

  25. Slide 25: Metal Prices - Prices Achieved for Major Metals

    METAL PRICES ‐ PRICES ACHIEVED FOR MAJOR METALS Free Market FY2015 FY2014 % change prices* Platinum ($/oz) 1 251 1 241 1 423 (13) Palladium ($/oz) 803 804 737 9 Rhodium ($/oz) 1 181 1 187 1 000 19 Nickel ($/t) 15 345 15 458 14 632 6 Basket ($/Pt oz sold) 2 207 2 199 2 299 (4) (R/Pt oz sold) 25 274 2

  26. Slide 26: Vehicle Sales – Regional Outlook

    VEHICLE SALES – REGIONAL OUTLOOK World Light‐duty vehicles sales by region Forecast Units: Millions 2014 % change 2015 North America 16.8 16.5 2 China 20.3 19.7 3 Western Europe 12.5 12.1 3 Japan 5.0 5.6 ‐10 Rest of the World 33.1 32.6 1 Annual Results September 2015 26 MARKET REVIEW

  27. Slide 27: Vehicle Ownership Trends

    VEHICLE OWNERSHIP TRENDS World personal vehicle ownership (per '000 driving population) USA Canada Australia W. Europe Japan 2015 2020 2030 Malaysia Korea E. Europe Mexico Taiwan Iran Argentina South Africa World Brazil China Still below mature markets Thailand Indonesia Egypt India Philippines 0 20

  28. Slide 28: Vehicle Sales - Western Europe

    VEHICLE SALES ‐ WESTERN EUROPE  Pt‐rich diesel shares in Western Europe  Diesel cars may have had some bad press recently, but the consensus forecast is that 46% of light vehicle powertrains sold in Europe in 2020 will be diesel, down from 51% in 2015. Platinum demand vs diesel shares in W. Europe

  29. Slide 29: Platinum Jewellery

    PLATINUM JEWELLERY Global Platinum jewellery 2014: 3.030 million ounces*  China: ‐ 3%  India: + 28%  Japan: + 3.3%  USA: + 8%  RoW: 0% Global Platinum jewellery 2015  Expected to fall by 3%  China lower  India growth through the Evara Programme  Japan growth  USA growth * PGI retail barome

  30. Slide 30: Investment

    INVESTMENT Global Platinum ETF Platinum ETF Investment Jan 13 ‐ Jun 15  2014 : +155K 3 500 3 000  H1 2015 : + 50K 2 500 Thousands, Ounces 2 000 Global Palladium ETF 1 500  2014 : +940K 1 000  H1 2015 : ‐ 86K 500 0 Jan‐13 Jul‐13 Jan‐14 Jul‐14 Jan‐15 Jul‐15 Futures Market ABSA Others SWISS ZKB UK

  31. Slide 31: The PGM Market

    THE PGM MARKET We remain bullish on long‐term fundamentals for our major metals  Captive PGM demand in emissions control technology  Rising middle classes in emerging markets:  Low vehicle ownership rates  Increased spending power on jewellery  Capacity increases in chemical, agrochemical and o

  32. Slide 32: Metal Prices – Current Price Environment

    METAL PRICES – CURRENT PRICE ENVIRONMENT Platinum price vs industry cost of production ZAR/Eq. Pt oz 15 000 14 500 90th centile  Platinum prices have overshot to the 14 000 downside 80th centile 13 500  Unsustainable at these levels over the 13 000 50th centile longer term 12 500  Requires decisi

  33. Slide 33: Response Plan

    RESPONSE PLAN Terence Goodlace

  34. Slide 34: Implats Strategic Review – February 2015

    IMPLATS STRATEGIC REVIEW – FEBRUARY 2015 Investment through the cycle Positive long term PGM fundamentals Expect LOWER for LONGER prices Maintain optionality & position for the future Improve efficiencies through operational excellence Cash conservation Maintain our social licence to operate Annual

  35. Slide 35: Reducing Operating Costs

    REDUCING OPERATING COSTS Responding to low price environment  Business plan: R930 million reduction as detailed in original 2016 business plan  Procurement, consumables, efficiencies, extra shifts, overtime, utilities  Response plan: R640 million additional operating cost reduction  R320 million

  36. Slide 36: Reprioritising and Rescheduling Capital Expenditure

    REPRIORITISING AND RESCHEDULING CAPITAL EXPENDITURE Capital budget reduced to R4.2 bn for FY2016 FY2016 Response plan Impala (Rm) 2 800 Marula (Rm) 90 Zimplats ($m) 115 Group (Rm) 4 200 Annual Results September 2015 36 RESPONSE PLAN

  37. Slide 37: Implementing the Impala Lease Area Strategy

    IMPLEMENTING THE IMPALA LEASE AREA STRATEGY Transforming the Impala Lease Area  Transforming Impala Lease Area into more concentrated, lower cost operation  Consolidating and mining out old shafts  Managing transition to modern, more cost effective shaft complexes  Ensuring efficient use of mini

  38. Slide 38: Strengthening the Balance Sheet

    STRENGTHENING THE BALANCE SHEET Debt facilities being enhanced  Facilities have been increased from R3.0 billion to R3.5 billion  Tenure, on a portion of the facilities has been increased from one to two and a half years Equity financing to secure delivery of the plan  R4.0 billion ‘book build’ e

  39. Slide 39: Slide 39

  40. Slide 40: Disclaimer

    DISCLAIMER NEITHER THESE MATERIALS NOR THE PRESENTATION CONSTITUTES OR FORMS PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, OR ANY OFFER TO UNDERWRITE OR OTHERWISE ACQUIRE ANY SHARES IN THE COMPANY OR ANY OTHER SECURITIES NOR SHALL TH

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