Polus · RUS:PLZL

Polus — Polyus — FY2019 Earnings Presentation

25 slides from Polus's earnings presentation, 2020

  1. Slide 1: 4Q & FY2019

    ye POLYUS ge % 4Q & FY2019 ~~ ee

  2. Slide 2: 2019 actual vs guidance

    +1.5% -8.8% 425 -6.7% 2,841 2,800 700 365 630 375 650 375 2019A 2019 guidance 2019A 2019 guidance 2019A 2019 guidance Actual 2019 guidance 1 Free cash flow is presented on a levered basis

  3. Slide 3: Capex guidance bridge for 2020

    Other  The introduction of new development projects. $120-135mln KBU - Verninskoye Mill expansion to 3.5 mtpa. $250-260mln - Further debottlenecking of the Natalka Mill. Sukhoi Log - New stage of BIO facilities upgrade at Olimpiada. $35mln - Engineering design works on Mill-5 at Blagodatnoye. Alluv

  4. Slide 4: Key financial and operating highlights

    Gold production (doré) (koz) 714 770 -7% 585 22% 2,847 2,450 16% Gold production (refined) (koz) 804 753 7% 640 26% 2,841 2,440 16% Average realised refined gold price excl. SPPP ($/oz) 1,482 1,482 - 1,229 21% 1,403 1,263 11% Average realised refined gold price incl. SPPP) ($/oz) 1,482 1,482 - 1,232

  5. Slide 5: 1. Overview

    1. OVERVIEW

  6. Slide 6: Gold production by asset

    Alluvials Kuranakh 4% 474 3Q 2019 7% 4Q 2019 Verninskoye 319 8% Olimpiada 51% Natalka 126 132 96 101 15% 64 64 81 68 63 35 Olimpiada Blagodatnoye Verninskoye Alluvials Natalka Kuranakh Blagodatnoye 15% Alluvials Kuranakh 5% 8% 1,416 2018 Verninskoye 1,289 Olimpiada 2019 9% 48% Natalka 420 430 405 15

  7. Slide 7: Refined gold output and cost trends by asset

    2018 2019 2018 2019 1,253 821 1,129 746 747 975 771 777 511 523 657 636 605 360 398 369 363 396 547 566 468 455 267 293 Olimpiada Blagodatnoye Verninskoye Alluvials Natalka Kuranakh Olimpiada Blagodatnoye Verninskoye Alluvials Natalka Kuranakh -17% 707 -28% -18% 585 -27% -17% 996 -8% 5% -8% -6% -4%

  8. Slide 8: Total cash cost (TCC) performance

    800 ($821/oz) Alluvials 600 $365/oz 400 Natalka Blagodatnoye Kuranakh 200 Verninskoye Olimpiada ($396/oz) ($398/oz) ($523/oz) ($363/oz) ($293/oz) 0 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 TCC, $/oz  In 2019, the group’s TCC increased 5% y-o-y to $365/oz. 1,800

  9. Slide 9: All-in sustaining cash cost (AISC) performance

    800 $594/oz 600 ($1,129/oz) Alluvials 400 Kuranakh Natalka Verninskoye ($777/oz) Blagodatnoye ($605/oz) ($636/oz) 200 Olimpiada ($566/oz) ($455/oz) 0 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 AISC, $/oz  In 2019, the group’s AISC per ounce decreased to $594/oz, 2

  10. Slide 10: Cash operating costs increased 29% y-o-y

    Outsourced mining Other services Other Power 4% Consumables 1% 7% 5% and spares Power 5% Consumables Fuel 29% and spares 11% 29% Fuel 11% MET 18% MET 17% Labour Labour 32% 30%  In 2019, cash operating costs increased 29% y-o-y to $1,135 mln, which reflects the inclusion of costs related to Natalka

  11. Slide 11: Adjusted EBITDA stood at $2,680 mln

    1,800 80% 4,000 1,600 72% 69% 70% 3,500 1,381 66% 1,400 62% 647 50 60% 3,000 1,200 54% (194) 50% 2,500 442 (130) 1,000 40% 2,000 34% 800 30% 1,500 600 2,680 415 400 361 20% 1,000 1,865 237 174 74 10% 500 200 - 0 - Olimpiada Blagodatnoye Verninskoye Natalka Kuranakh Alluvials EBITDA Gold price Sales

  12. Slide 12: Cash flow from operations increased 48%

    2,174 (748) 10 (531) 1,801 896 Cash & CE Operating CF Investing CF Financing CF Effect of foreign Cash & CE 31-Dec-18 exchange rate 31-Dec-19 changes  Cash flow from operations increased 48% y-o-y to $2,174 RUB mln. 8%  Cash outflow on investing activities was $748 mln, due to lower cash spent on

  13. Slide 13: Working capital outflow of $236 mln

    86 (2) 88 151 1 (11) (106) (23) 979 795 Net WC 2018 Inventories Deferred Receivables Payables Interest Income tax, net Payables for PPE Translation + Net WC 2019 expenditures payables non-OCF items  Polyus registered a working capital outflow of $236 mln in 2019.  This figure was mainly driven by

  14. Slide 14: Capex decreased 14% y-o-y to $630 mln

    Natalka 47 37 27% 155 228 -32% Olimpiada 67 38 76% 165 182 -9% Blagodatnoe 10 9 11% 37 71 -48% Verninskoye 20 11 82% 57 45 27% Alluvials 5 5 0% 21 24 -13% Kuranakh 15 10 50% 39 57 -32% Sukhoi Log 7 7 0% 28 23 22% IT capex 20 13 54% 51 47 9% Other 29 27 7% 77 59 31% CAPEX 220 157 40% 630 736 -14% Omc

  15. Slide 15: Net debt and debt maturity profile

    1,312  At the end of 4Q 2019, the group’s  956 1 net debt amounted to $3,285 mln, 64  696 613 remaining almost flat compared to 500 434 1  the end of the third quarter and up 32 6% compared to the end of 2018. 2019 2020 2021 2022 2023 2024  ND/EBITDA ratio went down to 1.2x, from 1.5x as of the

  16. Slide 16: Debt structure

    Eurobonds Eurobonds 49% 47% Bank loans Bank loans 38% 42% $4,855 mln $5,086 mln Convertibles Convertibles RUB bonds RUB bonds 4% 4% 5% 11% 58% 42% 62% 38% Public debt Private debt Public debt Private debt Floating rate Floating rate 3% 3% $4,855 mln $5,086 mln Fixed rate Fixed rate 97% 97% 4.8% 4.7%

  17. Slide 17: Net debt/adjusted EBITDA decreased to 1.2x

    1.8x 1.8x 1.8x 1.7x 1.7x 1.6x 1.5x 1.5x 3,639 1.2x 3,317 3,285 3,208 3,077 3,079 3,086 3,029 3,011 1,801 1,561 1,538 1,204 1,249 1,095 1,000 908 896 31-Dec-17 31-Mar-18 30-Jun-18 30-Sep-18 31-Dec-18 31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 Net Debt, $ mln Cash position, $ mln Net Debt/adj. EBITDA, x

  18. Slide 18: 3. Operational Performance

  19. Slide 19: Group operational performance

     Increase reflects higher rock moved volumes at Natalka, Olimpiada and Verninskoye  Increase in ore mined volumes was mainly driven by higher ore volumes mined at Natalka  Ore processed volumes increased following the completion of the ramp-up at the Natalka Mill and the implementation of through

  20. Slide 20: Olimpiada operating results

    4Q’19 3Q’19 Q-o-Q 2Q’19 1Q’19 4Q’18 Y-o-Y 2019 2018 Y-o-Y Rock moved, kt 34,388 35,508 -3% 33,361 32,232 35,176 -2% 135,489 126,608 7% incl. stripping, kt 29,554 30,465 -3% 27,692 27,065 30,019 -2% 114,776 108,449 6% Stripping ratio, t/t 6.1 6.0 2% 4.9 5.2 5.8 5% 5.5 6.0 -8% 10% Ore mined, kt 4,834

  21. Slide 21: Blagodatnoye operating results

    4Q’19 3Q’19 Q-o-Q 2Q’19 1Q’19 4Q’18 Y-o-Y 2019 2018 Y-o-Y Total rock moved, kt 16,727 17,691 -5% 16,334 17,050 18,151 -8% 67,802 77,407 -12% 11% including stripping, kt 11,284 13,299 -15% 13,754 14,835 16,178 -30% 53,172 70,236 -24% Stripping ratio, t/t 2.1 3.0 -30% 5.3 6.7 8.2 -74% 3.6 9.8 -63% Ore

  22. Slide 22: Verninskoye operating results

    4Q’19 3Q’19 Q-o-Q 2Q’19 1Q’19 4Q’18 Y-o-Y 2019 2018 Y-o-Y Total rock moved, kt 5,879 6,682 -12% 6,263 5,649 4,174 41% 24,473 19,341 27% -2% including stripping, kt 4,605 5,426 -15% 5,323 4,671 3,525 31% 20,025 16,352 22% Stripping ratio, t/t 3.6 4.3 -16% 5.7 4.8 5.4 -33% 4.5 5.5 -18% Ore mined, kt 1

  23. Slide 23: Kuranakh operating results

    4Q’19 3Q’19 Q-o-Q 2Q’19 1Q’19 4Q’18 Y-o-Y 2019 2018 Y-o-Y Total rock moved, kt 7,373 8,083 -9% 7,965 7,392 7,739 -5% 30,813 31,948 -4% including stripping, kt 5,682 5,831 -3% 5,685 5,766 6,051 -6% 22,964 24,116 -5% Stripping ratio, t/t 3.4 2.6 31% 2.5 3.5 3.6 -6% 2.9 3.1 -6% Ore mined, kt 1,691 2,25

  24. Slide 24: Alluvials operating results

    10% 4Q’19 3Q’19 Q-o-Q 2Q'19 1Q'19 4Q’18 Y-o-Y 2019 2018 Y-o-Y Sands washed, 000 m³ 1,207 5,115 -76% 2,259 - 1,258 -4% 8,581 7,689 12% 821 Average grade, g/m³ 0.54 0.52 4% 0.55 - 0.69 -22% 0.53 0.60 -12% 746 Gold in slime, koz 21.1 84.9 -75% 39.6 - 28 -25% 145.6 147.7 -1% Refined gold output, koz 34.

  25. Slide 25: Natalka operating results

    4Q’19 3Q’19 Q-o-Q 2Q’19 1Q’19 4Q’18 Y-o-Y 2019 2018 Y-o-Y -47% Total rock moved, kt 19,218 18,904 2% 16,809 15,343 15,707 22% 70,274 45,297 55% including stripping, kt 13,450 14,370 -6% 12,618 11,383 13,144 2% 51,821 38,637 34% Stripping ratio, t/t 2.3 3.2 -28% 3.0 2.9 5.1 -55% 2.8 5.8 -52% 747 Ore

Polyus — FY2019 Earnings Presentation on 6ix