Afrimat Limited · JSE:AFT
Afrimat — Shareholder Meeting (August 2021)
31 slides from Afrimat's shareholder meeting presentation, Aug 4, 2021
Slide 1: Consistently Delivering – Annual General Meeting
CONSISTENTLY DELIVERING Annual General Meeting 4 August 2021
Slide 2: What differentiates Afrimat
2 What differentiates Afrimat Competitive advantage from: ▪ Company culture ▪ Geographic location ▪ Diversification strategy ▪ Unique metallurgy ▪ Financial discipline ▪ Structural cost advantage Primarily focused on mid-tier mining
Slide 3: Company culture
3 Company culture ▪ Good people in their right positions ▪ Living our values ▪ Interdependent teamwork ▪ Track record of efficient execution ▪ Highly innovative and entrepreneurial Excellence with integrity
Slide 4: Segmental makeup
4 Segmental makeup Construction Materials Industrial Minerals Bulk commodities Aggregates Limestone Iron ore Contract crushing, drilling and blasting Dolomite Anthracite Concrete products Silica Readymix
Slide 5: Balanced portfolio at work
5 Balanced portfolio at work 31% Revenue 43% 43% 2021 2020 52% 17% 14% Construction Materials Industrial Minerals 12% Bulk Commodities 6% 31% Operating profit 2021 53% 2020 82% 16%
Slide 6: Rationale for diversified structure
6 Rationale for diversified structure ▪ Good blend of locally and internationally priced commodities ▪ Exposure to different currencies ▪ Exposure to different economic cycles ▪ Similar operational skills ▪ Smooth growth for more than a decade CAGR of PAT at 22% (February 2009 – February 2021) ▪ Cre
Slide 7: What conscious diversification is delivering
WHAT CONSCIOUS DIVERSIFICATION IS DELIVERING
Slide 8: Growth through diversification
8 Growth through diversification Profit history with and without acquisitions 450 400 350 Glen Douglas 300 Clinker 250 Cents Infrasors 200 Cape Lime 150 100 Demaneng 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Headline earnings per share Reality without strategic acquisitio
Slide 9: Financial highlights
9 Financial highlights 47,5% 24,0% 27,0% 11,8% Operating profit increased HEPS increased to 441,7 Group revenue increased Operating profit margin to R886,3 million cents to R3,7 billion 112,0 cents 34,0% 3,8% Return on net operating Final dividend Net debt:equity ratio assets
Slide 10: Revenue and operating profit
10 Revenue and operating profit Revenue (R’000) Operating profit (R’000) 1 000 000 4 000 000 900 000 800 000 3 500 000 700 000 533 183 3 000 000 2 135 130 1 584 574 600 000 2 500 000 1 531 549 282 959 500 000 1 196 402 2 000 000 1 074 899 400 000 268 483 203 492 1 500 000 194 244 157 294 300 000 1 0
Slide 11: Net cash from operating activities – full year
11 Net cash from operation activities – full year 900 000 CAGR – 17,26% (2017 – 2021) 800 000 767 580 700 000 676 810 600 000 R’000 500 000 410 484 400 000 326 536 300 000 200 960 200 000 100 000 0 2017 2018 2019 2020 2021
Slide 12: Operational overview
OPERATIONAL OVERVIEW
Slide 13: Bulk commodities
13 Bulk commodities ▪ Iron ore ▪ Demaneng mine ▪ Jenkins mine ▪ Anthracite ▪ Nkomati mine Nkomati operations Demaneng iron ore Jenkins office
Slide 14: Sales volumes (tons)
Sales Volumes (Tons) 100 000 0 20 000 40 000 60 000 80 000 Aug-17 22 715 Sep-17 28 629 Oct-17 27 088 Nov-17 30 643 Dec-17 30 282 Jan-18 45 743 Feb-18 45 392 Mar-18 45 225 Apr-18 45 758 May-18 57 172 Jun-18 45 705 19536 Jul-18 45 540 12896 Aug-18 56 535 18746 Sep-18 34 264 19131 Oct-18 45 796 19208 N
Slide 15: Jenkins iron ore mine
15 Jenkins iron ore mine ▪ Currently busy with ramp-up ▪ Mining and water use license approved Volumes expected: • Y1 500,000 tonnes ▪ Expect contribution in second half of 2022 • Y2 1,250,000 tonnes ▪ Product from mine for domestic market Capex: R110 million ▪ 20 year LoM
Slide 16: Nkomati anthracite mine
16 Nkomati anthracite mine ▪ All shares in mine now owned by Afrimat ▪ Non-core UCP (Unicorn Capital Partners) Volumes expected: assets sold, netting R45 million • F2022 – 225 000 tonnes ▪ Undertook comprehensive Life-of-Mine (LoM) • Steady state – 540 000 tonnes exercise, resulting in better unders
Slide 17: Industrial Minerals
17 Industrial Minerals ▪ Lime Cape Lime, main factory ▪ Metallurgical dolomite
Slide 18: Industrial Minerals: status
18 Industrial Minerals : status ▪ Good recovery after Covid-19 lockdown last year ▪ Volumes currently strong ▪ Strong demand from steelmakers, but expect slow November and December ▪ Good quality business ▪ Very strong team ▪ Potential for small but exciting acquisitions
Slide 19: Construction Materials
19 Construction Materials ▪ Aggregates ▪ Bricks & blocks ▪ Readymix concrete
Slide 20: Afrimat Construction Index – Q1 2021
20 Afrimat Construction Index – Q1 2021
Slide 21: Mozambique
21 Mozambique ▪ Eventually made a small operating profit (R13 million) ▪ Insurgents launched a deadly attack on 24 March 2021 ▪ All Afrimat staff withdrawn ▪ Currently plant and equipment being brought to safety ▪ Force Majeure declared by Total ▪ Limited financial impact expected
Slide 22: Construction Materials: current status
22 Construction Materials : current status ▪ Volumes made V-shaped recovery from Covid-19 lockdown ▪ Current volumes at pre-Covid levels ▪ Government infrastructure plans: ▪ Good prospects for the industry ▪ Has so far had limited impact on sales volumes ▪ Exciting strategic opportunities
Slide 23: Gravenhage
GRAVENHAGE
Slide 24: Gravenhage manganese mining right
24 Gravenhage manganese mining right ▪ Adding manganese to portfolio ▪ >20 year Life of Mine and high quality resource “Economic viability and profitability are one thing, but Afrimat is equally ▪ Additional foreign currency exposure passionate about the longer-term ▪ Possible synergies with Demanen
Slide 25: Sustainability
SUSTAINABILITY
Slide 26: Afrimat culture
26 Afrimat culture Caring environment Important relationships Results driven Teamwork Skills and competence Empowering Entrepreneurial drive Winning attitude Humility and belief
Slide 27: Human resource development
27 Human resource development Categorisation spend (R’000) R 733 R907 R2 573 R 3 834 R5 825 2020 R14 818 2021 R 5 823 R 14 044 R11 302 R 1 375 Bursary/study loans Training costs Bursary/study loans Training costs Skills development department cost Learnerships Skills development department cost Lear
Slide 28: Community development
28 Community development Categorisation spend (R’000) F2021 (R'000) FY 2020 (R’000) R154 R250 R7 R102 R616 R78 R356 Art, Sports & Culture (9,2%) Art, Sports & Culture (12,5%) Basic Needs (2,9%) R1 703 Basic Needs (7,2%) R770 Education projects (50,2%) Education projects (45,5%) Uplifting community (
Slide 29: The future
THE FUTURE
Slide 30: Looking ahead
30 Looking ahead ▪ Maintain excellent results from existing operations ▪ Remain vigilant, react quickly and keep employees safe should Covid-19 resurge ▪ Iron ore business to benefit from Jenkins iron ore mine ▪ Nkomati expected to contribute as from H2 of F2022 ▪ Good cash flow ▪ Execute diligently
Slide 31: Contact details
31 Contact details Thank you for your attendance and participation For any further investor relations questions please contact: Andries van Heerden | CEO 021 917 8853 Vanessa Rech | Keyter Rech Investor Solutions 087 351 3814 www.afrimat.co.za