Slide 1: Annual Financial Results
Annual Financial Results Presentation for the year ended 31 December 2022
Slide 2: FY22 results | Presentation outline
FY22 results | Presentation outline Welcome and Introduction Nombasa Tsengwa | Chief Executive Officer Macro View and Performance Highlights Nombasa Tsengwa | Chief Executive Officer Minerals Operational Performance Kgabi Masia | Managing Director Minerals Financial Results Riaan Koppeschaar | Finan
Slide 3: Welcome and Introduction
Welcome and Introduction
Slide 4: Macro View and Performance Highlights
Macro View and Performance Highlights Nombasa Tsengwa | Chief Executive Officer
Slide 5: Macro environment in FY22 | Global markets
Macro environment in FY22 | Global markets European energy crisis impacts RBCT exports to Europe seaborne thermal coal trade Million tonnes 14.26 China's restrictive Covid-19 policies 2.42 2.32 impact global growth FY20 FY21 FY22 Source: RBCT* Mixed portfolio with coal and iron Price ore prices coal
Slide 6: ...and South Africa has become a different place to do business
...and South Africa has become a different place to do business South Africa thermal coal exports Million tonnes Logistics challenges limit access to markets 72.2 70.2 58.7 51.0 50.3 Electricity shortage presents 1993 2019 2020 2021 2022 challenges to business Source: RBCT Hours of national loadshed
Slide 7: Highlights | Environmental, Social and Governance
Highlights | Environmental, Social and Governance • Contribution to Africa's biodiversity • 0.05 group LTIFR* (Target = 0.06) • 1 fatality (after 5 years and 5 months fatality free years) • Direct social investments (R1.6 billion) • Committed to empowering communities • Well established processes an
Slide 8: Highlights | Operational
Highlights | Operational Coal product Coal cost 43.1 Mt 12.7% 1.4% 1.1% below mining inflation Price realisation Wind energy delivered 93% 671 GWh of API4 7% 8
Slide 9: Highlights | Financial
Highlights | Financial EBITDA HEPS* ROCE** Final R19.0 billion R60.16 47% dividend 78% 28% 13% R11.36 * Headline earnings per share ** Adjusted for non-core items 9
Slide 10: Minerals Operational Performance
Minerals Operational Performance Kgabi Masia | Managing Director Minerals
Slide 11: Safety, Environmental & Social Impact
Safety, Environmental & Social Impact* | Our drive for a safe sustainable future Safety Social Value 0.05 LTIFR R1.6bn 38% 14% 1 fatality 17% rehabilitation of land disturbed 150l/t ROM** water intensity Stable performance Stable performance 0 level 2 & 3 (major) incidents Environment 5.54tCO e/kt T
Slide 12: Coal volumes | Operational resilience enabling value
Coal volumes | Operational resilience enabling value Total product Movement FY22 vs FY21 Million tonnes Million tonnes Product Sales +1.4% +3.2% 47.4 43.1 44.5 43.3 44.0 Domestic Export 0.3 42.5 6.1 0.2 5.8 4.4 4.7 6.2 5.9 Waterberg (WB) 12.2 7.1 8.6 8.9 8.9 9.1 Ramping up GG6, enabling • Grootegelu
Slide 13: Exports | Marketing responsiveness optimising price performance
Exports | Marketing responsiveness optimising price performance Exxaro export sales destinations (%) Successfully responded to the strong European demand 6 3 3 6 12 6 Early Value Strategy continues to render high quality product mix 22 16 32 46 FY20 42 FY21 24 FY22 Market to Resource flexibility yie
Slide 14: Cost containment | Effective optimisation countering inflationary pressures
Cost containment | Effective optimisation countering inflationary pressures Cash cost per tonne (R/t) Cash cost per tonne 1.1% below mining inflation Coal mining inflation: + 6.5% + 13.8% Cash cost per 444 +12.7% tonne* Countering inflationary cost impacts, by: 394 +5.3% 374 • Operational Excellence
Slide 15: Capex | Disciplined capital execution
Capex | Disciplined capital execution Capital profile Total capex 5% below previous guidance R million Benefiting from Capital Excellence and Early Value Strategy 2 500 2 500 Ramping up GG6 2 000 1 605 Sustaining Guide to sustain business at a range of R2bn to R2.5bn p/a 1 500 (real FY22) Expansion
Slide 16: Financial Results
Financial Results Riaan Koppeschaar | Finance Director
Slide 17: Group performance | Double-digit growth despite challenging operating environment
Group performance* | Double-digit growth despite challenging operating environment Revenue (Rm) EBITDA (Rm) +82% +161% 41% 78% 46 369 19 002 32 771 28 924 10 671 25 491 25 726 7 281 7 291 5 832 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Equity income (Rm) HEPS (cents) +123% +179% - 26% 28% 9
Slide 18: Group financial highlights | Diverse portfolio continues to deliver
Group financial highlights* | Diverse portfolio continues to deliver R billion 78% 78% FY21 19.0 18.9 26% FY22 14.6 26% 11.6 10.7 10.6 9.8 7.3 241% 5.2 (3.7) EBITDA Equity Headline Cash generated Net (debt)/cash income earnings by operations EBITDA (Rm) FY21 FY22 Change Equity income (Rm) FY21 FY22
Slide 19: Group EBITDA | Record EBITDA despite cost pressures
Group EBITDA | Record EBITDA despite cost pressures R million 13 254 (466) (2 161) (4 111) 2 797 (721) (261) 19 002 10 671 Actual Price Volume Inflation Cost Forex General * ECC Actual FY21 FY22 API4 USD index Export volumes Labour: 7% Mafube buy-ins at Weaker average Fair value Disposal of ECC pric
Slide 20: Coal | Value of coal growth projects evident
Coal | Value of coal growth projects evident Revenue (Rbn) R million FY21 FY22 +78% +43% 45.0 Revenue 31 395 44 971 31.4 27.9 Commercial Waterberg 16 852 23 613 25.3 25.6 FY18 FY19 FY20 FY21 FY22 Commercial Mpumalanga 9 439 15 797 EBITDA (Rbn) Tied Mpumalanga 5 089 5 561 +150% +78% Other 15 19.0 10.
Slide 21: Cennergi | Stable performance despite low wind conditions
Cennergi | Stable performance despite low wind conditions Electricity generation GWh 721 761 727 724 715 671 377 405 377 393 385 364 344 356 350 331 307 330 FY18 FY19 FY20 FY21 FY22 FY23* 1H 2H FY Total Performance since acquisition Unit FY21 FY22 Energy generation GWh 724 671 Revenue Rm 1 193 1 159
Slide 22: Capital allocation | Framework rewarding shareholders
Capital allocation | Framework rewarding shareholders (FY18 to FY22) Special dividend paid R9.6bn Cash inflow FY18 R4.5bn R billion 25.0 FY19 R3.2bn 20.6 5.8 FY21 R1.9bn Share buy-back FY21 R1.5bn 5.9 13.4 Cennergi 10.0 step-up acquisition Excess 10.1 Cash 9.0 5.1 R1.7bn cash inflow 0.4 3.3 R11.1bn
Slide 23: Capital allocation | Record cash generation and strong balance sheet
Capital allocation | Record cash generation and strong balance sheet Capital allocation – FY22 Economic value distributed R million R million 20 651 (332) (1 401) (9 665) 61 181 SIOC 4 248 4 431 Cash generated (5 153) Cennergi from (4 412) operations 8 961 after tax Rest of paid Rest Exxaro FY21 FY2
Slide 24: Group | Capital expenditure
Group | Capital expenditure R million 6 076 5 790 Expansion 2 943 3 574 3 175 Sustaining 2 471 950 836 1 652 Total Total 2 847 251 2 502 2 225 1 635 1 401 FY18 FY19 FY20 FY21 FY22 FY23* FY24* Sustaining 2 847 2 502 2 225 1 635 1 401 Average R2.5 billion per Coal 2 779 2 243 2 110 1 564 1 374 annum**
Slide 25: Dividend declared | Consistent shareholder returns
Dividend declared | Consistent shareholder returns Normal dividend declared R billion Total Final Interim Total 11.4 FY22 2H22 1H22 FY21 2.4 9.5 Dividend cover - Group adjusted 2.5 2.5 2.5 2.5 earnings* (times) 6.8 SIOC dividend declared (Rm) 3 917 1 419 2 498 8 984 5.6 5.1 1.4 Dividend declared per
Slide 26: Outlook
Outlook Nombasa Tsengwa | Chief Executive Officer
Slide 27: Focused on priorities that sustain current business and grow
We are focused on priorities that sustain current business and committed to growing the business into a diversified, global future critical minerals and renewable energy solutions business… ...on our way to carbon neutrality by 2050 27
Slide 28: Strategic Outlook | Sustaining our current business
Strategic Outlook | Sustaining our current business • A logistics solution will be our ultimate defense against logistical challenges • Our Operational Excellence and Digital Programs will drive efficiencies and cost containment • Safety and health of our people is our priority • Our Early Value Str
Slide 29: Strategic Outlook | Growing your minerals business
Strategic Outlook | Growing your minerals business • Remain committed to grow into a global diversified minerals business • In pursuit of acquisitive growth opportunities within minerals space and have built a pipeline • Copper remains a sought-after mineral • Moderate M&A activity in manganese • Ex
Slide 30: Strategic Outlook | Growing your energy business
Strategic Outlook | Growing your energy business • 68MW Lephalale Solar Project construction to commence • Partnership with Enertrag to develop opportunities in wind and solar • Acquisition of licensed sites for wind and solar • Acquisitions will form part of our growth strategy 30
Slide 31: Macro environment | Constraints remain to challenge our business
Macro environment | Constraints remain to challenge our business European energy Logistics challenges continue security remains fluid to constrain access to market Softer thermal coal prices China reopening likely to anticipated drive iron ore price recovery Export demand for Exxaro’s high Local ele
Slide 32: Conclusion
Conclusion Sustainable, Growth and Impact strategy remains intact The best place to Optimal pathway to energy transition be is in our future! Growth in Renewable Energy business goes beyond decarbonisation Taking our employees, communities and all our stakeholders along with us is critical 32
Slide 33: Thank you
Thank you
Slide 34: Additional Information
a Additional Information
Slide 35: Strategic Outlook | Concrete plans to drive decarbonisation
Strategic Outlook | Concrete plans to drive decarbonisation 900 Further opportunities to reduce emissions are being evaluated and considered including: 800 25.5 84.7 59.2 700 Expected reduction Divestment from current 208 initiatives 600 Biofuels Compressed Electric HD Carbon Capture 43% natural gas
Slide 36: Coal | Product volumes
Coal | Product volumes ‘000 tonnes FY20 FY21 FY22 FY23* FY24* FY25* Thermal production 44 933 40 375 41 136 41 255 39 891 40 358 Grootegeluk 26 554 25 359 27 849 26 842 26 606 26 802 Matla 6 153 5 903 6 157 5 820 4 385 4 735 ECC 3 834 2 789 Leeuwpan 3 720 2 396 2 645 3 937 4 054 4 070 Belfast 2 850
Slide 37: Coal | Sales volumes
Coal | Sales volumes ‘000 tonnes FY20 FY21 FY22 FY23* FY24* FY25* Sales to Eskom 30 861 30 361 31 549 31 454 29 486 29 834 Grootegeluk 24 704 24 462 25 392 25 663 25 123 25 123 Matla 6 157 5 899 6 157 5 791 4 363 4 711 Other domestic thermal coal sales 2 692 3 810 4 639 6 625 6 990 6 520 Grootegeluk
Slide 38: Coal | Market volumes per mine
Coal | Market volumes per mine Domestic market Export market Million tonnes Million tonnes 39.2 12.2 36.9 37.7 37.5 34.6 35.2 7.6 5.5 6.0 5.2 5.2 FY20 FY21 FY22 FY23* FY24* FY25* FY20 FY21 FY22 FY23* FY24* FY25* Grootegeluk 26.6 26.7 27.5 28.3 27.8 27.8 Grootegeluk 2.0 1.4 1.5 1.8 2.1 2.3 Matla 6.2
Slide 39: Coal | Sensitivities – FY22
Coal | Sensitivities – FY22 Measure Sensitivity Impact on NOP* (Rm) Royalty cost 1% (450) 450 Domestic sales volumes 1% (338) 338 Environmental rehabilitation discount rate 1% (218) 194 Production cost 1% (196) 196 Export sales volumes 1% (155) 155 Exchange rate 10 cent (118) 118 Export price per to
Slide 40: Financial overview | Group IFRS
Financial overview | Group IFRS R million 1H22 2H22 % change FY21 FY22 % change Revenue 22 330 24 039 8 32 771 46 369 41 Operating expenses (13 134) (17 015) (30) (23 094) (30 149) (31) Net operating profit 9 196 7 024 (24) 9 677 16 220 68 Net operating profit margin (%) 41 29 (12) 30 35 5 Post-tax
Slide 41: Financial overview | Non-core adjustments
Financial overview | Non-core adjustments* R million 1H22 2H22 FY21 FY22 Coal (78) (10) (988) (88) Impairment of assets at Thabametsi (21) Loss on disposal of subsidiaries (946) Loss on disposal of non-core assets (78) (10) (21) (88) TiO2: Disposal of Tronox investments 2 215 Other (10) (2) 456 (12)
Slide 42: Financial overview | Group adjusted
Financial overview | Group adjusted* R million 1H22 2H22 % change FY21 FY22 % change Revenue 22 330 24 039 8 32 771 46 369 41 Operating expenses (13 046) (17 003) (30) (24 777) (30 049) (21) Add back: Depreciation 1 319 1 363 3 2 677 2 682 EBITDA 10 603 8 399 (21) 10 671 19 002 78 EBITDA margin (%)
Slide 43: Group revenue | Strong coal prices
Group revenue | Strong coal prices R million (15) 472 (1 762) 2 115 1 135 (1 538) Coal Price 11 424 53 32 (87) 24 46 369 +R13bn Coal Volumes -R403m 1 745 32 771 Exchange rate Price Volume R1.75 Energy Actual Domestic Ferrous Export Domestic Energy Ferrous Exchange revenue Export Matla ECC * Actual &
Slide 44: Group EBITDA | Record EBITDA despite cost pressures
Group EBITDA | Record EBITDA despite cost pressures R million 14 888 (2 161) 8 (213) (90) (786) (2 244) 682 (786) (261) (706) Inflationary 19 002 impact 10 671 Alternative export Selling and and buy-ins Royalties Commercial ECC * Actual Inflation Employee Rehabilitation Operational Forex General **
Slide 45: Group adjusted earnings | Portfolio delivering returns
Group adjusted earnings | Portfolio delivering returns R million 1H22 2H22 % change FY21 FY22 % change Net operating profit 9 284 7 036 (24) 7 994 16 320 104 Income from investments 6 55 6 (89) Net financing cost – Exxaro excluding Cennergi (27) 153 (129) 126 198 Net financing cost – Cennergi (239)
Slide 46: Financial overview | EBITDA vs. Cash generated by operations
Financial overview | EBITDA vs. Cash generated by operations R million 1H22 2H22 FY21 FY22 EBITDA 10 603 8 399 10 671 19 002 Adjustments: Expected credit losses adjustment 78 1 (57) 79 Write-off of trade and other receivables and ESD loans 2 2 92 4 Movement in provisions 45 438 16 483 Foreign curren
Slide 47: Capital funding structure | Exxaro excluding Cennergi
Capital funding structure | Exxaro excluding Cennergi R million Facilities available Undrawn/ Undrawn/ Drawn committed unissued Term loan and revolving facility 3 850 3 250 DMTN* programme 643 4 000 Interest-bearing borrowings 4 493 Interest capitalised 60 Lease liabilities 420 Capitalised transacti
Slide 48: Capital funding structure | Cennergi
Capital funding structure | Cennergi R million Facilities available Undrawn/ Drawn committed Project financing 4 551 410 Interest-bearing borrowings 4 551 Interest capitalised 3 Lease liabilities 58 Maturity profile of debt Total interest-bearing debt 4 612 Repayment period 4 612 Net cash and cash e
Slide 49: Group results | Net debt/(cash) FY22
Group results | Net debt/(cash) FY22 3 718 (18 863) 1 652 (5 909) (5 241) 9 665 785 (742) Cennergi 4 482 Rest of Exxaro (764) Cennergi 4 412 4 121 Rest of Exxaro (9 653) 332 Other financing Tax 31 Dec generated Dividends Capex Dividends Eyesizwe 31 Dec received 2021 2022 Cash cost Net paid 49
Slide 50: Performance | Key indicators
Performance | Key indicators Target FY21 FY22 Internal key performance indicators EBITDA interest cover* # (times) >4 75 Net debt/(cash): equity* (%) <40 (2) (17) Net debt: EBITDA* ## (times) <1.5 Return on total capital employed (%) >20 36 45 Bank covenants** Net debt/(cash): equity (%) <80 (1) (16