Sibanye Stillwater Limited · JSE:SSW
Sibanye Stillwater — H1 2021 Earnings Presentation
41 slides from Sibanye Stillwater's earnings presentation, Aug 26, 2021
Slide 1: H1 2021 results and Group strategic update
H1 2021 results and Group strategic update for the six months ended 30 June 2021 26 August 2021
Slide 2: H1 2021 results & Group strategic update
H1 2021 results & Group strategic update 26 August 2021
Slide 3: Disclaimer
Disclaimer The information in this announcement may contain forward-looking statements within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, among others, those relating to Sibanye Still
Slide 4: Key highlights | H1 2021
Key highlights |H1 2021 Safe & healthy workforce • Implemented strategies to address safe production regression with tangible improvements evident • Covid-19 vaccination roll-out progressing well Embedding ESG excellence • Developed a comprehensive Sustainability strategy that addresses our ESG focu
Slide 5: Diversification and growth underpins record earnings & cash flow
Diversification and growth underpins record earnings & cash flow Earnings¹ % Production % 3,000 3 13% 2.6 2.5 22% 2.4 2,500 Net debt: adjusted EBITDA ratio Adjusted EBITDA (US$ million) 2 2,000 1.3 17% 1,500 1 H1 2021 1,000 0.55 500 0 (0.06) 0 (0.14x) net cash (500) (1) 48% H1 H2* H1* H2 H1 H2 H1 20
Slide 6: Operational and financial results
Operational and financial results Large, diversified production base underpins record earnings
Slide 7: Safe production - addressing behavioural issues and real risk reduction
Safe production - addressing behavioural issues and real risk reduction • Culture transformation through Values based decision making is a key strategic thrust, in addition to real risk reduction • “Rules of life” awareness campaign rolled out to underpin and strengthen the existing Zero harm safety
Slide 8: SA PGM operations – stellar performance
SA PGM operations – stellar performance SA PGM operations – Underground and surface production and AISC • 42% higher 4E PGM production at 894,165 4Eoz 1,200 60,000 • AISC well controlled – 10% reduction year on year at R16,921/4E oz (US$1,163/4E oz) 50,000 • 61% higher 4E PGM basket price at R53,629
Slide 9: US PGM operations – stable year-on-year
US PGM operations – stable year-on-year US PGM operations – Mined production (excl recycling) and AISC • Flat production of 298,301 2E oz year-on-year due to safety incident in June 2021 and resultant 21 day 350 2,500 stoppage (~20k 2E oz lost) at Stillwater mine 300 - update to annual guidance as a
Slide 10: PGM recycling – an under-recognised contribution of value
PGM recycling – an under-recognised contribution of value PGM recycling, adj. EBITDA and net interest received • 3E PGM Recycling output (403koz) 500 60 • US$50m adjusted EBITDA from recycling operations and US$12m in net interest income from short-term 450 advances to recycle customers 50 400 • Adj
Slide 11: SA gold operations – solid performance
SA gold operations – solid performance SA gold² – Underground and surface production with AISC & gold price • 29% higher production (519koz) post COVID-19 impact in H1 2020 800 1,250,000 • DRDGOLD production 15% higher (88koz) at an AISC R662,757/kg (US$1,417) 1,000,000 600 • AISC of R791,171/kg2 (U
Slide 12: 2021 Guidance
2021 Guidance5 • US PGM and cost guidance has been updated due to the impact of the accident • SA PGM capital guidance has been reduced due to real savings , delayed project and capital development • SA gold – updates to cost and capital made due to above inflation cost increases and inclusion of Bu
Slide 13: Financial results & optimising capital allocation
Financial results & optimising capital allocation
Slide 14: Income statement for the six months ended June 2021
Income statement for the six months ended 30 June 2021 H1 2021 H1 2020 H1 2021 H1 2020 Figures are in millions unless otherwise stated (Rm) (Rm) (US$m) (US$m) 63% increase in revenue, attributable to all segments Revenue 89,953 55,019 6,182 3,301 Cost of sales, before amortisation & depreciation (48
Slide 15: Strong dividend flow sustained following resumption in H1 2020
Strong dividend flow sustained following resumption in H1 2020 • 35% dividend declaration on H1 2021 normalised earnings at top end of dividend policy Dividend analysis Interim H1 2021 Interim H1 2020 Final H2 2020 Total 2020 full year Rm R24,411 R8,845 R21,762 R30,607 Normalised earnings US$m1 US$1
Slide 16: Significant cash generation benefitting all stakeholders
Significant cash generation benefitting all stakeholders Cashflow (Rm) 70,000 39,729 (4,469) 60,000 (5,586) 512 (478) (8,491) 50,000 (1,818) (9,660) 40,000 (742) (2,316) 30,000 (751) (5) 5,925 (68) 26,097 20,240 20,000 10,000 0 Opening Cash Working Capex Interest Interest Taxes Royalties Dividend Sh
Slide 17: Disciplined allocation of capital in line with stated framework
Disciplined allocation of capital in line with stated framework Performance H1 2021* • Reinvesting in operational sustainability. SA project capital – estimated at R6.3bn (2021 total ~R845m) • Liquidity buffer of R5bn; Debt buffer R15bn/US$1bn and improved credit metrics • Returning cash to sharehol
Slide 18: Our role in a greener future
Our role in a greener future
Slide 19: Sustainability themes to deliver on our ESG commitments
Sustainability themes to deliver on our ESG commitments Develop a climate change resilient business • Risk mitigation through • Building a Green metals business • Biodiversity in mitigation & enhance rehabilitation - Water demand and intensity design enhancements • Road to Carbon neutral • Global fu
Slide 20: 100MW generation license threshold increase
100MW generation license threshold increase Schedule 2 of the Electricity Regulation Act was amended by the DMRE, lifting the own-use generation licensing threshold to 100MW, thereby enabling derisking of renewable energy projects as well as acceleration execution by 3-6 months1 Progressive changes
Slide 21: Progress on our path to carbon neutral
Progress on our path to carbon neutral Several renewable energy projects are approved for execution for our SA operations, which contribute 97% of our Scope 2 emissions2 Renewable energy forms our strongest 50MW SA Gold Solar project decarbonisation lever as 88% of our • Site secured and permitted.
Slide 22: Building a Green metals business
Building a Green metals business • PGMs – current and future role – cleaning the air and application in fuel cells • Recycling – leverage existing business through growth, inventory management and unlocking logistic challenges • Tailings re-treatment - Producing the greenest metals while cleaning up
Slide 23: PGMs – critical to a cleaner, greener environment
PGMs – critical to a cleaner, greener environment 44 ruthenium Ru Demand secure over an extended horizon Conventional applications 101.1 • Removing noxious gasses from internal combustion engines • Stringent and increasing environmental legislation drives higher PGM loadings 77 • Ongoing Industrial
Slide 24: PGM market update
PGM market update • Supply disruptions from Q1 2021 eased in Q2 2021 • Recycling expected to increase ~15% year on year as high rhodium and palladium prices continue to incentivise metal returns to market despite supply chain disruptions and financing challenges • Demand recovery impacted by Delta v
Slide 25: Recycling PGMs – enabling multiple utilisation of these unique metals
Recycling PGMs – enabling multiple utilisation of these unique metals • Our US recycling business is one of the largest recyclers of PGMs from spent auto catalysts • The most environmentally friendly PGM’s emitting - 6x less tons of CO2 - 63x less water - 90x less waste than our underground mines •
Slide 26: Production of Green metals from tailings retreatment
Production of Green metals from tailings retreatment • Producing the greenest gold through our 50.66% investment in DRDGOLD • While also removing the environmental legacy of SA gold mining - hundreds of hectares cleared for social and industrial development - vegetating tailings depositions reducing
Slide 27: Battery metals
Battery metals Penetration of BEV’s into light duty automotive sector following an accelerated trajectory Indexed BEV production forecast 2019 = 100 • Chinese and European markets at the forefront 700 • increasing regionalisation of mobility battery metal supply chains Recent forecasts expected 600
Slide 28: Initial battery metals steps
Initial battery metals steps • Both Keliber and Sandouville are ideally located (in Finland and France) to access European BEV markets • Building on and leveraging off existing marketing relationships with OEMs • Strategic partnership with Johnson Matthey to drive more efficient uses of PGMs and met
Slide 29: Putting the puzzle pieces together
Putting the puzzle pieces together Green energy metals 3 28 1 27 29 25 Li Lithium Ni Nickel H Hydrogen Co Cu Mn Cobalt Copper Manganese Graphite 92 Recycling U Uranium Tailings retreatment PGMs 46 78 45 77 44 Pd Palladium Pt Platinum Rh Rhodium Ir Iridium Ru Ruthenium Future green energy Positioning
Slide 30: New horizons for Uranium - a significant element in our green metals portfolio
New horizons for Uranium - a significant element in our green metals portfolio Nuclear emerging as a zero-carbon baseload generation option essential for global decarbonisation • Commitment growing, especially in Asia Pacific region • 125 GW pipeline of new nuclear capacity Uranium market to move in
Slide 31: Ongoing strategic value creation
Ongoing strategic value creation • Pivoting into green metals through the combination of PGM’s, recycling, tailings re-treatment, battery metals and uranium • First mover advantage having started our analysis of this sector through the acquisition of SFA Oxford more than 2 years ago • Keliber and Sa
Slide 32: Continued focus and delivery on our strategic intent
Continued focus and delivery on our strategic intent Building an operating portfolio Strengthen our position of green metals as a leading international and related mining Group by: technologies 31
Slide 33: Conclusion
Conclusion cojbanue StillwaEer
Slide 34: Segmental life of mine net asset value composition
Segmental life of mine net asset value composition Sibanye-Stillwater NAV Analysis – at consensus prices4 R59 per share US PGM operations SA PGM operations SA gold operations SA projects (10%*) Net Cash (30Jun2021) Total Sibanye-Stillwater Market Cap (5%*) (7.5%*) (7.5%*) NAV Significant upside base
Slide 35: 2021 Investor days
Join our 2021 Investor days 99September September2021 2021 22 22September September2021 2021 More information on times and links will be available in due course at www.sibanyestillwater.com 34
Slide 36: Superior value creation – current and for the future
Superior value creation – current and for the future • 2013-2019: Cumulative Normalised earnings - R9.9bn (US$806m) • H1 2021: R24.4bn (US$1.68bn)3 – 85% of 2020 full year earnings and Improved multiples more than preceding years profitability Advancing complementary green metals Exposure to • 2013-
Slide 37: Making real changes to transform and create value for all stakeholders
Making real changes to transform and create value for all stakeholders Restructuring of the Marikana empowerment structure Social relief via BEE structures & employee profit share schemes • Previous structure non-beneficial with substantial debt burden • R145m paid to Rustenburg BEE structures & R64
Slide 38: Contacts
Questions? Contacts James Wellsted/ Henrika Ninham/ Chris Law ir@sibanyestillwater.com Tel: +27(0)83 453 4014/ +27(0)72 448 5910/ +44 (0)7923126200 Website: www.sibanyestillwater.com Tickers: JSE: SSW and NYSE: SBSW 37
Slide 39: H1 2021 results and Group strategic overview
H1 2021 results and Group strategic overview for the six months ended 30 June 2021
Slide 40: Appendices
Appendices
Slide 41: Disciplined allocation of capital in line with stated framework
Disciplined allocation of capital in line with stated framework Performance H1 2021 • Aim: Reinvesting in operational sustainability. SA project capital – R6.3bn ✓ K4 , Klipfontein and Burnstone – administration and project set-up started in H1 2021. R18m spend to date (2021 total ~R845m) • Aim: Liq