Slide 1: Financial Results Presentation for the Half-Year Ended 30 June 2018
FINANCIAL RESULTS PRESENTATION FOR THE HALF-YEAR ENDED 30 JUNE 2018 25 AND 26 JULY 2018
Slide 2: PERFORMANCE SUMMARY 02 BUSINESS ENVIRONMENT 03 RESULTS ANALYSED
01 PERFORMANCE SUMMARY 02 BUSINESS ENVIRONMENT 03 RESULTS ANALYSED 04 SEGMENTAL PERFORMANCE 05 KEY DRIVERS AND FOCUS
Slide 3: Executives
02 EXECUTIVES
Slide 4: Performance Summary
PERFORMANCE SUMMARY
Slide 5: Performance Summary
04 PERFORMANCE SUMMARY › Revenue +24% to R10 473m » Momentum maintained in existing business » Contribution from acquisitions » Foreign and export revenue = 40% › Profit from operations +35% to R911m › HEPS +19% to 458c › Trading margin up to 8,7% › EBITDA +28% to R1 258m › Acquisitions finalised »
Slide 6: Safety: TRIR
0,47 0,33* Jun 18 * Excluding acquisitions
Slide 7: Business Drivers
BUSINESS DRIVERS
Slide 8: Historical Price Performance – Gold, Platinum and Copper
07 BUSINESS DRIVERS HISTORICAL PRICE PERFORMANCE – GOLD, PLATINUM AND COPPER
Slide 9: Historical Price Performance – Coal and Iron Ore
08 BUSINESS DRIVERS HISTORICAL PRICE PERFORMANCE – COAL AND IRON ORE
Slide 10: ZAR/US$ Exchange Rate
09 BUSINESS DRIVERS ZAR/US$ EXCHANGE RATE
Slide 11: Brent Crude Oil
10 BUSINESS DRIVERS BRENT CRUDE OIL
Slide 12: Business Drivers: Ammonia
1 1 BUSINESS DRIVERS OA=CcrI' AMMONIA good chemistry ZAR Source: AEL US$ 8 000 800 7 000 700 ZAR ave. ZAR ave. 6 000 1H17 = 4 823,00 1H18 = 4788,83 | 600 5000 _o QD fleece eee 4000 30000 ON frtttteety ¥oreee \ 4 US$ ave. 2 000 US$ ave. 1His = 324,78 | 200 1H17 = 291,47 1 000 100 0 0 ie) oO o o o i>)
Slide 13: SA Mining Volumes
12 BUSINESS DRIVERS SA MINING VOLUMES
Slide 14: SA Manufacturing Volumes
13 BUSINESS DRIVERS SA MANUFACTURING VOLUMES
Slide 15: Results Analysed
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Slide 16: Earnings Analysed
15 EARNINGS ANALYSED › Profit from operations +35% to R911m 959 › EBITDA +28% to R1 258m 894 842 › HEPS +19% to 458c 818 791 › Trading margin = 8,7% (’17: 8,0%) › RONA of 16,0% (’17: 14,8%) › Tax rate 34% (’17: 31%) 565 » Foreign withholding tax » Once-off restructuring 458 › GCR rating of “A” with
Slide 17: Cash
16 CASH 6,000 115 5,500 5,409 › Capex = R436m » R113m for expansion projects 5,000 95 » R323m for maintenance incl. AEL boiler 4,500 statutory shutdown, air emission abatement projects at AEL Nitrates 4,000 75 › Trade WC to revenue of 20,8% 3,500 (18,5% in ’17) 3,000 55 » Customer terms » Acquisitio
Slide 18: Property & Corporate
17 PROPERTY & CORPORATE 1H18 1H17 Change (Rm) (Rm) (%) Corporate centre 56 76 26 Net defined-benefit costs 27 27 – Long-term incentive scheme costs 48 24 (100) Corporate spend before non-recurring items 131 127 (3) PRMA settlement costs (once-off) – 11 100 Total corporate spend for the period 131 13
Slide 19: Acquisitions
18 ACQUISITIONS 2018 2017 Growth (%) Operations Operations excluding Total Total excluding Rm acquisitions Acquisitions reported reported acquisitions Acquisitions Overall Revenue 9 127 1 345 10 473 8 478 8 16 24 Profit from operations 764 147 911 677 13 22 35 Headline earnings 443 40 483 407 9 10 1
Slide 20: Performance by Segment
OA=CI good chemistry PERFORMANCE BY SEGMENT
Slide 21: Strategic Pillars
OA=CI good chemistry CHEMICAL INITIATIVES CHEMFITe ImproChem juch sphalt WATER & PLANT & PROCESS ANIMAL HEALTH CHEMICALS
Slide 22: Summary by Segment
21 SUMMARY BY SEGMENT MINING WATER & PLANT & FOOD & CHEMICALS GROUP SOLUTIONS PROCESS ANIMAL BEVERAGE HEALTH REVENUE REVENUE REVENUE REVENUE REVENUE REVENUE R5 021m R678m R1 882m R552m R2 339m R10 473m 9,8% 4,1% 98,8% 2,6% 38,1% 23,5% PROFIT PROFIT PROFIT PROFIT PROFIT PROFIT FROM OPS FR
Slide 23: Contribution Analysis by Segment (%)
22 CONTRIBUTION ANALYSIS BY SEGMENT (%) 1H18 Outer circle 1H17 Inner circle Revenue (%) Profit/(loss) from Excludes inter-segment revenue operations (%) 2 -8 21 2 -14 19 26 48 24 6 57 5 54 70 11 4 3 4 8 12 18 13 6 9 Mining Solutions Water & Process Plant & Animal Health Food & Beverage Che
Slide 24: Mining Solutions
MINING SOLUTIONS
Slide 25: Mining Solutions 1H18: Revenue by Mineral Mined (%)
24 MINING SOLUTIONS 1H18: REVENUE BY MINERAL MINED (%)
Slide 26: Mining Solutions
25 MINING SOLUTIONS › Overall global commodity prices stable at higher levels › Upward trend in mining activity outside SA and more VOLUME 4,2% positive sentiment wrt new investments › 54% of Mining Solutions’ revenue generated outside SA REVENUE R5 021m 9,8% › Socio-political instability and la
Slide 27: Mining Solutions Explosives
26 MINING SOLUTIONS EXPLOSIVES › Excellent TP improvement, notwithstanding strong ZAR › Overall bulk explosives volumes +9,9% » Pleasing performance outside SA » New contracts ramping up › Overall initiating systems volumes -12,1% SA › Explosives volumes -4,9% » Optimum Coal mine business rescue » L
Slide 28: Mining Solutions Explosives Cont.
27 MINING SOLUTIONS EXPLOSIVES CONT. Rest of Africa › Explosives volumes +10,6% » Supported by copper, cobalt, diamond and gold businesses All equipment mobilised to support Francophone growth DRC volume improvement on back of commodity prices and lower rainfall Solid growth in Botswana Asia P
Slide 29: Mining Solutions Chemicals
28 MINING SOLUTIONS CHEMICALS › Volumes of extractive chemicals +3,6% » High demand for collectors in both SA and Central African region Global competitor supply shortages and Buoyant copper mining sector » Flocculant volumes lagging Slower recovery of lost PAM export volumes than expected – A
Slide 30: Current Pre-Operational Mining Projects
29 CURRENT PRE-OPERATIONAL MINING PROJECTS Development Rest of South stage Africa Africa Indonesia LatAm Australia Exploration 1 469 303 219 2 210 3 527 Prefeasibility 76 42 6 127 139 Feasibility 163 75 42 171 292 Construction 30 18 22 46 23 TOTAL 1 738 438 289 2 554 3 981 Source: extract, GlobalDat
Slide 31: Water & Process
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Slide 32: Water & Process
31 WATER & PROCESS › Export volumes delayed » Credit management processes VOLUME 15,4% » In hand for 2H › Reduced dosage of water treatment chemicals in 1Q REVENUE R678m » Western Cape drought effects 4,1% » 2H outlook more positive thus far › Unplanned extension of refinery shutdown PROFIT FROM
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Slide 34: Plant & Animal Health
33 PLANT & ANIMAL HEALTH › Segmental results boosted by inclusion of Schirm from February Nulandis VOLUME 76,3% › Difficult 1H as drought effects persisted in Western Cape and other SADC countries » 2H outlook more positive thus far REVENUE R1 882m 98,8% › Biocult: distribution agreements being
Slide 35: ENS
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Slide 36: Food & Beverage
35 FOOD & BEVERAGE › Volume and TP reflect shift in juice business from bulk trade to formulated products VOLUME 4,0% › Revenue growth driven by Dairy, Health & Nutrition products, Commodities and formulated juices » Incl. exports REVENUE R552m › Perlite business adversely affected by poor wine
Slide 37: Chemicals
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Slide 38: Chemicals Performance
37 CHEMICALS PERFORMANCE › Momentum from 4Q17 sustained, particularly in 1Q18 » Pleasing performance in context of SA manufacturing sector VOLUME >100% › Good cash generation by operations › Traded and manufactured volumes up overall » Sulphuric acid exports REVENUE R2 339m › Working capital adver
Slide 39: Key Drivers and Focus
KEY DRIVERS AND FOCUS
Slide 40: Key Drivers: Short- to Medium-Term
39 KEY DRIVERS SHORT- TO MEDIUM-TERM Exchange rate volatility Commodity prices GDP growth in SA Finalisation of SA’s Mining Charter Future of SA’s platinum mining sector Government spend on infrastructure in SA Extreme weather events Impact of shortages of specialist skills (Germany and US)
Slide 41: Focus to Year-End
40 FOCUS TO YEAR-END Complete the integration of acquisitions and extract value Claw back working capital Innovation – Business of Tomorrow
Slide 42: Disclaimer
41 DISCLAIMER This document has been prepared and issued by and is the sole responsibility of the management of AECI Ltd (the “Company”) and its subsidiaries. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or s
Slide 43: OA=CI
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