Sibanye Stillwater Limited · JSE:SSW
Sibanye Stillwater — H1 2024 Earnings Presentation
47 slides from Sibanye Stillwater's earnings presentation, Sep 12, 2024
Slide 1: Operating and financial results H1 2024
Operating and financial results H1 2024 Delivering on our commitment to strengthen the Balance sheet while also increasing liquidity
Slide 2: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this presentation
Slide 3: Agenda
Agenda 1 Strategic context 2 H1 2024 salient features 3 Financial review 4 Regional operating reviews 5 Conclusion www.sibanyestillwater.com 2
Slide 4: Our strategy to enable superior shared value delivery remains relevant
Our strategy to enable superior shared value delivery remains relevant 3 STRATEGIC FOUNDATION 2 STRATEGIC ESSENTIALS STRATEGIC DIFFERENTIATORS 1 Ensure safety Recognised and well-being as a force for good Unique global portfolio of green Prospering in every region metals and energy solutions in whic
Slide 5: Understanding mobility is important in predicting the demand for green metals
Understanding mobility is important in predicting the demand for green metals • Market share of electric powertrains will continue to increase in coming years • Technology and scale will solve the current BEV1 constraints of; - Range anxiety, charging infrastructure and charging time - Higher upfron
Slide 6: PGM market outlook
PGM market outlook Current and near-term price not Medium term outlook (2 to 10 years) Long term (>10 years), new applications reflecting market fundamentals for PGMs remains robust are needed to support ongoing demand • Current and expected short-term deficits • Declining primary supply from Southe
Slide 7: Fundamental 10-year 2E PGM outlook (platinum and palladium)
Fundamental 10-year 2E PGM outlook (platinum and palladium) 2E market balance 4 000 3 000 2 000 1 000 koz 0 (1 000) (2 000) (3 000) 2019A 2020A 2021A 2022A 2023A 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2E market balance Sibanye-Stillwater house view PGMs in deficit in the medium
Slide 8: Lithium deficits expected in the medium term
Lithium deficits expected in the medium term Lithium supply-demand balance • Lithium prices have declined during 2024 LCE kt US$/t but are expected to stabilise later this year 200 80 000 • The SFA price forecast assumes that all probable and low-risk lithium projects are 0 70 000 fully developed •
Slide 9: H1 2024 salient features
H1 2024 salient features
Slide 10: Salient features for the six months ended 30 June 2024 (H1 2024)
Salient features for the six months ended 30 June 2024 (H1 2024) Increasing Balance Sheet strength and liquidity by > R25bn/US$1.4bn • H1 Balance sheet initiatives - Debt covenants uplifted to 3.5x until June 2025 and 3.0x until December 2025 - Currency-geared collar implemented at SA PGM operations
Slide 11: H1 2024 increasing Balance sheet strength and liquidity by R25.2bn (US$1.4bn)
H1 2024 increasing Balance sheet strength and liquidity by R25.2bn (US$1.4bn) Commodity, Funding entity or facility Value Status PROJECT CAPITAL Covenant uplift ZAR RCF and US$ RCF ~R13bn (US$705m)1 benefit2 Complete US$35m - US$70m SRPM Complete Currency hedging (R18.00/US$ / R20.09/US$) CASH RESER
Slide 12: US PGM operations initiate new restructuring due to lower palladium prices
US PGM operations initiate new restructuring due to lower palladium prices Sandouville SA region Terminated Restructured contract, • Restructuring for a 2E PGM basket price below US$1,000/2Eoz for profitability GalliCam studies ongoing • Terminating high-cost production resulting in a reduction of 2
Slide 13: Maintaining financial flexibility: Adjusted EBITDA and gearing
Maintaining financial flexibility Adjusted EBITDA¹ and gearing Leverage 4 covenant 4 3.5 3 3 2.60 Adjusted EBITDA2 (US$ billion) 2.50 adjusted EBITDA2 : X times 2.40 Net debt/(cash)3: 2 2 • Proforma Net debt: 1.30 Adjusted EBITDA of 1.29x 1.43 including the R1.8bn gold 1 1.29 1 0.58 prepay arrangeme
Slide 14: Salient features for the six months ended 30 June 2024 (H1 2024)
Salient features for the six months ended 30 June 2024 (H1 2024) Protecting the Balance sheet Embedding ESG Delivering operational Financial > R25bn/US$1.4bn improvements and sustainability performance • H1 Balance sheet initiatives • Ongoing improvements in • SA PGM - profitable and solid • Earning
Slide 15: Unlocking latent value potential
Unlocking latent value potential • SA uranium assets - 32.2mlbs U3O8 Cooke tailings resource review completed and feasibility study to commence in 2025 - Near to mid-term uranium production potential with gold by-product credits - Opportunity to build a uranium business leveraging off Cooke’s low te
Slide 16: Financial review
Financial review Charl Keyter: Chief Financial Officer
Slide 17: Income statement for the six months ended 30 June 2024
Income statement for the six months ended 30 June 2024 H1 2024 H1 2023 H1 2024 H1 2023 9% decrease in revenue, mainly attributable to Figures are in millions unless otherwise stated (Rm) (Rm) (US$m) (US$m) PGM and gold segments Revenue 55,204 60,568 2,949 3,326 SA PGM US PGM U/g US PGM recycling SA
Slide 18: Manageable debt maturities with strong liquidity headroom (Rbn)
Manageable debt maturities with strong liquidity headroom (Rbn) Borrowing maturity ladder in R billion at 30 June 2024 • Borrowings of R34.2bn (US$1.9bn), cash on hand of R15.5bn (US$0.8bn) and net debt Borrowing maturities Gross and net debt Liquidity headroom of R18.7bn (US$1.0bn) 39.4 • Liquidity
Slide 19: Cyber-attack post H1 2024
Cyber-attack post H1 2024 • In July 2024, the Group experienced a cyber-attack impacting global ICT systems • An agile response was made by promptly isolating and disconnecting networks and systems across the business • Systems related to safety and employee wellbeing were prioritised during the rem
Slide 20: Regional operating reviews
Regional operating reviews Richard Stewart, Chief regional officer (CRO): SA region Mika Seitovirta, CRO: EU region Charles Carter, CRO: Americas region Robert van Niekerk: Chief Technical & Innovation Officer, Grant Stuart, Head of Recycling CRO: AUS region
Slide 21: Safe production: continued improvement delivers best ever safety performance
Safe production: continued improvement delivers best ever safety performance • Three fatalities during H1 2024 (6: H1 2023) • Lowest recorded serious injury frequency rate (SIFR) since 2013 • Consistent decline in high potential incidents (HPIs) reported since H2 2022 • SA gold operations achieved 1
Slide 22: Proactive restructuring to optimise operations
Proactive restructuring to optimise operations • Over the past 18 months the SA region has been restructured Repositioning steps (*updated with actuals) R / US$ for sustainability in the current price environment SA gold Beatrix 4 and KP 1 - Q1 2023 * R830m / US$48m - Closure of unprofitable operati
Slide 23: SA PGM operations - solid performance
SA PGM operations - solid performance • 4% higher 4E PGM production of 878,606¹ 4Eoz • AISC3 increased 9% to R21,533/4Eoz (US$1,150/4Eoz) - Additional 50% of Kroondal (~68,000 4Eoz) offset shaft restructuring and closures - Kroondal 17% increase due to lower production and closure of Klipfontein - R
Slide 24: SA gold operations – rebasing for profitability
SA gold operations1 – rebasing for profitability • SA gold production1 declined by 17% to 10,703kg (344,109oz) • AISC 18% higher to R1,251k/kg (US$2,078/oz) on lower volume despite absolute - Closure of Kloof 4 shaft accounted for 7% of decline AISC decrease by 3% - Increased seismic activity impact
Slide 25: Sandouville – evaluating transition to pCAM production
Sandouville – evaluating transition to pCAM production Nickel production, nickel equivalent basket price Sandouville nickel refinery and nickel equivalent sustaining cost • Total nickel production of 4,270 tonnes was 22% higher than for H1 2023 5 000 50 000 4 000 40 000 • Sustaining cost¹ declined b
Slide 26: Progressing the Keliber lithium project
Progressing the Keliber lithium project Project capital requirements1,2, spent and funding secured • Construction progressing on refinery, concentrator and first mine Capex Accumulated - On track to process third party material during H2 2025 (excluding Spent up to end of 2024 updated estimated sust
Slide 27: Postcard from Finland: Keliber lithium project
Postcard from Finland: Keliber lithium project The lithium refinery in construction in Kokkola (10 Aug 2024) Päiväneva concentrator – earthworks commencing (9 Aug 2024) Syväjärvi open pit mine site (9 Aug 2024) The lithium refinery in construction in Kokkola (10 Aug 2024) Päiväneva concentrator (9 A
Slide 28: Australian region – Century operations
Australian region – Century operations Payable zinc metal production, average Century zinc operation equiv. zinc concentrate price & AISC1 • Production of 42kt of payable zinc metal 60 3 000 • Adverse weather affected Q1 2024, production recovered during Q2 2024 • AISC1 improved by 8% to US$2,228/tZ
Slide 29: US PGM operations meeting plan but lower PGM prices require new restructuring
US PGM operations meeting plan but lower PGM prices require new restructuring • Benefits of restructuring evident in H1 2024 • Average 2E PGM basket price declined 30% to US$977/oz (R18,289/2Eoz) • 16% increase in 2E mined PGM production to 238,139 2Eoz the highest production • Adjusted EBITDA3 of U
Slide 30: Initiating new restructuring to drive towards a sustainable business through the price cycle
Initiating new restructuring to drive towards a sustainable business through the price cycle • 2E PGM basket prices below US$1,000/2Eoz requires further restructuring: - 2E annual production reduced by ~200,000 2E ounces from 2025 › Stillwater West to be placed on care & maintenance › Stillwater Eas
Slide 31: Initiating a new vision to drive towards a sustainable business through the price cycle
Initiating a new vision to drive towards a sustainable business through the price cycle • Continue best-in-class ESG performance - Build on stakeholder engagement integrity, especially through challenging times • Drive AISC to US$1,000/2Eoz - Ongoing cost optimisation - Optimise & resource load curr
Slide 32: US recycling – positive financial contribution with stable margins
US recycling – positive financial contribution with stable margins US PGM recycling – strong foundation with volumes stabilised PGM recycling production and gross margin % • Recycling volumes stabilised at 154,938 3Eoz fed 400 6% 3E PGM koz recycled • Lower vehicle scrapping rates globally Gross mar
Slide 33: Conclusion
Conclusion Neal Froneman, CEO
Slide 34: Operating guidance for 2024
Operating guidance for 2024⁴ Updates to the annual guidance include: • Managed SA gold production from 19,500kg (627koz) - 20,500kg (659koz) to 16,500kg (530koz) - 17,500kg (563koz)) and AISC from R1,100k/kg (US$1,955/oz) - R1,200k/kg (US$2,133/oz) to R1,250k/kg (US$2,222/oz) - R1,350k/kg (US$2,399/
Slide 35: The anti-fragility journey continues
The anti-fragility journey continues • Record safety performances with a continuous focus on eliminating fatalities and HPI reduction • ESG to remain embedded in the way we do business • Diversity, equity, inclusion and belonging (DEIB) to remain integral to our strategic differentiation • Fundament
Slide 36: Questions?
Questions? Email: ir@sibanyestillwater.com James Wellsted +27(0)83 453 4014 Henrika Ninham +27(0)72 448 5910 Sarel Barnard +27(0)82 376 9445 Tickers: JSE: SSW and NYSE: SBSW Website: www.sibanyestillwater.com
Slide 37: Appendix
Appendix
Slide 38: Manageable debt maturities with strong liquidity headroom (US$m)
Manageable debt maturities with strong liquidity headroom (US$m) Borrowing maturity ladder in US$ million at 30 June 2024 • Borrowings of R34.2bn (US$1.9bn), cash on hand of R15.5bn (US$0.8bn) and net debt Borrowing maturities Gross and net debt Liquidity headroom of R18.7bn (US$1.0bn) 1 294 2,136 •
Slide 39: Kroondal – change in processing contract increases costs but benefits revenue
Kroondal – change in processing contract increases costs but benefits revenue • Transition from PoC¹ to Toll processing² agreement - Kroondal to move from PoC to Toll treating processing agreement Toll is an agreed processing cost with ownership of metal retained by the miner, PoC involves the sale
Slide 40: Significant investment in lithium supply needed to meet BEV demand projections
Significant investment in lithium supply needed to meet BEV demand projections Primary lithium demand Net lithium demand LCE kt 2023 LCE kt Probably projects 1 032 984 (under construction) Low risk 1 379 1 226 possible projects Medium risk 1 640 1 564 possible projects 1 727 1 842 +15.7% p.a. 1 717
Slide 41: Rhodium market balance
Rhodium market balance Rhodium market balance 300 150 koz 0 (150) 2019A 2020A 2021A 2022A 2023A 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E Rhodium market balance House view Potential for switch back into Rh in industrial applications at lower price point Source: Company information;
Slide 42: Our group energy and decarbonisation strategy
Our group energy and decarbonisation strategy Progress towards on our commitment to carbon neutrality by 2040 in an economic and socially responsible manner 1. Ensure security of energy supply 2. Reduce absolute GHG emissions Carbon 3. Enhance sustainability through reduced neutrality by energy and
Slide 43: Our group energy and decarbonisation strategy (continued)
Our group energy and decarbonisation strategy (continued) Progress towards our commitment to carbon neutrality by 2024 in an economic and socially responsible manner Implementation levers SA electricity contributes 89% of Group operational emissions, focus on renewable energy sourcing Decarbonisatio
Slide 44: Disciplined delivery of capital allocation framework to protect the Balance sheet
Disciplined delivery of capital allocation framework to protect the Balance sheet • Continued investment in value accretive projects • H1 2024 project capex spend¹ - Burnstone R281m (US$15m), K4 R350m (US$19m) and Keliber R2.7bn (€135m) • Burnstone slowed down PROJECT CAPITAL • FY2024 Planned projec
Slide 45: Shared value - empowering employees with share options beyond salaries and wages
Shared value - empowering employees with share options beyond salaries and wages Cumulative pay-out of ~R1.75 billion to more than ~37,500 beneficiaries¹ over the last three years 2024* 2023* 2022* Number of beneficiaries = 37,369 Number of beneficiaries = 37,213 Number of beneficiaries = 37,990 Pay
Slide 46: Marikana renewal process – seeing tangible change due to efforts
Marikana renewal process – seeing tangible change due to efforts Honour Engage Create Delivering on commitments to widows and families The Company and its stakeholders have been Through the Renewal Programme and engagement • 16 homes committed by the Company, engaged through facilitated Pitsos with
Slide 47: Water management initiatives – closing the loop
Water management initiatives – closing the loop Southern Africa region Americas region Australian region Key achievements of our water treatment Stakeholder-supported water monitoring At Sibanye-Stillwater’s Mt Lyell copper/gold initiatives project in Tasmania, Australia the West Queen • The Good Ne