Slide 1: Interim Results Presentation for the half-year ended 30 June 2022
INTERIM RESULTS PRESENTATION FOR THE HALF‐YEAR ENDED 30 JUNE 2022 27 July 2022
Slide 2: Disclaimer
Disclaimer 1 This document has been prepared and issued by and is the sole responsibility of the management of AECI Ltd (the Company) and its subsidiaries (the Group). This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purc
Slide 3: Business results
2 Business results
Slide 4: Content
3 Content 3 Business results Financial performance Segment review Outlook and strategic priorities Q&A
Slide 5: Commitment to Zero Harm beyond compliance – record low TRIR of 0.15
Business results Financial performance Segment review Outlook and strategic priorities Q&A 4 Commitment to Zero Harm beyond compliance – record low TRIR of 0.15 4 Best‐ever safety performance Zero Milestones Our journey to Zero Harm 0,58 Milestones 2018 2019 2020 2021 H1 22 Fatalities 1 0 0 0 0 0,42
Slide 6: On track against our 2025 sustainability targets
Business results Financial performance Segment review Outlook and strategic priorities Q&A 5 On track against our 2025 sustainability targets 5 ESG scorecard Environment Social Governance Decrease potable water consumption Employee volunteerism Regulatory reporting Decrease discharge to sea or sewer
Slide 7: Operating environment
Business results Financial performance Segment review Outlook and strategic priorities Q&A 6 Operating environment 6 Customer demand Global supply‐ progressively returning Global energy crisis chain disruption to pre‐COVID levels Strong global Inflationary Cost of extreme commodity price pressure we
Slide 8: Market activity continues to improve albeit impacted by higher prices
Business results Financial performance Segment review Outlook and strategic priorities Q&A 7 Market activity continues to improve albeit impacted by higher prices 7 Macro economic indicators (1/2) ZAR/USD exchange rate SA mining volumes and sales 140 100,000 120 80,000 100 60,000 15.4 80 40,000 60 2
Slide 9: Market activity continues to improve albeit impacted by higher prices
Business results Financial performance Segment review Outlook and strategic priorities Q&A 8 Market activity continues to improve albeit impacted by higher prices 8 Macro economic indicators (2/2) Gold USD/oz PGMs USD/oz 2,000 30,000 3,000 25,000 2,500 1,800 20,000 2,000 15,000 1,500 1,600 10,000 1,
Slide 10: AECI Much Asphalt and AECI Schirm
Business results Financial performance Segment review Outlook and strategic priorities Q&A 9 AECI Much Asphalt and AECI Schirm 9 Business update • Business impacted by deferred road • AECI Schirm (USA) delivered to expectations infrastructure upgrades and new • Capex of R 504m (US$ 31m) to increase
Slide 11: Delivered record revenue, EBIT and HEPS performance
Business results Financial performance Segment review Outlook and strategic priorities Q&A 10 Delivered record revenue, EBIT and HEPS performance 10 Financial highlights H1 22 Revenue EBITDA EBIT HEPS 31% H1 22: R 15 505m H1 21: R 11 802m 6% H1 22: R 1 545m H1 21: R1 453m 11% H1 22: R 1 056m H1 21:
Slide 12: Financial performance
"a a OA=CIr ood Hemistry Financial performance
Slide 13: Record revenue, EBIT and HEPS as customer demand progressively returns
Business results Financial performance Segment review Outlook and strategic priorities Q&A 12 Record revenue, EBIT and HEPS as customer demand progressively returns 12 Summarised income statement Rm H1 22 H1 21 ∆% • Strong global commodity Revenue 15 505 11 802 31% prices resulted in revenue Operati
Slide 14: Revenue up across all segments – AECI Schirm impacted Agri Health EBIT
Business results Financial performance Segment review Outlook and strategic priorities Q&A 13 Revenue up across all segments – AECI Schirm impacted Agri Health EBIT 13 Performance by segment Rm Mining Water Agri Health Chemicals Revenue 7 749 2 889 3 921 979 % vs. H1 21 39% 29% 19% 32% EBITDA 974 41
Slide 15: Increase in inventory matched by higher short-term debt
Business results Financial performance Segment review Outlook and strategic priorities Q&A 14 Increase in inventory matched by higher short‐term debt 14 Summarised balance sheet Rm • Increase in accounts Assets H1 22 H1 21 FY 21 receivable, primarily driven Tangible assets 6 727 6 182 6 475 Intangib
Slide 16: Price increase primary driver of elevated inventory level
Business results Financial performance Segment review Outlook and strategic priorities Q&A 15 Price increase primary driver of elevated inventory level 15 Working capital and inventory drivers/analysis Ammonia IPP ZAR Working capital Rbn and days +83% FY 21 H1 22 83 97 68 71 66 67 2020 2021 2022 5.9
Slide 17: Gearing within expected range – primarily due to working capital
Business results Financial performance Segment review Outlook and strategic priorities Q&A 16 Gearing within expected range – primarily due to working capital 16 Net debt, gearing and cash movements Rm Gearing Gearing 24 % 44% ‐89 ‐412 1 720 ‐2 165 ‐2 760 ‐732 ‐543 ‐84 ‐41 ‐5 106 Net debt at Net cas
Slide 18: Net debt increased – still well within covenant levels
Business results Financial performance Segment review Outlook and strategic priorities Q&A 17 Net debt increased – still well within covenant levels 17 Debt maturity profile and covenants Rm Payment profile 2022 2023 up to 2027 Total Group loan covenants Actual DMTN auction ‐ 520 ‐ 520 Net debt to E
Slide 19: Strong organic growth investment to meet customer demand
Business results Financial performance Segment review Outlook and strategic priorities Q&A 18 Strong organic growth investment to meet customer demand 18 Capital expenditure Rm 847 833 • Capex requests increased to pre‐ 777 pandemic levels 748 19% • Strong focus on growth capex 39% 632 25% aligned t
Slide 20: We remain committed to returning value to shareholders
Business results Financial performance Segment review Outlook and strategic priorities Q&A 19 We remain committed to returning value to shareholders 19 Strong dividend track record Cents 685 515 570 570 6 7 6 5 505 366 414 470 149 156 180 194 100 2018 2019 2020 2021 2022 Dividends paid Rm 559 618 61
Slide 21: Capital allocation
Business results Financial performance Segment review Outlook and strategic priorities Q&A 20 Capital allocation 20 Capital allocation principles Clear capital allocation priorities Financial discipline and balance sheet management Capital commitment to 1 sustain operations Commitment to rating well
Slide 22: Segment review
21 Segment review
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Slide 24: Record revenue and EBIT – margin and working capital impacted by prices
Business results Financial performance Segment review Outlook and strategic priorities Q&A 23 Record revenue and EBIT – margin and working capital impacted by prices 23 AECI Mining Performance drivers Revenue by mineral mined % • Strong revenue growth of 39% driven by ammonia price which Gold increa
Slide 25: Resilient operating model in a difficult environment
Business results Financial performance Segment review Outlook and strategic priorities Q&A 24 Resilient operating model in a difficult environment 24 AECI Mining Mining Explosives Mining Chemicals • Bulk volumes up 6% • Metallurgical chemicals • Initiating systems volumes down 12% ─ Volumes up 8% •
Slide 26: Global status view of stage in mine life-cycle
Business results Financial performance Segment review Outlook and strategic priorities Q&A 25 Global status view of stage in mine life‐cycle 25 AECI Mining Number of mining projects Africa Development North Asia South (excluding South Middle stage America Pacific America Europe1 South Africa) Africa
Slide 27: Grow to become a leading global player
Business results Financial performance Segment review Outlook and strategic priorities Q&A 26 Grow to become a leading global player 26 AECI Mining: outlook High commodity price trends into H2 22 Will benefit from full impact of new business in 2022; notably Australia, Botswana and Ghana Continue to
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Slide 29: Well positioned for growth
Business results Financial performance Segment review Outlook and strategic priorities Q&A 28 Well positioned for growth 28 AECI Water Performance drivers Historical revenue H1 18 to H1 22 • Strong revenue growth of 29% to R 979m includes: Rm ̶ Market share gains in Public Water exports and high dem
Slide 30: Water sustainability projects
Business results Financial performance Segment review Outlook and strategic priorities Q&A 29 Water sustainability projects 29 AECI Water AECI Group Projects External projects AECI Mining Explosives, Modderfontein • 8 projects awarded and to be completed in H2 22 • Phase 2 effluent discharge reducti
Slide 31: Premier holistic water and waste-to-value solutions provider
Business results Financial performance Segment review Outlook and strategic priorities Q&A 30 Premier holistic water and waste‐to‐value solutions provider in key 30 geographies and high growth domains AECI Water: outlook Strong project pipeline in the Public, Mining and Industrial sectors both local
Slide 32: Agri Health
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Slide 33: Solid Plant Health results offset by weaker Schirm results
Business results Financial performance Segment review Outlook and strategic priorities Q&A 32 Solid Plant Health results offset by weaker Schirm results 32 AECI Agri Health Plant Health • Favourable climatic conditions drove sustained demand • Revenue up 23% to R 1 593m supported by higher commodity
Slide 34: Deliver a sustainable performance
Business results Financial performance Segment review Outlook and strategic priorities Q&A 33 Deliver a sustainable performance 33 AECI Agri Health: outlook Capacity increase at Biocult and on synthesis plant enabling volume growth both in SA and international markets Further expansion of agents net
Slide 35: Chemicals
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Slide 36: Regional champions in their local markets
Business results Financial performance Segment review Outlook and strategic priorities Q&A 35 Regional champions in their local markets 35 AECI Chemicals Performance drivers • All businesses recorded year‐on‐year revenue growth • Working capital increase based on supply‐chain challenges, but the bus
Slide 37: Well positioned for growth
Business results Financial performance Segment review Outlook and strategic priorities Q&A 36 Well positioned for growth 36 AECI Chemicals: outlook Continued expansion of product and service portfolio, including new products and agencies Strong key account management strategy across the segment enab
Slide 38: Outlook and strategic priorities
37 Outlook and strategic priorities
Slide 39: Outlook
Business results Financial performance Segment review Outlook and strategic priorities Q&A 38 Outlook 38 Well positioned to benefit further from the recovery in demand for our products and services in key sectors Annualised benefits of new business and market share gains Returns on growth capital in
Slide 40: Our global presence and future strategic opportunities
Business results Financial performance Segment review Outlook and strategic priorities Q&A 39 Our global presence and future strategic opportunities 39 Strong position for global growth Current presence Mining Water Agri health Chemicals Growth opportunities Mining Water Agri health Chemicals
Slide 41: Value creation is our priority
Business results Financial performance Segment review Outlook and strategic priorities Q&A 40 Value creation is our priority 40 Strategic priorities Deliver Zero Harm and ESG commitments in an integrated way as One AECI Pursue international growth where we have competitive advantage (primarily Minin
Slide 42: A=CI
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Slide 43: Thank you
OA=CIr ood taminty Thank you
Slide 44: Supplementary information
43 Supplementary information
Slide 45: Net debt increased – still well within covenant levels
44 Net debt increased – still well within covenant levels 44 Debt and gearing levels – Rm and % 5 106 4 177 4 030 2 760 2 383 44 41 36 22 24 2018 2019 2020 2021 H1 22 Gearing Net debt
Slide 46: Robust balance sheet
45 Robust balance sheet 45 Balance sheet summary – Rm H1 21 FY 21 H1 22 4 339 4 059 Interest‐ 6 475 6 727 6 267 bearing debt PP&E 6 182 4 683 6 153 4 880 6 344 Payables Inventories 4 188 6 518 612 602 1 351 1 775 601 Provisions 1 572 Other Receivables 4 657 5 872 6 425 Cash 1 911 10 680 1 953 11 589