Impala Platinum Holdings Limited · JSE:IMP
Impala Platinum — FY2014 Earnings Presentation
47 slides from Impala Platinum's earnings presentation, 2014
Slide 1: Annual Results for the year ended 30 June 2014
ANNUAL RESULTS For the year ended 30 June 2014
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT 2 Certain statements contained in this presentation other than the statements of historical fact contain forward-looking statements regarding Implats’ operations, economic performance or financial condition, including, without limitation, those concerning the economic outlo
Slide 3: Agenda
AGENDA 3 OVERVIEW Terence Goodlace OPERATIONAL REVIEW Terence Goodlace and Nelson Ndlala FINANCIAL REVIEW Brenda Berlin MARKET REVIEW Sifiso Sibiya OUTLOOK Terence Goodlace Annual Results for the year ended 30 June 2014
Slide 4: Overview
OVERVIEW Terence Goodlace, CEO
Slide 5: Safety Achievements
SAFETY ACHIEVEMENTS 5 OVERVIEW FIFR 34% improvement on 2013 Fatal injury frequency rate (per million man hours worked) Active participation in industry CEO 0.122 Elimination of Fatalities Task and MOSH 0.087 teams 0.065 0.053 Pursuing the cultural transformation 0.043 framework Full implemen
Slide 6: Operational – Key Features
OPERATIONAL – KEY FEATURES 6 OVERVIEW Strike severely impacts gross refined platinum Platinum production production - down 25.5% to 1 800 1.18 million ounces 1 582 1 600 Mine-to-market down 18.8% 1 400 368 Non managed production down 47.6% 1 200 Non- managed 1 178 Group unit costs increased
Slide 7: Wage Negotiations
WAGE NEGOTIATIONS 7 OVERVIEW Settled with NUM at Marula and Refineries in December 2013 Three year settlement reached with AMCU for Impala Rustenburg on 24 June 2014 following a 5 month industry-wide strike The mine was shutdown during the period of the strike for the safety of our employees
Slide 8: Group Refined Platinum Production
GROUP REFINED PLATINUM PRODUCTION 8 OVERVIEW 800 709 700 600 500 (000 oz) 411 400 368 300 226 180 192 200 157 168 97 103 100 71 77 0 Impala Zimplats Marula Mimosa Two Rivers IRS third party 2013 2014 Annual Results for the year ended 30 June 2014
Slide 9: Group Costs
GROUP COSTS 9 OVERVIEW 25 000 22 036 19 860 20 000 19 665 19 430 17 768 17 241 16 526 15 713 (R/Pt oz) 15 000 13 383 11 650 11 524 11 683 10 000 5 000 0 Impala Zimplats Marula Mimosa* Two Rivers* Group 2013 2014 * Non-managed operations Annual Results for the year ended 30 June 2014
Slide 10: Group Costs Including Capital
GROUP COSTS INCLUDING CAPITAL 10 OVERVIEW 35 000 30 000 25 000 (R/Pt oz) 20 000 15 000 10 000 5 000 0 Impala Zimplats Marula Group Mimosa Two Rivers Cash costs Stay in business capital Replacement capital Expansion capital 2014 R/Pt oz sold Current Rand basket Annual Results for the year ended 30 Ju
Slide 11: Financial – Key Features
FINANCIAL– KEY FEATURES 11 OVERVIEW Revenue down 2.7% to R29bn from HEPS R29.8bn Gross profit of R3.2bn down from R4.7bn 330 Gross profit margin declined to 11.2% from 15.8% Headline earnings per share declined 74% to 86 cents 142 (cps) Unchanged cash reserves at year end 86 of R4.3bn Av
Slide 12: A Tale of Two Halves
A TALE OF TWO HALVES 12 OVERVIEW IMPALA GROUP 1 178 Production 786 (000 oz) 390 411 392 21 H1 2014 H2 2014 FY2014 2014 H1 2014 H2 2014 FY2014 2014 3 242 Gross profit 1 760 1 482 (Rm) -134 -1 786 -1 900 H1 2014 H2 2014 FY2014 2014 H1 2014 H2 2014 FY2014 2014 Impala Group Annual Results for the year e
Slide 13: Operational Review
OPERATIONAL REVIEW Terence Goodlace, CEO
Slide 14: Zimplats
ZIMPLATS 14 OPERATIONS REVIEW Safety achievement: – 41.4% LTIFR improvement Ore milled increased by 26.8% to 5.9 million tonnes due to increased mining cut and Mupfuti ramp-up Platinum in matte up 21% to 239 700 ounces Gross profit margin declined to 34.1% from 34.9% Unit costs decreased b
Slide 15: Zimplats – Bimha Mine
ZIMPLATS – BIMHA MINE 15 OPERATIONS REVIEW N Failed pillars and collapsed Platinum production capacities: Bimha roof Boxcut • Bimha 90 000oz • Mupfuti 90 000oz • Rukodzi 45 000oz Stoped out area • Ngwarati 45 000oz Post year-end: ground conditions caused precautionary suspension of workings at Bim
Slide 16: Marula
MARULA 16 OPERATIONS REVIEW Safety achievement: – 2 million fatality free shifts Ore milled increased by 10.2% to 1.8 million tonnes Platinum in concentrate increased by 9.5% to 78 500 ounces Gross margin improved from -15.4% to -0.7% Cost per platinum ounce in concentrate increased only m
Slide 17: Mimosa and Two Rivers
MIMOSA AND TWO RIVERS 17 OPERATIONS REVIEW Mimosa Tonnes milled increased 3% to 2.45 million tonnes Platinum in concentrate production increased by 9.9% to 110 200 ounces Gross profit margin declined to 19.3% from 24.2% Unit costs benefited from increased volumes and decreased by 3.9% to US$
Slide 18: Capital Expenditure
CAPITAL EXPENDITURE 18 OPERATIONS REVIEW 9 000 8 000 7 000 6 000 5 000 R1.7bn (Rm) 4 000 3 000 2 000 1 000 - FY2012 FY2013 FY2014 FY2015 FY2016 Impala Zimplats Marula Afplats Annual Results for the year ended 30 June 2014
Slide 19: Major Capital Projects
MAJOR CAPITAL PROJECTS 19 OPERATIONS REVIEW Major capital projects 20 Shaft 16 Shaft 17 Shaft Zimplats Capital spend for 2014 R0.6 billion R0.8 billion R0.6 billion US$64 million Remaining capital spend R0.9 billion R0.8 billion R7.7 billion US$73 million Full production date Under detailed replanni
Slide 20: Operational Review
OPERATIONAL REVIEW Nelson Ndlala, Executive: Impala Rustenburg Operations
Slide 21: Impala Rustenburg - 2014
IMPALA RUSTENBURG - 2014 21 OPERATIONS REVIEW Performance has been impacted by the strike, even though we had a good operational start to the year Ore milled down 43% to 6.2Mt Refined platinum down 42% to 411 000 ounces (Strike impact 312 000 ounces) Milled head grade higher at 4.34g/t Rec
Slide 22: Impala – Restoring Operations 2015
IMPALA – RESTORING OPERATIONS 2015 22 OPERATIONS REVIEW Safe start-up Expected Impala Production – Ensuring safe underground mining areas, infrastructure and equipment 300 – Focus on health and wellness of employees – Operational and safety training 250 People strategy 200 – Rebuilding relations
Slide 23: Impala – Restoring Operations
IMPALA – RESTORING OPERATIONS 23 OPERATIONS REVIEW 723 715 140oz ramp up 312oz strike adj 575 411 Annual Results for the year ended 30 June 2014
Slide 24: Rustenburg Deliverables
RUSTENBURG DELIVERABLES 24 OPERATIONS REVIEW Actual Plan Progress on key metrics FY2013 FY2014 FY2015 FY2016 Increasing face length Total development km 97.4 61.3 74.4 94.2 Primary on-reef development km 29.7 21.1 27.1 34.7 Mineable face length km 19.0 20.5 22.2 22.8 Productivity Stope productivity
Slide 25: Mineral Reserves Distribution - FY14
MINERAL RESERVES DISTRIBUTION - FY14 25 OPERATIONS REVIEW Annual Results for the year ended 30 June 2014
Slide 26: Financial Review
FINANCIAL REVIEW Brenda Berlin, CFO
Slide 27: Income Statement
INCOME STATEMENT 27 FINANCIAL REVIEW R million FY2014 FY2013 % change Results severely impacted by strike Sales 29 028 29 844 (3) Cost of sales increased due to Cost of sales (25 786) (25 132) (3) lower stock levels Gross profit 3 242 4 712 (31) Gross profit margin of 11.2% Royalties increas
Slide 28: Gross Profit Movement
GROSS PROFIT MOVEMENT 28 FINANCIAL REVIEW R1.5 billion negative R654 million movement in gross profit impacted by: 8 000 3 296 – Strike 7 000 20 329 27 – Share based payments charge 6 000 1 013 – Depreciation remained flat 5 000 4 712 (Rm) – Lower stock levels 4 000 4 282 3 242 3 000 2 601 2 000 1
Slide 29: Implats Group Unit Cost
IMPLATS GROUP UNIT COST 29 FINANCIAL REVIEW 1 108 19 430 1 796 (R/Pt oz) 16 526 Annual Results for the year ended 30 June 2014
Slide 30: Headline Earnings per Operations
HEADLINE EARNINGS PER OPERATIONS 30 FINANCIAL REVIEW R million FY2014 FY2013 % change Impala (1 374) 1 661 (182.7) IRS 1 138 (170) 769.4 Zimplats 714 467 52.9 Marula (185) (297) 37.7 Mimosa 82 70 17.1 Two Rivers 273 156 75.0 Other (125) 107 (216.8) Headline profit 523 1 994 (73.8) HEPS (cps) 86 329
Slide 31: Headline Earnings Movement
HEADLINE EARNINGS MOVEMENT 31 FINANCIAL REVIEW Forex loss of R101 million vs. gain of R208 million in 2013 2500 Impairment charge during 1 994 FY2013 of R1.2 billion (non- 2000 recurring) 1500 1 201 “Other” includes the transfer of R1.26 billion of expenses 1000 during the strike Profit befo
Slide 32: Movement in Net Cash Position
MOVEMENT IN NET CASH POSITION 32 FINANCIAL REVIEW Cash impacted by strike action Operating cash flow of R4.1 2500 billion benefited from reduced 2000 4 096 working capital 1500 1000 Capital expenditure for the 500 year of R4.5 billion (Rm) 0 Net debt of R2.1 billion at -500 30 June 2014 excl
Slide 33: Net Debt
NET DEBT 33 FINANCIAL REVIEW Start-up to be funded R million FY2014 FY2013 % change Available Gross cash 4 305 4 924 (13) – R4.3bn, cash Convertible bond (4 410) (4 169) (6) – R3bn, facilities Marula BEE debt (878) (876) Zimplats debt (1 117) (1 037) (8) Bank overdraft - (811) 100 Debt excluding
Slide 34: Market Review
MARKET REVIEW Sifiso Sibiya
Slide 35: Sales Volumes by Metal
SALES VOLUMES BY METAL 35 MARKET REVIEW FY2014 FY2013 % change % South African sales Platinum (000oz) 1 197 1 333 (10) 11 Palladium (000oz) 767 859 (11) 36 Rhodium (000oz) 147 176 (17) 16 Nickel (000t) 10.7 13.2 (19) 58 Operating pipeline was restocked by June 2014 In FY2015 we will sell what we
Slide 36: Average Prices Achieved – Major Metals
AVERAGE PRICES ACHIEVED – MAJOR METALS 36 MARKET REVIEW Free Market prices* FY2014 FY2013 % change Platinum ($/oz) 1 429 1 423 1 551 (8) Palladium ($/oz) 737 737 676 9 Rhodium ($/oz) 1 002 1 000 1 143 (13) Nickel ($/t) 14 649 14 644 16 541 (11) Basket ($/Pt oz sold) 2 308 2 299 2 505 (8) (R/Pt oz so
Slide 37: Vehicle Sales
VEHICLE SALES 37 MARKET REVIEW World Light-duty vehicles sales by region (Millions) Forecast 2014* 2013* % change North America 16.3 15.6 4.8 Western Europe 11.7 11.6 1.3 China 19.2 17.9 7.1 Japan 5.2 5.3 (1.5) Rest of the world 34.8 33.5 3.9 World total 87.2 83.8 4.1 * Calendar years Annual Results
Slide 38: Platinum Jewellery
PLATINUM JEWELLERY 38 MARKET REVIEW Global jewellery growth 2013: 6%* – China 3.0% – Japan 3.5% – USA 11% – India 41% – ROW 13% 2014: SGE low year on year – Manufacturers destocking – Commodities in finance activities – 2014 Chinese growth: 5%* 2014 global growth estimates: 5% plus * PGI retai
Slide 39: Investment
INVESTMENT 39 MARKET REVIEW Global Platinum ETF Platinum ETF Investment Jan 11 - Jun 14 – H1 2014: +300 000 ounces 3 000 ABSA Others SWISS ZKB UK ETFs US ETFs South African Platinum ETF 2 500 (000 oz) – Global largest fund at more than 1.1million 2 000 1 500 1 000 Global Palladium ETF 500 – H1
Slide 40: Platinum Supply / Demand Outlook
PLATINUM SUPPLY / DEMAND OUTLOOK 40 MARKET REVIEW 000 oz 2012 2013 2014 (Forecast) DEMAND Automobile 3 470 3 150 3 215 Jewellery 2 525 2 675 2 865 Industrial 1 700 1 780 1 900 Investment 200 750 305 Total Demand 7 895 8 355 8 285 SUPPLY South Africa 4 025 4 080 2 950 Zimbabwe 350 390 390 North Ameri
Slide 41: Palladium Supply / Demand Outlook
PALLADIUM SUPPLY / DEMAND OUTLOOK 41 MARKET REVIEW 000 oz 2012 2013 2014 (Forecast) DEMAND Automobile 6 000 6 500 7 150 Industrial 3 110 3 125 2 750 Investment 300 250 870 Total Demand 9 410 9 875 10 770 SUPPLY South Africa 2 245 2 220 1 890 Zimbabwe 240 290 290 North America 930 960 980 Other 840 6
Slide 42: Rhodium Supply / Demand Outlook
RHODIUM SUPPLY / DEMAND OUTLOOK 42 MARKET REVIEW 000 oz 2012 2013 2014 (Forecast) DEMAND Automobile 790 800 825 Industrial 190 190 160 Total Demand 980 990 985 SUPPLY South Africa 580 580 500 Zimbabwe 25 30 30 North America 20 20 25 Other 5 5 10 Recycle 260 300 320 Russia 65 65 65 Total Supply 955 1
Slide 43: Market Outlook
MARKET OUTLOOK 43 MARKET REVIEW Southern African supply challenges Above-ground inventory and recycling – To compensate supply challenges – Will moderate price increases Fundamental demand positive – Encouraging auto sales – Emission legislation (2014: Euro 6; 2017: US Tier 3) – Jewellery and
Slide 44: Review and Outlook
REVIEW and OUTLOOK Terence Goodlace, CEO
Slide 45: Strategy - Respect, Care and Deliver
STRATEGY - RESPECT, CARE AND DELIVER 45 OUTLOOK Safe and effective Deliver operational people who respect excellence and and care for each continuous other improvement BEST Conserve natural resources Social capital and and mitigate the licence to operate impacts of our operations Annual Results for
Slide 46: A Winning Culture
A WINNING CULTURE 46 OUTLOOK Think like winners We are a product of our thinking and the choices we make, not the product of our environment. Do like Feel like winners winners Annual Results for the year ended 30 June 2014
Slide 47: Annual Results
ANNUAL RESULTS For the year ended 30 June 2014
Impala Platinum Holdings — FY2014 Earnings Presentation on 6ix