Slide 1: 2022 Annual Results and Strategy Update
[OFFICIAL] 2022 Annual Results and Strategy Update Presentation for the year ended 31 December 2022
Slide 2: Cautionary Statement
[OFFICIAL] CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Thungela Resources Limited (“Thungela”) and comprises the written materials/slides for a presentation concerning Thungela and its affiliates (together, the "Group"). By attending this presentation and/or reviewing the
Slide 3: Our Purpose
[OFFICIAL] OuR PURPOSE together thingela
Slide 4: 2022 Highlights: Our Purpose in Action
[OFFICIAL] 2022 HIGHLIGHTS: OUR PURPOSE IN ACTION SAFETY OPERATING PERFORMANCE FINANCIAL PERFORMANCE Total Recordable Case Export saleable production Profit for the period Frequency Rate 13.1 Mt (2021: 15.0 Mt pro forma) R18.2 billion (2021: R6.9 billion) 1.41 (2021: 1.35) Export equity sales Adjust
Slide 5: Executing on Our Strategy
[OFFICIAL] EXECUTING ON OUR STRATEGY DRIVING MAXIMISING VALUE FROM CREATING FUTURE OPTIMISING CAPITAL OUR ESG ASPIRATIONS EXISTING ASSETS DIVERSIFICATION OPTIONS ALLOCATION Sisonke and Nkulo trusts Approval of Acquisition of controlling Acquisition of remaining distribution of interest in Elders 27%
Slide 6: Safety
[OFFICIAL] SAFETY KEY SAFETY METRICS RELENTLESS DRIVE TO ELIMINATE FATALITIES • Zero fatalities in 2022 42 • Several operations reached 100+ days without reportable injury 34 • We remain determined to achieve a fatality-free 1.85 30 business through: – Maintaining our basics 25 25 1.51 1.48 – Work m
Slide 7: TFR Performance
[OFFICIAL] TFR PERFORMANCE TFR1 ANNUAL VOLUMES AND ANNUALISED AVERAGE RUN RATES (Mt per annum) TFR PLACING SA MINING EXPORTS AT RISK • Industry railed volume of 50.3 Mt for 2022 is the -28% lowest since 1996 73.0 71.1 70.1 • TFR performance continues to be plagued by -10% cable theft and locomotive
Slide 8: Demonstrating Agility in Our Response
[OFFICIAL] DEMONSTRATING AGILITY IN OUR RESPONSE EXPORT EQUITY SALES PRODUCT MIX (Mt) PROTECTING EARNINGS IN SHORT TERM • Continued railing higher quality products 6.5 • Full stockpiles resulted in higher-cost operations being curtailed 5.7 2.2 • Creating additional stockpile capacity 1.2 • Trucking
Slide 9: Creating Value Together for a Shared Future
[OFFICIAL] CREATING VALUE TOGETHER FOR A SHARED FUTURE DISTRIBUTIONS TO EMPLOYEE AND COMMUNITY TRUSTS SINCE LISTING (R million) CREATING VALUE FOR EMPLOYEES 1,170 • R198 million distributed to our Sisonke Employee Empowerment Scheme1 in H2 2022 (R585 million since listing) • First payment to employe
Slide 10: The Numbers
[OFFICIAL] The Numbers Deon Smith | Chief Financial Officer
Slide 11: 2022 Financial and Operational Highlights
[OFFICIAL] 2022 FINANCIAL AND OPERATIONAL HIGHLIGHTS NET PROFIT FOR ADJUSTED ADJUSTED OPERATING EARNINGS THE YEAR EBITDA FREE CASH FLOW PER SHARE R18.2 billion R29.5 billion R18.1 billion R127.08 (2021: R6.9 billion) (2021: R10.0 billion) (2021: R3.9 billion) (2021: R61.08) EXPORT SALEABLE FOB COST/
Slide 12: Record Benchmark and Realised Prices
[OFFICIAL] RECORD BENCHMARK AND REALISED PRICES BENCHMARK AND REALISED THERMAL COAL PRICES (R/t) EXPORT MARKETS R/t • Russia-Ukraine conflict fuelled energy security 6.000 crisis, increasing demand for thermal coal 5.500 • Supply constraints in major basins, including TFR challenges, heavy rainfall
Slide 13: Decrease in Export Saleable Production Due to Curtailment
[OFFICIAL] DECREASE IN EXPORT SALEABLE PRODUCTION DUE TO CURTAILMENT EXPORT SALEABLE PRODUCTION (Mt) RAIL PERFORMANCE HAD SIGNIFICANT IMPACT • Export saleable production 13% lower year-on- -13% year due to TFR rail performance 15.0 • Export sales of 12.2Mt, 12% lower than 2021 2.1 0.2 13.1 • Second
Slide 14: FOB Cost per Export Tonne
[OFFICIAL] FOB COST PER EXPORT TONNE 2021 vs 2022 FOB COST PER EXPORT TONNE (R/t) COST PERFORMANCE • FOB cost per export tonne of R1,079 (including 110 105 1,079 royalties) is marginally higher than R1,065 per 31 tonne guided in August 2022 (prior to TFR 108 derailment and strike) 105 • TFR underper
Slide 15: Record Adjusted EBITDA Driven by Prices
[OFFICIAL] RECORD ADJUSTED EBITDA DRIVEN BY PRICES ADJUSTED EBITDA1 (R billion) SIGNIFICANT INCREASE IN ADJUSTED EBITDA • EBITDA margin improved to 58% (2021: 38%) 1.6 • Average realised prices more than double those 1.6 0.6 0.4 0.8 0.7 achieved in 2021 coupled with a weaker ZAR/USD 29.5 exchange ra
Slide 16: Adjusted Operating Free Cash Flow Enables Strong Returns
[OFFICIAL] ADJUSTED OPERATING FREE CASH FLOW ENABLES STRONG RETURNS ADJUSTED EBITDA TO ADJUSTED OPERATING FREE CASH FLOW (R billion) STRONG CASH FLOW DRIVEN BY EARNINGS • Significant increase in adjusted operating free cash 29.5 from R3.9 billion in 2021 to R18.1 billion in 2022 • Increase in enviro
Slide 17: Disciplined Capital Allocation
[OFFICIAL] DISCIPLINED CAPITAL ALLOCATION DIVIDEND AND CAPITAL ALLOCATION CAPITAL ALLOCATION 14.7 • Strong cash flow generation resulted in net cash position of R14.7 billion after funding capex, self- insurance structure and improving environmental 4.2 liability coverage • Ensham acquisition (R4.2
Slide 18: Outlook for FY2023
[OFFICIAL] OUTLOOK FOR FY2023 EXPORT SALEABLE PRODUCTION (Mt) FOB COST PER EXPORT TONNE (R/t) CAPITAL EXPENDITURE (R billion) Guidance Guidance Guidance 1,131 – 1,264 1,079 84 2.9 – 3.3 150 1.9 1.6 – 1.8 13.1 0.2 10.5 – 12.5 929 1,047 – 1,180 1.7 1.3 – 1.5 2022 Actual 2023 Outlook 2022 Actual 2023 O
Slide 19: Strategy Update
[OFFICIAL] Strategy Update July Ndlovu | Chief Executive Officer
Slide 20: Our Strategy
[OFFICIAL] OUR STRATEGY Delivered through four strategic pillars Drive Maximise Create Optimise our ESG the full future capital aspirations potential of diversification allocation our existing options assets
Slide 21: Pathway to Net Zero by 2050
[OFFICIAL] PATHWAY TO NET ZERO BY 2050 PATHWAY TO NET ZERO INFORMED BY IEA SCENARIOS1 OUR ROLE IN A RESPONSIBLE TRANSITION • The world is facing a global energy crisis of STATED POLICY ANNOUNCED PLEDGES unprecedented depth and complexity NET ZERO SCENARIO SCENARIO SCENARIO • Coal will still be relie
Slide 22: Distinct Pathways to Meet 2050 Target
[OFFICIAL] 4 DISTINCT PATHWAYS TO MEET 2050 TARGET 2025 2030 2040 2050 Slow transition Need for energy • Carbon offset projects • Offset M&A or projects with • Wheel excess renewable energy from A outweighs change renewable energy closing operations to other sites in legislation Energy security redu
Slide 23: Intermediate Carbon Emission Reduction Targets
[OFFICIAL] INTERMEDIATE CARBON EMISSION REDUCTION TARGETS THUNGELA TOTAL SCOPE 1 AND 2 EMISSIONS (CO2e kt) INTERMEDIATE TARGETS SET • 30% reduction in Scope 1 and 2 emissions by -30% -95% 2030 (off 2021 baseline) 903 • Reduction through 2030 achieved by implementation 85 of 19MW of renewable energy,
Slide 24: Elders
[OFFICIAL] ELDERS CONTEXT AND STRATEGIC RATIONALE • Develop and deliver life extension project for Goedehoop volumes nearing end of life • Maintain size and shape of SA export coal business • Sustain regional jobs and existing community suppliers PROGRESS • Construction site ramped up. Main boxcut a
Slide 25: Zibulo North Shaft
[OFFICIAL] ZIBULO NORTH SHAFT CONTEXT AND STRATEGIC RATIONALE • Production replacement for Zibulo operations • Productivity improvement and optimise cost structure through reduced travel time to the coal face • Sustaining ROM production ensures continued utilisation of full Phola Plant capacity allo
Slide 26: Lephalale Coal Bed Methane Project
[OFFICIAL] LEPHALALE COAL BED METHANE PROJECT STRATEGIC RATIONALE • Potential to develop, with a phased approach, a high-quality coal-bed methane (CBM) project • Approximately 1.5 trillion cubic feet of extractable gas • Can supply into the local compressed natural gas or liquified natural gas marke
Slide 27: Ensham Coal Business
[OFFICIAL] ENSHAM COAL BUSINESS CONTEXT AND STRATEGIC RATIONALE • Geographic diversification into a leading mining jurisdiction, with well-established support services • Attractive high-quality, long-life asset with mining extraction methods aligned to Thungela’s operational expertise • Increased sc
Slide 28: Acquisition of 27% of AAIC
[OFFICIAL] ACQUISITION OF 27% OF AAIC CONTEXT AND STRATEGIC RATIONALE • In November 2022, Thungela acquired the remaining 27% shareholding in AAIC which was owned by Inyosi in exchange for 4,180,777 new shares in Thungela • Allows Thungela to benefit from the full economics of the Zibulo operation a
Slide 29: Conclusion
[OFFICIAL] CONCLUSION Be a fatality free Solid Superior returns to business results shareholders Safety continues to be our number Notwithstanding rail constrained R13.8 billon full year dividend one value environment 76% of adjusted operating free cash flow Balanced capital Driving our Executing on
Slide 30: Thank you
[OFFICIAL] Thank you