Slide 1: Financial Results Presentation
FINANCIAL RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2017 27 AND 28 FEBRUARY 2018
Slide 2: Agenda
01 PERFORMANCE SUMMARY 02 BUSINESS ENVIRONMENT 03 RESULTS ANALYSED 04 SEGMENTAL PERFORMANCE 05 ACQUISITIONS AND INNOVATION 06 OUTLOOK
Slide 3: Performance Summary
PERFORMANCE SUMMARY
Slide 4: Performance Summary
03 PERFORMANCE SUMMARY › Pleasing improvement in performance » Strong 4Q › Profit from operations +18% to R1 579m › HEPS +17,2% to 959c › Trading margin up to 8,5% › Cash generation in excess of R1bn › Safety performance improvement – TRIR of 0,39 › Strategic progress » Acquisitions announced » Geog
Slide 5: Safety: TRIR
04 SAFETY: TRIR OVERSHADOWED BY CONTRACTOR FATALITY, CHLOORKOP 0,52 0,50 0,45 0,39 0,35 13 14 15 16 17
Slide 6: Business Environment
BUSINESS ENVIRONMENT
Slide 7: Historical price performance – gold, platinum and copper
06 BUSINESS ENVIRONMENT HISTORICAL PRICE PERFORMANCE – GOLD, PLATINUM AND COPPER
Slide 8: Historical price performance – coal and iron ore
07 BUSINESS ENVIRONMENT HISTORICAL PRICE PERFORMANCE – COAL AND IRON ORE
Slide 9: Brent crude oil
08 BUSINESS ENVIRONMENT BRENT CRUDE OIL
Slide 10: Ammonia
09 BUSINESS ENVIRONMENT AMMONIA
Slide 11: ZAR/US$ exchange rate
10 BUSINESS ENVIRONMENT ZAR/US$ EXCHANGE RATE
Slide 12: ZAR/US$ exchange rate: sustained strength into '18
11 ZAR/US$ EXCHANGE RATE: SUSTAINED STRENGTH INTO ’18
Slide 13: Cumulative rainfall: Western Cape
12 BUSINESS ENVIRONMENT CUMULATIVE RAINFALL: WESTERN CAPE
Slide 14: SA mining volumes
13 BUSINESS ENVIRONMENT SA MINING VOLUMES
Slide 15: SA manufacturing volumes
14 BUSINESS ENVIRONMENT SA MANUFACTURING VOLUMES
Slide 16: Results Analysed
OA=Cr good chemistry RESULTS ANALYSED
Slide 17: Earnings Analysed
16 EARNINGS ANALYSED › Profit from operations +18% to R1 579m › EBITDA +11% to R2 176m 959 › Highest-ever HEPS: +17,2% to 959c › Trading margin = 8,5% (’16: 7,2%) › RONA of 16,7% (’16: 16,0%) 894 › Tax rate 30% (’16: 29%) » Foreign withholding tax 843 » Acquisitions costs 818 › GCR rating of “A” wit
Slide 18: Group Underlying Performance
17 GROUP UNDERLYING PERFORMANCE 2017 2016 Change Profit from Profit from operations HEPS operations HEPS (Rm) (cps) (Rm) (cps) (%) (%) Reported 1 579 959 1 335 818 18,3 17,2 Transaction costs 105 99 – – PRMA settlement cost 4 3 149 102 Impairments 13 – 82 – 1 701 1 061 1 566 920 8,6 15,3
Slide 19: Cash Generation and Utilisation
18 CASH GENERATION AND UTILISATION › Cash of R1 221m generated 2 000 30 › Capex = R704m: R288m for expansion 1 741 projects, R416m for maintenance 25 › Trade WC to revenue of 15,4% 25 (12,7% in ’16) 1 500 » Higher 4Q sales 20 1 178 › Net borrowings of R424m 666 › Gearing at 5% (3% in ’16) 1 000 15 1
Slide 20: Property & Corporate
19 PROPERTY & CORPORATE 2017 2016 Change (Rm) (Rm) (%) Corporate centre 163 157 3,8 Net defined-benefit costs 46 45 2,2 Long-term incentive scheme costs 39 50 (22,0) Corporate spend before non-recurring items 248 252 (1,6) PRMA settlement costs (once-off) 4 149 (97,3) Transaction costs 105 – 100 Tot
Slide 21: Performance by Pillar
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Slide 22: Contribution Analysis by Segment (%)
21 CONTRIBUTION ANALYSIS BY SEGMENT(%) Revenue (%) Profit/(loss) from Excludes inter-segment revenue operations (%) 2 -17 19 2 -23 19 24 68 6 6 29 52 52 69 13 4 1 13 13 8 8 12 8 2017 Outer circle 12 2016 Inner circle Mining Solutions Water & Process Plant & Animal Health Food & Beverage Ch
Slide 23: Revenue and Profit from Operations by Former Segments
22 REVENUE AND PROFIT FROM OPERATIONS BY FORMER SEGMENTS H1 '17 H1 '16 % H2 '17 H2 '16 % FY '17 FY '16 % REVENUE Explosives 3 674 4 154 (11,6) 4 171 3 820 9,2 7 845 7 974 (1,6) Chemicals 4 909 4 983 (1,5) 5 995 5 832 2,8 10 904 10 815 0,8 Property 188 195 (3,6) 204 203 0,5 392 398 (1,5) Corporate (2
Slide 24: Summary by Pillar
23 SUMMARY BY PILLAR MINING WATER & PLANT & FOOD & CHEMICALS GROUP SOLUTIONS PROCESS ANIMAL BEVERAGE HEALTH REVENUE REVENUE REVENUE REVENUE REVENUE REVENUE R9 718m R1 454m R2 543m R1 195m R3 564m R18 482m -2,2% 3,2% 0,1% 6,5% 0,5% -0,6% PROFIT PROFIT PROFIT PROFIT PROFIT PROFIT FROM OPS
Slide 25: Mining Solutions
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Slide 26: Mining Solutions Revenue by Mineral Mined (%)
25 MINING SOLUTIONS REVENUE BY MINERAL MINED (%)
Slide 27: Mining Solutions Performance
26 MINING SOLUTIONS PERFORMANCE Explosives › Robust TP improvement, notwithstanding strong ZAR and VOLUME 5,5% lower ammonia price › Overall bulk explosives volumes +6,5% » Good product and customer mix REVENUE R9 718m » New business -2,2% › Overall initiating systems volumes +1,7% PROFIT SA FRO
Slide 28: Mining Solutions Performance cont.
27 MINING SOLUTIONS PERFORMANCE CONT. Explosives cont. Rest of Africa › Volumes +5,2% » New business – copper and gold Mobilised – supported from Burkina Faso bulk emulsion plant in the interim » Plant and equipment from Egypt redeployed – SA (replacements), Botswana (expansion) » 3 major contract
Slide 29: Mining Solutions Performance cont.
28 MINING SOLUTIONS PERFORMANCE CONT. Mining chemicals › Overall volumes down 1,3% › SA results robust › Exports challenged by exchange rate » Key distributor lost market share › Good growth in mining surfactants on back of mining sector improvement › Benefits of Technical Centre » Low temperature t
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Slide 31: Water & Process Performance
30 WATER & PROCESS PERFORMANCE › Local demand curtailed by manufacturing environment and drought VOLUME 9,4% › Good progress in Africa, especially in Public Water › Exports now 30% of revenue (20% in ’16) REVENUE R1 454m 3,2% PROFIT FROM OPS R182m 14,2% MARGIN 12,5% ’16: 11,3% TRADE WC 20,4% ’
Slide 32: Plant & Animal Health
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Slide 33: Plant & Animal Health Performance
32 PLANT & ANIMAL HEALTH PERFORMANCE › Severe impact of drought conditions on profitability – Western Cape and Malawi (Farmers Organisation) VOLUME 11,5% » Product mix favoured low value crops – lower margins › Foreign exchange effects › Good growth in bulk nutrition REVENUE R2 543m » Investment i
Slide 34: Food & Beverage
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Slide 35: Food & Beverage Performance
34 FOOD & BEVERAGE PERFORMANCE › Revenue growth particularly in food additives and filtration › Profit from operations in ’16 negatively affected by R28m VOLUME 7,2% impairment – poultry brine business › New principals secured for product portfolio enhancement REVENUE R1 195m › Growth in formulate
Slide 36: Chemicals
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Slide 37: Chemicals Performance
36 CHEMICALS PERFORMANCE › Resilient result in context of » Closure of Huntsman Tioxide (R25m negative effect VOLUME 1,0% on contribution) » KZN storm affected local manufacture, suppliers and supply chain at harbour REVENUE R3 564m » Depressed manufacturing environment 0,5% Smaller customer c
Slide 38: Revenue and Profit from Operations by New Segments
37 REVENUE AND PROFIT FROM OPERATIONS BY NEW SEGMENTS H1 '17 H1 '16 % H2 '17 H2 '16 % FY '17 FY '16 % REVENUE Mining Solutions 4 574 5 321 (14,0) 5 144 4 617 11,4 9 718 9 938 (2,2) Water & Process 707 707 0,0 747 701 6,5 1 454 1 408 3,2 Plant & Animal Health 947 948 (0,1) 1 596 1 592 0,2 2 543 2 540
Slide 39: Acquisitions and Innovation
ACQUISITIONS AND INNOVATION
Slide 40: Acquisition: Schirm
39 ACQUISITION SCHIRM › Contract manufacturer of agrochemicals and fine chemicals; European and US footprint » 4 sites in Germany, 1 in US › Largest provider of external agrochemical formulation services in Europe › Purchase price = €128,4m › Closed 30 January ’18 › Standalone entity in Plant & Anim
Slide 41: Acquisition: Much Asphalt
40 ACQUISITION MUCH ASPHALT › SA’s leading manufacturer and supplier of hot and cold mix asphalt products; manufacturer, supplier and applicator of bituminous road binders, emulsions, primes, pre-coats, modified binders › Definitive agreements signed on 27 October ’17 » 100% of issued share capital
Slide 42: Innovation: AECI.GO
41 INNOVATION AECI.GO › Objective: increase revenue and profitability of the Group › Business of Tomorrow opportunities – focus on value creation by ’20 » Origin investment Pioneer plant anticipated in 1H19 Joint Development Agreement in progress » Good progress made wrt other opportunities in r
Slide 43: Outlook
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Slide 44: Outlook – Mining Solutions
43 OUTLOOK – MINING SOLUTIONS CURRENT PRE-OPERATIONAL MINING PROJECTS Development Rest of South stage Africa Africa Indonesia LatAm Australia Exploration 1 455 301 218 2 209 3 513 Prefeasibility 76 42 6 129 139 Feasibility 162 76 41 172 291 Construction 31 17 21 48 30 TOTAL 1 724 436 286 2 558 3 973
Slide 45: Outlook Mining Solutions
44 OUTLOOK MINING SOLUTIONS Explosives › Further roll-out of emulsion pumps and product – underground gold mining › New emulsion technology – underground platinum mining › Continued improvement of electronic detonators to support autonomous mining » Includes work on wireless system › New product dev
Slide 46: Outlook Mining Solutions: Mining Chemicals
45 OUTLOOK MINING SOLUTIONS: MINING CHEMICALS
Slide 47: Outlook Water & Process: Public Water
46 OUTLOOK WATER & PROCESS: PUBLIC WATER
Slide 48: Outlook Water & Process: Desalination Projects
47 OUTLOOK WATER & PROCESS: DESALINATION PROJECTS
Slide 49: Outlook Plant & Animal Health
48 OUTLOOK PLANT & ANIMAL HEALTH › Integration of Schirm – synergies and new opportunities › NuWay roll-out › Biocult expansion in US and Canada
Slide 50: Outlook Food & Beverage
49 OUTLOOK FOOD & BEVERAGE Expansion › Adjacent property in Bellville acquired › Two-phased project » Phase 1 – warehousing and distribution » Phase 2 – plant upgrade, Technical Centre and offices › Food & Beverage activities in Western Cape to be consolidated on this site › Pursue acquisitive growt
Slide 51: Outlook Chemicals
50 OUTLOOK CHEMICALS › Capex project at SANS › Integration of Much Asphalt into the pillar › Spare manufacturing capacity remains – prepared for any acceleration in demand
Slide 52: Outlook Environment
51 OUTLOOK ENVIRONMENT › Domestic political and economic sentiment becoming more positive › Commitment by stakeholders to negotiation of workable SA Mining Charter › Outlook for acceleration in investment in African mining more positive › Sentiment in some other African countries also shifting, thou
Slide 53: Focus for 2018
52 FOCUS FOR 2018 Integrate acquisitions Preserve cash and control costs Leverage synergies of pillar strategy Innovation drive – Business of Tomorrow
Slide 54: Thank You
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