Slide 1: Condensed reviewed results for the financial year ended 30 June 2023
Condensed reviewed results for the financial year ended 30 June 4 September 2023 2023 We do it better
Slide 2: Executive Chairman statement
“ “ARM’s quality diversified portfolio enabled us to achieve strong full year earnings and maintain a robust financial position, notwithstanding lower commodity prices and challenges relating to logistics, power and above-inflation costs. We declared a final dividend of R12 per share and remain comm
Slide 3: Disclaimer
Disclaimer Throughout this presentation a range of financial and non-financial measures are used to assess the company’s performance, including, but not limited to financial measures that are not defined under International Financial Reporting Standards (IFRS). These adjusted financial measures are
Slide 4: Overview of results
Overview of results Dr Patrice Motsepe Executive Chairman Beeshoek Mine We do it better
Slide 5: Group headline earnings decreased by 21%
Group headline earnings decreased by 21% Group headline earnings (R million) 21% 13 064 11 338 8 981 5 226 5 534 F2019* F2020* F2021* F2022* F2023* * The F2019 to F2023 headline earnings include re-measurement gains and losses on partner loans. Re-measurement gains and losses for the current and cor
Slide 6: Headline earnings by division
Headline earnings by division ARM Ferrous ARM Platinum 17% to R5.5 billion 52% to R1.5 billion (F2022: R6.7 billion) (F2022: R3.1 billion) ARM Coal 65% to R1.5 billion (F2022: R928 million) 6
Slide 7: Dividends per share (cents)
Dividends per share (cents) Total dividend: 1 300 1 200 3 000 3 200 2 600 2 000 2 000 1 400 1 200 1 200 1 000 900 700 500 400 F2019 F2020 F2021 F2022 F2023 Interim dividend per share Final dividend per share We are committed to paying dividends whilst pursuing quality growth and maintaining a robust
Slide 8: Dividends received
Dividends received Dividends received from Assmang Dividends received from Modikwa Mine 9% to R5.0 billion 100% to nil (F2022: R5.5 billion) (F2022: R1.0 billion) Modikwa paid distributions of R875 million to ARM Mining Consortium which in Subsequent to year end Assmang declared a dividend of R3 000
Slide 9: Safety and health
Safety and health Total Recordable Injury Lost Time Injury Frequency Rate (LTIFR)* Frequency Rate (TRIFR)** 13% to 0.27 10% to 0.62 (F2022: 0.31) (F2022: 0.69) ** TRIFR includes the number of fatal injuries, number of lost time injuries and * LTIFR per 200 000-man hours number of medical cases Fatal
Slide 10: Strategy: deliver competitive returns and create sustainable value
STRATEGY Owner-operator DELIVER COMPETITIVE RETURNS AND CREATE Entrepreneurial SUSTAINABLE VALUE management FOR ALL STAKEHOLDERS Operate Investing in Focus on our portfolio our employees value-enhancing of assets safely, and integrated responsibly and growth Partnering with efficiently Allocate capi
Slide 11: Segmental EBITDA split by commodity (%)
Segmental EBITDA split by commodity (%) (R million) 9 336 11 009 24 321 17 839 13 992 1% 3% 4% 3% 1% 4% 9% 19% 4% 12% 14% 29% Other* 46% 39% Coal (GGV) 46% 44% Manganese 54% Iron Ore 46% 42% 37% 36% PGMs 16% (3%) (4%) (3%) F2019 F2020 F2021 F2022 F2023 Significant segmental EBITDA contribution from
Slide 12: Community investment
Community investment Community social investment by the operations (100% basis) R125 million (F2022: R151 million) Enterprise and supplier development by the operations (100% basis) • 696 jobs sustained • R226 million spent on • 508 jobs created developing 294 SMEs ARM Mining Consortium dividend to
Slide 13: Responsible environmental management
Responsible environmental management Carbon emissions (Scope 1 and 2 emissions) Progress on decarbonisation 4% to 0.88 MtCO2e* In April 2023, signed power purchase agreements to build a 100MW solar (F2022: 0.92 MtCO2e*) plant to power ARM’s platinum *Million tonnes of carbon dioxide equivalents (MtC
Slide 14: Operational review
Operational review Chief Executive Officer: Phillip Tobias Two Rivers Mine We do it better
Slide 15: Headline earnings/(loss) by division / operation
Headline earnings/(loss) by division / operation (R million) F2023 F2022 % change ARM Ferrous 5 528 6 682 (17) Iron ore division 4 158 4 654 (11) Manganese division 1 372 2 068 (34) Consolidation adjustment and other (2) (40) 95 ARM Platinum 1 465 3 066 (52) Two Rivers Mine 1 262 1 968 (36) Modikwa
Slide 16: Headline earnings variance analysis
Headline earnings variance analysis (R million) 14 000 26% 21% 808 12 146 Increase 12 000 Decrease 11 338 (1 154) 10 000 227 8 973 8 8 981 (1 601) ( 645) 8 000 6 000 4 000 2 000 F2022 headline Net re- F2022 adjusted Ferrous Platinum Coal Corporate F2023 adjusted Net re- F2023 headline earnings measu
Slide 17: EBITDA margins by commodity (%)
EBITDA margins by commodity (%) 29% Manganese alloys 18% 30% Manganese ore 29% 55% PGMs* 42% 54% Coal (GGV) 46% 49% Iron ore 50% F2022 F2023 *Including Modikwa and Two Rivers mines only *Excludes any re-measurement adjustments 17
Slide 18: ARM Ferrous
ARM Ferrous Khumani Mine We do it better
Slide 19: ARM Ferrous
ARM Ferrous Variance analysis – segment result (R million) Changes in average US dollar index prices (%) 12 000 2 444 10 000 7 851 8 000 165 6 889 (2 048) (13%) (16%) (13%) 6 000 (1 508) (15) 4 000 (22%) 2 000 (30%) 0 Medium Carbon High Carbon Export 44% Export 37 % Export iron ore* F2022 ZAR:USD US
Slide 20: Iron ore (100% basis)
Iron ore (100% basis) Operational performance Khumani Mine achieved 5 million fatality-free shifts over approximately 8 years. % Beeshoek Mine achieved 5 million fatality-free shifts over unit F2023 F2022 change approximately 20 years. Export sales volumes 000 tonnes 11 966 13 176 (9) Local sales vo
Slide 21: Manganese ore (100% basis)
Manganese ore (100% basis) Operational performance The Black Rock project was completed in September 2022 and within the approved budget of R7.4 billion. % Black Rock Mine achieved 11 million fatality-free shifts over unit F2023 F2022 change approximately 14 years. Export sales volumes 000 tonnes 3
Slide 22: Manganese alloys (100% basis)
Manganese alloys (100% basis) Operational performance US dollar index prices for high carbon and medium carbon % ferromanganese decreased by 22% and 30% respectively. unit F2023 F2022 change Sales Volumes: South African operations 000 tonnes 97 99 (2) Sakura 000 tonnes 237 192 23 High carbon mangane
Slide 23: ARM Platinum
ARM Platinum Modikwa Mine We do it better
Slide 24: ARM Platinum
ARM Platinum Variance analysis segment result* (R million) Changes in unit cash costs** (%) 10 000 1 905 8 000 6 994 6 000 19 4 360 21% PGMs: Modikwa (3 659) 122 4 000 (8) (1 013) 2 000 24% PGMs: Two Rivers 0 F2022 ZAR:USD USD Volume Cash Non-cash Mark-to- F2023 Prices costs costs market adjustments
Slide 25: PGMs (100% basis)
PGMs (100% basis) Operational performance The average rand per 6E kilogram basket price for Modikwa and Two Rivers declined by 10% and 8% respectively. unit F2023 F2022 % change 6E PGM Two Rivers production volumes 295 441 301 935 (2) ounces 6E PGM Modikwa production volumes 285 910 294 541 (3) ounc
Slide 26: Nkomati Mine update
Nkomati Mine update Nkomati Mine remains on care and maintenance while ARM and its joint venture partner are considering various options for the future of the mine. At 30 June 2023 the estimated undiscounted rehabilitation costs attributable to ARM were determined to be R932 million (30 June 2022: R
Slide 27: ARM Coal
ARM Coal Goedgevonden Mine We do it better
Slide 28: ARM Coal
ARM Coal Variance analysis – segment result (R million)* Changes in on-mine unit production costs (%) 1 200 ARM Coal 730 1 052 441 1 000 Coal: PCB 29% 800 577 600 400 Coal: ( 571) ( 3) 14% ( 122) GGV 200 0 0% 5% 10% 15% 20% 25% 30% 35% F2022 ZAR: US D USD Volume Costs Re-measure- F2023 Prices ment g
Slide 29: GGV and PCB (100% basis)
GGV and PCB (100% basis) Operational performance The average realised thermal coal price (export US dollar) for % GGV and PCB decreased by 22% and 17% respectively. unit F2023 F2022 change Export sales volumes Mt 13.05 13.72 (5) Domestic sales volumes Mt 3.63 3.51 3 GGV on-mine production costs R/t
Slide 30: Completed growth projects
Completed growth projects Black Rock and Gloria projects The Black Rock Project was completed in September 2022 and within the approved budget of R7.4 billion, with 1.4 million fatality free shifts and a lost time injury frequency rate (LTIFR) of 0.219. Key benefits delivered from the Black Rock Pro
Slide 31: Future growth projects
Future growth projects Bokoni Platinum Mine Good progress has been made in advancing the definitive feasibility study (‘DFS’) based on a phased development approach. The phased development preserves optionality for a progressive production ramp-up, whilst reducing peak funding requirements and minim
Slide 32: Key focus areas
Key focus areas Delivering industry-leading and cost competitive operational performance. Pursuing value-enhancing growth opportunities. Containing unit cost escalations in line with inflation. Implementation of proven innovative technologies to enhance productivity and efficiencies. Delivering appr
Slide 33: Capital allocation
Capital allocation Finance Director: Tsundzukani Mhlanga Two Rivers Black RockMine Mine We do it better
Slide 34: Capital allocation guiding principles
Capital allocation guiding principles Invest in existing business Maintenance and efficiency improvement capital expenditure to secure the sustainability of our business. Balancing re-investment, profitability and returns. Debt repayment Healthy gearing levels create a flexible platform for sustaina
Slide 35: Cash flow analysis (R million)
Cash flow analysis* (R million) Increase Decrease Investing in Interest existing business and debt Shareholder Sources of funds and acquisitions repayments returns Other 6 225 (1 517) 8 090 (4 456) 771 (3 441) ( 251) 11 643 287 10 004 (6 666) ( 660) ( 21) Balance 1 July Cash generated Dividends Taxa
Slide 36: Net cash and debt
Net cash and debt (R million) 30 June 2023 30 June 2022 Cash and cash equivalents per statement of financial position* 10 021 11 659 Cash and cash equivalents per statement of cash flows** 10 004 11 643 Overdrafts 17 16 Total borrowings (242) (484) Long-term borrowings (206) (305) Short-term borrowi
Slide 37: Segmental capital expenditure
Segmental capital expenditure* (R million) 10 000 8 978 9 000 8 000 7 465 7 191 7 000 6 000 5 000 4 719 4 687 4 000 3 000 2 000 1 000 0 F2022 F2023 F2024e F2025e F2026e ARM Platinum ARM Ferrous ARM Coal *Capital expenditure includes; (i) deferred stripping, (ii) financed fleet replacement, and (iii)
Slide 38: Thank you
Thank you www.arm.co.za We do it better
Slide 39: Additional slides
Additional slides Two Rivers Mine We do it better
Slide 40: PGM Mark-to-market adjustments
PGM Mark-to-market adjustments The sales price of PGM concentrate is determined on a provisional basis at the date of sale. Adjustments are made to the sales price based on movements in the discounted forward commodity prices up to the date of final pricing. Where there are any differences between t
Slide 41: Mark-to-market adjustments (R million)
Mark-to-market adjustments (R million) Two Rivers Mine F2023 F2022 Realised mark-to-market adjustments* (696) (505) Provisional sales value 10 313 10 696 Final sales value 9 617 10 191 Unrealised mark-to-market adjustments (369) (203) Initial provisional sales recognition 1 260 1 967 Period end prov
Slide 42: Summary of re-measurement gains / (losses)
Summary of re-measurement gains / (losses) (R million) F2023 F2022 ARM Coal (4) (1 256) Goedgevonden Mine (4) (766) PCB operations - (490) ARM Corporate and other 12 488 ARM BBEE Trust 8 5 ARM Coal 4 443 ARM Group 8 (808) 42