Tharisa Plc · JSE:THA
Tharisa — FY2020 Earnings Presentation
28 slides from Tharisa's earnings presentation, Nov 30, 2020
Slide 1: FY2020 Results Presentation
FY2020 RESULTS PRESENTATION 30 NOVEMBER 2020 INVESTING IN SUSTAINABILITY THS:LSE • THA:JSE Enriching lives through innovating the resources company of the future
Slide 2: Tharisa Unite – Our Values in Action
THARISA UNITE – OUR VALUES IN ACTION Enriching lives through innovating the resources company of the future
Slide 3: Safety and Sustainability
SAFETY AND SUSTAINABILITY LTFIR FATALITY FREE YEARS ACHIEVEMENTS 0.09 5+ 4 million Fatality Free Shifts Tharisa Minerals - achieved: 19 June 2020 Lost Time Injury Frequency Rate Achieved: 28 September 2020 30 September 2020 365 days LTI free Mining Production and Genesis Plant 5 years LTI free Thari
Slide 4: A Resources Company for the Future
Committed to climate change A RESOURCES COMPANY FOR THE FUTURE interventions and the Paris Accord Developing a roadmap with our suppliers and stakeholders that will see a reduction in carbon emissions by 2030 Solid governance structures – value of accountability and transparency Responsible co
Slide 5: FY2020 Production Highlights
SPOT PGM BASKET PRICE FY2020 PRODUCTION HIGHLIGHTS ≈US$2 500/oz REEF MINED PGM PRODUCTION CHROME CONCENTRATE PRODUCTION (5PGE+Au) 4.97 Mt 142.1 koz 1.34 Mt up 7.6% up 1.7% up 3.9% (2019: 4.62 Mt) (2019: 139.7 koz) (2019: 1.29 Mt) STRIPPING RATIO* PGM PRICE CHROME CONCENTRATE PRICE 12.1 m3:m3 US$1 70
Slide 6: FY2020 Financial Highlights
AVERAGE EXCHANGE RATE ZAR:US$ FY2020 FINANCIAL HIGHLIGHTS 16.2 12.5% (2019: 14.4) REVENUE OPERATING PROFIT EBITDA US$406.0 m US$87.6 m US$113.4 m up 18.4% up 262.0% up 119.8% (2019: US$342.9 m) (2019: US$24.2 m) (2019: US$51.6 m) PROFIT BEFORE TAX EPS OPERATING CASH FLOW US$75.8 m US 16.2 cents US$7
Slide 7: FY2020 in Review
FY2020 IN REVIEW INCREASED PRODUCTION DESPITE COVID-19 STABLE RECOVERIES AND GRADE PGM up 1.7%, chrome up 3.9% PGM recovery at 80.1%, rougher feed grade at 1.46g/t chrome recovery at 62.1%, Cr2O3 ROM grade at 18.2% INCREASED STRIPPING RATIO increase of 45.7% to 12.1 m3:m3 (FY2019: 8.3 m3:m3) TA I L
Slide 8: Production Performance
PRODUCTION PERFORMANCE
Slide 9: Production - Mining
PRODUCTION - MINING Investment in fleet, technology and upskilling people MINING (Mtpa) Volume mined increased by 7.6% Stripping ratio increased by 45.7% and will be maintained at current levels 6.0 12.1 10.0 8.3 Reef tonnes milled up 4.1% to 5.1 Mt 7.3 7.5 7.9 5.0 Reef stockpile in excess
Slide 10: Production – PGM & Chrome
PRODUCTION – PGM & CHROME PGM PRODUCTION* Total PGM production for the year up 1.7% at 142.1 koz (kozpa) 203 200.0% Strong fourth quarter performance with delivery of 40.5 koz 100.0% 79.7% 84.1% 82.1% 80.1% FY2021 is focused on stable feed grade and increasing recoveries 153 160.0 0.0% 152.2 1
Slide 11: Our Markets
OUR MARKETS
Slide 12: Headwinds from Deep Mines to Meet Growing Rhodium Demand
HEADWINDS FROM DEEP MINES TO MEET GROWING RHODIUM DEMAND PRIMARY DEMAND OUTSTRIPPED BY PRIMARY SUPPLY Supply ‘000 oz 2017 2018 2019 South Africa 611 618 624 Russia 78 69 68 Others 70 70 65 Total primary supply 759 757 757 Gross demand ‘000 oz 2017 2018 2019 Autocatalyst 834 883 1 008 Other 207 170 1
Slide 13: Palladium and Platinum Outlook
PALLADIUM AND PLATINUM OUTLOOK PALLADIUM PLATINUM GROSS DEMAND (2019) GROSS DEMAND (2019) Autocatalyst Jewellery Industrial Autocatalyst Jewellery Industrial Investment 83.5% 1.2% 15.3% 34.0% 24.3% 28.4% 13.4% Growing car sales in China Tighter emission standards Continuing shortages Source: B
Slide 14: Chrome – Vital for Stainless Steel
CHROME – VITAL FOR STAINLESS STEEL Chrome is what makes steel stainless South Africa hosts 72% of the global chrome reserves Assuming a 5% CAGR in stainless steel: GLOBAL STAINLESS STEEL CAGR +5.0% ADDITIONAL STAINLESS STEEL 2.7 Mtpa ADDITIONAL FERROCHROME Roskill ores and concentrates price f
Slide 15: Chrome Tax
CHROME TAX Anglo American Platinum, Assore, Bauba Resources, Implats, Northam Platinum, Sail, Sibanye-Stillwater, Siyanda Resources and Tharisa An independent Chrome Ore Producers Group representing primary and UG2 chrome ore producers Opposed to the chrome tax as this will not solve the funda
Slide 16: Financial Performance
FINANCIAL PERFORMANCE
Slide 17: Sustainable Business Even in Times of COVID-19
SUSTAINABLE BUSINESS EVEN IN TIMES OF COVID-19 CO-PRODUCT AND HEALTHY CASH CONTINUED ROBUST BALANCE LIQUIDITY EXCHANGE RATE GENERATION INVESTMENT SHEET MANAGEMENT BENEFITS Multiple revenue streams Exposure to the right Investment in SHE, Low gearing Proactive management of coupled with US$ commoditi
Slide 18: Profitability
PROFITABILITY METRIC UNIT FY2020 FY2019 % change Revenue US$ m 406.0 342.9 18.4 EBITDA US$ m 113.4 51.6 119.8 Profit before tax US$ m 75.8 11.2 576.8 Earnings per share US$ cents 16.2 4.0 305.0 Dividend per share US cents 3.50 0.75 367.0 Return on equity % 12.3 3.3 272.7 Return on invested capital %
Slide 19: Revenue and Gross Profit
PGM GROSS PROFIT MARGIN CHROME GROSS PROFIT MARGIN REVENUE AND GROSS PROFIT 39.4% 25.0% Gross profit margins improved to 32.1% (2019: 17.6%) Agency and Trading Manufacturing 4.8% 0.6% The major factors contributing: ‒ increased sale volumes ‒ increase in the PGM basket price Chrome 29.5% ‒ benef
Slide 20: Costs
COSTS CASH COST OF SALES METRIC UNIT FY2020 FY2019 % Cubes mined* Mm3 18.5 12.5 +47.7 Overheads 21.4% Cost per cube mined US$/m3 7.1 9.1 -22.0 Mining Reef tonnes mined Mt 5.0 4.6 +7.4 33.5% Cost per reef tonne mined# US$/t 26.3 24.7 +6.5 Tonnes milled Mt 5.0 4.8 +4.1 Consolidated cash cost per tonne
Slide 21: Cash Flow and Dividends
CASH FLOW AND DIVIDENDS Group generated operating cash flow of US$73.0 m Committed to capital discipline ‒ Movement in trade and other receivables US$50.6 m Dividend of US 3.5 cents per share = 17.1% of NPAT Capex of US$70.6 m Minimum of 15% of annual NPAT Capex commitments taken into co
Slide 22: Balance Sheet and Capex
BALANCE SHEET AND CAPEX Total debt of US$70.4 m FY2020 Capex US$70.6 m ‒ Trade finance amounted to US$17.3 m ‒ US$24.7 m mining fleet ‒ Debt to total equity ratio of 21.9% ‒ US$22.7 m deferred stripping ‒ Cash and cash equivalent of US$49.3 m ‒ US$11.4 m related to other mining assets ‒ Net debt
Slide 23: Outlook
tharisa OUTLOOK
Slide 24: Commitment to R&D and Investment
COMMITMENT TO R&D AND INVESTMENT Since the initiation, Tharisa has been committed to the beneficiation of its mineral products as well as the development and deployment of innovative processing and technology US$504 m THARISA GROUP TOTAL INVESTMENT The R&D department of Tharisa has been developi
Slide 25: R&D to Commercialisation
R&D TO COMMERCIALISATION 1MW SMELTER PGM OPTIMISATION CHALLENGER PLANT FOURTH STAGE VULCAN PLANT PROJECTS CRUSHING Producing PGM alloy and Successfully increasing Production of higher Increased the capacity for In house developed to develop further the PGM recoveries at value chemical and production
Slide 26: Value Proposition
VALUE PROPOSITION Leading producer: excellent safety record and investment in EV/EBITDA (2021E) asset sustainability 6.0 5.5 5.0 4.4 4.5 4.6 Exposure to PGMs driven by high palladium and rhodium 4.0 4.0 3.3 demand and growing stainless steel market 3.0 3.0 2.5 2.1 2.0 1.6 Committed to strong r
Slide 27: Questions and Answers
QUESTIONS AND ANSWERS Expand and roll out our business sustainably Further optimise our existing operations Continue to invest in innovative thinking Become a global and diversified business Be the investment of choice in our chosen sector Responsibly enriching the lives of all of our st
Slide 28: Disclaimer
DISCLAIMER These Presentation Materials are for information purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity. Whilst the information contained herein has been prepared in good faith, neither Tharisa plc (the ‘C