Sibanye Stillwater Limited · JSE:SSW
Sibanye Stillwater — H1 2020 Earnings Presentation
32 slides from Sibanye Stillwater's earnings presentation, Aug 27, 2020
Slide 1: Results for the six months ended 30 June 2020
Results for the six months ended 30 June 2020 H1 2020 Neal Froneman 27 August 2020
Slide 2: Disclaimer
Disclaimer The information in this announcement may contain forward-looking statements within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, among others, those relating to Sibanye Still
Slide 3: Delivering on our strategic focus areas
Delivering on our strategic focus areas Strengthen our position as a leading international precious metals mining company by: Consistent focus on delivery of key strategic goals 3
Slide 4: Progressive execution of our strategic goals
Progressive execution of our strategic goals Strategic focus areas… Progress made/delivery August 2020 • Leadership resilience strengthened Building a values-based • Values based culture adoption accelerated through the COVID-19 challenges organisational culture • Culture programme embedding values
Slide 5: Embedding ESG excellence in the way we do business
Embedding ESG excellence in the way we do business
Slide 6: Impactful actions to assist vulnerable stakeholders during COVID-19
Impactful actions to assist vulnerable stakeholders during COVID-19 Contributions Financial support Employee donations Counselling and to the SA relief funds for non-working matched by psychological support employees the company extended to employees (R23.1 million) (R1.5 billion) (up to R2.0 millio
Slide 7: Commitment to renewal and restitution at Marikana
Commitment to renewal and restitution at Marikana • Acquired Lonmin with our eyes wide open regarding Marikana tragedy • An opportunity to create a new future with all stakeholders • Incorporation of the Marikana operations into Sibanye-Stillwater has ensured a sustainable future for all stakeholder
Slide 8: DRDGOLD – Rehabilitation through sustainable mining
DRDGOLD – Rehabilitation through sustainable mining • Through our 50.1% investment in DRDGOLD we are creating positive change by removing the environmental legacy of SA gold mining • ESG highlights - continued investment in rehabilitation - hundreds of hectares cleared for development - vegetating t
Slide 9: Recognition for our ESG efforts
Recognition for our ESG efforts • Admitted as ICMM member in Feb 2020 Marked 20 years of environmental and community collaboration under the Good Neighbor Agreement in the US PGM operations - rigorous evaluation process • CDP climate change disclosure - ‘A’ rating - one of only 179 companies globall
Slide 10: Ensuring safe production and operational excellence
Ensuring safe production and operational excellence
Slide 11: Progressive safety performance
Progressive safety performance • Zero fatalities during Q2 2020 for Group Fatal injury frequency rate* (SA gold operations) 0.3 • SA gold operations fatality free for almost two years 0.237 - 710 days with 13 million fatality free shifts (FFS) 0.2 • US PGM operations fatality free since Oct 2011 - 3
Slide 12: Recognition for our safety achievements
Recognition for our safety achievements At the annual South African Mining Industry safety and health excellence awards, Sibanye-Stillwater was presented with various safety awards • JT Ryan Award - mining company with the best safety improvement • Platinum - 1st place: Bathopele operations - 3rd pl
Slide 13: Responsible approach to COVID-19
Responsible approach to COVID-19 SA workforce attendance and productivity • US PGM operations largely unaffected outside of ongoing social distancing measures 100 - halted non-essential growth capital • US PGM operations achieved 89% of planned Q2 80 mined production • SA operations - full lockdown
Slide 14: Record earnings – despite COVID-19
Record earnings – despite COVID-19 • Q2 2020 impacted by COVID-19 but anchored Profitability (adjusted EBITDA 1) and gearing by strong Q1 2020 20 000 3 • 8x increase in adjusted EBITDA1 year-on-year 2.6 2.5 2.4 2.4 2.3 - R16.5bn vs R2.0bn in H1 2019 (US$990m 15 000 36% Net debt: adjusted EBITDA rati
Slide 15: Exposure to the right commodities at the right time
Exposure to the right commodities at the right time 3 year Produced Revenue Commodity performance (%) prill split 2(%) contribution 2(%) 1 Rhodium 1 041.5 4 21 2 Ruthenium 315.4 6 0.5 3 Palladium 138.3 28 43 4 Iridium 69.6 2 0.5 5 Silver 63.1 6 Gold 55.9 28 21 7 Iron Ore CFR 50.6 8 Nickel 33.0 9 Cop
Slide 16: SA PGM operations – contributing 54% of Group adjusted EBITDA
SA PGM operations – contributing 54% of Group adjusted EBITDA SA PGM operations – Underground and surface production and AISC • Production 5% higher than H1 2019 1 200 40 000 primarily due to the incorporation of Marikana from June 2019 • Risk based ramp-up 900 30 000 - Q2 production at 47% levels o
Slide 17: Estimated annual Marikana operational synergies more than double
Estimated annual Marikana operational synergies more than double Initial benefits Realised benefits Estimated Category Summary of key initiatives identified since acquisition annual benefits* Closure of London offices • Corporate rationalisation (closing London office and delisting) 138 51 102 • Emp
Slide 18: US PGM operations – contributing 36% of Group adjusted EBITDA
US PGM operations – contributing 36% of Group adjusted EBITDA1 US PGM operations – Mined and recycling production and AISC • 5% higher production year-on-year • Continued operations with reduced 800 2 000 contractor workforce at site • High margin underground operations - 60% adjusted EBITDA margin1
Slide 19: SA gold operations – contributing 10% of Group adjusted EBITDA
SA gold operations – contributing 10% of Group adjusted EBITDA1 SA gold – Underground and surface production with adjusted EBITDA margin¹ • 17% y-on-y increase in production - H1 2019 disrupted by AMCU strike 700 1 000 000 • Steady ramp-up post SA COVID-19 600 lockdown 800 000 - Q2 production at 54%
Slide 20: Financial review
Financial review Balance sheet de-risked CFO, Charl Keyter
Slide 21: Deleveraged - with further reduction in gross debt possible
Deleveraged - with further reduction in gross debt possible with CB soft call Net debt to adjusted EBITDA1 US$m • Net debt reduced by 38% to US$930 million (R16.1 billion) 2 000 3.5 from US$1,497 million (R21.0 billion) Net debt: adjusted EBITDA Covenant 3.0 in Dec 2019 2.98 limit 1 500 Pro forma2 2
Slide 22: Comfortably manageable debt maturities with good liquidity headroom
Comfortably manageable debt maturities with good liquidity headroom Debt maturity ladder at 30 June 2020 in US$ million • Gross debt of US$1,622 (R28.1 billion) and net debt 2 000 of US$930 million (R16.1 billion) 1621 692 • The next meaningful debt 1 500 339 maturity is the US$354 million US$ milli
Slide 23: Income statement for the six months ended June 2020
Income statement for the six months ended 30 Jun 2020 Rm H1 2020 H1 2019 % variance Revenue 55,019 23,535 134 134% increase in revenue Cost of sales, before amortisation & depreciation (37,725) (20,662) 83 Net other cash costs² (780) (854) (8) Adjusted EBITDA¹ 16,514 2,019 718 SA PGM - Amortisation
Slide 24: Surge in earnings and degearing enable the return to dividends
Surge in earnings and degearing enable the return to dividends Normalised earnings/(loss) and dividend payments2 • Return to positive normalised earnings after two years • Interim dividend of 50 SA cents 10 000 1 600 - ~2.94¹ US cents per ordinary share or 11.8¹ US cents per ADR 8 000 1338 1 400 • O
Slide 25: PGM market outlook
PGM market outlook CEO, Neal Froneman
Slide 26: PGM market – summary insights and outlook
PGM market – summary insights and outlook • Estimate 15% decline y-o-y in SA PGM production for 2020, due to COVID-19 lockdown - more severe impact on Rhodium • Recycling volumes affected by logistical constraints, staff shortages, liquidity and pipeline financing restrictions and economic Supply un
Slide 27: Guidance and conclusion
Giba ~ ic Geilpes lwa a Guidance and conclusion
Slide 28: 2020 Annual guidance
2020 Annual guidance³ Relative gold and PGM prices in rand and dollars Production All-in sustaining costs Total capital 90 US PGM operations 620 - 650 koz US$830 - 860/oz US$250 - 270m (2E mined) 60 Relative price performance (%) SA PGM R19,700 - 21,000/4Eoz R2,300m 30 operations² 1.35 -1.45 moz² (U
Slide 29: Undervalued compared to Peers
Undervalued compared to Peers Market consensus analysis EV / EBITDA (2020e / 2021e) P / FCFPS (2020e / 2021e) Net debt / 2020e EBITDA EV & market cap (USDm) 10.9x 33.3x 39 761 Senior Gold¹ Senior Gold¹ Senior Gold¹ 0.5x Senior Gold¹ 8.5x 19.8x 35 573 7.4x 17.7x 13 142 Intermediate Intermediate Siban
Slide 30: Questions?
Questions? Contacts James Wellsted/ Henrika Ninham/ Chris Law ir@sibanyestillwater.com Tel: +27(0)83 453 4014/ +27(0)72 448 5910/ +44 (0)7923126200 Website: www.sibanyestillwater.co.za Tickers: JSE: SSW and NYSE: SBSW
Slide 31: Appendix
Appendix
Slide 32: Summary of COVID-19 contributions
Summary of COVID-19 contributions Financial contributions Total Contributions to the SA national relief funds Employee wages and benefits Employee volunteerism scheme R25.1 million • Solidarity fund • Wages and benefits paid to employees during lockdown period • Up to R1.0million employee donations