Impala Platinum Holdings Limited · JSE:IMP
Impala Platinum — FY2016 Earnings Presentation
41 slides from Impala Platinum's earnings presentation, Sep 1, 2016
Slide 1: Annual Results 30 June 2016
ANNUAL RESULTS 30 June 2016 1 September 2016
Slide 2: Forward looking statement
ANNUAL RESULTS SEPTEMBER 2016 2 Forward looking statement Certain statements contained in this presentation other than the statements of historical fact contain forward-looking statements regarding Implats’ operations, economic performance or financial condition, including, without limitation, those
Slide 3: Agenda
ANNUAL RESULTS SEPTEMBER 2016 3 Agenda OVERVIEW OPERATIONS FINANCE MARKET OUTLOOK Terence Goodlace Terence Goodlace Brenda Berlin Paul Finney Terence Goodlace
Slide 4: Overview
OVERVIEW Terence Goodlace, CEO
Slide 5: Safety strategy
ANNUAL RESULTS SEPTEMBER 2016 5 Safety strategy The Group achieved lowest ever 12-month moving average FIFR of 0.024 per million man hours worked during 2016 Worked over 8 million fatality free shifts between 13 April 2015 and 24 November 2015 Person Striving to shift safety culture from depen
Slide 6: Safety performance
ANNUAL RESULTS SEPTEMBER 2016 6 Safety performance FIFR deteriorated to 0.091 per million man hours FATAL INJURY FREQUENCY RATE 0.091 (PER MILLION MAN HOURS 0.087 Tragic loss of lives at our operations during the year: 0.065 Two at Mimosa in Zimbabwe 0.058 WORKED) 0.043 Three at Impala Ruste
Slide 7: Operational – key features
ANNUAL RESULTS SEPTEMBER 2016 7 Operational – key features Tonnes milled increased by 15.0% to 18.5 million tonnes PLATINUM PRODUCTION Gross refined platinum production increased by 12.7% to 1 438 300 ounces 1 438 Group unit costs were well managed, despite safety impacts at the Lease 1 276 30
Slide 8: Reserves and resources
ANNUAL RESULTS SEPTEMBER 2016 8 Reserves and resources There has been no material change to Implats’ mineral ATTRIBUTABLE MINERAL RESOURCES OF 194MOZ PT (%) resources as at 30 June 2016 relative to 30 June 2015 5 4 2 Zimplats Estimated total attributable mineral resources decreased by 1% to 6 Im
Slide 9: Financial – key features
ANNUAL RESULTS SEPTEMBER 2016 9 Financial – key features Group revenue increased by 11% to R35.9 billion HEPS Despite rand basket decreasing by 7% to R23 413 per platinum ounce Cost increases contained through stringent cost control measures 36 realising a saving of some R1.4 billion Headlin
Slide 10: Operations
OPERATIONS Terence Goodlace, CEO
Slide 11: Impala
ANNUAL RESULTS SEPTEMBER 2016 11 Impala Milled tonnage increased by 12.1% to 10.32 million tonnes (9.21 million tonnes) Grades remained largely unchanged at 4.16g/t PRODUCTION Refined platinum production rose 9% to 626 900 ounces (575 200 ounces) 627 Focus on improving mining efficiencies an
Slide 12: Creating mining flexibility at Impala Rustenburg
ANNUAL RESULTS SEPTEMBER 2016 12 Creating mining flexibility at Impala Rustenburg Primary development up 2.5% to 58.5km MINEABLE FACE LENGTH Annual average achieved Average mineable face length increased to 21.9km Mining flexibility at 1.3 panels per crew 21.9 20.5 20.5 18.7 Plan to increase
Slide 13: New modern shafts at Impala Rustenburg
ANNUAL RESULTS SEPTEMBER 2016 13 New modern shafts at Impala Rustenburg The group has continued to invest Major capital projects 20 Shaft 16 Shaft through the cycle Capital spend for 2016* R753 million R544 million Good progress on commissioning and Remaining capital spend* R1 607 million R968 m
Slide 14: Implementing the Impala Rustenburg strategy
ANNUAL RESULTS SEPTEMBER 2016 14 Implementing the Impala Rustenburg strategy Key metrics 2017 2021 The strategy focuses on transforming Mining Mix (Merensky : UG2) 40 46 the Impala Rustenburg into a more Head Grade (6E g/t) 4.37 4.41 concentrated mining operation with Number of shaft complexes 13 10
Slide 15: Impala Refining Services (IRS)
ANNUAL RESULTS SEPTEMBER 2016 15 Impala Refining Services (IRS) Utilises Impala’s excess processing and refining capacity to (Pt oz 000) 2016 2015 smelt and refine the concentrate and matte produced by Zimplats 251.0 215.6 the group’s other mine to market operations and third parties Marula 77.1 7
Slide 16: Zimplats
ANNUAL RESULTS SEPTEMBER 2016 16 Zimplats Exceptional safety performance PRODUCTION Zero fatalities 290 Tonnes milled increased by 24.1% to 6.41 million (5.16 million), Lost production tonnage at Bimha fully recovered Additional open pit mining Redeployment of mining teams Increasing o
Slide 17: Zimplats capital
ANNUAL RESULTS SEPTEMBER 2016 17 Zimplats capital Capital expenditure reduced to US$68 million (US$85 million) due to cash preservation initiatives Major projects in planning Bankable feasibility study on portal 6 near completion - initial box cut underway (expected that US$148 million will be
Slide 18: Marula
ANNUAL RESULTS SEPTEMBER 2016 18 Marula Improved safety with zero fatalities PRODUCTION Milled tonnage increased by 2.5% to 1.70 tonnes (1.66 tonnes) 78 Head grade rose by 1.4% 74 Platinum in concentrate production rose by 5.6% to 77 700 ounces (73 600 ounces) Unit costs per platinum ounce
Slide 19: Mimosa
ANNUAL RESULTS SEPTEMBER 2016 19 Mimosa Two separate fatalities occurred PRODUCTION Devastating blow to an excellent safety record, 120 Continuous focus on behavioural and cultural issues to achieve zero harm. 117 Mimosa achieved record annual production Tonnes milled increased by 2.1% to
Slide 20: Two Rivers
ANNUAL RESULTS SEPTEMBER 2016 20 Two Rivers No fatalities in 2016 PRODUCTION Two Rivers delivered another exceptional year and remains one of South 186 Africa’s lowest-cost PGM producers 174 Acquired the mineral rights to the remaining extension of Kalkfontein Once incorporated, Implats’ sha
Slide 21: Finance
FINANCE Brenda Berlin, CFO IMPLATS
Slide 22: Income statement
ANNUAL RESULTS SEPTEMBER 2016 22 Income statement Revenue increased due to improved R million Jun-2016 Jun-2015 % change volumes Sales 35 932 32 477 11 Impairment and scrapping: Cost of sales (35 928) (30 847) (17) Closure of 12 Mechanised section and 8 shaft Gross profit 4 1 630 (100) 14 Sh
Slide 23: Sales revenue
ANNUAL RESULTS SEPTEMBER 2016 23 Sales revenue Revenue up by R3.45 billion: 40 000 5 682 Higher volumes 7 233 35 932 Lower dollar metal prices 35 000 32 477 Weaker exchange rate 30 000 9 460 25 000 (Rm) 20 000 -R2 227 million 15 000 10 000 Jun-2015 Sales Volume Sales Price Sales ROE Jun-2016
Slide 24: Cost of sales movement
ANNUAL RESULTS SEPTEMBER 2016 24 Cost of sales movement R5.1 billion increase in cost of sales 38 000 35 928 impacted by: 847 36 000 595 Low 2015 base 726 2 619 211 83 Build-up after industrial action at Impala 34 000 Temporary closure of Bimha 32 000 30 847 (Rm) 2016 increase in productio
Slide 25: Cost savings – South African operations
ANNUAL RESULTS SEPTEMBER 2016 25 Cost savings – South African operations Cost reduction of R1.4 billion for 19 000 18 048 R1.08 bn reduction the group 18 000 16 970 R1.1 billion at South African operations 1 154 17 000 R300 million at Zimplats 1 280 16 000 Consumable inflation of 2.4% which
Slide 26: Implats group unit cost
ANNUAL RESULTS SEPTEMBER 2016 26 Implats group unit cost 30 000 25 000 2 044 22 222 21 731 20 000 2 535 (R/Pt oz) 15 000 10 000 5 000 0 Jun-2015 Inflation Volumes and other Jun-2016 FINANCE
Slide 27: Headline earnings movement
ANNUAL RESULTS SEPTEMBER 2016 27 Headline earnings movement 500 Higher royalties: 221 1 692 83 0 Zimplats royalty correction in FY2015 (R1.2billion) 809 -500 2016: higher production and revenues -1000 Lower tax expense: (Rm) 455 -1500 2015 : Extra Zimplats tax R913 million 1 626 (court cas
Slide 28: Movement in gross cash position
ANNUAL RESULTS SEPTEMBER 2016 28 Movement in gross cash position Balance sheet strengthened through the 8 000 R4 billion equity raise before expenses 7 000 1 588 6 788 3 900 6 000 Total capital expenditure of R3.6 billion includes 5 000 1 297 (Rm) 16 and 20 Shafts spend which amounted 4 000 to
Slide 29: Net debt
ANNUAL RESULTS SEPTEMBER 2016 29 Net debt Net cash of R19 million at 30 June 2016 R million Jun-2016 Jun-2015 % change excluding leases Gross cash 6 788 2 597 161 Available R6.8bn, cash Convertible bond (5 423) (4 812) (13) Undrawn facilities of R4.0bn Derivative financial instrument 1 137 6
Slide 30: Market
MARKET Paul Finney, Group Executive – Refining and Marketing
Slide 31: Overview
ANNUAL RESULTS SEPTEMBER 2016 31 Overview The global macro economic picture remains uncertain 17.00 Continued growth downgrades by the IMF 1 250 Baseline projection of 3.1% global growth in 2016 16.00 1 150 Brexit vote will impact further 1 050 15.00 Demand for PGMs remains healthy, while prim
Slide 32: Vehicle sales
ANNUAL RESULTS SEPTEMBER 2016 32 Vehicle sales 2015 was another positive year World Light-duty vehicle sales by region 1.8% growth 2016 2016 2015 Global growth forecast of 2.4% Forecast Growth Forecast Actual (%) (millions) (millions) Major Contributors include: US, WE, China and India North A
Slide 33: The Automotive Market
ANNUAL RESULTS SEPTEMBER 2016 33 The Automotive Market Electric Vehicles EV shares for most automakers are expected to increase over the next few years Significant differences according to automakers’ views on their best route to lower CO2 emissions By 2023, global Electric Vehicles are estima
Slide 34: Platinum jewellery
ANNUAL RESULTS SEPTEMBER 2016 34 Platinum jewellery Global platinum jewellery sales accounted for 3.025 million ounces in 2015 China: -4% India: +24% Japan: +2.7% USA: +10% PGI’s strategic partners significantly outperform the market We continue to support PGI’s marketing efforts with the
Slide 35: Investment
ANNUAL RESULTS SEPTEMBER 2016 35 Investment H1 2016 Global ETFs - relatively small moves PLATINUM ETF INVESTMENT Platinum -40 koz 3 000 2 500 Palladium -130 koz Ounces (000) 2 000 1 500 Divergent Investor Views on Platinum and Palladium 1 000 500 H1 2016 Speculative market (NYMEX, TOCOM) 0 Jun-1
Slide 36: Investment
ANNUAL RESULTS SEPTEMBER 2016 36 Investment Japanese small Pt bars sales continued to perform well in H1 2016 Platinum +325 koz We continue to support the World Platinum Investment Council (WPIC) efforts in:- Stimulating investor demand for physical platinum Market development with JV partners
Slide 37: Supply and demand
ANNUAL RESULTS SEPTEMBER 2016 37 Supply and demand Fundamental demand demonstrates continued growth SUPPLY/DEMAND DEFICITS 2016 platinum to remain in fundamental deficit 0 Automotive and Industrial Jewellery -250 Marginal planned supply increases may well not be realised Recycling rebound wi
Slide 38: The PGM market outlook
ANNUAL RESULTS SEPTEMBER 2016 38 The PGM market outlook The market may have bottomed Liquid surface stocks will continue to cover fundamental deficits for the remainder of 2016 Expectation for “lower-for-longer” rand basket prices remains Stocks are increasingly being eroded Increasing autom
Slide 39: Outlook
OUTLOOK Terence Goodlace, CEO
Slide 40: Outlook
ANNUAL RESULTS SEPTEMBER 2016 40 Outlook Remain resolute in achieving zero harm goals Fundamental deficits in PGMs will have a positive effect on PGM prices in the medium to long-term Implats will continue its cash preservation initiatives and its drive to enhance productivity and profitabilit
Slide 41: Annual Results
ANNUAL RESULTS 30 June 2016 1 September 2016
Impala Platinum Holdings — FY2016 Earnings Presentation on 6ix