Slide 1: Financial Results for the year ended 31 December 2021
FINANCIAL One RESULTS AECI, for a For the year ended 31 December 2021 better 2 March 2022 world
Slide 2: Agenda
AGENDA 2 1 COVID-19 2 PERFORMANCE 3 BUSINESS UPDATE SUMMARY DRIVERS 4 5 PERFORMANCE PERFORMANCE ANALYSED BY SEGMENT 6 ONE AECI, FOR 7 OUTLOOK AND A BETTER WORLD FOCUS Financial Financial results 2021 results 2021
Slide 3: Non-executive Directors
Non-executive Directors 3 KHOTSO MOKHELE FIKILE DE BUCK WALTER DISSINGER PHILISIWE SIBIYA GODFREY GOMWE PATTY O’BRIEN RAMS RAMASHIA MARNA ROETS STEVE DAWSON Financial results 2021
Slide 4: Group Executive Committee
Group Executive Committee 4 MARK DYTOR MARK KATHAN CANDICE WATSON DEAN MULQUEENY CHERYL SINGH DEAN MURRAY AARTI TAKOORDEEN Aarti Takoordeen Financial results 2021
Slide 5: COVID-19 update
01. COVID-19 update
Slide 6: COVID-19 landscape
COVID-19 landscape 6 CUMULATIVE CASES GLOBAL PROGRESSION Active Recovered Hospitalised Mortality 4 000 3 000 312 1 551 2 000 312 1 448 12 1 000 12 0 1 2020 2021 2022 1 243 1 199 Europe South America USA South Africa China 12 12 1 1 SOUTH AFRICA’S WAVES 1 238 300k 837 International 200k 5 South Afric
Slide 7: Performance summary
02. Performance summary
Slide 8: Performance summary: COVID-19
Performance summary 8 COVID-19 • Impact on human health abating as fourth wave of infections receding and vaccination programmes rolling out • Impact on economies and businesses still evident – Uneven pace of recovery across world economies and sectors of activity – Significant supply chain disrupti
Slide 9: Performance summary
Performance summary 9 FINAL CASH DIVIDEND OF 505c DECLARED TOTAL DIVIDEND OF 685c FOR THE YEAR REVENUE PROFIT FROM CASH GEARING NET DEBT: EBITDA HEPS +8% to +5% to OPERATIONS +27% to GENERATED 24% EBITDA R26 053m +124% to FROM (1H21: 27%; <1 Foreign & export R3 091m R2 052m 1 116c OPERATING ACTIVITI
Slide 10: Performance summary: Zero Harm
Performance summary 10 ZERO HARM • Best-ever safety performance: TRIR of 0,23 (’20: 0,42) • Performance in relation to the Zero Milestones – All milestones achieved in a single year for the first time Milestones 2018 2019 2020 2021 0 Fatalities 1 0 0 0 0 Life-altering injuries 3 2 1 0 0 SHE legal di
Slide 11: Progress against sustainability targets
Progress against sustainability targets 11 REDUCE SCOPE 1 REDUCE SCOPE 2 REDUCE ELECTRICITY EMISSIONS EMISSIONS CONSUMPTION (MWH) 2025 TARGET 2021 RESULT 2025 TARGET 2021 RESULT 2025 TARGET 2021 RESULT 20% 35% REDUCTION REDUCTION 8% 15% REDUCTION REDUCTION 8% 10% REDUCTION REDUCTION INCREASE RENEWAB
Slide 12: ESG scorecard
ESG scorecard 12 AT DECEMBER 2021 ENVIRONMENT SOCIAL GOVERNANCE Decrease potable water consumption Employee volunteerism Regulatory reporting Decrease discharge to sea or sewer Gender equality External assurance Decrease Scope 1 emissions Corporate social responsibility Responsible leadership Decrea
Slide 13: AECI aspires to achieve net zero emissions by 2050
The Big Statement 13 AECI Net Zero is defined as a target of completely negating the amount of ASPIRES TO greenhouse gases produced by our business operations, to be achieved by reducing emissions and implementing ACHIEVE methods of absorbing carbon dioxide from the atmosphere. NET ZERO EMISSIONS BY
Slide 14: Business drivers
03. Bt ta Business drivers
Slide 15: Business drivers: ZAR/US$ exchange rate
Business drivers 15 ZAR/US$ EXCHANGE RATE Rand 20 19 18 Dec 21 close 17 = 15,98 16 Ave. 2020 = 16,46 15 Ave. 2021 = 14,78 14 Jan 21 open Jan 20 open = 14,03 = 14,65 13 2020 2021 Source: AECI Treasury, Bloomberg Financial results 2021
Slide 16: Business drivers: commodity prices and mining volumes
Business drivers 16 GOLD PGMs COBALT, COPPER AND NICKEL US$/oz US$/oz US$/oz US$/t US$/t 1 950 26 600 2 900 65 000 19 000 1 900 17 000 1 850 21 400 2 400 55 000 1 800 15 000 1 750 16 200 1 900 13 000 1 700 45 000 11 000 11 000 1 400 1 650 9 000 1 600 35 000 5 800 900 7 000 1 550 1 500 600 400 25 000
Slide 17: Business drivers: Brent crude and manufacturing volumes
Business drivers 17 BRENT CRUDE OIL SA MANUFACTURING VOLUMES US$/bbl Index Base: 2015 = 100 100 Cum change y-o-y = 6,4% 120 90 110 80 100 Jan 20 open = 66,25 70 Ave. 2021 = 70,95 90 60 80 Jan 21 open = 51,80 Ave. 2020 = 43,21 50 70 40 60 30 50 20 40 2020 2021 2016 2017 2018 2019 2020 2021 Source: Bl
Slide 18: Performance analysed
OA=Cr jood Aemintry 04. Performance analysed
Slide 19: Performance analysed: 2021 vs 2020
Performance analysed 19 2021 2020 PROFIT PROFIT FROM FROM EBITDA OPS HEPS EBITDA OPS HEPS (Rm) (Rm) (cps) (Rm) (Rm) (cps) REPORTED 3 091 2 052 1 116 2 943 917 880 CHANGE 5,0% 123,8% 26,8% IMPAIRMENTS OF GOODWILL AND PPE 890 NET PROFIT FROM SALE OF BUSINESSES (102) (102) UNDERLYING 3 091 2 052 1 116
Slide 20: Performance analysed: 2021 vs 2019
Performance analysed 20 2021 2019 PROFIT PROFIT FROM FROM EBITDA OPS HEPS EBITDA OPS HEPS (Rm) (Rm) (cps) (Rm) (Rm) (cps) REPORTED 3 091 2 052 1 116 3 473 2 031 1 150 CHANGE (11,0%) (1,0%) (3,0%) IMPAIRMENTS OF GOODWILL AND PPE 147 NET PROFIT FROM SALE OF BUSINESSES (234) UNDERLYING 3 091 2 052 1 11
Slide 21: Earnings analysed
Earnings analysed 21 EBITDA PROFIT FROM HEPS (CENTS) +5% to OPERATIONS R3 091m +124% to 1 045 1 150 1 116 R2 052m 959 880 HEPS TRADING MARGIN +27% to 7,9% 1 116c (’20: 3,8%) RONA OF TAX RATE AT 14,3% 34,7% (’20: 6,5%) (’20: 33% excl. impairments) – Increase in foreign withholding taxes 2017 2018 201
Slide 22: Cash management
Cash management 22 CASH • Capex = R777m 4 177 4 030 – R193m for expansion projects – R584m for sustenance > Projects delayed from ’20 • NWC to revenue of 17,6% (14,5% in ’20) 2 760 2 383 • Net borrowings of R2 760m • Gearing at 24% (1H21: 27%; FY20: 22%) 41 36 • Cash interest cover of 18,6x (’20: 8,
Slide 23: Inventory movement
Inventory movement 23 DEC 21 vs DEC 20 (Rm) 48 235 Movement in inventory: R1 119m Volume increase Cost increase Forex effects 836 Financial results 2021
Slide 24: Net borrowings and cash utilisation
Net borrowings and cash utilisation 24 Rm Net borrowings at Net cash Net interest paid Tax paid Changes in Net capex Dividends paid Lease payments Finance lease Other Net borrowings at 31 Dec 2020 generated from working capital liabilities 31 Dec 2021 operations (166) (528) (1 093) 3 289 (2 383) (69
Slide 25: Net borrowings analysis
Net borrowings analysis 25 PAYMENT PROFILE Net borrowings Borrowings Borrowings FX Net borrowings (excl. IFRS 16) at paid raised (excl. IFRS 16) Rm 2022 2023 TOTAL 31 Dec 2020 at 31 Dec 2021 Existing term 5 420 (1 877) DMTN auction 520 520 70 4 059 446 DMTN private placement 500 300 800 Term – ZAR 5
Slide 26: Performance by segment
OA=CIr ood hemintey 05. Performance by segment
Slide 27: Performance by segment
Performance by segment 27 SEGMENT REVENUE EBITDA PROFIT FROM OPS R11 969m R1 813m R1 277m 7,0% 4,0% 14,0% R1 541m R262m R212m 6,5% 1,2% 0,5% R6 020m R383m R179m 0,6% 26,1% 38,3% R6 462m R778m R586m 19,1% 40,2% >100% R26 053m R3 091m R2 052m 8,1% 5,0% >100% Financial results 2021
Slide 28: Mining
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Slide 29: AECI Mining summary
AECI Mining 29 SUMMARY REVENUE EBITDA TRADING PROFIT TRADING MARGIN TRADE WC R11 969m R1 813m R1 277m 10,7% 15,3% 7,0% 4,0% 14,0% ’20: R11 189m ’20: R1 744m ’20: R1 120m ’20: 10,0% ’20: 13,7% Financial results 2021
Slide 30: AECI Mining revenue by mineral mined
AECI Mining 30 REVENUE BY MINERAL MINED (%) 1 10 Gold 5 9 24 PMGs 7 24 Coal 5 Copper 16 Diamond 17 17 Iron ore 22 Other minerals below 1% 21 Outer: 2021 22 Inner: 2020 Financial results 2021
Slide 31: Ammonia
Ammonia 31 SUMMARY NITRATES: KEY PRICES Base case 10 Feb 3 Feb 27 Jan ZAR UAN - FOB Black Sea 32% N (US$/t) 628 - 663 628 - 654 628 - 651 UAN - FOB NOLA 32% N (US$/t) 545 550 545 AN - FOB Baltic/Black Sea (US$/t) 650 - 750 650 - 750 650 - 750 19 000 US$/t FOB 700 Open Jan 2022 = 15 550 600 17 000 50
Slide 32: AECI Mining
AECI Mining 32 SUMMARY • Revenue • Capex – Good recovery from COVID-19 – Stepped up but below – Uplift of high ammonia and depreciation value ammonium nitrate prices (lag in – Projects deferred from ’20, margin effect) completed in ’21 – Foreign revenue remained at 61% > Air emissions abatement of t
Slide 33: AECI Mining Explosives
AECI Mining Explosives 33 • Southern Africa – Good progress in surface mining with replacing lost bulk volumes in SA > Coal mining sector affected by higher rainfall in 4Q21 and exports in the year constrained by rail and port challenges > Regaining market share in Northern Cape – Growth in undergro
Slide 34: AECI Mining Explosives
AECI Mining Explosives 34 • Asia Pacific – Indonesia: solid performance > 5-year contract extension secured with KPC > BBRI granulator plant under construction – Australia: best-ever performance > Thiess contract rolled over for 5 years > New business secured and mobilised effective 1 March ’22 • La
Slide 35: AECI Mining Chemicals
AECI Mining Chemicals 35 EXCELLENT PERFORMANCE, WITH RECORD SALES • Metallurgical chemicals – Robust recovery in demand for metallurgical chemicals in platinum mining sector – Better placed to service demand of SA customers in global supply climate – Solid xanthate plant debottlenecked – Overall exp
Slide 36: AECI Mining outlook
AECI Mining 36 OUTLOOK • AECI Mining Explosives • AECI Mining Chemicals – Supply chain management – Momentum carried into ’22 > Higher plant utilisation rates – All production facilities are running optimally • Well positioned for export opportunities in view of global ammonium nitrate shortages – V
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Slide 38: AECI Water summary
AECI Water 38 SUMMARY REVENUE EBITDA TRADING PROFIT TRADING MARGIN TRADE WC R1 541m R262m R212m 13,8% 20,4% 6,5% 1,2% 0,5% ’20: R1 447m ’20: R259m ’20: R211m ’20: 14,6% ’20: 19,1% Financial results 2021
Slide 39: AECI Water revenue by industry
AECI Water 39 REVENUE BY INDUSTRY (%) Public Water 23 Mining 25 20 35 Oil & Refining Industrial & Other 25 17 30 Outer: 2021 25 Inner: 2020 Financial results 2021
Slide 40: AECI Water
AECI Water 40 SUMMARY • Revenue growth • SA – Public sector up >20% – Solid overall performance – Oil & Refining sector down significantly > Revenue +13% – Most revenue lost due to COVID-19 in ’20 did not return > Public Water volumes +19% > Contract pricing pressure – Export growth limited by COVID
Slide 41: Sustainability - Project Purpose update
Sustainability - Project Purpose update 41 AECI GROUP • AECI Mining Explosives, Modderfontein – Phase 1 potable water replacement (savings of 250 000m3 p.a.) – Phase 2 effluent discharge reduction and water reuse – EIA application in progress – Zero liquid discharge pilot work completion 3Q22; full-
Slide 42: Project Purpose update
Project Purpose update 42 EXTERNAL PROJECTS • Public Water – ’21 Lesotho potable project completion in 3Q22 – Awarded further 2 additional potable water projects in 4Q22 – Water treatment systems at 2 more schools to be commissioned in 2Q22 • Industrial – Automotive sector: packaged plant treating b
Slide 43: Lesotho
Lesotho 43 • Potable water – Treatment of dam water for Harapokolana sports complex – Plant designed to produce 1MLD potable water – Direct filtration removes suspended solids – Plant will also supply local community with drinking water • Completed in Nov ’21 Financial results 2021
Slide 44: Projects awarded in '22
Projects awarded in ’22 44 LESOTHO MPUMALANGA • Treatment of river water, Mapotsoe • Treatment of dam water, Vaalbank – Plant designed to produce 5MLD drinking water – Plant designed to remove sulphates (membrane technology) – Uses conventional filtration to reduce suspended solids – Designed to pro
Slide 45: Technology advancements
Technology advancements 45 ’22 WATER MUNICIPAL WATER TREATMENT PROJECTS • 1 - Membrane Aerated Biofilm Reactor pilot trial unit – Demonstrate technical advantages of superior MABR technology – MABR waste water application vs standard operations – Enables future business opportunities at under-capaci
Slide 46: AECI Water outlook
AECI Water 46 OUTLOOK • Growth in Project Purpose earnings enhancement – 2 Public Water projects due for completion by 3Q22 – 3 Mining projects at final tender stage – Progress on internal AECI projects • Continued growth in Public Water and Mining sectors on the continent • Pricing value chain enha
Slide 47: Agri Health
6A=CI FSC—“(;sSSC AGRI HEALTH
Slide 48: AECI Agri Health summary
AECI Agri Health 48 SUMMARY REVENUE EBITDA TRADING PROFIT TRADING MARGIN TRADE WC R6 020m R383m R179m 3,0% 17,4% 0,6% 26,1% 38,3% ’20: R6 056m ’20: R518m ’20: R290m ’20: 4,8% ’20: 13,1% Financial results 2021
Slide 49: AECI Plant Health
AECI Plant Health 49 SUMMARY • Outstanding performance on the back of strong demand in SA – All regions and all crops – Revenue +13% and trading profit +24% • Results underpinned by – Strong sales of in-house formulated products – Higher volumes of liquid Bulk Nutrition – Continued focus on green ch
Slide 50: AECI Plant Health outlook
AECI Plant Health 50 OUTLOOK • Strong momentum continued into ’22 • Expanded synthesis plant to support in-house formulated product growth completed – 30% increase in capacity • Further registrations in US and other countries – Foundation set; establishing commercial presence in North and South Amer
Slide 51: AECI Schirm
AECI Schirm 51 SUMMARY • Positive EBITDA • Germany: operating loss incurred for the year – Under-utilisation of sugar beet herbicide synthesis facility > Low demand from customer due to high inventory levels carried over from ’20 – Raw material and packaging shortages in Europe > Supply chain issues
Slide 52: AECI Schirm outlook
AECI Schirm 52 OUTLOOK • Germany – Management team renewed and refocused – New tenders awarded for execution from ’22 > Major customer – 8m litres agrochemicals > Major customer (biocide) relocating volumes from Far East > European crop protection customer – 3-year contract > Major fine chemical cus
Slide 53: Chemicals
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Slide 54: AECI Chemicals summary
AECI Chemicals 54 SUMMARY REVENUE EBITDA TRADING PROFIT TRADING MARGIN TRADE WC R6 462m R778m R586m 9,1% 14,9% 19,1% 40,2% >100% ’20: R5 427m ’20: R555m ’20: -R531m ’20: -9,8% ’20: 14,2% Financial results 2021
Slide 55: AECI Chemicals
AECI Chemicals 55 SUMMARY • Excellent y-o-y improvement across AECI Specialty Chemicals, AECI Industrial Chemicals, AECI Food & Beverage, AECI SANS Fibers • Business realignment project completed in ’20 – R100m structural and sustainable annualised benefits achieved – Quality of earnings improved su
Slide 56: AECI Chemicals
AECI Chemicals 56 AECI SPECIALTY CHEMICALS • Focus on margins and diligent cost control • Good growth in Consumer, Coatings, Construction and Metal Coatings • Consumer business expanded into East Africa • Momentum gained in new product approvals for European and US markets AECI INDUSTRIAL CHEMICALS
Slide 57: AECI Chemicals
AECI Chemicals 57 AECI FOOD & BEVERAGE • Growth across all Food categories • Focus on Better Food Systems benefited Health & Nutrition portfolio • Beverages – Consistent improvement, particularly in traded juice volumes (local and export) – Local demand for formulated juices remained depressed AECI
Slide 58: AECI Chemicals outlook
AECI Chemicals 58 OUTLOOK • Growth trends established in several niche market segments where Group operates • Stronger demand for locally manufactured products • Ongoing expansion of product and service offering • Export opportunities • New juice concentrate clarification technology equipment to be
Slide 59: AECI Much Asphalt review
AECI Much Asphalt 59 REVIEW • Volumes +20% vs ’20 but still 27% below ’19 • Stronger volume recovery noted in 4Q21 • Bitumen supply: interruptions at two refineries and planned shutdown at third – Strategic stock key to maintain service levels – Import capability established to supplement local supp
Slide 60: AECI Much Asphalt outlook
AECI Much Asphalt 60 OUTLOOK • Major infrastructure projects commenced - return of base volumes – Most large customers indicating increased activity levels in medium term • Increase in tender activity in mobile-type work • Major contract won in East London • Expanded operations into eMkondo area • N
Slide 61: One AECI, for a better world
06. One AECI, for a better world
Slide 62: AECI.GO: sustainability at our core
AECI.GO: sustainability at our core 62 MARKET EXPANSION SUSTAINABLE/ GREEN CHEMICALS INTEGRATED SOLUTIONS GOING GREEN EXPONENTIAL CHEMISTRY HEALTH Financial results 2021
Slide 63: Video
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Slide 64: Global transition to zero-carbon alternatives
Global transition to zero-carbon alternatives 63 ORIGIN MATERIALS • Strategic investment of US$5m in ’17 • Merger with Artius (SPAC) followed by Nasdaq listing in 2Q21 • US$5,6bn (previous US$1,9bn) order book • Capital raise - pioneer plant ’22 Going Green • Geismar, Louisiana selected for Origin 2
Slide 65: Slide 65
Slide 66: Turning a global problem into a sustainable solution
Turning a global problem into a sustainable solution 64 CLARITER • Proprietary, proven chemical upcycling process converts low-value mixed plastic waste into high value, green oils, solvents and waxes (ClariProducts) Going Green > Application in >1 000 end markets + • Moving to full commercialisatio
Slide 67: Outlook & focus
08. Outlook & focus
Slide 68: External environment
External environment 66 • Continued recovery from COVID-19 but risks remain – Future waves – Roll-out of mass vaccination programmes not uniform across the world – Similarly, economic recovery uneven in terms of timing and extent – Monetary tightening as COVID-19 support funds are withdrawn – Supply
Slide 69: Our strategy and focus
Our strategy and focus 67 • Clearly defined growth strategy and execution plans in place for all our business pillars • Well positioned to benefit from further post-pandemic recovery and increased demand for products and services in key sectors where we operate – Benefits of new contracts and market
Slide 70: Our strategy and focus
Our strategy and focus 68 • Zero Harm is the immovable priority • Ongoing promotion of COVID-19 vaccinations for employees, their families and communities • Further progress towards achievement of our published ESG goals and targets, aligned with UN SDGs – Accelerate alignment with best practice rep
Slide 71: Disclaimer
Disclaimer 69 This document has been prepared and issued by and is the sole responsibility of the management of AECI Ltd (the Company) and its subsidiaries. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or sub
Slide 72: Thank you
THANK YOU t