Slide 1: 2020 Results
2020 RESULTS For the year-ended 31 December 2020 24 February 2021
Slide 2: Welcome & Introduction
WELCOME & INTRODUCTION 01. COVID-19 RESPONSE & IMPACT 02. PERFORMANCE SUMMARY 03. OTHER BUSINESS DRIVERS 04. EARNINGS ANALYSED 05. PERFORMANCE BY SEGMENT 06. STRATEGY, OUTLOOK & FOCUS
Slide 3: COVID-19 response & impact
01. COVID-19 response & impact
Slide 4: COVID-19: Response
COVID-19: RESPONSE 3 – Risk acknowledged in February ’20 – Task Team established early March › All Exco members plus internal and external subject experts › Strategic intent: manage and mitigate effects on people and business (BCM) » Including second wave » No interruptions at Group operations » No
Slide 5: AECI Group Cumulative Cases at February '21
AECI GROUP CUMULATIVE CASES AT 23 FEBRUARY ’21 4 Germany USA Active: 0 Active: 0 Recovered: 15 Recovered: 19 Mali Burkina Faso Active: 0 Active: 0 Recovered: 1 Recovered: 4 Ghana Zambia Active: 1 Active: 3 Recovered: 3 Hospitalised: 1 Recovered: 8 DRC Brazil Active: 0 Active: 0 Recovered: 2 Recovere
Slide 6: COVID-19 Landscape: Cumulative Cases in SA
COVID-19 LANDSCAPE: CUMULATIVE CASES IN SA AT 23 FEBRUARY ’21 5 Active Recovered Hospitalised Mortality SOUTH AFRICA TOTAL NUMBER QUARANTINED RECOVERY RATE 493 Indirect Contact 135 792 4 2.7% 455 1 Site Requirements 73 4 2 Exhibiting Symptoms 252 Direct Contact 332 297 303 97.3 % 286 291 273 3 3 3 3
Slide 7: COVID-19 Landscape: International
COVID-19 LANDSCAPE: INTERNATIONAL AT 23 FEBRUARY ’21 6 Active Recovered Hospitalised Mortality TOTAL NUMBER QUARANTINED 97 303 TESTS CONDUCTED Indirect Contact 17 191 Site Requirements 51 1 Exhibiting Symptoms 9 97 Positive Tests 71 Negative Direct Contact 114 Tests 207 1 COMPANY BREAKDOWN 89 61 51
Slide 8: COVID-19 Relief Initiatives in 2020
COVID-19 RELIEF INITIATIVES IN 2020 7 R15m invested 1 040 026 beneficiaries R3,5m raised Multiple partnerships Increased international internationally for food parcels and collaboration reach and business Benefited 12 315 families participation
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Slide 11: COVID-19: Calculation of Estimated Financial Impact
COVID-19: CALCULATION OF ESTIMATED FINANCIAL IMPACT 10 – Revenue › Loss of revenue based on historical trends, revenue levels preceding 1 April ’20 and open orders cancelled as a direct result of the pandemic › Additional revenue generated directly related to the pandemic – Cost of sales › Costs not
Slide 12: COVID-19: Business Impact
COVID-19: BUSINESS IMPACT 11 ESTIMATED NEGATIVE FINANCIAL – No impact or restrictions in some countries and regions (e.g. Australia, Indonesia and West IMPACT Africa) but severe in others – Worst impact in SA and in 1H Revenue R1 091m › Some businesses classified as providers of essential services O
Slide 13: Performance summary
02. Nahe | \® re Performance summ
Slide 14: Performance Summary
PERFORMANCE SUMMARY 13 CASH GENERATED FROM OPERATING ACTIVITIES R3 132m GEARING 22% (FY19: 36%) FINAL CASH DIVIDEND OF 470c DECLARED
Slide 15: Performance Summary
PERFORMANCE SUMMARY 14 REVENUE HEPS -3% to R24 111m -23% to 880c Underlying* +2% to R25 202m Underlying* +6% to 1221c Foreign & export revenue: 44% of total revenue EBITDA REALIGNMENT PROJECTS -15% to R2 943m DELIVERING VALUE TO Underlying* +4% to R3 368m EXPECTATIONS PROFIT FROM OPERATIONS TOTAL IM
Slide 16: Performance Summary Cont.
PERFORMANCE SUMMARY CONT. 15 LEVEL 3 B-BBEE CONTRIBUTOR 3 EMPOWERMENT AWARDS (CSI UBUNTU, TOP EMPOWERMENT & GENDER MAINSTREAMING) CAIA AWARDS WINNER IN 3 OF 5 CATEGORIES, RUNNER-UP IN 3 CATEGORIES CERTIFIED AS A TOP EMPLOYER IN SA FOR ‘21 SAFETY PERFORMANCE TRIR of 0,42 (‘19: 0,38)
Slide 17: Safety Performance: TRIR
SAFETY PERFORMANCE: TRIR 16 1,0 0,8 0,6 0,58 0,45 0,42 0,39 0,38 0,4 0,2 0,0 2016 2017 2018 2019 2020
Slide 18: Other business drivers
03. Other business drivers
Slide 19: Business Drivers: ZAR/US$ Exchange Rate
BUSINESS DRIVERS 18 ZAR/US$ EXCHANGE RATE
Slide 20: Business Drivers
BUSINESS DRIVERS 19 Source: Bloomberg
Slide 21: Business Drivers: Platinum and Palladium
BUSINESS DRIVERS 20 Qa 202001 Q2 Q3 a4 === Platinum === Palladium Source: Bloomberg ee ee NS
Slide 22: Business Drivers: Cobalt, Copper and Nickel
BUSINESS DRIVERS 21 COBALT, COPPER AND NICKEL
Slide 23: Business Drivers: Coal and Iron Ore
BUSINESS DRIVERS 22 COAL AND IRON ORE
Slide 24: Business Drivers: SA Mining Volumes
BUSINESS DRIVERS 23 SA MINING VOLUMES Base: 2015 =100 Cum change = (10,7%)
Slide 25: Business Drivers: Brent Crude Oil
BUSINESS DRIVERS 24 BRENT CRUDE OIL
Slide 26: Business Drivers: SA Manufacturing Volumes
BUSINESS DRIVERS 25 SA MANUFACTURING VOLUMES Base: 2015 = 100 Cum change = (11,0%)
Slide 27: Performance analysed
04. > ie \ Performafite analysed
Slide 28: Performance Analysed
PERFORMANCE ANALYSED 27 2020 2019 % change Profit from Profit from Profit from EBITDA operations HEPS EBITDA operations HEPS EBITDA operations HEPS (Rm) (Rm) (cps) (Rm) (Rm) (cps) (%) (%) (%) Reported 2 943 917 880 3 473 2 031 1 150 (15,3) (54,8) (23,4) Impairments of goodwill and PPE 890 147 Net pr
Slide 29: Profit from Operations Analysed
PROFIT FROM OPERATIONS ANALYSED 28 Rm 1H20 2H20 TP margin 5% 5% 3% 9%
Slide 30: Profit from Operations Analysed
PROFIT FROM OPERATIONS ANALYSED 29 Rm 2019 2020 TP margin: 8% 9% 4% 7% 9%
Slide 31: Impairment of AECI Much Asphalt
IMPAIRMENT OF AECI MUCH ASPHALT 30 ASSUMPTIONS 2020 2019 IMPAIRMENT Discount Rate 14,3 13,8 CGU Assessment R millions Terminal Value Growth Rate 4,8 5,5 Recoverable amount 1 690 Budgeted revenue growth rate1 4,7 9,0 Carrying value 2 527 1 Revenue growth of 59% in 2021 and average of 4,7% for the nex
Slide 32: Earnings Analysed
EARNINGS ANALYSED 31 – EBITDA down 15% to R2 943m HEPS – Profit from operations down 55% to R917m 1 221 – HEPS down 23% to 880c 1 150 1 045 – Trading margin = 3,8% (’19: 8,2%) 959 – RONA of 6,5% (’19: 13,8%) 818 880 › Excl. impairments = 12,3% › Underlying = 15,1% – Tax rate excl. impairments at 32,
Slide 33: COVID-19: Cash Management
COVID-19: CASH MANAGEMENT 32 – Capex = R632m 4 500 4 177 115 4 030 › R201m for expansion projects 4 000 95 › R431m for sustenance 3 500 – NWC to revenue of 14,5% (17,2% in ’19) 3 000 75 – Net borrowings of R2 383m 2 383 2 500 – Gearing at 22% (36% in ’19) 55 2 000 › Excl. IFRS 16 18% (31% in ’19) 1
Slide 34: Net Debt and Cash Utilisation
NET DEBT AND CASH UTILISATION 33 Rm Gearing: Gearing: Gearing: Gearing: 36% 31% 18% 22%
Slide 35: Net Debt Analysis
NET DEBT ANALYSIS 34 PAYMENT PROFILE Rm 2021 2022 2023 TOTAL Group loan covenants Existing term 1 100 1 100 Net debt to EBITDA: ≤2,5 DMTM auction 360 520 880 – Actual: 0,8 DMTN private placement 500 300 800 Term – ZAR 200 500 700 Net debt to EBITDA breached if Term – US$ 205 220 293 718 – Borrowings
Slide 36: Performance by segment
05. Performance by segment
Slide 37: Performance by Segment: Reported
PERFORMANCE BY SEGMENT: REPORTED 36 Segment Revenue EBITDA Profit from ops R11 189m R1 744m R1 120m AECI MINING 3,0% 9,3% 14,2% R1 447m R259m R211m AECI WATER 0,3% 13,1% 11,1% R6 056m R518m R290m AECI AGRI HEALTH 17,5% 26,7% 27,2% R5 427m R555m (R531m) AECI CHEMICALS 18,6% 42,8
Slide 38: AECI Mining
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Slide 39: AECI Mining: Revenue by Mineral Mined
AECI MINING 38 REVENUE BY MINERAL MINED (%) 6% Gold 7% 6% 24% PGMs 5% 8% 4% 23% Coal Copper 18% 18% Diamond 22% Iron ore 19% 19% Other Outer:2020 21% Inner: 2019
Slide 40: AECI Mining
AECI MINING 39 Revenue EBITDA Trading profit Trading margin Trade WC R11 189m R1 R694m 744m R1 R393m 120m 10,0% 7,3% 3,0% -12,9% 9,3% -21,2% 14,2% 19,7% 13,7% (2019: (1H19:11,3%) 8,9%) Underlying Underlying Underlying (1H19: (2019: 19,3%) 18,3%) R11 886m 1H20: R2 170m R1 090m 1H20: R1 546m
Slide 41: AECI Mining Explosives: Ammonia
AECI MINING EXPLOSIVES 40 AMMONIA
Slide 42: AECI Mining Explosives
AECI MINING EXPLOSIVES 41 – SA › Delivery of value from realignment project exceeded expectations › Progress made in replacing lost bulk product volumes (surface mining) » Pace of replacement plan roll-out frustrated by COVID-19 impact on SA mining sector » 65% of contribution recovered › Some recov
Slide 43: AECI Mining Chemicals
AECI MINING CHEMICALS 42 – COVID-19 impact mostly in South Africa – Liquid xanthates › Lower volumes in 1H › Surface mining operations normalised in 2H › Slow resumption of activity in underground mining sector › Product mix and improved margins partly offset lower volumes – Solid xanthate sales rem
Slide 44: AECI Mining: Outlook
AECI MINING: OUTLOOK 43 – South Africa › Prospects in underground mining sector have improved, driven by positive outlook for gold and PGM prices › Underground emulsion sales have gained momentum – In addition to PGMs, recovery in diamond mining sector anticipated in neighbouring countries – Central
Slide 45: AECI Mining: Outlook Cont.
AECI MINING: OUTLOOK CONT. 44 – Sustained gold price supportive of mining sector performance in West Africa – Outlook for Australia and Indonesia remains positive – South America › Outlook positive for explosives (Brazil) and mining chemicals (Brazil, Chile and Peru) › Establishment of explosives ma
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Slide 47: AECI Water
AECI WATER 46 Revenue EBITDA Trading profit Trading margin Trade WC R1 447m R676m R259m R126m R211m R100m 14,6% 0,3% 13,1% -4,4% 70,3% 11,1% 104,1% 23,7% 19,1% 12,4% Underlying (2019: 13,1%) Underlying Underlying UnderlyingUnderlyingUnderlying (1H19: (2019: 18,4%) 19,1%) R1 507m R289m 1H
Slide 48: AECI Water: Project Purpose – Private Sector
AECI WATER: PROJECT PURPOSE – PRIVATE SECTOR 47 ROLL-OUT DELAYED BY COVID-19 ─ Industrial › AECI Mining Explosives – Phase 1 commissioned in December, Phase 2 in progress › Effluent recycle DAF unit project awarded and completed at fishery in WC › Designed, fabricated and supplied ultra filtration t
Slide 49: Mining Water Trial Zeeweed Ultra Filtration Pilot Skid
MINING WATER TRIAL ZEEWEED ULTRA FILTRATION PILOT SKID 48 Inside view of container showing ZW 1500 in testing. ZW500B on standby Containerised unit Control panel Air scour adjustment station Water quality test station CEB and CIP Coagulation Existing DAF leap weir fitted dosing station tank section
Slide 50: Project in Progress: DAF Unit – WC Fishery
PROJECT IN PROGRESS: DAF UNIT – WC FISHERY 49 Site preparation DAF units arriving on site DAF units arriving on site
Slide 51: AECI Water: AECI Mining Explosives – Water Re-use Facility
AECI WATER: AECI MINING EXPLOSIVES – WATER RE-USE FACILITY 50
Slide 52: AECI Water: Project Purpose Cont. – Public Sector
AECI WATER: PROJECT PURPOSE CONT. – PUBLIC SECTOR 51 ROLL-OUT DELAYED BY COVID-19 › 2 Decentralised Water Security Supply contracts awarded » 1st completed 1H 2020, 2nd in progress › Submitted additional proposal to expand the 2nd Water Security Supply project › Borehole water treatment solutions de
Slide 53: AECI Water: Outlook
AECI WATER: OUTLOOK 52 – COVID-19 impact remains a risk – Continued focus on realignment project gains – Working capital and cash management remain priorities – Continuity of supply and risk mitigation i.r.o new Public Water tenders – Strong focus on new technologies South Africa – Focus on Project
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Slide 55: AECI Agri Health
AECI AGRI HEALTH 54 Revenue EBITDA Trading profit Trading margin Trade WC R2 616m R229m R126m 4,8% 19,5% 21,2% R290m 22,3% 4,8% 14,5% 13,1% R6 056m -13,5% R518m Underlying Underlying 27,2% Underlying (1H19: 4,7%) (1H19: (2019: 18,2%) 15,0%) 17,5% 26,7% (2019: 4,4%) Underlying 1H20: R2 3
Slide 56: AECI Schirm
AECI SCHIRM 55 – Further improvement in safety performance – EBITDA improved by 31%, assisted by strong Euro exchange rate – Performance boosted in 1H by 1,9 millionℓ sanitiser contract › German Department of Interior – Projects completed › Magdeburg site closure (June ’20) › Blender installed at Ba
Slide 57: AECI Schirm: Outlook
AECI SCHIRM: OUTLOOK 56 – Strong return of automotive sector – SC facility in Ennis › Completed in November ’20 › Already fully loaded to June ’21 ─ Blender 5000 at Bar Ebenhausen 70% loaded in 1H21 – Cost focus › Sustain savings initiatives from ’20 › Lübeck production capacity re-structure – Bio s
Slide 58: AECI Plant Health
AECI PLANT HEALTH 57 – Positive trading trend established in 2H19 sustained – COVID-19 had minimal impact › Essential service in SA › Approved supplier to SA COVID-19 Agricultural Disaster Support Fund – Excellent rainfall and more normalised weather patterns across Southern Africa – Higher sales of
Slide 59: AECI Plant Health: Outlook
AECI PLANT HEALTH: OUTLOOK 58 – Annualised benefits of R10m from cost savings/restructuring initiative in 1H – Continue to focus R&D and registrations, particularly in Green Chemistry » 78 new product registrations in ’20 – Further expansion of agent network in SA and other countries in Africa – Bio
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Slide 61: AECI Chemicals
AECI CHEMICALS 60 Revenue EBITDA Trading profit Trading margin Trade WC R5 427m R555m R-531m -9,8% 18,6% 42,8% Change: >100% (2019: 6,0%) 14,2% Underlying Underlying Underlying Underlying (2019: 13,0%) R6 090m R652m R456m 7,5% 8,7% 11,5% 16,5% – Highly cash generative – Benefits of reali
Slide 62: AECI Chemicals: Pillar Breakdown
AECI CHEMICALS: PILLAR BREAKDOWN 61
Slide 63: AECI Chemicals: Realignment
AECI CHEMICALS: REALIGNMENT 62 – Business realignment complete – Realignment costs and impairments incurred in 1H – Savings to year-end realised in line with expectations – R100m “structural and sustainable” annualised benefits in ’21 – Quality of earnings improvement on track › Targeting TP margin
Slide 64: AECI Chemicals
AECI CHEMICALS 63 – AECI Specialty Chemicals › New business gained › Strong sales of sanitiser in 1H › Negative COVID-19 impact on personal care, coatings and construction, polymers, oleochemicals, can coatings customers – AECI Industrial Chemicals › Disappointing overall performance but very good s
Slide 65: AECI Chemicals: Outlook
AECI CHEMICALS: OUTLOOK 64 – Improvement in trading environment – Further roll-out of new products (including sanitisers and surface cleaners) 14,2% – Export volume growth a focus (2020: 13,0%) – Supply/demand balance in sulphuric acid market has improved – Sulphur prices have increased sharply – On
Slide 66: AECI Much Asphalt: Review
AECI MUCH ASPHALT: REVIEW 65 – Significant volume decline vs ’19 › Market decline estimated at 52% (-62,5% vs ’17) › AECI Much Asphalt decline of 38% (-45% vs’17) – Severe COVID-19 impact in 1H: R69m, with slow recovery in 2H – Bitumen supply affected by interruptions at two refineries – Some activi
Slide 67: AECI Much Asphalt: Outlook
AECI MUCH ASPHALT: OUTLOOK 66 – Benefits of realignment project – Infrastructure projects announced by government › Uncertainty on timing remains – Some SANRAL awards for N2/N3 work › Bituminous work only from end-’21 – Most major customers indicating increased activity levels in medium term – Upwar
Slide 68: Strategy, outlook & focus
07. Strategy, outlook & focus
Slide 69: Strategy 2025: Purpose is the Foundation of Strategic Focus
STRATEGY 2025: PURPOSE IS THE FOUNDATION OF STRATEGIC FOCUS 68 We are purpose-led in who we are and everything we do
Slide 70: Strategy 2025: Driven by Our Purpose
STRATEGY 2025: DRIVEN BY OUR PURPOSE 69 ENABLED BY 3 STRATEGIC PLATFORMS AND 6 STRATEGIC THEMES (1+3+6) Passionate, Financial & risk purpose-led stewardship people Customer- Growth centricity Business Partnerships & excellence ecosystems
Slide 71: Sustainability Report Imminent
SUSTAINABILITY REPORT IMMINENT 70 – Sustainability Framework agreed – Report nearing finalisation – Highlights key focus areas, aligned with selected UN SDG goals: SDG 2 Zero hunger, SDG 6 Clean water and sanitation, SDG 8 Decent work and economic growth, SDG 12 Responsible production and consumptio
Slide 72: Outlook
OUTLOOK 71 GLOBAL – COVID-19 remains overriding risk › Duration of current and future waves › Availability of vaccines for mass vaccinations, and their long-term efficacy › Timing and extent of economic recovery from current pandemic ─ However › Indications of accelerated recoveries in some leading
Slide 73: Outlook Cont.
OUTLOOK CONT. 72 SA – Negative COVID-19 effects on economic activity, employment and hence consumer demand continue – Electricity supply – Low investment levels – However, signs of overall economic improvement emerging, including in manufacturing and infrastructure sectors – Anticipate sustained dem
Slide 74: Focus
FOCUS 73 – Zero Harm – Diligent management of cash – Continued delivery of value from realignment projects – Geographic and market diversification strategy – Growth by acquisition remains on the agenda – Renewed focus on sustainability: “One AECI, for a better world” › Sustainable Development report
Slide 75: Thank You
OA=CI THANK YOU