Salungano Group Limited · JSE:SLG
Salungano — Wescoal Holdings — H1 2016 Earnings Presentation
23 slides from Salungano's earnings presentation, March 2017
Slide 1: Investor Presentation March 2017
INVESTOR PRESENTATION MARCH 2017
Slide 2: Important Notice
IMPORTANT NOTICE This document has been prepared by Wescoal Holdings Limited (the “Company”). For the purposes of this notice, the presentation that follows (the “Presentation”) shall mean and include the slides that follow, the oral presentation of the slides by the Company, any question-and-answer
Slide 3: Contents
CONTENTS 1 Latest Financial Highlights 2 Operational Review & Segmental Disclosure 3 Management & Business Overview 4 The Road Ahead: Strategic Priorities & Investment Case 5 Relative Performance Indicators & Appendices 3 3|
Slide 4: Financial Highlights and Performance
FINANCIAL HIGHLIGHTS AND PERFORMANCE INTERIM RESULTS 2016 • Wescoal delivered a solid interim performance on the back of strong sales and operational efficiencies from its flagship Elandspruit colliery* • Revenue increased by 37.1% or R281.3 million to R1 039.4 million (2015: R758.1 million) • EBITD
Slide 5: Cash Flow Generation
CASH FLOW GENERATION Unaudited Unaudited September 2016 September 2015 R000 R000 Cash generated from operations 98 330 129 092 PERFORMANCE • The improved profitability translated into Cash flows from investing activities (34 051) (144 969) strong cash generation, with R98.3 million in cash generated
Slide 6: Headline Earnings Per Share (HEPS) 5 Year Track Record
HEADLINE EARNINGS PER SHARE (HEPS) 5 YEAR TRACK RECORD cents per share 30 30 27.8 27.1 25 25 20 20 15.7 15.4 15.2 15 15 12.2 11.4 10 10 6.9 5.1 5 5 0 0 2013 2014 2015 2016 Interim September 2016 Full Year Interim 6|
Slide 7: Revenue 5 Year Track Record
REVENUE 5 YEAR TRACK RECORD REVENUE Rm 2 000 1 674 1,590 1 500 1 147 1 039 1 000 898 758 677 466 500 351 0 2013 2014 2015 2016 Interim September 2016 Full Year Interim 7|
Slide 8: Operating Profit 5 Year Track Record
OPERATING PROFIT 5 YEAR TRACK RECORD OPERATING PROFIT Rm 101 101 100 100 80 80 60 60 48 45 46 40 40 27 22 17 19 20 20 0 0 2013 2014 2015 2016 Interim September 2016 Full Year Interim 8|
Slide 9: Operational Review and Segmental Disclosure
OPERATIONAL REVIEW AND SEGMENTAL DISCLOSURE
Slide 10: Segmental Contributions
SEGMENTAL CONTRIBUTIONS (FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2016) REVENUE EBITDA 23% 46% 54% Mining Trading & Other 77% 10 |
Slide 11: Mining Division Update
MINING DIVISION UPDATE ELANDSPRUIT COLLIERY • Contains 5 mineable coal seams, which extend to a maximum depth of 70m below surface, are near horizontal in formation and devoid of geological complexities • Seams are mined selectively to ensure optimal product recovery during beneficiation process • M
Slide 12: Mining Division Update | Cost Management Remains a Focus
MINING DIVISION UPDATE | COST MANAGEMENT REMAINS A FOCUS THE INTIBANE COLLIERY • The Intibane Colliery was issued a water use license in December 2015 • Ramp up in site activity, increasing production to its steady state target of +75kt per month ROM • Increased production from Intibane will help dr
Slide 13: Trading Division Update
TRADING DIVISION UPDATE CREATES OPERATIONAL FLEXIBILITY WITH THE MINING DIVISION • Exceeded expectations with strong performance in a difficult business environment • Close working relationship with mining division creates operational flexibility/optionality • EBITDA increased 11.2% to R32.2m (2015:
Slide 14: Management & Business Overview
MANAGEMENT & BUSINESS OVERVIEW RISKS & MITIGATION
Slide 15: Operating Structure
OPERATING STRUCTURE HOLDINGS LIMITED Waheed Bothwell Vikesh Bongani Thivha Tshithavhane Sulaiman Mazarura Dhanooklal Hlope Business Development & CEO CFO Head Legal Head HR Projects WESCOAL MINING (PTY) LTD WESCOAL TRADING (PTY) LTD Dutch Botes Bonani Siko Jaap Kruger Izak van der Walt Mike Berry CE
Slide 16: Management & Strategic Priorities
MANAGEMENT & STRATEGIC PRIORITIES • Continue to deliver solid, predictable operational and financial performance • Complete re-alignment of trading business in line with Wescoal’s objectives • Continue with improvement projects in order to maximise value from existing assets • Operationalise Khanyis
Slide 17: The Road Ahead: Strategic Priorities & Investment Case
THE ROAD AHEAD STRATEGIC PRIORITIES & INVESTMENT CASE 17 |
Slide 18: Looking Ahead
LOOKING AHEAD • Wescoal has transformed into a majority-black-owned business supplying Eskom and others cost effectively • The challenging environment presents opportunities for corporate activity › Consolidation in the coal sector is happening and Wescoal sees itself as an active participant therei
Slide 19: Investment Case
INVESTMENT CASE • Actively pursuing organic and inorganic growth opportunities: Wescoal a consolidating agent in junior coal sector • Long term revenues secured through Eskom contracts coupled with significant future upside • Targeted revenue diversification generation initiatives such as non-Eskom
Slide 20: Relative Performance
WESCOAL Wh fi il . ti 7 : i mB ih’ i
Slide 21: WSL vs Mining Index | Relative Performance
WSL VS MINING INDEX | RELATIVE PERFORMANCE To be updated to incl: February 2017 21 |
Slide 22: WSL vs Domestic Junior Coal Peers
WSL VS DOMESTIC JUNIOR COAL PEERS To be updated to incl: February 2017 * Peers have been normalised 22 |
Slide 23: Coal, South African Export Price | ZAR & USD
COAL, SOUTH AFRICAN EXPORT PRICE | ZAR & USD To be updated to incl: February 2017 23 |