Slide 1: Financial Overview & Strategy
Financial Overview & Strategy
Slide 2: Conservative approach to financial management
Conservative approach to financial management Risk Management Unhedged gold production Leverage Target Internal Net Debt : EBITDA threshold of 1 times Combination C bi ti off iinternal t l cash h fl flow and dddebt bt Funding Strategy Equity issuance a last resort Investment grade rating C
Slide 3: Improving financial metrics
Improving financial metrics September Quarter 2008 2011 Hedging ZERO ZERO Net Debt:EBITDA1 0.67 times 0.42 times Free cash flow2 US$(235)m US$346m NCE margin -4% 29% Investment Grade Rating None Baa3/BBB- ZAR Bank, CP3 and Bond Funding Sources Available USD and ZAR Bank Debt USD Bank and Bond Maturi
Slide 4: Notional cash expenditure (NCE) explained
Notional cash expenditure (NCE) explained Disciplined approach to managing the all-in cost for the Group, and for each operation NCE includes NCE margin breakdown (US$/oz) • Operating costs 1800 • Growth and sustaining capital expenditure 1600 • Brownfields exploration p 490 NCE 1400 margin 318 27
Slide 5: Growing the NCE Margin
Growing the NCE Margin Record NCE margin of 29% in Q3 2011 exceeds long-term target US$/oz 1800 Gold Price Total Cash Cost NCE 1600 29 29% % 1400 21 21% 1200 % 1000 800 600 400 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 20
Slide 6: Industry is faced with rising costs
Industry is faced with rising costs Peer group NCE & Cash Costs quarter ending September 2011 (US$/oz) US$/oz 1800 NCE Cash Costs 1 669 1,669 1600 1,548 1,493 1,436 1,342 1,371 1400 1,212 , 1,262 1 173 1,173 1200 1,094 1000 851 879 800 800 737 733 706 651 578 600 400 200 0 Company 1 Company 2 Gold F
Slide 7: Comparative cost trends
- 0.50 1.00 2.00 2.50 3.00 1 50 1.50 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 South Africa Q2 2006 Q3 2006 Q4 2006 Ghana Q1 2007 Q2 2007 Q3 2007 Comparative cost trends Q4 2007 Australia Q1 2008 173 Q2 2008 Q3 2008 Peru Q4 2008 Gold Fields regional cash cost trends (Q1 2005 = 100) Q1 2009 Q2 2009 Q3
Slide 8: Business Process Re-engineering (BPR)
Business Process Re-engineering (BPR) Objective: Mitigate mining inflation Target sustainable gold production with at least 20% NCE margin in the short- to medium-term and 25% in the long-term long term South Africa – Total savings: July 2010 to Sept 2011: R353 million (annualised annuity effect:
Slide 9: Balance sheet positioned for growth
Balance sheet positioned for growth Conservative debt strategy - low gearing Net debt (US$m) & Net debt:EBITDA ratio (times) 1 600 1.60 Net Debt (LHS) Net Debt:EBITDA (RHS) 1 400 1.40 1 200 1.20 1 000 1.00 800 0.80 600 0.60 400 0.40 200 0.20 - 0.00 2006 2007 2008 2009 2010 Sept 2011 * ______________
Slide 10: Strong liquidity position and conservative maturity management
Strong liquidity position and conservative maturity management Debt Maturity Profile 30 Sep 2011 (US$m)1 1 200 Available committed Facilities as at 30 Sept 2011 − US$790 million undrawn USD facilities 1 000 − ZAR3 billion undrawn ZAR facilities 800 Extended maturity profile 600 − In October 2010
Slide 11: ~42% Average dividend pay-out ratio
~42% Average dividend pay-out ratio1 Dividend Policy: 50% of earnings less growth capital expenditure EPS DPS Pay-out % 20112 329 100 30% 2010 161 140 87% 2009 492 130 26% 2008 400 215 54% 2007 504 95 19% 2006 525 200 38% Average 42% _______________________________________________________ 1. Dividen
Slide 12: Returning cash to shareholders
Returning cash to shareholders One of the highest dividend yields in the sector 12 month net dividend yield (%) Gold Fields 1.33% Newmont 1 23% 1.23% Barrick 1.03% Newcrest 0.86% Kinross 0.84% Goldcorp 0.81% AngloGold Ashanti 0 71% 0.71% Harmony Gold 0.56% ______________________________________ Sour
Slide 13: Conservative balance sheet and debt strategy
Conservative balance sheet and debt strategy Balance sheet positioned for growth Low Gearing Net Debt:EBITDA of 0.42 times1 Strong liquidity position Robust cash flow generation Annualised free cash flow from operations2 of R10 billion (US$1.4 (US$1 4 billion) Conservative maturity manag