Sibanye Stillwater Limited · JSE:SSW
Sibanye Stillwater — FY2020 Earnings Presentation
63 slides from Sibanye Stillwater's earnings presentation, Feb 18, 2021
Slide 1: Well positioned for ongoing value creation
Well positioned for ongoing value creation H2 and full year 2020 results & strategic update 18 February 2021
Slide 2: Disclaimer
Disclaimer The information in this announcement may contain forward-looking statements within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, among others, those relating to Sibanye Still
Slide 3: Key strategic highlights
Key strategic highlights ESG excellence & beneficiary • Making a difference, one PGM ounce at a time with significant social, economic and of the Hydrogen economy environmental impact and exposure to the Hydrogen economy • Organisational structure transition to include Holacracy, Stratified Systems
Slide 4: ESG excellence - the way we do business
ESG excellence - the way we do business
Slide 5: Living and working with COVID-19
Living and working with COVID-19 • COVID-19 protocols rapidly developed and implemented at all operations • Most vulnerable employees identified and managed to reduce risk • SA mining industry COVID-19 death rate is a third of the national rate • Montana’s severe first wave impacted labour availabil
Slide 6: Making a real difference for stakeholders
Making a real difference for stakeholders Established 2,196 Support to local Contributions • Significant COVID-19 support to stakeholders continues bed quarantine small businesses to the SA relief funds • Willing to contribute R200m towards roll out of vaccines and isolation under specific condition
Slide 7: Marikana renewal and restitution – a new, better future
Marikana renewal and restitution – a new, better future • Marikana operations – economic viability restored and long term future secured • An opportunity to build a new legacy together with stakeholders • Fostering healing and closure by - providing ongoing counselling and emotional support for the
Slide 8: Leading producer and recycler of green metals
Leading producer and recycler of green metals Future hydrogen economy PGMs transform Technologies noxious exhaust gasses - • Green hydrogen made in electrolysers via renewable energy (solar, wind) - key to decarbonizing heavy industry & everyday hydrocarbons (HC), activities nitrogen oxide (NOx) and
Slide 9: Columbus recycling business
Columbus recycling business • One of the largest global recyclers of spent auto catalysts which recycled 840koz of 3E (palladium, platinum and rhodium) in 2020 • Environmentally friendly production of PGMs - Recycling emits 6x less tons of CO2 - Uses 63x less water - Generates 90x less rock waste th
Slide 10: Targeting carbon neutrality by 2040
Targeting carbon neutrality by 2040 In support of the Paris Agreement and the United Nations Our goal is underpinned by our Energy and Decarbonisation Sustainable Development Goals, we have set a goal to achieve strategy and implementation plan: 8 net-zero emissions by 2040 • Advocating for future d
Slide 11: Enhancing our established ESG credentials
Enhancing our established ESG credentials • Admitted as ICMM member in Feb 2020 • LPPM certifies Sibanye-Stillwater’s responsible platinum - rigorous evaluation process and palladium sourcing • Sibanye-Stillwater subscribes to Global industry standard • Member of the World Gold Council and subscribe
Slide 12: Building a values-based culture
Building a values-based culture
Slide 13: Committed to gender equality
Committed to gender equality • Group CEO championing “Woman in Mining” at Minerals Council • Sibanye-Stillwater gender equality journey › Targeting 30% females in the workforce by 2025 and increased representation and development of women at all levels • Progressing with intent › 30% SA female bursa
Slide 14: Values based culture growth accelerated through the COVID-19
Values based culture growth accelerated through the COVID-19 Used COVID-19 opportunity to accelerate organisational change • SOHO (small office home office) - Remote working where possible - Health, safety and productivity benefits - Lifestyle benefits - Access to global labour pool • Expanded inclu
Slide 15: New leadership architecture for further strategic delivery
New leadership architecture for further strategic delivery • Strategic leadership configured in line Board of Directors Governance with stratified systems theory and oversight • Embracing holacracy CEO CFO + - autonomy, agility and purpose Strategic CCO Advisory CHRO alignment Strategic Office - evo
Slide 16: Focusing on safe production and operational excellence
Focusing on safe production and operational excellence
Slide 17: Safe production: adapting to COVID-19
Safe production: adapting to COVID-19 • Group safety performance impacted by COVID-19 Journey towards zero harm - Lockdowns and safe production build-up in SA, complex and disruptive • Enabling environment • Safe production milestones - Real risk reduction initiatives ongoing - 16 million(m) FFS SA
Slide 18: Targeting world class safety performance
Targeting world class safety performance Total Injury Frequency rate (TIFR) - 5 year improvement trajectory • Responsible for the wellbeing of more than 80,000 employees TIFR Rate per million hours Blue 2019 Source ICMM (2020 data not available as at 2/21) • Do not accept our operating environment (
Slide 19: Growing the reserve base
Growing the reserve base* Mineral Reserves Mineral Resources • 40% increase in SA PGM 5.1 Mineral Reserves 2.8 2020: 2020: 8.4 54.3 86.0 • 7% increase in US PGM 82.0moz 3.8 477.9moz 19.7 Mineral Resources and 2.3 4.3 47.7 8.7 86.8 stable Reserves 46.5 28.2 2019: 4.5 2019: year on year 39.5 70.6 493.
Slide 20: Long-life assets
Long-life assets SA GOLD OPERATIONS SA PGM OPERATIONS US PGM OPERATIONS Current life of mine (LOM) Current LOM Current LOM (at 31 Dec 2020) (at 31 Dec 2020) (at 31 Dec 2020) • Beatrix 5 years • Kroondal 12 years • Stillwater West 25 years • Driefontein 10 years • Mimosa 12 years • Stillwater East (B
Slide 21: Larger, diversified production base underpins record earnings & cash flow
Larger, diversified production base underpins record earnings & cash flow Profitability (adjusted EBITDA 1) and gearing • Record financial performance - Accrued the benefits of an enlarged 2,500 3 2.6 SA PGM production base Net debt: adjusted EBITDA ratio US$ million 2.4 2.5 2.4 2.3 2,000 - Increase
Slide 22: SA PGM operations – contributing 60% of Group adjusted EBITDA
SA PGM operations – contributing 60% of Group adjusted EBITDA SA PGM operations – Underground and surface production and AISC • H2 2020 production 40% higher than H1 2020 1,200 50,000 R/4E oz 4E PGM koz • Normalised production rate 40,000 achieved in Nov 2020 900 • Successful integration of Marikana
Slide 23: SA PGM basket revenue drivers per metal
SA PGM basket revenue drivers per metal Illustrative revenue distribution of market prices based on the SA PGM H2 2020 metal prill split Revenue % Metals contribution Prill split 100% 8% 8% 6% 10% 15% 18% 19% • Rhodium a significant 27% 80% 39% revenue driver 46% 51% 51% • Iridium (1% of production)
Slide 24: SA PGM operations moving down the cost curve
Cash Cost (R/oz) 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 - 0 Sylvania Dumps (SLP) Stillwater (SWC) Platinum Mile (SGL) Source: Nedbank Two Rivers (ARM/IMP) Boulder (SWC) Mogalakwena (AMS) Zimplats (IMP) Mototolo (GLEN/AMS) BRPM (RBP) Booysendal (NHM) Kroondal (SGL/AMS) Boko
Slide 25: SA PGM four year outlook
SA PGM four year outlook SA PGM operations – Production and AISC (R/oz)* 2.0 25,000 4E PGM Production R/oz AISC 20,000 1.5 15,000 1.0 10,000 0.5 5,000 0.0 0 2020 2021 (FC) 2022 (FC) 2023 (FC) 2024 (FC) Production (4Emoz) excl projects AISC (R/oz) (rhs) SA PGM operations – Capital (Rm and US$m)* 4,00
Slide 26: US PGM operations – contributing 21% of Group adjusted EBITDA
US PGM operations – contributing 21% of Group adjusted EBITDA US PGM operations – Mined production, recycling and AISC • H2 2020 production 3% higher than H1 2020 • 2% increase in AISC in H2 2020, due to 7% 800 2,500 US$/2E oz 2E/3E PGM koz production increase in taxes & royalties 2,000 • 63% adjust
Slide 27: Long life assets with increasing output
Long life assets with increasing output US PGM operations - Production and AISC* US PGM operations - Capital* 2,000 1,000 350 US$/oz AISC US$m 2E/3E koz PGM Production 300 1,500 800 • Underground production 250 600 200 building up to ~850koz 2E 1,000 400 150 by 2024 and 500 100 200 50 • Recycling of
Slide 28: Stillwater East (Blitz) US PGM production build-up and costs
Stillwater East (Blitz) US PGM production build-up and costs • The Stillwater East (Blitz) production building-up to steady state 900 1,200 run-rate of ~300koz 2E oz in 2024 2E mine production 1,000 • Project capital forecast of US$375m over next three years 600 800 US$/2Eoz • US PGM operations stea
Slide 29: SA gold operations – contributing 19% of Group adjusted EBITDA
SA gold operations – contributing 19% of Group adjusted EBITDA SA gold2 – Underground & surface production with AISC & gold price • H2 2020 production 43% higher than H1 2020 - Successful ramp-up post SA COVID-19 lockdown 700 1,000,000 - Normalised production rates achieved mid-Nov Gold koz AISC R/k
Slide 30: SA gold operations four year outlook
4 year outlook SA gold operations – Production and AISC* (R/kg) • AISC to decrease due to Kloof infrastructure project which 35,000 900,000 will reduce infrastructure footprint • Elevated capital for 2021 due to carryover from 2020 Production (kg) R/kg AISC 30,000 25,000 600,000 20,000 15,000 300,00
Slide 31: Precious metals markets
Giba nue Gtilpos lwa a Precious metals markets
Slide 32: Platinum’s fortunes set to turn
Platinum’s fortunes set to turn Platinum market balance 1,000 1,400 koz • Primary platinum supply expected to fall US$/oz by ~ 225koz by 2025 – SA underinvestment 1,200 500 • Recycling to grow by ~23% over the period – higher loaded catalysts 1,000 0 • Increased gross autocatalyst demand 800 from 2.
Slide 33: Palladium – near term solid fundamentals
Palladium – near term solid fundamentals Palladium market balance 500 2,500 US$/oz koz • Deficit to widen again in 2021 as demand recovers 2,000 • +500koz primary supply between 0 2021-2025, primarily North American and Russian expansions 1,500 • +1Moz recycling over the period, ( 500) increased pal
Slide 34: Rhodium’s fundamental deficit continues
Rhodium’s fundamental deficit continues Rhodium market balance 200 • Auto demand anticipated to grow ~19% koz US$/oz 20,000 (2021-2025) 100 - tightening emissions regulations 16,000 = increased loadings • 13% decline (2021-2025) in primary 0 supply - South African industry 12,000 undercapitalised •
Slide 35: Growth in PGM loadings makes up for slower auto demand growth
Growth in PGM loadings makes up for slower auto demand growth Gross PGM auto demand vs vehicle demand 16,000 120 millions koz % CAGR 2019-2025 110 12,000 100 2.7% 8,000 90 80 1.6% 4,000 70 -0.3% 0 60 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 9.2% Platinum Palladium Rhodium Passenger car
Slide 36: Gold market review and outlook
Gold market review and outlook 2021 Outlook - Economic recovery & low interest rates set tone • Expected support for gold investment from low interest rates and lingering economic risks • Forecast recovery in gold consumer demand, largely from emerging markets economic recovery • Moderate net purcha
Slide 37: Financial results & optimising capital allocation
Financial results & optimising capital allocation
Slide 38: Income statement for the year ended Dec 2020
Income statement for the year ended 31 Dec 2020 Rm 2020 (Rm) 2019 (Rm) % variance 2020 (US$m) 2019 (US$m) 75% increase in revenue Revenue 127,392 72,925 75% 7,739 5,043 Cost of sales, before amort & depreciation (75,776) (56,100) 35% (4,604) (3,880) SA PGM - SA gold Net other cash costs1 (2,231) (1,
Slide 39: Deleveraging achieved - Net cash position
Deleveraging achieved - Net cash position Borrowings and cash2 – 31 Dec 2019 vs 31 Dec 2020 • Cash of R20bn (US$1.4bn) at 31 Dec 2020 • Gross debt2 of R17.1bn (US$1.2bn) 2,000 US$1,897 - Corporate bonds mature in June 2022 and US$ million 339 2025 1,500 - RCF’s temporarily drawn by 49%, primarily 62
Slide 40: Capital allocation for 2020
Capital allocation for 2020 Capital Allocation during 2020 R50,000 Earned • Cash generated post Capex, interest ZAR million Applied R6,967 R40,000 royalties and tax was predominately R666 R6,525 R30,000 allocated (56%) towards strengthening R11,073 the balance sheet during 2020 R45,186 R20,000 R2,64
Slide 41: Return to shareholders of R10.7bn/US$729m dividends for the year
Return to shareholders of R10.7bn/US$729m dividends for the year • Dividend policy of 25-35% of normalised earnings Normalised earnings/(loss) and dividend payments2 • 35% declaration to shareholders on 2020 full year earnings 25,000 10,000 9,375 Dividend payment (Rm) Normalised earnings (loss) Rm •
Slide 42: Strategic capital allocation
Strategic capital allocation 1 Project Capital Pipeline ~R6.2 billion High ◼ K4 – R3.9 billion (8 years) Project Capital R6.2 billion ◼ Klipfontein – R66 million (1 year) US$1.1bn ◼ Burnstone – R2.3 billion (14 years) ◼ Total capital (Project, ORD & SIB) ~R27.5 billion 2 Cash set aside for: Cash Res
Slide 43: Prospering in South Africa’s investment climate
Prospering in South Africa’s investment climate
Slide 44: Prospering in South-Africa’s investment climate
Prospering in South-Africa’s investment climate • Fragile state of SA economy exacerbated by ongoing COVID-19 pandemic SA Project pipeline • Economic recovery necessary to alleviate poverty & inequality • Current policies and ideologies inhibiting investment • Critical need to address these investme
Slide 45: K4 project – unrivalled tier 1 PGM project
K4 project – unrivalled tier 1 PGM project Key statistics (2021 terms) 1,400 LoM capital expenditure profile (R million) • Project capex* of ~R3.9bn over 8 years - 1,200 majority during first 3 years 1,000 800 • Steady state (2030 – 2063) 600 ~250koz per annum 400 • Average operating cost ~ R16,051/
Slide 46: K4 project – unrivalled PGM brownfields project
K4 project – unrivalled PGM brownfields project • Mining both Merensky and UG2 reefs to a depth of 1,287m K4 project - expected 4Eoz production 300,000 • Sunk capital of R4.4 billion invested by Lonmin Ounces (oz) 250,000 - Functional 130,000 tpm concentrator 200,000 - Equipped and functional vertic
Slide 47: Burnstone project – key information
Burnstone project – key information Key statistics (2021 terms) Capital expenditure (R million) • Project capex* of ~R2.3bn over 14 years 800 • Average steady state production ~138,000oz per annum 600 • Average operating cost of ~R415,866/kg (R380,000/kg at steady state) • ~2moz produced over 21 yea
Slide 48: Burnstone project
Burnstone project • Acquired with the Wits Gold acquisition in 2015 Burnstone - expected gold production 150 • Mining Kimberly reef to an average depth of 550m Au (koz) (deepest 1.05km) • Existing infrastructure 100 - Functional metallurgical facility - Established TSF 50 - Equipped and functional v
Slide 49: Pursuing value-accretive growth based on a strengthened equity rating
Pursuing value-accretive growth based on a strengthened equity rating
Slide 50: Track record of delivering superior returns through acquisitions
Track record of delivering superior returns through acquisitions Total investment of R43bn (US$3bn)1 – equivalent to 2020 adjusted EBITDA alone 350 Relative price performance (%) 300 Aquarius and Stillwater DRDGOLD Lonmin Rustenburg transaction transaction transaction 250 transactions announced - an
Slide 51: Positioning for tomorrow’s green technologies
Positioning for tomorrow’s green technologies • Battery and “tech metal” Growth Hydrogen strategy complementary economy exposure 5 to PGM investment case Establish base to participate in appropriate drive train and 4 • Tech metals and PGMs essential battery metal growth future components of the glob
Slide 52: Conclusion
Building a values-based oy I culture Pursuing value-accretive LY Focusing on safe growth based on iY ¢ production and a strengthened Embedding operational equity rating ESG excellence excellence as the way we do business Prospering in Optimising South Africa's capital investment allocation climate G
Slide 53: Sibanye-Stillwater continues to outperform peers
Sibanye-Stillwater continues to outperform peers…. 500 Share price (rebased to 100) +369.3% +347.4% (ADR) 400 300 200 100 0 February/13 November/13 September/14 June/15 March/16 January/17 October/17 July/18 May/19 February/20 November/20 February/21 Sibanye-Stillwater Sibanye-Stillwater ADR Barrick
Slide 54: …but still offering clear relative value on most metrics
…but still offering clear relative value on most metrics Market consensus analysis EV / EBITDA (2021e / 2022e) P / CFPS (2021e / 2022e) Net debt / 2021e EBITDA EV & market cap (USDm) 6.7x 8.0x 34,270 Intermediate Senior Gold¹ Senior Gold¹ (0.1x) Senior PGM³ Gold² 6.7x 8.0x 32,327 5.3x 6.4x 33,224 In
Slide 55: Conclusion – Building tomorrow’s successes, today
Conclusion – Building tomorrow’s successes, today ✓ Solid, consistent strategic delivery ✓ Leading position in global precious metals ✓ Positioned for green future ✓ Committed to ESG excellence ✓ Strong balance sheet & financial flexibility ✓ Investing in value accretive operational sustainability ✓
Slide 56: Questions?
Questions? Contacts James Wellsted/ Henrika Ninham/ Chris Law ir@sibanyestillwater.com Tel: +27(0)83 453 4014/ +27(0)72 448 5910/ +44 (0)7923126200 Website: www.sibanyestillwater.co.za Tickers: JSE: SSW and NYSE: SBSW
Slide 57: Appendix
Appendix Disclaimer: Photo utilised was taken pre-COVID-19
Slide 58: 2021 Annual guidance
2021 Annual guidance³ 2021 Production All-in sustaining costs Total capital US$300 - 320m (incl US PGM operations 670 - 690 koz US$840 - 860/oz4 US$175-185m project (2E mined) capex) US Recycling (3E) 790 - 810 koz n/a n/a SA PGM operations² R18,500 - 20,500/4Eoz R3,800m 1.75 -1.85 moz² (4E PGMs) (U
Slide 59: Extensive SA project pipeline – unrealised potential?
Extensive SA project pipeline – unrealised potential? PGM and gold projects Reserve Est (Moz) Project status 1 Marikana K4 (Both) 13,30 2 Marikana E3D (UG2) 2,75 Feasibility complete 3 KDL Klipfontein (UG2) 0,18 Pre-feasibility phase 4 Siphumelele 2 (Both) 2.76 5 Siphumelele 1 (UG2) 12.99 Concept ph
Slide 60: SA PGM operations – contributing 60% of Group adjusted EBITDA
SA PGM operations – contributing 60% of Group adjusted EBITDA SA PGM operations – Underground and surface production and AISC (US$/oz) • H2 2020 production 40% higher than H1 2020 1,200 3,000 4E PGM koz US$/4E oz • Normalised production rate 2,500 achieved in Nov 2020 900 2,000 • Successful integrat
Slide 61: SA PGM four year outlook
SA PGM four year outlook SA PGM operations – Production and AISC (US$/oz)* 4E PGM Production US$/oz AISC 2.00 1600 1.50 1200 1.00 800 0.50 400 0.00 0 2020 2021 (FC) 2022 (FC) 2023 (FC) 2024 (FC) Production (4Emoz) excl projects AISC (US$/oz) (rhs) SA PGM operations – Capital (Rm and US$m)* 4,000 300
Slide 62: SA gold operations – contributing 19% of Group adjusted EBITDA
SA gold operations – contributing 19% of Group adjusted EBITDA SA gold2 – Underground & surface production with AISC & gold price (US$/oz) • H2 2020 production 43% higher than H1 2020 - Successful ramp-up post SA COVID-19 lockdown 700 2,000 - Normalised production rates achieved mid-Nov Gold koz AIS
Slide 63: SA gold operations four year outlook
4 year outlook SA gold operations – Production and AISC (US$/oz*) • AISC to reduce due to Kloof infrastructure project to 1.0 1,800 reduce infrastructure footprint US$/oz AISC Gold production (moz) 0.8 1,500 • Elevated capital for 2021 due to carryover from 2020 1,200 0.6 900 0.4 600 0.2 300 0.0 0 2