Sibanye Stillwater Limited · JSE:SSW
Sibanye Stillwater — FY2021 Earnings Presentation
59 slides from Sibanye Stillwater's earnings presentation, Mar 3, 2022
Slide 1: H2 & year ended 31 December 2021 results and Group strategic update
H2 & year ended 31 December 2021 results and Group strategic update 3 March 2022
Slide 2: Results and strategic update
Results and strategic update H2 & year ended 31 December 2021 3 March 2022
Slide 3: 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 4: Agenda
Agenda 1. Safety and ESG 2. Strategic update - positioning for positive impact 3. Operational excellence 4. Financial review 5. Outlook and conclusion 3
Slide 5: Safety and ESG
Safety and ESG Neal Froneman, Chief Executive Officer Vegetated tailings area at the SA PGM Paardekraal TSF
Slide 6: Safe production journey – critical focus on elimination of fatalities
Safe production journey – critical focus on elimination of fatalities Focus areas • Increase in fatal incidents during 2021 – 20 colleagues tragically lost in 15 incidents • Decisive actions taken to address incidence of fatalities during H2 2021 - 28 Oct 2021: 5-day suspension of all operations to
Slide 7: A tough year for the industry locally and globally
A tough year for the industry locally and globally Industry regression – fatalities A large employer 2021 2020 2021 2020 2021 SA SA US 2020 SA SA SA* SA US* US • Since 2013 the workforce increased by 132% mainly due to M&A Group PGM gold PGM Group PGM gold Industry industry Industry industry despite
Slide 8: Safe production journey – focused efforts on our path to zero harm
Safe production journey – focused efforts on our path to zero harm Highlights • All operations received ISO 45001 and 14001 accreditation • Improving trend in all injury frequency measures since H1 2021 - 31% improvement in TRIFR H1 to H2 2021 and steady decline over 2021 • Safety milestones include
Slide 9: Our sustainability strategy - our commitment to ongoing ESG excellence
Our sustainability strategy - our commitment to ongoing ESG excellence Develop a climate change resilient business • Building a Green metals business • Risk mitigation through • Biodiversity in mitigation & enhance rehabilitation • Road to Carbon neutral - Water demand and intensity design enhanceme
Slide 10: Building a green metals portfolio
Building a green metals portfolio Green metals • Green metals strategy advanced – four transactions Battery metals following two years of detailed market assessment 3 28 1 27 25 29 Li Lithium Ni Nickel H Co Cu Mn Hydrogen Cobalt Copper Manganes Graphite e 2021: New Century (Tailings retreatment) 92
Slide 11: Path to carbon neutral by 2040 – a clear map and action plan
Path to carbon neutral by 2040 – a clear map and action plan using carbon budgeting Sibanye-Stillwater GHG emissions profile (Scope 1 and 2) 1. Business as usual (BAU) drivers a. Growth projects (K4, Burnstone) 8 SBTi target1 1a b. Natural life of mine closures c. Grid-supplied electricity decarboni
Slide 12: Path to carbon neutral by 2040 – renewable energy best decarbonisation lever
Path to carbon neutral by 2040 – renewable energy forms our best decarbonisation lever 93% of 2021 Group GHG emissions¹ due to SA 490 7% state grid-supplied electricity 2021 CO2e • Eskom tariff and supply risks persist emissions: Scope 1 & 2 • Extensive electrification of our operations (000t CO2e)
Slide 13: Making strides in our water performance
Making strides in our water performance Water use Water quality • SA potable water purchases reduced by 8% YoY¹ • US PGM operations 100% compliant with - SA gold operations purchased 17.1% less potable water YoY¹ water quality discharge permit for 2021 (1.55 kl/tonne vs 1.78kl/tonne)⁵ despite a 4% i
Slide 14: Strategic update - positioning for positive impact
Strategic update - positioning for positive impact Neal Froneman, Chief Executive Officer
Slide 15: Outstanding delivery as an outcome of focusing on our 2021 strategic pillars
Outstanding delivery as an outcome of focusing on our 2021 strategic pillars Record annual adj. EBITDA of R68.6bn (US$4.6bn) 88% higher adj. free cash flow of R37.4bn (US$2.3bn) 2022 redeemed & 2025 bonds replaced with US$1.2bn (2026 and 2029 notes) @ US$169m lower interest burden Dividend of R13.8b
Slide 16: Human economic and social progress characterised by disruption and change
Human economic and social progress characterised by disruption and change Previous industrial 1st REVOLUTION 2nd REVOLUTION 3rd REVOLUTION 4th REVOLUTION 5th REVOLUTION revolutions • hard on humans and hard on the environment Mechanisation, Mass production, Automation, Cyber Cyber steam power, assem
Slide 17: Currently transitioning from 4th industrial revolution to 5th
Currently transitioning from 4th industrial revolution to 5th – accelerated by COVID-19 The Fifth industrial 1st REVOLUTION 2nd REVOLUTION 3rd REVOLUTION 4th REVOLUTION 5th REVOLUTION revolution is a conscious rewiring to • prioritise the needs of human beings, the environment and society • reimagin
Slide 18: The grey elephants shaping the Fifth industrial revolution
The grey elephants shaping the Fifth industrial revolution • A grey elephant is a highly probable, high impact, yet neglected catalyst or force of change • Covid-19 is a grey elephant which was predicted, but ignored • The pandemic was a catalyst agitating & amplifying several "grey elephants" • We
Slide 19: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for The WHO predicts multiple pandemics by the end of the 2020s. Intelligent Pandemics Pandemics are highly probably and can come from anywhere. advances Need to be Pandemic resilient Multipolarity Ageing Adapting culture and st
Slide 20: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for The WHO predicts multiple pandemics by the end of the 2020s. Intelligent Pandemics Pandemics are highly probably and can come from anywhere. advances Need to be Pandemic resilient The world is ageing fast. For the first time
Slide 21: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for The WHO predicts multiple pandemics by the end of the 2020s. Intelligent Pandemics Pandemics are highly probably and can come from anywhere. advances Need to be Pandemic resilient The world is ageing fast. For the first time
Slide 22: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for The WHO predicts multiple pandemics by the end of the 2020s. Intelligent Pandemics Pandemics are highly probably and can come from anywhere. advances Need to be Pandemic resilient The world is ageing fast. For the first time
Slide 23: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for The WHO predicts multiple pandemics by the end of the 2020s. Intelligent Pandemics Pandemics are highly probably and can come from anywhere. advances Need to be Pandemic resilient The world is ageing fast. For the first time
Slide 24: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for The WHO predicts multiple pandemics by the end of the 2020s. Intelligent Pandemics Pandemics are highly probably and can come from anywhere. advances Need to be Pandemic resilient The world is ageing fast. For the first time
Slide 25: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for The WHO predicts multiple pandemics by the end of the 2020s. Intelligent Pandemics Pandemics are highly probably and can come from anywhere. advances Need to be Pandemic resilient Globalisation is unravelling. The world is a
Slide 26: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for Advances in robotics, artificial intelligence, and machine learning have ushered in a new age. The lag between The WHO predicts multiple pandemics by the end of the 2020s. technology adoption and new job creation will be hig
Slide 27: The context – being future ready by understanding what we need to adapt for
The context – being future ready by understanding what we need to adapt for Advances in robotics, artificial intelligence, and machine The WHO predicts multiple pandemics by the end of the 2020s. learning have ushered in a new age. The lag between technology Intelligent adoption and new job creation
Slide 28: Unpacking our new three-dimensional strategy – starting with our WHY
Unpacking our new three-dimensional strategy – starting with our WHY 3. STRATEGIC DIFFERENTIATORS How we grow prosper & deliver sustainable impact 2. STRATEGIC ESSENTIALS How we operate 1. STRATEGIC FOUNDATION Commitment Accountability Why we exist Respect Enabling Safety Larry Fink "It's never been
Slide 29: Sustained success requires delivery of non-negotiable strategic essentials
Sustained success requires delivery of non-negotiable strategic essentials 3. STRATEGIC DIFFERENTIATORS Ensuring safety and well-being How we grow prosper & deliver sustainable impact Prospering in every region in which we operate 2. STRATEGIC ESSENTIALS Achieving operational excellence and optimisi
Slide 30: …taking it to the next level with strategic differentiators
…taking it to the next level with strategic differentiators 3. STRATEGIC DIFFERENTIATORS Recognised as a force for good How we grow, prosper & deliver sustainable impact Unique global portfolio of green metals and 2. STRATEGIC ESSENTIALS energy solutions that reverse climate change How we operate In
Slide 31: ... designed to address the challenges and opportunities of grey elephants
... designed to address the challenges and opportunities of grey elephants Grey elephants Angry Big Angry Multi- Intelligent 3. STRATEGIC DIFFERENTIATORS Pandemics Ageing planet Inequality squeezes people polarity advances Recognised as a force for good Unique global portfolio of green metals and en
Slide 32: Operational excellence
Operational excellence Richard Stewart, Chief Operating Officer
Slide 33: Substantial Mineral reserves and resources
Substantial Mineral reserves and resources • Maiden declaration of lithium and zinc Mineral reserves* Mineral reserves and resources Life of mine (LOM) at 31 Dec 20211 2.6 • Attributable Mineral reserve and resources 7.8 • Kroondal 16 years DRDGOLD operations for SA operations affected by change in
Slide 34: SA PGM operations – consistent leading performance
SA PGM operations – consistent leading performance SA PGM – Underground and surface production and AISC • Production of 941,9732 4E oz for H2 2021, 5% higher year-on-year despite safety 1,200 60,000 stoppages 50,000 • Bucking the trend – cost management 900 offsetting inflationary pressures 40,000 -
Slide 35: SA PGM operations – well positioned on the industry cost curve
SA PGM operations – well positioned on the industry cost curve Global PGM cash cost+capex curve (CY21E - at spot) Cumulative annual production (4E Koz) 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 60,000 60,000 Spot PGM basket price received C
Slide 36: Kroondal PSA transaction – unlocking significant value for all stakeholders
Kroondal PSA transaction – unlocking significant value for all stakeholders • Agreements reached with Anglo American Platinum (AAP) allowing: - early mining of Rustenburg resources from low cost Kroondal infrastructure - acquisition of AAP 50% share of the Kroondal PSA • Transfer of ownership is exp
Slide 37: US PGM operations – Shorter term challenges
US PGM operations – Shorter term challenges US PGM – Mined production and AISC • H2 2021 mined PGM production of 272,099 2E oz - 11% lower than for H2 2020 350 2,500 • Short term and ongoing constraints - Stillwater bridge repairs during Q4 reduced 300 2,000 processing of Stillwater East material 2E
Slide 38: PGM recycling – delivering value
PGM recycling – delivering value • Reduction in 3E PGM Recycling (ounces fed) PGM recycling, adj. EBITDA and net interest received to 352,276 2E oz in H2 2021 due to: 500 60 - 7% less tonnes from mining operations which supports efficient commingling 50 - ongoing US logistic challenges and lower 400
Slide 39: SA gold operations – steady production despite operational disruption
SA gold operations – steady production despite operational disruption • Production for H2 2021 4% lower at 17,234 Kg (554,086 oz) SA gold² – Production, AISC & gold price - Group wide safety intervention and suspension of operations at 800 1,000,000 Beatrix 1& 3 shafts and Kloof 1 shaft in Dec 2021
Slide 40: Beatrix TSF remediation - proactive, ongoing monitoring and management of TSFs
Beatrix TSF remediation - proactive, ongoing monitoring and management of TSFs • Safety factor modelling indicated a requirement for remedial measures (buttressing etc.) - on the northern flank of the Beatrix tailings retreatment facility (TSF) – a length of 750m, 17% of the TSF perimeter • Processi
Slide 41: 2022 Annual guidance
2022 Annual guidance⁵ 20223 Production All-in sustaining costs Total capital US PGM operations US$290m - US$310m 550 - 580 koz US$980 - US$1,030/oz4 (2E mined) (incl US$70m project capital) US Recycling 750 - 800 koz n/a US$3m (3E) SA PGM operations² R18,500 - 19,200/4E oz R4,750m (US$317m)¹ 1.75 -1
Slide 42: Financial review
Financial review Charl Keyter, Chief Financial Officer
Slide 43: Income statement for the year ended 31 December 2021
Income statement for the year ended 31 December 2021 2021 year 2020 year 2021 year 2020 year 35% increase in revenue, Figures are in millions unless otherwise stated (Rm) (Rm) (US$m) (US$m) attributable to all segments Revenue 172,194 127,392 11,643 7,739 Cost of sales, before amortisation & depreci
Slide 44: Debt and liquidity – maturity profile
Debt and liquidity – maturity profile Deferred, low risk maturity ladder • Revolving credit facilities (RCFs) unutilised and expected to be extended/refinanced prior to maturities - US$600 million RCF matures in April 2023 - R5.5 billion RCF matures in November 2024 • Liquidity headroom of R48.3bn (
Slide 45: Strong dividend flow sustained
Strong dividend flow sustained • Final and interim dividends maintained at upper limit of the Normalised earnings and dividends paid/declared (Rm) policy range 50,000 18,000 - 35% of normalised earnings at R5.3bn (US$342m) for H2 2021 – resulting in total dividend for year of R13.8bn (US$907m) 40,00
Slide 46: Return of capital to shareholders with a clear value proposition
Return of capital to shareholders with a clear value proposition Sibanye- Anglo Actual paid during 2021 year Stillwater Amplats Implats RB Plats Barrick* Newmont Newcrest Gold Fields Gold Harmony R18,176 R55,718 R17,700 R3,000 R3,550 R884 Dividends paid (Rm/US$m) US$1,384 US$1,757 US$438 US$322 US$1
Slide 47: Disciplined delivery on all constituents of capital allocation framework
Disciplined delivery on all constituents of capital allocation framework Performance 2021 • Investing in value accretive operational sustainability • Approved SA project capital – c. R6.3bn (2021 total c. R845m) • Cash reserves of R30 bn exceed targeted R20 bn • Provides flexibility and optionality
Slide 48: Outlook and conclusion
Outlook and conclusion CEO, Neal Froneman
Slide 49: Green metals outlook
Green metals outlook PGM demand remains well supported • Internal combustion engine (ICE) vehicles have a substantial future during this decade despite growth of battery electric vehicle share • Tightening emissions regulations support PGM demand in hybrid and ICE vehicles • Growth in heavy duty fue
Slide 50: Adapt or die?
Adapt or die? ✓ Strategic delivery – doing what we say we will do ✓ Record annual earnings ✓ Well timed entry into the green metals sector ✓ Delivering on all elements of capital allocation framework ✓ Maintained value-based M&A discipline ✓ Enhanced strategic positioning for future resilience and s
Slide 51: Contacts
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.com Tickers: JSE: SSW and NYSE: SBSW 50
Slide 52: Appendix
we are one G; Seilpany’.
Slide 53: Competent persons’ declaration
Competent persons’ declaration This Mineral Reserve and Mineral Resource declaration represents a condensed and consolidated summary of the full Sibanye-Stillwater Mineral Resource and Mineral Reserve declaration available in the Group Mineral Resource and Mineral Reserve Report, which will be publi
Slide 54: Price assumptions on reserves and resources
Price assumptions on reserves and resources The Group complies with both the JSE and the US Securities and Exchange Commission (SEC) guidelines on commodity prices used in the estimation of Mineral Reserves at all managed operations and projects. An average exchange rate of R15.00/US$ (2020: R15.00/
Slide 55: PGM markets – 2022 outlook
PGM markets – 2022 outlook • Chip shortage began moderating towards end 2021 – expected to continue through 2022 • Light vehicle auto production forecast to recover to 82.7m units in 2022 • BEV sales expected to be 7% of global LV market for 2022 (vs 5% for 2021) • PGM loadings to remain flat on LVs
Slide 56: Price rally caused by strong demand pull from BEVs
Price rally caused by strong demand pull from BEVs Lithium supply-demand balance kt LCE $/t LCE Outlook 500 50,000 Price rally caused by: Current spot prices Prices expected to remain 400 1. Stronger than expected BEV sales (faster post Covid-19 recovery, Li₂CO₃: $71,721/t above the long-term averag
Slide 57: Mine supply urgently required to meet upgrades to BEV outlook
Mine supply urgently required to meet upgrades to BEV outlook Lithium demand by segment (kt LCE) Lithium supply by region (%) 1,200 Automotive battery 100% Australia expected to remain major primary supplier over the medium-term Other battery 100% Non-battery Automotive share of lithium demand (rhs)
Slide 58: Growing battery demand leads to nickel price appreciation
Growing battery demand leads to nickel price appreciation Nickel demand from automotive batteries (kt) Nickel Supply by type (%) 600 16% NPI and NiSO4 growing to serve stainless-steel and batteries respectively Automotive battery demand % of net demand (rhs) 100% 0% 2019 2020 2021 2022f 2023f 2024f
Slide 59: Detailed dividend table
Detailed dividend table • Final and interim dividends maintained at upper limit of the policy range - 35% of normalised earnings at R5.3bn (US$342m) H2 2021 – resulting in total dividend for year of R13.8bn (US$907m) • Shareholder returns enhance by 5% share buyback of R8.5bn concluded in Oct 2021 F