Tharisa Plc · JSE:THA
Tharisa — Investor Presentation (December 2020)
27 slides from Tharisa's investor presentation, Dec 10, 2020
Slide 1: Investor Presentation
Investor Presentation 10 December 2020 INVESTING IN SUSTAINABILITY THS:LSE • THA:JSE Enriching lives through innovating the resources company of the future
Slide 2: Who We Are
WHO WE ARE • Leading PGM and chrome co-producer • Located in the heart of PGM and chrome country • South Africa is host to over two-thirds of the world’s PGMs & chrome • Close to infrastructure, road, rail and power • Tharisa a product of the new mining code - fully compliant • Mechanised, open pit
Slide 3: How Is Tharisa Positioned
HOW IS THARISA POSITIONED • Sixth largest listed South African PGM producer • Fourth largest South African Chrome Producer ‒ 142 100 ounces per annum of PGM ‒ 1 344 800 tonnes of chrome per annum Tharisa position in terms of global demand ‒ Provides China with 10% of all its chrome concentrate ‒ ~
Slide 4: Safety and Sustainability
SAFETY AND SUSTAINABILITY LTFIR FATALITY FREE YEARS ACHIEVEMENTS 0.09 5+ 4 million Fatality Free Shifts Tharisa Minerals - achieved: 19 June 2020 Lost Time Injury Frequency Rate Achieved: 28 September 2020 30 September 2020 365 days LTI free Mining Production and Genesis Plant 5 years LTI free Thari
Slide 5: A Resources Company for the Future
Committed to climate change A RESOURCES COMPANY FOR THE FUTURE interventions and the Paris Accord Developing a roadmap with our suppliers and stakeholders that will see a reduction in carbon emissions by 2030 Solid governance structures – value of accountability and transparency Responsible co
Slide 6: FY2020 Production Highlights
SPOT PGM BASKET PRICE FY2020 PRODUCTION HIGHLIGHTS ≈US$2 500/oz REEF MINED PGM PRODUCTION CHROME CONCENTRATE PRODUCTION (5PGE+Au) 4.97 Mt 142.1 koz 1.34 Mt up 7.6% up 1.7% up 3.9% (2019: 4.62 Mt) (2019: 139.7 koz) (2019: 1.29 Mt) STRIPPING RATIO* PGM PRICE CHROME CONCENTRATE PRICE 12.1 m3:m3 US$1 70
Slide 7: FY2020 Financial Highlights
AVERAGE EXCHANGE RATE ZAR:US$ FY2020 FINANCIAL HIGHLIGHTS 16.2 12.5% (2019: 14.4) REVENUE OPERATING PROFIT EBITDA US$406.0 m US$87.6 m US$113.4 m up 18.4% up 262.0% up 119.8% (2019: US$342.9 m) (2019: US$24.2 m) (2019: US$51.6 m) PROFIT BEFORE TAX EPS OPERATING CASH FLOW US$75.8 m US 16.2 cents US$7
Slide 8: Our Markets
OUR MARKETS
Slide 9: Tharisa & the PGM Market
THARISA & THE PGM MARKET Known for their purity, high melting points and unique catalytic properties Extremely resistant to corrosion With up to a quarter of all manufactured goods either containing PGMs or having had PGMs play a role in its production, PGMs are some of the most versatile and
Slide 10: Headwinds from Deep Mines to Meet Growing Rhodium Demand
HEADWINDS FROM DEEP MINES TO MEET GROWING RHODIUM DEMAND PRIMARY DEMAND OUTSTRIPPED BY PRIMARY SUPPLY Supply ‘000 oz 2017 2018 2019 South Africa 611 618 624 Russia 78 69 68 Others 70 70 65 Total primary supply 759 757 757 Gross demand ‘000 oz 2017 2018 2019 Autocatalyst 834 883 1 008 Other 207 170 1
Slide 11: Palladium and Platinum Outlook
PALLADIUM AND PLATINUM OUTLOOK PALLADIUM PLATINUM GROSS DEMAND (2019) GROSS DEMAND (2019) Autocatalyst Jewellery Industrial Autocatalyst Jewellery Industrial Investment 83.5% 1.2% 15.3% 34.0% 24.3% 28.4% 13.4% Growing car sales in China Tighter emission standards Continuing shortages Source: B
Slide 12: Tharisa & the Chrome Market
THARISA & THE CHROME MARKET Chrome is what makes steel stainless South Africa hosts 72% of the global chrome reserves Tharisa supplies China with 10% -12% of all its chrome concentrate Chrome for Tharisa had a 25% margin in the FY2020 year, despite the low prices Source: ICDA, Roskill, Miner
Slide 13: Chrome – Vital for Stainless Steel
CHROME – VITAL FOR STAINLESS STEEL Chrome is what makes steel stainless South Africa hosts 72% of the global chrome reserves Assuming a 5% CAGR in stainless steel: GLOBAL STAINLESS STEEL CAGR +5.0% ADDITIONAL STAINLESS STEEL 2.7 Mtpa ADDITIONAL FERROCHROME Roskill ores and concentrates price f
Slide 14: Financial Performance
FINANCIAL PERFORMANCE
Slide 15: Sustainable Business Even in Times of COVID-19
SUSTAINABLE BUSINESS EVEN IN TIMES OF COVID-19 CO-PRODUCT AND HEALTHY CASH CONTINUED ROBUST BALANCE LIQUIDITY EXCHANGE RATE GENERATION INVESTMENT SHEET MANAGEMENT BENEFITS Multiple revenue streams Exposure to the right Investment in SHE, Low gearing Proactive management of coupled with US$ commoditi
Slide 16: Investment Paying Dividends
INVESTMENT PAYING DIVIDENDS Our Motto 2019 – a year of investment In people PGM PRICES US$/oz In equipment 3000 16000 In mine design 2500 14000 2020 – a year of delivery 2000 12000 10000 Exceptional safety performance in COVID-19 times 1500 8000 Improved performances on all mining metr
Slide 17: Profitability
PROFITABILITY METRIC UNIT FY2020 FY2019 % change Revenue US$ m 406.0 342.9 18.4 EBITDA US$ m 113.4 51.6 119.8 Profit before tax US$ m 75.8 11.2 576.8 Earnings per share US$ cents 16.2 4.0 305.0 Dividend per share US cents 3.50 0.75 367.0 Return on equity % 12.3 3.3 272.7 Return on invested capital %
Slide 18: Revenue and Gross Profit
PGM GROSS PROFIT MARGIN CHROME GROSS PROFIT MARGIN REVENUE AND GROSS PROFIT 39.4% 25.0% Gross profit margins improved to 32.1% (2019: 17.6%) Agency and Trading Manufacturing 4.8% 0.6% The major factors contributing: ‒ increased sale volumes ‒ increase in the PGM basket price Chrome 29.5% ‒ benef
Slide 19: Cash Flow and Dividends
CASH FLOW AND DIVIDENDS Group generated operating cash flow of US$73.0 m Committed to capital discipline ‒ Movement in trade and other receivables US$50.6 m Dividend of US 3.5 cents per share = 17.1% of NPAT Capex of US$70.6 m Minimum of 15% of annual NPAT Capex commitments taken into co
Slide 20: Balance Sheet and Capex
BALANCE SHEET AND CAPEX Total debt of US$70.4 m FY2020 Capex US$70.6 m ‒ Trade finance amounted to US$17.3 m ‒ US$24.7 m mining fleet ‒ Debt to total equity ratio of 21.9% ‒ US$22.7 m deferred stripping ‒ Cash and cash equivalent of US$49.3 m ‒ US$11.4 m related to other mining assets ‒ Net debt
Slide 21: Outlook
tharisa OUTLOOK
Slide 22: Commitment to R&D and Investment
COMMITMENT TO R&D AND INVESTMENT Since the initiation, Tharisa has been committed to the beneficiation of its mineral products as well as the development and deployment of innovative processing and technology US$504 m THARISA GROUP TOTAL INVESTMENT The R&D department of Tharisa has been developi
Slide 23: R&D to Commercialisation
R&D TO COMMERCIALISATION 1MW SMELTER PGM OPTIMISATION CHALLENGER PLANT FOURTH STAGE VULCAN PLANT PROJECTS CRUSHING Producing PGM alloy and Successfully increasing Production of higher Increased the capacity for In house developed to develop further the PGM recoveries at value chemical and production
Slide 24: Value Proposition
VALUE PROPOSITION Leading producer: excellent safety record and investment in EV/EBITDA (2021E) asset sustainability 6.0 5.5 5.0 4.4 4.5 4.6 Exposure to PGMs driven by high palladium and rhodium 4.0 4.0 3.3 demand and growing stainless steel market 3.0 3.0 2.5 2.1 2.0 1.6 Committed to strong r
Slide 25: Questions and Answers
QUESTIONS AND ANSWERS Expand and roll out our business sustainably Further optimise our existing operations Continue to invest in innovative thinking Become a global and diversified business Be the investment of choice in our chosen sector Responsibly enriching the lives of all of our st
Slide 26: Disclaimer
DISCLAIMER These Presentation Materials are for information purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity. Whilst the information contained herein has been prepared in good faith, neither Tharisa plc (the ‘C
Slide 27: Chrome Tax
CHROME TAX Anglo American Platinum, Assore, Bauba Resources, Implats, Northam Platinum, Sail, Sibanye-Stillwater, Siyanda Resources and Tharisa An independent Chrome Ore Producers Group representing primary and UG2 chrome ore producers Opposed to the chrome tax as this will not solve the funda