Annual Results FY2013 (Final)implats.co.za/pdf/presentations/2013/annual-results-29...2013/08/29...
Transcript of Annual Results FY2013 (Final)implats.co.za/pdf/presentations/2013/annual-results-29...2013/08/29...
29 August 2013
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We respect, care and deliver
Annual Results
for the year ended 30 June 2013
We respect, care and deliver
Forward-looking statement
Certain statements contained in this presentation other than the statements of historical fact contain
forward-looking statements regarding Implats’ operations, economic performance or financial condition,
including, without limitation, those concerning the economic outlook for the platinum industry, expectations
regarding metal prices, production, cash costs and other operating results, growth prospects and the
outlook of Implats’ operations, including the completion and commencement of commercial operations of
certain of Implats’ exploration and production projects, its liquidity and capital resources and expenditure,
and the outcome and consequences of any pending litigation or enforcement proceedings. Although
Implats believes that the expectations reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to be correct. Accordingly, results may differ
materially from those set out in the forward-looking statements as a result of, among other factors, changes
in economic and market conditions, success of business and operating initiatives, changes in the regulatory
environment and other government actions, fluctuations in metal prices and exchange rates and business
and operational risk management. For a discussion on such factors, refer to the risk management section
of the company’s Annual Report. Implats is not obliged to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances after the dates of the Annual Report or to
reflect the occurrence of unanticipated events. All subsequent written or oral forward-looking statements
attributable to Implats or any person acting on its behalf are qualified by the cautionary statements herein.
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Agenda
- Overview -Terence Goodlace
- Safety and Operational review -Terence Goodlace
- Impala Rustenburg review –Paul Dunne
- Financial review -Brenda Berlin
- Market Review -Derek Engelbrecht
- Conclusion -Terence Goodlace
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We respect, care and deliver
Key operational features
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Safety has improved across all indicators
Performance was impacted by low
throughput at Impala
Gross refined platinum production
increased by 9% to 1.58 million ounces
Mine-to-market down 2%
IRS up 80%
Group unit costs increased by 23% to
R16 570 per refined platinum ounce
000
oz
0
200
400
600
800
1 000
1 200
1 400
1 600
2012 2013
Mine-to-market
Non-Managed
Non-Managed
Mine-to-market
Platinum production
(000
oz)
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Key financial features
Revenue up 9% to R30 billion
Gross profit declined by 19% to R5.1 billion
Headline earnings declined by 52% to R2 billion (330 cps)
Group capital expenditure reduced by 22% to R6.4 billion
Successful convertible bond raising of R4.5 billion (US$500 million)
Net debt increased from R1.0 billion to R1.6 billion
Final dividend of 60 cps declared and 95 cps for the year
We respect, care and deliver
Safety Review
Terence Goodlace
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Group safety
Fatal injury frequency rate Industry comparison*
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*Calendar year statistics reported to the DMR
(per
mill
ion
man
hou
rs w
orke
d)
(per
mill
ion
man
hou
rs w
orke
d)
0.082
0.122
0.053
0.087
0.065
0.000
0.020
0.040
0.060
0.080
0.100
0.120
0.140
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
Implats Platinum industry
2009 2010 2011 2012 2013 to June
We respect, care and deliver
Group safety
Lost time injury frequency rate Total injury frequency rate
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(per
mill
ion
man
hou
rs w
orke
d)
(per
mill
ion
man
hou
rs w
orke
d)
2.92
4.614.94 4.96
4.21
0.00
1.00
2.00
3.00
4.00
5.00
6.00
13.95
15.21
13.47
11.19 10.90
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
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Notable safety achievements
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Operation Achievement
Zimplats 10 million fatality free shifts on 26 March 2013
Impala refineries 9 million fatality free shifts 9 November 2012
Impala 1 shaft 6 million fatality free shifts on 13 December 2012
Impala 12 shaft 4 million fatality free shifts on 9 May 2013
Mimosa 3 million fatality free shifts on 22 April 2013
Impala 16 shaft 2 million fatality free shifts on 1 March 2013
Impala 10, 14, 20, 6 shafts and Marula Each achieved 1 million fatality free shifts during the year
Mimosa Improved its lost time injury rate by 78% for the year
Marula Improved its lost time injury rate by 53% for the year
We respect, care and deliver
Safety Strategy
Cultural Transformation
Framework
SafetyStrategy
Technical Initiatives
Effective Supervision
Nets and Bolts
Proximity Detection Systems
Self Contained Self Rescuers
Modern Shaft Safety Devices
Fire Retardent Conveyor Belts
Electronic Winch Signaling Devices
Modern Centralised Blasting Systems
Methane Detection Systems
Leadership
Risk Management
Accident Investigations
Zero Harm Incentives
Adopting Leading Practices
Eliminating discrimination
Skills and Training
Effective Leadership
Triggered Action Response Plan
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Operational Review
Terence Goodlace
We respect, care and deliver
709
180
71
97
157
368 1 582
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Impala Zimplats Marula Mimosa Two Rivers Non-managed Total
Group refined platinum production
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Mine-to-market1 214 kozs
(00
0 o
z)
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Zimbabwean operations
Zimplats
Tonnes milled up 7% to 4.7 million
Platinum in matte increased by 6% to 198 000 ounces
Unit costs rose by 5% to US$1 307 per platinum ounce in matte
Phase 2 expansion on target for full production in 2015
Mimosa
Tonnes milled up by 2% to 2.3 million
Platinum in concentrate declined by 5% to 100 300 ounces
Unit costs increased by 23% to US$1 782 per platinum ounce in concentrate
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Other SA operations
Marula
Tonnes milled up 3% to 1.6 million
Platinum in concentrate increased by 4% to 71 700 ounces
Unit costs rose by 19% to R19 665 per platinum ounce in concentrate
Two Rivers
Tonnes milled increased by 2% to 3.2 million
Platinum in concentrate up by 8% to 162 200 ounces
Unit costs rose by 8% to R11 683 per platinum ounce in concentrate
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Group capital expenditure
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
2012 2013
(Rm
)
Zimplats Expansion
Other replacement projects
17 Shaft
16 Shaft
20 Shaft
SIB
Capital expenditure was reduced by 22% to R6.4 billion
Cash preservation initiatives
Focus on critical path activities
R4.4 billion incurred at Impala
R2.65 billion spent on 20, 16 and 17 shafts
R1.1 billion incurred on the Phase 2 expansion at Zimplats
We respect, care and deliver
Group unit cost plus capital - 2013
(R/P
t o
z)
0
5 000
10 000
15 000
20 000
25 000
Impala Zimplats Marula Mimosa Two Rivers Implats
Cash costs Stay in business capital Replacement capital Expansion capital
2013 R/Pt oz sold
Current R/Pt oz sold
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Employee relations
A dynamic labour environment
Government intervention to restore peace and stability to the industry
High barriers to exit
Diminished labour tension
Commencement of wage negotiations
Advancing our ER strategy
Increased employee engagement and team mobilisation
New recognition agreement concluded with AMCU
Health and safety agreement being progressed
We respect, care and deliver
Zimbabwe update
Indigenisation
Indigenisation Plans submitted for both Zimplats and Mimosa
Plans are constructed as follows:-
10% - Community Trust
10% - Employees Trust
31% - NIEEF
Term sheets being revisited
Discussions are on-going
Land acquisition
Gazetted on 1 March 2013
Objection and claim for compensation lodged
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Impala Rustenburg review
Paul Dunne
We respect, care and deliver
Constrained mining flexibility
Limited mining face availability
lower than planned primary development
backlog in construction, equipping and ledging
depletion of the old shafts
Further impacted by:
challenging UG2 geology at 10, 12 and 14 Shafts
safety initiatives and stoppages
changing workforce dynamic
deterioration in mining quality
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Merensky Reefs - 2014
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Merensky Reef - 2018
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UG2 Reef - 2014
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Mineral reserves distribution - FY13
3.4
7.1
0.7
5.1
3.4
0.0 2.0 4.0 6.0 8.0 10.0 12.0
(Pt Moz)
Merensky UG2
New Shafts
Mature Shafts
Old Shafts
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Initiatives
Ore reserve flexibility Proudfoot initiative Dedicated development and construction management Breast ledging Increased development
Quality mining Grade reviews Grade control observers Team mobilisation Incentive scheme
Improved systems Mine planning Enhanced Production Scheduler Geological information and diamond drilling Predictive planning models
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We respect, care and deliver
Deliverables – 2014
Face availability and quality measurements
Total development up 10% to 108 kilometres
Primary reef development up 35% to 47 kilometres
Increase mineable face from 19 kilometres to 22 kilometres
Productivity up 4% to 300m2 per team
Off-reef mining improvement from 12% to 9%
Sweepings improvement from 75% to 84%
This will result in:
Tonnes mined will increase to 11.4 million tonnes
Grade and recoveries will remain unchanged at 3.50 g/t and 85%
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Mineable Face Length
10 000
12 000
14 000
16 000
18 000
20 000
22 000
24 000
26 000
28 000
Mar-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18
Actual Target
(Me
tre
s)
We respect, care and deliver
Impala – tonnage production profile
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Old shafts
Mature shafts
New shafts
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
(00
0 t)
Old Shaft Mature Shafts New Shafts
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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Financial Review
Brenda Berlin
We respect, care and deliver
Group income statement
R million 2013 2012 % change
Sales 30 032 27 593 9
Cost of sales (24 980) (21 337) (17)
Gross profit 5 052 6 256 (19)
Gross margin 16.8 22.7 (26)
Royalty expenses (764) (664) (15)
Profit before tax 2 551 6 250 (59)
Profit 1 075 4 299 (75)
HEPS (cps) 330 685 (52)
DPS (cps) 95 195 (51)
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Sales variance
27 593
30 032
351
3 823
1 735
24 000
25 000
26 000
27 000
28 000
29 000
30 000
31 000
2012 Sales volumes Dollar prices Exchange rate 2013
(Rm
)
We respect, care and deliver
Operating costs per platinum ounce
13 450
16 570
1 582
2 833
1 295
5 000
7 000
9 000
11 000
13 000
15 000
17 000
19 000
2012 Strike Inflation Volumes & other 2013
(R/P
t oz)
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Gross profit movement
6 256
5 052
2 439
3172 832275 137
716
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
2012 Sales Cash costs Share basedpayments
Chromeoperations
Depreciation Metalspurchased andchange in stock
2013
(Rm
)
We respect, care and deliver
Profit movement – FY2013
4 299
1 075
196
466
1 204 100
928
1 018
323
313 0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
2012 Gross profit Royalties Impairments Goodwill Zim Tax FX gains Fair valueadj on bond
Other 2013
(Rm
)
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Net Earnings
2013 2012 %
(Rm) cps (Rm) Cps Var
Basic Earnings 1 022 168 4 180 690 (76)
Headline earnings adjustment *
979 162 (29) (5)
Headline Earnings 2 001 330 4 151 685 (52)
Impairments 1 306 215 378 62
Normalised Earnings 3 307 545 4 529 747 (27)
* Inclusive of goodwill impairment (R1.0 billion)
We respect, care and deliver
Movement in gross cash
587
4 497
5 938
4 466
446
366
1 159
6 360 214
(1 000)
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
Jun 2012 2012Dividend
Operatingcash flow
Capital InterimDividend
ConvertibleBond
Other Jun 2013
(Rm
)
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Net debt
R million 2013 2012
Cash 4 497 587
Debt excluding leases (6 114) (1 582)
Net debt (1 617) (995)
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Market Review
Derek Engelbrecht
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Sales Volumes by Metal
2013 2012 % change
Platinum (000oz) 1 333 1 368 (3)
Palladium (000oz) 859 765 12
Rhodium (000oz) 176 183 (4)
Nickel (000t) 14.7 13.9 5
We respect, care and deliver
Average Prices Achieved – Major Metals
2013 2012 % change
Platinum ($/oz) 1 551 1 614 (4)
Palladium ($/oz) 676 687 (2)
Rhodium ($/oz) 1 143 1 601 (29)
Nickel ($/t) 16 437 19 513 (16)
Basket ($/Pt oz sold) 2 528 2 601 (3)
(R/Pt oz sold) 22 246 20 054 11
Exchange rate (R/$) 8.80 7.71 14
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Investment
0
500
1 000
1 500
2 000
2 500
3 000
(00
0 o
z)
Palladium ETF Investment
US ETF UK ETF Swiss ZKB OTHER
0
500
1 000
1 500
2 000
2 500
(00
0 o
z)
Platinum ETF Investment
US ETFs UK ETFs SWISS ZKB OTHER ABSA
So
urc
e :
Mits
ui
We respect, care and deliver
Investment
0
500
1 000
1 500
2 000
2 500
3 000
(00
0 o
z)
Palladium Exchange Investment
0
500
1 000
1 500
2 000
2 500
3 000
3 500
(00
0 o
z)
Platinum Exchange Investment
So
urc
e :
Mits
ui
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Vehicle Sales
RegionYear-to-Date % Chg.
YTDCurrent
(000)Year-Ago
(000)
North America 9 181 8 573 7.1
Asia / Pacific 16 572 15 718 5.4
Europe 9 292 9 857 -5.7
South America 2 742 2 564 6.9
Other 1 948 1 877 3.8
World Total 39 735 38 589 3.0
World Light Vehicle Sales by Region
40 000
50 000
60 000
70 000
80 000
90 000
100 000
110 000
(000
uni
ts)
Light duty vehicles
6 000
7 000
8 000
9 000
10 000
11 000
12 000
13 000
(000
uni
ts)
Heavy duty vehicles
Sou
rce
: LM
C A
uto
mo
tive
We respect, care and deliver
Chinese Jewellery
0
200
400
600
800
1 000
1 200
(00
0 P
toz)
Shanghai Gold Exchange(Annual cumulative ounces)
2010 2011 2012 2013
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Platinum Supply / Demand Balance
000 oz 2011 20122013
(Forecast)
DEMAND
Automobile
Jewellery
Industrial
Investment
3 400
2 415
1 730
150
3 470
2 525
1 700
200
3 475
2 565
1 750
600
Total Demand 7 695 7 895 8 390
SUPPLY
South Africa
North America
Other- Incl. Jewellery recycle
Recycle - Auto
Russian Sales
4 735
375
1 020
1 110
800
4 025
380
1 040
1 120
795
4 175
335
1 125
1 230
800
Total Supply
Balance
8 040
345
7 360
- 535
7 665
- 725
We respect, care and deliver
Palladium Supply / Demand Balance
000 oz 2011 20122013
(Forecast)
DEMAND
Automobile
Industrial
Investment
5 600
3 160
-520
6 000
3 110
300
6 300
3 125
250
Total Demand 8 240 9 410 9 675
SUPPLY
South Africa
North America
Other
Recycle
Russian Sales
2 595
860
1 465
1 500
2 750
2 245
930
1 080
1 600
2 700
2 300
950
650
1 850
2 700
Total Supply
Balance
9 170
930
8 555
- 855
8 450
-1 225
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We respect, care and deliver
Rhodium Supply / Demand Balance
000 oz 2011 20122013
(Forecast)
DEMAND
Automobile
Industrial
760
180
790
190
800
190
Total Demand 940 980 990
SUPPLY
South Africa
North America
Other
Recycle
Russian Sales
635
20
30
265
70
580
19
31
260
65
590
20
35
300
65
Total Supply
Balance
1 020
80
955
-25
1 010
20
We respect, care and deliver
Prospects
Inventory overhang depressing prices.
Fundamental demand holding steady
Emission legislation continues to drive demand
Euro 6 – 2014
California - LEV III phased in from 2014
China – full Euro 4 plus diesel in 2015
Eurozone issues still a concern, but may be bottoming.
US recovery gaining momentum
Emerging market growth slowing
Southern African supply challenges will feature prominently
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We respect, care and deliver
Conclusion
Terence Goodlace
We respect, care and deliver
Conclusion
Safety
Remains our first priority
Will drive the safety strategy
PGM Markets
Above ground stocks pressurising short-term prices
Primary supply to remain constrained
Automotive (sales and legislation) drive demand
Positive medium to long term price outlook
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We respect, care and deliver
Conclusion
Operating environment
Changed workplace dynamic
Impending wage negotiations
Margin squeeze
Grow mine-to-market production
Execute operational plan at Impala Rustenburg to deliver 850 000 platinum
ounces by 2018
Complete the 90 000 ounce Phase 2 expansion at Zimplats by 2015
Grow Marula from 70 000 to 86 000 ounces of platinum by 2016
Maintain production at other operations
Pursue third party and other processing opportunities
We have a plan and we plan to deliver with respect and care
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We respect, care and deliver
Annual results
for the year ended 30 June 2013
52