PowerPoint Presentation · Palladium 2.27 1.74 2.06 . 23/08/2012 16 One Team One Vision With Pride...
Transcript of PowerPoint Presentation · Palladium 2.27 1.74 2.06 . 23/08/2012 16 One Team One Vision With Pride...
23/08/2012
1
One Team One Vision With Pride
Annual Results
for the year ended 30 June 2012
One Team One Vision With Pride
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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One Team One Vision With Pride
Agenda
- Overview -
Terence Goodlace
- Safety and Operational review -
Terence Goodlace
- Financial review -
Brenda Berlin
- Market Review -
Derek Engelbrecht
- Conclusion -
Terence Goodlace
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One Team One Vision With Pride
Remembrance
All Please Stand for a Minute’s Silence
We remember all those who have passed on in the
South African Mining Industry.
Our thoughts, prayers and sympathies are with the families,
friends and loved ones of those who have died.
We must never forget and we are poorer for their passing.
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One Team One Vision With Pride
Key features - operational
5
A significant intervention is required to
improve our safety culture
The six week illegal strike severely
impacted performance
Gross refined platinum production
declined by 21% to 1.45 million ounces
Mine-to-market down 13%
IRS down 50%
Group unit costs increased by 24% to
R13 450 per refined platinum ounce 0
00
oz
00
0 o
z
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
FY11 FY12
Mine-to-
market
Non-
Managed
Non-
Managed
Mine-to-
market
Platinum production
One Team One Vision With Pride
Key features - financial
Revenue down 17% to R27.6 billion
Gross profit fell by 40% to R7.0 billion
Headline earnings declined by 37% to
R4.2 billion equivalent to R6.85 per
share
Group capital expenditure increased by
38% to R7.3 billion
Cash decreased from R4.5 billion to
R0.6 billion
Final dividend of 60 cents per share and
195 cents for the year
Rm
4 542
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
June 2011 June 2012
Cash position
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One Team One Vision With Pride
Safety Review
Terence Goodlace
One Team One Vision With Pride
Group safety
Fatal injury frequency rate Industry comparison*
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*Calendar year statistics reported to the DMR
0.10
0.08
0.12
0.05
0.09
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
Implats Platinum industry
2008 2009 2010 2011 2012
(per
mill
ion m
an h
ou
rs w
ork
ed)
(per
mill
ion m
an h
ou
rs w
ork
ed)
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One Team One Vision With Pride
Group safety
Lost time injury frequency rate Total injury frequency rate
9
2.92 2.92
4.61
4.94 4.96
0.00
1.00
2.00
3.00
4.00
5.00
6.00
16.97
13.95
15.21
13.47
11.19
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
(per
mill
ion m
an h
ou
rs w
ork
ed)
(per
mill
ion m
an h
ou
rs w
ork
ed)
One Team One Vision With Pride
Safety – the way forward
Companies get the safety performance they demonstrate they are
prepared to accept
Now fully committed to industry initiatives which include:
The cultural transformation framework
The adoption of best practices
Safety nets and in stope bolting
Proximity Devices on trackless mobile machinery
Shaft Safety Devices
The training of 3 200 safety representatives by 2014
Internal safety stoppages to increase until we get it right
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One Team One Vision With Pride
Operational Review
Terence Goodlace
One Team One Vision With Pride
750
185 63
100
145
205 1448
0
200
400
600
800
1000
1200
1400
1600
Impala Zimplats Marula Mimosa Two Rivers Non-managed Total
Group refined platinum production
12
Mine-to-market 1 243 000 ozs
00
0 o
z
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One Team One Vision With Pride
Group unit cost per platinum ounce
13
R/P
t o
z
10 801
8 232
16 884
9 685 9 615
10 867
13 913
9 594
16 483
11 255 10 814
13 450
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
Impala Zimplats Marula Mimosa Two Rivers* Group
FY11 FY12
(Rm
)
*Not included in group unit costs
One Team One Vision With Pride
Group unit cost plus capex FY2012
0
5 000
10 000
15 000
20 000
25 000
Impala Zimplats Marula Mimosa Two Rivers Group
Cash costs Stay in business capital Replacement capital Expansion capital
FY2012 R/Pt oz sold
Current R/Pt oz sold
R/P
t o
z
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One Team One Vision With Pride
Six week strike at Impala
RDO wage demand and a refusal to deal through official structures
Ended up in a six week illegal strike with high levels of violence and
intimidation
Mass resignations from NUM and the emergence of AMCU
Current position
Increased communication with employees and industry
Ongoing meetings with interim workers committees
Working with all parties and honouring NUM’s threshold agreement
Striving for a new dispensation for employee participation
Uncertain labour environment across the industry
Performance at Impala remains below planned levels
One Team One Vision With Pride
Zimbabwe indigenisation update
Indigenisation Plans submitted for both Zimplats and Mimosa
Plans comply with the Indigenisation Law (51%) and are constructed as
follows:-
10% - Community Trust
10% - Employees Trust
31% - Broad based indigenous Zimbabwean groupings
Plans have been accepted in principle by the Government
Zimplats commencing with implementation of the Community and
Employee Trusts
Discussions are on-going to finalise the details of the sale of the 31% for
both companies
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One Team One Vision With Pride
Major capital projects
20 shaft 16 shaft 17 shaft Zimplats Ph II
Capital Spend for
FY2012
R997m R960m R581m US$176m
Remaining
Capital Spend
R3.2bn R4.1bn R8.3bn US$240m
Full production
date
FY2018 FY2018 FY2020 FY2015
Steady-state
throughput
1.7mtpa 2.7mtpa 2.7mtpa 2.0mtpa
Steady-state
platinum
production
125kozpa 185kozpa 180kozpa 90kozpa
Current primary
activities
Development of
the ancillary
inclines and
declines.
Production build
up has
commenced with
26koz planned for
FY2013
Main shaft
equipping
underway.
Development
towards reef has
commenced from
the ventilation
shaft
Sinking of the
main and
ventilation shafts
and excavating
Merensky Reef
shaft pillars
Construction of the
concentrator plant,
development of
Portal 3 and
associated
infrastructure
One Team One Vision With Pride
Leeuwkop Project
Leeuwkop
Capital Spend for
FY2013
R261m
Remaining Capital
Spend
R9800m
First production date FY2021
Full production date ≈FY2026
Steady-state
throughput
2.16mtpa
Steady-state platinum
production
145kozpa
Current primary
activities
Single shift sinking of
the main shaft to 330m
below surface
Board has approved R1.4 billion
for phase 1 but has restricted
spend to R261 million for
FY2013
Approvals to be sought on an
ongoing basis and dependent
upon market conditions and the
Implats balance sheet
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One Team One Vision With Pride
Leeuwkop location
One Team One Vision With Pride
Shaft Section
Intermediate Pumping Station
1142m BC
Ventila
tion s
haft
Pro
ductio
n s
haft
1580m BC
1476m BC Future decline
20 Level
27 Level
UG2 reef horizon dips at 9⁰ and
has a channel width of 1.32m
330m
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One Team One Vision With Pride
Financial Review
Brenda Berlin
One Team One Vision With Pride
Group Income Statement
R million FY2012 FY2011 % change
Sales 27 593 33 132 (17)
Cost of sales (20 641) (21 490) 4
Gross profit 6 952 11 642 (40)
Gross margin % 25 35 (28)
Royalty expenses (664) (804) 17
Profit before tax 6 250 9 561 (35)
Profit 4 299 6 810 (37)
HEPS (cps) 685 1 105 (38)
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One Team One Vision With Pride
Gross profit movement
Rm
FY2011 gross profit 11 642
Revenue (5 539)
Volumes (6 071)
Rand metal prices 532
Cost of sales 849
Inflation (1 940)
Inventories 1 447
Share based payments 253
Lower volumes 1 089
FY2012 gross profit 6 952
(40%)
One Team One Vision With Pride
Operating costs per platinum ounce
10 867
13 850
13 450
1 509
1 474 400
9 000
10 000
11 000
12 000
13 000
14 000
Jun 2011 Inflation Volumes Jun 2012 Off-reef Jun 2012
R/p
t o
z
% SA
(R)
Zim
(US$)
Wages 13.9 7.2
Power 22.8 47.8
Consumables 7.4 5.4
Total 12.3 11.2
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One Team One Vision With Pride
Group capital expenditure
25
Rb
n
4 502
2 123146
248265 7 284
858 8 142
3 000
4 000
5 000
6 000
7 000
8 000
9 000R
m
One Team One Vision With Pride
Movement in net cash position
4 542
818
587
- 995
4 978
1 715
2 546
7 284
-2 000
-1 000
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
FY2011 FY2011
Dividend
Operating
cash flow
Capital FY2012
interim
dividend
Other FY2012 Cash net
of debt
Rm
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One Team One Vision With Pride
Market Review
Derek Engelbrecht
One Team One Vision With Pride
Sales Volumes by Metal
FY2012 FY2011 %
change
Platinum (000oz) 1 368 1 665 (18)
Palladium (000oz) 765 1 011 (24)
Rhodium (000oz) 183 221 (17)
Nickel (000t) 13.9 15.5 (10)
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One Team One Vision With Pride
Average Prices Achieved – Major Metals
FY2012 FY2011 % change
Platinum ($/oz) 1 614 1 691 (5)
Palladium ($/oz) 687 670 3
Rhodium ($/oz) 1 601 2 275 (30)
Nickel ($/t) 19 513 23 965 (19)
Basket ($/Pt oz sold) 2 601 2 799 (7)
(R/Pt oz sold) 20 054 19 677 2
Exchange rate (R/$) 7.71 7.03 10
One Team One Vision With Pride
Investments
Moz as at 1 Jan 2011 31 Dec 2011 30 Jun 2012
Futures Platinum 2.14 1.21 1.26
(CME/Nymex) Palladium 1.68 0.60 0.43
ETF Platinum 1.26 1.40 1.45
Palladium 2.27 1.74 2.06
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One Team One Vision With Pride
Light Duty Vehicle Sales
Forecast for 2012 - 81.7 million units (+7%)
July 2012 year to date vs 2011
%
US 14
China 7
Europe (7)
India 9
Japan 53
One Team One Vision With Pride
Chinese Jewellery
0
200 000
400 000
600 000
800 000
1000 000
1200 000
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Pt
oz
Shanghai Gold Exchange annual cumulative ounces
2009 2008 2007 2010 2011 2012
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One Team One Vision With Pride
Platinum Supply / Demand Balance
000oz 2010 2011 2012
(Forecast)
DEMAND
Automobile
Jewellery
Industrial
Investment
3 270
2 260
1 695
650
3 400
2 415
1 730
150
3 470
2 420
1 730
100
Total Demand 7 875 7 695 7 720
SUPPLY
South Africa
Russian Sales
North America
Recycle - auto
Other – incl. jewellery
recycle
4 745
800
230
1 020
1 015
4 735
800
375
1 110
1 020
4 360
795
380
1 180
975
Total Supply 7 810 8 040 7 690
Balance -65 345 - 30
One Team One Vision With Pride
Palladium Supply / Demand Balance
000oz 2010 2011 2012
(Forecast)
DEMAND
Automobile
Industrial
Investment
5 200
3 155
1 055
5 600
3 160
-520
5 900
3 100
400
Total Demand 9 410 8 240 9 400
SUPPLY
South Africa
Russian Sales
North America
Recycle - auto
Other
2 580
2 850
665
1 370
1 360
2 595
2 750
860
1 500
1 465
2 425
2 750
930
1 700
975
Total Supply 8 825 9 170 8 780
Balance -585 930 -620
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One Team One Vision With Pride
Rhodium Supply / Demand Balance
000oz 2010 2011 2012
(Forecast)
DEMAND
Automobile
Industrial
750
150
760
180
790
190
Total Demand 900 940 980
SUPPLY
South Africa
Russian Sales
North America
Recycle - auto
Other
650
70
14
230
26
635
70
20
265
30
600
65
19
275
31
Total Supply 990 1 020 990
Balance 90 80 10
One Team One Vision With Pride
Prospects
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 2013
Eurozone issues still a concern
US recovery uncertain
Emerging market growth robust
Southern African supply challenges will feature prominently
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One Team One Vision With Pride
Conclusion
Terence Goodlace
One Team One Vision With Pride
Conclusion
Production
Impala to increase by between 80 and 100koz’s of platinum
Marula will improve marginally on current production levels
Zimplats, Two Rivers and Mimosa to maintain current
production levels
Third party suppliers stressed
Costs pressures
Mining inflation to remain at current levels
Increasing development to create ore reserve flexibility
Safety initiatives
Continued squeeze on operating margins
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One Team One Vision With Pride
Conclusion
Considerable "headwinds" facing the mining industry and
platinum in particular
Rapidly escalating costs in a price taker environment
Unproductive operating environment
Community and industrial relations challenges
Response
Strongly drive “Zero Harm” Health and Safety imperatives
Actively and collaboratively engage in dialogue at the highest
levels to improve the operating environment
Continue to invest in current long term capital projects
Implement cash preservation initiatives to protect the balance
sheet
Long term business with market fundamentals intact
One Team One Vision With Pride
Annual results
for the year ended 30 June 2012
40