[PPT] - Annual General Meeting 5 August 2016, 14h00 Feathers Lodge Boutique PowerPoint Presentation

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5 August 2016, 14h00

Annual General Meeting

Feathers Lodge Boutique Hotel 24 Melina Street, Rosendal, Durbanville

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Group overview

A supplier of quality materials sourced from our quarries and open pit mines
Strategically diversified through product range, target market and location

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What we do

Quarrying : aggregates
Open pit mining : industrial minerals
Concrete brick and block making
Readymix concrete

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Quarrying: aggregates

Concrete stone
Road stone

Products from quarrying

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Open pit mining: industrial minerals

Lime
Metallurgical dolomite
Metallurgical quartzite

Products from industrial minerals

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Lime

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Concrete brick and block making

Bricks and blocks
Paving

Products from brick and block making

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Readymix concrete

Readymix concrete
Readymix mortar

Products from readymix concrete

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Afrimat’s portfolio

… and footprint CONCRETE BASED PRODUCTS

Concrete brick & block factories (9) Readymix batching sites (16)

MINING & AGGREGATES

Commercial quarries (23) Sand and gravel mines (5) Dolomite mines (3) Clinker (3) Limestone mine (2) Silica mine (1) Mobile crushing Drilling & blasting

… which generates a balanced consistent income stream

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Company positioning

Open pit mining
Locally priced commodities
Unique competitive advantage
Geographic location
Unique metallurgy
Structural cost advantage
Highly entrepreneurial

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16,3% contribution from operations margin HEPS up 15,5% to 156,6 cents Net debt: equity ratio 3,5% 32,5% Return on net

perating assets

Final dividend up 10,8% to 41,0cps 720 cents NAV per share Highlights

Financial overview

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Revenue and operating profit

Operating profit margin 16,3%

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Breakdown of growth Contribution from operations split (%) F2016 F2015 Mining & aggregates 87.6% 80.5% Concrete based products 12.7% 20.1% Contribution from operations margin (%) F2016 F2015 Mining & aggregates 20.0% 15.5% Concrete based products 7.3% 9.6% Overall 16.3% 13.7%

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Well diversified contribution from operations

Traditional business 32% Mozambique 0% Glen douglas 18% Infrasors 12% Clinker Group 38%

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62.6 76.9 109.0 135.6 156.6

20.0

40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 2012 2013 2014 2015 2016

CAGR of 25.8% 2012-2016 HEPS Year on year growth 15.5%

Cents per share Headline earnings per share – full year

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Net cash from operating activities

146 343 169 764 243 861 261 646 320 339 50 000 100 000 150 000 200 000 250 000 300 000 350 000 2012 2013 2014 2015 2016

CAGR 21.64% 2012-2016

Rands (‘000’s)

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Statement of financial position - assets R’000 Reviewed Feb 2016 Audited Feb 2015 Property, plant and equipment 763 156 724 856 Mining rights and goodwill 149 744 153 339 Inventories 132 702 126 804 Trade and other receivables 295 552 287 976 Cash 117 241 78 124 Other assets / BEE funding 189 311 196 572 1 647 706 1 567 671

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Statement of financial position – equities & liabilities R’000 Reviewed Feb 2016 Audited Feb 2015 Total equity 1 025 086 949 437 Borrowings 112 885 122 421 Provisions 75 565 67 323 Overdraft 39 878 52 874 Trade and other liabilities 277 832 262 983 Other liabilities / deferred tax 116 460 112 633 1 647 706 1 567 671

Net debt less cash : equity 3.5%

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Statement of financial position – equities & liabilities H1: R 64 million H2: R 67 million R131 million H1: R 74 million H2: R 50 million R124 million F2016 Planned for F2017

Good balance between maintenance and expansion capex
Approximately 25% spent on expansion capex

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Dividends

19 28 39 50 57 10 20 30 40 50 60 2012 2013 2014 2015 2016

Final dividend

Cents per share

CAGR of 31.6% 2012-2016 Cover of 2.75x

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What makes Afrimat different

Growth through diversification
Core business principles
Strategic management
Our market

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20 40 60 80 100 120 140 160 180

2009 2010 2011 2012 2013 2014 2015 2016

Profit history with and without acquisitions

Headline earnings per share Reality without strategic acquisitions

Growth through diversification

Glen Douglas Clinker Infrasors

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Core business principles

Sticking to the core of the business and leveraging the core
Strong operational efficiency
Operating resources that have unique competitive advantages
The right people in the right position
Leveraging Afrimat’s “combined intellect” through synergistic teamwork
Customer advocacy through service, reliability and quality of supply
Values based entrepreneurial culture

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Strategic management

Fundamental understanding of market
Good understanding of own abilities
Continuous research of business environment
Facing the brutal facts
Companywide understanding of desired future
Financial discipline: making the returns
Focussed value enhancing acquisitions
Dedicated business development team

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Our market

Indicators are more

positive than in the past

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Index of construction sector activity (in real terms) Rands (‘000’s)

Source: Ekonostrat

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Value of recorded building plans passed in South Africa (constant 2010 prices)

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Domestic cement sales: 1892 - 2020

Source: Lewellyn Lewis www.strategicforum.co.za

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Budget 2016/17: Human Settlements

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Budget 2016/17: Water and Sanitation

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Provincial and SANRAL’s expenditures on roads trend

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Trends in Afrimat’s markets

Environmental focus: clean water and clean air
Spending on smaller infrastructure and services projects stronger
Roads a focus for Government and SANRAL
Steel industry remain under pressure
Volume growth in construction materials

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Outlook and drivers

Short term outlook:

‒ Improved volumes ‒ Glen Douglas, Clinker Group and traditional business will continue to perform ‒ Growth to come from Infrasors and Cape Lime

Momentum drivers:

‒ Roads: SANRAL and provinces ‒ Infrastructure and service delivery projects ‒ Natural gas projects in Mozambique ‒ Diversification of industrial minerals ‒ Building

Afrimat will pursue a conservative growth strategy preserving the integrity of the balance sheet Remain driven by successful execution

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Risk mitigation

Steel industry under pressure

Finding alternative markets for our products
No single dominant debtor
Strict efficient credit control

Country risk in South Africa

Seeking opportunities outside of South Africa
Eyes wide open in South Africa
Credit terms strictly monitored
Commenced Mozambique operations

Macro-economic threats

Constant strategic management (avoiding threats, exploiting opportunities)
Entrepreneurial culture and creative innovative solutions
Strong but conservative balance sheet

Labour unrest

Drive to create a unique and positive culture
Communication and upliftment
BEE share scheme
No labour action during the year

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