INTERIM RESULTS FY2020 27 February 2020 Forward-looking and - - PowerPoint PPT Presentation

INTERIM RESULTS FY2020

27 February 2020

INTERIM RESULTS FY2020 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

• utlook 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, regulatory approvals and/or legislative frameworks currently in the process of amendment, or any 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, levels of global demand 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 Integrated 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. Disclaimer: This entire presentation and all subsequent written or oral forward-looking statements attributable to Implats or any person acting on its behalf are qualified by caution. Recipients hereof are advised the presentation is prepared for general information purposes and not intended to constitute a recommendation to buy- or offer to sell shares or securities in Implats or any other entity. Sections of this presentation are not defined and assured under IFRS, but included to assist in demonstrating Implats’ underlying financial performance. Implats recommend you address any doubts in this regard with an authorised independent financial advisor, stockbroker, tax advisor, accountant or suitably qualified professional.

Forward-looking and cautionary statement

2

INTERIM RESULTS FY2020

Business

• utlook

Agenda

Group

• verview

Operational

• verview

Financial review

Nico Muller Mark Munroe Gerhard Potgieter Meroonisha Kerber

Market review

Sifiso Sibiya Nico Muller

3

OVERVIEW

Nico Muller, CEO

INTERIM RESULTS FY2020

▪ Marula

2.22 million

▪ 20 Shaft

2.00 million

▪ 16 Shaft

1.60 million

▪ Zimplats

1.50 million

Group safety overview

5

9 8 7 5 3

6.88 6.35 6.01 5.30 4.83

1 2 3 4 5 6 7 8 2 4 6 8 10 12 14 FY2016 FY2017 FY2018 FY2019 H1FY2020

FATALITIES & LOST-TIME INJURY FREQUENCY RATE

LTIFR* FATALITIES ▪ Rtb Services

13.20 million

▪ Refineries

12.01 million

▪ 14 Shaft

4.40 million

▪ 9 Shaft

3.14 million

▪ 6 Shaft

2.61 million

Fatality Free Shifts

▪ A good period of safety performance regressed in last quarter

• f FY2019 and into the first quarter of FY2020

▪ 3 fatalities in H1 FY2020 ▪ LTIFR improved 9% to 4.83 per million man hours worked ▪ TIFR improved 6% to 11.92 per million man hours worked ▪ 9 out of 16 millionaire sites

*per million man hours worked

INTERIM RESULTS FY2020

Group sustainable development

6

Committed to effecting change in gender equality

One of 325 companies globally and one

• f only eight South African companies

Received an A rating for disclosures, awareness and management of water security risk R36 million spent on social projects in South Africa in H1 FY2020

Road construction in Freedom Park and Kutlwanong near Rustenburg

Industry leaders in employee accommodation and living conditions

Spent R94 million on housing in H1 FY2020

INTERIM RESULTS FY2020

Group operational overview*

7

Description H1 FY2020 H1 FY2019 Var (%) Remarks Tonnes Milled Mt 10.31 10.24 1

• Including tonnage from Impala Canada

Concentrate 6E production Mine-to-market production

Impala Zimplats Marula Impala Canada Mimosa Two Rivers

Third-party purchased 6E koz 6E koz

6E koz 6E koz 6E koz 6E koz 6E koz 6E koz

6E koz 1 533 1 342

652 299 124 8 120 138

190 1 560 1 376

673 293 118

• 132

161

184 (2) (2)

(3) 2 6 100 (9) (14)

4

• Concentrator issues at Mimosa and Two Rivers
• Ramp-up from 16 and 20 Shafts, offset by 1 and 9 Shafts
• Sustained steady-state production
• Improved operational performance
• Production included from 13 December 2019
• Breakdown in the milling circuit during Q1
• Lower grade and poor concentrator recoveries during Q1
• Higher receipts from third-parties

Refined 6E production 6E koz 1 317 1 589 (17)

• Stock build of 135koz compared to previous period when 66koz was

released

Unit cost (milled) Unit cost (refined 6E stock adjusted) Unit cost (refined) R/t R/6E oz R/6E oz 1 157 13 157 12 312 1 049 11 413 10 885 (10) (15) (13)

• Impala (1# restructuring, development), Marula (stoping), Canada costs
• 11% increase in costs, reduction in grade, mill failures
• Inventory reallocation between Impala and IRS

Capital expenditure

Impala Zimplats Marula Impala Canada

Rm

Rm Rm Rm Rm

1 925

998 686 204 37

1 707

1 017 657 33

(13)

2 4 (>100) (>100)

• Right of use assets capitalized R117m
• Reduced spend on 20 shaft
• Lower spend on project capital
• New tailings dam extension (R117m), fleet replacement (R52m)
• New inclusion

* Includes 18 days from Impala Canada

INTERIM RESULTS FY2020

1 560 1 533

8 7 7 6

12 21 23

1 500 1 510 1 520 1 530 1 540 1 550 1 560 1 570 1 580 1 590 1 600 FY2019 Impala Canada 3rd party Receipts Marula Zimplats Mimosa Impala Two Rivers FY2020

6E koz in concentrate

H1 H1 koz 6E in concentrate

Group movement in 6E concentrate production

8 652

• 3%

8 100% 124 6% 299 2% 120

• 9%

138

• 14%

190 4%

INTERIM RESULTS FY2020

• 2 500

5 000 7 500 10 000 12 500 15 000 17 500 20 000 22 500 Marula in conc Two Rivers in conc Zimplats in matte Mimosa in conc Impala refined IRS + Impala refined Group Refined R/6E ounce

REVENUE AND COST OF PRODUCTION

Cash cost Stay-in-business capital Replacement capital Expansion capital Revenue

Description H1 FY2020 H1 FY2019 Var (%) 6E ounces produced (refined) koz 1 317 1 589 (17) 6E ounces sold koz 1 328 1 573 (16) Revenue per 6E ounce sold R/oz 20 888 14 804 41 Revenue Rm 28 019 23 521 19 Cost of sales Rm 21 853 20 289 (8) Gross profit Rm 6 166 3 232 91 Free cash flow Rm 4 989 4 647 7 Gross cash Rm 5 996 6 355 (6) Head room Rm 7 996 10 355 (4) Net cash/(debt) Rm (1 943) (976) (99)

Group business overview

9

INTERIM RESULTS FY2020

Optimise balance sheet and capital allocation

LIQUIDITY and CAPITAL STRUCTURE Converted the US$ bond Paid residual debt at Zimplats ($42.5m) Funded Impala Canada acquisition with mixture

• f cash and debt (R10.9bn)

R8.0bn liquidity R1.9bn net debt CAPITAL ALLOCATION Invested R1.9bn in Capex Repaid debt Concluded value accretive M&A Resumed dividend payments SHAREHOLDER RETURNS Resumed dividend payments based on payment

• f 30% FCF (pre-growth capital)

Declared R1.25 per share interim dividend

Group performance against strategic objectives

Enhance the competitiveness of the portfolio

Completed Impala Canada acquisition Pro-forma mechanised mine-to-market attributable volumes increase to 57% Improved commodity mix to more closely match anticipated future PGM demand Continued investment in maintenance and sustainability of processing assets (short term impact on unit costs) Enhancing operating resilience with additions to milling capacity planned at Zimplats, Mimosa and Two Rivers Sustained market development and supported targeted industry initiatives to grow PGM demand in jewellery, auto and industrial spheres

Protect and strengthen license to

• perate

Concluded a 3 year wage agreement without third party intervention and/or industrial action Increased spend on social projects by 16% in South Africa Released independent third party assessment of all Tailings Storage Facilities in the Group (increasing capacity at Marula and Two Rivers) An A rating from CPD for our management of water risk and a B rating for our efforts on climate change and disclosures Included In the Bloomberg 2020 Gender Equality Index Ongoing constructive dialogue with stakeholders and government in Zimbabwe and South Africa 10

Reposition Implats to the lower half of the cost curve

SAFETY PERFORMANCE LTIFR improved by 8.9% TIFR improved by 6.3% Impala Canada zero LTIs in CY2019 OPERATIONAL PERFORMANCE Sustained mine-to-market production PGMs -2% to 1.34Moz Increased third party receipts PGMs +4% to 190koz Refined production impacted by stock build-up PGMs -17% to 1.32Moz COST PERFORMANCE Group cash cost inflation of 11% Cash & SIB cost at IMPALA 12 & 14 shafts flat over two years with volumes up 13% pa Turnaround sustained at MARULA PGMs +6% to 124koz

INTERIM RESULTS FY2020

Delivering a profitable Impala Rustenburg with 12 and 14 Shafts

11 *in FY2018 terms Other include E&F, 6, 10 and 11 Shaft

Free cash flow generative

6

• perational shafts

producing

~520koz Pt

Opex + capex* <R24 500/Pt oz

Capital

R1 400m

(real FY2018) Labour

~27 000

Previous guidance Long-term Unprofitable

• peration

10

• perational shafts

ramping up to

750koz Pt

Opex + capex*

R29 006/Pt oz

Capital

R2 472m

(nominal)

Labour

42 253

Status FY2017 Free cash flow generative

8

• perational

shafts producing

~700koz Pt ~1.35moz 6E

Opex + capex* <R24 500/Pt oz <R13 000/6E oz

Capital

R1 800m

(real FY2018) Labour

~36 000

New guidance Long-term

50 000 100 000 150 000 200 000 250 000 1H FY2018 2H FY2018 1H FY2019 2H FY2019 1H FY2020

PGM production (6E ounces)

Other 12# & 14# 16# & 20# 1# & 9#

12 000 13 000 14 000 15 000 16 000 17 000 18 000 19 000 20 000 1H FY2018 2H FY2018 1H FY2019 2H FY2019 1H FY2020

Nominal Opex + SIB vs Revenue (R/6E ounce)

Other 12# & 14# 16# & 20# 1# & 9# Revenue

OPERATIONAL REVIEW

Mark Munroe, CE: Rustenburg operations

INTERIM RESULTS FY2020

Impala

Description H1 FY2020 H1 FY2019 Var (%) Remarks

Tonnes milled kt 5 739 5 969 (4)

• Reduced output 1 & 9 shafts as planned
• Reduced production flexibility 6 & 10 shafts

6E head grade g/t 3.91 3.98 (2)

• Increased on-reef development to increase

flexibility, Lower stoping to development ratios 6E in concentrate koz 652 673 (3)

• Effect of tonnes and grade, offset by improved

recoveries Refined 6E (stock-adjusted) Refined 6E koz koz 645 761 682 744 (5) 2

• Lower tonnes and grade, offset by improved

recoveries

• Inventory reallocation

Cash cost Rm 9 358 8 495 (10)

• 1# Restructuring, Additional development,

Critical processing maintenance Cost per 6E ounce

(stock adjusted)

Cost per 6E ounce R/oz R/oz 14 515 12 305 12 461 11 426 (16) (8)

• 10% increase in cash cost combined with lower

6E ounces produced

• Reallocation of inventory between Impala & IRS

Capital expenditure Rm 998 1 017 2

• Lower spend on 20 Shaft

Free cash flow Rm 7 083 2 228 >100

• Improved rand basket price; forward sale
• Inventory/sales reallocation
• Tonnes delivered from 11, 12 ,14, 16 and 20 increased, while the older shafts (especially 1 Shaft) declined
• Reduced head grade due to geological challenges (10 Shaft) and continued ore pass refurbishment at 16 and 20 Shaft
• Disappointing cost performance due to inefficiencies during the restructuring process at 1 Shaft
• Improved financial performance on the back of higher revenue basket and inventory reallocation
• Restructuring plan adjusted to benefit from increased price basket

13 540 587 744 647 761 706 557 682 617 645 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020

PRODUCTION

Refined 6E production Stock adjusted 6E production 15 013 12 877 11 426 13 208 12 305 11 480 13 562 12 461 13 868 14 515 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 R/oz PGM

COSTS

Cost per 6E refined Cost per 6E Stock adjusted

• 3 711
• 2 815

2 228

• 352

7 083

H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 Rm

FREE CASH FLOW

INTERIM RESULTS FY2020

682 645 18 6 6 3 3 2 1 4 6 12 37 14 600 620 640 660 680 700 720

FY2019 16 14 Re-mining 12 20 11 EF 9 6 10 1 Other FY2020

Stock-adjusted 6E oz (000)

Impala movement in 6E contribution (stock adjusted)

14

Ramp-up Ramp-up Constrained mineable face length Steady performance Depleted reserves Declining reserves Ramping down Stable performance Stable performance

6E koz 101 115 6 66 68 100 20 28 29 63 35 15 Revenue/6E oz 19 916 19 878 18 717 20 140 19 765 19 948 20 170 20 170 20 172 20 079 20 016 Cost + SIB Capital/6E oz 17 012 15 673 18 369 14 330 18 569 16 168 12 398 13 015 13 308 16 036 18 965 Cash Profit / (Loss) Rm2 149 472 1 375 10 341 154 196 169 249 33

Good performance

H1 H1

INTERIM RESULTS FY2020

Key projects progress

15

16 Shaft

Description H1 FY2020 H1 FY2019

Project completion % 94.3 91.8 Estimated completion date date Nov 21 Nov 21 Approved capital Rm 7 939 7 939 Estimate at completion Rm 7 939 7 939 Expenditure to date Rm 7 484 7 257 Estimated steady-state achievement date Jun 22 Jun 22 Design production (6E at steady state) koz per annum 330 330 6E production koz 101 83 Mineable face length (31 December) m 3 879 3 055 Stoping teams (31 December) teams 120 87 Panel Ratio (31 December)* panels/team 1.45 1.4 Average Productivity (half year)* ca/team/month 260 268 Unit cost (excl Project capital) R/6E oz 17 012 16 139

• Key focus is on increasing mineable face length. Significant progress

achieved with face length increasing by 824m or 27% during FY2020 H1

• Project completion date brought forward due to rescheduling of ore pass

rehabilitation activities.

• Project expenditure 93.7% complete (within budget).
• 6E production improved 22% HY on HY (60% of steady state)

* Based on producing stoping teams and 25 m panel

INTERIM RESULTS FY2020

Key projects progress

16

20 Shaft

Description H1 FY2020 H1 FY2019

Project completion % 100 99.3 Actual completion date date Mar 19 Jun 19 Approved capital Rm 7 930 7 930 Estimate at completion Rm 7 885 7 930 Expenditure to date Rm 7 885 7 873 Estimated steady-state achievement date Jun 22 Jun 22 Design production (6E at steady state) koz per annum 227 227 6E production koz 68 65 Mineable face length (31 December) m 2 400 1 446 Stoping teams (31 December) teams 59 54 Panel Ratio (31 December)* panels/team 1.60 0.8 Average Productivity (half year)* ca/team/month 270 233 Unit cost (excl Project capital) R/6E oz 18 569 15 975

• Project completed on schedule in March 2019 and

within budget.

• Primary focus on increasing mineable face length.

Material progress achieved with face length increasing by 66% or 954m during the past year.

Photo: Jacques McCarthy * Based on producing stoping teams and 25 m panel

OPERATIONAL REVIEW

Gerhard Potgieter, Chief Operating Officer

INTERIM RESULTS FY2020

Marula

• Sustained operational turnaround with no disruptions experienced during H1 FY2020
• Rand basket price benefited from higher palladium and rhodium content (Pt 38%; Pd 39%; Rh 8%)
• Increased capital for new tailings dam and new fleet
• Significant free cash flow generated

18 18

Description H1 FY2020 H1 FY2019 Var (%) Remarks

Tonnes milled kt 970 955 2

• Improved operational performance

6E head grade g/t 4.60 4.37 5

• Reduced stoping width

6E in concentrate koz 124 118 6

• Improved mining volumes and recoveries

Cash cost Rm 1 276 1 152 (11)

• Bonus payments (higher productivity)
• Inflation

Cost per 6E ounce R/oz 10 265 9 779 (5)

• Higher costs offset partially by higher

production Capital expenditure Rm 204 33 (>100)

• Tailings dam (R117m)
• TMM’s (R52m)

Free cash flow Rm 431 162 >100

• Higher rand basket
• Benefit from high Pd and Rh content

113 110 118 99 124

H1 H2 H1 H2 H1 FY2018 FY2019 FY2020

PRODUCTION

000 oz 6E in conc

9 515 9 428 9 779 11 493 10 265

H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 R/oz 6E

COSTS

• 223
• 76

162 218 431

H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 Rm

FREE CASH FLOW

INTERIM RESULTS FY2020

Two Rivers

• Split-reef mining impacted mill grade and plant recoveries were low

due to changed mineralogy

• New reagents introduced in an effort to improve recoveries
• Tender process has been initiated for the concentrator expansion

project

• Cost optimization initiatives identified to reduce cost overruns

19

Description H1 FY2020 H1 FY2019 Var (%) Remarks

Tonnes milled kt 1 646 1 667 (1)

• The milling of harder material slowed down the

milling process 6E head grade g/t 3.45 3.53 (2)

• Split-reef and additional development

6E in concentrate koz 138 161 (14)

• Reduced plant recoveries due to mineralogical

challenges and lower grade Cash cost Rm 1 329 1 244 (7)

• In line with inflation

Cost per 6E ounce R/oz 9 616 7 727 (24)

• Lower production and mining inflation

Capital expenditure Rm 391 247 (58)

• Deepening of the main decline (+R17m)
• Main decline development fleet (+25m)
• Groundworks for TSF (+R43m)

Free cash flow Rm 154 64 >100

• Higher rand basket

179 170 161 152 138 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020

PRODUCTION

000 oz 6E in conc 6 855 6 685 7 727 8 568 9 616 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 R/oz 6E

COSTS

71 313 64 381 154

H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 Rm

FREE CASH FLOW

Concentrator recoveries Q1 Q2 H1 Plan 67.1 80.4 73.8 84.6

INTERIM RESULTS FY2020

Zimplats

• Sustained exceptional operational performance with safety challenges during the year
• Mupani first ore production
• Ongoing monetary policy changes – no material impact for the half year

20

Description H1 FY2020 H1 FY2019 Var (%) Remarks

Tonnes milled kt 3 375 3 312 2

• Operating at steady-state levels

6E head grade g/t 3.48 3.48

• Sustained

6E in concentrate 6E in matte koz koz 299 267 293 289 2 (7)

• Furnace rebuild – stock release in H2

Cash cost US$m 181 175 (3)

• Higher mining volumes

Cost per 6E ounce US$/oz 675 606 (12)

• Reduction in matte ounces
• Exchange rate fluctuations

Capital expenditure US$m 47 46 (1)

• Largely on furnace reline, Bimha redevelopment

and Mupani Free cash flow US$m 37 65 (45)

• Impacted by furnace rebuild and higher taxes

290 288 289 291 267 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020

PRODUCTION

000 oz 6E in matte/conc

627 603 606 594 675 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020

US$/oz 6E in matte/conc

COSTS

61 12 65 62 37

H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 US$m

FREE CASH FLOW

INTERIM RESULTS FY2020

Key projects progress

21

Mupani

Description

H1 FY2020 Actual H1 FY2019 Actual

Project completion % 39 22 Estimated completion date date Jul 24 Jun 24 Approved capital $m 264 264 Estimate at completion $m 258 264 Expenditure to date $m 80 51 Design production (Pt at steady state) koz per annum 90 90 Estimated steady-state achievement date Jul 24 Jul 30 Actual Platinum production (in ore) koz 6

• Started producing ore in June 2019
• Sustained above-plan development rates
• Steady state production date brought

forward by 12 months

INTERIM RESULTS FY2020

Mimosa

• Sustained steady state production from underground
• Primary mill failure when a feed end trunnion snapped - impacted tonnes milled and ounces produced in Q1
• Q2 tonnage improved with production 4% above plan
• The lower ounces impacted the cost per ounce
• Ongoing monetary policy changes – no material impact for the half year

22

Description H1 FY2020 H1 FY2019 Var (%) Remarks

Tonnes milled kt 1 306 1 408 (7)

• Mill breakdown during Q1

6E head grade g/t 3.84 3.83

• Sustained

6E in concentrate koz 120 132 (9)

• Concentrator plant outage
• Lower recoveries during plant startup

Cash cost US$m 100 98 (2)

• Bad ground conditions

Cost per 6E ounce US$/oz 830 741 (12)

• Lower ounces

Capital expenditure US$m 25 25

• In line with previous year

Free cash flow US$m 9 (5) >100

• Increased prices

134 132 132 129 120 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020

PRODUCTION

000 oz 6E in conc 697 735 741 802 830 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 US$/oz 6E in conc

COSTS

6 10

• 5

9

H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 US$m

FREE CASH FLOW

INTERIM RESULTS FY2020

Impala Canada

117 130 117

FY2018 FY2019 FY2020

Pd oz in conc (000)

PRODUCTION

733 773 912

FY2018 FY2019 FY2020

C$/oz

COSTS

20 32 86

FY2018 FY2019 FY2020

C$m

FREE CASH FLOW

• Impala Canada acquisition included R1.4b take-on cash reserves.

23

Description H1 FY2020 H1 FY2019 Var (%) Remarks

Tonnes milled kt 1 953

• Impala Canada included in Implats results

from effective date of transaction which

• ccurred on 13 Dec 2019.
• 18 days operating results were

consolidated into H1 FY2020 6E head grade g/t 2.69

• 6E in concentrate

koz 135

• Total costs

C$m 137

• Cost per 6E ounce

(normalized) C$/oz 912

• Cost per 6E ounce

C$/oz 1 016

• Capital expenditure

C$m 43.4

• Free cash flow

C$m 86

INTERIM RESULTS FY2020

IRS

• Receipts were impacted by metallurgical issues at Mimosa and Two Rivers and the furnace rebuild at

Zimplats

• Significant inventory build-up compounded by the re-allocation of stock

24

Description H1 FY2020 H1 FY2019 Var (%) Remarks

Receipts 000 oz 822 879 (7) Mine-to-market 000 oz 631 696 (9)

• Lower Two Rivers, Mimosa, Zimplats receipts

3rd Party receipts 000 oz 190 184 3

• Higher 6E tailings from chrome operators

Refined output 000 oz 549 846 (35)

• Build-up in inventory / stock re-allocation

Refined metal returned 000 oz 1 2 (74) Free cash flow Rm (3 381) 743 <(100)

• Build-up in inventory / stock re-allocation

703 689 696 657 631 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020

MINE TO MARKET RECEIPTS

000 oz 6E 369 130 184 175 190 H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 000 oz 6E

THIRD-PARTY RECEIPTS

462 766 743 2 572

• 3 381

H1 H2 H1 H2 H1 FY2018 FY2019 FY2020 Rm

FREE CASH FLOW

INTERIM RESULTS FY2020

Stock levels – PGM 6E ounces

25 215 350 225 225 135 125

FY19 closing 1H20 build 1H20 closing 2H20 release (est) FY20 closing (est)

PGM 6E oz (000)

Excess PGM 6E inventory forecast

103 157 92 92 54 65

FY19 closing 1H20 build 1H20 closing 2H20 release (est) FY20 closing (est)

Pt oz (000)

Excess platinum inventory forecast ▪ At end December 2019 had 350 000 6E ounces of

excess in process inventory

▪ Higher build up than expected of 135 000 6E ounces

excess in process inventory in H1 FY2020 due to:

▪ Increased volumes of low-grade concentrates ▪ Higher matte fall while treating Zimplats concentrate

during Zimplats furnace rebuild

▪ Forecast release of 100 000 to 150 000 6E ounces in

H2 FY2020

INTERIM RESULTS FY2020

Agreement to roll ownership option Approvals required to start the project Offtake agreement DFS and option to increase ownership

Waterberg project progress

26

▪

DFS Document, schedules and models delivered to the JV partners during September 2019

▪

Implats has until mid April 2020 to exercise the option to increase

• wnership to 50.01%

▪

This will trigger an estimated R8,3bn capital exposure to breakeven:

• R0.5bn equity purchase from JOGMEG
• R2bn first project capital earn in
• R5,8bn project shared (@ 50%) of capital to breakeven

▪

IRS provided terms in November 2019

▪

JV partners to consider (may seek better terms)

▪

IRS has option to match

▪

Implats proposed to extend the option trigger date until:

• Mining Right is received
• Implats gives notice of its decision on the ownership option

▪

Implats will use this time to firm up on feasibility assumptions and de-risk implementation programme

▪

Implats to cover project expenditure, until option decision is made

▪

SLP – submitted August 2018 – outstanding

▪

WUL – commenced August 2019 – outstanding

▪

Mining Right – submitted August 2018 - outstanding

FINANCIAL REVIEW

Meroonisha Kerber, CFO

INTERIM RESULTS FY2020

Income statement

28

• Revenue up 19% to R28.0 billion

− Rand revenue basket 41% higher year-on-year − Partially offset by lower sales volumes and build in inventory

• Cost of sales increased 8%

− Higher cost of metals purchased by IRS − Cost inflation − Partially offset by build-up in inventory

• Stock-adjusted Group unit cost increased by 15% to R13 157

per 6E ounce

• Other expenses increased significantly

− R509 million premium paid on incentivized early conversion of the US$ bond − Revaluation of derivative financial instruments

• Headline earnings up 41% to 436 cents per share
• Acquisition of NAP (now Impala Canada) effective

13 December 2019

− 18 days included in the half year results

R million H1 FY2020 H1 FY2019 Variance (%)

Sales 28 019 23 521 19 Cost of sales (21 853) (20 289) (8) Gross profit 6 166 3 232 91 Net finance costs (346) (417) 17 Net foreign exchange losses (222) (165) (35) Other net (expenses)/income (1 066) 500 >100 Share of associates income 247 203 22 Profit before tax 4 779 3 353 43 Tax (1 312) (895) (47) Profit after tax 3 467 2 458 41 GP margin (%) 22.0 13.7 61 EBITDA 7 568 5 793 31 Headline earnings 3 378 2 228 52 Group unit cost (stock adjusted) (R/6E oz) 13 157 11 413 (15)

INTERIM RESULTS FY2020

Revenue

• Revenue up by R4.5 billion

− Higher dollar metal prices contributed R6.7 billion

• US$ basket increased by 36% to US$1 420

per PGM 6E ounce (H1 FY2019: US$1 044) − Weaker exchange rate

• 4% weaker at R14.71 (H1 FY2019: R14.18)

− Lower sales volumes impacted by R3.3 billion

• 6E ounces sold down 16% from 1 573koz

to 1 328koz

• Rand revenue per 6E ounce sold up 41% to

R20 888 per PGM 6E oz (H1 FY2019: R14 804)

29

23 521 28 019 6 741 1 010 3 253 H1 FY2019 Metal prices Exchange rate Volumes H1 FY2020 (Rm)

REVENUE

INTERIM RESULTS FY2020

Cost of sales

• Cost of sales increased by 8% year on year
• Cash costs increased by R1.4 billion year on year

− inflation of c. 6.3% − inclusion of Impala Canada costs for 18 days − cost anomalies

• Higher depreciation following a Zimplats change

in estimate

• Cost of metals purchased rose on the back of

higher rand metal prices

• Movement in metal inventories resulted in a

credit of R3.6 billion following a substantial increase in pipeline stocks due to constrained smelting capacity

• Stock-adjusted 6E unit cost rose by 15% to

R13 157 per ounce

30

20 289 21 853 1 417 271 183 207 2 965 68 3 411

15 000 16 000 17 000 18 000 19 000 20 000 21 000 22 000 23 000 24 000 25 000

H1 FY2019 Cash cost Share based payments Royalties Chrome

• perations

Depreciation Metals purchased Change in stock H1 FY2020

(Rm)

COST OF SALES

INTERIM RESULTS FY2020

Stock adjusted unit costs

• xxx

12 461 8 588 9 779 11 413 14 515 9 925 10 265 13 157 Impala refined stock-adjusted Zimplats in matte Marula in conc Group refined stock-adjusted R/oz 6E

UNIT COST BY OPERATION

H1 FY19 H1 FY20

• Stock adjusted unit cost up 15% at R13 157 per

6E ounce

• Mining inflation at South African operation of 6.8%
• Weaker rand impacted on the conversion of the

Zimplats US$ cost

• Additional development costs at Impala Rustenburg
• Concentrators treated 700 000 tonnes of tailings

re-mining material at a low grade

• Smelting and refining costs impacted by 17%

reduction in refined ounces

31

Rand per 6E Oz H1 FY2020 H1 FY2019 Variance (%)

On-mine 9 250 8 207 (13) Concentrating 2 025 1 745 (16) Smelting 705 556 (27) Refining 661 503 (31) Head office 516 402 (28) Group costs per PGM 6E ounce 13 157 11 413 (15)

INTERIM RESULTS FY2020

5 793 7 568 4 498 3 411 178 1 417 203 183 2 965 57 1 487

H1 FY2019 Revenue Cash cost Share based payments & other Royalties Metals purchased Change in stock FX gains / losses Share of profit in associates Other H1 FY2020

EBITDA

2 228 3 378 2 934 44 71 88 1 487 57 443

H1 FY2019 Gross profit Other FX gains / losses Associates Net finance Taxation Minorities H1 FY2020

HEADLINE EARNINGS

EBITDA and headline earnings

• EBITDA improved by R1.8 billion to R7.6 billion
• Revaluation of foreign currency balances resulted in a loss of

R222 million (H1 FY2019: R165 million)

− Largely due to FX losses on cash partially offset by a R73 million FX gain on the US$ bond

• Other relates to:

− Losses on the mark to market of the conversion option on the US$ bond of R203 million and R74 million on cancellation of CCIRS − A non-cash expense of R109 million relating to the zero cost collar derivative revaluation − Impala Canada transaction costs of R147 million − Receipt of insurance proceeds of R353 million (H1 FY2019: R90 million)

• Net finance costs include the interest on bridge funding in Impala

Canada of R176 million

• The tax expense was higher due to improved profitability
• Headline earnings improved from a profit of R2.2 billion to profit

R3.4 billion

32 (Rm)

Tax effects of reconciling items included in taxation line

(Rm)

INTERIM RESULTS FY2020

2 228 3 378 2 934 44 71 88 1 487 57 443

H1 FY2019 Gross profit Other FX gains / losses Associates Net finance Taxation Minorities H1 FY2020

HEADLINE EARNINGS

Headline earnings by company

• Headline earnings for most operations improved due to higher rand

metal pricing

• Impala headline profit of R2.6 billion for the 6 months

− benefitted from a metallurgical re-allocation of stock

• IRS headline profit of R261 million

− impacted by the build-up of stock as well re-allocation of stock to Impala

• Two Rivers and Mimosa benefitted from higher rand metal pricing

partially offset by lower production

• Impala Canada earnings impacted by bridge costs of R176 million
• Other includes

− The once off expense of R509 million on the incentivised early conversion

• f the US$ bond

− Mark to market of conversion option on the US$ bond of R203 million and loss of R74 million on settlement of CCIRS − Impala Canada transaction costs of R147 million

33 2 637 3 378 956 385 261 166 65 155 937

Impala Zimplats Marula IRS Two Rivers Mimosa Canada Other H1 FY2020

(Rm)

HEADLINE EARNINGS

(Rm)

INTERIM RESULTS FY2020

Cash flow

• Cash generated at operations increased by R193 million as

improved rand metal prices were offset by a build-up in inventory

− Includes R2 billion proceeds from forward sale of excess inventory

• Capital expenditure was 6% more, resulting from additional

spend on the Marula tailings dam

• Bridge funding of R5.1 billion raised for acquisition of

Impala Canada

• Debt of R1.8 billion repaid
• Overall free cash flow improved by R342 million year on year to

R5.0 billion

• Net cash and cash equivalents decreased by R2.3 billion

R million H1 FY2020 H1 FY2019 FY2019 Operating cash flow 7 990 5 586 11 445 Change in working capital

• Inventory

(3 770) (264) (152)

• Receivables/payable

2 675 1 380 551

Cash generated from operations 6 895 6 702 11 844

Finance costs paid (460) (520) (963) Income tax paid (450) (160) (223)

Net cash generated from operating activities 5 985 6 022 10 658

Purchase of property, plant and equipment (1 833) (1 727) (3 877) Net acquisition of Impala Canada (9 431)

• Other

509 341 885

Net cash used in investing activities (10 755) (1 386) (2 992)

Shares purchased (628) (101) (111) Proceeds/(repayment) of borrowings 3 244 (1 855) (2 169) Other (99) (135) (196)

Net cash generated from/(used in) financing activities 2 517 (2 091) (2 476) Net (decrease)/increase in cash and cash equivalents (2 253) 2 545 5 190

Opening balance 8 242 3 705 3 705 Exchange rates - cash impact 7 105 (653)

Closing cash balance 5 996 6 355 8 242

34

R million H1 FY2020 H1 FY2019 FY2019 Net cash from operating activities 5 985 6 022 10 658 Capital (1 833) (1 727) (3 877) Other 514 352 904 Add: Impala Canada transaction costs 147

• Add: Bridge financing costs

176

• Free cash flow

4 989 4 647 7 685

INTERIM RESULTS FY2020

Cash net of debt

• Net debt of R1.9 billion at 31 December 2019

(excluding finance leases)

− Impacted by the R9.8 billion net outflow on the acquisition of Impala Canada

• The remainder of the Zimplats facility repaid in

December 2019

• Available Group headroom of R8.0 billion

comprising:

− R6 billion cash − Committed RCF of R4 billion in place until June 2021, undrawn at 31 December 2019 − R2 billion of the RCF available at 31 December 2019 following R2 billion forward sale R million Dec 2019 Dec 2018 Jun 2019 Gross cash 5 996 6 355 8 242 Convertible bonds (2 838) (5 759) (5 831) Derivative financial instrument

• 213

151 Marula BEE debt (886) (887) (888) Zimplats debt

• (898)

(599) Bridge loan facility (4 215)

• Debt (excluding leases)

(7 939) (7 331) (7 167) Net (debt)/cash (excluding leases) (1 943) (976) 1 075 Gearing ratio (%) 4.0 2.3 n/a

35

INTERIM RESULTS FY2020

Disciplined capital allocation to create value for all stakeholders

36

▪ Dividends ▪ Share buybacks ▪ Special dividends

RETURNS TO SHAREHOLDERS APPROVED PROJECTS

• Restructuring
• Operational excellence
• Committed projects
• ESG

STAY-IN-BUSINESS CAPEX

• Exploration
• Ore reserve

development

• Infrastructure

replacement

Operating free cash flow

GROWTH AND INVESTMENT

▪ Replacement projects ▪ New growth (organic) projects ▪ Value accretive M&A ▪ Optimal capital structure ▪ Appropriate leverage

− Gearing: 10% − Net debt to EBITDA: <1.0x

▪ Appropriate liquidity through the cycle

BALANCE SHEET STRENGTH

▪

The board resolved to re-instate dividends with a pay-out ratio of at least 30% of free cash flow before growth capital

▪

The board declared an interim dividend of R1.25 per share

MARKET REVIEW

Sifiso Sibiya, Group Executive: Refining and Marketing

INTERIM RESULTS FY2020

Metal price index (H1 FY2020 VS H1 FY2019)

• US$ basket price increased by 36% year-on-year

− Platinum

+ 7% (Robust investor activity, strong gold price)

− Palladium

+ 59% (Accelerating auto demand, low ETF sales)

− Rhodium

+ 88% (Accelerating auto-demand, constrained supply)

− Nickel

+ 10% (Improving growth outlook, impacted by supply)

• ZAR:US$ exchange rate weakened by 4% year-on-year

− Rand strength underpinned by relative yields − Deteriorating domestic economic outlook − Liquid currency vulnerable to global macro-economic sentiment flows

• ZAR basket price 41% higher than the previous financial year

− Basket benefitted from diverse ore mix generated by group assets with substantial

palladium and rhodium production

38

1 000 1 200 1 400 1 600 1 800 2 000 2 200 15 000 17 000 19 000 21 000 23 000 25 000 27 000 29 000 31 000 Jul/19 Aug/19 Sep/19 Oct/19 Nov/19 Dec/19 Jan/20 Feb/20 US$/oz E R/oz 6E

Impala revenue basket per 6E ounce

R/oz 6E $/oz 6E

INTERIM RESULTS FY2020

24% 34% 9% 12% 10% 11%

MIMOSA

Platinum Palladium Rhodium Nickel Other FV prices and Fx

Revenue of

R2.65 billion

33% 34% 23% 4% 7%

IMPALA

Revenue of

R16.01 billion

28% 42% 19% 1% 4% 5%

MARULA

Revenue of

R2.01 billion

29% 32% 29% 1% 2% 8%

TWO RIVERS

Revenue of

R2.68 billion

30% 34% 21% 5% 10%

IRS

Revenue of

R11.7 billion

24% 38% 11% 7% 8% 11%

ZIMPLATS

Revenue of

R5.55 billion

39

PGM revenue baskets H1 2020

Description H1 FY2020 H1 FY2019 Var (%)

Platinum (US$/oz) 888 829 7 Palladium (US$/oz) 1 647 1 035 59 Rhodium (US$/oz) 4 491 2 395 88 Nickel (US$/t) 14 772 13 399 10 Exchange rate (US$/oz) 14.71 14.18 4 Basket price index (R/6E oz) 20 888 14 804 41

REVENUE CONTRIBUTION BY METAL

INTERIM RESULTS FY2020 WORLD LIGHT-DUTY VEHICLE SALES BY REGION – 2019 FORECAST

2018

(millions)

2019

(millions)

2018 growth

(%)

North America 19.23 18.91

• 1.6

Western Europe 16.15 16.28 0.8 China 27.75 25.45

• 8.3

Japan 5.20 5.13

• 1.4

Rest of the World 26.09 24.49

• 6.1

Total 94.42 90.27

• 4.4
• Automotive markets

−

2019: A weak year; sales down 4.4% (2018: -0.5%) Contraction driven by:

– 8.3% decline in China, weak consumer sentiment and trade uncertainty exacerbated inventory challenges ahead of China 6 – Slowing US growth after strong recovery post GFC – Growth in Western Europe on weak 2018 base and pull-forward pre CO2 – Japan impacted by sales tax adjustment in October

−

Global heavy-duty market down 3% to 3.1 million units on trade tensions and resultant economic uncertainty

−

2020 sales hinge on performance in China likely flat to lower

• Industrial markets

−

Robust demand, easing due to slowing capacity expansions

−

Platinum benefits from non-road demand, nascent fuel cell uptake

−

Palladium benefitting from strong chemical demand, relief expected from uptick in electrical components sector

• Platinum jewellery markets

−

Further contraction due to sustained weakness in key Chinese market and despite growth in India and broadly

stable Japanese and North American demand

−

Expect weak 1H 2020 Chinese data due to COVID-19 virus, with potential for strong recovery in 2H 2020 on strategic campaigns and manufacturer support

• Investment

−

Exceptional platinum ETF inflows in 2019 but softer bar and coin demand, gains in speculative positioning underpinned price gains

−

Step-change in palladium ETF disinvestment contributed to market tightness, while volatility in lease rates and physical tightness also dissuaded expansion in speculative length

Demand

40

INTERIM RESULTS FY2020

Supply and demand balances

• 2020 platinum market in surplus ex-investment (+ 1.27Moz)

−

Demand expected to fall due to lower investment Automotive flat on China VI and Bharat VI introduction and despite weaker LDD and HDD production Jewellery lower on a COVID-19 hit Chinese market, softer US and Japan Industrial firm but easing from recent highs Weaker underlying mine volumes, but some pipeline release and growth in secondary supply

• 2020 palladium market deficit to widen (-1.7Moz)

−

Demand estimated to increase by 5% Automotive growth on loadings rise – full year of China 6 loadings Industrial marginally lower Continued preference of gasoline systems over diesel Supply slightly lower on Russian sales and despite strong growth in secondary supply

• 2020 rhodium market to see another deficit (-70koz)

Automotive growth on loadings rise – full year of China 6 loadings Flat supply despite secondary supply growth

Including Investment / ETF Movements 41

• 2 000
• 1 500
• 1 000
• 500
• 500

1 000 1 500 2018 2019 2020F

Supply/Demand Balance

Platinum Palladium Rhodium

INTERIM RESULTS FY2020

PGM market outlook

• Renewed optimism in 4Q 2019 has been tempered by the unexpected threat

from COVID-19

− Market fundamentals for palladium and rhodium remain robust and supply constraints

likely to temper possibility of revisions to key customer requirements

− Palladium and rhodium well supported with average pricing to improve materially year

• n year
• We continue to highlight impediments to a rapid acceleration of primary

supply growth

− Expect rising capital expenditure aimed at extending life from producing assets

• Platinum is likely to return to surplus in the absence of investment demand

− Near-term switching potential adequately met from current supply − Pricing is vulnerable to a change in investor sentiment

• We continue to support market development efforts in the auto, industrial,

jewellery and investment sphere

42

OUTLOOK

Nico Muller, CEO

INTERIM RESULTS FY2020

Group outlook

Business area Unit FY2019 actual Pt Market Guidance FY2020 Pt Guidance FY2020 Pt Guidance FY2020 6E

Refined production: Group

• z (refined)

1.53 million 1.45 – 1.55 million 1.45 – 1.50 million 3.00 – 3.10 million Concentrate production: Impala

• z (in concentrate)

688 000 640 000 – 690 000 640 000 – 690 000 1.21 – 1.3 million Zimplats

• z (in concentrate)

269 000 265 000 – 280 000 265 000 – 280 000 565 000 – 600 000 Two Rivers

• z (in concentrate)

147 000 140 000 – 160 000 140 000 – 160 000 300 000 – 340 000 Mimosa

• z (in concentrate)

122 000 110 000 – 125 000 110 000 – 125 000 230 000 – 260 000 Marula

• z (in concentrate)

83 000 80 000 – 95 000 80 000 – 95 000 210 000 – 250 000 IRS (third party)

• z (in concentrate)

189 000 170 000 – 185 000 180 000 – 200 000 330 000 – 370 000 Impala Canada

• z (in concentrate)

na na 8 000 – 10 000 120 000 – 150 000 Group unit cost R/oz 23 942 25 500 – 26 500 27 500 – 28 500 12 500 – 13 500 Group capital expenditure Rbn 3.8 4.2 – 4.5 4.9 – 5.2 4.9 – 5.2

44

INTERIM RESULTS FY2020

27 February 2020