Reviewed condensed consolidated provisional financial results for the year ended 28 February 2019
Core message Strategic diversity Continue to drive Sound business enabled growth diversification in a and financial responsible fundamentals manner remain key 2 Afrimat final results presentation for the year ended 28 February 2019
Summary of the period Industrial Bulk Construction Commodities Minerals Materials Slightly down Difficult trading Positive contribution Better second half conditions Political uncertainty and economic slowdown Operating Profit Importance of a balanced portfolio 3 Afrimat final results presentation for the year ended 28 February 2019
Operational overview 1 What we do 4 Afrimat final results presentation for the year ended 28 February 2019
Group overview A supplier of quality materials sourced from our open pit mines and quarries Strategically diversified through product range, target market and location 5 Afrimat final results presentation for the year ended 28 February 2019
Our products Bulk commodities Industrial minerals Construction materials 6 Afrimat final results presentation for the year ended 28 February 2019
Bulk commodities Iron ore Coal • Non-binding indicative offer to acquire issued share capital of Universal Coal plc (“Universal’) * • Maximum consideration of A$ 0.40 per share (*) Refer to slide 49 - 52 for additional information. Due diligence in progress. 7 Afrimat final results presentation for the year ended 28 February 2019
Industrial minerals Lime Metallurgical dolomite Metallurgical quartzite 8 Afrimat final results presentation for the year ended 28 February 2019
Construction materials Aggregates Bricks & blocks Readymix concrete 9 Afrimat final results presentation for the year ended 28 February 2019
Diversified portfolio and footprint which generates a balanced, consistent income stream Construction Materials 2 25 Commercial quarries Mozambique Mozambique 3 Limpopo Limpopo 6 Sand & gravel mines 4 Clinker sources Mobile crushing & screening Drilling & blasting 9 Concrete brick & block factories 3 4 22 Readymix batching sites Gauteng Gauteng 4 Mpumalanga Mpumalanga Industrial Minerals 7 Free State Free State 17 KwaZulu-Natal KwaZulu-Natal 2 Limestone mines 2 Dolomite mines 1 Silica mine 1 1 Northern Cape Northern Cape South Africa South Africa Commodities 1 Eastern Cape Eastern Cape 2 27 Western Cape Western Cape 1 Iron ore and manganese mine 10 Afrimat final results presentation for the year ended 28 February 2019
What makes Afrimat different? Company positioning Company culture Strategic management 11 Afrimat final results presentation for the year ended 28 February 2019
Company positioning Primarily focused on mid-tier open pit mining Critical set of criteria used Unique competitive advantage when potential acquisitions are being evaluated Geographic location Unique metallurgy Structural cost advantage Highly entrepreneurial culture Hedged against economic volatility through wide diversification 12 Afrimat final results presentation for the year ended 28 February 2019
Company culture Strong operational efficiency – executing ability The right people in the right positions Synergistic teamwork Customer focus Values based entrepreneurial culture 13 Afrimat final results presentation for the year ended 28 February 2019
Strategic management Companywide understanding of desired future Fundamental understanding of market Good understanding of own abilities Continuous research of business environment Facing the brutal facts Meticulous strategy execution Financial discipline: making the returns 14 Afrimat final results presentation for the year ended 28 February 2019
Our performance What the diversification strategy is 2 delivering 15 Afrimat final results presentation for the year ended 28 February 2019
Headline earnings per share (HEPS) comparison 5.00 4.00 3.00 -- Afrimat 2.00 1.00 0.00 -- Raubex * -- Sephaku -1.00 * -- PPC -2.00 * -- CIL -3.00 * Interim HEPS -4.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 16 Afrimat final results presentation for the year ended 28 February 2019
Growth through diversification Profit history with and without acquisitions 250 Glen Douglas Clinker 200 Positive value Infrasors gap 150 Cape Lime 100 Demaneng 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Headline earnings per share Reality without strategic acquisitions
Operational overview 3 Financial review 18 Afrimat final results presentation for the year ended 28 February 2019
Financial overview Strong quality of Continued focus Exceptional cash earnings across on astute capital generation the group allocation 19 Afrimat final results presentation for the year ended 28 February 2019
Financial overview 24,6% 27,9% 29,6% 15,9% Group revenue HEPS increased to Operating profit increased to Tax rate 234,1 cps margin R3,0bn 15,3% 47,6% 25,4% 23,8% Net debt:equity Return on net Final dividend per NAV per share of ratio improvement operating assets share of 62,0 cps 1 030 cents from 35,5% 20 Afrimat final results presentation for the year ended 28 February 2019
Financial overview Revenue and operating profit Operating profit (R’000) Revenue (R’000) 500 000 Contribution from operations margin 15,9% (2018: 14,7%) 34.5% 450 000 400 000 268 483 350 000 3 500 000 24.6% 200 443 300 000 156 155 3 000 000 160 765 250 000 1 413 564 2 500 000 152 698 200 000 1 196 402 2 000 000 1 074 899 968 502 966 549 150 000 1 500 000 206 152 202 669 194 244 159 623 100 000 1 552 835 1 000 000 127 349 1 184 592 1 153 258 1 030 098 1 003 237 50 000 500 000 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 1st half 2nd half 1st half 2nd half 21 Afrimat final results presentation for the year ended 28 February 2019
Headline earnings per share – full year 29,6% 250 200 Cents per share 150 234.1 196.4 100 180.7 156.6 135.6 50 0 2015 2016 2017 2018 2019 2019 – Impairment of goodwill of R20,5m in Afrimat Concrete Products Proprietary Limited 22 Afrimat final results presentation for the year ended 28 February 2019
Segmental makeup Aggregates : Gauteng Infrasors Iron Ore (Demaneng) Glen Douglas Cape Lime Western Cape KwaZulu-Natal Eastern Cape Free State Limpopo Mpumalanga Mozambique Northern Cape Blocks and bricks Readymix 23 Afrimat final results presentation for the year ended 28 February 2019
Contribution from operations Revenue 2019 Revenue 2018 7% 23% Construction Materials Construction Materials 24% Industrial Minerals Industrial Minerals 59% 18% Bulk Commodities Bulk Commodities 69% Contribution from operations margin (%) FY2019 FY2018 Construction Materials 10,9% 16,7% Bulk Commodities 29,5% (19,0)% Industrial Minerals 14,3% 15,8% Overall 15,9% 14,7% 24 Afrimat final results presentation for the year ended 28 February 2019
Segmental operating profit Operating profit 2019 (R’000) Operating profit 2018 (R’000) Bulk Commodities 201 329 Bulk Commodities -33 443 Industrial Minerals 78 012 Industrial Minerals 88 393 Construction Materials Construction Materials 190 182 274 580 25 Afrimat final results presentation for the year ended 28 February 2019
Operational overview Well diversified contribution from operations February 2019 February 2018 7% 17% 19% 8% 42% 43% 9% 17% Traditional business Traditional business 16% 7% 15% Glen Douglas Glen Douglas Infrasors Infrasors Clinker Group Clinker Group Cape Lime Cape Lime Demaneng * Excluding Demaneng loss of R33 million 26
Net cash from operating activities – full year CAGR of 11,92% (2015 – 2019) 450 000 410 484 406 046 400 000 79 510 350 000 320 339 280 470 300 000 Rands (‘000’s) 261 646 79 510 250 000 326 536 200 000 150 000 200 960 100 000 50 000 - 2015 2016 2017 2018 2019 27 Afrimat final results presentation for the year ended 28 February 2019
Statement of financial position - assets Reviewed Audited R’000 Feb 2019 Feb 2018 Property, plant and equipment 1 469 837 1 417 845 Intangible assets 221 873 243 970 Inventories 261 249 242 124 Trade and other receivables 435 458 391 603 Cash 191 763 112 208 Other assets / deferred tax 106 832 126 965 2 687 012 2 534 715 28 Afrimat final results presentation for the year ended 28 February 2019
Statement of financial position – equities & liabilities Reviewed Audited R’000 Feb 2019 Feb 2018 Total equity 1 409 517 1 229 320 Borrowings 383 546 436 958 Provisions 141 080 130 288 Overdraft 134 153 90 203 Trade and other liabilities 390 517 407 022 Other liabilities / deferred tax 228 199 240 924 2 687 012 2 534 715 Debt:equity ratio improved to 23,8% (2018: 35,5%) 29 Afrimat final results presentation for the year ended 28 February 2019
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