Sibanye Stillwater Limited

To cater for our international audiences, good morning and good afternoon. Welcome to our H1 2021 results presentation and very importantly to me a group strategic update which I believe you will enjoy and in fact hopefully find class leading. I'll be assisted by Richard Stewart, our Chief Operating Officer, who will provide operating results, an update for the quarter and for the first half of 2021. And then Charles Carter, our CFO, will provide the financial results for the same period. Post the presentation, there will be a Q&A session where you will have full access to the corporate executive. And for those of you who may be wondering what is Johnny Five, and obviously those of you that have visited our operations in Montana, will know that Johnny Five is a robotic arm that is part of our world class recycling business which we will be talking more about later. So let me get on with the highlights of the presentation but of course our safe harbour statement I would ask you to take note of. Starting with people, and people are clearly the most important asset in our business and their safety and health of our people and workforce is absolutely the first priority. We did see a regression in safety and Richard will talk you through that in more detail but I'm really pleased to say that we've re-energized our safety strategies, implemented new strategies and we've actually already seen a reversal in this Regressions. So I hope that continues. We've made really good progress with the COVID-19 vaccination rollout. We've vaccinated more than 40,000 of our employees and we look forward to extending that to a significant number more and of course in conjunction with the Department of Health rolling that out into our communities as well. Another highlight and I will talk more about this in the strategic update but we have now taken our ESG focus areas and developed them into a comprehensive sustainable strategy and in fact that sustainability strategy drives the entire corporation strategy and you will see that unfolding. At the last presentation we did make a commitment to achieving net carbon zero by 2040 and internally by a significant amount earlier than that. I'm really pleased to say we've made good progress on that. Obviously it's progress on strategy and planning and it revolves mainly around renewable energy projects and that is another area that I will focus on because it is critically important. Operational excellence. You would have seen from the releases earlier today that we've delivered record financial results. That's off a solid operating base, especially within our South African PGM segment, which delivered exceptional results. and other than the safety stockages which hindered our delivery in the US and to some extent in South African Gulf, they also delivered positive results. As I said, we delivered exceptional and actually record results from a financial point of view. Our adjusted EBITDA was US$40.5 billion or US$2.8 billion. Themba George Nkosi Great results. Discipline capital allocation. We shared with you some time back our capital allocation framework. I think you've seen significant commitment to that framework. The key areas where we have adhered to that framework without any variation is we redeemed our 2022 bonds that happened post the H1 hub update, but that was in August of 2021. We have declared an interim dividend of 292 SA cents. We've implemented a 5% share buyback. of which we've brought back 1.92% or around 3.4 billion rands worth of shares. In share numbers that's 56.6 million shares and of course Morgan Stanley is mandated to complete that process as announced. Despite all these commitments and returns back to shareholders, we have a robust balance sheet position with a net cash position of 10.2 billion Rand or $702 million. In terms of precious metals markets, we're not going to spend a lot of time on this today. We will spend more time on this at our investor days in September. But suffice to say, strong long-term PGM fundamentals remain. There is some short-term volatility due to things like trip shortages and so on. In our view, the gold market is stable. Very importantly, again, there's been many requests for us to expand on our battery metal strategy. Of course, within the limits of not revealing our competitive position, we will do that today. But you have seen within this period two steps in terms of the acquisition of the Caliber Lithium Hydroxide Project and the We have also done more work on what we call our green metal strategy and I will share more of that I'll be with you later on in the presentation, but that really is complementing the battery metal strategy. So let's just talk a little bit about the history, diversification and the growth that has underpinned our record earnings and cash flow. The graph that you see up now has the history of how we've grown our PGM exposure both in South Africa and the US and as you can see from that, The very significant and material contribution made by the South African PGM sector. Gold is reasonably stable and the US continues with its bulldoze. You can also see from that how the The leveraging of the company has happened and in fact on a net cash to EBITDA metric we've doubled that ratio from 0.06 last year to 0.14 this year. So very nice trajectory and very pleasing to see the diversification strategy creating such value. From a production percentage point of view, a couple of key points to note. The pie chart on the right is production in ounces, not in value. You can see the very significant number of ounces again out of the South African PGM sector. Important to note on this graph, and for the first time, We are segmenting the recycling business as a business unit and I'll talk more about that a bit later on in the presentation. But we will be providing in future more data around the recycling business as we grow it. But you can see 17% of our ounces come out of recycling. Very, very significant. I do believe that our investment and moving from a single commodity to a multi commodity business has been very very successful and something we are very pleased with. With that very brief introduction I am now going to hand over to Richard to do the operational updates and results and post that Richard will hand over to Charles to do the financial results. Thank you Richard.

Thank you very much Neil. Good afternoon ladies and gentlemen and good morning to you as colleagues. I think it's a real pleasure to be able to present to you today an update of our operational performance. for the first half of 2021. As is customary at Subanya Stillwater, we start all of our engagements with a safety moment. It is disappointing that during the first half of this year we have seen a continued regression in our safety statistics. A trend that started after the COVID lockdown impacts we experienced last year, and our deepest condolences go to the friends and families of eight of our colleagues who we have lost during 2021. We have a safety strategy that has proven its success in the past. It is underpinned by a cultural transformation program, a program that drives the culture of values-based decision-making and is complemented by real risk reduction initiatives. Following the continued safety regression that we experienced into 2021, in June we rolled out our Rules of Life campaign. A campaign that targets addressing high risk behaviours through a zero tolerance approach. This initiative underpins our zero harm safety strategy, a strategy that includes the pillars of empowered people, an enabling environment and fit for purpose systems. It is extremely pleasing that we've seen a significant improvement in all of our safety statistics across the board since we rolled out this initiative and during the third quarter today. Our South African PGM operations have delivered a stellar performance over the last six months. Compared to the same period last year, we've seen a 42% increase in production at just under 900,000 ounces. Equally pleasing is that we've managed our costs well and seen a 10% reduction year-on-year in our all-in sustaining cost, maintaining it at below R17,000 per 40 ounces. This production delivery, combined with a 60% higher 4E PGM basket price, led to 14 billion rands worth of free cash flow generated from these operations during the first six months, or equating to a 66% adjusted EBITDA margin. Equally pleasing is the successful integration of the Morricana operations. where we have managed to retain costs and reduce them in fact by 13% over the last two years despite a reduction in volume output and despite two years worth of inflation. We have now truly embedded the synergies that were realized through this transaction. We have also realised value from the spare capacity we had at our processing facilities and during the last six months have processed an increased 35,000 ounces of third-party material through these facilities. Our Stillwater operations were on track to deliver a record six months performance. Unfortunately however, due to a tragic safety incident at Stillwater West that resulted in a 21-day safety shutdown, Our output for the first half ended up being flat year on year. The ongoing effect of this unfortunate incident will continue to impact the Stillwater operations for the remainder of this year. Pleasingly, however, the continued ramp-up of the Blitz project has exceeded planned for the year and will partially offset this temporary negative impact at Stillwater West. As a result of the reduced production, and a combined with a 24% increase in our 2e basket price that impacts royalties and taxes payable, we have seen our all-in sustaining costs at this operation increase by 12% to $973 per ounce. Despite these operational disruptions, however, the underground operation still delivered an adjusted EBITDA of $437 million for the first six months of this year. or the equivalent of a 65% EBITDA margin just on the underground operations. Stillwater also hosts one of the largest recycling facilities globally and during the last six months the output from this facility has delivered just over 400,000 ounces. That in turn has resulted in a $50 million adjusted EBITDA from our recycling operations, which when combined with a $12 million net interest income that was derived from short-term advances to our recycling customers, produces an EBITDA margin of 5%. Considering that our working capital is turned roughly four times a year or once a quarter, that 5% equates to a 20% return on that working capital investment. I dare say that this recycling business, besides for being a low risk business with very attractive returns, recycling is also an absolutely critical part of the demand and supply balance globally. Our recycled ounces have a significantly lower emission and waste footprint and therefore this green fingerprint is highly complementary to our primary production base and forms a solid base for future growth in this area. Our South African gold operations delivered a steady and solid performance, and compared to the same period last year that was disrupted by COVID, we saw 29% higher production of just over half a million ounces. DRD Gold delivered about 88,000 ounces of that, while the balance of just over 430,000 ounces came from Kerf, Beatrix and Dreyfontein. As a group, our oil and sustaining cost was just below R800,000 per kilogram and largely stable year-on-year. And despite the 3% lower average gold price, the increased production supported a 40% increase in EBITDA to just under R2.5 billion. When we look at our forecast for the balance of the year, we are forecasting A slight downturn of about 40,000 ounces at our US PGM operations or about 6% compared to previous guidance as a result of the ongoing impact of the safety incident experienced at Stillwater West. This reduced production output also has resulted in an increase in all its sustaining costs combined with a forecast higher 2E basket price which increased taxes and royalties means that we are now forecasting an all-in sustaining cost of between $910 and $940 per ounce or approximately 8% higher than previous guidance. There is a corresponding reduction in capital of also between 6% and 7%. Our US recycling business remains steady, forecasting approximately 800,000 ounces for the full year. There is no change to our guidance, our production or cost guidance at our South African PGM operations, although we are forecasting a reduction of about R350 million in capital, driven partially by real cost savings, as well as a delay to some of our project capital partially required due to permit requirements that were obtained later than expected. At our South African gold operations, Our production remains flat and we have not changed any guidance. However, due to higher than expected inflationary costs, particularly associated with steel and associated products, as well as electricity increases well above inflation, we are forecasting a 5% increase in oil and sustaining costs to between R815,000 and R840,000 per kilogram. We've increased our capital outlook at our gold operations by 300 million rand to cater for the Burnstone project capital that was approved by our board towards the end of the first quarter. Thank you very much and I will now hand over to Charles. Thank you.

Thank you Richard and good afternoon and good morning to all participants on this call. It again gives me great pleasure to share our financial results for half one 2021 with you. If we start with revenue, revenue increased 63% to just under R90 billion compared to the corresponding period in 2020. The improvement stems from very solid operational performance and strong commodity prices. Costs increased by 28% period on period and this was mainly due to the normalisation of the cost base following containment measures implemented during the hard lockdown period in 2020. We also saw an increase in recycling material treated, remembering that the costs of our recycling business are directly proportionate to changes in platinum, palladium and rhodium prices. The basket price for our recycling business averaged $3,200 per 3oz for half on 2021, We reported record adjusted EBITDA of $40.5 billion compared to $16.5 billion in half one 2020, which at the time was also a record. The $40.5 billion represents a 45% margin. Moving on to finance expenses. Net finance expenses reduced from 1.2 billion rand in half one 2020 to 640 million in half one 2021. And this was due to lower outstanding debt and higher cash balances. And following the early settlement of the 2022 bonds, we expect this number to decrease even further. Share of results of equity accounted investees after tax increased from 484 million rand to 1.4 billion rand and this was driven mainly by the performance of Mimosa following the strong commodity prices that we experienced during half one 2021. Royalties was up fourfold to 1.6 billion rand and mining and income tax up four and a half times to 9 billion rand and this was driven largely by the increase in profitability for the business. Profit for the period was 25.3 billion rand, up from 9.7 billion rand in half one 2020. And this equates to an earnings per share of 843 cents per share. Moving on to the next slide. In line with our dividend policy, we declared an interim dividend of 292 cents per share, or 35% of normalised earnings. Normalised earnings for the period was R24.4 billion, and this resulted in an industry-leading dividend of about R8.5 billion, or a yield of 10%. This slide also highlights the track record since the resumption of dividend payments in H1 2020. Since H1 2020, we have returned R19.3 billion in dividends. Overlay on this, the approximately 9.6 billion rand in share buybacks. This is a return of almost 30 billion rand. Turning to cash generation, the significant cash generation has continued into half one 2020. Cash generated by the operations was 59.7 billion rand. Working capital increased by 4.5 billion rand, mainly at our recycling business due to the increase in the 3e basket price up from $2,200 per 3 e-ounce to $3,200 per 3 e-ounce. Capital expenditure was 5.6 billion rand. Royalties and taxes amounted to an eye-watering 10.3 billion rand for the half year and I'm sure the incoming Minister of Finance and the Commissioner of Revenue Services welcomed this contribution to the fiscus. The final dividend for 2020 as well as dividends due in terms of our employee ownership plans was paid during this reporting period and amounted to 9.7 billion rand. The deferred payment of 2.3 billion rand related to the deferred purchase consideration of the Rustenburg assets that we acquired from Anglo Platinum in 2016. During this period we also repaid loans of 750 million rand and the share buyback up to the end of June amounted to 750 million rand. The net result of this is that cash increased from 20 billion rand to 26 billion rand. In terms of our capital allocation framework, we continued with our strict and disciplined approach. Looking at project capital, the project set up and administration of the K4 project, Burnstone and Chetfontaine started during this period An estimated expenditure for 2021 is approximately 845 million rand. Cash reserves for half one 2021 was 26 billion rand, which is well above our targeted level of 20 billion rand. Just as a reminder, the 20 billion rand consists of a debt buffer of 15 billion rand and a cash liquidity buffer of 5 billion rand. Returns to shareholders in the form of dividends for half one is 8.5 billion rand, which is at the top end of our dividend policy. And as highlighted earlier, dividends since the start of 2020 amount to 19.3 billion rand. We have further reduced our debt with approximately $350 million post half one 2021 through the early settlement of the 2022 bonds. and we are still on track to refinance the 2025 bonds with a $500 million issuance towards Q4 and as highlighted this is to ensure that we have access to the debt capital markets but also to take advantage of the low interest rate scenario. We committed when we have excess cash to consider share buybacks and the buyback of 5% of our issued share capital started in June. The estimated quantum of the buyback is 9.6 billion rand. Lastly, and to wrap up, we will continue to allocate capital in a prudent and responsible manner to ensure value is created for all stakeholders and to ensure that the sustainability of our operations are preserved. I will now hand back to Neil who will take us through the final part of the presentation. Thank you Neil.