Exxaro Resources Limited

Good morning, ladies and gentlemen. Welcome to Exaro's full year results for the year ended 31 December 2025. Thank you for joining us today. Thank you for joining us both here in person and online. I would like to welcome our board members who are here with us, as well as our executive leadership team. My name is Anda Mwanda, Manager, Investor Relations here at Exaro. And today, I have the privilege of facilitating this session. At Exaro, safety is our number one priority. And before we convene this meeting, I would like to take you through our safety briefing. Please note that we have not planned an emergency drill for today. If the alarm is activated, please remain calm and wait for the Exaro floor marshals. They are in the room and they are wearing red reflective vests. They will escort you to the assembly point that is outside in front of the building. We'll remain at the assembly point until instructions are issued to re-enter the building. Please note that visitors are advised to always be accompanied by their host. If you begin to feel unwell, please let your host know and they will escort you to our medical facilities on site today. Our blueprint facilities are outside the auditorium. You turn right and the first passage to the left. Please note that texting while walking is not permitted at Exaro. And therefore, I would like you to please keep your phones on silent for this session. we can move to the next slide please take note of our disclaimer and today's presentation will cover key highlights operational performance financial performance and finally we will take you through our outlook unless otherwise stated Results are presented today year-on-year. We're comparing year-on-year from 31 December 2024. Today's speakers are Chief Executive Officer Ben Makara and our Finance Director, Riyanko Pescar. Please note that as they come in, we have allocated time at the end of the session for questions and answers. And with that, Ben, over to you.

Thank you very much, Anda, and we call him Kopis. And very good morning to everyone, and thank you for joining us today, both here in person and some are also online. And let me really extend a warm welcome To the board members and to my chairman, Jeff Pienaar, thank you very much for joining us today. I've got some, my old alumni folks, they were a little bit tired and sitting on the sofas outside earlier on. We can see how much Xaro sweat them with the video you saw there. Dr. Kohn and Kolezi, you are present today, most welcome. Please raise your hands for all the new ones who don't know you. Thank you. Thank you. Thank you. Really, I would love you to enjoy today, everybody who's turned up, enjoy the pictures that you are going to see on the screens. They really are meant to depict all the various activities. that we did in some of the execution projects we executed last year, and some of them are still in execution right now. So as you go through, those pictures were deliberately put in this presentation, not just to make the presentation beautiful, but to showcase the hard work and the acceleration of delivery that happened with Exaro last year. This is my first Exaro annual results presentation as chief executive. We stabilized the business following a challenging start to the year. We had a very low coal pricing environment as well. And I'm pleased that the executives and I and every employee of Exaro put shoulder to will and we hit the ground running. My wife didn't want me to say this, but we got our mojo. Within a week of joining Exaro Coppice, and the executive team and I visited all our coal operations, and thereafter we also went to the closed coal areas, to our renewable energy facilities everywhere, we met the majority of our fellow employees, and the dividend paid. As ExCo, we showed up, we showed respect to our employees, we engaged and we listened. And our people said, in their words, uzobona. And these results are a testimony of what they said to us when we met them, and they said, uzobona. We also visited all our national labor organizations at their own offices. We were at Rasik Street downtown to see NAM. We went to Soltech to see Solidarity. And our regulators, we met all of them. and also met you, our investors. Unfortunately, when you've got white hair, you can't hide. So thanks, Sipo, for joining us. Thank you very much. It's wonderful to have you here. And we will deliver the video. Because I think it makes a great story for where Exaro has come from. We reinforced what our chairman, Jeff Kleener, was telling you in those tough times. That Exaro remained steadfast. It remained focused on its priorities. And that the strategy was intact. And that the strategy was intact. Thanks, Jeff. He almost became an executive, really delivering these kind of things. And consequently, we delivered the best industry-leading safety performance ever. We announced and delivered manganese. So we call it manganese is in the house. We doubled our renewable energy capacity. We refinanced our bank facilities at even better terms. We restructured and created a strong management team. making it really fit for purpose. And our leadership bench is now representative of our country's demographics with competent young and old executives. A blend of energy, of foresight, experience, expertise. It's diverse and inclusive. And if you are Mungesi, you are retiring this year. So... We executed on ethics and culture. Ethics and culture. We reset, and the results were reflected in a follow-up culture pulse survey outcome to just prove whether we are moving forward, and I'm very pleased with the results we got. And our network partners also came to the party. with much improved performance, both from Transnet and ESCOM. So we say and long may it continue. We are glad to see that the crisis management issues have basically been resolved. Now we can look ahead to long-term opportunities and partnerships with our partners. So ladies and gentlemen, it's been a lot of work. It's been extremely and very much fulfilling. we are doing the best work of our lives at Exaro, safely and together. Thank you. And as we celebrate Exaro's listing 20 years ago, my executive and I are confident of Exaro's next growth path. And we are on it. And evidence will be shown today as we go through. So with that backdrop, I would now want to go through the key highlights and the operational results and then hand over to Coppice who can share with us the financial results before I come back to talk about the outlook and how we see the world today. So starting with safety, as I said earlier on, the best and industry-leading safe performance ever. And I would like to state that I stand for safety. And at Exaro, we speak safety. with one voice when we talk about safety. In 2025, we close the year with 40 years consecutive months, 40 months consecutively without a fatality. We should not be measuring businesses with fatalities, but we know where we come from. And we want everybody to go home safely every day. We should expect it of ourselves, and we should expect it of our own people, and we should help them achieve that. Our group lost time injured frequency rate improved by 33% to 0.04 per 200,000 worker hours worked. If you look at that graph on the right-hand side, you will see that over the past 20 years since listing, we have reduced our lost time injury frequency rate tenfold, from 0.42 to 0.04. Even more encouraging, some of our mining operations like Rutgerlack and Belfast completed a full year without a lost time injury. This is a clear result of discipline and commitment at every level, with every single employee choosing, as I said earlier on, to work safely every day. And at Exaro, we believe zero harm is achievable. My fellow employees, we have to remain vigilant. Exaro delivered robust performance numbers, and I'll go through those numbers right away. At Synergy, we increased our wind farm plant availability by 2% to 98%. However, we received less favorable wind conditions, resulting in energy generation being down 3% year on year. Our coal operations, coal production is up 1%, and sales were also up 1%. Coal export sales up 2% to 7.1 million tons annually. supported by the improving logistics performance. I'll touch on this a little bit more later about where the real improvement came from and where the opportunities still lie. But overall, we increased our revenue by 3% to $41.8 billion, despite the export core prices being 14, 15% lower. So it was a tough and challenging low export pricing environment But despite all that, our EBITDA declined marginally by 2% to $10.2 billion. We were disciplined in our approach to cost management, and this is where Coppice comes in even more, because he kept stressing around the importance of cost management. And we were able to also keep our absolute cash costs, particularly in coal, essentially flat year on year. Our net cash rose by 8%. to 17.6 billion. And our balance exchange underpins the ability to invest and return capital to our shareholders, resulting in our headline earnings per share of 8% to 32 rounds 47 cents per share, supported by these stronger contributions we are seeing as well from our equity investments. Ladies and gentlemen, as I indicated, Manganese is in the house. And therefore the group will no longer maintain the previously targeted cash buffer that we were keeping at 12 to 15 billion. And in that regard, the board has revised our dividend policy. Our dividend cover ratio has been revised and improved from a range of 2.5 to 3.5 to 1.5 and 2.5 times as a range, based on our adjusted group earnings. For those who prefer calling it pay ratio, if you see 1.5, you say 1 divided by 1.5, you get 67%. And if you get the 2.5, 1 divided by 2.5, you get 40%. So our paying on group earnings... will range between 40 and 60% of our earnings, 67% of our earnings. We will continue to pay 100% pass-through of the dividend we get from SIOC. And in line with this revised policy, we are pleased to announce, with the Chairman present, that the Board has declared a final dividend of 10 rands per share, And together with the interim declaration of 8.43, it brings our total dividend for 2025 to 18.43 per share. In total, this equates to 6.3 billion rands to our shareholders' hands, which we promised, and I'm glad we have delivered. The revised dividend policy reflects our disciplined capital management approach, reinforcing our commitment to superior and consistent shareholder returns, while we not also preserve the balance sheet strength, while we still deliver beyond the surface on our social investment projects, and we are also conscious of the commodity cycles, and therefore we have monitored our future capital requirements and reflected on this and believe it is fair at this juncture to revise and improve our dividend cover ratio. Alongside this robust business performance, we accelerated the prudent delivery of our strategy, strengthening and diversifying our portfolio for long-term sustainability. Post-year end, you would have learned we completed our first manganese transaction, positioning Exaro as a globally significant manganese producer. I'll say more about this a bit later. But in renewable energy, we commissioned the 68 megawatts of the Lepalale solar plant feeding into Krutkalak. We now have our first green electrons into Exara. And Musa is shaking his head. We also announced the acquisition of 138 megawatts of the Goda wind farm and 75 megawatts of Sishen solar plant and the associated operations and maintenance company with those two assets. These transactions have progressed well, with competition through our bidder and reserve bank approvals already secured. We expect to close this transaction within the first half of this year. In partnership with Engie, Synergy was selected as a preferred bidder under the rebid seven window. on the 240 megawatts of corona solar plant in the Free State. Financial close on the corona will bring Synergy's growth capacity in operation and under construction to just under 900 megawatts in 2027. And as part of our portfolio rationalization and optimization, we also completed the responsible divestment of the entire shareholding of ferroalloys enabling our operational continuity through meaningful management and employee participation in the future of that business. Let me speak a bit about a key part of Exaro's unique value proposition. We are committed to meaningful socioeconomic impact, and we talk about impact beyond the surface. During the year 2025, Exaro created about 19 billion rands worth of value to all our stakeholders, including employees, shareholders, I've spoken about earlier already, but the employees got the biggest chunk at 7.4 billion for the sweat and for the efforts and in regards to what we are able to deliver today. And of course the government and finances as well. We are continuing to build an inclusive culture. 91% of our employees come from historically disadvantaged backgrounds. Women represent 35% of our people and 47% in management roles. We were again certified as a top employer. We invested almost $400 million in learning and development to strengthen the technical capability and the deep leadership that we require. And we are building our talent in order to make sure the next 20 years continues to deliver what we have been delivering. We want our people to do the best work of their lives at Exaro safely and together. And as I said, we invested $1.7 billion in social impact initiatives. focused on provincial procurement, education, infrastructure, supply development, and enterprise development, and also the creation of a sustainable secondary economies through our mineral succession program. Today, our early childhood development program supports almost 3,000 children, strengthening foundational learning across our host communities. So on that note, let me just give you a brief set of the context at which we produced these results. Globally, GDP was broadly resilient, despite all the trade and the policy uncertainties across most economies. And in South Africa, through our Operation Volingela project, we are witnessing a shift in progress through collaboration where business and government are working together to fast-track structural reforms, unlock economic growth, reduce costs, and improve South Africa's competitiveness. We are encouraged by the improvements both in energy availability and there are early signs of progress also in logistics, particularly in the second half. However, the strong runs continues to put pressure on export pricing, but also on inflationary pressures. And on commodities, the thermal coal market reflected a much weaker seaborn demand, and persistently the oversupply from China and the growing in-production in India reduced our coal pricing environment, with API4 around $90 per tonne. It went as low as $80 a ton in October. And all this, in average, reduced our pricing by 14% compared to the prior year. And again, as this backdrop, we are focused and we remain focused on operational delivery, protecting margins through effective cost management and operational efficiencies. Our teams, particularly in the market to resource, provided clear agility as the market started shifting between different regions. We continue to practice capital discipline. So let me explain briefly about logistics. We surely acknowledge the remarkable progress made by logistics and rail by Transnet. TFR delivered a strong performance in the second half, ending at about 57 million tons of coal moved through the coal line, up from 52 million tons the prior year. Performance improvements were most evident in the Mpumalanga region. While we welcome these improvements, This is way below Richard's base, 91 million ton capacity. And the waterbed line continues to operate below capacity. And Exaro has had to be agile in its approach, utilizing alternative channels to evacuate our coal from GG to the export market. With the foundation already laid, we are confident that we'll be able to make tangible progress in the waterbed. And Exaro responded to the request for information published by the Department of Transport in 2025 for the public sector participation in coal and in the chrome corridor. So we also expressed our willingness and readiness to participate in the RFP, which we expect to be released soon. So the long term of our export. We have a great optionality at GG. And this is key for us to continue to collaborate with Transnet, because it unlocks value for all our stakeholders. Now, going into operational performance, total coal production volume is 1% up to 39.9 million, mainly as a result of improved production at Matla and Mafube. At DG Krut Gelak, production decreased by 2%, more in line with demand from ESCOM. Unit 4 came back on Madupe in July, and we're pleased right now that all the 12 units, 6 at Madupe and 6 at Matimba, are running as we speak. We know there's less demand in the country for power and for ESCOM power, but the benefit for Exaro with those two power stations is that those are the two lowest cost power stations in the country. So to reduce costs, those two power stations have to keep running. And as long as Dan and his team continue to do the maintenance they are doing, we can reliably expect those two power stations to continue. And they will be more competitive in terms of power costs than anyone else in the country. Stable operations in Mpumalanga continue to underpin the strength and balance sheet of our coal portfolio. Belfast maintained its nemplet capacity. They produced 3.5 million tonnes. The work and focus on Leopold, which we announced last year, on the turnaround strategy continues. The progress is ahead of schedule. The Section 189 is completed, and there were no forced retrenchments. The majority of our employees were all redeployed to vacancies elsewhere in the wider group. We are now looking forward to to Caroline and her team to deliver in 2026. Mafuba production increased by 12%, mainly due to improved business transformation initiatives they've got in place. Matla, the ramp up of Matla's new shaft has progressed way ahead of schedule, delivering early coal production resulting in a 14% increase in production. That's the highest production increase of one mine in the whole of Exaro. And our president, Mangaliso, president of SACMA, is here today. Thank you very much. Thanks to you and your team. And the coal sales up as well, 1% up. And I've spoken already about Medupi and Matimba and our expectation going forward. This was all offset by MATLAB's early coal production. Other domestic coal sales increased by 28%. Yes, 28%. This is really because the agility of our marketing teams was able to tell that there are better local margins than the margins we were getting from our low export pricing environment. Metallurgical coal cells were down 43%, unfortunately, heavily impacted by the low demand from the local steel industry. So turning to our export performance, despite the softer demand from India, again, I keep talking about how the agility of our marketing teams, and Saki sits in the corner. even in the boardrooms, but they successfully placed coal in all the other regions so that we could improve on our exports. We saw improved sales into Japan, where Exaro's premium low-sulfur high-energy coal market is well established and appreciated. Exaro has an established brand with reliable quality and performance across our priority markets. rb1 made up 81 percent up from 74 percent in 2024 to 2025 in the export sales mix for 25. we achieved an overall price realization of 86 dollars per time which is 96 96 percent price realization enough on the call guys i think the synergy guys would want to hear a bit more from their activities but synergy operating assets yielded stable and high EBITDA margins year on year, with average plant affordability up 2% to 98%. This is all due to improved maintenance on the plant. Synergis operating wind assets generated 699 gigawatts, impacted by weaker wind conditions, particularly in the second half. The commissioning of the LSP in the Palale commenced in December, making a significant milestone, like I said earlier, onto our coal mines, delivering four gigawatt hours of green electrons to GG. It is envisaged that the reduction in Scope 2 emissions will be about 17%, and we are seeing a reduction in our costs of electricity by about 100 million rands per annum. So, ladies and gentlemen, it has been a robust year of delivery, and on that note, I need to hand over to Rian to share the financial results. Thank you. Thank you, Ben.

Good morning, ladies and gentlemen. It's good to share the financial results again with you. So just for comparability across the periods, the figures in this section are based on IFRS results adjusted for headline earnings items. So there's also a detailed reconciliation in the additional slides. So starting with the group results. The first two graphs at the top illustrate the performance of our own managed operations. So you can see revenue increased by 3%, demonstrating the stability of our revenue despite a decline in export prices. As Ben pointed out, EBITDA declined only by 2%, reflecting resilience in a challenging operating environment. The chart on the right shows income from our equity accounted investments. This line increased notably, driven primarily by Sish and Iron Ore Company, contributing $606 million more year-on-year. Black Mountain also delivered a strong performance, increasing by $425 million. So additional detail on the equity investments is provided in the supplementary slides. So despite operating in dynamic and challenging conditions, we generated cash of 10 billion rand ending financial year 2025 in a net cash position of 10.7, consisting of 6.9 debt in the energy business and 17.6 billion net cash for the rest of the Exaro group. I will touch on the cash position in more detail later in the presentation. The weighted average number of shares in issue decreased from 242 million to 238 million following the repurchase and cancellation of shares under the share repurchase program. So overall, this operational and investment performance translated into headline earnings of R32.47 per share, up 8%. So let's take a closer look at the EBITDA analysis, starting firstly with the price impact. So export prices realized in 2025 were $14 per ton lower, or 14% decline, in line with the lower api 4 benchmark price this was partially offset by a one percent improvement in our price realization relative to api from 95 to 96 percent we also experienced stronger pricing in the domestic market that supported revenue on volume we saw two distinct halves. So the first half of the year, severe rainfall caused significant road and rail disruptions. However, in the second half of the year, transnet performance improved, enabling a 9% increase in our export volumes through RBCT. And this resulted in a 2% increase in total export volumes at 7.1 million tonnes. There was lower offtake from ESCOM and AMSA, as Ben mentioned, but this was mitigated by higher domestic sales from Belfast and Leupon, helping to cushion the export shortfall. So across the mining industry, inflation continued to elevate the cost base. As explained earlier, if you look at electricity, increased year on year by 12.7%. Labor cost on average 6.7%, and other costs tracked the PPI at 1.5. Diesel was the only exception, providing relief with a 7% decrease, helping to offset the broader inflationary impacts. So beyond inflation, several cost factors also influenced EBITDA. Our operational cost as part of our cost drive decreased by $625 million, mainly due to lower overburden removal at Leupon at Belfast. You'll recall we were telling you over the past two years we are looking at the pit and the overburden. And then also cost savings from the Leupon turnaround strategy of $224 million. So inventory movements contributed a positive $424 million, mainly due to net realizable value adjustments in 2024 and employee cost increased by a higher production than sales volumes in 2025. Employee costs increased by $295 million, primarily due to the filling of vacant roles and also salary increases. Rehabilitation liability adjustments were $226 million more favorable, supported by lower closure cost adjustments and a revised long-term inflation assumption consistent with the lower government policy on inflation. This was partially offset by lower discount rates that we used for our provisions, and then there were also a few life-of-mine adjustments. So the stronger RAND negatively impacted revenue by R288 million with an additional R430 million in realized and unrealized foreign exchange losses on debtors and cash balances. General costs include R178 million in costs associated with the manganese transaction. This was partially offset by 77 million higher EBITDA from Faro alloys prior to the disposal the end of October 2025. As can be seen from the table on the top right, our Waterberg operations remain resilient. You can actually see EBITDA increasing year on year while optimization initiatives in the Mapumalanga region continue. So international coal pricing dynamics are impacting broader industry profitability, especially in the Mpumalanga region, where coal reserves are becoming increasingly more complex to mine. We continue to have a very disciplined approach to cost management, and you can see total production cost increased by 0.4% year-on-year to R20.5 billion, underscoring our continued focus on cost control. It is important to note on the figure on the left that production tons used in the calculation of our cost per ton exclude Matla and Mafube operations. The 2.4% increase in the cash cost was mainly driven by lower offtake from ESCOM at the Grote Geluk operation. On the cost front, key successes include improved efficiencies across the value chain at all our operations. Also, the loop-on turnaround strategy resulting in a reset of the cost structure at the mine. And we also have a continued business improvement focus across all the operations. We're also optimizing logistic costs all the time by directing exports through the lowest cost and most profitable export channels. So looking at the specific cost component movements reflected in the bottom right graph, So employee cost increased our cost by 15 rand a ton, mainly due to the filling of vacancies across the group and also the salary increases that we grant annually. General expenses were mainly impacted by a once-off credit in 2024. It did not occur again in 2025. So energy costs, as I pointed out, increased in line with the inflationary increase of 12.7%, but as a result of our improvement initiatives for the group, it only resulted in an increase of 11%. Maintenance was executed in life of the normal life cycle plans, resulting in an increase of free rent a tonne. Improved contractor performance reduced our cost by 12 rand a ton based on lower overburden removal as well as operational efficiencies. The reduced overburden removal, lower fuel prices and improved efficiency also resulted in a decrease of fuel cost and blasting material of 3 rand a ton and 2 rand a ton respectively. Rehabilitation cost decreased by 7 rand a ton as I previously explained. Export logistic cost increased by 3 rand a ton due to normal inflation with the remainder attributable to local sales where the corresponding income is reflected in revenue. So our continued cost optimization continues to deliver results and will remain a key element in driving operational efficiencies, ensuring resources are utilized effectively, and that performance aligns with our strategic objectives. Let me now turn to our cash generation and capital allocation strategy. Our framework remains disciplined and consistent as we continue to target a net debt to EBITDA ratio below 1.5 times, excluding our project financing arrangements. This ensures balance sheet strength while providing flexibility to execute our strategic priorities. In 2025, we generated $11.1 billion in net cash, And this comprised $7.8 billion from our own owner-controlled operations and $3.3 billion in dividends we received from SCIOC. So in line with our framework, we allocated the capital across the business to support operations, growth, and shareholder returns. $2.3 billion was invested in sustaining our operations and support functions, ensuring asset reliability and operational continuity. $5.9 billion was returned to shareholders through dividends, including $3.3 billion passed through from SCIOC and $2.6 billion from our own managed operations. We invested $2.8 billion in expansion capital primarily for the ongoing work at the Lepelale solar plant and the Karierbos wind farm which reached financial close in the first quarter of last year. $1.2 billion was also allocated to share buybacks under the share repurchase program. Other allocations totaled $1.2 billion and include $403 million relating to lease term extensions across the group, $360 million in deposits that we placed within those providers, and $261 million relating to the translation of foreign currency bank accounts. $180 million was also incurred in development costs associated with the Career Boss project. As a result of these allocations, our closing net cash position at the end of December was R17.6 billion, excluding the energy project financing net debt of R6.9 billion. Looking at sustaining capital, let me first start off with the coal business. Our capital performance remained disciplined and aligned to the long-term sustainability of the business. Total capex remained well within guidance with spend aligned to the capital execution plan, avoiding both over and under investment. We remain confident in our capital discipline and are committed to deliver the right investments at the right time in line with our strategic priorities. Further guidance on 2026 will be provided by Ben in the outlook section. Looking at energy, for Lepelale solar, the cumulative investment since 2023 totals $1.6 billion as at the end of December. During 2025, we also invested $2.7 billion in the Karierbos wind farm, of which $2.4 billion relates to expansion capital following the project reaching financial close in the first quarter. On average, our energy projects typically follow a 75% project finance and 25% equity funding model. The project financing is utilized from the onset of the project with the equity injections back-ended towards the latter stage of the project. All project financing has limited recourse to Exaro's balance sheet and is hedged through interest rate swaps. As mentioned by Ben earlier, under our revised dividend policy, we have reduced our cover ratio from the previous 2.5 to 3.5 times range to 1.5 up to 2.5 times of adjusted group earnings as depicted on the right-hand side of this slide. Also pleased to announce, as Ben pointed out, the Board has resolved to pay a final dividend of R10 per share and this results in an overall group cover ratio of 1.8 times. This includes the pass-through of the SIOP dividend and reflects a cover of 1.8 times on Exaro's adjusted group earnings. We also concluded our share repurchase program earlier in the year with a total of 7.4 million shares repurchased and canceled at a total value of 1.2 billion. So with that also I just want to thank all the colleagues out there at the business units here at the Connection for making the results possible. Also my team, finance, investor relations, communication, Everybody involved, it was really a pleasure to make these sterling set of results possible. We'll hand back to Ben. Thank you.