Ppc Ltd

to present our FY26 results, marking the completion of the first two years of our Awaken the Giant turnaround strategy. Two years of progress and consistent execution, translated into strong financial results. Two years of exceptional performance and value creation. I would like to extend a warm welcome to our shareholders, investors, board members, employees, members of the media, and other stakeholders joining us today. Your support and confidence in PPC are critical as we advance to the next phase of our journey with enthusiasm and ambition. Brenda Berlin, our CFO and I will take you through the FY26 financial results. The key highlights of the year and the progress we have made in executing our strategy. After that, we will open the floor for questions. Please remember that you can submit the question throughout the presentation. It has been over two and a half years since I took over as CEO of PPC. At the time, PPC share price was 2.6 rand, and nobody believed that an improvement in PPC was possible unless there was a significant turn in the construction sector in South Africa. At the time, almost everyone, investors, analysts, and even within PPC team, believed that PPC internally was doing perfectly well and that all the problems were caused by only external factors. I still remember the beginning of my first roadshow when an analyst asked me, What I was going to do? Because previous management team was leaving the company in an outstanding condition. Or an investor telling me that I was telling them the same old story that they had heard many times before. It has been two and a half years of deep personal commitment to rebuild PBC. It has been a very demanding personal journey for all of us, but undeniably a successful one. Today, PPC has a position of strength because we confronted with absolute clarity and courage years of decline. From the beginning, I made a conscious choice to be direct, transparent, and unapologetic about the realities of our company and the cement industry. The conversations were uncomfortable. The diagnosis of PPC was not easily accepted, internally and externally. In fact, Some of the external misconceptions about the industry, our business model and potential still persist today. PPC was not underperforming because of the market only. It was underperforming because of how the business was run, how performance was measured, and how decisions were made. The change in PPC has not been driven by market tailwinds or chasing volumes. It has been driven by strategic clarity and relentless execution. It has been driven by putting the right people in the right roles, by resetting targets, by building reliable data. And by leveraging off the fundamentals of cement business. These are not empty slogans. It is visible in our results compounded over two years. We had to replace comfort with accountability. And excuses with executions. That is the real transformation of PPC. The outcome today is clear. PPC is a stronger business and we are building the platform for sustained performance and value creation. In this slide, the numbers speak for themselves. These are the results we are proud of. From the outset, we have communicated the metrics that reflect quality earnings and value creation. These were EBITDA, EBITDA margin, cash flow generation, and return on invested capital. Delivering on those metrics would ensure value creation for shareholders. Our performance has been driven by step change in all these metrics. EBITDA increased by 28% in FY25, and additionally 31% in FY26, to 2%. up from 1.2 billion in FY24. This is not a cyclical change. It is structural. Margins tell the same story, and it is even more remarkable. Evident margin expanded around 4 percentage points in the first year. And as a proof of the consistency of the turnaround, another 4 percentage points to 20.3% in the second year. This is a significant shift in margins, demonstrated improved competitiveness and operational leverage. Importantly, these results are consistent across our two core businesses, South Africa and Zimbabwe Cement, which jointly represent 99% of our business. Cash generation from the operation has made a significant step change too. Just two years ago, it was at 260 million runs, moved to over 1 billion runs in FY25, and a further increase to 1.3 billion in FY26. Once again, it talks to the quality of the earnings, with a significant improvement in our cash conversion rate. Critically, improvements in this matrix have translated into returns. ROIC, excluding the new RK3 plant, increased to 16.7%, up to from 6.5% in FY24. A clear signal that capital employed is value-accurated. The Awaken the Giant Terraron strategy is delivering, and there is more to come. If I had to define our journey in one word, it would be consistency. Consistency in our message. Consistency in our plan. Consistency in our execution. And most importantly, consistency in delivering results. First, rebuilding PPC requires resetting the fundamentals of the company. Organizational culture, accountability and performance standards. This was a decisive shift to restore credibility, internally and externally. Secondly, introducing a robust strategic turnaround plan to awaken the giant. A strategy grounded in the internal value unlock, clear metrics, and well-defined vision. It was designed to be executable and to reshape the trajectory of the business with a relentless focus on margins, cash, and returns from our core cement business. This plan was based on a deep knowledge of the market dynamics and competitive landscape changes. Thirdly, executing. We translated the strategy into actions. We reset target, strengthen leadership teams, and embedded data-driven decision-making. Fourthly, building the future. This has never been about short-term wins. Will never be. It has always been about creating a platform for sustainable growth. We are building a more capable and competitive organization to position ourselves to deliver growth and performance in the long term. In addition to a sharper commercial approach, better operational performance, and leaner cost base, we are also adding the most competitive asset to our portfolio. Moving forward, a new integrated plant in Zimbabwe. Today, PPC is structurally stronger. This trend is reflected in our financial performance. More importantly, it gives us confidence in the next growth phase of PPC. I would like to provide a clear recap on where we stand across the three pillars of our strategy. It matters because it only reflects the results we have delivered, the hard work behind them, and the difficult decisions we have taken, but also the significant value still ahead of us. The first pillar is the organizational culture reset. We took deliberate actions to entrench a culture of discipline and accountability, align performance to outcomes, and to appoint the right people in the right roles. A strong management team with deep business knowledge has been instrumental to the performance of the past two years and remains central to rebuilding of PPC. It is essential to have a fully committed team obsessed with detail, understanding cost, technology, logistics, and market dynamics at a granular level. This talks directly to value-driven decisions across pricing, capital expenditure, growth, and efficiency decisions. initiatives. The focus is always to enhance quality returns and strengthen the long-term competitive position of PPC. We have made progress, but we must do more. Quality decisions need to be made deeper in the organization, reducing reliance at the top and reinforcing accountability where it belongs. Moving now to the four key pillars of the Awakening the Giant turnaround. Progress is visible across all four areas. But as you can see, there is still room for improvement. Two areas have developed faster and continue to gain traction. The less is more and cost mindset has delivered substantial value and will compound additional gains going forward as we streamline processes, increase internal agility, and maintain strict control over non-core expenses. The operational turnaround is progressing, but unevenly. This was anticipated. It required upskilling people and implementing routines and controls that were not there previously. We have raised the performance standard through our plant performance improvement plan, establishing industry benchmark metrics, clear targets, and robust action plans. The supply chain area is more advanced and continues to drive significant results. I will provide more details in the business performance section, but the logistic cost reductions achieved has been remarkable and an important driver of the results of the past two years. As I mentioned before, the commercial side is progressing with our competitiveness evolution, alongside the improvement in distribution channels and sales mix. The third pillar will set PPC apart from competition and unlock the next phase of profitability and growth. The new West Arcade State of the Art plant, Arcade 3, remains the most significant project. We enter FY27 in the critical phase of the plant construction, keeping the project on time, on budget, and safely. The solar project in Zimbabwe is also a strategic priority, since it directly addresses both the cost and the availability of electricity. The partnership with Sinoma Overseas, initially focused on South Africa, has now been extended to Zimbabwe. This new cooperation agreement also expands the scope. focusing on improving current plants' performance and output, while laying the groundwork for a new integrated plant. In our optimization CAPEX pipeline, we are also performing an important upgrade of the cooler of our SK9 slurry plant, at this stage the newest in the country. This will enhance better performance and higher production at the lowest cash cost plant across PPC until RK3 runs. Lastly, we have additional strategic options under evaluation for future value creation. It is clear we have delivered meaningful progress, but it is equally clear is the scale of the opportunity ahead. And that is what creates a real sense of excitement and focus for the next phase. I will hand over to Brenda now to cover the financial review. After that, I will deal with the business performance review and the strategic update and outlook.

Thank you, Matthias, and good morning, ladies and gentlemen. Matthias has already touched on some of the key metrics, but as usual, I will start with re-emphasizing some of the key features on the Consolidated Group, followed by some more detail on the SN Botswana Group and then Zimbabwe. I will close on capital allocation, capital expenditure, and returns to shareholders. Moving on to the Consolidated Group key features. Group revenue increased by 3.9% to 10.3 billion rand. I will go into a little bit more detail later as to the split of the revenue across South Africa and Zimbabwe. The increase in trading profits of 50% to 1473 million is due to three things, being the increase in revenue, containing cost of sales increased to 2%, and a further reduction of 19% in admin and other operating expenditure. The above results are also reflected in the 45% increase in the pro forma HIPs. The pro forma adjustments relates to adding back a pre-tax amount of $148 million realized and unrealized foreign exchange losses on hedging instruments taken out to de-risk PPC's balance sheet from Rand weakness when constructing RK3. The group continued investing in this equipment and spent 413 million on maintenance topics during the year. This excludes spend on RK3, which I will deal with separately later. Free cash flow from operations, again, before spend on RK3, increased by 24% to 1,295 million. All of the above has enabled a dividend of 30.2 cents a share, or 469 million, which is a significant 72% increase on the prior year dividend. I will also come back to this later on as to how it is built up. This slide sets out the key line items on a consolidated group income statement. I will cover both the South African Botswana group and Zimbabwe in a bit at the EBITDA level. The absolute increase in EBITDA of 486 million is reflected in the increase in trading profit, an increase of 491 million. Both EBITDA and trading profit include 139 million Rand profit, on the sale of a non-core property by Cement SA. Moving on to some relevant items below the trading profit line. The fair value in foreign exchange movements include the 148 million I referred to of forex losses. 78 million of this was unrealised at year end. Translation of foreign currency denominated monetary items for PPC Zimbabwe and PPC Botswana contributed a 56 million rand loss. there was a small specific assets impairment reversal on one of the aggregate plants that had been impaired in FY23. To remind you, the $181 million impairment last year was due to the cessation of mining activities at Duhook being replaced by better quality limestone from Rubiak. Net finance costs reduced from $106 million to $82 million due to a full year of better interest rates on facilities that we restructured in September 2004 and lower die-bar rates during the current year. The effective tax rate is 31%, which is slightly below our usual guidance of 33%. The reason it is above the statutory rate is due to withholding taxes paid on dividends received from Zimbabwe and certain non-deductible costs incurred in PPC Limited. Closing the slide with HEPs, we have adjusted the HEPs for the forex losses on the RK3 hedges, as these are not part of normal earnings, and gains or losses will only realize for another year. This is the final slide on the consolidated group. As usual, it depicts the contribution to both revenue and EBITDA by the South Africa Botswana Group and PPC Zimbabwe respectively. The numbers inside the wheel depict the current share percentages with the prior year shown on the outside. As can be seen, the relative contributions to both revenue and EBITDA have stabilised over the last two years with the South African entities contributing consistently some 65% of group revenue and some 45% of group EBITDA. I will move on now to give an overview of the South African Botswana Group followed by Zimbabwe. The South African Botswana Group is an aggregation of three components with the main driver being SA and Botswana Cement. The materials businesses comprise ready mix, ash and aggregates with PPC limited and other being essentially a listed company overhead. Matthias will go deeper in the business review, so I will just touch on some key features on this slide. Dealing with the South African Botswana Group stands first across all metrics. Revenue increased by $82 billion, or 1.4%. The focus remained on contribution margins and cost efficiencies, resulting in a very sound 42.9% EBITDA growth. EBITDA includes the $139 million on profit on sale of the non-core assets, And excluding this impact, EBITDA would have increased by 26.3% and the EBITDA margin would have increased by 3.5 percentage points to 17.3%. The material segment shows a significant but not material decline in EBITDA. Dealing with PPC limits and other, the focus remained on stringent cost control which reduced the costs associated with the segment by 24% in the current year. I will deal with the cash flow bridge for the SA and BOTS group shortly, but overall, the SA and Botswana group remains in a net cash position for a second year in a row. RK3 expenditure is in various places in the financials, and this slide attempts to bring together the overall picture for you. The total expenditure for the year is $108.4 million. Before dealing with the location of the expenditure, I'd like to touch on the hedging. As we have mentioned several times, PPC has hedged the entire dollar portion of the total cost of $3.1 billion. The consequence is that regardless of round strength or weakness, the total spend will be $3.1 billion. However, some will be in capex, or the asset, and the balance, positive or negative, will be in retained earnings. In the current year, in the environment of round strength, this started to happen. And $148 million, being realized and unrealized for instance, foreign exchange losses in the year are in the income statement, with the balance of the 1.084 on the balance sheet as follows. 712 million sits in capex, or assets under construction, and 224 million sits in trade and other receivables. Thank you, Paula. Dealing now with the SA and Botswana group cash flow. What is shown in the slide is the waterfall for the current period, up to, in the past instance, net cash generated by the core business of R446 million. Dealing with this section first, what you can see is strong operating cash flow before working capital changes of R1050 million, a small working capital release of R55 million, bearing in mind the R410 billion reduction in working capital for the year ended. March 2025. Taxes, CAPEX and other core operational business activities are then depicted to arrive at the net cash generated. What is shown after net cash generated are non-operational items, with the material items being essentially the proceeds received for the sale of the non-core property of 140 million, the investment in RK3 of 709, which I dealt with earlier. This excludes unrealised forex losses and the goods in transit that have not yet been paid for. Evidence received from PPC Zimbabwe of $595 million. This is PPC share of the $36 million paid in the current period. Distributions to shareholders in the current period of $274 million, being the $0.176 per share declared in respect of the FY25 year. Overall cash increased by $200 million and debt increased by $48 million, which was a drawdown on the new trade facility for RK3. Set out on this slide are the key metrics for Zimbabwe. We keep this slide in US dollars so that you can see the numbers in PPC, Zimbabwe's functional currency. The awakening of the giant turnaround gained traction in the current year with a 4% increase in earned income production and cost efficiencies. Volumes sold were a tale of two halves, with H1 up 25% and H2 up 12% due to the gearbox breakdown. Nonetheless, EBITDA was up by 19.1% and margin virtually flat at 27%. Cash holdings were at 8.1 million at the end of the year, of which 99% is in hard currencies, and this is after paying record dividends during the year of $36 million. Moving on to capital allocation now. On the left-hand side of the slide, you can see the actual capital spend for the group over the last three years. the forecast spend for FY27 is also shown. The reduction of the total group spend in FY26 to 413 million from previously guided 450 million is all due to strict capital allocation in South Africa. The cash spend on RK3 commenced and is shown in the black bars. The previous forecast spend in FY26 was estimated at 920 million, and as you can see, this reduced to 660, mainly due to timing of payments for goods already in transit that were not yet due for payment. The ROIC calculation remains consistent and was positively assisted by the 31% increase in EBITDA. In the current year, ROIC increased from 10.6% to 16.7%, a healthy 6.1 percentage points. This calculation excluded the $1084 million expenditure on RK3. This will remain the case for one more year, and then the calculation will include the full assets of RK3 and enhanced EBITDA from this project. RoEQ remains a key focus area and all expansion capital has to meet stringent criteria. Thank you. Thank you, Paolo. Oh, thank you, sir. Lastly, before I close, I'd like to deal with PPC Group's capital allocation model for dividends to shareholders and explain the buildup of the current dividend declared in respect of FY26. Firstly, for the purposes of dividends, we manage capital in two distinct pillars, being the SA and Botswana Group and Zimbabwe as separate entities. For the SA and Botswana Group, we determine what the pot of available cash is for dividends. How we do this is to determine what cash is available from either cash holdings or debt facility headroom, such that the utilisation of the cash and or drawdown of the debt would lead our net debt to EBITDA, in a range of at or below 1.3 to 1.5 times on a 12-month forward-looking basis. Importantly, the cash we look at here excludes dividends received from Zimbabwe. Expansion capex that meets our capital allocation criteria is included in the forward-looking cash outflows. The Board has approved a dividend from the SA and Bots Group of 2.3 cents per share of 36 million Rand. This is a 20% increase on the dividend declared in respect of FY25. This leaves our estimated 12-month forward-looking gearing ratio slightly below the bottom end of the range, but is prudent given the peak funding associated with RK3 in FY27. Regarding Zimbabwe, the distribution policy is to flow through to PPC shareholders and amount up to the gross dividend received by PPC from PPC Zimbabwe. In this regard, the total dividend received from PPC Zimbabwe was 595 million. However, we have excluded 105 million from this, as this was the dividend specifically to enable PPC to cash back a guarantee for PPC Zimbabwe's solar project. The adjusted amount is therefore 490 million. The 433 million dividend incurred amounts to almost 90% of the $490 million, with 10% retained by the S&B Group for prudence. This results in a 77.5% increase in the dividend from Zimbabwe compared to FY25. Combined, overall, the total dividend of $469 million is 72% above the FY25 dividend declared. Thank you very much, and I'll now hand you back to Matthias for the business review.

Thank you, Brenda. I want to take this moment to recognize and personally thank Brenda. This is the last time we are presented together, and I have appreciated every part of it. The discussion preparing the material, the valuable English grammar and pronunciation corrections, and your vast experience and deep insight into the listed environment in South Africa. Brenda, your impact on PPC has been profound. You inherited a devastated finance function. Your leadership and commitment have helped to shape the business we see today. On behalf of the executive team, the entire PPC team, but particularly for me. Thank you. Competitiveness is our obsession. Our understanding of the cement business and its evolving dynamics bring us back to a small number of fundamentals. At the center of all of them is one principle. Only competitive companies win. It is embedded in our daily decision. And aligning the organization behind it has been a delivery leadership priority. Today we are a different PPC competing in the market. structurally stronger. This change started with leadership. Organizational culture, governance and control changes followed. We are now managing PPC with an understanding of our cost base and clarity on what drives value and what does not. Revenue growth And buying market share in a muted market does not create value. Actually, this destroys it. As we have seen examples in the South African cement industry again and again. Improving our operational leverage, productivity, and quality sales does create value. This is why we have relentless focus on contribution margin, and we will continue doing so. It is important to maintain strict capital allocation while driving value-accreted projects. These investments vary in scale and impact and are fully aligned to the outcome, strengthen our competitive position, and create value for shareholders. Let me be clear. We have made good progress, but the transition in the next two to three years is going to be equally demanding and important. It will require ongoing commitment and deep expertise from the executive team. The giant is awake. is not longer reacting to its environment, but actively shaping its outcomes with stronger margins, better revenues, and a clear path ahead. Let me now take you into the performance of each of our business segments. South African cement delivers strong step-up in profitability. for the second consecutive year. This is remarkable, taking into consideration a largely unchanged demand context and irrational competitors' behavior. The numbers on this slide are impactful. The same demand in the market, the same asset, imports at the highest level ever, yet a fundamentally different outcome, an EBITDA expansion of 51% over two years under the Awaken, the giant implementation. As you can see, revenue growth was not the driver. It has increased around 3% over the period to 6.3 billion rands. reflecting the shift toward value-accreted sales. In FY26, volumes grew by 1.3%, but on a two-year view, total sales volumes are broadly flat. But here comes the important part. While total revenue might look less the same, the quality of those sales has improved materially. better product mix and distribution channels, and improved regional and sector portfolios. This improvement was leveraged by the logistic cost, with a significant reduction of our distribution expenses of over 24% over two years. All of this is driving the contribution margin growth and translating into bottom-line growth. Our journey is on quality earnings and margin expansion. Volume growth will come, but it will not be delivered through competitiveness, but it will be delivered through competitiveness and operational leverage, not through margin compromise. Over the past two years, EBITDA has grown by 55%. This was not a single jump that can be attributed to one factor, but sustained and consistent execution. EBITDA margin was at 11.5% in FY24. In FY25, margin grew by 2.1% to 13.6%. And this year, it has further expanded by 3.3 percentage points to 16.9, a total growth of 4.5 percentage points in two years. Importantly, these figures exclude the non-core property disposal, underscoring the robustness of the operational improvement achieved in the period. As I mentioned, This performance is entirely driven by internal actions, not the external environment. Our operation and discipline have driven a 6% reduction in cash cost per ton over the period, reflecting structural improvements in logistics, operations, and overhead costs. We executed a disciplined commercial strategy, prioritizing margin over volume, and optimizing route to market, especially in an environment of short-term, self-destructive tactics from some competitors. This is supported by real, tangible operational progress, including higher production of clinking and cement in our integrated plants, lower clinking incorporation, and an additional 2% point improving in OEEs. on top of the increase achieved in FY25. Importantly, looking at world-class benchmarks that one day we could become, we still have significant room to improve. Critically, our cold South African cement business moved from lethargic cash generation and even cash-consuming business not too long ago into a cash generation business for the second year in a row. Cash generations remain strong, but slightly lower than FY25, mainly due to temporarily higher stocks at the end of FY26, ahead of the planned maintenance shutdown of Dualbon and the Slurry in Q1 2027. The focus of working capital has been a key element to top up the structurally higher results and therefore deliver stronger cash conversions. The outcome is clear. Two years of materially improved results. South Africa cement has moved from a struggling underperforming business to a growth one with expanding margins. These positions of Africa cement to convert future volume recovery directly into earnings growth. The material business is very small in the context of the group. You can see in the left chart, it represents less than 1% of total EBITDA generation. That said, our focus has been clear and consistent. ensure the business is cash-positive, disciplined, and well-managed. As part of our strict pricing discipline, revenue was negatively impacted with softer volumes, especially in ash and ready-mix units. EBITDA in FY26 reached $11 million, with the segment presented a neutral profitability. The material business is well controlled with upside ahead, but due to its size won't change materially our results in the future. Zimbabwe delivered a remarkable performance in FY26, building on the strong performance achieved in FY25. It reinforced PPC Zimbabwe positioned as a high-quality cash-generated growth platform within the group. Revenue increased by 16%, an expansion marked by market growth. We have captured these momentos with sales volume growth, demonstrating our improved commercial reach to market. After a straight career in FY25, EBITDA increased to a new high of $56 million in FY26. EBITDA margins also had a step change from 20% in FY24 to a robust level at around 27% currently. FY26 margins were flattish. compared to FY25 due to the first-half impact of a plant-longer maintenance stoppage at our clinker plant. In H2, the evident margin recovered to a level above 30%, even with the temporary restriction caused by the Bulaguayo factory gearbox failure. This performance reflects clear traction from the turnaround actions. Increased clinker production by 4% year-on-year. Each additional ton of clinker produced is a leap in terms of profitability for PPC Zimbabwe. Launched a new product with higher extensions, reducing clinker incorporation by around 4% each point. which effectively increase our local cement capacity. Execute stronger route-to-market actions, including an expansion in our collect model, allowing us to capture better the strong market demand. Gain traction on efficiency and cost measures. What also stands out in the cash generation level Zimbabwe generated strong cash inflows, enabled a significant increase in dividends to $36 million in FY26, highlighting both the quality of earnings and balance sheet strength. The demand for cement remains high, and PPC is uniquely positioned to supply into this growing market. With our premium brand, national footprint, and full range of products, we are able to leverage and fully capture this growth into results. Zimbabwe continues to be a powerful engine of value within the group. What is particularly encouraging is that this performance is not reaching a ceiling. It is a building platform. That is why we believe in a phase of optimization and improvement of the current asset, while we prepare for a new phase of growth, a new integrated plant. Safety and decarbonization are much more than compliance for us. They define the sustainability of our business. On safety, the progress we make was overshadowed by a tragic fatality at our Hercules plant involving a contractor working at high. Despite the right equipment and risk assessment procedure being in place, a highly experienced, skilled, and certified operator neglected to attach himself to the lifeline. This is a sovereign reminder. Systems alone do not prevent accidents. Behaviors do. Our commitment is unconditionally to a safety culture of zero harm. Achieving this requires a deeply embedded safety culture, where every individual takes ownership every day, without exception. We are strengthening leadership accountability, supervision, and driving consistent behavior on the grounds. Safety comes from a safety-conscious mindset and discipline. In our decarbonization process, we are making tangible process across energy efficiency improvements, alternative fuels, and lower carbon products. This paves the way to reduce CO2 emissions while we strengthening competitiveness. On a light-for-light comparison, in terms of emission per ton of cement, we have registered a tangible reduction of emission in FY26. Both safety and decarbonization are journey. This is our commitment to build a business that is safer, more environmentally sustainable, and structurally stronger for the future. The journey has just begun. If we step back, the change is clear. From an EBITDA of 1.7 million runs in FY17, the PPC business on a like-for-like basis faced a sustained period of decline, reaching a low of just 900 million runs EBITDA in FY23. To awaken the giant and run, we fundamentally reset this trajectory. What we are now seeing is not a cyclical rebound, like the short post-COVID period. It is a structural recovery driven by competitiveness, cost discipline, and focused execution. The result is a step-changing performance. with EBITDA more than doubling to exceed 2.1 billion in FY26, surpassing prior peaks, and importantly, doing so with higher quality earnings and a stronger cash generation. Critically, this is not an end point. We have rebuilt the foundations, re-established operating leverage, and invested in value of creative projects that position the group for sustained value creation. The momentum is real. The trajectory is positive. And there is still significant upside ahead. Moving to the strategic update and outlook section. Creating shareholder value has been at the core of our turnaround. The results are clearly visible. Over the past two years, PPC has delivered a significant re-rating in the market. Our share price appreciation reflects the results achieved. Our market capitalization has increased meaningfully from around 4 billion rand to over 10 billion run over the last two years, reinforcing PPC position as a credible value creator in the sector. Importantly, this re-rating is not driven by external factors, ones of actions or short-term strategy. It is underpinned by a consistent improvement in the metrics that matter most We have delivered consistent growth in HEPS, reflecting both operating leverage and quality of earning. We have reinstated and grown dividends per share, demonstrated confidence in the cash generation of our core business, and a clear commitment to returning value to shareholders. we have also materially improved our ROIC, evidencing better capital allocation and more efficient use of our balance sheet. Taken together, these outcomes highlight a step change in the quality of our earnings, more cash generality, and most importantly, with room to grow. The strategic project with the new Western Cape plant as the main highlight and the compound effect of the turnaround will deliver a new step change in results and value in the near future. We believe there is a clear opportunity. Despite the progress as mentioned in our Capital Markets Day, PPC continues to trade at the valuation multiple below comparable players. a clear runaway for further upside. I will share again my confidence in our strategic plan and process. The early delivery in FY25 combined with compound momentum in FY26 has only strengthened that confidence. As we look ahead to FY27, our message remains unchanged. We started this year with a strong foundation and we are determined to build on that success. The Awaken the Giant strategy remains solid. In our plan, FY27 is a pivotal consolidation year. Consolidation of the turnaround process and capitalizing on the effect of actions already implemented, while preparing for the next step change in FY28. We are confident for FY27, but our focus will be on delivering and executing the plans for FY28, when there will be the next marked change for PPCs. The year started with global instability, expanding effects across the cost chain. This impact is seen in our cost structure and in our distribution costs, and to some extent in the demand behavior in the markets. It is an exciting year for South African operations. It is the year in which we will complete the construction of a new plant. Positioned in PPC with the two most advanced plants in the country, RK3 and SK9 in Slurry. Complemented by a modern and competitive plant in the oil bond. The project remains on schedule and within the approved budget. Importantly, our project governance, cost control and reporting structures remain robust and effective. Overall, the RK3 project is progressing and we remain confident in our ability to deliver this critical investment on time and within budget. In South Africa, we expect FY27 to be a year of consolidation, underpinned by broadly unchanged market conditions. As I mentioned earlier, The high inventories at the FY26 ERM were planned for use in the annual maintenance shutdowns at two of our main integrated plans, Dolbon and Slurry. These, combined with the worldwide cost inflation pressure, may temporarily impact H1 FY27 results, but our confidence in the full year results remains unchanged. The industry has been having productive engagement with the government lately about key aspects of the sector, namely the damp imports of clinker and cement into South Africa, the carbon tax equalization on imported cement and clinker, and the enforcement of the cement quality standards in the country. These are critical topics for the industry and jobs in South Africa. We believe that the moment for appropriate regulations to create a fair competitive landscape has finally come. We expect that some of the measures will take place in a short period of time. Leveling the playing field for local production with imports and blenders. This is a top priority to our business plan. In Zimbabwe, we expect to continue the previous two years trajectory. Also, an important year to drive forward with our partner the installation of the solar project. The 20 megawatt solar plant with battery backup at our Colim bomb plant will have significant impact on our cost base. This project will not only improve our margin and strengthen our energy security, but also demonstrate our commitment to environmentally sustainable operation. Future looks excited. This slide was first presented in our Capital Markets Day in March 2025. The plan remains firmly in place. But today, we stand one year further ahead in our execution, and importantly, ahead of our delivery curve. The story is even more compelling now. We set out a clear, ambitious plan, and we are delivering it at pace. Step by step, we have revealed PPC foundations, and the impact is visible in a materially stronger evidence. expanding margins, rising ROID, and sustained cash generation. The Awaken the Giant strategy continues to guide us. We are not just progressing. We are ahead. Looking forward, our trajectory remains clear. We will continue to consolidate these gains through FY27. strengthening the platform for the next step change in FY28 as RK3 comes online. Our ambition does not stop with these targets. We will continue focus on executing with consistency. As our strategic project takes shape, as tangible drivers of a more efficient and competitive PPC, we are increasingly confident in our ability to outperform our own plan. We believe PPC is uniquely positioned to deliver sustainable, high-quality shareholder returns. Starting with our leading position across our core markets, PPC holds leading market positions in South Africa, Botswana, and Zimbabwe. This enables scale advantages, powerful brand equity, and established commercial relationships across our market. We operate a modern, increasingly efficient asset base. Over the last years, we have started a plant performance improvement plan, to increase the plant's efficiency, reliability, and performance. At the same time, we are investing decisively for the future. Specifically, the new integrated plant in the Western Cape will strengthen our cost position and enhance long-term competitiveness. Down the road, a new integrated plant is involved. We are strategically positioned to capture the future demand. Our markets are underpinned by fundamental drivers, including population growth, urbanization, and infrastructure gaps. PPC is not only well-placed to capture the demand recovery, but also to extract maximum value from any market upturn. Over the past two years, PPC has demonstrated consistent EBITDA and EBITDA margin expansion, improving returns on capital and shareholders' value. This performance reflects the trajectory of the thermal run strategy, delivering above-peer growth in key financial metrics. Critically, this growth is underpinned by strong financial positions, We have a robust balance sheet, low leverage, and consistent cash generation. This gives us flexibility to invest in high return opportunities, maintain capital allocation discipline, and distribute dividends. Lastly, an experienced and proven management team. A company with strong governance and a clear long-term strategic vision. Execution matters, and PPC has the team to deliver. In summary, compelling investment case with a clear path to continue delivering shareholder value. Over the past two years, we have demonstrated through actions and results that the right team with the right strategies Executing with discipline and focus delivers tangible and clear outcomes. We have set ourselves to unlock the internal value of PPC. Without any changes in the macro environment, the changes reflect structural improvements that are making our business fundamentally more competitive. We know better. we now move forward from a position of strength. What we have delivered today is only the beginning. Internal opportunities for further value creation remain significant. Our strategic initiatives are set to deliver a further step change in performance. At the same time, the competitive shifts we anticipate in the market are expected to be positive. With a healthy balance sheet, disciplined capital allocation, and high return projects such as RK3 ahead of us, the pathway to sustain earnings growth, margin expansion, and improved returns is clear. The momentum is real, and we are all positioned to capture the meaningful upside that lies ahead. To our PPC team, we can be proud of our results. Together, we have reignited the pride and the belief in what we can achieve. We are re-establishing PPC as an iconic contributor to the growth of South Africa, Zimbabwe, and Botswana. Let us continue building on the success achieved today. To our investors and shareholders, Thank you for being part of PPC Awakening the Giant journey. PPC always stood for quality cement you can trust. Today, it also stands for quality of consistent results you can trust. The turnaround is real, and we are ready for the next phase. Thank you so much. We are moving now to the Q&A session.

Good morning, everyone.

This is Debbie Miller. I'm responsible for investor relations for PPC. If you want to ask a question, please type it up in the message section. I'm going to start from the top. The first question from Rowan Goller from Cronux Research. Is there still a market premium for the PPC SureBuild brand, and are you holding market share for this product? Thanks, Matthias. The next question is from Heinz Schenk, Network 24. Hi, Matthias and co. Congratulations on some heartening and robust results. I was hoping perhaps for some color on the realities of the local market, please. And he's broken it down into three parts. I'll read all three, and then you can take them. I think they are sort of regulation and market-related. You've mentioned that imported still remains a threat to competitiveness in the SA market. Is PPC of the opinion that some regulatory intervention is needed, or do you believe the focus on higher quality sales might eventually alleviate such pressures? Let's stop there and do that first, and then I'll deal with the second question.

Yes, let's clarify the point, or let's try to give some call. I mean, of course we believe that imported cement is a problem for the South African cement market. Not so much for PPC. but quite a lot for some of our competitors. So indirectly for us as well. As mentioned in the question, because we have some high-quality products, imported cement does not compete against us in that sector. But it's an extremely important topic for South Africa. Since last year, we have seen an increase in imported cement coming from Vietnam. For almost 10 years, South Africa imported cement coming from Vietnam was around 1 million tons of cement. In the past year, that jumped to 1.5 million tons of cement. Same thing is happening with the cement imported from Mozambique. From being a very small amount of cement coming from West China plant in the border with South Africa at around, I don't know, let's say around 50,000 tons of cement. Now we have seen an increase to 300,000 tons of cement coming from Mozambique, which I would say that represents a big risk for the country, not only for the cement industry. As you all know, Afrisam has been sold to West China. West China is in Chinese term, a small Chinese regional company, in Chinese terms, highly geared, that has supported their expansion in Africa through debt. Namely, recently, where China issued two bonds of around $700 million at an interest rate at around 10% per year. And West China has bought AFRISAM with a credit facility from Standard Bank. So AFRISAM has very old plans, an average of about 45 years old. So it's not very difficult to see that most probably the business plan from West China running AFRISAM, taking into consideration the weak financial position West China is, So it's quite difficult that we can believe that they are going to make a big investment in South Africa. I don't know, but I'm trying to interpret the situation. So the most probable scenario is that West China is going to start to move production from the current AfriSan plant in South Africa to Mozambique. We have made this point during the COMP-COM process to the acquisition of West China of AfriSan, but the CONCOM didn't pay much attention to our comment. We have been also engaging with the government lately and highlighting this problem that we would see. I mean, respectfully, I think that South Africa will have to take a decision in terms of if really South African jobs matter or all the incentives in place are going to move the industry to produce in neighboring countries and to bring cement to South Africa because clearly it's cheaper to produce cement in Mozambique that you don't pay the carbon tax, you don't pay South African taxes, you don't pay South African labor cost, you don't pay South Africa energy cost, logistics cost, et cetera. So imported cement is a problem. There is no level playfield competition with local production. And that is a problem. I don't have any problem to compete against any competitor. But I would like to have the same rules to compete. So imported cement coming from Vietnam is a big problem because it has increased to 1.5 million tons. But for me, a big, big concern is what is happening in Mozambique. I mean, if this trend continues again, All the incentives from government will be to push the industry to produce and to invest in the neighbouring countries and to bring the cement to South Africa.

Thanks, Matthias. Still with Heinz from NETVAP24. Related to this, have you and the industry seen any improvement in the circulation of substandard cement in the SA construction industry, or does it remain a problem?

It remains a big problem. We haven't seen any improvement. Basically, the substandard cement is coming from some blenders, not all the blenders, that reduce the content of the cement produced to a level that's not compliant with regulation and make it very dangerous for anyone building with that cement. So this is another huge, huge concern we have, and also we have expressed our concern to government.

Thank you. The third part of his question, Zimbabwe seems like a real growth platform, as mentioned. Could you perhaps provide color on what type of projects in the region is driving this?

I mean, different kinds of infrastructure is happening in Zimbabwe, from housing to public infrastructure to roads. We are seeing a consistent growth in the market from all segments. I couldn't point out one in particular. All of them are growing.

Okay, thank you. On to the next question from Warren Riley at Batalio Capital. What impact is higher diesel pricing having on the group post-March year end? Are you able to pass through the majority of the logistics costs, or are you expecting a negative margin impact?

Paolo, could you take that? But I would say that, yeah, we have passed part of that cost, and part we will have to absorb it. But Paolo can answer it easily.

Thank you for the question. Yes, we are seeing an impact in our logistic and distribution costs and some upstream cost inflation in some several input costs. We have passed a pricing flow through in terms of the most of the distribution costs. And regarding the cost inflation related to other input costs, we are working on optimizing our efficiency and balance that increase.

Thank you. There's a second part to the question from Warren. You referred to potential new integrated plant in Zimbabwe. Can you explain the logic behind this and the potential capital requirements?

First of all, I mean, as we mentioned in the presentation, we are not here for the short term. Our strategy includes short-term gains, as you have seen significant ones in the first two years of the turnaround, but also we are planning and building for the future. Again, as we have mentioned, Zimbabwe is a very important operation for us, business for us, and we see a country that is consistently growing. PPC plays a leadership position there. And in cement, you can't just think for the next two or three years. You need to think for the next 20 years. Like happened with the RK3 project in the West Cape. If you don't invest in advance of the demand and growth in the country, you put at risk the future of the company. And we are not going to do that. So of course, you know, we're starting the process. We have aligned with the board. We are starting to speak to Sonoma about the cost of the project. We are looking at where the new plant is going to be. Brenda and I and the whole team, we are working on looking at different finance options that we can look at. And, of course, we are going to follow our capital allocation process. But above all, and respectfully and humbly, I think that no one at this point would believe that this management team is going to do a crazy stuff like happened in PPC in the past. So I'm convinced we are doing the right thing, and I think that I'm very optimistic that in the middle term we are going to land with a very good project to build a new integrated plant in Zimbabwe.

Thank you. Nick De Fosse has got two questions here. But, Matthias, I think you've covered them all. Maybe I'll read them out. If you want to expand on anything, then you're very welcome. I think he's asked, Nick's from Centaur Asset Management. He asked, please can you comment on the review of your Zimbabwe operations by Sonoma and what this could look like? And I know we've spoken about the integrated plant.

I don't know if you want to... No, but I mean, no, it's an important one because, I mean, there are three aspects of our cooperation agreement with Sonoma and Zimbabwe. First of all, what is already in place, we are upscaling our skills in our Zimbabwean plants. And that is, you know, what in fact is happening is that we have Zinoma engineers there. They are helping to upscale the skill of the plants and improve the processes and the performance. Then we have already some ongoing projects. to invest in our current facilities in Zimbabwe to improve production and reduce cost in the short term. And in the middle long term, we are already working with Sinoma on defining a sustainable plan to build a new integrated plan in Zimbabwe.

You've covered this quite comprehensively, but once again, I'm going to just read the question if there's anything else you want to... Can you elaborate more? on the progress regarding safeguards on the importation of cement, which I know you covered quite a bit.

Yeah, but I mean, what I can tell you now is that I am cautiously optimistic. I think that the past two months we have had a very productive conversation with government. And I think that I always thought that, you know, partnership between public sector and private sector is extremely important for the progress of the country. So... I would rather prefer not to extend, but I'm cautiously optimistic that finally we have having productive conversation with the government for the benefit of the country and the industry.

Onto a question from Marco Russ from Optimum Investment Group. The underlying margin is 18.9%, obviously stripping out the one of non-core assets, et cetera. How much of the remaining gap to the sustainably 20% plus margin target can still be closed through the self-help before RK3? And what are the biggest levers to bridge that gap in FY27?

Well, I will answer you from a personal point of view. I'm not in a very good mood lately because I think that we continue committing unforced errors internally. Our result has been fantastic but could have been better. So I strongly believe that there is still a lot of opportunities ahead to improve our results and particularly our . So I think that there is still room to improve those financial indicators, even without artistry run.

Thank you. I don't think there are any more questions. Thanks very much.

Okay. Thank you very much.