REVIEWED INTERIM FINANCIAL RESULTS 2013 for the six-month period ended 30 June 2013
Overview # LTIFR* at 0,21 against target of 0,15 Revenue from coal R6,1 billion down 1% HEPS of 712 cents up 198% Coal HEPS contribution to group 225 cents up 58% Core net operating profit R1,2 billion up 254% Coal produced 18,8Mt ** down 9% Interim dividend of 235 cents per share up 57% on 2012 final dividend # Compared to 2H12 * Lost time injury frequency rate expressed per 200 000 man hours worked ** Excluding buy-ins 2
Human capital: safety and health Fatalities 1H13 fatality free LTIFR Safety LTIFR of 0,21 7 business units LTI * free Continued focus on safety improvement through audits, training and workshops Target: 0,15 Health Internal tuberculosis audits at all business units HIV/AIDS disclosure initiative Enrolment treatment up by 24% Reportable fatalities Accepted occupational disease cases Tuberculosis Pneumoconiosis Noise induced hearing loss 2H12 1H13 * Lost time injury 3
Human capital: leadership and people Transformation Achieved Mining Charter target in four of the six HDSA * categories HDSA statistics (%) Training interventions R68 million for 1H13 Mayoko in-country skills development Youth development A total of 735 young people have been trained of which 81% were HDSAs Actual Target HDSA youth training (n=594) Mpower R4 million dividends paid in April 2013 7 198 employees benefitted from the payout * Historically disadvantaged South Africans ** Professionals in training 4
Natural capital Biodiversity Wetland plans and ongoing rehabilitation at all business units Compliance Environmental authorisations for all operations in place* Integrated Water Use Licence for Arnot and NBC in process** Carbon and water Group target to reduce potable water consumption by 5% per annum * In terms of inter alia the Mineral and Petroleum Resources Development Act, National Water Act, National Environmental Management Act ** Operate under water use permits granted in terms of old Water Act 5
Social capital Social and labour plans Transform and leave a legacy in communities Implement our commitments Community development Finalised local economic development project plans to the value of R300m for 2013-2017 Housing 740 housing units at GMEP* completed at R590 million * Grootegeluk Medupi Expansion Project 6
Portfolio improvement: coal Strategy Improve asset portfolio Realise continuous improvement potential Increase productivity and efficiency while achieving targets Developments GMEP 96% complete Agreement in place to bridge period of Medupi delay GG backfill phase 1 on track for 3Q13 Moranbah South environmental impact and authorisation expected in 2H14 Thabametsi mine to supply 3,8Mtpa to 600MW IPP base load power station Contemplating cessation of NCC production Expected project timeline 2H13 Char 2 BFS* GG backfill phase 1 completion Market coke BFS Thabametsi phase 1 PFS # Potential cessation of NCC production 2014 Belfast BFS GMEP ramp-up Thabametsi phase 1 BFS Tshikondeni closure 2015 Belfast construction Moranbah South BFS Thabametsi small scale mining Semi coke/char 2 construction dependent on market conditions Inyanda closure Thabametsi phase 2 PFS 2016 Char 2 commissioning Moranbah South construction * Bankable feasibility study # Pre-feasibility study 7
Portfolio improvement: ferrous Strategy Develop and operate integrated ferrous business Review of the alloys business and beneficiation through application of UHDMS * Developments Mayoko 730Mt resource confirmed through additional exploration Continued discussion and consultation with RoC ** government to finalise Mining Convention Project delay as a result of Mining Convention Mayoko expected project timeline 1H14 Mining convention approval 2H14 Ramp-up to 30ktpm 2015 Ramp up to 2Mtpa Phase 2 BFS 2016 Phase 2 construction 2019 Ramp up to 10Mt AlloyStream TM Letaba demonstration facility re-started to generate input for commercial feasibility study FerroAlloys Expansion options continuously assessed subject to future demand * Ultra high dense medium separation ** Republic of Congo 8
Portfolio improvement: titanium dioxide Strategy Completed the first year of the three year standstill agreement Spending time understanding the business and its market Decision to potentially increase shareholding in Tronox still under review whilst we continue to consider our options within current and future markets for pigment Tronox shareholding 15 June 2012 39,20% 30 June 2012 39,20% 31 December 2012 44,65% 30 June 2013 44,42% Developments Dilution of shareholding due to warrants and options exercised Continues to be equity-accounted 9
Portfolio improvement: energy Strategy Explore and integrate opportunities in energy markets with a focus on cleaner energy Decrease carbon footprint Developments Cennergi Financial closure on Amakhala Emoyeni and the Tsitsikamma wind farms Commissioning 2016 Expected project timeline 2H13 Financial close on 2 wind projects Linc Energy development 2014-16 Cennergi project construction and commissioning Waterberg GDF SUEZ selected as partner for 600MW IPP* Underground coal gasification Partnered with Linc Energy to develop energy solutions in Sub-Saharan Africa Joint concept study in progress * Independent Power Producer 10
Operational and financial performance 11
Main features Financial metrics Revenue of R6,2 billion Core NOP # at R1,2 billion Equity income of R2 billion Owner-controlled operations Continued volatility in commodity prices and exchange rates Three weeks of industrial action decreased production by 2,2Mt Non-controlled operations Sishen Iron Ore Company Dividend received of R914 million Tronox Post-tax equity loss of R168 million Dividend received of R243 million Black Mountain Post-tax equity loss of R81 million Dividend received of R59 million Revenue (Rb) HEPS* (cps)** Dividend (cps) Interim dividend 235 cents per share 3 times cover*** # Net operating profit * Headline earnings per share ** Cents per share *** Excluding non-core items 12
Financial overview: IFRS* R million 1H13 2H12 % Change 1H13 vs 2H12 1H12 % Change 1H13 vs 1H12 Revenue 6 245 6 366 (2) 9 756 (36) Operating expenses (5 328) (5 966) 11 (6 636) 20 Profit/(loss) on sale of subsidiaries/non-core assets (84) 4 121 Net operating profit 917 316 190 7 241 (87) Operating margin (%) 15 5 200 74 (80) Post-tax equity-accounted income 2 015 994 103 2 608 (23) Attributable earnings: owners of parent 2 244 868 159 8 809 (75) Headline earnings 2 529 843 200 4 115 (39) Cash retained from operations 602 1 484 (59) 2 485 (76) Capital expenditure 2 403 2 981 (19) 2 352 2 Average ZAR/USD rate Realised 9,19 8,49 8 7,88 17 Spot 9,20 8,46 9 7,93 16 Attributable earnings (cents per share) 632 246 157 2 488 (75) Headline earnings (cents per share) 712 239 198 1 162 (39) Dividend declared 235 150 57 350 (33) Weighted average number of shares (million) 355 354 354 * International Financial Reporting Standards incorporating International Accounting Standards Including discontinued operations 13
Non-core adjustments R million 1H13 2H12 1H12 Coal Profit on sale of assets Impairment charge (287) 109 40 (292) 5 109 40 Mineral sands 99 Base metals 32 (2) 570 Other (15) (126) 3 923 (Loss)/profit on sale: subsidiaries and other PPE* (2) (126) 3 608 Dilution of investment in Tronox (13) Write down of intercompany loan 315 Impact on net operating profit (270) (19) 4 632 Post-tax equity-accounted income 44 7 467 Tax on headline earnings adjustments 12 (5) (29) Total non-core adjustment impact on attributable earnings (214) (17) 5 070 * Property, plant and equipment 14
Financial overview: core* R million 1H13 2H12 % Change 1H13 vs 2H12 1H12 % Change 1H13 vs 1H12 Revenue 6 245 6 366 (2) 9 756 (36) Operating expenses (5 058) (6 031) 16 (7 147) 29 Net operating profit 1 187 335 254 2 609 (55) Operating margin (%) 19 5 280 27 (30) Post-tax equity-accounted income 1 971 987 100 2 141 (8) Headline earnings 2 458 885 178 3 739 (34) Capital expenditure 2 403 2 981 (19) 2 352 2 Net debt 3 677 2 199 67 1 288 185 Headline earnings per share (cents) 692 250 177 1 056 (34) Weighted average number of shares (million) 355 354 354 * Non-IFRS numbers 15
HEPS contribution Cents* 1H13 % contribution 2H12 % contribution (Decrease)/ increase in % contribution 1H13 vs 2H12 1H12 % contribution JSE HEPS 712 100 238 100 1 162 100 (Decrease)/ increase in % contribution 1H13 vs 1H12 Coal 225 32 142 60 (28) 250 22 10 Ferrous 576 81 378 159 (78) 524 45 36 TiO 2 (47) (7) (109) (46) 39 340 29 (36) Other (42) (6) (173) (73) 67 48 4 (10) CORE HEPS 692 100 250 100 1 056 100 Coal 225 33 142 57 (24) 250 24 9 Ferrous 557 80 378 151 (71) 524 50 30 TiO 2 (47) (7) (108) (43) 36 342 32 (39) Other (43) (6) (162) (65) 59 (60) (6) * Based on group weighted average number of shares (WANOS) of 355 million (2H12: 354 million; 1H12: 354 million) 16
Coal financial performance R million 1H13 2H12 % Change 1H13 vs 2H12 1H12 % Change 1H13 vs 1H12 Revenue 6 149 6 239 (1) 5 825 6 Tied operations 1 782 1 996 (11) 1 453 23 Commercial operations 4 367 4 243 3 4 372 Net operating profit 1 318 644 105 1 312 Tied operations 210 206 2 79 166 Commercial operations 1 108 438 153 1 233 (10) Operating margin (%) 21 10 110 23 (9) Post-tax equity-accounted income* 81 79 3 65 25 Capital expenditure 1 485 2 458 (40) 1 767 (16) Headline earnings contribution to group 798 502 59 885 (10) HEPS contribution (cents) 225 142 58 250 (10) Average export price US$/tonne 84 87 (3) 103 (18) * Mafube and SDCT 17
Coal production* Total coal production (Mt) Metallurgical coal production (Mt) Thermal coal production (Mt) Tonnes lost due to strikes (kt) GG 880 Inyanda 67 Arnot 162 Leeuwpan 204 Matla 854 Total 2 167 Commercial Tied Buy-ins * Restated 18
Coal market and sales* Total coal sales (Mt) Metallurgical coal sales (Mt) Thermal coal sales (Mt) Steam coal and market coke prices # 200 600 150 400 100 50 200 0 0 2011 2012 2013 2014FC 2015FC Domestic Tied Export RBCT steam HCC Chinese market coke * Restated # US$/t FOB Source Macquarie 19
Coal contribution Revenue contribution (Rb) Net operating profit variance analysis (Rm) Core NOP 2H12 Core NOP 1H13 Net operating profit contribution (Rb) HEPS contribution to group 0 Commercial Tied 20
Coal capital expenditure GMEP 96% complete Project expenditure to date is R8,9 billion Capital expenditure forecast at R10,2 billion 740 housing unit project completed at R590 million All costs and revenue to be capitalised until commissioning GMEP capital and ramp up Rm Mt GG backfill 94% complete Project expenditure to date is R633 million Phase 1 capital expenditure forecast of R946 million Phase 2 expected in FY14 with capital expenditure of R650 million Cumulative capital Coal capital expenditure (Rb) Ramp-up 2018 Expansion Sustaining 21
Mayoko capital expenditure Mayoko phase 1 730Mt resource confirmed Project capital increased from US$320 to US$340 Total expenditure in 1H13 of R854m: Capital expenditure at R650 million Exploration cost capitalised at R64 million Operational expenditure of R140 million capitalised Current impact of delay: Additional nine months and R200 million additional capital Ramp-up subject to Mining Convention as well as finalisation of port and rail access requirements expected in 1H14 First ore in 2H14 2Mt in FY15 Risk mitigation: R1 billion contractual exposure limit 1 350 ore containers, eight locomotives, 90 rail wagons, and Phase 1A plant delivered Value engineering process kicked-off in light of delay Mayoko capital expenditure and ramp-up US$m Mt Cumulative capital Ramp-up Mayoko capital expenditure (US$m) 22
Ferrous: SIOC SIOC HEPS contribution SIOC post-tax equity contribution (Rb) 0 SIOC dividend received (Rb) Iron ore prices # 2011 2012 2013 2014FC 2015FC Fines (62% Fe) Lump (63% Fe) # US$/t FOB Source Macquarie 23
Titanium dioxide Shareholding Dilution from 44,65% to 44,42% HEPS contribution Financial performance Tronox loss of R168 million Dividends received of R243 million Decrease in mineral sands and pigment prices Increased volumes Exxaro s share of purchase price allocation adjustments of R361million 1H11 2H11 1H12 2H12 1H13 Purchase price adjustments (June YTD) Tronox dividend received (Rm) IFRS results (Rm) Total Tronox SA Ops UK Equity (loss)/income (168) (664) 365 131 Add back PPA # 363 150 213 RSA 213 213 Remainder of Tronox 150 150 Adjusted contribution to group earnings 195 (514) 578 131 # Relates to depreciation adjustments and inventory write-downs 24
Attributable earnings: core R million 1H13 2H12 % Change 1H13 vs 2H12 1H12 % Change 1H13 vs 1H12 Net operating profit 1 187 335 254 2 609 (55) Net financing cost (266) (197) (35) (156) (71) Income from investments 2 1 100 2 Post-tax equity-income/(loss) 1 971 987 100 2 141 (8) SIOC 2 044 1 260 62 1 938 5 Tronox Limited (168) (368) 54 118 (242) Mafube 81 79 3 65 25 Cennergi (38) (40) 5 (25) (52) Black Mountain 52 56 (7) 45 16 Tax (441) (253) 74 (875) 50 Profit after tax 2 453 873 181 3 721 (34) Non-controlling interest 5 12 (58) 18 (72) Attributable earnings: owners of parent 2 458 885 177 3 739 (34) Attributable earnings (cents per share) 692 250 177 1 056 (34) Dividend declared (cents per share) 235 150 57 350 (33) 25
Net debt variance R million 2 403 55 (1 218) 49 3 677 2 199 (602) 128 117 546 Net debt January 2013 Cash generated Net financing costs Tax Dividends paid Capex Investing activities Dividends received Other Net debt June 2013 26
Capital funding structure Ratios*: 1H13 2H12 1H12 Net financing cost cover (times): EBITDA 6 3 21 Return on equity: attributable income (%) 8 2 61 Return on equity: headline earnings(%) 9 3 15 Return on capital employed (%) 10 4 40 R million Facilities available Maturity profile of debt Drawn Undrawn Repayment year Interest-bearing borrowings 3 600 4 400 Interest capitalised 38 Capitalised transaction cost (44) Long-term borrowings 3 594 Short-term borrowings net of cash 83 2H14-1H15 167 2H15-1H16 333 2H16-1H17 1 933 After 1H17 1 167 3 600 Net debt 3 677 Net debt/equity ratio (%) 12 * Based on IFRS results 27
Dividend Interim dividend 30 June 2013 Interim dividend 30 June 2012 Final dividend 31 Dec 2012 Total dividend 31 Dec 2012 Core attributable earnings per share (cents) 692 1 056 250 1 306 Dividend declared per share (cents) 235 350 150 500 Dividend cover* (times) 2,94 3,02 1,67 2,61 Dividend declared (Rm) 841 1 252 537 1 789 BEE Holdco 438 653 280 933 Anglo 82 122 52 174 Public 314 467 200 667 Mpower 2012 7 10 5 15 * Adjusted for non-cash non-core items 28
Outlook 29
Future outlook: medium term General Improve safety performance Restricted economic outlook Mining sector concerns Strategic response: Reposition for future Cost management Coal Local markets stable Sensitivity to global commodity influences International markets softer GMEP ramp-up Cessation of production contemplated at NCC Ferrous Establish our footprint through Mayoko AlloyStream demonstration facility initiation Energy Cennergi to focus on delivering current projects following financial closure 30
Additional slides Opinions expressed herein are by nature subjective to known and unknown risks and uncertainties. Changing information or circumstances may cause the actual results, plans and objectives of Exxaro Resources Limited (the Company ) to differ materially from those expressed or implied in the forward looking statements. Financial forecasts and data given herein are estimates based on the reports prepared by experts who in turn relied on management estimates. Undue reliance should not be placed on such opinions, forecasts or data. No representation is made as to the completeness or correctness of the opinions, forecasts or data contained herein. Neither the Company, nor any of its affiliates, advisors or representatives accepts any responsibility for any loss arising from the use of any opinion expressed or forecast or data herein. Forward-looking statements apply only as of the date on which they are made and the Company does not undertake any obligation to publicly update or revise any of its opinions or forward looking statements whether to reflect new data or future events or circumstances. 31
Key events 1H13 1H12 2H12 January February March May June New Clydesdale Colliery (NCC) impairment Dilution of Tronox shareholding from 44,65% to 44,42% Restatement of prior year and revised results due to the early adoption of new accounting standards (IFRS* 10, 11 and 12 as well as IAS27 and 28) African Iron acquisition consolidated subsidiary Cennergi JV equity accounted joint venture KZN Sands partial impairment reversal Sale of Rosh Pinah operations derecognised subsidiary Sale of mineral sands derecognised subsidiary Acquisition of shareholding in Tronox Limited equity accounted associate September December Increased shareholding in Tronox Limited to 44,65% Sale of non-core coal prospecting rights 32
Group cash flow R million 1H13 2H12 1H12 Cash retained from operations 602 1 484 2 485 Net financing cost (128) (57) (80) Interest paid (165) (124) (221) Interest received 37 67 141 Tax (117) (113) (164) Dividends paid (546) (1 241) (1 771) Net cash from operating activities (189) 73 470 Fixed assets (2 403) (2 981) (2 352) Intangible assets (23) (35) (1) (Increase)/decrease in non-current financial assets 33 (166) 150 Dividend income from investments 1 218 2 062 1 960 Proceeds from disposal of PPE 11 40 37 Proceeds on disposal of subsidiaries 202 931 Increase in investments in associates and joint ventures (76) (396) Acquisition of subsidiary Decrease in cash and cash equivalents on disposal of subsidiaries (1 421) (1 052) Other 79 3 Net cash outflow (1 429) (1 122) (1 275) 33
Group depreciation and amortisation: core R million 1H13 2H12 1H12 Coal 319 310 301 Tied operations 18 21 18 Commercial operations 301 289 283 Ferrous 2 4 2 Mayoko 3 1 FerroAlloys 1 1 1 Other 1 Other 93 45 349 Mineral sands 283 Base metals 1 27 Other 93 44 39 Total 414 359 652 34
Group EBITDA: core R million 1H13 2H12 1H12 Coal 1 637 954 1 613 Tied operations 228 228 96 Commercial operations 1 409 726 1 517 Ferrous (42) 61 (87) Mayoko (1) 75 (77) FerroAlloys (25) (15) (8) Other (16) 1 (2) Other 6 (321) 1 735 Mineral sands 2 109 Base metals (12) (106) Other 6 (309) (268) Total EBITDA 1 601 694 3 261 35
Thermal: volumes '000 tonnes 1H13 1H12 1H11 FY12 FY11 Production 17 704 18 171 18 467 37 641 37 731 Grootegeluk 7 544 7 642 7 799 15 489 16 369 Matla 4 805 5 088 5 135 10 948 10 150 Leeuwpan 1 744 1 864 2 057 3 844 4 029 NBC 1 505 1 167 963 2 717 2 346 Inyanda 968 954 904 1 845 1 918 Arnot 835 1 053 1 235 2 081 2 291 NCC 303 403 374 717 628 Buy-ins 542 460 868 1 111 1 636 Total production 18 246 18 631 19 335 38 752 39 367 36
Thermal: sales '000 tonnes 1H13 1H12 1H11 FY12 FY11 Sales to Eskom 14 692 15 125 15 496 31 367 31 681 Grootegeluk 6 780 6 943 7 014 14 174 14 668 Matla 4 808 5 083 5 141 10 941 10 152 Leeuwpan 890 962 1 187 1 922 2 311 NBC 1 379 1 084 869 2 249 2 209 Arnot 835 1 053 1 235 2 081 2 291 NCC 50 50 Other domestic 1 585 1 621 1 581 3 362 3 088 Exports 1 625 1 478 1 893 3 199 4 461 Total sales 17 902 18 224 18 970 37 929 39 230 37
Metallurgical coal: volumes and sales '000 tonnes 1H13 1H12 1H11 FY12 FY11 Production 1 095 1 274 1 241 2 366 2 161 Grootegeluk 916 1 125 1 107 2 027 1 862 Tshikondeni 179 149 134 339 299 Sales 1 142 1 209 1 187 2 326 2 190 Domestic 866 871 996 1 630 1 753 Export 276 338 191 696 437 38
Group net operating profit: 2H12 vs 1H13 R million IFRS 2H12 Tronox working capital adjustment Base metals Sale of non core assets Core 2H12 Price Volume Exchange Inflation GMEP shortfall Cost Core 1H13 NCC impairment Base metals Tronox investment dilution Sale of noncore assets IFRS 1H13 Coal 753 (109) 644 144 (35) 113 (78) 337 193 1 318 (292) 5 1 031 Ferrous 57 57 2 (5) (98) (44) (44) Other (494) 95 26 3 (370) (13) 99 (5) 202 (87) 32 (13) (2) (70) Total 316 95 26 (106) 331 146 (53) 212 (83) 337 297 1 187 (292) 32 (13) 3 917 39
Group net operating profit: 1H12 vs 1H13 R million IFRS 1H12 Mineral Sands Base metals Sale of assets & subsidiaries Core 1H12 Price Volume Exchange Inflation GMEP shortfall Cost Core 1H13 NCC impair ment Base metals Tronox investment dilution Sale of non-core assets IFRS 1H13 Coal 1 352 (40) 1 312 (228) (50) 167 (164) 601 (320) 1 318 (292) 5 1 031 Ferrous (88) (88) 5 3 (2) 38 (44) (44) Other 5 977 (1 925) (438) (3 923) (309) 39 (16) (32) 231 (87) 32 (13) (2) (70) Total 7 241 (1 925) (438) (3 963) 915 (223) (8) 151 (198) 601 (51) 1 187 (292) 32 (13) 3 917 40
Salient dates Last day to trade cum dividend Friday 6 September 2013 Shares trade ex-dividend Monday 9 September 2013 Record date Friday 13 September 2013 Payment date Monday 16 September 2013 41
Definitions Operating margin Net operating profit/loss as a percentage of revenue Net financing cost cover EBITDA Net operating profit/loss (before interest, tax, depreciation, amortisation, impairment charges and net deficit/surplus on sale of investments and assets) divided by net financing cost Return on equity attributable income Attributable earnings attributable to owners of the parent as a percentage of equity attributable to owners of the parent Return on capital employed Net operating profit/loss plus income/loss from non-equity-accounted investments plus income/loss from investments in associates as a percentage of average capital employed Net debt to equity ratio Interest-bearing debt less cash and cash equivalents as a percentage of total equity Net debt to net debt plus total shareholders equity Interest-bearing debt as a percentage of interest-bearing debt plus total shareholders equity 42
Index Title Page number Title Page number Adjustments non-core 14 Attributable earnings core 25 Commodities Coal 7; 17-21 Energy 10 Ferrous 8; 22, 23 Titanium dioxide 9; 24 Cash flow 33 Capital expenditure 21; 22 Capital funding structure 27 Definitions 42 Depreciation 34 Dividend 28 EBITDA 35 Financial performance Coal 17 Core 15 IFRS 13 HEPS 16 Human capital 3; 4 Key events 32 Main features 12 Natural capital 5 Net debt variance 26 Net operating profit 39; 40 Outlook 30 Overview 2 Portfolio improvement 7-10 Production: Coal volumes and sales 36-38 Revenue 13; 20 Salient dates 41 Social capital 6 Strategy 3-10 43