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SIBANYE STILLWATER LIMITED - Results for the six months and year ended 31 December 2020 Short form announcement

Release Date: 18/02/2021 08:03
Code(s): SSW     PDF:  
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Results for the six months and year ended 31 December 2020 – Short form announcement

Sibanye Stillwater Limited
Incorporated in the Republic of South Africa
Registration number 2014/243852/06
Share codes: SSW (JSE) and SBSW (NYSE)
ISIN – ZAE000259701
Issuer code: SSW
(“the Company / Sibanye-Stillwater”)
Website: www.sibanyestillwater.com

Results for the six months and year ended 31 December 2020 – Short form announcement

Johannesburg, 18 February 2021: Sibanye-Stillwater (Tickers JSE: SSW and NYSE: SBSW) is
pleased to report operating and financial results for the six months ended 31 December 2020,
and reviewed condensed consolidated provisional financial statements for the year ended 31
December 2020.

SALIENT FEATURES FOR THE SIX MONTHS AND YEAR ENDED 31 DECEMBER 2020
•     Profit attributable to owners of Sibanye-Stillwater increased to R29,312m (US$1,781m)
      from R62m (US$5m) for 2019
•     Record adjusted Free Cash Flow (FCF) of R19.9bn (US$1.2bn) – 63x increase from R318m
      (US$22m) for 2019
•     Driven by larger diversified production base and robust recovery from COVID lockdown in
      SA
         - Proven ability to assess and respond to challenges
•     Deleveraging achieved – net cash of R3.1bn (US$210m) at end 2020
         - Shift in strategic focus to capital allocation
•     Final dividend of R9.4bn (US$649m) for 2020 – 321cps (US88.8cents per ADR). Full year
      dividend yield of 8.7%1
•     R6.8bn approved investment in high return SA PGM and gold projects securing operational
      sustainability and 7,000 jobs

1    Based on the average share price of R42.52 for the year end 31 December 2020

KEY OPERATING RESULTS


                      US dollar                                                                                                  SA Rand

      Year ended              Six months ended                                                                  Six months ended              Year ended

       Dec          Dec                                                                                         Dec                            Dec          Dec

      2019         2020 Dec 2019 Jun 2020 Dec 2020                       KEY STATISTICS                        2020 Jun 2020 Dec 2019          2020        2019

                                                                 UNITED STATES (US) OPERATIONS

                                                                        PGM operations1,2

    593,974   603,067     309,202   297,740   305,327 oz               2E PGM2 production             kg      9,497     9,261      9,617     18,758    18,475

    853,130   840,170     431,681   397,472   442,698 oz                 PGM recycling1               kg      13,769    12,363    13,427     26,132    26,535

      1,403     1,906       1,508     1,837     1,970 US$/2Eoz        Average basket price         R/2Eoz     32,026    30,621    22,150     31,373    20,287

      504.2     794.8       295.9     360.0     434.8 US$m              Adjusted   EBITDA3            Rm     7,081.2   6,002.0   4,332.5   13,083.2   7,290.9

        27           29        28        26        32 %              Adjusted EBITDA margin3           %         32        26        28         29           27

       784          874       795       866       882 US$/2Eoz       All-in sustaining cost4       R/2Eoz     14,342    14,429    11,678     14,385    11,337

                                                                 SOUTHERN AFRICA (SA) OPERATIONS

                                                                        PGM operations2,5


     1,608,332 1,576,507   980,343   657,828   918,679 oz               4E PGM2 production             kg      28,574    20,461    30,492     49,035    50,025

      1,383     2,227       1,475     2,002     2,396 US$/4Eoz        Average basket price         R/4Eoz     38,954    33,375    21,671     36,651    19,994

      608.3   1,766.5       464.5     542.8   1,223.7 US$m              Adjusted EBITDA3              Rm    20,024.4   9,050.1   6,753.2   29,074.5   8,796.2

        32           53        32        42        60 %              Adjusted EBITDA margin3           %         60        42        32         53           32

      1,027     1,111       1,074     1,156     1,082 US$/4Eoz       All-in sustaining cost4       R/4Eoz     17,586    19,277    15,779     18,280    14,857

                                                                        Gold operations

    932,659   982,559     587,908   403,621   578,939 oz                Gold production               kg      18,007    12,554    18,286     30,561    29,009

      1,395     1,747       1,432     1,613     1,850 US$/oz           Average gold price            R/kg    967,229   864,679   676,350    924,764   648,662

     (67.0)     472.1       140.0     100.9     371.2 US$m              Adjusted EBITDA3              Rm     6,087.4   1,682.9   1,967.7    7,770.3   (969.4)
        (5)        28      16      16        36 %             Adjusted EBITDA margin3          %         36        16        16         28         (5)

      1,544     1,406   1,347   1,493     1,347 US$/oz        All-in sustaining cost4        R/kg    704,355   800,048   636,405    743,967    717,966

                                                                      GROUP

       4.5    1,780.9    22.6   563.1   1,217.8 US$m              Basic earnings              Rm    19,926.9   9,385.0    316.8    29,311.9       62.1


     (69.7)   1,770.7    19.3   561.5   1,209.2 US$m            Headline earnings             Rm    19,785.1   9,360.4     254.9   29,145.5   (1,008.2)


    1,034.3   3,000.4   892.4   990.4   2,010.0 US$m             Adjusted EBITDA3             Rm    32,870.9 16,514.0 12,937.5     49,384.9   14,956.0

                                                         Average exchange rate using daily
      14.46     16.46   14.69   16.67     16.26 R/US$              closing rate

1   The US PGM operations’ underground production is converted to metric tonnes and kilograms, and performance is translated into SA
    rand (rand). In addition to the US PGM operations’ underground production, the operation treats recycling material which is
    excluded from the 2E PGM production, average basket price and All-in sustaining cost statistics shown. PGM recycling represents
    palladium, platinum and rhodium ounces fed to the furnace
2   The Platinum Group Metals (PGM) production in the SA operations is principally platinum, palladium, rhodium and gold, referred to
    as 4E (3PGM+Au), and in the US Region is principally platinum and palladium, referred to as 2E (2PGM)
3   The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included
    in the facility agreements for compliance with the debt covenant formula. For a reconciliation of profit/loss before royalties
    and tax to adjusted EBITDA, see note 11.2 of the condensed consolidated provisional financial statements. Adjusted EBITDA margin
    is calculated by dividing adjusted EBITDA by revenue
4   See “Salient features and cost benchmarks” sections for the definition of All-in sustaining cost (AISC)
5   SA PGM operations’ results for the year ended 31 December 2019 include the Marikana operations for the seven months since
    acquisition



STATEMENT BY NEAL FRONEMAN, CHIEF EXECUTIVE OF SIBANYE STILLWATER
2020 was a defining year for the Group, marking the end of the deleveraging phase that has
prevailed over the past three years. Despite the significant challenges associated with the
COVID-19 pandemic, the Group delivered a record financial performance and made notable progress
towards delivery on many strategic targets. This performance is testament to benefits of the
strategic growth and diversification undertaken in recent years and reflects the quality,
depth and resilience of the Sibanye-Stillwater leadership. We have come out of this period
strongly, and the Group is well positioned for the ongoing delivery of value for all
stakeholders.

Despite the ongoing implementation and observance of COVID-19 protocols to support the health
and wellbeing of our workforce, production from the three operating segments for 2020 was
consistent with the prior year. The build-up to normalised production levels at the SA
operations from the COVID-19 lockdown in Q2 2020 exceeded forecasts despite the adoption of
a phased return to work in order to protect the health and safety of employees during this
sensitive period. Both the SA gold and PGM operations reached normalised production rates in
November 2020, positioning the Group for an improved operational performance in 2021.

The SA PGM operations produced 1,576,507 4Eoz in 2020 (including attributable ounces from
Mimosa), exceeding the upper limit of revised annual guidance of between 1,350,000 4Eoz and
1,450,000 4Eoz by 9%, with PGM production of 918,679 4Eoz for H2 2020, 40% higher than for H1
2020. Mined PGM production from the US PGM operations of 603,067 2Eoz in 2020 was marginally
higher year-on-year, but below revised guidance of between 620,000 and 650,000 2Eoz, primarily
due to the impact of a spike in COVID-19 infections at the US PGM operations in Q4 2020,
associated with a severe wave of COVID-19 infections in Montana. Despite the COVID-19
disruptions, H2 2020 production of 305,327 2Eoz was 3% higher than for H1 2020, with most
operating trends improving towards the end of the year. Production from the SA Gold operations
(excluding DRDGOLD) of 25,190kg (809,877oz) was 3% above revised guidance of between 23,500
and 24,500kg (756,000oz and 788,000oz), with production of 15,023kg (483,001oz) for H2 2020,
48% higher than for H1 2020.

This solid operational performance underpinned the record financial results by obtaining full
exposure to higher average precious metal prices. The average 4E PGM basket price increased
by 83% to R36,651/4Eoz (US$2,227/4Eoz) for 2020 with the average 2E PGM basket price increasing
by 36% to US$1,906/2Eoz (R31,373/2Eoz) and the average rand gold price increasing by 43% to
R924,764/kg (US$1,747/oz). The average SA exchange rate depreciated by 14% to R16.46/US$ for
the year.

Group revenue increased by 75% year-on-year to R127,392 million (US$7,740 million), with H2
2020 revenue of R72,374 million (US$4,439 million) on par with full year revenue of R72,925
million (US$5,043 million) for 2019. Group adjusted EBITDA for 2020 increased by 230% year-
on-year to R49,385 million (US$3,000 million) compared to R14,956 million (US$1,034 million)
for 2019.

This resulted in profit attributable to owners of Sibanye-Stillwater, increasing 472 fold
from R62 million (US$5 million) for 2019 to R29,312 million (US$1,781 million). Basic earnings
per share (EPS) of 1,074 cents (US 65 cents/US 261 cents/ADR) and headline earnings per share
(HEPS) of R1,068 cents (US 65 cents/US 260 cents/ADR) increased by 53,600% and 2,770%
respectively year-on year.

Sibanye-Stillwater’s economic contribution to the regions in which we operate grew
commensurately to our profitability, with royalties increasing by 310% to R1,765 million
(US$107million) for 2020 from R431 million (US$30 million) for 2019 and current mining tax
increasing from R1,849 million (US$128 million) for 2019 to R5,374 million (US$327 million)
for 2020. Along with other taxes, this R4,859 million (US$295 million) higher fiscal
contribution is significant, particularly during a period when many countries have experienced
economic devastation associated with the COVID-19 pandemic.

The Group deleveraging was successfully achieved during the year, with borrowings reducing by
R5,354 million (US$444 million) to R18,383 million (US$1,251 million) and cash and cash
equivalents increasing to R20,240 million (US$1,378 million). On a trailing 12 month basis,
adjusted EBITDA increased by 230% to R49,385 million (US$3,000 million) resulting in a net
cash: adjusted EBITDA ratio of 0.06x compared to net debt: adjusted EBITDA of 1.25x at the
end of 2019.

This accelerated deleveraging has significantly de-risked the Group from a financial
perspective, addressing what market analysts have continually highlighted as a primary concern
and a justification for a relative discount in our investment rating since 2017. Completing
this strategic priority allows for a shift in the strategic focus from deleveraging to capital
allocation - securing an appropriate balance between consistent and sustained flows of value
to stakeholders and allocating capital to ensure the sustainability of the Group and support
strategic growth.

After giving due consideration to the successful resumption of operations to normalised
operating levels during H2 2020 and the robust financial position of the Group, the Board
declared a year-end dividend which delivers a full year dividend to shareholders at the top
end of the Group policy range.

Normalised earnings** which are the basis for the declaration of dividends as per                                                    the Group
dividend policy increased by R28,247 million (US$1,696 million), to R30,607 million                                                  (US$1,860
million) for 2020 from R2,360 million (US$163 million) in 2019, resulting in                                                         the Board
declaring full year dividends of R10,713 million (US$649 million) or 371 cents                                                       per share
(US$25.15 cents per share or US$100.62 cents per ADR).

** Normalised earnings is defined as earnings attributable to the owners of Sibanye-Stillwater
excluding gains and losses on financial instruments and foreign exchange differences,
impairments, gains and losses on disposal of property, plant and equipment, occupational
healthcare expense, restructuring costs, transactions costs, share-based payment on BEE
transaction, gain on acquisition, net other business development costs, share of results of
equity-accounted investees, after tax, and changes in estimated deferred tax rate. This
measure constitutes pro forma financial information in terms of the JSE Listings Requirements
and is the responsibility of the board of directors (Board)


KEY FINANCIAL RESULTS


                          US                                                                                           SA rand
                        dollar
    Year ended               Six months ended                                                       Six months ended                 Year ended
       Dec       Dec
                            Dec         Jun        Dec                                              Dec        Jun         Dec          Dec           Dec
       2019      2020      2019        2020       2020                                             2020       2020        2019         2020          2019
  5,043.3     7,739.5     3,385.9     3,300.5   4,439.0            Revenue (million)            72,373.7   55,018.7     49,390.5   127,392.4      72,925.4
                   65             1       21        44     Basic earnings per share (cents)         716        351           12        1,074            2
   -
        (3)        65             1       21         44   Headline earnings per share (cents)        711       350           10        1,068          (40)



DIVIDEND DECLARATION
The Sibanye-Stillwater board of directors has declared and approved a cash dividend of 321 SA
cents per ordinary share (US 22.2067 cents* per share or US 88.8268 cents* per ADR) or R9,375
million (US$649 million*) in respect of the six months ended 31 December 2020 (“Final
dividend”). The Board applied the solvency and liquidity test and reasonably concluded that
the company will satisfy that test immediately after completing the proposed distribution.
Sibanye-Stillwater dividend policy is to return at least 25% to 35% of normalised earnings to
shareholders. Normalised earnings is defined as earnings attributable to the owners of Sibanye-
Stillwater excluding gains and losses on financial instruments and foreign exchange
differences, impairments, gains and losses on disposal of property, plant and equipment,
occupational healthcare expense, restructuring costs, transactions costs, share-based payment
on BEE transaction, gain on acquisition, net other business development costs, share of
results of equity-accounted investees, after tax, and changes in estimated deferred tax rate.
The total dividend declared of 371 cents (Final dividend: 321 SA cents and Interim dividend:
50 SA cents) equates to 35% of normalised earnings for the year ended 2020.

The final dividend will be subject to the Dividends Withholding Tax. In accordance with
paragraphs 11.17 (a) (i) and 11.17 (c) of the JSE Listings Requirements the following
additional information is disclosed:

• The dividend has been declared out of income reserves;
• The local Dividends Withholding Tax rate is 20% (twenty per centum);
• The gross local dividend amount is 321.00000 SA cents per ordinary share for shareholders
  exempt from the Dividends Tax;
• The net local dividend amount is 256.80000 SA cents (80% of 321 SA cents) per ordinary share
 for shareholders liable to pay the Dividends Withholding Tax;
• Sibanye-Stillwater currently has 2 923 570 507 ordinary shares in issue; and
• Sibanye-Stillwater’s income tax reference number is 9723 182 169.

Shareholders are advised of the following   dates in respect of the final dividend:
Final dividend:                             321 SA cents per share
Declaration date:                           Thursday, 18 February 2021
Last date to trade cum dividend:            Tuesday, 16 March 2021
Shares commence trading ex-dividend:        Wednesday, 17 March 2021
Record date:                                Friday, 19 March 2021
Payment of dividend:                        Tuesday, 23 March 2021

Please note that share certificates may not be dematerialised or rematerialised between
Wednesday, 17 March 2021 and Friday, 19 March 2021 both dates inclusive.

To holders of American Depositary Receipts (ADRs):
• Each ADR represents 4 ordinary shares;
• ADRs trade ex-dividend on the New York Stock Exchange (NYSE): Thursday, 18 March 2021;
• Record date: Friday, 19 March 2021;
• Approximate date of currency conversion: Tuesday, 23 March 2021; and
• Approximate payment date of dividend: Thursday, 1 April 2021

Assuming an exchange rate of R14.4551/US$1*, the dividend payable on an ADR is equivalent to
88.8268 United States cents for Shareholders liable to pay dividend withholding tax. However,
the actual rate of payment will depend on the exchange rate on the date for currency conversion.

* Based on an exchange rate of R14.4551/US$ at 15 February 2021 from IRESS. However, the
actual rate of payment will depend on the exchange rate on the date for currency conversion

This short-form announcement is the responsibility of the Board.
The information disclosed is only a summary and does not contain full or complete details.
Any investment decisions by investors and/or shareholders should be based on a consideration
of the full announcement as a whole and shareholders are encouraged to review the full
announcement (results booklet), which is available for viewing on the Company’s website at
https://www.sibanyestillwater.com/news-investors/reports/quarterly/h22020-booklet to above
and via the JSE link. The full results announcement is available for inspection at the
Company’s registered office and the office of our sponsors during normal business hours and
is available at no charge. Alternatively, copies of the full announcement may be requested
from the Company’s Investor relations department.
The financial results as contained in the condensed consolidated provisional financial
statements for the year ended 31 December 2020 have been reviewed by Ernst & Young Inc., who
expressed an unmodified review conclusion thereon.

The JSE link is as follows:
https://senspdf.jse.co.za/documents/2021/jse/isse/sswe/FY20Result.pdf


Investor relations contact:
Email:
ir@sibanyestillwater.com
James Wellsted
Head of Investor Relations Tel: +27 (0) 83 453 4014
www.sibanyestillwater.com

Sponsor: J.P. Morgan Equities South Africa Proprietary Limited

FORWARD LOOKING STATEMENTS
The information in this document may contain forward-looking statements within the meaning
of the “safe harbour” provisions of the United States Private Securities Litigation Reform
Act of 1995. These forward-looking statements, including, among others, those relating to
Sibanye Stillwater Limited’s (“Sibanye-Stillwater” or the “Group”) financial positions,
business strategies, plans and objectives of management for future operations, are necessarily
estimates reflecting the best judgment of the senior management and directors of Sibanye-
Stillwater and involve a number of risks and uncertainties that could cause actual results
to differ materially from those suggested by the forward-looking statements. As a consequence,
these forward-looking statements should be considered in light of various important factors,
including those set forth in this document.

All statements other than statements of historical facts included in this document may be
forward-looking statements. Forward-looking statements also often use words such as “will”,
“forecast”, “potential”, “estimate”, “expect”, “plan”, “anticipate” and words of similar
meaning. By their nature, forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances and should be considered in light of various
important factors, including those set forth in this disclaimer. Readers are cautioned not
to place undue reliance on such statements.

The important factors that could cause Sibanye-Stillwater’s actual results, performance or
achievements to differ materially from estimates or projections contained in the forward-
looking statements include, without limitation, Sibanye-Stillwater’s future financial
position, plans, strategies, objectives, capital expenditures, projected costs and
anticipated cost savings, financing plans, debt position and ability to reduce debt leverage;
economic, business, political and social conditions in South Africa, Zimbabwe, the United
States and elsewhere; plans and objectives of management for future operations; Sibanye-
Stillwater’s ability to obtain the benefits of any streaming arrangements or pipeline
financing; the ability of Sibanye-Stillwater to comply with loan and other covenants and
restrictions and difficulties in obtaining additional financing or refinancing; Sibanye-
Stillwater’s ability to service its bond instruments; changes in assumptions underlying
Sibanye-Stillwater’s estimation of its current mineral reserves; any failure of a tailings
storage facility; the ability to achieve anticipated efficiencies and other cost savings in
connection with, and the ability to successfully integrate, past, ongoing and future
acquisitions, as well as at existing operations; the ability of Sibanye-Stillwater to complete
any ongoing or future acquisitions; the success of Sibanye-Stillwater’s business strategy
and exploration and development activities; the ability of Sibanye-Stillwater to comply with
requirements that it operate in ways that provide progressive benefits to affected
communities; changes in the market price of gold and PGMs; the occurrence of hazards
associated with underground and surface mining; any further downgrade of South Africa’s
credit rating; a challenge regarding the title to any of Sibanye-Stillwater’s properties by
claimants to land under restitution and other legislation; Sibanye-Stillwater’s ability to
implement its strategy and any changes thereto; the occurrence of labour disruptions and
industrial actions; the availability, terms and deployment of capital or credit; changes in
the imposition of regulatory costs and relevant government regulations, particularly
environmental, tax, health and safety regulations and new legislation affecting water, mining,
mineral rights and business ownership, including any interpretation thereof which may be
subject to dispute; the outcome and consequence of any potential or pending litigation or
regulatory proceedings or environmental, health or safety issues; the concentration of all
final refining activity and a large portion of Sibanye-Stillwater’s PGM sales from mine
production in the United States with one entity; the identification of a material weakness
in disclosure and internal controls over financial reporting; the effect of US tax reform
legislation on Sibanye-Stillwater and its subsidiaries; the effect of South African Exchange
Control Regulations on Sibanye-Stillwater’s financial flexibility; operating in new
geographies and regulatory environments where Sibanye-Stillwater has no previous experience;
power disruptions, constraints and cost increases; supply chain shortages and increases in
the price of production inputs; the regional concentration of Sibanye-Stillwater’s
operations; fluctuations in exchange rates, currency devaluations, inflation and other macro-
economic monetary policies; the occurrence of temporary stoppages of mines for safety
incidents and unplanned maintenance; Sibanye-Stillwater’s ability to hire and retain senior
management or sufficient technically skilled employees, as well as its ability to achieve
sufficient representation of historically disadvantaged South Africans (HDSAs) in its
management   positions;   failure   of   Sibanye-Stillwater’s   information   technology   and
communications systems; the adequacy of Sibanye-Stillwater’s insurance coverage; social
unrest, sickness or natural or man-made disaster at informal settlements in the vicinity of
some of Sibanye-Stillwater’s South African-based operations; and the impact of HIV,
tuberculosis and the spread of other contagious diseases, such as the coronavirus disease
(COVID-19). Further details of potential risks and uncertainties affecting Sibanye-Stillwater
are described in Sibanye-Stillwater’s filings with the Johannesburg Stock Exchange and the
United States Securities and Exchange Commission, including the Integrated Annual Report 2019
and the Annual Report on Form 20-F for the fiscal year ended 31 December 2019.

These forward-looking statements speak only as of the date of the content. Sibanye-Stillwater
expressly disclaims any obligation or undertaking to update or revise any forward-looking
statement (except to the extent legally required). These forward-looking statements have not
been reviewed or reported on by the Company’s external auditors.

Date: 18-02-2021 08:03:00
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