financial results - omnia

FINANCIAL RESULTS6 m o n t h s e n d e d

3 0 S e p t e m b e r 2 0 1 9

CONTENTS

General

Business update

Financial results

Conclusion

Annexures

01

02

03

04

Further Annexures: www.omnia.co.za

05

3 INTERIM RESULTS | 30 SEPTEMBER 2019

GOVERNANCE – BOARD COMPOSITION

INDEPENDENT NON-EXECUTIVES

Prof. Nick Binedell

Tina Eboka

Ronnie Bowen

Thoko Mokgosi-

Mwantembe

Wim Plaizier

Frank Butler

Ralph Havenstein

Sizwe Mncwango

Linda de Beer

Independent Chairman

of the Board.

Appointed in 2007 with

over 22 years executive

leadership experience


over 27 years’ board level

strategy consulting

experience


over 35 years’ senior

executive experience


over 30 years’ business

leadership and strategy

experience


close to 30 years’

business strategy

experience


over 10 years’

corporate governance

experience


17 years’ executive

management experience


35 years’ global and

senior management

experience

Chief Executive Officer


close to 20 years’ executive

leadership experience


extensive experience as

a director of various

multinationals

EXECUTIVES

George Cavaleros

Appointed in 2019

30 years’ experience

in financial services

Seelan Gobalsamy

Bernard Swanepoel



in mining industry

BOARD MEMBERS 12

11Independent

Non-Executive

directors1 Executive director

Appointment to be made

Chief Finance Officer


25+ years’ experience in explosives industry

MANAGEMENT TEAM

Jan Vermaak

MD Fertilizer International

Lennon Phillip

General counsel

Stephan Serfontein

Acting Interim CFO

Mike Smith

MD Protea Mining

Chemicals

Funani Mojono

MD Chemicals

Appointed in 2018

Admitted attorney with


Appointed in 2001

Over 20 years’ industry

experience

Appointed in 2018

Over 15 years’ executive

business experience

Appointed in 2006

Over 25 years’ in

petrochemical & mining

experience


close to 20 years’

executive leadership

experience

Appointed in 2011

17 years’ international

corporate finance

experience

Jacques de Villiers

MD Fertilizer RSASeelan Gobalsamy

CEO

Francois Visagie

Business Initiatives

Appointed in 2015


in mining industry

EXCO 11

10 Management 1 Executive director

Kavita Pema

Safety, Sustainability & Risk

Michelle Nana

Company Secretary

Appointed in 2018

25 years’ experience in

JSE-listed + unlisted

companies

Joe Keenan

MD BME

Appointed in 2001

Over 20 years’ industry

experience

Appointed in 2007

20 years’ industry

experience

Appointed in 2013

20 years’ industry

experience

Appointment to be made

Human Resources

BUSINESS UPDATE


SALIENT FEATURES HY2020

REVENUE INCREASEDWITH 1% TO R8.7BNFROM R8.6BN

OPERATING PROFIT

INCREASEDBY 137% TO R294M FROM R124M

NO INTERIM DIVIDENDHY2019: 75 CENTS

PROFIT AFTER TAXOF R35M(HY2019: R93M LOSS)

HEADLINE EARNINGS PER

SHARE INCREASEDTO 49 CENTS PROFITFROM 122 CENTS LOSS

EARNINGS PER SHAREOF 39 CENTS (HY2019: 120 CENTS LOSS)

OVERSUBSCRIBED RIGHTS

OFFER OF R2BNSUCCESSFULLY CONCLUDED WITH

SHAREHOLDER UNDERWRITE

NET DEBT DECREASED BY R1.4BN FROM R4.65BN

AT HY2019 TO R3.3BN (FY2019: R4.4BN)

NET DEBT: EBITDA

RATIO DOWN TO 2.35*(FY2019: 4.50)

* Excluding IFRS 16 impact


MACRO ENVIRONMENT

7

AGRICULTURE MINING

• Sector globally in recovery with

gains in commodity prices,

aided in RSA by a weaker Rand

• Increased competition and

oversupply of explosives led to

margin pressure

• SA manufacturing sector remains

in low growth / stagnation

• Price competitiveness in highly

fragmented market

• Increased demand for specialised

product and service solutions

across various sectors including

food, oil and gas

CHEMICALS

• Low maize prices cause switching of

crops and reduced fertilizer demand

• Soil moisture content good -

cautiously optimistic regarding rainfall

• Increasing use of technology to

maintain and increase crop yield

• Strong demand of AgriBio products

globally

• Hyperinflation in Zimbabwe creating

volatility in our earnings results

• Zambia concerns – drought, inflation,

exchange rate

The “new normal” requires Omnia to undertake a holistic review of its portfolio and

structure as well as strategy and business practices to succeed in long-term


SHORT TERM STRATEGY SET OUT PREVIOUSLY

HY2020 immediate action 12 - 18 months Focus way forward

1. Stabilise

• Elicit lender & shareholder support

• Deep dive into sustainability and operational matters

• Consider, then execute

• Capital restructure

• Debt structure

2. Fix

• Within existing structures

• Cut cost where possible without major business disruption

• Quick fixes

• Change managementwhere required

• Significantly reduce capital expenditure and working capital

3. Renewal Strategy

4. Executeand Grow• Rethink the business model under

new market conditions

• Challenge current beliefs on competitive advantage

• Seek group synergies

• Create high performance culture

• Stabilise new operating cost base and operating model

• Capital light expansion strategy going forward: Heavy assets in RSA; Expansion around Oro Agri and BME’s new detonators

Operating leverage:

• Cost saving

Financial leverage:

• Reduce net working capital

• Capital investment

Margins:

• Cost saving

• Nitrophos


HY2020 SATISFACTORY PROGRESS

Completed capital restructure

• Elicited lender and shareholder support

• Capital restructure and bridge loan

• Rights issue complete with asset manager

underwrite and oversubscription of excess

shares

• Net proceeds used to pay down the term

portion of the bridge facility

• Debt restructure in final stages

• Optimised peak season net working capital

STABILISE FIX

Good progress made

• Reduced NWC whilst increasing inventory

• Cash and capex management

• Return to profitability

• Share schemes unwind – no share dilution

Further focus needed

• Cost savings outstrip inflation

• Nitrophosphate Plant 2 ramp up

• Capital light expansions

• Operational stability

• B-BBEE level 3 verification

• Carbon emissions

RENEWAL

Started

• Strengthened financial control

(focus on – return on capital)

• Cross-divisional collaboration

• Business reviews

Going forward

• Group operating model change for

synergy & scale benefits

• Asset base review

• Culture change

• Rebuild trust in the market


DEBT RESTRUCTURE

• Improved capital structure in place

• Commercial & structural terms pertaining to the refinance of

existing bridge loan & working capital facilities are agreed

• Clearing pricing for refinance is better than bridge pricing

• The bridge package will be replaced by:

• Core term facilities of R2bn

• 5 year revolving credit facility of R1bn

• Committed, structured working capital facilities of R1.8bn

• Legal implementation in final stages

Debt restructure

Bridge package, post partial repayment utilising net proceeds of

rights offer comprises:

• Bridge loan: 12-months bullet term loan of c.R3.1bn

• General short-term banking facility limited to R1.6bn committed

for 12 months, excluding soft lines

Bridge package

Facilities profile as at 30 Sep 2019*

R’m Drawn Available Total

Bridge 3 066 - 3 066

GBF’s 595 1 005 1 600

Total 3 661 1 005 4 666

* South Africa only


-

1

2

3

4

5

6

7

-

1 000

2 000

3 000

4 000

5 000

6 000

7 000

Ap

r-17

Ma

y-1

7

Jun

-17

Jul-

17

Au

g-1

7

Se

p-1

7

Oct-

17

Nov-1

7

Dec-1

7

Jan

-18

Fe

b-1

8

Ma

r-1

8

Ap

r-18

Ma

y-1

8

Jun

-18

Jul-

18

Au

g-1

8

Se

p-1

8

Oct-

18

Nov-1

8

Dec-1

8

Jan

-19

Fe

b-1

9

Ma

r-1

9

Ap

r-19

Ma

y-1

9

Jun

-19

Jul-

19

Au

g-1

9

Se

p-1

9

EBITDA (cum 12m rolling) - actual Net Debt - actual Net debt to EBITDA (Actual)

Umongo,

Nitrophos & AX

Oro Agri,

Nitrophos &

high NWC

Nitrophos & AX

Rights issue

• R2 billion rights issue fully underwritten by shareholders

• Priced early vs. conventional recapitalisations

• Shareholders subscribed to 96.6% of total number of rights

offer shares available for subscription

• Excess applications which were oversubscribed by 84m

shares

• No requirement for underwrite commitments to be called on

• Proceeds of R2bn utilised to partially repay the bridge loan

Commentary

30 Sep 19 31 Mar 19

Net debt (Rm) * 2 781 4 403

12 month rolling EBITDA (Rm) * 1 180 979

Ratio * 2.35 4.50

Key metrics

R2BN NEW CAPITAL INJECTIONR

mill

ion

s

Ne

t d

eb

t: E

BIT

DA

ra

tio

** Incl. IFRS 16 impact, net debt is R3 292m and ratio is 2.5

* Excl. IFRS 16 impact


GROUP’S COMPARATIVE EBITDA – R612MR

‘0

00

S

• Cumulative YTD EBITDA tracking in

line with 2017 & 2018 despite

difficult market conditions

• Excludes impact of adoption of

leases (IFRS 16) & first-time

application of Hyperinflation (IAS

29) accounting in Zimbabwe

• Including all accounting treatments

EBITDA is at R752m

-100

100

300

500

700

900

1 100

1 300

1 500

1 700

1 900

April May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2013 2014 2015 2016 2017 2018 2019 2020 Actual (cum)

Commentary


REDUCTION IN CAPEX

• Omnia has reached the end of its high capital

investment cycle

• Capex has reduced in line with plan

• Capex spend in HY2020 of R164m includes

• Nitrophosphate plant – R57m

• EnviNox catalyst

• BME

• YTD maintenance capex:

• R57m (HY2019: R151m)

Commentary

R M

illio

n

817 887 1 120 570 2600

200

400

600

800

1 000

1 200

FY2017 FY2018 FY2019 HY2019 HY2020


-

1.00

-

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

Ap

r-14

Ma

y-1

4

Jun

-14

Jul-

14

Au

g-1

4

Se

p-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan

-15

Fe

b-1

5

Ma

r-1

5

Ap

r-15

Ma

y-1

5

Jun

-15

Jul-

15

Au

g-1

5

Se

p-1

5

Oct-

15

Nov-1

5

Dec-1

5

Jan

-16

Fe

b-1

6

Ma

r-1

6

Ap

r-16

Ma

y-1

6

Jun

-16

Jul-

16

Au

g-1

6

Se

p-1

6

Oct-

16

Nov-1

6

Dec-1

6

Jan

-17

Fe

b-1

7

Ma

r-1

7

Ap

r-17

Ma

y-1

7

Jun

-17

Jul-

17

Au

g-1

7

Se

p-1

7

Oct-

17

Nov-1

7

Dec-1

7

Jan

-18

Fe

b-1

8

Ma

r-1

8

Ap

r-18

Ma

y-1

8

Jun

-18

Jul-

18

Au

g-1

8

Se

p-1

8

Oct-

18

Nov-1

8

Dec-1

8

Jan

-19

Fe

b-1

9

Ma

r-1

9

Ap

r-19

Ma

y-1

9

Jun

-19

Jul-

19

Au

g-1

9

Se

p-1

9

Inventories Net working capital - actual

REDUCTION IN NWC BY R714MR

Mill

ion

• NWC down by R714m (HY2019: R5.3bn to R4.6bn)

• Year-on-year stock down by R1.4bn but up by R860m

since Mar 2019

• FY2018 to HY2019 NWC up by R917m

• FY2019 to HY2020 NWC up by R368m

• Lower NWC volatility, but inventory in line with prior years

(R727m) (R179m) (R176m)

NWC reduction by

division *

* R368m for Head office

R917m

R368m


• RSA: Higher bulk volumes

• Cost cutting initiatives implemented, partially offset by once off restructuring cost

• International: New business awarded

• Mining Chemicals increased margins

• RSA: Cost cutting initiatives implemented

• Difficult trading conditions

• International: Increased volumes and net revenues combined with lower expenses

• Trading: Restructured to reduce NWC

• Biological: Strong demand for Agri Bio products globally

OPERATING PROFIT – INCREASED BY 137% TO R294M

• Improved overall margins for Chemicals division

• Protea Chemicals: Lower revenue but higher margin product mix

• Reduced cost base due to restructuring from prior year

• Umongo Petroleum: Increase in volumes and selling prices

Key D

rivers

Operating profit (Rm) Operating profit (Rm) Operating profit (Rm)

395 13 98

FY2019 HY2019 HY2020

234 104 169

FY2019 HY2019 HY2020

13 19 91

FY2019 HY2019 HY2020

MarginMargin Margin

Agriculture ChemicalsMining

0.7% 3.5%0.2%4.2% 8.9%3.5%0.4% 2.8%4.8%


NITROPHOSPHATE PLANT 2

Our manufacturing competency, its unique design in terms of efficiencies and low environmental impact,

will provide Omnia with strong competitive advantage in coming years

Slower ramp-up than anticipated

due to technical difficulties

Capacity

• More than expected start-up difficulties

• Modifications to crystallizers

• Capital requirement for modifications expected to be

circa 5% of total capital spend

• At start up, instantaneous capacity of 60% achieved

• 1 Apr 2019 to 30 Sep 2019, lower average capacity

achieved and hence benefits expected not realised

• Expected to achieve about 60% - 85% of instantaneous

capacity by end of FY2020 but with average capacity less

than expected for the year


RENEWAL STRATEGY IN PROGRESS

People alignment

Capital light geographic

expansion

Operating model restructure

& B-BBEE strategy

Strengthened financial

discipline

Recognising the need for higher overall returns to shareholders, we embarked on key strategic projects

FINANCIAL RESULTS


INCOME STATEMENT

Rm 30 Sep 2019 % 30 Sep 2018 31 Mar 2019

Revenue 8 723 1 8 654 18 628

Cost of sales (6 561) 2 (6 669) (14 495)

Gross profit 2 162 9 1 985 4 133

Distribution expenses (1 034) 3 (1 067) (2 140)

Administrative expenses (672) (6) (632) (1 500)

Other operating income 68 (9) 75 325

Other operating expenses (200) (6) (189) (384)

Impairment losses on non-financial assets (8) - - (340)

Impairment losses on financial assets (15) 73 (56) (97)

Share of net profit of investments:

equity method(7) (>100) 8 27

Operating profit 294 >100 124 24

Monetary gain on hyperinflation 50 - - -

Finance expense (313) (29) (242) (481)

Finance income 23 (4) 24 43

Profit/(loss) before taxation 54 >100 (94) (414)

Income tax expense (19) >100 1 7

Profit/(loss) for the period 35 >100 (93) (407)

Operating margin 3.4% 1.4% 0.1%

• HY2020 gross profit margin 25% versus 23% in PY

• Administration expenses closely managed

• Other operating income:

• Forex gains of R26m - revaluation on foreign balances

• HY2019 incl. R52m release of Umongo earn out

• Other operating expenses:

• Forex loss of R90m, R80m of which relates to

Zimbabwe operations partly offset by higher GP

• Increase in amortisation of intangibles of R13m

• Impairments: non financial assets R8m,

ECL (IFRS 9) of R15m

• Higher interest costs on bridge loan & interest on

Nitrophosphate plant which was previously capitalised to

asset while under construction

Commentary


MOVEMENT TO ADJUSTED EBITDA

294 752 612

341

109

8 15

125

0

500

1 000

R M

illio

n

30 Sep 19

Operating

Profit

Depreciation Amortisation 30 Sep 19AdjustedEBITDA

ZimbabweHyperinflation

30 Sep 19EBITDA

IFRS 16 impact

Impairment


BALANCE SHEET

Rm 30 Sep 2019 % 30 Sep 2018 31 Mar 2019

Non-current assets 8 470 4 8 138 8 140

Current assets 10 251 (12) 11 655 8 507

Inventories 4 741 (22) 6 105 3 883

Trade and other receivables 4 473 (2) 4 557 3 838

Other current assets 167 (38) 268 142

Cash and cash equivalents 870 20 725 644

Total assets 18 721 (5) 19 793 16 647

Total equity 9 116 14 8 013 7 225

Deferred tax 523 39 851 733

Trade and other payables 4 920 9 5 421 3 613

Lease liabilities 539 (100) - -

Derivative financial instrument - 100 129 29

Debt – short, long-term & overdraft 3 623 33 5 379 5 047

Total equity and liabilities 18 721 (5) 19 793 16 647

Net debt (incl. lease) 3 292 29 4 654 4 403

Net working capital 4 632 13 5 346 4 264

• Increase in right of use assets of R539m relating to the

first-time adoption of IFRS 16

• Inventory levels in line with prior FY2019 experience

• Other current assets: Reduction in income tax assets

• Cash incl. 38 foreign entities where no facilities exist &

pooling of cash ahead of peak procurement season

• Unwinding of deferred tax in acquisitions

• Increase in lease liabilities relating to the first-time adoption

of IFRS 16

• NWC reduction includes provisions & non-current trade

receivables, payables & derivatives

Commentary


MOVEMENT IN NET DEBT

31 Mar 19Net debt

R M

illio

n

4 654 4 403 3 292

1 603

300

24550

376

49 53 186290

37 260

2 000 23 511

0

1 000

2 000

3 000

4 000

5 000

30 Sep 19Net debt

Cash generated

fromoperations

Net interest

paid

Taxationpaid

Capital expenditure

Forex &ECL

movements

Rights Issue

proceeds

IFRS 16Lease

Liabilitiesexcl. finance

leases previous recognised

30 Sep 18Net debt

Acquisitions Cash generated

fromoperations

Net interest

paid

Taxationpaid

Capital expenditure

Forex &disposal

Dividendspaid


CASHFLOW STATEMENT

Rm 30 Sep 2019 30 Sep 2018 31 Mar 2019

Net cash (outflow)/inflow from operating activities (141) (968) 311

Cash generated/(utilised) by from operations 186 (605) 998

Finance expense (313) (242) (561)

Finance income 23 24 43

Income taxes paid (37) (145) (169)

Net cash outflow from investing activities (260) (1 135) (2 059)

Purchase of PP&E (221) (460) (977)

Proceeds on disposal of PP&E - - 2

Additions to goodwill, intangible and other assets (39) (110) (143)

Acquisition of a business - (565) (941)

Net cash inflow from financing activities 2 386 1 861 1 463

Interest bearing borrowings raised 386 1 965 1 616

Proceeds from share issue 2 000 - -

Dividends paid - (104) (153)

Net increase/(decrease) in cash & cash equivalents 1 985 (242) (285)

Net cash & cash equivalents - beginning of period (1 613) (1 459) (1 459)

Exchange rate movements 21 157 131

Net cash/(overdraft) balance at end of period 393 (1 544) (1 613)

Long-term debt (34) (2 534) (45)

Net debt (including lease liabilities) (3 292) (4 654) (4 403)

• Cash generated from operations: Lower NWC through

reduction of slow-moving inventory, lower inventory holding

& improved debtor collections

• Finance expense: Nitrophosphate plant interest no longer

capitalised during HY2020

• Addition of intangibles incl. Microsoft Dynamics AX in

comparatives

• Acquisition of business: Oro Agri

• Long term Debt: R2.5bn was replaced by bridge loan -

repayable during Jun 2020

Commentary

OPERATIONAL

FINANCIALS


HY20

NET REVENUE

Rm

OPERATING

PROFIT (Rm) &

MARGIN %

SOUTH AFRICA:

• Revenue 3%, Operating profit 40%

• Margins reduced due to higher cost inventory being sold in declining

market, countered by focused cost reductions

INTERNATIONAL:


• Brazilian & Australian entities tracking ahead, sales of humates increasing

• Australian humate drying project on track and construction underway

• Zimbabwe’s performance in line with strategy; focus on expatriation of funds

• Zambia sales exceeded expectation with strict credit control

• Reduced retail store footprint in Africa

TRADING:


• Model realigned to improve returns, generation of cash & for better leverage

of the Group’s market position

BIOLOGICAL:


• Higher sales volumes in Brazil, USA & RSA

• Increased sales from new products

• New product registrations in Europe and Brazil

• Portugal factory performing in line with expectations

1 7

88

1 1

23

43

1

27

9

1 8

48

1 0

31 22

5

39

9

0

500

1 000

1 500

2 000

-77

62 1 27

-46

70

-2

76

-100

-50

0

50

100

COMMENTARY

HY19 HY20 HY19 HY20 HY19 HY20 HY19 HY20

-4.3%

HY19 HY20

HY19 HY20 HY19 HY19 HY20

-

2.5%

5.5%6.8%

0.2%

-1.0%

9.6%

19.0%

RSA Int’l Trade Bio

AGRICULTURE - REVENUE AND OPERATING PROFIT


MINING - REVENUE AND OPERATING PROFIT

COMMENTARY

SOUTH AFRICA:


• Increase in bulk volumes

• Various cost cutting initiatives

• Awarded new contracts at various colliers

INTERNATIONAL:


• Increased bulk volumes in Zambia & Mali

• Decrease in staff employment costs in West Africa

• Lower ammonia prices create margin pressure

• Prior year stock write-off, once-off costs and provision for debtor in Angola

PROTEA MINING CHEMICALS:

• Improved profitability mainly from new sales and services

• Depressed cobalt sector impacting negatively on sales

NET REVENUE

Rm

OPERATING

PROFIT (Rm) &

MARGIN %

1 0

48

1 4

30

1 1

52

1 4

85

-

400

800

1 200

1 600

HY19 HY20 HY19 HY20

49 55 82 152 -

40

80

120

160

HY19 HY20 HY19 HY20

4.7%

7.2%

3.9%

10.2%

RSA International


CHEMICALS - REVENUE AND OPERATING PROFIT

NET REVENUE

(Rm)

OPERATING

PROFIT (Rm) &

MARGIN %

COMMENTARY

PROTEA CHEMICALS:


• Lower revenue but higher margin product mix

• Operating costs saving

UMONGO PETROLEUM:


• Increase in volumes

• Base oils increased revenue largely due to exports & sale to independent

lube market customers

• Increase in specialty sales

1 9

96

55

9

1 9

63

62

0

-

400

800

1 200

1 600

2 000

2 400

- 19 53 38 -

20

40

60

0.0%

2.7%

HY19 HY20 HY19 HY20

HY19 HY20 HY19 HY20

6.1%

Protea Umongo

3.5%

CONCLUSION


GOING FORWARD

29

AGRICULTURE MINING

• Lower agri-commodity prices and climate

change impacting negatively

• Reduced fertilizer demand

• Cautiously optimistic regarding rainfall

• Hyperinflation in Zimbabwe and Zambia

concerns creating volatility in our earnings

• Strong demand of AgriBio products globally

• Sector globally in recovery with gains in

commodity prices, aided in South Africa by a

weaker Rand

• Increased competition and oversupply of

explosives led to margin pressure

• Locally, tender business has high dependency

on B-BBEE levels and community inclusion

• SA manufacturing sector remains in low growth /

stagnation

• High level of competitor activity in highly

fragmented market

• Increased demand for specialised product and

service solutions across various sectors

including food, oil and gas

CHEMICALS

CORE FOCUS

• Improving production efficiencies and

ramping up Nitrophosphate production

• Integrated operating model across Agri BUs

• Axioteq, AgriBio and Oro Agri to target

higher margin opportunities

• Further operating cost savings

• Expanding geographical footprint leveraging

current distribution infrastructure

• Strong pipeline of new products (several

patented)

CORE FOCUS

• Further development of AXXIS™ technology &

digital solutions - to be launched in H2

• New business in RSA

• Set-up plants and equipment in Canada (JV

with Consbec)

• Through distribution partnerships, expand into

Alaska, Texas, Mexico & Latin America

• Growth and operational set-up in Australia

• Set up execution in Indonesia

• Various growth opportunities in solvent

extraction business

CORE FOCUS

• Further profitability enhancement by reducing

high asset base and explore JV opportunities

• Strategic supplier relationships

• Penetrate export market

• Increase sale of speciality products


ROADMAP

Stabilise

Fix

Renewal Strategy

Execute& Grow

✓GOOD

PROGRESS

MADE

ROAD STILL TO TRAVEL

“We are making good progress, but more work lies ahead to position Omnia for

the new normal in an environment where both the climatic conditions and the

sectors we service are increasingly unpredictable and volatile.”

✓

QUESTIONS


FORWARD LOOKING STATEMENTS

Throughout this report there are certain statements made that are ‘forward-looking statements’. Any statements preceded or

followed by, or that include the words ‘forecasts’, ‘believes’, ‘expects’, ‘intends’, ‘plans’, ‘predictions’, ‘will’, ‘may’, ‘should’, ‘could’,

‘anticipates’, ‘estimates’, ‘seeks’, ‘continues’, or similar expression or the negative thereof, are forward-looking statements. By

their nature, forward-looking statements are speculative and allude to known and unknown risks, opportunities, macroeconomic

issues and any factors that could cause the actual results, performance or achievements of the Group to be materially different

from the future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking

statements are not guarantees of future performance and reflect the Group’s view at the date of publication of this report. The

Group is not obliged to publicly update or revise these forward-looking statements for events or circumstances occurring after

the date of publication of this report. Any forward looking statement contained herein based on current trends and/or activities of

the Group should not be taken as a representation that such trends or activities will continue in the future. No statement in this

document is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will

necessarily match or exceed the historical or published earnings of the Group. Forward-looking statements should not be relied

on because they involve uncertainties and known and unknown risks which risk factors are described throughout the

commentary in this report, and include economic, business and political conditions in South Africa and elsewhere.

Comprehensive additional information is available on our website: www.omnia.co.za

Or email queries: [email protected]

Annexures

34 INTERIM RESULTS| 30 SEPTEMBER 2019

OMNIA PORTFOLIO

MainPortfolio

Omnia Nutriology: Ammonia nitrate-based fertilizer

(granular, liquid, direct application), specialty fertilizers,

AgriBio products, Farming R&D and retail

Oro Agri: Biostimulants, adjuvants, crop protection

products, liquid foliar

Innofert:Trading

Axioteq: Consulting, analytics services

BME:

Bulk emulsion, packaged explosive, initiating

systems,blasting accessories, detonators

Protea Mining Chemicals: Chemicals for

Mining industry, value added services

Protea Chemicals: • Chemicals supply chain management

(representing global companies in South

Africa and Africa); Specialty chemicals

Umongo Petroleum: • Lubricants, additives, base and process oils

• Distribution partner to global oil companies

• Advanced technology through Chevron

With its vision of leaving a better world as a footprint, the Group’s solutions promote the responsible use of chemicals for health,

safety and a lower environmental impact → shift towards cleaner technologies

Agriculture Mining Chemicals

Ammonium Nitrate:

N H4 N O3

Fertilizer requires

the Nitrate

Explosives requires

the Oxidiser


INVESTOR PROPOSITION

LEADER IN ENVIRONMENTALLY

FRIENDLY PRODUCTION• Leading innovation in used oil recycling

• Continental leader in generation of carbon credits

• Proactive implementation of best in class GHG

emission mitigation

BLASTING CONTRACTS Commenced for Indonesia & Canada

NEXT GENERATION

TECHNOLOGYIn soil & plant tissue testing

FORERUNNER IN AGRIBIO

PRODUCTSWith secure, highest quality humate supply

(Australia) and patented high margin

biocontrol products in Oro Agri

LEADING MINING TECHNOLOGY:

AXXIS™ TITANIUM Has the longest firing

time of any electronic detonator

PROGRESSIVELY

EMBEDDING SDG’SIn business strategy


RCR - SAFETY PERFORMANCE BENCHMARKED

1.1

1

0.5

8

0.5

2

0.4

8

0.4

4

0.3

9

0.3

4

0.3

0

0.2

7

0.2

0

0.1

8

0.1

8

0

0.2

0.4

0.6

0.8

1

1.2

Ashland AECI Omnia Orica DuPont Bayer Huntsman BASF Sasol Akzo Nobel Dow Shell

* The RCR rates relate to the 2018 and 2019 years for companies, depending on when the RCR rate was published; Omnia rate as at 30 September 2019


SHARE SCHEMES AND B-BBEE

SAKHILE 1

• Offer to settle in cash - No share dilution

• 96.5% of participants accepted the offer

• Settlement in cash likely to occur in December

Employee Share Schemes

SCORECARD

FY19 FY18

Ownership 24.06 25

Management control 11.01 12.82

Skills 17.05 22.61

Enterprise & Supplier Development 34.03 27.42

Socio-Economic Development 5 2.82

TOTAL 91.15 90.67

SAKHILE 2

• Vested tranches settled in shares bought in the open

market in the name of the participants (66 000 shares)

• No share dilution

OTHER MANAGEMENT SHARE SCHEMES

• EPS / ROE Performance targets not met

• No intention to issue any further tranches

• Maintained Level 3 rating in Oct 2019

• Improved overall score

• Assessing new strategy with focus on ownership structure

and enhanced skill development initiatives

B-BBEE


CONTINUOUS FOCUS ON CARBON MANAGEMENT

• Response to climate change – SDG’s being embedded in business strategy

• Omnia has emerged as a leader in the mitigation of Greenhouse gases

(GHG):

• Implementing advanced technological mitigation measures

(measured reduction of NOX & N2O being > 90%)

• Focusing on green chemistry & optimising blasting solutions

• Co-generation of electricity from waste heat

• No CERs in stock - contract with NEFCO to sell all CP2 CERs until Jun 2020

• Some unregistered CP1 CERs that are currently not tradeable through

UNFCCC - these can be used to reduce carbon tax liability into the future

• Carbon tax liability

• Well managed mitigation measures implemented as early as 2008

• Current 2019 tax liability higher due to end of life catalyst to be installed

early next year

93%

4% 3%

TOTAL GHG EMISSIONS BY DIVISION 2019

Agriculture

Mining

Chemicals

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

FY2014FY2015FY2016FY2017FY2018FY2019FY2020FY2021

Scope 1 Scope 2

^ ^

^ Estimated

GHG EMISSIONS

FINANCE


8 654 8 723

60 92

206 120

104

55 39 61

6

8 000

8 500

9 000

MOVEMENT IN REVENUE

30 Sep 18

R M

illio

n

30 Sep 19RSA Int Trading RSA Int Chemicals OtherBiological UmongoPetroleum

Movement R(118)m Movement R159m Movement R22m


1 067 1 034

17 39

9

46

1 000

1 010

1 020

1 030

1 040

1 050

1 060

1 070

1 080

1 090

1 100

MOVEMENT IN DISTRIBUTION EXPENSE

30 Sep 18

R M

illio

n

30 Sep 19

Increase relating to Agriculture Biological in correlation with the increase in revenue

IFRS 16 impact

Decrease largely attributable to the decrease in staff related costs due to restructuring in line with rightsizing the business


MOVEMENT IN ADMINISTRATIVE EXPENSE

30 Sep 18

R M

illio

n

632 672

21

50

25

41

45

500

600

700

30 Sep 19IFRS 16 impact

Head office

Include restructuring cost of R15m


124 294

41

99

88

78

136

0

50

100

150

200

250

300

350

400

450

500

30 Sep 18 Forex movement Head Office 30 Sep 19

R M

illio

n

• RSA: Difficult trading conditions due to subdued commodity prices

• International: Performed better due to earlier deliveries• Biological: Strong demand for Agri Bio products• Cost cutting initiatives implemented

• RSA: Higher bulk volumes • Cost cutting initiatives implemented, partially offset by

once-off restructuring cost• International: New business awarded• Protea Mining Chemicals: Increased margins

• Increase in volumes and sales for Umongo Petroleum• Improved margins for Chemicals division• Reduced cost base in Protea Chemicals due to restructuring from prior year

• R52m: Umongo earn out reversal in HY19• R48m: IAS19 & bonus reversals in HY19• R12m: Debt restructure cost• R8m: IFRS16 impact • R8m: Impairment of software

MOVEMENT IN OPERATING PROFIT – INCREASED BY 137% (R170M)


13 98

28

14 7

4

28 83

11 24

0

20

40

60

80

100

120

30 Sep 18 30 Sep 19

R M

illio

nAGRICULTURE’S MOVEMENT IN OPERATING PROFIT

Forex movement

Acquisition cost not

repeated in HY20

IFRS16Leases impact

Zimbabwe hyperinflation

impact

RSA

• RSA: Difficult trading conditions due to subdued commodity prices• International: Performed better due to earlier deliveries• Biological: Strong demand for Agri Bio products• Cost cutting initiatives implemented

International Trading Biological

Excludes a forex loss of R80m offset by an increase in gross margin


MINING’S MOVEMENT IN OPERATING PROFIT

104 234

27

17

16

42

15 6 37

0

50

100

150

200

250

30 Sep 18 30 Sep 19Bad debt provision not repeating in

HY20

Stock write offs not

repeating in HY20

International set up cost not

repeating in HY20

Forex movement

RSA

R M

illio

n

Restructuring cost

• Higher bulk volumes in RSA • New international business awarded• Cost cutting initiatives implemented, partially offset by once off restructuring cost• Protea Mining Chemicals increased margins

International


CHEMICALS MOVEMENT IN OPERATING PROFIT

19 91

11

6 3 19

67

0

50

100

30 Sep 18 30 Sep 19IFRS16Lease impact

Zimbabwe hyperinflation

impact

Forex movement

Umongo Petroleum

R M

illio

n

Protea Chemicals

• Increase in volumes and selling prices for Umongo Petroleum• Improved margins for Chemicals division• Reduced cost base in Protea Chemicals due to restructuring from prior year


(12)

(129)

(52)

(24)

(24)

(12) (8)(11) (13)

-200

0

200

OPERATING PROFIT ALLOCATION – HEAD OFFICE MOVEMENT

30 Sep 19

Umongo earn out reversal not in HY20

IAS 19 reversal

not in HY20

Head Office unallocated

cost

Debt restructure

costIFRS 1630 Sep 18

BonusReversal

not in HY20

19

Forex movement

Additional amort for Oro Agri

HY19 5 months vs HY20 6 months

R M

illio

n

8

Softwareimpairment


VOLUMES

% Revenue Volumes Average price Comments

Agriculture RSA 3 (1) 4 Cyclical nature with most sales occurring in H2 of FY2020

Agriculture International (5) 6 (11)

Mozambique - lower blender throughput with cyclone in Beira.

Zimbabwe in line with expectations underpinned by breakeven

strategy and a focus on expatriation of funds. Zambia sales

exceeded expectations. Australia & Brazil performed well due

largely to increased humate sales

Agriculture Trading (48) (50) 2Change in operating model, decreasing volumes with low

margins on products

Agriculture Biological 43 25 18

HY19 included 5 months, HY20 included 6 months, on

normalised basis, average price remained unchanged with 25%

volume increase

Total Agriculture (3)

Mining RSA 10 3 7 Sales of non-electronic detonators declined

Mining International excluding PMC 16 - 16 Strengthening of the dollar

Protea Mining Chemicals (22) 38 (60) Change in product mix

Total Mining 6

Protea Chemicals (2) (0.5) (1.5) Decommissioning of EcoGypsum plant

Umongo Petroleum 11 4 7 Exports and sale to independent lube market customers

Total Chemicals 1


REDUCING WORKING CAPITAL – R714M ACHIEVED YEAR ON YEAR

5 346 4 264 4 632

169

234

336 12 103

20

64 75

155

3 500

3 750

4 000

4 250

4 500

4 750

5 000

5 250

5 500

30 Sep 18NWC

R M

illio

n

30 Sep 19NWC

31 Mar 19NWC

RSA Int Trading Bio Int Umongo HOProteaRSA

Movement (R81m) Movement (R123m) Movement (R11m)


PLANT UTILISATION – NICTRIC ACID PLANTS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 HY2020 FY2020

• FY17: Extended plant breakdown

• FY20: Forecast utilisation


THANK YOU

THANK YOU

Further Annexures


SEGMENT RECON – GROSS REVENUE H1 FY2019 AND FY2019

Reconciling items for 30 Sep 2018 and 31 Mar 2019 are detailed below:

GROSS REVENUE (Rm)Agriculture

RSA

Agriculture

International

Agriculture

Trading

Agriculture

Biological

Mining

RSA

Mining

International

Protea

Chemicals

Umongo

Petroleum

Head office &

Eliminations Total

H1 2019 Published AFS 2 494 1 403 431 - 1 048 1 430 2 430 161 (743) 8 654

Change to include intercompany 588 - 14 - 717 93 - 15 (1 426) -

Segment disclosed seperately - (280) - 279 - - (399) 399 - -

H1 2019 Restated AFS 3 082 1 123 445 279 1 765 1 523 2 031 575 (2 169) 8 654

FY 2019 Published AFS 5 661 2 081 961 711 2 104 3 001 4 108 1 193 (164) 19,656

Change to include intercompany 1 246 5 107 15 1 344 74 112 60 (3 991) (1 028)

FY 2019 Restated AFS 6 907 2 086 1 068 726 3 448 3 075 4 220 1 253 (4 155) 18 628

Segment for period

ended 30 Sep 2019

includes

intercompany

balances

This impacted

amounts published

on segment at

31 Mar 2019 &

30 Sep 2018 since

these only included

intersegmental

balances

At Sept 2018

Umongo Petroleum

& Agriculture

Biological were

included as part of

the Chemicals and

Agriculture

International

segments

respectively


SEGMENT RECON – OPERATING PROFIT & PBT H1 FY2019

• At Sep 2018 Umongo Petroleum & Agriculture Biological were included as part of the Chemicals and Agriculture International segments respectively

• Acquisition costs relating to Umongo Petroleum & Oro Agri were included as part of the Chemicals & Agriculture International segments respectively

• At 30 Sep 2018 Protea Angola was included as part of the Chemicals International segment this has now been reallocated to the Chemicals segment

Reconciling items for 30 Sep 2018 are detailed below:

• Interest expense is calculated per each business unit based on their individual net-controlled assets. Previously the interest was allocated to Head office

Reconciling items for 30 Sep 2018 are detailed below:

OPERATING PROFIT (Rm)Agriculture

RSA

Agriculture

International

Agriculture

Trading

Agriculture

Biological

Mining

RSA

Mining

International

Protea

Chemicals

Umongo

Petroleum

Head office &

Eliminations Total

H1 2019 Published AFS (95) 57 1 - 82 23 39 26 (9) 124

Segment disclosed seperately - (33) - 33 - - (20) 20 - -

Protea Angola reallocated - - - - - - 20 (20) - -

Transfer of forex - 9 - - - - (9) - - -

Management Fee 12 (5) - (6) - - - - - -

Oro Amortisation reallocated - 40 - - - - - - (40) -

Unearned profit reallocated 6 (6) - - - - - - - -

Bad debt reallocated - - - - (17) 17 - - - -

Restructing costs reallocated - - - - (16) 16 - - - -

Umongo Amortisation reallocated - - - - - - 20 - (20) -

Earn out reallocated - - - - - - (52) - 52 -

Share based payment reallocated - - - - - - - (7) 7 -

H1 2019 Restated AFS (77) 62 1 27 49 55 - 19 (12) 124

PROFIT BEFORE TAXATION (Rm)Agriculture

RSA

Agriculture

International

Agriculture

Trading

Agriculture

Biological

Mining

RSA

Mining

International

Protea

Chemicals

Umongo

Petroleum

Head office &

Eliminations Total

H1 2019 Published AFS (190) 27 - - 79 9 21 14 (54) (94)

Operating profit adj (refer above) 18 5 - 27 (33) 33 (40) (7) (2) -

Interest reallocation 7 7 (2) (4) (22) (2) (13) - 28 -

H1 2019 Restated AFS (165) 39 (2) 23 24 40 (32) 7 (28) (94)


SEGMENT RECON – OPERATING PROFIT & PBT FY2019

Reconciling items for 31 Mar 2019 are detailed below:

• Interest expense is calculated per each business unit based on their individual net controlled assets

• Interest reallocation as a result of change in net controlled assets recognised for respective business units

Reconciling items for 31 March 2019 are detailed below:

OPERATING PROFITAgriculture

RSA

Agriculture

International

Agriculture

Trading

Agriculture

Biological Mining RSA

Mining

International

Protea

Chemicals

Umongo

Petroleum

Head office &

Eliminations Total

FY 2019 Published AFS 93 169 3 105 21 148 (68) 78 (525) 24

Reallocation of ECL (10) 22 - - - - - (12) -

Forex adjustment - - - - - - 4 - (4) -

Reallocation of associate - - - - - - 30 - (30) -

Transfer of forex - 13 - - - - (13) - - -

Share based payment reallocated - - - - - - - (18) 18 -

FY 2019 Restated AFS 93 172 25 105 21 148 (47) 60 (553) 24

PROFIT BEFORE TAXATIONAgriculture

RSA

Agriculture

International

Agriculture

Trading

Agriculture


Mining

International

Protea

Chemicals

Umongo

Petroleum

Head office &

Eliminations Total

FY 2019 Published AFS (58) 131 (3) 88 (16) 114 (102) 68 (636) (414)

Operating profit adj (refer above) - 3 22 - - - 21 (18) (28) -

Interest reallocation (14) (7) - 10 - - - 11 -

FY 2019 Restated AFS (72) 127 19 98 (16) 114 (81) 50 (653) (414)


SEGMENT RECON – NET WORKING CAPITAL

• Balance sheet segment was not disclosed at 30 Sep 2018

• Net working capital published did not include long term receivables and payables, derivative

receivables and derivatives payables.

Net working capital for 30 September 2018 was restated as per below:

Net working capital for 31 Mar 2019 was restated as per below:

H1 FY2019 NWC published 5 415

H1 FY2019 NWC restated 5 346

Difference 69

Include long term trade receivables 134

Include derivatives - receivables 57

Include long term trade payables (174)

Include derivatives - liabilities (129)

Tax liability 43

(69)

NET WORKING CAPITAL (Rm)Agriculture

RSA

Agriculture

International

Agriculture

Trading

Agriculture


Mining

International

Protea

Chemicals

Umongo

Petroleum

Head office &

Eliminations Total

FY 2019 Published AFS 965 1 053 217 304 363 833 876 278 (625) 4 264

Inventory reallocated to PPE (142) - - - - - - - 142 -

Land bank loan reallocated to trade payables (79) - - - - - - - 79

Business reallocation - 12 - - - - - - (12) -

Reallocation of ECL - (10) 22 - - - - - (12) -

FY 2019 Restated AFS 744 1 055 239 304 363 833 876 278 (428) 4 264


SEGMENT RECON – NET CONTROLLED ASSETS

Oro Agri acquisition adjustments were recognised as part of the Agriculture

Biological segment which is now being disclosed separately and included with

Head office & eliminations

Net controlled assets for 31 Mar 2019 were restated as per below:

NET CONTROLLED ASSETSAgriculture

RSA

Agriculture

International

Agriculture

Trading

Agriculture

BiologicalMining RSA

Mining

International

Protea

Chemicals

Umongo

Petroleum

Head office &

EliminationsTotal

FY 2019 Published AFS 4 508 1 318 217 588 1 148 1 083 1 275 295 1 905 12 337

Inventory reallocated to PPE (142) - - - - - - - 142 -

Land bank loan reallocated to trade payables (79) - - - - - - - 79 -

Business reallocation - 12 - - - - - - (12) -

Reallocation of ECL - (10) 22 - - - - - (12) -

Acquisition adjustment reallocated - - - 21 - - - - (21) -

FY 2019 Restated AFS 4 287 1 320 239 609 1 148 1 083 1 275 295 2 081 12 337


HYPERINFLATION - KEY POINTS

• In a hyperinflationary economy, reporting of operating results &

financial position in local currency without restatement is not useful

• Decrease in purchasing power at such a rate that comparison of

amounts from transactions and other events that have occurred at

different times, even within same accounting period, is misleading

• In a hyperinflationary economy, financial statements are useful, only

if they are expressed in terms of the measuring unit current at the

end of the reporting period

• Any gains or losses on the net monetary position shall be included in

profit & loss and separately disclosed

• An entity with an excess of monetary liabilities over monetary assets,

gains purchasing power

Month CPI ZWL:USD Index-CPI Index-ROE

Oct-18 74.60 4.1597 3.8928 4.6234

Nov-18 81.50 4.7501 3.5632 4.0488

Dec-18 88.80 5.0750 3.2703 3.7896

Jan-19 98.40 5.2879 2.9512 3.6370

Feb-19 100.00 4.5313 2.9040 4.2443

Mar-19 104.40 5.0003 2.7816 3.8462

Apr-19 110.10 5.9228 2.6376 3.2471

May-19 124.00 8.9673 2.3419 2.1447

Jun-19 172.60 8.7312 1.6825 2.2027

Jul-19 208.90 11.9913 1.3901 1.6038

Aug-19 246.70 15.0280 1.1771 1.2797

Sep-19 290.40 19.2320 1.0000 1.0000

Hyperinflation-Indices:

Commentary


SUMMARY IMPACT OF HYPERINFLATION - ZIMBABWE

• Equity adjustment at 1 Apr 2019 of R50m

• Effect of hyperinflation on 30 Sep 2019:

• Increase in local currency but decrease in ZAR

• Due to exchange rates applied to translate

performance & balances

Rm

Before

hyperinflation

After

hyperinflation Impact

Income statement

Revenue 267 203 (64)

Expenses (152) (119) 33

Foreign exchange (109) (80) 29

Hyperinflation - 50 50

Tax 4 (7) (11)

Profit for the year 1 (1) (2)

Balance sheet 11 46 35

Assets

Liabilities 217 224 7

Equity (441) (450) 10

FCTR(288) (82) 206

Commentary

60 INTERIM RESULTS| 30 SEPTEMBER 2019

ADOPTION OF IFRS 16 - LEASES

Impact of adopting IFRS 16 - Leases

• All operating leases now capitalised to the balance sheet as right-of-use

assets with corresponding lease liabilities

• Right of use assets are depreciated over the lease term

• Finance costs accrued on lease liabilities at the incremental borrowing rate

and lease liability reduced by lease payments

On initial application (1 April 2019)

• Lease liabilities were measured at the PV of remaining lease payments,

discounted using lessee’s incremental borrowing rate as at 1 Apr 2019

• Right of use assets was measured at an amount equal to the remaining lease

liabilities

✓ No impact on opening retained earnings at 1 Apr 2019

• Leases previously classified as finance leases

• Lease asset was transferred to right of use assets

• Lease liability treated as before

• Impact at 1 April 2019:

BALANCE SHEET (Rm)

Impact as at

30 Sep 2019

Right of use assets

At 1 April 2019 543

Additions 116

Depreciation (112)

Foreign exchange movement (9)

At 30 September 2019 538

Lease liability

At 1 April 2019 536

Additions 100

Finance costs (25)

Lease payments (122)

At 30 September 2019 539

Commentary

INCOME STATEMENT (Rm)

Impact as at

30 Sep 2019

Lease expenses no longer recognised 130

Depreciation of right of use assets (112)

Operating profit 18

Finance expenses (25)

Profit before tax (7)

BALANCE SHEET (Rm) Lease liability

Right of use

assets

Operating leases capitalized 494 494

Finance leases transferred 42 49

IFRS 16 impact at 1 April 2019 536 543

Impact


IFRIC 23 – UNCERTAIN TAX POSITIONS SUMMARY

Background

• Tax positions taken are included in normal & deferred tax

calculations as per IAS 12

• Group previously recognised tax liabilities on most likely outcome in

accordance with IAS 12

• IFRIC 23 now requires weighted probability approach where there is

a wide range of outcomes

Application

• Retrospective implementation, cumulative adjustment for prior years

in opening retained earnings of R144m

Commentary

BALANCE SHEET (Rm) Retained earnings

Income tax

liability

At 31 March 2019 4 594 20

Adoption of IFRIC 23 (144) 144

At 1 April 2019 4 450 164

AGRICULTURE DIVISION


AGRICULTURE – OUR UNIQUE POSITIONING

Agro chemicals

Data science

Farming retail

Omnia’s brand is globally known for improving yield and providing state-of-the-art agriculture solutions

Growth opportunities exist in Africa (low fertilizer use compared to rest of world) and Rest of the world due to fears on health and a lower

environmental impact

Omnia is the only provider of granulated fertilizer in Africa –

now at lower cost

Omnia provides farmers with integrated solutions for

sustainable and responsible food production

The integration of Omnia and Oro Agri provides both

businesses with expanded market reach

1 2

3

High potential globally in AgriBio and Agro Chemical products – a 12%-

18% growth market with no dominant player at the moment.

MINING DIVISION


MINING – BME MARKETING POSITION

International expansion to key markets in progress• Product registrations obtained

• International distribution channels have been developed

• Competing in Indonesia through a secured local partnership

• JV in Canada completed, product trials being developed & funding model

to be addressed

• USA direct to market with opportunities identified in Alaska and Texas

• Mexico and Colombia – partnership models being developed

• Nitrophosphate plant to deliver lower cost CN to improve BME’s competitive

position in Africa

• Well positioned for new customers growth & market upturn

BME has operations across 20 African countries, as well as Australia, South-East Asia and South America

Recently secured operating licenses for USA & Canada

New state-of-the-art detonators to be

launched in FY2020 AXXIS-Titanium™

• Axxis Titanium™ is built on he latest technology, which represents a step

change in terms of utility & safety for users & adaptability to further

developments in technology & digital solutions at a cheaper cost of production

vs. existing products

• Axxis Titanium™ technology is adaptable to new developments such as

wireless

Complete range of high-quality blasting products &

services with a focus on lower ‘total cost of

ownership” than competitors

• Highly stable & re-pumpable emulsion formulations allow for specialised use

(e.g. larger sleep time)

• Modular automation plants and remote emulsion manufacturing

facilities offer clients security & continuity of supply

RESULTS PRESENTATION | 25 June 2019

1

2

3


REVENUE BY COMMODITY AND MARKET

68%

9%

24%

64%9%

26%

HY19HY20

O Other (civils, contractors, distributors)

S Surface & quarry

U Underground

36%

17%13%

9%

8%

5%

5%

4% 3%31%

22%16%

9%

7%

5%

5%3% 2%

HY20 HY19

Copper, Cobalt &

Nickel

Coal Other

Diamonds

PlatinumPt

GoldAU

Iron Ore

Surface & quarry

Manganese

REVENUE BY MARKETREVENUE BY COMMODITY

M

SD

O

MACRO-ECONOMICS


RAND: USD EXCHANGE RATE

R 11.00

R 11.50

R 12.00

R 12.50

R 13.00

R 13.50

R 14.00

R 14.50

R 15.00

R 15.50

R 16.00

Sep 2017 Mar 2018 Sep 2018 Mar 2019 Sep 2019

Average rate8% mvmt 30 Sep 18 to 30 Sep 19

6% mvmt 31 Mar 19 to 30 Sep 19

Closing rate7% mvmt 30 Sep 18 to 30 Sep 19

5% mvmt 31 Mar 19 to 30 Sep 19

R14.50

R13.80

R11.85

R12.90

HY2019HY2020

R14.17

R13.49

R15.18

R14.64


INTERNATIONAL CROP PRICES: USD PER TONNE

$100

$150

$200

$250

$300

$350

$400

$450

Sep 2015 Sep 2016 Sep 2017 Sep 2018 Sep 2019

Yellow maize Wheat Soya

Yellow Maize1%

Wheat-6%

Soya2%

Prices at 30 Sep USD

YELLOW MAIZE

2015 138

2016 120

2017 127

2018 132

2019 133

WHEAT

2015 181

2016 143

2017 160

2018 186

2019 174

SOYA

2015 317

2016 340

2017 345

2018 310

2019 315

% Movement is for the year 30 Sep 18 to 30 Sep 19


SOUTH AFRICA CROP PRICES: RAND PER TONNE

R 0

R 1 000

R 2 000

R 3 000

R 4 000

R 5 000

R 6 000

R 7 000

R 8 000


Yellow maize Wheat Soya

Yellow Maize16%

Wheat7%

Soya31%

Prices at 30 Sep ZAR

YELLOW MAIZE

2015 2 890

2016 3 016

2017 1 953

2018 2 352

2019 2 722

WHEAT

2015 4 089

2016 4 202

2017 4 063

2018 4 305

2019 4 600

SOYA

2015 5 350

2016 6 120

2017 4 682

2018 4 526

2019 5 910



0.0

0.5

1.0

1.5

2.0

2.5

$100

$200

$300

$400

$500

$600

$700

Sep 2015 Mar 2016 Sep 2016 Mar 2017 Sep 2017 Mar 2018 Sep 2018 Mar 2019 Sep 2019

Urea gran Ammonia Ammonia:urea ratio

0.83

AMMONIA VS UREA: USD PER TONNE

Urea Gran-20%

Ammonia-34%

Ammonia:Urea ratio-25%


UREA (GRAN)

2015 252

2016 194

2017 273

2018 312

2019 260

AMMONIA

2015 413

2016 175

2017 253

2018 358

2019 238

SIX MONTH AVERAGE

AMMONIA:UREA RATIO

2015 1.41

2016 1.51

2017 1.29

2018 1.11

2019 0.83

1.51

1.29

1.11


1.63

1.001.20

1.08


PRECIOUS METALS USD PER OUNCE

Gold26%

Platinum15%

Palladium57%


GOLD

2015 1 146

2016 1 327

2017 1 279

2018 1 192

2019 1 497

PLATINUM

2015 951

2016 1 029

2017 909

2018 812

2019 931

PALLADIUM

2015 668

2016 721

2017 935

2018 1 073

2019 1 681

Pt

Pt

AU

AU

Pd

Pd

Pa

llad

ium

$0

$200

$400

$600

$800

$1 000

$1 200

$1 400

$1 600

$1 800

$2 000

$0

$500

$1 000

$1 500

$2 000

$2 500

Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019

Gold Platinum Palladium


Go

ld a

nd

Pla

tin

um


ENERGY/COMMODITY PRICES IN USD

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110


Brent Crude $/barrel Coal $/ton Uranium $/lb

Brent Crude-25%

Coal-40%

Uranium-4%


BRENT CRUDE

2015 49

2016 49

2017 58

2018 83

2019 62

COAL

2015 51

2016 74

2017 91

2018 100

2019 60

URANIUM

2015 37

2016 22

2017 20

2018 27

2019 26

U

U



METAL COMMODITY PRICES IN USD PER TONNE

Copper-8%

Iron Ore+35%


COPPER

2015 5 041

2016 4 844

2017 6 447

2018 6 260

2019 5 749

IRON ORE

2015 57

2016 57

2017 70

2018 69

2019 93

Iro

n O

re

$0

$40

$80

$120

$160

$0

$2 000

$4 000

$6 000

$8 000


Copper Iron Ore



COBALT PRICES IN USD PER TONNE

$0

$10 000

$20 000

$30 000

$40 000

$50 000

$60 000

$70 000

$80 000

$90 000

$100 000


Cobalt- 41%


COBALT

2015 27 695

2016 27 500

2017 59 094

2018 62 250

2019 37 000

Co

Co



INDEX OF PHYSICAL VOLUME OF MANUFACTURING

Stagnant for a period of 7 years

60

70

80

90

100

110

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

financial results - omnia

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