Aeci 5 1/2% Prf Regulatory News (87FZ)

AECI Limited - Summarised Results for the year ended 31 Dec 2021

PR Newswire

London, March 1

AECI Limited

(Incorporated in the Republic of South Africa)

(Registration No. 1924/002590/06)

Share code: AFE ISIN: ZAE000000220

Hybrid code: AFEP ISIN: ZAE000000238

Bond company code: AECI

LEI: 3789008641F1D3D90E85

(AECI or the Company or the Group)

Summarised audited consolidated financial results, Board change and final cash dividend declaration for the year ended 31 December 2021

Revenue

+8% to R26 053m

Foreign & export revenue: 41% of total revenue

HEPS

+27% to 1 116c

EBITDA

+5% to R3 091m

Cash generated from operating activities

R1 467m

Profit from operations

+124% to R2 052m

Gearing

24%

(1H21: 27%; FY20: 22%)

Final cash dividend of

505 cents per share declared

685 cents per share total dividend for ’21

Net debt:EBITDA

Best-ever safety performance

TRIR of 0,23

(’20: 0,42)

In 2021, AECI successfully navigated through three waves of COVID-19, overcoming significant global supply chain challenges and higher commodity prices to ensure the reliable supply of our diverse range of quality products and services to customers in various markets around the world. At the same time, we recorded our best-ever safety performance and made significant progress towards the achievement of our sustainability targets.

Amid high input costs, the impact of supply chain disruptions on working capital and a stronger average rand affecting hard currency earnings, we reported robust financial results, demonstrating the benefits of our diversification, agility and strategic pillar structure.

The Board of Directors formally reviewed and approved our strategy in October, clearly defining the Company’s growth plans, targets and objectives to ensure we deliver on our purpose of “One AECI, for a Better World”.

COVID-19

Across the world, COVID-19 continued to impact health and wellbeing, lives and livelihoods. Many of our people experienced bereavement among their families and friends. Tragically 12 of our colleagues succumbed to COVID-19-related illnesses. All were in South Africa and all passed away during the first three waves of the pandemic. The Board and management extend their sincere condolences to their families and to all employees who have lost loved ones. The fourth wave of COVID-19 is receding and thankfully no further deaths have occurred.

People everywhere became more accustomed to navigating the crisis, with changes in consumer patterns impacting supply chain dynamics. Supply chains and shipments slowed, causing shortages of certain raw and packaging materials, thus disrupting production. Although not unscathed, companies with local sources of supply and local production facilities were better able to meet their customers’ requirements. For many companies the need to hold higher levels of more expensive inventory pushed up working capital. This was indeed the case for AECI.

Our COVID-19 Task Team continued to meet — virtually — every week, implementing our Response Plan. The plan focuses on mitigating the impact of the pandemic on our people, our operations and the supply of products and services to customers, as well as on the roll-out of vaccinations. Together with the Response Plan, the Group also continued to apply its business continuity plans at all operations globally.

Almost all AECI’s people are now back at their places of work. The Board and management would like to thank all employees for their diligence and determination in response to the challenges of life under COVID-19. We are also grateful to our many other stakeholders for their support.

Safety

One of our three strategic platforms is “Zero Harm and Sustainability”. The year 2021 was the most successful in AECI’s history in terms of performance against all the occupational health and safety indicators that we measure.

The Total Recordable Incident Rate (TRIR) improved to 0,23 (2020: 0,42). The TRIR measures the number of recordable incidents per 200 000 hours worked. While COVID-19 continued to present numerous challenges to our employees, we learnt how to deal with the pandemic in the workplace and our people renewed their commitment to achieving Zero Harm by re-committing to our Safety Improvement Plan. A key part of this plan is the standardisation across the business of items such as safety, health and environment risk descriptors, processes and systems.

Financial performance

AECI’s revenue increased by 8% to R26 053 million (2020: R24 111 million). AECI Mining and AECI Chemicals were the business pillars most affected by COVID-19 in 2020. The businesses in both segments recovered well in 2021, with AECI Mining benefiting as global mining activity returned to more normalised levels. AECI Chemicals further benefited from the strategic realignment process completed in 2020 which delivered in line with expectations. Also assisting was a level of overall improvement in South Africa’s manufacturing, infrastructure and general industrial sectors, albeit from a low base.

Of the total Group revenue, 41% (2020: 44%) was generated outside of South Africa, with the stronger average rand exchange rate against these major currencies having an impact.

EBITDA of R3 091 million grew by 5% from 2020’s R2 943 million. Profit from operations recovered strongly to R2 052 million, 124% up from 2020’s R917 million. There were no impairments in the current year, compared to 2020 which had been negatively affected by impairments of certain property, plant and equipment and goodwill in the amount of R890 million, mostly relating to the goodwill on the acquisition of AECI Much Asphalt.

Reported headline earnings per share (HEPS) of 1 116 cents was 27% higher year-on-year (2020: 880 cents). Headline earnings increased to R1 178 million from 2020’s R928 million.

The Company remains in a solid financial position and has repaid R1 877 million in term debt, while maintaining a robust net gearing ratio of 24% (2020: 22%). There has been an investment in inventory to ensure supply is available to meet increasing demand in an environment where supply chain timing has extended and disruptions have become frequent.

The Board, considering the solid performance and stable financial position, declared a final ordinary cash dividend of 505 cents (final ordinary dividend of 470 cents for the year ended 31 December 2020), a 7% increase.

The total ordinary dividend for 2021 was 685 cents, up from the 570 cents total dividend for 2020, a 20% increase.

The net asset value per share attributable to ordinary shareholders increased by 7% (from 9 679 cents in 2020 to 10 384 cents) and basic earnings per share increased by more than 100% (from 127 cents in 2020 to 1 125 cents in 2021).

Directorate and Group Company Secretary

Changes that were announced and took effect in the year, as well as those that take effect in 2022, were as follows:

After a tenure of 12 years, on 1 March 2022, Rams Ramashia advised the Board of his intention to step down as a Non-executive Director of the Company at the next AGM, on 31 May 2022. During his tenure as Non-executive Director, Rams served as a member of the Remuneration and Nomination Committees. He also chaired the Social and Ethics Committee prior to becoming Chairman of the Risk Committee. The Board thanks him for his valuable contribution.

Dividend

Declaration of final ordinary cash dividend No. 176

Notice is hereby given that on Tuesday, 1 March 2022 the Directors of AECI declared a gross final cash dividend of 505 cents per share in respect of the financial year ended 31 December 2021. The dividend is payable on Monday, 11 April 2022 to holders of ordinary shares recorded in the register of the Company at the close of business on the record date, being Friday, 8 April 2022.

A South African dividend withholding tax of 20% will be applicable to all shareholders who are not either exempt or entitled to a reduction of the withholding tax rate in terms of a relevant Double Taxation Agreement, resulting in a net dividend of 404 cents per share payable to those shareholders who are not eligible for exemption or reduction. Application forms for exemption or reduction may be obtained from the Transfer Secretaries and must be returned to them on or before Tuesday, 5 April 2022.

The issued share capital of the Company at the declaration date is 105 517 780 listed ordinary shares, 10 117 951 unlisted redeemable convertible B ordinary shares and 3 000 000 listed cumulative preference shares. The dividend has been declared from the income reserves of the Company.

Any change of address or dividend instruction must be received on or before Tuesday, 5 April 2022.

The salient dates for the dividend will be as follows:

Share certificates may not be dematerialised or rematerialised between Wednesday, 6 April 2022 and Friday, 8 April 2022, both days inclusive.

By order of the Board

Cheryl Singh

Group Company Secretary

Woodmead, Sandton

1 March 2022

The full announcement including the unmodified audit opinion of the external auditor, Deloitte & Touche, on the summarised consolidated financial statements, and the basis for its unmodified opinion has been released on SENS and is available at:

https://senspdf.jse.co.za/documents/2022/JSE/ISSE/AFE/fy21.pdf

https://investor.aeciworld.com/s/2021-results-announcement.pdf

The annual financial statements including the audit opinion of the external auditor, Deloitte & Touche, which sets out a key audit matter and the basis for its unmodified opinion is available at:

https://investor.aeciworld.com/s/AECI2021fullafs.pdf

The contents of this short-form announcement are the responsibility of the Board of Directors of AECI. This short-form announcement is only a summary of the information in the full announcement and does not contain full or complete details. This announcement is itself not audited but extracted from audited results. Any investment decisions made by investors and/or shareholders and/or noteholders should be based on consideration of the full announcement as a whole. Investors, shareholders and noteholders are encouraged to review the full announcement which is available on SENS and on AECI’s website. The full announcement is also available for inspection at the registered office of AECI. Copies of the full announcement are available to investors, shareholders and noteholders at no charge. These copies can also be requested by contacting the Group Company Secretary: C Singh, Private Bag X21, Gallo Manor, 2052, cheryl.singh@aeciworld.com or groupcommunications@aeciworld.com.

Registered Office

First floor, AECI Place, 24 The Woodlands, Woodlands Drive, Woodmead, Sandton

Share transfer secretaries

Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196

Computershare Investor Services plc, PO Box 82, The Pavilions, Bridgwater Road, Bristol BS 99 7NH, England

Sponsor and Debt Sponsor

Rand Merchant Bank (A division of FirstRand Bank Limited)

1 Merchant Place, Cnr Fredman Drive and Rivonia Road, Sandton, 2196

Directors

KDK Mokhele (Chairman), SA Dawson*, FFT De Buck, WH Dissinger?**, MA Dytor (Chief Executive), G Gomwe?†, KM Kathan (Executive), PM Mishic O’Brien?‡, R Ramashia, AM Roets, PG Sibiya * Australian ** German † Zimbabwean ‡ American

aeciworld.com