Strategic performance dashboard

Our strategy is detailed in our integrated report. Exxaro's strategic dashboard measures our key performance indicators (KPIs) across the sustainability capitals, from governance and compliance to best practice. The board and executive committee monitor the dashboard quarterly to ensure all sustainability-related risks and key metrics remain within our risk appetite.

For Exxaro, an integrated approach to sustainability and value creation for stakeholders lies in distilling every facet of our business (strategy, risk management, compliance KPIs, licence to operate, audits, assurance and performance measurement) into a coherent whole - focused on our stated goals.

In recent years, we have refined the way we do business to ensure the way we manage our strategy is both integrated and holistic. Key steps included:

• Implementing an integrated risk management framework, ensuring everyone clearly understands what is material to the company and why
• Establishing a sustainability framework
• Identifying KPIs aligned with material issues, risks and our sustainability framework, each measured against a tolerance level or appetite set by our board
• Linking the combined assurance plan with risks, material issues and KPIs.

The result of this process is an integrated strategic performance dashboard that gives the board and executive committee the most critical information required to measure and manage Exxaro's strategy and performance. It also provides a transparent and consolidated view for stakeholders on our drivers for creating value and ensuring sustainability.

The tool we use to determine whether we are on track to achieve our objectives is the Exxaro strategic performance dashboard. This dashboard has built-in risk appetite thresholds to ensure decisions in pursuing Exxaro's strategic objectives are in line with the risk threshold which, as a whole, makes up the risk appetite of the group.

How to interpret the dashboard

The dashboard lists all KPIs linked to a strategic priority/sustainability capital and material issue. Current performance and the status of the indicator (shown as a bulb) reflect whether the KPI is within our risk appetite thresholds. We aim to be within the target threshold: anything outside worst tolerable and target means we act outside our defined risk appetite in pursuing our strategic objectives. This will require additional controls or improving existing controls.

Example of KPI measure

One of our strategic objectives is to improve our portfolio; a related KPI is core operating margin. Anything outside of worst tolerable or target will mean that we underperformed or overperformed and appropriate action will be taken.

KPI current performance

KPI	Current performance		Legend  (indicator)
Core operating margin	25%

KPI threshold

KPI	Out of appetite		Worst tolerable		Best realistic		Target		Possible waste/ opportunity
Core operating margin	Less than 15%		15%		Between 15% and 20%		20%		More than 20%
Legend

HUMAN CAPITAL

		2018			2017
	KPI	Actual	Indicator		Actual	Indicator		Trend
	Number of fatalities	0			1
	Lost-time injury frequency rate (LTIFR)	0.12			0.12
	Lost-time injuries (LTIs)	23			21
	Occupational health incident frequency rate (OHIFR) - reported Chronic obstructive airways disease (COAD) Noise-induced hearing loss (NIHL) Pneumoconiosis Silicosis Occupational TB	0.33			0.33
	Occupational health (accepted cases include COAD, pneumoconiosis, NIHL, silicosis and TB)	12			22
	Non-occupational diseases (chronic diseases, eg diabetes, high blood pressure, etc)	117			17
	People who received HIV/Aids awareness training (% of group)	100			90
	% of employees who received awareness training and voluntarily tested for HIV/Aids	77			100
	HIV/Aids prevalence rate (%) compared to country prevalence rate	9			4.2
	Skills provision (% of internal appointments for critical skills)	52.4			56.1
	Retention of scarce skills (% turnover)	5.01			5
	Fraud and corruption/asset destruction (annual % of PPE, inventory, debtors and cash)	0			0
	Successful civil and criminal liability claims against Exxaro or other non-compliance penalties (% of revenue).	0			0

Negative

Positive

Unchanged

New KPI this period

		NATURAL CAPITAL
			2018			2017
	KPI		Actual	Indicator		Actual	Indicator		Trend
	Reportable environmental incidents		7			1
	Stoppage directives (including section 54 under MHSA, section 93 under MPRDA and directives under NWA and NEMA)		0			0
	Valid mining rights (in place/not) Current operations (MWP and SLP) (%)		100			100
	Projects (MWP and SLP) (%)		100			100
	Valid authorisations (EA, IWUL, AEL, EIA, ROD) Current operations		100			100
	Valid authorisations (EA, IWUL, AEL, EIA, ROD) Projects		100			100
	Compliance to valid licences/authorisations (%) Current operations		96			91
	Compliance to valid licences/authorisations (%) Projects		99			99.8
	Environmental liability provisions in place (%) (gap between immediate closure cost and rehabilitation funds available excluding guarantees) Commercial operations		25			24.2
	Environmental liability provisions in place (%) (gap between immediate closure cost and rehabilitation funds available excluding guarantees) Captive operations		15			8.7
	Carbon footprint (ktCO2e)
	Scope 1		315.4			324.9
	Scope 2		552			539
	Carbon intensity (ktCO2e/TTM)		5.3			5.4
	Water intensity (kl/ROM)		0.10			0.14

Negative

Positive

Unchanged

New KPI this period

	SOCIAL CAPITAL
		2018			2017
KPI		Actual	Indicator		Actual	Indicator		Trend
Ownership at group level (%) - mining charter		30			34.8
People living with disabilities - mining charter III		1.16			1.02
HR development (% payroll excluding levies, including internal and external training) - mining charter		5.27			5.14
Employment equity (%) on top management bands - five-year plan (2022)		66.67			5.14
Employment equity (%) on senior management bands - five-year plan (2022)		46.74			–	–
Employment equity (%) on middle management bands - five-year plan (2022)		65.43			–	–
Employment equity (%) on junior management bands - five-year plan (2022)		73.64			–	–
Black women (%) on top management bands - five-year plan (2022)		33.3			–	–
Black women (%) on senior management band - five-year plan (2022)		7.6			–	–
Black women (%) on middle management band - five-year plan (2022)		17.2			–	–
Black women (%) on junior management band - five-year plan (2022)		17.4			–	–
Inclusive procurement (%)
Capital		74			69
Services		81			78
Goods		76			79
BBBEE level		Level 4			Level 5
Enterprise development (% of NPAT)		0.97			0.35
Supplier development (% of NPAT)		1.47			0.80
Socio-economic development (% of NPAT)					0.90
Skills development: learning programmes for black people and people living with disabilities - target as % of payroll excluding mandatory sectoral training - BBBEE codes		3.4			2.34
Project delivery measure - LED projects per SLP - mining charter (%) Time variance from plan		12			15
Cost variance from plan		–8			–5

Negative

Positive

Unchanged

New KPI this period

MANUFACTURED CAPITAL

	2018			2017
KPI	Actual	Indicator		Actual	Indicator		Trend
Capital project delivery measure
Time	0.1			0.7
Cost	0			–1
Country risk as per assessment criteria (key drivers physical security and security of tenure)	–			–
Asset availability of enterprise resource planning systems	99.75			99.48
Digitalisation programmes (cost overrun)	–12			–
Digitalisation programmes (time overrun)	8			–

FINANCIAL CAPITAL

	2018			2017
KPI	Actual	Indicator		Actual	Indicator		Trend
Core operating margin (%)	22.36			25.49
Return on capital employed (ROCE) (%)	22.38			24.95
Return on equity based on core headline earnings (HEPS) (%)	17.49			16.57
Core HEPS (cps, short-term target)	2 159.00			2 011
Net debt to equity (times)	12.40			3.1
Net debt to annualised EBITDA (times)	0.50			0.1
EBITDA interest cover (times)	20.40			15
Negative Positive Unchanged New KPI this period