Exxaro report selector 2019

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Exxaro Resources Limited
Integrated report 2019

Currently viewing: Understanding our business / Year in review

Year in review

Value creation

To illustrate value creation over time, Exxaro uses the six categories of capital identified by the IIRC: natural, human, social and relationship, manufactured, financial and intellectual.

In all of our activities, we manage the capitals responsibly to ensure maximum benefit for all stakeholders, as outlined in our business model.

Adding value to each capital, and managing the trade-offs, supports our social licence to operate (understanding our strategic trade-off considerations).

Value distribution (Rm)
2019 2018
95 Community investments and volunteerism 77
1 391 Dividend paid to external shareholders of Eyesizwe 247
1 315 Employees' tax 1 163
1 690 Payments to government: taxation contribution 1 664
4 209 Salaries, wages and benefits 3 379
558 Cost of finance 518
5 812 Cash dividend paid 5 483
80 Phantom employee scheme 87

1 Eyesizwe (RF) Proprietary Limited.

Strategic performance and key outcomes in 2019

Natural capital Trend Target 2019 2018 2017
Reportable environmental incidents (levels 2 and 3)
0 0 x level 2 7 x level 2 1 x level 2
Carbon intensity (scope 1) (kt CO2e)
Actual for previous year less 5% 7%
improvement
12%
improvement
17.7%
improvement
Carbon intensity (scope 2) (kt CO2e)
Actual for previous year less 5% 2%
improvement
(0.01%) 5%
improvement
Water intensity (kL/run of mine)
0.20 0.10 0.11 0.18
Rehabilitation funding adequacy of commercial mines, including guarantees (%)
80% to 100% 68

R4.4 billion

Our employees enjoy the largest share of value created from earnings as well as investments in development

2 316 cps

Shareholders receive a return on their investment through dividends

Human capital          
Fatalities
0 0 0 1
Lost-time injury frequency rate (LTIFR)
0.11 0.12 0.12 0.12
Occupational health incident frequency rate (OHIFR)
0.31 0.24 0.33 0.33
Skills provision (% of appointment from within)
60.0 47.9 52.4 56.1

R15.6 billion

Suppliers and contractors are supported by our procurement of consumables, services and capital goods

R1.7 billion

Governments of countries in which we operate and invest receive taxes and royalty payments

Social and relationship capital          
B-BBEE contribution level
1 2 5
Black ownership (%)
30 30 30 30 
Social and labour plans (SLP) project delivery (time variance) (%)
0 (11) 12 (15)
SLPs project delivery (cost variance) (%)
0 (58) (8) (15)

28% ROCE

Providers of finance receive a return on their investment

R170.7 million

30 enterprises were granted loans and grant funding

Manufactured capital          
Capital project delivery measure (time variance) (%)
0 5 (behind) 0.1 (behind) (0.17) (behind)
Capital project delivery measure (cost variance) (%)
0 3.1 (within budget) 0 (on target) 1.0 (saving)

R5.8 billion

We reinvest in the growth of our coal business: R2.2 billion sustaining capital and R3.6 billion expansion capital

Financial capital          
Core operating margin (%)
20 15 29 32
Annualised return on capital employed (ROCE)1 (%)
>20 28 23 23
Annual core HEPS2 (cents per share short term target)
2 354 2 159 2 011
Net debt to annualised EBITDA3 (times)
<1.5 1.0 0.6
1 2017 is restated ( refer to group annual financial statements at https://www.exxaro.com/investor/integrated-reports2019/index.php.
2 HEPS is headline earnings per share
3 EBITDA is net operating profit before interest, tax, depreciation, amortisation, impairment charges/reversals and net loss or gain on the disposal of assets and investments (including translation differences recycled to profit or loss).

Improvement in performance    
Unchanged performance    
Deterioration in performance