PPC s Slurry plant in the North West Province

Transcription

1 For PPC, our icon, the elephant, symbolises strength, stature and dependability. This, combined with its wisdom, maturity, family orientation and loyalty, encapsulates the essence of PPC PPC s Slurry plant in the North West Province

2

3 Fast facts Profile Our strategy Focus on core businesses Generate superior cash flow returns Achieve global competitiveness Develop globally competitive people Practise sound corporate, environmental and social governance Build on our strengths through synergistic growth Reader note: Given its broad stakeholder base, PPC has elected to publish separate annual financial and sustainability reports in 2009 to enable wider but cost-effective dissemination of its sustainability practices and progress. We also believe a stand-alone sustainability report will enable the group to elicit pertinent feedback from stakeholders that will be incorporated into future strategies and initiatives. These reports should be read together for a fuller understanding of the group s performance, strategies and objectives.where reference is made to other sections in this report, readers are given the page number. Where reference is made to the companion volume to this report, readers are guided by the icon and page number. Group revenue 9 Accredited as BBBEE level Energy consumed per ton of product The roots of Pretoria Portland Cement Company Limited (PPC) stretch back well over a century to 1892 when it established the first cement plant in South Africa. PPC listed on the then Johannesburg Stock Exchange in Today, PPC is the leading supplier of cement in southern Africa. Collectively, eight manufacturing facilities and three milling depots in South Africa, Botswana and Zimbabwe are capable of producing almost eight million tons of cement products each year. PPC s established distribution network supplies quality branded cement to the building and construction industry, concrete product manufacturers, hardware stores and DIY centres. The group s product range spans all applications, supported by a technical services team known for developing innovative industry solutions. Related products include aggregates from PPC s Gauteng quarries at Mooiplaas and Laezonia, and in Botswana. PPC Lime is the leading supplier of metallurgicalgrade lime, burnt dolomite, limestone and related products in southern Africa. It operates one of the largest lime plants in the world at Lime Acres in the Northern Cape, South Africa. A vital element in maintaining its market leadership in the region is PPC s unwavering commitment to excellence in satisfying customers needs and striving for total quality across its operations.

4 Moving forward Business objectives Economic Ensure cash flow returns that allow for continued reinvestment in and replacement of capacity Continuously explore ways to reduce costs and improve efficiency of operations Operational Reduce energy cost Increase manufacturing capacity to meet the country s needs Environmental Reduce energy consumption Rehabilitate and obtain closure certificates for all worked-out mining areas Meet all legislated emission level requirements and further reduce emissions Reduce non-renewable resource requirements by optimising the level of extenders in the final product Social Assist with uplifting disadvantaged communities by investing in and using resources from the communities in which PPC operates Skills transfer in disadvantaged communities for sustainable empowerment Continue to develop BBBEE in line with applicable guidelines and legislation Page 1 Pretoria Portland Cement Company Limited Annual Report 2009

5 Financial highlights Revenue (R million) EBITDA (R million) Headline earnings per share (cents) Cash available from operations (R million) Operating profit* Cash earnings Operating profit up 4% to R2 418 million (2008: R2 323 million) Cash earnings per share up 6% to 329 cents (2008: 311 cents per share) * Excluding impact of the BBBEE IFRS 2 charges and the take-on gain arising from the consolidation of Porthold Page 2

6 Financial summary Financial results (R million) Revenue Operating profit* Property, plant and equipment Total assets Cash generated from operations Ordinary share analysis (cents per share) Headline earnings per share (cents)* 256,8 282,6 263,1 Earnings per share (cents)* 257,3 283,5 265,8 Dividends per share (cents) 200,0 225,0 265,5 Number of employees # * Excluding BBBEE IFRS 2 charges and take-on gain on consolidation of Porthold # Includes employees in Botswana and Zimbabwe Sustainability highlights Over 7% of payroll spent on employee training and development Behaviour-based safety campaign results in 1,5 million accident-free hours for the Ntšhafatso project 15% reduction in CO 2 emissions per ton cement, lime and dolomite from 1990 to % reduction in energy consumption per ton cement, lime and dolomite from 2000 to 2009 PPC s sustainability performance for 2009 is summarised on pages 58 to 65. A separate sustainable development report accompanies this annual report. It can also be accessed on Page 3 Pretoria Portland Cement Company Limited Annual Report 2009

7 Investment proposition Leading producer with best geographic spread Strong infrastructural demand outlook to 2014 New capacity available Cash generative Excellent dividend yield history Strong balance sheet Financial strength to explore expansion opportunities Experienced management team Operations and locations * Cement plants Limestone quarries Aggregate quarries Lime quarries Lime plant Gypsum quarry Head office * Materials handling facility 1 Hercules 2 Jupiter 3 Slurry 4 Dwaalboom 5 Riebeeck 6 De Hoek 7 Port Elizabeth 8 Colleen Bawn (Zimbabwe) 9 Bulawayo (Zimbabwe) 10 Beestekraal quarry 11 Dwaalboom quarry 12 Slurry quarry 13 Zoutkloof quarry 14 Riebeeck quarry 15 Grassridge quarry 16 Colleen Bawn quarry (Zimbabwe) 17 Lime Acres 18 Lime Acres quarry 19 Mount Stewart quarry 20 Laezonia quarry 21 Mooiplaas quarry 22 Kgale quarry (Botswana) 23 Gaborone (Botswana) 24 Head office (Sandton) 25 Saldanha Page 4

8 Group at a glance Cement R million Change Revenue % EBITDA % EBITDA margin (%) 42,6 42,5 Total assets* % *Includes Porthold assets of R675 million in 2009 Overview PPC was established 118 years ago as De Eerste Cement Fabrieken Beperkt and is today the acknowledged market leader in South Africa. The history of PPC is closely linked to the growth and development of South Africa PPC has produced cement for many of the country s most famous landmarks and construction projects, including the Union Buildings, Gariep Dam, Van Staden s River Bridge, new Greenpoint Stadium and much of the rest of southern Africa s infrastructure. The company s cementitious brands in South Africa include the market-leading Surebuild and specialist cement brands Rapo and OPC. In addition to serving southern African markets, cement is exported to other African countries and the Indian Ocean islands. PPC International Trading is responsible for exports of PPC cement from South Africa, and trading cement sourced elsewhere into various other markets. Porthold Registered in Zimbabwe, Porthold s core product is Unicem, a trusted cement made at the Bulawayo factory from high-quality raw materials. PPC Botswana PPC Botswana has been operational for over 50 years. From its sales office and cement-blending operation in Gaborone, it supplies cement throughout Botswana. Page 5 Pretoria Portland Cement Company Limited Annual Report 2009

9 Group at a glance continued Lime R million Change Revenue (9%) EBITDA (28%) EBITDA margin (%) 22,3 27,9 Total assets (3%) Overview PPC Lime has grown from small beginnings in 1907 at Uitloop in Limpopo producing lime for the burgeoning gold mining industry, into one of the largest lime producers in the southern hemisphere, supplying almost 60% of the lime consumed in southern Africa. PPC Lime is certified to ISO 9001, and OHSAS (safety management) standards. Together with SANS 1841 and a five-star Dekra rating, customers are continually assured of superior quality products. Lime products Unslaked lime, hydrated lime and limestone. PPC Lime PPC Lime is the leading supplier of metallurgicalgrade lime, burnt dolomite and related products in southern Africa. Page 6

10 Aggregates R million Change Revenue % EBITDA (10%) EBITDA margin (%) 28,4 33,1 Total assets % Overview PPC Aggregates supplies quality construction aggregates to the civil construction sector as well as products for the chemical, metallurgical and agricultural industries. Mooiplaas, Laezonia and Kgale quarries are ISO 9001:2000 certified and members of the Aggregate and Sand Producers Association of South Africa (ASPASA). All operations are committed to producing quality products to meet customers requirements in the most cost-effective manner. Aggregate products Concrete stone, road stone, crusher sand, river sand, building sand, plaster sand, Magalies silica, natural base, sub-base, fill material, dolomite and agricultural lime. PPC Aggregate Quarries Mooiplaas dolomite mine and Laezonia quarry produce quality aggregates and sands to meet diverse customer requirements. Kgale Quarries At this quarry in Kgale Hills, Botswana, granite is processed into quality aggregates and sands. Page 7 Pretoria Portland Cement Company Limited Annual Report 2009

11 Directorate Note: Directors CVs can be found on page 56 in the corporate governance section of this annual report Page 8

12 IFC Profile 2 Financial highlights 3 Financial summary and sustainability highlights 4 Investment proposition 4 Operations and locations 5 Group at a glance 8 Directorate in brief 01 Overview 12 Chairman s report 18 Chief executive officer s report 24 Chief financial officer s report 12 Management review Porthold review 34 Operational review: Cement 37 Operational review: Lime and Aggregates 28 Operational review Corporate governance structure and management systems 56 Board of directors full CVs 38 Corporate governance 12 1 Bheki Lindinkosi Sibiya Chairman 2 Paul Stuiver Chief executive officer 3 Salim Abdul Kader Executive director, organisational performance and transformation 4 Robert Harley Dent Executive director, lime, aggregates and strategic projects 5 Peter Esterhuysen Chief financial officer 6 Zibusiso Janice Kganyago Independent non-executive director 7 André Jacobus Lamprecht Independent non-executive director 8 Nomalizo Beryl Langa-Royds Independent non-executive director 9 Mangalani Pieter Malungani Non-executive director 10 Timothy Dacre Aird Ross Independent non-executive director 11 Joe Shibambo Independent non-executive director 12 Jerry Siklulumi Vilakazi Non-executive director Page 9 58 Sustainability review 69 Report of the independent auditors 70 Directors report 89 Accounting policies 100 Group financial results 154 Company financial results 181 Administration 182 Notice of annual general meeting 185 Form of proxy 187 Index to Global Reporting Initiative indicators 58 Corporate responsibility 66 Financial statements Pretoria Portland Cement Company Limited Annual Report 2009