AECI Limited Year-end Results & Dividend Declaration

 
TIDM87FZ 
 
AECI LIMITED 
(Incorporated in the Republic of South Africa) 
(Registration No. 1924/002590/06) 
Tax reference No. 9000008608 
 
Share code: AFE           ISIN: ZAE000000220 
Hybrid code: AFEP        ISIN: ZAE000000238 
Bond company code:     AECI 
Bond code: AECI03       ISIN: ZAG000155227 
Bond code: AECI04       ISIN: ZAG000155235 
LEI: 3789008641F1D3D90E85 
 
 
(AECI or the Company or the Group) 
 
Summarised audited consolidated financial results and final cash dividend 
declaration for the year ended 31 December 2020 
 
-   CASH GENERATED FROM OPERATING ACTIVITIES R3 132m 
 
-   GEARING 22% FY19: 36% 
 
-   FINAL CASH DIVID OF 470c DECLARED 
 
-   REVENUE -3% to R24 111m Underlying* +2% to R25 202m Foreign & export 
revenue: 44% of total revenue 
 
-   EBITDA -15% to R2 943m Underlying* +4% to R3 368m 
 
-   PROFIT FROM OPERATIONS -55% to R917m Underlying* +3% to R2 232m 
 
-   SAFETY PERFORMANCE TRIR of 0,42 
 
*Excl. impairments, net profit from sale of businesses and estimated COVID-19 
impact. 
 
AECI's results for 2020 demonstrated the benefits of the Company's strategy to 
diversify geographically and in terms of the markets served. We now operate in 
22 countries and regions on six continents and provide products and services to 
customers across a broad range of sectors. This diversification makes us more 
resilient and agile in responding to changing market conditions. Without these 
advantages, some unprecedented challenges in 2020 would have had a 
significantly more severe impact on our performance. 
 
Further diversification and consolidation of our strategic footprint will 
remain a focus going forward as we deliver value to all stakeholders in line 
with our commitment being purpose-led in who we are and in everything we do. 
Purpose is at the core of our "One AECI, for a better world" revised brand 
promise. The global pandemic has brought humanity together in a desire to build 
back better and, through our products and service, we embrace the opportunity 
to make a meaningful contribution into the future. 
 
COVID-19 
 
The COVID-19 pandemic and its ongoing effects have dominated global 
conversation and every aspect of human life for the past year. Regrettably, the 
AECI family has not been left unscathed. Four of our colleagues in South Africa 
have succumbed to COVID-related illnesses to date and many others have 
experienced tragedy in their own families and among their friends. The Board 
and management extend their sincere condolences to the families of our deceased 
employees and to all our employees who have suffered similar bereavement. 
 
The Board and management also take this opportunity to pay tribute to the way 
all employees have responded to the unprecedented challenges. Their diligence 
and determination have been exemplary. Equally, we express our gratitude to all 
AECI's stakeholders for their ongoing and unwavering support. 
 
The Group leadership's focus since March last year has been on navigating the 
business through the effects of the pandemic. To this end, a COVID-19 Task Team 
was established with the strategic intent of minimising impact on our people, 
on our operations and safeguarding the supply of products and services to 
customers globally. 
 
A comprehensive AECI COVID-19 Response Plan was developed in March 2020 and has 
been updated regularly to reflect the changing circumstances and requirements 
through the pandemic. It is currently in its 12th Revision. Employees' health 
and working arrangements continue to be tracked and monitored daily in line 
with this plan, which is available at https://static1.squarespace.com/static/ 
5dc3e3a1ddb32f 457c64c6af/t/6024f2bf87d7df2a609f7980/1613034179567/ 
12-august-2020-aeci-response-plan-for-covid-19-rev12.pdf. 
 
More than 90% of all employees are now performing their duties at their place 
of work. A total of 590 employees have tested positive for COVID-19 to date, 
with 574 of them having recovered fully. Currently, 16 positive cases are being 
tracked actively and two employees are receiving treatment in hospital. 
 
In addition to implementation of the Response Plan, operational business 
continuity management plans have been adapted and applied in line with the 
Company's overall risk management framework. These measures have enabled 
continuity in operations and in meeting all our customers' needs globally. 
 
The net asset value per share attributable to ordinary shareholders decreased 
by 2% (from 9 925 cents in 2019 to 9 679 cents) and basic earnings per share 
decreased by 90% (from 1 223 cents in 2019 to 127 cents in 2020). 
 
Safety 
 
The TRIR* was at 0,42 at year-end (2019: 0,38). This was a disappointing 
performance. COVID-19 continues to present emotional and logistical challenges 
for our employees, both in their homes and in the workplace. These challenges 
undoubtedly have an impact. We recognise this and a new programme focused on 
holistic wellness and safety has been launched Group-wide in response. Some key 
elements of the programme cover people engagement, behaviour-based safety, risk 
management and process safety. 
 
*The TRIR measures the number of recordable incidents per 200 000 hours worked. 
 
Financial performance 
 
Revenue of R24 111 million was 3% lower (2019: R24 799 million), with declines 
recorded primarily in the AECI Mining and AECI Chemicals segments. Of the total 
revenue, 44% was generated outside of South Africa and mostly in US dollars and 
Euros. The weaker average rand exchange rate against these major currencies 
assisted in limiting the revenue decline. 
 
EBITDA of R2 943 million was 15% lower than 2019's R3 473 million. Profit from 
operations was 55% lower at R917 million (2019: R2 031 million) and was 
negatively impacted by impairments of certain property, plant and equipment and 
goodwill in the amount of R890 million. R821 million of this amount related to 
the impairment of goodwill on the acquisition of AECI Much Asphalt. There was a 
positive impact from the disposals of three business units. The most 
significant of these was the sale of the Group's pulp and paper chemicals unit. 
Proceeds of R208 million were received, with profit of R108 million. The 
benefits of the strategic realignment projects undertaken in the prior year in 
AECI Mining Explosives and AECI Water were in line with expectations overall. 
 
The structural realignment of AECI Chemicals was undertaken in the first half 
of the year. Associated costs were offset by the project's benefits in the 
second six months and annualised savings of R100 million are still anticipated. 
 
Reported headline earnings per share (HEPS) of 880 cents was 23% lower 
year-on-year (2019: 1 150 cents). Headline earnings decreased to R928 million 
from 2019's R1 213 million. 
 
Financial impact of COVID-19 
 
Each Group operating entity estimated the impact of the COVID-19 pandemic on 
revenue, volumes and costs as accurately as it was possible to do so from March 
2020 onwards. These calculations were based on the following: 
 
-   Revenue 
 
    o Loss of revenue based on historical trends, revenue levels preceding 1 
April 2020 and open orders cancelled as a direct result of the pandemic 
 
    o Additional revenue generated directly related to the pandemic 
 
-   Cost of sales 
 
    o Costs not incurred as a direct result of revenue assumptions above 
 
    o Overhead under-recoveries as a direct result of the loss of revenue 
 
    o Costs incurred as a direct result of additional revenue generated 
 
    o Calculated as volumes not sold at current market prices or estimates of 
costs based on an estimated gross profit percentage 
 
-   Operating costs 
 
    o Additional costs incurred as a direct result of the pandemic 
 
    o Costs not incurred as a direct result of the pandemic 
 
-   Tax on above 
 
    o Tax at the Group's effective tax rate, excluding impairments 
 
The estimated negative impact on the Group's financial performance was as 
follows: 
 
-   revenue           R1 091 million 
 
-   profit from       R527 million 
operations 
 
-   HEPS              341 cents 
 
The AECI Mining and AECI Chemicals segments were the most seriously affected. 
These losses were partly offset by good sales of sanitiser by AECI Schirm in 
Germany and AECI Specialty Chemicals in South Africa. 
 
Having considered that the Company managed its cash resources exceptionally 
well in the period and remains in a solid financial position, notwithstanding 
the uncertainty and negative effects resulting from the COVID-19 pandemic, the 
Board decided to declare a final ordinary cash dividend of 470 cents (final 
ordinary dividend of 414 cents for the year ended 31 December 2019). 
 
The total ordinary dividend for 2020 was 570 cents, unchanged from the total 
dividend for 2019. 
 
Directorate and Group Company Secretary 
 
Changes that were announced in the prior year and took effect in the current 
year, as well as those 
 
announced in the current year, were as follows: 
 
-   Allen Morgan resigned as a Non-executive Director on 26 May 2020 after 10 
years on the Board, and 
 
    Jonathan Molapo resigned on 24 November 2020 owing to the demands of his 
executive commitments outside the Group. The Board reiterates its appreciation 
for their services. 
 
-   Steve Dawson and Walter Dissinger joined the Board on 1 January 2020 as 
Non-executive Directors and 
 
    Marna Roets was appointed in the same capacity with effect from 1 June 
2020. 
 
-   Nomini Rapoo resigned from her position as Group Company Secretary, with 
effect from 31 December 2020, after almost a decade in that role. We thank her 
for her contribution. Wynand Strydom was appointed to act in this position with 
effect from 1 January 2021. 
 
Dividend 
 
Declaration of final ordinary cash dividend No. 174 
 
Notice is hereby given that on Tuesday, 23 February 2021 the Directors of AECI 
declared a gross final cash dividend of 470 cents per share in respect of the 
financial year ended 31 December 2020. The dividend is payable on Monday, 12 
April 2021 to holders of ordinary shares recorded in the register of the

Company at the close of business on the record date, being Friday, 9 April 
2021. 
 
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 376 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, 6 April 2021. 
 
The issued share capital of the Company at the declaration date is 109 944 384 
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, 6 April 2021. 
 
The salient dates for the dividend will be as follows: 
 
Last day to trade cum        Tuesday, 6 April 2021 
dividend 
 
Ex dividend trade            Wednesday, 7 April 2021 
 
Record date                  Friday, 9 April 2021 
 
Payment date                 Monday, 12 April 2021 
 
Share certificates may not be dematerialised or rematerialised between 
Wednesday, 7 April 2021 to Friday, 9 April 2021, both days inclusive. 
 
By order of the Board 
 
WJ Strydom 
 
Group Company Secretary 
 
Woodmead, Sandton 
 
24 February 2021 
 
The full long-form 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/2021/JSE/ISSE/AFE/fy20.pdf 
 
https://investor.aeciworld.com/s/2020-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/full-afs-2020.pdf 
 
The contents of this short-form announcement are the responsibility of the 
Board of Directors of AECI Ltd. 
 
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, can also be requested by contacting the Group Company 
Secretary: WJ Strydom, Private Bag X21, Gallo Manor, 2052, 
wynand.strydom@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, Johannesburg, 2196 
 
Computershare Investor Services plc, PO Box 82, The Pavilions, Bridgwater Road, 
Bristol BS99 7NH, England 
 
EQUITY 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), R Ramashia, AM Roets, PG 
Sibiya 
 
*Australian **German ?Zimbabwean 
 
AECIWORLD.COM 
 
 
 
END

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