PERFORMANCE HIGHLIGHTS ENVIRONMENT FINANCIAL 114% cash conversion ratio achieved 10% reduction in absolute carbon emissions of finished cement Revenue R9,2 billion (2014: R9 billion) Slurry factory granted authorisation by the to construct a new kiln line which will improve environmental impact PEOPLE Over R58 million in dividends paid to employees 44 housing transactions completed in the PPC staff housing initiative to date Headline earnings per share 145 cents (2014: 179 cents) Over R2 billion spent on expansion projects in this year result in 15% thermal heat replacement OPERATIONAL 600 000 tpa plant in Rwanda successfully commissioned in 2015 SOCIAL 87% of total procurement (R4,5 billion) spent with BBBEE suppliers Profit improvement programme delivered R212 million for 2015 4 PPC Ltd Integrated report 2015
PERFORMANCE REVIEW Here we summarise our progress against key strategic objectives in the period. Our new strategy is detailed on page 32. Key targets related to the new strategy will be disclosed in our next integrated report. Enhance our industry leadership in southern Africa 2015 at a glance Our business OBJECTIVE PROGRESS Improve sales, marketing, customer focus and overall value Repositioned PPC Surebuild s price premium to activate the proposition inherent brand equity strength Variable delivered cost of sales per tonne declined 2% in the and logistical efficiencies and good corporate governance increased by 2% Review or upgrade equipment, especially in relation to environment or efficiency To ensure increased reliability and improved energy efficiency, we kiln 1 Ensure cash flow returns that support sustainable investment in Strong cash generation ability R2,7 billion of cash generated current and new markets from operations and achieved a cash conversion ratio of 114% Expand our operational footprint into other parts of Africa OBJECTIVE PROGRESS by 2017 Target countries with high potential for infrastructure Successfully commissioned the 600 000 tonne per annum plant development, low per-capita cement consumption and current in Rwanda cement shortages 50% complete Appendices Financial Sustainability Governance Strategic and operational PPC Ltd Integrated report 2015 5
KEY MILESTONES 1892 PPC Ltd established Cement Fabrieken Beperkt, in Hercules, Pretoria 1902 Changed its name to The First Portland Cement Factory Limited 1908 Name changed to Pretoria Portland Cement Company Limited Maiden dividend starts a tradition unbroken for over a century 1910 PPC listed on the JSE 1992 Centenary first 100 years 1994 Nelson Mandela black president 1996 Surebuild brand launched Botswana blending plant commissioned 2001 Holdings in Entered aggregates market by acquiring Mooiplaas dolomite quarry 6 PPC Ltd Integrated report 2015
1916 PPC Slurry produced its first cement 1921 built in Western Cape 1927 Cement factory built in Port 1937 PPC Jupiter started up in Germiston, just outside Johannesburg 2008 R3,9 billion broadbased black economic empowerment transactions 2010 PPC cement used in multi-billion rand projects including Gautrain, soccer stadiums, Medupi stations PPC listed on JSE for 100 years 2012 stake in Habesha Cement, Ethiopia Name changes to PPC Ltd 1956 Construction of PPC Riebeeck in the Western Cape 1977 Entered lime industry by acquiring Northern Lime Company 1984 PPC built and mothballed in economic recession; recommissioned the plant in 1998 2013 Construction started on new cement plant Cement centenary 2014 Readymix Construction of mill in 2015 New 600 000tpa plant commissioned in Rwanda Commenced construction of Slurry kiln 9 2015 at a glance Our business Appendices Financial Sustainability Governance Strategic and operational PPC Ltd Integrated report 2015 7
A PROFILE OF OUR BUSINESS PPC now supplies from nine cement factories, four milling plants, five blending facilities and nine readymix batching plants after acquiring Safika Cement and Pronto Readymix (including Ulula Ash) in 2014. PPC also produces aggregates, metallurgical-grade lime, burnt dolomite and limestone. Our Mooiplaas aggregates quarry in Gauteng has the largest aggregate production capacity in South Africa. half a million tonnes of fly ash. EXCELLENCE IN ALL WE DO We are professional and do things properly. We at PPC set the standard. We lead. We set challenging goals and are performancedriven. We are flexible and agile and we seek to continuously improve. Yesterday s stretch becomes today s standard. INTEGRITY IS NON-NEGOTIABLE We meet our commitments. We do what we say. We are honest and obey the law. EXCELLENCE INTEGRITY GREAT PLACE TO WORK We work in teams. Everyone has an important role to play and we want to maintain a non-discriminatory, safe and healthy work environment. We respect the dignity of every individual we engage with. We embrace transformation and diversity. EMPLOYEE SATISFACTION LEGITIMACY PPC VALUES STAKEHOLDER VALUE CUSTOMERS CUSTOMER-FOCUSED Our customers are the reason for our existence and all our efforts are focused on good relationships, understanding and meeting their needs consistently. LEGITIMACY We are seen by our stakeholders as caring and adding value. We are seen as long-term contributors and not short-term takers. We care for the environment and the communities in which we operate. CREATING A BETTER LIFE FOR STAKEHOLDERS Everyone s contribution creates the value. All stakeholders share in the value and success we create. 8 PPC Ltd Integrated report 2015
Managing our business Responsibility and integrity underpin our approach to managing our business. Key developments during the year were focused on strengthening this approach. ETHICS Founded in our corporate value that states integrity is non-negotiable, and supported by a code of conduct enforced across our operating territories. RISK COMPLIANCE Risk and compliance is monitored by a board committee. The main objective of risk management at PPC is to ensure sustainable growth in all our businesses and promote a proactive approach in evaluating, resolving and reporting risks associated with our businesses. GOVERNANCE Robust governance standards are monitored by a strong and experienced board of directors. REMUNERATION To ensure we create value for shareholders, including our own people, greater emphasis is now placed on reward for performance at senior levels, and the overall reward for semiskilled employees is being increased. SALIENT FEATURES IN 2015 Completed ethics training across the group. Enhanced communication efforts and increased profile of anonymous tip offs line. SALIENT FEATURES IN 2015 During the period, a risk management software solution was implemented for the group. In December 2014, all site champions and risk managers were trained on the new system, with all risk registers loaded into the system by the end of February 2015. Workshops were facilitated for all of the group functions and South African business to develop risk registers. These registers together with the PPC International register were then used by the Exco in a workshop to develop the PPC group risk register. This was considered by the board and the material issues are included in the integrated report. SALIENT FEATURES IN 2015 Governance, risk and compliance standards further enhanced. SALIENT FEATURES IN 2015 In complementing the performance culture across the business, the short-term incentive parameters have been ed and now include strategic nonfinancial elements that are strongly aligned with PPC s expansion strategies and shareholders interests. 2015 at a glance Our business Appendices Financial Sustainability Governance Strategic and operational PPC Ltd Integrated report 2015 9
AWARDS South Africa PMR supplier 2015 Standard Bank smarties award Mail & Guardian top 200 young South Africans CFO, was listed in the business and law category Zimbabwe Zimra (Zimbabwe Revenue Authority): PPC won the first prize for Region 2 in VAT and income tax. We also won the second prize in Pay as You Earn (PAYE) Concrete Society of Southern Africa s 2015 Fulton awards in the category innovation in concrete From Zimbabwe National Chamber of Commerce we won the following: Zimbabwe national annual quality awards Annual Business Day BASA awards, partnered by Hollard (South Africa s most prestigious awards recognising business arts partnerships) PPC public bench project Steinbuild awards Botswana Trust for PPC s contribution EY excellence in integrated reporting 2014: excellent ranking Other awards PMR Africa diamond arrow award of cement Most influential woman in business and governance Standard Bank top women awards relations) young achiever of the year business woman of the year gender empowered company: engineering Nkonki Top 100 Integrated Reporting awards 2015 10 PPC Ltd Integrated report 2015
OUR FOOTPRINT DEMOCRATIC REPUBLIC OF THE CONGO ETHIOPIA 2015 at a glance ZIMBABWE Our business ETHIOPIA SOUTH AFRICA Population (m) 54,9 Urbanisation (%) 64,8 5 784 Cement consumption/capita (kg) 230 1,8 Current national cement production capacity (mtpa) RWANDA 96 130 17 Population (m) 11,4 Urbanisation (%) 15 743 Cement consumption/capita (kg) 45 7,1 Current national cement production capacity (mtpa) BOTSWANA SOUTH AFRICA Source: International Monetary Fund 230 270 0,7 ZIMBABWE Population (m) 13,4 Urbanisation (%) 29 1 037 Cement consumption/capita (kg) 77 2,5 Current national cement production capacity (mtpa) DEMOCRATIC REPUBLIC OF THE CONGO Population (m) 81,7 Urbanisation (%) 42,5 478 Cement consumption/capita (kg) 34 7,2 Current national cement production capacity (mtpa) DEMOCRATIC REPUBLIC OF THE CONGO ZAMBIA BOTSWANA SOUTH AFRICA ZIMBABWE RWANDA BURUNDI 180 270 1,8 225 260 0,4 (in use) MALAWI MOZAMBIQUE BOTSWANA Population (m) 2,1 Urbanisation (%) 62 6 150 Cement consumption/capita (kg) 302 3,3 Current national cement production capacity (mtpa) ETHIOPIA Population (m) 89,8 Urbanisation (%) 19,5 702 Cement consumption/capita (kg) 61 8,0 RWANDA Current operation Current operation and current project Current project and export market Export markets Current project Current national cement production capacity (mtpa) 100 160 0,6 130 140 11 Appendices Financial Sustainability Governance Strategic and operational PPC Ltd Integrated report 2015 11