Capital discipline and financial performance introduction

To achieve our vision, we must deliver sustainable financial returns to our investors and shareholders. Our financial strategy differentiates the Group by focusing on growing the margin and free cash flow achieved for every ounce of gold produced.

Key measurements – capital discipline and financial performance1

    2017   Status   2016   2015   2014  
  US$/A$ (average) 0.77     0.75   0.75   0.81  
  R/US$ (average) 13.33     14.70   12.68   11.56  
  Average US$ gold price received (US$/oz) 1,255     1,241   1,140   1,249  
  Average A$ gold price received (A$/oz) 1,640     1,675   1,541   1,404  
  Average Rand gold price received (R/kg) 538,344     584,894   478,263   441,981  
  Revenue (US$m) 2,811     2,750   2,545   2,869  
  AISC (US$/oz) 955     980   1,007   1,053  
  AIC (US$/oz) 1,088     1,006   1,026   1,087  
  Cost of sales2 (US$m) 1,404     1,388   1,456   1,678  
  Total capital expenditure (US$m) 840     650   634   609  
  Net cash-flow3 (US$m) (2)     294   123   235  
  Free cash-flow margin (%) 16     17   8   13  
  Net debt (US$m) 1,303     1,166   1,380   1,453  
  Net debt/adjusted EBITDA ratio4 1.03     0.95   1.38   1.30  
  Normalised earnings (US$m) 154     186   40   85  
  Total dividend payment (R/share) 0.90     1.10   0.25   0.40  
  Dividend as a % of normalised earnings 39     35   33   34  
1 All figures are for total operations (continued and discounted
2 Cost of sales before amortisation and depreciation
3 Net cash-flow = cash-flow from operating activities less net capital expenditure and environmental payments
4 This measure is defined and reconciled in note 38 of the consolidated financial statements

2017 performance improvement on 2016 or achievement in line with strategy
2017 performance drop against 2016
2017 performance on par with 2016
Results and impact
  •    
    • Allocate capital in line with strategic priorities as per capital ranking
       
    • Pay dividends in line with policy
    • Maintain net debt to EBITDA ratio of under 1.25x and extend debt maturity
    • All new capital spend to have appropriate returns taking into account
      risks and cost of capital ranked and prioritised in accordance with an
      agreed matrix and in line with internal capital control standards and
      study guidelines. Accordingly all growth capital expenditure on existing
      mines, new projects or acquisitions to have hurdle rates of 15% at a
      US$1,300/oz gold price
    		 

    Strong
    balance sheet     maintained while investment in future growth continued

       
    • A sustained and significantly lower gold price and currency exchange rate
      volatility
    • South Deep – Partial achievement of the production targets as defined in
      the rebase plan and the associated loss of investor confidence
    		  
           
Average US$ gold price received
US$1,255/oz		   Key stakeholders
  Shareholders and investors