Average US$ gold price received

US$1,252/oz

KEY MEASUREMENTS – CAPITAL DISCIPLINE AND FINANCIAL PERFORMANCE¹

	2018			Status			2017	2016	2015	2014
US$/A$ (average)	0.75						0.77	0.75	0.75	0.81
R/US$ (average)	13.20						13.33	14.70	12.68	11.56
Average US$ gold price received (US$/oz)	1,252						1,255	1,241	1,140	1,249
Average A$ gold price received (A$/oz)	1,694						1,640	1,675	1,541	1,404
Average Rand gold price received (R/kg)	531,253						538,344	584,894	478,263	441,981
Revenue (US$m)	2,578						2,811	2,750	2,545	2,869
All-in Sustaining Costs (AISC) (US$/oz)	981						955	980	1,007	1,053
All-in Costs (AIC) (US$/oz)	1,173						1,088	1,006	1,026	1,087
Cost of sales2 (US$m)	1,375						1,404	1,388	1,456	1,678
Total capital expenditure (US$m)	814						840	650	634	609
Net cash-flow3 (US$m)	-132						-2	294	123	235
Free cash-flow margin (%)	16						16	17	8	13
Net debt (US$m)	1,612						1,303	1,166	1,380	1,453
Net debt:adjusted EBITDA ratio4	1.45						1.03	0.95	1.38	1.30
Total dividend payment (R/share)	0.40						0.90	1.10	0.25	0.40

	2018 performance improvement on 2017 or achievement in line with strategy
	2018 performance drop against 2017
	2018 performance on par with 2017

STRATEGIC GOALS

1	Strong balance sheet maintained while investment in future growth continued

RESULTS AND IMPACTS

SUSTAINABLE DEVELOPMENT GOALS

KEY STAKEHOLDERS –

SHAREHOLDERS AND INVESTORS

Financial performance

Introduction

The focus of Gold Fields' business strategy is to grow margin and free cash-flow (FCF) for every ounce of gold produced, and to sustain this FCF in the long term. In this regard, our target is to generate a FCF margin of at least 15% per region at a notional long-term planning gold price of US$1,200/oz. However, to ensure the sustainability of this cash-flow, the Group had to reinvest in the portfolio during 2017 and 2018, spending project capital of US$502m over this period. Importantly, Gold Fields spent this capital on projects that will improve the overall quality of its asset base and enhance FCF generation in the future.

After two years of elevated levels of project capital, 2019 looks set to be an inflection point for Gold Fields in terms of FCF generation. During 2018, the Group spent US$64m at Salares Norte and incurred project capital of US$277m (US$125m at Damang, US$134m at Gruyere, and US$18m at South Deep), underpinning a net cash-outflow of US$132m (2017: US$2m).

Further project capital of US$143m will be spent at Damang and Gruyere in 2019, with the majority scheduled for the first half of the year. The project capital is then expected to decrease significantly in H2 2019, at which point an increase in FCF is anticipated. Once the capital bill has rolled off, Gold Fields does not envisage spending material growth capital in the short to medium term. The objective is to reap the rewards of the capital invested through an increase in FCF, which will go towards decreasing debt and, potentially, increased dividends.

The Group's FCF margin, which is adjusted for share-based payments, Salares Norte exploration expenditure and Damang and Gruyere project capital, remained steady at 16% in 2018 (2017: 16%). Encouragingly, this is in line with our targeted 15% FCF margin at a US$1,200/oz gold price.

2018 financial performance

Gold Fields' financial performance was underpinned by the strong operational performance of the Ghanaian, Australian and Peruvian assets in 2018, with South Deep presenting a drag on Group results. The outperformance of these operations (relative to guidance), coupled with a US Dollar gold price received that was higher than our business planning price, enabled the Group to contain the cash-outflow, limit the increase in net debt and maintain a healthy balance sheet during the year. Net debt increased to US$1,612m during 2018 from US$1,303m at end 2017, resulting in a net debt:adjusted EBITDA of 1.45x at 31 December 2018 (December 2017: 1.03x). A large portion of this increase was due to the US$165m upfront payment relating to the Asanko Gold acquisition.

Net revenue declined by 7% to US$2,578m in 2018 from US$2,762m in 2017, driven by the decrease in production coupled with a slightly lower gold price received. Cost of sales decreased by 3% to US$2,043m in 2018 from US$2,105m in 2017. The bulk of Gold Fields' costs in Australia and South Africa are incurred in local currencies. As such, the slight strengthening of the Australian Dollar and South African Rand had a negative impact on costs in US Dollar terms - and ultimately profits - in these geographies during 2018.

The Group AISC of US$981/oz and All-in Costs (AIC) of US$1,173/oz in 2018 compared with AISC of US$955/oz and AIC of US$1,088/oz in 2017. Encouragingly, costs came in below guidance (AISC: US$990/oz - US$1,010/oz; AIC: US$1,190/oz - US$1,210/oz) for the sixth consecutive year. The increase in AIC was driven by an increase in Salares Norte expenditure and project capital incurred at Gruyere.

Other salient features during 2018 included:

• Royalty of US$63m in 2018 compared with US$62m in 2017
• Total capital expenditure of US$814m in 2018 versus US$834m in 2017
• A decrease in the normal taxation charge to US$146m in 2018 (2017: US$205m)
• Asset write-downs and impairments of US$520m were recognised in 2018 (2017: US$200m), comprising mainly a US$482m impairment of South Deep

Taking into account all of the above, the net loss attributable to Gold Fields' shareholders amounted to US$348m in 2018, compared to a net loss of US$19m in 2017. Headline earnings were US$61m in 2018 compared to US$210m in 2017.

A detailed analysis of our financial performance is provided in the management's discussion and analysis of the financial statements in the 2018 Annual Financial Report.

The consolidated income statement, statement of financial position and cash flow statement - extracted from the 2018 Annual Financial Report.

Free Cash-Flow

Gold Fields recorded a net cash-outflow (see footnote 3 on p2) of US$132m in 2018 compared with an outflow of US$2m in 2017. Included in the 2018 number is project capital of US$125m (2017: US$115m) and US$134m (2017: US$81m) for Damang and Gruyere, respectively. South Deep recorded a net cash-outflow of US$141m compared with an outflow of US$60m in 2017. US$143m in project capital is budgeted for 2019, with the majority scheduled to be spent during H1 2019.

At a mine level, cash generation remained strong in 2018. Excluding project capital and off-site exploration expenditure, mine cash-flow was US$334m (US$195m in Australia, US$114m in Peru, US$149m in Ghana and a negative US$123m in South Africa) versus US$441m in 2017. Our Australian, Ghanaian and Peruvian mines collectively generated a net cash-flow of US$457m (2017: US$484m), demonstrating again the quality of this portfolio of assets.

FCF margin, which is adjusted for share-based payments, Salares Norte exploration expenditure and Damang and Gruyere project capital, remained unchanged at 16% in 2018 compared to 2017.

Dividends

Gold Fields has a long and well-established policy of rewarding shareholders by paying out between 25% and 35% of normalised earnings as dividends. This policy is viewed as an important element of Gold Fields' investment case, and we have consistently honoured this commitment with an average pay-out of approximately 30% of earnings every year over the past nine years.

Despite recording a net cash-outflow in 2018, the Group maintained its dividend policy and declared a final dividend of R0.20/share for the year. Together with the interim dividend of R0.20 per share (for the six months ending on 30 June 2018), this brings the total dividend for 2018 to R0.40/share. In 2017 we paid a total dividend of R0.90 per share.

Reducing debt

A strategic objective of management during the peak capital expenditure years (2017 and 2018) has been to maintain a healthy balance sheet and minimise the increase in net debt through limiting the cash-outflow.

Net debt increased by US$309m during 2018 to end the year at US$1,612m (end December 2017: US$1,303m). This includes US$165m related to the Asanko Gold acquisition, which closed on 31 July 2018. The outperformance of the international portfolio and a higher gold price received than budgeted enabled Gold Fields to end 2018 on a better than expected net debt:adjusted EBITDA ratio of 1.45x (2017: 1.03x).

During 2018, the Group successfully extended the maturity of its US$380m term loan by 12 months to 6 June 2020 (from 6 June 2019). As such, the first material debt maturity is now due in June 2020. In addition, having entered into an A$500m revolving credit facility in June 2017, Gold Fields' balance sheet is in a comfortable position with regards to solvency and liquidity. At the end of 2018, the Group had committed and uncommitted loan facilities totalling US$2.5bn, A$500m and R4.2bn, of which US$976m, A$50m and R2.2bn,respectively, are unutilised. Our debt is currently rated BB+ by Standard & Poor's and Baa3 (investment grade) by Moody's, the latter being an upgrade from 2017.

During the course of 2019, Gold Fields will look to refinance and extend the maturities of its syndicated bank facilities (US$1.3bn) and US$1bn bond (US$852m outstanding).

Hedging

Given the high levels of project capital expenditure incurred during the year, together with the volatility in commodity prices and exchange rates, as well as our higher net debt position, management continued with the short-term, tactical hedging programme that was implemented in 2017. These hedges were put in place to protect cash-flows during the investment phase, and Gold Fields will look to continue the hedging programme during the first half of 2019, whilst the remainder of capital is spent on Damang and Gruyere. Hedges during 2018 and those put in place in Q1 2019 are in the table below. Net realised gains from these hedge positions were US$17m in 2018, compared with US$13m in 2017.