Gold Fields

Dec-YE

2019E

2020E

2021E

Income statement

Revenue

2,824

3,023

3,070

EBITDA

1,417

1,490

1,465

EBIT

706

722

649

Other items

-209

-224

-228

Net interest

-69

-91

-75

Taxation

-154

-149

-132

Minority interest in profit

-17

-16

-16

Net profit for the year

270

252

205

Headline earnings

270

252

205

Headline EPS, USc

32

30

25

Thomson Reuters consensus HEPS, USc

20

26

20

DPS declared, USc

11

10

8

Underlying EBIT

-48

20

32

South Africa Region

EBIT margin

-19%

6%

8%

West Africa Region

240

223

221

EBIT margin

24%

22%

21%

South America Region

112

92

81

EBIT margin

32%

29%

25%

Australia Region

402

387

316

EBIT margin

33%

29%

24%

Adjusted EBIT

706

722

649

Income statement ratios

EBITDA margin

50%

49%

48%

EBIT margin

25%

24%

21%

HEPS Growth

357%

-6%

-17%

Dividend payout ratio

33%

33%

33%

Input assumptions

Gold, $/oz

1,350

1,337

1,311

Copper, $/t

6,400

6,500

7,025

ZAR/$

14.28

14.40

14.49

AUD/$

1.37

1.28

1.25

PEN/$

3.33

3.33

3.36

Gold production volumes, koz

South Africa

lumes

193

268

299

West Africa

lumes

765

783

819

South America

lumes

290

263

276

Australia

lumes

902

1,010

1,010

Total lumes

2,150

2,324

2,404

Volume growth

5.5%

8.1%

3.4%

Calculated breakeven price, $/oz

South Africa breakeven

1,448

1,134

1,108

West Africa breakeven

795

895

878

South America breakeven

882

874

902

Australia breakeven

921

946

990

Group breakeven

1,000

1,031

1,045

Dec-YE

2017

2018

2019E

2020E

2021E

Balance sheet

Net operating assets

4,711

4,373

4,357

4,251

4,134

Investments, net of rehab provision

-6

-54

-54

-54

-54

Equity

3,276

2,586

2,846

3,037

3,217

Minority interest

127

121

124

127

131

Net debt

1,303

1,612

1,333

1,032

732

Balance sheet ratios

Gearing (net debt/(net debt+equity))

28.4%

38.4%

31.9%

25.4%

18.5%

Net debt to EBITDA

0.9x

1.3x

0.9x

0.7x

0.5x

RoCE

12.7%

11.0%

15.4%

16.0%

14.8%

RoIC (after tax)

9.6%

9.6%

11.2%

12.1%

11.3%

RoE

6.6%

2.1%

9.9%

8.6%

6.5%

Cash flow statement

Operating cash flow

1,147

1,091

1,213

1,337

1,310

Capex (net of disposals)

-834

-814

-633

-674

-699

Other cash flows

-271

-328

-193

-184

-181

Free cash flow

42

-50

387

478

431

Equity shareholders' cash

-73

-39

325

401

365

Dividends and share buy-backs

-63

-46

-47

-100

-65

Surplus (deficit) cash

-136

-84

279

301

300

Cash flow ratios

-8

0

2

-1

-1

Working capital turnover, days

FCF yield

0.9%

-1.1%

8.2%

10.7%

10.4%

Equity shareholders' yield

-2.4%

-1.4%

9.9%

12.2%

11.1%

Capex/EBITDA

59.3%

66.2%

44.7%

45.3%

47.7%

Cash conversion

-0.4x

-0.6x

1.2x

1.6x

1.8x

Valuation

$mn

ZAR/sh

South Africa Region

752

13.2

West Africa Region

1,829

32.0

South America Region

870

15.2

Australia Region

2,203

38.6

Other

-1,657

-29.0

Operating value

3,997

70.0

Financial instruments and rehab provision as at 31 December 2018

-54

-1.0

Enterprise value

3,942

69.1

Net debt as at 31 December 2018

-1,612

-28.2

Minority interest

-121

-2.1

Salares Norte value assuming it trades at avg. replacement cost

393

6.9

Cash used in share buy-backs during 2019E

0

0.0

Equity value

2,602

45.6

46.0

Share price on 26/3/2019

57.7

Expected share price return

-20.3%

Plus: expected dividend yield

2.5%

Total implied one-year return

-17.8%

Share price range, ZAR:

12-month high on 21-2-2019

61

12-month low on 11-9-2018

33

Price move since high

75.5%

WACC

7.4%

Cost of debt

5.0%

Risk-free rate

4.0%

Tax rate

30%

Equity risk premium

1.1%

Beta

1.00

Debt weighting

30%

Cost of equity

9.0%

Terminal growth rate

2.0%

Dec-YE, $mn

2017

2018

2019E

2020E

2021E

P/E multiple

14.6x

48.9x

12.5x

13.4x

16.0x

Dividend yield

1.8%

0.9%

2.6%

2.5%

2.1%

EV/EBITDA

3.2x

3.7x

3.4x

3.0x

2.8x

P/B

0.9x

1.1x

1.2x

1.1x

1.0x

NAV per share, $

4.0

3.1

3.5

3.7

3.9

NAV per share, ZAR

53

42

49

53

57