GOLDFIELDSGFIJ.JSIBANYEGOLDSPINNINGOFFSOMEOFTHEPARTS1130

1、15014013012011010090-2.83m12deutsche bankmarkets researchratingholdsub-saharan africasouth africacompanygold fieldsdate30 november 2012company updategoldprice at 28 nov 2012 (zar)price target (zar)102.73120.00reutersgfij.jbloomberggfi sjexchange tickerjnbgfij52-week range (zar)138.45 - 96.00sibanye

2、gold: spinning off some ofthe partsa potential catalyst for consolidation but key risks remainthe announced unbundling of gold fields two deep-level, narrow vein, high-cost mines in south africa will allow the group to control the costs and cashflow of its remaining assets more effectively. to split

3、 the business by mine typemakes sense, in our view. the most positive outcome of the spin-off would beincreased cash returns to shareholders of both companies. we reiterate ourhold rating on gold fields shares however as we see some key downside riskswith the need to turnaround the australian mines

4、and make decisions on futureprojects. for sibanye, there is the risk of flowback upon listing from investorsanna mulholland, cfaresearch analyst(+27) 11 775-price/price relativewho do not want to hold shares in a business solely exposed to south africa.11/105/1111/115/12creation of sibanye gold limi

5、ted, housing kdc and beatrix minesgold fields announced plans to unbundle two of its three south african minesinto a new company, sibanye gold limited, via a 1 for 1 share issue to existinggold fields shareholders. sibanye will take on the groups south africangold fieldsftse/jse all share (rebased)p

6、erformance (%) 1mabsolute -0.912m-20.4balance sheet, which has an estimated net debt of r4bn. gold fields will retainftse/jse all share1.54.717.6ownership of the south deep mine in south africa, tarkwa and damang minein ghana, st ives and agnew in australia, cerro corona mine in peru and thegroups p

7、ipeline of projects. neal froneman, former ceo of gold one, will besibanye ceo. nick holland will remain gold fields ceo. gold fields aims to listsibanye on the jse and via adrs on the nyse in mid-february 2013.sibanye looks relatively cheap, pre the allocation of corporate costson our estimates, si

8、banye will produce 1.23moz in 2013, with revenue ofr21.2bn, ebitda of r9.8bn and fcf of r4.6bn. we estimate the equity valuefor sibanye at r10.8bn, or r15 per share. the company trades on a 2013eev/ebitda multiple of 1.5x and a p/e multiple of 3.5x, cheap relative to peersbut at risk from allocation

9、 of corporate costs and sga costs, the level of whichis at yet unknown.retain target price of r120 ahead of unbundlingwe retain our group target price of r120 ahead of the unbundling beingeffected. we derive our tp from a dcf model of life of mine cash flows, usinga wacc of 11% and an exit multiple

10、of 1. upside risks to our tp include abetter-than-expected ramp-up of mines post the strikes in south africa.downside risks include further production interruptions from labour unrest andsafety stoppages.forecasts and ratiosyear end dec 31revenue (zarm)ebitda (zarm)p/e (db eps) (x)dps (zar)yield (%)

11、2011a41,87720,27912.23.302.82012e46,00820,88710.52.602.52013e62,22034,8325.06.606.42014e67,77135,7384.86.906.7source: deutsche bank estimates, company datadb eps is fully diluted and excludes non-recurring itemsmultiples and yields calculations use average historical prices for past years and spot p

12、rices for current and future years, except p/b which usesthe year end close_deutsche securities (pty) ltddeutsche bank does and seeks to do business with companies covered in its research reports. thus, investors shouldbe aware that the firm may have a conflict of interest that could affect the obje

13、ctivity of this report. investors shouldconsider this report as only a single factor in making their investment decision. disclosures and analystcertifications are located in appendix 1. mica(p) 072/04/2012.30 november 2012goldgold fieldsmodel updated:26 november 2012fiscal year end 31-dec2010201120

14、12e2013e2014erunning the numbersfinancial summarysub-saharan africasouth africagoldgold fieldsdb eps (zar)reported eps (zar)dps (zar)bvps (zar)weighted average shares (m)average market cap (zarm)11.786.221.9060.471173,1199.729.723.3065.172285,3769.749.742.6070.672374,26920.3520.356.6086.772474,33221

15、.4821.486.90100.872474,354reuters: gfij.jbloomberg: gfi sjenterprise value (zarm)78,72495,06586,64275,45566,308valuation metricsholdp/e (db) (x)p/e (reported) (x)8.716.512.212.210.510.55.05.04.84.8price (28 nov 12)target price52 week rangemarket cap (m)zar 102.73zar 120.00zar 96.00 - 138.45zarm 74,2

16、69usdm 8,472p/bv (x)fcf yield (%)dividend yield (%)ev/sales (x)ev/ebitda (x)ev/ebit (x)2.004.61.81.64.06.51.916.52.82.34.76.51.45nm2.51.94.16.01.1920.26.41.22.22.71.0220.46.71.01.92.3company profileincome statement (zarm)gold fields is the third largest gold miner globally. it hasoperations in south

17、 africa, peru, ghana and australia.price performance15014013012011010090nov 10may 11nov 11may 12sales revenuegross profitebitdadepreciationamortisationebitnet interest income(expense)associates/affiliatesexceptionals/extraordinariesother pre-tax income/(expense)profit before taxincome tax expensemin

18、oritiesother post-tax income/(expense)net profitdb adjustments (including dilution)db net profitcash flow (zarm)cash flow from operations49,87320,73419,7747,613012,161-742-88-2,328849,1753,5301,08204,4744,0048,47815,73641,87721,11220,2795,656014,624-20329-865-1,44412,1124,33578007,0271,4558,48115,74

19、646,00821,88020,8876,442014,444-338-396-802-1,93611,3693,59833207,0422,3519,39312,27662,22036,19134,8327,111027,720-351-1,193-676-2,93223,7617,128709014,7313,81718,54822,86367,77137,21835,7387,214028,523206-1,231-676-3,13224,9227,477668015,5464,01219,55823,596gold fieldsmargin trends60504030ftse/jse

20、 all share (rebased)net capexfree cash flowequity raised/(bought back)dividends paidnet inc/(dec) in borrowingsother investing/financing cash flowsnet cash flowchange in working capital-12,3363,40095-1,7351,4514,2947,50466-10,1655,58147-1,5313,391-6,847641-642-12,800-52414-2,8992,212-75-1,273360-7,8

21、4315,0210-3,0610011,960-723-8,44115,1560-5,320009,836170201011ebitda margin12e13eebit margin14ebalance sheet (zarm)cash and other liquid assetstangible fixed assetsgoodwill/intangible assets5,46453,2504,4596,10462,6834,4594,77669,9324,45916,73670,6634,45926,57271,8894,459growth & profitabilityas

22、sociates/investmentsother assets1,4507,1921,1929,0062,7278,7872,72710,2722,72710,925403020100-10-20101112e13e14e100806040200total assetsinterest bearing debtother liabilitiestotal liabilitiesshareholders equityminoritiestotal shareholders equitynet debt71,8149,43815,75425,19243,5423,08046,6233,97483

23、,44415,50919,40334,91347,0541,47748,5319,40590,68118,06719,73637,80451,0681,80952,87713,291104,85718,06721,53339,60062,7392,51865,2571,331116,57218,06722,35240,42072,9653,18676,152-8,505sales growth (lhs)roe (rhs)key company metricssolvencysales growth (%)db eps growth (%)nmna-16.0-17.59.90.235.2109

24、.08.95.53020100100806040ebitda margin (%)ebit margin (%)payout ratio (%)roe (%)capex/sales (%)39.624.430.225.624.848.434.933.939.124.445.431.426.738.027.856.044.632.477.312.652.742.132.179.612.5-10-20101112e13e14e200capex/depreciation (x)net debt/equity (%)net interest cover (x)1.68.516.41.819.472.2

25、2.025.142.81.12.078.91.2-11.2nmnet debt/equity (lhs)anna mulholland, cfanet interest cover (rhs)source: company data, deutsche bank estimates+27 11 775-7270page deutsche securities (pty) ltd2006 2008 20102012e2014e2016e2018e2020e2022e2024e2026e2028e2030e2032e2034e2036e2038e2040e2006 2008 20102012e20

26、14e2016e2018e2020e2022e2024e2026e2028e2030e2032e2034e2036e2038e2040e2006 2008 20102012e2014e2016e2018e2020e2022e2024e2026e2028e2030e2032e2034e2036e2038e2040efy06 fy07 fy08 fy09 fy10 fy11fy12efy13efy14efy15efy16efy17efy18efy19efy20efy21efy22efy23efy24efy25efy26efy27efy28efy29efy30efy31efy32efy33efy34

27、efy35efy36efy37efy38efy39efy40e12%source: company data, deutsche bank (pty) ltd30 november 2012goldgold fieldsgold fields operational summary datadecember year endas s umptionszarusdgold (us$/oz)silver (us$/oz)copper (us$/lb)production, kozkdcbeatrixsouth deeptarkwadamangst ivesfy088.2687315314.5fy0

28、81493408165447140415fy098.4297415233.9fy091459400237473144415fy107.321,22620342.6fy101215377274523162468fy117.231,57337407.2fy111100347273576174465fy12e8.081,69632363.3fy12e970299279637145445fy13e8.142,11344363.0fy13e929298528706139417fy14e8.592,00040340.3fy14e1137324636706132417fy15e9.421,75634323.

29、3fy15e1137347691706132417npvkdcbeatrixsouth deeptarkwadamangst ivesagnewcerro coronanet debtminoritiesequity v aluezarm11,4973,37520,67419,8281,1382,8672,31712,56613,291(1,809)59,162multiple1.001.001.001.001.001.001.001.001.001.001.00zar/sh15.94.728.627.41.64.03.217.418.4(2.5)81.8(%)19%6%35%34%2%5%4

30、%21%22%-3%agnew201188152194169180180180cerro coronat otalt otal cas h cos ts , us $/ozkdc603,451fy084792683,616fy095433283,538fy108253583,448fy119373243,269fy12e10483163,514fy13e10573153,847fy14e10133243,935fy15e1031number of shares (m)wacc723.011.1%beatrixsouth deeptarkwadamangst ivesagnewcerro cor

31、onaw eighted av eragecapex , rmkdc5438764946286014070517fy081935637693489629711539348555fy092113828917572660909741398736fy1024399321083581683893829489810fy11230010921105692965948822536902fy12e2420119977269110241067867582896fy13e2398121674671910911136903592905fy14e2968115572574811361182939596913fy15e

32、3313graph 1 - production profile to 2040e4,5003,5002,5001,500500(500)beatrixsouth deep60185663513876491806611198268024478731600101611201134944kdcdamangbeatrixst ivessouth deepagnewtarkwacerro coronatarkwadamangst ivesagnewcerro corona211716583227319461144164609332728143055281441651416866921319535501

33、196687123865256118832581015374442969276119641148511063151365469554graph 2 - capex profile to 2040e15,00010,000other5,000t otal8,7257,1128,6209,62711,9067,8438,4419,198-graph 8 - s outh deep production, unit capex and cash cost until fy40e8001,400kdcdamangbeatrixst ivessouth deepagnewtarkwacerro coro

34、na7001,200graph 3 - cash cost profile to 2040e6001,000400,0001,200500400300200800600400350,000300,000250,000200,000150,000100,00050,000-1,000800600400200-100-gold produced kozcash operating costs $/oz (rhs)capex $/oz (rhs)200-cash costs (r/kg)cash costs ($/oz, rhs)graph 2 - ebitda spilt by region -

35、2010graph 4 - production split per region - 2010graph 6 - capex split per region - 2010americas18%australasia16%southafrica35%australasia18%southamerica9%southafrica53%australasia15%rest ofafrica18%southamerica5%southafrica62%rest ofrest ofafrica31%africa20%graph 3 - ebitda s plit by region - 2020eg

36、raph 5 - production split per region - 2020esouthgraph 7 - capex split per region - 2020eaustralasia0%americas16%rest ofamericaaustralasia0%rest ofafrica14%australasia0%southamerica9%africarest ofafrica28%southafrica56%22%southafrica66%southafrica77%deutsche securities estimates, datastreampage 330

37、november 2012goldgold fieldsa catalyst for consolidationunbundling of kdc and beatrix mines into sibanyehaving announced its intention to look at a significant restructuring of its south africanbusiness at its 3q12 results earlier this week, gold fields has announced plans tounbundle two of its thre

38、e south african mines.kdc and beatrix mines will be unbundled into gold fields existing south africansubsidiary, which will be listed in february 2013 as a separate and independentcompany from the existing gold fields group, and named sibanye gold limited. theunbundling will be effected via a 1 for

39、1 issue of shares in sibanye to existing goldfields shareholders. sibanye will be listed on the jse and through adrs on the nyse.the transaction has received approval from the south african reserve bank and isawaiting listing approval from the jse and the nyse. as the size of the unbundling isless t

40、han 50% of the overall group, no shareholder approval is required or sought.a new board will be constituted for sibanye, chaired by matthews s moloko, currentlya non-executive director of gold fields. other non-executive directors will be jerryvilikazi, chair of palama and former ceo of business uni

41、ty south africa, rick menell, anon-executive director of gold fields, and keith rayner, ceo of kar presentations,who will also chair the audit committee. two further hdsa directors will be appointedin due course. cain farrel, the current company secretary of gold fields, will becomethe new company s

42、ecretary of sibanye.neal froneman, currently chief executive officer of gold one, will become ceo ofsibanye gold and charl keyter, currently head of finance for gold fields internationaloperations, will become the cfo of sibanye.gold fields will retain ownership of the south deep mine in south afric

43、a, tarkwa anddamang mine in ghana, st ives and agnew in australia, cerro corona mine in peru andthe groups pipeline of projects. nick holland will remain gold fields ceo.rationale for the deal: controlling future cash flowswhilst at first glance this transaction appears to be the splitting of the go

44、ld fields groupalong south african and non-south african lines, gold fields management highlightsthat it is retaining ownership of the south african south deep mine, the groups keyproduction growth driver in the near term, and that the unbundling is rather designed toenable better management of futu

45、re cash flows and their allocation.split of mines per mining typethe groups mines are being split along the lines of mine type, with gold fields twodeep-level, narrow vein mines in south africa (kdc and beatrix) being separated fromthe other mines in the portfolio which are either open-pit operation

46、s, shallowunderground mines, or bulk volume, highly mechanised mines such as south deep.decisions to be made around future use of sibanye cash flowsthe mines to be spun into sibanye are mature mines, currently with high cash costsand declining production profiles. near term, the margins of each mine

47、 are beingsqueezed further by the impact of the recent strikes and the slow ramp-up of theoperations this quarter and next.page 4deutsche securities (pty) ltd30 november 2012goldgold fieldswe believe the new sibanye management team will look, over time, to make a decisionaround use of the mines cash

48、 flows either to invest to extend the lives of the minesthough further capital investments and reserve development or to return cash toshareholders. in our view, the latter is the more preferable option, given the high capitalcost of mine development and the more burdensome cost base of these types

49、of goldmines in a high inflation environment.a catalyst for further consolidation of the south african gold mining industrygold fields makes the specific point that it believes there is potential for the creation ofsibanye to act as a catalyst for further consolidation within the south african goldm

50、ining industry. we note that anglogold, in particular, has committed to reviewing itsown portfolio of south african mines in the wake of the strikes it has experienced in2h12 and similar options could be considered for streamlining its business.the assets and structure of sibanyekdc which comprises

51、the kloof and driefontein mines and beatrix mines are deep-level, narrow vein underground mines. gold fields describes kdc, in particular, as a“large, challenging, complex and deep ore body”.kdc mines from shallow to ultra-deep levels (600m 3347m below surface) through 12shaft systems. kdc west mine

52、 uses breast mining, pillar extraction and has one minilongwall; kdc east mine uses pillar extraction and breast mining. the full miningcomplex is clustered into six operating units as follows:driefontein 1 and 5 shaftsdriefontein 2 and 4 shaftsdriefontein 6,7,8 and 10 shaftskloof 3 and 4 shaftskloo

53、f main, 7, 8 and 10 shaftsreef and waste plantsbeatrix mine consists of four surface operating shafts which access open ground andremnants at depths between 600m and 2155m.both mines are mature and are seeing production decline over time, with high unitcosts as a result:deutsche securities (pty) ltd

54、page 5-30 november 2012goldgold fieldsfigure 1: production profile of sibanye mines, 2008-12(000oz)2,000figure 2: unit cost profile of sibanye mines vs gold fieldsgroup, 2008-12e (us$/oz)12001,60010001,20080080060040040020082009201020112012e20082009kdc20102011beatrix2012ekdcbeatrixgold fields groups

55、ource: deutsche bank estimates, company datasource: deutsche bank estimates, company datagold fields has been aiming to stabilise kdcs production at 1-1.1moz per annum andbeatrix at around 300koz per annum. as shown in figure 2 and below, unit costs havebeen increasing steadily for both mines, with

56、kdc producing at an average cost ofus$1048/oz in 2012e and beatrix at us$1092/oz:figure 3: unit cost profile of sibanye mines, 2008-12e20082009201020112012ekdcbeatrixgold fields group47954351754363755582582873693793281010481092902source: deutsche bank estimates, company datawe estimate the sibanye m

57、ines will generate ebitda of r6bn in 2012, compared withr14bn for the gold fields group ex-sibanye (see figure 4). kdc and beatrix account forthe largest proportion of group capex, on our 2012 estimates, with estimated spend atkcd of r2.4bn and r680m at beatrix (see figure 5).figure 4: ebitda split,

58、 2008-12e (rm)25,000figure 5: split of 2012e capex by minecerro20,00015,00010,0005,000agnew4%st ives20%damangcorona5%kdc20%beatrix6%20082009201020112012e7%tarkwasouth deep21%sibanyesource: company data, deutsche bank estimatesgold fields ex sibanyesource: deutsche bank estimates17%figure 6 summarise

59、s the key financial metrics of the sibanye assets and our estimate ofthe npv of the new company.page 6deutsche securities (pty) ltd30 november 2012goldgold fieldsin terms of earnings and cash flow, we forecast the sibanye mines to generate revenueof r17.3bn in 2012e, from production of 1.27moz. we e

60、stimate ebitda of r6.1bn andearnings of r2.5bn although we have not as yet factored in the share of corporatecosts and sga that will be allocated to sibanye from the group level as gold fieldscontinues to work on that process.figure 6: sibanye key financial metrics summary, 2008-15e20082009201020112012