AECI Ltd (AFE) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to the AECI results presentation for 2020 results. I'd like to welcome everybody. We have over 100 people on the line. And it's my pleasure to welcome you to the results presentation, obviously, under trying circumstances. But we're going to do our best to lift the energy. And hopefully, you can feel that passion about the results. And also welcome to our NEDS, where I also have Dr. Khotso Mokhele, he is online. Special -- our Chairman. So welcome to him. And also the Chair of Auditors also online Philisiwe Sibiya. She's also with us. And hopefully, if there's any questions, we can also some -- direct them that way. But -- and also the rest of the NEDS are also joining us this morning. So a special welcome to them. And also special welcome to my whole executive team who's going to help me with the presentation. And we've divided it into quite a few different sections as normal and for -- obviously, for them to give you feedback about 2020. 2020, a tough year. COVID-19 hit. Who would have thought when I was standing in this auditorium or at head office here, with the -- been fuller then most of you present, who would have thought a year later we will be in these circumstances. And I guess it's that challenge that's come through this last year that we've all had to do things differently, rise up to the challenge around us. And I'm quite happy relative to the diversity of the group and the strategy of the group that we are actually in good stead. And hopefully, by the singling of the dividend, the cash and some of the underlying results, we'll be able to demonstrate that today. So firstly, I'm going to go into an agenda, and that should be coming up on your screens right now. And we're going to look at the COVID response and probably the impact on us and what we've done around that. Performance summary is really around what I think as the highlights and some of the low lights relative to our performance. And other business drivers, I'll handle that, where Mark will handle the earnings, analyze, and then I'll have help from the balance of the executive in the performance by segments. And then I'll end off and hopefully by -- we've set ourselves a time by at least 10 past, quarter past 12, is really to have strategy and outlook and focus of what we think where the world is and where it's going. But most importantly, for us is to give you a sense of what are the priorities this year. And we've -- we're not been sitting back. We are -- actively we've been doing things. And I think it's been really testament to the Board and also to the management and the leadership of the group of the way that we've come through this. It's not over by a long shot. But we've learned how to deal with the circumstances around us. COVID, in terms of the response and the impact I'm going to handle that. We put a team. I did say at half year, we did put a team together of the executive and also of the senior management within the group. And on a day-to-day, we were actually managing that process. And it was like a moving target because new legislation was coming through, different levels of lockdown, and we've been able to come through that. We now obviously came through December in the second wave. That was also pretty difficult for us. And I think the second wave had more impact on our workforce and the amount of people that were actually COVID-positive than the first wave. And I'm happy to report that we had no instances with the infections from the workplace. So that's been kept pretty sterile and COVID-free. Where we saw the most outbreaks was from people from outside at home, celebrating Christmas, going to malls, et cetera, parties. And those were actually -- we kept them before at home, before coming to work, which is a good part of our response plan. Our response plan is still intact. We're on the 12th version of that. And I think now where we're going is really into the vaccinations. And we are working with [indiscernible] in obviously, elevating ourselves again as essential services, which is important for us. As you know, we were -- parts of our businesses were classified as essential services in the first half. But we -- the big priority for us is to get our workforce back to work in a healthy state, but to remain healthy, and that's getting them the vaccinations. So we are endorsing a rollout. We're trying to assist. We have clinics, et cetera, where we can apply the vaccinations. And I think from our priority around the world wherever we operate is to get our people vaccinated and to endorse the rollout. And that's a priority for us right now. Our medical aids are coming to the party, and we are being -- and we will support less fortunate as well. So you'll find our CSI will not only look between our workers and families, but also helping to vaccinate the people in those communities. So I think that's a lot of work for us to be doing on the softer issues, but most important issues in this year to come. Just to give you an idea, we do -- we know exactly where people are infected at the moment, and this number changes every day. We have 15 people throughout the world that is off going through either isolated, and we have a few of those -- we have 2 of those that's hospitalized at the moment, and we monitor their progress. Unfortunately, we have 4 members of our business, our family that have passed due to the COVID. And it is regret and standards that we have had those losses and touched a lot of our colleagues and family and friends. It's come very close. And I'm sure you all out there have been affected in 1 way or the other. So we really look at the world, how the infections. And this 1 also gives you a more data and a feel. And I think most importantly, what we are seeing especially in the South African context, is that the rates are declining and under 1,000 people infected in the last 2 days. However, we should see that start to pull down, which is good news for us. And on the international basis, we also -- in every country that we operate, we're getting daily feedback. So it's just, I'm demonstrating the intensity of the management team applying their minds to what's going on the world. And to make sure that we are -- the business continuity plans have kicked in, that we continually are giving product and services to customers and especially those customers that are still seen as essential services. So COVID is here to stay. There is still uncertainty of the effects and I will in my closing, give you some views of that. But what I can say is that we've -- from our CSI fund, we have invested over ZAR 15 million. And this is particularly in the COVID Relief, i.e., sanitizers, water, drinking water opportunities, food parcels, et cetera. And I'm thankful because a lot of you on the call have also contributed to the iPledge. And we set ourselves a target, and we surpassed that 3.5 million food parcels -- yes, ZAR 3.5 million that was allocated into food parcels. And we benefit over 12,000 families. This initiative is 1 of the initiatives that we like to drive forward. And this has really come from the people, investors, suppliers and also our own employees who've contributed to that fund. And we have lots of multiple partnerships and collaboration to make sure that the right people, and most importantly, are getting those food parcels. And that's just a couple of examples of how we went into communities. We're still going into communities, handing over food because we see that as probably -- as the major priority. And especially this morning, the announcement of the unemployment rate over the [Technical Difficulty] South Africans unemployed right now, and that's going to have a catastrophic effect on people's lives and livelihoods. And that's some more examples of exactly how we interact with communities, et cetera. Okay. So I'm going to go -- the COVID effect, and of course, probably this is my disclaimer. So I think in terms of the AECI, we are saying how we have got to those numbers. It's not just thumb suck. It's actually done in each business, by division, by product, by customer. So we know exactly what businesses have disappeared, especially in the in the full lockdown in March last year. I think that was when we were mainly all affected the most. And as we're coming through the year, we plotted on a daily, monthly basis, to see exactly what those losses were and are. We are still seeing some losses in some segments. As you can understand, the economy has not come back in to full as it was prior to the curve. So there is still some losses being incurred. But majority of our business is back. And -- but if it stays back relative to how the next wave comes across, I think it's going to be a challenge, and the effects of that is still not taking into account for our forecast in this year. So when we did the counting and as year end, we've allocated over ZAR 1 billion is what we have lost in turnover. The operating profit, ZAR 527 million, a lot of that has actually been in the chemicals and predominantly mining. And you might look at it and say the margin is quite high, but you must understand, if you're still running plants, if you're running plants at half capacity or [Technical Difficulty] as in the underground shop to your plant of ours, you can easily see how that has an effect on the profitability or the loss of profits. And we've estimated a HEPS of ZAR 3.41 and Mark will talk about it when he comes to his presentation. But the ZAR 3.41 is, obviously, we're looking at insurance claim in terms of a total number and profit. And that is currently being prepared and I'll ask Mark just to maybe comment on that. But just going through the first half was the worst affected. Fortunately, we were able to continue operations in some of our business, especially around the agriculture, the water. And obviously, mining on the coal side was seen as essential services. And of course, as the levels lessened, we actually were able to bring more and more of our businesses back. We've paid all our people. We gave them the dignity and I think that's attributable to the values within AECI is how we look after people and through this pandemic. And we've given them support [Technical Difficulty] other area in terms of medical et cetera. Performance summaries, I'm really looking at it from a high level now, cash generation. And I think when we hit COVID, the management team got together and said, our biggest priority because the uncertainty of the world going forward was how do we preserve cash? How do we collect cash and how do we generate cash? And the actions we put in some really strict actions in place in terms of working capital, CapEx. And obviously, on a day-to-day basis, the management team of the organization from myself and all the way down we have visual [Technical Difficulty] and it's highlighted every night, I get a message. Cash has come in. This is how much as cash has gone out, relative to our forecast, which is most important. So also thanks to my team and a lot of them are watching, thanks to you all for your contribution in delivering those cash targets, but it's not going to stop. And it's something we need to carry on to this year. Obviously, that has assisted us in our gearing. And Mark did -- he did give you a heads up as where he thought this game would be going this year, at half year results, and I'm happy to say that our gearing is at 22%, which is a fantastic achievement. And obviously, will continue to fall. Just on the gearing, people are probably talking a couple of months' time, you've got a lazy balance sheet. However, we've been very prudent right now because uncertainty is still going forward in this market. And then that's also enabled us to give and reward our shareholders with [ ZAR 4.70 ]. And Mark just reminded me, probably the largest final cash dividend that we've ever paid. So -- and that's been attributable and the confidence around the cash generation and around the business that we're in, that we're going to continue generating cash in the next -- in this year, for sure. The revenue, obviously, as reported, minus ZAR 24 billion. However, with the underlying, and I've explained those numbers, and those are the impacts, it will be definitely up. Interestingly, our foreign export revenue a 44% of our total. And we've always said our goal is to actually get it up to over that 50%. EBITDA, I'm giving you underlying plus 4% and profit from the operations, minus 55%. But obviously, that does have the impairment of ZAR 890 million, which was predominantly the much goodwill but -- and also the COVID coming back, which would give you a 3% up. So that's where we feel we obviously could have ended up, obviously, if it was with COVID. And in terms of the HEPS, we've actually reported ZAR 8.80, but underlying ZAR 12.21. We've also, at I'm pleased and each of the executive have taken this very seriously the projects and the projects Align and Ripple and Optimum and those were with those projects in our water, mining and obviously, chemical business is how we refocused those businesses, we got rid of some noncore assets and some -- and realigned those businesses and their people in terms of the cost structures, but also importantly, in the future markets and opportunities that we want to serve going forward. And you'll see those savings will be coming out in each of pillars that we've discussed. But I think really, the -- again, that diversity, the strategy around that and moving in different geographies in different areas has helped us in this year. Level 3 BE, and that's dropped 1 level and mainly because we couldn't continue the learner shops in the workplace because we had to restrict people and also the business schools, et cetera, we couldn't actually put people on those courses. And importantly, the task teams on the interaction is quite key to us. That will continue in 2021. So we do see to get our bounce back to Level 2 at the end of this year. We've also won empowerment awards and that's from a human capital side, and Candice has been steering that ship and done a great job in terms of diversity and [Technical Difficulty] also top of her agenda as well. [ KAYA ] awards in terms of safety, in terms of innovation and all those good, we've done very well. So -- and despite [Technical Difficulty] that we are in a COVID year. And also in January, we've just been certified as a Top Employer. And that's part of our strategy is that we've got to make AECI relative to our growth, we actually want to attract the best talent out there and be a fantastic place to work so that we can continue delivering results. Safety performance, a little bit down, disappointing for me. And I think we were on track to better last year, and we have seen improvement in a lot of our areas. But as we got through the year, we did see some of the numbers starting to escalate in some of the business. And I honestly think COVID has played a part in 1 way or the other in terms of fatigue, in terms of challenges of people, families, et cetera. And also, I think also unable for management and leadership to get to a lot of our sites around the world has been challenging for us. And we are starting to get leadership out, especially in the local operations now, doing the walkabouts and obviously leading from the front. So we will turn that around. Because part of our values is at 0 harm and that we will not harm people at work. The other business drivers, big 1 for us is obviously the exchange rate. The first half, the rand weakened substantially, but we did see strengthening coming through to the end of the year. And of course, probably that had -- if you look at the accounting, as you come through into December, at ZAR 14.69 didn't help us much because, obviously, you take the valuations the other way, but we did see the rand starting to strengthen as we came to the end of the year. Obviously, we prefer more a stable weakening rand over time. And these fluctuations are quite tricky to manage, especially around stock revaluations. Gold, and I think this is really the story of Africa in a way is that the resurgence of gold price, resurgence of mines opening up, especially in West Africa. And even our own South African gold mines, you can see the results that are starting to come out have been pretty assisted by this pricing. And obviously, gives that the life of those mines, the life of tailings treatment, longer life and more opportunities for us. So I think this is probably -- and I talk -- if you look at the commodity prices, January all going up, which is good for us in terms of our mining strategy. And I think that's where the -- a lot of our focus is going to be with Edwin and his team in 2021 is how we can take advantage of the current prices. Opportunities of shops opening up. And obviously, in terms of extraction, processing more gold and platinum metals. PGMs, you have seen some of the results prior to this week. And of course, at the moment, I think some of these big companies out there that are putting these results are having a great time of it. And it's really around the pricing moving up, especially in the second half of 2020. Cobalt, what we did see in Central Africa, whereas -- and Edwin will talk about, first half, pretty tough, some closures in DRC and Zambia. However, with this pricing kicking up in the last quarter, we start to see some resurgence in the Central Africa copper and nickel market. So those have been good for us. Iron ore is coming back. Thermal coal's ticked up a bit, albeit we probably suffered from low exports last year. And obviously, the coal mine is not producing as much volumes, and that remains a challenge. And of course, the rain that we've had has the impact on the open cast mines. And also Schirm not running at full tilt because of maintenance issues. That also caused problems relative to coal. And hopefully that can turn itself around this year. The SA mining volumes still down year-on-year. However, what you need to take into account here is that there was back in terms of our -- maybe and not to the level prior to COVID, but there has been a bounce back in that market. Mark is nodding at me. So hopefully, you are nodding at me as well. The other area is, obviously, Brent crude really dipped down that further. And of course, as the global economy starts to come back, automotive industries, et cetera, you are starting to see an uptick in oil price, which does have an impact on a lot of our raw materials in terms of the products that we import. So we are seeing some pressures on pricing coming. This the more worrying 1 is the manufacturing industry of South Africa. Very concerning store, it did bounce back. Again, you can see that fee, but also similar to mining, cumulative for the year, 11% down. And of course, we are worried. This manufacturing sector was in trouble before COVID. And I think now with some of these customers not coming back, obviously, unemployment it's how that -- and we'll be interested here from our budget speech, and I'm sure we're going to hear the same, is how does South Africa kick itself back and get our manufacturing and people back to work, I think, is a high priority for government. Performance analyzed. I'm really going to hand over to Mark now, who's going to talk about the performance overall. And Mark, it's over to you.

Yes these green one? Thanks. Good morning, everyone, and I hope you're all safe and healthy, and your families as well. Yes, I think it was an interesting year of performance going through the numbers. The first slide that I've got up is really to analyze the performance if we took out some of the once off items and also taking out what our performance would have been if we took out COVID. And as Mark said earlier in his presentation, how we've actually calculated the COVID impacts, so I'm not going to go through that with you. So we did report an EBITDA by close to ZAR 3 billion, which is ZAR 2.9 billion. And if you really add back the sale of the business. And remember, in the first half of the year, we sold the paper and pulp chemicals business, and we finalized the sale of Wolfenbüttel in the second half of the year. So that was [Technical Difficulty] in profit, less ZAR 6 million that we lost on Wolfenbüttel. So that gave us the ZAR 102 million. And then if you looked at the -- the impairments that we've taken was about ZAR 890 million. So that was a combination of goodwill and some property, plant and equipment that we took in impairments, but the key goodwill number that we wrote off was the acquisition, goodwill on Much Asphalt. And I have got a slide later on. That was 128 -- ZAR 121 million -- ZAR 821 million. And that I'll go through with you as to how we've assessed that goodwill. So if you take the underlying out before COVID, our EBITDA would have been down 12.3% and our profit from operations would have been down close to 22% and the HEPS number, 23% down. So if you -- so the adjustments that we took, the once-off items did not really impact our headline earnings per share. However, if you take our estimation on COVID and the COVID estimation is, as Mark said earlier, the revenue estimation was ZAR 1,091 million, which is close to ZAR 1.1 billion. And the profit impact was ZAR 527 million for the year. And remember, we're still within the pandemics. So a lot of this could still be ongoing in time to come. So if we take the COVID impact into account, EBITDA would have been 4% up, and our profit from operations would have delivered a marginal [Technical Difficulty] and HEPS, 6.2%. So as you can clearly see the interest impact coming in on HEPS, and I'll go through that later on. So what we can see is that COVID did have a big impact in the business. My next few slides sort of dimension as to what the first half would have been versus the second half. And I did share this with you in the first half presentation, where we would have delivered a normal or an underlying profit impact of ZAR 611 million. So what happened in the second half of the year? Well, the second half of the year, we reported an operating profit of about ZAR 359 million. Then if you take into account, the goodwill impairment of much, which was ZAR 821 million, and then the 2 minor items -- well, nor minor. I'll talk about the savings just now. But if we take the profit on sale of business of Wolfenbüttel transaction well that was a loss and then the savings that we incurred from the restructuring. So what we did say in our commentary was that our restructuring costs largely offset the savings that we incurred. That would have taken us to about a second half performance of about ZAR 1.1 billion. And that brings us back up to the 9% trading profit to sales. If we look at the 2019 versus the 2020 impact, I think what's important to realize is that the 2019 numbers not only did it have an impairment in it, but it also had some project costs -- realignment project costs at both mining and water, and those were both offset by the gains that we made. So that took us up to a trading margin of 9% and ZAR 2.2 billion. If you look at what happened in 2020 and you add back the impairments, you add back the COVID losses. And what you would get is a ZAR 2.2 billion trading profit for 2020. And that also takes you back to 9% trading margin. So if you look at the 9% trading margin year-on-year, that's sort of kept in line and that makes me think that our COVID calculation was more or less in line, although it's an estimate, was more or less in line with what we were telling the market in the first half and where we are now in the second half. As I said to you, I would take you into the much goodwill. And I've put a very detailed slide here, and this is also presented in our financial statements. But what I'd like to bring to your attention, and you may say that we've been highly conservative. What we have done is we've upped the discount rate by 0.5%, which is quite significant in the calculation. The terminal growth, we've dropped that from 5.5% to 4.8% and then the budgeted growth rate, revenue growth rate, and that was the biggest impact that we've taken through. That was from 9% to 4.7%. So that's how we sort of calculated the ZAR 821 million goodwill impairment. We still have ZAR 709 million on the balance sheet or EUR 710 million. And if you look at that, and that really goes to the sensitivity impact. And what we would have to test next year at this time, when we look at the sensitivity, in order to write-off ZAR 233 million, we'd have to increase the discount rate, the post-tax discount rate to 16% and then I'll just -- and then if we had a decrease of 1% in the trading profit margin, which is quite significant, we would take another ZAR 150 million impairment. So we've built the sensitivities in. I believe that we have been quite conservative. And Dean will later on, will go through the Much business. But what I can say is that the local Much team are very positive about a good business recovery through the year. And later on, we'll hear from the honorable Minister of Finance as to how much money they will allocate to the infrastructure budget and more specifically the roads. If I take you into -- and I've gone through these numbers on the EBITDA. What I'd like to bring to your attention on this is that the RONA, that was the press at half year. It remains depressed at 6.5%. But if we add back the cohort and the impairments, we do get back to closer to our target of 15%. So -- so hopefully, good RONA improvement for next year. The tax rate is about -- we ended on -- and it's a normalized tax rate, excluding impairments, that was 32.9%. And that was higher because of withholding taxes that we pay offshore. So I think what's important to realize, if I have to talk about a forecasted tax rate, last year, I did forecast this at 32%. We're probably seeing a little bit of a higher tax rate going forward. So maybe 32.5% is probably more realistic to look at for the upcoming year. The cash management, and there's a good story to tell about cash, and I'll build that up later on. We did spend ZAR 632 million on CapEx. ZAR 201 million of that was really on expansion projects, and I'll go through some of those expansion projects when Edwin is a mining and when we get to the Schirm business because that's where it was largely spent. We did continue maintaining our plant. ZAR 431 million was spent. We did defer to CapExs, and Edwin will bring that up in the mining presentation. Net working capital, 14.5% at the year-end versus 17.2%. A lot of hard work has gone into our net working capital over the year, and that did drive the cash generation. As Mark said, we did monitor cash literally on a day-to-day basis. If we look at our gearing, 22% that's really been a stellar performance from 2018 when we did both acquisitions and bringing that all the way down through this COVID time to 22%. I did highlight at the half year that we were aiming at 25%. We betted that. And you're going to ask me where do I think we're going to be next year. So my gut feel looking at the business, and we must believe that business is going to come back. We are going to invest some money in working capital. I still believe that, that number is going to be below 20%. And if I hazard a guess, we're probably looking at about anywhere between 15% and 17%. Mark would like it to be at 10%. The cash interest cover, 8.5x. I think that's a good performance. We were able to bring back about $20 million with our dividend. And we also brought back some foreign interest from our U.S. subsidiary. The final ordinary cash dividend, ZAR 4.70, we looked at it. And the way we've looked at it as a Board, we said our has been good, and we still believe in the performance of this business next year. So we've sort of aligned the business -- sorry, this year, in 2021. We've aligned the dividend very much in line with the dividend last year. We paid for the whole year, we declared and paid ZAR 5.70 and we've done the same thing for this year. So dividend cover of about a 1.5x. It's much better than what we've ever done in the past. We don't have a dividend policy. So we do take it from year-to-year. And I think that's quite important to [ realize ] that and if we look at a dividend yield percentage, we're probably sitting at about close to 6% right now on this -- on our share price where we are today. Just the net debt, we did present this a similar slide at half year. Just to show you how our gearing has decreased over time. And if you do take out the IFRS 16 impact, we would have set at about an 18% ring. And I'm not going to go through each individual item, but you can see how we've actually managed our cash and deployed our cash in the business. Just now on our debt. And I know I have lots of my banking colleagues on the line. We are -- we do have some debt retiring in 2021. There's a loan that's due ZAR 1.1 billion in April. So I just want to say that we are looking at this myself and Trevor, who's our group Treasurer. We are looking at this very closely, and we are looking at a whole debt strategy going forward and communicate with our Audit Committee going before we come out with that. We have met all our covenants. We're well within our covenants, and we have stress tested various scenarios, and I'm pleased to say that we are going concern, and we are a very solvent company right now. And you can see that GCR have rated us at our last update that we had with them as an A plus. Just going into performance by segment. Mining was down largely due to COVID. Water had a good outcome, up 11% year-on-year, and that's with the COVID impacts taken into account. And I will go into agriculture, the agri health side of our business. That has had a real stellar performance, driven by both plant health and Schirm. And then chemicals been a tough year. We've taken the impairments through that. They've gone through a restructuring exercise that has driven that results down. Dean will talk about that later on in the year. So now I'd like Edwin, just to take over and talk about the mining business. Over to you, Edwin.

Good morning, everybody. I know Mark used the word of a difficult year, Mark Dytor. Mark Kathan called it an interesting year and good mining terms, I could have given a much better descriptor of the year. But the fact remains that the year was really tough for us, and we'll talk about it going forward. Just this is a split again by mineral first in terms of our business. What is important to keep in mind, when you look at the split by mineral, is when you look at gold, to understand that gold is affected some by exchange rate and some is local. So there's a sort of split between the exchange rate. When you look at PGMs, it's mainly not affected by exchange rate. When you look at coal, the revenue will be affected by exchange rate because of the business we've got in Indonesia and the business we've got in Australia. When you look at copper, it's mainly affected by exchange rate. When you look at diamonds, it's mainly outside of South Africa, and when you look at iron ores, it's local. I've always reported on other, and that's mainly our industrial sales, and we often use that just to sort of get a volume balance in our business. So when we look at the results as published, and we look at the underlying results, when we look at our mining business, our underlying results directly related to COVID. So there's nothing else in the underlying results other than COVID. So if we look at the revenue, we were down 3% to ZAR 11.189 million but if we look at underlying, we're up 3% to ZAR 11.886 billion. When we look at the EBITDA number, we were down 9.3%. But when we look at underlying, we by 12.8% to ZAR 2.17 billion. Trading profit similar. We were down 14%, but underlying, we're up 18.5%. If you look at our trading margin, which is pleasing. If we look at the underlying number, it is at 13%. And the highlight for us was our trade working capital, which we managed very well, and that's at 13.7%. So I've mentioned the foreign revenue. So you can see what the exchange rate effect was. And we're now 61% outside of South Africa in terms of foreign revenue. There were 2 effects on our revenue number when you read it, 1 was the COVID, which was mainly South Africa, driven. And then we had a significant positive effect on exchange rate, as Mark Dytor showed us earlier, what the average exchange in '20 was versus 2019. If you look at the margins, you will see the underlying margins improved fairly well. Our improvement in underlying margin is on efficiencies that we brought into the business, but also on cost savings that we very successfully brought through in the business. Investment in business expansion, Mark Kathan has mentioned it, and we have invested in areas like Botswana, DRC, we've invested in South Africa and some projects and in Australia. So there's a number of projects that we did invest for the future. As I said, excellent working capital and as a result, also excellent cash flow. Mark has mentioned, we've pulled together as a team and we said, during this year, cash will be very important, and we managed it very well in our mining business. We launched a project called C2, which was cost and cash. And that was monitored daily and weekly and monthly. And I must congratulate the team. They've done really well. Working capital, we've really pulled down stock towards the end of the year, and we managed it very well. CapEx slide was mentioned before [Technical Difficulty] nitric acid [indiscernible]. We should see it up and running by the end of this week. So we delayed it to this year and then we've also had delays in our air emission abatement project, and it was largely because of difficulty to get some of the raw material steel in as a result of COVID. And some of the people that need to come and sign international people to come and sign up on the project. But most of this project was spent prior to '20, some of it, but very little will be spent in '21 on this project. I normally show the ammonia effect on the business. This year, ammonia effect was very, very small. I think it's like 0.5% on turnover. So it's really not an issue this year, ammonia, it was more exchange rate matter. If we look at the mining explosives business, specifically, so we've promised previously to deliver an realignment project, a ZAR 200 million public, we declared a ZAR 200 million saving. That we will deliver, and we've exceeded that expectation. So we're very happy that we've achieved that. We made progress. I've reported previously that we've lost some business in South Africa. We've made progress in getting some of those volumes, albeit a bit slow because of the COVID impact but what we specifically did as well is that we said, when we recover, we want to recover rather contribution than volume necessarily because we said that our focus should be on a return on invested capital rather than just bluntly look at volume recovery. We recovered some of the initiating systems volumes. And I hope we still have slides on, the slides just did here on my side. So I've just got the thumbs up that the slides are on with you. So we recovered some of the initiating systems volumes in the second half, but the initiating systems were really affected badly by the COVID effect. We've mentioned that our product is in the [ auto ] and reactive ground-friendly product, and it's really performing well. We're very proud of the development we've done there. Rollout on underground bulk emulsion systems that continue, and we see some good progress happening there. Central Africa business showed a good recovery in the fourth quarter, the negative effect of cohort and the copper commodity, as Mark mentioned earlier, had an effect on that Central Africa area. There are still some businesses not back, and we see them slowly coming back during 2021, and we should see a more normalized year in Central Africa. We've seen record gold prices, and that, of course, really helped us in the West African region, and we saw excellent performance as a result of that. When we move to Indonesia and Australia, COVID at minimal influence on Indonesia and it basically 0 influence on Australia. So we've seen a very strong performance in that region. We've also managed to get these opportunistic sales that we always talk about, we managed to get some contracts in Australia of the value of 24,000 tons on several contracts to to at least give us more security in that region. The Brazilian acquisition, we've gained some additional business there. It was frustratingly slow because of COVID, we couldn't send out technical salespeople to go held [Technical Difficulty] but we did gain and did sign some small contracts and did benefit in that region as well, albeit in a difficult COVID environment. If we look at the chemicals business, the Mining Chemicals business, the COVID impact mostly in South Africa. So our liquids xanthates, which is money South Africa -- South African sales. We had really low volumes in first half. The service mining operations for liquid xanthates really recovered in the second half because it's mainly platinum related. So -- but we had a slow recovery for underground business and some of the underground mines really struggle to bring people back and bring the mines back to normal capacity really because of the restrictions that COVID-19 brought to them. The product mix and improved margin partly offset the lower volumes, and that was also part of the cost reductions that we worked on, and it really helped us in terms of our margin that we achieved. The solid xanthates sales remained flat. And we hope to see a good jump in that this '21 season. Flocculants still a major export customer remained on care and maintenance, and we see this operation that restarted, and it will most probably start buying from us in the second quarter '21. Good growth in exports for flocculants in the DRC, Zambia and LATAM, although LATAM was slightly below what we expected to achieve. And it was, again not ability to get around the customers to do test work on it. Emulsifiers and coatings, low SA sales in the back of some of the loss in the surface mining sector. But we've seen really good growth in Australia, in Europe and in LATAM on our emulsifiers and coatings. The migration of the Asia mining businesses, meaning the chemical business into the explosive business to place, and it's now on 1 platform, a SAP platform, and we've got a financial shared services center complete for the total business. So we really run this business now as 1 business. If we look at the outlook and the picture if you wonder what the picture is, the picture that we show there is just our developments in terms of digitization or digital progress in the business. And these are the areas where we are actually digitizing the business, and they all speak into 1 hub, which we call a blaster. So just for interest sake, you can see, we're actually really taking the whole business into the digital world. If we look at South Africa, the prospects in underground mining sector has improved, driven by positive outlook on gold, and PGM prices. And I've seen the platinum prices have really -- they're talking about platinum definitely moving up in future. So quite excited about this year, what we will see in the South African market. The underground emulsion sales, we've also seen good gains and momentum happening in the underground emulsion sales, and now we see that progress in this year. In addition to we also see a recovery in diamond mining in our neighboring countries as as the world economies recover. So we're quite positive about that. Central Africa, we'll see -- we believe we'll see with a stronger copper price. We'll see a more normalized business for both explosives and chemicals in that business. So business in the region remains highly competitive, however, in that region. So if we look at the rest of our areas, West Africa, we still continue to see a strong gold price helping us there. And then Australia and Indonesia, we remain positive about those areas. South America outlook positive, specifically for explosives in Brazil and our mining chemicals as good opportunities in Brazil, Chile and Peru. Establishment of the Chile manufacturing facility for explosives is a priority, and we'll work on that. Our strategy has not changed. Structure is now in place to deliver mine to mineral solution. So the complete mining business now sits together and we can develop that strategy very well and execute on it. The regional step out continues part of our strategy, and we will work on future step outs. Growth of Bulk emulsion explosive business in South Africa, both for surface and underground will continue, and it will be a focus for us. And we will continue to do R&D developments to deliver to customers value-adding solutions like the [ auto ] products that we have developed. Diligent control on cost will continue, and we will definitely make sure that we do not slide back in how we managed to do these things. Thank you very much. That is mining, and I'm going to hand over to Dean Mulqueeny to talk about water.

AECI water. I think if I just go through from the revenue perspective, just short [Technical Difficulty], which was slightly down on last year. And I think to the team is slightly disappointing, especially in quarter 4 where we could see some of our clients, they were cash constraints and also with our debtor management on our LCs for exports for public water that some of these orders were actually delayed. So we did have an impact, not as much as the rest of the -- some parts of the group of ZAR 61 million from COVID. And that would have said an underlying revenue of about nearly 4% up. I think more importantly, the trading profit has moved in the right direction to 11.1%. And the margin percent, as we have alluded to the market previously, we're targeting 15%, we finished at 14.6%. But if we took the cover impact of the ZAR 30 million, we would have been somewhere around the 16%. With regards to our structural project, we were slightly different to the mining. There were 2 phases or 2 legs to it. Structurally, we achieved the target, but we had quite a few upliftment projects that with the pandemic related delays, we only achieved 75% of what we're targeting. So overall, we were close to achieving our goal. And it is -- it will continue in 2021. We did have a small phase of a second phase, which was regarding operations and the Nigerian entity, which came at a cost of ZAR 15 million, and we realized about 2/3 of that in last -- during the course of last year. I think 1 of the key focuses and the stresses I was getting from Mr. D was at half year, our working capital was sitting around just short of 24%, and we managed to claw back that significantly in H2 finishing exactly the same as the previous year with our target to try and get below around 18%. Overall, like most of the group big focus on cash. And I think pleasing to say that our cash generation in water was 18% up. South Africa was solid under the circumstances. But overall, the results were down in terms of revenue, but again, a fantastic performance in public water segment, up 37% year-on-year. The area that we were hampered was refining in the mining sectors. And there were a couple of others in terms of customer closures business interruptions, as we are aware of the 2 refineries. And of course, in a market where things are quite constrained, you'll find that there is a lot of pressure on pricing and margins. There has been a change overall in the business last year with the growth of public water in the sales product mix. And I'm also pleased to say that as we are trying to do our part in terms of the group, our exports now sitting at 31% of our total revenue, about nearly 8% up on the previous year. Public waters growth was substantial, 31%. And as we mentioned earlier, the mining sector and the oil and gas sectors was affected by COVID. I did report on project purpose early last year as well as in the half year, and I'm just want to give an update on where we are. So we splitted it into 2 sectors, the private sector, industrial and mining. And we had made mention of our first major project, which was internally at AECI Mining Explosives. I'm pleased to say this plant has been commissioned in December last year, and I will show a little video of what it looks like. But we've also made good progress in the Western Cape in the fishery, putting in and installing a DAF unit, which is being commissioned as I talk. And there was a couple of other projects, which I won't go through all of them. With regards to the mining sector, we were significantly impacted on our progress with project purpose there. But I'm pleased to say that our first water treatment trial has commenced, and I will show some picks of that as well just now. And we also are doing a validation steps in 2 major mining facilities where we're replacing public water -- potable water with reused water. This is just some pictures of the container-based plants that we're currently running a trial at and it's running exceptionally well, and we should be making some decisions towards H2 this year. The other DAF unit, which I spoke about, the visual on the extreme left of your screen gives you once it's completed, but it's busy being commissioned today as we speak, and that should be up and running by end of March. The major project that we did last year was at mining explosives which was significant, and I have a short video. It will play for about 2 minutes, if you can just bear with me. [Presentation]

The main message there is charity begins at home or work begins at home. So a journey or a business of purpose, I'm glad to say we've already started that and there will be Phase II and Phase III coming up shortly. Just regarding the public water sector, I'm not going to go through all the points, but to say that we've also started projects there. We were awarded 2 contracts 1, we completed in 1H, which is the picture you see on your right. And the second one, we were awarded in December, which we're busy commissioning. But at the same time, the same client has now asked us to expand that. So we're looking at doubling up on that project capacity as well. And furthermore, we are working very closely with the water boards and utilities in our public-private partnership journey. So we want to actually try as part of our purpose to bring water to the less fortunate to the remote areas and to the rural areas as well. So the outlook, I think we still have some challenges regarding COVID in our middle market segment and the refineries. But again, the public water segment is unaffected by this, and we've seen some good gains there. The 2 projects that we went in Phase I, Phase II, we continue to be focused on that and letting that continue on our journey to a much higher quality earnings business. Working capital and cash management will continue to remain a priority. I think more so, we are focusing on technologies as well. With South Africa, as we've showed earlier, the project purpose growth plans are needs, we've got quite a few more projects that we anticipate that will materialize in 2021. On the export side, we have been in the final phases of getting further growth in exports, and we expect public water to get to close to 50% of the business being export business. And of course, the projects which I did mention earlier that were delayed, we are anticipating all of these because it's not lost business. It was just delayed business, and we anticipate all of this to take off some time in quarter 2, moving into H2 as well. So that's my side for water, and I'll hand over to my colleague, Mr. Mark.

Yes. What can I say about agriculture, it was really a great performance and really backed up by some really good weather conditions. If I go into -- if I go into Schirm. Schirm had a great performance as well. That further improvement in safety, EBITDA improved by 31%. Revenue was up. The performance of Schirm was really boosted by the 1.9 million liter sanitizer contract that we got in the first half of the year. And that really demonstrated the agility of our business as to how quickly we could see the opportunity, react and get our plants going to actually manufacture this and get the distribution chain working. And that was a really profitable contract for us. Some of the projects that we've completed during the year, we shut the Magdeburg site down. That was a lease site with the end-of-life plant on it. So we shut that down. The Blender that I told you about, from a CapEx point of view, there's a Blender 5000. That was installed silver Baar-Ebenhausen that was successfully completed and within budget. The suspension concentrate herbicide plant in the U.S. at [ NS ], that was also completed in November, and that's already started up. The cost savings project that we embarked on has delivered EUR 2 million per annum, and we'll see some of those annualized savings coming through in 2021. I think what was disappointing and the impact that we've seen from COVID was really on the automotive sector. It really impacted the second half of the year. And there's been a significant slowdown in some of the agri chemicals sectors. For instance, the flower market that we used to support, et cetera, that has shown quite a big depression in that. The U.S. business, that was totally unaffected by COVID and has continued to perform strong with good demand in that market. Just the outlook for Schirm. We see -- what we are seeing now in 2021, especially in the first quarter, we're starting to see the return of the automotive sector. I think that's important. The suspension concentrate facility, that's a picture on the right there before all the snow in Texas. So that, as I said, that was completed in 2021. The facility is already fully loaded right up until June 2021, which is this year. The Blender 5000 at Baar-Ebenhausen, that's already loaded up to 70%, and that was opportunistic CapEx that we put in. So there has been good demand for the products that come out of that Blender. We'll continue with our our savings initiative in 2020 -- from 2020. What we have done, though, is the team has looked at where we duplicate production and where we can reestablish and use other production facilities around the site. And what we have done is we are restructuring the production facility around [indiscernible]. We've also embarked on a buyer sales strategy that is being implemented and rolled out. And currently, we are waiting for 2 significant tenders to be awarded. And hopefully, we have a good chance, maybe look at all the volumes from those tenders, but get some key parts of those tenders that would enhance our capability. We are concerned there's been poor demand for the sugar beet herbicide and especially in the first half of 2021, and we hope to see that actually return back to normalized volumes in the second half of the year. Dean, will you talk about plant health much connected?

All right. Just to continue on the AECI plant health. The positive trends that we had in -- that we established in 2019, the second half, they've continued through 2020. So we've had a very good year in this business. COVID-19 had minimal impact, and that's mainly because we were an essential service provider in South Africa. But we also benefited from being an approved supplier to the COVID-19 Agricultural Disaster Support Fund. And then, of course, as we all know, we've had excellent rainfalls this year and with all -- with the more normalized weather patterns across South Africa, we had a fantastic year last year. Then very importantly, we had also -- we had higher sales of our in-house formulated and registered products, which, as I've mentioned before, this really improves the quality of earnings in the business. And now our in-house products make up about 32% of our total revenue. Of course, we also had a -- we had good rainfalls in Malawi, and we had a strong recovery with our FOL business up there, and that was really on the back of new business that we gained. And then lastly, solid progress on on our Biocult business, and that's really starting to see the benefits of the growth in the local market and a bit into the export market as well. Just on the outlook, obviously, we have seen the benefits. We talked about this at the half year of the restructuring that we did in plant house. So those benefits will come through. But the focus really is to continue on R&D and registrations, particularly in the green chemistry space. And I'm very proud of the team. They actually had 78 new product registrations in 2020. And of course, this really forms the backbone of getting these products launched and growing our in-house product range. Of course, also, we will focus on the further expansion of the agent network in South Africa. We have increased that. And of course, also in other countries in Africa as well. And then with Biocult, we're now probably at the stage where we need to expand production again. It's not a big expansion, but it's really in line with focusing on internationalizing that business. And then of course, we mentioned the cooler app in the last session as well. This has now been rolled out, and we are really focusing on getting business with emerging farmers. And also there's a lot of interest from corporate funders as well. And then, of course, my favorite is the sub plant. This was quite a hard project to get going, but I think we've started to see the success. We've also added new technology to this -- to the offering as well. Really where we'll focus on increasing our hectarage that we want to target with this technology. And then lastly, the animal health business, which was run independently in the past has been incorporated into the agri pillar. So there's a strong focus on the whole AECI agri segment now. All right. I'll move on to chemicals and just some of the numbers, obviously, you can see at the top revenue, the underlying numbers, just over ZAR 6 billion. Of course, this sector of the market was quite severely impacted by COVID, and I'll talk about it. And of course, also the impairment that we took. EBITDA, the underlying ZAR 652 million and then of course, you can see on the trading profit side, we had that major impact of the impairments that we took place. Despite that, though, this -- the businesses that are in this sector are still highly cash generator. I think the other positive was the benefits of the realignment process, which I'll talk about just now, they are on track as well. But the actual manufacturing and infrastructure sectors, as we know, have been constrained over the past 2 years. You saw the graph a bit earlier on, but also severely impacted by COVID-19. And you can see there that the impact of COVID on the trading profit line in these businesses was ZAR 198 million. Okay. We did see some signs of recovery in the second half, which we're very grateful for, and we've also gained some new business as well. I think we're leaner and meaner as we were aiming to be. Also, we have experienced some shortages in supply chain interruptions, but I think with our good international experience and our sourcing, we are able to manage that. And then of course, you've also heard that we have sold 3 businesses. It was the paper and pulp business. It was the -- obviously affordable as we restructured as opposed to closing it down. We sold it. So from a cash point of view, we're better off. And thirdly, we also disposed about 49% shareholding that we had in Clover pride as well. And then, of course, lastly, we all know about the goodwill impairment, which Mark K went through earlier on. So just to remind everybody, this was part of the restructuring that we did. Of course, this restructure excluded sands, fibers and much asphalt. And what we really did was that we collapsed the food pillar. And we formed within the chemicals business, 3 businesses, industrial chemicals, which is really our big bulk industrial business. Our specialty chemicals, which is our more value-added product trade as well as manufacturing. And of course, we consolidated our juice business and our food ingredients business as well. Just an update on the realignment process. It is complete. The realignment cost in impairments were all incurred in the first half, as we mentioned, the savings to year-end realized in line with the expectations. And most importantly, of course, we are confident of achieving the ZAR 100 million structural and sustainable benefits in 2021. And I think what we were able to see with this process of cleaning out our businesses is really an improvement in quality of earnings, and we've got to get that over the 10% mark, and I'm quite happy to say we are succeeding. Just a little bit more detail on the business, and it is quite diverse, as you'll see. Our specialty business, I mean we gained new business in this sector. Also, we had some very good strong sales of sanitizer in the first half of the year. But you can see the impact of COVID really on the personal care, coatings and construction, polymers earlier chemicals, and of course, the can coatings customers because of the alcohol ban. The industrial chemicals was probably the biggest disappointment for us, and that's really because of the reduced demand for sulfur products. And of course, we had no exports into Central Africa. The reduced supply of acid from the mining sector also impacted us. And of course, the molten short -- molten sulfur shortages from the refineries. But on a positive note, the Home Care sector performed exceptionally well, and we expect that to continue as well. On the food and beverage side, good recovery in revenue and margins, and we've got a far more focus portfolio. The juice concentrates, I'm very happy to say, increased significantly in the second half of the year. And also our health and nutrition ingredients, we saw good improvement there as well. And last but not least, our sands, fibers business in the states had a very strong recovery in the second half of the year. Just quickly on the outlook. We have started to see an improvement in the trading environment. We've also got a number of new products that we will roll out really in the lines of more or improved salaries and surface cleaners. Again, a strong focus on the export volume with our specialty products. We've also seen an improvement in the supply-demand balance of sulfuric acid in the market, which is encouraging for our industrial business. Sulfur prices have increased sharply, and of course, the ongoing demand in the home care business. And then just lastly, with our resin production, we've seen a lovely increase in volumes there, and that's all in the local demand market. Right, I'm going to hand over to my colleague, Mr. Mulqueeny.

Thank you. Thanks, team. Afternoon. Just much, I'll start a quick review. As we've said, the volumes, which 2019 wasn't a good year, but the volumes for 2020 actually declined significantly. And I just want to indicate from a market perspective, we estimate that the market shrunk about 52% last year and if we actually look at our base case or our investment case, when we purchased the business in 2017, that's about 62% down. Much Asphalt itself, the volumes are 38% and respectively, 45% on 2017. So we believe we haven't lost as much as the market has, and I think that's mainly because of our geographical footprint and the strong business relationships that much does have within the segment. COVID, as we said earlier, in H1, had a huge impact of about ZAR 69 million. The recovery in H2 was very slow, and slower than we actually hoped for. We were also affected by the bitumen supply from the 2 refineries. There was some activity, positive activity in certain metros and Department of Transport, but Gauteng still remains a concern, which also, as we mentioned at half year, we also embarked on our realignment project. So we've mothballed 1 of our manufacturing sites in Gauteng, and the volumes have been moved to a site not too far from it. And the project itself mainly focused on the operations with Much having a significant number of operations throughout the country. And I'm pleased to say that the savings that were achieved in 2020 is ZAR 27 million, we envisage about ZAR 40 million annual savings, which has reduced the cost base of the business quite significantly. So the SANRAL tender, as we know, there has been some talk, but a lot of the projects are either deferred or canceled. What do we think is going to be for 2021? Well, we certainly hope that the benefits of the realignment project will kick in, and we've seen it already in the 2 months. It's growing extremely well. Some SANRAL work in the 2 and 3. But from a bitumen perspective, we'll see that at the end of 2021. I think positively, and from the team, which Mark K. had indicated the customers and our major customers have indicated an increased level of activities, not to where we will see it in 2017, but certainly, hoping to get back at least to 2019's volumes. There's been an upward trend in the mobile type work, which is more in the remote areas. The wild coast is progressing well. Good activity we've seen in our Eastern Cape region. And I think overall, Mark and the team remain positive, but are well positioned for any upturn in the South African infrastructure spend.

Thank you. Okay. So I'm going to conclude it to the last few slides, the strategy, outlook and focus. We've tried to compact a lot of information and obviously, the presentation will be available as well as the slides will be available online. But we did launch 2020 with our purpose. And obviously, that leads into our 2025 strategy document, which we have now completed. And that is around the 1 AECI for a better world. And you will see on the LinkedIn, on website has changed, the Internet -- and the Internet sites have changed. And we'll give examples of how we will change the world in terms of sustainability. We've put together a 2025 framework. The plan is that later in the year, we will try and do an Investor Day in talking about strategy and how we're going to roll that out. We've also now embarked, we've put an execution office together. But really core to this is that the 1 is purpose, but importantly, 0 harm sustainability and obviously moving digital. And obviously, the customer centricity, passion, growth is going to be a key business excellence, AI, ERP systems. There's a lot of work going on in terms of strategy, but this is the framework that we've agreed and the Board have endorsed to 2025. Most importantly as well, which we will be launching in this next month and will be part as well as an important part of our integrated report is our sustainability report. As well as goals that we will be putting in there. And I'm not going to go into that in detail now. But obviously, this forms a very strong basis of our strategy moving forward because the world is changing. And investors like yourselves are also looking on how companies like us embark upon these new challenges moving forward. And that's going to be key for us in the next 5 years. Outlook global. I think COVID-19 is here to stay for a while. And I think really, from our point of view, is how we get the vaccinations out. And of course, it's a moving target because the cover form is changing its different strains. And of course, to get people vaccinated as quick as possible is going to be challenging. But however, we are endorsing it, we're behind that, and we need to move. We are seeing some lift in global economies. We are seeing America and China is obviously offtake in the commodities, which is pushing prices. And I think in terms of the global our mining strategy bodes well for the future to take advantage of those new commodity prices. So on a global, we've got lots to do. There's opportunities there. South Africa, obviously, in terms of unemployment, consumer spend, I think it's a challenge. We are not seeing investment levels. Electricity is still a concern for us and infrastructure around electricity supply and we're working through that. We are still, however, seen -- we have seen signs of the economy returning in a lot of the areas that we operate and price is moving in terms of some of the key raw materials, such as sulfur, sulfuric acid. We anticipate some good demand from some of our products and services, and I'm talking really in the chemical space, but particularly I think mining in South Africa relative to the gold and PGMs and water treatment, agri, food and beverage are areas that we have been concentrated on and looking to grow. And we've also seen the benefit of those realignment projects. Focus for us is 0 harm. I'm not happy with our total recordable injury rate. We need to improve that, and my management team are listening to this. So we're going to have to be a lot more assertive in the way that we implement our safety strategy going through, and we are embarking on a new strategy. Diligent cash is going to be -- cash is king for us, and we're going to continue. There should be no reason why we do not continue to generate the cash we have. The value of the realignment projects, we're still monitoring those on a monthly basis. We know exactly what savings we've obtained, and we're making sure we're holding on to those savings. Geographic and market diversity is key. And you'll see Edwin has spoken about key areas, i.e., Chile, even North America on our radar, especially in the mining and the construction industry. Again, on our agenda as well. We've got a lot of number, but we're also seeing still acquisition opportunities. They are coming. As you can understand, a lot of companies are in a little bit of a stress situation. However, we're being prudent. And from our perspective, is we can't overpay for anything right now if we buy -- and it must fit within our strategic framework. There will be focused on a better world, and I've spoken about our sustainable development report. And importantly for us is the execution of our 2025 strategy and the growth targets that are in that strategy. That brings me to a conclusion, and thank you for your attendance. We will be taking some questions, and I see Fulvia has a number of questions on her iPad, so we will be taking them and I'll direct as I feel the right people are to actually answer those questions. Thank you.

[Operator Instructions] We have a question from the lines, which comes from Steph Erasmus of Avior Capital Markets.

Just a couple of questions from my side. I think, firstly, just I think, congrats on a pretty good set of results given the circumstances. Just to pick up on the mining and water sort of overlap, if you want to call it that, what sort of cross-selling opportunities are to cross-sell those water solutions to your existing mining clients?

Yes, I'm going to ask Dean Mulqueeny to answer that.

Yes. So the cross-selling is actually something as part of the group's collaboration that was initiated a couple of years ago, and quite a few of the projects that I did mention have come from leads from within our Mining Explosives division as well as our Mining Chemicals division. So the teams are working together and especially where we have a better footprint from an explosive perspective, the introductions are now happening. So that is helping our path on our journey to be accelerated.

All right. And then I mean, what -- is it sort of enough to move the needle for your water division, top line wise?

Yes. We are targeting at least 10% this year with a growth of up to 30% in the next 3 years from the projects that we're working on.

Okay, excellent. My second question is probably for Mark Kathan. And just, Mark, in terms of Schirm, and that write down, if things kind of normalize your the sensitivity say, what kind of opportunity do you think there is to write that investment back up to its purchase price?

Are you talking about Schirm or Much Asphalt?

Sorry, let me rephrase. Sorry, Mark. My question for Schirm was just the revenue growth guidance and then some margin guidance, please, on Schirm specifically.

Yes. So you would have seen the agri guidance on where we ended up as an agri pillar, which I think was about 400%. I think that's where Schirm is sort of positioned in euro terms. And the growth in revenue, I would -- I am worried about the sugarbeet herbicide. We are going to recover on automotive chemicals, but I would not go too high on revenue growth for this, but certainly for next year. And then on the Much side, just on -- you can't -- from a technical point of view, once you've written goodwill off, that says written off. If it was PPE, you could reverse that impairment.

Correct. Okay. And just in terms of the realignment benefits, Mark, how much of those sort of realignment benefits aren't in the FY '20 base yet? So how much are we looking at sort of more or less FY '21 across that?

Are you talking for chemicals?

Across the group.