Slide 1: Financial results for the six months ended 31 December 2010
financial results for the six months ended 31 December 2010 Pat Davies chief executive 0 7 March 2011 JSE: SOL | NYSE: SSL
Slide 2: Forward-looking statements
forward-looking statements The estimates of contingent resources contained in this announcement are based on definitions provided by the Society of Petroleum Engineers. Contingent resources do not constitute, and should not be confused with, reserves. Contingent resources are defined as those quanti
Slide 3: Recent achievements
recent achievements Accolades ● Ixia BEE Mining transaction ● Inzalo is first listing on JSE BEE board ● Runner up at Edelman Awards for excellence in R&D ● Global leader of oil and gas sector on Dow Jones Sustainability Index ● Second place in Ernst & Young Excellence in Sustainability Awards ● Sas
Slide 4: Delivering on our priorities through focused actions
delivering on our priorities through focused actions ● Solid performance from foundation businesses Improve ● Synfuels volumes on track for full year, despite major planned outage; operating improved volumes across other businesses performance ● Strong contribution to operating profit of 29% from ch
Slide 5: Focused strategy delivering solid results
focused strategy delivering solid results Financial highlights ● Headline earnings per share up 22% to R12,97 ● Earnings per share up 20% to R12,68 ● Group cash fixed costs down in real terms ● Interim dividend up by 11% to R3,10 per share ● Strong cash flow generation and balance sheet ● Local and
Slide 6: Financial and operational review
financial and operational review Christine Ramon chief financial officer 5
Slide 7: Gradual recovery in rand commodity prices
gradual recovery in rand commodity prices Fuel price Currency US$bbl US$1 = Rand Brent Product price Currency $82 $91 $71 $82 R7,64 R7,11 1H10 1H11 1H10 1H11 Chemical prices Commodity prices Average % ∆ vs Rand/unit 1H11 1H10 US$ton Polymers Solvents $1 279 Brent/bbl 581 ▲ 6 $1 100 Fuel products/bbl
Slide 8: Margin expansion and cost containment enhance bottom line
margin expansion and cost containment enhance bottom line Operating profit (Rm) Macro Cost containment environment and production 15 000 4 694 12 018 12 000 10 468 (950) (219) (25) 9 000 (1 950) 6 000 3 000 0 1H10 Exchange rate Crude oil and Once-offs² Inflation/cost Volumes 1H11 prices reduction³ 7
Slide 9: Focus on cost containment continues
focus on cost containment continues Cash fixed costs (Rm) 16 000 734 14 619 14 647 312 14 335 (1 018) 12 000 8 000 4 000 0 1H10 Once-off 1H10 normalised Inflation Cost reduction 1H11 adjustments⁴ 8 4. Includes capitalised maintenance costs in 1H11 and competition related administrative penalties
Slide 10: Cluster review: chemicals drive improved profitability
cluster review: chemicals drive improved profitability % ∆ vs ● Robust performance from SA energy Operating profit (Rbn) 1H11 1H10 despite Synfuels planned outage and Ixia BEE once-off charge SA Energy 7,4 -8 ● Improved contribution from both SSI and SPI International Energy 0,9 +154 ● Strong perfor
Slide 11: SA energy: robust performance despite major planned outage
SA energy: robust performance despite major planned outage % ∆ vs Operating profit (Rm) 1H11 1H10 ● Mining benefits from higher prices. Mining 140 -18 Once-off Ixia BEE charge of R565m ● Gas volumes up 22% Gas 1 282 +9 ● Synfuels production volumes down 7,5% due to major planned outage. Additional S
Slide 12: International energy: Oryx delivers operational improvement
international energy: oryx delivers operational improvement Operating profit (Rm) 1H11 1H10 SSI 539 112 ● Oryx 871 507 ● Oryx production up 42% ● Funding growth (332) (395) from 1H10 with capacity utilisation of 84% SPI 333 231 ● Production volumes from Mozambique up 22% ● Mozambique, Gabon 529 361
Slide 13: Chemical cluster: O&S delivers record performance
chemical cluster: O&S delivers record performance % ∆ vs Operating profit (Rm) 1H11 1H10 ● Polymers overall production up by 14% Polymers 574 +519 › RSA margins still tight › Arya production up 26% from 1H10 Solvents 440 +116 and capacity utilisation at 71% ● Solvents benefits from improved margins
Slide 14: Healthy cash generation supports growth and enhances returns
healthy cash generation supports growth and enhances returns Uses of cash (Rbn) Estimated total capital expenditure and asset acquisition (Rm) 40 000 2,2 31 000 30 000 23 000 20 000 16 108 9,2 4,7 10 000 0 2010a 2011e 2012e Taxation Dividends Capex Sustain Growth Farrell Creek Deleveraged balance sh
Slide 15: Balancing growth and competitive returns
balancing growth and competitive returns Return on invested capital (%) Progressive dividend growth (ZAR) 30 15 20 10 10 0 2003 2004 2005 2006 2007 2008 2009 2010 5 ROIC WACC IRR target ● Portfolio management with an emphasis on strategic fit, risk management and returns ● Capital prioritisation and
Slide 16: Outlook
outlook Operational performance Macro economic conditions FY2011 remain uncertain ● Continued production volume growth ● Commodity price fundamentals have › Synfuels full year production target improved remains 7,2m tons ● Refining margins remain weak › Expect to maintain Oryx and Arya at ● Further
Slide 17: Strategic review
strategic review Pat Davies 16
Slide 18: Progress on strategic imperatives
progress on strategic imperatives Foundation Sustainable growth Definition of victory Accelerate GTL, Operations Develop and empower focused CTL growth Excellence our people Grow related Group imperatives Functional upstream business Excellence Grow Continuously improve stakeholder Grow technologica
Slide 19: Strategic agenda: continuously improve foundation
strategic agenda: continuously improve foundation Foundation Sustainable growth Definition of victory Accelerate GTL, Operations Develop and empower focused CTL growth Excellence our people Grow related Group imperatives Functional upstream business Excellence Grow Continuously improve stakeholder G
Slide 20: Continuously improve and grow existing asset base
continuously improve and grow existing asset base Key focus areas Plant stability Energy efficiency Continuous improvement Volume and Cost management margin improvement Actions delivering results 19
Slide 21: Strategic agenda: accelerating GTL focus
strategic agenda: accelerating GTL focus Foundation Sustainable growth Definition of victory Accelerate GTL, Operations Develop and empower focused CTL growth Excellence our people Grow related Group imperatives Functional upstream business Excellence Grow Continuously improve stakeholder Grow techn
Slide 22: Shale gas is a game-changer in the US energy landscape
shale gas is a game-changer in the US energy landscape The unanticipated success of shale gas in the US has completely changed North American gas market dynamics … US shale gas dynamics 16 80 80% Production (bcf/d) bcf/d % conventional gas/total gas supply Marcellus 12 60 60% Haynesville Woodford 8
Slide 23: Increasing number of shale gas rigs in North America
increasing number of shale gas rigs in north america US gas drilling rigs 1 800 1 500 1 200 900 600 300 0 Rigs 2006 2007 2008 2009 2010 22 Horizontal Vertical Source: Baker Hughes
Slide 24: Farrell Creek acquisition supports GTL drive
farrell creek acquisition supports GTL drive ● Large reserves ~9,6 trillion cubic feet ● High quality ~1 200 feet thick and brittle ● Access to water and gas pipeline infrastructure ● Proximity to potentially large GTL fuel market ● Environmentally sustainable operations 23
Slide 25: Potential to grow group production significantly
potential to grow group production significantly Farrell Creek assets offer alternative monetisation options ● At full ramp-up, Sasol 50% can add ~600 mmcf/d ● As a piped gas operation this is double our current group production ● Alternatively, can supply a 48 000 bbl/day GTL plant, increasing grou
Slide 26: Strategic agenda: new energy ramping up
strategic agenda: new energy ramping up Foundation Sustainable growth Definition of victory Accelerate GTL, Operations Develop and empower focused CTL growth Excellence our people Grow related Group imperatives Functional upstream business Excellence Grow Continuously improve stakeholder Grow techno
Slide 27: New energy opportunities
new energy opportunities Addressing our carbon footprint Synfuels electricity generation ● More than 70 experienced Sasol people Coal 33% ● Partially funded by proceeds from sale of 50% Gas turbines carbon credits Eskom ● Initial focus on low or no carbon electricity 17% › Electricity from gas to gr
Slide 28: Capital projects must sustain competitive advantage and low-cost position
capital projects must sustain competitive advantage and low-cost position 1. Strategic fit 2. Rate of return 3. Risk profile ● Backward integrated ● Grow technological into feedstock Tetramerisation lead ● Off-take arrangements and wax ● Grow chemicals based ● Exceed hurdle rate in place expansion o
Slide 29: Project pipeline – exploiting opportunities from shift in global energy landscape
project pipeline – exploiting opportunities from shift in global energy landscape Exploration Implementation Feasibility Pre-feasibility Idea stage – gas focus ● Secunda growth ● Canada GTL ● Several GTL ● Several GTL ● Mozambique blocks phase 1 ● Uzbekistan GTL opportunities opportunities A, Sofala
Slide 30: Sasol's investment case remains strong
sasol’s investment case remains strong Leading technology-driven, Stability Unique investment alternative energy company in a volatile world proposition ● Proven alternative energy ● Long-term oil fundamentals ● Strong and improving existing experience intact businesses ● Operating and continuously
Slide 31: Questions
questions 30 7 March 2011 JSE: SOL | NYSE: SSL
Slide 32: Sasol
sasot 34 JSE:SOL | NYSE: SSL