Slide 1: Transitioning to the Future: Sasol Limited Financial Results FY2016
TRANSITIONING TO THE FUTURE SASOL LIMITED FINANCIAL RESULTS for the year ended 30 June 2016 JSE: SOL NYSE: SSL
Slide 2: Forward-looking statements
Forward-looking statements Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future pros
Slide 3: Introduction
INTRODUCTION Bongani Nqwababa and Stephen Cornell Joint Presidents and Chief Executive Officers JSE: SOL NYSE: SSL
Slide 4: What you will hear today
What you will hear today Key messages ● Joint CEO model working – seamless handover and continuity ● LCCP (USA) – detailed review outcome sets sound basis for effective execution going forward ● Solid operational and financial performance ● Cost and cash initiatives exceeding expectations ● Prior to
Slide 5: Joint CEO model working – seamless handover and continuity
Joint CEO model working – seamless handover and continuity Building on successes of the past ● Operating model provides solid foundation ● Enhanced cost competitiveness – business profitable at lower oil prices ● Improved operational reliability and performance continues ● Balance sheet has sufficie
Slide 6: LCCP in North America – detailed review outcome
LCCP in North America – detailed review outcome sets sound basis for effective execution going forward Investment fundamentals remain in place ● Capital cost of US$11 billion which includes sufficient contingency to complete execution ● Over 80% of the total output from LCCP reaching beneficial oper
Slide 7: Solid operational and financial performance
Solid operational and financial performance Record volumes, with costs contained ● Group safety performance, excluding illnesses, remained solid with an RCR of 0,29 ● Regrettably two tragic fatalities in FY16 ● Strong, stable operational performance across most of the value chain ● Secunda Synfuels
Slide 8: Continuing focus on Response Plan
Continuing focus on Response Plan Ensure sustainable global business, operating at optimal margin and cost levels Targeted range to end FY18 (42 months) ● Response Plan initiative Margin and working capital exceeding targets ● Current streams ensure we achieve targeted commitments Capital structurin
Slide 9: Business Performance Enhancement Programme
Business Performance Enhancement Programme Savings target increased to R5,4 billion by FY18 Targeting Targeting an savings of at least exit run-rate of R5,0bn in FY17 R5,4bn by FY18 Rand 4,5bn 2,5bn 1,9bn 1,3bn 0,5bn 0,3bn FY14 FY15 FY16 FY17 FY18 Project implementation cost Actual savings Annualise
Slide 10: Prior to LCCP completion, incremental margin and volume growth projects being delivered
Prior to LCCP completion, incremental margin and volume growth projects being delivered Volume and margin growth mitigates impact of lower oil price Project Status update High density polyethylene Mechanical completion target early in CY2017 (Gemini JV) PSA (Mozambique) Drilling campaign underway an
Slide 11: Financial and Operational Performance
FINANCIAL AND OPERATIONAL PERFORMANCE Paul Victor Chief Financial Officer JSE: SOL NYSE: SSL
Slide 12: Challenging macro environment continues
Challenging macro environment continues Significant drop in oil price Weakening currency R14,52 US$1 = ZAR $/mmbtu (gas price) US$/bbl R11,45 $91 $60 $73 $43 $3,35 $2,25 FY15 FY16 FY15 FY16 Brent Product price Henry Hub Chemical prices ($/ton) vs Brent ($/bbl) Commodity prices % ∆ vs % change y-o-y
Slide 13: Group profitability
Group profitability Strong operational performance supported by delivering cost and cash initiatives FY16 FY15 %∆ Mining 4 739 4 343 9▲ Profit from operations contribution (%) Exploration and Production (11 714) (3 170) >100▼ International (EPI) 58% 46% Performance Chemicals (PC) 11 276 12 714 11▼ 2
Slide 14: Operating profit
Operating profit Impacted by volatile macro environment and once-off items Macro environment Costs and volumes 80 000 Rand million 51% 68% 60 000 BPEP & RP 46 549 benefits of R6,1bn exceed 40 000 32% cost increases 4% 3% 24 239 20 000 0 FY15 Exchange Crude oil and Once-off items Cost Sales FY16 rate
Slide 15: Cash fixed costs down 8,1% in real terms
Cash fixed costs down 8,1% in real terms Proactive cash and cost savings initiatives drive costs down Costs and volumes Restructuring, Macro environment study and growth cost 50 000 Rand million 44 388 4,2% (4,6%) 44 455 3,9% (5,6%) 40 782 1,9% 40 000 30 000 20 000 10 000 0 FY15 BPEP¹ Response Norma
Slide 16: Mining and EPI Operating Business Units
Mining and EPI Operating Business Units Mining’s strong operational performance continues Operating profit / (loss) (Rm) FY16 FY15 %∆ ● Mining Mining 4 739 4 343 9▲ ● Normalised unit costs 5% below inflation EPI (11 714) (3 170) >100▼ ● Continued stable mining operations Producing assets ● Explorati
Slide 17: Chemicals Strategic Business Units
Chemicals Strategic Business Units PC business remains resilient, BC margins under pressure Operating profit (Rm) FY16 FY15 %∆ ● Performance Chemicals Performance Chemicals 11 276 12 714 11▼ ● Normalised operating profit increased by 5% Base Chemicals 4 486 10 208 56▼ ● Margins in surfactant and alc
Slide 18: Energy Strategic Business Unit
Energy Strategic Business Unit Record production volumes and a strong cost performance Operating profit (Rm) FY16 FY15 %∆ ● Energy Energy 14 069 22 526 38▼ ● Secunda Synfuels and Natref increased total Southern Africa¹ 13 607 20 668 34▼ production by 1% ORYX GTL 462 1 858 75▼ ● Liquid fuels sales vo
Slide 19: Capital portfolio prioritised for growth projects in Southern Africa and North America
Capital portfolio prioritised for the advancement of our growth projects in Southern Africa and North America Capital spend forecast increases due to updated LCCP cost estimate Capital expenditure 80 ● Execution of strategic projects Rand billion 74 73 75 70 in North America and Southern 60 Africa k
Slide 20: Balance sheet gearing up, but liquidity remains strong
Balance sheet gearing up, but liquidity remains strong Facilities and funding strategy in place to execute growth portfolio Cash generation and utilisation 100 ● Net debt:EBITDA increased to Rand billion 0,6x – peak to remain below ceiling of 2,0x 75 ● Gearing (net debt:equity) increased to 14,6% –
Slide 21: FY17 outlook
FY17 outlook Maintain momentum despite macroeconomic challenges ● Southern African liquid fuels product sales volumes to be approximately 61 million barrels ● Higher average utilisation rate of ORYX GTL is expected to be about 90% ● Base Chemicals and Performance Chemicals sales volumes to be higher
Slide 22: Transitioning to the Future
TRANSITIONING TO THE FUTURE Bongani Nqwababa and Stephen Cornell Joint Presidents and Chief Executive Officers JSE: SOL NYSE: SSL
Slide 23: Transitioning to the future
Transitioning to the future Deliver maximum sustainable value to shareholders ● Pursue zero harm ● Deliver BPEP and Response Plan targets for FY17 ● Continue to deliver on stakeholder commitments ● Deliver on major growth projects ● Drive continued operational and capital discipline ● Building a res
Slide 24: LCCP Photo Library
LCCP PHOTO LIBRARY iene] oy)
Slide 25: Project site, LCCP, USA
25 Project site, LCCP, USA 25
Slide 26: Cracker furnaces installed, LCCP, USA
26 Cracker furnaces installed, LCCP, USA 26
Slide 27: Three boilers installed at site, LCCP, USA
27 Three boilers installed at site, LCCP, USA 27
Slide 28: Cracker tower dress-out, LCCP, USA
28 Cracker tower dress-out, LCCP, USA 28
Slide 29: Cracker tower dress-out, LCCP, USA
29 Cracker tower dress-out, LCCP, USA 29
Slide 30: Olefin storage spheres, LCCP, USA
30 Olefin storage spheres, LCCP, USA 30
Slide 31: Questions and Answers
QUESTIONS AND ANSWERS Bongani Nqwababa and Stephen Cornell Joint Presidents and Chief Executive Officers JSE: SOL NYSE: SSL