Slide 1: Transitioning to the Future: Sasol Limited Financial Results
TRANSITIONING TO THE FUTURE SASOL LIMITED FINANCIAL RESULTS for the six months ended 31 December 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 ● Strong results delivery and capital excellence focus despite continued market volatility ● Resilient operational and financial performance across our global business ● Improving focus on capital allocation to drive total shareholder return ● Lake Charles Chemi
Slide 5: Strong results delivery and capital excellence focus despite continued market volatility
Strong results delivery and capital excellence focus despite continued market volatility ● Operating model continues to deliver further efficiencies and effectiveness ● Foundation businesses safe, highly efficient and driving continuous improvement ● Proactive financial risk mitigation measures to p
Slide 6: Resilient operational and financial performance across our global business
Resilient operational and financial performance across our global business ● Group safety performance, excluding illnesses, remained solid with an RCR of 0,27 ● Regrettably three tragic fatalities in HY17 ● Strong business performance across most of the value chain ● Secunda Synfuels Operations prod
Slide 7: Improving focus on capital allocation to drive total shareholder return
Improving focus on capital allocation to drive total shareholder return ● Long-term strategy being further refined ● Ensure robust capital allocation approach aimed at maximum sustainable returns to shareholders ● Focused interventions to close the current value gap ● Policy and structures in place
Slide 8: LCCP on track and delivering on key project milestones
LCCP on track and delivering on key project milestones ● Overall project almost two thirds complete with engineering at 94% ● Procurement activities nearly completed ● Capital expenditure to date of US$6,0 billion – tracking revised estimate ● Modularisation approach benefitting overall construction
Slide 9: Mozambique PSA – steady progress with drilling activities yielding positive results
Mozambique PSA – steady progress with drilling activities yielding positive results ● Mozambique facing major fiscal challenges ● Working very closely with all our partners to support them ● Confident that the challenges will be overcome ● Mitigating actions in place to minimise impact on Sasol ● In
Slide 10: Financial and Operational Performance
FINANCIAL AND OPERATIONAL PERFORMANCE Paul Victor Chief Financial Officer JSE: SOL NYSE: SSL
Slide 11: Key messages
Key messages ● Volatile macro environment continues, current rand strength will negatively impact earnings ● Continued focus on factors within our control ● Operational stability and production volumes remain a key deliverable ● Cost and cash savings initiatives providing headroom ● Protection and s
Slide 12: Macro environment remains challenging
Macro environment remains challenging Chemical product prices trending up but exchange rate remains volatile Product price differentials under pressure Volatile currency R15,48 US$/bbl US$1 = ZAR $/mmbtu (gas price) R14,71 R13,62 R13,99 R13,74 $65 R12,17 $60 $47 $48 $2,95 $2,44 1H16 1H17 1H16 1H17 B
Slide 13: Group profitability
Group profitability Solid operational performance supported by continued effective cost management HY17 HY16 %∆ Mining 1 534 2 359 35▼ Operating profit % Exploration and Production 204 (8 289) >100▲ International (EPI) Performance Chemicals (PC) 4 647 5 161 10▼ 11 Base Chemicals (BC) 1 733 3 178 45▼
Slide 14: Operating profit impacted by volatile macro environment
Operating profit impacted by volatile macro environment Operating profit Headwinds ● Impact of stronger closing HY16 14 916 exchange rate ● Steep decline in product Exchange rate (15%) differentials and refining Macro environ- margins, trending upwards Crude oil and ment since November (16%) product
Slide 15: Cash fixed costs down 1% in real terms
Cash fixed costs down 1% in real terms Cash fixed costs Tailwinds HY16 21 429 ● Cost and value mindset culturally entrenched Sustainable business savings 1,6% Costs and ● Increased BPEP and volumes Response Plan savings Cost increase 1,1% below inflation delivering in excess of internal targets Mini
Slide 16: Targeting to deliver upper end of Response Plan range
Targeting to deliver upper end of Response Plan range Response Plan cost savings to end FY18 (42 months) ● Savings of R54,9 billion achieved Margin and working capital since January 2015 Capital structuring ● FY17 target increased to R26,0 billion Cash cost savings ● Additional opportunities continu
Slide 17: Mining and EPI Operating Business Units
Mining and EPI Operating Business Units 359 19,8 R/ton mm tons Mining mm tons 16,6 256 ● Operating profit decreased by 35% ● Export coal market prices higher 4,4 ● Strike significantly impacted 2,4 profitability ● Business ramp-up from January 2017 on target HY16 HY17 HY16 HY17 HY16 HY17 ● Impact of
Slide 18: Chemicals Strategic Business Units
Chemicals Strategic Business Units kt % Rm 1 702 1 727 15 5 161 Performance Chemicals 14 4 647 ● Normalised sales volumes up 2% ● Operating profit down 10% to R4 647m ● R527m impairment in US Phenolics ● Significant decline in ammonia pricing ● Phase 2 of FTWEP expected to reach HY16 HY17 HY16 HY17
Slide 19: Energy Strategic Business Unit
Energy Strategic Business Unit 392 mmbbl Energy number mmbbl 378 30,2 29,6 ● Liquid fuels sales volumes 2% lower 17,1 15,8 ● Cash fixed costs down 2% ● Operating profit down 46% to R5 529 million ● Petrol differential 38% lower, diesel HY16 HY17 HY16 HY17 HY16 HY17 differential 12% lower Synfuels re
Slide 20: Driving disciplined and transparent capital allocation
Driving disciplined and transparent capital allocation Sources Allocation of capital of capital Maintain strong balance sheet and liquidity Focused value-based capital allocation Cash flow Balance sheet protection will take precedence from if investment grade credit rating at risk operations All thr
Slide 21: Capital spend forecast reduced due to stronger rand
Capital spend forecast reduced due to stronger rand Capital expenditure ● FY17 Capital forecast 80 impacted by: Rand billion 75 70 ● Stronger exchange rate 66 60 60 ● Re-prioritised spend on LCCP 60 without impacting schedule ● Forecast based on ~R14,15/US$ (FY17) and ~R14,50/US$ (FY18) 40 ● Capital
Slide 22: Sufficient liquidity headroom available
Sufficient liquidity headroom available Liquidity ● Credit ratings confirmed at investment grade Opening cash balance 52 ● Moody’s – Baa2 (negative) (1 July 2016) ● S&P – BBB (negative) Cash retained 12 ● Liquidity headroom to execute growth projects – LCCP 2H17 spend forecast Dividend 6 of US$1,7 b
Slide 23: FY17 Outlook
FY17 Outlook Outlook Return to full production with corresponding cost performance Mining to follow inflation Increased gas production from PPA ● PSA drilling activities to continue EPI ● No drilling activity in Canada Liquid fuels sales approximately 61 million barrels Energy ● ORYX GTL average uti
Slide 24: Questions and Answers
QUESTIONS AND ANSWERS Bongani Nqwababa and Stephen Cornell Joint Presidents and Chief Executive Officers JSE: SOL NYSE: SSL