Sasol Limited · JSE:SOL
Sasol — Investor Day (March 2008)
127 slides from Sasol's investor day presentation, Mar 14, 2008
Slide 1: Sasol investor day agenda
1 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable developme
Slide 2: Sasol – group perspectives
Sasol – group perspectives Pat Davies, CE
Slide 3: Forward-looking statements
3 forward-looking statements We may in this document make statements that are not historical facts and relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These are forward-looking statements as defined in the U.S. Private Secu
Slide 4: Sasol operates an integrated business model
4 Sasol operates an integrated business model coal mining synthetic oil refining & fuel marketing gas E&P fuels & chemicals chemicals oil E&P Co-products Fischer-Tropsch Conversion Chemical products Markets Sasol markets products directly to the consumer, as well as to commercial and industrial mark
Slide 5: Sasol's investment case
5 Sasol’s investment case leading alternative in a world of unique investment energy company disruptive change proposition + rising demand for oil driven by technology strong existing business from emerging consumers not reserve replacement unique technology revenue proportional to oil nationalism o
Slide 6: A value proposition based upon a strong business model
6 a value proposition based upon a strong business model core competencies competitive advantage shareholder value 50 years of technological innovation, commercialisation & project execution world leader in superior returns + applying proprietary to shareholders FT Technology 50 years operating & co
Slide 7: Competencies combine to provide sustainable competitive advantage
7 competencies combine to provide sustainable competitive advantage resource proprietary technology market FT fuel coal refining & gasification blending natural gas fuel chemical extraction & gas reforming purification coal Fischer Tropsch chemicals process 50+ years experience unrivalled expertise
Slide 8: Non OECD demand growth sustaining higher prices
8 non OECD demand growth sustaining higher prices 3,5 billion people consume 3,5 billion less than 2bbl/a oil & 10 kg/a Polymer 30 developing USA 25 Oil consumption per capita country 20 consumers 15 (bbl/pa) approaching 10 demand inflection 5 point 0 India China 0 10000 20000 30000 40000 50000 GDP
Slide 9: Supply concerns further supporting oil price
9 supply concerns further supporting oil price average finding 44 70 & development 43 60 cost risen from 42 $6 to $16 50 R/P Ratio in YRS 41 $ per barrel 40 40 finding & 39 30 development 38 cost for 20 37 marginal barrel 36 10 much higher 35 0 19 6 19 7 19 8 19 9 19 0 19 1 19 2 19 3 19 4 19 5 19 6
Slide 10: Building an organisation able to deliver
10 building an organisation able to deliver grow CTL & grow CTL GTL & GTL grow growth drivers chemicals develop and deliver on nurture and (based on our commercialise empower our SA grow our technology or technological people transformation existing feedstock lead to deliver agenda asset base advant
Slide 11: Corporate levers to build a rejuvenated Sasol
11 corporate levers to build a rejuvenated Sasol talent management develop and grow our people values driven leadership enhance Sasol’s culture to lift performance and organisation culture and health of organisation improve efficiency and reliability of operations excellence operations reduce operat
Slide 12: Taking opportunities & ensuring delivery to create value
12 taking opportunities & ensuring delivery to create value taking opportunities ensuring delivery technology & SA Energy projects SA Energy project execution (Benny (Willem Mokaba) Louw) international sustainable energy development environment sustainability international energy (Lean (Kim Fraser)
Slide 13: Sasol investor day agenda
13 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable developm
Slide 14: South African energy business cluster
South African energy business cluster Benny Mokaba, executive director
Slide 15: SA energy cluster: primary contributor to earnings
15 South African energy cluster: primary contributor to Sasol’s earnings mining synfuels oil 43 Mt/a 7,3 Mt/a 9,7 Mm3 5% of EBIT 64% of EBIT 9% of EBIT Co-products Fischer-Tropsch Conversion Chemical products Markets Sasol markets products gas directly to the consumer, as well as to commercial and i
Slide 16: Sustained substantial contribution to operating profit
16 sustained substantial contribution to Sasol operating profit RSA energy business cluster contribution to group operating profit, fy00 vs. fy07 synfuels, oil & mining: consistent strong contribution, 86% even at lower end of 90 commodity cycle 80 67% 70 % contribution 60 robust profitability at lo
Slide 17: Maintaining strong operating margins across businesses
17 maintaining strong operating margins across the various businesses robust profitability through operating margins in the various divisions in the RSA energy business cluster lower energy cost cycles and R/$ exchange rate variations 25.4% 52.3% 12% 55.9% 48.9% 34.4% fy01 fy02 fy03 fy04 fy05 fy06 f
Slide 18: SA energy cluster well positioned to grow
18 the South African energy cluster is well positioned to grow mining 1.5 billion tons recoverable reserve optimised production to meet synfuels’ demand gas grow existing transmission pipeline capacity (owner/operator) investment for growth underway synfuels brownfields capacity expansion operations
Slide 19: Strong geographic advantage
19 the South African energy cluster has a strong geographic advantage Natref 108 000 b/d Sapref 180 000 b/d Enref 125 000 b/d Sasol Synfuels equivalent to 160 000 b/d Calref 100 000 b/d crude oil pipeline gas pipeline PetroSA product pipeline 45 000 b/d equiv
Slide 20: Southern Africa – growth opportunities
20 Southern Africa – growth opportunities opportunities South African demand growth and resulting supply shortfall power supply in South Africa development corridor threats multiple regional conventional crude refineries mooted power supply in South Africa factors favouring Sasol Sasol well placed i
Slide 21: Increasing own electricity generating capacity
21 increasing own electricity generating capacity total electricity requirement in South Africa ~1500 MW generate ~ 550 MW internally, balance imported Synfuels is a priority customer additional power generation capacity being installed at Synfuels 280 MW, capex R2.5 billion, beneficial operation fo
Slide 22: Projected SA fuel balance illustrates opportunities
22 projected SA fuel balance illustrates opportunities 7.0 opportunity for additional refined product capacity 2.0 billion litres (3.0) (8.0) (13.0) (18.0) 2010 2012 2014 2016 2018 2020 2008 2022 2026 2002 2004 2006 2024 petrol diesel kerosene white product balance based on 5% GDP growth assumption
Slide 23: Greenfields expansion opportunities from supply shortfall
23 greenfields expansion opportunities presented by market supply shortfall and demand growth opportunity for new CTL 7.0 facility – Mafutha 2.0 billion litres (3.0) Synfuels expansion (8.0) Synfuels expansion (13.0) (18.0) 2012 2014 2018 2020 2010 2016 2026 2008 2002 2006 2024 2004 2022 petrol dies
Slide 24: Natural gas and synfuels growth (20% expansion)
24 Southern Africa – growth opportunities natural gas and synfuels growth (20% expansion) phase 1 [approved] 4% growth on FY04 implemented during FY10 phase 2 [feasibility] additional about 11% growth on FY04, taking total on gas to around 15%, based on FY04 in stages by 2014 phase 3 [idea packaging
Slide 25: Mafutha – a greenfield growth opportunity
25 Mafutha – a greenfield growth opportunity being progressed an 80 000 bbl/day operations with expansion possibilities Sasol and government cooperating continuing with exploration tests at Waterberg and Free State progress in the pre-feasibility stage R300m earmarked for pre-feasibility studies oth
Slide 26: Strong contribution to Sasol going forward
26 strong contribution to Sasol going forward enhancing existing operations to sustain delivery – essential efficiency initiatives an important aspect of future sustainability profitable growth possible in a supply-constrained domestic market. greenfields and brownfields expansion. delivering on env
Slide 27: Sasol investor day agenda
27 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable developm
Slide 28: International energy cluster
international energy cluster Lean Strauss, group general manager “We are confident that Sasol’s experience in transforming the energy landscape in South Africa can be replicated in other parts of the world.”
Slide 29: International energy cluster replicates SA advantages
29 international energy cluster replicates advantages of integrated SA energy cluster main operating companies are Sasol Synfuels International (SSI), Sasol Chevron (50/50 JV – GTL) and Sasol Petroleum International SPI SSI 2007 sales: - 69 M GJ gas - 2.2 M barrels oil & condensate Co-products Fisch
Slide 30: Technology provides energy security and resource monetisation
30 Sasol’s proven technology and operating experience provides energy security and resource monetisation alternatives abundant, global drive less expensive for cleaner hydrocarbon transportation reserves fuels in country + = win - win solutions sasol’s resource need for energy technology monetisatio
Slide 31: Gas and coal beat oil for energy security
31 gas and coal beat oil for energy security creating various opportunities for GTL & CTL • 80% of world oil in 9 countries, representing 5% 14 mb/d oil of world population and 5% of GDP • 80% of world coal in 6 countries, representing total reserves – million BOE 45% of world population and 46% of
Slide 32: Global demand for oil increasing
32 global demand for oil increasing … 0.10 3,5 billion people consume 0.09 less than 0,01bbl/d Oil consumption per capita 0.08 0.07 USA 0.06 0.05 OECD (bbl/d) 0.04 0.03 0.02 0.01 0.00 0 10000 20000 30000 40000 50000 India India China China 2016 2016 2005 2005 GDP per capita only 10 out of every thou
Slide 33: Segregated energy market: arbitrage opportunity
33 the world’s energy market is segregated: CTL and GTL provide opportunity for arbitrage 29% 38% households gas 23.6% & other 15% 24% 36% hydro 6.2% electricity nuclear 5.8% 69% 8% industry coal 28.4% 16% 16% oil 36% transportation 47% 4% Total = 10 878.5 million tons oil equivalent per annum Sourc
Slide 34: Technology and experience lead not easily challenged
34 technology and experience lead not easily challenged GTL - world’s largest operating GTL facility - overcoming ramp-up challenges the Sasol Synthol - 2nd & 3rd generation systems in CFB reactor development 1950 to 1998 - strong intellectual property portfolio 6 500 bbl/d - world’s only commercial
Slide 35: Economics are location specific
35 economics are location specific – significant upside potential as income is directly linked to oil price return value of products - cost of capex - cost of feedstock - opex profit capex and feedstock costs are influenced by location specifics labour costs greenfields vs existing infrastructure fe
Slide 36: Securing feedstock a challenge
36 securing feedstock a challenge - considerable but in high demand gas - stiff competition from LNG and pipeline gas energy price comparison - more expensive than 5 years ago due to oil price increase coal - abundant with 200+ years reserves - inexpensive (low quality or land locked) opportunities
Slide 37: High oil prices led to feedstock and construction cost increases
37 high oil prices have led to feedstock and construction cost increases significant increases in feedstock cost, especially gas increases in construction, metal and labour cost worldwide spiraling costs increased the cost estimate for the Pearl GTL plant to around $20 billion from an original budge
Slide 38: Growth opportunities in various stages of development
38 several growth opportunities in various stages of development • identify • US & India (CTL) long term Mozambique growth • Australia and other GTL • EOR with CO2 sequestration • plan medium term China (CTL) • • develop Mozambique expansion • Increase Qatar footprint • short term Oryx • optimise /
Slide 39: Good progress made with current investments
39 good progress made with current investments Oryx GTL Nigerian GTL E&P our production construction Mozambique expansion exceeded 16 000 b/d continues to 183mGJ/a in December 2007 contract strategy two well offshore ten GTL shipments amended campaign in 3Q2008 since April 2007 capital cost Gabon op
Slide 40: China CTL feasibility studies progressing
40 China CTL feasibility studies progressing Shaanxi China CTL feasibility studies in Ningxia progress two separate projects Beijing 80 000 b/d capacity for each scheduled for completion end 2009 expected cost of $140 million over 18 months FEED/FID decision about 2 years Hong Kong away these projec
Slide 41: Commercial enablers in place for second feasibility stage
41 commercial enablers in place to proceed with second stage of feasibility study 50% Sasol shareholding agreed sites allocated are in dry areas, but guaranteed sufficient industrial water available CO2 sequestration via enhanced oil recovery possibilities in both areas Shaanxi: selected CTL site wi
Slide 42: Medium-term opportunities in GTL and upstream
42 medium-term opportunities also in GTL and upstream Qatar GTL Mozambican gas & West African oil Oryx expansion initiatives to find more gas show promise various expansion options under consideration first Nigerian oil production planned with partners for FY13
Slide 43: Longer-term opportunities being developed
43 longer-term opportunities being developed CTL E&P CTL pre-feasibility Mozambique gas resource studies in the USA growth beyond current and India licenses acquiring acreage in other GTL parts of the world GTL in Australia and other locations being CO2 solution investigated first CO2 sequestration
Slide 44: Sasol's GTL & CTL opportunities span the globe
44 Sasol’s GTL & CTL opportunities span the globe Sasol/TATA 80 000 b/d Sasol India 80 000 b/d Qatar Petroleum/Sasol 34 000 b/d operational pre-feasibility Phase USA Qatar Sasol/Shenhua/Ningxia pre-feasibility phase evaluating further projects 2 x 80 000 b/d China feasibility phase USA European Unio
Slide 45: Identifying & converting opportunities into profitable projects
45 identifying & converting opportunities into profitable projects drivers for CTL and GTL are in place and improving confronting challenges actively: securing feedstock supply, especially gas securing large volume CO2 solutions increased capital and construction cost of large complex plants closing
Slide 46: Sasol investor day agenda
46 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable developm
Slide 47: Chemical cluster
chemical cluster Reiner Groh, group general manager
Slide 48: Chemical cluster strategy
48 chemical cluster strategy portfolio role good growth of the chemical cluster in the period FY04 – FY07 the chemical cluster is exploring the next level of profitable growth
Slide 49: 30–40% of Synfuels' products sold as chemicals
49 30% – 40% of Synfuels’ products are sold as chemicals Co-products Fischer-Tropsch Conversion Chemical products Markets Sasol markets products directly to the consumer, as well as to commercial and industrial markets, integrating its upstream and downstream activities.
Slide 50: Sasol people living outside South Africa
50 19% or more than 6 300 Sasol people live and work outside South Africa Europe: ~ 3 780 12% Rest of Asia: USA: Africa: ~ 270 ~ 740 ~ 150 1% 2% < 1% Middle East: RSA: ~ 1370 ~ 26 600 4% 81% Sasol employee numbers the chemical cluster provides 75% of Sasol’s international presence
Slide 51: Chemicals integral to strategic agenda for growth
51 chemicals are an integral part of Sasol’s strategic agenda for sustainable growth grow CTL & grow CTL GTL & GTL Grow develop and growth drivers grow chemicals deliver on nurture and chemicals commercialise empower our (based SA grow our (basedon onour our technological people technology transform
Slide 52: Chemical portfolio of FT integrated and supplemental businesses
52 our chemical portfolio includes a mix of FT integrated and supplemental businesses polymers growing high value monomer and polymer businesses by utilising Sasol and other global low cost feed streams solvents grow chemical opportunities related to FT (like solvents and comonomers) or based on own
Slide 53: Chemical cluster strategy
53 chemical cluster strategy portfolio role good growth of the chemical cluster in the period FY04 – FY07 the chemical cluster is exploring the next level of profitable growth
Slide 54: Solid growth despite increases in feedstock cost
54 the chemical cluster has demonstrated solid growth despite increases in feedstock cost CAGR in operating profit 2004-07: 25% 3,2 2,8 2,1 1,3 fy04 fy05 fy06 fy07 operating profit excluding O&S, R billion
Slide 55: Olefins and surfactants turnaround on track
55 the olefins and surfactants turnaround is on track portfolio restructuring three major announcements have already been made with Augusta, Baltimore and Porto Torres. Further restructuring opportunities are being investigated margin improvement discussions have taken place with all of our major cu
Slide 56: Chemical cluster strategy
56 chemical cluster strategy portfolio role good growth of the chemical cluster in the period FY04 – FY07 the chemical cluster is exploring a next level of profitable growth
Slide 57: Exploring a next level of profitable growth
57 the chemical cluster is exploring a next level of profitable growth FT Growth Non-FT Growth long term ● CTL projects ● competitive ● GTL projects feedstock ● FT to chemicals ● other competitive ● syngas advantages / opportunities opportunities ● polymers medium term ● solvents – tetramerisation,
Slide 58: Chemical cluster growth based on three pillars
58 chemical cluster growth is based on three pillars international FT non-FT platform 1. by realising the full 2. by leveraging other 3. by providing Sasol value of our Fischer competitive with platforms for Tropsch advantages further international technologies (feedstock, expansion technology and m
Slide 59: Chemical cluster strategy
59 chemical cluster strategy portfolio role good growth of the chemical cluster in the period FY04 – FY07 the chemical cluster is exploring the next level of profitable growth
Slide 60: Sasol investor day agenda
60 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable developm
Slide 61: Sasol technology & project management
Sasol technology & project management Willem Louw - managing director
Slide 62: Sasol Technology established in the 1980s
62 Sasol Technology established in the 1980s Sasol Technology is responsible for developing, commercialising and optimising technologies for the Sasol Group Sasol Technology employs about 2000 technical and support personnel, mainly in South Africa the R&D department has more than 100 PhDs and has f
Slide 63: Technology contributes to sustainability and competitiveness
63 Sasol Technology contributes to Sasol’s sustainability and competitiveness focus areas we develop technology to ensure we process development stay ahead of the competition fuels research we commercialise our developments from idea to operation focused on core technologies we resolve problems and
Slide 64: Technology leads innovation and commercialisation
64 Sasol Technology leads technology innovation and commercialisation for Sasol’s sustainability direct acquire • research & development commercialise install • fuels technology • greenhouse gas • execution landscape optimise • portfolio shaping • continuous improvement commercial success requires c
Slide 65: R&D: world leader in Fischer-Tropsch
65 R&D: Sasol is the world leader in Fischer -Tropsch combined with early identification, adoption and improvement of emerging technologies key technology focus areas: direct acquire FT to fuels gasification processing/ separation of FT streams ethylene oligomerisation technologies FT to chemicals o
Slide 66: Fischer-Tropsch technology
66 Fischer-Tropsch technology Gasification HTFT - High Temperature Fischer-Tropsch Product LPG Synthesis gas upgrading Coal Gasoline or Kerosene Biomass Diesel Chemicals Product upgrading Synthesis gas Olefins (to plastics) Current Future LPG Kerosene Natural gas Naphtha Base oils Diesel LTFT - Low
Slide 67: Portfolio of commercially proven Fischer-Tropsch technologies
67 Sasol’s portfolio of commercially proven Fischer-Tropsch technologies high temperature processes low temperature processes products - gasoline and light products - mostly diesel olefins original 1950’s to 1980’s technology the Sasol the Arge tubular Synthol reactor reactor 1950 to 1987 1950 to 19
Slide 68: World leaders in Synfuels applications testing
68 R&D: world leaders in Synfuels applications testing CTL fuel testing since 1980s, GTL since direct acquire 1990: automotive to jet applications blends of FT, conventional and bio fuels applications heating fuels successes and world firsts: first commercially approved semi-synthetic jet fuel in 19
Slide 69: GTL/CTL fuel burns cleanly
69 GTL/CTL fuel burns cleanly clean fuels burn cleanly emissions benefits are immediately realisable GTL diesel low sulphur refinery diesel
Slide 70: Addressing the greenhouse gas challenge
70 addressing the greenhouse gas challenge direct acquire CTL feedstock (starved of hydrogen) results in challenging CO2 footprint which is addressed through a multi-facetted approach improving process efficiency – the best CO2 molecule is the one not produced investigating non-carbon based sources
Slide 71: Project execution landscape has changed worldwide
71 project execution landscape has changed commercialise install worldwide project we are combating this through challenges schedules under pressure strategic relationships with costs escalating engineering contractors and contractor order books full suppliers contracts changing from matching projec
Slide 72: Capital cost indices are increasing
72 IHS/CERA downstream capital cost index (DCCI) & upstream capital cost index (UCCI) are increasing Source: Cambridge Energy Research Associates. 71023-12, 701133 commercialise install 210 198 200 Q1 2007: 190 179 180 Q3 2006: Q3 2007: Index(2000 = 100) 167 170 166 160 Q1 2007: 150 154 140 Q3 2006:
Slide 73: World class delivery of capital investment
73 world class delivery of capital investment from idea to operation commercialise install robust process to scope, develop & cost the technical solution that best matches the business do it early on – avoids schedule impact and rework front end loading (FEL) benchmarking FEL via Independent Project
Slide 74: Ensure efficiency and competitive sustainability of technologies
74 ensure efficiency and competitive sustainability of technologies implemented optimise continuous performance improvement baseline defence and sustainability programmes maintenance and renewals environmental footprint reduction (legislated and non-legislated) fuel specifications efficiency improve
Slide 75: Results achieved at Oryx GTL
75 results achieved at Oryx GTL optimise successfully implemented Sasol’s Slurry Phase Distillate technology into the largest commercial GTL facility in the world, which also has the world’s largest per train capacity Sasol Technology is actively supporting Oryx to ramp up to maximum production
Slide 76: Technology has travelled up a 1,5 billion barrel learning curve
76 conclusion Sasol’s technology has travelled up a 1,5 billion barrel learning curve •we design and implement BETTER than anyone in this field •we do not rest on our laurels – active/focused R&D and intellectual property activity •we have gained an increasing lead over the competition
Slide 77: Sasol investor day agenda
77 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable developm
Slide 78: Delivering on sustainability
delivering on sustainability Kim Fraser, general manager, SH&E
Slide 79: Safe operations and climate change
79 safe operations and climate change the first is about providing a safe workplace for our employees the second is the balance between energy needs and the impacts of using energy in any form
Slide 80: Continuous improvement in safety performance
80 continuous improvement in safety performance we commit to eliminate all incidents and work to world-class safety standards 12 MMA RCR approximately 140 million hours per year; split equally between employees and service providers 2.0 service providers and illnesses were not included in results to
Slide 81: Moving in amongst the world leaders
81 we are moving in amongst the world leaders RCR 1 Year Kentz (E&I construction) 0.10 2006 Chevron 0.34 2 2006 Dow Chemicals 0.39 2006 Royal Dutch Shell 0.46 2006 BP Global 0.40 2 2006 Sasol 0.62 Jan 2008 1 from published results using the numbers closest to our definition of RCR 2 these results ar
Slide 82: Leadership and management approach to safety
82 the drivers of our path forward leadership and management approach results orientation (reporting, analysis, learning and communication) commitment to action and closure constructive intolerance determination, tenacity, consistency and focus becoming recognised as the most safety conscious compan
Slide 83: Four points define our safety roadmap
83 in summary four points define our safety roadmap: 1. we have worked hard and improved consistently for seven years; 2. we aspire to even greater heights, recognising that different skills have to be have deployed; 3. we have identified the important and sustainable characteristics required for su
Slide 84: Protecting the environment
84 protecting the environment environmental realities (climate change, pollution, water, waste...) environmental expectations (governments, society, shareholders…) coal and gas conversion processes products (potentially also (e.g. CTL, GTL) (e.g. clean fuels) renewables)
Slide 85: Our response: a greenhouse gas policy
85 our response…a greenhouse gas policy we recognise and share global concerns that: GHGs contribute to climate change growing energy demand will accelerate GHG emissions technological solutions and management interventions required we believe that challenges can be successfully overcome by: carbon
Slide 86: Targets we set ourselves voluntarily
86 targets we set ourselves voluntarily energy efficiency intensity improvement target of 15% on 2000 base year by 2015, agreed with the government for South African operations. GHG intensity reduction target of 10% on the 2005 baseline by 2015; a combined result for all global operations against wh
Slide 87: The impacts of economic growth
87 the impacts of economic growth emissions growth 28 proportional to economic growth contributors to improvements in the GTL process: • carbon capture and storage (CCS) 21 • nuclear • gas replacing coal virtual • renewables (biomass replacing coal) triangle • process and energy efficiency GtC/yr 14
Slide 88: Using technology to reduce GHG emissions
88 using technology to reduce GHG emissions driving energy efficiency C TL process and wnon investigating here C O 2 energy carbon is em itted sources utilities < 50% of C O 2 (power and steam ) C O 2 is dilute and expensive to capture coal Fischer T ropsch Liquid gasification gas synthesis products
Slide 89: CTL competes with refineries on an LCA basis
89 CTL competes with refineries on an LCA basis 3 without CCS 2,5 with CCS 2 1,5 Refinery = 1 1 0,5 0 CTL Baseline CTL with electricity export CTL with natural gas on a life cycle analysis basis, CTL with CO2 capture and storage, combined with either : becoming a net exporter of electricity, or
Slide 90: GTL shows better particulate and acidifying emissions
90 GTL shows better particulate and acidifying emissions particulate emissions acidifying emissions (SOx and NOx) upstream transportation to user upstream use production use production Refining system GTL system conventional ultra low diesel blend (20% conventional diesel sulphur GTL,
Slide 91: Conclusions
91 conclusions Sasol recognises the realities of global warming and water constraints CTL can be a competitive part of the energy solution, but national and international efforts are essential to deal with the complex social, economic and technical challenges presented by carbon a much broader and m
Slide 92: Sasol investor day agenda
92 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable developm
Slide 93: Talent management
talent management Nolitha Fakude – executive director
Slide 94: Building an organisation able to deliver
94 building an organisation able to deliver grow CTL & grow CTL GTL & GTL grow growth drivers chemicals develop and deliver on nurture and (based on our commercialise empower our SA grow our technology or technological people transformation existing feedstock lead to deliver agenda asset base advant
Slide 95: Sasol's people philosophy and employee value proposition
95 Sasol’s people philosophy and employee value proposition… a key vehicle to achieve business priorities Sasol’s people philosophy: to build a sustainable and adaptive organisation of talented, diverse, competent and inspired people who face the future with confidence Sasol’s employee value proposi
Slide 96: Focus of presentation
96 focus of presentation talent demand and supply (attraction and retention) management skills development initiative: project TalentGro skills development: contributing to South Africa
Slide 97: Future growth requires substantial staffing intervention
97 Sasol’s future growth requires substantial staffing intervention 1 Global Venture Support staffing requirement “over and above” for RSA •Sasol Foundation growth (eg. Mafutha, •TalentGro (GVS1) China) replacements •6 300 international base •24 000 RSA base existing business 2005 2006 2007 2008 201
Slide 98: Attraction and retention management are key initiatives
98 attraction and retention management are key initiatives dynamic careers with personal growth and development; competitive and flexible remuneration in the markets in which we operate creating a values driven organisational culture which is inclusive; and enabling every individual to perform to th
Slide 99: Project TalentGro: pre-investment in talent
99 project TalentGro : initiative for pre-investment in talent stream 1 – internal competence delivery stream 2 – global venture support - pre-appointment and development of employees with critical and scarce competencies to ensure future talent supply stream 3 – facilitate the alignment and integra
Slide 100: Commitment to continuous learning and development
100 our commitment to continuous learning and development in FY07 invested more than R80m in employee training. 15 000 employees received training in FY08 we have committed R106m for further initiatives for the 2008 academic year Sasol is financing 717 undergraduate students and 101 post graduate st
Slide 101: Skills initiatives extend into broader South Africa
101 skills initiatives extend into broader South Africa technical skills business partnership alliances with engineering houses 35% of corporate social investment budget spent on education (pre- tertiary): Sasol Foundation (proposed) 1,5% of Sasol Limited focus on the development of skills of black
Slide 102: Our people deliver growth
102 our people deliver growth we have a strong existing talent base, focus is on growing a robust talent pool issue is not only numbers, but skill level/experience retention the most powerful lever maintaining an attractive employee value proposition costs may increase, however our people are worth
Slide 103: Sasol investor day agenda
103 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable develop
Slide 104: Financial review
financial review Christine Ramon, CFO
Slide 105: Key financial priorities
105 key financial priorities business performance fund capital programme sound governance individual performance and talent management
Slide 106: Financial discipline has delivered value
106 financial discipline has delivered value US$ attributable earnings growth accelerating … 2400 3-year moving average performance and growth target cost optimisation $ m 1600 800 operational excellence capital structure 0 business performance fy02 fy03 fy04 fy05 fy06 fy07 fy08 (e) growth economic
Slide 107: Total shareholder return compares well with peers
107 compound annual growth* in total shareholder return compares well with peers 30 US$ shareholder return was 39% over the last 5 years 28 20 Rand shareholder return was 20 38% over the last 5 years % 9 9 10 4 0 (2) -10 Sasol Conoco ExxonMobil Chevron BP Shell * - based on financial results fy02 to
Slide 108: Sensitivity to crude oil and R/$ exchange rate
108 Sasol remains sensitive to crude oil and R/$ exchange rate fluctuations Rm 500 crude oil short-term sensitivities 250 should the crude oil price increase by US$1/bbl, then 0 Sasol’s ebit will improve by ~R300m (@US$1 = R7,15) -250 SA energy Int. energy chemicals Rm exchange rate 500 should the R
Slide 109: Favourable long-term pricing expected
109 favourable long-term pricing expected long term crude price in mid $80s expected R/$ exchange rate expected to weaken in long run based on inflation differentials
Slide 110: Hedging philosophy
110 hedging philosophy exchange rate hedge import exposures mainly capital of nature exports trade related oil strategic oil hedging on Synfuels and SPI oil production reviewed annually not a long-term hedging strategy increased level of stability and predictability of cash flows risk management app
Slide 111: Oil price hedging
111 oil price hedging volatility oil prices have increased sold forward $/bbl significantly zero cost collar $/bbl 150 135,0 attractive hedging levels available 120 90 82,6 83,6 average swap price for fy09 is 76,8 16.4 80,0 13.7 $102/b 60 12.6 63,0 62,4 30 45,0 33,1 decision to hedge portion of fy09
Slide 112: Accelerating capital programme requires strong balance sheet
112 accelerating capital programme requires strong balance sheet and funding capacity 25 potential 23 probable basket of opportunities require 20 approved R billion prudent evaluation, 15 prioritisation & selection 15 12 methodology 10 strong balance sheet with capacity for funding 5 gearing to rema
Slide 113: Around R50bn allocated to sustaining and growth to 2010
113 around R50bn allocated to both sustaining existing operations and growth to 2010 25 chemicals 23 intl energy 20 SA energy R billion 15 15 SA energy capturing largest 12 portion of allocated capital in 10 this timeframe 5 maintaining and sustaining 0 fy08 fy09 fy10 existing operations imperative
Slide 114: Strong free cash flow creates strong debt servicing position
114 strong free cash flow creates strong debt servicing position total capital additions (R bn) cash available from operations (R bn) 20.4 17.8 13.7 13.3 12.0 12.6 FCF strength yields strong debt servicing position fy05 fy06 fy07 strong balance sheet with capacity for growth capital expenditure buy
Slide 115: Initiatives to contain costs
115 initiatives to contain costs renewed focus on cost containment through understanding: costs related to existing business focussing on:- efficiency improvements (operations excellence) cost containment costs related to growth programme seen as an investment into future growth must be linked to an
Slide 116: Strong cash flows fund capex and return cash to shareholders
116 strong cash flows used to fund capex and return cash to shareholders dividend growth of 14,9% (compounded annually) over the past 5 years dividend cover expected to be within the preferred range of 2,5 to 3,5 times taking into account capex, growth & BEE repurchased 37,1m shares (5,9%) at a cost
Slide 117: Continuing to create value for shareholders
117 continuing to create value for our shareholders Sasol has consistently met and exceeded its financial targets strong balance sheet cash flows to fund growth need to raise additional equity not anticipated
Slide 118: Sasol investor day agenda
118 Sasol investor day agenda introduction and overview Pat Davies business cluster overview SA energy business Benny Mokaba international energy business Lean Strauss chemicals business Reiner Groh Q&A Lunch ensuring sustainable growth technology & project management Willem Louw sustainable develop
Slide 119: In summary
SAaSOL ? reaching new frontiers in summary Pat Davies, CE
Slide 120: What you have heard
120 what you have heard harnessing opportunity ensuring delivery creating Value consistent earnings & growing demand for ensuring long term dividend growth alternative energy sustainability total annual USD growing demand for securing and retaining shareholder return of energy in South Africa world
Slide 121: Sasol today
121 Sasol today leading alternative energy play unique technology & competencies strong South African base strong market positions internationalising successful model changing energy world rising demand for transportation fuel crude oil supply concerns strong financial performance average return on
Slide 122: The Sasol future
122 the Sasol future Southern Africa remain leading liquid fuels & chemical producer by exploiting growth opportunities international moved from fringe player in energy & chemicals to substantial multi-regional player through unique technology position a sustainable Sasol new values driven culture e
Slide 123: An industry and South African leader on the world stage
123 an industry and South African leader, delivering on the world stage Qatar Germany & Italy 34 000 bbl/d GTL facility being Chemical operations commissioned, further Iran expansions in pre-feasibility 1 million ton per annum ethane cracker & downstream polymers has just been constructed Evaluating
Slide 124: Building blocks of a unique energy investment
124 the building blocks of a unique energy investment unaffected by rising finding & development cost effectively 30 superior years of proven reserves investment in tight oil markets revenue proportional to oil prices alternative energy company driven by technology
Slide 125: Superior investment in tight oil market
125 superior investment in tight oil market leading alternative in a world of unique investment energy company disruptive change proposition + rising demand for oil driven by technology strong existing business from emerging consumers not reserve replacement unique technology revenue proportional to
Slide 126: Q&A
SASOL ; . reaching new frontiers Q&A
Slide 127: Thank you
SAaSOL - reaching new frontiers Thank you