Slide 1: Financial results for the 6 months ended 31 December 2009
financial results for the 6 months ended 31 December 2009 JSE: SOL Pat Davies NYSE: SSL chief executive
Slide 2: Forward looking statements
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. There are forward- looking statements as defined in the U.S. Private Secur
Slide 3: Dramatic decrease in commodity prices
dramatic decrease in commodity prices Fuel pricing Currency $/bbl $1=R 11 150 Product 10 120 price $121 9 R8,88 90 $85 Brent $82 8 $71 R7,64 60 7 30 6 1H09 1H10 1H09 1H10 Chemical pricing Commodity prices in Rand Average % ∆ vs. 1H10 1H09 1675 Polymers Brent / bbl 546 È 24 1250 $1284 Fuel products /
Slide 4: Salient features
salient features Operating profit decreased by 51% to R10,5 billion Headline earnings per share declined by 51% to R10,67 Cash fixed costs reduced Capital expenditure of R6,6 billion Interim dividend increased by 12% to R2,80 per share 4
Slide 5: Improved operating performance
improved operating performance Safety: RCR1 continues downward trend Increase in group production volumes: Synfuels up 3% Synfuels unit cash costs decline by 5% O&S turnaround delivering results Growth pipeline progressing well Focused response to climate change imperative 1 RCR: Recordable Case Rat
Slide 6: Results reflect market conditions
results reflect market conditions % ∆ vs. 1H10 1H09 Turnover (Rm) 58 072 È 30 Gross profit (Rm) 20 543 È 37 Operating profit (Rm) 10 468 È 51 Earnings per share (R) 10,54 È 52 Headline earnings per share (R) 10,67 È 51 6
Slide 7: Strong rand weighs on profit recovery
strong rand weighs on profit recovery Operating profit in R million Macro Volume improvements environment & cost containment 21 484 10 468 7
Slide 8: Reduction in cash fixed cost
reduction in cash fixed cost Cash fixed cost in R million 18 619 14 941 14 647 8
Slide 9: Cash generation remains robust
cash generation remains robust Cash flows in R billion Cash flow from operations Uses of cash balance sheet remains strong, gearing 3,7% 9
Slide 10: Cluster review
cluster review Operating profit (Rbn) 1H10 1H09 SA Energy 8,1 21,8 International Energy 0,3 2,1 Chemical 2 1,5 3,5 Increase in group production volumes overshadowed by: Lower commodity prices; and Strong Rand International energy investing in growth improved operating performance offset by macro fac
Slide 11: SA energy cluster
SA energy cluster %∆ Operating profit Rm Improved production at Mining vs. 1H09 overshadowed by weak Rand Mining 170 -88% export prices Gas 1 178 -19% Robust performance from Gas Synfuels production volumes Synfuels 6 072 -70% 3% higher and cash unit cost 5% lower, marred by materially Oil 680 lower
Slide 12: Synfuels management actions yielding results
synfuels management actions yielding results Gasifier jacket replacement on track Reforming stable, 17th reformer approved Process safety management and operations excellence on track Production incidents reduced by 40% Unit cash costs reduced by 5% – Positive impact of higher volumes – September 09
Slide 13: Synfuels on track to improve production
synfuels on track to improve production Additional natural gas feedstock used to generate New baseline electricity 7,3 mtpa NG introduced & 15th O2 train Phase & full shutdown No shutdown 13
Slide 14: International energy cluster
international energy cluster %∆ Lower oil prices and strong Rand Operating profit Rm vs. 1H09 impacts on cluster turnover SSI 112 -90% Oryx production down 13% due to unplanned shut down; SPI 231 -77% production recovery underway Total cluster 343 -83% SSI comparable period included profit from redu
Slide 15: Chemical cluster
chemical cluster %∆ Improved sales volumes at Operating profit Rm vs. 1H09 Polymers dampened by lower prices and negative exchange Polymers (137) rate differences Solvents 204 -85% Depressed prices offset improved sales volumes at Solvents O&S 904 +570% O&S showing strong margin improvement Other3 4
Slide 16: O&S: a complex, non-integrated business
O&S: a complex, non-integrated business Fourteen production sites – ~50 producing assets in seven different countries Over four million tons per annum of installed production capacity More than seventeen different production technologies Over 3 000 customers globally More than 300 products in five m
Slide 17: O&S: delivering a successful turnaround program
O&S: delivering a successful turnaround program Global functional structure implemented Organisational restructuring Head count rationalised Head office cost reduced by 52% Closure of 7 world-scale assets (~500 ktpa), resulting in Asset sustainable profit improvement restructuring Non-strategic asse
Slide 18: Outlook and strategy
outlook and strategy Pat Davies
Slide 19: Cautious outlook maintained
cautious outlook maintained Commodity prices stabilising – Global chemical markets recovering – Crude oil and product prices improving Anticipated increase in overall production volumes Refining margins remain under pressure Strong Rand continues to impact on profitability 19
Slide 20: Key priorities remain unchanged
key priorities remain unchanged Improving efficiency Improve operating Strong focus on profitability performance Managing costs Maintaining growth pipeline momentum Focus on growth Disciplined capital and resource allocation Rigorous review of project portfolio Striving for improved safety performan
Slide 21: Solid pipeline of long term growth projects
solid pipeline of long term growth projects4… Implementation Feasibility Pre-feasibility Idea stage Mozambique China CTL Mafutha CTL Mozambique CPF expansion exploration blocks Uzbekistan GTL India CTL A, Sofala, M-10 Escravos GTL Tetramerisation Papua New Guinea Oryx GTL II Secunda and Australia gr
Slide 22: Underpinned by robust capital expenditure
…underpinned by robust capital expenditure Projects in implementation Estimated total capital expenditure End of job cost 19 000 in Rm 15 000 Secunda growth phase 15 12 100 Sasol wax expansion 8 400 Additional electricity generation6 2 400 Relocation of export coal mine 3 100 VOC7 abatement (environ
Slide 23: Long term strategy on track
long term strategy on track Grow CTL Strategic agenda grow CTL & & GTL GTL Earnings growth Grow Growth drivers growth drivers chemicals (based on our Return / Deliver on Nurture and Commercialise Develop and technology or economic SA grow our technological empower our feedstock profit transformation
Slide 24: Margin between gas and crude oil prices expected to widen
margin between gas and crude oil prices expected to widen Crude oil prices expressed as a multiple of natural gas prices 22 20 WTI crude oil as a multiple of henry hub gas Economic crisis and perceptions around shale gas 18 16 prices (mmBtu/bbl) 14 12 10 8 Energy parity pricing (5.6) 6 Hurricanes 4
Slide 25: Making GTL an attractive opportunity
making GTL an attractive opportunity Crude oil prices expressed as a multiple of natural gas prices 22 20 WTI crude oil as a multiple of henry hub gas 18 GTL 16 prices (mmBtu/bbl) 14 12 10 8 6 LNG 4 1985 1990 1995 2000 2005 2010 2015 Year 25
Slide 26: A leading alternative energy company positioned to deliver sustainable shareholder value
a leading alternative energy company 60 years of alternative energy experience Innovative and competitive technology Resilient performance of existing businesses Solid pipeline of growth projects Robust balance sheet positioned to deliver sustainable shareholder value 26