Slide 1: Sasol Limited Financial Results for the period ended 30 June 2017
SASOL LIMITED FINANCIAL RESULTS for the period ended 30 June 2017 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 ● Robust all round performance despite continued challenging macro environment ● Competitive cost base driven by cash and cost savings programmes ● Actively managing the balance sheet to maintain resilience and flexibility ● LCCP¹ and PSA² investments on track ●
Slide 5: Robust all round performance despite continued challenging macro environment
Robust all round performance despite continued challenging macro environment ● Group safety performance, excluding illnesses, improved to a RCR of 0,28 ● Regrettably five fatalities in FY17 ● Sales volumes ▲3% for Base Chemicals, ▲2% for Performance Chemicals and liquid fuels ▼2% ● Strong operationa
Slide 6: Competitive cost base driven by cash and cost savings programmes
Competitive cost base driven by cash and cost savings programmes Business Performance Enhancement Programme ● Delivered FY18 target of R5,4bn Rand 5,4bn a year earlier than planned 4,5bn ● Programme closed out with cost savings culture embedded 2,5bn 1,9bn ● Sustained savings of R5,4bn 1,3bn 0,5bn g
Slide 7: Actively managing the balance sheet to maintain resilience and flexibility
Actively managing the balance sheet to maintain resilience and flexibility ● Maintain a prudent approach in managing the impact of macro-economic volatility to ultimately protect and strengthen our balance sheet ● Proactively executed our hedging policy to mitigate specific financial risks ● Suffici
Slide 8: LCCP on track and progressing well
LCCP on track and progressing well ● Overall project 74% complete with construction execution at 42% ● Remain on track for start-up of first units in 2nd half of calendar year 2018 ● Capital expenditure to date of US$7,5 billion – tracking revised $11bn estimate ● First quintile construction product
Slide 9: PSA – Sasol remains committed whilst optimising our development plan
PSA – Sasol remains committed whilst optimising our development plan ● Progressing field development plan with 4 oil and 2 gas wells drilled ● Capital expenditure to date of US$384 million on PSA license ● Gas reserves in line with expectations but oil production expected in mid to lower end of rang
Slide 10: Delivering on our broader sustainability and stakeholder commitments
Delivering on our broader sustainability and stakeholder commitments ● Invested R1,6 billion in skills and socio-economic development programmes globally ● Increased access to healthcare services for over 270 000 people living in fence-line communities ● Improved local government service delivery to
Slide 11: Continuous improvement to drive competitive advantage
Continuous improvement to drive competitive advantage ● Objective to innovate, grow ROIC and manage costs below inflation going forward ● Asset review process underway to ensure assets deliver against stringent financial metrics ● Optimising margins by improving our customer experience and reducing
Slide 12: Long-term strategy to drive future value-based growth
Long-term strategy to drive future value-based growth ● Progress with delivery of our medium-term strategy in FY17 ● Continued focus on delivering our strategic investments in North America and Southern Africa ● Refined our long-term strategy to enable future growth and clarify strategic choices pos
Slide 13: Financial and Operational Performance
FINANCIAL AND OPERATIONAL PERFORMANCE Paul Victor Chief Financial Officer JSE: SOL NYSE: SSL
Slide 14: Key messages
Key messages ● Able to generate sustainable cash flows at oil prices of $40/bbl ● Current operations are robust and we are driving improved performance ● Delivering on our cost and cash improvement programmes has placed Sasol in a strong position ● Mitigating risks to create headroom on the balance
Slide 15: Macro environment remains challenging
Macro environment remains challenging Chemical prices trending up but exchange rate remains volatile Product price differentials under pressure Volatile currency R14,71 US$1 = ZAR $/mmbtu (gas price) US$/bbl R13,61 $64 R14,52 $60 R13,06 $43 Brent $50 Product price $2,25 Average rate during period $3
Slide 16: Group profitability
Group profitability Operating profit impacted by volatile macroeconomics and once-off items FY16 FY17 %∆ Operating profit (%) diversified by product Mining 4 739 3 725 21▼ Exploration and Production International (11 714) 585 +100▲ Performance Chemicals (PC) 11 276 10 000 11▼ Base Chemicals (BC)¹ 4
Slide 17: Operating profit impacted by volatile macroeconomics and once-off items
Operating profit impacted by volatile macroeconomics and once-off items Operating profit Tailwinds ● Strong volume performance FY16 24 239 across most of value chain ● Higher crude oil and product Exchange rate¹ (38%) prices Market factors ● Resilient margins in Crude oil and product prices¹ 30% che
Slide 18: Cash fixed costs flat in real terms despite Mining strike costs
Cash fixed costs flat in real terms despite Mining strike costs Cash fixed costs Tailwinds FY16 44 455 ● Embedded cost culture enabling value Net sustainable 1,2% Costs and ● BPEP and Response Plan business savings volumes initiatives providing robust Mining strike (1,0%) foundation Headwinds Normal
Slide 19: Mining and Exploration and Production International
Mining and Exploration and Production International Operating Business Units 40,3 R/ton mm tons 298 Mining mm tons 36,0 8,0 227 ● Operating profit down 21% to R3,7bn mainly due to cost of the strike 5,0 ● Delivered our full supply commitment to Secunda Synfuels ● Business Improvement Plan in place t
Slide 20: Chemicals Strategic Business Units
Chemicals Strategic Business Units kt % Rm 11 276 Performance Chemicals 3 458 3 541 15 14 10 000 ● European operations volumes up 6%, highest since 2015 ● Normalised operating profit up 2% to R11,0bn ● Contribution from most product lines increased from prior year ● FTWEP produced 92kt of hard wax F
Slide 21: Energy Strategic Business Unit
Energy Strategic Business Unit 397 mmbbl 61,3 Energy number 388 mmbbl 60,0 33,2 32,5 ● Liquid fuels sales volumes 2% lower ● Cash fixed costs down 6% in real terms over the last 3 years ● Normalised operating profit up 5% to R13,6bn FY16 FY17 FY16 FY17 FY16 FY17 ● Petrol differential 19% lower, dies
Slide 22: Capital portfolio prioritised for growth projects in Southern Africa and North America
Capital portfolio prioritised for growth projects in Southern Africa and North America Capital spend forecast decreases due to stronger rand Capital expenditure ● Key focus on execution of 80 strategic projects in North Rbn America and Southern Africa 66 ● Gemini HDPE plant essentially 60 60 59 60 c
Slide 23: Sufficient liquidity headroom available
Sufficient liquidity headroom available Liquidity ● Net debt to EBITDA increased to 1,1x – expect Opening cash balance 52 to remain below 2x ceiling (1 July 2016) ● Credit ratings remain at Cash retained 46 investment grade ● Moody’s – Baa3 (negative) ● S&P – BBB- (stable) Dividend 9 ● Funding plan
Slide 24: FY18 – Strong operational performance expected from our global business
FY18 – Strong operational performance expected from our global business Outlook ● Return to normalised production levels Mining ● Drive Business Improvement Plan to improve cost and productivity performance ● Increase gas production from PPA to between 114-118 bscf EPI ● PSA drilling activities to c
Slide 25: Questions and Answers
QUESTIONS AND ANSWERS Bongani Nqwababa and Stephen Cornell Joint Presidents and Chief Executive Officers JSE: SOL NYSE: SSL