Slide 1: Sasol Limited Financial Results for the year ended 30 June 2019
SASOL LIMITED FINANCIAL RESULTS for the year ended 30 June 2019 October 2019
Slide 2: Forward-looking statements
Introduction Forward-looking Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based statements on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to ou
Slide 3: Introduction
INTRODUCTION Fleetwood Grobler
Slide 4: Key messages: Board review concluded, resilient performance
Key messages Board Review Board actions deliver assurance and change concluded Resilient results from foundation business in a challenging environment LCCP cost on track with strengthened control environment Resilient performance in FY19 Improving stability of operations and pathway to zero harm Bal
Slide 5: LCCP root causes understood
Key messages LCCP root causes¹ • Implemented a new LCCP controls structure and redesigned the controls regarding understood cost reporting and learnings • Reassigned LCCP oversight and accountability; additional project management resources added to be entrenched REMEDIAL in organisation ACTIONS • A
Slide 6: Resilient results from foundation business in a challenging environment
Key messages Resilient results from foundation • Three tragic fatalities occurred; Group recordable case rate at 0,26 excluding business in illnesses a challenging • Strong production and cost performance from foundation business environment OPERATIONAL • Natref ▲20%, Synfuels performing strongly fo
Slide 7: LCCP cost on track with capital cost estimate
Key messages FY19 LCCP cost • Overall project 98% complete, construction at 94% and capital expenditure of US$11,8bn on track with o Strong safety performance continues with RCR of 0,11 capital cost • Marketing channels supporting successful placement of products estimate of • Project controls, repo
Slide 8: Improving stability of operations and pathway to zero harm
Key messages Southern Africa Improving • Our relentless focus on reducing high severity incidents continues stability of • Coal production productivity improved 3% operations • Synfuels production of 7,6mt; strong performance with extended shutdown and pathway • Natref production rate of 637 m3/h fo
Slide 9: Enhanced sustainability framework positions Sasol for the future
Key messages Enhanced sustainability • Four sustainability focus areas linked to specific UN Sustainability Development Goals: o Resilience in a lower carbon future framework o Enduring and safe operations positions Sasol o Minimise our environmental footprint for the future o Growing shared value f
Slide 10: Current status of portfolio optimisation
Key messages Current status of portfolio optimisation • Asset portfolio aligned to company’s strategic objectives and growth targets 2017 • Continuous reviews to test strategic alignment and enhance competitive advantage ASSET REVIEW PRINCIPLES • Maximise return on investment in the long term • Effe
Slide 11: Focused short term priorities to restore confidence
Key messages Focused CURRENT STATUS FY20 PRIORITIES short term • Generally robust operational performance • Relentlessly drive zero harm and eliminate fatalities • Deliver all units of the LCCP and embed learnings across priorities • Foundation business sales volumes the organisation Operational mos
Slide 12: Financial and Operational Performance
FINANCIAL AND OPERATIONAL PERFORMANCE Paul Victor
Slide 13: What you will hear today
Financial and operational performance What you will hear today Challenging and volatile macro-economic environment Strong core earnings; remeasurement items weigh in on earnings Resilient performance in our foundation business Focused actions to protect and strengthen balance sheet FY20 outlook and
Slide 14: Managing macroeconomic volatility
Macroeconomic environment Improved crude oil prices Weaker currency Managing 100 macroeconomic US$1 = ZAR Currency conversion rate 78 82 volatility 64 R13,73 R14,20 US$/bbl 69 R12,85 R14,08 32 cpg 26 cpg 20 FY18 FY19 FY18 FY19 Brent crude oil Fuel basket price Ethane Average rate during period Closi
Slide 15: Strong core headline earnings performance
Group profitability Strong core FY19 FY18 %∆ headline earning Mining 4 701 5 244 10▼ Adjusted EBITDA (%) by product performance Exploration and Production International (EPI) (889) (3 683) 76▲ 15 Performance Chemicals (PC) (7 040) 7 853 >100▼ 37 Base Chemicals (BC) (1 431) 918 >100▼ Energy 16 566 14
Slide 16: Normalised cash fixed cost managed below inflation target
Cash fixed cost Normalised TAILWINDS cash fixed cost FY18 50 403 managed below o Actions taken to control costs across the organisation inflation target, US growth (LCCP & Gemini) (6,4%) o Improved production tons per head 6 years in a row o Continuous improvement initiatives Business establishment
Slide 17: Operating profit negatively impacted by remeasurement items
Operating profit Operating profit TAILWINDS negatively FY18 17 747 impacted by o Weaker average R/US$ exchange rate and higher oil prices remeasurement Exchange rate 46% o Strong operations performance items Crude oil 23% o Strong cost discipline Macro environment o LCCP volume ramping up Product pr
Slide 18: Resilient operational performance: Mining and EPI
Mining and EPI OBUs Resilient 37,2 36,1 6,7 313 MINING operational 5,2 284 o Productivity improved by 3% performance o Production meeting customer demand mm tons mm tons R/ton o Normalised unit cost up 10% due to lower production and higher maintenance and labour cost o External purchases decreased
Slide 19: Energy SBU: solid volume performance
Energy SBU Solid volume 58,7 60,0 410 ENERGY performance 31,5 31,4 399 o Normalised EBIT up 13% to R17,1bn following strong • Benefitted from higher rand oil mmbbl and 11% higher diesel differential Natref and SSO mmbbl number negated by 45% lower petrol production differential o ROIC of 27% o Liqui
Slide 20: Performance and Base Chemicals SBUs
Performance and Base Chemicals SBUs PERFORMANCE CHEMICALS Foundation 2 760 2 671 7 933 7 940 o Sales volumes impacted by external supply business strong, 12 12 constraints in Europe, extended SSO shutdown and softer macro-environment impacted by o Robust margins and demand in the specialty kt Rm mac
Slide 21: Capital spend declining as LCCP completed
Capital expenditure Capital spend 70 o Capital expenditure guidance declining as • LCCP spend of R13bn (US$868m) LCCP completed 60 6 in FY20 3 50 4 • Total capital expenditure for FY20 is R38bn; R30bn in FY21 largely R billion 40 1 sustenance 37 30 2 30 o Forecast based on R14,60/US$ for 30 3 FY20 a
Slide 22: Elevated gearing with cash flow inflection late in FY20
Balance sheet Elevated gearing with cash flow • Elevated gearing due to LCCP and current chemicals pricing inflection o Gearing = 56% late in FY20 o Net debt : EBITDA = 2,6 times STATUS • Increased flexibility from balance sheet management actions o US$4bn LCCP asset-based loan refinanced with unsec
Slide 23: Taking decisive action to support balance sheet
Balance sheet Taking decisive action OBJECTIVES ACTIONS to support balance sheet • Enhance cash flow profile during peak o Continued focus on management self-help actions gearing o Hedge selectively to protect downside • Balance sheet flexibility o FY19 final dividend passed o Passing of FY20 interi
Slide 24: FY20 outlook and Q1 performance
FY20 outlook and Q1 performance FY20 outlook Q1 FY20 performance Turning the corner • Bank Net Debt: EBITDA range 2,6 - 2,9 times GROUP • Normalised cash fixed costs to remain below 6% inflation target • Tracking targets for FY20 by focused • Capital expenditure of R38bn (FY20) delivery • Focus on s
Slide 25: Questions and Answers
QUESTIONS AND ANSWERS SAaSOL POSITIONING FORA SUSTAINABLE FUTURE . st
Slide 26: Abbreviations
Abbreviations AVE Average LCCP Lake Charles chemicals project BC Base Chemicals LDPE low density polyethylene B-BBEE broad-based Black economic empowerment LLDPE linear low density polyethylene EBIT earnings before interest and tax OBU operating business unit EBITDA earnings before interest, tax, de