Slide 1: 2010 financial results: consistent, focused and energised
2010 financial results consistent, focused and energised Pat Davies JSE: SOL NYSE: SSL chief executive
Slide 2: Forward-looking statements
forward-looking statements In this document we 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 prospects, de
Slide 3: Consistent focus through challenging times
consistent focus through challenging times Actions implemented to improve operating performance, delivering results Successful execution of offshore projects support earnings growth Strategically well positioned to leverage opportunities for growth through continuous enhancement of proprietary techn
Slide 4: Value creation by ongoing improvement and execution of strategy
value creation by ongoing improvement and execution of strategy Financial highlights Headline earnings per share up 5% to R26,57 Earnings per share up 17% to R26,68 Strong balance sheet Total dividend up by 24% to R10,50 per share 4
Slide 5: Operating improvement drives solid performance across the group
operating improvement drives solid performance across the group Operational highlights Increase in group production volumes Reduction in group cash fixed costs Strong turnaround in chemical cluster Improved operating performance from offshore projects which now contribute ~30%1 to group earnings 1 I
Slide 6: Delivery against our priorities for the year
delivery against our priorities for the year Synfuels volumes +4% Improve Synfuels cash unit costs +1%2 operating Improved margins in chemical cluster performance Oryx and Arya operating at planned capacity Synfuels growth: gas turbine generators commissioned Drive Mozambique gas pipeline capacity e
Slide 7: Financial and operational review
financial and operational review Christine Ramon chief financial officer 7
Slide 8: Rand strength / US$ commodity prices improved
rand strength / US$ commodity prices improved Fuel price Currency US$/bbl US$1=Rand Product $91 R9,04 price $68 $86 Brent R7,59 $74 2009 2010 2009 2010 Chemical prices Commodity prices (Rand) US$/ton Average % ∆ vs. 2010 2009 Polymers Brent / bbl 564 ▼ 8 $1048 $1049 $1039 Fuel products / bbl 659 ▼ 1
Slide 9: Operational improvement drives increased profitability
operational improvement drives increased profitability Operating margin (%) Headline earnings per share (Rand) 9
Slide 10: Offshore investments deliver earnings growth
offshore investments deliver earnings growth Oil and gas O&S, wax, GTL Polymers production solvents Germany Iran Mozambique Location Qatar USA Malaysia Gabon Italy Contribution 7% 3% 7% 14% to group earnings Operating margin 44% 27% 45% ~10% Oryx GTL full payback ~5 years from start up O&S turnaroun
Slide 11: Management actions enhance operating profit
management actions enhance operating profit Operating profit (Rm) Macro Volume improvements environment & cost containment 24 666 (10 457) 7 840 1 544 1 854 23 937 6 181 (4 603) 4 5 4 Once-offs include competition related administrative penalties, re-measurements and Inzalo charges 5 Amount includes
Slide 12: Successful cost management delivers reduction in cash fixed costs
successful cost management delivers reduction in cash fixed costs Cash fixed costs (Rm) 33 723 4 016 1 942 2 158 29 707 29 491 6 6 Once-offs include competition related administrative penalties 12
Slide 13: Cluster review: robust operational performance across the group
cluster review robust operational performance across the group Operating profit %∆ (Rbn) 2010 vs 2009 Higher volumes negated by rand strength in SA energy SA Energy 17,8 -38% Investing for growth in international International Energy 0,5 -47% energy Chemical7 5,5 +226% Chemicals deliver robust impro
Slide 14: SA energy production volumes up, costs contained
SA energy production volumes up, costs contained Improved production at Mining Operating profit %∆ negated by weak rand export (Rm) 2010 vs 2009 prices Mining 815 -49% Gas remains a consistent performer, highlighting the value of Gas 2 479 +2% our Mozambican assets Synfuels production volumes Synfue
Slide 15: International energy: Oryx continues to perform well
international energy oryx continues to perform well Sasol portion of Oryx operating Operating profit profit R1,0bn (Rm) 2010 2009 Oryx production down 16% SSI 131 (235) due to planned (6%) and Oryx 1 045 1 305 unplanned (10%) outages Funding growth (914) (1 540) Unplanned outage caused by SPI 337 1
Slide 16: Chemical cluster business improvement plans deliver results
chemical cluster business improvement plans deliver results Rise in profit despite adverse Operating profit %∆ impact of rand strength (Rm) 2010 vs 2009 Improved production volumes at Polymers 958 +1% Polymers Improved production and sales Solvents 1 154 +133% volumes, coupled with higher margins, b
Slide 17: Healthy cash generation supports sustainable growth
healthy cash generation supports sustainable growth Cash flow (Rbn) Cash generated by Uses operating activities of cash 48,2 27,4 strong balance sheet maintained 17
Slide 18: Increased capex supported by strong balance sheet
increased capex supported by strong balance sheet Projects in implementation Estimated total capital Estimated expenditure (Rm) End-of-job beneficial cost in Rm operation 22 000 (CY) Secunda growth 19 000 12 100 2013 phase 19 16 108 Sasol wax expansion 8 400 2014 Additional electricity 5 800 2012 ge
Slide 19: Balancing investment with returns to shareholders
balancing investment with returns to shareholders Return on invested capital (%) Dividend (Rand) ROIC WACC IRR target Ongoing review of project Progressive dividend growth portfolio and prioritising capex Committed to total shareholder return 19
Slide 20: Outlook: improved operational performance but cautious due to macro variables
outlook: improved operational performance but cautious due to macro variables Operational Macro economic performance 2011 conditions remain uncertain Continued production volume Instability in global economic growth conditions • Synfuels volumes will be maintained at 7,3 mtons despite large planned
Slide 21: Solid financial position supporting operational and strategic priorities
solid financial position supporting operational and strategic priorities Improving profitability despite Rand strength Successful cost management Business improvement plans delivering sustainable results Strong balance sheet providing financial flexibility Enhancing long-term capital efficiency 21
Slide 22: The way forward
saso. ¢* reaching new frontiers Pat Davies
Slide 23: Strategy on track: Group imperatives
strategy on track Definition of Foundation Growth Victory Accelerate GTL, Operations Develop and focused CTL growth excellence empower our people Grow related Group imperatives upstream business Functional Grow excellence Grow technological Continuously stakeholder lead improve and grow value existi
Slide 24: Key actions driving strategy
key actions driving strategy Value and volume focus Optimise Plant stability, availability, reliability 1 operating Cost containment performance Energy efficiency Leverage proprietary technology Reduce carbon intensity Sustainable 2 Natural gas, GTL focus growth Build new energy business Electricity
Slide 25: Robust pipeline of long-term growth projects
robust pipeline of long-term growth projects12 Exploration – Implementation Feasibility Pre-feasibility Idea stage gas focus Secunda growth China CTL Mafutha CTL Oryx GTL II Mozambique phase 1 Uzbekistan GTL India CTL Indonesia CTL blocks A, Sofala, Four gasifiers M-10, 16/19 Tetramerisation Syngas
Slide 26: Prioritising natural gas expansion
prioritising natural gas expansion Abundance of remote natural gas reserves Arbitrage opportunity between oil and gas prices Macro drivers • Shale-gas dynamics • GTL currently more competitive than LNG Clean electricity Monetisation GTL options • Clean fuels • Chemical products Carbon footprint of g
Slide 27: Building a sustainable future
building a sustainable future Addressing our carbon footprint Synfuels electricity generation Drive energy efficiency e.g. through power generation from natural and waste gas Growth focus on natural gas Develop carbon capture and storage solution as prerequisite for new CTL plants Carbon reduction t
Slide 28: Ongoing focus and improvement delivering sustainable returns to shareholders
ongoing focus and improvement… Strong operational performance delivering financial returns Growing demand for alternative energy creating significant opportunities for growth Financial strength to support strategic priorities Compelling growth strategy Ensuring long term sustainability …delivering s
Slide 29: Offering a proven, alternative solution to meeting growing, global, energy demand
offering a proven, alternative solution to meeting growing, global, energy demand In-country, Global drive Abundant win-win solution for cleaner hydrocarbon transportation Transportation reserves Sasol’s fuels fuel security Need for Resource + technology & operating experience = Job creation monetis
Slide 30: Our investment case remains strong
our investment case remains strong Leading alternative In a world of Unique investment energy company disruptive change proposition 60 years of alternative The ‘new normal’ Strong existing energy experience business Volatile economic recovery Operating & continuously Competitive technology lead impr
Slide 31: Questions
SAaSOL reaching new frontiers Xe