Slide 1: Maintaining Momentum: Sasol Limited Financial Results
MAINTAINING MOMENTUM SASOL LIMITED FINANCIAL RESULTS for the six months ended 31 December 2015 JSE: SOL NYSE: SSL
Slide 2: Forward-looking statements
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 al
Slide 3: Introduction
INTRODUCTION David E Constable President and Chief Executive Officer Maintaining momentum
Slide 4: What you will hear today
What you will hear today Key messages ● Proactive management interventions continue to support business resilience ● Business Performance Enhancement Programme (BPEP) target increased ● Response Plan (RP) driving additional cash conservation for longer ● Southern African regional strategy delivering
Slide 5: Proactive management interventions continue to support business resilience
Proactive management interventions continue to support business resilience Cost and cash savings targets increased significantly through the downturn Business Performance Response Plan Response Plan target Enhancement Programme launched – target and duration extended – 140 launched – target R30-R50
Slide 6: Business Performance Enhancement Programme target increased
Business Performance Enhancement Programme target increased On target to exceed expectations ● Restructuring process concluded and full programme nearing completion ● Cumulative restructuring costs to date of R3,4 billion ● Delivered actual cost savings of R3,1 billion in HY16 ● On track to meet sav
Slide 7: Response Plan driving additional cash conservation for longer
Response Plan driving additional cash conservation for longer Providing balance sheet capacity to create maximum sustainable value ● January 2015 Response Plan positioned company for a US$45-US$50/bbl oil price environment ● Achieved cash conservation benefits of R10,8 billion in HY16 ● On target to
Slide 8: Southern Africa regional strategy delivering results
Southern Africa regional strategy delivering results Expanding our interests in Southern Africa ● Field Development Plan approval obtained from Mozambican authorities ● Final Investment Decision taken on Loop Line 2 natural gas pipeline project ● Mine replacement programme on track – Impumelelo coll
Slide 9: Lake Charles Chemicals Project progressing
Lake Charles Chemicals Project progressing Significant progress continues ● Overall capital expended to date of ~$3,7 billion ● Detailed engineering for all process units and supporting facilities at an advanced stage ● Major underground and civil work activities nearing completion ● Site preparatio
Slide 10: Solid operational and financial performance, notwithstanding challenging environment
Solid operational and financial performance, notwithstanding challenging environment Operational stability and contained costs ● Group safety performance, excluding illnesses, remained strong with an RCR of 0,32 ● Strong operational performance across most of the value chain ● Secunda Synfuels Opera
Slide 11: Financial and Operational Performance
FINANCIAL AND OPERATIONAL PERFORMANCE Bongani Nqwababa Chief Financial Officer Maintaining momentum
Slide 12: Challenging macro environment
Challenging macro environment Significant drop in oil price Weakening currency R13,62 US$1 = ZAR $/mmbtu (gas price) US$/bbl $105 $89 R10,99 $65 $47 $3,87 $2,44 1H15 1H16 1H15 1H16 Brent Product price Henry Hub Chemical prices vs Brent Product prices % ∆ vs % change y-o-y Average US$/unit HY16 HY15
Slide 13: Group profitability
Group profitability Strong operational performance supported by delivering cost and cash initiatives HY16 HY15 %∆ Profit from operations contribution (%) Mining 2 359 2 241 5▲ 69% Exploration and Production (8 289) (1 748) 374▼ International (EPI) 35% 16% 21% 15% Energy 10 261 14 818 31▼ Base Chemic
Slide 14: Profit from operations
Profit from operations Impacted by volatile macro environment and once-off items Macro environment Costs and volumes 50 000 Rand million 46% 62% 40 000 30 034 30 000 31% 20 000 2% 5% 14 916 10 000 0 1H15 Exchange Crude oil and Once-off items Cost and other² Sales volumesᶟ 1H16 rate product prices an
Slide 15: Cash fixed costs down 8,4% in real terms
Cash fixed costs down 8,4% in real terms Proactive cash and cost savings initiatives drive costs down Costs and volumes Restructuring, Macro environment study and growth cost 30 000 Rand million 22 435 3,0% 5,4% (3,9%) (3,7%) 21 429 20 555 3,7% 20 000 10 000 0 1H15 Sustainable Cost increase Normalis
Slide 16: Mining and EPI Operating Business Units
Mining and EPI Operating Business Units Mining cash unit costs below inflation Profit / (loss) from operations ● Mining (Rm) HY16 HY15 %∆ ● Normalised unit costs 4% below inflation Mining 2 359 2 241 5▲ ● Stable mining operations EPI (8 289) (1 748) 374▼ ● Strong BPEP and RP contributions Producing
Slide 17: Energy Strategic Business Unit
Energy Strategic Business Unit Record production volumes and solid cost performance, margins under pressure ● Energy Profit from operations (Rm) HY16 HY15 %∆ ● Secunda Synfuels and Natref increased Energy 10 261 14 818 31▼ production by 6% and 1% respectively Southern Africa¹ 9 688 13 520 28▼ ● 1% d
Slide 18: Chemicals Strategic Business Units
Chemicals Strategic Business Units Solid cost performances support chemicals contribution to group ● Base Chemicals Profit from operations (Rm) HY16 HY15 %∆ ● Chemical basket prices down 23% despite Base Chemicals 3 178 5 818 45▼ 47% drop in oil price Performance Chemicals 5 161 7 365 30▼ ● Sales vo
Slide 19: Business Performance Enhancement Programme
Business Performance Enhancement Programme Savings target increased to R5,0 billion by end FY17 Targeting an Cost trend from end FY17 not exceeding inflation exit run-rate of Rand billion R5,0bn by end FY17 Targeting an exit run-rate of R4,3bn at end FY16 R3,1bn 2,8bn actual savings 1,9bn achieved 1
Slide 20: Response Plan duration extended and target increased
Response Plan duration extended and target increased Cash conservation levers deliver a benefit of R10,8 billion in HY16 Targeted 42 month range (Rbn) Response Plan updated: Margin and working capital ● Cumulative cash savings since program’s inception of R19,7 billion ● Target increased to R65-R75
Slide 21: Capital portfolio prioritised for the advancement of our growth projects
Capital portfolio prioritised for the advancement of our growth projects in Southern Africa and North America Capital spend forecast increases due to weakening rand Capital expenditure 90 Rand billion ● No compromise on safety, 74 73 reliability and sustainability 70 65 of operations 60 ● Forecast i
Slide 22: Robust balance sheet to fund growth plans
Robust balance sheet to fund growth plans Balance sheet levering up, but liquidity remains strong Cash generation and utilisation 80 Rand billion ● Gearing (net debt:equity) increased to 6,2% – internal 60 ceiling target lifted to 44% in short-term ● Net debt:EBITDA increased to 40 0,6x – peak to re
Slide 23: FY16 outlook
FY16 outlook Strong operational performance and cost reductions to continue ● South African liquid fuels sales volumes expected to be approximately 60 million barrels ● Average utilisation of ORYX GTL is expected to be about 80% due to extended statutory shutdown ● Base Chemicals sales volumes to be
Slide 24: A Smooth Transition
A SMOOTH TRANSITION David E Constable President and Chief Executive Officer Maintaining momentum
Slide 25: Prioritising business activities and ensuring a smooth leadership transition
Prioritising business activities and ensuring a smooth leadership transition Detailed handover plan ensures a seamless leadership transition by end June ● Joint CEOs have complementary skills, experience, qualifications and backgrounds, and will form a formidable team ● Joint CEOs will be jointly an
Slide 26: Questions and Answers
QUESTIONS AND ANSWERS David E Constable President and Chief Executive Officer Maintaining momentum