Slide 1: Interim results - 31 December 2008
interim results - 31 December 2008 JSE: SOL navigating through the storm NYSE: SSL 9 March 2009
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: 1st half of 2009: solid performance in deteriorating markets
1st half of 2009 solid performance in deteriorating markets Pat Davies – chief executive 1 9 March 2009
Slide 4: Overarching strategy remains unchanged
overarching strategy remains unchanged strategic agenda and profitability grow CTL & grow CTL & grow GTL CTL earnings GTL & GTL growth drivers grow growth drivers growth drivers growth drivers chemicals deliver on nurture and commercialise develop and (based on our growth SA grow our technological e
Slide 5: Solid performance in deteriorating markets
solid performance in deteriorating markets operating profit up 53% to R21,5bn headline earnings per share up 51% to R21,92 interim cash dividend R2,50 per share capex of R7,0bn and cash on hand R22,7bn strong balance sheet, gearing lower at 2% oil hedge cushions impact of sharp decline in oil price
Slide 6: Positive fundamentals within global economic crisis
positive fundamentals within global economic crisis foundation growth sustainability strong balance sheet production ramp up Inzalo success operational Oryx maintaining RCR efficiencies and Arya Sasol performance improvements Polymers carbon reduction governance focus reviewing and re- initiatives p
Slide 7: Maintaining a strong cash position to stay on course
maintaining a strong cash position to stay on course operations and functional excellence operational energy efficiency improvements improvements competitive procurement focus working capital reduction cash flow improvement initiatives credit processes strengthened cash conservation gearing target r
Slide 8: Project pipeline progressing well
project pipeline progressing well Gas pipeline expansion Mafutha CTL Secunda growth phase 1 Secunda growth Thubelisha mine Escravos GTL phase 2 Oryx GTL Nigeria deep Mozambique Pande Mozambique gas field Gabon Ebouri oil water oil field exploration Mozambique CPF offshore Mozambique expansion Arya S
Slide 9: Project pipeline progressing well
project pipeline progressing well Gas pipeline expansion Mafutha CTL Secunda growth phase 1 Secunda growth Thubelisha mine Escravos GTL phase 2 Oryx GTL Nigeria deep Mozambique Pande Mozambique gas field Gabon Ebouri oil water oil field exploration Mozambique CPF offshore Mozambique expansion Arya S
Slide 10: Project pipeline progressing well
project pipeline progressing well Gas pipeline expansion Mafutha CTL Secunda growth phase 1 Secunda growth Thubelisha mine Escravos GTL phase 2 Oryx GTL Nigeria deep Mozambique Pande Mozambique gas field Gabon Ebouri oil water oil field exploration Mozambique CPF offshore Mozambique expansion Arya S
Slide 11: Project pipeline progressing well
project pipeline progressing well Gas pipeline expansion Mafutha CTL Secunda growth phase 1 Secunda growth Thubelisha mine Escravos GTL phase 2 Oryx GTL Nigeria deep Mozambique Pande Mozambique gas field Gabon Ebouri oil water oil field exploration Mozambique CPF offshore Mozambique expansion Arya S
Slide 12: Maintaining RCR performance
maintaining RCR performance recordable case rate* 1,2 * recordable injuries and occupational 0,9 illnesses per 200 000 hours worked 0,7 0,5 0,5 ^ 2005 excludes service providers and occupational illnesses; thereafter results include them 2005^ 2006 2007 2008 1H09 foundation growth sustainability 10
Slide 13: Financial review
financial review solid financial performance in deteriorating markets Christine Ramon – chief financial officer 11 9 March 2009
Slide 14: Market conditions initially favourable
market conditions initially favourable $/bbl fuel pricing $1=R currency 11 150 10 $121,2 120 product price 9 R8,88 $94,9 90 $81,8 $84,7 8 R6,94 60 brent 7 30 6 1H08 1H09 1H08 1H09 $/ton chemical pricing $/ton export coal price 1675 180 polymers $1295 $1371 1250 130 $124 $1212 $1192 $73 825 solvents
Slide 15: 1H09 HEPS up 51%, 2H09 challenging
1H09 HEPS up 51%, 2H09 challenging % ∆ vs. 1H08 operating profit (Rbn) turnover (Rm) 83 118 +50 gross profit (Rm) 32 371 +38 CAGR 2004-08: 36% other expenditure (Rm) (3 209) -7% 12.2 operating profit (Rm) 21 484 +53 21,5 19,8 operating margin 26% 13,4 14,0 earnings per share (R) 22,17 +47 headline e
Slide 16: Increased oil prices and weaker rand contribute to profits
increased oil prices and weaker rand contribute to profits 10 690 (1 308) oil hedge: realised 1 730 (1 424) 835 (657) (7 515) unrealised 3 334 Rand million Oryx up 21 484 6 853 Arya Sasol up Synfuels down +53% Inzalo (2 953) Wax fine (3 678) 14 010 1H08 exchange crude oil product inflation gross new
Slide 17: Cash fixed cost contained within inflation
cash fixed cost contained within inflation Wax fine 3 678 3 278 18 619 cost increase before new business, study costs and Wax fine 15% Rand million 287 +50% 322 967 1 355 12 410 1H08 exchange rate inflation new business study costs other 1H09 15 9 March 2009
Slide 18: Improved first half performance for all clusters
improved first half performance for all clusters * operating profit Rbn SA Energy International Energy 40 Chemicals * other 30 operating margin % 1H09 1H08 SA Energy 34% 25% 20 International Energy 69% 3% 10 Chemicals * 7% 8% 0 2007 1H08 2008 1H09 * excluding Wax fine -10 international energy cluste
Slide 19: SA Energy cluster: benefits from weaker rand, higher prices
SA Energy cluster: benefits from weaker rand, higher prices coal mining export prices up increased gas sales volumes and higher prices %∆ operating profit Rm vs. 1H08 higher synfuels prices, weaker rand and oil hedge, but lower Mining 1 434 +154% production volumes Gas 1 448 +57% reduced refining ma
Slide 20: International Energy cluster: Oryx leading the way
International Energy cluster: Oryx leading the way Oryx production significantly up %∆ operating profit Rm EGTL profit realised from reducing vs. 1H08 interest SSI 1 072 +491% SPI gas and crude oil production SPI 1 001 +224% marginally up high oil prices supporting product prices and operating profi
Slide 21: Chemicals cluster: strong performance but sharp downturn ahead
Chemicals cluster: strong performance but sharp downturn ahead Polymers volume growth positively %∆ impacts profit operating profit Rm vs. 1H08 higher solvents prices, weaker rand Polymers 1 107 +123% but lower volumes O&S turnaround progressing well, Solvents 1 366 +146% reduced sales volumes, inve
Slide 22: Strong cash flows and balance sheet help weather the storm
strong cash flows and balance sheet help weather the storm free cash flow ~40% reduction in 3 year capex forecast Rbn lower gearing target range 40 cash generated by operating activities balance sheet de-leveraged investment income and tax paid investing activities share buy-back suspended shares re
Slide 23: Outlook: tough times ahead
outlook: tough times ahead reduction expected in HEPS and EPS for FY09 compared to FY08 based on: sharp downturn in world-wide chemical markets overall deterioration in market conditions lower crude oil and chemical prices weaker exchange rate increased production volumes from Arya Sasol Polymers an
Slide 24: Well positioned for tough times ahead
well positioned for tough times ahead WACC increased from ROIC in excess of targets 11.75% to 13,25 %. US$ attributable earnings growth over the cycle IRR target = 1,3 times % WACC 30 ROIC $m WACC 2400 3-year moving average IRR target growth target 20 1600 10 800 0 0 2003 2004 2005 2006 2007 2008 20
Slide 25: Summary
summary smooth seas do not make for skilled sailors Pat Davies – chief executive 23 9 March 2009
Slide 26: Thank you
thank you 9 March 2009