Sasol Limited financial results 1H14... · Sasol Limited financial results. ... and relate to analyses and other information which are based on forecasts of future ... regarding exchange

better together ... we deliver

for the

six months ended

31 December 2013

Sasol Limited financial results

better together ... we deliver 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 prospects, developments and

business strategies. Examples of such forward-looking statements include, but are not limited to, statements

regarding exchange rate fluctuations, volume growth, increases in market share, total shareholder return and

cost reductions. Words such as “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”,

“endeavour” and “project” and similar expressions are intended to identify such forward-looking statements,

but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements

involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions,

forecasts, projections and other forward-looking statements will not be achieved. If one or more of these risks

materialise, or should underlying assumptions prove incorrect, our actual results may differ materially from those

anticipated. You should understand that a number of important factors could cause actual results to differ

materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking

statements. These factors are discussed more fully in our most recent annual report under the Securities

Exchange Act of 1934 on Form 20-F filed on 9 October 2013 and in other filings with the United States

Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on

forward-looking statements to make investment decisions, you should carefully consider both these factors and

other uncertainties and events. Forward-looking statements apply only as of the date on which they are made,

and we do not undertake any obligation to update or revise any of them, whether as a result of new information,

future events or otherwise.


Introduction

David E. ConstableChief Executive Officer


What you will hear today

Key messages

• Creating long-term shareholder value

• Delivering and growing sustainably

• Strong headline earnings growth

• Taking decisive management action

• Excellent overall financial and operational performance

• Advancing key capital projects

• Compelling investment proposition

Lake Charles, Louisiana Sasol Synfuels, Secunda


Creating long-term shareholder value

Delivering results through decisive leadership

1. Share price movements based off 30 Jun 2012 EV/EBIT multiple, applied to movements in operating profit for the 20 month period ended 7 Mar 2014.

Analysis excludes effects of depreciation, once-offs and impairments

2. Includes exchange rates, oil and product prices, inflation as well as risks associated with investing in emerging markets

3. Includes focused leadership and strategic direction, optimising volumes and maintaining reliable operations, enhancing organisational structures and

systems, executing strategic growth projects and driving business performance improvements

340

146

96 582

0

100

200

300

400

500

Share price2 Jul 12¹

Macro/externalfactors²

Controllablefactors³

Share price7 Mar 14

Ran

d

Factors influencing the share price

Supported by progressive

dividend policy

Medium

term catalyst:

US cracker

Short term catalyst:

business performance

improvements


Delivering and growing sustainably

Our broader contributions to South Africa in 1H14

• Invested R10,8 billion (54%) of our CAPEX spend

• Contributed R205 million to date through the Ikusasa initiative

– R800 million total commitment

• Invested R165 million in socioeconomic development

• Spent R353 million on skills development

• Contributed over R15 billion in direct and indirect taxes

Sasol Gas Engine Power Plant, Sasolburg Sasol training, Secunda


Delivering and growing sustainably

Key milestones in 1H14

• Robust safety performance - RCR 0,30

• Successful completion of largest shutdown in Synfuels’ history

• ORYX GTL plant continues to achieve production records - 94% utilisation rate

• Extension of Secunda mining rights to support our 2050 strategy

• Ethylene purification unit successfully commissioned

• Sasol turbodiesel™ ULS 10ppm launched

Sasol forecourt, Secunda Lake Charles, Louisiana


Strong headline earnings growth

Delivering shareholder returns

• Solid contributions across the value chain

• Synfuels’ normalised production volumes up by 3%

• Normalised cash fixed costs below SA PPI of 6,4%

• Operating profit up 33%, excluding once-off items

• Headline earnings per share up by 26% to R30,19 off a record base

• Cash generated from operations up 50%

• Record interim dividend of R8,00 per share - up by 40%

Lake Charles, Louisiana Sasol Synfuels, Secunda


Taking decisive management action

Business Performance Enhancement Programme

• Notable progress made on right-sizing and repositioning the organisation

• Implementing new operating model on 1 July 2014

• Top management decision-making layers significantly reduced

• Simplified governance framework

• First tranche of bankable savings driven by optimising external spend

• FY14 savings trending above R200 million

• On track to deliver more than R3 billion annually by FY16

Sasol retail site, South Africa Sasol Polymers, Secunda Gas Engine Power Plant, Sasolburg


Financial and operational performance

Paul VictorActing Chief Financial Officer


Supported by weakening rand

Favourable macro environment

Prices reflect international commodities or baskets of commodities and are not necessarily Sasol specific

Sources: RSA Department of Energy, ICIS-LOR, Reuters, Platts, World Scale Association, McCloskey, International Energy Agency

US

$1

= R

an

d

Weakening currency

$/m

mb

tu(g

as p

rice

)

US

$/b

bl

Higher US gas pricesBrent

Product price

Henry Hub

1H13 1H14

R8,48

R10,08

1H13 1H14

$128 $124

$110 $110

$3,14$3,71

$/m

mb

tu(g

as p

rice

)

US

$/t

on

Improved chemical prices

Solvents basket

Polymers basket

1H13 1H14

$1 220

$1 368

$1 146$1 198

Commodity prices

Rand/unit

Average

1H14

% ∆ vs

1H13

Brent/bbl 1 107 19▲

Fuel products/bbl 1 245 15▲

Polymers/ton 13 791 33▲

Solvents/ton 12 072 24▲

Export coal/ton 751 2▲


1H14 1H131 % ∆

SA Energy 21,2 16,5 28▲

International Energy (6,6) (1,2) 467▼

Chemicals 3,6 1,8 100▲

Other 1,1 1,1 -

Operating profit (Rbn) 19,3 18,2 6▲

Income from equity

accounted investments (Rbn)2,2 0,8 175▲

Earnings per share (R) 20,88 20,10 4▲

Headline earnings

per share (R)30,19 24,01 26▲

Dividend per share (R) 8,00 5,70 40▲

Cash flow from operations

(Rbn)33,2 24,4 36▲

Group profitability

1. Restated – refer to the financial results booklet for reporting changes

• Strong overall performance from SA Energy

despite largest shutdown in Synfuels’ history

• Improved volumes and recovering product

prices boosted chemical operations

profitability

• Operating profit negatively impacted by

once-off items of R5,7 billion

• Operating profit margin, excluding once-off

items, of 26%

Underpinned by SA Energy

109%

(34%)

19%6%

Operating profit split (%)

SA Energy International Energy Chemicals Other


Increase within inflation

Costs and

volumes

Macro

environment

Cash fixed costs


2. Includes the impact of inflation (6%) and exchange rate effects (5%)

3. Includes business restructuring costs of R190 million

17 948

19 853 19 993(10,6%) (0,4%) (0,4%)

0

3 000

6 000

9 000

12 000

15 000

18 000

21 000

24 000

1H13¹ Uncontrollablefactors²

Period-on-periodnormalised

Growth andstudy costs

Businessenhancement³

1H14

Ra

nd

mill

ion


Notwithstanding once-off items and year-end adjustments

Macro

environment

Costs and

volumes

Improved operating profit

1. Restated - refer to the financial results booklet for reporting changes

2. Includes gains on forward exchange contracts

3. Includes Canada impairment (-R5,3bn) and other remeasurement items, as well as adjustments for provision for share-based payment expenses (-R0,7bn)

4. Includes incremental depreciation for Canada (-R0,6bn), for shutdowns and statutory maintenance (-R0,4bn) and new plants (-R0,2bn)

5. Includes cost inflation and growth and study costs

18 28019 381

37%7%

7%

(32%)

(8%)(5%)

0

5 000

10 000

15 000

20 000

25 000

30 000

1H13¹ Exchangerate²

Crude oiland product

prices

Once-offitems andyear-end

adjustments³

Depre-ciation⁴

Costsand other⁵

Salesvolumes

1H14

Ran

d m

illio

n

FY13 sales

volumes up 7%


Solid performance underpins group profit

SA Energy

Natref, Sasolburg Sasol Mining, Secunda


• Mining impacted by recovery of export market

and higher operating costs

• Gas includes profit on sale of SLG, with

improved volumes and sales prices

• Synfuels

• Marginally lower volumes, despite

largest shutdown in history

• Cash unit costs increase contained to

6,9%, despite higher feedstock, labour

and electricity cost

• Oil benefited from higher margins coupled

with improved volumes

Operating profit (Rm) 1H14 1H131 % ∆

Mining 1 351 1 302 4▲

Gas 2 626 1 967 34▲

Synfuels 16 223 12 458 30▲

Oil 989 809 22▲

Total cluster 21 189 16 536 28▲


International Energy

Sasol CPF, Mozambique ORYX GTL, Qatar


• SSI impacted by lower US GTL study costs

and higher once-off charges

• SPI

• Volumes up 6%

• Canada – R5,3 billion partial impairment,

higher depreciation of R1,3 billion

• Exploration and growth costs include

PSA development costs

• ORYX GTL higher volumes, exceeding guided

utilisation range of 90%

ORYX GTL excels in performance


SSI (435) (452) 4▲

SPI (6 137) (707) 768▼

Production

Mozambique and Gabon 1 187 985 21▲

Canada upstream (6 484) (713) 809▼

Exploration, growth and

well write-offs(840) (979) 14▲

Total cluster (6 572) (1 159) 467▼

ORYX GTL 1 903 1 732 10▲


Canadian shale gas assets

Impairment overview

• Impairment triggers

• Talisman’s sale of its 50% share of the Montney asset to Progress

(CAD1 320 million for its share of Farrell Creek and Cypress A)

• Other factors considered

• Further decline of conditions in the North American gas market

• Canadian LNG opportunities still in planning horizon – not yet impacting future

gas prices

• Further decrease in the group’s outlook on gas prices in the short to medium term

• Impairment

• Carrying value of CAD1,6 billion impaired by CAD540 million to CAD1,1 billion

• Additional future risks

• Reserves – timing and execution of development plans subject to gas price recovery

• Further decline in North American gas prices

Gas investments remain a strategic resource for our downstream GTL plans

and provide a natural hedge


Chemicals

Lake Charles, Louisiana Sasol Solvents, Secunda


• Polymers improved margins and sales

volumes – stability benefits from EPU 5

• Solvents higher solvents sales volumes and

improved margins

• O&S US operations benefit from low ethane

prices coupled with 5% increase in volumes,

continued margin pressure in Europe

• Other chemicals wax up 24% but challenging

market conditions for fertiliser and ammonia

businesses

Improved volumes and margins


Polymers (351) (1 124) 69▲

Solvents 358 29 1134▲

O&S 2 749 1 568 75▲

Other 888 1 350 34▼

Total cluster 3 644 1 823 100▲


Investing for sustainable growth

54% of capital spend in South Africa

30,4

42,0

50,0

0

10

20

30

40

50

60

2013 act 2014 est 2015 est

Ran

d b

illio

n

Estimated capital investments

Sustenance Growth

54%

7%

5%

34%

Capital expenditure for 1H14 by region(R20 billion)

South Africa Rest of Africa

Europe North America

Capital spend reflects execution of our global strategy


We remain committed to delivering valueto shareholders

Record interim dividend

1. Source: Bloomberg 31 December 2012 to 31 December 2013, assuming dividends are reinvested in securities

2. Source: Bloomberg 31 December 2008 to 31 December 2013, assuming dividends are reinvested in securities


0

10

20

30

40

50

60

2010 2011 2012 2013 1H13 1H14

Ran

d

Growth in headline earnings per share

Headline earnings per share³ Dividend per share

0

5

10

15

20

2010 2011 2012 2013 1H14

Ran

d

Progressive dividend for growth

Interim Final

Rand one year TSR¹ 48%

Rand five year TSR² 122%


FY14 profit outlook

Strong operational performance underpinned by volatile macroeconomic

conditions

Macro Financial and operational

• Rand remains biggest external factor impacting

profitability

• Weaker rand will improve profitability

• Oil price expected to remain stable in the near term

• Slightly improved US natural gas prices

• Product prices expected to remain volatile

• European market conditions improving slowly

• Production

• Synfuels FY14 target of 7,3 mt to 7,5 mt

(total shutdown year)

• ORYX GTL average utilisation rate to exceed 90%

• Canada to marginally decrease production

• Cost optimisation

• Expect normalised cash fixed costs to

slightly exceed indicative South African PPI

• Focus on volume growth, margin

improvement and cost reduction

• Improvement in Polymers’ profitability expected

to be above previous guidance


2014 2015 2016 2017 2018

Ran

d b

illio

n

Project implementation cost (FY14 - R1,2bn) R3bn annual savings (real)

Business Performance Enhancement Programme

Cost savings realisation timeline

Sustainable R3 billion savings per annum

Sustainable savings on FY12 base

Final

implementation

stage

Potential upside

to be confirmed

Peak

Initial

ramp-up

Cost trend from FY16

to follow inflation


Strong investment case

David E. ConstableChief Executive Officer


Advancing key capital projects

Upcoming project milestones in the 2014 calendar year

• Progressing our world-scale ethane cracker and US GTL projects in Louisiana

• Project financing on track for Uzbekistan GTL project

• Commissioning activities underway at Escravos GTL in Nigeria

• C3 stabilisation project on target in Secunda

• Start up of first-of-a-kind tetramerisation project in Louisiana

• Completing our gas-fired power generation plant in Mozambique

Southern Africa upstream near-term opportunities

EGTL, Escravos, Nigeria Lake Charles, Louisiana


Compelling investment proposition

Creating sustainable value

• Excellent operational

performance

• Mining licences granted

to 2040

• Increased contribution

by chemicals business

to cash generated by

operations

• Continued research

and development in our

technologies

• Capitalising on gas

monetisation options

in Southern Africa and

North America

• US mega-projects

advancing

• Progress on other GTL

projects – Nigeria and

Uzbekistan

• Solid balance sheet

underpinning growth

• Progressive dividend

policy

• Long-term shareholder

value

Existing asset base Growth opportunities Value creation


Questions and answers


for the

six months ended

31 December 2013

Sasol Limited financial results

Documents

Sasol Limited financial results 1H14... · Sasol Limited financial results. ... and relate to analyses and other information which are based on forecasts of future ... regarding exchange