Sasol Limited · JSE:SOL
Sasol — FY2008 Earnings Presentation
41 slides from Sasol's earnings presentation, Sep 8, 2008
Slide 1: 2008 financial results
2008 financial results 2008 financial results positive energy building momentum positive energy building momentum 8 September 2008
Slide 2: Forward looking statements
forward looking statements We may in this document make statements that are not historical facts and relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable. These are forward-looking statements as defined in the U.S. Private Securi
Slide 3: Advancing our long-term strategy
advancing our long-term strategy strategic agenda grow CTL & grow CTL & grow GTL CTL earnings GTL of victory & GTL growth drivers grow growth drivers growth drivers growth drivers chemicals (based on our develop and growth deliver on nurture and definitions commercialise empower our return / technol
Slide 4: Highlights of 2008
highlights of 2008 operating profit up 32% to R34 billion headline earnings per share up 50% to R38,09 final dividend up 58% to R9,35 per share continued production volume growth operational efficiency improvements at existing businesses delivery on growth projects Oryx GTL production
Slide 5: The Sasol story for 2008
the Sasol story for 2008 foundation growth sustainability operational projects delivery landmark Sasol turnarounds pipeline of Inzalo share offer extension of retail projects commitment to footprint ideas skills stability plan for pre-feasibility development synfuels feasibility p
Slide 6: Outstanding performance from fuels business
outstanding performance from fuels business fuel retail sites solid year for synfuels and even more expected 391 406 376 341 specific plans in place to ensure Exel stable operation of gasifiers and 268 gas reformers equipment renewal and Sasol modifications emphasis on accelerated technical sk
Slide 7: Exciting project pipeline progressing well
exciting project pipeline progressing well Oryx Turbo Arya Sasol Octene 3 4% Secunda growth (gas) ramp up China CTL EGTL E&P – Moz implementation Mafutha Wax expansion 16% Secunda growth (2nd & feasibility numerous 3rd phases) (incl. India CTL, PNG, pre-feasibility Australia)
Slide 8: Sasol Inzalo R24bn transaction exceeds expectations
Sasol Inzalo R24bn transaction exceeds expectations cash invitation 13% oversubscribed funded invitation 3 times subscribed 95% of applications were for 200 shares or less about 300 000 applicants (47% women and women’s groups) “bottom up” approach to share allocation broad-based empower
Slide 9: Ongoing commitment to skills development
ongoing commitment to skills development global issue >R300 million invested in employee training in fy08 R48 million in bursaries granted to under- and post graduates R80 million support to universities, SETAs and schools focus on executive development and leadership programmes R116 mil
Slide 10: Positive safety trend continues
positive safety trend continues recordable case rate* 1,3 1,2 RCR reduced by 30% 1,0 0,9 0,7 0,5 results to 2005 exclude service 2006 2005 2007 2008 2004 2003 providers and occupational illnesses; thereafter results include them *recordable injuries and occupational illnesses per 200 000 hours work
Slide 11: On-going investment toward environmental sustainability
on-going investment toward environmental sustainability where we are? what’s new? what’s next? developed set up New investment in innovative Energy business new energy technologies for technologies energy security & established development energy efficiency implement and GHG targets energy
Slide 12: Financial review
financial review Christine Ramon – chief financial officer 8 September 2008
Slide 13: Favourable market conditions continue
favourable market conditions continue $/bbl $1=R 150 fuel pricing 8 currency R7,20 R7,30 120 $107,1 7 $89,5 90 BFP $80,9 $63,7 6 60 Brent FY07 FY08 FY07 FY08 30 5 $/ton 1800 chemical pricing + 20% 1450 + 12% polymers 1100 solvents FY08 750 8 September 2008
Slide 14: Earnings growth continues in 2008
earnings growth continues in 2008 % ∆ vs. 2007 turnover (R m) 129 943 + 32% operating profit (Rbn) gross profit (R m) 55 309 + 45% CAGR 2004-08: 36% 33,8 other expenditure (R m) (8 800) 26,6 17,2 operating profit (R m) 33 816 + 32% 14,4 9,2 earnings per share (R) 37,30 + 36% 2004 2005 2006 2007 2008
Slide 15: Strong prices contribute to solid profits
strong prices contribute to solid profits operating profit contributors Rand million 2 650 (3 105) 2 500 (1 838) 2 430 (4 367) 9 925 33 816 25 621 2007 product crude oil exchange gross margin inflation capital items other 2008 prices rates volumes 8 September 2008
Slide 16: Cash fixed costs increase lower than inflation
cash fixed costs increase lower than inflation cost increase before new business and capacity changes = 8,5% 257 (183) 24 491 531 701 642 1 171 21 372 Rand million 2007 inflation exchange rate new business study costs other shut downs 2008 8 September 2008
Slide 17: SA energy cluster is again the largest contributor to operating profit
SA energy cluster is again the largest contributor to operating profit operating profit Rand billion 33,8 SA energy chemicals 25,6 operating International energy margin % 2008 2007 other 17,2 83% SA energy 27% 28% 85% 14,4 109% 9,2 chemicals 9% 7% 81% 93% group 26% 26% 2004 2005 2007 2008 2006 8 Sep
Slide 18: Increased volumes and high prices benefit South African energy cluster
increased volumes and high prices benefit South African energy cluster operating %∆ high international oil and coal prices, Rm profit vs. 2007 a slightly weaker rand and increased mining 1 393 + 19% volumes contributed largely to gas 1 785 - 8% excellent results synfuels 19 416 + 19% high oil pr
Slide 19: International energy cluster's maiden contribution
international energy cluster’s maiden contribution operating %∆ sasol synfuels international (ssi) Rm profit vs. 2007 benefited from production ramp-up at ssi (621) - 19% Oryx spi 1 004 + 235% increased oil and gas sales volumes and higher prices boost sasol 383 petroleum international (spi) con
Slide 20: Chemical cluster driven by strong global demand and healthy margins
chemical cluster driven by strong global demand and healthy margins operating %∆ higher operating profit mainly due to Rm profit vs. 2007 improved margins, strong global polymers 1 511 + 39% demand and restructuring initiatives solvents 2 382 + 116% feedstock costs impacted by high oil olefins &
Slide 21: 2008 dividend increased by 44%
2008 dividend increased by 44% to 1 300 cents dividends per share CAGR 2004-08: 30% SA cents 1 300 900 2008 final dividend up 58% to 935 cents 935 final 710 590 540 dividend cover within preferred range 450 of 2,5 to 3,5 times interim including Inzalo effect = 2,8 times 365 310 excluding Inz
Slide 22: Strong cash flows funded capex and share repurchase programme
strong cash flows funded capex and share repurchase programme cash retained from operating free cash flow activities up 14% Rand billion cash generated by operating activities fy08 capex R11 bn (fy09 – fy11 investment income & tax paid investing activities capex of R70 bn expected) shares repurc
Slide 23: Robust growth forecast for 2009
robust growth forecast for 2009 Oryx GTL, Arya Sasol Polymers, 3rd octene train and Synfuels set to boost production in 2009 based on overall improved production volumes modest increase in average crude oil prices marginally weaker exchange rate softer refined product prices and chemical pri
Slide 24: Summary
summary Pat Davies 8 September 2008
Slide 25: Advancing our long-term strategy: setting priorities
advancing our long-term strategy setting priorities strategic agenda grow CTL & grow CTL & grow GTL CTL deliver on nurture and commercialise develop and earnings GTL of victory & GTL SA grow our technological empower our growth drivers transformation existing lead people grow agenda asset base to de
Slide 26: The Sasol story for 2008
the Sasol story for 2008 foundation growth sustainability operational good progress landmark Inzalo turnarounds with on-going share offer extension of retail projects commitment to footprint clear pipeline of skills recovery plan for new projects development synfuels positive safety
Slide 27: Supplementary slides
supplementary slides 8 September 2008
Slide 28: Mining benefits from higher coal prices
mining benefits from higher coal prices higher operating profit primarily due to increased selling prices, improved coal quality and stable operations lower export and Eskom sales partially offset by higher sales to Synfuels saleable production down 2% sales cost per ton up 19% contribution
Slide 29: Gas expands its customer base
gas expands its customer base operating profit 8% lower – ebit, before capital items, up 21% sales volumes increased by 8% to 122 M GJ (external markets 15% higher) construction of Komatipoort compressor station underway drilling for gas (offshore Mozambique) continues contribution to group
Slide 30: Synfuels delivers increased volumes at higher prices
synfuels delivers increased volumes at higher prices increased operating profit mainly due to impact of high product prices, net of hedge production output 1% higher – lower levels of plant stability experienced in 2nd half cash unit production costs up 13% 4% expansion plans on track contri
Slide 31: Oil delivers a strong operating performance
oil delivers a strong operating performance increased operating profit primarily due to improved margins and higher sales volumes Natref crude oil throughput up 12% total liquid fuel sales up 3% retail market share now 8.8% retail pursuing a single brand strategy contribution to Rm 2008 20
Slide 32: Sasol Synfuels International delivering production ramp up at Oryx
Sasol Synfuels International delivering production ramp up at Oryx operating losses decreased by 19% production ramp-up at Oryx is progressing – August 2008 average total production >24 000 b/d GTL diesel commanding premium prices EGTL interest reduced to 10% China focus on Ningxia 80 kb/d
Slide 33: Sasol Petroleum International delivering increased production
Sasol Petroleum International delivering increased production operating profit before exploration costs up 48% natural gas production in Mozambique up 9% oil sales from Gabon fields up 12% 30% interest in W. Australian natural gas exploration permit awaiting government approval 51% working
Slide 34: Polymers commissioning new capacity
polymers commissioning new capacity higher operating profit due to increased polymer margins, volumes and foreign exchange gains sales volumes up 1,5% new polymer plants (Turbo) operating in campaign mode ethane cracker (Arya Sasol) started up in November 2007 commissioning of two PE plant
Slide 35: Strong margins drive solvents performance
strong margins drive solvents performance higher operating profit mainly due to strong global demand negating increased feedstock costs daily production records achieved for various products 3rd octene plant (100 ktpa) successfully commissioned contribution to group ebit Rm 2008 2007 % change
Slide 36: Olefins & surfactants restructure drives results
olefins & surfactants restructure drives results higher operating profit due to improved margins, portfolio restructuring and cost reduction fixed cost reduction of 5% further restructuring in progress 50% alcohols JV commissioned in China contribution to group ebit Rm 2008 2007 % change ebi
Slide 37: Other chemical businesses delivers volume growth at improved margins
other chemical businesses delivers volume growth at improved margins improved contribution from nitro and wax due to higher sales volumes and increased margins capital items reduced operating profit by R229 million contribution to group ebit Rm 2008 2007 % change ebit 1 200 958 + 25% 4% earnings
Slide 38: GTL update
GTL update Oryx GTL average production for August 2008 of >24 000 b/d 3,8 mboe produced in fy08 F-T reactors successfully modified additional filtration equipment currently being installed Escravos GTL development continuing but costs of US$6 billion expected expected completion date now
Slide 39: Steady progress on overseas CTL ventures
steady progress on overseas CTL ventures China CTL Sasol’s first CTL feasibility study outside of South Africa feasibility studies expected to be completed in fy10 Shenhua jv based on Ningxia site India CTL MOU signed with Tata Sasol-Tata JV applied for long-term access to a number of coal
Slide 40: Polymers update
polymers update Arya Sasol ethane cracker (1 mtpa) producing on-spec product at reduced rates since November 2007 bulk of ethylene produced to date has been exported beneficial operation of both LDPE plant (300 ktpa) and HDPE plant (300 ktpa) expected 4QC08 Project Turbo selective catalytic
Slide 41: Positive energy building momentum
positive energy building momentum 8 September 2008