Sasol Integrated Report 2022 - Book - Page 20
INTRODUCTION | ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
DELIVERING
GOVERNANCE AND REWARDS
ADMINISTRATION
CHIEF FINANCIAL OFFICER’S STATEMENT (CONTINUED)
Embedding the early success of Sasol 2.0
Sasol’s transformation programme, Sasol 2.0, commenced in 2021. Significant progress has now been made
towards more competitive cost structures, improved cash generation, an optimised operating model and a
balance sheet that is better able to navigate a volatile environment.
During FY22 we significantly surpassed both the committed cash fixed cost (up to R3 billion) and gross margin
(R1,5 billion) targets. The focus for FY23 is on embedding these gains and continuing to develop the remaining
initiatives to meet our FY25 targets.
Delivering with Purpose
FUTURE SASOL
Initiatives delivering value
The implementation of the new operating model is establishing a leaner organisational
structure, which is expected to deliver sustainable savings of ~R2,5 billion per annum from
FY25 onwards, relative to the FY20 baseline.
A number of initiatives are being implemented to reduce the cash fixed costs including the
optimisation of our real estate portfolio. A reduction in professional fees is visible from the
FY20 base but requires monitoring to ensure sustainability. Chemicals Europe embarked on
a maintenance improvement process that will lead to improved plant reliability and will help
keep the maintenance cost at a moderate increase. New business models are explored to
manage demand for services and materials in order to optimise spend.
Margin improvements in the Chemicals and Energy business are being delivered through
external spend optimisation, plant efficiency improvements related to feedstock
optimisation, debottlenecking and reduction of processing losses and market driven
strategies to maximise value.
In support of Sasol 2.0, we are focusing on creating
a smart and connected value chain for speedy data
driven decision-making, enabling digital initiatives,
safeguarding systems to minimise disruptions and
establish capabilities to link into suppliers and
customers environments.
Dividends restored
We remain committed to delivering sustainable
shareholder returns and are pleased to declare a
final dividend of R14,70 per ordinary share for the
year ended 30 June 2022, the first dividend since
the final dividend declared for FY18. This is supported
by the achievement of our dividend trigger targets,
namely net debt to EBITDA ratio of 1,5 times and
a net debt level of sustainably below US$5 billion.
A step-up to 2,5 times cover or 40% of Core HEPS
will follow when absolute net debt levels reduce
sustainably to below US$4 billion.
We remain on track to keep our capital spending
to maintain and transform the business within a
R20 to R25 billion annual range in real terms. At these
levels we continue to safeguard capital investment to
ensure safe and reliable operations and meet our
self-funded 2030 GHG reduction targets.
The aggregate capital for our 30% GHG emission
reduction is estimated at between R15 to R25 billion
of cumulative spend up to FY30 and is included in
the R20 to R25 billion per annum annual capital cash
flow. The 2022 capital in this category was limited
to study cost. R0,5 billion transform capital spend
is planned for FY23, with peak transform capital
spending forecast for FY25 to FY27. Discretionary
cash flow generation will start to build steadily
over the next few years as we further delever the
balance sheet and realise the incremental benefits
of Sasol 2.0.
In conclusion
Good demand recovery, stronger pricing and
improved operating performance in the second half
We communicated an updated capital allocation
framework and governance structure at the Capital
Markets Day in 2021 in order to give clarity on our
approach to optimising risk-weighted returns for
the long term. In order to achieve this, we must
continue to stick to our priorities:
Maintaining a robust balance sheet with
strong liquidity;
Safeguarding the integrity and reliability
of our existing assets;
Meeting our climate change targets;
Ensuring shareholders participate directly
in our increasing profitability; and
Making disciplined investments in value accretive
growth opportunities where we are confident
that on a risk-weighted basis this represents
the best outcome for shareholder value.
Moving forward, our short-term focus will continue
to be on improving our balance sheet by hitting
our operating targets and embedding our Sasol 2.0
gains, whilst also making progress on our plans to
achieve our sustainability goals.
I thank the Board and GEC for their support and
the Finance team for their resilience and dedication.
I look forward to my journey ahead with Sasol and
I want to reiterate that we remain committed to
operating and capital allocation discipline and so
delivering a brighter future for all our stakeholders.
Hanré Rossouw
Chief Financial Officer
26 August 2022
OUTLOOK FOR FINANCIAL YEAR 2023
SASOL CHEMICALS
SASOL ENERGY
Chemicals Africa sales
Mining productivity
Improved operational performance
Improvement through Fulco ramp-up
6 – 12% higher
Disciplined capital allocation
of FY22, contributed to a strong financial
performance. This also resulted in a robust liquidity
position and reduced leverage by year end. I am
delighted that this has meant that we were in a
position to resume dividend payments.
1 000 – 1 100 t/cm/s
Mozambique gas production
Chemicals America sales
5 – 10% higher
Continued LCCP ramp-up
109 – 112 bscf
Drilling campaign on track
Liquid fuels sales
53 – 56 mm bbl
Improved fuels demand
Chemicals Eurasia sales
0 – 5% higher
Improved demand
Geopolitical risk remains
SASOL INTEGRATED REPORT 2022
SO production
7,0 – 7,2 mt
Improved plant utilisation
Coal stockpile stability
ORYX GTL utilisation
83% – 88%
Unplanned shutdown in Q1
19
