investor strategy presentation New York: 9 April 2013 Cape Town: 19 April 2013
introduction and safety Raj Naidu Executive: Investor Relations and Shareholder Value Management
setting the scene David E. Constable Chief Executive Officer
what we will cover today strategy execution and project prioritisation Topic Duration Presenter Introduction and safety 5 min Raj Naidu Setting the scene 15 min David Constable Portfolio management and finance 30 min Christine…
what we will cover today focus on North America Topic Duration Presenter Our North American priorities 10 min David Constable Our North American value proposition 20 min Lean Strauss Technology Feedstock Our North American…
the past 2 years key themes Goal-setting and consolidation Prioritisation and focus Delivery and growth Well-positioned and focused regional strategies - Nurture and grow in Southern Africa - Expand and deliver abroad Cost…
enhancing our long-term strategy evaluating the current strategy and our strategic path forward Embarked on a review of the group strategy for the period beyond 2020 Assessed our current strategic reality Developed scenarios to…
our strategic agenda will continue to guide our near- to medium-term strategy Foundation Sustainable growth grow shareholder value Operations Accelerate GTL growth Develop and empower sustainably Excellence high-performing,…
our investment considerations robust project economics remain cornerstone of our investment decisions Do we have access to adequate funding Financing while maintaining our targeted gearing and progressive dividend policy robust…
our investment considerations financing Do we have access to adequate funding Financing while maintaining our targeted gearing and progressive dividend policy robust project Do we have a technology, scale of plant or economics…
portfolio management and finance Christine Ramon Chief Financial Officer
solid strategic capital allocation process options that maximise long-term shareholder value prioritised Process Response Distinguish between: Mandatory sustenance and value-enhancing Growth / sustenance growth capex prioritised…
robust portfolio management process Portfolio analysis Selecting the optimal project and identify current gaps portfolio based on available to achieve strategy resources Sasol Strategy Portfolio strategy translation…
prioritising our strong project pipeline Project categories Prioritisation criteria Capital projects ranked with a focus on risk and returns Sustenance Mandatory Safety and compliance Statutory shutdowns Clean fuels specification…
targeted returns compensate for investment risks Targeted IRR for capital investments Mechanisms to mitigate (on an unlevered basis) investment risk Sustenance Mandatory n/a Discretionary hurdle rate Project financing Growth…
project execution delivered through rigorous capital governance processes BD&I model* Sasol business development and Idea generation New energy implementation model (BD&I Model) to govern Gate 1 capital investment decisions…
enabling robust investment decision-making Key project assumptions stress tested Capital excellence through Monte Carlo analysis definition of victory to enhance project (Illustrative sensitivity tornado diagram) returns through:…
prudent long term gas price view compares favourably to panel view Gas price long-term panel comparison 12 Henry Hub gas price (/MM) 10 8 6 4 2 0 FY11 FY13 FY15 FY17 FY19 FY21 FY23 FY25 FY27 FY29 better…
focused on managing long-term gearing within target Gearing within targeted range during capex peak 100% 40% Gearing Capex spend 80% 30% 60% 20% 40% 10% 20% 0% 0% -10% FY13 FY14 FY15 FY16 FY17 FY18 FY19…
maintaining flexibility to fund capital investments Options Considerations Phase capex spend to maintain flexibility Projects could be phased to reduce Internal options Reduce capex and enhance project NPV gearing Cost optimisation…
delivering leading dividend yield vs. peer indices Sasols dividend yield compares favorably on historic basis Historic dividend yield FY12 6% 5% 4% 3% 2% 1% 0% Sasol MSCI EM Energy MSCI World energy JSE Resi 10…
growing shareholder value sustainably Solid strategic Focused on managing capital allocation process long-term gearing growing shareholder value sustainably Strong track record Robust investment of delivering superior…
questions and answers
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our North American priorities David E. Constable Chief Executive Officer
the home of our US growth projects Lake Charles Lake Charles better together we deliver 30
top management line of sight Sasol Limited board CEO/GEC Mandating committee Project sponsor Steering Executive Technical contract committee committee approval committee US GTL LCCP project team project team…
priority areas to drive project progress in the near term guiding principles Appoint the best people for the job at hand Ensure robust Integrated Project Management Team with world-class project controls and management systems…
our investment considerations technology and feedstock Do we have access to adequate funding Financing while maintaining our targeted gearing and progressive dividend policy robust project Do we have a technology, scale of plant…
our investment considerations market and capability Do we have access to adequate funding Financing while maintaining our targeted gearing and progressive dividend policy robust project Do we have a technology, scale of plant or…
our North American value proposition technology and feedstock Lean Strauss Senior Group Executive: international energy, new business development and technology
technology
gas to liquids(GTL) in a nutshell Product work-up GTL products Diesel: 75% Naphtha: 20% Natural gas Reforming GTL synthesis LPG: 5% as feedstock 10 mcf 1 barrel of product 1 bcf/d 100 000 bbl/day 1 tcf reserve 100 million…
ORYX Qatar, Sasols GTL flagship A joint venture with Qatar Petroleum A total of 45+ million barrels produced to date 32 400 bbl/d nameplate capacity Some key performance indicators from 2012: Zero RCR Six months production in…
other GTL projects in the pipeline Escravos GTL, Nigeria OLTIN YOL GTL, Uzbekistan Joint venture with Chevron + NNPC Joint venture with Uzbekneftegaz + Petronas 32 400 bbl/d Oryx look alike 38 400 bbl/d enhanced Oryx Beneficial…
identified various levers to extract greater value Improving Driving capital technology productivity Improving improvement product value Across the fence utility Reactor intensification Chemicals supply Generation 3 FT…
scale up and intensification of GTL reactor Significant scale-up during successful commercialisation at ORYX GTL Subsequent focus on intensification to increase production in essentially the same shell Enabled by: Integrated…
feedstock
not only shale gas, but also shale ethane has changed North American energy and chemical markets estimates vary from 40-100 years of supply History 2009 Projections US dry gas (trillion cubic feet per year) 30 1% 25 Net…
the US GTL opportunity is advantaged by favourable oil/gas price ratios Crude oil (Brent) prices expressed as a multiple of natural gas prices (Henry Hub) 40 More than 400 tcf of gas in the US can be 30 commercially produced…
Montney shale gas a feedstock hedge for US GTL A 50:50 Joint venture with Talisman in British Columbia Drilling and completion costs coming down approaching investment assumptions 129 mcf/d average (gross) production for 2012 Montney…
integrated gas and GTL economics in North America Standalone Integrated Montney gas provides risk cover US GTL Montney US GTL in higher gas scenario economic value - NPV economic value - NPV integrated: US GTL +…
GTL a compelling value proposition in Lake Charles Phased approach after ethane cracker Value indicators 96 000 bbl/d Fuels Capacity (nameplate): +96 kbpd Gas requirement: 9 - 9,5 mmbtu Diesel 43% per barrel product Naphtha and…
in summary GTL value proposition Lake Charles Arbitraging gas and oil - shale World class infrastructure gas revolution Supportive government Technology enhancements - Access to multiple markets extending our lead Competitive…
our North American value proposition market and capability Andr de Ruyter Senior Group Executive: global chemicals and North American operations
market
ethane associated with gas leads to global leadership position for US crackers Source: CMAI Position in bottom 30% on a cash cost basis better together we deliver 51
low market risk Lake Charles Chemical Project gives backward-integrated growth for Sasol into a well-established and uniquely diversified market Oxygen MEG Ethylene To existing ETO Oxide/MEG* External Alcohol Ethoxylates ETO…
GTL sells diesel, not crude oil Average oil prices in 2012: Brent: 111,6/bbl WTI: 94,2/bbl 129,8 130,2 Source: Platts 128,7 126,2 129,2 132,6 Diesel prices in the US are linked to international prices better…
US GTL product marketing a Sasol wholly-owned facility with a nameplate capacity of +96 000 bbl/d wax products debottleneck in reactor wax wax Hamburg, LPG Germany oxygen phase 1 extraction fuels natural gas syngas sasol…
our key markets and products improving the competitiveness of Sasols current global business Current Future Technology/ Technology/ production production Value chain Feedstock platform Market Feedstock platform Market C…
capability
proactive actions to address execution challenges Mitigation Integrated project management team Utilization of Recent mega-project standard Sasol and expert contractor members experience in the Gulf designs where Leverage local…
actions to mitigate similar risks and apply best practices mega-project experience In process to contract with A global construction company, with relevant US Gulf Coast experience A global engineering and construction management…
addressing execution risks building on prior experience Construction will not commence until well-defined design targets have been achieved Access to partners systems to enable tracking of costs and schedule independent of…
extending the GTL schedule will reduce risk project definition drives estimate accuracy Delay engagement of EC and give Advancing project definition past typical end of FEED better definition for FEED kickoff of: (30%) to between…
modularization mitigates shortage of skills LCCP modularization study (feasibility) Module Yard Craft Peak Site Personnel (with modularization) Site Personnel (without modularization) better together we deliver 62
favourable location enables modularization Potential MATERIALS Module LABOR Laydown HEAVY HAUL EVERGREEN RD Area RAILROAD MATERIAL OFF-LOADING FACILITY SULPHUR ROAD I-10 better together we deliver 63
in summary Market Capability Good positioning of products Experienced, well-resourced integrated owner team Well-established and uniquely diversified market Participation of independent reputable industry partners Balanced…
closing remarks David E. Constable Chief Executive Officer
LCCP business drivers to create meaningful and profitable growth by capitalising on abundant and low-cost US ethane supplies Establish an ethylene-based chemicals facility with a balanced product portfolio Unique products and…
US GTL business drivers the US holds significant fuels and chemical growth opportunities for Sasol and supports our strategic objectives Favourable US natural gas market dynamics Security of feedstock supply Sasols GTL and…
revisiting our investment considerations robust project economics remain cornerstone of our investment decisions Prioritised portfolio Financing Managing balance sheet within gearing target Good market appetite for Sasol debt…
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