Sasol Ltd. (SSL)

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Sasol Limited (SSL)

F4Q 2011 Earnings Call

September 12, 2011 10:00 am ET

Executives

Giullean Johann Strauss – Senior Group Executive, New Business Development and Technology

David E. Constable – Chief Executive, Executive Director

Andre Marinus De Ruyter – Senior Group Executive

Kandimathie Christine Ramon – Chief Financial Officer, Executive Director

Analysts

Caroline Learmonth – Absa Capital

Nick Damon – KB Securities

Jarrett Geldenhuys – Deutsche Bank

Campbell Parry – Investec Securities

Alex Comer – JPMorgan

Presentation

Operator

Good afternoon, everybody, and welcome to Sasol’s Results Announcement for 2011. Just before we get started in the interest of safety, I'd like to point out the doors at the rear of the auditorium. In a case of emergency, we’d ask you to exit through those doors in orderly fashion. From where Sasol representatives will further assist you to evacuate the building.

Your presenters for today is Chief Executive Officer, David Constable; and our Chief Financial Officer, Ms. Christine Ramon. Also on the panel for Q&A later on, two familiar faces, our Senior Group Executive, Giullean Strauss and Andre De Ruyter.

Just before we get started, I would like to point your attention to our forward-looking statements. If you can just take a moment to familiarize yourself with that, it's also in your packs.

And with that, I’d like to hand over to David. Thank you.

David E. Constable

Thank you, Karris, appreciate it. Hello, everyone, welcome. Great to be here in Johannesburg, and here, at Sasol here with all of you today. As I said this morning, it was also good to see the Springboks conserving their energy yesterday. You don’t want to peak too early in such a big tournament, but that was a nerve-racking second half that I watched yesterday, but congratulations to the Boks on their win against Wales, and all the best to them as they drive to defend their World Cup Championship in New Zealand.

Also congratulations to the Orlando Pirates. They won the MTN8 soccer championship this weekend, and condolences to Kaizer Chiefs stands out there. Still trying to figure out which of those two teams I'll be cheering for, so, I'll take any advice on that.

And then finally, Sasol sponsored Women’s national soccer team, Banyana Banyana tied with Ethiopia yesterday, and they previously beat them 3-0, so they'll be going through to the Olympics, which is very good news for Sasol and for the team as well.

I've known Sasol since the early days of my career, and I've always had an extremely positive view in admiration of the Company. Now, seeing it from the inside, I can tell you, I’ve not been disappointed, the professionalism, the talented people, the technology leadership position we enjoy, and the strong can-do attitude of the team has made a great impression on me.

Sasol’s values also resonate with those I’ve lived by throughout my career, and so I’m very excited to be a part of the Sasol family.

Before getting started, I'd like to first acknowledge every single Sasol employee at each of our facilities and offices, all the management teams, the Group executives and my predecessor Pat Davies for the outstanding performance delivered this financial year. I’m honored to be communicating our results on their behalf.

Let me start with an overview of what you’re going to hear today. First off, Sasol performed strongly over the financial year, both operationally and financially, and equally important, we’re well positioned to pursue the abundant growth opportunities in front of us. We’re committed to responsible growth that ensures long-term sustainability, and finally the Company remains an extremely compelling investment proposition. So, these are the key messages you’ll be hearing throughout today’s presentation.

For the agenda, I’ll begin with some high level introductory remarks, followed by Christine Ramon, our Chief Financial Officer, who will be reviewing our financial and operational performance for 2011. I'll come back up to review our strategy going forward, and then open it up to the floor for any questions you would like to ask us.

Let’s start with the big picture by looking at GDP forecast, notwithstanding the recent weakening in the external environment over recent months, such as the ongoing and spreading sovereign debt crisis in Europe and the U.S. debt ceiling challenge. Most of the world’s growth is expected to come from emerging and developing economies over the next four years. With respect to energy consumption, as countries develop and populations expand, the demand for energy increases to power additional cars, transportation fleets, electricity generation, and of course, the manufacturing and construction industries.

It also results in demand for products such as plastics, cosmetics and household cleaning supplies, many of which require using Sasol’s chemicals as feedstocks. Sasol is well positioned to benefit from this demand in growth. We’re present in, and already serve many of the large growth markets in Africa, Asia and the Middle East. While we have good exposure to these high growth areas, we also have activity in the developed markets including Canada, the USA and Europe.

Now, our business is not just about international growth, South Africa is our home base and we remain firmly rooted in this country. We’re committed to investing in growth and in making a positive contribution into South Africa over the long-term. We’ve invested a significant amount of money in South Africa, ZAR42 billion over the last three years, and we plan to do much more, another ZAR40 billion committed over the next three to four years.

We’re one of the largest corporate taxpayers in South Africa, with more than ZAR25 billion, contributed annually in direct and in indirect taxes. In total, Sasol contributes about 5% to South Africa’s GDP. Over 82% of our staff complement it’s here at home. That’s around 28,000 jobs for the country, not to mention the thousands of indirect jobs that we create. Very pleased to report that we’ve made progress on transformation as well. Ixia Coal, our BEE partner in Sasol Mining now owns 20% of the mining business. Clearly, we’re committed and continue to make progress on the South African mining charter.

This year we became the very first Company in the country to have a BEE listing on the Johannesburg Stock Exchange. Our stated BEE objective was to achieve Level 4 status by 2012, and we’re pleased that we reached our target earlier than planned. Our focus now is to ensure this achievement is sustainable.

Read the rest of this transcript for free on seekingalpha.com