Sasol Ltd. (SSL)

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Sasol Limited (SSL)

F4Q12 (Year-End) Earnings Call

September 10, 2012 9:00 AM ET

Executives

Raj Naidu – IR

David Constable – CEO

Kandimathie Ramon – CFO

Leon Reddy – Group Executive

Andre de Ruyter – Senior Group Executive, Operations

Bernard Klingenberg – Group Executive, South African Energy Businesses, Excluding Sasol Mining

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

Analysts

Alex Comer

Jacob Shulman

Gerhard Engelbrecht – Renaissance Capital

Nishal Ramloutan – UBS

Caroline Learmonth – Absa Capital

Campbell Perry – Investec Securities

Presentation

Operator

Good morning, good afternoon, ladies and gentlemen, and welcome to the Sasol Year-End Financial Results Conference Call. Today’s call will be hosted by David Constable, Chief Executive Officer and Christine Ramon, Chief Financial Officer.

I would like to remind participants that we will be connecting to a live meeting in Johannesburg. Following the formal presentation by Sasol management, an interactive Q&A session will be available. A copy of today’s slide presentation is available on www.sasol.com.

(Operator Instructions)

Raj Naidu

Okay. Good afternoon, everyone, and welcome to Sasol Ltd.’s Results Presentation. I’m Raj Naidu, Executive, Investor Relations. Today, David Constable, Chief Executive Officer; and Christine Ramon, Chief Financial Officer will present our results for the financial year ended 30th June, 2012. They’re also joined by Nolitha Fakude, Johann Strauss, Andre de Ruyter and Bernard Klingenberg as well as other members of our Group Executive Committee as well as some managing directors and functional leaders.

Before we proceed, in the case of an emergency, please exit by the main auditorium doors and follow the exit signs, the emergency exit back to the left and right of the auditorium, and there will be safety marshals to also guide you around the process.

Before David takes the podium, we want to showcase some of our recent projects in a short video.

(Video Presentation)

David Constable

Well good afternoon everyone. Thank you for joining us to discuss our Year-end Results Presentation today. As you’ve seen in the videos, Sasol is a great organization and it is delivering results not only here in South Africa but also as we expand globally.

As a company, we are committed to exercise excellence in all we do and we now that in working in partnership with others, we are better able to deliver exceptional results on on-going basis. I’ve been with Sasol just over a year now and it is certainly, have been both an eventful and exhilarating first year.

Today, we will be announcing record full year earnings as you know and before I begin, I would like to recognize and congratulate and thank all staff of people throughout the world for their dedication, hard work and perseverance in the past financial year. We’ve been through a lot together – from strikes, to plant instabilities, from a continuing global economic crisis, to factions and from volatile commodity prices to softening product demand, especially in our chemicals businesses.

Notwithstanding a year of ups and downs, as an organization we ended our 2012 financial year in solid platform. Let me start with an overview of what you’re going to hear today. First of all, our record full year earnings are due to the fact that notwithstanding the challenges we faced, particularly in the first half of the financial year, we delivered on several key milestones both in South Africa and abroad and significantly, improved our operational performance in the second half. We’ll expand on both of these areas later in the presentation.

Next, we’ll highlight our strategic agendas better aligning the organization, how we intend to execute on our agenda through our FY 2013 priorities. We’ll wrap up this afternoon’s session by summarizing why Sasol remains an extremely compelling investment proposition.

To frame our key messages today, I’ll begin by providing with a high level overview of what we delivered in FY 2012. Christine Ramon, our CFO will go into more detail on the financial and operational performance of our businesses. I’ll then come back up to talk you through Sasol’s strategies and initiatives in the near to medium term. In particular, I will highlight why we see North America is our next frontier. We’ll then open it up for any questions you’d like to ask us.

Looking now at the graph on the screen, you’ will note that in the past 20 years, we’ve seen strong growth in emerging countries which in turn has fueled demand for many resources including oil. As a result and unsurprisingly since 1990, oil consumption has grown rapidly in India and China and in other emerging countries. And these countries development, their populations expand, their demand for energy will continue to increase.

However, we should not lose sight of the fact that the current per capita consumption in these countries remains a fraction of OECD levels which will also continue to grow. Furthermore, as global income levels increase, so too will the demand for oil. If these trends are to persist, by 2030, India and China’s oil consumption will increase to about 11 million barrels per day which is equivalent to Saudi Arabia’s current oil production.

Clearly, the anticipated supply gap, the situation created must be bridged. Globally, there are abundant supplies of natural gas which can be developed at relatively low-cost given our current reality, gas development is the path to take.

So this mix of forces, we had the delinking of the oil gas price ratio and the abundance of gas at relatively low prices in North America. With natural gas front the center of the energy, future looks bright, and Sasol is well-positioned to capitalize on this growth in demand.

Turning to contributions we made globally as an international integrated energy and chemicals company, we leveraged the talent and expertise of more than 34,000 people working in 38 countries. We developed and commercialized technologies and build and operate world-scale facilities to produce the range of high-value product streams including liquid fuels chemicals and lower-carbon electricity.

Sasol’s operations has become a catalyst for socioeconomic development far beyond the employment we provide. We have strong relationships with the business communities and the government of the countries in which our people live and work. Working together, we deliver, first of all, energy supply and socioeconomic development, secondly, a viable alternative to ensure cost-effective energy security, and downstream manufacturing growth, and third, in-country investments and use of resources. These in turn lead to significant skills transfer to the local workforce while delivering world-class products.

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