Sasol Limited

Good morning, and welcome to SASL's annual results presentation for financial year 25. My name is Tiffany Sider from Investor Relations, and on behalf of the SASL executive management team, we are pleased that you could join us today both in person and online. With me is Simon Beloy, our CEO and president, and Walt Bruntz, the chief financial officer. The group executive is also seated in the front row and joins us today. Before we begin the presentation, I'd like to point out a few safety and housekeeping items. The emergency exits are located at the back of the room where you entered. In the event of an emergency, please exit the room and enter the reception area where a safety marshal will give you further instructions. The restrooms are also located at the same door to your immediate right. Please ensure that your cell phone is on silent for the duration of this presentation. And lastly, all the materials have been uploaded onto our website and are available for your perusal. The agenda today, Simon will begin the presentation with our business overview, followed by Walt, who will give an overview of the financial performance for this year. Simon will then conclude with a strategic update at the end. Online participants are then welcome to join our Q&A session, which will start immediately after the session. And you are able to then type in your question online or ask it in person for our in-room participants. Thank you. I will now hand over to Simon.

Thank you, Tiffany. Good day, everyone. Thank you for joining us today, both in person and online. We value your time. At our Capital Marketers Day a few months ago, I told you that we have a business with real potential to deliver significant shareholder value. However, we need to navigate a number of challenges to deliver that potential. we outlined focused initiatives that are underway to turn strategic ambition into actionable plans. Three months on, we fully remain committed to those plans. Today, it's all about the financial aid 25 results. Furthermore, this is an opportunity to talk about how we are tracking against our CMD plans. To summarize the key themes that we'll cover today, let me begin with safety. Nothing matters more than making sure that every employee and every service provider goes home safely to their loved ones. Since mid-August 2024, I'm deeply grateful that we have not lost any team members. We know that when we put safety first, strong operations naturally follow. Our strategy is clear, strengthen the foundation, grow and transform the business. In Southern Africa, we are focused on restoring the value chain and we are resetting international chemicals. I will share more detail on the progress of our plans for financial year 26. We have achieved good momentum that we aim to build on in the next 12 months. Despite the challenging operating and microenvironment, we focused on the controllables. As a result, we met most of our financial targets provided in February for the group. We also saw clear cash improvement performance helping to deliver the balance sheet. What will unpack our financial performance in more detail later. Concluding today's session, I will return to discuss how we are progressing against our broader strategic priorities to grow and transform our business, with a focus on the implementation of the Emission Reduction Roadmap, or ERR in short, and in particular, renewable energy. Overall, we remain confident in our plans, and now it is all about execution. We shared specific targets with you in Capital Markets Day in May 2025 and are committed to giving you regular feedback. We have started to implement our action plans and I can report the following progress. Construction of the distilling plant is completed and we are busy with start-up activities. We are on track to meet our commitment. The core quality and gasify availability challenges continue to impact southern Africa value chain. Although we saw improved gasify performance in quarter four, the secunda volumes ended marginally below target. Despite these lower volumes, the South African value chain breakeven price ended at $59 a barrel due to disciplined cost and capital management supported by the receipt of the Transnet legal settlement. This is in line with our previous target of below $60 a barrel. In our international chemicals, adjusted EBITDA increased by more than $120 million, despite the prolonged downturn in the chemical market. This is also in line with the targets communicated at half-year end. On the balance sheet, we made progress on our key objective to deleverage and reduce risk. We closed the year with a net debt of $3.7 billion, excluding leases, achieving our target of staying under $4 billion. On the grow and transform front, our optimized ERR implementation, including our target of 2 gigawatts of renewable energy by 2030, is on track. We have secured more than 900 megawatts from power purchase agreements in South Africa, setting the stage for long-term decarbonization and energy resilience. I'll now highlight more specific detail around our performance for financial year 2025. Starting with safety, in financial year 25, we had a tragic fatality and one of our colleagues did not go back home. However, we did see some progress in our safety efforts. Financial year 25 marks the first fatality-free financial year for social mining, a milestone never achieved before. We experienced no major process safety incidents during the year. Notwithstanding the higher hospitalization rate, the injury severity rate has decreased, resulting in our employees returning to work sooner. That said, we acknowledge that there is still work to do in meeting our commitment to send everyone home safely. This is aligned with our commitment to drive rigorous safety measures to prevent harm to our people, to our communities, environment and asset. In the last year, we have reinforced personal and leadership accountability and we've also deepened collaboration with service providers. Looking ahead, we are focused on strengthening risk management and further embedding a safety culture centered on continuous improvement. Our goal remains clear to ensure safety is prioritized, safety is integrated into everyday practices, and safety is at the forefront of everything we do. I will now touch on a few highlights of our financial performance. Notwithstanding our lower production volumes and operational setbacks, which we successfully resolved, we continued to navigate the challenging macroeconomic environment. In this context, adjusted EBITDA for the period was down 14% to R52 billion. Team Sasol delivered good results in areas within our control, particularly margin realisation, managing the fish cash cost below inflation, and optimising capital spend whilst protecting integrity and reliability. This, together with our continued focus on value over volume, supported an improved fish cash flow generation of more than 70% compared to prior. Restoring the performance of our South African value chain remains a key priority. In Financial Year 2025, we strongly focus on feedstock quality and availability. This includes a stable gas supply from Mozambique and improving the quality of coal supplied to secondary operations. We took a final investment decision on the distilling plant and as mentioned earlier, construction is complete and we are busy with start-up activities. We are on track to reach beneficial operation in the first half of FY26. The discerning plant construction did impact coal blending and thus overall coal quality. We had to increase coal purchases to reduce the impact on the gasifiers. As a result, we saw improved gasifier performance in quarter four of financial year 25. We also made progress towards enabling NatRef to be Clean Flues 2 compliant through the installation of low-carbon boilers. I can report that we successfully commissioned the first low-carbon boiler, the second one will be commissioned by the end of this month, and the last boiler before the end of the calendar year. Our marketing and sales teams focus on higher price realisation through enhancing the channel mix. Looking ahead to FY26, as said previously, our focus is on ramping up the distilling plant. This is expected to reduce the coal sinks to below 14% for the year and improve gasifier availability. Together with improved focus on operations reliability and the absence of a phase shutdown, we expect Secunda to achieve a production target of between 7 to 7.2 million tonnes. We will continue to optimise our channel mix and manage global market shifts, including the potential impacts of US tariffs. Delivering across all these areas will be critical in making sure that we achieve our financial year 2016 break-even target of $60 to $55 per barrel. We have announced changes in the executive leadership team recently. The upcoming retirement of Herman Venos and Charlotte Mokoena marks the conclusion of long and highly valued tenors on the executive team. And for Herman, the end of an illustrious 40 years with SASO. We are grateful for the significant contribution to SASO's journey. Going forward, Sandile Siaya, who is with us here in the room, is the current Senior Vice President Mining, will assume the role of Executive Vice President Mining from the 1st of September 2025. Sandile has 18 years of social experience and a deep-rooted understanding of our mining activities, combined with the required strategic acumen and leadership skill. He is well-placed to address both our short- and long-term goals for mining. Kabila Makala will join SASOL as an Executive Vice President, People, She, Risk and Corporate Affairs from the 1st of October 2025. Her strategic expertise and executive leadership skills, combined with more than 20 years of global experience, will stand in good stead in her new role at SASOL. In international chemicals, we are starting to see the results of the research phase of our strategy. This is centered on improving profitability through three core strategic initiatives, market focus, asset optimization, and cost efficiency. We have made good progress to date with an adjusted EBITDA of $411 million, an improvement in adjusted EBITDA margin from 6% to 9%. On our market forecast initiatives, we continue to drive our value over volume approach, refining our commercial strategy to better align with the customer needs and improve margins. We will continue rolling out commercial excellence programs and embed a tailored market model to sharpen customer focus and drive improved margins. On asset optimization, we progress the previously communicated mothballing and closure of underperforming assets. Asset reviews will remain part of ongoing portfolio management, while we aim to unlock growth by improving utilization of installed capacities. In April 2025, we reached a major milestone with the go-live of the Modern Enterprise Resource Planning, or ERP, program in Italy. We will extend our ERP system across more sites, driving standardization, transparency, and greater cost efficiency. These continued efforts are expected to deliver further improvements in profitability. Adjusted EBITDA for FY26 is expected to be between $450 to $550 million, with an adjusted EBITDA margin between 10% and 13%, moving us closer to our peers. Twelve months ago, I shared our vision of building a profitable and sustainable business that safely delivers value to our shareholders, value to our customers, and value to our communities through inspired people. I now want to reflect on the social value we have created for our people and our communities in the financial year 25. We have invested 600 million rands in social programs across the globe. We supported more than 250 students with bursaries through the Social Foundation, helping to grow and develop future leaders. Included in this amount is 150 million rands invested in community infrastructure projects globally. These comprises of building health facilities and community centers, upgrading roads, water and sanitation services. All of this is geared towards improving the daily living condition of our communities and supporting local economic development. Our economic contribution has been equally impactful. Globally, we contributed about 44 billion rands in direct and indirect taxes. We also invested more than 100 million rands enabling 3,000 jobs and supporting small business growth. These achievements go beyond numbers. They represent life's change, opportunities created, and communities strengthened. They reflect our unwavering commitment to making a positive difference and being a true force for good. Looking forward to FY26, our priorities are clear. Safety first. We remain committed to ensuring that everyone goes home safely. In support of this commitment, we will also focus on building an empowering culture where safety performance goes hand in hand. Our customers are central to our success, and we will focus on delivering innovative value-adding solutions benefiting both customers and SASOL. Strengthening our foundation businesses through researching international chemicals and restoring South African value chain will continue. We are focused on delivering on the financial year 26 commitments, especially improving cash generation to accelerate delivery regime. We will also advance our grow and transform agenda while continuing to cultivate strong relationship for shared value creation. With that, I will now hand over to Walt, who will unpack our financial performance.

Thank you, Simon. Good morning, ladies and gentlemen, and thank you for joining us today. A few months ago at Capital Markets Day, I set out four priorities to deliver a robust financial framework for SASL. These priorities included improved sustainable free cash flow, two, deleverage the balance sheet, three, reinstate dividends when appropriate, and four, disciplined capital allocation. These priorities were underpinned by proactive risk management to ensure that we respond quickly to changes in our operating and macro environment to mitigate risks and accelerate opportunities. Today, I'll take you through our financial performance for FY25, reflect on the first progress made against these priorities and previous targets communicated. I will also detail our targets for FY26 with the aim to build continued credibility in our FY28 plans that we communicated at Capital Markets Day. Turning to an overview of our FY25 financial performance, we achieved the majority of our key financial targets previously communicated, despite lower turnover and adjusted EBITDA as a result of a challenging macro and operating environment. This delivery was achieved with focus in our planning and discipline in our execution. Key highlights include containing cash fixed cost increases to just 1% below the inflation rate of 3%, achieving capital expenditure of $25 billion, 13% lower than our target of $28 to $29 billion, reducing our net debt to $3.7 billion U.S., the lowest levels since 2016, and 8% lower than our target of $4 billion. Lastly, we successfully completed our FY26 hedge program ahead of schedule. Only our net working capital as a percentage of turnover on a 12-month rolling basis was slightly above our target of 15.5% to 16.5% and equal to 16.8%. This was mainly due to lower rolling turnover and an increase in inventory to manage supply variability during the year. Net working capital percentage as of 30 June 2025 was however 15.4% and slightly below target. This delivery is the first step in translating the plans communicated at half year end and capital markets day into tangible proof points that build credibility with you, our stakeholders. The macroeconomic environment in which we operated in 2025 was highly volatile, influenced by uncertainty around global tariffs and heightened geopolitical tensions. These dynamics have had varied impacts across our business segments. In our fuels business, a 15% lower rand oil price and 68% lower refining margins had a significant negative impact on its results. Meanwhile, our chemical segments benefited from stronger US ethylene margins and a 5% uplift in the overall chemicals basket price. Our response to navigate this volatility has been to focus on things within our control, including strict cost and capital discipline, maintaining robust liquidity, proactive hedging, and continually optimizing where and how we place our products. This helped us in FY25 and will continue to help us in FY26, where we anticipate continued volatility as global market sentiment remains sensitive to changes in tariffs, interest rates and geopolitical risks. Looking at more details in the group financial results, the most important metric is free cash flow, which increased to almost 12.6 billion rand. a 75% improvement to the prior year and despite lower adjusted EBITDA. The increase was driven by disciplined capital spend, lower tax payments and the receipt of the Transnet Legal Settlement. Even after normalising for the Transnet Legal Settlement, free cash flow increased by more than 30%, a solid performance considering the headwinds in the macroeconomic environment. Gross margin declined by 12% mainly due to a 9% reduction in turnover as a result of the aforementioned lower rand oil price and a 3% decrease in sales volumes associated with lower production and weaker market demand. Cash fixed cost performance reflects the impact of our cost saving initiatives driven by reduced headcount from operating model changes and a vacancy freeze, better contracting, tighter scope control and other optimisation initiatives that are considered sustainable going forward. Total impairments were R20.7 billion, 73% lower than the R74.9 billion in the prior year and contributing significantly to the more than 100% increase in earnings. The largest impairments were $13 billion related to Secunda and Sasselberg liquid fuel refinery cash generating units, or CGU's, which remain fully impaired. The recoverable amount of these CGU's improved through management actions, but was negatively impacted by lower forecast macroeconomic price assumptions. Additional management initiatives need to be further progressed before their benefits can be incorporated into the impairment calculations. As a reminder, the Secunda Complex, including the Secunda Chemicals CGU's, continues to have significant headroom when comparing the total recoverable amount to the net book value. In addition, impairments were recorded on Mozambique and Italy Care Chemicals CGU's, offset by the reversal of impairments for the China Care Chemicals CGU. Capital spend of $25 billion was 16% lower than the prior year due to a combination of lower feedstock replacement, compliance spend, and discretionary sustenance spend, including focused cost-saving initiatives without compromising on safety or asset integrity. Net debts excluding leases ended the year at $3.7 billion, above our dividend trigger of sustainably below $3 billion U.S., which we continue to target for between FY27 and FY28 in line with our CMD guidance. Shifting our focus to the adjusted EBITDA performance by segment, our South African business continues to be the primary contributor to group adjusted EBITDA at around 85%, with each segment in the value chain playing an important role. Mining EBITDA increased by 15%, while gas increased by 35%, driven by a combination of higher gas prices and sales volumes. Fuels declined by 38% on the back of the weaker RAND oil price, lower NARTREF refining margins, reduced production volumes, and higher feedstock costs. On the positive side, sales volumes in the higher margin mobility channel increased by 5%, despite a broader market decline. In chemicals Africa, EBITDA declined by 32%, impacted by lower production volumes, a stronger RAND dollar exchange rate, and higher feedstock costs. This was partially offset by a higher average basket sales price, despite continued weak market conditions. International chemicals increased its share of group-adjusted EBITDA from 9% to 15%, with an improvement across both regional segments driven by a combination of improved U.S. ethylene margins, stronger palm kernel oil pricing, and further progress on our strategic reset initiatives. In summary, our diversified portfolio supported by targeted initiatives is helping to balance earnings across geographies and further improve our resilience in an ever-changing global landscape. We continue to follow the capital allocation framework as outlined at our Capital Markets Day. As a reminder, first order maintain capital is primarily directed towards maintaining safe, reliable and compliant operations, with selective growth and transformed capital focused on smaller, higher return projects aligned to our strategy. While the framework is important, it means little without disciplined application. In FY25, we made meaningful progress on our deleveraging, which is ahead of the plan communicated at CMD. Net debt reduced by 11% to $3.7 billion. In addition, gross debt was reduced by 10% as excess cash was deposited into the revolving credit facility to reduce financing costs. We aim to build on this momentum in FY26, targeting further reduction in the net debt as we work towards our net debt target of $3 billion between FY27 and FY28. Achieving this target is pivotal. It improves our resilience and in so doing lifts our enterprise value and the associated equity share. It also enables dividend reinstatement with a commitment to return 30% of free cash flow to shareholders once net debt is sustainably below the target. The remaining 70% of free cash will be allocated with discipline to our second-order capital in line with our framework. We remain well positioned to navigate ongoing macro volatility, supported by strong liquidity position, a robust hedging program, and continued focus on cost and capital discipline. At the end of June 2025, we have more than US$4 billion in available liquidity, which includes strong cash reserves, unutilized committed facilities, and no immediate debt maturities. In July 2025, we also successfully issued a 5.3 billion rand bond and received 300 million US dollars in exchange, supporting our efforts to diversify the funding base, reduce US dollar debt exposure and financing costs. This issuance together with our June 2025 liquidity provides the flexibility to address upcoming bond maturities using available liquidity if required. From a risk management perspective, and as I have mentioned, we have completed our hedging program for FY26. For oil, we achieved a 60% effective hedge cover ratio with an average floor price of $60 per barrel. For the exchange rate, we achieved a 30% hedge cover ratio with a range of R17.60 to R21.10 using zero-cost collars. We will continue to manage these exposures while preserving optionality to respond to a dynamic external environment. As we look ahead to FY26, this slide outlines our key financial metrics that we are guiding on. Our first priority is to deliver on our volume targets that Simon shared, supported by focused interventions and execution across our business. Secondly, we will maintain our cost and capital discipline by keeping cash fixed cost increases below inflation, maintaining first order capital expenditure between 24 and 26 billion rand, and net working capital percentage between 15.5 to 16.5 as guided at CMD. Thirdly, our aim is to continue to reduce net debt ahead of the CMD base plan, supported by continued free cash flow generation despite the uncertainties in the macroeconomic environment. Lastly, we will continue to manage risks proactively, including the completion of our FY27 hedging program. In summary, FY26 is grounded in delivery. Our plan is clear, and we're focused on the fundamentals to unlock value where it matters most. We are encouraged by our financial performance in FY25, but remain humble and determined to build credibility through performance. With that, I will now hand over to Simon for his closing remarks and look forward to engaging with you in the Q&A session later.