Sasol Limited

Good morning and welcome to SASL's annual results presentation for financial year 26. My name is Tiffany Sydow from Investor Relations and on behalf of the SASL executive management team, we are pleased that you could join us today. With me is Simon Baloy, our president and CEO of SASL, and Walt Bruns, the chief financial officer. The group executive team is present today as well and will join for the market call which follows directly after the presentations. As a reminder, the presentation and all supporting materials are available on our website since this morning. As a reminder, our strategy follows a two-pillar approach. Firstly, to strengthen our foundation business, where Simon will begin today's presentation with a business overview, which is then followed by Walt, who will take us through the financial performance for the full year. The second pillar addresses our pathway to grow and transform the business in the long term where Simon will conclude and provide an update on our progress in this area. A market call will follow immediately after the presentation where you can submit your questions via the webcast or join the teleconference facilities. As a reminder, the presentation contains some forward-looking information and more detail is shared on the slide in front of you. I would now like to hand over to Simon to commence his presentation. Thank you.

Good day everyone, and thank you for joining us today. We appreciate your time. The past year has been about turning commitments into delivery. At Capital Markets Day, we set out a clear roadmap. Today, we can demonstrate meaningful progress in strengthening the foundation business. In the past year, we have done the following. Improved reliability across the value chain. strengthened the balance sheet, advanced the reset in international chemicals, and continue to progress our grow and transform agenda. However, today's results reflect more than improved market conditions. They are evidence of a business that is becoming stronger, more resilient, and more competitive. I wish to thank every member of Team Sasol who has contributed to this excellent set of results. While there is still work ahead, Financial Year 26 gives us greater confidence that the foundation we are building is becoming stronger and that we are moving in the right direction. Before getting into the detail, let me highlight the five key messages I would like our stakeholders to take away today. Firstly, safety remains our foremost value. While we are deeply disappointed by the loss of two colleagues, they are encouraging signs that the interventions we have implemented are strengthening our safety culture. Secondly, we are restoring stability across the Southern African value chain. Improvements in cold quality, reliability, operational performance are translated into better outcomes. Thirdly, international chemical research is delivering measurable progress and improving competitiveness. Fourthly, improved execution is translating into a stronger balance sheet and increased financial resilience. And finally, we continue to advance our grow and transform strategy in a pragmatic and value-accretive manner. Taken together, these outcomes show that we are not only delivering today, we are positioning Sasol for tomorrow. At Capital Markets Day, we committed to strengthening the foundation business. What matters most is delivery. And today, I'm pleased to say that we have delivered or exceeded our key financial year 26 targets. We improved coal quality, exceeded our secondary production target, reduced the southern African oil break-even to $49 per barrel, and strengthened the balance sheet below our target. In international chemicals, performance benefited from both self-help actions and a more supportive fourth quarter market environment. The recent actions we have implemented effectively positioned the business to capture those opportunities. We also continue to make tangible progress on our grow and transform agenda. During this year, we brought more than 500 megawatts of renewable energy online in South Africa. We remain on track towards our renewable energy targets. This progress supports our emission reduction roadmap, while at the same time creating long-term returns and future growth optionality. These outcomes reinforce an important point. We understand the challenges in our business, we understand the levers within our control, and we are executing accordingly. This is how credibility is built, by doing what we said we will do and consistently delivering against our commitments. Turning to safety, the loss of two colleagues during the year is unacceptable and deeply regrettable. Once again, let me extend our heartfelt condolences to the families, friends, and colleagues of Mr. Godfrey Mamafa and Mr. Sonoabo Makamba. Any loss of life reminds us that no matter how strong our operational or financial performance may be, there is nothing that matters more than ensuring that every person returns home safely every day. Following these incidents, we implemented targeted action plans focused on the following. Strengthening leadership accountability, improving risk identification, and reinforcing safety ownership across our people, leaders, and service providers. Our safety culture interventions focus on disciplined execution and process safety management so that the rules are followed every time on every shift. While we remain deeply disappointed by the fatalities, the broader trends are encouraging. Hospitalization fell to record lows and process safety performance improved. This is reflected in the meaningful reduction in significant process safety incidents like fires, explosions, and releases. We again had no major process safety incidents in the past year. This was accompanied by substantial lower human-related safety failures indicating progress in the behavior and discipline that underpin a stronger safety culture. This improvement also reflects in the recordable case rate. However, we will not measure success by statistics alone. Our objective remains unchanged. Every employee and every service provider must return home safely every day to their loved ones. I will now briefly touch on the financial highlights. Walt will provide a more detailed review of the performance and underlying business drivers later. For much of the past year, we operated in a volatile and uncertain environment. We experienced geopolitical disruption, supply chain pressures, and changing market conditions. I am proud to say that Team Sasol acted decisively to manage the direct and indirect consequences of events in the Middle East. The business captured the benefits of supportive macro conditions in fourth quarter due to improvements we've made in operational reliability, cost discipline, and commercial agility. While we do not control geopolitics, exchange rates, or market cycles, we remain intensely focused on what we can control. In that context, we delivered a 17% increase in adjusted EBITDA of R61 billion. We held cash-fix costs flat compared to prior. We reduced capital expenditure by 18% to R21 billion without compromising safety or asset integrity, and we generated approximately R12 billion of free cash flow. This reflects a business that is becoming more disciplined, more resilient, and increasingly focused on what we can control. Feedstock security remains fundamental to the competitiveness of the Southern African value chain. In mining, the implementation of the distilling plant has materially improved coal quality to strengthen secondary operation by achieving our goal of reducing sinks below 12%. Looking ahead, we will ensure sustained coal quality while focusing on increasing all coal production, Reducing external coal purchases and improving the cost competitiveness of our feedstock. The assessment of scenarios to ensure our long-term coal supply is progressing well. We will give feedback to the market in 2027. In gas, although production was impacted during the year by some well constraints and flooding events, we continue to make progress across multiple horizons. We achieved a significant milestone with PSA reaching beneficial operation. This enabled the first in-country production of LPG in Mozambique, reducing imported LPG requirements while also contributing additional natural gas, light oil, and condensate production. Gas remains a critical bridge to the future for the Southern African value chain. As with the rest of the foundation business, our focus is on balancing short-term reliability with long-term optionality. NASA approved our gas pricing application for financial year 27 and part of 28, with financial years 29 and 30 pending. This is a positive step towards enabling the MRG bridge solution. Our focus remains on maximizing existing gas supply, managing the transition as natural gas deadlines, and preserving future optionality through LNG and broader gas solutions. Here, we believe SASOL can play a critical aggregation role. Importantly, we assess all opportunities through an integrated value chain lens because reliability, affordability, and value creation must remain linked. Our objective is clear, to protect feedstock security and sustain the competitiveness of the value chain. The Southern African business delivered one of its strongest operational performances in recent years. Production reached a five-year high at Secunda, where we produced 7.26 million tonnes because of improved coal quality, improved gasifier availability, and more stable operations. NatRef also delivered stable performance. These improvements enabled us to capture stronger margins when market conditions became more favorable in Q4. Sales continued to grow as a result of driving our strategy to increase our market share in higher value retail and commercial fuel channels. OREX was shut down earlier this year following the geopolitical disruptions experienced in the Middle East. However, the facility successfully brought back online during the earlier month of August. Chemicals performance improved during the second half, supported by higher sales volumes and recovering basket prices during the fourth quarter. All of these improvements resulted in the South African oil breakeven reducing to $49 per barrel. While this result includes $6 to $9 per barrel improvement due to macro tailwinds and the absence of a secondary shutdown, it also reflects genuine progress in restoring the value chain and improving performance. The value chain is not yet where we want it to be. But reliability is improving, competitiveness is improving, and the direction of travel is clear. For Financial Aid 27, our focus thus remains on the following. Gasify turnaround initiatives in Secunda, as well as the safe execution of the shutdown. Implementing the hybrid refinery project at NatRef, which includes the production of clean fuels to compliant fuels. Driving our strategy to increase our share in higher value retail and commercial fuel channels. And finally, improving value delivery across our chemicals portfolio. The research in international chemicals continues to gain momentum. Over the past two years, we have streamlined the portfolio, reduced the costs, improved operational performance, and strengthened commercial excellence. In Financial Year 26, we continue to see the benefits of these actions. We delivered further cost savings during the year and also went live with our ERP program in Germany, Slovakia and the United Kingdom during July this year. This gives us more efficient way of working across the business. From a market perspective, we continue to strengthen commercial excellence and agility across the business. When market condition improved in the fourth quarter, the business was better positioned to capture value and respond quickly to opportunities. Against this backdrop, we delivered an adjusted EBITDA of $604 million. What is particularly encouraging is that the improvement we saw during the year was not driven by one initiative alone. It reflects the combined impact of several efforts across the business. Teams across commercial, supply chain, planning, manufacturing and operation worked more closely together to improve competitiveness and unlock value. One example was a dedicated focus on shifting sales into differentiated applications, specifically in Europe linked to alcohol and alumina portfolios. Another example is that we initiated the restart of the paraffin unit in Augusta to take advantage of attractive market conditions created by supply constraints and better serve customer demand. Beyond the short-term benefit, these positions ask to strengthen customer relationships and capture sustainable margin upside through higher value and more differentiated applications. While we are encouraged by the strong performance in Q4, it is too early to assume these market conditions will persist. We continue to plan the business on prudent assumptions and do not only rely on market recovery to deliver our objectives. The objective is to build a business that is competitive, delivers peer-level returns, and remains resilient through the cycle. The business is better positioned today than it was two years ago, but there is still more work ahead. We will continue to strengthen the portfolio, maintain cost discipline, improve cash conversion, and optimize asset availability in line with demand. At the same time, we will continue to act on opportunities that strengthen the portfolio and improve returns. The Bruins Brutal Alumina investment is a good example. We are building out our advanced material business, thereby strengthening our position in higher value specialty markets and supporting the long-term quality of the portfolio. SASO's role extends beyond our own operation. This matters because our strategy is not only about financial performance. It is also about building a responsible company that continues to contribute to skills development, local communities, energy security, industrial activity, and economic resilience. We continue to invest in communities and enterprise growth in the past year. We expanded access to water in Mozambique. We trained more than 450 artisans and supported the development of small businesses across our operating regions. These initiatives reflect our belief that long-term business success and social progress must go hand in hand. Sasol remains a force for good in a changing world, creating shared value and positively impacting the lives of our communities. As we look ahead to financial year 27, our priorities remain unchanged. We will stay focused on the following areas within our control. Safety, Operational Excellence, Commercial Excellence, Cost Efficiency, Cash Generation, and Disciplined Capital Allocation. We will continue strengthening the foundation business while advancing our grow and transform pillar in a pragmatic and value-accretive manner. As the markets continue to normalize, maintaining focus on these priorities becomes even more critical to sustaining our momentum. Financial Year 26 gives us confidence, but we are not complacent. Credibility is earned through consistent delivery over time, and our focus remains on executing against these commitments we have made. With that, I'll now hand over to Walt, who'll take you through the performance against our financial framework in more detail.

Thank you Simon, and good morning everyone. At our Capital Markets Day in May last year, we set out four clear and connected priorities for our robust financial framework. Firstly, improve sustainable free cash flow. Secondly, strengthen the balance sheet through deleveraging. Thirdly, allocate capital with discipline. And lastly, resume dividends when it is prudent to do so. These priorities are underpinned by proactive risk management and a clear focus on the factors within our control. FY26 represents meaningful progress against this framework. While market conditions became more supportive in the second half of FY26, the stronger result was not simply market driven. Improved operational performance, strict cost management, and disciplined capital allocation created operating leverage across the business to convert the opportunity into stronger earnings and further balance sheet strengthening. This progress gives us greater confidence in the operating and financial platform we are building. Our work is, however, not complete. Our focus now is to sustain the momentum, improve cash conversion, and deliver against the FY28 targets we set out at Capital Markets Day. First, some context on the macro environment. FY26 remained volatile, with geopolitical developments driving significant movements in commodity prices and currencies, especially during the second half of the year. Overall, the year-on-year impact of pricing was mixed, with the Rand oil price and US dollar per tonne chemical sales prices broadly flat and only refining margins improving materially. Oil prices strengthened following the conflict in the Middle East, before moderating towards year-end as geopolitical concerns eased. We continue to expect volatility in oil markets in the near to medium term. The stronger RAND remained a significant earnings headwind given the US dollar-linked nature of much of our revenue, although it also reduced the RAND value of our US dollar-denominated debt. Refining margins were a notable positive, supported by stronger fuel differentials and improved operational performance at NARTREF. Chemical markets remain challenging, with excess capacity and weaker demand continuing to put pressure on prices and margins. While conditions improved in the fourth quarter, margins still remain below historical levels and recovery is expected to be gradual. As an example, full-year US ethylene margins were still 8% below FY25. As always, our focus remains on what we can control. Operational performance, costs, capital discipline, debt reduction and risk management. Overall, we delivered against the majority of these items and the associated targets we set for FY26. Sales volumes increased by 4%, reflecting improved operational performance across the business. Cash fix costs remained flat despite inflation, extending our cost optimization track record to three consecutive years of absorbing inflation. Capital expenditure of 21 billion rand was in line with our revised lower guidance, while net debt reduced to 3.3 billion US dollars, well ahead of our FY26 target of below 3.7 billion US dollars. Working capital was 18.3% on a 12-month turnover basis and above our target of 15.5% to 16.5%. The increase was mainly driven by higher commodity prices in the second half of the year, the utilization of Praxis shareholding capacity at NARTREF during the ongoing business rescue process, and higher inventory due to lower demand in May and June and planned shutdowns in the first half of FY27. Given ongoing pricing volatility, we believe a six-month annualised turnover measure better reflects current trading conditions. On this basis, working capital was 16.6% and only slightly above the target range. Managing working capital remains a key focus area as we work to improve cash conversion in FY27. Finally, we continue to execute our hedging program in line with our risk management framework, completing the FY27 oil program, while the FY27 foreign exchange program remains in progress. Turning to the details of the group financial performance, FY26 delivered a materially stronger earnings outcome. Gross margin and adjusted EBITDA increased by 13% and 17% respectfully. Higher sales volume, stronger oil prices, and significantly improved fuel differentials more than offset the headwinds from a stronger RAND exchange rate and the absence of the Transnet legal settlement received in the prior year. Cashfix costs remain broadly flat despite inflationary pressure, reflecting the benefit of the cost-saving initiatives we have been driving. The current year includes impairments on the Secunda Liquid Fuels Refinery CGU, which remains fully impaired, the South African Polyethylene CGU due to a stronger forecast RAND exchange rate and lower longer-term polyethylene pricing outlook, and an impairment of the Mozambican development, which we recognised at the interim results. Importantly, the Secunda impairment should not be interpreted as a deterioration in the underlying business performance. The recoverable amount improved through the actions we have implemented. The impairment was primarily driven by changes in long-term valuation assumptions, particularly a stronger RAND outlook, and relates only to the liquid fuels refinery, CGU. The broader Secunda complex, including the chemical CGU's, continues to retain significant headroom when comparing the total recoverable amount to the net book value. As such, the accounting treatment and value should not be viewed as a direct reflection of the underlying economic value of the Secunda complex. Further improvement initiatives are still being progressed, and the benefits thereof will be included in future impairment assessments once sufficiently advanced. Free cash flow, as defined in our capital allocation framework, was 11.9 billion rand, 5% lower than the prior year. Excluding the prior year's one soft transnet benefit, free cash flow increased by 26% year on year. Cash flow from operations increased by 22%, reflecting stronger operational performance, improved earnings quality, and a greater contribution from international chemicals. As I already mentioned, working capital was the primary headwind to cash conversion during the year, and we expect part of this to unwind in quarter one of FY27. Overall, FY26 demonstrates that stronger operational execution is translating into stronger financial outcomes. The business generated higher quality earnings, stronger underlying cash flows and continued progress on our deleveraging, which I will address later. Turning to capital management, one of our key priorities has been improving capital efficiency across the portfolio. This is not simply about reducing capital expenditure, it is about ensuring every rand of capital is allocated to the areas that create the greatest value while maintaining safe and reliable operations. Capital expenditure in FY26 was 18% lower than the prior year, reflecting the completion of the Mozambique PSA project and environmental compliance programs in South Africa, as well as lower maintenance expenditure due to the absence of a secunda phase shutdown during the year. Importantly, lower capital spend has not come at the expense of delivery. During the year, the destoning plant, PSA project and three NARTREF low-carbon boilers all reached beneficial operation and are already contributing to improved operational performance. Beyond project completion, we have continued to systematically challenge scope, timing and cost across the portfolio. As a result, our FY27 capital guidance is lower, resulting in a cumulative capital reduction of approximately 12 to 14 billion rand compared to the ranges that we communicated at Capital Markets Day. Approximately half of this reduction reflects sustainable cost and scope improvements, with the balance largely related to project timing and phasing. Looking forward, we will continue to drive capital efficiency as it remains an important contributor to improving free cash flow. At our Capital Markets Day, we set out a clear vision for capital allocation. Build a more resilient business by de-risking and growing the enterprise value and increase the share of that value that belongs to shareholders. Deleveraging was a key enabler of that strategy and we've made good progress over the past two years. In FY26, net debt reduced by a further 11% to 3.3 billion US dollars, the lowest level in 10 years and ahead of the profile we had at CMD. That keeps us firmly on track toward our objective of sustainably reducing net debt below 3 billion US dollars between FY27 and FY28. Enterprise value grew 32% during the year, with the equity share of that value increasing from 37% to 57%. Put simply, shareholders today own a larger share of a significantly larger enterprise. We also improved our liquidity position, with available liquidity increasing by 21% to approximately US$5 billion. During the year, we also successfully issued a 5.3 billion rand bond in exchange for 300 million US dollars and a 750 million US dollar bond maturing in 2033. These proceeds were applied for a partial repayment of our 2028 and 2029 bond maturities, which was therefore debt neutral. Collectively, these actions have materially extended our debt maturity profile, further reduced near-term refinancing risk, and improved the currency mix of our debt to better match the cash generation of our assets. SASL's balance sheet is therefore in one of its strongest positions for many years. As we move closer to our net debt target, attention naturally turns to dividends. Our policy remains unchanged. Returning capital to shareholders is important and net debt of sustainably below US$3 billion remains the threshold for the resumption of dividends. Sustainably is the key word. We will continue to test the balance sheet against a range of commodity, price, currency and other scenarios to ensure that any return of capital is supported through the cycle by sufficient free cash flow generation. Thank you for watching. Each will compete for capital based on strategic fit, risk-adjusted returns and affordability as part of our commitment to creating long-term shareholder value. As we continue to deleverage, hedging remains an important part of our risk management framework. Our objective is not to eliminate exposure to commodity price and currency movements. It is to protect the balance sheet against material downside, manage the cost of protection and retain appropriate upside participation. During the year, we completed our FY27 oil hedging program and also secured protection for the first quarter of FY28. While oil prices increased following the Middle East conflict, the medium-term forward curve did not move to the same extent and remained largely in backwardation with premiums elevated. As a result, we continued using a combination of put options, locking in an average floor of approximately US$59 per barrel at an acceptable cost. Our FY27 Rand Dollar program is approximately 60% complete with the second half of FY27 fully hedged. We have mainly used zero-cost collars with an average collar range of approximately 16 rand 50 to 19 rand to the US dollar. Recent US dollar weakness has made it more challenging to execute the remaining cover at appropriate levels in H1FY27, but with commodity prices remaining elevated, the risk at an enterprise level is reduced. Lastly, hedging complements but does not replace strong operational performance and balance sheet strength. Thank you for watching. Turning to adjusted EBITDA by segment, market conditions varied across our businesses, but strength in fuels and international chemicals helped offset pressure in mining, gas and chemicals Africa, supporting materially stronger group earnings. Mining was impacted by the planned phase-out of export coal sales, partly offset by redirecting volumes to secunda operation, which benefits the broader SA value chain, while gas was negatively affected by lower volumes and a stronger RAND exchange rate. Fuels delivered a particularly strong performance, benefiting from improved operational performance and stronger refining margins and product differentials, partly offset by the transnet legal settlement in the prior year. Chemicals Africa remained under pressure largely from the stronger RAND offset by higher volumes and a marginal increase in prices in Q4. International Chemicals EBITDA increased in both Chemicals America and Eurasia and maintained its contribution of 16% to Group EBITDA, reflecting the benefits of our reset strategy and the more supportive market environment that emerged during the fourth quarter. In summary, FY26 demonstrated the value of our diversified portfolio with a broader contribution to earnings across the group than we have seen in recent years. Our priorities for FY27 remain fully aligned with the financial framework we set out at Capital Markets Day. Our focus remains on delivering volumes in line with our targets, maintaining cost discipline, driving further capital efficiency, improving cash conversion, and continuing to strengthen the balance sheet through deleveraging. Together, these actions will further improve resilience, support transformation, and create sustainable long-term shareholder value. While there is still more work to do, FY26 has clearly demonstrated that disciplined performance is translating into stronger operating and financial outcomes, giving us confidence and credibility to deliver our FY28 commitments. With that, I will now hand back to Simon for the strategic update and I look forward to engaging with you in the Q&A session later.