16 Aug - 10 min read

Audited Financial Results for the year ended 30 June 2021 - Short Form

Audited Financial Results for the year ended 30 June 2021 - Short Form

Sasol Limited (Incorporated in the Republic of South Africa)
(Registration number 1979/003231/06)
Sasol Ordinary Share codes: JSE: SOL    NYSE: SSL
Sasol Ordinary ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE: SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
("Sasol" or "the Company")

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2021

Earnings performance
Sasol delivered a strong set of results for the year ended 30 June 2021. Earnings before interest
and tax (EBIT) of R16,6 billion increased by more than 100% compared to the prior year. This
performance was underpinned by a strong cost, working capital and capital expenditure
performance, despite the continued impacts of the COVID-19 pandemic and adverse weather
events. A notable gross margin recovery was recorded in the second half of the financial year,
supported by the combined impact of higher Brent crude oil and chemicals prices, offset by a
stronger rand/US dollar exchange rate.

Earnings were mainly impacted by the following non-cash adjustments the net of which
amounted to R15,4 billion:
-    Net impairments of R28,7 billion mainly due to adjustments to our long-term exchange
     rate outlook and higher cost to procure gas over the longer term;
-    Net profit on disposal of businesses of R2,2 billion, including the Air Separation Units;
-    R3,4 billion gain on the realisation of the foreign currency translation reserve (FCTR),
     mainly on the divestment of a 50% interest in the LCCP Base Chemicals business;
-    Gains of R5,5 billion on the translation of monetary assets and liabilities due to a 18%
     strengthening of the closing rand/US dollar exchange rate compared to June 2020; and
-    Gains of R2,3 billion on the valuation of financial instruments and derivative contracts.

Sasol’s results contain a prior year adjustment related to the South African integrated value
chain impairment assessment, impacting impairments recognised since the 2017 financial year.
The Company has revised its previously reported results and related disclosures. The
comparative balances differ from those previously reported. The Company evaluated the effect
of the prior period adjustments, both quantitatively and qualitatively, and concluded that the
correction neither had a material impact on, nor require amendment of, any of the Company’s
previously issued or filed financial statements taken as a whole.

                                                                             2021              2020          Change %
    Key metrics
                                                                                           Restated
    EBIT/(LBIT) (R million)                                                16 619          (111 926)             >100
                        
    Adjusted EBITDA (R million)1                                           48 420            34 976                38
    Headline earnings/(loss) (R million)                                   24 503            (7 106)             >100
    Basic earnings/(loss) per share (Rand)                                  14,57           (148,49)             >100
    Headline earnings/(loss) per share (Rand)                               39,53            (11,50)             >100
    Core headline earnings per share2 (Rand)                                27,74             15,08                84
    Dividend per share (Rand)
     - Interim (Rand)                                                           -                 -                 -
     - Final (Rand)                                                             -                 -                 -
1    Adjusted EBITDA is calculated by adjusting EBIT for depreciation, amortisation, share-based payments,
     remeasurement items, change in discount rates of environmental provisions, all unrealised translation gains and
      losses, and all unrealised gains and losses on our derivatives and hedging activities. We believe Adjusted
      EBITDA is a useful measure of the Group’s underlying cash flow performance. However, this is not a defined
      term under IFRS and may not be comparable with similarly titled measures reported by other companies.
      (Adjusted EBITDA constitutes pro forma financial information in terms of the JSE Limited Listings Requirements
      and should be read in conjunction with the basis of preparation and pro forma financial information as set out in
      the full set of audited summarised financial statements).

2     Core HEPS is calculated by adjusting headline earnings per share with non-recurring items, earnings losses of
      significant capital projects (exceeding R4 billion) which have reached beneficial operation and are still ramping up,
      all translation gains and losses (realised and unrealised), all gains and losses on our derivatives and hedging
      activities (realised and unrealised), and share-based payments on implementation of B-BBEE transactions.
      Adjustments in relation to the valuation of our derivatives at period end are to remove volatility from earnings as
      these instruments are valued using forward curves and other market factors at the reporting date and could vary
      from period to period. We believe core headline earnings are a useful measure of the Group´s sustainable
      operating performance. (Core HEPS constitutes pro forma financial information in terms of the JSE Limited
      Listings Requirements and should be read in conjunction with the basis of preparation and pro forma financial
      information as set out in the full set of audited summarised financial statements.

                                                                            2021               2020             Change %
    Net asset value
                                                                                           Restated
    Total assets (R million)                                             360 743            474 535                 (24)
    Total liabilities (R million)                                        208 272            318 618                  53
    Total equity (R million)                                             152 471            155 917                  (2)

           Turnover                                                                          EBIT/(LBIT)
        2020       2021                                                                   2021         2020
                                                                                                     Restated
     R million       R million                                                          R million    R million
                                    Energy business
        19 981           21 704      Mining                                              3 227         2 756
        12 419           10 990      Gas                                                 6 656         5 527
        62 553           60 649      Fuels                                             (18 170)      (11 609)
                                    Chemicals business
        54 310           60 597      Africa                                              6 957       (17 035)
        28 809           29 360      America                                             8 116       (77 556)
        39 989           46 038      Eurasia                                             4 680          (894)
            30               26     Corporate Centre                                     5 153       (13 115)
       218 001          229 364     Group performance                                   16 619      (111 926)
       (27 634)         (27 454)    Intersegmental turnover
       190 367          201 910     External turnover

Balance sheet management
Cash generated by operating activities increased by 6% to R45,1 billion compared to the prior
year. This, together with the asset divestment programme, enabled the repayment of
approximately R81 billion of debt, including the settlement of our rand denominated banking
facilities of approximately R4 billion.

Actual capital expenditure amounted to R16,4 billion compared to R35,2 billion during 2020. The
reduction in capital expenditure was carefully executed as a result of our optimised risk
management focus whilst ensuring asset integrity and safety were not compromised.
Our net debt to EBITDA ratio at 30 June 2021, based on the revolving credit facility (RCF) and
US dollar term loan covenant definition, was 1,5 times, significantly below the agreed threshold
level. Although this ratio meets our targeted net debt to EBITDA level, we will continue with our
efforts to reduce leverage and absolute debt levels further. This will create valuable financial
flexibility as we execute our Future Sasol strategy in the midst of an uncertain macroeconomic
environment. Our objective remains to steer the balance sheet metrics toward restoration of our
investment grade levels.

During the year bonds of US$1,5 billion (R21,4 billion) were issued and listed on the New York
Stock Exchange. At 30 June 2021, our total debt was R102,9 billion compared to R189,7 billion
at 30 June 2020. During the year, we utilised proceeds from our asset divestments to repay the
US dollar syndicated loan, a portion of our RCF and term loans, reducing our US dollar
denominated debt by almost R76 billion (US$5 billion).

Our gearing decreased from 117,0% at 30 June 2020 to 61,5% at 30 June 2021 mainly due to
repayment of US dollar debt and a stronger closing rand/US dollar exchange rate.

As at 30 June 2021, our liquidity headroom was R84 billion (US$5,9 billion), well above our
outlook to maintain liquidity in excess of US$1 billion, with available rand and US dollar-based
funds improving as we advance our focused management actions. We have no significant debt
maturities before November 2022 when the US$1 billion bond becomes due.

In line with our financial risk management framework, we continue to make good progress with
hedging our foreign currency, crude oil and ethane exposure. We have been successful in
hedging our total oil exposure for 2022 which increases the certainty of future cash flows to
reduce debt levels and enable us to execute on our Future Sasol strategy. For further details of
our open hedge positions we refer you to our Analyst Book (www.sasol.com).

Dividend
The restoration of dividends is a key priority, but in the context of the high level of
macroeconomic uncertainty the Board believes it is prudent not to declare a dividend at this
stage.

Changes in Directors
The following change to the Board occurred after the publication of the Company’s interim
financial results on 22 February 2021:
Mr S Subramoney was appointed as independent non-executive director and member of the
Audit Committee with effect from 1 March 2021. The Company announced the appointment of
Ms GMB Kennealy, an independent non-executive director, as Chairman of the Audit Committee
effective 1 September 2021 upon the retirement of Mr C Beggs as independent non-executive
director and Chairman of the Audit Committee on 31 August 2021.

Mr P Victor has informed the Company that he will step down as Chief Financial Officer (CFO)
and executive director of Sasol Limited on 30 June 2022. Mr H Rossouw has been appointed as
CFO designate and executive director designate of Sasol to succeed Mr Victor. He will join
Sasol on 4 April 2022 and will succeed Mr Victor as executive director and CFO on 1 July 2022.

Short-form statement
This announcement is the responsibility of the directors. The information in this short-form
announcement, including the financial information on which the outlook is based, has not been
audited and reported on by Sasol Limited’s external auditors. Financial figures in this
announcement have been correctly extracted from the audited financial results. The audited
financial results have been audited by the group’s auditors, PwC who expressed an unmodified
opinion thereon. A key audit matter relating to “Impairment assessment of property, plant and
equipment and investments in subsidiaries” is addressed in PwC’s independent auditor’s report.
This announcement does not include the information required pursuant to paragraph 16A(j) of
IAS 34 ‘Interim Financial Reporting. It is only a summary of the information contained in the full
announcement and does not contain full or complete details. Any investment decision should
also take into consideration the information contained in the full announcement, published on
SENS on 16 August 2021, via the JSE link. The full announcement and the FY21 audited
financial results, which includes the auditor’s report, will be available on the Company's website
at https://www.sasol.com/investor-centre/financial-reporting/annual-integrated-reporting-set.

The pre-recorded presentation is available on the following link:
https://www.corpcam.com/Sasol16082021

Copies of the full announcement may also be requested from the Investor Relations office,
investor.relations@sasol.com or +27 10 344 9280.

The JSE link is as follows:
https://senspdf.jse.co.za/documents/2021/JSE/ISSE/SOL/FY21Result.pdf

The President and Chief Executive Officer and Chief Financial Officer will host a conference
call on Monday, 16 August 2021 via webcast at 15:00 (SA time) to discuss the results and give
an update of the business.

Live conference call link:
https://www.corpcam.com/Sasol16082021Q


CAPITAL MARKETS DAY

Sasol’s President and Chief Executive Officer, Fleetwood Grobler, together with his executive
leadership team will be hosting a virtual Capital Markets Day, including a Q&A session, on
Wednesday, 22 September 2021 at 12:00 (SA time).

Please join us for our 2021 virtual Capital Markets Day where we will provide an update on
Sasol’s longer-term strategy and sustainability ambitions, including our transition pathway until
2050.

The agenda and participation details will follow closer to the event. Please direct any queries to:
investor.relations@sasol.com or call +27 10 344 9280.


SENS issue: 16 August 2021

Sponsor: Merrill Lynch South Africa (Pty) Limited t/a BofA Securities

Disclaimer - Forward-looking statements
Sasol may, in this document, make certain statements that are not historical facts and relate to
analyses and other information which are based on forecasts of future results and estimates of
amounts not yet determinable. These statements may also relate to our future prospects,
expectations, developments and business strategies. Examples of such forward-looking
statements include, but are not limited to, the impact of the novel coronavirus (COVID-19)
pandemic on Sasol’s business, results of operations, financial condition and liquidity and
statements regarding the effectiveness of any actions taken by Sasol to address or limit any
impact of COVID-19 on its business; statements regarding exchange rate fluctuations, changing
crude oil prices, volume growth, changes in demand for Sasol’s products, increases in market
share, total shareholder return, executing our growth projects, oil and gas reserves, cost
reductions, legislative, regulatory and fiscal development, our climate change strategy and
business performance outlook. Words such as “believe”, “anticipate”, “expect”, “intend", “seek”,
“will”, “plan”, “could”, “may”, “endeavour”, “target”, “forecast” and “project” and similar
expressions are intended to identify such forward-looking statements, but are not the exclusive
means of identifying such statements. By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and there are risks that the
predictions, forecasts, projections and other forward-looking statements will not be achieved. If
one or more of these risks materialise, or should underlying assumptions prove incorrect, our
actual results may differ materially from those anticipated. You should understand that a number
of important factors could cause actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such forward-looking statements. These
factors and others are discussed more fully in our most recent annual report on Form 20-F filed
on 24 August 2020 and in other filings with the United States Securities and Exchange
Commission. The list of factors discussed therein is not exhaustive; when relying on forward-
looking statements to make investment decisions, you should carefully consider both these
factors and other uncertainties and events. Forward-looking statements apply only as of the
date on which they are made, and we do not undertake any obligation to update or revise any of
them, whether as a result of new information, future events or otherwise.

Please note: One billion is defined as one thousand million, bbl – barrel, bscf – billion standard
cubic feet, mmscf – million standard cubic feet, oil references brent crude, mmboe – million
barrels oil equivalent. All references to years refer to the financial year ended 30 June. Any
reference to a calendar year is prefaced by the word "calendar".

Date: 16-08-2021 07:05:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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