Sasol (SOL) CMD 2025 summary

Updated strategy and future plans

• Strategy focuses on strengthening the foundation business, operational reliability, cost efficiency, and decarbonization, with a clear distinction between current and future operations.

• Southern Africa operations target a $50/bbl break-even by FY2028, with production restored above 7.4 million tons through coal quality improvements and gasifier reliability.

• Emission reduction roadmap maintains a 30% GHG reduction by 2030, now at a lower capital cost (ZAR 4-7bn), leveraging renewables and offsets without production turndown.

• Renewable energy ambition increased to over 2 GW by FY30, with embedded generation, trading, and over 757MW online by FY28, supporting decarbonization and new income streams.

• New business streams in sustainable aviation fuel and renewable diesel, leveraging partnerships and technology, with growth in power and sustainable fuels expected this decade.

Financial guidance and capital allocation

• Targeting adjusted EBITDA of up to ZAR 71bn by FY2028, with 70% of international chemicals improvement from management actions and the rest from gradual market recovery.

• Net debt target reduced to below $3bn by FY28, prioritizing deleveraging before dividend reinstatement or major growth investments.

• Annual maintenance capital spend set at ZAR 23-31bn, with selective growth capital of ZAR 1-2bn per year from FY2026 and a revised capex profile down by R15-20bn.

• Cost savings of ZAR 10-15bn targeted by FY2028, focusing on procurement, asset optimization, and renewables to offset rising utility costs.

• Capital allocation prioritizes safe operations, debt reduction, and disciplined investment, with future dividends at 30% of free cash flow once debt targets are met.

International Chemicals business reset

• Turnaround plan underway to address profitability challenges, with positive free cash flow before financing costs expected by FY25 and EBITDA of US$750-850mn by FY28.

• Decisive portfolio actions include mothballing or closing underperforming assets, targeting a >15% EBITDA margin by FY28.

• Streamlined organizational structure and excellence programs aim for a 15-20% reduction in cash fixed costs by FY28 versus FY24.

• Progress in FY25 includes asset mothballing, ERP system rollout, and improved half-year EBITDA.

• Shift from volume-driven to value-driven approach, with tailored go-to-market strategies and product innovation.