Sasol Limited (SOL) Earnings Call Transcript & Summary

2025 capital Markets Day hosted here at our head office in Sandton, Johannesburg. My name is Tiffany Sydow from Investor Relations. And on behalf of the management team, we are very pleased that you could join us in person today as well as an overwhelming support online. Today, we'll be sharing our updated strategy, which is defined by 2 pillars. Firstly, our near-term plans to strengthen our foundation business; and secondly, pursuing a pathway that will grow and transform our business in the long term. We invite you to listen, engage and walk the journey with us in achieving our objectives and delivering sustainable value for you as our key stakeholders. Before we begin the presentation, I'd like to cover a few housekeeping and safety rules for today. The emergency exits in this room are the door at the back and is located and walks you out to the reception area. In the event of any emergency, please exit the room to the reception area where safety marshal will give you further instructions. The restrooms are out the same door to your immediate right. I'll remind you that this is a live stream event, so we would ask that you please ensure that your cell phone is on silent for the duration of the presentation. WiFi detail should have been provided at reception. However, if you miss those, there should be some cards on your table with the WiFi details. And very last, the smoking area is out the door outside reception in the outside area. Our agenda today consists of a few presenters. They will include our Sasol Board Chairman, Muriel Dube; our President and CEO, Simon Baloyi; Group CFO, Walt Bruns; Executive Vice President of International Chemicals, Antje Gerber; Executive Vice President of Operations and Project Southern Africa, Victor Bester; and last but not least, our Executive Vice President of Business Building Strategy and Technology, Sarushen Pillay. The presentation will be delivered in 2 parts. The first part will consist of Simon and Walt presenting their key messages. We'll then take a short comfort break and head into the second part, which consists of the deep dives into our international chemicals and Southern Africa business, followed by our growth and transform plans for the future. Antje, Victor and Sarushen will lead this part of the session. And following this, Simon will give his closing remarks for the session. After that, we will commence for a short break and then head into the Q&A session where our online participants can also join. This afternoon, we'll invite you to join us for an informal lunch in the outside area together with a walk-through of a few of the exhibitions that we've put on display for you today. Just a reminder that the presentation today will contain some forward-looking statements. More detail on the slide ahead of you. A reminder as well that all the content has been put on our website this morning and is available for you to download. I'd now like to hand over to our Board Chairman, Muriel Dube, to commence today's session.

Thank you, Tiffany. Good morning to everyone who are joining us in person and a warm welcome to those connecting online. I'm Muriel Dube, Chairman of Sasol Limited, and I'm pleased and delighted to have stakeholders from across the globe join us for this important occasion, which is Sasol's Capital Markets Day. Today, our CEO, Simon Baloyi, together with his group executive team will unpack Sasol's updated strategy and how we are positioning the business for the future. The world remains volatile and building resilient businesses in this environment is vital. For Sasol, this means proactively addressing our challenges and opportunities, which includes restoring our Southern African business to historical levels of performance, turning our international chemicals business around progressing with our grow and transform agenda and doing all of this while staying committed to a value-accretive decarbonization path as indicated in our emissions reduction road map. These strategic priorities must be carefully balanced across social, economic and environmental dimensions. Sasol plays a vital role in the countries where we operate, especially in South Africa, where we contribute over 5% of national GDP and remain 1 of the largest private investors in social development. We are also acutely aware of the pressure on our business macroeconomic headwinds persist and a disciplined focus on the controllables is critical. Strengthening our balance sheet and driving financial resilience remain top of mind. We believe the steps we are taking to unlock greater value, reduce debt and restore confidence will go a long way. As the Board of Sasol, we are unwavering in our commitment to safety. It is a core value, and we continue to hold management accountable for building and sustaining safe environments every day across every site. What the team will share today, I believe, provides a credible pathway to a more competitive, relevant and sustainable Sasol. We have full confidence in Simon and his team to execute the strategy. Thank you again for joining us for today's Sasol's Capital Markets Day. We value your interest, your engagement and your partnership on this journey. It is now my pleasure to hand over to Simon and the executive team for the remainder of today's proceedings. Thank you.

Thank you, Muriel. Good morning, [Foreign Language] and in Portuguese, Bom Dia. Ladies and gentlemen, thank you for joining us today, both in person and online. We value your time and continued interest in Sasol. Today's presentation is more than just an update, it marks a pivotal moment in our journey. Since our founding in 1950, Sasol has been a beacon of innovation and resilience, delivering immense value to our stakeholders. Over the decades, we've evolved from humble beginnings from a small town, not far from here in Sasolburg into a global powerhouse. We have divest assets. We have customers in over 100 countries, and most importantly, a workforce that includes more than 75 nationalities. But ladies and gentlemen, let me be the first one to acknowledge that our recent performance over the last 4 years has not lived up to our own expectations. Today, we will discuss how we are fundamentally reshaping Sasol's performance to deliver value and we are positioning the company for sustainable growth. Recently at the half year results, I emphasize that our journey is like running a marathon, not a sprint. Just like marathon runners, we must prepare ourselves thoroughly. We must place ourselves wisely, and we must maintain an unwavering focus on our goal. Team Sasol stands before you today fully committed to this transformative journey. We understand the challenges ahead. We have already implemented decisive actions to address them with robust solutions and measurable plans. We are dedicated to restoring the path forward, and we appreciate your support during this pivotal moment. Thank you for being an integral part of this team. At Sasol, safety is the foundation of everything that we do. We have to ensure that everyone goes home safely to their loved ones, whether it be our own employees, service providers or anyone that interacts with our facilities and operations must go home safely. Today, my executive team and I will share the turnaround plans focused over the next 3 years. We're going to detail how we're navigating the current environment. We'll also demonstrate the progress that we've made over the last year. We'll also set a milestone that are going to deliver shareholder value. We'll not only be limited ourselves by discussing only the next 3 years, we will also share a vision for transforming Sasol into the future. Sasol has a solid foundation with the potential to generate enhanced value. Over the past few months, we've taken a hard look at what has held us back. We've also identified the levers that we need to address to deliver value. So why should we believe that this time is different? Well, we've developed clear plans and targets. We've already seen some real traction. And today, we'll get to share some of that progress with you that we've made over the last year. As a company, we are also thinking about our future. Our inherent flexibility to adopt alongside our customers, position Sasol for transformation and long-term competitiveness. We will share some of our ideas with you later. Walt will take you through the financial framework that underpins our strategy, ensuring that capital is allocated with discipline, execution is tightly managed and shareholder returns are at the center of everything that we do. You'll recall that at the half year results, I articulated our strategic pillars to strengthen our business and build a sustainable future Sasol. In Southern Africa, we are focused on addressing 3 priorities: feedstock quality, operations reliability and cost efficiency. This, together with the initiatives by our marketing team, I mean, ably led by Christian Herrmann on my left, will make sure and it will enable us to deliver a breakeven price of $50 per barrel by financial year '28. In International Chemicals, I mean, Antje is doing a brilliant job for us there. She is going to concentrate on a reset and turnaround aiming to improve our EBITDA margins to more than 15% through the cycle. As we strengthen our foundation we are also exploring opportunities to transform into a more sustainable business. We are focusing on delivering value reducing our carbon intensity and addressing the terminal value concerns of the South African business. We are already aligning to positive changes that we are seeing in the policy space. A key initiative is our emission reduction road map, also known to some of us as the ERR. You'll all recall that our initial iteration of the ERR saw us aim for a 30% reduction in our greenhouse gases by 2030. And this was going to be done through production cutbacks and electricity cutbacks and this was at a capital cost of ZAR 15 billion to ZAR 25 billion. Leveraging our global innovative spirit, the latest road map still sees us maintaining the 30% greenhouse gas reduction. However, what we have now done, the capital cost is at a much reduced ZAR 4 billion to ZAR 7 billion, and this would not turn down. This positions us to develop the renewable energy business with its own independent business case. I will now take the pillars of our strategy in more detail. I'm going to start with what we've done to create a more effective organization. Over the past year, we have streamlined our organization, our organizational structure. We have redefined our business operating model, and we've realigned it into international chemicals as well as Southern Africa Energy and Chemicals. Furthermore, we have centralized functions in both regions, improving efficacies and removing duplications. At the executive level, we've established clear accountabilities and these enhanced oversight has strengthened our focus and ownership and delivery, which is already improving performance. This approach allows us to maintain a strong focus on both the current operations and future growth initiatives. I believe we strike the right balance in our leadership team. We have brought in external talent to inject fresh perspective and challenge the status quo while also elevating experienced individuals who understands the complexity of our business. This combination of both new insight and institutional experience creates a powerful dynamic, one that positions us with to lead with greater clarity, to make better decisions and build a Sasol that delivers and grows. At the center of our agile organization is our people. The driving force behind Sasol's 75-year legacy of innovation and resilience. Day after day, month after month, year after year, decade after decade, we have measured a culture where our people have driven to shape a business that is highly ambitious with a globally unique value proposition. Let us now turn our focus to our international chemical business. Over the past few years, our international business has been lagging our peers. Our goal is to really align this business with a high standard of performance that we have historically achieved. We are implementing a comprehensive research strategy that is going to reset the business, enhance our market position and drive sustainable growth. In this business, we aim to be [ cash positive ] before financing costs this financial year. We are committed to achieving an EBITDA margin of 15% through the cycle by financial year '28. We are committed to establishing a resilient business regardless of the macroeconomic shifts that we're going to face along the way. International chemicals will grow in value due to self-help measures, but there will be some market support. Closer to the end of the decade, we will consider to unlock further value from this business. This will be done through additional investments or potential portfolio plays such as unbundling, partnering and M&A amongst other options that we'll consider. Antje will unpack this plan in more detail. Moving over to the actions that we are taking to restore the Southern African operations. The quality of coal has deteriorated over the last 4 years. Exposure to poor coal quality has also taken a toll on our gasifier fleet at Secunda. We've previously shared with you that in December 2024, we took final investment decision on our destoning project. This will result in a step change in the performance. But this is not a single fix. We are driving a portfolio of improvements across the entire values. Furthermore, we are driving a culture of cost consciousness and disciplined spending without sacrificing both asset integrity and safety. As our operations stabilize and improve in both plant reliability and coal quality, we are expected to see Secunda operations restored with the full performance reaching above 7.4 million tonnes a year. Victor Bester will go into more details. Let us now take this moment and address the grow and transform pillar. The energy transition has been a major driver of the global agenda over the past 5 years. South Africa is already undergoing an energy transformation that will redefine our economy. And Sasol is well positioned to champion our nation's just energy transition. We also know that the pace won't be uniform as it is affected by political shifts, energy security consents and inflationary pressures. Our approach to greenhouse gas reduction addresses both value creation and carbon intensity reduction. While the road ahead may be uneven, we are resolute in our goal. Our strategy is agile, resilient and, most importantly, responsive to change. This supports our customers and the communities that we serve. By focusing on executable projects and areas where we have a clear right to win, we are building a sustainable business that will deliver shareholder value. On this front, we are not starting from scratch. We've already made good progress. We have secured more than 750 megawatts of power purchase agreements, and we will look to scale our renewable businesses. With more than 2 gigawatts of internal captive demand, we can develop a self-build renewable energy projects that align with our broader decarbonization goals. We will transition alongside our customers as the demand for sustainable chemicals and aviation fuels develops. As the aviation industry transition, we see significant potential in sustainable aviation fuels. We have the people, the assets the technology, the expertise to scale production. However, this must be done when the time is right. We cannot be ahead of the market. Sasol is also expanding the window for South Africa's transition to LNG. We've already extended the gas production plateau to financial year '28. You'll recall that the previous date was FY '26, and we've now extended that to FY '28. And recently, we also announced a methane rich gas bridging solution that will extend this window to financial year '28, so this gives the country enough time to transition to LNG. In the face of a complex transition, we have a compelling value proposition to protect the South African investment case well into the future. Sarushen will provide more detail on the grow and transform pillar. As I've outlined, our strategy will position us to be profitable and competitive business going forward. We are targeting an adjusted EBITDA of up to ZAR 71 billion by financial year '28 through forecast management interventions and actions. This will enable us to deleverage the balance sheet and will reduce -- with a net debt target of below $3 billion. We are applying disciplined capital allocation, ensuring it is return driven and aligned with our strategic priorities. This discipline is key to maintaining our competitiveness and sustained value creation. We are operating in a world which is shaped by geopolitical tensions, global supply disruption and shifting trade dynamics. This operating reality is placing pressure on both producers and consumers alike. However, our strategy creates the flexibility required to navigate this macroeconomic volatility while consistently delivering shareholder value. To summarize this section of my presentation, let me restate that we are reshaping Sasol into a business that delivers strong and resilient performance, even in an uncertain world. Our priority is to strengthen the foundation in the near term. Our targets are underpinned by credible and executable plans that build on the unique capabilities of our business. International chemicals is an excellent business that holds significant promise for us. With the business fundamentals having been reset, as I said earlier, closer to the end of the decade, we will consider further options to unlock value. Our Southern African foundation will remain largely fossil-fuel based and it will carry our business well into the future. This strong foundation is key and it will provide a platform for our growth and transformation. We've already started and are already making progress on building sustainable business that will grow and inherently decarbonize Sasol. We are taking the hard steps now to position Sasol for the long term through the following initiatives: improved balance sheet resilience, value-enhancing decarbonization and consistent performance and this will ensure competitive shareholder instance. So at this moment, I know some of you are accountants and globally, that the CFOs are known as the CF Nos, but I want to assure you that Walt is not, I'm going to allow him to come up and share more on our financial framework.

Before I start, I just want to remind Simon, that the no doesn't mean no, it means I know a lot. Cool. Thank you, everybody. Thank you, Simon. Good morning, ladies and gentlemen, and thank you for joining us today. I look forward to taking you through the financial framework that underpins our Capital Markets Day. I'm excited to lead this next chapter in Sasol's journey, leveraging my many years of Sasol experience, and it's a company I care deeply about. As Simon has outlined, we are executing against a clear road map to strengthen our foundation business and to lay a platform for future growth and transformation. This, however, needs to be supported by a robust financial framework. Over the next few slides, I'll take you through what this means, how we're putting it into action and the future pathway. A robust financial framework -- our robust financial framework is built on 4 clear and connected priorities. The first priority, improve sustainable free cash flow. We are doing this through a combination of key levers. First is restoring operational performance across the business, which increases our volumes and supports top line revenue growth. Secondly, we have stepped up capital and cost discipline. We've done a comprehensive review of spending across all of our businesses. This review ensures that capital and costs are directed towards assets that deliver real value. We are also moving away from once-off cost initiatives and focusing more on processes that embed cost discipline across the organization and don't allow inflation to erode our competitiveness. Thirdly, through Christian and the marketing and sales team, we're driving margin improvement through prioritizing higher-margin channels to market. And lastly, we will continue to optimize working capital by implementing integrated business planning across all of our businesses. The second priority is to deleverage the balance sheet. This is critical to building financial resilience as we navigate an increasingly volatile macro environment. The third priority, reinstate dividends when we have a stronger balance sheet and then make larger focused investments in our business that improve returns going forward in line with the fourth priority, which is a disciplined capital allocation. All of this is underpinned by proactive risk management, ensuring that we respond to the changes in our operating environment that Simon alluded to and to mitigate risks and accelerate opportunities. Our robust framework and priorities are essential, but in order to deliver a compelling value proposition, it's important and helpful to understand how this translates into EBITDA delivery. Before we dive into numbers, it's worth noting that the macro environment remains volatile and difficult to predict. However, we cannot wait for the macros and are focusing on our controllables through the delivery of self-help initiatives which are already underway. Looking ahead to FY '28, you'll see we're targeting an EBITDA of ZAR 64 billion to ZAR 71 billion. This is informed by the macroeconomic assumptions as well as the controllable elements. In Southern Africa, we are anticipating more macroeconomic pressure from lower oil prices and refining margins, but we're actively offsetting this through higher production volumes across our different sites and significant cost improvements. Victor will share more on these later. FY '28 EBITDA is therefore expected to be between ZAR 50 billion and ZAR 55 billion. In our international chemicals business, we've already seen significant progress from our self-help initiatives in the first half of FY '25 where EBITDA has almost doubled. Looking ahead, we're targeting EBITDA of between ZAR 14 billion to ZAR 16 billion, 3x higher than FY '24. Approximately 70% of this improvement will come from management actions which Antje will share to improve margins and reduce costs, and the balance supported by gradual recovery in the market, which has experienced a prolonged downturn over the past few years. Overall, we're confident that our EBITDA delivery is being driven largely by actions within our control despite the uncertain macroeconomic environment and this gives us confidence that we are on the path to implementing management interventions or converting management interventions into stronger earnings performance. Beyond this period, the sustained cost savings will position us well to maintain our profitability going forward. One of the key items that we've raised is cost discipline. We made significant progress in keeping cost increases below the rate of inflation, which is already and will have a positive impact on our cash generation this year. Our goal is to hold the cost base largely flat in nominal terms and to deliver savings of ZAR 10 billion to ZAR 15 billion by FY '28. I've already touched on some of these levers driving this outcome but let me highlight a few more. On external spend, we're improving strategic sourcing and contracting. This includes identifying opportunities to centralize procurement across the business, avoiding duplication and unlocking better pricing through economies of scale and a buy better approach. In addition, scope will be reviewed to ensure that we spend less. We're following a similar approach on internal spend. On utilities, we're shifting towards lower cost renewable energy, which not only reduces our costs over time, but also supports our decarbonization goals. And finally, we're continuing with our asset portfolio optimization which will continue in international chemicals and extend to Southern Africa to reduce costs and save capital further. Ultimately, this is about embedding cost discipline to improve our competitiveness and enhance the quality of our earnings over the longer term. Our capital framework sets out the principles that guide how we allocate capital in order to create sustainable value for our shareholders. It's about finding the right balance between investing in the business, the balance sheet and returning capital to shareholders. Our first order capital -- our first order, maintain capital allocation is directed to ensure safe, reliable and compliant operations. We're targeting ZAR 23 billion to ZAR 31 billion per annum in nominal terms over the next 3 years with lower capital in years with no major shutdown. In addition, we've included -- in addition to maintain capital, we've included an allocation of ZAR 1 billion in FY '26 and ZAR 2 billion from FY '27 onwards for selective growth and transformation projects, ensuring that we continue to look towards the future. A key example is advancing our renewable energy ambitions. Any step-up in the selective capital allocation will be dependent on the successful recycling of carbon tax in South Africa, which we are actively engaging with stakeholders to expand the definition of this expenditure that qualifies and allows for the transformation agenda in South Africa to be self-funded from carbon tax revenue. The second priority is reducing debt. We are targeting net debt sustainably below $3 billion, excluding leases, which equates to approximately 1 to 1.5x net debt to EBITDA through the cycle. In order to do this as quickly as possible, we will prioritize deleveraging over all other uses of capital, including the reinstatement of dividends. This represents a step change from our previous $4 billion target. However, we believe it is a prudent adjustment given the significantly elevated and potentially prolonged macro volatility we are facing. We know that our shareholders have been patient with us in this regard, and we appreciate the support to sustainably deleverage in the short term. Only once we have sustainably achieved this threshold will we consider reinstating dividends. We still believe that paying 30% of free cash flow strikes the right balance, enabling shareholders to share in our success while maintaining flexibility to reinvest in growth, transformation and/or return additional capital to shareholders. Larger grow and transform capital will be deployed into the business, aligned with our strategy and core capabilities. Every investment will be subject to clear hurdle rate returns and rigorous evaluation to ensure that it's value accretive and enhances the long-term value of our business. Sarushen will share more on this. Turning to some more details on our first order capital profile. Maintenance spends, which includes shutdowns and renewables continues to make up the majority of our first order capital spend equating to approximately 60%. Over the past year, we've made good progress in driving greater efficiency in our capital profile without compromising on safety or asset integrity. This includes more strategic sourcing and better planning. For example, we have extended the shutdown intervals from 4 to 5 years in Secunda, which unlocks material cost and time benefits as evidenced in the lower capital spend for FY '26. Our future first order capital spend is expected to be ZAR 5 billion to ZAR 6 billion per annum, lower than our previously guided range of ZAR 29 billion to ZAR 36 billion per annum. This equates to approximately ZAR 15 billion to ZAR 20 billion in cumulative savings over the next 3 years. A key priority remains ensuring stable and competitive feedstock supply. As capital spend in the PSA gas project in Mozambique reduces, we're making sure that mining receives the capital that it needs to ensure long-term coal supply. Herrmann will share some more details on that. Both capital and noncapital options will, however, be pursued. As the portfolio evolves, particularly within our optimized ERR, we are unlocking further reductions in capital now targeting ZAR 4 billion to ZAR 7 billion from the previously guided ZAR 11 billion to ZAR 16 billion at half year-end. At this stage, we are prioritizing noncapital solutions wherever possible. Spend on Clean Fuels 2 and our environmental compliance program is also expected to reduce with compliance achieved. When we bring together the operating and financial plans, we see a clear pathway to improve -- to reduce debt, improve our resilience and in so doing, lift our enterprise value and the associated equity share over the next 2 to 3 years. This will further help to improve our credit rating, reduce debt and consequently lower the financing costs. We expect to achieve our net debt target between FY '27 and FY '28, positioning us to restore dividends at this time. The range reflects the sensitivities to macros and the pace of delivery of our turnaround initiatives. We've also stress-tested this under different -- a lower oil price scenario which gives us confidence in our ability to reach this milestone and then shift our focus to a more strategic deployment of capital in line with our revised capital allocation framework. I think the question on everybody's mind is, given the ongoing macro volatility, I want to highlight how we are positioned to respond. In terms of resilience, we have a strong liquidity position with more than $3 billion on hand. That includes our healthy cash buffer, unutilized facilities and no immediate debt maturities. We maintain a proactive hedging program for both oil price and rand-dollar exchange rate, which looks more than 12 months ahead. We've completed this program for FY '25 and more than 90% complete for FY '26 while increasing our hedge cover ratio. It's worth noting that Sasol is more sensitive to the rand-dollar exchange rate than to the oil price. And as such, it's important to look at the rand oil price when assessing the impact on our business. Should markets deteriorate further and for longer, we have additional levers available to protect our financial position. The priority, however, is to ride through the current unknowns, avoid short-term decisions and not lose focus on our core operating improvements, which will create a more resilient company going forward. To summarize, everything I've outlined today is focused on delivering what we can control with discipline, urgency and clear targets. We are driving sustainable free cash flow, supported by improved earnings and operational performance, tighter cost and capital discipline, optimized working capital and proactive risk management. These actions are really delivering early positive momentum, and we expect the pace of improvement to accelerate as we embed these changes more deeply. Stronger cash generation enables us to accelerate deleveraging, rebuild flexibility and ultimately deliver value to the shareholders in the medium to longer term. We know what needs to be done. Our metrics are clear, and we are fully committed to delivering and building credibility through performance. I look forward to your questions later. Thank you very much.

Thank you, Walt and Simon for unpacking the strategy and the financial framework. Our next session will be the business deep dives, focusing on the international chemicals business and Southern Africa business as well as our grow and transform agenda. Before we head into this, we'll take a short comfort break and commence again at 11:15 sharp. So all our online participants, please remain online, and we'll notify you as soon as we're ready to start. Thank you. [Break]

Ladies and gentlemen, please welcome back to the stage Tiffany Sydow.

Thank you, and I'd like to welcome Antje Gerber to the stage to commence with the presentation on International Chemicals.

Thank you very much, Tiffany. Welcome back from the break. Ladies and gentlemen, good morning. And yes, thank you, Simon and Walt for bringing up the foundation of the International Chemicals business, which I will kind of now describe further and maybe start with a personal note, first of all. As Simon has said, I joined Sasol just a year ago, and I was amazed by this business, by the global reach, the new and the strong assets we have and also the broad portfolio of chemical products, which are used in consumer and also industrial applications. At the same time, I was surprised though about the financial results. The situation has been challenging for everyone or most of the chemical players in the recent years. Nevertheless, from the outside, it looked as if Sasol is burdened more by the recent downturn than others. So I thought there must be something to improve, to increase the profitability and also leverage the new footprint of this business. And before I share my observations of Sasol's international chemicals business situation, our improvement plans and what we've done so far already. Let me reconfirm to you that my assumption was right. There's a lot we can do ourselves to improve the profitability and the resilience of this business. With the presence spanning 12 countries, we integrate cutting-edge technologies into world-scale facilities, to source, produce and market high-quality products. Our reach extends over 4,000 customers across 88 countries in various industries, generating altogether a revenue of $4.5 billion. Despite our impressive footprint though, we recognize that this business has not performed to its full potential. We have clear plans now to enhance significantly shareholder value by fortifying our international chemicals business. And let me set the operating context for our Chemicals business first. Over the past decades, there have been a lot of chemical -- petrochemical cycles. Only this one seems to manifest itself for much longer and also at a lower level than before. So the chemicals business has been navigating this challenging operating context over the last years, and one of the primary hurdles as well has been the muted demand, particularly from China and Europe. And despite the recent interest cuts in Europe and also stimulus packages in China, the chemicals industries continues to face subdued demand and substantial geopolitical uncertainties affect additionally the trade flows. The situation is compounded by new capacity coming online at a time of structurally weaker global demand in recent years. And given the scale of that overcapacity, chemical producers will face subdued demand, lower margins and increased competition in 2025 and the years beyond. Additionally, gas prices in Europe remain high and also the involving sustainability targets and regulatory policies have resulted in ambiguity in global supply -- sustainability benchmarks. Adhering to diverse and frequently changing environmental regulations often leads also to increasing operational costs. Additionally, we at Sasol have faced internally significant challenges and as a result, have underperformed our peers. In fiscal year '24, our EBITDA margin stood at 6.4% while our peers achieved on average a level of 12.5%. Together with my leadership team, we have identified several of the key challenges for this business. The first challenge we faced was that our recent investment in Lake Charles has fallen short of expectations. Secondly, several of our assets have enhanced operational reliability issues, including our legacy Lake Charles ethane cracker which suffered a fire resulting in 8 months downtime from March to November of 2024. Thirdly, our previous organizational structure was regionally focused leading to duplication of functions, roles and also systems. Additionally, we were carrying stranded costs from previous asset optimizations. Altogether, this resulted in high overhead costs and inefficiencies. Now these challenges provide opportunities, and we are turning the business around by leveraging the strength of the business and the competitive advantages we have to drive improvements and achieve better results going forward. We are strategically positioned to benefit from our access to cost-effective ethane feedstock and also low energy cost environment in the U.S. Our global assets are geographically close to our key customer markets and geared to meet increasing demand. And we pride ourselves on our established and strong relationships with our customers and main brand over in targeted markets such as fabric and home care, personal care, metalworking and lubricants, adhesives -- abrasives, I'm sorry, or catalyst supports. Our product portfolio is tailored to address the needs of multiple markets and the end markets, which we will focus on are structurally sound. Throughout the business, we have experienced and knowledgeable team members, for example, our technical experts in our state-of-the-art and global R&D facilities. They work very closely with our customers to meet their current and also the future needs by collaborating on innovative solutions. On the sustainability front, we remain committed to delivering our part of the group's greenhouse gas target of 30% reduction by 2030 from our 2017 base. While at the same time, we are lowering the carbon footprint of our products for our customers. So you may ask now, how do we leverage all of this into closing the profitability gap to our peers and enabling profitable growth? Over the last months, we have developed a plan stretching now over the next few years with a strong and clear focus on fostering a strong and resilient foundation. Then post fiscal year '28, we will build on this to leverage options for Sasol, as Simon has mentioned, and grow the business further. Our initial reset phase is centered on improving our profitability, and it consists of 3 core strategic initiatives. First, we have made a conscious decision to change our go-to-market strategies by implementing a tailored and market-oriented operating model for commodities, differentiated and specialty products. The shift from a volume-driven to a value-driven approach ensures a stronger focus on margin expansion over scale. Secondly, we are reviewing our global asset footprint and to maximize value going forward. We have already taken decisive actions to mothball or close 4 of our assets across Italy, Germany and the U.S. Finally, cost discipline is a key driver to improve International Chemicals financial performance. And we have started with implementing a new organizational structure and also various excellence programs, such as our recent procurement excellence initiative, which is targeting unlocking value across direct and indirect purchases. This will deliver already more than $30 million EBITDA uplift this fiscal year. Altogether, our reset phase will deliver an EBITDA uplift of $350 million to $400 million by fiscal year '28. Importantly, all of this is underpinned by a renewed culture and mindset with a goal of fostering and cultural transformation that reignites the power of collaboration in the spirit of winning. At International Chemicals, we benefit from integrated value chains with a tailored approach for each of our businesses to meet the customer needs and also to deliver returns for Sasol. To start with the base chemicals business. It provides critical raw materials for captive use in our alcohols and ethoxylate value chain based on those products which are based on the surfactants. This includes also ethylene and industrial intermediates, such as ethylene oxide and monoethylene glycol, which are sold to merchant markets. The focus in this business is to become leaner, more efficient and also maximize our cash generation. In care chemicals, which is a leading producer of surfactants and intermediates, fatty alcohols and linear alkylbenzene for 3 distinct markets. One is fabric and home care, as I mentioned before, industrial institutional cleaning and personal care. Certain portions of this portfolio behave like commodities. And the focus of the care chemicals business in these areas is to unlock value by implementing a commodity business model for these businesses. This approach will reduce cost and improve regional competitiveness in commodity detergent and surfactant applications. We have initiated this process already by introducing -- by reducing the capacity for LAB in Italy, as previously mentioned. On the other hand, our world-class portfolio of surfactants and alcohols enables innovations like cold-water wash. And in this area, we also continue to drive disciplined innovation targeting, for example, differentiated markets like personal care, health and the wellness segment. Over the past few months, I have met several of our largest also care chemicals customers and major brand owners, along with our commercial team. And I have been really impressed by the depth of our relationship and most importantly, by the commitment to jointly continue developing sustainable solutions that provide value for both partners. In technical formulations, we will unlock further value through expansion and development of differentiated markets for alcohols and specialty alkoxylates in key industrial applications. This business is well positioned to deliver as well components that enable a superior performance in metalworking lubricants and other high-value industrial applications. Lastly, the advanced materials business houses our specialty alumina portfolio, which finds applications in end markets such as engineered abrasives for precision machining or also technical ceramics for use in artificial hip and knee joints, or various catalytic applications. A key strength of our advanced materials division is its ability to provide tailored solutions to our customers and therefore, emphasizing the specialty nature of this business. By focusing on tailored solutions and targeted market expansion, international chemicals is well positioned to meet the current and also the upcoming customer needs and unlocking value for both the customer and Sasol. The closure, sale or mothballing of an asset is never an easy decision. We fully understand the impact these measures have on our employees. And therefore, these decisions are not made lightly. However, to ensure a sustainable international chemicals business, we believe these actions are necessary. Recently, we made decisions to mothball our alkylphenol and HF LAB plants in Europe as well as our U.S. Guerbet plant. And further plants are now progressing as well for the closure of our phenolic producing sites in the U.S. [indiscernible] and Winnie. All of these decisions were driven by a combination of weak market demand with no signs of recovery, global overcapacity and/or sustained higher input costs. All of that negatively impacting our profitability where we did not foresee this changing in the medium or long term. These actions will have a minimal impact on our integrated value chain but it will lead to reduce costs and capital requirements going forward. We're already well on track and expect to see a $50 million to $60 million EBITDA, U.S. dollar EBITDA uplift per annum from these measures by fiscal year '26. The asset reviews will remain part of our normal board business process while we continue to optimize our portfolio. Lastly, to further reduce our cost base. We have also identified 3 different levers. Firstly, we streamlined our organization across all functions and all regions. This started with a leaner executive management team with consolidated functions organized along our global value chain rather than a regional model. This new organizational structure enables us to standardize our processes and systems and apply best practices globally, resulting in higher efficiencies and also making faster decisions. Secondly, we have adjusted our operating model to be a fit-for-purpose go-to-market organization, with defined service levels for differentiated and differentiated for commodities and specialty products as described before. We launched with that a commercial excellence program to define the business -- the different business leads based also on a customer segmentation. Lastly, to accelerate cost efficiencies, the focus is on operational excellence. And here, we facilitate and guide a unified approach to global operations across the entire international chemicals business. Our goal is to produce quality according to plan, while we ensure zero harm for our people, assets and also the environment. This is achieved through the efforts of an innovative and enabled and highly skilled personnel, utilizing reliable and compliant assets while continuously improving our production cost and operational methods. Our excellence programs are supported by our new SAP S/4HANA platform, which is currently in implementation. This updated platform enhances our ability across all functions via globally aligned processes based on best-in-class standards. This is a big step forward compared to our fragmented legacy approach using regionally focused SAP systems. We will also introduce organizational structures that will increase the efficiency of the end-to-end processes. The impact of all of these actions will be significant and will be delivering between 15% to 20% reduction of our fixed costs by fiscal year '28 versus fiscal year '24. We understand the urgency of turning our business around, and we are moving at pace with decisive actions. As you've heard, we've made decisions already on assets and the full benefit of these decisions will become evident in the next fiscal year. The unfortunate fire incident, which we had in the U.S. with our legacy ethylene cracker being off taken for 8 months, I'm pleased to report now that the production has been stable for the last 6 months without any further safety incident. The new streamlined leadership team is working effectively together to ensure that we are on track with our turnaround strategy and the results of our actions have already started to show, as Walt has mentioned, in the half year results, where our half year '25 EBITDA has almost doubled year-on-year. The streamlining activities are in full swing. And yes, the recent last milestone being our go tool, Go-live for our new ERP system in Italy, in April. And we are confident that we are on track to creating a healthy and sustainable business for Sasol. As I close, I would like to reiterate our commitment to strengthening the international chemicals business. Our targets remain bold, and we are confident in the ability to reach them through the decisive actions we have already taken and further identified. We are on track to be free cash flow positive before financing costs this fiscal year. And the significant investment we made in the U.S. has incurred substantial debt. But we believe we will be in a much better position to service this U.S. dollar debt with stronger U.S. dollar cash flows going forward. This will put us then on a strong position to embark on our growth journey to build on our position as a global leader in surfactants and associated value chains. By the end of fiscal year '28, we anticipate that our international chemicals portfolio will be a $750 million to $850 million business, EBITDA business, achieving more than 15% EBITDA margin through the cycle. However, this will not be an overnight result. We expect this journey to spend the next 3 years to achieve this ambitious target. And as an investor, you may be wondering, given all the challenges if this business can be turned around. Well, after a year in the role, my team and I, we are convinced that this is indeed possible. We are confident that the strategic initiatives that we have already identified will yield significant value and we look forward to sharing more of the positive outcomes in these actions and decisions. Thank you. And please let me hand over now to my colleague, Victor Bester, to share more on the Southern African operations.

Well, thank you, Antje. And thank you, Simon and Walt for setting the context and for providing a holistic overview of the business. So good day, ladies and gentlemen. We will now take a closer look at the Southern African business. And as we reflect on the past year, we do so with a deep sense of responsibility and commitment. Our high severity incident program is delivering results. which is -- which shows a decline in serious incidents, which is a testament of our team's dedication and the effectiveness of our targeted interventions. At Natref and Sasolburg, we are improving asset management practices, setting the stage for long-term operational reliability and competitiveness aligned to industry benchmarks. But Secunda is the subject of this deep dive and more specifically, the key aspects that impact the performance. These are improving coal quality, restoring gasification performance and optimizing our cost base. All of this is done to achieve our ambition to be competitive delivering at a nominal oil breakeven price of $50 per barrel by FY '28, which includes capital. So let's take another look at the Southern African business, and I'm sure, you know the Southern African business well. This business is the cornerstone of Sasol. It is characterized by significant value and its strategic importance to the country. The key features of this business. It's in an advantaged location in the industrial heartland of South Africa. It's diverse and integrated portfolio enables us to optimize across the entire value chain. It's a leading brand with established local and global customers. This is not just a good business but a strategically advantaged one with immense potential. We recognize that our recent performance has not been reflective of this potential leading to questions about its future, but I must state, and I must clarify that this is not a broken business. We are dealing with a specific set of issues that we understand, and we are working to address them. In the next section, I will outline our plan to restore business performance to historic levels. So unlocking value in the assay business is really anchored in feedstock, operations and marketing and sales with feedstock and operations being the largest lever at our disposal. And as we know, Secunda operations operating at full capacity with affordable high-quality coal represents an exceptional business. But a 9% reduction in throughput has a significant impact. which has really prompted us to launch an extensive investigation to identify and understand that causes leading to this level of underperformance and the primary causes are escalating cost and a decline in our coal quality. The sustained decline in core quality has adversely affected gasification. To address this, we are following an integrated approach, spanning mining and our downstream facilities with a focus on targeted reliability interventions to reverse the trend. And finally, for the overall business, we are managing costs below inflation to enhance our profitability. So let's dive into the specific areas. And let's start with mining. And it's important to note that for many decades, the mining business benefited from favorable geology, which has shaped a business that could deliver the volumes at competitive costs. However, as mining develops reserves, further away, we encountered complex geology that require proactive mine deployment and/or reactive beneficiation. Unfortunately, our response to these changes has not been timely. And while current benchmarks indicate that we are 1 of the lowest cost producers of coal in South Africa, the true cost of maintaining quality has eroded 1 of Secunda's key competitive advantages. And that is inexpensive fit-for-purpose feedstock. The poor quality of coal has a dual impact on our business. I think, firstly, it reduces the gas yield at gasification, meaning we produce less gas per gasifier. It damages equipment leading to longer downtimes and therefore, fewer gasifiers available for production. In response, we have shifted to a quality-first approach balancing quality, volume and cost to restore Secunda's competitive advantage. I will now unpack each 1 of these mining levers yes. So starting with quality. We have commenced the construction of the destoning project. The successful delivery of this project is the most significant lever to improve coal quality. In broad terms, the scope of this project is to retrofit and repurpose our existing Twistdraai export plant to destone Thubelisha run of mine and 30% of Bosjesspruit coal, right? And this combined feed will be fed to gasification to produce pure gas. This is a low-risk cost-effective solution that will come on stream by the end of this calendar year. We are also testing real-time quality analyzers that will allow us to make in time decisions to improve our blending capabilities. Together, these improvements represent a significant shift in the operating philosophy to improve our core quality from a blend composition and variability perspective. Moving on to volume, how we address the volume problem. We are resetting selected mining fundamentals to meet Secunda's demand by increasing drilling for our improved reserve interpretation. This will enable effective mine planning and the time is establishment of the required infrastructure deployment which is supported by our current capital plans. And with the improved geological understanding, we can proactively plans stoneworks ensuring flexibility in mine execution. But this approach still requires us to supplement with competitive external purchases. Yes. Proceeding to the cost of coal, Here, our goal is to maximize production from our own low-cost sources, leveraging our operating efficiencies. And we've implemented a few operating efficiencies, like the walk-on, walk-off operations at a few of our mining sections. This initiative employs to continuous miners per section to minimize downtime. Couples to these efficiency improvements, our actions to address the competitiveness of specific internal sources. And here, trade-offs are considered to substitute or supplement volumes with competitive external purchases. Moving on to our long-term supply. Here, we are developing solutions to extend supply beyond 2030. As we face depletion of existing collieries like Isibonelo will cease deliveries by December 2025, and our Bosjesspruit operations is expected to close by 2030. To address this, we are following a multi-phased approach to evaluate both internal and external supply options. These include developing our own reserves, procuring external coal and forming strategic partnerships to unlock future supply. We have shortlisted several potential suppliers. And we will compare internal and external options to determine the most reliable and cost-effective path forward. As you can see, we have translated our action plans into a comprehensive and realistic road map with key milestones. Some of them have been achieved. So you can see some are about to be achieved and others are more in the long term. I will highlight a few. In August 2024, we established a world-class integrated quality management center. And if we were to combine this with our real-time analysis, this will be a key operational lever for our quality-first approach. Simon mentioned, we took FID on the destoning project. And we expect beneficial operation by the end of this calendar year. And in October 2028, we will finalize long-term coal supply auctions. Yes. Now moving on to gasification. With the destoning project coming on stream, it's important to note we will see an immediate and measurable increase in gasifier yield, yes. Though I must state that production levels will still be limited by gasify availability. And this is due to longer gasifier maintenance durations, which were caused or are caused by higher wear and tear rates associated with poor coal quality. And we've seen outage durations have increased from 65 days to 135 days per gasifier. We have a fleet of 84 gasifiers. And under normal circumstances, we expect 75 to be online at any given time. However, over the past 4 years, this number dropped to 65 to 70 gasifiers, representing a significant drop in our production capacity. The good news is we are working on the restoration of our gasifier availability, right? And we have a set of levers that we are working on to achieve this. And starting off with the first one, we are taking a risk-based approach to restoring integrity and reliability. We've deployed new repair methods. We've also optimized our contracting strategies for competitive outcomes. We focused on productivity and we've added additional but temporary resources to catch up on the maintenance backlog. These interventions, combined with improved coal quality, will result in an average maintenance outage duration of 65 days, which is kind of where we were in the past in terms of outage durations. In the graph, you will see the correlation between sinks, gasifiers and total production. It shows that over the period FY '22 to FY '25, there was a step increase in syncs with a decrease in gasifier availability. That resulted in lower overall production for Secunda operations, yes. I think it's over here. You can see it relative to where we were prior to that period. But that being said, with destoning and the increase in gasifier availability, we expect a ramp-up of Secunda production to be more than 7.4 million tonnes in FY '28. Yes. This particular slide is an illustration of our recent co-quality efforts where we performed a test run. We isolated high-zinc sources and if I could explain this, what this represents the puzzle pieces is basically a coal blend, which consists of coal from different sources and we make it up to a recipe to feed into the gasifiers. And in this instance, we isolated high-zinc sources, and we replaced it with losing sources. What that demonstrated is -- on the graph on the right, you can see the period before the test run, what the gasifier yields were. And during the test run, which is the darker blue bar, what the yields were during the test run. This was done over a 14-day period. And if we extrapolate that over a year for 75 gasifiers, it confirms that we can produce more than 7.4 million tonnes of product out of the Secunda facility. So the destoning investment, the focus on gasify availability will restore Secunda's production levels to where we wanted to be, more than 7.4 million tonnes, yes. We move on. Let's move on to the next slide. So the next slide is focused on cost. And here, Walt has covered some of this. And I will talk to some of it as well. And our business is one that's characterized by high revenues with low conversion to free cash flow, yes? And this is due to our cost and capital structure. We know this. We recognize this and more needs to be done to increase this conversion to cash. Our recent history demonstrates our ability to manage costs below inflation, and we aim to build on this. So going forward, we will focus on the efficiency and the cost effectiveness of both internal and external spend. We will keep cash costs below inflation by targeting a cash cost saving of between ZAR 8 billion and ZAR 10 billion by FY '28, whilst keeping our capital expenditure below ZAR 27 billion. We will ramp up renewables by 757 megawatts. This in an effort to lower our increasing utility costs. And we will focus our efforts on assets that continue to add value to our portfolio. Our approach to capital efficiency is really anchored in the following principles: sustained reduction in sustenance capital whilst ensuring no compromise on equipment integrity, safety, operational stability and reliability. We'll take a closer look at project scope optimization and we will also improve our project contracting strategies. We believe by leveraging these measures, we are well positioned to optimize our cost base. Yes. So in conclusion, our focus in the Southern African business can be summarized as follows: deliver on volume growth and margin upliftment, drive disciplined cost reduction with targeted focus on capital efficiency, and both internal and external spend. This approach ensures business resilience at a nominal breakeven of $50 per barrel by FY '28. We are confident that these interventions will position the SA business as an exceptional investment case. I will now hand you over to Sarushen Pillay, who will provide insights into how we aim to grow and transform our business. Thank you.

Thank you, Victor, and good morning, ladies and gentlemen. It's time to talk about our future. So let's jump straight into the specifics of our transformation journey. Now moving forward, our new approach is to build new sustainable value streams to grow our income and reduce our carbon intensity over time. By 2028, with the ramp-up of our international chemical business, here, we're not starting from scratch. So as this business ramps up, our dependence on coal would reduce the group's dependence by less than half of our EBITDA. But we can't stand still. As markets and customers are evolving, we will have to be ready to move as the demand for lower carbon products grows. Let's put the slide up, please. And here, Sasol's real advantage is our fully integrated value chain. Our fuel and chemical plants give us a significant guaranteed offtake for any sustainable feedstock that we introduce. Now that anchor demand lets us bolt on renewable energy and sustainable carbon streams earning returns from day 1. So in effect, new sustainable businesses grow on the core of the existing businesses instead of risky greenfield projects. And this allows us to scale and expand beyond our own consumption, all with far lower risk than our peers. Now importantly, as an investor, we're doing this with realism. No moon shots, no speculative bets. Each initiative is grounded in technical feasibility matches market maturity and delivers attractive returns. Our optimized emission reduction road map is the clearest proof that Sasol can reduce carbon intensity while growing value. Today, we're still achieving our target, but under vastly better operating and financial conditions. Now I'm sure you must be asking, how is this possible, right? Three shifts unlocked this spectrum. Firstly, regulatory certainty. In 2024, the environmental minister confirmed load-based sulfur dioxide limits for our boilers. So this allows us to keep more boilers running, preserving steam capacity while meeting compliance requirements. So this means we are no longer cutting back on gasifiers and will maximize Secunda's production. This also allows us to reduce our CapEx by more than 70% by moving away from recycling fine coal and progressing alternative solutions. Next, we've expanded our renewable energy ambition to more than 2 gigawatts displacing expensive coal-based electricity and generating competitive returns. And finally, to bridge the gap to our target, we'll leverage carbon offsets and renewable energy certificates. Now Sasol has long purchased offsets to manage our carbon tax liability, and we are going to use the same offsets to count towards our emission start with. Offsets provide flexibility for hard-to-abate residuals. So put it all together, and the result is the road map is now a catalyst for growth. This is a breakthrough in aligning our environmental and business goals, lower capital, higher returns, allowing us to reduce our debt and accelerate growth. Full gasifier utilization keeps Secunda generating strong cash flows deep into the future. And importantly, we've planted the seed for a new integrated power business with scalable, stand-alone economics. Now to date, we've already made tangible progress. We are seeing the benefits of our energy efficiency projects, and this allowed us to turn down our first boiler equivalent in Secunda earlier this year. We've also decommissioned all our on-site incinerators in Sasolburg and Secunda and recycled most of our waste streams. Renewable energy is already starting to flow into our facilities. So in short, Sasol's optimized road map does more than just cut emissions. It offers economic value and strategic optionality. Now this is the kind of innovation that's in our DNA. And investors can expect more as we respond to changes and opportunities in the external environment. So now that you've seen how we anchor our transformation in value, let me bring this renewable power story to life. Secunda alone consumes well over a gigawatt of electricity. So every electron from our solar panels or wind turbines has an immediate home. Every megawatt of renewables drives our breakeven down and lowers our emissions. Now initially, we limited our ambition to 1.2 gigawatts to avoid spilling risks but shifts in the regulatory environment now allow us to sell excess electricity. And therefore, we've lifted our renewable energy target to up to 2 gigawatts. At that level, we extend the clean power window and earn returns that comfortably key our hurdle rate on substitution savings alone. The opportunity to trade excess electrons allows us to expand our position in the market. And to achieve this, last month, we applied for our own stand-alone trading license. Some of you may have seen last week, we partnered with Discovery Green to launch Ampli Energy an innovative pay-as-you-go product. And this product is already oversubscribed, giving us an indication of the significant demand. Now once those first 2 gigawatts are running, it's that same anchor demand that lets us move step-wise beyond 2 gigawatts. Extra capacity further extends the clean power window and we can sell any surplus into the market. Now you may ask, so what happens if the South African grid ever finds itself a wash with mid-day electrons. Well, we enjoy a release valve that no pure-play generator has. We can convert, we have the opportunity to convert this excess electricity into hydrogen, allowing our Fischer-Tropsch's units to convert electrons into higher-value fuels and chemicals, putting a floor under returns. And in this market, we're uniquely positioned to succeed. Sasol already operates the country's largest private fleet of coal and gas-fired electricity generation. So buying, selling and balancing electricity is business as usual for us. We also have access to extensive land ideal for embedded generation that then bypasses current grid bottlenecks. So in short, we start with guaranteed demand to unlock immediate savings, we learn at scale and retain the unique ability to turn electrons into premium molecules. It's a clear low-risk route to becoming a top-tier power player while strengthening Sasol's earnings and resilience every step of the way. Now our renewable energy strategy is already deep in execution. And we here we've followed a 2-pronged approach. First, we secured low-cost power purchase agreements for shovel-ready projects, and this allowed us to decarbonize quickly and lock in immediate savings. Second, we use the breathing room that these PPAs have created to pivot into equity stakes and trading positions for added value. Now projects that are coming online, we have 757 megawatts that will ramp up over the next 18 months with a further 1 gigawatt that we aim to contract by financial year 2028. Now this first wave of PPAs were cumulatively over the next 5 years, save more than ZAR 4 billion in costs alone and reduce over 10 million tonnes of greenhouse gas emissions. Now these are benefits that drop straight to the bottom line and count towards our 30% emissions target. Now we are applying the same start small scale fast logic to embedded generation. A 3-megawatt solar array in Sasolburg has proven the concept of building inside our fence and bypassing grid access delays and we are now rolling out this template across our land portfolio, site by site. With these successes, we are moving from pure offtake to selective equity allowing us to capture developer margins as well as trading upside. We are avoiding overexposure on 1 mega project and instead are stacking a series of smaller, high-confidence projects, each one, lowering our cost base and ratcheting up our capabilities. The savings and carbon reductions already being realized from renewable energy prove that our strategy is effective and profitable. Now let me turn to gas. Here gas plays a pivotal role for both Sasol and South Africa. It is critical for our customers, and it enables the transformation of the South African grid. And we see our gas value chain continuing as a stand-alone profitable business. As gas from Southern Mozambique declines, we bridge this with near field extensions Simon spoke about methane-rich gas and ultimately, an LNG solution. As gas demand in the country grows, we see an opportunity to protect and to grow our income from our mid- and downstream business. Now we believe that LNG remains the only viable alternative to meet the country's medium-term needs. And here, we are collaborating with Eskom to accelerate the development of a gas to power solution that provides the anchor demand to aggregate LNG. With LNG solutions unlikely to be available before 2030, it is critical to bridge the supply gap for our customers. And here, Sasol has developed a unique solution to redirect methane-rich gas from our Secunda operations. This mitigates customer uncertainty regarding the timing of LNG. Our pricing application will support us being compensated for the loss in high-value products. Now unlocking the next phase in South Africa's gas economy is highly complex. And here, Sasol is uniquely positioned to support the country's gas ambition. Let's shift gears now towards sustainable feedstocks and products. This is a rapidly expanding market with multiple opportunities emerging across various industries. And here, our approach is to focus on areas where there's an immediate demand, renewable diesel and sustainable aviation fuel. Renewable diesel provides a seamless alternative to fossil diesel in heavy vehicles and we expect this market to grow by up to 500 million liters annually by 2030 in South Africa. Success in this area will depend on the ability to access low-cost feedstocks, convert these feedstocks into products and place them competitively into the market. And here, we're making good progress. In collaboration with Anglo American and De Beers we are converting degraded mining land into high oil yielding crop hubs. This initiative, when combined with our Natref refinery and our established diesel customer base provides us with a significant competitive advantage. In the aviation sector, mandates, such as those in the European Union, are driving viable demand for sustainable aviation fuel. And here, we are well positioned to participate. Our Zaffra joint venture with Topsoe leverages our globally recognized technologies to facilitate the competitive production of sustainable aviation fuel. Notably, Sasol and Topsoe's technology has been selected for the German aerospace power centers power to liquids platform. We are also gearing up to produce commercial-scale staff in South Africa. Supported by EU backing to ensure sustainable production in Secunda. So as an investor, what can you expect? In this decade, you can expect growing income from 2 new value streams. First, from the Power business; and secondly, from our sustainable fuels business. In addition to these new ventures, we are focused on protecting our gas income and are executing comprehensive plans to secure the country's gas future. Finally, we have a funnel of emerging opportunities that are in earlier stage of development. And here, we are advancing these in line with our principles of being market-led and value-focused. Now let's get to the burning question. Based on what you've heard today, I'm sure you're asking, is there still a strong South African business for Sasol way beyond 2030. Everything that you've heard to today points towards an unequivocal yes. Our feedstock security is solid with own mine and contracted coal supporting full gasifier rates into the 2040s. Regional demand for liquid fuels and chemicals extends beyond 2040, ensuring continued cash generation. Current initiatives protect income from the gas value chain. We are lowering our Southern African oil price breakeven ensuring healthy margins even in conservative scenarios. The optimized ERR turns decarbonization into value creation, allowing us to meet our emissions target while enhancing Secunda's value. Secunda remains cash positive even as throughput drops below 7 million tonnes when gas declines. We will keep our gasifiers fully loaded, replace expensive coal power with low-cost renewables, shift to sustainable fuels and chemicals and rightsize the cost and capital base. In addition, we will grow new income from new sustainable businesses. These steps transform our assets, offset the gas shortfall and protect and grow our profitability. Now externally, policies are also fast shifting from headwinds to tailwinds. Treasury has extended the carbon tax allowances and raised the offset cap, flattening the cost curve. We are also advancing a carbon tax recycle concept to reinvest the tax in our transition. So put it all together and the future is compelling. The business is evolving into a cash-generating lower carbon platform with multiple new value streams and reduced oil price exposure. I'll now hand over to Simon. Thank you very much.

Thank you, Sarushen. Ladies and gentlemen, Sarushen, Victor and Antje has showed that Sasol investment case is strong, and we are well positioned to deliver sustained value in a changing world. We are committed to strengthening our foundation within the next 3 years. Our value accretive approach to decarbonization will create value while leveraging our strength that we have today. We are following a disciplined approach to capital allocation, which provides the balance sheet flexibility to enable growth. And this will deliver sustained returns to our customers and shareholders. We have translated our strategy into specific targets and actionable plans to deliver meaningful value. We are confident that we can deliver against the FY '28 targets, which are shown in this slide behind me. I'll provide you with regular feedback of our progress at future engagements. Over the past year, we have taken decisive actions and made inroads to us delivering on our targets, most notably, we've already commenced with the construction of the destoning plant and this is going to be a step change in our quality. I know that some of you are going to Secunda over the next few days, and we are going to show you that construction process. We've streamlined the organization, removing duplications and reducing efficiencies and removing duplications. We've also made very hard decisions to mothball nonperforming assets. This has started globally. And as Victor has indicated, we will extend this to the South African region as well. And most importantly, we've also restored key relationship with critical partners and stakeholders. We are committed as Team Sasol to build credibility through performance. At the outside of this session, I kind of phrase reshaping for a new era. What does a new shaping for a new era mean? Reshaping for a new area means prioritizing value over volume. While we'll maximize the progression volumes, those volumes will be placed in higher gross margin channels. And simultaneously, for the plants that are on negative margins, we have to identify those plants, mothball them or close them. We've already demonstrated this in the International Chemicals and will follow suit in the South African region. Reshaping for new era means cultivating a culture of cost and responsibility where every Sasol employee is a steward of our finances. And most importantly, reshaping for new era means delivering on our promises and commitments. To our employees, Team Sasol, I'd like to commend you and thank you for your unwavering commitment, dedication, innovative spirit and resilience. These are the qualities that truly set us apart to our shareholders in this room and online, the last 4 years have not been easy. Thank you for your unwavering support. Team Sasol stands before you today fully committed to this transformative journey to deliver value for you. To our customers, we are your partner and credible supplier of high-quality products and innovative solutions. We appreciate your continued business. To our host communities, thank you for your support. Sasol will not be the same without you. And to all our stakeholders and partners, we are committed to be a force for good and a partner of choice and adjust energy transition. Ladies and gentlemen, in closing, I want to assure you that we are a resilient team and are committed to our costs from the operators that are running the plants right now as I speak to you, to a minus underground, 100 meters underground, busy running our continuous miners right now as I speak to you, to all our global employees that are listening to this broadcast, to the Chairperson and the Board, I mean, the Chairman is here with us in the room, we will leave no stain -- no stone and tend to ensure that we achieve our goals. We will do this with care and dedication. We'll give it our all. No obstacle will stand in front of us because our blood is blue, we are Sasol. Thank you to all of you. I'll now hand you over to Tiffany. [Presentation]

Simon, for your closing remarks. Thank you to the deep type speakers as well, Antje, Sarushen and Victor. This concludes our formal presentation for today. We very much appreciate your attention and invite you to take a short break before we'll begin with the Q&A session, which I'm sure many of you are looking forward to which will be hosted by our executive management team in the room. We'd ask that we take a break until 12:30. And if you could just please be seated about 5 minutes before to accommodate our online participants as well who will participate. Thank you. [Break]

Okay. Thank you, everyone, and welcome back from the break. We'll commence now with our Q&A session where you'll have the opportunity to direct your question to any of the management team on stage. So just to do a few introductions at the beginning, in addition to the speakers that you've heard today, there are a few additional members of the executive team. Herrmann Wenhold is our Executive Vice President of Mining; Vuyo Kahla, right next to me is our Executive Vice President of Commercial and Legal and to Sarushen's left is Christian Herrmann, who is our Executive Vice President of Marketing and Sales, Energy and Chemicals, Southern Africa. Also, we have Charlotte Mokoena next to Christian, who is our Executive Vice President of Human Resources and Corporate Affairs. [Operator Instructions] Okay. So if I can ask that we begin with the first round of questions in the room, we'll take 2 questions at a time. Chris, if we can start with you and then Charlotte.

It's Chris Nicholson from RMB Morgan Stanley. I've got 2 questions to start off with. So maybe if we can just start with the comments around no turn down of Secunda production post 2030. My understanding from what you presented today is that you are planning to throw a lot more renewables at the asset. Thus, in the mix, you're going to be using more energy from renewables, less from coal and hit net for 30% reduction target at the same time. Can I ask about some of the other factors? You have a sulfur dioxide limit that I think has been extended by the ministry until 2030. I think that's about 500 tons. That needs to be turned down to 360 or so up to 2030. That's number one. Surely, that would impact the total production Secunda provides. And then linked to that, maybe again, also the gas from Mozambique, what happens to wax or ammonia, that whole value chain at Sasolburg as that comes off. Ultimately, the question is, is 7.4 really the right number post 2030?

I think let's just take questions as well and then we can answer in one batch, if that's okay.

Okay. I also pose 2 questions. One on mining. So destoning is coming in at the end of the year [indiscernible] is running out. Porsche's price volumes are falling and Secunda's volumes are going up. So maybe if you can just give us some sort of an indication of what the coal balance looks like? How much coal do you need to take into Secunda to get to 7.4 million? How much coal do you expect to buy in? What will inform the decisions that you will make, as you said, by October FY '28 in terms of future coal supply? And then maybe just on the $750 million to $850 million of EBITDA at the International Chemicals business. Can you maybe just elaborate on the cycle assumptions that you're making to get to the -- I see it's 30% of the uplift is macro. What are the cycle assumptions that you're making? And what will it look like if your macro assumptions are very different, if oil was $65 for the next 3 years? And those macro assumptions did not materialize on the chemical side?

Thank you, Chris. Let's start with Chris' question first. I will start and I'll then allow Sarushen to weigh in on this. So Chris, you asked about Secunda turning down, I mean, post 2030, how does this relate to the other factors like SO2 and the gas from Mozambique. So the Tandon that's associated with gasification. You remember, we said you have to keep gasification full. So that's what when you're referring to the Tandon, we're talking about that. Sarushen in his presentation, he did allude to, I mean, the Tandon that will come later due to gas. I think Sarushen, you can elaborate more on that.

Thanks, Simon. So 2 things, Chris. The first is in Secunda, our boiler fleet, 17 boilers used for steam and electricity, right? The boilers that we want to turn down are the ones that relate to our own electricity generation. And this is where we'll replace it with renewables and for the electricity imports. And that's how we want -- we will meet our sulfur dioxide emissions target. So that's from the boiler turn down, right? As you know, our gas is about 10% of the feedstock into Secunda. So as that drops off, we will see that reduction in production. So that is the reduction that we'll see in the longer term. You asked about our WAM value chain. There, we're looking at now repurposing that facility, but we'll do it only if it's financially viable and value accretive to convert it now into making sustainable chemicals and sustainable fuels as well.

Then Sarushen, maybe cover that 7.4. It was in your presentation.

Yes. So on the 7.4 -- 7.4, the right number, I think what we are saying is gasification, we want to run flat out. So 3 million pure gas from gasification, gasifier is fully loaded, our coal demand will not change. So we'll keep the gas -- the core part of the value chain running. And then we look at how do we now pivot some of that facility, if possible, to other products, right? But we will see that decline from gas. And there we see production then dropping as gas tails off. We expect the gas to tail off by 2034 and their production should drop below 7 million tons.

Yes. Thanks, Sarushen, and thank you, Chris, for your questions. [ Gerhard ], when we're going to go into your questions, it's also a 2-part question. We will start firstly with the mining asset value chain question. I'll address that, and then I'll ask Victor. Victor, you can weigh in into the call that you want and Herrmann, you can then chat about the coal outlook. I mean as I start, [ Gerhard ], the mines that need to be retired, Isibonelo, Bosjesspruit, that is part of the normal end of life of those mines. And we have to replace those. So we'll continue replacing those mines. You remember, we previously indicated we've got enough reserves. Victor did indicate during his presentation that we will look at options. We don't have to build. We can build, we can partner and we can purchase. We're going to look at all the options. What we're maximizing is quality and the cost of coal. So I mean, Herrmann, let's start with you. Let's go into the details of the -- I mean, coal supply, the midterm and the long term so that we comprehensively cover the question. And Victor, you can talk about the Secunda ones in terms of both quality and volumes.

Thank you, Simon. Good afternoon, everybody. Let me start answering your question by the immediate short term. So as we know, Isibonelo will stop supplying coal to Sasol Mining by the end of December of '25. But that means for the FY '26 financial year, we will still get approximately 2 million tons from Isibonelo. The latter portion of the financial year, that gap caused by Isibonelo will actually be replaced by the coal from Thubelisha that flows via the destoning plant into Secunda operations. That's a little bit more from Thubelisha eventually that will end up in [indiscernible] than what our export -- what we exported over the last few years. But that will still leave us with a gap in FY '26 of approximately 2 million to 3 million tons, which we will purchase and we will bring that coal in via road. And we already have contracts in place for that coal. I think what's important then is when we get into FY '27 onwards to FY '30, FY '31 time period. So the gap of 2 million to 3 million toes that we have to buy in '26, that will actually increase to about 4 million to 6 million tons from FY '27 onwards. And remember that we still have -- so that will be the gap. It's going to increase to that. The reason is that Isibonelo will fall away completely in FY '27. And the other reason is the fact that the Secunda operations demand will increase to meet the throughput of 7.4 million tons, which is planned for. Now to close that gap from FY '27 to FY '31, we would like to close the gap of purchases, which is 4 million to 6 million tons. And there's 2 main actions that we are focusing on. The first one is we are planning to sink a man and material shaft -- a new man and material shaft at Syferfontein colliery, which is our cheapest producing colliery. And the plan is to have that shaft operational by early 2029. That shaft will access areas that will allow us to move from of the Syferfontein areas that will be mined out. So it will be a replacement of capacity, but it will also create additional capacity. The other matter that we are focusing on for this period is we have implemented -- started implementing a program at Sasol Mining where we are improving on our mining fundamentals. What does that mean? We need to have a better understanding of our reserve base so that we can improve our planning in order to know where we need to plan for stone work going forward, and that will help us to create additional flexibility and that will also help us to create limited but create additional capacity in 1 or 2 of our current mines. That -- focusing on the fundamentals will include, as Victor alluded as well, we will improve our drilling capacity to do geological drilling. That will directly inform our planning. And it will also enable us to do better planning and balancing between mining lower sinks and higher sinks reserves simultaneously so that we can get the blend. That fundamental program will also create some stonework capacity. Due to our challenging geological areas, we need to do more stone work. And that plan also will include the establishment of ventilation shafts and underground infrastructure. All of this is part of the capital plan that Bolt has indicated. It's part of that capital that we will be spending. However, as you alluded, not only Isibonelo is mined out, Bosjesspruit will be mined out around about FY '31 as well. And that's a baseload that we want to replace with establishing new baseload capacity. So not bringing in coal by truck, preferably then coal via conveyor belt or coal via rail is what we're looking at as a preference. We have approached the market, as Victor indicated as well. There is enough interest to supply Sasol of coal and supply Sasol of baseload coal. But what we are also doing is we also have internal reserves, one set of -- one block of reserves we own with a partner and 2 blocks of reserves, the so-called Alexander Reserve and Falcorp, which is another one is reserves that we own ourselves. We will soon commence with pre-feasibility and feasibility studies on our own reserves, our reserves that we have a partnership on as well as the work that we're doing with potential suppliers to go into a pre-feasibility level with them. So that we can be in a position in 2028. The plan is between June and October 2028 to take a final investment decision by evaluating options, which will then include external supply or internal supply or own reserves or reserves that we own in partnership. And we are also -- we will also be exploring the potential to go into partnerships where either our reserves can be mined by an operator or we will go into partnerships with other reserve owners. It's important for us to have a high level of control over our feedstock.

Can you just clarify on the 46 million that is over and above the existing current purchases.

No, no -- no, no. That's part of the existing current purchases, that's not over and above.

I think it's important to emphasize that the export plant coal to Thubelisha run of mine will now be directed to Secunda operations.

Yes, I think it will be sweet and short. It's Secunda demands 36 million to 38 million tons in order to produce at least 7.4 million tons of product.

Thank you, [Gerhard], we will also quickly handle your questions on the cycle assumptions. I'll let Walt handle that. I mean, suffice to say that our uptake is just based on demand projections because we know that this is driven by the capacity which is there in terms of the chemical -- I mean, cycle, and we know towards the end of the decade, that capacity get taken up and gradually with that, you should see market recovery. But Walt, you can handle the assumption question that...

Yes. Thanks, Simon. I think the -- so I mean, you've answered part of it is that delinking between the chemical prices and oil at the moment because of the oversupply in the chemical market. We do see that towards the end of the decade improving and getting much more in balance. I think you would have -- we've been careful not to bank on the macro improvement. And I think that's part of the message why we wanted to clearly split out that EBITDA delivery graph to say this is the base business. You see a slight recovery over time, but nothing dramatic. And the real key thing is what can we do that's in our control. And very clearly, that's around the go-to-market, the cost and some of the portfolio work that we're doing. Kurt, we haven't given all the price assumptions. You would have seen on my EBITDA curve. I have kind of given an idea of where I think oil will end up in FY '28, around $74 a barrel. That's a trajectory, obviously up from where we are at the moment at around $65. In our deleveraging graph, some of the scenarios that we've looked at is a lower for longer oil price around $60 and a stronger rand. That's really what is -- the rand oil price is what I'm tracking more closely at the moment in terms of those numbers and the impact on our business. But suffice to say, we've looked at the different scenarios and still believe that especially on the chemical side, the more we can take into our control, the better for the long-term viability of that business.

Okay. I think we can pass on to more questions in the room. I'm going to ask Harsha just in front of me here. And then the second set from Oliver, just a little bit in front of Harsha, and we can move to the back of the room afterwards.

I'm Harsha from HSBC. My question is for Antje. So you had a 15% mid-cycle EBITDA number for chemical margins. Now obviously, that's a blended number. You have a different mix of assets and various cost advantage assets in the U.S., you have non-advantaged assets in Europe. So could you split that out, what do you think mid-cycle margins are for those sets of assets? You also had a chart in there, which showed the gap between where you were relative to your peers. So how does that gap look again on a regional basis? Is the underperformance largely stemming from your U.S. assets? Or you think it's Europe or a mix of both?

Thank you very much for your question. The performance compared to our peers shows that there is across the business, something we can do to improve this business, which is very good. And those are the self-help measures, which I've mentioned before. We have right now, and you saw that in my first slide, a split of EBITDA of 60 to 40 U.S. versus Europe. And that's the split which we -- is the basis of the business going forward as well, more or less. So meaning that, yes, for sure, in Europe, we will have a lower EBITDA going forward than in the U.S. throughout our planning horizon.

Oliver Connor from Citi. Two questions from me. First one, again, just coming back on the International Chemicals business. So obviously, a lot of self-help going in there to reach your target. I mean could you give us a little bit more color around maybe some of the portfolio shifts that might go on in terms of the products that you sell to achieve that? I understand sort of closures and some of the efficiencies you can get from that, but just a sense of any changes in the mix across the portfolio? And then the second question, one probably more for Simon. If I look at the overall picture, particularly in the SA business, it's very much focused on cost savings and efficiency, and there was acknowledgment in the presentation that the company was a bit slow to react to some of the issues in the value chain before. I guess what would you -- would your message be to investors to say that this time is different in terms of reaching some of those cost saving ambitions?

Simon, do you want to go first or shall I?

No, you can go ahead.

Okay. So, Connor, on the product portfolio going forward in our new go-to-market strategy. So we have a mix of products at the moment in our portfolio, high-volume commodity-driven products and then differentiated products and a very small part of special products, which are sitting across the technical formulations and massively in the Advanced Materials business. Our intention is to adjust our business model to serve these markets. Commodity business is not a bad business. You need just to drive it as a commodity business with the right service levels and costs associated with that. That's what we are setting up. And then obviously, we're trying to drive more into -- from our value chain into higher value markets and applications of our specialty alcohols, for example, and some other products. So you will see that shift over time that we strengthen particularly the applications in all of the sectors, not base chemicals, but in care chemicals, which are more differentiated, which is, to a large extent, still a commodity business, but particularly in Technical Formulations and in Advanced Materials, you will see a shift to higher volumes and higher margins as well going forward.

Yes. Thank you. On the SA value chain, Southern African value chain, driving the guiding Northern Style with a $50 a barrel. And in other to achieve the $50 a barrel, we have to deal with the volume and deal with the cost. And on the volume side, we're very clear what we need to do. We fix the coal quality, we get the gas price back, we can get the volumes back. On the cost side, we're focusing on both internal spend and external spend. We've already started with initiatives and we'll continue adding more initiatives. What is different and what is key is that we're not going to run a separate program. That has to translate itself in the $50 a barrel. And that for us, we think the flexibility between both volume and cost that can help will allow us to achieve that $50 a barrel. And that measurement will then -- we have seen another question, which is online. We're going to make sure that the target that I've shown here, those targets are going to be embedded into our short-term incentive, long-term incentives to make sure the whole organization is aligned in achieving those targets.

Thank you, Simon. I'll take 2 more in the room, and then we can switch to the online participants. Deepak in the middle there and then Andrew in the same row to start further down.

Simon, given the focus on CapEx cost cutting -- sorry, it's Deepak from the Industrial Development Corporation. So given the focus on CapEx cost cutting, I'd be interested to get your perspective on contract mining and maybe just to add a bit more flavor in terms of lower capital intensity and also benchmarking contract mining versus in-house operations and also from a cost perspective.

Andrew, can we have your questions as well?

Yes. In your target to EBITDA by FY '28, the range is ZAR 64 billion to ZAR 71 billion. But you also within that, say that it excludes external feedstock and white product purchases. And then I noticed also on your cost target, the ZAR 121 million going -- between ZAR 125 and ZAR 130 million, which is very impressive by FY '28. Again, you were saying you're excluding that. So I guess the key question here is how variable would you expect that number to be? Because it sounds as if there's pressure on that number, if I listen to [ Gerhard's ] question earlier in terms of i.e., the need to bring in more external purchases. Maybe you can just give us a sense that ZAR 7 billion is why the variance? You've given us your assumption on oil price, you've given us your assumption on the rand. Is it related to that external cost? Maybe you could just -- kind of full picture in terms of why the range and just how sensitive that net EBITDA will be to the final outcome on external purchases. And then the other question I have is more like field -- we have a very uncertain global environment at the moment with U.S. tariffs. Maybe you could just give us some sense, I'm sure you've done the math on the net impact for your business that you expect in U.S. tariffs. Obviously, your U.S.-based business could be a net beneficiary, but the South African business is also selling products into the U.S. Maybe just give us a sense of is this a number we should be worried about?

Thank you handled the EBITDA question. Christian -- do the tariffs for international chemical business. And Christian, you can talk about the tariffs and its impact on our South African chemical business. Let me open by quickly answering the question on the contract mining versus in-house. Our focus at Sasol Mining is to get the right coal quality at the right cost, and that has to be done safely. That is our, I mean, overarching focus in that operation. And the cost of coal, of course, I mean, how you optimize that, it predominantly depends on, I mean, our payment capability and the fundamentals that Herrmann has comprehensively covered. So we're not yet at the point where we want to declare whether this is going to be done in-house or it is going to be done with contract mining. Those are options that we might have to consider in the future, but that you remember, we must be in consultation with many other stakeholders in order to effect that. But what we're committing ourselves to -- is to making sure that we guarantee the quality and we guarantee that quality at the lowest possible cost. Walt then, we'll go to Antje and then we'll go to Christian.

Yes. Thanks, Andrew. Just to be clear, on the EBITDA, we haven't excluded the feedstock purchases and costs. The EBITDA that we're guiding there on the ZAR 64 billion to ZAR 71 billion is what we think the nominal EBITDA will be in FY '28. The range reflects the -- some uncertainty on the macroeconomic environment and also some of the pace of delivery of the cost takeout. So we wanted to be not overpromise and under deliver but be realistic with what the range of outcomes could be. On the feedstock on the cost side, there, we've taken out the feedstock cost just because that can move with -- we're buying crude oil as an example, into the Natref refinery that has a big impact. But obviously, I don't want to claim the benefit of oil prices go down. It looks like I've saved the cost, but I actually -- it's just a market movement. The same as on, say, ethane in the U.S. So we just try to separate out those feedstock costs and really focus on the costs within, say, our control and less linked to kind of movements in the macroeconomic environment.

Just give us a sense of what you are seeing the most difficult at the moment and by how much is that range?

Let me just -- I don't have the detail in front of me, Andrew. But if I look -- I mean, you can easily see, I guess, total cost of say, the [ $120 ] million we're quoting at the moment, 70 million is the cash fixed cost that would be quite clearly seen. The difference is -- this 50 is around the variable cost portion that excludes the feedstock portion, but I'll ask the team to just send me some detail with regards to that.

Thank you for the expected question on tariff. It's a topic, I think, of interest for everyone at the moment. It's still not settled. We all wait how it might play out. But obviously, we have installed, yes, a team -- a SWAT team who's working diligently on all the impact which we might have on a global basis at Sasol for all the different trade flows. We expect this to pan out eventually also impacting the trade flows, not only as a tariff. For international chemicals, the impact will be low because, as you said, we produce regionally for the region, within the region. We may have some benefits as well from changing trade flows in the future to, at the moment, pay as an assumption, flat 20% tariffs. It would be a minimal impact of less than 3% of our turnover.

Christian...

Yes. Thank you, Simon. So for us in Southern African chemicals, it's a little bit more profound. So just to put this into perspective. So we are producing roughly 3.5 million tons and roughly 1/3 of that is exported into global markets. So it goes into the U.S., it goes into Latin America, it goes to Europe, it goes to Asia. Roughly less than 10% of the turnover that we produce is going to the U.S. So you can see if we have an unmitigated event and the tariff at 30% would kick in, our risk to the portfolio and not the price would be roughly $90 million. But there are several ways to counter that. So at the moment, we have a 10% flat tariff to most of the countries. So there is a level playing field. And customers at this time are actually quite willing to at least share that additional burden. So there is a certain appetite to continue on that basis. If we go to 30% that appetite, I think, will be a bit less. So that's a bit more. But what we do is we look at passing on where we have pricing power in our markets. We look at, for example, bonded areas of supply where the market is actually not in the U.S., but it's just an interim step. And for example, it will be exported to Canada or other markets. And there is an opportunity to more or less avoid that tariff. So there are many avenues that our team is looking at actually to avoid it. Certainly, if something is 30% and there's no way to mitigate it, we have the chance, and that's what we do on a daily basis to use the arbitrage between the markets. So we see, okay, if the American market is less attractive, is there a way to now steer more to Europe? Or is there a way now more to Asia. But that's what we are doing certainly, and we have to observe this now on a more or less unfortunately, I have to say, daily basis. What you also have to be very frank here, what you have to be aware of are the secondary impacts. So if there are, in the future, no level playing fields anymore, and it's really country by country. What we then really have to do is we have to compare our competitive position to the U.S. to anyone else who is producing the same product and is also exporting to the U.S. So we have to see how do we compete against domestic producers or other produce from other countries, and then we have to see the relative composition. So it's not just a peanut butter spread, okay, 30%, it's really into the detail then how do we show up against our competition. Thank you.

Thank you. I think I'm going to take one more question from the lady right in the back. that's had a hand up for a while, and then we can switch to online.

I' m [Ramos] from Argus Media. I was just wondering how does Sasol price that coal mines and that it's -- and fuels unit thing consumes. Do you use market-based pricing methodology? Or do you do it in-house? And the other thing I'm trying to understand is your greenhouse gas reduction target. If you want to achieve 30% by 2030, you need to cut greenhouse gas emissions by 90 million tons. And if I understand correctly, you see that as being met -- 10 million tons being met by introducing renewables. Will the rest be met by offsets?

Thank you. I mean I'll quickly answer the first one and then the second one -- I'll start and I'll ask to conclude. The mining of coal, the pricing is an in-house -- I mean, prices -- all mining it's our own entity. So you just take their volumes produced and you divide that cost by the volume produced. So you've got the total cost of maintenance, operations, electricity and everything, you divide that by the tons produced and you just get that per ton. You do allocate some overhead cost as well as per our group allocation principles. Then on the greenhouse gas target, yes, we do have, I mean, 30% greenhouse gas target that we have indicated that we are sticking to and we do have various levers that we're going to pull to do that. But the 10 million tons that Sarushen was speaking about, that's cumulative that will be saved by the renewables but that 757 that we are bringing on stream. So that will save us the 10 million tons. But Sarushen, maybe just to help, you can go and give a high level overall picture of the elements of how we decrease the greenhouse gases.

Yes. Thanks, Simon. So a couple of levers that we will use to meet our emission reduction target. Firstly, we're continuing with the energy efficiency projects. We started that program a number of years back. And as I indicated, that's already allowed us to turn down our first boiler equivalent. So that's -- energy efficiency really talks to steam savings on the factory, better use of energy on the factory. So that program is still underway and will continue. Then the second lever is shutting down or turning down our own electricity generation, and that will be mainly coal generation within the factory and replacing that with imports and renewable energy. That will be a large part of it. And then the third important element is these market mechanisms. So this is carbon offsets and renewable energy certificates. So it's a combination of factors that will deliver us the 30%. But as Simon said, this is cumulative and why we showed it as cumulative is these projects are ramping up. So in the next 2 years, you'll see more and more -- our first 69 megawatts is already online in this year, the next 100 megawatts of solar project will come online. And as the further ones come online, and then we'll start now running at full capacity on the 757, and then we want to now ramp up even further, right? So with our embedded generation projects and additional projects, we expect to achieve far more reductions from the renewables.

Okay. Thank you. I'm going to move to a few financial questions from our online participants. I'll do them in a batch of 3. The first centers around the projected CapEx savings. A question from [ Raymond ] is with your ZAR 15 billion to ZAR 20 billion of capital cumulative savings, what is the projected capital per year until 2030? And I think Sashank Lanka from Bank of America adds on to this to say, how does that impact volumes and productivity? Second question from [indiscernible] on Walt's presentation, he's mentioned the potential to use recycling of carbon tax revenues for selective growth projects. Please elaborate on the mechanics of this and what could this translate to? And then I think a question from Lorenzo Parisi from JPMorgan as well. Explain a little bit more detail how you plan to reach the net debt of ZAR 3 billion? And would that be through debt paydown as well or only cost cutting? I'll pause there. Walt, if you could address those 2.

Yes, thanks. I'll take it in that order. So I think on our previous first order maintained capital, as I mentioned, was ZAR 27 billion to ZAR 34 billion in FY '24 real terms, that was guided at the end of last financial year. If you put that in '25 terms, that the ZAR 29 billion to ZAR 36 billion. I think on one of my slides, I've kind of tried to be very clear in terms of the capital ranges that we're targeting. So for '26, it's ZAR 23 billion to 25 billion, quite a bit lower than what we've achieved in the last few years because we don't have a big Secunda shutdown. And '27 is '27 to '29 and '28 is '29 to '31, some of that depends on the shutdowns in that year. So that -- those major shutdowns will impact the capital range. But what's I think important is we are trying to allocate some of the capital also to our mining operations to make sure that we can meet some of those higher volume numbers that we've spoken about, particularly as some of the TSA spend in Mozambique reduces. So that kind of versus the previous range in this range gets you to that ZAR 15 billion to ZAR 20 billion in capital savings. The impact on productivity, I think all of these are bottom-up plans, guys. So it's not like I've gone and set a capital target and it's separate to the volume plan and separate to the productivity measures. I think we'll have to continue to make trade-offs the whole time. I think each -- what the commitment that I want to give you and we want to give as a team is in terms of the capital allocation is that it needs to generate a return. It can't just be the opportunity cost of doing it. We're trying to look at it with a clear lens and make sure that it is value accretive. And that also includes some of the portfolio optimization that we'll continue to do on some of the assets. If you look forward, some of the assets, the capital required is not justified by the future earnings that will be generated. In terms of the carbon tax, so it's not a new kind of mechanism. It's something that has been in place for a while. It's effectively taking the revenue that carbon tax generates and recycling it into particularly supporting GHG reduction and some of the transformation Phase 2 carbon tax document that National Treasury released towards the end of November. And some of the definitions that were included in there related to energy efficiency projects, renewable energy. So we want to spend some time with National Treasury and others just to make sure that, that definition is clear and how do we make sure that we can use that carbon tax. Even though the developments have been positive in terms of extending the allowances and increasing the offsets, we still pay a significant portion of carbon tax, and we'd like to make sure that, that's used to fund this transformation and particularly some of the initiatives that Sarushen has outlined. Then moving on to the last question, Tiffany, I think just on the net debt. I mean, put simply, it's generating free cash flow. So that's from operating activities and keeping our investing activity CapEx low, as I've guided. We're not planning any significant asset divestments or anything else. And so we believe that we can do that through just a sheer focus on free cash flow delivery.

Great. Thank you. I think a question for Sarushen. I'm going to do a question on the ERR and then also a question from Adrian Hammond on elaborate what small growth projects you have in the pipeline? And then I think on the ERR specifically, there was a question around how this impacts our carbon tax profile from [ Mega Bansal ] and Adrian. Is there any relief from government beyond 2030? And what is the likelihood of extending carbon tax allowances beyond 2030?

Yes. Thanks, Tiffany. Just to build on what Walt said that. So our focus in our engagements is to say, let's fund this transition, fund our own transformation through the recycling of the carbon tax. So that mechanism allows us then to grow a new business. I mean that's our -- in essence, our whole strategy to say we're not turning down what we have. We're rather adding new, and that's better for the country, right? I mean that's the focus of what we're trying to achieve. So that's how we've positioned it with our government and our stakeholders. And while we still see demand for the products that Secunda produces, it makes no sense to start turning down Secunda. So you add and then you position for the future when you have new markets that want these products. So in a nutshell, that's our strategy. The question on -- so what small value-accretive projects. Here, our approach is, again, to move in lockstep with the market with the customers, right? And that's why I emphasize the Anglo American and De Beers partnership. We have a customer with a market that wants the product, and we're codeveloping it with them. And that's our strategy. So with that -- so that's one opportunity. The second one is in renewable energy. And here, we want to take small equity stakes in these projects, especially the ones that on our land. And here, we can look at a mix of wind, solar and storage projects. So those will be the small equity stakes within the capital allocation framework that Walt aligned. And we believe there's sufficient headroom and we have sufficient opportunities in our pipeline to then meet that 2 gigawatt target.

Great. Thank you, Sarushen. Thank you, Walt. I think 2 more for you, Walt, on the cost-cutting initiatives from Lorenzo again at JPMorgan. Could you provide more details on cost cutting and granular details on the quantum, pace and areas of cutting? What do you expect to cut specifically? And why and how was this not done before? And then I think just a follow-up question from Lorenzo as well on the EBITDA projection and the relative -- the oil forecast that supports that. Forecast is likely to remain at the 55 to 65 range according to Lorenzo. And would you still then be able to generate cash flow and reduce your net debt if oil prices remain at those lower levels?

Cool. Yes. So I think in terms of the details on the cost cutting and I think it's not specific to any one region or line item. I mean, I think it's across the board. We have the fixed cost portion that I've already alluded to. I think Andrew also alluded to the fact that there's a variable cost component. The main -- I'd say the biggest driver that we're facing, we're pushing is on the external spend. That's the biggest component. So there, we're working closely within procurement space and our different service providers to not only look at the cost of items, but also the scope of the work that we're doing. On our utilities, we've already alluded to -- I think what makes the renewable energy business case compelling for me is this cost substitution. The tariffs that -- or tariffs that are going up double digits certainly have a big impact on our cost per ton and swapping that out with lower-cost renewable energy is not only good for the financials, but also good for the environment. And then I think on some of the internal spend, there, it will be much more surgical in terms of looking at specific areas where we need to focus on as opposed to a broad-based initiative. And we'll obviously look at ways to accelerate where we need to reduce that cost, we've set the pace. If I look at Victor's last slide, I think where you showed the trajectory on the breakeven oil price, I think that gets a lot of attention. I mean we're kind of at that $59 a barrel at the moment. In the first year, we go quickly down to around the $55 a barrel. Why do we do that? Because we're able to increase the volumes from Secunda because we don't have the shutdown. We have destoning in place, and we save on the capital cost. So that first FY '26 is well entrenched. And then more longer term, some of the initiatives that I've alluded to earlier. On the EBITDA modeling, we have put that range there of the $74. I would say I'm less worried again on the dollar per barrel oil price as I am on the rand per barrel oil price. You would have seen in the deleveraging slide there, we've assumed kind of a $60 oil price and a ZAR 1,750, and the pace of deleveraging is just slightly slower than what we showed in kind of our base case. But we still think that, that just means we would only get to the $3 billion net debt target towards the end of FY '28 as opposed to FY '27. It's difficult to call the oil price at the moment, to be honest. But we continue to look at different scenarios, and I alluded it to it, there are opportunities for us to potentially accelerate some of our cost savings, defer some of the discretionary capital spend should we need to release cash, but we really are trying to avoid any short-term responses that we then pay for later because we've rushed the decision. So it's an interesting space, and we'll continue to monitor it closely.

Thank you. I'm going to go back to the room, but I'm going to ask 2 questions on international chemicals. There are quite a few relating to -- or similar topics, similar questions on this theme relating to the EBITDA targets given. So Antje, if I may direct those to you. Clarity on the ZAR 360 million of uplift in international chemicals without any help from the macro? And how is this possible? Why was it not done earlier? And then also from Alex Comer, am I right in thinking Lyondell controls the production at LCCP? And is the ZAR 100 million to ZAR 200 million improvement in international chemicals for 2025 versus '24 still valid? Sorry, 3 instead of 2.

Thank you, Tiffany. The International Chemicals team and I will work very diligently over the last 12 months to come up with a plan how to make this business more attractive and resilient on the long term. Because we looked -- when I started at the comparison to the peers and found that there was a lag in terms of profitability. So there was a lot of analysis done, which backs up the ZAR 360 million uplift, which is spent by self-help. We have our components, big portion is obviously in driving the business differently, as I've described before, where we have a tailored approach for the commodity, the differentiated and the specialty area. This will lead us well to more cost efficiencies, big help will be our new ERP system as well as the platform to drive more transparency and ability to standardize processes and also be more cost-effective in serving our customers going forward. And driving efficiencies throughout the entire value chain. And yes, that cost bucket altogether is starting already to deliver, as I've said, through the asset closures, which we have decided on over the last couple of months for assets by now and they will deliver next by fiscal year, ZAR 50 million to ZAR 60 million, which are part of that overall cost savings bucket as well. So LyondellBasell is controlling the LIP joint venture, which is producing or is running the new cracker, which was built as part of the LCCP project and also the subsequent LLDPE and LDPE plants. They're not running Lake Charles as a whole. Don't forget, Sasol had kind of an asset part there already before they started with the project. And we have since sold part of the 50% of the cracker in the downstream polymer business, but we retain the rest, and we are happy that we have the rest still, and we are also happy with the joint venture so far. The ZAR 100 million to ZAR 200 million improvement for yes, this fiscal year on the base of last fiscal year, we still stick to the guidance, but we'll lower the guidance.

Okay. Thank you, Antje. We'll move to the room for more questions. I think the gentleman in the fifth row...

So it's [indiscernible] from the IDC. I think it was in Victor's slides where it was mentioned that there's a number of key interventions being looked into to try and resolve for the gasifier yield and availability problems. I think it was risk-based repairs and new repair methods, construction strategies, et cetera. Do you mind elaborating on those particularly given that-- it's mentioned that it's going to be key to improve volumes up to where they were. And maybe if you could elaborate for us how those are any different from what the company is doing currently, so you can try and measure the potential effectiveness of the interventions going forward?

All right. Can I go ahead?

Yes, you can go ahead, Victor. I mean maybe before you start, [indiscernible] suffice to say, I mean we're not starting with new things. We are building on and improving on what we've done. What we're doing, we're setting targets that must then guide the business to go towards that. So we're not going to go to the business and introduce multiple activities. We're actually simplifying and removing activities. And I think Victor, you can go into the details to just share some of them. But I just wanted to at least underscore that message that we're not starting and introducing lots of initiatives. We've been on this journey for a year, and we just need to accelerate now.

I think it's important to understand that having been -- I've worked gasification as a young engineer, so I know it very well, that our maintenance strategies at gasification and asset strategies of the past were very focused on you do a longer duration shutdowns, but you also do intermediate interventions, right, to manage gasify availability. And with the deteriorating coal quality, that just became difficult, right, because the extent of the damage was higher due to the higher wear and tear and the durations were longer. What we are doing now in terms of our risk-based approach to integrity and reliability is anticipating that the coal quality will improve and the wear rates will also go down. We are reverting back to a strategy where we are saying, let's have shorter interventions, drive availability up, right? And then longer interventions over let's call it, over a high -- not a high frequency, a lower frequency. And that's part of what we are doing. We are also interrogating the scope, the repair scope on the gasifiers. I think we are employing interesting and fascinating engineering techniques to determine whether the minimum scope that needs to be applied on the gasifier can actually reduce the duration, the outage duration. And we've recently completed a pilot on a gasifier where we have restored internal integrity to the minimum requirements as per engineering calculations, and we were able to turn that gasifier around in a much shorter duration, and we hope to scale that across other gasifiers. So we've deployed a technical team of experts within the organization. This is their field of expertise, and we've specifically asked them to look at productivity opportunities, scope reduction opportunities and to deploy different repair methods to see whether we can reduce that duration and increase the duration between outages. That's where the work is currently happening.

Thank you, Victor. Next question.

I am Carl from BP Bernstein. I just want to know regarding share buybacks, why isn't the consideration for the company to do any sort of share buybacks at current levels seeing where the share price is trading at the moment and the specific reason for that not being a consideration now or in the near future?

Yes. So I think what we've -- so the short answer is the amount of debt that we have at the moment. So if you looked at our capital allocation, we've got to maintain capital that we obviously need to support to keep the business running. We've got then on our net debt dividend trigger and target. And within that second allocation. So to answer your question, that may be an option once we get below the $3 billion net debt target. But right now, we just need to reduce the quantum of debt. We talk about the net debt number, which is around the $4 billion $4.1 billion at year-end, gross debts are sitting at around $6 billion. Obviously, the cash portion is what we're using now to manage the liquidity, but we just need to reduce that absolute quantum of debt. And if you look at interest rates, the cost of refinancing at the moment is quite high. And so I would like to use that cash to reduce our absolute debt quantum, and then we can see what other options we'll do for the good.

If you get to that $3 billion, you would still consider paying a dividend instead of doing some sort of a buyback or is it....

There might be both. Yes, it could be both. So if you -- the dividend would be 30% for the free cash flow. The remaining 70% would then there's optionality. It's either to reduce the debt, invest in growth and transform depending if solutions economics support it. But then the last item is the -- is additional shareholder returns either in the form of special dividends or buybacks.

I'm curious about the extension of MRG to the current natural gas customers. I guess that reduces the MRG recycled to the reformers at Secunda. What are the other operational consequences of this? It will be lower volumes of high-value products, but the plants constrained in ethylene, what will the impact be on the hydrogen balance? Have you considered all of these things? And can we expect consistent stable operations on if that actually happens? And then maybe just another question is you say that the surfactants is core to the international business, but you've impaired the specialty or that business in the U.S. completely. At what point in this process, will you reconsider that impairment and reverses the effect, if you're forecasting such a great uplift in EBITDA.

Victor, you can take the MRG question. As we indicated, we're not -- we said this is an extension of the window and a transition to LNG this is not a solution that remains forever due to many of the considerations that the teams are doing and Victor can go into that. And in terms of sacrificing high-value products, we said again, I mean this is an option that we're considering and we'll talk with all -- I mean, the various licensing authorities to make sure we can't sacrifice [indiscernible] Our role is to protect the shareholder value, but we have a commodity that can be used to bridge that fuel. But we take and go into the technical details of it. And I think we'll just quickly cover the impairments and what does this EBITDA mean in terms of the impairment of the surfactants business.

Yes. So, I think I need to qualify and say we are in the pre-feasibility stage of this particular project. We hope to have this completed by July of this year. The mass balance will dictate. And then as Simon has indicated, the value of fuels and chemicals versus extending the gas level for supplying this MRG as bridging right, needs to be compensated for. In terms of the light ends, our preliminary mass balances kind of indicate less than 5% impact. So not mature enough to impact the feasibility of our operations in Secunda.

Yes. And then I think just Curt, on the impairment question, obviously, we booked a fairly sizable impairment at year-end, specifically on the Lake Charles, the Ziegler alcohol and the ETI value chain. If you remember, that impairment was very much linked to the assumptions around U.S. ethylene in margins in terms of ethane prices and ethane prices and where we think NTP prices on ethylene will trade that we believe our self-help initiatives, obviously, we're less reliant on that than we are on actually delivery of the cost takeout program that Antje mentioned. So the potential exists for obviously a reversal, but it will depend on the prevailing macroeconomic assumptions. That's a process that we run at year-end. I think Italy margins have come down a little bit over the last month or so because of uncertainty around the tariffs and the pull-through to polyethylene. But we'll assess that at year-end. Just to qualify, we didn't impair the whole amount or so in the U.S. There's still a portion there of the invested capital that remains. We also did book some impairments in Italy, and that business does remain structurally challenged at the moment, and the initiatives are underway to see how we can improve the cost base in that business, too, but that's more linked to the alkylate value chain.

Great. Thanks. I will take another question from Chris and the gentleman behind Chris.

It's Chris Nicholson of Morgan Stanley again. So just 2 questions, easy one just to confirm what you said there, Walt. So the $650 million bond, I think that's due in September next year, obviously, refinancing rates almost double what you're paying on that. So do you have enough scope, if necessary, to pay out of existing and facilities or cash headroom? And then I think the bigger one, I mean, if you go back a step, and I'm not going to try to hit you over the head with this. But if I go back to the 2021 Capital Markets Day, I think the target that was put out there was a cash cost breakeven of $30 to $35 a barrel. Now for various reasons by 2025, you haven't hit that and we're sitting at $58 or $59. We're now putting out a target that's actually 40% to 60% higher, obviously, 3 years down the line. Maybe just reflecting on some of the things that are most permanently set. So '25 to 2028, we're talking costs 40% to 60% higher as a best case target. Maybe what's kind of driving that? And what do you think the learnings are from last time on that target?

Can we take the next question as well and then deal with those collectively?

David [indiscernible] SciFi Capital. My client saw equity shareholders. So I have just 2 questions. If I just look at the valuation on the equity side, I mean, let's give us a rule of thumb, market is giving you a 30% chance of what you're targeting in these financials, right? So there--you are there saying 70% chance you're not going to make it. What do you think are the one of 2 greatest things the market is missing about your story for FY '28? The second question is, I mean, my clients effectively are going to be -- their capital is going to be working for the banks for the next 3 years, right? What -- Do you think you're doing enough to cost cuts to right size the business. I mean, for their capital in this business for the next 3 or 4 years, I mean, I look at the building, I look at the events fantastic. But are you doing enough to manage the business in the right-sized way for the conditions that we're in?

Thank you. Let me start with the last questions. Are we doing enough? I mean, absolutely, we spent the last year, identifying the levers in both businesses. We didn't wait. We started pulling on those levers. You can see already in international chemicals at half year-end, we promised $100 million to $200 million uplift. And I mean we are on cost to at least meet the bottom end of that, notwithstanding the significant changes that happened in that period. We still, I mean, did what needed to be done to make sure we can get to that commitment. In the South African value chain, we understand that the key driver of productivity is always Secunda, running at full throttle -- and that unfortunately takes time. However, if you remember, our initial destoning commitment was to do that by FY '28. We've already accelerated that. This zoning is in construction. It will be running before the end of, I mean, December this calendar year. So we've also had significant time on that. I mean we've given commitment on the gasifier I mean, refurbishment. You hear what Victor has said, we've given a time frame that we think we will meet that. But you can be rest assured, if we can accelerate and meet it area, we're going to do that. So we are doing absolutely enough to make sure that we can do it. The rightsizing, if you look at our staff establishment, you see that year-on-year, our staff establishment is not growing. So we're already doing enough there as well on making sure that we can, I mean, using the processes that are available to us to contain the staff in line with what the business requirements are. You don't want to apply a peanut butter spread. You have to go for the businesses that are giving you marginal or negative gross margins. And we've already moved in international chemicals and we'll remove the cash fixed costs associated with that. And that thought process will be given into -- I mean, will be taken into the South African value chain. Then you ask there's a 30% chance that we're going to make it. I mean there's 2 key drivers, 30% EBITDA margins and $50 breakeven by FY '28. You can see on the International Chemicals, we started at 6%. We'll see when we end this year, we might be between 8% and 10%. So we're already moving up. You've seen on the graph that Antje has shown. On the SA value chain, once we get the volume next year, we're also already promising around 54%, 55% in terms of the breakeven. So we're moving, and we're moving at pace. We're not leaving any stone unattend. So that's my answer. And the 30% chance of making it again just close that. I think for us, we said we just need to build that credibility through performance. So as the quarters come and the results presentation comes, we'll show you what we're busy with and where we are and how we're progressing. Walt you can handle the bond, I mean the $650 million bond. And yes, I think you can cover that.

Yes. Thanks, Chris. Yes. So I think currently, I mean, we -- I mean, I think I mentioned it, I mean, we're going to be proactive in terms of those maturities. We do have -- we are building some cash in there and also putting some money into the RCF, like I highlighted at half year-end. So we'll be proactive in terms of the maturities around that and seeing how we can also try and balance between the SA versus U.S. That's our challenge, too, is the quantum of U.S. debt versus the cash flow that's been generated. So doing some rebalancing there. If maybe, Simon, I can just cover on the 2021 CMD. I mean, I think the $35 a barrel, obviously, where we've deteriorated from there. I think the biggest items, one is the volumes that if you look at that graph, I think, Victor, you were pairing along at 7.6 million tonnes. The mining costs were a lot lower. Utility costs, we had assumed a certain increase in Eskom tariffs that obviously has been higher than what we expected and pushing us to also look at our renewable energy. And then also, even though we've got some relief on the carbon tax, that number has grown over the years. So all of those are not to make excuses, but that's the reality we're dealing with now at the moment. And so we want to set a stretch but realistic target that builds that credibility with all of you. I think none of us want to stand on the stage in 6 months from now or whenever it is and have overpromised and underdelivered again. So it's about being realistic, but then also building that credibility through performance.

Great. Thank you, Walt. Are there any more questions in the room? It's Andrew and -- at the back, and we'll go back to online after this.

It's Andrew [ Snowdon ] again. So just following up on the impairments, we're talking about the chemicals business. Victor pose the question is the South African business broken? We have had some very significant impairments over there. And it kind of feeds back to what about -- what was behind us in terms of what the share is currently factoring in, i.e., the market is suggesting the business is broken. You believe it's not. Now the obvious way of identifying that is when you reverse that impairment. How far are we from reversing that impairment would you say? What needs to change before we meet those requirements?

Can we take the second question at all?

My question was actually the same. I was just wondering the impairment on the Secunda plant. Can that now be lifted seeing that you're aiming for volume recovery?

Yes, we can. Let me start. And Victor, I'll ask you to at least talk about the initiatives to restore value. And what -- I mean, you run the IDC. You can just chat about, I mean, the assumptions and everything that we see there. Andrew, the impairment is not a whole Secunda. You remember, Secunda has 2 cash generating unit. The [ SynRef ], which is the fuels portion of the business and the chemicals portion, which Christian helps to run and sell those products. And a combination of both of them still gives you significant value. I mean we do publish with our year-end results, the value in use of that chemicals is significantly higher. So there's a massive headroom on that. The [ SynRef ] portion, I mean, of course, you saw we did book an impairment there and that impairment when it was first introduced, it's when we were cutting down production volumes as one of the levers to mitigate the greenhouse gases. But I mean, there was many other factors as well that we're working on. I mean for us, there could always be a simple answer to say run it as one CGU and you don't impair, but we don't think it's the right thing. You have to keep them separate. It allows for us to have cost focus, and we're working very hard to deal with, I mean, that impairment. So Victor, maybe let's talk about again, just to restate the initiatives that we're going to work on to restore value in that [ SynRef ] portion of the CGU and what we can talk about the IDC.

Well, thank you, Simon. And Andrew, thank you for your question. I think what is clear is we're not turning down Secunda's production. Yes, I think we need to start off there. And then secondly, in terms of the ERR program, we are -- we've optimized the scope, right? And I think at half year-end, we kind of gave you a capital range of ZAR 11 billion to ZAR 16 billion and that has now come down to ZAR 4 billion to ZAR 7 billion, yes. So I think that's the next data point. And then what informs that is that if we think about the scope for the ERR, initially, we were going to invest in a precutting facility for gasification, right? We're no longer pursuing that solution, and that has a substantial impact in terms of that capital number. And then we are also looking at finding no or low capital solutions for some of the other scope items, which is really around the condensate solutions because we will be turning down electricity generation, which leaves us a little bit short in terms of condensate for steam generation. So that is part of it. And then in terms of our solutions for fine coal, here, it's really a combination of a few solutions, right? And we may have optionality with the new destoning plant that's coming on stream at the end of this year to partially help with the fine coal imbalance and then also operational levers, both at mining and Secunda operations that we could pull and I think combined, we can offset the fine coal imbalance. I think these are the levers that we are considering to address the no turndown scenario, but also the ERR program. I'll hand over to Walt to speak about the other aspects that impact the impairment.

Yes. So thanks. I think -- I mean, needless to say, everything that Victor just alluded to helps to lift the value and use calculation in your impairment. But it's similar to your question on the U.S. I mean it is dependent on the prevailing macroeconomic assumptions. So especially that [ SynRef ] cash-generating unit is highly sensitive to the oil price, the exchange rate and some of our assumptions on petrol and diesel differentials. Again, focusing on the cost of capital and volume levers certainly helps to lift the value in use, but it will depend on the prevailing assumptions at the end of the year. We go through quite a rigorous process also with our external auditors to make sure that our assumptions are in line with benchmarks and the industry. And we'll -- I think for me, the first -- I think, Andrew, your first question is first, we want to stop impairing the capital we're currently spending. And then second is the reversal of those impairments. And so that's what -- even though it's an accounting kind of metric, but it's indicative of a bigger problem. And so that's why we -- I don't want to have these questions around capital allocation. But just to remind you what Simon also said is if you look at the overall cash Secunda as a complete chemicals and fuels, is significantly cash flow that does get generated. And we're trying to manage it as a complex from a management point of view.

Thank you. I'm going to go back to a few online questions, which has come up around the business building plans, and a lot of this is focused on the renewable plans and targets that we've put out. So Sarushen, if I can direct those to you. A question from [ Krish Mabulia ]. What will be the impact on Sasol's 2 gigawatts on the Sasol balance sheet or if there is a balance sheet impact? I think considering the ambition on the renewable energy with Sasol Explore participating in the manufacture of renewable components, that's from [indiscernible]. And then I think more on renewables is you specify -- sorry, to -- there was another question on the ERR also relating to renewables about the big capital change from the [ 15 to 25 ] previously and how you've managed to cut that down to ZAR 4 billion to ZAR 7 billion.

And the cost savings.

And the cost savings associated with that.

Yes. No, Thanks, Tiffany. Let me talk about the strategy, right? So the 757 have been done as pure PPAs, where Sasol just contracts as the offtaker. And what we want to do now is move into taking small equity stakes. And a lot of you would know the people who actually take equity in these projects, they normally take between 10%, 15%, 20% equity and the rest is debt finance. And that's how we see it as well, taking a small stake of a project where we provide the anchor demand because ultimately, we are the ones providing the guarantee for that renewables. And what that does is then allows us to participate in the margins across the value chain, the developer margins, the generator margins, us as the cost saver. And then if there's any spillage, we also then can trade that. So we then start playing across the value chain in terms of the renewable energy margins. And our anchor demand gives us that ability, right? It allows us then to sink it in Secunda and Sasolburg and our mining -- our total demand is about 1.5 gigawatts. So we have a huge sink. So the risk is low on that. In terms of the components, already for the renewable energy projects, we maximize the use of local components. Some of our wind projects don't use steel mask. We now use concrete mask. So where we can, where it's cost competitive and where it leads to an advantage, we look at that. And together with Charlotte's team, we look at job creation opportunities in and around our factories to see if we can leverage that. If you look at the business case for renewables and the -- coming back, I think Victor articulated the exact levers and why that cost has now gone from the 15% to 25% to 4% to 7%. Just wanted to point out that in the original 15% to 25%, we had capital in there for additional gas into Secunda. So there was gas reforming capital in there. That was removed. We dropped the capital to about 11% to 16%. And then now what we've done is taken out the [ fine core picketing ] capital. And then as we ramp up, we expect to get quite a significant saving on the renewable energy versus Eskom. And that will go further because the escalation of our renewable energy costs will be lower than the escalation of the Eskom electricity cost. So we'll see that savings increase into the future.

Thank you, Sarushen. Thanks for that clarity. I think I'm going to move just to a few more questions on International Chemicals. There were a few more relating to some of the targets and plans around there. So the first question from Christian [indiscernible], can you elaborate on the rationale to shut down the Gabon plant? My understanding is that, that was one of the new plants both at LCCP and should and thus have minimal CapEx and have a clear feedstock advantage. I think a clarity also from Sashank Lanka on the ZAR 50 million to ZAR 60 billion of EBITDA uplift from the mothballing or closure of units and is this part of the cost bridge that you showed on your earlier slide? Antje and I think the last question on this is what levers do we plan to use to triple the EBITDA in the international chemicals business, seeing lots of detail in your slides, but not clear that is going to result in the 3x improvement, and that's from anonymous.

I mean maybe let me start on the Gabon, then you can continue with that and then later on the other 2 questions. When we took the decision at the time to build the Gabon, the market dynamics were completely different to what we have today and what then unfolded after that. And I think Antje and the team and the group executive went through a well considered and thought process in terms of which assets to mothball because we've not shut it down, it's actually mothballed depending on what will then happen in the market. So I mean, Antje, can elaborate further.

Yes. No, thank you, Simon, and thank you for the question. It's counterintuitive, although it's absolutely true. The market demand has not been there for the Gabon plant which can cover still for the demand, which we have globally. And as Simon has said, if the demand picks up to that level that we can fill the Lake Charles plant, we obviously will bring it back into operations. The ZAR 50 million to ZAR 60 million EBITDA uplift, which is connected to the mothballing or closure of the assets, which have been highlighted. That is part of the overall cost bridge, which I think Slides 18 -- on the cost bridge on the EBITDA uplift bridge, which Walt has shared. So that is the asset optimization is part of our cost initiative for the next 3 years. And the last question was what other levers? What levers do we plan to use to triple the EBITDA? so The levers are really centered around on one side, our new go-to-market strategy, where we expect to have a margin uplift with our offerings to the customers to generate more value. More value through the additional volume as well. We still have the capacity that we want to do an upsell of higher value applications and markets. The other thing is as well on the other side, obviously, as I've said, we have our procurement excellence program. So it was both ways that we increased the margin for our business. The second one is driven through the asset closures and driving also some cost reduction in the business. That, together with other cost and excellence programs we have started already. We expect then the yes, 15% to 20% cash fixed cost reduction for the business. And altogether, that with kind of some uplift in the market assumptions, mainly based on ethylene, we will get to the uplift of yes, ZAR 750 million to ZAR 850 million EBITDA in '28.

Great. Thank you, Antje before are getting towards the end of time, so I want to allow more questions in the room. I'm going to conclude with 2 questions online around our marketing and sales plants in our South African business. The first is from Kevin Govender and that question is around the renewed macro strategy is being considered to leverage Sasol's higher production volumes towards higher-margin channels including commercial, retail and new green energy. So a little bit more color on that. And then I think the next question is from [indiscernible] on the increased participation of commodity traders in the SA fuel market recently will import cleaner fuels at below BFP. if they are a long-term risk to Sasol given that our products are maybe not fully clean yet and given the height or the elevation of trading activity in South Africa.

Yes. Thank you. Let me start and Christian can complete. Firstly, on the cleaner fuels, Secunda, both Secunda and Natref will be fully clean fuel compliant by the time when the legislation kicks in. So we're about done with the project in Secunda. It's a ZAR 7 billion project done successfully. So we're very proud of the work that's happening there. And in Natref, as I speak right now, we're also busy with the project. You remember on the diesel front, we actually came with a very innovative solution where we could comply at a very low cost. And on the petrol front, we also -- we did indicate previously that we also comply between ZAR 1 billion and ZAR 2 billion. I mean if memory serves me well. But we were on track to comply on those. The market itself is because you use the same pipeline. So there is a mix of all fuels. So it's actually almost close to impossible for anyone to try and use that as an advantage. I mean if you remember, even on -- I mean, low sulfur diesel, we were the first one to have it way ahead of time, but the pipeline has all the products. So it's not something that you can readily use. So we're not seeing lots of threat from that side. But Christian, you can elaborate and then cover how you also -- I mean, high margin in your products.

Thank you, Simon. So I guess the second question is answered. There is no price differentiation between CF1 or CF2 fuels. On the strategy going forward and also seeing higher volume coming out of Secunda and I think we'll also see higher volume coming out of Natref going forward. We are prepared for that. And actually, we are just continuing the strategy that we are already having been deploying since the last 2, 3 years. So which is basically in retail, it's back to basics. It's refreshing our retail site. You should not be underestimating the power of the Sasol brand. I am now in charge for the last one year, and I have to say Sasol brand is a beloved brand here in South Africa, and it pays out but what we have to do is we have to nurture it. We have to reinvigorate it on a constant basis. That's what the team has been doing over the last 2.5 years, and it has paid off. It has paid off that you can even measure it in, for example, market share. So at the moment, we are roughly at 12.4%. We were clearly below 10% 2.5 years ago. And our ambition is to organically to grow that market share further over the next few years to beyond 14%. Where we have now really work to do is in our commercial business. So in the commercial business, we for example, direct in the mining, transportation, agricultural sector. Here, we have very ambitious plans over the next 2, 3 years. And our market share right now is again below 10% and our market share ambition over the next few years is, again, like in retail, 13% to 14%. So you can see the clear customer value propositions now laid out to our customers. What we need, and this will now come with Natref and with Secunda is consistent, steady supply. And last year--sorry not last year, this year, fiscal '25. You heard about the fire at Natref, you heard about a maybe a bit lengthy shutdown announcement. That's over. The team is fully committed to do this, and we are working together here in marketing and sales and operations to have that customer value proposition outlined going forward. So we're actually excited to grow that commercial market to those numbers. I also don't want to forget the lubricant market. Lubricants is a very profitable business for us, but it's small for us. And we are clearly punching not the weight that we actually should have. So our market share in lubricants roughly is at the 4% level. Also here, over the next few years, we have significant ambitions to grow that market. We have dedicated teams set up to do this. And if the plans that we have full materialize, then you will see this, and you can measure us against that. Clean Fuels as mentioned, Secunda, $50 is really important for us to stay competitive in the marketplace. And so that's the reason why Victor's teams and my teams are really excited about this $50 breakeven initiative. Thank you.

Thank you, Christian and Simon. We have 5 minutes left, and I'm going to take maybe last 2 questions in the room and then allow Simon to just conclude with a few remarks. Are there any further questions in the room? No. Okay. Simon, over to you. If you could complete the session for us.

Yes. On that note, thank you. Ladies and gentlemen in both in the room and online. Thank you so much for taking your time to join us here. Thank you for your continued interest in our company. And my final word to you is that my executive team and the whole team Sasol, all 28,000 of us are fully committed to making sure that we can continue this journey and deliver on the commitments that we're making.

Thank you, Simon and the executive team. So that concludes the formal part of today's agenda. We'd like to invite you now for some lunch outside and to walk through some of our deep dive exhibits that we have on display. There are 3 exhibits, one centered around our South African business and the restoration plans there. And then the second 2 are focused on our business building initiatives that Sarushen talked you through earlier this morning. And the last exhibit is around innovating for a better world, which showcases how we will continue to innovate and support our current operations in future. So please take the time to walk through the exhibits and enjoy some lunch and further network with the Sasol management team. Thank you.