Our performance scorecard
Our performance scorecard provides an overview of how we have delivered in the year and tracks and reports on how we create value on our robust foundation. It shows our progress against seven Key Performance Indicators (KPIs) that are linked to the delivery of our strategy to create superior value for our stakeholders. The KPIs are integral to our risk management process, providing a tool with which to measure our risk tolerance.
Our key performance indicators
|To target returns for net investments of 1,3 times weighted average cost of capital (investment WACC)||2017 – 9% (including AUC) and 17% (excluding AUC)
All new growth-related capital projects are required to provide a return of at least 1,3 times our investment WACC. In South Africa, our investment WACC is 14,05%. In the US, our investment WACC is 8,00% (excludes sustenance capital expenditure).
In 2017, although a marked improvement from 2016, we did not achieve our target. This was mainly due to the lower oil price environment and the impact of significant capital investments (LCCP project in the US and PSA project in Mozambique). We expect the return on invested capital ratio to remain under pressure in the short to medium term.
|8% US dollar ebit growth on a three-year moving average||2017 – (21%)
The sharp drop in global oil prices since 2015 negatively impacted earnings. This resulted in us not delivering on our target. The impact of the macro-economic environment was, however, partially mitigated by our Business Performance Enhancement Programme and Response Plan initiatives.
Sasol’s cash-generative foundation business and growth prospects should enable us to achieve sustainable compound US dollar earnings growth of 8% per annum.
|Maintain a net-debt-to-EBITDA ratio of below 2,0 times||Net debt-to-EBITDA remains healthy at 1,13 times.
Our target takes into account our capital investment programme as well as our exposure to external market factors such as crude oil prices, commodity chemical prices and exchange rates.
We expect our net debt-to-EBITDA to reduce substantially two years post the completion of the LCCP.
|To maintain a gearing level of 20% – 40% (Temporarily lifted to 44% until the end of 2018)||Our gearing level increased to 26,7% mainly due to our capital investment programme. This is still comfortably within our self-imposed target of 44%.
We expect our balance sheet to deleverage two years post the completion of the LCCP.
|To achieve a recordable case rate (RCR) excluding illnesses of less than 0,30 by 2020 with no fatalities.||Our safety Recordable Case Rate (RCR), excluding illnesses, improved to 0,28, however the high severity of injuries remains a concern. Regrettably, five fatalities occurred.|
|To maintain direct GHG emissions from our South African operations within 302mt of CO2e over calendar years 2016 – 2020||Sasol is voluntarily taking part in the trial phase of the South African carbon budget process. In total, our budget contemplates a limit of 302mt carbon dioxide equivalent over five years (2016 to 2020), making provision for growth. For calendar year 2016, Sasol South Africa emitted approximately 55mt of direct CO2 equivalent emissions of our total budget, taking project delivery into account. From 2021 onwards mandatory budgets will be set in line with government’s requirements. We are engaging with government on the proposed methodology and will provide the necessary data to enable setting of appropriate limits. Refer to for further information.|
|To achieve at least level 4 contributor status in terms of the revised Codes of Good Practice by 2020||Our most recent certification issued in April 2017 represents a key milestone in our transformation efforts, with year-on-year improvements once again being realised across most pillars of the scorecard. Our current contributor status is level 8. In 2017, we increased our total expenditure with BEE-compliant businesses. We endeavour to build an inclusive supply base and leveraging opportunities as a catalyst for local economic growth. The Group is considering the merits of a new B-BBEE transaction to replace the Sasol Inzalo transaction.|