Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 41
On asset disposals: Of the transactions either concluded, or where SPAs have been signed to the value of $3,5bn, transactions completed with
funds received amounted to $3,1bn. The bulk of the proceeds were received by December 2020 and the closing of the ASUs at 30 June 2021 was
the last transaction of FY 21 to be closed. Guarantees have been received in respect of the Rompco sale. The disposals have been challenging due
to the individual complexities with protracted negotiations and regulatory approvals requiring significant work to close off.
On Cash Fixed Costs: The organisation rallied as the business suffered cash flow constraints following the drop in crude oil prices and lower
demand for our fuels and chemicals following the COVID-19 spread across the numerous markets we operate in. The salary sacrifice and
postponement of annual salary increases were significant personal costs to Team Sasol and in addition strict cost discipline helped us deliver
R2,5bn reduction in fixed costs.
SASOL LIMITED GROUP
CONSOLIDATED FINANCIAL STATEMENTS
(after the 3% fatality penalty) to 116,50% out of the maximum award of 150%. Asset disposals, strict management of cash fixed costs and
prudent allocation of capital mainly ensuring ongoing reliability of our operations, were excellent outcomes. On capex: Actual capital expenditure
amounted to R16,4 billion compared to R35,2 billion during 2020. The reduction in capital expenditure was not at the expense of maintaining our
asset integrity and was achieved through an optimised asset risk management process. In addition, the progression of the PSA to FID stage was a
key milestone for us in 2021.
For comparative purposes the following tables set out the Group’s performance on a weighted basis against STI targets that were set the
previous two years.
Preferential
procurement
and
Project
Safety and employment
delivery environment
equity
Growth
in headline
earnings
Production
volumes
Growth in
cash fixed
costs
2020
0,0%
0,0%
30,0%
3,0%
7,0%
6,0%
46%
2019
45,0%
0,0%
0,0%
0,0%
12,5%
8,2%
66%
Period
Total
No short-term incentives have however been paid out to members of the GEC for 2019 and 2020 despite some of the performance targets
having been achieved.
NOTES TO THE FINANCIAL STATEMENTS
The sales volume target was set in anticipation of a quicker recovery of global demand and was not achieved. No normalisation in respect of the
impact of COVID-19 on the STI outcomes, was applied. The Committee was disappointed with the one fatality in Natref, but very satisfied with the
safety performance. The Committee was overall very comfortable with the STI outcome being representative of the business results and agreed
that the rounded score of 117% be applied in the calculation of the short-term incentives for the members of the GEC.
Long-term incentive outcomes
Weighting
Threshold
Target (100%)
Stretch Target
Weighted
(200%) Achievement Achievement
Increase in tons
produced/head
25%
1% Compound
improvement
on base
2% Compound
improvement
on base
3% Compound
improvement
on base
2,8%
compound
growth over
three years4
44,7%
Return on Invested
Capital (ROIC)
25%
3-year average
ROIC (excl AUC)3
at 1 x WACC (as at
30/6/2018)
3-year average
ROIC (excl AUC)3 at
1,3 x WACC (as at
30/6/2018)
3-year average
ROIC (excl AUC)3 at
1,5 x WACC (as at
30/6/2018)
-10% 3 year
average
0,0%
TSR MSCI World
Energy Index
25%
Below the 40th
percentile
of the index
60th percentile
of the index
75th percentile
of the index
Below
threshold
0,0%
TSR MSCI Chemicals
Index
25%
Below the 40th
percentile
of the index
60th percentile
of the index
75th percentile
of the index
Below
threshold
0,0%
Measure
SASOL LIMITED COMPANY
The following table provides the outcomes against the corporate performance targets (CPTs) which were linked to the 2019 Long-Term
incentive awards, which are due to vest in 2022. The vesting percentage is determined by the Group’s performance against CPTs over the
performance period 1 July 2018 – 30 June 2021.
0 – 200% range¹ = 44,7%
Achievement
40% – 160% range² = 66,8%
1. In respect of LTIs issued to members of the group executive committee including the executive directors, 100% of the award was subject to the achievement
of CPTs. Of the vested portion, 50% will be released in 2022 and the balance in 2024.
2. In respect of LTIs issued to SVPs and lower where 60% of the award was subject to CPTs and the balance to time-based vesting criteria ranging between three
and five years.
4. The Committee approved that the production volumes/headcount be normalised for the impact of severe weather impacts in the US and in Sasolburg which
caused electricity outages for extended period of time and a resultant loss in production volumes of 442kT, which were completely out of management’s
control.
39
Sasol Annual Financial Statements 2021
OTHER
3. AUC = Assets under construction.