Integrated_Annual_Report_2026 - Flipbook - Page 69
DRIVING SUSTAINABLE
VALUE CREATION
SASOL AT A
GLANCE
INTRODUCTION
EXECUTING
STRATEGY
DELIVERING
BUSINESS VALUE
SUMMARISED FINANCIAL
PERFORMANCE
CORPORATE
GOVERNANCE
SUSTAINABILITY
REPORT
REMUNERATION
REPORT
CHIEF FINANCIAL OFFICER STATEMENT CONTINUED
Further strengthening our financial position
Disciplined capital allocation
FY26 marked another year of meaningful progress in reducing net debt and
strengthening our balance sheet.
Net debt (excluding leases) reduced by 11% to US$3,3 billion compared to
US$3,7 billion in the prior year, and below our guidance of less than US$3,7 billion,
reflecting continued cash generation and disciplined capital allocation. Total debt also
decreased from US$5,8 billion (R103,3 billion) to US$5,7 billion (R93,9 billion), while
liquidity remained strong at US$5 billion, providing sufficient financial resilience.
During the year, we further optimised our debt maturity profile through the
successful issuance of both a 5-year, R5,3 billion floating rate bond in exchange for
US$300 million and a US$750 million bond maturing in 2033, together with the
partial repayment of our 2028 and 2029 bond maturities (i.e. debt neutral). This
materially extended our debt maturity profile, further reduced near-term refinancing
risk and improved the regional mix of our debt to better match the underlying cash
generation of our assets.
Our proactive hedging programme continues to mitigate the volatility arising from oil
price and exchange rate movements. Our strategy is to provide downside protection
while retaining upside participation and managing hedging costs. The FY27 oil
hedging programme is complete, while the FY27 ZAR/USD hedging programme
remains underway.
Our capital allocation framework remains central to how we create
long-term shareholder value. It provides a disciplined and transparent
approach to allocating capital across the business, balancing the need
to maintain safe and reliable operations, strengthen the balance sheet,
invest in future growth opportunities, and enhance shareholder returns.
In FY26, we continued to apply this framework by prioritising investments
that protect the competitiveness of our existing operations while advancing
selective growth opportunities. As gas development costs within the
PSA licence in Mozambique come to an end, we are redirecting capital
to ensure coal and gas feedstock security. At the same time, we remain
disciplined in pursuing selective growth opportunities. This included
the €60 million final investment decision for the Brunsbüttel specialty
alumina project in Germany, supporting the growth of our Advanced
Materials business.
Until our net debt target of below US$3 billion on a sustainable basis is
achieved, deleveraging will remain our primary capital allocation priority.
Thereafter, our stronger financial position will provide more flexibility to
allocate capital where it creates the greatest value, including further
debt reduction, additional value-accretive growth investments and/or
enhanced shareholder returns.
REVISED CAPITAL ALLOCATION FRAMEWORK
1ST ORDER
ALLOCATION
1
2
Maintain safe and
reliable operations
Selective Growth
and Transform
1
Optimise maintain capital
Ensuring continued safe and reliable operations
2
Selective Growth and Transform (1st order)
Smaller, high-return growth projects and incremental transform initiatives
3
Strengthen the balance sheet
Reinforce financial resilience to manage volatility
4
Growth and Transform capital shifted
Prioritise value-accretive investments once balance sheet allows
3
NET DEBT1 SUSTAINABLY
