Vedanta Limited · NSE:VEDL
Vedanta — Investor Presentation (June 2022)
42 slides from Vedanta's investor presentation, Jun 9, 2022
Slide 1: Investor Presentation
VEDANTA LIMITED June 2022 Investor Presentation Sensitivity: Internal (C3)
Slide 2: Vedanta Limited – Overview
Vedanta Limited – Overview A globally Strong diversified natural management Demonstrated 1st quartile cost Committed to >$14 bn Capex resource team with >30 track record of curve positioning ESG leadership in Contribution to over last 10 years CRISIL and India powerhouse with years of industry leadi
Slide 3: Group structure to support diversified commodity exposure
Group structure to support diversified commodity exposure Listed entities Volcan 52.4% 71.4% Unlisted entities 100% Sterlite Sterlite Power Technologies Transmission Vedanta Resources Ltd Divisions of Vedanta Limited 79.4% 69.7% ⚫ Sesa Iron Ore Konkola ⚫ Sterlite Copper Copper ⚫ Power (600 MW Jharsu
Slide 4: FY22 financial highlights
FY22 financial highlights Revenue EBITDA EBITDA Margin 1 PAT 2 (before exceptional and one-time tax gain) ₹ 131,192 Cr ₹ 45,319 Cr 39% ₹ 24,299 Cr ($ 17,619 mn) ($ 6,086 mn) ($ 3,263 mn) 51% YoY 66% YoY Industry leading margin 95% YoY ROCE 3 Cash and Cash Net Debt Net Debt / EBITDA equivalents c.30%
Slide 5: FY22 Operational performance and ESG highlights
FY22 Operational performance and ESG highlights OPERATIONAL ESG o Record annual production across key businesses and stable Oil & o 3,200+ Nand Ghars created for social welfare Gas performance: o ₹ 359 crores ($ 48 mn)Social Investment; improving the lives • Aluminium and Alumina production grew to
Slide 6: Key investment highlights
Key investment highlights World-class natural resources powerhouse with Low cost and long-life diversified asset base Well positioned to capitalize on India’s growth and benefit through the cycle with attractive commodity mix 1 2 Robust financial profile with improving ROCE, increasing cash Proven t
Slide 7: World class diversified natural resource powerhouse
1a World class diversified natural resource powerhouse 1 SILVASSA | Copper 2 TUTICORIN | Copper, INDIA 3 Captive Power Plant LANJIGARH | Aluminium (VAL) & Captive Power Plant 4 JHARSUGUDA | Aluminium 6 (VAL), Commercial Power (SEL), Captive Power Plant & Projects under development IRELAND KORBA | Al
Slide 8: Tier-1 low-cost assets and long-life assets with exploration upside
1b Tier-1 low-cost assets and long-life assets with exploration upside Competitive Position on Cost Curve POSITIONING R&R Life1 FY2022 Production Full Capacity2 Quartiles I II III IV Zinc India Largest integrated zinc-lead producer 25+ 1,017kt 1.2mtpa Zinc International One of the largest undevelope
Slide 9: Well positioned to capitalize on global natural resource potential and India growth outlook (1/2)
Well positioned to capitalize on global natural resource potential and India growth 2a outlook (1/2) GLOBAL NATURAL RESOURCE UPCYCLE Natural resources are Current geo-political Oversupply risk is low China’s focus on Commodity prices are in demand upcycle situation has led to amidst dearth of new It
Slide 10: Well positioned to capitalize on global natural resource potential and India growth outlook (2/2)
Well positioned to capitalize on global natural resource potential and India growth 2b outlook (2/2) India is the fastest growing major economy in the world 2030 2021 2030 CAGR 6.1% 2021 $5tn economy GDP(Real) $2.8 tn $4.8 tn 5th largest CAGR 5.2% $2.8 tr Per capita $6.8k $11.6k Zinc, Aluminium and
Slide 11: Our portfolio with attractive commodity mix is well placed to meet energy transition demand
Our portfolio with attractive commodity mix is well placed to meet the energy 2c transition led mineral demand growth Mineral intensity vs Clean Vedanta’s presence conventional energy shift tech Key mineral for clean energy technologies Electric vehicles 5x Fe Al Cu Zn Pb Ni 2x 2x 2x 2x 2x 1.5x Sola
Slide 12: Proven track record of operational excellence
3a Proven track record of operational excellence Zinc-Lead Silver Copper Aluminium Steel Power Iron Ore Oil & Gas Total Production Copper Equivalent (kt) 2,000 1,800 Strong EBITDA Performance 1,600 1,400 1,200 $ 6.1 bn 1,000 800 600 400 200 $0.3 bn 0 FY2011 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009
Slide 13: Well invested and consolidated assets driving growth
3b Well invested and consolidated assets driving growth Inorganic Growth ✓ Acquired Cairn India Organic growth ✓ Vedanta IPO ✓ Acquired Zinc International ✓ Acquired KCM ✓ Acquired VS Dempo ✓ 170 kT Zinc smelter ✓ Commissioned 100kt Dariba Pb smelter ✓ 50 kT Pb smelter ✓ Acquired ESL ✓ Expanded 274M
Slide 14: Aluminium business: Set to be among top 3 globally
Aluminium business: Set to be among top 3 globally* delivering superior value for all its 3c stakeholders Aluminium: achieved record production, margins o JSG capacity ramp-up to 1.8 MTPA – 1QFY23 o Environmental clearance continue to improve is in place o Balco capacity expansion to 1 Aluminium Cap
Slide 15: Zinc Business: Transformed zinc India over the last decade
Zinc Business: Transformed zinc India completely over the last decade; Zinc International poised to 3d deliver significant value VOLUME (KT) & COP ($/T) ZINC INDIA ZINC INTERNATIONAL GROWTH PROJECT 1,400 1,100 ➢ Largest Integrated Zinc-Lead miner with ➢ $466 mn capex on Gamsberg phase 2 500 >25 year
Slide 16: Oil & Gas: Rich portfolio mix spread across basins
Oil & Gas: Rich portfolio mix spread across basins; focus on augmenting R&R and increase production 3e volume Vision Current growth project: $687mn growth capex projects, includes $360mn to monetize 52.6mmboe > 50% of India’s domestic reserves and $327mn to grow resources production Maximize resourc
Slide 17: Iron & steel: Potential to create long term growth
3f Iron & steel: Potential to create long term growth 4.5 MTPA 12 MTPA 150 KTPA 7 KTPA STEEL & VAP IRON ORE FERRO ALLOY NICKEL Expansion at Bokaro / Goa Starting mines in Liberia Charge Chrome plant (CCP) Starting Operations Greenfield at Bellary Reserves and Resources Expansion Debottlenecking Pote
Slide 18: Focused on digitalization and innovation to drive efficiency and resilience
4 Focused on digitalization and innovation to drive efficiency and resilience Six core pillars of center of excellence: clear outcomes outline ambition for each pillar o Digital first approach across business Volume Cost Enabling Digital Digital o Digital as culture of organization 10% 5% automation
Slide 19: Disciplined capital allocation framework
5a Disciplined capital allocation framework o Intend to deleverage at group level Key Strategic Priority Optimize Leverage Ratio o Leverage ratio at Vedanta Limited should not be more than 1.5x. Project Capex o Volume augmentation, cost reduction or creating value added products are key guiding prin
Slide 20: Emphasis on superior and consistent shareholder returns while investing for growth
5b Emphasis on superior and consistent shareholder returns while investing for growth Dividend payout of ₹ 47,691 crore (~$7 bn) over 10 years $mn 16,727 Total 7,880 shareholder 7,099 7,005 3,531 return of 269% 782 964 1,216 1,038 1,450 in last 10 years FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY20
Slide 21: Our commitments to achieve 'Net Zero'
6a Our 10 commitments to achieve ‘Net Zero’ Percentile ranking Net Zero Carbon by 2050 or sooner 1 89% 86% Use 2.5 GW of Round-The-Clock RE 2 and reduce absolute emissions by 25% by 2030 from 2021 baseline 2020 2021 Pledge US$ 5bn over the next 10 years to accelerate transition to Net- 3 Zero No add
Slide 22: Board of Directors with a global and diversified experience
6b Board of Directors with a global and diversified experience Anil Agarwal Navin Agarwal Sunil Duggal DD Jalan Whole Time Non-Executive Non-Executive Executive Director & CEO Independent Chairman Vice Chairman 37+ years of Director four decades of four decades of experience of 40+ years of entrepre
Slide 23: Experienced management team
6c Experienced management team Sunil Duggal Priya Agarwal Ajay Goel Madhu Srivastava Sharad Gargiya WTD & Group CEO Non-Executive Group Acting CFO Group CHRO Group CCO B.Tech- Thapar Inst Independent Director B.Com (H), CA, CS PGDM – IIM A (Buying & Selling) Exp: 38 years MBA Exp: 21 years Exp: 20 y
Slide 24: People – our biggest asset
6d People – our biggest asset OUR KEY FOCUS AREAS Next Set of 4000 Company with Governance, Working with Leaders are Professionally diverse ethics, integrity, best global home grown driven company - demographics – and compliance Each business business through our Nationality, – most revered having s
Slide 25: Robust financial profile with improving ROCE, increasing cash flow and a stronger balance sheet
7 Robust financial profile with improving ROCE, increasing cash flow and a stronger balance sheet Revenue (Rs crore) EBITDA (Rs crore) Profit after tax (Rs crore) 131,192 45,319 23,709 92,923 25,470 13,692 65,733 20,407 10,339 FY14 FY18 FY22 FY14 FY18 FY22 FY14 FY18 FY22 Net debt / EBITDA x Net gear
Slide 26: Strategy to enhance long term value
Strategy to enhance long term value Optimise capital Operational Delivering on STRATEGIC Committed to ESG Augment reserves excellence and allocation & growth PRIORITIES leadership & resources base maintain strong cost leadership opportunities Balance Sheet o Achieve net o Disciplined o Focus on full
Slide 27: To sum up
To sum up Unique and diversified portfolio of natural resources Significant Macro opportunity- Successful track record of demand/pricing. Vedanta’s portfolio delivering long term sustainable well positioned to capitalize the growth opportunity Large and scalable asset base with Robust dividend payou
Slide 28: Appendix
VEDANTA LIMITED INVESTOR PRESENTATION June 2022 Appendix Sensitivity: Internal (C3)
Slide 29: FY22 Income statement
FY22 Income statement ▪ Depreciation & Amortization ₹ Crore $ million o Higher by 16%YoY in 4QFY22 mainly due to increase in FY’22 FY’21 FY’22 FY’21 amortization as a result of increase in Ore production at Revenue from operations 131,192 86,863 17,619 11,722 Zinc Business. Other operating income 1,
Slide 30: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net debt / EBITDA – maintained at low level Debt breakdown (as of 31st Mar 2022) Gross Debt In $bn In ₹ 000’ crores 1.1 1.0 0.9 0.9 Term debt 6.1 46.4 0.5 Working capital 0.2 1.6 FY'18 FY'19 FY'20 FY'21 FY'22 Short term borrowing 0.7 5.1 ▪ Liquidity: Cash and cash eq
Slide 31: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Term Debt of $6.1bn Term Debt Maturities : ₹ 46,442 crore ($6.1bn) (as of 31st Mar 2022) (as on 31st Mar’22) 0.2% Standalone Subsidiaries 9% Bonds - INR 17% 6.5 Term Loan - INR In ₹ 000’ crore Term Loan - USD 14.8 Bonds - USD 2
Slide 32: Growth capex and returns profile
Growth capex and returns profile $bn Full year Capex guidance 1.0 1.2 1.5 1.2 0.7 1.1 Growth Capex profile 2.0 Oil & Gas Zinc 0.2 Al & Power Copper Other 1.0 1.1 0.1 0.8 0.8 0.7 0.1 0.0 0.7 0.5 0.1 0.2 0.1 0.2 0.2 0.3 0.5 0.3 0.3 0.0 0.6 0.5 0.5 0.1 0.0 0.3 0.12 0.2 0.2 0.1 FY2017 FY2018 FY2019 FY20
Slide 33: Our ESG Strategy
Our ESG Strategy ESG Purpose Transforming for good Pillars 1 2 3 Transforming Communities Transforming the Planet Transforming the Workplace ▪ Aim 1. Keep community ▪ Aim 4. Net-carbon ▪ Aim 7. Prioritizing Commitments & welfare at the core of neutrality by 2050 or safety and health of all targets s
Slide 34: Pillar 1: Transforming communities
Pillar 1: Transforming communities - benefitting the lives of 4.64 million people across 1268 villages 3,200+ Nand Ghar across India Nearly 4.64 million beneficiaries through Vedanta-wide 180 programs Healthcare: Drinking water and sanitation: • Nearly 2.4 million people benefited • More than 323,00
Slide 35: Pillar 2: Transforming the planet
Pillar 2: Transforming the planet Net Zero Carbon Company by 2050 or sooner | 25% absolute GHG reduction by 2030 Renewable power: Fuel Switch Programs: Committed to use 2.5 GW of RE RTC equivalent by 2030 ▪ Biomass firing: Committed to use 5% ▪ Signed PDA for 580 MW of RE by FY25 biomass in thermal
Slide 36: Pillar 2: Transforming the planet
Pillar 2: Transforming the planet Water Positivity | Waste Management | Partnerships Achieve Water Positivity by 2030: Partnerships: ▪ Collaboration with TUV-SUD to develop roadmap for ‘Net ▪ Green Spark: Program to collaborate with Water Positive’ initiative technology start-ups to solve ESG challe
Slide 37: Pillar 2: Transforming the planet - Green Spark
Pillar 2: Transforming the planet - Green Spark Spark vision: Green spark objective: To achieve corporate innovation and growth outcomes through Strategic investments in start-ups to unlock value across Vedanta. strategic partnerships and investments with Digital or Offers opportunities to explore b
Slide 38: Pillar 3: Transforming workplace
Pillar 3: Transforming workplace Organizational design to ensure right people in right roles; Launch of ‘People’ CoP to have globally benchmarked HR practices on ESG side In decision making bodies Leadership roles Enabling roles Overall Safety & health: Group 2030 target 30% 40% 50% 50% ▪ Focus on “
Slide 39: Awards and Recognition: FY22
Awards and Recognition: FY22 Our group companies received more than 100 awards in the finance, operational excellence, sustainability, CSR and HR categories Sustainability development & CSR Finance & Operational Health, Safety & HR Hindustan Zinc has been awarded the ‘Most Sustainable Company in the
Slide 40: Disclosures & publications
Disclosures & publications Sustainability Report Tax Transparency Report Integrated Annual Report TCFD Report 40 Vedanta Limited Investor presentation June 2022 Sensitivity: Internal (C3)
Slide 41: Cautionary statement and disclaimer
Cautionary statement and disclaimer 01 The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any fo
Slide 42: Thank you
Thank you Vedanta Limited Investor presentation June 2022 Sensitivity: Internal (C3)