Vedanta Resources — Investor Presentation (September 2022)
33 slides from Vedanta Resources's investor presentation, Sep 12, 2022
Slide 1: Investor Presentation
VEDANTA RESOURCE LIMITED SEPTEMBER 2022 Investor Presentation Sensitivity: Internal (C3)
Slide 2: Vedanta Resources Limited – Overview
Vedanta Resources Limited – Overview A globally diversified Strong management team 1st quartile cost curve Committed to ESG natural resource with > 30 years of Contribution to positioning globally leadership in the natural powerhouse with experience; 76,000+ exchequer of > $38 bn across key segments
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: Vedanta is uniquely positioned to deliver sustainable value
Vedanta is uniquely positioned to deliver sustainable value Robust financial profile with improving World-class natural resources powerhouse with ROCE, increasing cash flow and a low cost and long-life diversified asset base stronger balance sheet 7 1 Well positioned to capitalize on India’s growth
Slide 5: World class diversified natural resource powerhouse
1a World class diversified natural resource powerhouse 1 SILVASSA | Copper 2 TUTICORIN | Copper, Captive Power Plant 3 LANJIGARH | Aluminium INDIA (VAL) & Captive Power Plant JHARSUGUDA | Aluminium 4 (VAL), Commercial Power (SEL), Captive Power Plant & Projects under development, Captive coal mines
Slide 6: 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 Quartiles5 I II III IV Zinc India Largest integrated zinc-lead producer 25+ 1,017kt 1.2mtpa Zinc International One of the largest undevelop
Slide 7: 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 Europe’s energy crisis Natural resources are Current geo-political Oversupply risk is low led cost pressures, in demand upcycle situation has led to amidst dearth of n
Slide 8: 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 9: Portfolio with attractive commodity mix well placed for 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 10: 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 $ 6.3 bn 1,000 800 600 400 200 $0.3 bn 0 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
Slide 11: Well invested and consolidated assets driving growth
3b Well invested and consolidated assets driving growth Inorganic Growth ✓ Acquired Cairn India Organic growth ✓ Vedanta IPO ✓ Acquired Zinc International ✓ Acquired KCM ✓ Acquired VS Dempo ✓ 170 kT Zinc smelter ✓ Commissioned 100kt Dariba Pb smelter ✓ 50 kT Pb smelter ✓ Expanded 274MW wind power ✓
Slide 12: Aluminium business: Set to be among top 3 globally
Aluminium business: Set to be among top 3 globally* delivering superior value for all its 3c stakeholders Aluminium: achieved record production, margins o JSG capacity ramp-up to 1.8 MTPA – 2QFY23 o Environmental clearance continue to improve is in place o Balco capacity expansion to 1 Aluminium Cap
Slide 13: Zinc Business: Transformed Zinc India; Zinc International poised to deliver
Zinc Business: Transformed zinc India completely over the last decade; Zinc International 3d poised to deliver significant value VOLUME (KT) & COP ($/T) ZINC INDIA ZINC INTERNATIONAL GROWTH PROJECT 1,400 ➢ Largest Integrated Zinc-Lead miner with ➢ $466 mn capex on Gamsberg phase 2 1,100 >25 years of
Slide 14: Oil & Gas: Rich portfolio mix spread across basins
Oil & Gas: Rich portfolio mix spread across basins; focus on augmenting R&R and increase 3e production 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 15: 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 16: 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 17: Disciplined capital allocation framework
5 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 princ
Slide 18: Our ESG Strategy
6a 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 target
Slide 19: ESG strategy progress: Pillar 1 – Transforming Communities
Steadily progressing on our repurposed ESG strategy: Pillar 1 – Transforming 6a Communities Total Beneficiaries FY22 CSR Spend Villages reached Key Initiatives of CSR 4.64 mn ₹ 399+ crores 1268+ Areas of Focus in CSR Healthcare Drinking water and sanitation Nand Ghar Saplings Plantation > 30 Initiat
Slide 20: ESG strategy progress: Pillar 2 – Transforming the Planet
Steadily progressing on our repurposed ESG strategy: Pillar 2 – Transforming the 6a Planet Baseline 2030 Our aims Key KPIs (UoM) Key strategic initiatives (FY21) Target Absolute GHG emissions 60mn ▪ Started Biomass usage at HZL / BALCO / Val J 45mn (TCO2e) ▪ Procured ~ 867 Million units of RE power
Slide 21: ESG strategy progress: Pillar 3 – Transforming the workplace
Steadily progressing on our repurposed ESG strategy: Pillar 3 – Transforming the 6a workplace Baseline 2030 Our aims Key KPIs (UoM) Key strategic initiatives (FY21) Target ▪ Implementing Critical Risk Controls on vehicular safety across Prioritizing Ongoing sites safety and Fatal incidences target-
Slide 22: People – our biggest asset
6b 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 23: Robust financial profile with improving ROCE, increasing cash flow and stronger balance sheet
7a Robust financial profile with improving ROCE, increasing cash flow and a stronger balance sheet Revenue ($bn) EBITDA and EBITDA Margin 45.0 40.0 35.0 17.6 15.4 EBITDA ($ bn) 12.9 EBITDA Margin % 4.5 4.1 6.3 FY14 FY18 FY22 FY14 FY18 FY22 Net debt / EBITDA x FCF post capex and ROCE 31.9 14.9 2.4 5.
Slide 24: Delivering on deleveraging commitment along with proactive refinancing
7b Delivering on deleveraging commitment along with proactive refinancing ▪ On track to deliver on deleveraging commitment; achieved $1.5bn In strong position to proactively address YTD FY23 deleveraging at VRL including $300mn ICL repayment maturities with a combination of deleveraging and proactiv
Slide 25: Strategy to enhance long term value
Strategy to enhance long term value Optimise capital Operational Delivering on STRATEGIC Committed to ESG Augment reserves excellence and allocation & growth PRIORITIES leadership & resources base maintain strong cost leadership opportunities Balance Sheet o Achieve net o Disciplined o Focus on full
Slide 26: Appendix
VEDANTA RESOURCES LIMITED INVESTOR PRESENTATION September 2022 Appendix Sensitivity: Internal (C3)
Slide 27: Vedanta Limited - Best ever first quarter performance in 1QFY23
Vedanta Limited - Best ever first quarter performance in 1QFY23 Operational Financial ESG Key businesses continue to deliver strong ▪ Revenue of ₹ 38,251 crore ($ 4,964 ▪ Completed internal carbon pricing, climate operating performance: mn), up 36%YoY risk assessment, scope -3 inventorization ▪ Alum
Slide 28: Vedanta Limited - Growth capex and returns profile
Vedanta Limited - 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
Slide 29: Currency and commodity sensitivities
Currency and commodity sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ $50 million/year Commodity prices – Impact of a 10% increase in Commodity Prices FY 2022 Full Year Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 81 68 Zinc
Slide 30: Disclosures & publications
Disclosures & publications Integrated Annual Report1 Tax Transparency Report2 Sustainability Report2 TCFD Report2 https://www.vedantaresources.com/InvestorReports/Ve https://www.vedantalimited.com/uploads/investor- https://www.vedantalimited.com/uploads/investor- https://www.vedantalimited.com/uploa
Slide 31: Key Awards and Recognitions
Key Awards and Recognitions 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 32: 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 33: Thank you
Thank you Vedanta Resources Limited Investor presentation September 2022 Sensitivity: Internal (C3)
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