Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q2 FY2022 Earnings Presentation
32 slides from Tata Steel's earnings presentation, Nov 11, 2021
Slide 1: Results Presentation: Second quarter and half year ended September 30, 2021
Results Presentation Second quarter and half year ended September 30, 2021 November 11, 2021 1
Slide 2: Safe harbour statement
Safe harbour statement Statements in this presentation describing the Company’s performance may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those directly or indirectly expressed, inferred or implied. Imp
Slide 3: Tata Steel is focused on creating sustainable value
Tata Steel is focused on creating sustainable value Consolidate Leadership in Robust financial position as global India health cost leader Leadership position Leadership in Become culturally in technology sustainability future ready and digital 3
Slide 4: Committed towards excellence in Safety & Health of our employees
Committed towards excellence in Safety & Health of our employees LTIFR1 reduction by Safety remains a top priority 3.06 70% since FY06 2.35 ▪ Launched safety campaign on ‘Slip/Trip/Fall’ to improve 2.10 awareness among the workforce 1.31 0.95 0.92 0.78 0.68 0.60 0.56 0.58 0.46 0.47 0.69 0.72 ▪ 24%Yo
Slide 5: Improving quality of life of our communities
Improving quality of life of our communities ▪ Engaged with 1.9 million+ lives through our CSR Key areas for CSR initiatives program ▪ Spent more than Rs.1,350 crores1 since FY17 on Rural & Urban Dignity for the Signature programmes at regional scale as well as Education Disabled programmes for Comm
Slide 6: Standing with the nation during COVID-19 pandemic
Standing with the nation during COVID-19 pandemic Supporting the community Health Support ▪ Vaccination campaign: 77%2 of the eligible employees are fully 23 lakh+ vaccinated; more than 98% have received their first dose Lives reached out1 ▪ Liquid Medical Oxygen: more than 80,000 tons Liquid Medica
Slide 7: Sustainability is deeply embedded in our ecosystem
Sustainability is deeply embedded in our ecosystem Long term Pursuing low Circular Economy Deploying Responsible Improving decarbonization carbon integrated as part Supply Chain Policy transparency and roadmap created technologies of business model across value chain disclosures 2025 goals 2030 goal
Slide 8: Progressing towards sustainability goals
Progressing towards sustainability goals CO2 capture plant Electric Vehicles for transportation Water treatment plant Commissioned 5 TPD CO2 capture plant Flagged off first batch of Electric at Jamshedpur; first in India by a Steel Commissioned 3,000 KLD water Vehicles at our stockyard for company t
Slide 9: Steel prices remained rangebound; Coking coal supply disruption impacts steel spreads
Steel prices remained rangebound; Coking coal supply disruption impacts steel spreads ▪ Global economic recovery continues Regional steel prices remain buoyant China CFR coking coal rose to $600/t level… HRC prices ($/t) Prices ($/t) ▪ Steel prices remained buoyant with western 2,500 Premium Low Vol
Slide 10: India steel demand affected by seasonality; European steel margins soften on rising energy cost
India steel demand affected by seasonality; European steel margins soften on rising energy cost India Europe ▪ Apparent steel consumption shrank by 2.3%QoQ in ▪ Key steel consuming sectors growth remain robust; 2QFY22 amidst heavy rains/seasonality and 2nd wave of automotive sector yet to achieve pr
Slide 11: India: Deliveries increased despite the contraction in market demand
India1: Deliveries increased despite the contraction in market demand ▪ Crude steel production increased by 2%QoQ and 3%YoY ▪ Overall deliveries increased 11%QoQ despite market demand contraction amidst seasonal weakness; deliveries were lower 9%YoY due to higher opening stock in 2QFY21 enabling sto
Slide 12: India: Market leadership in chosen segments
India1: Market leadership in chosen segments Launched new and superior rebar Tata Tiscon 550SD for ▪ Received approvals of 198 kg flat steel per retail customers vehicle for a new SUV of a leading OEM ▪ Highest ever quarterly sales in Infra & Engineering segment with 19%QoQ growth in 2QFY22 ▪ Initia
Slide 13: India: Micro-segmentation approach driven by Customer focus leading sales growth
India1: Micro-segmentation approach driven by Customer focus leading sales growth ▪ Servicing 80 microsegments – ensuring preferred supplier Gross Revenue through ECA (Rs. crores) status on monthly basis with 10,000+ MSMEs pan India 7,826 21% 6,460 ▪ Augmenting channel capacity to improve reach and
Slide 14: India: New products developed across customer segments
India1: New products developed across customer segments Rim Auto: Car Seat Auto: Reinforcement Auto: Disc wheel belt assembly for Axle mounting; application; HR anchor plate Grade (S315MC) Grade (A03 Fe360) Disk Auto: Truck wheel Ri; Auto: Handle-bar of BPR: HR Astrum Grade (SPFH 540 – 5.5 2-wheeler
Slide 15: India: 5 MTPA TSK Phase II expansion driving value accretive growth in India
India: 5 MTPA TSK Phase II expansion driving value accretive growth in India CRM complex Width Thickness Capacity Pellet Plant capability (in mm) (in mm) (in MTPA) Pickling Line and 1,870 0.3 - 2.3 2.2 Tandem Cold rolling Mill Continuous Annealing 1,870 0.3 - 2.3 0.9 Line Continuous Galvanizing 1,56
Slide 16: India: New initiatives are progressing well
India: New initiatives are progressing well Aashiyana1 Service & Solutions Steel Recycling Business New Material Business Initiated direct exports of FRP Pressure Vessels ‘Aashiyana’ generated gross Tata Pravesh and Nest In Developed Graphene enriched revenue of Rs.338 crores in Commissioned shreddi
Slide 17: Business outlook is robust for 2HFY22 despite volatile raw material prices
Business outlook is robust for 2HFY22 despite volatile raw material prices Steel demand Steel prices Raw material prices ▪ Global steel demand is ▪ Asian steel prices are expected ▪ Seaborne iron ore prices are expected to expand by 4.5% in to remain rangebound amidst now expected to remain CY21 wit
Slide 18: Pathway for our future financial strategy
Pathway for our future financial strategy Target 1HFY22 performance ▪ Investment grade financial metrics; ▪ Achieved investment grade financial metrics strong earnings and cashflow ▪ Consolidated EBITDA of Rs.32,803 crores performance ▪ Generated free cash flow of Rs.6,876 crores ▪ US$2 bn+ gross de
Slide 19: Tata Steel Consolidated: Highest ever quarterly EBITDA
Tata Steel Consolidated: Highest ever quarterly EBITDA (All figures are in Rs. Crores unless stated otherwise) 2QFY22 1QFY22 2QFY21 Key drivers for QoQ change: Production (mn tons)1 7.77 7.88 7.25 ▪ Revenues: improved across key entities with increase Deliveries (mn tons) 7.39 7.11 7.93 in realisati
Slide 20: Tata Steel Standalone: Highest ever quarterly EBITDA
Tata Steel Standalone1: Highest ever quarterly EBITDA (All figures are in Rs. Crores unless stated otherwise) 2QFY22 1QFY22 2QFY21 Key drivers for QoQ change: Production (mn tons) 4.56 4.45 4.42 ▪ Revenues: increased mainly due to higher steel prices Deliveries (mn tons) 4.42 3.99 4.87 and deliverie
Slide 21: Tata Steel Europe: Strong operating performance
Tata Steel Europe: Strong operating performance (All figures are in Rs. Crores unless stated 2QFY22 1QFY22 2QFY21 otherwise) Key drivers for QoQ change: Liquid Steel production (mn tons) 2.56 2.67 2.15 ▪ Volumes: deliveries declined by 8% due to seasonal Deliveries (mn tons) 2.14 2.33 2.27 impact as
Slide 22: Achieved highest ever Consolidated EBITDA despite higher raw material prices
Achieved highest ever Consolidated EBITDA1 despite higher raw material prices Rs. Crores ▪ Selling Result: primarily due to strong steel realisations across entities 5,424 6,884 772 17,810 1,230 15,892 ▪ Cost Changes: Primarily due to increase in coking coal consumption cost and purchased Iron Ore c
Slide 23: Generated free cash flows of Rs.3,322 crores in 2QFY22
Generated free cash flows of Rs.3,322 crores in 2QFY22 Rs. Crores 16,618 3,889 1,199 4,223 1,226 3,020 2,191 3,322 EBITDA Working capital Finance cost (net) Taxes paid Non-cash & Others Dividend (Incl. tax) Capex Free Cash Flow 2QFY22 movement 2QFY22 23
Slide 24: Debt repayment of Rs.11,424 crores in 1HFY22
Debt repayment of Rs.11,424 crores in 1HFY22 88,501 Rs. Crores 106 84,237 5,894 35 1,524 13,1131 5,530 78,163 10,2641 580 75,3892 9,3031 73,9732 68,8602 Gross Debt Addition of Loan FX Impact Gross Debt Addition of Loan FX Impact Gross Debt Mar'21 new leases movement and Others Jun'21 new leases move
Slide 25: Key metrices are at investment grade levels
Key metrices are at investment grade levels EBITDA Margin (%)1 EBITDA / ton (Rs.)1 Interest Coverage Ratio (x)1,2 Gross & Net Debt (Rs. crore) 22,636 11.6 28.9% 116,328 100,816 92,147 88,501 18.9% 83,014 17.2% 19.8% 104,779 78,163 11,110 94,879 14.5% 9,337 10,838 7,129 72,367 69,215 75,389 6,267 3.9
Slide 26: Annexures
TATA STEEL TATA '# WeAlsoMakeTomorrow Annexures
Slide 27: Tata Steel Standalone: Continued focus on operational efficiencies and minimizing environmental impact
Tata Steel Standalone: Continued focus on operational efficiencies and minimizing environmental impact Coke Rate (kg/thm) Specific Energy Consumption (Gcal/tcs) Specific Fresh Water Consumption (m3/tcs) Good Good Good 434 420 7.29 399 5.55 386 6.83 376 6.8 367 367 6.61 364 359 358 354 353 6.39 352 3
Slide 28: Tata Steel Long Products
Tata Steel Long Products Crude Steel production (k tons) Steel Sales (k tons) ▪ Steel production increased by 2% on QoQ Crude steel 184 and 4% on YoY basis despite planned production and 175 172 168 168 162 maintenance shutdowns Steel sales volume increased on ▪ Steel sales volume increased by 4% Qo
Slide 29: Tata Steel Long Products: Continue to deleverage with strong FCF generation
Tata Steel Long Products: Continue to deleverage with strong FCF generation Consolidated financial statements Key drivers for QoQ change: 2QFY22 1QFY22 2QFY21 (All figures are in Rs. Crores unless stated otherwise) ▪ Revenues: increased with improved steel and DRI Total revenue from operations 1,637
Slide 30: Tata Steel Long Products: consistent improvement in key operating parameters
Tata Steel Long Products: consistent improvement in key operating parameters (all figures are indexed; 1QFY20=100) Coke rate1 PCI rate Crude Steel Yield 100 94 160 143 106 Good Good 102 Good 85 130 102 70 100 98 55 70 94 40 40 90 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22
Slide 31: Tata Steel SEA: Strong performance with higher steel prices
Tata Steel SEA: Strong performance with higher steel prices (All figures are in Rs. Crores unless stated 2QFY22 1QFY22 2QFY21 otherwise) Key drivers for QoQ change: Saleable Steel production (mn tons) 0.48 0.59 0.51 Deliveries (mn tons) 0.59 0.63 0.55 ▪ Volumes: production and sales declined primari
Slide 32: Investor relations contact
Investor relations contact Investor enquiries : Sandep Agrawal Email: sandep.agrawal@tatasteel.com 32