Vedanta Limited · NSE:VEDL
Vedanta — Non-Deal Roadshow (March 2016)
30 slides from Vedanta's roadshow presentation, Mar 9, 2016
Slide 1: Vedanta Limited Corporate Presentation
Vedanta Limited Corporate Presentation March 2016
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statements. We do not undertake to update our forward-looking publicly available sources that have not been independently verified. statements. We caution you that reliance on any forward-looking statem
Slide 3: Overview and Key Investment Highlights
Overview and Key Investment Highlights
Slide 4: Vedanta Limited Overview
Vedanta Limited Overview • One of the world’s largest diversified natural resource Group Structure companies Vedanta plc – Operations across India, Africa, Australia and (Listed on LSE) Europe • Market leadership in various commodities in India. India market share: 62.9% 79.4% – Zinc: 75%+ Vedanta L
Slide 5: Safety and Sustainability
Safety and Sustainability Safety LTIFR (per million man-hours worked) 2 fatalities in Q3 FY2016; 8 fatalities in FY2016 (YTD) LTIFR for 9M 2016 higher due to shift to ICMM 2014 Health & Safety methodology Focus on bringing in a culture of Zero-Harm Making Better Risk Decisions (MBRD) – sessi
Slide 6: Key Investment Highlights
Key Investment Highlights 1. Diversified, Low Cost, Tier-I Assets 2. Attractive 6. Proven Track Commodity Mix Record 5. Well-Invested 3. Exposure to Asset Base: India’s Growth significant growth Story & Mining with minimal Potential capex 4. Relentless focus on opex, capex and FCF optimisation VEDAN
Slide 7: 1. Diversified, Low-Cost, Tier-I Assets
1. Diversified, Low-Cost, Tier-I Assets Sustainable LTM Dec 2016 Full LTM Dec 2016 Cash Cost Consensus Global Positioning Production Capacity1 EBITDA Position LT price4 Zinc India Lowest India's largest & world's second largest 969kt 1.2mtpa $950mn $2,154/t Quartile zinc miner Zinc Intl. One of the
Slide 8: 2. Attractive Commodity Mix
2. Attractive Commodity Mix Exposure to an attractive commodity mix Stability of earnings by diversifying across (Based on EBITDA contribution) commodities with different economic Investment stage¹ Consumption stage¹ Late stage¹ cycles Vedanta Ltd Well-balanced exposure to: Peer 1 − Consumption
Slide 9: 3a. Exposure to India Growth Story
3a. Exposure to India Growth Story Strong Macroeconomic Indicators Indian GDP to grow 44% by 2020, highest among the BRICS India is the fastest growing major economy (IMF) 160 India was no.1 FDI destination in H1 CY2015 (EY) World Brazil China − Capital inflows of US$31 bn in H1 CY2015 150 Russi
Slide 10: 3b. India's Untapped Mining Potential
3b. India’s Untapped Mining Potential India: Shared geology and India reserves ranking India’s share of global non-ferrous exploration spending very mineral potential with Africa & Global Ranking1 based on low 34.8% 100% Australia reserves 5th Coal R&R: 295 bn tonnes 0.2% 3% 3% 3% 6th Zinc 5% 4% R&R
Slide 11: 4. Relentless focus on opex, capex and FCF optimisation
4. Relentless focus on opex, capex and FCF optimisation in current market environment Pragmatic decisions in current market Cost and marketing savings program benefits conditions US$mn Maintained 1st/2nd quartile cost positions across major businesses Cost restructuring and optimisation at all b
Slide 12: 5. Well-Invested Asset Base: significant growth with minimal capex
5. Well-Invested Asset Base: significant growth with minimal capex Vedanta: set to deliver near term growth as latent Total Production (copper equivalent kt)3 capacity ramps up 2,500 Zinc-Lead Silver Copper Contribution to copper % capex Aluminium Power Iron Ore equivalent 83% 97% 47% 3% NA invested
Slide 13: 6. Proven Track Record: Production Growth and Exploration
6. Proven Track Record: Production Growth and Exploration Zinc India (mn tonnes) Iron Ore (mn tonnes) Production (Zn-Pb MIC) R&R Production R&R 2.0 400 20.0 400 375 373 300 1.6 16.0 300 13.8 202 200 1.2 144 12.0 200 10 0.9 0.8 8.0 4.0 0.4 0.2 0.0 0.0 FY2007 FY2012¹ FY2003 FY2015 1. Pre-ban volumes a
Slide 14: Financial Review
2S vedanta Financial Review
Slide 15: Financial Priorities and Highlights
Financial Priorities and Highlights Financial Priorities Financial Highlights • Robust EBITDA margins¹ at 30% in a volatile commodity market Disciplined Capital Allocation: Optimising • Maintain strong liquidity with cash and liquid investments of $7.6bn and capex, focus on FCF a balanced debt matur
Slide 16: Focus on free cash flow post capex
Focus on free cash flow post capex Free cash flow of $1.6 bn before capex during 9M FY2016 in a volatile commodity price Cash Flow and Growth Capex Profile - $bn environment Prioritised capital to high-return, low-risk Oil & Gas Capex¹ Zinc Capex M&M Capex² Free Cash Flow³ projects to maximise c
Slide 17: Balance Sheet and Maturity Profile
Balance Sheet and Maturity Profile Maturity Profile of Term Debt ($7.9bn) (as of 31st December 2015) Subsidiaries Standalone External term debt of $7.9bn ($4.6bn at Standalone and $3.3bn at Subsidiaries) Maturity profile shows external term debt at book value (excludes working capital of $2.1bn and
Slide 18: Business Review
2S vedanta Business Review
Slide 19: Oil: World Class, Low-Cost Operations in India
Oil: World Class, Low-Cost Operations in India Overview of Operations Rajasthan Block Best in class opex at c.US$6/boe in 9M FY2016 for water flood in c.3,111 km2 block with rich set of options Rajasthan c.40 km Well cost cut by c.15%: Realized better cost efficiency for drilling & completion of
Slide 20: Zinc: Attractive Fundamentals
Zinc: Attractive Fundamentals Zinc market is expected to be in a state of deficit Rampura Agucha Mine Isometric Zinc has the strongest fundamentals across commodities Mine closures, supply shortages to support prices, c.5% of global mined zinc already offline with end of life of Lisheen and Cent
Slide 21: Aluminum: Low-cost producer, ramping up production
Aluminum: Low-cost producer, ramping up production Global Demand and Supply Dynamics Vedanta: Roadmap to 2.3mtpa Aluminium Capacity (in ktpa) Capacity closures by several major producers Cost curve suggests >45% of world capacity at loss based on current LME, will drive supply adjustments Vedant
Slide 22: Copper and Iron Ore
Copper and Iron Ore Copper Operations One of the most efficient custom smelters globally, located in Tuticorin, India 400kt Cathode, with a capacity to make 250 kt of value added rods 1.3 mtpa Sulphuric Acid; c.50% used to make 0.23 mtpa Phosphoric Acid Positioned in the lowest cost quartile
Slide 23: Power
Power Power Generation Capacity: Q3 FY2016 Coal Mix (5.5mt) Vedanta: Efficient operator of thermal power plants c. 9 GW Power vertical set up to leverage synergies across the 9GW portfolio 1980 MW TSPL Plant in Punjab: Offtake committed by Punjab state, ensuring stable margins Unit-I & II to
Slide 24: Strategic Priorities Remain Unchanged
Strategic Priorities Remain Unchanged Production Growth and Asset optimisation − Disciplined approach towards ramp up: positive FCF at each segment a top priority Deliver the Balance Sheet − Optimising opex and capex to maximise cash flows − Deliver cost and marketing savings of US$1.3bn − Reduce ne
Slide 25: Appendix
Appendix = vedanta
Slide 26: Geographical Overview
Geographical Overview 6 Africa 15 3 15 14 4 2 1 14 13 23 20 13 25 5 20 13 7 12 1. Debari smelter 26 16 23. Lisheen mine, Ireland 27 2. Chanderiya smelters 16 3. Rampura Agucha mine 28 21 8 17 4. Rajpura Dariba mine & smelters 29 18 30 and Sindesar Khurd mine 5. Zawar mine 6. Talwandi Sabo power proj
Slide 27: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. Crore) 31 March 2015 30 September 2015 31 December 2015 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 37,636 840 36,796 39,394 2,194 37,200 42,645 3,055 39,590 Standalone Zinc India - 27,192 (27,192) - 30,404 (30,404
Slide 28: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $ 7.9bn Debt Breakdown (as of 31 December 2015) (as of 31 December 2015) Debt breakdown (in $bn) External term debt 7.9 Working capital 2.1 Inter company loan from Vedanta 2.2 Plc1 Total consolidated debt 12.2 Cash and Liq
Slide 29: Timeline: Merger of Vedanta Ltd and Cairn India Ltd
Timeline: Merger of Vedanta Ltd and Cairn India Ltd Event Completion BSE, NSE and SEBI approvals sought Q2 CY2015 BSE, NSE and SEBI approvals Q3 CY2015 Application to High Court in India Q4 CY2015 Vedanta plc posting of UK Circular Q1 CY2016 Vedanta plc EGM Q1 CY2016 Vedanta Limited and Ca
Slide 30: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 62.9% Sesa Iron Ore Konkola Sterlite Copper (Tuticorin) Copper Vedanta Ltd Power (2,400 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Subsidiaries of Vedanta Ltd 59.9% 64.9% 51% 100% 100% 100%