Vedanta Limited · NSE:VEDL
Vedanta — Q2 FY2022 Earnings Presentation
49 slides from Vedanta's earnings presentation, Oct 29, 2021
Slide 1: Q2 FY2022 Earnings Presentation
VEDANTA LIMITED INVESTOR PRESENTATION 29th Oct 2021 Q2 FY2022 Earnings Presentation Sensitivity: Internal (C3)
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements
Slide 3: Contents
Contents Section Presenter Page Q2 FY22 Review & Business Update Sunil Duggal, CEO 4 Financial Update Ajay Goel, Acting CFO 22 Appendix 29 VEDANTA LIMITED – Q2 FY2022 INVESTOR PRESENTATION 3 Sensitivity: Internal (C3)
Slide 4: Q2 FY2022 Review and Business Update
VEDANTA LIMITED INVESTOR PRESENTATION Q2 FY2022 Q2 FY2022 Review and Business Update Sunil Duggal Group CEO & Chief Safety Officer Sensitivity: Internal (C3)
Slide 5: Strong Growth Momentum Continues
Strong Growth Momentum Continues ▪ Commit towards becoming net zero carbon by 2050 ESG ▪ Embedding ESG to make Vedanta truly future-ready ▪ Steady volume performance across business segments Operational Performance ▪ Sustained margins on strong commodity prices ▪ Highest Revenue and EBITDA for Q2 an
Slide 6: Uniquely Positioned To Deliver Sustainable Value
Uniquely Positioned To Deliver Sustainable Value World-Class Natural Competitive position in Delivering growth by Contributing to a Resources Powerhouse Indian and Global market capacity expansion sustainable development ▪ Diverse portfolio, strong ▪ Well-placed to benefit ▪ Production ramp-up ▪ Net
Slide 7: Multiple Initiatives to Improve ESG Performance Over the Years
Multiple Initiatives to Improve ESG Performance Over the Years Themes Actions already taken Resulting into rating improvement in last few years Renewable RE adoption across BUs Energy (40 MW solar & 273 MW Wind at HZL) Fleet MoU signed up with Normet, Epiroc at HZL Electrification ESL adopted EVs fo
Slide 8: Multi-dimensional Approach to Redefine ESG Strategy
Multi-dimensional Approach to Redefine ESG Strategy 1 ▪ Partnered with world’s leading companies to develop a robust roadmap to be a Global leader in ESG space Tapping Global Expertise in ▪ Mentored by Mr. Kuldeep Kaura on ESG Vedanta’s DNA ▪ Onboarded Dr Raj Aseervatham and Mr. Peter Sinclair as ES
Slide 9: Redefining our ESG Strategy
Redefining our ESG Strategy ESG Transforming for good Purpose 1 2 3 Pillars Transforming Communities Transforming the Planet Transforming the Workplace ▪ Aim 1. Keep community ▪ Aim 4. Net-carbon ▪ Aim 7. Prioritizing safety Commitments welfare at the core of neutrality by 2050 or and health of all
Slide 10: Our Commitments – On Net Zero we Commit to
Our 10 Commitments – On Net Zero we Commit to Net Zero Carbon by 2050 or sooner 2 Use 2.5 GW of Round-The-Clock RE and reduce absolute emissions by 25% by 2030 from 2021 baseline 3 Pledge US$ 5b over the next 10 years to accelerate transition to Net-Zero 4 No additional coal-based thermal power and
Slide 11: Heading Towards – Zero Harm, Zero Waste, Zero Discharge
Heading Towards – Zero Harm, Zero Waste, Zero Discharge Safety Update Environment Update Q2 Fatality ▪ 3 fatalities at ESL Steel ▪ Digitalization of tailing dam at HZL & VZI ▪ CEOs are driving critical risks across Vedanta. completed and in progress at Aluminum ▪ Expert for Critical Risk Management
Slide 12: Aluminium: Success Continues; Growing Value in Dynamic World
Aluminium: Success Continues; Growing Value in Dynamic World Highest Ever Aluminium Production Alumina Production & COP 282 270 1,647 1,588 258 1,526 227 222 1,288 1,278 1,104 1,030 951 477 418 462 482 511 938 993 473 549 570 941 1,118 Q2 FY21 Q1 FY22 Q2 FY22 H1 FY21 H1 FY22 Q2 FY21 Q1 FY22 Q2 FY22
Slide 13: Aluminium: Well-Poised to be among Global Leaders
Aluminium: Well-Poised to be among Global Leaders COP Reduction potential ~$150–200 /t 2.8 Capacity (Mtpa) Step towards Vertical Integration 2.2 1.9 Steps towards Vertical Integration ▪ Lanjigarh expansion by Q1 FY23 (EC received 6Mnt) FY21 FY22 e 1-2 years ▪ Lanjigarh ▪ Jharsuguda ▪ 100% JSG Ramp-u
Slide 14: Zinc India: Strong Foundation Driving Growth
Zinc India: Strong Foundation Driving Growth Key Highlights: Mined metal Production (kt) 440 470 ▪ Record-High# Q2 and H1 mined metal Production - higher 238 221 248 ore treatment and improved recovery ▪ Metal Production in Q2* down due to planned Q2 FY21 Q1 FY22 Q2 FY22 H1 FY21 H1 FY22 maintenance
Slide 15: Zinc International: Gamsberg Positioning for Long Term Value Creation
Zinc International: Gamsberg Positioning for Long Term Value Creation Consistently Achieving Better than Design Throughput Key Highlights: ▪ Highest excavation at Gamsberg in Q2 (5.9Mt per 817 833 782 month), post successful onboarding of business 684 partner in Q1 501 522 532 526 ▪ Q2 Production up
Slide 16: Oil & Gas: Stable Operations, Focus on Delivery of Growth Projects
Oil & Gas: Stable Operations, Focus on Delivery of Growth Projects Operations Development Projects ▪ Production: Maintained at Q4 FY21 levels of 165 ▪ Mangala Wells : 3 new wells drilled & complete, 7 new wells put on production kboepd in H1 FY22 ▪ Infill Drilling to start in Q3 FY22: ▪ Opex: Operat
Slide 17: Oil & Gas: Key Projects For Production Growth In Mid To Long Term
Oil & Gas: Key Projects For Production Growth In Mid To Long Term ASP Exploration (OALP + PSC) Shale >300 mmboe1 600 mmboe2 300 mmboe3 ▪ Modularized approach for ▪ Portfolio prioritization ▪ Partners engaged on studies accelerated volumes ▪ Investment partnerships ▪ Pilot program under planning ▪ Pi
Slide 18: Iron ore: Continued Performance Growth Trajectory
Iron ore: Continued Performance Growth Trajectory Highest Ever six months production at Karnataka Key Highlights Q2: 2.7 ▪ Record Hot metal production at VAB through 2.4 Production (Mnt) productivity improvement initiatives 1.5 1.4 1.3 ▪ VAB Margin up 50% y-o-y and down 32% q-o-q due to higher cokin
Slide 19: ESL Steel: Towards Long Term Organic Growth
ESL Steel: Towards Long Term Organic Growth Consistent Performance Key Highlights Q2: 71 ▪ Hot Metal production up 11% y-o-y and 1% q-o-q 115 67 94 ▪ Saleable Production up 12% y-o-y and 1% q-o-q 32 through improvement of furnaces post shutdown in Q2 FY22 260 289 293 528 582 ▪ Margin down 66% y-o-y
Slide 20: FACOR: Delivering Stronger Growth
FACOR: Delivering Stronger Growth Strong Performance Continues Key Highlights Q2: 655 ▪ Achieved highest quarterly Fe Chrome production; 537 424 plant productivity enhancement by ~10% 38 32 ▪ Highest quarterly EBITDA margin ~14x y-o-y and 17 18 19 54% q-o-q supported by increase in NSR 48 56 ▪ Ore p
Slide 21: Strategy to Enhance Long Term Value
Strategy to Enhance Long Term Value Continue Focus on World Class ESG Performance Augment Our Reserves & Resources Base Operational Excellence and Cost Leadership Optimise Capital Allocation & Maintain Strong Balance Sheet Delivering on Growth Opportunities VEDANTA LIMITED – Q2 FY2022 INVESTOR PRESE
Slide 22: Finance Update
VEDANTA LIMITED INVESTOR PRESENTATION Q2 FY2022 Finance Update Ajay Goel Acting Chief Financial Officer Sensitivity: Internal (C3)
Slide 23: Financial snapshot Q2 FY 2022
Financial snapshot Q2 FY 2022 Revenue EBITDA EBITDA Margin 1 Attributable PAT (before exceptional items) ₹ 30,048 cr ₹ 10,582 cr 40% ₹ 4,644cr Up 44% y-o-y Up 62% y-o-y Industry leading margin Up 486% y-o-y ROCE 2 Cash and Cash ND ND/EBITDA equivalents c.26% ₹ 30,650 cr ₹ 20,389cr 0.5x Up ~345 bps Q
Slide 24: EBITDA Bridge (Q2 FY2022 vs. Q1 FY2022)
EBITDA Bridge (Q2 FY2022 vs. Q1 FY2022) (In ₹ crore) HZL,ZI 114 Aluminum 1,069 Copper 60 Zinc, Lead & Silver 116 IOB 47 Oil & Gas 175 Al (84) Iron & Steel 46 1,412 471 77 182 11,231 281 - 539 171 10,582 10,031 HZL,ZI (405) IOB (115) Market & Regulatory Al 254 ₹ 1,199 crore Al (199) HZL,ZI (178) IOB
Slide 25: EBITDA Bridge (Q2 FY2022 vs. Q2 FY2021)
EBITDA Bridge (Q2 FY2022 vs. Q2 FY2021) (In ₹ crore) Al 4,145 Zinc, Lead & Silver 1,058 Cairn 635 Iron & Steel 900 HZL, ZI 149 IOB 46 Al (45) 6,738 1,290 117 109 11,971 189 1,357 157 10,582 Al (984) 6,530 HZL,ZI (121) Iron & Steel (162) Cairn (93) HZL,ZI (521) Market & Regulatory TSPL (123) ₹ 5,439
Slide 26: Net Debt for Q2 FY2022
Net Debt for Q2 FY2022 (In ₹ crore) Inventory, Debtors & Others 360 Creditors/ Customers Advance 1,059 20,261 8,722 6,855 661 20,389 2,753 1,419 FCF Post Capex ₹ 7,388 Cr CF from WC Capex Dividend Translation Net Debt Net Debt Operations Movements & Others* 30th Sep’21 30th Jun’21 (Incl Buyer’s cred
Slide 27: Balance Sheet and Debt Breakdown
Balance Sheet and Debt Breakdown Net Debt / EBITDA – lowest in last 4 years Debt Breakdown (as of 30th Sep 2021) 1.1 1.0 0.9 0.9 Debt breakdown as of 0.5 (in $bn) (₹ in 000’ Cr) 30th Sep 2021 Term debt 6.5 48.1 FY'18 FY'19 FY'20 FY'21 H1 FY'22 Working capital 0.2 1.8 Short term borrowing 0.1 1.1 ▪ L
Slide 28: Capex and Returns Profile
Capex and Returns Profile Growth CAPEX Profile, $bn Oil & Gas Zinc Al & Power Copper Other Optionality Full year Capex guidance 0.7 1.0 1.2 1.5 1.2 0.7 1.1 1.1 1.1 0.1 0.2 0.8 0.8 0.1 0.7 0.1 0.5 0.1 0.6 0.1 0.2 0.4 0.2 0.3 0.5 0.3 0.3 0.1 0.2 0.1 0.3 0.1 0.1 0.2 0.1 0.1 0.5 0.5 0.2 0.1 0.3 FY2016 F
Slide 29: Appendix
VEDANTA LIMITED INVESTOR PRESENTATION Q2 FY2022 Appendix Sensitivity: Internal (C3)
Slide 30: FY 2022 Guidance
FY 2022 Guidance Segment Production and COP Revised Production and COP Mined Metal and Finished Metal: 1,025 – 1,050 Kt No change in Production Zinc India Silver: c. 720 tonnes COP: < $1,075/t excluding royalty COP: < $1,000/t excluding royalty BMM: ~70 – 80 Kt No Change in Production Zinc Internati
Slide 31: Income Statement
Income Statement Depreciation & Amortization In ₹ Crore Q2 Q2 Q1 FY’22 FY’21 FY’22 ▪ Y-o-Y higher majorly on account of project Revenue from operations 30,048 20,804 28,105 capitalization at Oil & Gas and Aluminium and higher ore production at Zinc business. Other operating income 353 303 308 EBITDA
Slide 32: Project Capex
Project Capex (In $ mn) Spent up to Approved Spent in H1 Unspent as at Capex in Progress Status Capex3 31 Mar’214 FY20224 30 Sep 20215 Cairn India1 – Mangala Infill, Liquid handling, Bhagyam & Aishwariya EOR, Tight Oil & Gas, OALP etc 2,459 1,028 85 1,346 Aluminium Sector Line 3: Fully capitalised L
Slide 33: Entity Wise Cash and Debt
Entity Wise Cash and Debt (In ₹ crore) Sep 30, 2021 Jun 30, 2021 Sep 30, 2020 Company Cash & Cash & Cash & Debt Net Debt4 Debt Net Debt4 Debt Net Debt4,5 Cash Eq4 Cash Eq4 Cash Eq4,5 Vedanta Limited Standalone 30,462 1,697 28,765 27,788 2,246 25,542 32,790 1,609 31,181 Cairn India Holdings 2,792 2,0
Slide 34: Funding Sources and Term Debt Maturities
Funding Sources and Term Debt Maturities Diversified Funding Sources for Term Debt of $6.5bn Term Debt Maturities : ₹ 48,135 Cr ($6.5bn) (as of 30th Sep 2021) (as at 30th Sep’21) 53% 1% 25.3 Term Loans-INR 10% Bonds-INR 8.5 21% 17% Term Loans- 17% ₹ ‘000 Crore USD/Foreign Currency 9% 10.3 Bonds-FC 8
Slide 35: Segment Summary – Zinc India
Segment Summary – Zinc India Q2 Q1 H1 Production (in ’000 tonnes, or as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Mined metal content 248 238 4% 221 470 Integrated metal 209 237 (12)% 236 445 Refined Zinc – Integrated 162 180 (10)% 188 350 Refined Lead – Integrated1 47 57 (18)% 48 95 Refin
Slide 36: Segment Summary – Zinc International
Segment Summary – Zinc International Q2 Q1 H1 Production (in’000 tonnes, or as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Mined metal content- BMM 16 16 3% 15 31 Mined metal content- Gamsberg 39 35 10% 46 85 Total 55 51 8% 61 115 Financials (In ₹ Crore, except as stated) Revenue 1,044 632 6
Slide 37: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q2 Q1 H1 OIL AND GAS (boepd) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Average Daily Gross Operated Production 165,327 165,045 - 164,899 165,114 (boepd) Rajasthan 141,766 132,296 7% 139,798 140,787 Ravva 14,282 21,610 (34)% 14,662 14,471 Cambay 9,279 11,139 (17)% 10,440
Slide 38: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q2 Q1 H1 OIL AND GAS (boepd) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Average Daily Production Gross operated 165,327 165,045 - 164,899 165,114 Oil 138,121 142,150 (3)% 139,978 139,044 Gas (Mmscfd) 163 137 19% 150 156 Non-operated- Working interest 546 291 88% 530 538
Slide 39: Segment Summary – Aluminium
Segment Summary – Aluminium Q2 Q1 H1 Particulars (in’000 tonnes, or as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Alumina – Lanjigarh 511 462 11% 482 993 Total Aluminum Production* 570 473 21% 549 1,118 Jharsuguda-I 138 131 6% 137 275 Jharsuguda-II* 285 200 42% 267 553 245kt Korba-I 67 66 1
Slide 40: Aluminium profitability
Aluminium profitability $/t Q1 FY22 2,400 73 69 2,542 (664) (499) (363) (64) 951 (132) (284) 535 1,526 Q2 FY22 1,647 98 2,848 2,648 102 688 554 406 97 1,104 134 285 684 245 LME Ingot Value Other Realisation Alumina Power Conversion EBITDA Dep Int PBT Premium addition Hot & Others Metal VEDANTA LIMIT
Slide 41: Segment Summary – Power
Segment Summary – Power Q2 Q1 H1 Particulars (in million units) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Total Power Sales 2,904 3,998 (27)% 2,716 5,620 Jharsuguda 760 807 (6)% 545 1,305 BALCO 199 418 (52)% 409 608 HZL Wind Power 155 107 45% 134 289 TSPL 1,790 2,666 (33)% 1,628 3,418 Financials (
Slide 42: Segment Summary – Iron Ore and Steel
Segment Summary – Iron Ore Particulars (in million dry metric tonnes, or Q2 Q1 H1 as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Sales 1.3 1.5 (12)% 1.7 3.0 Goa 0.1 0.2 (43)% 0.4 0.5 Karnataka 1.2 1.3 (9)% 1.3 2.5 Production of Saleable Ore 1.3 1.5 (11)% 1.4 2.7 Goa Karnataka 1.3 1.5 (11)% 1
Slide 43: Segment Summary – FACOR and Copper Business
Segment Summary – FACOR* Q2 Q1 H1 Particulars (in ‘000 tonnes, or as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Total Production Ore Production 24 11 - 123 147 Ferrochrome Production 19 17 10% 18 38 Financials (In ₹ crore, except as stated) Revenue 210 118 78% 170 380 EBITDA 93 6 - 62 155 M
Slide 44: Sales Summary
Sales Summary Sales volume Q2 FY2022 Q2 FY2021 Q1 FY2022 H1 FY2022 Zinc-India Sales Refined Zinc (kt) 164 181 187 352 Refined Lead (kt) 47 57 49 95 Total Zinc-Lead (kt) 211 238 236 447 Silver (tonnes) 152 203 160 312 Zinc-International Sales Zinc Refined (kt) - - - - Zinc Concentrate (MIC) 45 44 53
Slide 45: Sales Summary
Sales Summary Sales volume Q2 Q2 Q1 H1 Q2 Q2 Q1 H1 Power Sales (mu) FY 2022 FY 2021 FY 2022 FY 2022 Sales volume FY 2022 FY 2021 FY 2022 FY 2022 Jharsuguda 760 807 545 1,305 Iron-Ore Sales TSPL 1,790 2,666 1,628 3,418 Goa (Mn DMT) 0.1 0.2 0.4 0.5 BALCO 199 418 409 608 Karnataka (Mn DMT) 1.2 1.3 1.3
Slide 46: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ ₹ 850 crore / year Commodity prices – Impact of a 10% increase in Commodity Prices H1 FY 22 Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 71 33 Zinc ($/t)
Slide 47: Awards & Recognition in Q2 FY22
Awards & Recognition in Q2 FY22 Name of Awards Category/ Recognition Recipient (Business Unit) Legal Team of the Year India Legal Awards 2021 Cairn Oil and Gas Gold and Silver award CII National Kaizen competition Vedanta Ltd., IOK Most Sustainable Company in Mining Industry for 2021 World Finance M
Slide 48: Group Structure
Group Structure Vedanta Resources Ltd Divisions of Vedanta Limited 79.4% 65.2% ⚫ Sesa Iron Ore ⚫ Sterlite Copper Konkola ⚫ Power (600 MW Jharsuguda) Copper Vedanta Ltd Mines (KCM) ⚫ Aluminium (Odisha aluminium and power assets) ⚫ Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 51% 100% 100% 95.5%
Slide 49: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 6:00 PM (IST) on Oct 29, 2021. The dial-in numbers for the call are given below: Event Telephone Number Earnings conference call Universal Dial-In +91 22 6280 1114 on Oct 29, 2021 (Friday) +91 22 7115 8015 from 6:00 - 7:00 PM (I