Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q3 FY14 Earnings Presentation
31 slides from Hindalco Industries's earnings presentation, Feb 13, 2014
Slide 1: Investor Presentation Q3 FY14: Performance and Financial Review
INVESTOR PRESENTATION Q3 FY14 Performance and Financial Review February 13, 2014
Slide 2: Contents
Contents Highlights and Financial Performance Aluminium Business Copper Business Projects 2
Slide 3: Highlights and Financial Performance
HIGHLIGHTS AND FINANCIAL PERFORMANCE 33
Slide 4: Global Macro: Uncertainty Continues
Global Macro: Uncertainty Continues US: Growth picking up; unemployment Emerging markets: Growth rate easing still soft US GDP Growth (%, QoQ, SAAR) 4.1 3.7 3.2 2.8 2.5 1.2 1.1 0.1 2012 2012 2012 2012 2013 2013 2013 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 8.3 US Unemployment (%) US recovery 6.6 Momentum? Chine
Slide 5: Aluminium: Weakness persists
Aluminium: Weakness persists Aluminium LME ($/t) China overtakes RoW in production 2600 7000 World Ex-China 2400 6500 2200 6000 2000 5500 China 1800 5000 1600 4500 1400 4000 Primary Al Production 1200 3500 (kt) 1000 3000 FY10 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY11 Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY12 Q1 FY12 Q2
Slide 6: Demand Robust, Outlook Bullish
Demand Robust , Outlook Bullish Aluminium Consumption Al Projected demand 55 6% World growth (CAGR 2013-17 ) 50 10.0 8.1% 45 40 6% China 35 5.0 11% 30 25 20 0.0 15 China World 2012 2013 2012 2013 Demand remained robust & outlook is bullish on the back of strong consumer led demand expectations…
Slide 7: Financial Highlights: Q3 FY14
Financial Highlights: Q3 FY14 (Vs. Q2 FY14) Net Sales 15% EBITDA 17% 6% PAT Lower other income and Higher effective tax rate affected financial performance despite a robust operational performance 7
Slide 8: Highlights … EBITDA Trend
HIGHLIGHTS … EBIDTA TREND EBITDA (` Crore) 629 540 478 Q1FY14 Q2FY14 Q3FY14 Sequential rise despite severe headwinds… 8
Slide 9: Highlights …
HIGHLIGHTS … Robust Portfolio helped us deliver in these challenging times… For Q3 FY 14… Aluminium EBIT at Rs 170 Cr Copper EBIT at Rs 300 Cr … delivered highest ever quarterly EBIT.. 99
Slide 10: Highlights … Projects on course
HIGHLIGHTS … Projects on course... Mahan & Utkal ramp up progressing as per plan In Q3 FY14… Mahan produced 18 KT Metal Utkal produced 87 KT Alumina Aditya first metal tapped in January 2014 Mahan debt refinanced… Annual interest savings of Rs 100 Cr…. With this refinancing all project debt h
Slide 11: Financial Performance
Financial Performance: Q3 Q3 Change Q2 Change 9M 9M Change ` Cr FY14 FY13 %, YoY FY 14 %QOQ FY14 FY13 (%, YoY) Net 7273 6,872 5.8 6305 15.4 19416 19063 1.9 Sales EBITDA 629 582 8.1 540 16.6 1,648 1560 5.6 Other 204 318 (35.8) 280 (27) 912 752 21.3 Income PBITDA 834 900 (7.4) 820 1.7 2560 2312 10.7 P
Slide 12: Segmental Performance – Q3 FY14
Segmental Performance – Q3 FY 14 Aluminium Greenfield Copper SALES 34% 66% EBIT 36% 64% C.E 19% 67% 14% 12
Slide 13: Aluminium Business
ADITYA BIRLA ! ALUMINIUM BUSINESS
Slide 14: Al: External Environment
Al: External Environment LME was at 18-quarter low, but rupee depreciation mitigated some impact Value Drivers Trend LME ($/t) 62.25 2,002 62.05 YOY trend & Impact 1,781 1,767 INRUSD LME ($/t) Exch. Rate (`/$) 54.14 Ingot Premium Rising Key Input Q3 Q2 Q3 Q3 Q2 Q3 Prices FY13 FY14 FY14 FY13 FY14 FY1
Slide 15: Al: Production Performance
Al: Production Performance Q3 Q3 (Kt) Change (%) FY14 FY13 Alumina 342 326 4.8 Metal 158 139 13.5 FRP 59.7 56.9 5.1 Extrusions 9.5 8.3 14.3 Metal output includes 18.1 kt trial production at Mahan (7.4 kt in the previous quarter) Alumina output corresponds to standalone Hindalco and does not incl
Slide 16: Al: Financial Performance
Al: Financial Performance Q3 Performance 9M Performance Net Sales (` Crore) Net Sales (` Cr) 2,471 2,343 9M 6383 2,215 FY13 9M 7025 Q3 FY13 Q2 FY14 Q3 FY14 FY14 EBIT (` Crore) EBIT (` Cr) 206 166 170 9M 646 FY13 9M 585 FY14 Q3 FY13 Q2 FY14 Q3 FY14 16
Slide 17: Novelis: Q3 FY14 Highlights
NOVELIS : Q3 FY14 HIGHLIGHTS Shipments Up 11% YoY to 721 Kilo tonnes, Up 1% Sequentially Despite Seasonally Low Quarter Adjusted EBITDA Up 10% YoY to $203 Million Free Cash Flow Before Capex of $96 Million, Up $212 Million YoY Net Income of $13 Million; Excluding Certain Items, Net Income $2
Slide 18: Novelis: Shipments and Sales
Novelis: Shipments and Sales Sales (Billions) • Third Party Shipments (Kt) Consolidated Shipments & Sales Shipments by Region $3.5 800 10% 250 721 10% $3.0 647 650 200 2.4 17% $2.5 2.3 150 500 10% $2.0 100 350 $1.5 50 $1.0 200 0 Q3FY13 Q3FY14 South Asia Europe North America America Sales Shipments Q
Slide 19: Auto and Recycling: Key Growth Stories for Novelis
Auto and Recycling: Key Growth Stories for Novelis Auto Share of Novelis Portfolio Average Recycled Content in Novelis Products 80% 80% > 25% 70% 60% 50% 6% 50% 43% 39% 40% 33% 30% FY13 FY20 FY10 FY12 FY13 FY15 FY20 North America FRP Auto Demand Targets North America Aluminum Auto FRP Demand Estimat
Slide 20: Copper Business
ADITYA BIRLA COPPER BUSINESS
Slide 21: Cu: Sharp drop in Co-Product Realization
Cu: Sharp drop in Co-Product Realization Q3 FY14 vs. Q3 FY14 vs. Impact Q2 FY14 Q3 FY13 (YoY) TCRC Slightly higher Slightly higher LME ($/t) Flat Sharply lower Exch. Rate Flat Favourable (`/$) Significantly Acid Price Slightly higher lower DAP Flat Weaker Realization 21
Slide 22: Cu: Production Performance
Cu: Production Performance Cathode (kt) DAP (kt) 89 67 84 65 77 61 Q3 FY13 Q2 FY14 Q3 FY 14 Q3 FY13 Q2 FY14 Q3 FY14 Post shutdown– Improved Operating efficiency Achieving better feed rate, plant uptime and operating efficiencies 22
Slide 23: Cu: Financial Performance
Cu: Financial Performance Q3 Performance 9M Performance Net Sales (` Crore) Net Sales (` Cr) 4,661 4,817 3,974 9M 12699 FY13 9M 12427 Q3 FY13 Q2 FY14 Q3 FY14 FY14 EBIT (` Crore) EBIT (` Cr) 22% 300 238 9M 509 225 FY13 9M 620 FY14 Q3 FY13 Q2 FY14 Q3 FY14 23
Slide 24: Projects
ADITYA BIRLA PROJECTS
Slide 25: Projects: On Stream
PROJECTS : ON STREAM Utkal Refinery Aditya Smelter Hirakud FRP Mahan CPP 25
Slide 26: Aditya: First Metal tapped
Aditya: First Metal tapped…. First Metal: 18th January 2014 26
Slide 27: Mahan: Scaling up
Mahan: Scaling up CPP View Metal Production (kt) 18.1 7.4 Green anode line Q2 FY14 Q3 FY14 *YTD … 27.6 kt 27
Slide 28: Utkal: Gaining momentum
Utkal: Gaining momentum Refinery Overview Alumina Production (kt) 87 41 Alumina Conveyor Q2 FY14 Q3 FY14 28
Slide 29: Summing Up
Summing Up FY14 has turned out to be a watershed year for us when the projects have gone on stream Business environment will continue to be tough, with added uncertainty on coal blocks TCRC cycle turning in favour of Copper business; but co- product realizations pose challenges Bottom line will come
Slide 30: Thank you
ADITYA BIRLA HINDALCO Thank you
Slide 31: Forward Looking & Cautionary Statement
Forward Looking & Cautionary Statement Certain statements in this report may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the