Vedanta Limited · NSE:VEDL
Vedanta — Q4 FY2022 Earnings Presentation
50 slides from Vedanta's earnings presentation, Apr 28, 2022
Slide 1: 4QFY22 Earnings Presentation
VEDANTA LIMITED INVESTOR PRESENTATION 28th April 2022 4QFY22 Earnings Presentation Sensitivity: Internal (C3)
Slide 2: Cautionary statement and disclaimer
Cautionary statement and disclaimer 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 forwa
Slide 3: 4QFY22 Review and Business Update
VEDANTA LIMITED INVESTOR PRESENTATION 4QFY22 4QFY22 Review and Business Update Sunil Duggal Group CEO & Chief Safety Officer Sensitivity: Internal (C3)
Slide 4: FY22 Highlights
FY22 Highlights Operational Financial ESG ▪ Record annual production across key ▪ Record Revenue of ₹ 131,192 crore with ▪ 3,200+ Nand Ghars created for social businesses and stable Oil & Gas performance: 51%YoY growth welfare o Aluminium and Alumina production grew to ▪ All time high consolidated E
Slide 5: EBITDA contribution by key businesses
EBITDA contribution by key businesses FY20 FY21 FY22 990 2% 1,209 4% 1,231 3,305 6% 8% 1,466 2,744 7% 10% Zinc 1,998 17,695 O&G 9% 9,094 39% EBITDA EBITDA 12,431 EBITDA ₹ 21,060 43% Aluminium ₹ 27,341 46% ₹ 45,319 crore crore 17,337 crore Iron Ore & Steel 7,751 38% 28% Others 7,271 35% 3,206 12% 5,9
Slide 6: 4Q FY22 Highlights
4Q FY22 Highlights Operational Financial ESG ▪ Strong quarterly volume growth at key ▪ Record Revenue of ₹ 39,342 crore, up 41%YoY ▪ Signed PDA for 580 MW RE - a businesses: significant step towards 2.5 GW RE ▪ Highest ever EBITDA of ₹ 13,768 crore, up 51% o Aluminium production grew 8%YoY commitmen
Slide 7: Pillar 1: Transforming communities
Pillar 1: Transforming communities - benefitting the lives of 4.36 million people across 1268 villages 3,200+ Nand Ghar across India Nearly 4.36 million beneficiaries through Vedanta-wide 180 programs Healthcare: Drinking water and sanitation: • Nearly 2.23 million people benefited • More than 325,0
Slide 8: Pillar 2: Transforming the planet
Pillar 2: Transforming the planet Net Zero Carbon Company by 2050 or sooner | 25% absolute GHG reduction by 2030 Renewable power: Fuel Switch Programs: Committed to use 2.5 GW of RE RTC equivalent by 2030 ▪ Biomass firing: Committed to use 5% ▪ Signed PDA for 580 MW of RE by FY25 biomass in thermal
Slide 9: Pillar 2: Transforming the planet - Water, waste, partnerships
Pillar 2: Transforming the planet Water Positivity | Waste Management | Partnerships Achieve Water Positivity by 2030: Partnerships: ▪ Collaboration with TUV-SUD to develop roadmap for ‘Net ▪ Green Spark: Program to collaborate with Water Positive’ initiative technology start-ups to solve ESG challe
Slide 10: Pillar 2: Transforming the planet - Green Spark
Pillar 2: Transforming the planet - Green Spark Spark vision: Green spark objective: To achieve corporate innovation and growth outcomes through Strategic investments in start-ups to unlock value across Vedanta. strategic partnerships and investments with Digital or Offers opportunities to explore b
Slide 11: Pillar 3: Transforming workplace
Pillar 3: Transforming workplace Organizational design to ensure right people in right roles; Launch of ‘People’ CoP to have globally benchmarked HR practices on ESG side In decision making bodies Leadership roles Enabling roles Overall Safety & health: Group 2030 target 30% 40% 50% 20% ▪ Focus on “
Slide 12: Aluminium: value creation through continued focus on growth and integrated operations
Aluminium: value creation through continued focus on growth and integrated operations Aluminium: achieved record production, margins continue to improve Key highlights: Production (kt) COP ($/T) ▪ Record annual Aluminium production at 15%YoY growth 2,268 Margin ($/t) 1,858 driven by JSG ramp-up; qua
Slide 13: Zinc India: new milestone with >1 mn tonnes mined metal production
Zinc India: touched a new milestone with >1 mn tonnes Mined metal production Key performance highlights: ▪ Highest ever annual mined Metal production - crossed 1 MTPA mark; best ever quarterly production since underground transition ▪ Highest ever annual refined Metal production with 4%YoY growth; s
Slide 14: Zinc International: Gamsberg production run rate
Zinc International: Gamsberg achieved 220 kt annualized run rate of MIC production in Mar’22 Gamsberg - Production Key highlights: Production (kt) ▪ Achieved highest ever annual production of mined 170 metal with 18%YoY growth; Crushing throughput 145 increased to 827tph in FY22 from 767tph in FY21
Slide 15: Oil & Gas: stable operations with focus on growth projects
Oil & Gas: stable operations with focus on growth projects Key highlights: Gross production (kboepd) ▪ Production: annual production was broadly stable as impact of natural decline was largely offset by – 165 159 154 162 161 o Polymer injection in Bhagyam & Aishwariya fields, o Infill wells in Manga
Slide 16: Iron ore: continue to improve performance trajectory
Iron ore: continue to improve performance trajectory Karnataka Iron ore sales Iron ore Karnataka: Sales (mn tonnes) 5.7 ▪ Achieved highest ever annual sales of 5.7 mn tonnes 4.4 with 30%YoY growth; Quarterly sales increased 22%YoY driven by support from all key operational projects 1.7 1.4 1.5 ▪ Ann
Slide 17: ESL Steel and FACOR
ESL Steel and FACOR ESL: key performance highlights FACOR: key performance highlights ▪ Record Annual Hot Metal production of 1,355 kt since ▪ Highest ever Annual Chrome Ore production at 250kt, since acquisition, up 5% YoY acquisition, up 70%YoY ▪ Quarterly Hot Metal production grew 3%YoY to 344 kt
Slide 18: Upcoming growth projects – Oil & Gas and Aluminium
Upcoming growth projects – Oil & Gas and Aluminium Oil & Gas: $687mn new growth capex projects, this includes Aluminium: $1.4 bn growth capex over 2 years; vertical integration $360mn to monetize 52.6mmboe reserves and $327mn to grow focus to reduce market volatility impact and create value resource
Slide 19: Upcoming growth projects – Zinc International and ESL
Upcoming growth projects – Zinc International and ESL Zinc International ESL Steel ▪ $466 mn capex on Gamsberg phase 2 project ▪ Capex investment of $348 mn ▪ New 4 MTPA Concentrator (200 kt MIC) ▪ Doubling Hot Metal Capacity to 3.0 MTPA from 1.5 MTPA ▪ Completion by 1HFY24 and commissioning in 3QFY
Slide 20: Finance Update
VEDANTA LIMITED INVESTOR PRESENTATION 4QFY22 Finance Update Ajay Goel Acting Chief Financial Officer Sensitivity: Internal (C3)
Slide 21: Financial snapshot 4QFY22
Financial snapshot 4QFY22 Revenue EBITDA EBITDA Margin 1 PAT 2 (before exceptional and one-time tax gain) ₹ 39,342 crore ₹ 13,768 crore 39% ₹ 7,570 crore 41% YoY 51% YoY Industry leading margin 48% YOY ROCE 3 Cash and Cash Net Debt Net Debt / EBITDA equivalents c.30% ₹ 32,130 crore ₹ 20,979 crore 0.
Slide 22: EBITDA bridge 4QFY22 vs. 3QFY22
EBITDA bridge 4QFY22 vs. 3QFY22 (QoQ comparison) Aluminium 2,162 (In ₹ crore) Zinc, Lead & Silver 664 Oil & Gas (O&G) 338 IOB, ESL 255 Zinc 53 O&G (17) 13,550 13,768 853 67 20 350 33 166 3,418 10,938 IOB 149 Zinc 134 Market & Regulatory Aluminium 93 ₹ 2,612 crore O&G (29) 3QFY22 LME/ Brent / Input C
Slide 23: EBITDA bridge 4QFY22 vs. 4QFY21
EBITDA bridge 4QFY22 vs. 4QFY21 (YoY comparison) Aluminium 5,070 Zinc, Lead & Silver 1,685 (In ₹ crore) Oil & Gas (O&G) 810 ESL 409 AL (702) Zinc (169) O&G (108) 3,591 612 66 254 963 8,014 14,076 401 13,768 Aluminium 274 ESL 73 9,107 Power 53 Zinc (148) Market & Regulatory ₹ 4,969 crore 4QFY21 LME/
Slide 24: Net debt movement during 4QFY22
Net debt movement during 4QFY22 (In ₹ crore) 27,569 11,305 Inventory, Debtor & others (1,336) 402 Creditors/Advances 3,780 20,979 4,823 2,444 2,738 FCF Post Capex ₹ 11,011 Cr Net Debt CF from WC Movements Capex Dividend Translation & Net Debt (Dec 31, 2021) Operations (Incl Buyer’s Others* (Mar 31,
Slide 25: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net debt / EBITDA – maintained at low level Debt breakdown (as of 31st Mar 2022) Gross Debt In $bn In ₹ 000’ crores 1.1 1.0 0.9 0.9 Term debt 6.1 46.4 0.5 Working capital 0.2 1.6 FY'18 FY'19 FY'20 FY'21 FY'22 Short term borrowing 0.7 5.1 ▪ Liquidity: Cash and cash eq
Slide 26: Disciplined capital allocation framework
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 princip
Slide 27: Growth capex and returns profile
Growth capex and returns profile Full year Capex guidance 1.0 1.2 1.5 1.2 0.7 1.1 Growth Capex profile, $bn 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 FY2018 FY2019 FY2
Slide 28: Strategy to enhance long term value
Strategy to enhance long term value Committed to ESG leadership Augment reserves & Delivering on growth resources base opportunities Operational excellence Optimise capital allocation & and cost leadership maintain strong Balance Sheet 28 Vedanta Limited 4QFY22 Investor Presentation Sensitivity: Int
Slide 29: Appendix
VEDANTA LIMITED INVESTOR PRESENTATION 4QFY22 Appendix Sensitivity: Internal (C3)
Slide 30: FY23 guidance
FY23 guidance Zinc India ▪ Mined Metal and Finished Metal: 1,000 - 1,025 Kt Aluminium ▪ Silver: c. 700 - 725 tonnes ▪ Alumina: 2.0 - 2.1 Mtpa ▪ COP: $1,125/t - $1175/t excluding royalty ▪ Aluminium: 2.2 - 2.3 Mtpa Zinc International ▪ BMM: 60 – 70 Kt Oil & Gas ▪ Gamsberg: 200 - 225 tonnes ▪ Average
Slide 31: Income statement
Income statement ▪ Depreciation & Amortization 4Q 4Q In ₹ Crore FY’22 FY’21 o Higher by 16%YoY in 4QFY22 mainly due to increase in FY’22 FY’21 amortization as a result of increase in Ore production at Revenue from operations 39,342 27,874 131,192 86,863 Zinc Business. Other operating income 480 332
Slide 32: Project capex
Project capex Approved Spent up to Spent in Unspent as at Capex in Progress (In $ mn) Status Capex2 31 Mar’213 FY223 31 Mar 20224 Cairn India1 – Mangala infill, Bhagyam & Aishwariya 3,100 1,028 184 1,888 Polymer, Liquid handling , ASP , OALP, Tight oil & gas etc. Aluminium Sector Balco smelter and r
Slide 33: Entity-wise Cash and Debt
Entity-wise Cash and Debt (In ₹ crore) Mar 31, 2022 Mar 31, 2021 Company Debt Cash & Cash Eq3 Net Debt3 Debt Cash & Cash Eq3 Net Debt3 Vedanta Limited Standalone 36,696 7,057 29,639 32,166 5,851 26,315 Cairn India Holdings Limited1 1,602 1,389 213 2,810 1,402 1,408 Zinc India 2,823 20,789 (17,966) 7
Slide 34: Net debt movement during FY22
Net debt movement during FY22 FCF (post Capex) ₹ 21,715 Crore (In ₹ crore) 24,414 37,392 19,356 1,076 20,979 11,043 Inventory, Debtor (5,918) and others Creditors/Advances 1,284 4,634 Net Debt CF from WC Movements Capex Dividend Translation Net Debt (Mar 31, 2021) Operations (Incl Buyer’s & Others*
Slide 35: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Term Debt of $6.1bn Term Debt Maturities : ₹ 46,442 crore ($6.1bn) (as of 31st Mar 2022) (as on 31st Mar’22) 0.2% Standalone Subsidiaries 9% Bonds - INR 17% 6.5 Term Loan - INR In ₹ 000’ crore Term Loan - USD 14.8 Bonds - USD 2
Slide 36: Segment Summary – Aluminium
Segment Summary – Aluminium Particulars (in’000 tonnes, or as Quarter Full year stated) 4QFY22 4QFY21 % YoY 3QFY22 FY22 FY21 % YoY Alumina – Lanjigarh 503 496 1% 472 1,968 1,841 7% Total Aluminum Production 572 531 8% 578 2,268 1,969 15% Jharsuguda 428 387 11% 431 1,687 1,400 20% Korba 144 144 - 147
Slide 37: Aluminium profitability
Aluminium profitability $/t 3QFY22 2,762 109 130 3,001 (756) (833) (466) (70) 876 (137) (262) 477 2,055 4QFY22 2,182 145 102 3,527 3,280 858 826 499 160 150 1,185 253 783 LME Ingot Value Realisation Alumina Power Other hot Coversion & EBITDA Depreciation Interest PBT Premium Addition metal other 37
Slide 38: Segment Summary – Zinc India
Segment Summary – Zinc India Quarter Full year Production (in ’000 tonnes, or as stated) 4QFY22 4QFY21 % YoY 3QFY22 FY22 FY21 % YoY Mined metal content 295 288 3% 252 1017 972 5% Integrated metal 260 256 2% 261 967 930 4% Refined Zinc – Integrated 211 195 8% 214 776 715 8% Refined Lead – Integrated1
Slide 39: Segment summary – Zinc International
Segment summary – Zinc International Production (in’000 tonnes, or as Quarter Full year stated) 4QFY22 4QFY21 % YoY 3QFY22 FY22 FY21 % YoY Refined Zinc – Skorpion - - - - - 1 - Mined metal content- BMM 10 14 (29)% 11 52 58 (9)% Mined metal content- Gamsberg 45 41 9% 41 170 145 18% Total 55 55 (1)% 5
Slide 40: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Quarter Full year Oil & Gas (boepd) 4QFY22 4QFY21 % YoY 3QFY22 FY22 FY21 % YoY Average Daily Gross Operated 153,840 165,000 (7%) 159,230 160,851 162,104 (1%) Production (boepd) Rajasthan 132,443 138,057 (4%) 136,795 137,723 132,599 4% Ravva 13,248 16,258 (19%) 14,457 14,1
Slide 41: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Quarter Full year Oil & Gas (boepd) 4QFY22 4QFY21 % YoY 3QFY22 FY22 FY21 % YoY Average Daily Production Gross operated 153,840 165,000 (7%) 159,230 160,851 162,104 (1%) Oil 130,758 139,818 (6%) 133,731 135,662 140,353 (3%) Gas (Mmscfd) 138 151 (9%) 153 151 131 15% Non ope
Slide 42: Segment Summary – Iron Ore and Steel
Segment Summary – Iron Ore and Steel Iron Ore Particulars (in million dry metric tonnes, or Quarter Full year as stated) 4QFY22 4QFY21 % YoY 3QFY22 FY22 FY21 % YoY Sales 2.3 2.2 4% 1.5 6.8 6.5 4% Goa 0.5 0.8 (31%) 0.1 1.1 2.1 (50%) Karnataka 1.7 1.4 22% 1.5 5.7 4.4 30% Production of Saleable Ore 1.4
Slide 43: Segment Summary – Power
Segment Summary – Power Particulars (in million units) Quarter Full year 4QFY22 4QFY21 % YoY 3QFY22 FY22 FY21 % YoY Total Power Sales 2,803 3,352 (16)% 3,448 11,872 11,261 5% Jharsuguda - 558 - 755 2,060 2,835 (27)% BALCO 251 380 (34)% 279 1,139 1,596 (29)% HZL Wind Power 66 65 2% 59 414 351 18% TSP
Slide 44: Segment Summary – FACOR and Copper
Segment Summary – FACOR and Copper Copper Quarter Full year Production (in ’000 tonnes, or as stated) 4QFY22 4QFY21 % YoY 3QFY22 FY22 FY21 % YoY Copper - Cathodes 34 35 (3%) 33 125 101 24% Financials (In ₹ crore, except as stated) Revenue 4,351 3,945 10% 3,741 15,151 10,890 39% EBITDA 16 (71) - 14 (
Slide 45: Sales Summary – Zinc and Aluminium
Sales Summary – Zinc and Aluminium Quarter Full Year Sales volume 4QFY22 4QFY21 3QFY22 FY22 FY21 Zinc-India Sales Refined Zinc (kt) 214 198 212 777 724 Refined Lead (kt) 49 62 47 192 216 Total Zinc-Lead (kt) 263 260 259 969 940 Silver (tonnes) 162 203 173 647 735 Zinc-International Sales Zinc Refine
Slide 46: Sales summary – Iron & Steel, FACOR and Power
Sales summary – Iron & Steel, FACOR and Power Quarter Full Year Sales volume Quarter Full Year Sales volume 4QFY22 4QFY21 3QFY22 FY22 FY21 Power Sales (mu) 4QFY22 4QFY21 3QFY22 FY22 FY21 Iron ore sales Jharsuguda - 558 755 2,060 2,835 Goa (mn dmt) 0.5 0.8 0.1 1.1 2.1 TSPL 2,486 2,349 2,355 8,259 6,4
Slide 47: Currency and commodity sensitivities
Currency and commodity sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ ₹ 1000 crore / year Commodity prices – Impact of a 10% increase in Commodity Prices FY 2022 Full Year Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 81 68 Z
Slide 48: Group – present debt structure
Group – present debt structure As of 31-Mar-22 ($bn) Volcan Listed entities Unlisted entities EBITDA - Vedanta Resources (VRL) Net Debt - Consolidated Standalone EBITDA 6.3 0.2 Net Debt 11.7 8.9 69.7% Divisions of Vedanta Limited ⚫ Sesa Iron Ore Vedanta Limited (VEDL) ⚫ Sterlite Copper ⚫ Power (600
Slide 49: Awards 4QFY22
Awards 4QFY22 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 Cairn awarded the ‘Global CSR Excellence and ESL awarded the ‘Best Indirect Tax Tea
Slide 50: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 5:15 PM (IST) on April 28, 2022. The dial-in numbers for the call are given below: Event Telephone Number +91 22 6280 1114 Universal Dial-In Earnings conference call +91 22 7115 8015 on April 28, 2022 India National Toll Free 1