Jsw Steel Limited · NSE:JSWSTEEL
Jsw Steel — Investor Presentation (July 2018)
30 slides from Jsw Steel's investor presentation, July 2018
Slide 1: JSW Steel Limited Investor presentation
JSW Steel Limited Investor presentation July 2018 Confidential
Slide 2: Forward looking and cautionary statement
Forward looking and cautionary statement Certain statements in this report concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The
Slide 3: JSW Group and company overview
JSW Group and company overview Key highlights Appendix
Slide 4: JSW Group – overview
JSW Group – overview JSW Steel* JSW Energy* – Among India’s leading integrated – Engaged across the value chain of steel producers (Steel making capacity: power business 18 MTPA) – Operational capacity: 4,531 MW – Market capitalisation of US$11. 5bn(a) – Market capitalisation of US$1.6bn(a) JSW Infr
Slide 5: JSW Steel – among India’s leading steel manufacturers
JSW Steel – among India’s leading steel manufacturers – Installed capacity of 18 MTPA, at – Integrated steel manufacturing strategic locations in South and West facilities – from raw material processing India plants to value-added product capacities One of the leading Integrated manufacturing steel
Slide 6: Transformational journey to market leadership
Transformational journey to market leadership Capacity (MTPA) Total revenue (US$m)(a) EBITDA (US$m)(a) 18.0 10,463 2,160 7.8 2,846 607 1.6 254 41 FY02 FY10 FY18 FY02 FY10 FY18 FY02 FY10 FY18 Market cap (U$m)(b) FY02 FY10 FY18 11,350 (c) 26x increase • Adopting industry leading Technology Corex Corex
Slide 7: Key highlights
Key highlights JSW Group and Appendix company overview
Slide 8: Key highlights
Key highlights 1 Market leader and well placed to benefit from upcycle 2 Strong business profile diversified by region, markets and products 3 Strong focus on operational efficiency with globally renowned operations 4 Robust financial profile and stable cash flows 5 Prudent leverage management 6 Pro
Slide 9: Market leader and well placed to benefit from upcycle
1 Market leader and well placed to benefit from upcycle JSW Steel is a leading player in India Buoyant steel market conditions • Government focus on infrastructure development FY18 standalone saleable steel • INR 5.97tn planned to be spent on infrastructure in FY19 15.6MT Indian • National steel pol
Slide 10: Strong business profile diversified by region, markets and products
2 Strong business profile diversified by region, markets and products Geographically diversified with manufacturing facilities in South and Flexibility to judiciously shift between domestic and international markets based West India along with strategic overseas presence on market conditions India F
Slide 11: Strong business profile diversified by region, markets and products (continued)
2 Strong business profile diversified by region, markets and products (continued) Market leader and best placed to benefit from upcycle HR GC/GL/ Color Slabs HRC CRC Plates GI Coated Wide offering of flat and long products Billets RCS/Blooms Bars/Rods Wire Rods Diversified portfolio to address gro
Slide 12: Strong focus on operational efficiency with globally renowned operations
3 Strong focus on operational efficiency with globally renowned operations JSW Steel has seen decreasing conversion costs(a) Parameter 126.0 Expanding 10 / 10 9 9 6 8 7 5 Capacity Location in high USD/Tonne 10 / 10 9 6 7 6 7 4 growth markets Conversion costs; 123.7 10 / 10 8 9 8 10 7 10 yields Labor
Slide 13: Robust financial profile and stable cash flows
4 Robust financial profile and stable cash flows Strong track record of volume growth Continued positive momentum in operating revenues (13.2)% 31.7% 18.1% 10,438 15.6 14.7 8,837 12.3 7,733 12.1 6,712 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Consolidated sales volume (MT) Revenue (US$m) y-o-y growth
Slide 14: Prudent leverage management
5 Prudent leverage management Publicly stated financial policies Focused leverage Diversify Improve debt management funding sources maturity profile Strong y-o-y profitability improvement -> reduction in net leverage Diverse sources of funding (b) 5,546 6,161 6,326 5,751 Foreign currency Bonds
Slide 15: Proven track record of growth through organic and inorganic expansions
6 Proven track record of growth through organic and inorganic expansions Combination of organic and inorganic growth Key new projects 2007 2009 2011 2013 2015 2017 India • 4.8 MTPA • 49.3% stake in • 14.3 MTPA post • CRM2 – Phase 2 • 74% stake in Praxair’s(c) • Capacity at 7.8 • Dolvi: Ongoing capac
Slide 16: Proven track record of growth: Turnaround strategy at Dolvi plant
6 Proven track record of growth through organic and inorganic expansions (continued) Case study: Turnaround strategy at JSW Ispat’s Dolvi plant JSW Steel has a proven track record of identifying, acquiring and integrating assets creating synergies and optimizing costs December 2010 Completed initiat
Slide 17: Proven track record of growth: capex plan
6 Proven track record of growth through organic and inorganic expansions (continued) Detailed capex plan… …based on a well thought-out guidelines / strategic rationale Pellet plant, Coke ovens, 6,478 6,478 captive power Focus on return metrics instead of pure capacity addition plant, pipe conveyer
Slide 18: Experienced management with strong parentage
7 Experienced management with strong parentage Chairperson — Emeritus Promoter Director Savitri Devi Jindal Sajjan Jindal JSW-JFE partnership Chairman and Managing Director Partnership overview • 14.99% minority stake bought by JFE in July 2010 Executive Directors • Access to cutting edge technologi
Slide 19: Conclusion
Conclusion Leading steel manufacturer in India Market leadership Largest steel exporter in India 58% share of VASP and special products Geographically diversified with manufacturing facilities in South and West India Focus on flat steel products (approximately 72% of sales(a)) with higher entry barr
Slide 20: Appendix
Appendix JSW Group and Key highlights company overview
Slide 21: Steel spreads have improved since December 2015
Steel spreads have improved by US$209/tonne since December 2015 Steel prices have trended upward since Q4 CY15 Raw material price trends (US$/tonne) 120 350 (USD / ton rebased to 100 110 300 100 Change since 250 1-Jan-16 US$201 90 200 + India HRC 80 47.5% Mumbai 150 70 China HRC 114.7% 100 60 US$69
Slide 22: Reducing Chinese steel exports and strong domestic consumption growth
Reducing Chinese steel exports supplemented with strong fundamental for domestic consumption growth Significant room for improvement in per-capita China steel exports (MT) Positive India steel consumption environment consumption in India 90.7 1,106 29.4 81.5 84.0 28.1 7.9% 77.0 23.6 steel products p
Slide 23: Consolidated Financials
Consolidated Financials (a) Particulars (US$m) FY-15 FY-16 FY-17 FY-18 (b) Operating revenue 8,259 6,712 8,837 10,438 Operating EBITDA 1,373 934 1,777 2,160 % margin 17% 14% 20% 21% Profit before tax 371 (360) 749 1149 Profit after tax 262 (70) 506 892 (c) Shareholder’s equity 4,995 1,794 3,279 4,02
Slide 24: Volume guidance for FY19
Volume guidance for FY19 +3.0% +2.5% YoY % YoY % 16.75 16.00 16.27 15.62 FY18 FY19 E FY18 FY19 E Crude Steel Production Saleable Steel Sales All figures are in million tonnes 23
Slide 25: Key Projects
Key Projects Total project cost – `15,000 crore (USD $2,190M) Total capacity will be increased from 5 MTPA to 10 MTPA. The major facilities to be set-up under the expansion project Dolvi: increasing steel making capacity to are: 10 MTPA 4.5 MTPA Blast furnace with 5 MTPA Steel Melt Shop 5 MT
Slide 26: Key Projects
Key Projects Total project cost – `2,000 crore (USD $292M) Vijayanagar: CRM-1 complex CRM1 complex capacity will be increased from 0.85 MTPA to 1.80 MTPA alongwith two Continuous capacity expansion Galvanizing Line of 0.45 MTPA each, a new 1.2 MTPA Continuous Pickling Line for HRPO products Co
Slide 27: Key Projects
Key Projects Total project cost – `5,200 crore (USD $759M) Vijayanagar: Manufacturing Pellet plant 8 MTPA Integration Coke oven battery 1.5 MTPA Commissioning: by March 2020 Total project cost – `975 crore (USD $142M) Dolvi – Captive Power Instal 175 MW WHRB and 60 MW CPP to harness flue
Slide 28: JSW Steel Branded Portfolio
JSW Steel Branded Portfolio 27
Slide 29: Performance on sustainability metrics
Performance on sustainability metrics 2018: • Ranked sixth among the best operating steel plants in the world (World Steel Dynamics, Material June 2017). Waste heat recycled 3.29 MT 96% utilization rate • Recognised as the ‘Industry Mover’ in the Dow Jones Sustainability Indices for for FY17 achievi
Slide 30: Thank you
Thank you