Vedanta Limited · NSE:VEDL
Vedanta — Investor Presentation (December 2015)
34 slides from Vedanta's investor presentation, December 2015
Slide 1: Vedanta Limited Corporate Presentation
Vedanta Limited Corporate Presentation December 2015
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: 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. Positive FCF at Current Prices, with Continued Focus on De
Slide 6: 1. Diversified, Low-Cost, Tier-I Assets
1. Diversified, Low-Cost, Tier-I Assets Sustainable H1 FY2016 Full H1 FY2016 Cash Cost Consensus Global Positioning Production Capacity1 EBITDA Position LT price5 Zinc India 4 India's largest & world's second largest 469kt 1.2mtpa $501mn Lowest Quartile $2,274/t zinc miner Zinc Intl. One of the larg
Slide 7: 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 8: 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 World Brazil India was no.1 FDI destination in H1 CY2015 (EY) 150 China Russia − Capital inflows of US$31 bn in H1 CY201
Slide 9: 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 3% 0.2% 3% 3% 6th Zinc 5% 4% R&R
Slide 10: 4. Positive FCF Post Capex at Current Prices with Focus on Deleveraging
4. Positive FCF Post Capex at Current Prices with Focus on Deleveraging Optimising opex and capex to generate positive FCF Maintained cost in 1st/2nd quartile of the cost curve across major businesses FY2016 capex further reduced by $300 mn from $1 bn announced earlier; rephased FY2016 capex at
Slide 11: 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% 43% investe
Slide 12: 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 13: Financial Review
2S vedanta Financial Review
Slide 14: Financial Priorities and Highlights
Financial Priorities and Highlights Financial Priorities Financial Highlights • Robust EBITDA margins¹ at 32% in a volatile commodity market with H1 Disciplined Capital Allocation: Optimising EBITDA of $1.3bn capex, focus on FCF • Maintain strong liquidity with cash and liquid investments of c. $8bn
Slide 15: Optimising Capex to drive Cash Flow Generation
Optimising Capex to drive Cash Flow Generation Free cash flow of $1.5bn before capex during H1 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
Slide 16: Diversified Funding Sources
Diversified Funding Sources Vedanta Ltd domestic credit rating: AA (Stable) by CRISIL (S&P Diversified Funding Sources subsidiary) Short Term Diversified sources of debt capital: USD Bonds/Convertibles, INR Bonds Loans - and Money Markets, Project Finance, USD & INR Syndicated and USD 4% Bilater
Slide 17: Cost and Marketing Savings
Cost and Marketing Savings Case Studies – Cost / Marketing Initiatives Announced c.$1.3 bn savings program in March 2015 Polishing Filter Package over 4 years Alternate methodology of modifying existing − c.$800 mn in cost and c.$500 mn in marketing infrastructure and using new media for treatme
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 US$5.4/boe in H1 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 strong fundamentals in the commodity complex As significant capacity to go offline : Century (500 ktpa) closed in September and our Lisheen mine (160 ktpa) closed in Novembe
Slide 21: Aluminum: Cost curve suggests 50%+ of world's capacity at loss
Aluminum: Cost curve suggests 50%+ of world’s capacity at loss Global Demand and Supply Dynamics Roadmap to 2.3mtpa Aluminium Capacity (in ktpa) 80 pots under Capacity closures by several major producers 1,250 2,320 trial runs 83 pots Cost curve suggests >50% of world capacity at loss based on c
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 Facilities & Operations Power Generation Capacity: Q2 FY2016 Coal Mix (6 mt) c. 9 GW Jharsuguda 2400MW: PLF to be ramped up in H2 as 1.25mtpa Linkage E-auction Imports smelter ramps up Commercial Captive Power Power c. 3 GW c.6 GW BALCO 1200MW Power Plant 2×300MW IPP: Unit I has commence
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$1.3bn − Reduce ne
Slide 25: Appendix
= vedanta Appendix
Slide 26: Safety and Sustainability
Safety and Sustainability Safety LTIFR (per million man-hours worked) 2 fatalities in Q2 FY2016; 6 fatalities in H1 FY2016 LTIFR for H1 higher due to shift to ICMM 2014 Health & Safety methodology: restricted injuries considered as LTI unlike earlier Focus on bringing in a culture of Zero-Harm
Slide 27: Geographical Overview
Geographical Overview 6 Africa 15 3 15 14 4 2 1 14 13 23 20 13 25 5 20 13 7 12 1. Debari smelter 26 16 23. Lisheen mine, Ireland 27 2. Chanderiya smelters 16 3. Rampura Agucha mine 28 21 8 17 4. Rajpura Dariba mine & smelters 29 18 30 and Sindesar Khurd mine 5. Zawar mine 6. Talwandi Sabo power proj
Slide 28: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. Crore) 30 September 2014 30 June 2015 30 September 2015 Company Net Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Debt Vedanta Limited 40,187 3,143 37,044 40,164 1,263 38,901 39,394 2,194 37,200 Standalone Zinc India - 25,412 (25,412) - 27,519 (27,5
Slide 29: Segment Wise Summary
Segment Wise Summary Oil & Gas H1 FY2015 H1 FY2016 Zinc-India H1 FY2015 H1 FY2016 Average Daily Gross Operated Mined Metal (kt) 376 472 Production (boepd) 206,125 207,538 Refined Zinc – Integrated (kt) 312 398 Rajasthan 173,158 170,164 Refined Lead – Integrated (kt)1 47 67 Ravva 22,259 27,303 Saleab
Slide 30: Segment Wise Summary contd.
Segment Wise Summary contd. Copper-India/Australia H1 FY2015 H1 FY2016 Aluminium H1 FY2015 H1 FY2016 Mined Metal – Australia (kt) - - Aluminium Production (kt) 424 464 Copper Cathodes– India (kt) 166 193 Jharsuguda-I 270 262 Tuticorin Power Plant (mu) 319 293 Jharsuguda-II - 38 Average Copper LME ($
Slide 31: Segment Wise Summary contd.
Segment Wise Summary contd. Power H1 FY2015 H1 FY2016 Iron Ore and Pig Iron H1 FY2015 H1 FY2016 Power Sales (mu) 4,627 5,789 Sales (mt) 1.1 1.2 Jharsuguda 2,400MW 3,807 3,820 Goa - - BALCO 270MW 71 128 Karnataka 1.1 1.2 BALCO 600MW - 158 Production 0.3 1.0 MEL 433 320 Goa - 0.0 Talwandi Sabo - 1,077
Slide 32: Project Capex
Project Capex Capex Spent up to Spent in Unspent as at 30 Capex in Progress Status (US$mn) March 2015 H1 FY16 Sep 2015 Cairn India Phase wise Completion (c$180 mn to be 3,030 1,080 211 1,739 spent in H2 FY16 and retain the flexibility to invest balance $1 billion as oil prices improve and cost botto
Slide 33: 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 Vedanta plc posting of UK Circular Q4 CY2015 Application to High Court in India Q4 CY2015 Vedanta plc EGM Q4 CY2015 Vedanta Limited and Ca
Slide 34: 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%