Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q1 FY2014 Earnings Presentation
29 slides from Tata Steel's earnings presentation, Aug 13, 2013
Slide 1: Results Presentation First Quarter Ended 30th June 2013
August 13, 2013 Results Presentation First Quarter Ended 30th June 2013
Slide 2: Disclaimer
Disclaimer Statements in this presentation describing the Company’s performance 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
Slide 3: Tata Steel Group – Health and Safety
Tata Steel Group – Health and Safety Reduction continues in lost time injuries Lost Time Injury Frequency (LTIF) with Q1 FY14 performance 20% better than FY13 3.5 3.06 3 Robust review of fatality prevention 2.5 2.35 practices and deployment following 2.10 recent incidents 2 1.5 1.31 Implementa
Slide 4: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 4
Slide 5: Steel market developments
Steel market developments Global crude steel production & capacity utilisation HRC spot price (US$/tonne) 140 Crude steel production (Mt, LHS) 100% 1,000 Germany domestic 130 Capacity utilisation (%, RHS) Russia export (FOB Black Sea) 90% 900 USA domestic (Midwest) 120 China (includes 17% VAT) 110 8
Slide 6: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 6
Slide 7: Group Financial Highlights
Group Financial Highlights First Quarter Ended 30th June, 2013 Deliveries Mn T Turnover Rs. Crore 34,650 6.56 33,821 32,805 6.08 5.68 Q1 FY13 Q4 FY13 Q1 FY14 Q1 FY13 Q4 FY13 Q1 FY14 EBITDA Rs. Crore PAT* Rs. Crore 4,368 1,139 598 3,581 3,755 -6,529 Q1 FY13 Q4 FY13 Q1 FY14 Q1 FY13 Q4 FY13 Q1 FY14 7 *
Slide 8: Key Drivers
Key Drivers First Quarter Ended 30th June, 2013 India Volume increase even in a soft demand environment Net realisation improved over the last quarter Sequential improvement in underlying EBITDA/t Stable deliveries to target customer segments Europe Average revenue improved on a sequential
Slide 9: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 9
Slide 10: Performance of Tata Steel India
Performance of Tata Steel India First Quarter Ended 30th June, 2013 Production Mn T Deliveries Mn T 2.26 2.28 2.15 2.01 1.74 1.59 Q1 FY13 Q4 FY13 Q1 FY14 Q1 FY13 Q4 FY13 Q1 FY14 Turnover Rs. Crore EBITDA Rs. Crore 10,771 3,714 9,455 8,908 2,897 2,791 Q1 FY13 Q4 FY13 Q1 FY14 Q1 FY13 Q4 FY13 Q1 FY14 1
Slide 11: Performance of Tata Steel India
Performance of Tata Steel India Longs, Flats and FAMD 2.00 Flat Products 50,000 1.00 Long Products 50,000 40,398 41,007 35,374 40,000 36,703 37,138 40,000 36,228 1.50 30,000 30,000 1.46 1.50 0.80 1.37 0.75 0.78 1.29 0.77 20,000 0.73 20,000 1.00 0.71 0.69 1.01 0.90 10,000 10,000 0.50 0 0.50 0 Q1 FY13
Slide 12: Performance of South East Asia
Performance of South East Asia First Quarter Ended 30th June, 2013 Production Mn T Deliveries Mn T 0.74 0.86 0.80 0.63 0.72 0.61 Q1 FY13 Q4 FY13 Q1 FY14 Q1 FY13 Q4 FY13 Q1 FY14 Turnover Rs. Crore EBITDA Rs. Crore 3,908 224 3,486 3,372 95 93 Q1 FY13 Q4 FY13 Q1 FY14 Q1 FY13 Q4 FY13 Q1 FY14 12
Slide 13: South East Asia – Updates
South East Asia – Updates Spread between rebar and scrap prices deteriorated by US$30/t Q/Q 800 700 600 500 400 300 200 100 0 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Spread (US$/t) China Rebar price fob (US$/t) SGP Domestic Scrap price (US$/t) Singapore Operations took a planned shutdown to upgrade its
Slide 14: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 14
Slide 15: Performance of Tata Steel Europe
Performance of Tata Steel Europe First Quarter Ended 30th June, 2013 Production Mn T Deliveries Mn T 3.74 3.42 3.53 3.21 3.14 3.22 Q1 FY13 Q4 FY13 Q1 FY14 Q1 FY13 Q4 FY13 Q1 FY14 Turnover GBP mn EBITDA GBP mn 2,395 2,301 91 2,156 73 72 Q1 FY13 Q4 FY13 Q1 FY14 Q1 FY13 Q4 FY13 Q1 FY14 15
Slide 16: European operations
European operations EBITDA bridge Q1 FY2014 vs. Q4 FY2013 £ million 150 3 months Manufacturing Central to Jun & Other 2013 100 3 months Production to Mar Selling Volume £19m £(5)m 2013 Result Cost Changes £(9)m £17m £91m £58m 50 £71m £(43)m 0 16
Slide 17: European update
European update Improved Production Performance Highest quarterly steel production in two years • BF4 in Port Talbot now fully operational • Successful maintenance of BF7 in IJmuiden in Q4 Differentiated Products Strategy Ratio of differentiated products increased by 5% in Q1 alone Upgraded co
Slide 18: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 18
Slide 19: Group Financial Performance – Q1 FY14
Group Financial Performance – Q1 FY14 Figures in Rs. Crore unless specified Q1 FY14 Q1 FY13 Tata Steel Tata Steel SE Others Tata Steel Tata Steel India Europe Asia Group Group Deliveries (Mn T) 2.00 3.14 0.86 6.08 5.68 Turnover 9,455 18,432 3,908 1,010 32,805 33,821 EBITDA 2,897 777 93 (11) 3,755 3,
Slide 20: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations All figures in Rs. Crore Particulars Q1 FY14 Q4 FY13 Key Reasons Net sales 9,363 10,603 Decrease in sales due to seasonal decline in volumes, partly compensated by increase in realisation Other operating income 92 168 Q4 included non-recurring service income Chang
Slide 21: Consolidated Results – QoQ Variations
Consolidated Results – QoQ Variations All figures in Rs. Crore Particulars Q1 FY14 Q4 FY13 Key Reasons Net sales 32,550 34,180 Decrease due to lower deliveries partly compensated by higher realisation in both India and Europe Other operating income 255 470 Decrease in India and lower electricity buy
Slide 22: Net Debt Movement and Liquidity Position
Net Debt Movement and Liquidity Position Net debt movement Rs Crores 7,321 4,688 71,467 66,074 (6,617) 61,289 60,246 (10,178) (1,043) Gross Debt Mar 13 Loans taken Loans repaid Forex Impact Gross Debt June Cash & Cash Eq Net Debt June 13 Forward Covers Underlying Net 13 Debt June 13 Liquidity positi
Slide 23: Pensions Management – European Operations
Pensions Management – European Operations Figures in GBP mn Jun-12 Mar-13 Jun-13 Total Scheme Retirement Benefit Assets 16,891 18,674 18,010 Total Scheme Retirement Benefit Liabilities (16,853) (18,391) (17,582) Net Pension Surplus (BSPS &SPH) 38 283 428 Pension Asset Composition – BSPS GBP mn 2% 3%
Slide 24: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 24
Slide 25: KPO Project Update
KPO Project Update Project work in progress at Odisha site Civil work, structural fabrication and structural erection work on schedule Refractory work in Coke Oven Battery 2 Rs.9,500 spent to date with Rs.2,000 crores spent in Q1 Organised mobile health dispensary - 1895 patients served 25
Slide 26: Raw Material Projects
Raw Material Projects Benga Project, Mozambique About 0.3mt of hard coking coal shipped YTD 2013 Severe monsoons have disrupted shipments in the first half • Coking coal volume of about 900kt is expected in 2013 Phase II expansion delayed pending more clarity on rail and port capacity enhancem
Slide 27: Business Outlook
Business Outlook India: Market conditions have become more difficult than they were at the beginning of the year Auto sector challenges continue along with the seasonal weakness in construction Long products will be undergoing a sixty day planned shutdown from September Rupee depreciation is
Slide 28: Thank You
qp TATA Thank You TATA STEEL 28
Slide 29: Contact Information
Contact Information For investor enquiries contact: For media enquiries contact: Samita Shah Sunil Bhaskaran Tel: +91 22 6665 7371 Tel: +91 92233 02888 Email: samita.shah@tatasteel.com Email: sunilbhaskaran@tatasteel.com Subhra Kanti Das Bob Jones Tel: +91 22 6665 7382 Tel: +44 207 717 4532 Email: s