Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q3 FY2018 Earnings Presentation
31 slides from Tata Steel's earnings presentation, Feb 9, 2018
Slide 1: Results Presentation: Third quarter and Nine months ended December 31, 2017
Results Presentation Third quarter and Nine months ended December 31, 2017 February 09, 2018 1 1
Slide 2: Safe harbor statement
Safe harbor statement 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 may differ materially from those directly or indirectly expressed, inferred or implied. Impo
Slide 3: Tata Steel is committed towards excellence in Health and Safety
Tata Steel is committed towards excellence in Health and Safety LTIFR* data for Tata Steel Group Ambition: Committed to ensuring all Tata Steel sites are sustainably fatality free on our way to ‘become the benchmark in H&S in 3.06 our industry’ Key Focus areas: Felt Leadership programme complete
Slide 4: Focused on engaging with communities and improving quality of life
Focused on engaging with communities and improving quality of life India Education: Health & Sanitation: Livelihood: CSR Spend -India (Rs. Crs) 212 204 Delivered a total of ‘8’ schools Over 1,03,000 patient footfalls Over 441 youths were 194 under “30 Model School recorded at static and mobile
Slide 5: Highlights of 3QFY18
Highlights of 3QFY18 Deliveries of 6.56 million tonnes Announced 5MTPA capacity expansion at Tata Steel Kalinganagar Consolidated EBITDA of Rs.5,801 crores TATA STEEL Consolidated EBITDA per ton of Rs.8,836/t Rights issue announcement of INR 12,800 crore
Slide 6: Agenda
Agenda Business Environment Operational Performance Financial Performance Appendix 6
Slide 7: Global Steel | Market update
Global Steel | Market update Crude steel production (mn tons) Global economic recovery is broad based and continues to strengthen 1,691 CY2016 CY2017 1,606 Global steel demand-supply position is favourable; capacity 832 860 closures in China have helped improvement in mainstream steel 787 819 pr
Slide 8: India Steel | Market update
India Steel | Market update Steel production, demand and imports (mn tons) Key steel consuming sectors (% YoY) 30 2.6 2.7 48% Passenger Vehicles* Commercial Vehicles Consumer Durables Capital goods 36% 25 2.5 Construction 24.6 25.7 25.2 25.9 23.7 24.0 24.6 22.4 24% 22.0 20 2.3 20.7 20.6 21.0 21.8 20
Slide 9: Europe Steel | Market update
Europe Steel | Market update EU market supply (mn tons, annualized) and EU sector output1 (Jan 2008=100) imports’ share (%) Deliveries Imports Import share (%) 120 160 24% Automotive Machinery Construction 110 120 18% 100 80 12% 90 40 6% 80 70 0 0% Jan-14 Jan-15 Jan-16 Jan-17 Oct-14 Oct-15 Oct-17 Ap
Slide 10: South East Asia | Market update
South East Asia | Market update Manufacturing PMIs Industrial Production (%YoY change, 3mma) 53 20 Singapore Singapore 52 Thailand 15 Thailand 10 51 5 50 0 49 -5 48 -10 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 South
Slide 11: Agenda
Agenda Business Environment Operational Performance Financial Performance Appendix 11
Slide 12: Tata Steel India | Stronger than market growth
Tata Steel India | Stronger than market growth Crude Steel Production Volume (mn tons) Saleable Steel Sales Volume (‘000 tons) 9,122 9.41 990 8.49 3,297 7,763 2,994 3,075 339 853 3.27 307 350 3.20 1403 3,911 3.15 1350 1310 3,241 1035 937 943 2,851 2,519 10% 520 472 1,150 1,370 399 3QFY17 3QFY18 2QFY
Slide 13: Tata Steel India | Focus on operational efficiencies and minimizing environmental impact
Tata Steel India | Focus on operational efficiencies and minimizing 1 environmental impact 3 Specific Energy Intensity (Gcal/tcs) Specific Coke Rate (Kg/thm) Specific Water Consumption (m3/tcs) 6.12 479 5.92 6.02 6.01 5.58 5.54 455 443 Good Good 4.39 Good 3.83 3.80 5.77 380 5.67 5.67 360 347 FY 13 F
Slide 14: Tata Steel Europe | Improving offering to customers
Tata Steel Europe | Improving offering to customers Liquid Steel Production Volume (mn tons) Saleable Steel Sales Volume (mn tons) 7.45 7.94 8.06 7.09 2.67 2.60 2.64 2.60 2.44 2.34 3QFY17 3QFY18 2QFY18 9MFY17 9MFY18 3QFY17 3QFY18 2QFY18 9MFY17 9MFY18 Liquid steel production of 2.67 million tons in
Slide 15: Tata Steel Europe | Focus on operational efficiencies and minimizing environmental impact
Tata Steel Europe | Focus on operational efficiencies and minimizing 1 environmental impact 5 Specific Energy Intensity (Gcal/tcs) Specific Coke Rate (Kg/thm) Waste to landfill (Kton) 5.40 330 51 50 Good 325 321 41 Good 37 Good 30 29 5.03 4.99 4.96 293 293 4.93 4.89 287 FY 14 FY 13 FY 15 FY 16 9MFY1
Slide 16: Tata Steel South East Asia | Operating performance
Tata Steel South East Asia | Operating performance Saleable Steel Production Volume (mn tons) Saleable Steel Sales Volume (mn tons) 1.68 1.95 1.66 1.89 0.61 0.67 0.65 0.58 0.62 0.55 3QFY17 3QFY18 2QFY18 9MFY17 9MFY18 3QFY17 3QFY18 2QFY18 9MFY17 9MFY18 Production and deliveries at Nat Steel were lo
Slide 17: Tata Steel India | Capacity expansion at Tata Steel Kalinganagar
Tata Steel India | Capacity expansion at Tata Steel Kalinganagar The Board has approved a 5 MTPA expansion at Tata Steel Kalinganagar. Project The expansion includes investments in upstream facilities, 2.2 MTPA Cold Rolling details Mill and raw material facilities. Reduced capex intensity in pha
Slide 18: Tata Steel Europe | creating a leading European steel enterprise through JV with thyssenkrupp
Tata Steel Europe | creating a leading European steel enterprise through JV 1 with thyssenkrupp 8 Jun’17 Tata Steel Europe (LTM) Signed MoU for 50:50 Joint venture with Deliveries (in million tons) 9.8 Thyssenkrupp in Sep 2017 Turnover (EURmn) 7,381 EBITDA (EURmn) 699 The JV will create the 2nd
Slide 19: Business outlook
Business outlook India: o Overall steel demand is expected to grow by 5% in 4QFY18. The World Steel Association has estimated India Steel demand growth at 5.3% in 2018. o Healthy growth expected in Auto, Construction, LPG, Railway, Engineering segments, Tubers Steel and Galvanizers. Demand o India
Slide 20: Agenda
Agenda Business Environment Operational Performance Financial Performance Appendix 20
Slide 21: Quarterly Financial Performance
Quarterly Financial Performance Rs Crores Consolidated India 3QFY18 2QFY18 3QFY17 9MFY18 9MFY17 3QFY18 2QFY18 3QFY17 9MFY18 9MFY17 Production (MT)1 6.49 6.41 6.37 19.14 18.11 3.27 3.20 3.15 9.41 8.49 Deliveries(MT) 6.56 6.45 6.07 18.84 17.05 3.30 3.08 2.99 9.12 7.76 Turnover 33,447 32,464 29,025 96,
Slide 22: Quarterly Financial Performance as per Ind-AS
Quarterly Financial Performance as per Ind-AS1 Rs Crores Europe SEA Others & Eliminations 3QFY18 2QFY18 3QFY17 9MFY18 9MFY17 3QFY18 2QFY18 3QFY17 9MFY18 9MFY17 3QFY18 2QFY18 3QFY17 9MFY18 9MFY17 1 Production (MT) 2.67 2.60 2.64 8.06 7.94 0.55 0.61 0.58 1.66 1.68 - - - - - Deliveries (MT) 2.44 2.60 2
Slide 23: Consolidated Debt movement 3QFY18 Vs. 2QFY18
Consolidated Debt movement 3QFY18 Vs. 2QFY18 ₹ Crores 2,713 4,532 90,259 915 743 88,601 83,014 12,681 75,921 Gross Debt Loans Forex Impact Gross Debt Loans Forex Impact Gross Debt Cash, Bank & Net Debt Mar 17 Movement & Others Sep 2017 Movement & Others Dec 2017 Current Dec 2017 Investments 23
Slide 24: Group EBITDA movement 3QFY18 Vs. 2QFY18
Group EBITDA movement 3QFY18 Vs. 2QFY18 ₹ Crores 129 801 8 137 5,801 4,726 2QFY18 Selling Result Cost Changes Volume/Mix Others 3QFY18 Selling result improved with better realisations across the geographies Cost reduction was marginal as improvement in India was primarily offset by increased mai
Slide 25: Tata Steel India | EBITDA movement – 3QFY18 vs. 2QFY18
Tata Steel India | EBITDA movement – 3QFY18 vs. 2QFY18 ₹ Crores 171 195 279 4,647 595 3,408 2QFY18 Selling result Cost Volume/Mix Others 3QFY18 Selling result improved on the back of increase in steel realisations Decrease in cost was mainly due to reduction in cost of coking coal, lower convers
Slide 26: Tata Steel Europe | EBITDA movement – 3QFY18 vs 2QFY18
Tata Steel Europe | EBITDA movement – 3QFY18 vs 2QFY18 £52mn £(12)mn £89mn £2mn £(5)mn £(54)mn £72mn 3 months to Selling Result Cost Changes Production Manufacturing Central 3 months to Sep 2017 Volume & Other Dec 2017 EBITDA lower than the prior quarter by £17m Selling Result were broadly stabl
Slide 27: Other key developments
Other key developments Successfully issued US$1.3bn dual tranche unsecured bonds comprising of: US$300mn, 4.45% bonds due on July 24, 2023, and US$1.3bn Bonds US$1.0bn 5.45% bonds due on January 24, 2028 Issue in Jan 2018 This has further improved the debt maturity profile, diversified the i
Slide 28: Agenda
Agenda Business Environment Operational Performance Financial Performance Appendix 28
Slide 29: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations Rs Crores 3QFY18 2QFY18 Key Reasons Gross Sales 15,310 13,910 Primarily due to increase in volumes and realisations Other operating income 286 311 Higher other sales in 2Q Increase in raw material inventory levels in Ferro alloys division, lower Raw materials cons
Slide 30: Consolidated Results – QoQ Variations
Consolidated Results– QoQ Variations Rs Crores 3QFY18 2QFY18 Key Reasons Income from operations 33,100 32,101 Improved realisations across geographies and higher deliveries in India Other operating income 347 363 At par with previous quarter Decrease in India partly offset by increase in Europe main
Slide 31: Contact
Contact Investor enquiries : Sandep Agrawal Tel: +91 22 6665 0530 Email: Sandep.agrawal@tatasteel.com 31