Vedanta Limited · NSE:VEDL
Vedanta — Citi: India Investor Conference June 2017
29 slides from Vedanta's conference presentation, June 2017
Slide 1: Vedanta Limited: Citi India Investor Conference
Vedanta Limited Citi: India Investor Conference June 2017 Elements for a Sustainable Future VEDANTA LIMITED, Citi: India Investor Conference, June 2017
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: Vedanta Group
Vedanta Group Overview Group structure • Vedanta Resources Plc Vedanta Resources Plc • Premium listing in London in 2003 • Owns 50.1% of Vedanta Ltd; with completion 50.1% of Vedanta Ltd-Cairn India • Also owns Konkola Copper Mines - copper producer in Zambia 79.4% Konkola Copper Vedanta Ltd² Mines
Slide 4: A world-class natural resource powerhouse anchored in India
Vedanta Limited: A world-class natural resource powerhouse anchored in India The completion of the Cairn merger enables Greater financial flexibility to allocate capital efficiently Focus on shareholder returns - Dividend policy announced 6th largest diversified resources company in the worl
Slide 5: A well diversified resources company, with low cash cost positions
Vedanta Limited: A well diversified resources company, with low cash cost positions Attractive cost position I II III IV Size of circle Zinc denotes Zinc India EBITDA Intl. contribution O&G Copper India Aluminium Iron ore Commodity diversification1 Peers Oil and Gas Zinc Aluminium Copper Power Iron
Slide 6: Sector leading growth and one of the strongest balance sheets
Sector leading growth and one of the strongest balance sheets in the sector Sector leading growth 9% 2016A – 2018E Cu equiv. 6% production CAGR 3% 0% (3%) (6%) (9%) Peers One of the strongest balance sheets in the sector Peer Companies 60% 50% Gearing1 40% 30% Vedanta Ltd 20% CRISIL rating 10% AA 0%
Slide 7: FY2017 Results Highlights
FY2017 Results Highlights Operations: Record production, capacities Group EBITDA Mix ramping-up FY2017 FY2016 Ramp-up of capacities at Aluminum, Power, Iron Ore 6% 3% Record production at Zinc–India, Aluminum, Power and Copper India 7% 14% 8% Gamsberg zinc project on track for CY18 production
Slide 8: Capital Allocation: Focus on Shareholder Returns
Capital Allocation: Focus on Shareholder Returns World class assets and operational excellence to deliver strong and sustainable cash flows Production growth and asset optimization Strong Shareholder Returns Maintain Strong Balance Sheet Grow Existing Businesses • Announced dividend policy at • Cont
Slide 9: Well-invested assets driving cash flow growth
Well-invested assets driving cash flow growth Significant capex already spent, ready to reap benefits from incremental production with low remaining capex Capex Spent (US$bn) Total Production (copper equivalent kt) Zinc-Lead Silver Copper Aluminium 3,000 Power Iron Ore Oil & Gas 2.2 2.0 Copper Equiv
Slide 10: India has the resource base to support its growth
India has the resource base to support its growth 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 Zi
Slide 11: Ideally positioned to capitalize on India's growth and natural resource potential
Ideally positioned to capitalize on India’s growth and natural resource potential Secular growth trends… …to drive increasing resources demand 30 India key themes 25 China Germany South Korea consumption (kg/capita) Aluminium 20 Population (mn) US 15 1,600 Japan 10 1,500 5 India Population 1,400 0 g
Slide 12: Vedanta well-positioned to benefit from strong Zinc fundamentals
Vedanta well-positioned to benefit from strong Zinc fundamentals Refined Zinc inventory (mt) at 7 year lows, supporting zinc prices LME SHFE Zinc LME $/t (RHS) 1.8 3,500 1.6 3,000 1.4 2,500 1.2 1.0 2,000 0.8 1,500 0.6 1,000 0.4 0.2 500 0.0 0 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 In
Slide 13: Delivering on our Strategic Priorities
Delivering on our Strategic Priorities Strategic Priority What we Achieved in FY2017 Focus Areas for FY2018 Record production at several operations Continued production ramp up Production Significant ramp ups at Aluminium, Iron Ore Progress towards production at Gamsberg growth and Power C
Slide 14: Scorecard for the year
Scorecard for the year Focus Area Status Production growth Disciplined Capital Allocation; Focus on FCF De-leveraging Simplification of group structure Preserve License to Operate Identify next generation of Resources Shareholder returns VEDANTA LIMITED, Citi: India Investor Conference, June 2017 14
Slide 15: Appendix
Appendix VEDANTA LIMITED, Citi: India Investor Conference, June 2017
Slide 16: Diversified, low cost asset base: World-scale capacities
Diversified, low cost asset base: World-scale capacities • India’s largest private sector oil producer Oil & Gas • Operates c. 30% of India’s total oil production • One of the lowest cost producer in the world with cost at sub $6/boe • India’s only miner of Zinc-Lead, and the world’s second largest
Slide 17: Zinc India
Zinc India As a low cost Zinc producer, well positioned in any cycle FY2017 Results CY 2017E Zinc C1 composite cost curve Record production: MIC at 907kt; silver at 453 tonnes $/t Integrated refined metal production at 809kt 2,000 CoP at $830/t; 1st quartile on global cost curve 1,500 Zinc 1,0
Slide 18: Zinc International
Zinc International FY2017 Results Production at 156kt: Skorpion at 85kt; BMM at 70kt CoP $1417/t, higher mainly due to lower production 250kt Gamsberg Project On target for first production by mid-2018 Mining contract outsourced; 16mt of waste moved to date Contractor Camp Over 75% of budg
Slide 19: Cairn: Oil & Gas
Cairn: Oil & Gas MPT: Facility modifications FY 2017 Results FY2017 gross average production at 189,926boepd Rajasthan production at 161,571boepd Offshore production at 28,355boepd Mangala EOR, world’s largest polymer program Successful ramp up with production level of 56 kboepd in Q4 RJ
Slide 20: Cairn: Oil & Gas Forward Plan
Cairn: Oil & Gas Forward Plan MPT: Facility modifications RDG Gas project Phase-1: 40-45 mmscfd by Q2 FY2018 Phase-2: Gas production of 100mmscfd and condensate production of 5kboed by H1 CY2019; Tendering for new gas processing terminal and rig underway Key Oil projects Mangala Infill: Commen
Slide 21: Aluminium
Aluminium FY 2017 Results Aluminium Costs and Margins (in $/t, for Q4 FY2017) Record production of Aluminium: 1,213kt and Alumina: 1,208kt Q3’17 1710 56 72 1,838 (560) (571) (298) (68) $342/t (158) (368) (184) Aluminum Q4 CoP at $1,492/t higher q-o-q due to higher imported Alumina offset by lowe
Slide 22: Power
Power Results Power Generation Capacity – c. 9GW TSPL: All 3 units became operational in FY 2017: record CPP:5.1GW plant availability of 85% in Q4 FY2017 and 79% in FY2017 IPP: 3.6GW • 1,215MW Jharsuguda • 600MW Jharsuguda Plant currently out of production due to fire at coal • 3*600MW Jharsugud
Slide 23: Iron Ore and Copper India
Iron Ore and Copper India Iron Ore Goa iron ore costs and margin (Q4 FY2017, US$/t) Achieved full year production cap in Goa and Karnataka FY2017 72 25 7 1 39 5 7 19 Produced additional allocation of 2.6mt in Goa 7 Q4 Goa CoP reduced to US$19/t 86 39 FY2017 CoP at US$21/t, 38% lower y-o-y
Slide 24: Optimising Capex to drive Cash Flow Generation
Optimising Capex to drive Cash Flow Generation Prioritised capital to high-return, low-risk projects to maximise cash flows Growth Capex Profile and Free Cash Flow pre capex - $bn Capex spent for FY 17 at $0.7bn against original Oil & Gas guidance of $1bn Zinc 2.8 Al & Power Copper 2.4 FY 2018
Slide 25: Strong Credit Profile and Balance Sheet
Strong Credit Profile and Balance Sheet Maturity Profile of Term Debt ($7.1bn) (as of 31stMar 2017) Subsidiaries Standalone 1.8 1.7 0.7 0.7 1.2 1.1 0.3 0.8 0.4 0.7 0.6 0.4 1.1 0.9 0.2 1.0 0.7 0.4 0.4 FY2018 FY2018 FY2019 FY2020 FY2021 FY2022 & Later FY2023 & Later as of date1 Term debt of $7.1bn ($4
Slide 26: FY2018 Guidance
FY2018 Guidance Segment FY18e Comments Zinc-Lead Integrated: 950kt; Silver volume: Zinc India +500 tonnes CoP ($/t): marginally higher than FY2017 Zinc-Lead volume: c.160kt Zinc International Gamsberg expected CoP: $1000-1,150/t CoP: c.$1,500/t RJ Gross Volume: 165kboepd Oil & Gas Ravva Gross volume
Slide 27: Project Capex
Project Capex Spent up Capex to March Spent in FY Unspent as at Capex in Progress Status ($mn) 2017 17 31 Mar 17 Cairn India - RDG, Mangala Infill, Aishwariya & 295 45 45 250 Bhagyam EOR, Barmer Hill, Liquid handling etc Aluminium Sector Smelter: 168 pots capitalised and BALCO – Korba-II 325ktpa Sme
Slide 28: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. crore) 31 March 2017 31 December 2016 31 March 2016 Company Cash & Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Net Debt LI Vedanta Limited Standalone (excluding 43,233 2,316 40,917 43,168 1,247 41,921 33,466 1,352 32,114 Cairn India) Zinc India 7,908 32,166
Slide 29: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 50.1% Sesa Iron Ore Sterlite Copper (Tuticorin) Konkola Copper Vedanta Ltd Power (600 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Cairn India (O&G) Subsidiaries of Vedanta Ltd 64.9% 51% 10