Vedanta Resources — Investor Presentation (December 2022)
41 slides from Vedanta Resources's investor presentation, Dec 8, 2022
Slide 1: Investor Presentation
VEDANTA RESOURCE LIMITED DECEMBER 2022 Investor Presentation Sensitivity: Internal (C3)
Slide 2: Vedanta – Overview
Vedanta – Overview A globally diversified natural resource 1st quartile cost curve Strong management Committed to ESG powerhouse with positioning globally team with >30 years of leadership in the natural presence across across key segments experience; 76,000+ resources sector; Net Aluminium, Zinc-le
Slide 3: Group structure to support diversified commodity exposure
Group structure to support diversified commodity exposure Listed entities Volcan 52.4% 71.4% Unlisted entities 100% Sterlite Sterlite Power Technologies Transmission Vedanta Resources Ltd Divisions of Vedanta Limited 79.4% 69.7% ⚫ Sesa Iron Ore Konkola ⚫ Sterlite Copper Copper ⚫ Power (600 MW Jharsu
Slide 4: Vedanta is uniquely positioned to deliver sustainable value
Vedanta is uniquely positioned to deliver sustainable value Robust financial profile with strong World-class natural resources powerhouse with ROCE, cash flow and balance sheet low cost and long-life diversified asset base 1 Well positioned to capitalize on India’s 7 growth and benefit through the c
Slide 5: World class diversified natural resource powerhouse
1a World class diversified natural resource powerhouse 1 SILVASSA | Copper 2 TUTICORIN | Copper, Captive Power Plant 3 LANJIGARH | Aluminium INDIA (VAL) & Captive Power Plant JHARSUGUDA | Aluminium 4 (VAL), Commercial Power (SEL), Captive Power Plant & Projects under development, Captive coal mines
Slide 6: Tier-1 low-cost assets and long-life assets with exploration upside
1b Tier-1 low-cost assets and long-life assets with exploration upside Competitive Position on Cost Curve POSITIONING R&R Life1 FY2022 Production Full Capacity2 Quartiles5 I II III IV Zinc India Largest integrated zinc-lead producer 25+ 1,017kt 1.2mtpa Zinc International One of the largest undevelop
Slide 7: Well positioned to capitalize on global natural resource potential and India growth outlook (1/2)
Well positioned to capitalize on global natural resource potential and India growth 2a outlook (1/2) GLOBAL NATURAL RESOURCE UPCYCLE Focus on de- Europe’s energy crisis Current geo-political Oversupply risk is low carbonization and led cost pressures, situation has led to amidst dearth of new It has
Slide 8: Well positioned to capitalize on global natural resource potential and India growth outlook (2/2)
Well positioned to capitalize on global natural resource potential and India growth 2b outlook (2/2) India is the fastest growing major economy in the world 2030 2021 2030 CAGR 6.1% 2021 $5tn economy GDP(Real) $2.8 tn $4.8 tn 5th largest CAGR 5.2% $2.8 tr Per capita $6.8k $11.6k Zinc, Aluminium and
Slide 9: Portfolio well placed to meet energy transition led mineral demand growth
Our portfolio with attractive commodity mix is well placed to meet the energy 2c transition led mineral demand growth Mineral intensity vs Clean Vedanta’s presence conventional energy shift tech Key mineral for clean energy technologies Electric vehicles 5x Fe Al Cu Zn Pb Ni 2x 2x 2x 2x 2x 1.5x Sola
Slide 10: Proven track record of operational excellence
3a Proven track record of operational excellence Zinc-Lead Silver Copper Aluminium Steel Power Iron Ore Oil & Gas Total Production Copper Equivalent (kt) 2,000 1,800 Strong EBITDA Performance 1,600 1,400 1,200 $ 6.3 bn 1,000 800 600 400 200 $0.3 bn 0 FY2011 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009
Slide 11: Well invested and consolidated assets driving growth
3b Well invested and consolidated assets driving growth Inorganic Growth ✓ Acquired Cairn India Organic growth ✓ Vedanta IPO ✓ Acquired Zinc International ✓ Acquired KCM ✓ Acquired VS Dempo ✓ 170 kT Zinc smelter ✓ Commissioned 100kt Dariba Pb smelter ✓ 50 kT Pb smelter ✓ Expanded 274MW wind power ✓
Slide 12: Focused on digitalization and innovation to drive efficiency and resilience
4a Focused on digitalization and innovation to drive efficiency and resilience Six core pillars of center of excellence: clear outcomes outline ambition for each pillar o Digital first approach across business Volume Cost Enabling Digital Digital o Digital as culture of organization 10% 5% automatio
Slide 13: Digitalization focus to become a data driven organization
4b Digitalization focus to become a data driven organization Smart Operations and Digital Mission - 2025 01 Asset Optimization Creating 10% EBITDA 5 impact 02 Workplace safety We are here Digitalization – Stage 2 Focus Pratham – 2 : Area Digitalization Aim to ✓ 100% automation in Enabling 03 Logisti
Slide 14: Disciplined capital allocation framework
5 Disciplined capital allocation framework o Intend to deleverage at group level Key Strategic Priority Optimize Leverage Ratio o Leverage ratio at Vedanta Limited should not be more than 1.5x. Project Capex o Volume augmentation, cost reduction or creating value added products are key guiding princ
Slide 15: Our ESG Strategy
6a Our ESG Strategy ESG Purpose Transforming for good Pillars 1 2 3 Transforming Communities Transforming the Planet Transforming the Workplace ▪ Aim 1. Keep community ▪ Aim 4. Net-carbon ▪ Aim 7. Prioritizing Commitments & welfare at the core of neutrality by 2050 or safety and health of all target
Slide 16: Vedanta entered top 10 S&P Global Corporate Sustainability Assessment
Vedanta: entered in exclusive club of top 10 S&P Global Corporate Sustainability 6b Assessment benchmark1 global Metals & Mining companies Vedanta amongst top 10 Industry leaders in 2022 S&P Global Corporate Sustainability Assessment Vedanta ranks 6th out of 148 metal and mining companies across the
Slide 17: ESG Moment: planting a trillion trees
6c ESG Moment: planting a trillion trees (video) Vedanta to plant 7 million trees Aim 7: Innovations for greener business model ▪ Part of World Economic Forum’s “1 Trillion Tree” initiative – 1t.org ▪ Trees to be planted between 2020 – 2030 ▪ Includes reforestation, agro- forestry, mangrove restorat
Slide 18: Vedanta Delhi Half Marathon: #RunForZeroHunger
6d Vedanta Delhi Half Marathon: #RunForZeroHunger – contributed 2 Mn Meals Shri Manish Sisodia at the Flag Off Mrs. Mallika Nadda at Prize Distribution Vedanta Leadership with Dy. CM Vedanta Employees at VDHM Medal made with the zinc from the 20+ national ads Coverage across top publications Priya A
Slide 19: Key ESG projects across Vedanta
6e Key ESG projects across Vedanta Green Copper (Sterlite Copper) Remote Blasting (HZL) Reducing Gas Flaring (O&G) Watershed Management Aim 4: Net Carbon neutral by 2050 Aim 7: Prioritizing safety and Aim 4: Net zero carbon by 2050 or BU: VAL - Lanjigarh or sooner health sooner Aim 5: Achieving net
Slide 20: ESG strategy progress: Pillar 1 – transforming communities
Steadily progressing on our repurposed ESG strategy: Pillar 1 – transforming 6f communities Total Beneficiaries 1H FY23 CSR Spend1 Total Nandghars 2.40+ mn ₹ 147+ crores 3609 Areas of Focus in CSR Healthcare Drinking water and > 30 Initiatives sanitation > 17 Initiatives Community Children’s well-be
Slide 21: ESG strategy progress: Pillar 2 – transforming the planet
6g Steadily progressing on our repurposed ESG strategy: Pillar 2 – transforming the planet Baseline 2030 Our aims Key KPIs (UoM) Key strategic initiatives/outcomes (FY21) Target Absolute GHG emissions ▪ 500 MW RE power EOI issued 60mn 45mn (TCO2e) ▪ Biomass usage ~28000 MT in 1H FY23 ▪ ~ 1 Billion u
Slide 22: ESG strategy progress: Pillar 3 – transforming the workplace
Steadily progressing on our repurposed ESG strategy: Pillar 3 – transforming the 6h workplace Key KPIs Baseline 2030 Our aims Key strategic initiatives/ outcomes (UoM) (FY21) Target ▪ Conducted CRM- 7 design workshops ▪ Launched CRM- Top 3 risk control initiatives Ongoing target- ▪ Real time trackin
Slide 23: People – our biggest asset
6i People – our biggest asset OUR KEY FOCUS AREAS Next Set of 4000 Company with Governance, Working with Leaders are Professionally diverse ethics, integrity, best global home grown driven company - demographics – and compliance Each business business through our Nationality, – most revered having s
Slide 24: Robust financial profile with improving ROCE and stronger balance sheet
Robust financial profile with improving ROCE, increasing cash flow and a stronger 7a balance sheet Revenue ($bn) EBITDA and EBITDA Margin 45.0 40.0 35.0 17.6 15.4 EBITDA ($ bn) 12.9 EBITDA Margin % 4.5 4.1 6.3 FY14 FY18 FY22 FY14 FY18 FY22 Net debt / EBITDA x FCF post capex and ROCE 31.9 14.9 2.4 5.
Slide 25: Delivering on deleveraging commitment at VRL Standalone
7b Delivering on deleveraging commitment at VRL Standalone ▪ On track to deliver on deleveraging commitment; achieved $1.35 bn in H1 FY23 deleveraging at VRL including $300mn ICL repayment. In strong position to proactively address maturities with a combination of deleveraging and proactive long-ter
Slide 26: Strategy to enhance long term value
Strategy to enhance long term value Optimise capital Operational Delivering on STRATEGIC Committed to ESG Augment reserves excellence and allocation & growth PRIORITIES leadership & resources base maintain strong cost leadership opportunities Balance Sheet o Achieve net o Disciplined o Focus on full
Slide 27: Appendix
VEDANTA RESOURCES LIMITED INVESTOR PRESENTATION December 2022 Appendix Sensitivity: Internal (C3)
Slide 28: Vedanta Limited: Robust cash generation underpinned by strong 1H performance
Vedanta Limited: Robust cash generation underpinned by strong 1H performance despite challenging macroeconomic environment ESG Operational Financial ▪ Entered in exclusive club of top 10 S&P Global Key businesses continue to deliver strong ▪ Revenue of ₹ 74,488 crore ($9,523 Corporate Sustainability
Slide 29: Growth capex and returns profile
Growth capex and returns profile Full year Capex guidance 1.0 1.2 1.5 1.2 0.7 1.1 1.6 Growth Capex profile, $bn Oil & Gas Zinc Al & Power 1.6 Copper Other 0.2 1.1 0.6 0.1 0.8 0.8 0.7 0.0 0.7 0.1 0.5 0.1 0.6 0.2 0.2 0.2 0.1 0.3 0.5 0.3 0.3 0.2 0.0 0.1 0.6 0.5 0.5 0.1 0.0 0.3 0.2 0.2 0.2 0.1 0.12 FY20
Slide 30: FY23 guidance
FY23 guidance Zinc India Aluminium ▪ Mined Metal : 1,050 - 1,075 Kt ▪ Alumina: 2.0 - 2.1 Mtpa ▪ Finished Metal: 1,000 – 1025 Kt ▪ Aluminium: 2.2 - 2.3 Mtpa ▪ Silver: c. 700 - 725 tonnes ▪ COP1 (2H FY23): $2,150/t - $2,250/t ▪ COP (FY23): $1,225/t - $1,275/t excluding royalty Zinc International ▪ Gam
Slide 31: Aluminium: strong volume delivery and improved COP
Aluminium: strong volume delivery and improved COP on operational and buying efficiencies Aluminium: Achieved record metal production COP ($/T) Key highlights: Production (kt) Margin ($/t) 1,118 1,150 2,541 2,653 2,429 Quarterly: 1,588 1,647 ▪ Aluminium production up 3% QoQ and 2% YoY 570 565 584 52
Slide 32: Aluminium: growth and vertical integration projects underway
Aluminium: growth and vertical integration projects underway to reduce market volatility impact and create value ▪ Aluminium capacity expansion to 3 MTPA o JSG capacity ramp-up to 1.8 MTPA – Completed o Balco capacity expansion to 1 MTPA – 2QFY24 o Debottlenecking for balance 0.2 MTPA – 3QFY24 ▪ Val
Slide 33: Zinc India: delivering sustainable growth
Zinc India: delivering sustainable growth Key quarterly performance highlights: Key half yearly performance highlights: ▪ Highest-ever 2Q mined metal production up 3% YoY ▪ Best-ever first half mined metal production, up 8% ▪ Best-ever 2Q refined metal production1, up 18% YoY driven by YoY improved
Slide 34: Zinc International: Gamsberg delivers record MIC production
Zinc International: Gamsberg delivers record MIC production; cost improves on increased recovery and operational efficiency Gamsberg - Production Key highlights: Production (kt) Quarterly: 108 ▪ Achieved highest ever MIC production 43%YoY growth 85 ▪ Highest recovery of 78.5%. Highest concentrate gr
Slide 35: Oil & Gas: lower production partially offset by infill wells
Oil & Gas: lower production was partially offset by infill wells; focused on delivery of growth projects Key highlights: Gross production (kboepd) ▪ Production: Impact of natural decline in Rajasthan and Offshore blocks partly offset by infill wells in Mangala, Bhagyam 165 165 148 140 144 and Raages
Slide 36: Iron ore and VAB
Iron ore and VAB Karnataka Iron ore sales Iron ore – Karnataka: Sales (mn tonnes) ▪ Quarterly sales increased 8%YoY and 44% QoQ ▪ Half yearly Iron ore sales was down by 11%YoY due to 2.5 2.2 delay in implementation of procedural changes by DMG for sale of material 1.2 1.3 0.9 Value added business (V
Slide 37: ESL Steel and FACOR
ESL Steel and FACOR ESL: key performance highlights FACOR: key performance highlights ▪ Quarterly saleable production up 11%YoY on account of ▪ Quarterly and Half yearly ore production higher by 43% YoY completion of debottlenecking activity in blast furnace -3 in and 18% YoY respectively due to ope
Slide 38: Disclosures & publications
Disclosures & publications Integrated Annual Report1 Tax Transparency Report2 Sustainability Report2 TCFD Report2 https://www.vedantaresources.com/InvestorReports/Ve https://www.vedantalimited.com/uploads/investor- https://www.vedantalimited.com/uploads/investor- https://www.vedantalimited.com/uploa
Slide 39: Awards and Recognition – 1HFY23
Awards and Recognition – 1HFY23 Our group companies received more than 100 awards in the finance, operational excellence, sustainability, CSR and HR categories Sustainability development Finance and Operational Health, Safety & HR & CSR Balco awarded with ‘CEE Environment Balco awarded with ‘Happies
Slide 40: Cautionary statement and disclaimer
Cautionary statement and disclaimer 01 The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any fo
Slide 41: Thank you
Thank you Vedanta Resources Limited Investor presentation September 2022 Sensitivity: Internal (C3)
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