Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q4 FY2022 Earnings Presentation
32 slides from Tata Steel's earnings presentation, May 3, 2022
Slide 1: Results Presentation: Fourth quarter and Financial year ended March 31, 2022
RESULTS PRESENTATION Fourth quarter and Financial year Ended March 31, 2022 May 03, 2022 Sir Dorabji Tata Park, Jamshedpur, India
Slide 2: Safe harbour statement
Safe harbour 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. Imp
Slide 3: Overview: Performance update, 4QFY22 Results
Overview 1 Performance update 2 4QFY22 Results 3
Slide 4: A year of record performance and strategic progress
A year of record performance and strategic progress Sustainability at its core Increasing India footprint India1 constitutes 62% of FY22 deliveries (mn tons) ▪ Best in Class CO2 footprint in all ▪ Highest ever annual delivery volumes at geographies 18.27 mn tons Others: ▪ 100% solid waste utilisatio
Slide 5: Some milestones we are proud of
Some milestones we are proud of 29.4 million tons of Inland shipping to drive 3 sites included in WEF’s Best manufacturing company Iron ore mined supply chain efficiencies Lighthouse network to work for in 2021 Dream Click Build A Tata Steel Constructions Initiative 50+ transgender employees Pan Ind
Slide 6: Committed towards excellence in Safety & Health of our employees
Committed towards excellence in Safety & Health of our employees Safety remains a top priority Health is a key focus area 2.35 LTIFR1 reduction by 2.10 69% in the last 15 years 1.31 Health check ups 0.95 0.780.68 0.690.720.73 0.600.56 0.58 0.440.39 0.460.47 Safety Leadership Development Centre FY07
Slide 7: Improving quality of life of our communities
Improving quality of life of our communities 28 lakh+ 51,000+ Key areas for CSR initiatives Lives reached out1 Hours of volunteering1 Rural & Urban Dignity for the Education Disabled ▪ Spent more than Rs.1,350 crores2 since FY18 on Signature programmes at regional scale as well as programmes for Com
Slide 8: Sustainability is deeply embedded in our ecosystem
Sustainability is deeply embedded in our ecosystem Current 2025 goals 2030 goals Group 3.12 ▪ TSI: Achieve <1.8 tCO2/tcs Best in class CO2 ▪ TSI: Achieve <2 tCO2/tcs carbon carbon emission 2.2 footprint in all Climate geographies emission ▪ TSE: 30% reduction in specific change FY05 FY22 emissions o
Slide 9: Leadership in India on the back of value accretive growth
Leadership in India on the back of value accretive growth Crude steel production (MTPA) Upstream › Pellet capacity to increase from 7 to 13 MTPA (TSK Ph II) › Iron ore mining to expand from 30 to 60-65 MTPA Flats › 2.2 MTPA CRM complex close to commissioning (TSK Ph II) › 5 MTPA expansion on track (
Slide 10: Optimised portfolio: 2.2 MTPA CRM & 5 MTPA expansion to drive product mix enrichment
Optimised portfolio : 2.2 MTPA CRM & 5 MTPA expansion to drive product mix enrichment 2.2 MTPA CRM complex to be commenced in 4QFY23 High end Products for Automotive & Engineering Width Thickness Capacity ▪ Meeting customer requirement on lightweighting and CRM complex capability (in mm) (in mm) (in
Slide 11: Optimised product portfolio: Ramp up long products to drive high margin retail business
Optimised product portfolio : Ramp up long products to drive high margin retail business ▪ NINL Share purchase agreement completed; ▪ Leverage strong portfolio of retail brands and extensive Transaction to close in 1QFY23 distribution network to drive scale and profitability Neelachal Ispat Nigam Li
Slide 12: Overview: Performance update, 4QFY22 Results
Overview 1 Performance update 2 4QFY22 Results 12
Slide 13: Geopolitical tensions in Europe and COVID in China have weighed on steel operating landscape
Geopolitical tensions in Europe and COVID in China have weighed on steel operating landscape ▪ Steel prices in western markets rose steeply Steel prices moved higher esp. in west Heightened volatility in raw material prices in the January – March period on tight supply HRC prices ($/t) Prices ($/t)
Slide 14: Steel demand continued to recover in India; Renewed supply–demand imbalance in Europe
Steel demand continued to recover in India; Renewed supply – demand imbalance in Europe India Europe ▪ Apparent steel consumption improved by ~4% QoQ driven ▪ Steady growth in steel consuming sectors; Automotive by ongoing economic recovery. Consumers though remain sector recovering but continues to
Slide 15: Highest ever annual production and deliveries in India
Highest ever annual production and deliveries in India1 Crude Steel Production (mn tons) Highest ever 4.90 4.81 4.75 ▪ Production crossed 19 million tons for FY21 16.92 the first time, 13% YoY increase FY22 19.06 4QFY22 3QFY22 4QFY21 Steel deliveries (mn tons) 5.12 4.67 4.42 FY21 17.30 ▪ Highest eve
Slide 16: Tata Steel Europe: Transformation program and focus on product mix yielding results
Tata Steel Europe : Transformation program and focus on product mix yielding results Transformation programme Sustained focus on product mix Automotive Engineering Governance & Structure Functional Vs Value Delivery Value Chain & Enablement Overall benefits in FY22 (Rs Crores) Packaging Construction
Slide 17: Tata Steel Long Products: Product mix enrichment to drive value maximisation
Tata Steel Long Products : Product mix enrichment to drive value maximisation Enhancing presence in chosen segments ▪ Focus on high end products Increase in Rolled product sales Wire rod sales mix enrichment o Highest ever sales of rolled products, 22% YoY growth in the year High Carbon Alloy Rolled
Slide 18: Tata Steel Consolidated: Steady EBITDA performance despite surge in coal costs
Tata Steel Consolidated1: Steady EBITDA performance despite surge in coal costs (All figures are in Rs. Crores unless stated otherwise) 4QFY22 3QFY22 4QFY21 Key drivers for QoQ change: Production (mn tons)2 7.62 7.76 8.02 ▪ Deliveries: were up 14% driven by increase in India Deliveries (mn tons) 8.0
Slide 19: Consolidated EBITDA stood at Rs 15,891 crores
Consolidated EBITDA1 stood at Rs 15,891 crores Rs. Crores 353 461 ▪ Selling Result: Primarily due to better steel 15,890 15,891 realisations in Europe 3,549 … 3,658 ▪ Cost Changes: Primarily due to increase in coking coal consumption cost across entities ▪ Volume/Mix: Primarily due to higher steel d
Slide 20: Generated free cash flows of Rs.13,971 crores in 4QFY22
Generated free cash flows of Rs.13,971 crores in 4QFY22 Rs. Crores 1,425 4,589 2,696 1,637 3,308 15,174 13,971 Reported EBITDA Working capital Finance cost (net) Taxes paid Non-cash & Others Capex Free Cash Flow 4QFY22 4QFY22 movement Note : In addition, ~Rs 1,210 crores of cash has been kept in esc
Slide 21: Generated free cash flows of Rs 27,185 crores for the year
Generated free cash flows of Rs 27,185 crores for the year Rs. Crores 63,830 9,618 4,348 11,902 2,809 3,064 10,522 27,185 Reported EBITDA Working capital Finance cost (net) Taxes paid Non-cash & Others Dividend Capex Free Cash Flow FY22 movement FY22 Note : In addition, ~Rs 553 crores has been utili
Slide 22: Debt repayment of ~Rs. 15,232 crores in the last 12 months, Net debt to EBITDA at 0.8x
Debt repayment of ~Rs. 15,232 crores in the last 12 months, Net debt to EBITDA at 0.8x Rs. Crores 88,501 387 13,113 15,232 75,561 1,905 75,389 24,513 51,049 Gross Debt Addition of Loan FX Impact Gross Debt Cash, Bank & Net Debt Mar'21 new leases movement and Others Mar'22 Current Mar'22 Investments
Slide 23: Key metrices are at investment grade levels
Key metrices are at investment grade levels EBITDA Margin (%)1 EBITDA / ton (Rs.)1 Interest Coverage Ratio (x)1,2 Gross & Net Debt (Rs. crore) 26.2% 21,626 11.7 1,16,328 19.8% 1,00,816 17.2% 92,147 88,501 18.9% 1,04,779 75,561 11,110 94,879 9,337 10,838 12.2% 3.9 3.9 75,389 6,267 69,215 4.1 2.4 51,0
Slide 24: Business outlook for 1QFY23: Strong underlying momentum despite short term volatility
Business outlook for 1QFY23 : Strong underlying momentum despite short term volatility Steel demand Steel prices Raw material prices ▪ Global steel demand to remain ▪ Asian steel prices are expected ▪ Coking coal prices to remain broadly stable in CY22 driven by to be range bound as COVID volatile s
Slide 25: Annexures
Annexures Jubilee Park, Jamshedpur, India
Slide 26: Tata Steel Standalone: Continued focus on operational efficiencies and minimizing environmental impact
Tata Steel Standalone: Continued focus on operational efficiencies and minimizing environmental impact Meramandali Coke Rate (kg/thm) Specific Energy Consumption (Gcal/tcs) Specific Fresh Water Consumption (m3/tcs) Good Good Good 434 420 7.29 399 5.55 386 6.83 376 6.8 367 367 365 6.61 364 354 353 6.
Slide 27: Tata Steel Long Products: Key operating parameters
Tata Steel Long Products: Key operating parameters (all figures are indexed; 1QFY20=100) Coke rate1 PCI rate1 Crude Steel Yield2 100 96 160 106 Good 126 Good 101 Good 85 130 102 70 100 98 55 70 94 40 40 90 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22 3QFY22 4QFY22 1QFY20 2QF
Slide 28: Tata Steel Standalone: Operating performance
Tata Steel Standalone1: Operating performance (All figures are in Rs. Crores unless stated otherwise) 4QFY22 3QFY22 4QFY21 Key drivers for QoQ change: Production (mn tons) 4.73 4.64 4.56 ▪ Revenues: increased by 15% driven by higher volumes Deliveries (mn tons) 4.97 4.25 4.50 Total revenue from oper
Slide 29: Tata Steel Europe: Operating performance
Tata Steel Europe: Operating performance (All figures are in Rs. Crores unless stated 4QFY22 3QFY22 4QFY21 otherwise) Key drivers for QoQ change: Liquid Steel production (mn tons) 2.31 2.57 2.66 ▪ Volumes: increased on the back of inventory Deliveries (mn tons) 2.40 2.16 2.47 liquidation despite low
Slide 30: Tata Steel Long Products: Operating performance
Tata Steel Long Products: Operating performance Consolidated financial statements Key drivers for QoQ change: 4QFY22 3QFY22 4QFY21 (All figures are in Rs. Crores unless stated otherwise) ▪ Revenues: increase driven primarily by higher DRI Total revenue from operations 1,799 1,677 1,547 realisations
Slide 31: Tata Steel Thailand: Operating performance
Tata Steel Thailand : Operating performance (All figures are in Rs. Crores unless stated 4QFY22 3QFY22 4QFY21 otherwise) Key drivers for QoQ change: Saleable Steel production (mn tons) 0.34 0.32 0.39 Deliveries (mn tons) 0.34 0.32 0.37 ▪ Volumes: production and sales were slightly higher QoQ Total r
Slide 32: Investor relations contact
Investor relations contact Investor enquiries : Hriday Nair Pavan Kumar Email: hnair@tatasteel.com Email: pavan.kumar@tatasteel.com 32