Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q2 FY2018 Earnings Presentation
34 slides from Tata Steel's earnings presentation, Oct 30, 2017
Slide 1: Results Presentation
Results Presentation Second quarter and half-year ended September 30, 2017 October 30, 2017 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 ‘ being the benchmark in H&S in our industry’ 3.06 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 CSR Spend -India (Rs. Crs) India Education: Health & Sanitation: Livelihood: 212 204 Delivered a total of ‘6’ schools ~1,22,000 patient footfalls Over 846 youths were 194 under “30 Model School recorded at static and mobile ski
Slide 5: Building a sustainable business for the future
Building a sustainable business for the future >100 years of inclusive growth in partnership with communities Structured long term interventions for sustained impact in areas we operate Efficient use of resource through superior design and operating philosophy Sustained efforts to mitigate impact on
Slide 6: Consolidated Financial Performance
Agenda 6 Consolidated India and Europe Appendix Financial South East Asia Performance Performance Performance 6
Slide 7: Global Steel | Market update
Global Steel | Market update GDP growth (%, YoY) Global economic recovery is now more broad based 2016 2017P Manufacturing PMI’s across regions are trending upwards; 7.1% 6.7% 6.8% 6.7% manufacturing activities are seeing upturn supported by more visible signs of continued investment recovery 5.
Slide 8: Global Steel | Market update
Global Steel | Market update China steel production and apparent consumption* China has closed ~120MTPA steel production capacity (mn tons, annualized) since the start of 2016 900 850 Crude Steel Production Apparent Steel Consumption Chinese apparent steel demand is on an increasing 800 trend; m
Slide 9: Highlights of the second quarter
Highlights of the second quarter Deliveries of 6.45 million tonnes Consolidated revenues of Rs.32,464 crores Consolidated EBITDA of Rs.4,726 crores Consolidated EBITDA per ton of Rs.7,323/t Tata Steel Kalinganagar is close to full ramp-up 9
Slide 10: Strategic Developments
Strategic Developments Signed Memorandum of Understanding for a 50:50 joint venture with thyssenkrupp to create a leading European steel enterprise The Pensions Regulator has approved the Regulatory Apportionment Agreement in respect of BSPS and payment of GBP 550mn has been completed. The BSPS
Slide 11: Quarterly Financial Performance
Quarterly Financial Performance Rs Crores Consolidated India Q2 FY18 Q1 FY18 Q2 FY17 Q2 FY18 Q1 FY18 Q2 FY17 Production (MT)1 6.24 6.25 5.94 3.03 2.95 2.72 Deliveries(MT) 6.45 5.83 5.61 3.08 2.75 2.62 Turnover 32,464 30,973 27,120 14,221 14,422 11,718 Raw material cost2 12,981 13,037 10,425 4530 4,4
Slide 12: Quarterly Financial Performance as per Ind-AS
Quarterly Financial Performance as per Ind-AS1 Rs Crores Europe SEA Others & Eliminations Q2 FY18 Q1 FY18 Q2 FY17 Q2 FY18 Q1 FY18 Q2 FY17 Q2 FY18 Q1 FY18 Q2 FY17 Production (MT)1 2.60 2.79 2.68 0.61 0.50 0.54 - - - Deliveries(MT) 2.60 2.40 2.26 0.67 0.60 0.65 - - - Turnover 15,006 14,079 12,006 2,42
Slide 13: Group EBITDA movement 2QFY18 Vs. 1QFY18
Group EBITDA movement 2QFY18 Vs. 1QFY18 ₹Crores 308 26 4,296 4,196 104 78 1QFY18 Selling Result Cost Changes Volume/Mix Others 2QFY18 Note: Consolidated EBITDA consists of EBITDA across four operating entities –TSI, TSE, NSH & TSTH Selling result and Cost changes impacted by mainly due to lower re
Slide 14: Consolidated Debt movement 2QFY18 Vs. 1QFY18
Consolidated Debt movement 2QFY18 Vs. 1QFY18 ₹Crores 1,583 864 90,259 87,812 11,956 78,303 78,303 Gross Debt Loans Movement Forex Impact & Gross Debt Cash, Bank & Net Debt Jun 2017 Others Sep 2017 Current Sep 2017 Investments 14
Slide 15: India and South East Asia Performance
Agenda 1 5 Consolidated India and Europe Appendix Financial South East Asia Performance Performance Performance 15
Slide 16: India Steel | Market update
India Steel | Market update GDP Growth rate (% YoY) Strong monsoons and initial hiccups around GST1 8.0 7.9 implementation affected demand 7.5 7.5 7.0 Passenger vehicles productions was up by 3.8%YoY and 6.4 6.1 11%QoQ in 2QFY18 5.7 Commercial vehicles witnessed sharp recovery with a 11.9%YoY
Slide 17: India Steel | Market update
India Steel | Market update Finished steel production, demand and imports (mn tons) HRC prices – domestic vs. China FOB (US$ per ton, Indexed to Sep 2015) 30 2.6 2.7 220 China Export FOB 25 2.5 Mumbai (ex duty, VAT, GST) 24.3 24.4 25.1 24.6 25.2 180 23.7 20 20.9 22.1 21.0 21.9 2.3 20.1 20.6 15 2.1 1
Slide 18: Tata Steel India | Stronger than market growth in a seasonally weak quarter
Tata Steel India | Stronger than market growth in a seasonally weak quarter 3,075 12% 2,624 17% 350 2,750 14% 9% 301 272 1310 1153 1198 11% 8% 943 846 873 34% 25% 352 472 378 2QFY17 2QFY18 1QFY18 Auto BPRS IPPE Transfers to Downstream Deliveries grew with increase in capacity, this is despite subd
Slide 19: Tata Steel India | Segment sales highlights
Tata Steel India | Segment sales highlights Segments Products Key highlights Automotive & Special products Hi-end automotive steel sales grew by 23%YoY and 14%QoQ Increase market share with focus on new grades development and new vehicle models Branded products, Sales to emerging customer acco
Slide 20: Tata Steel India | Building a portfolio of strong brands
Tata Steel India | Building a portfolio of strong brands 20
Slide 21: Tata Steel India | Continues to improve operational efficiencies and minimize environmental impact
Tata Steel India | Continues to improve operational efficiencies and minimize environmental impact 2 1 Specific Energy Intensity… Specific Fuel Rate (Kg/thm) Specific Coke Rate… 6.12 589 479 6.02 6.01 455 578 443 Good Good 569 Good 5.77 548 380 542 5.67 5.66 360 537 349 FY 13 FY 14 FY 15 FY 16 H1 FY
Slide 22: Tata Steel India | EBITDA movement – 2QFY18 vs. 1QFY18
Tata Steel India | EBITDA movement – 2QFY18 vs. 1QFY18 ₹Crores 248 232 62 3,408 (56) 2,922 1QFY18 Selling result Cost Volume/Mix Others 2QFY18 Selling result improved on the marginally improved prices Decrease in cost is mainly due to reduction in cost of coking coal Deliveries grew by 12%QoQ
Slide 23: South East Asia | Market update
South East Asia | Market update Manufacturing PMIs South East Asia rebar-scrap spread (US$/tonne) 52 Scrap Rebar Gap 518 Singapore Rebar Price 445 436 Thailand 398 51 Scrap Price 358 344 333 265 284 282 269 50 257 255 230 175 193 49 185 162 168 143 101 114 91 91 48 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16
Slide 24: Tata Steel South East Asia | Operating performance
Tata Steel South East Asia | Operating performance Nat Steel Holdings Production was up by 11% YoY and 18%QoQ; Deliveries were up 4%YoY and 7%QoQ despite weak domestic market conditions EBITDA improved on higher volumes and better spreads Continued focus on key markets for exports Tata Steel T
Slide 25: India & South East Asia | Business Outlook
India & South East Asia | Business Outlook The overall outlook for the steel market remains constructive, however, jump in steel imports in 2QFY18 continues to pose a risk Accelerating government reforms are expected to result in stronger growth. However, private sector investment is still muted
Slide 26: Europe Performance
Agenda 2 6 Consolidated India and Europe Appendix Financial South East Asia Performance Performance Performance 26
Slide 27: European market context
European market context EU market supply (mn tons, annualized) and import share (%) EU sector output1 (%YoY, 3mma2) 200 24% 120 Deliveries Imports Import share (%) Automotive Machinery Construction 150 18% 110 100 100 12% 90 50 6% 80 0 0% 70 Jan-12 Jan-15 Jan-17 Jan-13 Jan-14 Jan-16 Jul-12 Jul-13 Ju
Slide 28: Tata Steel Europe | Improving offering to customers
Tata Steel Europe | Improving offering to customers Five new products launched in Q2 including a coated steel with a revolutionary paint system offering superior aesthetics and colour performance KALZIP® VARIO RT Cr-FREE COLORCOAT® Continuing to work closely with customers to develop differentia
Slide 29: Tata Steel Europe | EBITDA movement – 2QFY18 vs 1QFY18
Tata Steel Europe | EBITDA movement – 2QFY18 vs 1QFY18 £152mn £(33)mn £(4)mn £6mn £(21)mn £(11)mn £83mn £89mn 3 months to Jun Selling Result Cost Changes Production Manufacturing Central 3 months to 2017 Volume & Other Sep 2017 EBITDA lower than the prior quarter by £63mn Selling Result worsened
Slide 30: Tata Steel Europe | Business Outlook
Tata Steel Europe | Business Outlook EU economy is expected to grow by 2.2% in 2017. UK economy is forecasted to grow by 1.5% as higher inflation weakens consumer spending growth European steel demand expected to grow by 1.9% in 2017 in line with modest economic growth European steel mills exp
Slide 31: Appendix
Agenda 3 1 Consolidated India and Europe Appendix Financial South East Asia Performance Performance Performance 31
Slide 32: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations Rs Crores 2QFY18 1QFY18 Key Reasons 2Q sales excludes excise duty in line with with GST implementation. Adjusting for this, sales has increased with higher deliveries partially offset Gross Sales 13,910 14,287 by lower ferro-chrome prices and change in the busines
Slide 33: Consolidated Results – QoQ Variations
Consolidated Results– QoQ Variations Rs Crores 2QFY18 1QFY18 Key Reasons Income from operations 32,101 30,803 Higher deliveries across the regions Primarily due to release of deferred income related to export obligation of Other operating income 363 170 EPCG Raw materials consumed 10,355 10,279 In l
Slide 34: Contact
Contact Investor enquiries : Sandep Agrawal Tel: +91 22 6665 0530 Email: Sandep.agrawal@tatasteel.com 34