Nmdc Limited · NSE:NMDC
Nmdc — Non-Deal Roadshow (February 2020)
41 slides from Nmdc's roadshow presentation, Feb 11, 2020
Slide 1: Cover letter to stock exchanges: Investor (Non-Deal) Presentation
"Cf' ~ ft "fit R=t Pt=ts NM DC Limited (~ ~ <61 ~) (A GOVT. OF INDIA ENTERPRISE) ~ Cblit~clit : ·~ ~·. 10-3-311 ~, '$m;; ~, +lRITTl' ~. t G~'<~l~C5ll~G- .. 500 028. Regd. Office : 'Khanij Bhavan' 10-3-311/A, Castle Hills, Masab Tank, Hyderab NMD C m ~~ I Corporate Identity Number : L 13100TG1958 GOI
Slide 2: Investor (Non-Deal) Presentation, February 2020
Investor (Non-Deal) Presentation FEBRUARY 2020 NMDC LIMITED
Slide 3: Disclaimer
DISCLAIMER This presentation is issued by NMDC Limited (the "Company") for general information purposes only, without regard to specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form part of any offer or invitation
Slide 4: Overview of Iron ore and Steel Sectors
Overview of Iron ore and Steel Sectors
Slide 5: Trends in Global steel production and apparent consumption
Trends in Global steel production and apparent consumption Apparent Steel Consumption v/s Production (Million Tons) 1712 1808 1560 141 2011 2012 2013 2014 2015 2016 2017 2018 • China's steel production • Rest of the world steel production Apparent steel use •!• 2019 (for 11 months) production -1684
Slide 6: Trends in Indian steel production and consumption
Trends in Indian steel production and consump tion 160 90 138 142 140 122 U) 120 85 c E 100 80 80 0 c 80 o'' Q ·- 60 lb 2 40 fU 20 0 65 FY 20 11 FY 20 12 FY 20 13 FY 20 14 FY 20 15 FY 2016 FY 2017 FY 2018 FY L019 - Cru de steel capacity - Crude steel prod uction - Capacity utilization% Source: Minis
Slide 7: Trends in Finished steel prices
Trends in Finished steel prices 43981 43851 (lJ c - c .... 0 a:: z 2015 2016 2017 2018 2019 2020+ • HRC prices • CRC prices Source: Steel mint *2020 data is till 3rd Feb 2020. Past 12 months Price Trend Due to sluggish demand In domestic steel 49000 49000 46000 44000 42 350 44300 sector and ri se in
Slide 8: 62% Fe Fines, CFR China
62% Fe Fines, CFR China (INR/dmt) (83) USD/DMT) GLOBAL MACRO INDICATORS =0=62% Fe Fines, CFR China REMAINS STRONG FOR ** Iron Ore prices have been increasing steadily over the years, IRON ORE with peaks and lows amidst global concerns. * Prices reached a peak of 125 $/tonne amidst supply concerns fr
Slide 9: Iron Ore: Overview of the Domestic Market
Iron Ore: Overview of the Domestic Market , - - .... Target as per ~ ' -- 500 •I NSP, 2017 ' .... lli:ll _, I 35 400 30 mJ 25 300 20 200 15 10 100 0 0 FY 15 FY 16 FY 17 FY 18 FY 19 FY 30 (P) - Iron Ore Production (MT) -+- Export (MT) - Import (MT) Source: IBM and Steelmint 0 Production is increasing
Slide 10: Trends in Indian Iron Ore prices
Trends in Indian Iron Ore prices Prices of Iron ore Lumps (Fe 62°/o to 65%) - Price of Iron ore Fines (Fe 62°/u to 65°/o) - INR/T INR/T Otr1 Otr2 Otr3 Qti4 Qtr1 Otr2 Otr3 Otr4 Otr1 Otr2 Otr3 Otr4 Otr1 Otr2 Otr3 Otr4 Qtr1 Qtr2 Otr3 Otr4 Qtr1 Otr2 Otr3 Qtr4 Qtr1 Otr2 Otr3 Otr4 Otr1 Otr2 Otr3 Otr4 2016
Slide 11: The steel prices has already seen the trough and likely to continue increasing
4,500 4,000 3,500 3,000 c: ~ 2,500 ..... cii ii. .,; 2,000 c::: 1,500 1,000 500 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4E 2018-19 2019-20 - LUMP 3, 264 3,448 3,892 3,185 3,253 3,278 2,937 3,500 - FINES 2,670 2,760 3,152 2,632 2,733 2,680 2,39 2 2,960 - AVG 2,884 2,999 3,398 2,827 2,916 2,891 2,578 3,150 The steel pr
Slide 12: Distribution of Merchant and Captive Miners in Odisha
Distribution of Merchant and Captive Miners in Odisha Distribution of Merchant and Captive Miners in Odisha Production (MT} • Currently 84 MT of Iron ore in Odisha is produced by Merchant miner. • The trend of premium being quoted in the auctions is not feasible for merchant miners since the price i
Slide 13: Iron ore requirement of successful bidders more than their requirement for end use
Iron ore requireme nt of successful bidders as well is more than their requireme nt for end use S.N. Company Crude Steel Crude Steel Total Iron ore Auctioned Other blocks Shortfall (MT) Capacity Capacity requirement in blocks Odisha (MT) (Mt) 2019 (Mt) 2024 2024 (MT) (MT) 1 JSW 18 29.7 47.5 26.3 11.
Slide 14: Production profile of steel majors
Production profile of steel majors Production Capacity (MT) Production (MT) 20 20 15 15 10 10 5 5 0 0 FY2014-15 FY2015-16 FY2016-1 7 FY2017-18 FY2018-19 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-1 9 • JSW • JSPL SAIL TSL • RINL • JSW • JSPL • SAIL TSL • RINL •:• Tata Steel is eyeing for 30
Slide 15: Major existing customers of NMDC and their offtake
Major existin g custom ers of NMDC and their offtak e Customer Off-take (Mt) % of Total Off-take (Mt) FV19-20 FV19-20 Off-take (Mt) % of Total Off -ta ke (Mt) (Apr-Dec) (Apr-Dec) FV18-19 FV18-19 RINL S.lQ 21% 8.69 27% Essar t:\.21 21% 7.14 22% JSW (Group) 6.12 27% 8.16 26% CG Parties 1.84 8% 2.16 7%
Slide 16: Customer map and long term contracts
Gujarat, Chhattisg ISW ISPAT / Welspun * Japanese steel mills (LT contract) JSW Steel “~~ * POSCO, South Korea (LT contract) KIOCL *Not to scale “Not to scale + Long Term Contracts with Key International Customers * Prices are fixed quarterly benchmarked to prices of Platts Fe 65%
Slide 17: Standing Strong in Global Competition
STANDING STRONG IN GLOBAL COMPETITION
Slide 18: Optimizing Efficiency
Rs/TONNE ONE OF THE LOWEST COST OF PRODUCTION ONE OF THE HIGHEST PRODUCTION TO RESERVES RATIO. OPTIMIZING EFFECIE NCY
Slide 19: A Highly profitable firm with large reserve base and high returns to shareholders
A Highly profitable firm with large reserve base and high returns to shareholders • 770 • ~ £ 61 % 4.7 % Rs/Ton Large reserve base One of the lowest EB/OTA Margin at par Dividend Yield operating cost among with best performing comparable firms firms in business Source : NMDC, PwC Analysis. Conversio
Slide 20: Robust Operational And Financial Performance In FY20 (9M)
Robust Operational And Financial Performance In FY 20 (9M) Strong Performance despite non operation of DIOM Operational performance Financial performance ~ PRODUCTION 220.15 LT REVENUE Rs 8512 Crore SALES 228.95 LT EBITDA Rs 4898 Crore EXPORTS 17.71 LT Capital Rs 1052 Crore OPERATIONAL Rs 770 /tonne
Slide 21: Globally one of the lowest cost producers and high EBITDA margin iron ore player
Globally one of the lowest cost producer and high EBIDTA Margin Iron ore player 25 100 20 75 15 10 Ill 50 I 5 0 I ~ ~ ~ 25 BHP Rio Tinto NMDC Vale FMG 0 BHP Rio Tinto NMDC Vale FMG Drivers for low costs are : Stability/predictability of expenses such as wage increase, LTA w ith OEMs ; Proximity of e
Slide 22: Government of India is the major stakeholder of NMDC Limited
Government of India is the major stakeholder of NMDC Limited 14.16% 5.85% 1.96% 1.50% 0.52% 0.28% 5.98% 69.65% 0- (j Source: NMDC Reports and PwC Analysis
Slide 23: Financial strength is the cornerstone of NMDC success
Financial strength is the cornerstone of NMDC success 2016-17 2017-18 2018-19 2018-19 2019-20 Upto Q3 Upto Q3 • • Sales 8830 11615 12153 (INR Crores) • • . EBITDA (INR Crores) 4510 6472 7519 PAT (INR Crores) 2589 3806 4642 • . • • • Net Worth 22519 24354 25952 (INR Crores) • • Capital 3465 2346 2090
Slide 24: NMDC revenue growth driven by large best quality asset base
NMDC revenue growth driven by large best quality asset base Location of NMDC's mining facilities Revenue Growth 4 ~ Bae eli Mining fF-~~~\'(.r-1r<!f-----f-- Complex: Deposit- 5, 10 and 11A Kirandul Mining Complex· Deposit-11 C, 14 Chennai Port umaraswamy' Source : NMDC Reports and PwC analysis
Slide 25: Consistent high production and sales of iron ore
Consistent high production and sales of iron ore are drivers for NMDC Profitability Iron Ore Production (LT) Iron Ore Sales (LT) Source : NMDC Reports and PwC analysis
Slide 26: Capital Expenditure up to January 2020 and Expansion Schemes
Capital Expenditure up- to January, 2020 and Expansion Schemes 1822 1814.17 0 NMDC has already incurred the targeted capital expenditure for FY 2019-2020 (up-to Jan'20), and is expected to incur additional 500 Crores by 31st March, 2020. Major Scheme - wise Capital Expenditure planned to be incurred
Slide 27: Future Plans
Future Plans
Slide 28: Ramping up Mining and Evacuation capacities
Ramping up Mining and Evacuation capacities Mining Capacity Evacuat ion Capacity (MTPA) (MTPA) Sectors Mo de of Evacuation I FY'21 (E) Ramp up by FY'21 (E) Ramp up by FY FY'24 24 28 40 Railways Bailadila Sector 34 34 Road (Existing Mines) 1 1 8 8 Essar's Slurry Pipeline Bailad ila Sector 16 (New Min
Slide 29: Diversification: Forward-integrate to value added businesses (Pellet, Steel)
Diversification: Forward-integrate to value added businesses (Pellet, Steel) NMDC Iron and Steel Plant (NISP), Nagarnar Product mix including by-product s NISP, Nagam11r • Pig Iron HR Coils/ Sheets/ Plates • BF Coke (surplus) • Granulated Slag • By- products The NMDC Iron and Steel Plant (NISP) is l
Slide 30: Diversify into strategic and critical raw materials
Diversify into strategic and critical raw materials required by the nation and other commoaities - ... ..... .... - ·- Exploring opportunities for 92.46% stake in strategic and critica l raw Legacy Iron Ore materials like Rare Earths. Limited, Australia - involved in exploration Exploring battery mi
Slide 31: Diversification into commercial Coal Mining
Diversification into commercial Coal Mining Recently, NMDC has also been awarded Rohne coking coal block and Tokisud coal block, hereby expanding the business portfolio from Iron ore to coal as well. Rohne Coking Coal Block Tokisud Coal Block • Total Lease Area- 1245 Ha • Total Lease Area- 585.18 Ha
Slide 32: Achievements, Awards and Recognition
Achiviements, Awards and Recognition
Slide 33: Major Achievements During FY 19-20
Major Achievements During FY 19- 20 e • 0 Operations Technology Investments Awards Other Aspects • 2.76 LT higher production of Iron ore. • NMDC Adopting SAP • Expansion to Coal • NMDC received the • Ministry of Mines has as ERP solution in mining through Rohne prestigious S&P Platts amended the 'MM
Slide 34: Accolades received for exemplary work
Accolades received for exemplary work Awards and Recognition •Platts Global Metal Awards 2018 & 2019 at London •Navratna status in 2008 •National safety award conferred by President of India •5 star rating to mines by Ministry of Mines. •Governance now Public service undertaking award •"PSU Award 20
Slide 35: Spreading Smile through ethos of sustainable development
Spreading Smile through ethos of sustainable developmen t NMDC has put a complete ban on Others single-use plastic in all its offices and projects. NMDC has spent USO 10.5 million Education for plantation as part of its green initiatives during FY2016 to FY2019 . NMDC has spend an average of USO 26
Slide 36: Partnering with local communities
Partnering with local communities Eco-friendly Miner J Care for Health Education 5 Star ratings for Mines wrt to NMDC operates full-fledged hospitals sustainability from Government of India at projects Shiksha Sahayog Yojana : Scholarship scheme for tribal students. All projects of NMDC IS014001 cer
Slide 37: Harnessing Technology
Transformational leadership backed by innate risk-taking ability, the discovery of new horizons of growth HARNESSING TECHNOLOGY
Slide 38: NMDC's Transformational change brought about by axes of changes
NMDC's Transformational change brought about by axes of changes D Upskilling its manpower through D Implementation of fleet skill development program at management systems, ERP projects, trainings and seminars implementation, Enterprise data D Culture building program for hub implementation improvin
Slide 39: Sustainability & Responsible Mining
RESPONSIBL E MINING THE INNATE CULTURE SUSTAINA BILITY &) Scientific Mining Social Responsibility Climate Protection Biodiversity Conservation Economic Development
Slide 40: Transitioning Towards a Carbon-Neutral Economy
Transitioning Towards a Carbo-Neutral Economy 22% Renewable Energy . 975MwH INR 56.42 Crores Energy Saved Environmental Expenditure 113650 Nos. @ 27 Nos . Plantation carried out Check Dams Constructed Source: NMDC Sustainability Report 2018 • 36542 cubic meter. Retaining Walls Constructed
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