Vedanta Resources — FY2020 Earnings Presentation
33 slides from Vedanta Resources's earnings presentation, Aug 12, 2020
Slide 1: Vedanta: Transforming Elements
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Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements
Slide 3: Contents
Contents Section Presenter Page FY20 Review & Business Update Sunil Duggal, CEO 4 Financial Update Arun Kumar, CFO 14 Appendix 20 VEDANTA RESOURCES LIMITED – FY2020 INVESTOR PRESENTATION 3
Slide 4: FY2020 Review & Business Update
FY2020 FY2020 Review & Business Update Sunil Duggal Chief Executive Officer
Slide 5: United Against COVID-19
UNITED AGAINST COVID-19 Employee Safety & Supporting Government Supporting Nation ▪ Contributed ~$14mn to PM Cares ▪ Provided >900,000 meals to Welfare ▪ Sets up ~$14mn corpus for daily daily wage earners. ▪ Global Standards to Manage workers, preventive healthcare & ▪ Supported 13,500 fisherman Hea
Slide 6: Vedanta Work Readiness in COVID-19
Vedanta Work Readiness in COVID-19 Continuous monitoring of workforce for signs of COVID-19 symptoms Stay Home Elimination Robust business continuity Work Remotely Substitution plan in place Sanitize Engineering Controls frequently Implemented wide ranging controls across operations Practice Social
Slide 7: Heading Towards Zero Harm, Zero Waste, Zero Discharge
Heading Towards – Zero Harm, Zero Waste, Zero Discharge Safety Program Update Environment Update ▪ Increased focus on isolation procedures & Water ▪ ~7 million m3 of water savings 2 fatalities in Q4 adequate infra-in-place to prevent repeats conservation over three years ▪ Guidance Note of VFL devel
Slide 8: Contributing to the communities
Contributing to the communities Flagship Programs Benefitting the lives of 3.26 million people across 868 villages 1302th Nand Ghar established in 4 states Healthcare Drinking Water and Sanitation Nearly 1.9 Million people benefited Nearly 388,000 people benefited > 35 Initiatives 24 Initiatives Com
Slide 9: Zinc India: Strong Foundation Driving Growth
Zinc India: Strong Foundation Driving Growth Performance Update Year of Achievements Quarter Performance: Rampura Agucha ▪ MIC Production 249kt, up 6% q-o-q and 2% y-o-y ▪ All major projects for 1.2 Mtpa MIC ▪ Metal Production 221kt, up 1% q-o-q and down 3% y-o-y capacity completed ▪ Silver Producti
Slide 10: Zinc International: Gamsberg Positioning for Long Term Value Creation
Zinc International: Gamsberg Positioning for Long Term Value Creation Performance Update Gamsberg Quarter Performance: Quarter Performance: ▪ Production at 57kt, down 5% q-o-q and up 7% ▪ Production at 30kt with best ever production of y-o-y 13kt in Jan ▪ COP at $1,784/t, up 13% q-o-q and 20% y-o-y
Slide 11: Oil & Gas: Portfolio being monetized to drive multi-fold growth
Oil & Gas: Portfolio being monetized to drive multi-fold growth 235 Wells Drilled 10 new blocks ▪ 75 wells hooked up. 2 new wells in Ravva, ▪ Won 10 blocks in OALP Round II & III (total achieved peak production of 10 kboepd ▪ All wells drilled in Mangala Infill, Bhagyam and 51 blocks under OALP) Ais
Slide 12: Aluminium: Achieving Design Structure
Aluminium: Achieving Design Structure Structural Reduction in Cost Performance Update 1,967 1,810 Quarter Performance: 1,691 1,690 1,451 ▪ Aluminium COP at $1,451/t, down 14% q-o-q and 20% y-o-y ▪ Lanjigarh production 479 kt, flat q-o-q and up 13% y-o-y ▪ Lanjigarh COP at $258/t, down 4% q-o-q and 1
Slide 13: Other Assets: Iron ore and Electrosteel Steels
Other Assets: Iron ore and Electrosteel Steels Iron Ore Electrosteel Steels Performance Update Performance Update Quarter Performance: Quarter Performance: ▪ Karnataka sales 1.6 Mnt, up 8% q-o-q & 17% y-o-y ▪ Production 320kt, up 1% q-o-q and down 8% y-o-y ▪ Pig Iron production 148kt, down 17% q-o-q
Slide 14: Financial Update
FY2020 Financial Update Arun Kumar Chief Financial Officer
Slide 15: Financial snapshot
Financial snapshot EBITDA FCF post capex EBTIDA Margin* Cash & Cash Equivalent $ 3.0 bn $ 0.8 bn 29% $ 5.1 bn Down 40% y-o-y Consistent Cash generation Robust Margin Strong liquidity * Excludes custom smelting at Copper India, Copper Zambia and Zinc-India operations EBITDA Bridge (In $ mn) Aluminium
Slide 16: Net Debt for FY 2020
Net Debt for FY 2020 (In $ mn) Debtor realization 120 Inventory 40 Creditors/Provisions/BC (136) 10,292 2,111 635 98 10,005 1,311 24 FCF $ 823 mn 1st Apr’19 CF from WC Movements Capex Dividend Paid Translation 31st Mar’20 Operations (Incl Buyer’s & others credit) VEDANTA RESOURCES LIMITED – FY2020 I
Slide 17: Strong Financial and Returns Profile
Strong Financial and Returns Profile Term Debt Maturities - $12.9 bn (as of Mar 31, 2020) ▪ Liquidity – Cash and investments @ $ 5.1 billion 3.6 3.2 – Undrawn line of credit c. $ 1.5 billion 2.7 1.6 ▪ Net Interest $ bn 1.8 0.9 1.6 1.7 ▪ Interest Income – Returns ~6.1%. 0.6 0.6 ▪ Interest Expense – M
Slide 18: Capex and Returns Profile
Capex and Returns Profile Growth CAPEX Profile, $bn Oil & Gas Zinc Al & Power Copper Other Optionality Full year Capex guidance 0.7 1.0 1.2 1.5 1.2 1.1 0.1 0.8 0.8 0.7 0.1 0.5 0.1 0.6 0.1 0.2 0.2 0.3 0.5 0.2 0.3 0.2 0.1 0.1 0.5 0.5 FY2016 FY2017 FY2018 FY2019 FY2020 FCF pre capex, $bn 2.4 2.8 2.0 2.
Slide 19: Key Investment Highlights
Key Investment Highlights 1 Large Low Cost, Long Life and Diversified Asset Base with an Attractive Commodity Mix 2 Ideally Positioned to Capitalise on Favourable Geographic Presence 3 Well-Invested Assets Driving Cash Flow Growth 4 Operational Excellence and Technology Driving Efficiency and Sustai
Slide 20: Appendix
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Slide 21: Income Statement
Income Statement Depreciation & Amortization In $ mn FY’20 FY’19 ▪ Higher on account of new well capitalisation at Oil and Revenue from operations 11,790 13,006 Gas business , higher ore production at Zinc India and EBITDA 3,003 3,456 commencement of operations in Gamsberg. Depreciation & amortizati
Slide 22: Income Statement – Special Items
Income Statement – Special Items In $ mn FY’20 FY’19 Exceptional Items – credit / (expense) (2,053) 47 Taxes on Exceptional Items 781 (16) Exceptional items net of tax (1,272) 31 Breakup of Exceptional Items / Impairment FY’20 FY’19 net of tax Cairn (1,164) 25 Copper (61) Avanstrate (61) Others 14 6
Slide 23: Project Capex
Project Capex Approved Spent up to Capex3 Spent in Unspent as at Capex in Progress Status ($mn) 31 Mar’194 FY20204,6 31 Mar’20205 Cairn India1 – Mangala Infill, Liquid handling, 2,493 651 492 1,350 Bhagyam & Aishwariya EOR, Tight Oil & Gas etc Aluminium Sector Line 3: Fully capitalised Jharsuguda 1.
Slide 24: Entity Wise Cash and Debt
Entity Wise Cash and Debt 31 Mar 2020 ($ mn) 31 Mar 2019 ($ mn) Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited Standalone 5,053 672 4,380 6,101 1,195 4,906 Cairn India Holdings Limited1 494 1,027 (533) 379 1,172 (793) Zinc India 82 2,974 (2,892) 367 2,821 (2,454) Zinc Intern
Slide 25: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $12.9bn Debt Breakdown (as of 31st Mar 2020) (as of 31 Mar 2020) Debt breakdown as of (in $bn) 31 March 2020 Term debt 12.9 Term Loans-INR Working capital 1.2 24% Bonds-INR 32% Short term borrowing 1.0 Term Loans-USD/Forei
Slide 26: Segment-wise Summary
Segment-wise Summary Oil & Gas FY20 FY19 Zinc-India FY20 FY19 Average Daily Gross Operated Mined Metal Content (kt) 917 936 Production (boepd) 172,971 188,784 Refined Zinc – Integrated (kt) 688 696 Rajasthan 144,260 155,903 Refined Lead – Integrated (kt)1 181 198 Ravva 14,232 14,890 Saleable Silver
Slide 27: Segment-wise Summary (cont’d)
Segment-wise Summary (cont’d) Aluminium FY20 FY19 Copper FY20 FY19 Aluminium Production (kt) Copper Cathodes– India (kt) 77 90 1,904 1,959 Jharsuguda I - 500kt 545 Tuticorin Power Plant (mu) - - 543 Average Copper LME ($/t) 5,855 6,337 Jharsuguda II - 1,250kt1 800 843 EBITDA ($mn) (40) (36) Korba-I
Slide 28: Aluminium profitability
Aluminium profitability $/t Q3 ‘20 1,752 59 67 1,879 (625) (698) (368) (90) (98) 132 230 49 (138) (247) (106) 1,691 Q4 ‘20 1,451 72 1,823 62 1,690 571 560 320 - - 145 34 340 340 249 (55) 245 LME Ingot Value Realisation Alumina Power Other Hot Conversion Underlying RPO Reported Exceptional Dep Int PB
Slide 29: Segment-wise Summary (cont’d)
Segment-wise Summary (cont’d) Power FY20 FY19 Iron Ore FY20 FY19 Power Sales (million units) 11,162 13,517 Sales (dmt) 6.6 3.8 Jharsuguda 600MW 776 1,039 Goa 0.9 1.3 BALCO 1 1,726 2,168 Karnataka 5.8 2.6 Talwandi Sabo 1980MW 8,223 9,858 Production (mt) 4.4 4.4 HZL Wind Power 437 449 Goa - 0.2 Power
Slide 30: Sales Summary
Sales Summary Sales volume FY20 FY19 Sales volume FY20 FY19 Sales volume FY20 FY19 Power Sales (mu) Zinc-India Sales Iron-Ore Sales Jharsuguda 600 MW 776 1,039 Refined Zinc (kt) 683 694 Goa (mn DMT) 0.9 1.3 TSPL 8,223 9,858 Refined Lead (kt) 182 198 Karnataka (mn DMT) 5.8 2.6 Total Zinc-Lead (kt) 86
Slide 31: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of 1 ₹ depreciation in FX Rate Currency Increase in EBITDA INR/USD ~US$ 25 – 30 million / year Commodity prices – Impact of a 10% increase in Commodity Prices FY‘20 Commodity Average price EBITDA ($mn) Oil ($/bbl) 61 96 Zinc ($/t) 2,402
Slide 32: Augment our Reserves and Resources Base
Augment our Reserves and Resources Base Focused exploration to expand our reserves and resources base for support our future growth through • Targeted and disciplined exploration • Offsetting depletion and bringing on stream more discoveries • Team aim to discover mineral and oil deposits in a safe
Slide 33: Group – Present Debt Structure
Group – Present Debt Structure ($ bn) Vedanta Resources (Consolidated) Volcan FY20 FY20 EBITDA 3.0 EBITDA - Net Debt 10.0 Net Debt 0.3 Vedanta Resources (Standalone) FY20 % EBITDA 0.0 1% Net Debt 7.3 73% Divisions of Vedanta Limited 79.4% 50.1% ⚫ Sesa Iron Ore Konkola Copper Mines (KCM) Vedanta Ltd