Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q2 FY2024 Earnings Presentation
39 slides from Tata Steel's earnings presentation, Nov 1, 2023
Slide 1: Exchange filing cover letter
November 1, 2023 The Secretary, Listing Department The Manager, Listing Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 001. Mumbai - 400 051. Mah
Slide 2: Press release: Consolidated EBITDA of Rs 4,315 crores
Mumbai, November 01, 2023 Tata Steel reports Consolidated EBITDA of Rs 4,315 crores for the quarter Highlights: ▪ Consolidated Revenues for the half year stood at Rs 1,15,172 crores. EBITDA was Rs 10,437 crores and the EBITDA margin was 9%. ▪ Consolidated Revenues for the July – Sep quarter stood at
Slide 3: Financial Highlights and Management Comments
Financial Highlights: Key Profit & Loss account items (All India1,2 Consolidated figures are in Rs. Crores unless stated otherwise) 2QFY24 1QFY24 2QFY23 2QFY24 1QFY24 2QFY23 Production (mn ton)3 5.02 5.02 4.80 7.31 7.13 7.56 Deliveries (mn ton) 4.82 4.79 4.91 7.07 7.20 7.23 Turnover 33,922 35,352 34
Slide 4: Disclaimer
Disclaimer Statements in this press release 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. Important fac
Slide 5: Tata Steel Results Presentation 2023
Tata Steel Results Presentation 2023 Financial quarter ended September 30, 2023 November 01, 2023 36 feet high Charkha in Cross Maidan at Mumbai, India : Symbolises steely determination to build and sustain a self-enabled nation, made using 24 tons of Tata Structura steel hollow sections
Slide 6: 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 7: Business Update
Business Update Floating solar power panels at Jamshedpur, India
Slide 8: Leadership in Sustainability
Leadership in Leadership in Leadership position in Sustainability India technology and digital Consolidate position Robust financial Become future as global cost leader health ready 4
Slide 9: Journey towards excellence in Safety & Health of employees
Committed Safe to ‘Zero harbour harm’ statement Journey towards excellence in Safety & Health of employees1 Safety Competency Development 68% LTIFR* Fatalities › FELT Leadership Training for competency development and In the last 15 years empowerment of site safety 7 supervisors 5 4 4 1 FY20 FY21 FY
Slide 10: Improving quality of life of our communities
Improving Safe quality harbour of life of our communities statement Social capital and scalable change models to enable deep societal impact Strengthening tomorrow via range of signature programs across focus areas 1 Program to drive rural and urban Rural & Urban Education Public Health & Nutrition
Slide 11: Net Zero by 2045: route and pace of decarbonisation
Net Zero Safe by 2045 harbour statement Route and Pace of decarbonisation to be calibrated across geographies Pursuing Steel – permanent material in the Multiple circular economy Initiatives ▪ Key engineering and Higher scrap Higher Renewable Reducing ash in construction material charge energy use
Slide 12: TSUK: Pursuing decarbonisation to reduce 50 mn tons CO2e
Safe TSUK:harbour statement Pursuing decarbonisation to reduce 50 mn tons CO2e over a decade 2,000 UK Customers supplied by UK operations 1 Existing configuration ▪ BF – BOF based steelmaking with downstream 3 mn tons 50 mn tons capacity of around 3 million tons direct emissions Downstream capacity
Slide 13: TSN: Committed to achieve 30% CO2 emission reduction by 2030
Safe TSN: harbour to achieve 35 – 40% CO2 emission reduction by 2030 statement Committed Government support is essential for transition Roadmap+ (2019 – 2025) Transition to Green steel ▪ Investment to achieve significant ▪ Discussions with government and One of the most reduction in emissions, dust,
Slide 14: TSI: Pursuing sustainability through multiple initiatives
Safe harbour sustainability TSI: Pursuing statement through multiple initiatives Committed to responsible growth 379 MW renewable energy project to enable reduction of 1 more than 50 million tons of carbon emissions over time 1st site GreenPro1 Increase in Steel scrap usage during steelmaking across
Slide 15: Committed to transparency via enhanced sustainability disclosures
Committed to transparency via enhanced sustainability disclosures Tata Actively involved in development of global & national standards Adopted and reporting 1st Sustainability report published 2001 based on GRI framework Contribution to UN SDGs 1st CDP Climate reporting, expanded 2006 Sustainability
Slide 16: Tata Steel is scaling up to capitalise on India growth opportunity
Tata Steel is scaling up to capitalise on India growth opportunity Investments set to drive sector leading returns 2x 40 capacity growth in NINL / MTPA Flats (A) ~16 MTPA ~27 MTPA India EAF Longs (B) ~5 MTPA ~13 MTPA Dominant manufacturing base 0.75 ~21 EAF TSK / Crude Steel ~21 MTPA 40 MTPA MTPA 5
Slide 17: 5 MTPA capacity expansion progressing at Kalinganagar
5 MTPA capacity expansion is progressing at Kalinganagar Tata The largest ‘Blast furnace’ in India at 5,870 cubic metres Tata Steel Kalinganagar 5 MTPA expansion Consolidate leadership in Automotive Engineering chosen segments Energy Performance Update ▪ Top combustion stoves* → Optimal fuel consump
Slide 18: Pellets and FHCR coils production commenced
2.2 MTPA CRM complex → product mix, 6 MTPA Pellet plant → Cost savings Tata Pellets and FHCR coils production commenced Continuous Annealing & Continuous galvanising lines work underway Widest cold rolling mill in India with capacity of 2.2 million tons per annum High Tensile steel to meet Advanced
Slide 19: Agile business model to leverage digitisation to create value
Tata Agile business model to leverage digitisation to create value Far-site Remote Operation Centres (iROC) Strong India franchise Service centers for 250+ distributors & last point processing 20,400+ dealers Agile 30+ Product E-commerce to Application Engineers distribution enhance reach network Pe
Slide 20: Auto: Consolidating the position of Preferred Steel Supplier
Auto: Consolidating the position of “Preferred Steel Supplier” Tata Product mix and enhanced services to meet needs of the future Making Steel smarter ▪ Makes up 24% of domestic ▪ Strong presence across all the deliveries automotive OEMs Auto as % of total deliveries 24% 24% 24% FY22 FY23 1HFY24 Per
Slide 21: Retail: Poised to grow 2x in high margin business
Retail: Poised to grow 2x in high margin business Tata Leveraging pan India growth and branded presence esp. Tata Tiscon Joy of building ▪ Envisaged capacity growth at ▪ Serving 500K+ Individual NINL and EAF Homebuilders per annum 8 times in a row 1st in India Performance Update Our retail volumes h
Slide 22: Downstream: Value added growth for product mix enrichment
Downstream: Value added growth for product mix enrichment Tata Set to grow by 2x – 4x Tubes Wires Tinplate Ductile Iron Pipes Wide product Our LRPC strands Application in Tata Ductura, portfolio incl. HAR & are widely used in growing packaging designed to last transportation of ApplicationERW of tub
Slide 23: Financial management to enable returns across cycle
Financial management to enable returns across cycle Tata Value Drivers Outcome Bond spreads converged to Investment grade Balance sheet management Tata Steel Abja 5.45 (2028) ▪ Optimise capital structure and cost ▪ Target Net Debt to EBITDA <2.5x across cycle ▪ Proactive financing & asset – liabilit
Slide 24: Value accretive consolidation with multiple benefits
Value accretive consolidation with multiple benefits Tata Unlisted Listed Tata Steel S&T Mining Indian Steel & TSLP TCIL Tata Metalliks TRF Ltd. Mining (TSML) Wire Products Swap ratio 6.7 Swap ratio 3.3 Swap ratio 7.9 Swap ratio 1.7 Filing of scheme Filing of 1st motion Shareholders Final hearing /
Slide 25: Performance Update
Performance Update Identifying and developing sporting talent among rural youth, India
Slide 26: Economic slowdown in China and elevated input costs weighed on spreads
Economic slowdown in China and elevated input costs have weighed on global steel spot spreads ▪ Global steel prices moderated in the July – Sep period on ▪ Raw material prices moved slightly higher in the past few sustained concerns about slowing growth momentum weeks. Coking coal prices are above $
Slide 27: India steel demand resilient while EU demand subdued
India steel demand remained resilient despite seasonal rains while EU steel demand was subdued on economic slowdown India Europe ▪ Indian apparent steel consumption was up around 10% on ▪ Eurozone manufacturing PMI was 43 in Sep, indicating the QoQ basis in 2QFY24 persistent concerns about economic
Slide 28: Steady increase in India sales to chosen segments
Steady increase in India sales to chosen segments Domestic deliveries up 6% YoY on improving demand Business Verticals End use sectors mn tons Auto and Retail : Individual Construction & ancillaries housebuilders Infrastructure 1.2 1.1 0.8 0.7 1.2 1.2 1.1 1.1 0.7 4.91 4.79 4.82 0.67 0.68 0.72 2QFY23
Slide 29: Tata Steel Consolidated
Tata Steel Consolidated (All figures are in Rs. Crores Key drivers for QoQ change: 2QFY24 1QFY24 2QFY23 unless stated otherwise) Production (mn tons)1 7.31 7.13 7.56 ▪ Revenues: decreased by 6% due to lower volumes, as Deliveries (mn tons) well as lower realisations across geographies 7.07 7.20 7.23
Slide 30: Consolidated 2QFY24 EBITDA bridge
Consolidated 2QFY24 EBITDA1 stood at Rs 4,147 crores EBITDA margin was at 7% ▪ Selling Result: driven by lower realisations in India and Europe 4,021 4,300 ▪ Cost Changes: given drop in raw material costs especially coking coal 96 1,716 ▪ Volume/Mix: primarily driven by lower deliveries in Europe 6,
Slide 31: Net debt stood at Rs 77,032 crores
Net debt stood at Rs 77,032 crores Group liquidity remains strong at Rs 27,6371 crores in Rs crores 689 212 184 90,440 89,723 12,691 77,032 Gross Debt Movement in Loan FX Impact Gross Debt Cash, Bank & Net Debt Jun'23 leases movement and Others Sep'23 Current Sep'23 Investments 1 Note Group liquidit
Slide 32: Key financial credit metrics
Key financial credit metrices 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 1,00,816 19.8% 88,501 89,723 18.9% 84,893 1,04,779 75,561 94,879 11,358 11,110 5.2 77,032 13.4% 75,389 12.2% 10,838 7,316 3.9 4.1 67,810 6,267 3
Slide 33: Annexures
Annexures Safety Competency Development through VR modules
Slide 34: Tata Steel Standalone: Continued focus on operational efficiencies
Tata Steel Standalone1 Continued focus on operational efficiencies and minimizing environmental impact Coke Rate (kg/thm) Specific Energy Consumption (Gcal/tcs) Specific Fresh Specific Water Fresh Consumption (m3/tcs) Water Good Good 3 Consumption (m /tcs) Good 6.00 365 5.95 362 3.51 5.85 358 5.79 3
Slide 35: Tata Steel Standalone
Tata Steel Standalone1 (All figures are in Rs. Crores Key drivers for QoQ change: 2QFY24 1QFY24 2QFY23 unless stated otherwise) Production (mn tons) 4.91 4.84 4.80 ▪ Revenues: decreased on lower steel realisations Deliveries (mn tons) 4.82 4.79 4.91 ▪ Raw Material cost: decreased primarily due to lo
Slide 36: Key operating parameters TSUK and TSN
TSUK TSN Key operating parameters Coke Rate (kg/thm) Specific Energy Consumption (GJ/tcs) CO2 Emission Intensity (tCO2/tcs) Good Good Good 337 333 324 317 23.9 311 23.3 23.1 22.8 22.6 2.25 2.18 2.16 300 2.14 21.1 2.11 298 20.4 20.2 19.8 19.5 291 1.84 1.78 1.77 1.76 1.76 279 275 FY20 FY21 FY22 FY23 1
Slide 37: Tata Steel Netherlands
Tata Steel Netherlands (All figures are in Rs. Crores Key drivers for QoQ change: 2QFY24 1QFY24 2QFY23 unless stated otherwise) ▪ Revenues: were lower on reduction in volumes as well Liquid Steel production (mn tons) 1.19 0.94 1.65 as realisations Deliveries (mn tons) 1.23 1.37 1.27 ▪ Raw Material c
Slide 38: Tata Steel UK
Tata Steel UK (All figures are in Rs. Crores Key drivers for QoQ change: 2QFY24 1QFY24 2QFY23 unless stated otherwise) ▪ Revenues: declined upon reduction in steel realisations Liquid Steel production (mn tons) 0.76 0.85 0.75 ▪ Raw Material cost: was lower QoQ due to drop in Deliveries (mn tons) 0.7
Slide 39: Tata Steel Investor Relations
Tata Steel Investor Relations Investor enquiries ir@tatasteel.com Samvaad – Bringing together tribes of India