Vedanta Resources — FY2023 Earnings Presentation
35 slides from Vedanta Resources's earnings presentation, Jun 9, 2023
Slide 1: FY2023 Earnings Presentation
VEDANTA RESOURCES LIMITED INVESTOR PRESENTATION June 9, 2023 FY2023 Earnings Presentation Sensitivity: Internal (C3)
Slide 2: Cautionary statement and disclaimer
Cautionary statement and disclaimer The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forwa
Slide 3: FY2023 Business Update
VEDANTA RESOURCES LIMITED INVESTOR PRESENTATION FY2023 Business Update Sensitivity: Internal (C3)
Slide 4: Disciplined Investment Case
Investment Case Robust financial profile 1 World-class natural resources powerhouse 7 with strong ROCE, cash flow and balance sheet Well positioned to capitalize 2 on India’s growth with attractive commodity mix 6 Focused on digitalization and innovation 3 Committed to ESG leadership 5 Disciplined c
Slide 5: FY23 ESG highlights
FY23 ESG highlights RE Power Waste Utilization Water Positivity 1,636 MW 94% 4 PDA in place HVLT usage Units water +ve 2Bn+ 112% 26% Units utilized Fly Ash usage Water Recycling Nand Ghars Biomass ESG Ratings 77,000+ 6th 4,500+ tons of Biomass firing Global ranking on Dow Jones Sustainability Index
Slide 6: Pillar 1 – transforming communities
Pillar 1 – transforming communities : Steadily progressing on our repurposed ESG strategy 44 mn US$ 56 million 4,500+ CSR CSR spend Total Beneficiaries1 NandGhars Areas of focus in CSR 1 > 33 Initiatives Healthcare 2 Drinking water and sanitation: > 17 Initiatives 3 4 Children’s well-being Community
Slide 7: Pillar 2 – transforming the planet
Pillar 2 – transforming the planet: Steadily progressing on our repurposed ESG strategy Baseline 2030 FY23 Our aims Key KPIs (UoM) Progress against few key KPIs (FY21) Target Status Absolute GHG emissions 60mn 45mn 65.6mn (TCO2e) GHG intensity 5.2 6.45 6.36 Net carbon (TCO2e/T of metal) (2025) neutr
Slide 8: Pillar 3 – transforming the workplace
Pillar 3 – transforming the workplace: Steadily progressing on our repurposed ESG strategy Key KPIs Baseline 2030 Our aims FY23 Status Progress against few key KPIs (UoM) (FY21) Target Ongoing target- Fatal incidences 8 Zero 13 (Number) Prioritizing safety and Fatalities health of employees Fataliti
Slide 9: FY23 operational and financial highlights
FY23 operational and financial highlights Operational Highlights Financial Highlights Record production across key businesses Revenue EBITDA → Aluminium : 2.3 mnt US$ 18,141 mn US$ 4,608 mn → HZL: crossed 1 mnt mark All time high 2nd highest o MIC: 1.062 mnt o Refined metal: 1.032 mnt EBITDA Margin1
Slide 10: Aluminium: Highest ever aluminium production
Aluminium: Highest ever aluminium production Aluminium: Achieved record metal production in FY23 Key Highlights ▪ Record annual aluminium production at 2,291 kt COP ($/T) Production (kt) 2,268 2,291 2,541 2,324 ▪ Aluminium domestic sales at 775kt, up 28% YoY 2,118 2,104 1,858 ▪ Commissioned 120 KTPA
Slide 11: Aluminium: Strategic Initiatives
Aluminium: Strategic Initiatives ▪ Aluminium capacity expansion to 3 MTPA Progress on Lanjigarh Refinery Expansion o Balco capacity expansion to 1 MTPA – 1QFY25 o Debottlenecking for balance 0.2 MTPA – 4QFY25 ▪ VAP 60% → 90% o JSG VAP expansion from 1 to 1.6 MTPA – 3QFY24 (120 KTPA Billet Commission
Slide 12: Zinc India: Setting new benchmarks
Zinc India: Setting new benchmarks: Refined metal production crossed 1 MnT milestone Key highlights Strategic Initiatives ▪ Highest-ever annual mined metal production, up 4% YoY ▪ Rajpura Dariba Mill revamp ▪ Record-high annual refined metal production, up 7% YoY ▪ 1.6 LTPA Fumer commissioning ▪ All
Slide 13: Zinc International: Well positioned for long term value creation
Zinc International: Well positioned for long term value creation Gamsberg Production (KT) Key highlights Gamsberg: ▪ Highest ever annual MIC production at 208 kt, up 22%YoY 208 170 ▪ Gamsberg annual CoP (ex TcRc) lower by 12% YoY 100 Key cost initiatives 80 108 100 60 86 40 ▪ Throughput and recovery
Slide 14: Oil & Gas: Partnering in India's journey to energy self-reliance
Oil & Gas: Partnering in India’s journey to energy self-reliance Key Highlights Gross production (kboepd) ▪ Signed off Rajasthan 10-year PSC extension ▪ Secured 8 blocks in DSF-III round & 1 block in special CBM 157 161 144 141 143 round 2021 ▪ Drilled 62 wells across Bhagyam, ABH, Satellite Fields,
Slide 15: Iron ore and VAB
Iron ore and VAB Iron ore sales - Karnataka Key Highlights ▪ Export ban lifted in Karnataka 5.7 5.0 ▪ Barbil mines fully ramped up 3.2 2.8 ▪ Commenced export shipments from Western Cluster, Liberia 2.2 ▪ Acquired Bicholim iron ore mines in Goa 2H 1H 2H FY22 FY23 FY22 FY23 FY23 ▪ Completed relining o
Slide 16: ESL Steel and FACOR
ESL Steel and FACOR ESL FACOR Key Highlights Key Highlights ▪ Record annual hot metal production of 1,367 kt ▪ Record annual ore production of 290 kt, up 16% YoY ▪ Enhanced hot metal capacity to 1.7 mnt ▪ Commissioned new 60 KTPA furnace; total capacity increased from 80KTPA → 140 KTPA Strategic Ini
Slide 17: Strategy to enhance long term value
Strategy to enhance long term value Optimize capital Operational Delivering on STRATEGIC Committed to ESG Augment reserves excellence and allocation & growth PRIORITIES leadership & resources base maintain strong cost leadership opportunities Balance Sheet o Achieve net o Disciplined o Focus on full
Slide 18: FY2023 Investor Presentation
VEDANTA RESOURCES LIMITED INVESTOR PRESENTATION FY2023 Sensitivity: Internal (C3)
Slide 19: FY23 financial snapshot
FY23 financial snapshot Revenue EBITDA EBITDA Margin1 $ 18,141 mn $ 4,608 mn 29% Higher 3% YoY Lower 26% YoY Maintained strong margin FCF (Pre Capex) ROCE 2 Cash and Cash equivalents c.20% $ 2,813 mn $ 2,628 mn Maintained strong double Higher 1% YoY digit return Strong liquidity position 19 1. Exclu
Slide 20: EBITDA bridge FY23 vs. FY22
EBITDA bridge FY23 vs. FY22 (YoY comparison) Zinc (139) (In $ mn) Aluminium (770) ESL 104 ESL (128) Oil and Gas(O&G) 159 O&G (49) Zinc (40) 6,255 614 Aluminium (47) 1,341 34 86 352 238 368 4,636 4,608 Zinc 207 O&G (102) IOB (45) Aluminium 19 Market & Regulatory Operational: ($ 266 mn) ($ 1,621 mn) F
Slide 21: Net Debt Walk- FY23
Net Debt Walk- FY23 (In $ mn) 70 57 12,730 11,686 2,527 2,604 1,936 942 FCF Post Capex $1,610 mn Net Debt Cash flow from WC Movements Capex Dividend Athena Translation and Net Debt 31st Mar'22 operations acquistion Others 31st Mar'23 21 WC: Working Capital Vedanta Resources Limited FY2023 Investor P
Slide 22: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net debt / EBITDA Debt breakdown (as of 31st Mar’2023) Gross Debt In $bn 3.3 3.0 2.8 2.8 Term debt 13.85 1.9 Working capital 0.52 Short term borrowing 0.99 Total consolidated debt 15.36 FY'19 FY'20 FY'21 FY'22 FY'23 Cash and Cash Equivalents 2.63 ▪ Liquidity: Cash an
Slide 23: Continued discipline investment in value adding growth
Continued discipline investment in value adding growth ($ Bn) FY growth Capex guidance 1.5 1.2 0.7 1.1 2.0 Growth Capex profile Oil & Gas Zinc 1.7 Al & Power Other 0.3 1.2 1.1 0.2 0.1 0.6 0.8 0.5 0.1 0.7 0.5 0.2 0.2 0.3 0.1 0.3 0.3 0.5 0.5 0.0 0.0 0.4 0.5 0.1 0.2 0.2 FY2019 FY2020 FY2021 FY2022 FY20
Slide 24: 2HFY23 Appendix
VEDANTA RESOURCES LIMITED INVESTOR PRESENTATION 2HFY23 Appendix Sensitivity: Internal (C3)
Slide 25: FY24 Production and Cost Guidance
FY24 Production and Cost Guidance Zinc India Aluminium ▪ Mined Metal : 1,075 - 1,100 kt ▪ Alumina: 2.5 - 2.7 Mnt ▪ Finished Metal: 1,050 – 1075 kt ▪ Aluminium: 2.2 - 2.3 Mnt ▪ Silver: 725 - 750 tonnes ▪ COP1: $1,800/t - $1,900/t ▪ COP: $1,125/t - $1,175/t excluding royalty Zinc International Oil & G
Slide 26: Income statement
Income statement ▪ Depreciation & Amortization In $ Mn FY23 FY22 o Higher by 13% YoY in FY23 due to increase in ore Revenue from operations 18,141 17,619 production at Zinc India and higher depletion charge at Oil EBITDA 4,608 6,255 &Gas business Depreciation & amortization (1,382) (1,228) ▪ Finance
Slide 27: Project capex
Project capex Approved Spent up to Spent in Unspent4 as on Capex in Progress (In $ mn) Status Capex2 FY223 FY23 31st Mar 2023 Cairn India1 – Mangala, Bhagyam & Aishwariya infill, 1,069 188 392 489 OALP, ABH infill, RDG infill, Shale, Offshore infill etc Aluminium Sector Jharsuguda VAP capacity expan
Slide 28: Entity-wise Cash and Debt
Entity-wise Cash and Debt (In $ mn) Mar 31, 2023 Mar 31, 2022 Company Cash & Cash Cash & Cash Debt Net Debt Debt Net Debt Eq Eq Vedanta Limited Standalone 5,114 896 4,218 4,855 934 3,921 Cairn India Holdings Limited1 324 196 128 212 184 28 Zinc India 1,441 1,206 235 373 2,750 -2,377 Zinc Internation
Slide 29: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Long Term Debt of $13.8 Bn Long Term Debt Maturities: $13.8 bn (as of 31st Mar’23) (as on 31st Mar’23) Standalone Subsidiaries 8.9% 4.3 4.1 3.9 In $ billion 33.1% Bonds INR Term Loan INR Term Loan Fx 1.3 33.4% 1.2 Bonds Fx 3.1
Slide 30: Segment Summary
Segment Summary Full Year Full Year Zinc India Aluminium FY23 FY22 FY23 FY22 Mined metal content 1,062 1017 Integrated metal 1,032 967 Alumina – Lanjigarh 1,793 1,968 Refined Zinc – Integrated 821 776 Refined Lead – Integrated1 211 191 Total Aluminum Production 2,291 2,268 Refined Saleable Silver -
Slide 31: Segment Summary – Continue
Segment Summary – Continue Full Year Full Year Oil and Gas (boepd) Steel FY23 FY22 FY23 FY22 Average Daily Gross Operated Production Total Production 1,285 1,260 1,42,615 1,60,851 Pig Iron 192 186 (boepd) Rajasthan 1,19,888 1,37,723 Billet Production 947 932 Ravva 11,802 14,166 Billet Consumption (i
Slide 32: Sales Summary – Zinc and Aluminium
Sales Summary – Zinc and Aluminium Full Year Full Year Sales volume Full Year Sales volume Sales volume Power Sales (mu) FY23 FY22 FY23 FY22 FY23 FY22 Iron ore sales Jharsuguda 3,048 2,060 Zinc-India Sales Goa (mn dmt) 0.7 1.1 TSPL 10,744 8,259 Refined Zinc (kt) 821 777 Karnataka (mn dmt) 5.0 5.7 BA
Slide 33: Currency and commodity sensitivities
Currency and commodity sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~$45 - 50 million / year Commodity prices – Impact of a 10% increase in Commodity Prices FY23 Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 96 74 Zinc ($/t)
Slide 34: Group structure
Group structure As of 31-Mar-23 Listed entities Vedanta Resources Ltd Unlisted entities Divisions of Vedanta Limited 79.4% 68.1% ⚫ Sesa Iron Ore ⚫ Sterlite Copper Konkola ⚫ Power (600 MW Jharsuguda) Copper Vedanta Ltd Mines (KCM) ⚫ Aluminium (Odisha aluminium and power assets) ⚫ Cairn Oil & Gas* Sub
Slide 35: Awards and Recognition – 2HFY23
Awards and Recognition – 2HFY23 Our group companies received more than 50 awards in the finance, operational excellence, sustainability, CSR and HR categories Sustainability development Finance and Operational Health, Safety & HR & CSR HZL and BALCO won multiple awards at‘36th Vedanta Limited won pr