Jsw Steel Limited · NSE:JSWSTEEL
Jsw Steel — Debt Investor Presentation (April 2019)
28 slides from Jsw Steel's debt investor presentation, April 2019
Slide 1: Investor presentation: Senior Notes Offering
Investor presentation US$[•] million Senior Notes Offering April 2019 Confidential
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS BEING PRESENTED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. This presentation and accompanying slides (the “Presentation”) is
Slide 3: Offering summary
Offering summary Summary indicative term sheet Issuer • JSW Steel Limited Structure • Senior Unsecured Notes Corporate ratings(a) • Moody’s: Ba2 (Positive)/Fitch: BB (Stable) Expected issue ratings(a) • Ba2 by Moody’s / BB[EXP] by Fitch Distribution • Reg S only Issue size • US$[ ]m Tenor • 5 years
Slide 4: JSW Group and company overview
JSW Group and company overview Key credit Business Appendix highlights environment
Slide 5: JSW Group – overview
JSW Group – overview JSW Steel* JSW Energy – Among India’s leading integrated – Engaged across the value chain of steel producers (Installed crude steel power business production capacity: ~18 MTPA) – Operational capacity: 4,543 MW – Market capitalisation of US$10.1bn(a) – Market capitalisation of U
Slide 6: JSW Steel – among India's leading steel manufacturers
JSW Steel – among India’s leading steel manufacturers – Integrated steel manufacturing – Installed crude steel capacity of ~18 facilities – from raw material MTPA, at strategic locations in processing plants to value-added South and West India product capacities One of the leading Integrated steel p
Slide 7: Transformational journey to market leadership
Transformational journey to market leadership Capacity (MTPA) Total revenue (US$m)(a) (b) EBITDA (US$m) 10,514 18.0 18.0 2,120 2,079 8,961 7.8 2,793 596 1.6 249 40 FY02 FY10 FY18 9M FY19 FY02 FY10 FY18 9M FY19 FY02 FY10 FY18 9M FY19 Market cap (US$m)(c) FY02 FY10 FY18 10,109 • Adopting industry lead
Slide 8: Key credit highlights
Key credit highlights JSW Group and JSW Group company Business Appendix andoverview company environment overview
Slide 9: Key credit highlights
Key credit highlights 1 One of the leading domestic steel player and well placed to benefit through the cycle 2 Strong business profile diversified by region, markets and products 3 Strong focus on operational efficiency with best-in-class conversion costs 4 Robust financial profile and stable cash
Slide 10: One of the leading domestic steel players, well placed through the cycle
One of the leading domestic steel player and well placed to benefit 1 through the cycle JSW Steel is a leading player in India Buoyant steel market conditions FY18 9M FY19 • Government focus on infrastructure development(d) • Announced outlays of INR ~1 trillion in the Interim Budget via direct 15.6
Slide 11: Strong business profile diversified by region, markets and products
2 Strong business profile diversified by region, markets and products Geographically diversified with manufacturing facilities in South and Flexibility to judiciously shift between domestic and international markets West India along with strategic overseas presence based on market conditions India F
Slide 12: Strong business profile diversified by region, markets and products (continued)
Strong business profile diversified by region, markets and products 2 (continued) Market leader and best placed to benefit from upcycle HR GC/GL/ Color Slabs HRC CRC Plates GI Coated Wide offering of flat and long products Billets RCS/Blooms Bars/Rods Wire Rods Diversified portfolio to address gro
Slide 13: Strong focus on operational efficiency with best-in-class conversion costs
Strong focus on operational efficiency with best-in-class conversion 3 costs Parameter(a) Ongoing cost benefit initiatives Project Description Expanding Vijayanagar Works 10 / 10 9 8 9 7 6 6 Capacity Blast Furnace • Revamp and upgrade of Blast Furnace-3 at Vijayanagar from 3 MTPA to 4.5 upgradation
Slide 14: Robust financial profile and stable cash flows
4 Robust financial profile and stable cash flows Strong track record of volume growth Positive momentum in operating revenues 31.7% 20.9% 20.0% 10,490 15.6 8,939 14.7 8,674 12.3 7,452 11.3 6,588 (a) (a) FY16 FY17 FY18 9M FY19 FY16 FY17 FY18 9M FY18 9M FY19 Consolidated saleable steel (MTPA) Operatin
Slide 15: Prudent leverage management
5 Prudent leverage management Publicly stated financial policies Focused leverage Diversify Improve debt management funding sources maturity profile Strong y-o-y profitability improvement -> reduction in net leverage Diverse sources of funding(d) (e) 6,047 6,209 5,644 6,812 Bonds and debenture
Slide 16: Proven track record of growth through organic and inorganic expansions
Proven track record of growth through organic and inorganic 6 expansions Combination of organic and inorganic growth Key new projects 2007 2009 2011 2013 2015 2017 India • 3.8 MTPA • 49.3% stake in • 14.3 MTPA post • CRM2 – Phase 2 • 74% stake in Praxair’s(c) • Dolvi: Increasing steel making capacit
Slide 17: Case study: Turnaround strategy at JSW Ispat's Dolvi plant
Proven track record of growth through organic and inorganic 6 expansions (continued) Case study: Turnaround strategy at JSW Ispat’s Dolvi plant JSW Steel has a proven track record of identifying, acquiring and integrating assets creating synergies and optimizing costs December 2010 Completed initiat
Slide 18: Detailed capex plan
Proven track record of growth through organic and inorganic 6 expansions (continued) Detailed capex plan… …based on a well thought-out guidelines / strategic rationale Pellet plant, Coke ovens, 6,358 6,358 captive power Focus on return metrics instead of pure capacity addition plant, pipe conveyer
Slide 19: Experienced management with strong parentage
7 Experienced management with strong parentage Chairperson — Emeritus Promoter Director Savitri Devi Jindal Sajjan Jindal Chairman and JSW-JFE partnership Managing Director Partnership overview • 14.99% minority stake bought by JFE in 2010 • Access to cutting edge technologies Executive Directors •
Slide 20: Conclusion
Conclusion One of the largest steel manufacturers in India(a) Market leadership One of the largest steel exporters in India(a) 55% share of VASP and special products(b) Geographically diversified with manufacturing facilities in South and West India Focus on flat steel products (approximately 70% of
Slide 21: Business environment
Business environment JSW Group Key credit Appendix and company highlights overview
Slide 22: Strong momentum in steel prices with positive spread
Strong momentum in steel prices, with increase faster than raw material cost rise leading to positive spread Steel prices trends (US$/tonne)(a) Raw material price trends (US$/tonne) Coking coal price change since Nov’ 2015 : 117.7% Change since Nov’ 2015: 103.1%(b) Iron ore price change since Nov’ 2
Slide 23: Reducing Chinese steel exports and strong domestic consumption growth
Reducing Chinese steel exports supplemented with strong fundamental for domestic consumption growth Significant room for improvement in per-capita China steel exports (MTPA) Positive India steel consumption environment consumption in India 111.6 1,106 108.1 90.7 92.9 84.0 81.5 7.9% 77.0 steel produc
Slide 24: Appendix
Appendix JSW Group Key credit Business Appendix and company highlights environment overview
Slide 25: Consolidated financials
Consolidated financials (a) (a) Particulars (US$m) FY16 FY17 FY18 9M-FY18 9M-FY19 Operating revenue 6,588 8,674 10,490 7,452 8,939 (b) Operating EBITDA 917 1,744 2,120 1,381 2,079 % margin 13.9% 20.1% 20.2% 18.5% 23.3% Profit before tax (354) 735 1,090 596 1,266 Profit after tax (69) 497 876 482 864
Slide 26: Standalone financials
Standalone financials (a) (a) (b) Particulars (US$m) FY16 FY17 FY18 9M-FY18 9M-FY19 Crude steel production 12.6 15.8 16.3 12.0 12.5 Saleable Steel sales (MT) 12.1 14.8 15.6 11.4 11.5 Operating revenue 5,854 8,155 9,704 6,836 8,171 Operating EBITDA 913 1,654 1,969 1,266 2,015 % margin 15.6% 20.3% 20.
Slide 27: Performance on sustainability metrics
Performance on sustainability metrics Deming Award for Vijayanagar Works 2018 1 JSW Steel included in the NIFTY 50 Index Material Waste gas recycled 3.29 MT 96% utilization rate for FY18 2017 1 Golden Peacock Innovative Product Award 3.29 Scrap recycled Recycled and 17,741 million tons for FY18 reus
Slide 28: Thank you
Thank you