Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Investor Day (February 2021)
40 slides from Hindalco Industries's investor day presentation, Feb 22, 2021
Slide 1: Regulation 30 filing cover letter
22nd February, 2021 BSE Limited National Stock Exchange of India Phiroze Jeejeebhoy Towers Limited Dalal Street Exchange Plaza, 5th Floor Mumbai: 400 001 Plot No. C/1, G Block Scrip Code: 500440 Bandra Kurla Complex Bandra (East) Mumbai – 400 051 Scrip Code: HINDALCO Mr. Daniel Schammo Banque Intern
Slide 2: Hindalco Industries Limited Investors' Day
Hindalco Industries Investors’ Day Limited 22nd February 2021
Slide 3: Safe Harbor Statement
Safe Harbor Statement Forward-looking statements Statements made in this presentation which describe the company's' intentions, expectations, beliefs or predictions may be forward-looking statements within the meaning of securities laws. Forward-looking statements include statements preceded by, fol
Slide 4: Content
CONTENT 1. About Us 2. Our Purpose 3. Our Focused Approach 4. Strategic Imperatives 1. Market Outlook & Growth Strategy – India & Novelis 2. ESG 3. Deleveraging 4. Shareholder Returns 5. Q&A
Slide 5: About Us
About Us Leading Global Industry Player India Operations Novelis Hindalco Aluminium* Copper* Industries Aluminium Flat Rolled Products (FRP) Ltd Alumina ……….. ..2.8 MT Copper Cathode….. 321 KT Global Presence Rolling Capacity…~4.0MT Primary Metal…...1.3 MT Copper Rods………..263 KT Global leader in Foc
Slide 6: Our Purpose
Our Purpose We Manufacture Shaping Materials That Make The A Sustainable World World Together Shaping Sustainability World Together We shape Everything at Novelis When we work together and build on innovations that is made to last – into our collective move us toward the future and intelligence, we
Slide 7: Our Focused Approach
Our Focused Approach Hindalco : The Focused 3C+2S Novelis : The Focused 5 SUSTAINABILITY FOCUSED (Including Health, Safety & Environment) CUSTOMER CASH Return on Capital Safety Employed Culture COST Operational SYSTEMS Excellence Customer Centricity (including (People, Quality Processes & Governance
Slide 8: Strategic Imperatives
Strategic Imperatives SHAREHOLDER GROWTH ESG DELEVERAGING RETURNS Identify Value Create Target Enhance Enhancing Consolidated Shareholder Value Sustainable World Organic Growth Net Debt to EBITDA Creation Opportunities Together ratio of ~2.5x in less in Novelis and than 2 Years India Business 7
Slide 9: Novelis: Market Outlook and Growth Strategy
Novelis : Market Outlook and Growth Strategy GROWTH Identify Value Enhancing Organic Growth Opportunities in Novelis 8 Investors’ Day
Slide 10: Novelis: World's largest Aluminum FRP producer & Recycler
Novelis : World’s largest Aluminum FRP producer & Recycler Novelis, Inc Global FRP aluminum market Global HQ: Atlanta, U.S. ~28 million tonnes in 2019 33 operating locations ~4MT rolling capacity Forecast to grow 3% CAGR through 2025 ~1MT automotive finishing ~2.5MT recycling capacity Other Transpor
Slide 11: Market Overview: Beverage Packaging
Market Overview: Beverage Packaging 1 2 3 4 5 North America New Beverage Types Packaging (%) Consumer Driving package Increasing Significant Utilize global 100% sustainable mix shift from demand for new canmaker capacity, 90% package other substrates, beverage types expansions debottlenecking, prefe
Slide 12: Market Overview: Automotive
Market Overview: Automotive Trucks & SUVs, a growing share of vehicle production mix Growing EV and mobility markets, CY20-25 especially in North America including increasing e-commerce aluminum (~75%), have rapidly recovered deliveries automotive sheet global demand CAGR 10% Global long-term demand
Slide 13: Increasing Aluminum's Share in Automotive
Increasing Aluminum’s Share in Automotive o Aluminum sheet is a 2 million tonne market today, compared to 80 million ton steel sheet o The increase in aluminum pounds per vehicle is driven by growth in sheet. Sheet represents 23% of total aluminum pounds per vehicle in 2020, growing to 30% by 2030 o
Slide 14: Market Overview: Specialties
Market Overview: Specialties North America Specialties post-acquisition Global footprint Increased demand Serve diverse & flexible for sustainable array of end capabilities products driving markets & #1 in Commercial #1 in Building & #1 in Container enable portfolio shipments & Trucks & Trailer Shee
Slide 15: Market Overview: Aerospace
Market Overview: Aerospace Aircraft Plate & Sheet Applications Airbus & Boeing Commercial Airframe Order backlog Status through January 2021 16000 14000 12000 10000 8000 6000 4000 2000 0 2005 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Boeing 20 year delivery demand projection 2020-2039 R
Slide 16: Growth Opportunities Abound
Growth Opportunities Abound Directional Consolidated Long-Term Capacity (MT) o Zhenjiang, China expansion 0.3 4.5 o Debottlenecking and capacity expansion 0.1 0.2 o Approximately $1.5 o Investing in innovative 0.5 billion organic processes, technologies o Casting & recycling 3.4 growth capital over
Slide 17: Novelis: Announced Project Spends and Execution Time Horizon
Novelis : Announced Project Spends and Execution Time Horizon Capacity Identified Projects & FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Spends Cold Mill Expansion US$ 300 Mn Zhenjiang China Integration 200 KT Auto finishing Lines US$ 480 Mn Kentucky , US 200 KT Changzhou, China 100 KT Rolling & Casting
Slide 18: India Downstream and our Growth Strategy
GROWTH India Downstream and our Growth Strategy Identify Value Enhancing Organic Growth Opportunities in India 17 Investors’ Day
Slide 19: Dominant Global Segments On Cusp Of Growth In India
Dominant Global Segments On Cusp Of Growth In India Market Segments, FY20 Product Segments, FY20 Others 2% 4% Others 6% 8% Wire & Cable 10% Machinery & Equipment 11% 5% 4% 34% Consumer Durables 6% Castings 24% Electrical 11% 31% Packaging 16% Extrusions 33% 32% 7% Construction 8% 24% 14% FRP 31% 36%
Slide 20: By 2030 Aluminum Consumption Expected To Be More Than 7.2 Mt
By 2030 Aluminum Consumption Expected To Be More Than 7.2 Mt Building & Construction Transport/Automotive Packaging Others o Expected to be 3rd largest in the world by o BS-6 to be the driver of sales o Primarily driven by growing o Others end-use industries include 2030 o Focus of light weighting a
Slide 21: Copper VAP Market Outlook
Copper VAP Market Outlook o Refined copper Demand Likely to grow by around 7-8% in next 8-10 years from FY22E (785Kt) o Copper in India is consumed largely in the form of CC Rods for all the downstream value chain o Applications of CC Rods – Building Wires , Automotive Wires, Railway Catenary system
Slide 22: Speciality Alumina Market Outlook
Speciality Alumina Market Outlook Speciality Alumina Market Outlook Existing core applications Promising future applications Global Demand (in MTPA) Refractory Lithium ion battery 9.2 7.9 Display glass LED 2019 2024e India Demand (in KTPA) Ceramics Advanced Ceramics 549 392 Wire/ Cables & Electronic
Slide 23: Enhancing Value Added Presence Across Portfolio
Enhancing Value Added Presence Across Portfolio Aluminium VAP (in KT) Copper VAP (in KT) Specialty Alumina VAP* (in KT) Primary Metal Capacity (in KT) Cathode Capacity including Recycling (in KT) Specialty Alumina Capacities (in KT) 441 451 1,300 1,300 1,300 771 401 521 421 384 410 655 314 900 445 6
Slide 24: India Operations: Project Spends - Execution Time Horizon
India Operations : Project Spends - Execution Time Horizon Capacity Identified Projects & FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Spends Aluminium Upstream US$ 200 Mn Alumina (Utkal) 500 KT Aluminium US$ 650 Mn Finishing Assets 50 KT Extrusion 34 KT FRP TBD* Recycling TBD* Copper US$ 200 Mn Inner Gr
Slide 25: ESG
ESG ESG Create Sustainable World Together 24 Investors’ Day
Slide 26: Strong ESG Commitment
Strong ESG Commitment ENVIRONMENT SOCIAL GOVERNANCE o Continued emphasis on recycled content o Zero Harm-occupational Health And Safety o Highest Level of Values And Transparency o Net Carbon Neutrality by 2050 o Diversity and Inclusion o Strict Adherence of Code Of Conduct o Zero waste to Landfill
Slide 27: Hindalco in DJSI Year Book 2021
Hindalco in DJSI Year Book 2021 Inclusion in DJSI Sustainability Year Book 2021 Sustainability Leaders 2021 S&P Global Gold Class Hindalco Industries Limited* India S&P Global Bronze Class Alcoa Corporation United States Norsk Hydro ASA Norway Industry Statistics Number of companies assessed 13 Mark
Slide 28: Novelis: Progress Since Average of FY2007-09
Novelis : Progress Since Average of FY2007-09 Recycled Content Evolution 26% 59% Energy lower water intensity 30% lower greenhouse gas emissions Waste 25% lower energy intensity Water 40% Carbon 30% lower non-dross intensity 27 Legacy Novelis plants progress, FY20 vs baseline (average FY2007-09)
Slide 29: Novelis: Progressing Towards a Circular Economy
Novelis : Progressing Towards a Circular Economy INCREASE RECYCLING- CLOSED-LOOP RECYCLED FRIENDLY RECYCLING CONTENT SOLUTIONS o 75% of all aluminum ever produced is still in use today o Invested approximately $700 million since FY11 to Novelis recycles more Closed loop recycling grow total recyclin
Slide 30: Hindalco: Environment Stewardship
Hindalco : Environment Stewardship Water Positivity Green Cover & Biodiversity Zero liquid discharge at 11 Enhanced green cover at all Over 5% YOY growth in sites out of 15. Water Shed Water sites >33% with focus on native Green cover from FY19. Target of increasing management, more Consumption and
Slide 31: Circular Economy - Waste Management
Circular Economy - Waste Management Hindalco – 3 sites Single Use Plastic (SUP) free Bauxite Residue (Red Mud) Fly Ash Generation – 3.06 MT –YTD Dec’ FY21 Generation – 4.3 MT YTD Dec’-FY21 Dispatch by rake – 1.07 MT – YTD Dec’ FY21 FA gets Green Berth – Maximising dispatches through Rail Bauxite Res
Slide 32: No Net Loss on Biodiversity
No Net Loss on Biodiversity- Flora and Fauna cultivation 1 3 Red Mud Dump On-Site Greenbelt Development/ development and Site Reclamation Enhance Nursery Biodiversity and Ecological Rock Heaps for Reptiles Nest Boxes Habitat of native species Enhancement Restoration 2 4 5 Eco-System Development @ Nu
Slide 33: Journey towards Zero Harm and Renewable Energy
Journey towards Zero Harm and Renewable Energy o Serious Injuries and Fatality prevention program implementation LTIFR o All Cat 5 & 4 Incident / Near Miss investigation using “TapRoot” 0.48 0.44 Methodology and Software 0.36 0.38 Safety Program Update o Corporate – Cross Entity Safety audit to brin
Slide 34: Product Stewardship for Lowering Carbon Footprint through Lightweighting
Product Stewardship for Lowering Carbon Footprint through Lightweighting Sustainable transportation and Sustainable packaging logistics India’s first lightweight aluminium trailer and A combination of aluminium and jute bags, for Aluminium Aluminium Aluminium bulker which helps transporters to save
Slide 35: Strengthening the Balance Sheet
DELEVERAGING Strengthening the Balance Sheet Target Consolidated Net Debt to EBITDA ratio of ~2.5x in less than 2 Years 34 Investors’ Day
Slide 36: Deleveraging Target
Deleveraging Target Consolidated Gross Debt (US$ Billion) $2.6 Billion debt reduction plan by Novelis : As on As on As on As on • US$1.1 billion repayment of the Bridge Loan by end of fiscal 2021 31st Mar ‘20 30th Jun ‘20 31st Dec ‘20 31st Mar ‘21 (E) • US$500 million already repaid in Q3 FY21 and t
Slide 37: Value Creation through Capital Allocation
SHAREHOLDER RETURNS Value Creation through Capital Allocation Enhance Shareholder Value Creation 36
Slide 38: Capital Allocation Framework
Capital Allocation Framework Sustainable performance and cash flow generation at India and Novelis operations On a Consolidated level, the company is expected to generate over US$ 1-1.2 billion cash flow per annum post its normal working capital and maintenance capex Following are priorities f
Slide 39: Capital Allocation Framework Contd
Capital Allocation Framework …..Contd There will be enhanced focus on higher shareholder returns. This will be achieved through: Higher capital appreciation arising from Increased earnings Lower leverage Increased dividends Broad allocation of Cash Flow post normal working capital and ma
Slide 40: Thank You
Thank You For Further Queries Please Contact : Corporate office Subir Sen, Hindalco Industries Limited Investor Relations Birla Centurion, 7th floor Telephone- +91 22 6662 6666 Pandurang Budhkar Road E mail: hilinvestors@adityabirla.com Worli, Mumbai - 400 030 Website: www.hindalco.com Tel: +91 22 6