Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q2 FY23 Earnings Presentation
33 slides from Tata Steel's earnings presentation, Oct 31, 2022
Slide 1: Tata Steel Results Presentation 2022
Tata Steel Results Presentation 2022 Financial quarter ended September 30, 2022 October 31, 2022 Jamshedpur, India
Slide 2: 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 3: Index
Index Q2 FY23 Results Performance Update 2QFY23 Bara pond, Jamshedpur (India) 3
Slide 4: Focused on creating sustainable value
Focused on creating sustainable value Global Consolidate technology position as Robust Become Sustainability Leadership & digital global cost financial culturally at our core in India benchmark leader health future ready 4
Slide 5: Net Zero by 2045
Net Zero by 2045 Pursuing sustainability through multiple pathways Initiatives Targets Higher scrap charge 2025 Reducing ash in Coke ▪ Achieve <2 tCO2 per ton of crude steel in India ▪ Gradually phase out BFs in Netherlands and replace with DRI, REF and IF Cleaner fuel like gas ▪ Finalisation o
Slide 6: Underpinned by Commitment towards Safety & Health
Underpinned by Commitment towards Safety & Health of our employees Safety remains a top priority 73% LTIFR1 In the last 15 years FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 1HFY23 Undertook behavioural based programs to improve perception about safety. TSJ recognised b
Slide 7: Improving quality of life of our communities
Improving quality of life of our communities Rural & Urban Education Household Health & Nutrition 9.8 Lakh+ Tribal Cultural Heritage Lives Impacted1 Grassroots Rural Governance ~Rs 1,300 crores spent2 since FY19 Women & Youth Empowerment 406 Dignity for the Disabled 315 Household Livelihoods 222 193
Slide 8: Growth in India to consolidate market leadership
Leadership in India Growth in India to consolidate 2x market leadership India Crude Steel production by 2030 with future investments set to drive sector leading returns Upstream Flats Longs From ~7 MTPA to From ~16 MTPA to From ~5 MTPA to ~13 MTPA ~25 MTPA ~15 MTPA Pellet capacity (TSK Ph II) Crude
Slide 9: Flats: TSK 5 MTPA expansion
5MTPA Expansion Flats: TSK 5 MTPA expansion on track, CRM complex to drive product mix enrichment while pellet plant enables cost savings 2QFY23 FY23 FY24 Pellet plant CRM : CRM : 5 MTPA PLTCM CAL / CGL Pellet plant control room Outer shell of Blast Furnace has been erected Note : TSK – Kalinganagar
Slide 10: Longs: Poised to grow 2x Pan India
Longs: Poised to grow 2x Pan India in high margin retail business Distribution network Tata Steel has a strong portfolio of 11 retail brands 2x growth in retail FY22 FY27 Leveraging retail housing growth in semi urban India Driven by capacity growth at NINL and EAFs Enhanced physical and digital rea
Slide 11: Product portfolio
Product portfolio that can cater to end to end requirements of key project segments Metro example 1 Cut and bend 2 LRPC Strands 3 Lattice Trusses 4 Structural Tubes 5 Roofing Solutions 6 Couplers 7 Bore Pile Cages 8 Diaphragm Wall 9 Welded Wire Mesh/Fabric 10 Doors 11 AAC Blocks 12 Charging Stations
Slide 12: Value accretive consolidation with multiple benefits
Value accretive consolidation with multiple benefits Unlisted Listed TS Mining S&T Mining Indian Steel & TSLP TCIL Tata Metalliks TRF Ltd. Wire Products Swap ratio 6.7 Swap ratio 3.3 Swap ratio 7.9 Swap ratio 1.7 Reduced corporate Optimal resource Faster growth, Provide greater and compliance use, l
Slide 13: Tata Steel Europe
Tata Steel Europe embarking on green journey with Zeremis in TSN & Optemis in TSUK, customers across segments Supplier for a leading global tank Supplied steel for tubes of Supplier for leading Auto OEMs storage manufacturer Hyperloop Note : Green steel offerings - Zeremis = Zero Emissions (Tata Ste
Slide 14: Digital ecosystem to empower business
Digital ecosystem to empower Digital ready Digital leader in $2bn Digitally business and drive cultural readiness culture Global steel enabled savings Belief System Digital Digital 2015 - 17 Acceleration Best-in-class 2018 - 21 2022 - 25 • Reverse Mentoring • Integrated One-IT • Hyper-personalizatio
Slide 15: Financial management to enable returns across cycle
Financial management to enable returns across cycle Medium-term (Across cycle targets) Balance sheet management Maximising ROIC Target Leverage Investment grade metrices Portfolio restructuring 2x 4x Net Debt/EBITDA Interest Cover Target RoIC1 Dividend Policy Future readiness Cost optimisation Progr
Slide 16: 2QFY23 Results
2QFY23 Results Butterfly park, Noamundi mines (India)
Slide 17: Steel industry adversely impacted by decline in spreads and high energy prices
Steel industry adversely impacted by decline in spreads and high energy prices, especially in Europe ▪ Global steel prices continued to moderate in July – Sep ▪ Iron ore and Coking coal prices have declined by around period amidst concerns about global recovery & seasonal 15 -20%. Energy costs remai
Slide 18: India demand stable; inflation affected EU demand
India demand stable though export ban affected equilibrium; Inflationary pressures affected EU demand India Europe ▪ Economic activity in India remained stable despite the ▪ Inflation – rate hike dynamics and Russia – Ukraine crisis global cues. Apparent steel consumption was broadly have raised con
Slide 19: Record domestic deliveries India
India1 Steel domestic deliveries Record domestic deliveries Mn tons aid in retaining market leadership across segments 4.37 3.86 3.68 0.67 Catering to ~87% of domestic market 0.66 0.69 1.53 Service centres For last point processing 250+ 14,600+ 1.28 1.15 Distributors Dealers 1.57 1.81 1.52 95% 100%
Slide 20: Record quarterly sales in Industrial Products & Projects
India1 Record quarterly sales in Industrial Products & Projects driven by rise in value added products to target segments Oil & Gas Pre-Engineered Buildings Solar 1400+ km 9.3 million sq ft 130+ MW of Oil and Gas pipeline infrastructure of Pre-Engineered buildings constructed Power generation infras
Slide 21: Tata Steel Consolidated
Tata Steel Consolidated (All figures are in Rs. Crores 2QFY23 1QFY23 2QFY22 Key drivers for QoQ change: unless stated otherwise) Production (mn tons)1 7.56 7.74 7.77 ▪ Revenues: decreased primarily driven by drop in Deliveries (mn tons) 7.23 6.62 7.39 realisations across geographies and lower volume
Slide 22: Consolidated EBITDA stood at Rs 5,817 crores
Consolidated EBITDA1 stood at Rs 5,817 crores Drop in realisations in India, lower volumes in Europe coinciding with consumption of high-cost inventory led to margin compression in Rs crores ▪ Selling Result: Primarily due to drop in steel 14,348 realisations in India 7,235 ▪ Cost Changes: Primarily
Slide 23: Net debt stood at Rs 71,753 crores
Net debt stood at Rs 71,753 crores Bunching up of large cash payouts ~ Rs 19,000 crores in Q2 - on account of NINL acquistion, FY22 dividend payout and growth capex drives increase in gross debt in Rs crores 511 4,340 87,516 69 - 82,597 15,763 71,753 Gross Debt Addition of Loan FX Impact Gross Debt
Slide 24: Key metrics are at investment grade levels
Key metrices are at investment grade levels 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 9.8 1,00,816 19.8% 92,147 88,501 87,516 18.9% 1,04,779 75,561 94,879 17.2% 15,387 17.3% 9,337 11,110 75,389 12.2% 10,838 3.9 3.9 4
Slide 25: Outlook
Outlook Steel demand Steel prices Raw material prices China steel output to moderate on Prices to stabilise as steel supply Coking coal to be range bound; winter cuts even as demand finds - demand dynamics improve sans demand from India and cyclone support from stimulus measures seasonal factors wea
Slide 26: Annexures
Annexures Jamshedpur, India
Slide 27: Continued focus on operational efficiencies
Tata Steel Standalone Goodness Indicator 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 3 Consumption (m /tcs) 363 3.50 356 355 353 5.84 3.10 347
Slide 28: Key operating parameters
Tata Steel Long Products Goodness Indicator Key operating parameters Coke rate (kg/thm) PCI rate (kg/thm) Crude Steel Yield (%) 542 82.9 82.8 82.6 128 81.9 81.0 116 116 111 500 99 498 486 474 FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY19 FY20 FY21 FY22 1HFY23 1HFY23 1HFY23 Power consumption (KVAH/tcs
Slide 29: Tata Steel Standalone
Tata Steel Standalone (All figures are in Rs. Crores Key drivers for QoQ change: 2QFY23 1QFY23 2QFY22 unless stated otherwise) Production (mn tons) ▪ Revenues: Broadly similar as higher volumes more 4.64 4.73 4.56 than offset the decline in steel realisations Deliveries (mn tons) 4.76 3.89 4.42 Tota
Slide 30: Tata Steel Europe
Tata Steel Europe (All figures are in Rs. Crores Key drivers for QoQ change: 2QFY23 1QFY23 2QFY22 unless stated otherwise) ▪ Revenues: decreased on absolute basis (in £) and per Liquid Steel production (mn tons) 2.40 2.44 2.56 ton basis due to lower deliveries and steel realisations Deliveries (mn t
Slide 31: Tata Steel Long Products (Consolidated with NINL)
Tata Steel Long Products (Consolidated with NINL) (All figures are in Rs. Crores Key drivers for QoQ change: 2QFY231 1QFY23 2QFY22 unless stated otherwise) ▪ Revenues: decreased on lower volumes and decline in Total revenue from operations 1,869 1,994 1,637 realisations in Steel and DRI business Raw
Slide 32: Tata Steel Thailand
Tata Steel Thailand (All figures are in Rs. Crores Key drivers for QoQ change: 2QFY23 1QFY23 2QFY22 unless stated otherwise) ▪ Volumes: broadly stable production and sales volumes Saleable Steel production (mn tons) 0.30 0.31 0.27 ▪ Revenues: Decreased on drop in steel realisations Deliveries (mn to
Slide 33: Investor relations contact
Investor relations contact Investor enquiries Hriday Nair hnair@tatasteel.com Pavan Kumar pavan.kumar@tatasteel.com