Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q1 FY2017 Earnings Presentation
27 slides from Hindalco Industries's earnings presentation, Aug 11, 2016
Slide 1: Investor Presentation – Q1 FY 2017
Investor Presentation – Q1 FY 2017 Hindalco Industries Ltd … A Global Aluminium and Copper Producer… 1
Slide 2: Forward Looking & Cautionary Statement
Forward Looking & Cautionary Statement Certain statements in this report may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the
Slide 3: Contents
Contents.. Economy & Industry… Business Highlights … Operational & Financial Review • Aluminium • Copper 3
Slide 4: Economy Update
Economy Update.. Global Economy stable for now US outlook encouraging, Fed interest rate hike fears appear to have subsided Brexit – after initial shock financial markets have recouped all losses Liquidity driving financial markets up China -Growth Rebalancing continues India – Growth pi
Slide 5: Aluminium Industry Update
Aluminium Industry Update.. Demand – Robust demand LME is holding up well so far Global demand continued to be robust, expected to grow at ~5% Chinese demand was strong on restocking and economic stimulation LME ($/t) 2,054 Indian demand rising, expected to grow smartly on the back of pick
Slide 6: Aluminium Industry Drivers
Aluminium Industry Drivers YOY Driver Q1 Q4 Change Q1 Change Realisations were significantly lower due to drop in LME and sharp FY17 FY16 % (Seq) FY 16 % (YOY) decline in local market premium LME 1571 1515 4% 1769 (11%) Industry cost curve fell sharply… Lower carbon and alumina prices Premium
Slide 7: Copper - Industry Update & Drivers
Copper - Industry Update & Drivers Q1 FY 17 Mine supply continues to remain robust despite depressed LME Impact (YoY) Vs. Q1 FY 16 Demand from China continues to remain lacklustre TCRC Stable For Indian smelters though industry drivers broadly LME ($/t) Lower supportive… Exch. Rate (Re/$) Favo
Slide 8: Highlights
Highlights…. Q1 FY 17 – A Strong operating performance 8
Slide 9: Q1 FY 17: Highlights
Q1 FY 17: Highlights… Aluminium EBITDA up 64% YoY on strong volumes and continued COP improvement Coal security and improved power cost visibility – Locked in 25% of annual coal requirement Aluminium in recent auction at an attractive price All greenfield projects – Running at design capacity
Slide 10: Q1 FY 17: Standalone Highlights
Q1 FY 17: Standalone Highlights… YoY (%) 11% Lower Al & Cu realisations, lower copper Net Sales Rs 7,597 Cr volume negated impact of higher Al volumes Strong gains in Aluminium operations offset PBITDA Rs 1,351 Cr 34% impact of lower contribution from Cu Aluminium EBIDTA up 65% Sharply up due to rob
Slide 11: Performance Review – Aluminium India
Performance Review – Aluminium India 11
Slide 12: Aluminium - Production Trends
Aluminium - Production Trends…. Alumina* (kt) Metal (kt) (Kt) Q1FY16 Q1FY17 708 644 308 Wire Rods 22 40 264 FRP 60 67 Q1FY 16 Q1FY 17 Q1 Fy 16 Q1 FY 17 Extrusions 10 11 *Includes Utkal Strong Production growth. Mahan and Aditya ramped up and are stabilising VAP production rising with improved demand
Slide 13: Utkal Alumina Update
Utkal Alumina Update Utkal Production (KT) Q1 FY 17 372 Cash cost of Alumina amongst the lowest cost refineries of the world Long distance bauxite conveyor fully operational Q1 FY 16 330 13
Slide 14: Aluminium - Our Cost Focus
Aluminium - Our Cost Focus… Better Softer coal prices Scale economies Optimizing older efficiencies of & better coal post ramp-up smelters new-age smelters availability ….. Across the board improvement in efficiencies … supported by lower input costs 14
Slide 15: Performance Review – Copper
Performance Review – Copper 15
Slide 16: Copper - Production Trends
Copper - Production Trends…. Q1 FY 17 Vs Q1 FY 16 KT KT 94 102 78 65 Q1FY 16 Q1FY 17 Q1FY 16 Q1FY 17 Cathode DAP Cathode production declined due to planned maintenance shutdown DAP production increased following increase in capacity The plant has stabilized quickly post-shutdown and initial op
Slide 17: Performance Review – Novelis
Performance Review – Novelis 17
Slide 18: Highlights - Novelis
Highlights - Novelis Adjusted EBITDA Ex MPL $ Mn YOY – 26% growth in adjusted EBIDTA * to $ 268 Mn Q1 FY 17 268 Overall shipments down 2% to 755 KT Q1 FY 16 212 YOY – 15% increase in automobile sheet shipment volumes Automobile sheet demand continues to be strong All our auto sheet finishi
Slide 19: Financial Performance Review
Financial Performance Review 19
Slide 20: Q1 FY 17 Financial Highlights
Q1 FY 17 Financial Highlights Change % Rs Cr Q1 FY17 Q1 FY16 YoY Aluminium up 7.5%, Copper sales Net Sales 7,597 8,575 (11%) impacted due to plant shutdown and lower LME PBITDA 1,351 1,005 34% Strong Aluminium results despite Depreciation 338 331 lower realisations Finance Costs 600 604 Profit befor
Slide 21: Al - Financial Performance
Al - Financial Performance Revenue (Rs Cr) EBITDA (Rs Cr) 4,263 901 3,966 Revenues increased primarily on the back of sharp jump in volumes – up 7.5% 550 Rupee LME lower by 6% EBITDA jumped sharply (64%) on the back of higher volumes and lower costs despite softer realisations Q1 FY 16 Q1 FY 1
Slide 22: Copper – Financial Performance
Copper – Financial Performance Net Sales (Rs Cr) EBITDA (Rs Cr) 4,614 398 284 3,336 Revenue registered a fall due to lower volumes and 22% decline in Cu LME EBIDTA got impacted due to lower volumes owing to lower production on account of planned maintenance shutdown Q1 FY 16 Q1 FY 17 Q1 FY 16 Q1
Slide 23: Novelis – Financial Highlights
Novelis – Financial Highlights YOY… Net Sales ($ Bn) Adjusted EBITDA* ($ Mn) Sales declined 13% to $ 2.3 Bn, primarily driven by 46% lower local 268 market premium, lower LME and marginally lower shipments 2.6 2.3 212 Adjusted EBITDA * up 26% YOY to $ 268 Mn Net Income was $ 24 Mn as compared
Slide 24: Aditya Birla Minerals Ltd
Aditya Birla Minerals Ltd… ABML divestment completed in July 2016.. 1 Metals X share for every 4.5 ABML shares and A$ 0.08 cash for every ABML share – represents 32% premium based on stock prices traded on the offer date 24
Slide 25: In Summary
In Summary - All greenfield projects running at design capacities Strong Operational Performance by Aluminium business in Q1 FY 17 On the back of strong volume and efficiency gains Significantly supported by lower input cost, especially coal and crude derivatives Improved coal security and
Slide 26: Our Focus
Our Focus - Enhancing operating efficiency Supply Chain logistics optimisation Leverage potential demand in Value added products across businesses Proactive working capital management Cost savings and cash conservation across operations 26
Slide 27: Thank you
Thank you REGISTERED OFFICE Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 030 Telephone- +91 22 6662 6666 Website www.hindalco.com E mail hindalco@adityabirla.com Corporate Identity No. L27020MH1958PLC011238
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