Vedanta Limited · NSE:VEDL
Vedanta — Q3 FY2022 Earnings Presentation
44 slides from Vedanta's earnings presentation, Jan 28, 2022
Slide 1: Q3 FY2022 Earnings Presentation
VEDANTA LIMITED INVESTOR PRESENTATION 28th Jan 2022 Q3 FY2022 Earnings Presentation Sensitivity: Internal (C3)
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements
Slide 3: Contents
Contents Section Presenter Page Q3 FY22 Review & Business Update Sunil Duggal, CEO 4 Financial Update Ajay Goel, Acting CFO 20 Appendix 26 VEDANTA LIMITED – Q3 FY2022 INVESTOR PRESENTATION 3 Sensitivity: Internal (C3)
Slide 4: Q3 FY2022 Review and Business Update
VEDANTA LIMITED INVESTOR PRESENTATION Q3 FY2022 Q3 FY2022 Review and Business Update Sunil Duggal Group CEO & Chief Safety Officer Sensitivity: Internal (C3)
Slide 5: Strong Growth Momentum Continues
Strong Growth Momentum Continues ▪ Aluminium became the LARGEST INDUSTRIAL CONSUMER OF RE1 in India ▪ Jharsuguda collaborates with GEAR India for INDIA’S LARGEST E-Forklift Fleet Environment, ▪ Improved MSCI rating to B (earlier CCC) and CDP rating to B (earlier B-) Sustainability ▪ Board has approv
Slide 6: Key Operational Highlights
Key Operational Highlights Q3 FY2022 9M FY2022 ✓ Aluminium, record aluminium* production of 578kt ✓ Aluminium, highest aluminium* production of ✓ Zinc India, record refined metal production of 261kt ~1.70 Mnt and alumina production of ~1.47 Mnt ✓ Zinc International, Gamsberg production at 41kt ✓ Zin
Slide 7: ESG Purpose: Transforming for good
ESG Purpose: Transforming for good ESG purpose Transforming for good 1 2 3 Pillars Transforming Communities Transforming the Planet Transforming the Workplace ▪ Aim 1. Keep community ▪ Aim 4. Net-carbon ▪ Aim 7. Prioritizing welfare at the core of neutrality by 2050 or safety and health of Commitmen
Slide 8: Transforming for Good: Actions in support of the greater good
Transforming for Good: Actions in support of the greater good Net Zero by 2050 or sooner 1. RENEWABLE ENERGY | 2.5 GW RTC by 2030; reducing 25% absolute GHG emissions ▪ 500 MW Round-the-Clock RE power purchase under final approvals ▪ Vedanta becomes largest industrial consumer of Renewable Energy in
Slide 9: Transforming for Good: Actions in support of the greater good
Transforming for Good: Actions in support of the greater good Other critical ESG actions ESG Rating Improvements 1. WATER | Net water positive by 2030 a. Onboarded Agency for water positivity roadmap, water accounting across BUs ESG rating(1) 44.1 b. High impact initiatives - Ash pond water reuse at
Slide 10: Transforming for Good: Prioritizing safety and health of all employees
Transforming for Good: Prioritizing safety and health of all employees ▪ 2 fatalities in Q3 Fatality - Trend ▪ HZL – Zawar ▪ VZI – BMM Swartberg Mine 9 8 7 7 ▪ CEOs are driving critical risks across Vedanta and DuPont Sustainability Solutions onboarded for implementation of Critical Risk Management.
Slide 11: Aluminium: Success Continues; Growing Value in Dynamic World
Aluminium: Success Continues; Growing Value in Dynamic World Highest Ever Aluminium Production Alumina Production and COP 2,055 282 290 230 277 1,747 249 1,647 1,387 1,315 1,104 976 876 565 469 497 570 578 1,438 1,697 407 511 472 1,345 1,465 Q3 FY21 Q2 FY22 Q3 FY22 9M FY21 9M FY22 Q3 FY21 Q2 FY22 Q3
Slide 12: Aluminium: Focus on forward & backward integration
Aluminium: Focus on forward & backward integration to bring structural changes & reduce market induced volatility $~650-750/t COP $/t 2,055 1,675-1,775 c. 1,300 – 1,400 Q3FY22 FY22e Target 2-3 years Captive Alumina 43% 43%→45% 100% Captive Coal 0% 0% 100% VAP 36% 35%→40% 80-90% ✓ Alumina: Optimised
Slide 13: Zinc India: Future-ready Mines to Drive Growth
Zinc India: Future-ready Mines to Drive Growth Key Highlights Q3: Mined metal Production (kt) 684 722 ▪ Mine metal production up 3% y-o-y and 2% q-o-q 244 248 252 ▪ Record refined metal production; up 11% y-o-y and 25% q-o-q Q3 FY21 Q2 FY22 Q3 FY22 9M FY21 9M FY22 Metal Production and COP ▪ Silver P
Slide 14: Zinc International: Gamsberg Positioning for Long Term Value Creation
Zinc International: Gamsberg Positioning for Long Term Value Creation Key Highlights Gamsberg: Gamsberg Key Levers of Q4 Performance ▪ Q3 production down 5% y-o-y due to lower Zinc 575 519 recovery and up 6% q-o-q on account of higher tons Zinc Reagent treatment Lead skid rougher pump box upgrade ex
Slide 15: Oil & Gas: Stable Operations, Focus on Delivery of Growth Projects
Oil & Gas: Stable Operations, Focus on Delivery of Growth Projects Operations Development Projects ▪ Production: Y-O-Y 9M average production rate up ▪ Mangala Infill : 10 new wells online from 161 Kboepd to 163 kboepd ▪ Tight Oil (ABH): 5 well program commenced ▪ Tight Gas (RDG): 27 well program com
Slide 16: Iron ore: Continued Performance Growth Trajectory
Iron ore: Continued Performance Growth Trajectory Sustaining growth at Karnataka Key Highlights Q3: ▪ Karnataka sales up 24% y-o-y and 22% q-o-q 4.0 ▪ VAB production up 39% y-o-y and down 3% q-o-q Sales (Mnt) 3.0 1.5 ▪ VAB margin down 49% y-o-y and 48% q-o-q due to 1.2 1.2 lower pig iron prices and
Slide 17: ESL Steel: Towards Long Term Organic Growth
ESL Steel: Towards Long Term Organic Growth Consistent Performance Key Highlights Q3: 111 ▪ Record Hot Metal production post acquisition, up 72 71 2% y-o-y and 20% q-o-q 83 32 ▪ Sinter plant and Blast Furnace have stabilized in 340 293 350 868 933 Q3 resulting improved Hot Metal production Q3 FY21 Q
Slide 18: FACOR: Delivering Stronger Growth
FACOR: Delivering Stronger Growth Strong Performance Continues Key Highlights Q3: 655 ▪ Achieved highest quarterly Fe Chrome production; 590 555 plant productivity enhancement by ~5% 58 50 ▪ EBITDA margin 5x y-o-y and down 10% q-o-q 112 18 19 20 77 majorly impacted by high coke prices Q3 FY21 Q2 FY2
Slide 19: Strategy to Enhance Long Term Value
Strategy to Enhance Long Term Value Continue Focus on World Class ESG Performance Augment Our Reserves & Resources Base Operational Excellence and Cost Leadership Optimise Capital Allocation & Maintain Strong Balance Sheet Delivering on Growth Opportunities VEDANTA LIMITED – Q3 FY2022 INVESTOR PRESE
Slide 20: Finance Update
VEDANTA LIMITED INVESTOR PRESENTATION Q3 FY2022 Finance Update Ajay Goel Acting Chief Financial Officer Sensitivity: Internal (C3)
Slide 21: Financial snapshot Q3 FY 2022
Financial snapshot Q3 FY 2022 Revenue EBITDA EBITDA Margin 1 Attributable PAT (before exceptional items) ₹ 33,697 cr ₹ 10,938 cr 37% ₹ 4,189 cr Up 50% y-o-y Up 42% y-o-y Industry leading margin Up 27% y-o-y ROCE 2 Cash and Cash ND ND/EBITDA equivalents c.25% ₹ 25,207 cr ₹ 27,576 cr 0.7x Up ~1,250 bp
Slide 22: EBITDA Bridge (Q3 FY2022 vs. Q3 FY2021)
EBITDA Bridge (Q3 FY2022 vs. Q3 FY2021) (In ₹ crore) Al 3,753 HZL, ZI 1,277 Cairn 785 IOB, ESL 599 Facor 98 Cairn 163 HZL, ZI 70 Al 62 6,542 IOB, ESL 43 2,937 11,476 487 1,417 272 97 - 391 10,938 7,695 Al (843) HZL,ZI (246) IOB, ESL (168) Cairn (123) Al 369 Market & Regulatory HZL,ZI 170 ₹ 3,781 cro
Slide 23: EBITDA Bridge (Q3 FY2022 vs. Q2 FY2022)
EBITDA Bridge (Q3 FY2022 vs. Q2 FY2022) (In ₹ crore) HZL, ZI 579 Aluminum 474 Cairn 92 Cairn 62 IOB, ESL (26) Al 19 1,142 1,655 975 344 10,938 10,582 247 71 10,245 62 HZL 721 TSPL 185 Market & Regulatory IOB 76 ₹ (337) crore 10,876 Al (276) Cairn (58) HZL, ZI (48) ESL 36 Q2 FY22 LME/ Brent / Input C
Slide 24: Net Debt for Q3 FY2022
Net Debt for Q3 FY2022 (In ₹ crore) 1,429 27,576 Inventory, Debtors & Others (1,984) 7,678 Creditors/ Customers Advance (1,050) 20,389 8,423 3,469 3,034 FCF Post Capex ₹ 1,920 Cr CF from WC Capex Dividend Translation Net Debt Net Debt Operations Movements & Others* 31st Dec’21 30th Sep’21 (Incl Buye
Slide 25: Balance Sheet and Debt Breakdown
Balance Sheet and Debt Breakdown Net Debt / EBITDA – Maintained at low level Debt Breakdown (as of 31st Dec 2021) 1.1 1.0 0.9 0.9 Debt breakdown as of 0.7 (in $bn) (₹ in 000’ Cr) 31st Dec 2021 Term debt 6.3 46.8 FY'18 FY'19 FY'20 FY'21 Q3 FY'22 Working capital 0.4 2.9 Short term borrowing 0.4 3.1 ▪
Slide 26: Appendix
VEDANTA LIMITED INVESTOR PRESENTATION Q3 FY2022 Appendix Sensitivity: Internal (C3)
Slide 27: Income Statement
Income Statement Depreciation & Amortization Q3 Q3 Q2 In ₹ Crore ▪ Q-o-Q higher mainly due to higher capitalization at FY’22 FY’21 FY’22 Aluminium and Zinc India business, partially offset by Revenue from operations 33,697 22,498 30,048 lower ore production at Zinc International Other operating inco
Slide 28: Entity Wise Cash and Debt
Entity Wise Cash and Debt (In ₹ crore) Dec 31, 2021 Sep 30, 2021 Dec 31, 2020 Company Cash & Cash & Cash & Debt Net Debt4 Debt Net Debt4 Debt Net Debt4 Cash Eq4 Cash Eq4 Cash Eq4 Vedanta Limited Standalone 35,065 3,393 31,671 30,462 1,697 28,765 33,824 2,993 30,831 Cairn India Holdings 2,682 2,773 (
Slide 29: Funding Sources and Term Debt Maturities
Funding Sources and Term Debt Maturities Diversified Funding Sources for Term Debt of $6.3bn Term Debt Maturities : ₹ 46,790 Cr ($6.3bn) (as of 31st Dec 2021) (as at 31st Dec’21) 0% 57% Term Loans-INR 26.7 9% Bonds-INR 8.3 18% 21% Term Loans- USD/Foreign Currency 18% ₹ ‘000 Crore Bonds-FC 4% 9.8 8.3
Slide 30: Segment Summary – Zinc India
Segment Summary – Zinc India Q3 Q2 9M Production (in ’000 tonnes, or as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Mined metal content 252 244 3% 248 722 Integrated metal 261 235 11% 209 707 Refined Zinc – Integrated 214 182 17% 162 565 Refined Lead – Integrated1 47 52 (10)% 47 142 Refined
Slide 31: Segment Summary – Zinc International
Segment Summary – Zinc International Q3 Q2 9M Production (in’000 tonnes, or as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Mined metal content- BMM 11 16 (28)% 16 42 Mined metal content- Gamsberg 41 43 (5)% 39 126 Total 52 59 (11)% 55 168 Financials (In ₹ Crore, except as stated) Revenue 1,0
Slide 32: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q3 Q2 9M OIL AND GAS (boepd) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Average Daily Gross Operated Production (boepd) 159,230 159,621 0% 165,327 163,146 Rajasthan 136,795 132,174 3% 141,766 139,452 Ravva 14,457 16,770 (14)% 14,282 14,466 Cambay 7,906 10,677 (26)% 9,279
Slide 33: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q3 Q2 9M OIL AND GAS (boepd) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Average Daily Production Gross operated 159,230 159,621 0% 165,327 163,146 Oil 133,731 136,687 (2)% 138,121 137,267 Gas (Mmscfd) 153 138 11% 163 155 Non-operated- Working interest 550 432 27% 546 542
Slide 34: Segment Summary – Aluminium
Segment Summary – Aluminium Q3 Q2 9M Particulars (in’000 tonnes, or as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Alumina – Lanjigarh 472 407 16% 511 1,465 Total Aluminum Production* 578 497 16% 570 1,697 Jharsuguda-I 138 132 4% 138 413 Jharsuguda-II* 294 218 35% 285 846 245kt Korba-I 67 68
Slide 35: Aluminium profitability
Aluminium profitability $/t Q2 FY22 2,648 102 98 2,848 (688) (554) (406) (97) 1,104 (134) (285) 684 1,647 Q3 FY22 2,055 109 130 3,001 2,762 756 833 466 70 876 137 262 477 245 LME Ingot Value Other Realisation Alumina Power Conversion EBITDA Dep Int PBT Premium addition Hot & Others Metal VEDANTA LIM
Slide 36: Segment Summary – Power
Segment Summary – Power Q3 Q2 9M Particulars (in million units) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Total Power Sales 3,448 2,066 67% 2,904 9,069 Jharsuguda 755 784 (4)% 760 2060 BALCO 279 395 (29)% 199 888 HZL Wind Power 59 67 (13)% 155 348 TSPL 2,355 820 187% 1,790 5,773 Financials (in ₹ c
Slide 37: Segment Summary – Iron Ore and Steel
Segment Summary – Iron Ore Particulars (in million dry metric tonnes, or Q3 Q2 9M as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Sales 1.5 1.8 (13)% 1.3 4.5 Goa 0.1 0.6 (90)% 0.1 0.5 Karnataka 1.5 1.2 24% 1.2 4.0 Production of Saleable Ore 1.2 1.4 (14)% 1.3 4.0 Goa Karnataka 1.2 1.4 (14)% 1.
Slide 38: Segment Summary – FACOR and Copper Business
Segment Summary – FACOR* Q3 Q2 9M Particulars (in ‘000 tonnes, or as stated) FY 2022 FY 2021 % change YoY FY2022 FY 2022 Total Production Ore Production 59 43 37% 24 206 Ferrochrome Production 20 18 13% 19 58 Financials (In ₹ crore, except as stated) Revenue 229 123 86% 210 609 EBITDA 88 15 - 93 243
Slide 39: Sales Summary
Sales Summary Sales volume Q3 FY2022 Q3 FY2021 Q2 FY2022 9M FY2022 Zinc-India Sales Refined Zinc (kt) 212 182 164 563 Refined Lead (kt) 47 53 47 142 Total Zinc-Lead (kt) 259 235 211 706 Silver (tonnes) 173 183 152 485 Zinc-International Sales Zinc Refined (kt) - - - - Zinc Concentrate (MIC) 45 51 45
Slide 40: Sales Summary
Sales Summary Q3 Q3 Q2 9M Sales volume Q3 Q3 Q2 9M Sales volume Power Sales (mu) FY 2022 FY 2021 FY 2022 FY 2022 FY 2022 FY 2021 FY 2022 FY 2022 Iron-Ore Sales Jharsuguda 755 784 760 2,060 Goa (Mn DMT) 0.1 0.6 0.1 0.5 TSPL 2,355 820 1,790 5,773 BALCO 279 395 199 888 Karnataka (Mn DMT) 1.5 1.2 1.2 4.
Slide 41: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ ₹ 950crore / year Commodity prices – Impact of a 10% increase in Commodity Prices 9M YTD FY 22 Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 74 50 Zinc ($/
Slide 42: Awards & Recognition in Q3 FY22
Awards & Recognition in Q3 FY22 Name of Awards Category/ Recognition Recipient (Business Unit) Dariba Smelting Complex, Hindustan CII-National Awards Excellence in Water Management Zinc Gold and Silver award Kalinga Environment Excellence Award, 2020 Vedanta Ltd., Jharsuguda SABERA Award 2021 Respon
Slide 43: Group Structure
Group Structure Vedanta Resources Ltd Divisions of Vedanta Limited 79.4% 69.7% ⚫ Sesa Iron Ore ⚫ Sterlite Copper Konkola ⚫ Power (600 MW Jharsuguda) Copper Vedanta Ltd Mines (KCM) ⚫ Aluminium (Odisha aluminium and power assets) ⚫ Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 51% 100% 100% 95.5%
Slide 44: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 6:00 PM (IST) on Jan 28, 2022. The dial-in numbers for the call are given below: Event Telephone Number Earnings conference call Universal Dial-In +91 22 6280 1114 on Jan 28, 2022 +91 22 7115 8015 from 6:00 - 7:00 PM (IST) India