Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Investor Day (March 2022)
56 slides from Hindalco Industries's investor day presentation, Mar 30, 2022
Slide 1: Exchange filing cover letter for Investor Day presentation
30th March, 2022 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Dalal Street Plot No. C/1, G Block, Mumbai: 400 001 Bandra Kurla Complex, Bandra (East) Mumbai – 400 051 Scrip Code: 500440 Scrip Code: HINDALCO Mr. Daniel Schammo Banque Intern
Slide 2: Investor Day 30th March 2022
Investor Day 30th March 2022 1 1
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: Agenda
About Us Our Growth Strategy Update on Shareholder Sustainability Returns Broad Capital Summary Allocation Q&A 3 3
Slide 5: Hindalco is a leading global industry player
Hindalco is a leading global industry player Novelis | Largest aluminum FRP producer and recycler in India Ops Novelis the world Hindalco | Largest fully Aluminium Copper Capacity Capacity Aluminium Flat Rolled Products (FRP) integrated aluminum player in Alumina Copper Cathode Beverage Can Sheets I
Slide 6: Strategic Priorities | Way Forward
Strategic Priorities | Way Forward Shareholder Value Enhancement ESG Enhance Shareholder Deleveraging Growth Sustainability value with return based allocation of capital, net Achievement of Net Debt Strong focus on Initiatives across entire to EBITDA ratio of 1.62x in expanding capacities value chai
Slide 7: Growth Strategy
Growth Strategy 6 6
Slide 8: Market Overview: Novelis Business Segments
Market Overview Novelis Business Segments 7 7
Slide 9: Novelis: The world's largest aluminium FRP producer and recycler
Novelis : The world’s largest aluminium FRP producer and recycler TTM FRP Shipments by Geography Global HQ Atlanta, US South America 16% 33operating locations North America ~4MT global rolling capacity 37% North America Europe Vision Europe 27% Global 3,854kt HQ Atlanta, US HQ Kusnacht, Switzerland
Slide 10: Growing Global Aluminium FRP Industry
Global FRP Aluminum Growing Global Aluminium FRP Industry 2021 Consumption Other 14% Transport 15% Machinery & 20-Year Global FRP Aluminum Consumption (million tonnes) Equipment 8% ~30 Construction 36.3 ~30million million tonnes in 13% tonnes in 2021 2021 30.0 25.0 Foil stock Can stock 27% 23% 19.8
Slide 11: Global FRP Leader in Beverage Can Sheet
Global FRP Leader in Beverage Can Sheet Maintaining global leadership position as world’s largest aluminium recycler and largest supplier of beverage can sheets 75%+ Recycled Can Content North America Europe Strong customer demand and preference for domestic supply drives Demand remains strong as ma
Slide 12: Strong Beverage Packaging Market
Strong Beverage Packaging Market North America Can Sheet Market Supply/Demand Imbalance 3,000 Supply/Demand gap grows from 300kt 2022 to >500kt by 2030 Supply/Demand Global demand for can stock forecasted to increase 4% by CAGR 2028 2,500 gap grows from mainly driven by Sustainability trends 300kt 2
Slide 13: Robust long-term growth rates in Auto Body Sheet
Robust long-term growth rates in Auto Body Sheet COVID and semi-conductor shortage not systemic to Global Automotive Aluminium FRP Demand (MT) future automobile demand; production volumes to recover quickly to satisfy pent-up replacement demand 3.7 CAGR 3.1 8% Stringent global tail pipe emissions an
Slide 14: Opportunities across Specialties Markets
Opportunities across Specialties Markets Novelis Specialties Portfolio is Diverse & High-End Focused Building & Construction benefits from pent-up demand for US single-family Flexible capabilities enable portfolio optimization housing driving high housing starts; remodel market also continuing to gr
Slide 15: Recovering Aerospace Market
Recovering Aerospace Market Global coordination, regional execution Improved Air Travel Recovery Projections Novelis Aerospace Portfolio and Manufacturing Sites Koblenz, Germany Zhenjiang, China 1. Plate 2. Contoured plates 3.Sheet 4. Special Surface Products & wingskins Products Quality Sheet Comme
Slide 16: Novelis: Updates on Growth Capex
Novelis Updates on Growth Capex 15 15
Slide 17: Transformational Investments Phase I (FY11-18)
Transformational Investments Phase I (FY11-18) Adding global FRP rolling & recycling capacity, and expanding automotive Total Capital Expenditure ($ mn) Novelis invested over $2 billion strategic growth capex in a 775 transformational investment period between Fiscal 2011-2016 717 516 518 370 Expand
Slide 18: Transformational Investments Phase II (FY19-22)
Transformational Investments Phase II (FY19-22) Organic and Inorganic Investment in Capacity & Diversification Recently Completed Organic Projects Region Capacity (Kt) Project Cost (US$) Status Automotive Finishing Lines, Kentucky US 200 $315 mn In Production Automotive Finishing Lines, Changzhou Ch
Slide 19: Investment Opportunities (FY23-27)
Investment Opportunities (FY23-27) Facilitated by Stable Cashflows and Reduced Leverage Primary Product Expected Identified Projects Location Capacity (Kt) Cost (US$) Markets Supported completion North America $3.0 Bn Hot mill debottlenecking & automotive upgrades Oswego, US Specialties, Auto 124 $1
Slide 20: US Rolling Mill Capacity Addition - Strategic Rationale
US Rolling Mill Capacity Addition - Strategic Rationale Highly-profitable Step-change in Customers Seize first mover Leverage successful automotive business global can market willingness to advantage and track record in contributes growth driven by commit volume, support customer recycling, quality
Slide 21: New Recycling & Casting Centers in US & South Korea
New Recycling & Casting Centers in US & South Korea $365 million investment in Guthrie, Kentucky Automotive Aluminium Recycling Process Reduces Novelis’ carbon emissions by one million tons annually Adds 240kt automotive- focused sheet ingot capacity Advanced sorting technology and expanded automoti
Slide 22: Novelis | Projected Capacity Evolution
Novelis | Projected Capacity Evolution Phase 2 completed Rolling & integrated Recycling & Sustainability Digital, EHS, Reliability investments now in plant expansions related projects and Quality and Other production Optimization projects China, US, and other expansions US, China, South Korea, and o
Slide 23: India Business: Growth Strategy
India Business Growth Strategy 22 22
Slide 24: Market Overview: Business Segments – Indian Operations
Market Overview Business Segments – Indian Operations 23 23
Slide 25: Domestic Aluminium Consumption Expected to Double by FY32
Domestic Aluminium Consumption Expected to Double from ~4 MT in FY22 to ~8 MT in FY32 Building & Construction Transport/Automotive Packaging Other Expected To be 3rd largest market in the Driven by growing pharmaceutical, liquor, Other industries include Electrical, Focus on light weighting and incr
Slide 26: Domestic Copper Consumption is expected to more than double in a decade
Domestic Copper Consumption is expected to more than double in a decade E-Mobility Urbanization IoT Enabled Industry New Age Lifestyle Reliable Clean Others India’s focus is shifting & Smart Cities Energy Infra With growing population Industry is estimated to Because of high conductivity & Other art
Slide 27: Global & Domestic Specialty Alumina Consumption
Global & Domestic Specialty Alumina Consumption Advanced Ceramics & Catalyst Flame Retardants Refractories Electronics Solid Surface Increasing demand for high Increase in global demand for Increasing trends in Demand for specialty aluminium high-quality refractories for miniaturization of consumer
Slide 28: India Business: Updates on Growth Capex
India Business Updates on Growth Capex 27 27
Slide 29: India Business | Recent Acquisitions in VAP
India Business | Recent Acquisitions in VAP Ryker CCR Facility Inorganic Products Capacity EV Status Projects Ryker CCR Copper CCR 225Kt $46 Mn Completed SAPA Aluminium 15Kt $33 Mn Completed Extrusions Extrusions SAPA Extrusion Facility TOTAL 340 Kt $79 Mn 28 28
Slide 30: India Business | Segment-wise Allocation of Growth Capex (FY23-27)
India Business | Segment-wise Allocation of Growth Capex (FY23-27) Capacity Estimated Expected Year Identified Projects Plant/ Region (Kt) Cost (US$) of Completion Aluminium - Upstream $1.71 bn Alumina Expansion (via Debottlenecking) Utkal 350 $40 mn FY2024 Under Appraisal : Alumina Expansion (Green
Slide 31: India Business | Segment-wise Allocation of Growth Capex (FY23-27)
India Business | Segment-wise Allocation of Growth Capex (FY23-27) Capacity Estimated Expected Year Identified Projects Plant/ Region (Kt) Cost (US$) of Completion Copper Business $286 mn Under Appraisal : Recycling + E-Waste TBD 100 $220 mn FY2025 Inner Grove Tubes (PLI Scheme) & Alloy Rods Dahej 2
Slide 32: India Business | Projected Capacity Evolution
India Business | Projected Capacity Evolution Aluminium VAP (in KT) Copper VAP (in KT) VAP Projects VAP Projects 540 565 521 1300 1530 New Silvassa fully automated Primary Metal Cathode Capacity (in KT) Acquisition of Ryker 421 Extrusions facility (34Kt) Base, a wholly owned Capacity (in KT) State-o
Slide 33: Update on Sustainability
Update on Sustainability Our ESG initiatives to create a sustainable world together 32 32
Slide 34: Our commitment to
Our commitment to Continued Emphasis On Recycled Content Net Carbon Neutrality By 2050 Zero Waste To Landfill By 2050 Water Positive In Mining Locations By 2050 No Net Loss On Biodiversity By 2050 Zero Harm-occupational Health And Safety Diversity And Inclusion Commitment To Community And Society Wi
Slide 35: ESG Score
The Sustainability @ Yearbook 2022 Sus stain ability In index ADITYA BIRLA One of only SIndian companies in the DJSI World Index ~~ Andustry leader, ranked no. 1 in the Materials Sector — Aluminium
Slide 36: Novelis' ESG Ambitions
Novelis’ ESG Ambitions 30%* Carbon- reduction in carbon foot- neutral print by 2026 by 2050 Reduction in Reduction in Reduction in Energy Intensity Water Intensity Waste to Landfill use by 2026 use by 2026 by 2026 *Includes Scopes 1-3 Greenhouse Gas Emissions and based on Fiscal Year 2016 Baseline 3
Slide 37: Low-Carbon Action Plan Recycling Capacity
Low-Carbon Action Plan Recycling Capacity Expanding recycling capacity through investments in every region Low CO2 in Operations Established Net Zero Lab Valais at Maximize Circularity Sierre to develop Carbon-Neutral Design Low CO2 Solutions for Aluminum Alloys & Processes Manufacturing Certificati
Slide 38: Novelis: Decarbonization Progress and Roadmap
Novelis : Decarbonization Progress and Roadmap -30% tCO2e Absolute -4% -47% tCO2e/t Intensity 25 Identified 19.8 decarbonization 20 ~ 19.1 strategies million metric tons CO2e Emissions Net CO2 due to all ~ (6) new capex growth 15 projects 13.9 ~+1.1 ~ (0.3) 10 5 0 FY16 Baseline Estimated FY22 Identi
Slide 39: Sustainability at Hindalco | Awards in FY22
Sustainability at Hindalco | Awards in FY22 India Green GreenPro Manufacturing Challenge Certification Aditya Aluminum won Gold for for Eternia and Energy Conservation Everlast product lines Samri mine won Silver ICAI–SRSB CII Appreciation Silver Shield Award for Integrated Report, under Waste-3R ca
Slide 40: Journey Towards Net Zero Carbon
Journey Towards Net Zero Carbon Efficiency Improvement Renewables Other Initiatives Aluminium Smelter Reached 100 MW (as Targeted) Installed Capacity in Q3-22 Fuel Switching Continuous improvement through Innovation 50 MW Solar capacity installed in this FY at Renukoot, Liquid Fuel to LNG & trial fo
Slide 41: Hindalco: Decarbonization Progress and Roadmap
Hindalco : Decarbonization Progress and Roadmap Primary Aluminum + Downstream -18.5 -25% tCO2e /t Intensity 30.0 25.0 24.1 Identified decarbonization strategies CO2e Emissions Intensity ~ 19.7 ~ (1.7) 20.0 ~ 0.1 18.1 tonCO2e/t Downstream 15.0 expansion 10.0 5.0 0.0 FY12 Baseline FY22 Estimated Inden
Slide 42: Water Positivity by 2050
Water Positivity by 2050 Four Pronged Approach Towards Water Positivity Water Consumed & Recycled (million m3) Consumption Recycled 79.7 78.4 71.7 60.4 1. Water credit 2. Increasing rainwater harvesting 18.6 18.9 16.0 estimation and water 13.3 in plant locations and achieving positivity for Mines by
Slide 43: Journey Towards No Net Loss on Biodiversity
Journey Towards No Net Loss on Biodiversity BMP Implementation at Sites FY22 Initiatives GREEN COVER AND Developed 4 BMP with 4 season study in partnership with IUCN and 4 more BMPs CARBON SEQUESTERED are under preparation for 9 mine leases. 6000 40 4672 4980 5000 4373 35 Developed sustainable minin
Slide 44: Zero Waste to Landfill (ZWTL) by 2050
Zero Waste to Landfill (ZWTL) by 2050 | Interim targets up to 2030 120 Storage / Landfill (via RMPs & Ash Dykes), % Target Utilization at Other Industries, % Actual Performance, % 100 80 82 82% waste recycled/ reused from total waste 80 100 generated in FY22 for various applications in line with 80
Slide 45: Circular Economy | Waste Management
Circular Economy | Waste Management Bauxite Residue Recycling Total Bauxite Residue (% Recycled from 3/4 Refineries) 98% of Bauxite Residue from three refineries is re-used in Cement making 100% 98% Utkal refinery is conducting pilot projects for mines backfilling using 2 pilot pits 67% spanning 50x
Slide 46: Shareholder Returns
Shareholder Returns 45 45
Slide 47: Enhanced All Round Performance
Enhanced All Round Performance Consistent Additional Returns Synergies Supportive Operational from Completed From Aleris Performance Projects Macros Acquisition Outstanding Stable Reduced Stronger Financial Results Cash Flows Leverage Balance Sheet Improved Higher ROE and ROCE Shareholder Returns 46
Slide 48: Deleveraging Target Achieved
Deleveraging Target Achieved Novelis: Net Debt to EBITDA (x) India Business: Net Debt to EBITDA (x) 4.10 4.00 3.79 3.70 3.43 3.60 3.34 3.50 3.30 3.10 2.90 3.00 2.90 2.60 2.50 2.10 2.03 2.29 2.00 1.60 1.50 1.10 0.60 0.69 1.00 0.10 30-Jun-20 30-Sep-20 30-Dec-20 31-Mar-21 31-Dec-21 30-Jun-20 30-Sep-20
Slide 49: Broad Capital Allocation
Broad Capital Allocation Deleveraging targets achieved well ahead of time Growth capex Strong Balance Sheet – An enabler for sustainable growth ~75% Net Debt Reduction Enhanced focus on shareholder returns through profitable growth ~15% and optimum capital structure Amount available for Shareholder
Slide 50: Summary | Shareholder Value Creation
Summary | Shareholder Value Creation through ESG commitments to become Portfolio Value Enhancing Enrichment ‘the Industry Leader in Growth Sustainability’ 49 49
Slide 51: Thank You
For Further Queries Please Contact : Subir Sen, Investor Relations Telephone- +91 22 6662 6666 E mail: hilinvestors@adityabirla.com Thank You Website: www.hindalco.com Registered Office Ahura Centre, 1st Floor, B Wing Mahakali Caves Road Andheri (East), Mumbai 400 093 Telephone- +91 22 6691 7000 Web
Slide 52: Annexures
Annexures 51 51
Slide 53: Air Emissions | Flue Gas Desulphurization (FGD) installation for DeSOXing
Air Emissions | Flue Gas Desulphurization (FGD) installation for DeSOXing Installing one unit of DeSox- Installing Mahan and Aditya will use pilot FGD at Mahan, automatic lime Semi dry tech from Black and FGD unit erection Aditya and Renusagar feeding system Weltch, first time in India with at Mahan
Slide 54: Pilot Study on Mine Backfilling with Red Mud & Eco Restoration of Mine Voids
Pilot Study on Mine Backfilling with Red Mud & Eco Restoration of Mine Voids Pit number 1 ready for backfilling, Pit number 2 under design with IIT and NEERI as designers Geomembrane Geomembrane Sand+gravel Anchoring joint testing laying Clay laying Geomembrane Geotextile RCC sump & compaction stitc
Slide 55: Breakthrough Technology for SPL Waste Recycling and Re-use
Breakthrough Technology for SPL (Spend Potline) Waste Recycling and Re- use Crusher in collaboration with M/s Geocycle Bag Filter & Cyclone Bagfilter Suction SPL Crusher Pipe Connection Machine 54 54
Slide 56: Copper Inner Groove Tubes (IGT): Domestic market expected to grow to 53 KT by FY29
Copper Inner Groove Tubes (IGT): Domestic IGT market is expected to grow to 53 KT by FY29 Domestic IGT market demand is largely driven by more than 90% consumption by the AC industry. Currently, Domestic AC manufacturing capacity around 10 million units with an Atma Nirbhar additional capacity of ~5