Vedanta Limited · NSE:VEDL
Vedanta — Sesa Sterlite — Citi India Corporate Day 2014
30 slides from Vedanta's conference presentation, September 2014
Slide 1: Corporate Presentation - Citi India Corporate Day
Corporate Presentation Citi India Corporate Day September 2014 Tom Albanese, CEO
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived metal prices; from future integration of acquired businesses; from publicly available sources that have not been and from numerous other matters of national, regional and independently verified. global scale
Slide 3: Global Resource Industry: Key Themes
Global Resource Industry: Key Themes Deliver on Operational Performance • Increased focus on productivity gains and cost optimization programs • Improved operational efficiency in core commodities to boost returns and create shareholder value Simplification to unlock additional value Disciplined
Slide 4: Sesa Sterlite: A Global Diversified Natural Resources Major
Sesa Sterlite: A Global Diversified Natural Resources Major Top Global Diversified Oil & Gas Zinc-Lead Iron Ore 1 Natural Resources Companies Copper Base Metals Coal Aluminium Ferroalloys Other CY13 EBITDA ($ bn) BHP Billiton 32.6 27% 43% 21% 3% 6% Vale 22.7 92% 7% 1% Rio Tinto 21.0 76% 8% 4% 8% 5%
Slide 5: India's Premier Natural Resources Company
India’s Premier Natural Resources Company WORLD'S FASTEST WORLD'S LARGEST CONTRIBUTES 0.3% OPERATING ~30% OF ZINC MINER AND GROWING ENERGY OF INDIA’S GDP INDIA'S CRUDE SECOND LARGEST OIL PRODUCTION COMPANY, AS PER INTEGRATED ZINC PLATTS RANKING PRODUCER 2013 ONE OF THE LARGEST COMMUNITY INDIA'S MARK
Slide 6: Tier-1 Asset Portfolio
Tier-1 Asset Portfolio R&R FY2014 Competitive Position on Cost Curve Quartiles Positioning Life1 Production Capacity2 I II III IV Oil & Gas (Cairn India) 225+ 3 Top 20 global independent E&P; Platts 2013: 15 218kboepd Size of circle denotes Fastest growing energy company globally kboepd EBITDA contr
Slide 7: India: Strong Fundamentals for Demand
India: Strong Fundamentals for Demand Low Per Capita Consumption (Metals - CY 2013 per capita consumption in kg; Oil - CY2012 per capita consumption in barrels) 15.4 India World China 6.6 7.2 4.2 4.6 3.5 2.7 1.5 1.9 0.5 1.0 0.4 A view of skyline of Mumbai Aluminum Copper Zinc Oil Urbanization increa
Slide 8: India's Unexplored Potential - Mining
India’s Unexplored Potential - Mining India: Shared geology and mineral India reserves ranking India’s share of global non-ferrous exploration spending very low potential with Africa & Australia Global ranking¹ 5th Coal 34.8% 100% R&R: 295 bn tonnes 0.2% 3% 6th Zinc 4% 3% 3% R&R: 50 mn tonnes 5% 5%
Slide 9: India's Unexplored Potential – Oil & Gas
India’s Unexplored Potential – Oil & Gas India drilled ~6,700 exploratory wells since inception; U.S drills as many wells in less than 3 years¹ • US$ 400 Mn per day - Daily Import substitution opportunity U.S. 1,800 • 78% basins yet to be well explored Operating Rigs 1,400 • ~130 Bn barrels of resou
Slide 10: Sesa Sterlite: Delivering for India
Sesa Sterlite: Delivering for India SSLT’s Share in Royalty on minerals 20.8% 0.3% of India’s GDP 17.2% 19.8% 15.0% 15.3% 15.5% 1.4% of revenue receipts of Centre and States Major minerals Fuel minerals FY11 FY12 FY13 c. 8% of GoI’s non-tax revenue SSLT’s Share in Government’s non-tax revenue 7.8% c
Slide 11: Current Regulatory Framework
Current Regulatory Framework “It is my government’s intention to encourage investment in mining sector and promote sustainable mining practices to adequately meet the requirements of industry without sacrificing environmental concerns. The current impasse in mining sector, including iron ore mining,
Slide 12: Gaining momentum with our strategic priorities
Gaining momentum with our strategic priorities Underground mine development at Rampura Agucha progressing well First phase of 325kt Korba-II smelter commenced production – 84 pots commissioned till date Received forest diversion clearance and R&R approval for BALCO coal block Significant potential f
Slide 13: Sustainability: Core to our Business
Sustainability: Core to our Business Safety Significant reduction in LTIFR Focus is on eliminating fatalities Behavioral based safety programmes introduced Environment Significant investments (US$250mn+ over last 3 years) Higher technical standards, more recycling rate and zero-discharge f
Slide 14: Summary: Building on Operational Momentum
Summary: Building on Operational Momentum Diversified portfolio of high-quality world-class assets Cash flows ramping up from well-invested assets to drive deleveraging Focus on delivering operational excellence and exploration upside Sustainability is core to our operations and long term va
Slide 15: Appendix
S sesa sterlite a vedanta company Dy, Appendix
Slide 16: Q1 FY2015 Highlights
Q1 FY2015 Highlights Financial • Revenues 19% higher at Rs 17,056 crore • EBITDA growth of 3.5% at Rs.5,670 crore; continued strong EBITDA margin¹ of 47% • Attributable PAT (excluding exceptional items) doubled to Rs.1,341 crore • Strong balance sheet with Cash & Cash equivalents of over Rs.47,500 c
Slide 17: CEO's Priorities
CEO’s Priorities Aluminum Smelter, Jharsuguda, India Operational excellence Improve business performance: Aluminium: Operationalise remaining smelter capacity and work on bauxite sourcing Iron Ore: Restart operations in Goa Enhance performance of well-performing assets Zinc-India: Transiti
Slide 18: Oil & Gas
Oil & Gas Production Oil & Gas Q1 FY2014 Q1 FY2015 • Rajasthan production in line with FY15 guidance Total Gross Operated Production(boepd) 220,088 226,597 Average Daily Gross Operated Production Rajasthan Exploration 212,442 217,869 (boepd) • Established 1.2bn boe of hydrocarbons in-place Rajasthan
Slide 19: Zinc-Lead-Silver
Zinc-Lead-Silver Zinc India Zinc-India Q1 FY2014 Q1 FY2015 Mined Metal (kt) 238 163 Mine Development Refined Zinc – Integrated (kt) 173 139 • Rampura Agucha and SK shaft project progressing well Refined Lead – Integrated (kt)1 27 22 • Exploring further deepening of RA mine open pit: Mine Saleable Si
Slide 20: Iron Ore
Iron Ore Karnataka Iron Ore Q1 FY2014 Q1 FY2015 Sales (mt) 0.0 0.5 • Q1 Production lower on account of slower auction process • E-auctions picked up recently - expect to produce the Goa 0.0 0.0 remaining provisional capacity of 2.29 million tonnes during Karnataka 0.0 0.5 the year Production 0.0 0.0
Slide 21: Copper – India/Australia
Copper – India/Australia Copper India Copper-India/Australia Q1 FY2014 Q1 FY2015 • Completed planned maintenance shutdown in 23 days Mined Metal – Australia (kt) 6 - – Smelter successfully ramped-up Copper Cathodes– India (kt) 16 66 • Conversion cost impacted primarily due to lower volume • 75% purc
Slide 22: Aluminium
Aluminium Aluminium and Alumina Q1 FY2014 Q1 FY2015 Operations • Stable aluminium production Aluminium Production (kt) 195 203 245ktpa Korba – I 61 60 • Lanjigarh refinery operating at 93% utilisation 325 ktpa Korba - II¹ - 11 • Lower half cost positioning, without captive bauxite Jharsuguda-I 134 1
Slide 23: Power
Power Power Q1 FY2014 Q1 FY2015 Operations • 2,400 MW Jharsuguda power plant : Total Sales (mu) 3,177 2,599 – PLF higher at 45% as compared with 36% in Q4 Jharsuguda 2,400 MW 1 2,604 2,154 FY14 BALCO 270 MW 187 70 – COP lower on account of temporary improved MALCO 100 MW 224 229 coal mix HZL WPP 274
Slide 24: Financial Highlights
Financial Highlights • Continued Strong EBITDA margins driven by diversified portfolio • Attributable PAT (before exceptional items) and corresponding EPS more than double Rs. Crore or as stated Q1 FY2015 Q1 FY2014 change EBITDA 5,670 5,479 3.5% EBITDA margin¹ (%) 47% 45% Gearing (%) 23% 30% Net Deb
Slide 25: EBITDA Bridge
EBITDA Bridge Q1 FY2015 vs. Q1 FY2014 (In Rs. Crore) Non-Controllable Rs. 515 Crore 6,600 6,400 214 6,200 582 197 6,000 109 219 5,800 238 165 5,600 61 214 5,400 5,200 5,670 5,479 Controllable 5,610 5,000 Rs. (323) Crore 4,800 Notes:. Q1 FY2014 numbers are on proforma basis 1. Higher exploration cost
Slide 26: Income Statement - Variances
Income Statement - Variances Proforma • Higher other income at Zinc India and Rs. Crore or as stated Q1 FY2015 Q1 FY2014 Cairn India, driven by FMP maturities EBITDA 5,670 5,479 during the quarter. Finance Cost 1,537 1,571 Other Income 1,139 600 • Higher depreciation primarily on account Depreciatio
Slide 27: Maturity Profile
Maturity Profile Term Debt Maturity Profile (in $bn) Diversified Funding Sources as of 30 June 2014 (as of 30 June 2014) Money Standalone Subsidiaries Market Short 2.3 Instruments- Term 11% Loans - Bonds-INR - 9% 19% 1.1 1.5 Convertible 1.2 Bonds-USD Term Loans- 1.0 0.4 - 9% 0.8 0.8 USD - 10% 0.4 0.
Slide 28: Well-Invested Assets Driving Cash Flow Growth
Well-Invested Assets Driving Cash Flow Growth Positive Free Cash Flow with production ramp- Cash Flow and Growth Capex Profile - $bn up $1.6bn free cash flow (post growth capex) Free Cash Flow-FY³ M&M Capex O&G Capex² in FY2014 Capex up to FY20171: $4.7bn Oil & Gas: c.$3.0bn2 Proven and hi
Slide 29: Entity wise Debt and Cash
Entity wise Debt and Cash Net Debt Summary ($ Mn) 30 June 2014 31 March 14 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Sesa Sterlite Standalone 6,636 414 6,222 6,479 409 6,070 Zinc India - 4,095 (4,095) - 3,984 (3,984) Zinc International - 161 (161) - 200 (200) Cairn India 59 3,225 (3,16
Slide 30: Group Structure
Group Structure Vedanta Resources Plc Divisions of Sesa Sterlite 79.4% 60.4% Iron Ore (Sesa Goa) Konkola Copper Smelting (Tuticorin) Copper Sesa Sterlite Mines (KCM) Power (2,400 MW Jharsuguda) Aluminium (VAL aluminium and power assets) Subsidiaries of Sesa Sterlite 59.9% 64.9% 51% 100% 100%