Jsw Steel Limited · NSE:JSWSTEEL
Jsw Steel — Investor Presentation (November 2019)
31 slides from Jsw Steel's investor presentation, November 2019
Slide 1: JSW Steel Limited Investor presentation
JSW Steel Limited Investor presentation November, 2019 Confidential
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS BEING PRESENTED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. This presentation and accompanying slides (the “Presentation”) is
Slide 3: JSW Group and company overview
JSW Group and company overview Key highlights Appendix
Slide 4: JSW Group – overview
JSW Group – overview JSW Steel* JSW Energy* – India’s leading integrated – Engaged across the value chain of steel producers (Installed crude steel power business production capacity: ~18 MTPA) – Operational capacity: 4,543 MW – Market capitalisation of US$7.8 bn(a) – Market capitalisation of US$1.6
Slide 5: JSW Steel – among India's leading steel manufacturers
JSW Steel – among India’s leading steel manufacturers – Integrated steel manufacturing – Installed crude steel capacity of ~18 facilities – from raw material MTPA, at strategic locations in processing plants to value-added South and West India product capacities One of the leading Integrated steel p
Slide 6: Transformational journey to market leadership
Transformational journey to market leadership Capacity (MTPA) Total revenue (US$m)(a) EBITDA (US$m) 12,019 2,681 18.0 18.0 18.0 10,380 2,093 5,330 7.8 912 2,758 588 1.6 246 39 FY02 FY10 FY18 FY19 H1 FY20 FY02 FY10 FY18 FY19 H1 FY20 FY02 FY10 FY18 FY19 H1 FY20 Market cap (US$m)(b) FY02 FY10 FY19 7,78
Slide 7: Key highlights
Key highlights 1 One of the leading domestic steel players and well placed to benefit through the cycle 2 Strong business profile diversified by region, markets and products 3 Strong focus on operational efficiency with best-in-class conversion costs 4 Robust financial profile and stable cash flows
Slide 8: One of the leading domestic steel players and well placed to benefit through the cycle
One of the leading domestic steel players and well placed to benefit through 1 the cycle JSW Steel is a leading player in India Global steel markets FY19 H1 FY20 • Subdued economic activities underpinned by credit squeeze, weakened consumer sentiment has resulted in muted steel demand in H1 FY20 15.
Slide 9: Key highlights
Key highlights JSW Group and Appendix company overview
Slide 10: Strong business profile diversified by region, markets and products
2 Strong business profile diversified by region, markets and products Geographically diversified with manufacturing facilities in South and Flexibility to judiciously shift between domestic and international markets West India along with strategic overseas presence based on market conditions India F
Slide 11: Strong business profile diversified by region, markets and products (continued)
2 Strong business profile diversified by region, markets and products (continued) HR GC/GL/ Color Slabs HRC CRC Plates GI Coated Wide offering of flat and long products Billets RCS/Blooms Bars/Rods Wire Tin Rods Plate Diversified portfolio to address growing demand for value-added steel Commissi
Slide 12: Strong focus on operational efficiency with best-in-class conversion costs
3 Strong focus on operational efficiency with best-in-class conversion costs Parameter(a) Ongoing initiatives Project Description Expanding 10 / 10 9 8 9 7 6 6 Capacity Vijayanagar Works • To transport Iron ore from the mines to the Vijayanagar plant with Location in high a capacity of 20 MTPA (Phas
Slide 13: Robust financial profile and stable cash flows
4 Robust financial profile and stable cash flows Strong track record of volume growth Positive momentum in operating revenues 31.7% 20.9% 15.8% 11,990 15.55 15.60 14.70 10,357 12.30 8,564 6,504 7.22 5,113 (a) FY16 FY17 FY18 FY19 H1 FY20 FY16 FY17 FY18 FY19 (a) H1 FY20 Consolidated saleable steel (MT
Slide 14: Prudent leverage management
5 Prudent leverage management Publicly stated financial policies Focused leverage Diversify Improve debt management funding sources maturity profile Strong y-o-y profitability improvement => reduction in net leverage Diverse sources of funding(d) (e) 5,,970 6,130 5,573 7,390 8,482 Bonds and de
Slide 15: Proven track record of growth through organic and inorganic expansions
6 Proven track record of growth through organic and inorganic expansions Combination of organic and inorganic growth Key new projects 2002 2005 2007 2011 2013 2015 2017 2019 India 2009 • 2.5 MTPA • 3.8 MTPA • 49.3% • 14.3 • CRM2 – • 74% stake in Praxair’s(c) • Preferred • Capacity • Color coating •
Slide 16: Proven track record of growth: Dolvi turnaround case study
6 Proven track record of growth through organic and inorganic expansions (continued) Case study: Turnaround strategy at JSW Ispat’s Dolvi plant JSW Steel has a proven track record of identifying, acquiring and integrating assets creating synergies and optimizing costs December 2010 Completed initiat
Slide 17: Detailed capex plan based on strategic rationale
6 Proven track record of growth through organic and inorganic expansions (continued) Detailed capex plan… …based on a well thought-out guidelines / strategic rationale 7,308 7,308 Pellet plant, 208 822 Coke ovens, captive power plant, pipe 906 Focus on return metrics instead of pure capacity addit
Slide 18: Experienced management with strong parentage
7 Experienced management with strong parentage Chairperson — Emeritus Promoter Director Savitri Devi Jindal Sajjan Jindal Chairman and JSW-JFE partnership Managing Director Partnership overview • 14.99% minority stake bought by JFE in 2010 • Access to cutting edge technologies Executive Directors •
Slide 19: Conclusion
Conclusion One of the largest steel manufacturers in India Market leadership One of the largest steel exporters in India 53% ( FY19) share of VASP and special products(a) Geographically diversified with manufacturing facilities in South and West India Focus on flat steel products (approximately 75%
Slide 20: Appendix
Appendix JSW Group and Key highlights company overview
Slide 21: Strong momentum in steel prices with positive spread
Strong momentum in steel prices, with increase faster than raw material cost rise leading to positive spread Steel prices have trended upward since Q4 CY15 (a) (b) Raw material price trends (US$/tonne) 120 160 350 140 300 100 120 250 USD/t rebased to 100 100 80 200 80 150 60 60 40 100 20 50 40 0 0 D
Slide 22: Reducing Chinese steel exports and strong domestic consumption growth
Reducing Chinese steel exports supplemented with strong fundamental for domestic consumption growth Significant room for improvement in per-capita China steel exports (MTPA) Positive India steel consumption environment consumption in India 111.6 108.1 1,047 92.9 97.5 90.7 (Kg of finished steel produ
Slide 23: Consolidated financials
Consolidated financials Particulars (a) (b) FY16 FY17 FY18 FY19 H1 FY20 (US$m) Operating revenue 6,504 8,564 10,357 11,990 5,113 (c) Operating EBITDA 906 1,722 2,093 2,681 912 % margin 13.9% 20.1% 20.2% 22.4% 17.8% Profit before tax (349) 725 1,082 1,580 348 Profit after tax (68) 490 865 1,064 501 S
Slide 24: Standalone financials
Standalone financials Particulars (a) (a) (b) FY16 FY17 FY18 FY19 H1 FY20 (US$m) Crude steel 12.56 15.80 16.27 16.69 8.08 production Saleable Steel sales 12.13 14.77 15.62 15.76 7.35 (MT) Operating revenue 5,780 8,051 9,580 10,854 4,699 Operating EBITDA 901 1,633 1,944 2,603 938 % margin 15.6% 20.3%
Slide 25: Volume guidance for FY20
Volume guidance for FY20 16.95 16.0 16.69 15.76 FY20 FY20 Sales Production is is expected expected to to be lower be lower by by 3% from 3% from the the earlier earlier guidance of guidance of 16.0 16.95 FY19 FY20E FY19 FY20E Crude Steel Production Saleable Steel Sales All figures are in million ton
Slide 26: Key Projects
Key Projects Total project cost – `15,000 crore (USD $2,122M) Total capacity will be increased from 5 MTPA to 10 MTPA. The major facilities to be set-up under the expansion Dolvi: increasing steel making capacity project are: to 10 MTPA 4.5 MTPA Blast furnace with 5 MTPA Steel Melt Shop 5 MT
Slide 27: Key Projects
Key Projects Total project cost – `2,000 crore (USD $283M) Vijayanagar: CRM-1 complex CRM1 complex capacity will be increased from 0.85 MTPA to 1.80 MTPA along with two Continuous capacity expansion Galvanizing Line of 0.45 MTPA each, a new 1.2 MTPA Continuous Pickling Line for HRPO products C
Slide 28: Key Projects
Key Projects Total project cost – `5,200 crore (USD $736M) Vijayanagar: Manufacturing Pellet plant 8 MTPA , Commissioning: by March 2020 Integration Coke oven battery 1.5 MTPA, Commissioning: in FY21 Total project cost – `975 crore (USD $138M) Dolvi – Captive Power Install 175 MW WHRB and
Slide 29: JSW Steel Branded Portfolio
JSW Steel Branded Portfolio 28
Slide 30: Performance on sustainability metrics
Performance on sustainability metrics Recognised as one of the “Steel Sustainability 1 Champion” by World Steel Association Waste gas 2019 Material Deming Award for Salem Works recycled 4.5 MnT 96% utilization rate for FY19 2018 Deming Award for Vijayanagar Works 1 JSW Steel included in the NIFTY 50
Slide 31: Thank you
Thank you