Vedanta Limited · NSE:VEDL
Vedanta — Credit Suisse: Annual Asian Investment Conference 2017
23 slides from Vedanta's conference presentation, March 2017
Slide 1: Vedanta Limited
Vedanta Limited Credit Suisse: Annual Asian Investment Conference March 2017 VEDANTA LIMITED, Credit Suisse: Annual Asian Investment Conference, March 2017
Slide 2: Disclaimer
Disclaimer The views expressed here may contain information derived from publicly only as of the date of this presentation, and we disclaim any responsibility available sources that have not been independently verified by us. to update or revise such statements. No representation or warranty (expres
Slide 3: Vedanta Group
Vedanta Group Overview Group structure • Vedanta Resources Plc Vedanta Resources Plc • Premium listing in London in 2003 • Owns 63% of Vedanta Ltd; 50.1% post merger 62.9% (50.1%)¹ of Vedanta Ltd-Cairn India • Also owns Konkola Copper Mines - copper producer in Zambia 79.4% • Strong access to global
Slide 4: Diversified Commodity Basket
Diversified Commodity Basket Our commodity basket has captured commodity price upside, with low volatility Aluminium Zinc Copper Iron Ore 62%² Silver Brent Oil VED commodity basket¹ 700 600 Vedanta’s commodity basket up by 57% (01 Jan 2004 = 100) Commodity prices 500 since Jan’16 400 201% Silver 300
Slide 5: Attractive cost curve positioning with best in class balance sheet
Attractive cost curve positioning with “Best in class” Balance Sheet Low cost assets provide sufficient cushion in any cycle I II III IV Zinc India Zinc O&G Intl. Copper Aluminium Size of circle India denotes EBITDA Iron ore¹ contribution Source: Wood Mackenzie as of Q4 2016, CRU Aluminium business
Slide 6: Strong volume growth with significant capex already spent
Strong volume growth with significant capex already spent Capacity expansion should drive growth ..positioned to reap benefits from incremental production 25% Total Production (copper equivalent kt) Consensus EBITDA CAGR (CY16-18) 20% Zinc-Lead Silver Copper Aluminium 2,500 15% Power Iron Ore Oil &
Slide 7: Zinc: Fundamentals supporting price
Zinc: Fundamentals supporting price Global Zinc concentrate deficit supporting zinc prices (kt) Global Zinc Cost curve 800 CY 2016E Zinc C1 composite cost curve Surplus Century closure (500ktpa) Dugald River 600 (210 ktpa) $/t Lisheen closure Zinc Zinc (160 ktpa) Gamsberg India Intl 400 (250ktpa) to
Slide 8: Well positioned to benefit from the India story
Well positioned to benefit from the India story India’s demand is growing 18 Copper consumption (kg/capita) 4,500 16 Germany Real GDP Per Capita (USD) 4,000 14 South Korea 3,500 12 3,000 10 China 2,500 8 2,000 GDP/capita 6 Japan US 1,500 growth 1,000 4 500 2 India 0 0 2015 2020 2025 2030 0 10 20 30
Slide 9: Financial Priorities focused on a strong Balance Sheet
Financial Priorities focused on a strong Balance Sheet Disciplined Capital Allocation: Ramp-ups at Aluminium, Power and Iron Ore are generating significant cash flows Optimising capex, Continued optimization of Opex and Capex focus on FCF Deleveraging; Continued reduction in debt Strong Liquid
Slide 10: Strategic priorities remain unchanged
Strategic priorities remain unchanged Production growth and asset optimisation Disciplined approach towards ramp up De-levering the balance sheet Reduce gross debt Continued optimisation of opex and capex Continued discipline around working capital Simplifying the Group structure Complete
Slide 11: Appendix
Appendix VEDANTA LIMITED, Credit Suisse: Annual Asian Investment Conference, March 2017
Slide 12: Zinc India
Zinc India World class fully integrated zinc producer Rampura Agucha Mine – Longitude Vertical Section Annual zinc/lead production of 904kt as of 31 March 2016 Rampura Agucha: +13mRL ‐80mRL Largest zinc mine in the world1 ‐130mRL Present Working 22.1 year life of mine (reserves and resources
Slide 13: Zinc International
Zinc International Overview Gamsberg is a large, high return project Vedanta’s international zinc business comprises: Project NPV ($mm) Skorpion (Namibia, 100% owned) Black Mountain (South Africa, 74% owned) Gamsberg project (South Africa, 74% owned) Skorpion mine: Strongly positioned in
Slide 14: Oil & Gas
Oil & Gas India’s leading O&G producer Rajasthan Block Cairn India is the largest private sector producer of crude oil in India c.3,111 km2 block with rich set of options Operating c.27% of India’s domestic crude oil production1 c.40 km Currently present in eight blocks: one in Rajasthan, two
Slide 15: Aluminium
Aluminium Major Indian producer with established infrastructure Aluminium Costs and Margins (in $/t, for Q3 FY2017) #1 aluminium producer in India by installed capacity with 44% of 1,620 72 Q2’17 82 1,774 (560) (593) (309) (65) $247/t (167) (359) (279) total1 1,838 1,710 Primary products are alu
Slide 16: Power
Power Overview Power Generation Capacity – c. 9GW Vedanta is well positioned to capitalise on India’s economic growth, IPP (3.6GW) CPP (5.1GW) power deficit and large coal reserves 600MW Jharsuguda 1,215MW Jharsuguda Building and managing captive power plants in India since 1997 (of 2400MW p
Slide 17: Iron Ore
Iron Ore Overview Goa iron ore costs and margin (Q3 FY2017, US$/t) Vedanta’s iron ore business is in the states of Goa and Karnataka 73 22 First company to restart iron ore mining in Goa (August 2015) after 3 year state-wide mining bans 8 2 41 8 Leading company in iron ore mining, processing a
Slide 18: Copper India
Copper India Overview Sustained, high utilisation rate Large custom smelting and refining business with capacity of 400ktpa (40% of total Indian capacity according to the Indian Copper cathode production (kt) Utilisation rate Minerals Yearbook 2014) 450 96% 100% High utilisation: record copper c
Slide 19: Vedanta Ltd-Cairn India merger
Vedanta Ltd-Cairn India merger Efficient capital allocation, more stable cash flows Timeline Diversified portfolio de-risks earnings volatility and Key completed events drives more stable cash flows through the cycle Vedanta Limited will announce its dividend policy BSE, NSE and SEBI approvals s
Slide 20: Balance sheet and maturity profile
Balance sheet and maturity profile Maturity Profile of Term Debt ($9.0bn) (as of 31st December 2016) 2.2 Subsidiaries Standalone 0.5 1.7 1.7 1.3 0.7 0.7 1.1 1.0 0.3 0.5 0.4 1.7 1.0 1.0 0.7 0.8 0.7 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 & Later External term debt of $9.0bn ($6bn at Standalone and
Slide 21: Entity wise cash and debt
Entity wise cash and debt (in Rs. Crore) 31 December 2016 30 September 2016 30 June 2016 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 43,168 1,247 41,921 41,285 2,114 39,171 35729 1,216 34,513 Standalone Zinc India 0 25,373 (25,373) 1,928 27,186 (25
Slide 22: Debt breakdown & funding sources
Debt breakdown & funding sources Diversified Funding Sources for Term Debt of $9.0 bn Debt Breakdown (as of 31 Dec 2016) (as of 31 Dec 2016) Short term loans- USD 3% Debt breakdown as of 31 Dec 2016 (in $bn) Bonds- INR Money Market 22% External term debt 9.0 Instrument- INR 23% Working capital 0.4 I
Slide 23: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 62.9% Sesa Iron Ore Konkola Sterlite Copper (Tuticorin) Copper Vedanta Ltd Power (600 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Subsidiaries of Vedanta Ltd 59.9% 64.9% 51% 100% 100% 100% 1
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