Vedanta Limited · NSE:VEDL
Vedanta — Investor Presentation (August 2022)
42 slides from Vedanta's investor presentation, Aug 9, 2022
Slide 1: Investor Presentation
VEDANTA LIMITED August 2022 Investor Presentation Sensitivity: Internal (C3)
Slide 2: Vedanta Limited – Overview
Vedanta Limited – Overview A globally diversified natural resource Strong management 1st quartile cost curve Committed to ESG powerhouse with team with >30 years positioning globally leadership in the presence across of experience; across key segments natural resources Aluminium, Zinc- 76,000+ peopl
Slide 3: Group structure to support diversified commodity exposure
Group structure to support diversified commodity exposure Listed entities Volcan 52.4% 71.4% Unlisted entities 100% Sterlite Sterlite Power Technologies Transmission Vedanta Resources Ltd Divisions of Vedanta Limited 79.4% 69.7% ⚫ Sesa Iron Ore Konkola ⚫ Sterlite Copper Copper ⚫ Power (600 MW Jharsu
Slide 4: Vedanta is uniquely positioned to deliver sustainable value
Vedanta is uniquely positioned to deliver sustainable value Robust financial profile with improving World-class natural resources powerhouse with ROCE, increasing cash flow and a low cost and long-life diversified asset base stronger balance sheet Well positioned to capitalize on India’s growth and
Slide 5: World class diversified natural resource powerhouse
1a World class diversified natural resource powerhouse 1 SILVASSA | Copper 2 TUTICORIN | Copper, Captive Power Plant 3 LANJIGARH | Aluminium INDIA (VAL) & Captive Power Plant JHARSUGUDA | Aluminium 4 (VAL), Commercial Power (SEL), Captive Power Plant & Projects under development, Captive coal mines
Slide 6: Tier-1 low-cost assets and long-life assets with exploration upside
1b Tier-1 low-cost assets and long-life assets with exploration upside Competitive Position on Cost Curve POSITIONING R&R Life1 FY2022 Production Full Capacity2 Quartiles5 I II III IV Zinc India Largest integrated zinc-lead producer 25+ 1,017kt 1.2mtpa Zinc International One of the largest undevelop
Slide 7: Well positioned to capitalize on global natural resource potential and India growth outlook (1/2)
Well positioned to capitalize on global natural resource potential and India growth 2a outlook (1/2) GLOBAL NATURAL RESOURCE UPCYCLE Europe’s energy crisis Natural resources are Current geo-political Oversupply risk is low led cost pressures, in demand upcycle situation has led to amidst dearth of n
Slide 8: Well positioned to capitalize on global natural resource potential and India growth outlook (2/2)
Well positioned to capitalize on global natural resource potential and India growth 2b outlook (2/2) India is the fastest growing major economy in the world 2030 2021 2030 CAGR 6.1% 2021 $5tn economy GDP(Real) $2.8 tn $4.8 tn 5th largest CAGR 5.2% $2.8 tr Per capita $6.8k $11.6k Zinc, Aluminium and
Slide 9: Attractive commodity mix well placed for energy transition led mineral demand
Our portfolio with attractive commodity mix is well placed to meet the energy 2c transition led mineral demand growth Mineral intensity vs Clean Vedanta’s presence conventional energy shift tech Key mineral for clean energy technologies Electric vehicles 5x Fe Al Cu Zn Pb Ni 2x 2x 2x 2x 2x 1.5x Sola
Slide 10: Proven track record of operational excellence
3a Proven track record of operational excellence Zinc-Lead Silver Copper Aluminium Steel Power Iron Ore Oil & Gas Total Production Copper Equivalent (kt) 2,000 1,800 Strong EBITDA Performance 1,600 1,400 1,200 $ 6.1 bn 1,000 800 600 400 200 $0.3 bn 0 FY2011 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009
Slide 11: Well invested and consolidated assets driving growth
3b Well invested and consolidated assets driving growth Inorganic Growth ✓ Acquired Cairn India Organic growth ✓ Vedanta IPO ✓ Acquired Zinc International ✓ Acquired KCM ✓ Acquired VS Dempo ✓ Acquired ESL ✓ 170 kT Zinc smelter ✓ Commissioned 100kt Dariba Pb smelter ✓ 50 kT Pb smelter ✓ Acquired FACO
Slide 12: Aluminium business: Set to be among top globally
Aluminium business: Set to be among top 3 globally* delivering superior value for all its 3c stakeholders Aluminium: achieved record production, margins o JSG capacity ramp-up to 1.8 MTPA – 2QFY23 o Environmental clearance continue to improve is in place o Balco capacity expansion to 1 Aluminium Cap
Slide 13: Zinc Business: Transformed zinc India; Zinc International poised to deliver
Zinc Business: Transformed zinc India completely over the last decade; Zinc International 3d poised to deliver significant value VOLUME (KT) & COP ($/T) ZINC INDIA ZINC INTERNATIONAL GROWTH PROJECT 1,400 ➢ Largest Integrated Zinc-Lead miner with ➢ $466 mn capex on Gamsberg phase 2 1,100 >25 years of
Slide 14: Oil & Gas: Rich portfolio mix spread across basins
Oil & Gas: Rich portfolio mix spread across basins; focus on augmenting R&R and increase 3e production volume Vision Current growth project: $687mn growth capex projects, includes $360mn to monetize 52.6mmboe > 50% of India’s domestic reserves and $327mn to grow resources production Maximize resourc
Slide 15: Iron & steel: Potential to create long term growth
3f Iron & steel: Potential to create long term growth 4.5 MTPA 12 MTPA 150 KTPA 7 KTPA STEEL & VAP IRON ORE FERRO ALLOY NICKEL Expansion at Bokaro / Goa Starting mines in Liberia Charge Chrome plant (CCP) Starting Operations Greenfield at Bellary Reserves and Resources Expansion Debottlenecking Pote
Slide 16: Focused on digitalization and innovation to drive efficiency and resilience
4 Focused on digitalization and innovation to drive efficiency and resilience Six core pillars of center of excellence: clear outcomes outline ambition for each pillar o Digital first approach across business Volume Cost Enabling Digital Digital o Digital as culture of organization 10% 5% automation
Slide 17: Disciplined capital allocation framework
5a Disciplined capital allocation framework o Intend to deleverage at group level Key Strategic Priority Optimize Leverage Ratio o Leverage ratio at Vedanta Limited should not be more than 1.5x. Project Capex o Volume augmentation, cost reduction or creating value added products are key guiding prin
Slide 18: Emphasis on superior and consistent shareholder returns while investing for growth
5b Emphasis on superior and consistent shareholder returns while investing for growth Dividend payout of ₹ 66,624 crore (> $9 bn1) over a decade $mn 143 159 199 159 1,058 1,223 1,002 205 504 2,246 2,438 ₹ crore 16,727 18,933 7,099 7,880 7,005 3,531 782 964 1,216 1,038 1,450 FY2013 FY2014 FY2015 FY20
Slide 19: ESG strategy: Pillar 1 – Transforming Communities
Steadily progressing on our repurposed ESG strategy: Pillar 1 – Transforming 6a Communities Total Beneficiaries FY22 CSR Spend Villages reached Key Initiatives of CSR 4.64 mn ₹ 399+ crores 1268+ Areas of Focus in CSR Healthcare Drinking water and sanitation Nand Ghar Saplings Plantation > 30 Initiat
Slide 20: ESG strategy: Pillar 2 – Transforming the Planet
Steadily progressing on our repurposed ESG strategy: Pillar 2 – Transforming the 6a Planet Baseline 2030 Our aims Key KPIs (UoM) Key strategic initiatives (FY21) Target Absolute GHG emissions 60mn ▪ Started Biomass usage at HZL / BALCO / Val J 45mn (TCO2e) ▪ Procured ~ 867 Million units of RE power
Slide 21: ESG strategy: Pillar 3 – Transforming the workplace
Steadily progressing on our repurposed ESG strategy: Pillar 3 – Transforming the 6a workplace Baseline 2030 Our aims Key KPIs (UoM) Key strategic initiatives (FY21) Target ▪ Implementing Critical Risk Controls on vehicular safety across Prioritizing Ongoing sites safety and Fatal incidences target-
Slide 22: Board of Directors with a global and diversified experience
6b Board of Directors with a global and diversified experience Anil Agarwal Navin Agarwal Sunil Duggal DD Jalan Whole Time Non-Executive Non-Executive Executive Director & CEO Independent Chairman Vice Chairman 37+ years of Director four decades of four decades of experience of 40+ years of entrepre
Slide 23: Experienced management team
6c Experienced management team Sunil Duggal Priya Agarwal Ajay Goel Madhu Srivastava WTD & Group CEO Non-Executive Group Acting CFO Group CHRO B.Tech- Thapar Institute Non-Independent Director B.Com (H), CA, CS PGDM – IIM A Exp: 38 years MBA, Warwick University Exp: 21 years Exp: 20 years Arun Misra
Slide 24: People – our biggest asset
6d People – our biggest asset OUR KEY FOCUS AREAS Next Set of 4000 Company with Governance, Working with Leaders are Professionally diverse ethics, integrity, best global home grown driven company - demographics – and compliance Each business business through our Nationality, – most revered having s
Slide 25: Robust financial profile with improving ROCE and stronger balance sheet
7 Robust financial profile with improving ROCE, increasing cash flow and a stronger balance sheet Revenue (Rs crore) EBITDA (Rs crore) Profit after tax (Rs crore) 131,192 45,319 23,709 92,923 25,470 13,692 65,733 20,407 10,339 FY14 FY18 FY22 FY14 FY18 FY22 FY14 FY18 FY22 Net debt / EBITDA x Net gear
Slide 26: Best ever first quarter performance in 1QFY23
Best ever first quarter performance in 1QFY23 Operational Financial ESG Key businesses continue to deliver strong ▪ Revenue of ₹ 38,251 crore, up ▪ Completed internal carbon pricing, climate operating performance: 36%YoY risk assessment, scope -3 inventorization ▪ Aluminium production grew 3%YoY ▪ A
Slide 27: Strategy to enhance long term value
Strategy to enhance long term value Optimise capital Operational Delivering on STRATEGIC Committed to ESG Augment reserves excellence and allocation & growth PRIORITIES leadership & resources base maintain strong cost leadership opportunities Balance Sheet o Achieve net o Disciplined o Focus on full
Slide 28: FY23 key priorities
FY23 key priorities Deliver on target volume growth across businesses Strive for timely completion of capex projects Focus on integrated Aluminum operations to reduce impact on market volatility Continued focus on Reduce costs to sustain and improve margins sustainable shareholder value creation Imp
Slide 29: To sum up
To sum up Unique and diversified portfolio of natural resources Well positioned to capitalize the Successful track record of opportunity through the commodity delivering long term sustainable cycle with attractive commodity mix growth Large and scalable asset base with Robust dividend payout - among
Slide 30: Appendix
VEDANTA LIMITED INVESTOR PRESENTATION August 2022 Appendix Sensitivity: Internal (C3)
Slide 31: Income statement
Income statement ▪ Depreciation & Amortization ₹ Crore $ million In ₹ Crore 1QFY23 1QFY22 FY22 1QFY23 1QFY22 FY22 o Higher by 16% YoY in 1QFY23 mainly due to increase in depletion charge in Oil & Gas and Revenue from operations 38,251 28,105 131,192 4,964 3,810 17,619 increased Ore production at Zin
Slide 32: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net debt / EBITDA – maintained at low level Debt breakdown (as of 30th Jun 2022) Gross Debt In $bn In ₹ 000’ crores 1.1 1.0 0.9 0.9 Term debt 6.4 50.6 0.5 0.6 Working capital 0.4 3.3 FY'18 FY'19 FY'20 FY'21 FY'22 1QFY'23 Short term borrowing 0.9 7.2 ▪ Liquidity: Cash
Slide 33: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Term Debt of $6.4bn Term Debt Maturities : ₹ 50,658 crore ($6.4bn) (as of 30th Jun 2022) (as on 30th Jun’22) Standalone Subsidiaries 8% 21% In ₹ 000’ crore Bonds INR Term Loan INR 6.3 Term Loan USD 20.5 71% 2.1 5 2.0 5 6 3.7 Te
Slide 34: Growth capex and returns profile
Growth capex and returns profile $bn Full year Capex guidance 1.0 1.2 1.5 1.2 0.7 1.1 Growth Capex profile 2.0 Oil & Gas Zinc 0.2 Al & Power Copper Other 1.0 1.1 0.1 0.8 0.8 0.7 0.1 0.0 0.7 0.5 0.1 0.2 0.1 0.2 0.2 0.3 0.5 0.3 0.3 0.0 0.6 0.5 0.5 0.1 0.0 0.3 0.12 0.2 0.2 0.1 FY2017 FY2018 FY2019 FY20
Slide 35: Our ESG Strategy: Transforming for good
Our ESG Strategy ESG Purpose Transforming for good Pillars 1 2 3 Transforming Communities Transforming the Planet Transforming the Workplace ▪ Aim 1. Keep community ▪ Aim 4. Net-carbon ▪ Aim 7. Prioritizing Commitments & welfare at the core of neutrality by 2050 or safety and health of all targets s
Slide 36: Our commitments to achieve 'Net Zero'
Our 10 commitments to achieve ‘Net Zero’ Percentile ranking Net Zero Carbon by 2050 or sooner 1 89% 86% Use 2.5 GW of Round-The-Clock RE 2 and reduce absolute emissions by 25% by 2030 from 2021 baseline 2020 2021 Pledge US$ 5bn over the next 10 years to accelerate transition to Net- 3 Zero No additi
Slide 37: Vedanta - Green spark
Vedanta - Green spark Spark vision: Green spark objective: To achieve corporate innovation and growth outcomes through Strategic investments in start-ups to unlock value across Vedanta. strategic partnerships and investments with Digital or Offers opportunities to explore breakthrough products or Te
Slide 38: Organizational design to ensure right people in right roles
Organizational design to ensure right people in right roles; Globally benchmarked HR practices on ESG side In decision making bodies Leadership roles Enabling roles Overall Safety & health: Group 2030 target 30% 40% 50% 50% ▪ Focus on “Critical Risk Management” Diversity (CRM) to improve workplace s
Slide 39: Key Awards and Recognitions
Key Awards and Recognitions Our group companies received more than 100 awards in the finance, operational excellence, sustainability, CSR and HR categories Sustainability development & CSR Finance & Operational Health, Safety & HR Hindustan Zinc has been awarded the ‘Most Sustainable Company in the
Slide 40: Disclosures & publications
Disclosures & publications Sustainability Report Tax Transparency Report Integrated Annual Report TCFD Report https://www.vedantalimited.com/Pages/VedantaRep https://www.vedantalimited.com/Pages/VedantaRep https://www.vedantalimited.com/Pages/VedantaRep https://www.vedantalimited.com/Pages/VedantaRe
Slide 41: Cautionary statement and disclaimer
Cautionary statement and disclaimer 01 The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any fo
Slide 42: Thank you
Thank you Vedanta Limited Investor presentation August 2022 Sensitivity: Internal (C3)