Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q3 FY2009 Earnings Presentation
30 slides from Tata Steel's earnings presentation, Feb 27, 2009
Slide 1: Tata Steel Group Consolidated Financial Performance
Tata Steel Group Consolidated Financial Performance Quarter Ended December 31, 2008 Analyst Meet – Mumbai February 27 , 2009 1
Slide 2: Agenda
Agenda Highlights Management Initiatives Fi Financial i l Review R i Near Term Outlook 2
Slide 3: Highlights
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Slide 4: Consolidated Highlights - Nine Months ended Dec'08
Consolidated Highlights - Nine Months ended Dec’08 (US$ Mn) Deliveries ((MT)) Turnover 22.6 23.5 24,922 Q3 19,739 Q3 Q2 Q2 Q1 Q1 EBITDA PAT * 3 784 3,784 1,953 Q3 2,829 Q3 Q2 1 087 1,087 Q2 Q1 Q1 4 * PAT after Minority Interest and Share of Associates
Slide 5: Q3 FY'09 Production / Deliveries (Mn T)
Q3 FY’09 Production / Deliveries (Mn T) Tata Steel India Tata Steel Europe p Nat Steel Asia Tata Steel Thailand Q3 FY’09 5 * India – Saleable Steel Production , Europe – Liquid Steel Production & S.E Asia- Finished Steel Production Q3 FY’08
Slide 6: Apr-Dec FY'09 Production / Deliveries (Mn T)
Apr- Dec FY’09 Production / Deliveries (Mn T) Tata Steel India Tata Steel Europe p Nat Steel Asia Tata Steel Thailand Apr- Dec’08 6 * India – Saleable Steel Production , Europe – Liquid Steel Production & S.E Asia- Finished Steel Production Apr- Dec’07
Slide 7: Tata Steel Group Management Initiatives
Tata Steel Group Management Initiatives 7
Slide 8: Response to the Financial Crisis
Response to the Financial Crisis Tata Steel India Maximize sales in Jan-March Qtr to 1.5 million tons. (Achieved Sale of 0.5 mt in Jan’09) Renegotiating existing coal contracts for off take till June’09 2.9 mtpa p expansion p p plans on track Nat Steel Asia Maximize plant capacity with c
Slide 9: Savings Through Improvement Initiatives - India
Savings Through Improvement Initiatives - India US$ Mn 106.42 118.77 91.18 • Procurement: Saving of US$ 16.4 Mn through spot buying of coal and exercise mutual options and saving of US$ 4.4 Mn through postponement of spot buy of ferroalloys. • CSI: Saving of US$ 12.6 Mn due to reduction in coke rate
Slide 10: Key Initiatives – TS Europe
Key Initiatives – TS Europe “Weathering the storm” programme - £ 600 m cash savings to be realised in H2 FY’09 Tactical actions to mitigate negative impact of the current market conditions Training and up skilling programme to take advantage of periods of low activity “Fit for Future” programme-
Slide 11: 'Weathering the Storm' – TS Europe
‘Weathering the Storm’ – TS Europe Aligning g g production with current market demand 3 blast furnaces idled Adjustment of logistic and supply chain Operational cash savings program to yield £600m in H2 2009 Reduction in use of 3rd party services Flexible production to reduce energy cost R
Slide 12: 'Fit For Future' – Divestments - TS Europe
‘Fit For Future’– Divestments - TS Europe Aluminium Corus and Klesch signed Sale and Purchase agreement 21 January 2009 Briand Invest Klesch will acquire the aluminium smelters at Voerde and Delfzijl T Teesside id Cast C t Products P d t Sale of a majority stake in the equity of Teesside Cast
Slide 13: 'Fit For Future' - Asset restructuring - Strip UK
‘Fit For Future’- Asset restructuring - Strip UK Steel Making Rolling Re-rolling + Coating Port Talbot Port Talbot Port Talbot Key Actions CRM Mothball Llanwern HSM BF - running BF5 i HSM 3.2mt 4mt CAPL and Pickle line 1 BF4 – currently idled Extend life of BF4 to 2012 Repair BF to extend life t
Slide 14: 'Fit for Future' - Asset restructuring - CES
‘Fit for Future’ - Asset restructuring - CES Key Actions ss peciality Busines Steel Making Casting & Rolling Downstream Re-size CES to 1mt Rotherham Aero Service Create 2 businesses Stocksbridge EAF-T Mills & Finishing g Centres: Speciality business focused Bolton EAF-N on higher margin products (
Slide 15: 'Fit for Future' - Asset restructuring - Downstream
‘Fit for Future’ - Asset restructuring - Downstream Further Rationalisation of Distribution Closure of the Bellshill, Blackburn and Stourton service centres in the UK Strategic review of operations in Spain Restructuring Building Systems Closure of Ammanford and Tewkesbury and relocate panel a
Slide 16: Synergies Realized in Apr-Dec FY'09
Synergies Realized in Apr-Dec FY’09 US $ Mn Cost Projects in Progress TS India Realized Exit rate IJmuiden Increase in LCCS (low cost carbon sources) g Manufacturing 28.5 17.4 g from 15% to 39%. usage Procurement 2.8 2.3 Jamshedpur Coke Rate reduced from 430 kg/thm to 380 kg/thm Total 31.3 19.7
Slide 17: Financial Review
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Slide 18: Consolidated Financial Performance
Consolidated Financial Performance US $ Mn Q3 FY’09 Tata T t TS NSA TSTH Tata T t Steel St l Steel Europe Group(*) Deliveries (mt ) 1.1 4.3 0.4 0.3 6.0 Turnover 991 5,381 343 127 6,839 EBIDTA 306 358 (16) (76) 611 EBIDTA margin 31% 7% (5%) (60%) 9% PBT 142 PBT margin 2% PAT** 168 PAT margin 2% ROIC
Slide 19: Consolidated Financial Performance
Consolidated Financial Performance US $ Mn Apr – Dec A D Tata T t TS NSA TSTH Tata T t Steel St l FY’09 Steel Europe Group(*) Deliveries (mt ) 3.5 16.2 1.9 0.9 22.6 Turnover 3,721 18,909 1,541 692 24,922 EBIDTA 1 635 1,635 2 047 2,047 59 22 3 784 3,784 EBIDTA margin 44% 11% 4% 3% 15% PBT 2,361 PBT m
Slide 20: Consolidated Profit Bridge – Q3 FY'09
Consolidated Profit Bridge – Q3 FY’09 US$ Mn 611 (223) (188) (41) 8 168 * PAT is after Minority Interest and Share of Associates 20
Slide 21: Consolidated Profit Bridge – Apr-Dec FY'09
Consolidated Profit Bridge – Apr- Dec FY’09 US$ Mn 3,784 (687) (526) (182) (436) 1,953 * PAT is after Minority Interest and Share of Associates 21
Slide 22: Consolidated Financial Ratios
Consolidated Financial Ratios Net Debt / EBITDA Interest Cover ROIC (%) – Pre Tax – (Annualised) Diluted EPS – (Not Annualised) ( $ ) 22
Slide 23: Working Capital Management
Working Capital Management Tata Steel India Tata Steel Europe US$ Mn Nat Steel Asia Tata Steel Thailand 23 ------ Inventory -------- Receivables
Slide 24: Net Term Debt Position – Tata Steel Group
Net Term Debt Position – Tata Steel Group US$ Mn Net Debt Increase Includes : 8,939 8 786 8,786 Exchange Rate Fluctuation on account of US$ 1.6 Bn ECB loans in TSL India (Fully Hedged) – 694 7,893 Exchange Fluctuation impact due to depreciation of Pound Sterling against Euro in Senior Facility A
Slide 25: Gross Debt Maturity – Tata Steel Group
Gross Debt Maturity – Tata Steel Group US$ M Mn No N repaymentt obligation bli ti till 698 December 2009 in TS Europe 524 Company will prepay debt of 625 68 271 ~ US$ 450 M Mn d during i FY’10 iin Q4 FY'09 FY'10 FY'11 TS Europe Tata Steel Europe Tata Steel India Natsteel Asia has no long term ex
Slide 26: Liquidity Position - Tata Steel Group
Liquidity Position - Tata Steel Group US $ Mn Position as on 20th Feb’09 752 1 886 1,886 1,134 Covenants as at Dec’08 have been met 26
Slide 27: Group CAPEX for 2009-10
Group CAPEX for 2009-10 2009-10 Capex for TS group to be around d US$ 1 1.2 2BBn Focus on High Growth Projects e.g. Jamshedpur Expansion to 10 mtpa by December 2010 Continue commitment towards developing existing investment in overseas raw material projects 27
Slide 28: TS Europe Pensions
TS Europe Pensions Combined Surplus of all TS Europe Pension Funds £ Mn 1,334 Tri-ennial valuation completed Agreement with trustees 819 finalized 692 Contribution fixed for next 3 years @ 12% 371 Proposal to close schemes 236 to new members by migrating from Defined Benefit scheme to Define
Slide 29: Near Term Outlook
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Slide 30: Thank You
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