Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q1 FY2022 Earnings Presentation
32 slides from Tata Steel's earnings presentation, Aug 12, 2021
Slide 1: Results Presentation
Results Presentation Financial quarter ended June 30, 2021 August 12, 2021 1
Slide 2: Safe harbour statement
Safe harbour statement Statements in this presentation describing the Company’s performance may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those directly or indirectly expressed, inferred or implied. Imp
Slide 3: Tata Steel is focused on creating sustainable value
Tata Steel is focused on creating sustainable value Consolidate Leadership in Robust financial position as global India health cost leader Leadership position Leadership in Become culturally in technology sustainability future ready and digital 3
Slide 4: 1QFY22 performance: key themes
1QFY22 performance: key themes Robust financial Sustainability at the core performance Continued focus on long Capitalizing strong performance term value creation to strengthen financial health Constructive macro Resilient operational environment performance Improved fundamentals Underpinning our st
Slide 5: Committed towards excellence in Safety & Health of employees and communities
Committed towards excellence in Safety & Health of our employees and improving quality of life of our communities Safety remains a top priority Key areas for CSR initiatives ▪ Launched 5th MASS+ wave on ‘Standardization of ▪ Engaged with 1.6 million+ lives through our CSR program tools & tackles’ un
Slide 6: Standing with the nation during COVID-19 pandemic
Standing with the nation during COVID-19 pandemic Supporting the community Health support ▪ Vaccination campaign: 90%2 of the eligible employees received their first 18 lakh+ dose of vaccination Lives reached out1 ▪ Liquid Medical Oxygen: more than 68,600 tons Liquid Medical Oxygen supplied till 31s
Slide 7: Sustainability is deeply embedded in Tata Steel ecosystem
Sustainability is deeply embedded in Tata Steel ecosystem Key focus areas ▪ Improving transparency and disclosures; First Indian Company to adopt “Task Force on Climate Change Climate-related Financial Disclosures” ▪ Deploying responsible supply chain policy across the value chain Water ▪ Implementi
Slide 8: Western market steel prices and spot spreads remain elevated; Chinese steel spreads correct
Western market steel prices and spot spreads remain elevated; Chinese steel spreads correct ▪ Global economy continues to recover Global manufacturing PMIs improve China CFR coking coal prices are at >$300/t 70 Prices ($/t) Premium Low Vol HCC CFR China EU UK 350 Premium HCC, Australia FoB ▪ Raw mat
Slide 9: India steel demand impacted by 2nd wave of COVID-19; European steel supplies lag demand recovery
India steel demand impacted by 2nd wave of COVID-19; European steel supplies lag demand recovery India Europe ▪ 1QFY22 steel demand impacted due to seasonality and ▪ Steel consuming sectors, especially automotive, weakness amidst the 2nd wave of COVID-19 continued to recover ▪ European spot Steel pr
Slide 10: India: Deliveries increased by 42% YoY amidst the 2nd wave of COVID-19
India1: Deliveries increased by 42%YoY amidst the 2nd wave of COVID-19 ▪ Crude steel production fell 2.6%QoQ due to the supply of liquid medical oxygen amidst the 2nd wave of COVID-19 pandemic ▪ Steel deliveries declined 11%QoQ due to partial lockdowns and temporary shutdowns in few steel consuming
Slide 11: India: Market leadership in chosen segments
India1: Market leadership in chosen segments Tata Tiscon was one of the 1st TMT rebar brand in India to ▪ Value-added products’ sales to key segments receive the CII GreenPro certification like Pre-Engineered buildings, Oil & Gas and agricultural implements grew 175% YoY in 1QFY22 ▪ Received approva
Slide 12: India: New products developed across customer segments
India1: New products developed across customer segments HR C15 for clutch Grade: Fe 550SD, 8 to HR 550MC for 25mm rebars (BPR): Rim plate (Auto): camber plate (Auto): Good chemistry High strength, high Auto-structural with ductility rebars developed design and control enhanced mechanical Core for go
Slide 13: India: 5 MTPA TSK Phase II expansion driving value accretive growth
India: 5 MTPA TSK Phase II expansion driving value accretive growth in India CRM complex capability Width (in mm) Thickness (in mm) Capacity (in MTPA) Pickling Line and Tandem Cold rolling Mill 1,870 0.3 - 2.3 2.2 Continuous Annealing Line 1,870 0.3 - 2.3 0.9 Continuous Galvanizing Line (non-auto) 1
Slide 14: India: New initiatives are progressing well
India: New initiatives are progressing well Aashiyana1 Service & Solutions Steel Recycling Business New Material Business Developed FRP2 cable trays Graphene solutions ‘FABOURTM’ ‘Aashiyana’ generated Opened first dedicated Launched Shredded Ferrous and ‘DUROMIXXTM’ are now gross revenue of Rs.257 A
Slide 15: Business outlook is constructive
Business outlook is constructive Steel demand Steel prices Raw material prices ▪ Global steel demand is ▪ Asian steel prices are ▪ Seaborne iron ore prices are expected to expand by 5.8% in expected to remain elevated expected to witness pressure CY21 with recovering economy amidst supply tightness
Slide 16: Delivered strong financial performance
Delivered strong financial performance 1QFY22 deliveries (mn tons) ▪ Highest ever quarterly consolidated EBITDA of Rs.16,185 crores Others 42% India* 58% ▪ Generated free cash flow of Rs.3,553 crores ▪ Debt repayment of Rs.5,894 crores 1QFY22 EBITDA (Rs. crores) ▪ Net Debt to EBITDA improved sharply
Slide 17: Tata Steel Standalone: Highest ever quarterly EBITDA and PAT
Tata Steel Standalone: Highest ever quarterly EBITDA and PAT (All figures are in Rs. Crores unless stated otherwise) 1QFY22 4QFY21 1QFY21 Key drivers for QoQ change: Total revenue from operations 20,798 21,203 9,339 ▪ Revenues: decreased as deliveries were impacted by Raw material cost1 4,523 4,376
Slide 18: Tata Steel Consolidated: Highest ever quarterly EBITDA
Tata Steel Consolidated: Highest ever quarterly EBITDA (All figures are in Rs. Crores unless stated otherwise) 1QFY22 4QFY21 1QFY21 Key drivers for QoQ change: Production (mn tons)1 7.88 8.02 5.54 ▪ Revenues: improved across key entities (except at Deliveries (mn tons) 7.11 7.83 5.34 Tata Steel Stan
Slide 19: Tata Steel Europe: Strong operating performance
Tata Steel Europe: Strong operating performance (All figures are in Rs. Crores unless stated 1QFY22 4QFY21 1QFY21 otherwise) Key drivers for QoQ change: Liquid Steel production (mn tons) 2.67 2.66 2.15 ▪ Volumes: production was stable while deliveries Deliveries (mn tons) 2.33 2.47 1.98 declined by
Slide 20: Achieved highest ever Consolidated EBITDA despite higher raw material prices
Achieved highest ever Consolidated EBITDA1 despite higher raw material prices Rs. Crores ▪ Selling Result: Sharply improved with increase 3,184 in steel prices across entities 6,641 1,500 15,892 2 ▪ Cost Changes: Primarily due to increase in 13,933 purchased Iron Ore and coking coal consumption cost
Slide 21: Generated free cash flows of Rs.3,553 crores in 1QFY22
Generated free cash flows of Rs.3,553 crores in 1QFY22 Rs. Crores 16,185 8,272 1,133 958 213 44 2,011 3,553 EBITDA 1QFY22 Working capital Finance cost (net) Taxes paid Non-cash & Others Dividend (Incl. tax) Capex Free Cash Flow movement 1QFY22 21
Slide 22: Debt repayment of Rs.5,894 crores in 1QFY22
Debt repayment of Rs.5,894 crores in 1QFY22 Rs. Crores 88,501 106 84,237 5,894 13,1131 1,524 10,264 1 73,973 75,389 Gross Debt Addition of Loan FX Impact Gross Debt Cash, Bank & Net Debt Mar'21 new leases movement and Others Jun'21 Current Jun'21 Investments 1. Cash, bank & current investments 22
Slide 23: All key metrics continue to improve
All key metrices continue to improve EBITDA Margin (%)1 EBITDA / ton (Rs.)1 Interest Coverage Ratio (x)1,2 Gross & Net Debt (Rs. crore) 22,779 8.9 30.3% 116,328 100,816 92,147 88,501 84,237 18.9% 19.8% 83,014 104,779 17.2% 11,110 94,879 14.5% 12.2% 9,337 10,838 3.9 3.9 7,129 3.4 4.1 72,367 69,215 75
Slide 24: Pathway for our future financial strategy
Pathway for our future financial strategy ▪ Investment grade financial metrics; strong earnings and cashflow performance ▪ US$2 billion+ gross debt reduction while prioritize off-shore debt pre-payment Short-term ▪ Continued focus on capital allocation, cashflow and working capital management (FY22
Slide 25: Annexures
TATA STEEL TATA '# WeAlsoMakeTomorrow Annexures
Slide 26: Tata Steel Standalone: Continued focus on operational efficiencies and minimizing environmental impact
Tata Steel Standalone: Continued focus on operational efficiencies and minimizing environmental impact Coke Rate (kg/thm) Specific Energy Consumption (Gcal/tcs) Specific Fresh Water Consumption (m3/tcs) Good Good Good 434 7.29 399 6.31 6.27 6.24 367 364 360 354 353 352 352 348 345 5.84 4.76 5.68 5.6
Slide 27: Tata Steel BSL: Highest ever quarterly EBITDA and PAT; focussed on deleveraging
Tata Steel BSL: Highest ever quarterly EBITDA and PAT; focussed on deleveraging Consolidated financial statements (All figures are in Rs. Crores unless stated otherwise) 1QFY22 4QFY21 1QFY21 Key drivers for QoQ change: Crude Steel production (mn tons) 1.17 1.18 0.66 ▪ Volumes: production and deliver
Slide 28: Tata Steel Long Products: Consistent improvement in operations and marketplace
Tata Steel Long Products: Consistent improvement in operations and marketplace Crude Steel production (k tons) Steel Sales (k tons) ▪ Steel production declined on QoQ basis 186 Crude steel 172 172 due to planned maintenance shutdowns 162 production and and limited availability of Oxygen Steel sales
Slide 29: Tata Steel Long Products: Highest ever EBITDA; continue to deleverage
Tata Steel Long Products: Highest ever EBITDA; continue to deleverage with strong FCF generation Consolidated financial statements Key drivers for QoQ change: 1QFY22 4QFY21 1QFY21 (All figures are in Rs. Crores unless stated otherwise) ▪ Revenues: increased with improved steel and DRI Total revenue
Slide 30: Tata Steel Long Products: consistent improvement in key operating parameters
Tata Steel Long Products: consistent improvement in key operating parameters (all figures are indexed; 1QFY20=100) Coke rate1 PCI rate Raw Material handling through Rake 100 97 160 200 183 Good Good Good 85 130 123 160 70 100 120 55 70 80 40 40 40 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QF
Slide 31: Tata Steel SEA: Strong performance with higher steel prices
Tata Steel SEA: Strong performance with higher steel prices (All figures are in Rs. Crores unless stated 1QFY22 4QFY21 1QFY21 otherwise) Key drivers for QoQ change: Saleable Steel production (mn tons) 0.59 0.61 0.39 Deliveries (mn tons) 0.63 0.64 0.42 ▪ Volumes: production and sales declined primari
Slide 32: Investor relations contact
Investor relations contact Investor enquiries : Sandep Agrawal Email: sandep.agrawal@tatasteel.com 32