Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q1 FY2018 Earnings Presentation
34 slides from Tata Steel's earnings presentation, Aug 7, 2017
Slide 1: Results Presentation
Results Presentation Financial Quarter ended 30th June 2017 07th August 2017
Slide 2: Safe harbor statement
Safe harbor 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. Impo
Slide 3: Tata Steel is committed towards excellence in Health and Safety
Tata Steel is committed towards excellence in Health and Safety 0.95 LTIFR* data for Tata Steel Group Ambition: Committed to ensuring all Tata Steel sites are sustainably fatality free on our way to ‘being the benchmark in H&S in 0.78 our industry’ Key Focus areas: 0.68 H&S Excellence programmes
Slide 4: Focused on engaging with communities and improving quality of life
Focused on engaging with communities and improving quality of life Education Health Livelihood CSR Spend -India (Rs. Crs) Thousand Schools Project, aimed Over 98,500 cases related to Over 800 farmers benefitted from at improving quality of education in primary health responded to in agricultur
Slide 5: Agenda
Agenda I Consolidated Financial Performance II India & SE Asia performance III Europe performance IV Appendix 5
Slide 6: Global Steel | Market update
Global Steel | Market update Global Steel production and Demand ( in MT) 500 During the quarter, global steel production grew 400 at the rate of ~4% YoY and QoQ aided by 300 significant growth in China 200 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 However, demand was subdued and coupled with Product
Slide 7: Global Steel | Market update
Global Steel | Market update China steel production and apparent demand (MT) 240 220 Despite stated capacity cuts, China steel 200 180 production grew at ~4% YoY and 9% QoQ in 160 Q1 FY 2018 140 120 100 However, the improved steel consumption in the Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 past six
Slide 8: Highlights of the first quarter
Highlights of the first quarter Deliveries of 5.83 Consolidated revenues Consolidated EBITDA million tonnes of Rs. 30,973 crores of Rs. 4,939 crores Tata Steel Kalinganagar Consolidated EBITDA/t continues to ramp up of Rs 8,480/t smoothly 8
Slide 9: Strategic Developments
Strategic Developments Transformation Regulated Sale of non core programme Apportionment divisions at Tata underway at TSE Agreement for Steel Europe to improve the BSPS to be continues underlying finalised shortly performance Monetisation of Supreme Court non core assets – judgement on Rs 3,778 cro
Slide 10: Quarterly Financial Performance as per Ind-AS1
Quarterly Financial Performance as per Ind-AS1 Rs Crores Consolidated India Q1 FY18 Q4 FY17 Q1 FY17 Q1 FY18 Q4 FY17 Q1 FY17 Deliveries(MT) 5.83 6.83 5.37 2.75 3.21 2.15 Turnover 30,973 35,305 25,971 14,422 17,113 10,323 Raw material cost2 11,070 12,447 8,138 3,578 4,550 1,476 EBITDA 4,939 6,982 3,30
Slide 11: Quarterly Financial Performance as per Ind-AS1
Quarterly Financial Performance as per Ind-AS1 Rs Crores Europe SEA Others & Eliminations Q1 FY18 Q4 FY17 Q1 FY17 Q1 FY18 Q4 FY17 Q1 FY17 Q1 FY18 Q4 FY17 Q1 FY17 Deliveries(MT) 2.40 2.85 2.49 0.60 0.66 0.65 - - - Turnover 14,079 15,244 12,665 1,995 2,275 2,020 477 674 963 Raw material cost2 6,027 6,
Slide 12: Group EBITDA Bridge Q1 FY18 Vs. Q4 FY17
Group EBITDA Bridge Q1 FY18 Vs. Q4 FY17 ₹ Crores 537 6,442 1,744 4,196 769 270 Q4 FY17 Selling Result Cost Changes Volume/Mix Others Q1 FY18 Note: Consolidated EBITDA consists of EBITDA across four operating entities –TSI, TSE, NSH & TSTH Selling result improved due to higher realisations at Europ
Slide 13: Consolidated Debt Bridge Q1 FY18 Vs. Q4 FY17
Consolidated Debt Bridge Q1 FY18 Vs. Q4 FY17 ₹ Crores 3,668 1,023 107 87,812 83,014 71,703 16,109 Gross Debt Mar 17 Loans Movt Forex impact Others Gross Debt June'17 Cash, Bank & Current Inv. Net Debt June' 17 Gross debt increased by Rs. 4,798 crores to Rs. 87,812 crores due to FX impact, inventor
Slide 14: Agenda
Agenda I Consolidated Financial Performance II India & SE Asia performance III Europe performance IV Appendix 14
Slide 15: India Steel | Market update
India Steel | Market update Strong GDP growth and Reducing Fiscal Deficit (%) 8.0% 7.60% 7% 7.5% 7.20% 7.10% 7.20% 6% India’s composite PMI witnessed a mixed quarter 7.0% 6.60% 5% as it moderated in April, gained traction in May 6.5% 4% and had mixed activity in June 6.0% 5.60% 5.5% 3% 5.0% 2% Ser
Slide 16: India Steel | Market update
India Steel | Market update Production Outpaced Consumption 30 25.0 24.0 25 22.0 22.0 21.0 22.0 21.0 22.0 21.0 20.0 20 Domestic demand declined by ~5% sequentially 15 while production was lower by ~4% 10 5 0 Domestic production grew at 7% YoY outpacing Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 the c
Slide 17: India | Operating performance
Tata Steel India | Operating performance Volumes in KT +28% 3,208 2,750 -14% 432 2,146 378 947 399 873 -8% +19% 736 1526 1198 -21% 738 +62% 274 301 303 Q1 Q1 Q4 FY17 FY18 FY17 Transfers IPPE BPRS Auto Sales volume was up 28% largely due to ramp up of Kalinganagar facility Sales volume declined b
Slide 18: India | Some facts we are proud of
Tata Steel India | Some facts we are proud of 1 out of every 7 3 among every 4 1 in every 3 GC Individual house builders medium & heavy roofs in rural India build their homes with commercial vehicles is made with Tata Tata Tiscon rebars run on chassis made Shaktee from TS HR coil Nearly every 2 out
Slide 19: India | Investments in Services & Solutions segment continue
Tata Steel India | Investments in Services & Solutions segment continue Pravesh – Doors of India Campaign ‘Doors of India Campaign’ launched across 46 cities to increase ‘Pravesh’ door brand essence in the market Sampoorna - Retail Outlet A first-of-its-kind retail outlet ‘Tata Steel Sampoorna’
Slide 20: India | Our track record of improving operational efficiencies
Tata Steel India | Our track record of improving operational efficiencies and minimizing environmental impact 550 Coke rate (kg/thm) 240 PCI rate (kg/thm) 496 Good 220 Good 487 483 500 479 468 200 181 180 455 455 168 443 443 180 450 160 140 122 123 126 400 380 116 117 110 360 120 348 91 93 350 100 8
Slide 21: India | EBITDA Bridge – Q1FY18 vs. Q4FY17
Tata Steel India | EBITDA Bridge – Q1FY18 vs. Q4FY17 ₹ Crores 4,324 272 427 395 2,922 299 11 Q4 FY17 Selling RevenueResult Cost Vol/Mix FAMD Others Q1 FY18 Selling Result declined on the back of lower realisations. Increase in cost mainly due to lower absorption of fixed cost, higher maintenance
Slide 22: South East Asia | Market update
South East Asia | Market update Singapore Manufacturing PMI & Thailand Manufacturing Index 52 Spreads remained flat in US$ terms but declined 50 marginally in local currency terms due to forex movement 48 Singapore construction sector declined by ~6% in the last quarter which led to a significant
Slide 23: South East Asia | Operating performance
Tata Steel South East Asia | Operating performance Nat Steel Holdings Deliveries were flat on QoQ basis and down 8% YoY basis due to weak market conditions Lower spreads and increased domestic competitiveness affected profitability Continued focus on export driven strategy Tata Steel Thailand
Slide 24: India & South East Asia | Business Outlook
India & South East Asia | Business Outlook India Steel demand benefiting from government spending on roads, power transmission and distribution Drop in interest rates and inflation likely to trigger a consumption cycle, rural demand is expected to recover due to higher MSP for crops , loan waivers a
Slide 25: Agenda
Agenda I Consolidated Financial Performance II India & SE Asia performance III Europe performance IV Appendix 25
Slide 26: Europe | Market update
Tata Steel Europe | Market update EU market supply (Mt, import share %) 20 20% 18 16 15% Eurozone economy grew by 0.6% q/q in first 14 12 10% quarter of calendar year 2017. UK economic 10 growth slowed to 0.2% q/q as consumer spending 8 6 5% growth decelerated to levels last seen in 2014 4 0% 2010
Slide 27: Europe | Improving offering to customers
Tata Steel Europe | Improving offering to customers Customer-focused developments: New products included one which enables heavy goods vehicle trailers to be lighter and more efficient Continuing to work closely with customers to develop differentiated products and services they need in their ma
Slide 28: Europe | Operating performance
Tata Steel Europe | Operating performance Deliveries in KT -3% 2.8 -14% 2.5 2.4 Q1 Q1 Q4 FY17 FY18 FY17 Increase in production levels by ~7% both YoY and QoQ Reduction in deliveries in Q1FY18 following higher deliveries in the seasonally strong Q4 Deliveries reduced compared to first quarter o
Slide 29: Europe | EBITDA Bridge – Q1FY18 vs. Q4FY17
Tata Steel Europe | EBITDA Bridge – Q1FY18 vs. Q4FY17 £ millions 56 230 (164) £92m 16 152 10 4 Q4 FY17 Selling Result Cost changes Production Volume Manufacturing Central & Others Q1 FY18 Selling Result improved due to a continued increase in selling prices Cost Changes have been impacted by hig
Slide 30: Europe | Business Outlook
Tata Steel Europe | Business Outlook EU economy expected to grow by 2.2% in 2017. UK economy forecast to grow slower by 1.7% as higher inflation weakens consumer spending growth European steel demand expected to grow by 1.9% in 2017 in line with modest economic growth European steel mills expected t
Slide 31: Agenda
Agenda I Consolidated Financial Performance II India & SE Asia performance III Europe performance IV Appendix 31
Slide 32: Standalone Results – Q/Q Variations
Standalone Results – Q/Q Variations Rs Crores Q1 FY18 Q4 FY17 Key Reasons Gross sales 14,287 16,693 Lower volumes and prices in Steel and lower prices in Ferro chrome business Other operating income 135 420 EPCG benefit on fulfillment of exports obligations in Q4 Changes in inventories (905) 96 Incr
Slide 33: Consolidated Results – Q/Q Variations
Consolidated Results – Q/Q Variations Rs Crores Q1 FY18 Q4 FY17 Key Reasons Gross sales 30,803 34,833 Decrease in revenue across geographies driven by lower volumes Other operating income 170 472 Q4 included EPCG benefit on fulfillment of exports obligations in India Changes in inventories (1,967) (
Slide 34: Contact
Contact Investor enquiries : Kiran Kanchinadham Tel: +91 22 6665 0548 Email: Kiran.Kanchinadham@tatasteel.com Media enquiries: Kulvin Suri Tel: +91 657 664 5512 / +91 92310 52397 Email: kulvinsuri@tatasteel.com Rob Simpson Tel: +44 207 717 4404/ +44 7990 786531 Email: rob.simpson@tatasteel.com 34