Tata Steel Limited · NSE:TATASTEEL
Tata Steel — FY2014 Earnings Presentation
44 slides from Tata Steel's earnings presentation, May 14, 2014
Slide 1: Results Presentation Q4 and Financial Year Ended 31st March 2014
Results Presentation Q4 and Financial Year Ended 31st March 2014 May 14, 2014
Slide 2: Disclaimer
Disclaimer 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 could differ materially from those expressed or implied. Important factors that could make a difference
Slide 3: Tata Steel Group – Health and Safety
Tata Steel Group – Health and Safety Lost Time Injury Frequency (LTIF) Reduction continues in lost time injuries with FY14 performance 7% 3.5 3.06 better than FY13 3 The new leadership team has set 2.5 2.35 2.10 an ambition to make Tata Steel 2 sustainably fatality free 1.5 1.31 0.95 Common H&
Slide 4: Agenda
Agenda Corporate Social Responsibility Consolidated Highlights Indian and South East Asian Operations European Operations Group Financial Performance Key Developments 4
Slide 5: Engaging with communities and improving quality of life
Tata Steel continues to focus on engaging with communities and improving quality of life No. of adults turned literate 16,824 13,570 5,600 2,295 2,555 FY'10 FY'11 FY'12 FY'13 FY'14 Area under 2nd & 3rd crop (acres) 5,032 3,177 2,360 2,027 1,256 Total Population Impacted : 2.42 million in Jharkhand,
Slide 6: Guiding principles: Sustainable and Inclusive growth
Guiding principles: Sustainable and Inclusive growth Improvement in HDI in Jharkhand, Odisha & Chhattisgarh Focus on Education, Livelihood & Health IMPACT BASED AFFIRMATIVE PARTNERSHIPS VOLUNTEERISM INNOVATION COMMUNICATION CSR ACTION Leverage Work with other Tata Impact in terms Government to Impro
Slide 7: Working closely with local communities in Europe
Working closely with local communities in Europe European Programme Future Generations 80,000 people benefited in local communities Education Environment Health & Wellbeing Improve and inspire future Acting responsibly and Improving the quality of life in technical skills maintaining high standards
Slide 8: Agenda
Agenda Corporate Social Responsibility Consolidated Highlights Indian and South East Asian Operations European Operations Group Financial Performance Key Developments 8
Slide 9: World Steel Market
World Steel Market Tata Steel Slide 9 Global crude steel production & capacity utilisation Steel demand outlook (y/y% chg) 150 100% 10% 9.2 Crude Steel Production, Mt (LHS) 2013 140 Capacity utilisation, % (RHS) 8% 90% 2014 130 6.1 6% 2015 120 4.5 4.5 4.3 80% 3.8 3.4 3.6 110 4% 3.1 3.0 3.0 2.7 3.3 3
Slide 10: Group Financial Highlights
Group Financial Highlights Financial Year Ended 31st March‟14 Deliveries Turnover Mn T 1,48,614 Rs. Crore 26.56 1,34,712 24.13 7.62 42,428 34,650 Q4 Q4 6.56 Q4 Q4 6.38 32,107 Q3 36,736 Q3 5.83 Q3 Q3 Q2 6.07 Q2 6.48 Q2 34,133 Q2 36,645 Q1 5.68 Q1 6.08 Q1 33,821 Q1 32,805 FY13 FY14 FY13 FY14 EBITDA PA
Slide 11: Key Drivers
Key Drivers Financial Year Ended 31st March‟14 India o 2.9mtpa expansion ramped up delivering higher volumes, better efficiencies & richer product mix o Focus on further strengthening customer relationships and increasing market penetration Europe o Re-established asset platform led to stable q-o-q
Slide 12: Agenda
Agenda Corporate Social Responsibility Consolidated Highlights Indian and South East Asian Operations European Operations Group Financial Performance Key Developments 12
Slide 13: India and South East Asia: Economy and steel market
India and South East Asia: Economy and steel market GDP – India, Singapore and Thailand (y/y% chg) PMIs (manufacturing) - India and SEA countries 20% 65 India India 15% Singapore Indonesia Thailand 60 Singapore 10% 55 Expansion 5% 50 0% 2008 2009 2010 2011 2012 2013 2014 2015 Contraction -5% 45 -10%
Slide 14: Performance of Tata Steel India
Performance of Tata Steel India Financial Year Ended 31st March‟14 Production Deliveries Mn T 7.48 8.52 Mn T 7.94 8.93 2.43 Q4 2.41 Q4 Q4 Q4 2.28 2.26 2.15 Q3 2.07 Q3 2.07 Q3 Q3 1.89 Q2 Q2 2.21 Q2 Q2 2.04 1.87 1.73 Q1 1.74 Q1 2.14 Q1 1.59 Q1 2.00 FY13 FY14 FY13 FY14 Turnover EBITDA Rs. Crore 13,281
Slide 15: Brownfield expansion has helped deliver more value
Brownfield expansion has helped deliver more value Brownfied expansion of 2.9mtpa Higher Volumes fully ramped up in H2FY‟14 New facilities like LD3, TSCR, Pellet Plant have stabilised Greater Efficiencies CGL#3 commissioned Enhanced Coke Oven Battery no. 11 Product-Mix started 15
Slide 16: Improved product mix and value addition to drive higher realisations
Improved product mix and value addition to drive higher realisations Focus on high-end sales in Auto segment Investing in brands and retail distribution TSCR Strong inroads into the Industrial Products segment Downstream processing to move up the value chain Further value addition through Subsidiari
Slide 17: Market penetration and branding to improve customer connect
Market penetration and branding to improve customer connect Marketing network strengthened 62 Distributors ~6,000 Dealers 48 Service Partners o Strategically located finishing facilities to serve the growth markets o Continuous innovations to service our customers effectively o Strong portfo
Slide 18: Marketing & Sales team is realigned to customer segments
Marketing & Sales team is realigned to customer segments M&S – Earlier Products M&S – Now Channel Partners Flat Products Automotive & Special Direct HR Products • Auto • Roofing C CR Auto • LCA/ Gen. Engg. • ECA/ SME Galva Distributors U • Tubes & Agrico, Branded Products, Retail & Tinplate So
Slide 19: Significant increase in sales volumes despite poor markets
Significant increase in sales volumes despite poor markets Higher sales in all Verticals (kt) Quarterly Sales (in kt) 8,515 2,406 2,279 7,485 1,126 2,066 298 6,643 280 1,062 268 997 3,341 935 2,821 958 2,290 850 2,865 820 2,311 2,573 775 664 1,045 1,029 1,183 266 284 353 FY12 FY13 FY14 Q4 FY13 Q3 FY
Slide 20: Unrelenting focus on improving efficiencies & reducing costs
Unrelenting focus on improving efficiencies & reducing costs Savings on Improvement Initiatives All figures in Rs. Crore 2,000 1,840 244 1,560 1,614 1,500 162 354 1,000 1,596 1,398 1,260 500 1,170 - FY12 FY13 FY14 Cost Cutting Value Addition Improving yield at raw material units Reduction in fue
Slide 21: Ferro Alloys & Minerals SBU
Ferro Alloys & Minerals SBU Segmental Deliveries (in kt) Quarterly Sales (in kt) 600 200 515 500 470 155 150 141 400 355 300 100 223 187 200 152 152 47 44 42 46 115 50 39 33 29 100 52 69 50 51 15 13 12 0 0 FY 12 FY 13 FY 14 Q4 FY 13 Q3 FY 14 Q4 FY 14 Ferro Chrome Ferro Manganese Ferro Chrome Ferro M
Slide 22: KPO Project update
KPO Project update Blast Furnace Site View Project work continues with commissioning expected in Q4 FY 2015 We have spent Rs.16,350 crores on the project as of March 31, 2014 of which about Rs.8,000 crores were spent in FY‟14 and Rs.1,800 crores in Q4FY‟14 We continue investing in CSR initiati
Slide 23: Performance of Tata Steel South East Asia
Performance of Tata Steel South East Asia Financial Year Ended 31st March‟14 Production Deliveries 2.89 Mn T 3.98 Mn T 2.85 3.11 Q4 1.07 Q4 0.74 Q4 0.73 Q4 0.80 Q3 Q3 0.82 Q3 1.09 0.77 Q3 0.82 Q2 Q2 Q2 0.96 0.70 0.72 Q2 0.77 Q1 0.63 Q1 0.61 Q1 0.72 Q1 0.86 FY13 FY14 FY13 FY14 Turnover EBITDA Rs. Cro
Slide 24: South East Asia – Updates
South East Asia – Updates NatSteel Holdings Tata Steel Thailand Key plant modernisation and Despite political turmoil, operations automation projects completed in turned profitable at PAT level after 4 Singapore years Operations restructured to improve Domestic sales increased by 10% profita
Slide 25: Agenda
Agenda Corporate Social Responsibility Consolidated Highlights Indian and South East Asian Operations European Operations Group Financial Performance Key Developments 25
Slide 26: European economy and steel market
European economy and steelTata market Steel Slide 26 GDP – Eurozone and UK (y/y% chg) Market spreads – Lagged (€/tonne) 4% 2% 0% 2008 2009 2010 2011 2012 2013 2014 2015 -2% -4% Eurozone -6% UK -8% PMIs for main steel using sectors in EU EU trade balance (Mt) 70 5 60 Expansion 4 3 50 2 Contraction 40
Slide 27: Performance of Tata Steel Europe
Performance of Tata Steel Europe Financial Year Ended 31st March‟14 Liquid Steel Production Deliveries 15.55 Mn T 13.07 Mn T 13.86 13.37 Q4 4.04 Q4 Q4 4.07 3.42 Q4 3.22 Q3 3.91 Q3 Q3 3.19 Q3 3.29 3.02 Q2 Q2 3.86 Q2 3.42 Q2 3.46 3.34 Q1 3.53 Q1 3.74 Q1 3.21 Q1 3.14 FY13 FY14 FY13 FY14 Turnover EBITDA
Slide 28: Operational Excellence improvements in the year
Operational Excellence improvements in the year Re-established asset base enabled return to normal liquid steel production (2.2mt more in FY‟14 than in FY‟13) Focus on cost reduction initiatives to continue Savings in operating costs approached £200 million in FY‟14 Intensifying focus on cas
Slide 29: Customer Focus and Innovative products & services
Customer Focus and Innovative products & services Developing „New Home Markets‟ – markets where we see good growth for our differentiated products. Sales increased by about 50% over last 3 years Launched 30 new products, as planned, in FY14 – Volume of new products sold increased by about 75% in
Slide 30: European operations – EBITDA bridge Q4
European operations EBITDA bridge Q4 FY2014 vs. Q3 FY2014 £ million 125 Central Production Manufacturing & Other Volume 3 months 100 to Dec 3 months £5m £(26)m 2013 Cost Changes £21m to Mar 2014 75 £(26)m £20m 50 Selling £87m £81m Result 25 0 30
Slide 31: European operations – EBITDA bridge FY2014
European operations EBITDA bridge FY2014 vs. FY2013 £ million Central 400 & Other £314m Manufacturing 300 £38m 200 Production £173m Volume £89m 100 £213m 0 12 months 12 months to Mar 2013 to Mar 2014 (100) £(490)m (200) £291m (300) (400) Selling Cost Changes Result 31
Slide 32: Agenda
Agenda Corporate Social Responsibility Consolidated Highlights Indian and South East Asian Operations European Operations Group Financial Performance Key Developments 32
Slide 33: Key financial highlights
Key financial highlights Strong operating performance in India and Europe: Group sales volume increased by 10% in FY‟14 and increased by 20% Q/Q. Group EBITDA increases by 29% to Rs. 16,377 crore in FY‟14 Group Profit after tax doubles on a sequential basis and rises to Rs. 3,595 crores Improv
Slide 34: Group Financial Performance – Q4 FY14
Group Financial Performance – Q4 FY14 Figures in Rs. Crore unless specified Q4 FY14 Q3 FY14 Q4 FY13 Figures in Rs. Crore unless specified India Europe SE Asia Others Group Group Group & Elimn Deliveries (Mn T) 2.41 4.07 1.07 0.08 7.62 6.38 6.56 Turnover 12,191 24,376 4,365 1,496 42,428 36,736 34,650
Slide 35: Group Financial Performance – FY14
Group Financial Performance – FY14 Figures in Rs. Crore unless specified FY14 FY13 Figures in Rs. Crore unless specified India Europe SE Asia Others & Group Group Elimn Deliveries (Mn T) 8.52 13.86 3.98 0.20 26.56 24.13 Turnover 41,711 84,666 16,988 5,248 1,48,614 1,34,712 Raw Mat consumed 9,678 35,
Slide 36: Debt Movement and Pension update
Debt Movement and Pension update (1,902) 78,699 (11,373) 76,500 4,101 67,326 (752) 66,074 66,574 8,740 1,685 Gross Debt Net borrowing Forex Impact Gross Debt Net borrowing Forex Impact Gross Debt Cash & Net Debt Forward Underlying Net Mar 13 Dec 13 Mar 14 Cash Eq Mar 14 Covers Debt Mar 14 Note: Figu
Slide 37: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations All figures in Rs. Crore Particulars Q4 FY14 Q3 FY14 Key Reasons Net sales 12,042 10,040 Higher volumes and higher realisation Other operating income 149 103 Receipt of insurance claim Changes in inventories 296 36 Decrease in inventories Purchases of finished, 54
Slide 38: Consolidated Results – QoQ Variations
Consolidated Results – QoQ Variations All figures in Rs. Crore Particulars Q4 FY14 Q3 FY14 Key Reasons Higher revenue driven by Tata Steel India (TSI) and Tata Steel Europe Net sales 42,018 36,410 (TSE) partially offset by lower volume and realisation in South East Asian (SEA) operations Other opera
Slide 39: Agenda
Agenda Corporate Social Responsibility Consolidated Highlights Indian and South East Asian Operations European Operations Group Financial Performance Key Developments 39
Slide 40: Raw Material Projects
Raw Material Projects Benga Project, Mozambique Logistic issues and security considerations affect productions in Q4 FY‟14 0.86 mt of hard coking coal shipped in FY‟14 with 178 kt of HCC shipped in Q4 FY‟14 Direct Shipping Ore Project, Canada 1mt of iron ore produced so far. First shipment ach
Slide 41: Regulatory update
Regulatory update Iron Ore (In Million Tons) Our iron ore and coal mining operations 20 17.4 in Jharkhand and Orissa have been 15.0 15 13.2 ramped up over the years 10 All iron ore and coal produced from our mines is used for captive consumption 5 0 The mines have the requisite FY12 FY13 FY14
Slide 42: Business Outlook
Business Outlook Market conditions are stable; expected to improve in H2 Auto sector expected to register slow growth; Construction India and capital goods sectors should revive with better macro- economic conditions Focus on domestic markets to continue EU demand expected to show further re
Slide 43: Thank You
qp TATA Thank You TATA STEEL
Slide 44: Contact Information
Contact Information For investor enquiries contact: For media enquiries contact: Samita Shah Kulvin Suri Tel: +91 22 6665 7371 Tel: +91 657 664 5512 / Email: samita.shah@tatasteel.com +91 92310 52397 Email:kulvinsuri@tatasteel.com Subhra Kanti Das Bob Jones Tel: +91 22 6665 7382 Tel: +44 207 717 453