Vedanta Resources — FY2021 Earnings Presentation
42 slides from Vedanta Resources's earnings presentation, Jun 18, 2021
Slide 1: FY2021 Earnings Presentation
FY2021 Earnings Presentation VEDANTA RESOURCES LIMITED 18 June 2021
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements
Slide 3: Contents
Contents Section Presenter Page FY21 Review & Business Update Sunil Duggal, CEO Financial Update Ajay Goel, Deputy CFO Appendix VEDANTA RESOURCES LIMITED – FY2021 INVESTOR PRESENTATION 3 Sensitivity: Internal (C3)
Slide 4: FY2021 Review and Business Update
FY2021 Review and Business Update Sunil Duggal Group CEO & Chief Safety Officer Sensitivity: Internal (C3)
Slide 5: Ideally Positioned with Attractive Commodity Mix
Ideally Positioned with Attractive Commodity Mix Vedanta has unparalleled exposure to India, the world’s fastest growing major economy with excellent diversified exposure 2021 2030 CAGR World CAGR India demand Global demand GDP CAGR 2020–20302 CAGR 2020–20302 (real terms) $2.8trn $4.8trn 6.3% 3.1% G
Slide 6: COVID-19 Response: Supporting Communities, Employees & Partners
COVID-19 Response: Supporting Communities, Employees & Partners Vedanta Cares 1,000 bed initiative in 10 locations across India will add Helping Community 10 ventilator-equipped beds, 90 oxygen-support beds in each location. ▪ Aluminium, Cairn, HZL have added almost 1000 additional Global Standards
Slide 7: Key Highlights: FY 2021
Key Highlights: FY 2021 Production Cost of Production R&R Records Lower Advancing At Zinc India, Aluminium & Zinc Across all the businesses Enhancing life and R&R base International Reliability Technology & Digitalization COVID-19 Improved On Track Highest safety standards No major operational disru
Slide 8: Delivering Strong Operational Performance in Challenging times
Delivering Strong Operational Performance in Challenging times Aluminium Zinc India Gamsberg 1,047 1,690 954 1,347 1,445 1,288 Strong 1,904 1,969 870 930 108 145 operational recovery FY20 FY21 FY20 FY21 FY20 FY21 Aluminium (kt) COP ($/t) Metal (kt) COP ($/t) MIC Production (kt) COP $/t Record Produc
Slide 9: Heading Towards – Zero Harm, Zero Waste, Zero Discharge
Heading Towards – Zero Harm, Zero Waste, Zero Discharge Safety Program Update ▪ Comprehensive focus on HSE at CEO and Group ExCo Level; Consequence Management program set up Focus on Learning and ▪ New Vedanta-wide Fatality Investigation Procedure Improvement ▪ Working groups focusing on critical ri
Slide 10: ESG is core to everything we do
ESG is core to everything we do Achievements in FY 2021 On track to Achieve Vedanta’s Vision ▪ Water Savings of 2.03 mm3 ▪ Zero discharge across all our sites ▪ 1.86 million GJ Energy Savings ▪ 20% reduction in GHG emission intensity by 2025 from a 2012 baseline ▪ Reduced GHG emissions by 13.0 milli
Slide 11: Climate Change Roadmap
Climate Change Roadmap Building Blocks to achieve Net-Zero Carbon Emissions Avoid Increase Renewable Energy Deployment Minimize Align with Science Based Targets Offset Bridge gap by sequestration & carbon credits use Disclose Annual TCFD Climate Change Report FY2021 Milestones ▪ 13.6 million tons of
Slide 12: Aluminium: Success Continues; Growing Value in Dynamic World
Aluminium: Success Continues; Growing Value in Dynamic World Aluminium Production & COP Performance Update 1,904 1,969 Half Year Performance: 1,571 1,278 1,411 1,690 ▪ Highest ever Aluminium production 1,028 kt*, up 7% y-o-y 1,028 1,347 957 941 ▪ Aluminium COP $ 1,411/t, down 10% y-o-y ▪ Lanjigarh p
Slide 13: Alumina: Expanding Lanjigarh on path to Vertical Integration
Alumina: Expanding Lanjigarh on path to Vertical Integration Grow Into Among One Of The Largest Single-location Alumina Refineries In The World 5 Capacity (Mtpa) 2 Expected Project Completion by Q1 FY2023 Present Target Strong Foundation for Expansion Finest Technical Mix of global & local bauxite T
Slide 14: Zinc India: A Year Full of the Achievements
Zinc India: A Year Full of the Achievements Sustained production post-transition to Performance Update fully UG mining company 19% UG ▪ Highest ever Ore production of 15.5 million MT CAGR ▪ Highest ever Mined Metal Delivered of 972kt, up 6% 972 Mined Metal in kt 223 936 917 426 primarily on account
Slide 15: Zinc India: Strategy in Practice for Executing Growth Imperatives
Zinc India: Strategy in Practice for Executing Growth Imperatives Strengthen Cost Leadership Portfolio of Mines with Long Transition to a Circular Life Economy ▪ Digitalization ▪ Upgrading R&R through world ▪ Focus on technology and ▪ Autonomous vehicles class technologies innovation to ▪ Implemente
Slide 16: Zinc International: Gamsberg Positioning for Long Term Value Creation
Zinc International: Gamsberg Positioning for Long Term Value Creation Continued Performance Ramp Up Performance Update 150 1,445 1500 Half Year Performance: 1,433 1,293 1300 ▪ Production at 84kt, up 40% from 60kt in H1 of FY2021. 100 1,288 1,280 Best ever monthly production (17kt) achieved in Oct 11
Slide 17: Zinc International: Gamsberg Ramp up Plan
Zinc International: Gamsberg Ramp up Plan 145kt 190-210kt FY21 Four Key Priorities Going Forward FY22e Mining Focused Concentrator Focused 1 2 3 4 Equipment Run-hours Additional Resource Increase Mill Recovery Ramp up Improvement to gear up Mining Throughput Increase Expedite on-boarding Improve rec
Slide 18: Oil & Gas: Stable Operations, Focus on Delivery of Growth Projects
Oil & Gas: Stable Operations, Focus on Delivery of Growth Projects Operations Growth Projects OALP ▪ Gas Terminal: Ramp-up by ▪ Drilling: 15 well exploration ▪ Production: flat 162 kboepd in H2 ~15kboepd underway. Gas offtake FY21 vs H1 FY21 drilling program commenced impacted by Covid in Gujarat ac
Slide 19: Oil & Gas: Digitalisation & Partnering to Drive Efficiency & Recovery
Oil & Gas: Digitalisation & Partnering to Drive Efficiency & Recovery Digitalization to improve Technology to Solution based asset reliability accelerate recovery Partner Approach • Well interventions • Polymer & Water • Global EOI for solution & • Process Controls Management KPI driven Partnering •
Slide 20: Iron ore: Resilient Results in Extraordinary Times
Iron ore: Resilient Results in Extraordinary Times Capitalised opportunity of increased Global Value Added Business prices by increasing sales in Goa ▪ Benefitted by domestic steel prices and 2.1 International coal prices 1.3 ▪ Margin improvement through efficiency Mnt 0.8 0.7 0.9 enhancement projec
Slide 21: ESL Steel: Continuing Improvement Journey
ESL Steel: Continuing Improvement Journey Performance Update Capacity Expansion Plan in Pipeline Half Year Performance: ▪ Robust margin of $121/t, up 81% compared to H1 ▪ Doubling Hot Metal Capacity from 1.5 to 3 ▪ Saleable Production of 659kt, up 3% y-o-y and 25% vs H1 MTPA production ▪ Sales of 65
Slide 22: FACOR: Complete Turnaround Performance
FACOR: Complete Turnaround Performance Delivering Stronger Growth and Margins FY22 Growth Plan ▪ Ore Production in H2 increased by 105% vs H1 ▪ Targeting to increase Furnace ▪ Reduced ore procurement from third party to ZERO production by 10% by optimizing operation & better process control ▪ Fe chr
Slide 23: Finance Update
FY2021 Finance Update Ajay Goel | Deputy Chief Financial Officer
Slide 24: Financial snapshot
Financial snapshot EBITDA ROCE# EBTIDA Margin* Net Debt $ 3.8bn c.19% 37% $ 10.7 bn Up 27% y-o-y Improved double digit Industry leading margin *Excludes custom smelting at Copper India and Zinc-India operations. # ROCE is calculated as EBIT net of tax outflow divided by average capital employed. EBI
Slide 25: Net Debt for FY 2021
Net Debt for FY 2021 (In $ mn) Inventory , Debtors & Others 63 Creditors/Customers Advance (432) 383 10,731 400 29 10,022 2,586 1,151 963 369 FCF $ 1,253mn CF from Capex Dividend Paid Stake FACOR Translation 1st Apr’20# WC Movements 31st Mar’21 increase in Acquisition & others* Operations (Incl Buye
Slide 26: Balance Sheet and Debt Breakdown
Balance Sheet and Debt Breakdown Net Debt / EBITDA – maintained at low level Debt Breakdown (as of 31st Mar 2021) 3.3 3.0 2.8 Debt breakdown as of 2.7 (in $bn) 2.4 31st Mar 2021 Term debt 15.9 Working capital 0.2 Short term borrowing 0.3 FY17 FY18 FY19 FY20 FY21 Total consolidated debt 16.4 Cash and
Slide 27: Capex and Returns Profile
Capex and Returns Profile Growth CAPEX Profile, $bn Oil & Gas Zinc Al & Power Copper Other Optionality Full year Capex guidance 0.7 1.0 1.2 1.5 1.2 0.7 1.1 1.1 0.1 0.2 0.8 0.8 0.1 0.7 0.1 0.5 0.1 0.6 0.1 0.3 0.2 0.2 0.3 0.1 0.5 0.3 0.2 0.3 0.1 0.2 0.1 0.1 0.5 0.5 0.2 0.4 FY2016 FY2017 FY2018 FY2019
Slide 28: Strategy to Enhance Long Term Value
Strategy to Enhance Long Term Value Continue Focus on World Class ESG Performance Augment Our Reserves & Resources Base Operational Excellence and Cost Leadership Optimise Capital Allocation & Maintain Strong Balance Sheet Delivering on Growth Opportunities VEDANTA RESOURCES LIMITED – FY2021 INVESTO
Slide 29: Appendix
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Slide 30: FY 2022 Guidance
FY 2022 Guidance Segment Production and COP Mined Metal and Finished Metal: 1,025 – 1,050 Kt Zinc India Silver: c. 720 tonnes COP: < $1,000/t excluding royalty BMM: ~70 – 80 Kt Zinc International Gamsberg: 190-210 kt COP: $1,100/t - $1,200/t Average Gross Volume: 175-185 kboepd; Oil & Gas Opex: c. $
Slide 31: Income Statement
Income Statement Depreciation & Amortization In $ mn FY’21 FY’20 ▪ Lower majorly on account of Oil & Gas assets Revenue from operations 11,722 11,790 impairment in Q4 FY 20. EBITDA 3,800 3,003 Depreciation & amortization (1,099) (1,412) Finance Cost EBIT 2,701 1,591 ▪ Higher finance cost primarily o
Slide 32: Project Capex
Project Capex (In $ mn) Spent up to Approved Spent in Unspent as at Capex in Progress Status Capex3 31 Mar’204 FY20214 31 Mar 20215 Cairn India1 – Mangala Infill, Liquid handling, Bhagyam & Aishwariya EOR, Tight Oil & Gas, OALP 2,522 1,144 181 1,197 etc Aluminium Sector Line 3: Fully capitalised Lin
Slide 33: Entity Wise Cash and Debt
Entity Wise Cash and Debt 31 Mar2021 ($ mn) 31 Mar 2020 ($ mn) Company Cash & Cash Cash & Cash Debt Net Debt Debt Net Debt5 Eq Eq5 Vedanta Limited Standalone 4,388 798 3,590 5,053 662 4,390 Cairn India Holdings Limited1 383 191 192 494 1,027 (533) Zinc India 979 3,044 (2,064) 82 2,972 (2,890) Zinc I
Slide 34: Funding Sources and Term Debt Maturities
Funding Sources and Term Debt Maturities Diversified Funding Sources for Term Debt of $15.9bn Term Debt Maturities - $15.9 bn (as at Mar 31, 2021) (as at 31st Mar 2021) 6.0 3.4 Term Loans-INR 3.3 2.9 3.1 Bonds-INR 1.0 27% 1.3 $ bn 37% Term Loans- USD/Foreign Currency 2.0 Bonds-USD 14% 3.1 2.4 22% 2.
Slide 35: Segment-wise Summary
Segment-wise Summary Oil & Gas FY21 FY20 Zinc-India FY21 FY20 Average Daily Gross Operated Mined Metal Content (kt) 972 917 Production (boepd) 162,104 172,971 Refined Zinc – Integrated (kt) 715 688 Rajasthan 132,599 144,260 Refined Lead – Integrated (kt)1 214 181 Ravva 19,177 14,232 Saleable Silver
Slide 36: Segment-wise Summary (cont’d)
Segment-wise Summary (cont’d) Aluminium FY21 FY20 Copper FY21 FY20 Aluminium Production (kt) Copper Cathodes– India (kt) 101 77 1,969 1,904 Jharsuguda I - 500kt Average Copper LME ($/t) 6,897 5,855 533 543 EBITDA ($mn) (21) (40) Jharsuguda II - 1,250kt1 867 800 Korba-I 245kt 265 256 Korba-II 325kt 3
Slide 37: Segment-wise Summary (cont’d)
Segment-wise Summary (cont’d) Power FY21 FY20 Iron Ore FY21 FY20 Power Sales (million units) Sales (dmt) 6.5 6.6 Jharsuguda 600MW 2,835 776 Goa 2.1 0.9 BALCO 1,596 1,726 Karnataka 4.4 5.8 Talwandi Sabo 1980MW Production (mt) 5.0 4.4 6,479 8,223 Goa 0.0 0.0 HZL Wind Power 351 437 Karnataka 5.0 4.4 Po
Slide 38: Sales Summary
Sales Summary Sales volume FY21 FY20 Sales volume FY21 FY20 Sales volume FY21 FY20 Power Sales (mu) Zinc-India Sales Iron-Ore Sales Jharsuguda 600 MW 2,835 776 Refined Zinc (kt) 724 680 Goa (mn DMT) 2.1 0.9 TSPL 6,479 8,223 Refined Lead (kt) 216 180 Karnataka (mn DMT) 4.4 5.8 Total Zinc-Lead (kt) 94
Slide 39: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ US$ 25 million / year Commodity prices – Impact of a 10% increase in Commodity Prices FY 2021 Full Year Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 45 68
Slide 40: Augment our Reserves and Resources Base
Augment our Reserves and Resources Base Focused exploration to expand our reserves and resources base for support our future growth through • Targeted and disciplined exploration • Offsetting depletion and bringing on stream more discoveries • Team aim to discover mineral and oil deposits in a safe
Slide 41: Awards & Recognition for FY21
Awards & Recognition for FY21 Name of Award Category/ Recognition Recipient (Business Unit) Vedanta Ranked 2nd in Asia Pacific, and 12th Globally The Dow Jones Sustainability Index 2020 (Metals & Mining Sector) Vedanta & Hindustan ZInc HZL ranked 1st in Asia-Pacific and 2nd Globally In Large Enterpr
Slide 42: Group – Present Debt Structure
Group – Present Debt Structure ($ bn) Vedanta Resources (Consolidated) Volcan FY21 FY21 EBITDA 3.8 EBITDA - Net Debt 10.7 Net Debt 0.2 Vedanta Resources (Standalone) FY21 % EBITDA 0.1 3% Divisions of Vedanta Limited Net Debt 7.4 69% 55.1% ⚫ Sesa Iron Ore ⚫ Sterlite Copper Vedanta Ltd (Consolidated)