Slide 1: Vedanta – Transforming Elements
oe vedanta transforming elements ER | ALUMINIUM & POWER | COPPER | IRON ORE & STEEL .
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 FY19 Review Venkat, CEO 4 Financial Update Arun Kumar, CFO 12 Business Update Venkat, CEO 19 Appendix 30 VEDANTA LIMITED – FY2019 INVESTOR PRESENTATION 3
Slide 4: FY2019 Review
FY2019 Review Venkat Chief Executive Officer
Slide 5: Heading Towards – Zero Harm, Zero Waste, Zero Discharge
Heading Towards – Zero Harm, Zero Waste, Zero Discharge Safety Environment Sustainability • Zero fatality in Q4 (9 in FY 2019) • 94% waste recycling in FY 2019 • Reusing 60% tailings as ‘paste- fills’ for void replacement at • Safety focus across business: • 16.6% reduction in GHG Zinc India undergr
Slide 6: Contributing to the communities
Contributing to the communities Benefitting the lives of 3.0 million people across 1,042 villages Spent ₹ 309 Crore in FY 2019 (₹ 244 Cr in FY 2018) • 502 centers across Rajasthan, Uttar Pradesh, Madhya Pradesh, Goa and Uttarakhand • Supporting 17,000 children and 15,000 women Nand Ghar • Building w
Slide 7: Technology Driving Efficiency, Safety & Sustainability
Technology Driving Efficiency, Safety & Sustainability Oil & Gas: Central Polymer Facility Zinc International: Collision Awareness System • World’s largest Enhanced Oil Recovery polymer flood project in Mangala Field • Safety: State of the art Collision Awareness system for vehicle and individuals •
Slide 8: Large Diversified Asset Base with an Attractive Commodity Mix
Large Diversified Asset Base with an Attractive Commodity Mix Vedanta’s Focus is on the Right Commodities – Base Metals & Oil Global Demand CAGR 2019-30E India mineral reserves ranking globally Aluminium 2.8% 7th Zinc 90% of O&G India 2.2% Vedanta Reserves: 10m tonnes Group’s Nickel 2.2% FY2019 EBIT
Slide 9: Ideally positioned to capitalise on India's growth potential
Ideally positioned to capitalise on India’s growth potential India Key Metrics • National Mineral Policy (NMP) 5.6 trillion 3,699 (2030) 40% (2030) • Hydrocarbon Exploration and (2030) 34% (2019) Licensing Policy (HELP) 2,054 (2019) • Open Acreage Licensing Policy (OALP) 2.8 trillion (2019) GDP (rea
Slide 10: Significant Production Ramp-up across all businesses
Significant Production Ramp-up across all businesses Zinc India Zinc International Oil & Gas Aluminium Steel ✓ Growth projects ✓ Ramp-up of ✓ Gamsberg 250 kt ✓ Achieve 1.5 Mtpa ✓ Expansion to 1.2 including: Jharsuguda II total production in FY20 (Full potential) in smelter from 2.0 Mtpa – Enhanced o
Slide 11: Strategy to Enhance Long Term Value
Strategy to Enhance Long Term Value Continue Focus on World Class ESG Performance Augment Our Reserves & Resources Base Delivering on Growth Opportunities Optimise Capital Allocation & Maintain Strong Balance Sheet Operational Excellence VEDANTA LIMITED – FY2019 INVESTOR PRESENTATION 11
Slide 12: Financial Update
Financial Update Arun Kumar Chief Financial Officer
Slide 13: Financial snapshot
Financial snapshot EBITDA FCF post capex ND/EBITDA Net Debt ₹ 24,012 cr ₹ 11,553 cr 1.1x ₹ 26,956 cr Down 4% y-o-y Up 47% y-o-y Lowest among Indian peers Higher 23% y-o-y EBITDA Margin* Contribution to ROCE^ Dividend Yield Exchequer 30% ~₹ 42,400 cr c. 13% 8.6% Industry leading margin Highest till d
Slide 14: EBITDA Bridge (Q3 FY2019 vs. Q4 FY2019)
EBITDA Bridge (Q3 FY2019 vs. Q4 FY2019) (In ₹ crore) Iron-ore 148 Aluminium 594 ESL 87 ZI 72 Aluminum (303) ZI 76 Cairn 27 Brent (142) Power (32) Mktg & others 44 Zinc, Lead & Silver 81 HZL (44) Cairn 17 737 287 6,330 5,953 364 304 233 37 257 5,623 Market & Regulatory Operational ₹ (330) crore ₹ 994
Slide 15: EBITDA Bridge (FY2018 vs. FY2019)
EBITDA Bridge (FY2018 vs. FY2019) (In ₹ crore) ESL 791 Aluminium 454 Zinc & Lead (1864) Power 186 Aluminum (212) HZL (473) Brent 1553 25,532 955 1,021 24,900 523 3,203 188 1,454 24,012 2,236 Market & Regulatory Operational ₹ 632 crore ₹ (66) crore FY18 LME/ Brent / Input Currency Regulatory & Adjust
Slide 16: Net Debt for FY2019
Net Debt for FY2019 (In ₹ crore) FCF Post Capex ₹ 11,553 crore 11,823 34 26,956 21,958 18,744 4,762 9,857 2,666 Net Debt Cash Flow from WC movements Capex ESL Acquistion Minority Translation Net Debt 1st Apr Operations & BC Dividend Payment & Others 31st Mar VEDANTA LIMITED – FY2019 INVESTOR PRESENT
Slide 17: Strong Financial and Returns Profile
Strong Financial and Returns Profile Term Debt Maturities - ₹ 43,249 Crore ($6.3 bn) (as of 31 Mar 2019) ▪ Liquidity – Cash and investments @ ₹ 39,269 cr 11.5 11.6 rated Tier I by CRISIL; 9.1 8.0 3.5 – Undrawn line of credit ₹ c. 6,400 crore ₹ ‘000 Crore 2.9 6.2 ▪ Net Interest – Reducing q-o-q 3.8 8
Slide 18: Self funded Capex Delivering Superior Returns
Self funded Capex Delivering Superior Returns Growth CAPEX Profile, $bn Oil & Gas Zinc Al & Power Copper Other Optionality Full year Capex guidance 0.7 1.0 1.2 1.5 1.4 0.2 1.1 0.1 0.1 0.1 0.8 0.7 0.5 0.4 0.6 0.1 0.2 0.3 0.5 0.2 0.3 0.2 0.1 0.1 0.5 0.6 FY2016 FY2017 FY2018 FY2019 FY2020e FCF pre cape
Slide 19: Business Update
Business Update Venkat Chief Executive Officer
Slide 20: Zinc India: On-track for 1.2Mtpa, planning for 1.35Mtpa underway
Zinc India: On-track for 1.2Mtpa, planning for 1.35Mtpa underway Record Underground Mine Performance FY2019 Record production of Underground (kt) OC (kt) ▪ Mined metal from UG mines, up 29% y-o-y 223 ▪ Silver at 679 tonnes, up 22% y-o-y 426 544 ▪ Lead metal at 198kt, up 18% y-o-y 638 936 724 ▪ Zinc
Slide 21: Zinc International: Growth Plan for > 500ktpa Zinc Production
Zinc International: Growth Plan for > 500ktpa Zinc Production Value Addition 148ktpa >370 ktpa 500 ktpa 650 ktpa Incl. Gamsberg Incl. Gamsberg Incl. Gamsberg Current Phase 1 Phase 2 Phase 3 FY20 +3 yrs +5 yrs BMM 70kt BMM 65kt BMM 60kt BMM 70kt Gamsberg Ph1 250kt Skorpion 66kt Skorpion 110kt Gamsber
Slide 22: Oil & Gas: Opportunities across life cycle
Oil & Gas: Opportunities across life cycle 10 Year PSC Extension $ 3.2bn Gross Capex Exploration 41 OALP Blocks Approval for Rajasthan & Ravva PSC Growth Capex driven through Integrated Rajasthan Extension as per GoI policy, subject to Partnership model with global oil field KG Offshore certain cond
Slide 23: Oil & Gas: Continuing to Execute on our Growth Strategy
Oil & Gas: Continuing to Execute on our Growth Strategy • Rich project portfolio comprising of enhanced oil recovery, tight oil and tight gas • Focus on cutting edge technology enabling world class recovery rates Development Projects • Projects generate IRR of > 20% at oil price of $ 40/bbl • Number
Slide 24: Oil & Gas: Adopting Cutting Technology for world class recovery rates
Oil & Gas: Solidifying Long-Standing Reputation of Adopting Cutting Technology to foster world class recovery rates Resources Reserves Production World Class Resource Base Production being ramped up – Increasing Gas Mix (As at March 2019) Gross Average Volume (kboepd) • Hydrocarbon Initially in Plac
Slide 25: Aluminium: Significant progress on Strategic levers
Aluminium: Significant progress on Strategic levers Mar’19 COP at $ 1,700/t FY2019 2,018 2,025 • Structural Reduction in Aluminium Cost 1,934 1,776 • Achieved Alumina Peak run rate of 1.8 Mtpa during the year • Increased Local Bauxite supply met 30% of requirement • Ramped Up Lanjigarh volume and lo
Slide 26: Aluminium – Moving towards Structural Cost Reduction
Aluminium – Moving towards Structural Cost Reduction Local Bauxite Imported Alumina ~50% Alumina Aluminum Capacity 2 ✓ Mine capacity ✓ Index linked pricing MTPA FY20 requirement achieved: 3 MTPA; ✓ LTC signed of 4 Mtpa supplies as per ✓ Alumina price indices state policy have softened since ✓ Expect
Slide 27: Aluminium – Moving towards Structural Cost Reduction (cont.)
Aluminium – Moving towards Structural Cost Reduction (cont.) Secured Linkage 90% Coal Margin Improvement Initiatives ✓ 72% coal requirement secured from • Increase value added production E-Auction linkage & captive • Focus on higher domestic sale block ✓ Balance • Tranche V linkage • Long term contr
Slide 28: Electrosteel Turnaround Performance
Electrosteel Turnaround Performance FY2019 Asset turnaround strategy • Record production of 1,199kt; up 17% y-o-y • Ever highest sales of 1,185kt; up 15% y-o-y ▪ Achieved run rate • Industry leading margin at $115/t up 116% y-o-y Current of c1.5 Mtpa Hot Metal Production • VAP sale at 85%, up 8% y-o
Slide 29: Key Investment Highlights
Key Investment Highlights 1 Large Diversified Asset Base with an Attractive Commodity Mix 2 Ideally Positioned to Capitalise on Favourable Geographic Presence 3 Well-Invested Assets Driving Cash Flow Growth 4 Operational Excellence and Technology Driving Efficiency and Sustainability 5 Strong Financ
Slide 30: Appendix
RZ vedanta transforming elements n PRESENTATION FY2019 Appendix
Slide 31: FY 2020 Guidance
FY 2020 Guidance Segment FY20 Production FY20 CoP Mined Metal and Finished Metal: c 1.0 Mtpa Zinc India < $1,000/t excluding royalty Silver: 750 - 800 tonnes Skorpion and BMM: >170kt ZI COP (excl Gamsberg) : $1,400/t Zinc International Gamsberg: 180 - 200kt Gamsberg: c $1,000/t Oil & Gas Gross Volum
Slide 32: Income Statement
Income Statement Depreciation & Amortization Q4 Q4 In ₹ Crore FY’19 FY’18 FY’19 FY’18 • Higher FY vs FY on account of non cash impairment Revenue from operations 90,901 92,011 23,092 27,311 reversal and change in reserve estimates in Q4 FY 2018 at Oil and Gas business , higher ore production at Zinc
Slide 33: Project Capex
Project Capex Capex3 Spent up to Spent in Unspent as at Capex in Progress Status ($mn) 31 Mar’184 FY20184 31 Mar’195 Cairn India1 – Mangala Infill, Liquid handling, 2,481 183 469 1,829 Bhagyam & Aishwariya EOR, Tight Oil & Gas etc Aluminium Sector Line 3: Fully capitalised Jharsuguda 1.25mtpa smelte
Slide 34: Entity Wise Cash and Debt
Entity Wise Cash and Debt 31 Mar 2019 (₹ Crore) 31 Mar 2018 (₹ Crore) Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited Standalone 42,204 8,269 33,935 40,713 7,132 33,581 Cairn India Holdings Limited1 2,624 8,326 (5,702) 2,773 5,653 (2,880) Zinc India 2,538 19,512 (16,974) - 22
Slide 35: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $6.3bn Debt Breakdown (as of 31st Mar 2019) (as of 31 Mar 2019) Debt breakdown as of (in $bn) (₹ in 000’ Cr) 31 March 2019 11% Term debt 6.3 43.2 Term Loans-INR Working capital 0.6 3.9 Bonds-INR Short term borrowing 2.8 19
Slide 36: EBITDA Bridge (Q4 FY 2019 vs. Q4 FY 2018)
EBITDA Bridge (Q4 FY 2019 vs. Q4 FY 2018) (In ₹ crore) ESL 337 Zinc, Lead & Silver (717) Zinc Int 158 Aluminum (913) HZL (287) Brent 51 Aluminium (52) 7,767 1,579 72 162 39 955 914 7,162 12 6,330 Operational Market & Regulatory ₹ 123 crore ₹ (605) crore 1 Q4 FY 18 LME/ Brent / Input Currency Regulat
Slide 37: Segment Summary – Zinc India
Segment Summary – Zinc India Q4 Q3 Full year Production (in ’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 FY 2018 % change YoY Mined metal content 245 255 (4%) 247 936 947 (1%) Underground mines 245 197 24% 247 936 724 29% Open cast mines - 57 - - - 223 - Integrated metal Re
Slide 38: Segment Summary – Zinc International
Segment Summary – Zinc International Q4 Q3 Full year Production (in’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 FY 2018 % change YoY Refined Zinc – Skorpion 21 22 (5%) 20 66 84 (22%) Mined metal content- BMM 19 13 41% 18 65 72 (10%) Mined metal content- Gamsberg* 14 - - 3 1
Slide 39: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q4 Q3 Full year OIL AND GAS (boepd) FY 2019 FY 2018 % change YoY FY2019 FY 2019 FY 2018 % change YoY Average Daily Gross Operated Production 187,063 190,172 (2%) 187,191 188,784 185,587 2% (boepd) Rajasthan 152,825 162,357 (6%) 151,574 155,903 157,983 (1%) Ravva 15,067 16
Slide 40: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q4 Q3 Full year OIL AND GAS (boepd) FY 2019 FY 2018 % change YoY FY2019 FY 2019 FY 2018 % change YoY Average Daily Production Gross operated 187,063 190,172 (2%) 187,191 188,784 185,587 2% Oil 172,859 181,612 (5%) 176,997 178,207 177,678 - Gas (Mmscfd) 85 51 66% 61 64 47
Slide 41: Segment Summary – Aluminium
Segment Summary – Aluminium Q4 Q3 Full year Particulars (in’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 FY 2018 % change YoY Alumina – Lanjigarh 424 351 21% 404 1,501 1,209 24% Total Aluminum Production 481 477 1% 502 1,959 1,675 17% Jharsuguda-I 135 132 2% 137 545 440 24%
Slide 42: Aluminium profitability
Aluminium profitability $/t Q3 ‘19 1,971 29 93 2,093 (875) (793) (357) 11 $79/t (146) (225) (292) Q4 ‘19 99 2,010 (784) 1,859 52 (632) (360) (103) 131 (171) (236) (276) LME Ingot value Realisation Alumina Power Other Hot Conversion EBITDA Dep Int PBT premium addition Metal & others Operating costs V
Slide 43: Segment Summary – Power
Segment Summary – Power Q4 Q3 Full year Particulars (in million units) FY 2019 FY 2018 % change YoY FY2019 FY 2019 FY 2018 % change YoY Total Power Sales 3,520 3,109 13% 3,165 13,517 11,041 22% Jharsuguda 600 MW 615 404 52% 136 1,039 1,172 (11%) BALCO 600 MW 593 388 53% 438 2,168 1,536 41% HZL Wind
Slide 44: Segment Summary – Power (contd.)
Segment Summary – Power (contd.) Power Generation Capacity – c. 9GW IPP: 3.3GW CPP:5.5GW • 600MW Jharsuguda (of 2400MW • 1,215MW Jharsuguda plant) • 3*600MW Jharsuguda (of 2400MW • 1,980MW TSPL 37% plant) • 300MW BALCO (of 1200MW • 540MW BALCO plant) • 270MW BALCO 63% • 274MW HZL Wind Power • 3*300M
Slide 45: Segment Summary – Iron Ore and Steel
Segment Summary – Iron Ore Particulars (in million dry metric tonnes, or Q4 Q3 Full year as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 FY 2018 % change YoY Sales 1.4 2.7 (49%) 0.7 3.8 7.6 (49%) Goa 0.0 2.4 - 0.1 1.3 5.4 (77%) Karnataka 1.4 0.3 - 0.6 2.6 2.2 19% Production of Saleable Ore 0.
Slide 46: Segment Summary – Copper India
Segment Summary – Copper India Q4 Q3 Full year Production (in ’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY 2019 FY 2019 FY 2018 % change YoY Copper - Cathodes 26 106 (75%) 23 90 403 (78%) Tuticorin power sales (million units) - 2 - - - 39 - Financials (In ₹ crore, except as stated) Rev
Slide 47: Sales Summary
Sales Summary Sales volume Q4 FY2019 FY 2019 Q4 FY2018 FY 2018 Q3 FY2019 Zinc-India Sales Refined Zinc (kt) 177 694 210 793 187 Refined Lead (kt) 52 198 50 169 54 Total Zinc-Lead (kt) 229 892 259 961 241 Silver (tonnes) 196 676 169 558 178 Zinc-International Sales Zinc Refined (kt) 26 66 23 85 16 Zi
Slide 48: Sales Summary
Sales Summary Q4 FY Q4 FY Q3 Sales volume Q4 FY Q4 Q3 Sales volume FY2019 FY2018 FY2019 FY2018 2019 2018 FY2019 Power Sales (mu) 2019 FY 2018 FY2019 Iron-Ore Sales Jharsuguda 600 MW 615 1,039 404 1,172 136 Goa (mn DMT) 0.0 1.3 2.4 5.4 0.1 TSPL 2,235 9,858 2,258 7,915 2,543 Karnataka (mn DMT) 1.4 2.6
Slide 49: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of 1 Rs depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ INR 600 crs / year Commodity prices – Impact of a 10% increase in Commodity Prices FY 2019 Commodity Average price EBITDA ($mn) Oil ($/bbl) 70 119 Zinc ($/t) 2,743 196
Slide 50: Group Structure
Group Structure Vedanta Resources Ltd Divisions of Vedanta Limited 79.4% 50.1% ⚫ Sesa Iron Ore ⚫ Sterlite Copper Konkola ⚫ Power (600 MW Jharsuguda) Copper Vedanta Ltd Mines (KCM) ⚫ Aluminium (Odisha aluminium and power assets) ⚫ Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 51% 100% 100% 90% Z
Slide 51: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 6:30 PM (IST) on May 7, 2019. The dial-in numbers for the call are given below: Event Telephone Number India: +91 7045671221 Earnings conference call on May 7, 2019 India – 6:30 PM (IST) Toll free: 1800 120 1221 Universal access