Slide 1: Vedanta Limited Q3 FY2017 Results
Vedanta Limited (formerly known as Sesa Sterlite Ltd.) Q3 FY2017 Results 14 February 2017 VEDANTA LIMITED – Q3 FY2017 RESULTS PRESENTATION Results conference call details are on the last page of this document
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from publicly only as of the date of this presentation, and we disclaim any responsibility available sources that have not been independently verified by us. to update or revise such statements. No represent
Slide 3: Contents
Contents Section Presenter Page Strategic Update Tom Albanese, CEO 4 Financial Update Arun Kumar, CFO 11 Business Review Tom Albanese, CEO 19 Appendix 27 VEDANTA LIMITED – Q3 FY2017 RESULTS PRESENTATION 3
Slide 4: Strategic Update
Strategic Update Tom Albanese Chief Executive Officer VEDANTA LIMITED – Q3 FY2017 RESULTS PRESENTATION
Slide 5: Safety and Sustainability
Safety and Sustainability Health, Safety and Environment LTIFR (per million man-hours worked) Building a Zero Harm Culture 1.0 0.89 0.9 - Zero fatalities in Q3 0.8 0.7 0.52 - Zero “higher category” (Cat# 4&5) environmental incidents 0.49 0.6 0.5 0.41 0.43 0.39 Line leadership coaching on “Making
Slide 6: Q3 FY2017 Results Highlights
Q3 FY2017 Results Highlights Operations: Continued ramp-up of production capacities Group EBITDA mix Zinc India: Mined metal production up 44% q-o-q; environmental Q3 FY2017 Q3 FY2016 clearance received for Zawar and SK mine expansions Rs 6,002 crore Rs. 3,284 crore Aluminium: Smelters continue
Slide 7: Vedanta has an Attractive Commodity Mix
Vedanta has an Attractive Commodity Mix Our commodity basket has captured commodity price upside, with low volatility Aluminium Zinc Copper Iron Ore 62%² Silver Brent Oil VED commodity Basket¹ 700 600 Vedanta’s commodity (01 Jan 2004 = 100) basket up by 57% Commodity prices 500 since Jan’16 400 201%
Slide 8: Well-invested assets driving production growth
Well-invested assets driving production growth Significant capex already spent, ready to reap benefits from incremental production with low remaining capex Capex Spent (US$bn) Total Production (copper equivalent kt) Zinc-Lead Silver Copper Aluminium 2,500 Power Iron Ore Oil & Gas 2.2 2.0 Copper Equi
Slide 9: Zinc: Fundamentals supporting price
Zinc: Fundamentals supporting price Global Zinc concentrate deficit supporting zinc prices (kt) Global Zinc Cost curve 800 CY 2016E Zinc C1 composite cost curve Surplus Century closure (500ktpa) Dugald River 600 (210 ktpa) $/t Lisheen closure Zinc Zinc (160 ktpa) Gamsberg India Intl 400 (250ktpa) to
Slide 10: The India Story is Compelling
The India Story is Compelling Strong Potential for Demand Growth in India India’s GDP is similar to China in the mid-2000s …to be driven by Indian urbanization… …and boost metal demand intensity 14.4 China ( GDP $tn 1991 to 2015) 18 60 China 1991-2015 12.8 India ( GDP $tn 2001 to 2025) India 2001-20
Slide 11: Financial Update
Financial Update Arun Kumar Chief Financial Officer VEDANTA LIMITED – Q3 FY2017 RESULTS PRESENTATION
Slide 12: Q3 Financial Highlights: EBITDA and PAT highest in last eight quarters
Q3 Financial Highlights: EBITDA and PAT highest in last eight quarters EBITDA up 29% q-o-q and 83% y-o-y; strong EBITDA margin of 39% Driven by production volumes, higher commodity prices and strong operating performance PAT up significantly q-o-q and y-o-y Strong Free Cash Flow post capex o
Slide 13: EBITDA Bridge
EBITDA Bridge Q3 FY2017 vs. Q2 FY2017 (In Rs. Crore) Zinc 499 Iron ore 337 Zinc and Lead 354 Aluminium 133 Aluminium 143 Copper India 49 Brent 97 Power 61 Iron Ore 59 Oil & Gas (117) Brent Discount 35 Others (9) Metal Premiums (122) Others (16) 7,000 383 209 208 953 6,002 550 154 5,083 43 8 11 5,000
Slide 14: Cost Savings and Marketing Initiatives
Cost Savings and Marketing Initiatives Achieved cumulative savings of $545 mn in the last 7 quarters Cost and marketing savings program ($mn) $515 mn in Cost and Marketing savings $30 mn in capex savings 1,300 Program is ahead of original plan to deliver $1.3bn cumulative savings by FY 2019
Slide 15: Income Statement
Income Statement Depreciation Q3 Q3 Q2 In Rs. Crore − Lower q-o-q on account of lower volume at O&G; offset by FY’17 FY’16 FY’17 capitalization of new capacities at Aluminium and Power EBITDA 6,002 3,284 4,641 − Lower y-o-y on account of lower volume at O&G and closure of Lisheen mine in Dec 2015;
Slide 16: Net Debt for Q3 FY 2017
Net Debt for Q3 FY 2017 (In Rs. Crore) 14,000 FCF Post Capex Rs. 1,801 Crore 13,000 11,961 4,531 12,000 11,514 390 858 11,000 894 106 10,000 42 753 9,000 1,041 8,000 7,000 6,000 Net Debt 30 Sep Cash Flow from WC movements Debtors & Sustaining Capex Project Capex DDT Dividend Translation Profit/ Net
Slide 17: Balance Sheet and Maturity Profile
Balance Sheet and Maturity Profile Maturity Profile of Term Debt ($9.0bn) (as of 31st December 2016) 2.2 Subsidiaries Standalone 0.5 1.7 1.7 1.3 0.7 0.7 1.1 1.0 0.3 0.5 0.4 1.7 1.0 1.0 0.7 0.8 0.7 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 & Later External term debt of $9.0bn ($6bn at Standalone and
Slide 18: Financial Priorities focused on a strong Balance Sheet
Financial Priorities focused on a strong Balance Sheet Disciplined Capital Allocation: Ramp-ups at Aluminium, Power and Iron Ore are generating significant cash flows Optimising capex, Continued optimization of Opex and Capex focus on FCF Deleveraging; Continued reduction in debt Strong Liquid
Slide 19: Business Review
Business Review Tom Albanese Chief Executive Officer VEDANTA LIMITED – Q3 FY2017 RESULTS PRESENTATION
Slide 20: Zinc India
Zinc India Q3 Results Rampura Agucha Mine – Longitude Vertical Section Metal in concentrate(MIC) production at 276kt, 44% higher q-o-q as per the mine plans Refined zinc and lead production at 205kt and 39kt, respectively +13mRL Q3 CoP at $861/t, higher mainly on one-time change in the ore to
Slide 21: Zinc International
Zinc International Skorpion and Black Mountain Results Q3 production of 33kt Skorpion: metal production lower q-o-q at 17kt, impacted by wetter than anticipated ore BMM: Stable production q-o-q at 15kt CoP at $1615, higher due to lower production volumes at Skorpion Outlook Skorpion pit ex
Slide 22: Oil & Gas
Oil & Gas Results MPT: Facility modifications Mangala EOR, world’s largest polymer program EOR production reached 55 kboepd, 5% higher q-o-q Rajasthan production at 154 kboepd in Q3, given planned shutdown RJ water-flood cost at $4.3/boe; blended cost at $6.3/boe. Opex higher due to lower ov
Slide 23: Aluminium
Aluminium Aluminium volumes ramping up, quarterly production at 319kt Aluminium Costs and Margins Ramp-up at Jharsuguda-II : (in $/t, for Q3 FY2017) 1st line impacted by transformer failure in mid-Jan, rectification Q2’17 1,620 82 72 1,774 (560) (593) (309) (65) $247/t (167) (359) (279) in pro
Slide 24: Power
Power Results Power Generation Capacity – c. 9GW TSPL: All 3 units operational, with plant availability of 77% CPP:5.1GW in Q3 IPP: 3.6GW • 1,215MW Jharsuguda • 600MW Jharsuguda Targeting availability of over 80% in Q4 FY2017 • 3*600MW Jharsuguda (of (of 2400MW plant) 2400MW plant) • 1,980MW TSP
Slide 25: Iron Ore and Copper India
Iron Ore and Copper India Iron Ore Goa iron ore costs and margin (Q3 FY2017, US$/t) Sales of 3.7mt and production of 2.6mt in Q3 73 22 Achieved full year production cap in January at Goa (5.5mt) and Karnataka (2.3mt) 8 2 41 8 Received further allocation of 3mt in Goa for FY2017; engaged with K
Slide 26: Strategic priorities
Strategic priorities Production growth and asset optimisation Disciplined approach towards ramp up De-levering the balance sheet Reduce gross debt Continued optimisation of opex and capex Continued discipline around working capital Simplifying the Group structure Complete Vedanta Limited -
Slide 27: Appendix
Appendix VEDANTA LIMITED – Q3 FY2017 RESULTS PRESENTATION
Slide 28: Vedanta Ltd.– Cairn India merger
Vedanta Ltd.– Cairn India merger Key completed events BSE, NSE and SEBI approvals sought BSE, NSE and SEBI approvals Application to National Company Law Tribunal in India Vedanta plc posting of UK Circular Vedanta plc EGM Vedanta Limited shareholder meeting Cairn India Limited shareholde
Slide 29: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. Crore) 31 December 2016 30 September 2016 30 June 2016 Company Cash & Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Net Debt LI Vedanta Limited 43,168 1,247 41,921 41,285 2,114 39,171 35729 1,216 34,513 Standalone Zinc India 0 25,373 (25,373) 1,928 27,186 (25
Slide 30: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $9.0 bn Debt Breakdown (as of 31 Dec 2016) (as of 31 Dec 2016) Short term loans- USD 3% Debt breakdown as of 31 Dec 2016 (in $bn) Bonds- INR Money Market 22% External term debt 9.0 Instrument- INR 23% Working capital 0.4 I
Slide 31: EBITDA Bridge
EBITDA Bridge Q3 FY2017 vs. Q3 FY2016 (In Rs. Crore) Iron ore 279 Power 214 Zinc and Lead 1402 Aluminium 127 Aluminium 341 Copper India 51 Brent 148 Zinc 20 Iron Ore 88 Oil & Gas (95) Brent Discount 214 Metal Premiums (79) Others 31 7,000 Others (62) 522 31 294 6,002 627 92 183 106 145 5,178 2,053 5
Slide 32: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q3 Q2 9M OIL AND GAS (boepd) % change % change FY2017 FY2016 FY2017 FY2017 FY2016 YoY YoY Average Daily Total Gross Operated Production (boepd)1 191,230 211,843 -10% 206,230 201,286 214,663 -6% Average Daily Gross Operated Production (boepd) 181,818 202,668 -10% 196,399 1
Slide 33: Segment Summary – Zinc India
Segment Summary – Zinc India Q3 Q2 9M Production (in ’000 tonnes, or as stated) % change % change FY2017 FY2016 YoY FY2017 FY2017 FY2016 YoY Mined metal content 276 228 21% 192 595 700 -15% Refined Zinc – Total 205 206 0% 150 457 605 -24% Refined Zinc – Integrated 205 206 0% 149 456 605 -25% Refined
Slide 34: Segment Summary – Zinc International
Segment Summary – Zinc International Q3 Q2 9M Production (in’000 tonnes, or as stated) % change % change FY2017 FY2016 FY2017 FY2017 FY2016 YoY YoY Refined Zinc – Skorpion 17 13 34% 23 64 55 16% Mined metal content- BMM 15 17 -11% 16 51 48 5% Mined metal content- Lisheen - 21 - 0 - 81 -% Total 33 51
Slide 35: Segment Summary – Aluminium
Segment Summary – Aluminium Q3 Q2 9M Particulars (in’000 tonnes, or as stated) FY2017 FY2016 % change YoY FY2017 FY2017 FY2016 % change YoY Alumina – Lanjigarh 328 218 50% 292 895 760 18% Total Aluminum Production 319 234 37% 296 860 697 23% Jharsuguda-I 132 131 1% 132 393 392 0% 1 Jharsuguda-II 84
Slide 36: Segment Summary – Power
Segment Summary – Power Q3 Q2 9M Particulars (in million units) % change % change FY2017 FY2016 FY2017 FY2017 FY2016 YoY YoY Total Power Sales 3,413 2,934 16% 3,030 9,453 8728 8% 1 Jharsuguda 600 MW(FY 2016 nos are 2400 MW) 879 1,593 -45% 605 2,376 5413 -56% 2 BALCO 270 MW 41 0 169 BALCO 600 MW 660
Slide 37: Segment Summary – Copper India
Segment Summary – Copper India Q3 Q2 9M Production (in ’000 tonnes, or as stated) % change % change FY2017 FY2016 FY2017 FY2017 FY2016 YoY YoY Copper - Mined metal content - - - - - - - Copper - Cathodes 102 89 15% 97 300 282 6% Tuticorin power sales (million units) 46 40 15% 30 136 334 -59% Financi
Slide 38: Segment Summary – Iron Ore
Segment Summary – Iron Ore Q3 Q2 9M Particulars (in million dry metric tonnes, or as stated) % change % change FY2017 FY2016 FY2017 FY2017 FY2016 YoY YoY Sales 3.7 1.5 - 0.8 7.1 2.7 - Goa1 2.6 0.6 - 0.3 5.1 0.6 Karnataka 1.0 0.9 4% 0.5 2.0 2.1 -6% Production of Saleable Ore 2.6 1.4 86% 1.5 7.3 2.4 -
Slide 39: Sales Summary
Sales Summary Sales Volume Q3 FY2017 9M FY2017 Q3 FY2016 9M FY2016 Q2 FY2017 Zinc-India Sales Refined Zinc (kt) 211 479 204 602 148 Refined Lead (kt) 36 91 35 104 32 Zinc Concentrate (DMT) - - - - 0 Lead Concentrate (DMT) - - - - 0 Total Zinc (Refined+Conc) (kt) 211 479 204 602 148 Total Lead (Refin
Slide 40: Sales Summary
Sales Summary Sales Volume Q3 9M Q3 9M Q2 Q3 FY2017 9M FY2017 Q3 FY2016 9M FY 2016 Q2 FY2017 Sales Volume FY2017 FY2017 FY2016 FY2016 FY2017 Power Sales (mu) Jharsuguda 2,400 MW 879 2,376 1,593 5,413 605 Iron-Ore Sales TSPL 1,792 4,743 839 1,922 1,679 Goa (mn DMT) 2.7 5.1 0.6 0.6 0.3 BALCO 270 MW 41
Slide 41: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 62.9% Sesa Iron Ore Konkola Sterlite Copper (Tuticorin) Copper Vedanta Ltd Power (600 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Subsidiaries of Vedanta Ltd 59.9% 64.9% 51% 100% 100% 100% 1
Slide 42: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 6:00 PM (IST) on Tuesday, 14 February 2017. The dial-in numbers for the call are given below: Event Telephone Number Mumbai main access Earnings conference call on February India – 6:00 PM (IST) +91 22 3938 1017 14, 2017 Toll Fr