Slide 1: Vedanta Limited FY2017 Results
Vedanta Limited FY2017 Results 15 May 2017 Results conference call details are on the last page of this document Elements for a Sustainable Future VEDANTA LIMITED - FY2017 RESULTS PRESENTATION
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statements. We do not undertake to update our forward-looking publicly available sources that have not been independently verified. statements. We caution you that reliance on any forward-looking statem
Slide 3: Contents
Contents Section Presenter Page Strategic Update Tom Albanese, CEO 3 Financial Update Arun Kumar, CFO 13 Business Review Tom Albanese, CEO 23 Q&A 32 VEDANTA LIMITED - FY2017 RESULTS PRESENTATION 2
Slide 4: Strategic Update
Vedanta Limited FY2017 Results 15 May 2017 Strategic Update Tom Albanese Chief Executive Officer Empowering Growth VEDANTA LIMITED - FY2017 RESULTS PRESENTATION
Slide 5: Sustainable Development
Sustainable Development Building a Zero Harm Culture Safety - 5 Fatalities during FY17 - crane related accident at a site in Rajasthan (4 fatalities in Q4) Social Licence to Operate - Social Investment of Rs. 110 crore benefitted 2.2mn people - 71 Model ‘Nand Ghar’ (signature project of Vedanta)
Slide 6: Vedanta Limited: A diversified resources company
Vedanta Limited: A diversified resources company, with low cash cost positions, market leading growth and strong balance sheet Commodity diversification1 Attractive cost position I II III IV Size of circle Zinc denotes India EBITDA Zinc Intl. contribution Peers O&G Copper Aluminium India % Revenue (
Slide 7: A world-class natural resource powerhouse anchored in India
Vedanta Limited: A world-class natural resource powerhouse anchored in India The completion of the Cairn merger enables Greater financial flexibility to allocate capital efficiently Focus on shareholder returns - Dividend policy announced 6th largest diversified resources company in the worl
Slide 8: FY2017 Results Highlights
FY2017 Results Highlights Operations: Record production, capacities Group EBITDA Mix ramping-up FY2017 FY2016 Ramp-up of capacities at Aluminum, Power, Iron Ore 6% 3% Record production at Zinc–India, Aluminum, Power and Copper India 7% 14% 8% Gamsberg zinc project on track for CY18 production
Slide 9: Capital Allocation: Focus on Shareholder Returns
Capital Allocation: Focus on Shareholder Returns World class assets and operational excellence to deliver strong and sustainable cash flows Production growth and asset optimization Strong Shareholder Returns Maintain Strong Balance Sheet Grow Existing Businesses • Announced dividend policy at • Cont
Slide 10: Vedanta well-positioned to benefit from strong Zinc fundamentals
Vedanta well-positioned to benefit from strong Zinc fundamentals Refined Zinc inventory (mt) at 7 year lows, supporting zinc prices LME SHFE Zinc LME $/t (RHS) 1.8 3,500 1.6 3,000 1.4 2,500 1.2 1.0 2,000 0.8 1,500 0.6 1,000 0.4 0.2 500 0.0 0 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 In
Slide 11: Ideally positioned to capitalize on India's growth and natural resource potential
Ideally positioned to capitalize on India’s growth and natural resource potential Secular growth trends… …to drive increasing resources demand 30 India key themes 25 China Germany South Korea consumption (kg/capita) Aluminium 20 Population (mn) US 15 1,600 Japan 10 1,500 5 India Population 1,400 0 g
Slide 12: Vedanta to benefit from strong Indian growth and encouraging regulatory environment
Vedanta to benefit from strong Indian growth and encouraging regulatory environment Government’s strong push for Infrastructure Growth Industrial Production Growth Rates 1.65 Allocation of $35bn for infrastructure development China India 1.55 “Housing for All” budget of $12bn over next three yea
Slide 13: Delivering on our Strategic Priorities
Delivering on our Strategic Priorities Strategic Priority What we Achieved in FY2017 Focus Areas for FY2018 Record production at several operations Continued production ramp up Production Significant ramp ups at Aluminium, Iron Ore Progress towards production at Gamsberg growth and Power C
Slide 14: Financial Update
Financial Update Arun Kumar Chief Financial Officer Value Creation VEDANTA LIMITED - FY2017 RESULTS PRESENTATION
Slide 15: FY2017: Strong profitability and balance sheet
FY2017: Strong profitability and balance sheet FY2017 Change vs Rs. crore or as stated FY2017 FY2016 Change Q4 FY2017 Pro-forma2 Q4 FY2016 EBITDA 21,437 15,184 41% 7,275 109% EBITDA margin¹ 39% 30% 9% 44% 15% Attributable PAT 7,323 2,839 2.6x 2,971 3.4x (Before Exceptional & DDT) Attributable PAT 5,
Slide 16: EBITDA Bridge (FY2017 vs FY2016)
EBITDA Bridge (FY2017 vs FY2016) FY2017 vs. FY2016 Iron ore 674 (In Rs. crore) Zinc & Lead 3,196 Power 687 Initiatives 1,850 Aluminium 576 Aluminium 301 Volume Led (219) Brent Discount 231 Others 67 Lisheen (138) Iron ore 112 Zinc India (249) Brent 74 25,000 Zinc Intl (22) Power (173) Cairn (335) Me
Slide 17: Q4 FY2017 EBITDA at over $1bn
Q4 FY2017 EBITDA at over $1bn Q4 FY2016 vs. Q4 FY2017 Zinc & Lead 1,777 Zinc India 701 Initiatives 508 (In Rs. crore) Aluminium 546 Aluminium 229 Volume Led 129 Iron ore 81 Brent 563 Power 134 Iron ore 61 Cairn (91) Brent Discount 96 Zinc Intl. (99) 8,000 Power 16 Others 36 Metal Premiums (74) 637 2
Slide 18: Cost Savings and Marketing Initiatives
Cost Savings and Marketing Initiatives Achieved cumulative savings of $712m in last 2 years with Cost and marketing savings program ($m) $ 462m in FY 2017 (run rate of $40m, up from $20m in FY progressing ahead of original plan 2016) ‒ $682m in cost and marketing savings 1,300 462 712 – $30m in ca
Slide 19: Income Statement
Income Statement In Rs. crore Q4 Q4 FY’17 FY’16 Depreciation & Amortization FY’17 FY’16 Revenue 22,371 15,828 71,721 63,920 − Lower in Q4 and FY17 on account of lower amortization charge on mining reserves at Oil & Gas due to EBITDA 7,275 3,489 21,437 15,184 impairment in FY16, partially offset by
Slide 20: Net Debt for FY2017
Net Debt for FY2017 (In Rs. crore) FCF Post Capex Rs. 13,312 crore 916 743 17,777 (6,123) (8,492) (3,051) (8,099) Project Capex (5,355) Sustaining capex (768) (9,673) (196) Net Debt 1st Cash Flow from WC Debtors & Capex DDT Dividend to Translation & Net Debt 31st Apr 16 Operations Movements Creditor
Slide 21: Optimising Capex to drive Cash Flow Generation
Optimising Capex to drive Cash Flow Generation Prioritised capital to high-return, low-risk projects to maximise cash flows Growth Capex Profile and Free Cash Flow pre capex - $bn Capex spent for FY 17 at $0.7bn against original Oil & Gas guidance of $1bn Zinc 2.8 Al & Power Copper 2.4 FY 2018
Slide 22: Strong Credit Profile and Balance Sheet
Strong Credit Profile and Balance Sheet Maturity Profile of Term Debt ($7.1bn) (as of 31stMar 2017) Subsidiaries Standalone 1.8 1.7 0.7 0.7 1.2 1.1 0.3 0.8 0.4 0.7 0.6 0.4 1.1 0.9 0.2 1.0 0.7 0.4 0.4 FY2018 FY2018 FY2019 FY2020 FY2021 FY2022 & Later FY2023 & Later as of date1 Term debt of $7.1bn ($4
Slide 23: Financial Priorities: Shareholder returns while strengthening Balance Sheet
Financial Priorities: Shareholder returns while continuing to strengthen Balance Sheet Focus on FCF and return on capital Ramp-ups at Aluminium, Power FCF (Rs. Crore) and Iron Ore are generating ROCE, RHS Disciplined Capital 14.4% 16% significant cash flows Allocation; 14,000 Continued optimizat
Slide 24: Business Review
Vedanta Limited FY2017 Results 15 May 2017 Business Review Tom Albanese Chief Executive Officer Operational Excellence VEDANTA LIMITED - FY2017 RESULTS PRESENTATION
Slide 25: Zinc India
Zinc India As a low cost Zinc producer, well positioned in any cycle FY2017 Results CY 2017E Zinc C1 composite cost curve Record production: MIC at 907kt; silver at 453 tonnes $/t Integrated refined metal production at 809kt 2,000 CoP at $830/t; 1st quartile on global cost curve 1,500 Zinc 1,0
Slide 26: Zinc International
Zinc International FY2017 Results Production at 156kt: Skorpion at 85kt; BMM at 70kt CoP $1417/t, higher mainly due to lower production 250kt Gamsberg Project On target for first production by mid-2018 Mining contract outsourced; 16mt of waste moved to date Contractor Camp Over 75% of budg
Slide 27: Cairn: Oil & Gas
Cairn: Oil & Gas MPT: Facility modifications FY 2017 Results FY2017 gross average production at 189,926boepd Rajasthan production at 161,571boepd Offshore production at 28,355boepd Mangala EOR, world’s largest polymer program Successful ramp up with production level of 56 kboepd in Q4 RJ
Slide 28: Cairn: Oil & Gas Forward Plan
Cairn: Oil & Gas Forward Plan MPT: Facility modifications RDG Gas project Phase-1: 40-45 mmscfd by Q2 FY2018 Phase-2: Gas production of 100mmscfd and condensate production of 5kboed by H1 CY2019; Tendering for new gas processing terminal and rig underway Key Oil projects Mangala Infill: Commen
Slide 29: Aluminium
Aluminium FY 2017 Results Aluminium Costs and Margins (in $/t, for Q4 FY2017) Record production of Aluminium: 1,213kt and Alumina: 1,208kt $342/t (158) Aluminum Q4 CoP at $1,492/t higher q-o-q due to higher Q3’17 1710 56 72 1,838 (560) (571) (298) (68) (368) (184) imported Alumina offset by lowe
Slide 30: Power
Power Results Power Generation Capacity – c. 9GW TSPL: All 3 units became operational in FY 2017: record CPP:5.1GW plant availability of 85% in Q4 FY2017 and 79% in FY2017 IPP: 3.6GW • 1,215MW Jharsuguda • 600MW Jharsuguda Plant currently out of production due to fire at coal • 3*600MW Jharsugud
Slide 31: Iron Ore and Copper India
Iron Ore and Copper India Iron Ore Goa iron ore costs and margin (Q4 FY2017, US$/t) Achieved full year production cap in Goa and Karnataka FY2017 72 25 7 1 39 5 7 19 Produced additional allocation of 2.6mt in Goa 7 Q4 Goa CoP reduced to US$19/t 86 39 FY2017 CoP at US$21/t, 38% lower y-o-y
Slide 32: Scorecard for the year
Scorecard for the year Focus Area Status Production growth Disciplined Capital Allocation; Focus on FCF De-leveraging Simplification of group structure Preserve License to Operate Identify next generation of Resources Shareholder returns VEDANTA LIMITED - FY2017 RESULTS PRESENTATION 31
Slide 33: Q&A
Vedanta Limited FY2017 Results 15 May 2017 Q&A VEDANTA LIMITED - FY2017 RESULTS PRESENTATION
Slide 34: FY2018 Guidance
FY2018 Guidance Segment FY18e Comments Zinc-Lead Integrated: 950kt; Silver volume: Zinc India +500 tonnes CoP ($/t): marginally higher than FY2017 Zinc-Lead volume: c.160kt Zinc International Gamsberg expected CoP: $1000-1,150/t CoP: c.$1,500/t RJ Gross Volume: 165kboepd Oil & Gas Ravva Gross volume
Slide 35: Project Capex
Project Capex Spent up Capex to March Spent in FY Unspent as at Capex in Progress Status ($mn) 2017 17 31 Mar 17 Cairn India - RDG, Mangala Infill, Aishwariya & 295 45 45 250 Bhagyam EOR, Barmer Hill, Liquid handling etc Aluminium Sector Smelter: 168 pots capitalised and BALCO – Korba-II 325ktpa Sme
Slide 36: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. crore) 31 March 2017 31 December 2016 31 March 2016 Company Cash & Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Net Debt LI Vedanta Limited Standalone (excluding 43,233 2,316 40,917 43,168 1,247 41,921 33,466 1,352 32,114 Cairn India) Zinc India 7,908 32,166
Slide 37: Net Debt for Q4 FY 2017
Net Debt for Q4 FY 2017 (In Rs. crore) FCF Post Capex Rs. 8,772 crore 2,698 2,421 (2,238) (1,536) 5,890 Project Capex (2,133) Sustaining capex (105) 441 (8,099) (4,261) (11,514) Net Debt 1st Jan Cash Flow from WC Movements Debtors & Capex DDT Dividend to Translation & Net Debt 31st 17 Operations Cre
Slide 38: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $7.1bn Debt Breakdown (as of 31 March 2017) (as of 31 March 2017) 1% Debt breakdown as of 31 Mar 2017 (in $bn) 20% Term Loans-INR Term debt 7.1 Working capital 0.3 Bonds-INR Short term borrowing 2.3 49% Term Loans-USD Shor
Slide 39: EBITDA Bridge (Q4 FY2017 vs Q3 FY2017)
EBITDA Bridge (Q4 FY2017 vs Q3 FY2016) Q4 FY2017 vs. Q3 FY2017 Zinc & Lead 401 Zinc India 559 (In Rs. crore) Aluminium 222 Aluminium 89 Iron ore (77) Brent (11) Power 41 Iron ore (10) Cairn 151 Brent Discount (68) Zinc Inter. (99) 8,000 Power (28) Others 42 Metal Premiums 62 230 49 11 7,275 706 7,00
Slide 40: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q4 Q3 Full Year OIL AND GAS (boepd) % change % change FY2017 FY2016 FY2017 FY 2017 FY 2016 YoY YoY Average Daily Total Gross Operated Production (boepd)1 1,94,343 2,06,170 -6% 1,91,230 1,99,574 2,12,552 -6% Average Daily Gross Operated Production (boepd) 1,84,585 1,97,039
Slide 41: Segment Summary – Zinc India
Segment Summary – Zinc India Q4 Q3 Full Year Production (in ’000 tonnes, or as stated) % change % change FY 2017 FY 2016 YoY FY 2017 FY 2017 FY 2016 YoY Mined metal content 312 188 66% 276 907 889 2% Refined Zinc – Total 215 154 40% 205 672 759 -11% Refined Zinc – Integrated 215 154 40% 205 670 759
Slide 42: Segment Summary – Zinc International
Segment Summary – Zinc International Q4 Q3 Full Year Production (in’000 tonnes, or as stated) % change % change FY 2017 FY 2016 FY 2017 FY 2017 FY 2016 YoY YoY Refined Zinc – Skorpion 21 27 -22% 17 85 82 4% Mined metal content- BMM 20 15 33% 15 70 63 11% Mined metal content- Lisheen - - - - 81 -100%
Slide 43: Segment Summary – Aluminium
Segment Summary – Aluminium Q4 Q3 Full Year Particulars (in’000 tonnes, or as stated) FY2017 FY2016 % change YoY FY2017 FY2017 FY2016 % change YoY Alumina – Lanjigarh 313 211 48% 328 1,208 971 24% Total Aluminium Production 353 226 56% 319 1,213 923 31% Jharsuguda-I 132 123 7% 132 525 516 2% Jharsug
Slide 44: Segment Summary – Power
Segment Summary – Power Q4 Q3 Full Year Particulars (in million units) % change % change FY 2017 FY 2016 FY2017 FY 2017 FY 2016 YoY YoY Total Power Sales 3,462 3,391 2% 3,413 12,916 12,121 7% Jharsuguda 600MW (FY 16 nos are 2400MW) 1 952 1,906 -50% 879 3,328 7,319 -55% Balco 270MW 2 - - - 169 - Balc
Slide 45: Segment Summary – Copper India
Segment Summary – Copper India Q4 Q3 Full Year Production (in ’000 tonnes, or as stated) % change % change FY 2017 FY 2016 FY 2017 FY 2017 FY 2016 YoY YoY Copper - Mined metal content - - - - - - - Copper - Cathodes 103 102 1% 102 402 384 5% Tuticorin power sales (million units) 64 68 -6% 46 200 402
Slide 46: Segment Summary – Iron Ore
Segment Summary – Iron Ore Q4 Q3 Full Year Particulars (in million dry metric tonnes, or as stated) % change % change FY 2017 FY 2016 FY 2017 FY 2017 FY 2016 YoY YoY Sales 3.0 2.6 15% 3.7 10.2 5.3 91% Goa1 2.3 1.6 44% 2.6 7.4 2.2 - Karnataka 0.7 1.0 -30% 1.0 2.7 3.1 -13% Production of Saleable Ore 3
Slide 47: Sales Summary
Sales Summary Sales Volume Q4 FY2017 FY 2017 Q4 FY 2016 FY 2016 Q3 FY2017 Zinc-India Sales Refined Zinc (kt) 217 696 158 760 211 Refined Lead (kt) 47 138 41 145 36 Zinc Concentrate (MIC) 27 27 - - - Lead Concentrate (MIC) - - - - - Total Zinc (Refined+Conc) kt 243 723 158 760 211 Total Lead (Refined
Slide 48: Sales Summary
Sales Summary Sales Volume Q4 Q4 FY Q3 Q4 FY2017 FY2017 Q4 FY 2016 FY 2016 Q3 FY2017 Sales Volume FY2017 FY2017 2016 FY 2016 FY2017 Power Sales (mu) Jharsuguda 2,400 952 3,328 1,906 7,319 879 Iron-Ore Sales MW TSPL 1,596 6,339 869 2,792 1,792 Goa (mn DMT) 3 2.3 7.4 1.6 2.2 2.7 BALCO 270 MW - - - 169
Slide 49: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 50.1% Sesa Iron Ore Sterlite Copper (Tuticorin) Konkola Copper Vedanta Ltd Power (600 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Cairn India (O&G) Subsidiaries of Vedanta Ltd 64.9% 51% 10
Slide 50: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 6:00 PM (IST) on Monday, 15 May 2017. The dial-in numbers for the call are given below: Event Telephone Number Mumbai main access Earnings conference call on May 15, India – 6:00 PM (IST) +91 22 3938 1017 2017 Toll Free number 1