Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q3 FY2024 Earnings Presentation
39 slides from Tata Steel's earnings presentation, Jan 24, 2024
Slide 1: Tata Steel Results Presentation, Quarter ended December 31, 2023
GR WTH WITH PURPOSE Tata Steel Results Presentation Financial quarter ended December 31, 2023 January 24, 2024
Slide 2: Safe harbour statement
Safe harbour statement 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 may differ materially from those directly or indirectly expressed, inferred or implied. Imp
Slide 3: Structural trends are reshaping global steel industry dynamics over time
Structural Safe trends harbour are reshaping global steel industry dynamics over time statement China’s transition Focus on Geopolitical Technological to consumption Decarbonisation events / progress led growth across sectors conflicts over time Shaping dynamics in the near to long term Global Steel
Slide 4: India steel remains a bright spot aided by the economic growth cycle
India harbour Safe steel remains a bright spot aided by the economic growth cycle statement India steel demand forecast (in mn tons) Uptick in steel end use across segments Megacities Connectivity 120 Urbanisation FY23 FY24 FY26 FY28 FY30 Apparent steel use and GDP per capita National Infra Affordab
Slide 5: Tata Steel is focused on creating sustainable value
Tata Steel Safe is focused harbour on creating sustainable value statement Leadership in Consolidate position Sustainability as global cost leader Leadership in Leadership position in India technology & digital Robust financial Become future health ready 5
Slide 6: We are committed to 'Zero harm'
We are Safe committed harbour to ‘Zero harm’ statement Journey towards excellence in Safety & Health of employees1 Safety workshops involving Senior Leadership 69% LTIFR* Fatalities In the last 15 years 7 5 4 4 3 FY20 FY21 FY22 FY23 9MFY24 Control Room FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY
Slide 7: Improving quality of life of our communities
Improving Safe quality harbour of life of our communities statement Social capital and scalable change models to enable deep societal impact 33 Lakh+ Rural & Urban Structured learning for 7 lac+ children Lives Impacted1 Education >Rs 1,600 crores Samvaad'23 14,500+ high risk spent2 since FY20 conven
Slide 8: Aligned with the UN SDG framework to ensure a better future
Aligned Safe with the harbour UN SDG framework to ensure a better future statement 68 targets have been prioritised across 15 UN SDGs Relevant Targets 3/7 Agriculture and allied Skill Community activities development enterprises Households covered via improved Youth skilled and gainfully engaged Wom
Slide 9: Our Journey so far
Our Journey Safe harboursostatement far… Consistent growth at India operations… …with industry leading profitability in million tons 18 19 17 17 Average India EBITDA margin : 26% 16 39% 12 32% 32% 11 26% 27% 9 10 24% 22% 9 21% 20% 18% FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY14 FY15 FY16
Slide 10: Business update
Business update Tata Steel Meramandali received ResponsibleSteelTM certification
Slide 11: Sustainability is at the core of our strategy
Sustainability Safe harbour is at the core of our strategy statement Our sustainability framework guides deployment of sustainability initiatives across value chain Performance Update Business Update Note : HR: Human Resource, POSH: Prevention of sexual harassment, SC: Supply Chain, ABAC: Anti-Bribe
Slide 12: Net Zero by 2045
Net Zero Safe by 2045 harbour statement Route and Pace of decarbonisation to be calibrated across geographies Pursuing Steel – permanent material in the Multiple circular economy Initiatives ▪ Key engineering and Higher scrap Higher Renewable Reducing ash in construction material charge energy use
Slide 13: TSUK: Pursuing decarbonisation to reduce 50 mn tons CO2e over a decade
Safe TSUK:harbour statement Pursuing decarbonisation to reduce 50 mn tons CO2e over a decade ▪ Decarbonisation plan → Transition to EAF based steelmaking ▪ Statutory consultations with the Unions have been initiated ▪ Partnering with Henry Royce Institute at Manchester for advanced materials researc
Slide 14: TSI: Pursuing sustainability through multiple initiatives
Safe harbour sustainability TSI: Pursuing statement through multiple initiatives ▪ We are committed to responsible growth and the key levers for decarbonisation are carbon reduction through Process improvement, Carbon direct avoidance and Carbon Capture and Utilisation ▪ Our Jamshedpur plant is the
Slide 15: Tata Steel is scaling up to capitalise on India growth opportunity
Tata Steel is scaling up to capitalise on India growth opportunity Investments set to drive sector leading returns 2x 40 capacity growth in NINL / MTPA Flats (A) ~16 MTPA ~27 MTPA India EAF Longs (B) ~5 MTPA ~13 MTPA Dominant manufacturing base 0.75 ~21 EAF TSK / Crude Steel ~21 MTPA 40 MTPA MTPA 5
Slide 16: Commenced phased commissioning of expansion at Kalinganagar
Commenced phased comissioning of 5 MTPA expansion at Kalinganagar Tata The largest ‘Blast furnace’ in India at 5,870 cubic metres First Slab cast at SMS Caster #2 at Kalinganagar 6 MTPA capacity Pellet plant at Kalinganagar Performance Update Business Update Power systems at 5 MTPA blast furnace Not
Slide 17: 2.2 MTPA CRM complex to drive product mix enrichment
2.2 MTPA CRM complex to drive product mix enrichment Tata FHCR coils production commenced Continuous Annealing Line Widest cold rolling mill in India with capacity of 2.2 million tons per annum High Tensile steel to meet Advanced steel to serve lightweighting & safety Infra and Energy Performance Up
Slide 18: Capacity growth to aid continued strong presence across segments
Capacity growth to aid continued strong presence across segments Leadership in chosen segments Customer engagement & investment in technology Multiple routes to connect, transact & engage Delivering superior experience on multiple points of “friction” Performance Update Developing long term partners
Slide 19: Focus on innovation to remain supplier of choice in chosen segments
Tata Focus on innovation to remain supplier of choice in chosen segments Focus on product innovation and Servitization across segments Consistently filed 100+ 500+ New Products Ecosystem patents for the last 5 years developed in last 5 yrs. to drive Embracing Digitisation & Industry 4.0 innovation →
Slide 20: Auto: Consolidating the position of Preferred Steel Supplier
Auto: Consolidating the position of “Preferred Steel Supplier” Tata Product mix and enhanced services to meet needs of the future ▪ Makes up 24% of domestic ▪ Shift to Hi-strength steels to cater deliveries to emerging needs Auto as % of total Auto High-end sales up 8% deliveries YoY in 9MFY24 24% 2
Slide 21: Retail: Poised to grow 2x in high margin business
Retail: Poised to grow 2x in high margin business Tata Leveraging pan India growth and branded presence especially Tata Tiscon ▪ Envisaged capacity growth at ▪ Strong cash flow generation NINL and EAF Performance Update ▪ Enhanced Phygital reach to the ▪ Developing strong ecosystem to market deliver
Slide 22: Downstream: Value added growth for product mix enrichment
Downstream: Value added growth for product mix enrichment Tata Set to grow by 2x – 4x Tubes Wires Tinplate Ductile Iron Pipes Wide product One out of three tyre Application in Tata Ductura, portfolio incl. HAR & manufacturers in growing packaging designed to last transportation of ApplicationERW of
Slide 23: Financial management to enable returns across cycle
Financial management to enable returns across cycle Tata Value Drivers Outcome Bond spreads converged to Investment grade 1600 Balance sheet management Tata Steel Abja 5.45 (2028) 1400 ▪ Optimise capital structure and cost 1200 1000 ▪ Target Net Debt to EBITDA <2.5x across cycle 800 ▪ Proactive fina
Slide 24: Value accretive consolidation with multiple benefits
Value accretive consolidation with multiple benefits Tata Unlisted Listed Tata Steel S&T Mining Indian Steel & TSLP TCIL Tata Metaliks TRF Ltd. Mining (TSML) Wire Products Swap ratio 6.7 Swap ratio 3.3 Swap ratio 7.9 Swap ratio 1.7 Filing of scheme Filing of 1st motion Shareholders Final hearing / w
Slide 25: Performance Update
Performance Update Identifying and developing sporting talent among rural youth, India
Slide 26: Elevated input costs and volatile steel prices have weighed on spreads
Elevated input costs and volatile steel prices have weighed on global steel spot spreads across most regions ▪ Global steel prices were mixed in the Oct – Dec’23 period ▪ Raw material prices moved higher during the quarter, with across key regions. US / EU prices increased towards the Coking coal pr
Slide 27: India steel demand improved while EU demand was subdued
India steel demand continued to improve while EU demand was subdued given the operating landscape marked by slowdown and geopolitics India Europe ▪ Indian apparent steel consumption was up around 11% on ▪ EU manufacturing PMI was 43 - 44 during Oct – Dec’23 YoY basis in 3QFY24 aided by government sp
Slide 28: Steady increase in India sales to chosen segments
Steady increase in India sales to chosen segments Domestic deliveries up 3% QoQ and 10% YoY Business Verticals End use sectors mn tons Auto and Retail : Individual Construction & ancillaries housebuilders Infrastructure 1.2 1.3 1.2 0.8 0.7 0.7 1.2 1.2 1.0 4.82 4.88 4.74 0.64 0.72 0.78 3QFY23 2QFY24
Slide 29: Tata Steel Consolidated
Tata Steel Consolidated (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY24 2QFY24 3QFY23 unless stated otherwise) Production (mn tons)1 7.58 7.31 7.56 ▪ Revenues: were broadly stable QoQ as effect of slightly Deliveries (mn tons) higher volumes was offset by lower realisations esp. in
Slide 30: Consolidated 3QFY24 EBITDA stood at Rs 5,742 crores
Consolidated 3QFY24 EBITDA1 stood at Rs 5,742 crores EBITDA margin was at 10% ▪ Selling Result: driven by lower realisations in 465 UK and Netherlands partly offset by India - 1,097 ▪ Cost Changes: given drop in raw material - costs in India and Netherlands 944 977 5,742 ▪ Volume/Mix: primarily driv
Slide 31: Net debt stood at Rs 77,405 crores; group liquidity remains strong
Net debt stood at Rs 77,405 crores Group liquidity remains strong at Rs 23,3491 crores in Rs crores 337 2,494 665 89,723 88,230 10,825 77,405 Gross Debt Movement in Loan FX Impact Gross Debt Cash, Bank & Net Debt Sep'23 leases movement and Others Dec'23 Current Dec'23 Investments 1 Note Group liquid
Slide 32: Key financial credit metrics
Key financial credit metrices EBITDA Margin (%)1 EBITDA / ton (Rs.)1 Interest Coverage Ratio (x)1,2 Gross & Net Debt (Rs. crore) 26.2% 21,626 11.7 1,16,328 1,00,816 19.8% 88,501 84,893 88,230 18.9% 1,04,779 75,561 94,879 11,358 11,110 5.2 77,405 13.4% 75,389 12.2% 10,838 7,832 3.9 4.1 67,810 6,267 3
Slide 33: Annexures
Annexures Robotics Wagon Tippler at India operations
Slide 34: Tata Steel Standalone: operational efficiencies and environmental impact
Tata Steel Standalone Continued focus on operational efficiencies and minimizing environmental impact Coke Rate (kg/thm) Specific Energy Consumption (Gcal/tcs) Specific Fresh Specific Water Fresh Consumption (m3/tcs) Water Good Good 3 Consumption (m /tcs) Good 6.00 365 5.95 362 3.51 5.85 358 5.78 3.
Slide 35: Tata Steel Standalone
Tata Steel Standalone1 (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY24 2QFY24 3QFY23 unless stated otherwise) Production (mn tons) 5.13 4.91 4.94 ▪ Revenues: were marginally higher on improved Deliveries (mn tons) volumes and steel realisations 4.88 4.82 4.74 Total revenue from ope
Slide 36: Key operating parameters TSUK and TSN
TSUK TSN Key operating parameters Coke Rate (kg/thm) Specific Energy Consumption (GJ/tcs) CO2 Emission Intensity (tCO2/tcs) Good Good Good 337 336 324 317 23.9 311 23.3 23.1 22.8 22.7 2.25 2.18 2.16 300 300 2.14 2.12 21.0 20.4 20.2 19.8 19.5 291 1.80 1.78 1.77 1.76 1.76 279 275 FY20 FY21 FY22 FY23 9
Slide 37: Tata Steel Netherlands
Tata Steel Netherlands (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY24 2QFY24 3QFY23 unless stated otherwise) ▪ Revenues: were broadly similar with higher volumes Liquid Steel production (mn tons) 1.19 1.19 1.52 being offset by drop in steel realisations Deliveries (mn tons) 1.30 1
Slide 38: Tata Steel UK
Tata Steel UK (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY24 2QFY24 3QFY23 unless stated otherwise) ▪ Revenues: declined on lower deliveries as well as drop Liquid Steel production (mn tons) 0.72 0.76 0.72 in realisations Deliveries (mn tons) 0.64 0.73 0.66 ▪ Raw Material cost: de
Slide 39: Tata Steel Investor Relations
Tata Steel Investor Relations Investor enquiries ir@tatasteel.com Samvaad – Bringing together tribes of India