Vedanta Limited · NSE:VEDL
Vedanta — CLSA Investor Conference 2018
27 slides from Vedanta's conference presentation, Nov 16, 2018
Slide 1: Channelling growth opportunities
Channelling growth Vedanta Limited opportunities OIL&GAS|ZINC&SILVER|ALUMINIUM|POWER|IRONORE|STEEL|COPPER I N V E S T O R P R E S E N T A T IO N November 2018
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: Key Investment Highlights
Key Investment Highlights 1 2 Large & diversified asset base with an Ideally positioned to capitalise on attractive commodity mix India’s growth potential 3 4 Operational Excellence and Well-invested assets Technology Driving Efficiency and driving cash flow growth Sustainability 5 6 Strong Financia
Slide 4: Health, Safety, Environment and Sustainability
Health, Safety, Environment and Sustainability Environment and Sustainability Water Management • HZL - 1st in Environment category, DJSI global rankings for Water risk mitigation measures for water self-sufficiency metals & mining; Overall ranking improves to #5 from #11 • Dariba, HZL - uses treated
Slide 5: H1 FY2019 Business Highlights
H1 FY2019 Business Highlights Zinc India Zinc International O&G Aluminium Refined Zn-Pb: 425kt BMM: 29kt Aluminium: 976 kt Production Gross average: 190 kboepd Silver: 310 tonnes Skorpion: 25kt Alumina: 673 kt Costs CoP ex. royalty: $1,039/t CoP: $2,393/t RJ blended: $7.2/bbl CoP: $1,978/t EBITDA Rs
Slide 6: H1 FY2019 Business Highlights (cont'd)
H1 FY2019 Business Highlights (cont’d) Power Iron Ore and Steel Copper India Iron Ore Electrosteel Power sales: 6,830 MU Production Karnataka Iron Ore: 2.6mt ESL: 527kt Cathodes: 40kt TSPL availability: 93% Costs TSPL margin: Re 1.0/unit IOK CoS: $7.0/t EBITDA/t $112/t CoP: - EBITDA Rs. 803 cr Rs.26
Slide 7: Financial Update
Financial Update VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|STEEL|COPPER
Slide 8: H1 FY2019 Financial Snapshot
H1 FY2019 Financial Snapshot Revenue EBITDA Gross Debt Net Debt Rs. 44,911 cr Rs. 11,871 cr Rs. 66,372 cr Rs. 26,357 cr EBITDA margin1 ND/EBITDA2 Dividend ROCE3 30% 1.0x Rs. 17 per share 15.8% Notes: 1. Excludes custom smelting at Copper India and Zinc India operations 2. On LTM basis 3. Based on av
Slide 9: Growth Delivering Superior Returns
Growth Delivering Superior Returns Growth Capex Profile, $bn Oil & Gas Zinc Al & Power Copper Optionality Capex 1.8 Lanjigarh 4mt refinery expansion (Phase 1) 0.6 ESL 2.5mt expansion Towards Zinc India expansion to 0.9 0.3 1.2mt MIC Outstanding capex at Gamsberg 0.8 0.1 0.01 0.02 to be spent in H2 F
Slide 10: Balance Sheet Strength
Balance Sheet Strength Forex Currency Impact Term Debt Maturities - Rs. 44,096 Crore ($6.1 bn) (as of 30 Sep 2018) $ debt at 7% of portfolio - Subsidiaries 10.0 12.5 11.2 fully hedged Standalone 4.6 ~Rs 600 crore per year 6.3 3.8 increase with every Rupee Rs. ‘000 Crore 5.8 depreciation 2.1 8.0 2.8
Slide 11: Capital Allocation: Focus on Shareholder Returns
Capital Allocation: Focus on Shareholder Returns 3 year average TSR >100% 78% 53% -36% FY16 FY17 FY18 H1 FY19 6% CAGR production growth1 Superior Shareholder Returns Strong Balance Sheet Attractive Brownfield Investments Dividend Yield (%)2 ND/EBITDA<= 1 Capex, $bn ROCE 10.5% 15.0% 17.5% 15%+ 7.2% 6
Slide 12: Growth Projects and Business Deep Dive
Growth Projects and Business Deep Dive VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|STEEL|COPPER
Slide 13: Zinc India: On-track for ramp-up to 1.2mt MIC
Zinc India: On-track for ramp-up to 1.2mt MIC RA UG: Mid shaft loading system RA UG full shaft MIC production trend, kt Zawar new production, commissioned in end Q2 Underground 2mtpa mill: Zawar mill SK: Material hoisting from shaft Open pit Civil & erection commissioning SK: New 1.5mt mill commissi
Slide 14: Zinc International: Gamsberg starts trial production
Zinc International: Gamsberg starts trial production 250kt Gamsberg project 450-500 Production (kt) • 100% of pre-stripping completed in July 250 • Trial production of concentrate commenced in end September 75 • Crusher commissioned; 750kt of ore stockpile built ahead of plant feed FY18 FY19 FY20 Ph
Slide 15: Aluminium: Progress on structural reduction in costs
Aluminium: Progress on structural reduction in costs COP, $/t 2,018 1,500 Coal Alumina Bauxite initiatives ramp-up sourcing Other Q2 FY2019 Target H1 FY19 Steps Mid term plan Progress Coal security • 3.2mt additional linkage from Tranche IV auction; Tranche V, VI expected in mid term Coal 49% (Q2
Slide 16: Oil & Gas Business Strategy
Oil & Gas Business Strategy Exploration • For the first time, a sustainable and large portfolio mix comprising 41 OALP Blocks opportunities across O&G lifecycle Rajasthan KG Offshore Ravva • Acquisition of 41 blocks in OALP establishes Cairn as one of the largest acreage holder in the country Apprai
Slide 17: OALP: Provides 6x jump in acreage in India
OALP: Provides 6x jump in acreage in India Presence • 41 blocks, mostly in established basins • Onshore 33 blocks, Offshore 8 blocks Prospective resource base • Potential of ~1.4 - 4.2 bn boe of resources • Blocks closer to existing infrastructure facilitating ease of cost effective monetization • ~
Slide 18: Exploration: High impact prospects across basins
Exploration: High impact prospects across basins Onshore Offshore Rajasthan Rajasthan Tight Oil KG Offshore Ravva Exploration Appraisal 4 Fields Work Program Wells: 7-18 Wells: 2 Wells: 9-16 (V&V, MBH, DP & Shakti) Resources Target, Reserves – 17 mmboe 300-600 190 300 mmboe Resources – 50 mmboe Cape
Slide 19: Monetizing resources with best in class technology
Monetizing resources with best in class technology All Reserve & Resources Numbers in mmboe Rajasthan Offshore 85 32 200 28 40 250 1,093 51 458 Growth Projects 418 469 Production Existing Liquid B&A MBA Tight Tight RJ EUR Production Existing & Offshore (Till Mar'18) Wells Handling Polymer ASP Oil Ga
Slide 20: Growth Projects: Wells hook up to add volumes
Growth Projects: Wells hook up to add volumes Timeline Capex Project Partner Wells EUR Rigs ($ Million) Jun 18 Sep 18 Dec 18 Mar 19 Mangala Infill Halliburton 100 45 18 1 3 10 2 22 11 45 21 Bhagyam & Aishwariya Halliburton 140 42 40 2 10 2 19 6 33 13 42 23 Polymer BH-GE MBA ASP Facilities: Under 905
Slide 21: Delivering on our Strategic Priorities
Delivering on our Strategic Priorities Optimise Capital Augment our Operational Allocation & Maintain Reserves & Excellence Strong Balance Sheet Delivering on Resources base • Volume growth and Preserve our License • Improving cash flows Growth • Well developed asset optimisation to Operate Opportun
Slide 22: Appendix
Appendix VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|STEEL|COPPER
Slide 23: FY 2019 Guidance
FY 2019 Guidance Segment FY19 Production and CoP Zinc-Lead Integrated > FY18 production ; Silver: 650 - 700 tonnes Zinc India H2 COP: $950-975/t excluding royalty Skorpion and BMM: 150kt Zinc Gamsberg: 75kt International COP: ZI (excl Gamsberg) : $1,850 – 1,950, Gamsberg: $800 - $1,000/t H2 Gross Vo
Slide 24: Entity Wise Cash and Debt
Entity Wise Cash and Debt 30 Sept 2018 (Rs Cr) 30 June 2018 (Rs Cr) 30 Sept 2017 (Rs Cr) Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited Standalone 44,754 8,050 36,704 43,263 5,888 37,375 38,232 12,375 25,857 Cairn India Holdings Limited1 2,912 7,101 (
Slide 25: Project Capex
Project Capex Capex3 Spent up to Mar Spent in H1 Unspent as at Capex in Progress Status ($mn) 20185 FY20195 30 Sept 186 Cairn India1 – Mangala Infill, Liquid handling, Bhagyam & 1,991 183 179 1,629 Aishwariya EOR, ASP, Tight Oil & Gas etc Aluminium Sector Line 3: Fully capitalised Line 4: Fully Capi
Slide 26: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of a 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 H1 FY19 H1 FY19 Commodity Average price EBITDA ($mn) Oil ($/bbl) 75 62 Zinc ($/t)
Slide 27: Group Structure
Group Structure Vedanta Resources Plc 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