Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q3 FY2023 Earnings Presentation
40 slides from Tata Steel's earnings presentation, Feb 6, 2023
Slide 1: Tata Steel Results Presentation
Tata Steel Results Presentation Financial quarter ended December 31, 2022 February 06, 2023
Slide 2: Safe harbour statement
Safe harbour statement Statements in this presentation describing 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. Importa
Slide 3: 3QFY23 Performance Update
3QFY23 Performance Update Tata Steel Jamshedpur, India
Slide 4: Focused on creating sustainable value
Focused on creating sustainable value Leadership in Leadership Leadership Consolidate Robust Become Sustainability in India position in position as financial future technology global health ready & digital cost leader 4
Slide 5: Net Zero by 2045
Net Zero by 2045 Pursuing sustainability through multiple pathways Targets Initiatives 2025 Higher scrap charge Alumina in Iron ore ▪ Achieve <2 tCO2 per ton of crude steel in India ▪ Gradually phase out BFs in Netherlands and replace with Multilocation EAF Renewable energy DRI, REF and IF ▪ Fi
Slide 6: Focus on 'Zero harm'
Focus on ‘Zero harm’ Committed towards excellence in Safety & Health of our employees Safety Line Walks Tata Main Hospital, Jamshedpur Safety remains a top priority Focus on Zero harm ~1,000 beds + state-of-the-art facilities 71% Fatalities LTIFR1 7 In the last 15 years 4 4 4 3 2.50 FY19 FY20 FY21 F
Slide 7: Improving quality of life of our communities
Improving quality of life of our communities Social capital and scalable change models to enable deep societal impact Rural & Urban Education 14.2 Lakh+ Household Health & Nutrition Lives Impacted1 Tribal Cultural Heritage ~Rs 1,380 crores Grassroots Rural Governance spent2 since FY19 Women & Youth
Slide 8: Growth in India to consolidate market leadership
Growth in India to consolidate market leadership Future investments set to drive sector leading returns Leadership in India From ~30 MTPA to Mining 2x 60-65 MTPA India Crude Steel Iron ore mining EAF, Punjab production by 2030 From ~21 MTPA to From ~16 MTPA to From ~5 MTPA to Crude Steel Production
Slide 9: Value accretive consolidation with multiple benefits
Value accretive consolidation with multiple benefits Unlisted Listed TS Mining S&T Mining Indian Steel & TSLP TCIL Tata Metalliks TRF Ltd. Wire Products Swap ratio 6.7 Swap ratio 3.3 Swap ratio 7.9 Swap ratio 1.7 Reduced corporate and Optimal resource use, Faster growth, stronger Provide greater liq
Slide 10: Flats: ~25% market share driven by value added growth
5MTPA Expansion at Kalinganagar on track Flats: ~25%1 market share driven by value added growth across chosen segments Phased commissioning of 6 MTPA pellet plant at Kalinganagar has begun Pellets Note : 1. The 25% market share is in terms of domestic deliveries in India 10
Slide 11: Longs: Construction landscape in India being rapidly reshaped
Longs: Construction landscape in India being rapidly reshaped due to a confluence of factors India steel demand Longs to grow at higher Longs Industry structure to grow with rate given government → Opportunity to grow GDP focus and urbanisation on demand formalisation Today Future ▪ Demand is projec
Slide 12: Longs: Well-placed to more than double market share
Longs: Well-placed to more than double market share Leveraging future growth in construction and infrastructure pan India ~3x Longs capacity Established brands and Moving up the value driven by BF + EAF enhanced physical and chain by being a mix virtual reach solution partner ~5 MTPA MTPAinin2022 20
Slide 13: Flats + Longs: Focus on innovative solutions and operating model
Flats + Longs: Focus on innovative solutions and operating model to move up the value chain 45+ service centres by FY27 to drive pre-sale design Cut and and site management to enhance value addition bend MILL LGSF Home making Construction solutions Mesh and Bore piles LGSF (Light Gauge Steel Frame)
Slide 14: Tata Steel Europe: Product mix oriented towards evolving needs
Tata Steel Europe : Product mix oriented towards evolving needs Green steel offerings – Zeremis in Netherlands & Optemis in UK Supplier for leading Auto OEMs Energy and Mobility Infrastructure and Construction Note : Zeremis = Zero Emissions (Tata Steel Netherlands), Optemis = 0% Port Talbot Emissio
Slide 15: Financial management to enable returns across cycle
Financial management to enable returns across cycle Medium-term (Across cycle targets) Target Leverage Balance sheet management Maximising ROIC Investment grade metrices Portfolio restructuring 2x 4x Net Debt/EBITDA Interest Cover Target RoIC1 Dividend Policy Progressive Future readiness Cost optimi
Slide 16: 3QFY23 Financial Results
3QFY23 Financial Tata Steel Meramandali, India Results
Slide 17: Global steel spreads have been subdued especially in Europe
Global steel spreads have been subdued especially in Europe, partly due to inflated energy cost ▪ Global steel prices continued to moderate till mid-Nov but ▪ Iron ore prices rose from <$100/t to $120/t levels by end since then have began to recover on inflation and China December. Coking coal price
Slide 18: Steady improvement in India economic activity; Eurozone inflation elevated
Steady improvement in India economic activity; Eurozone inflation has peaked but remains elevated India Europe ▪ Economic activity in India remained resilient despite global ▪ Economic activity remains subdued. Industrial output has cues. Apparent steel consumption rose 8% on QoQ basis. declined by
Slide 19: India deliveries grew by 7% YoY during the quarter
India1 Deliveries grew by 7% on YoY basis during the quarter Broad based growth in domestic deliveries mn tons 4.91 4.74 4.42 0.67 0.64 0.66 1.53 1.46 1.30 1.81 1.86 1.62 0.35 0.36 0.39 0.50 0.54 0.38 3QFY22 2QFY23 3QFY23 Automotive BPR IPP Downstream Exports Tata Steel has supplied 75% of rebar req
Slide 20: India Industrial Products & Projects: Record sales for the quarter
India Industrial Products & Projects: Record sales for the quarter Consistent growth driven by rise in value added products ▪ During the quarter, Industrial Products & Projects registered 15% growth on YoY basis ▪ Active engagement and expanded product range has led to 17% YoY growth in o Oil & Gas
Slide 21: India Branded Products & Retail: Micro-segmentation to drive demand
India Branded Products & Retail : Micro-segmentation to drive demand in the face of market volatility 6 segments 28 TDCs 40 sub 140 TDCs 80 micro- 350+ TDCs segments segments General Washing Machine Appliances Refrigerator Engineering Air Conditioner Key Enablers All-weather demand Partner MSMEs Mar
Slide 22: India New products developed across customer segments
India New products developed across customer segments 36 new products developed in nine months of the financial year Auto: Fender & muffler cover Auto: Commercial Vehicle rim Appliances: Electrical Steel Grade for fan (Bright Finish 0.7mm thickness) (4.5mm & 6.2 mm thickness) motor, armature etc. In
Slide 23: Tata Steel Consolidated
Tata Steel Consolidated (All figures are in Rs. Crores 3QFY23 2QFY23 3QFY22 Key drivers for QoQ change: unless stated otherwise) Production (mn tons)1 7.56 7.56 7.76 ▪ Revenues: decreased primarily driven by drop in Deliveries (mn tons) 7.15 7.23 7.01 realisations across geographies Total revenue fr
Slide 24: Consolidated EBITDA stood at Rs 2,727 crores
Consolidated EBITDA1 stood at Rs 2,727 crores Margin compression in Europe offset the increased margin in India in Rs crores ▪ Selling Result: Primarily due to drop in steel 5,817 realisations across geographies ▪ Cost Changes: due to decline in raw material 169 costs especially coking coal 4,043 1,
Slide 25: Net debt stood at Rs 71,706 crores
Net debt stood at Rs 71,706 crores Broadly stable on QoQ basis, liquidity remains strong at Rs 15,943 crores in Rs crores 69 1,366 1,430 87,516 87,649 15,943 71,706 Gross Debt Addition of Loan FX Impact Gross Debt Cash, Bank & Net Debt Sep'22 new leases movement and Others Dec'22 Current Dec'22 Inve
Slide 26: Key metrics are at investment grade levels
Key metrices are at investment grade levels 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% 92,147 88,501 87,649 18.9% 7.3 1,04,779 75,561 94,879 17.2% 9,337 11,110 75,389 12.2% 10,838 12,125 3.9 3.9 4.1 71,
Slide 27: Outlook
Outlook Steel demand Steel prices Raw material prices Stable China steel output even as Asia steel prices to gradually Coking coal prices to remain demand gradually picks up on recover on improving sentiment in volatile on resumption of China reopening and stimulus measures China and demand outlook
Slide 28: Annexures
Annexures Tata Steel Kalinganagar, India
Slide 29: Tata Steel Standalone: Continued focus on operational efficiencies
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 363 3.50 356 355 353 5.84 3.10 346 5.80
Slide 30: Tata Steel Standalone
Tata Steel Standalone (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY23 2QFY23 3QFY22 unless stated otherwise) Production (mn tons) 4.77 4.64 4.64 ▪ Revenues: marginal decline primarily driven by drop in Deliveries (mn tons) net realisations 4.59 4.76 4.25 Total revenue from operatio
Slide 31: 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 340 324 322 317 24.2 23.8 311 23.20 23.10 22.8 2.22 2.21 2.18 2.16 300 2.14 20.38 20.22 19.99 19.79 19.62 291 1.78 1.77 1.77 1.77 1.76 279 275 275 FY19 FY20 FY21
Slide 32: Tata Steel Europe
Tata Steel Europe (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY23 2QFY23 3QFY22 unless stated otherwise) ▪ Revenues: were lower due to drop in steel realisations, Liquid Steel production (mn tons) 2.24 2.40 2.57 this was partly offset by 6% QoQ growth in deliveries Deliveries (mn t
Slide 33: Tata Steel Long Products: Key operating parameters
Tata Steel Long Products Key operating parameters Coke rate (kg/thm) PCI rate (kg/thm) Carbon Emission (tCO2/tcs) Good Good Good 4.5 4.4 4.3 128 4.0 116 115 111 500 499 486 474 FY22 FY20 FY20 FY21 FY20 FY21 FY22 FY21 FY22 9MFY23 9MFY23 9MFY23 Power consumption (KVAH/tcs) Electrode consumption (kg/tc
Slide 34: Tata Steel Long Products (Consolidated with NINL)
Tata Steel Long Products (Consolidated with NINL) (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY231 2QFY231 3QFY22 unless stated otherwise) ▪ Revenues: increased on higher volumes as NINL has Total revenue from operations 2,113 1,869 1,677 commenced operations. This was partly offse
Slide 35: Tinplate Company of India: Key operating parameters
Tinplate Company of India Limited Key operating parameters CO2 Emission Intensity (tCO2/tFP) Fresh Water Consumption (m3/tFP) Good Good 13.7 13.0 12.7 0.71 12.2 12.1 0.66 0.65 0.64 0.62 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 9MFY23 9MFY23 Power consumption (KWH/tFP) CRM Material Yield (%) Good Good
Slide 36: Tinplate Company of India Limited
Tinplate Company of India Limited (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY23 2QFY23 3QFY22 unless stated otherwise) ▪ Revenues: were broadly similar as higher tinplate Total revenue from operations 960 960 1,180 volumes were fully offset by decline in net realisations Raw mate
Slide 37: Tata Metaliks: Key operating parameters
Tata Metaliks Key operating parameters Carbon Emission (tCO2/thm) Energy Consumption Intensity (GJ/thm) Pig Iron business Good Good 1.95 19.6 1.87 1.82 18.7 18.5 1.75 1.73 17.8 17.8 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 9MFY23 9MFY23 Ductile Iron Pipe business Carbon Emission (tCO2/tFP) Energy Con
Slide 38: Tata Metaliks Limited
Tata Metaliks Limited (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY23 2QFY23 3QFY22 unless stated otherwise) ▪ Revenues: decreased driven by drop in realisations Total revenue from operations 792 882 693 of Pig Iron and DIP (Ductile Iron Pipe) Raw material cost1 536 634 437 ▪ Raw M
Slide 39: Tata Steel Thailand
Tata Steel Thailand (All figures are in Rs. Crores Key drivers for QoQ change: 3QFY23 2QFY23 3QFY22 unless stated otherwise) ▪ Deliveries: were broadly stable on QoQ basis Saleable Steel production (mn tons) 0.27 0.30 0.32 ▪ Revenues: were slightly lower on drop in steel Deliveries (mn tons) 0.29 0.
Slide 40: Investor relations contact
Investor relations contact Investor enquiries Hriday Nair hnair@tatasteel.com Pavan Kumar pavan.kumar@tatasteel.com Tata Steel , Joda East Iron ore mines