Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q3 FY2016 Earnings Presentation
28 slides from Hindalco Industries's earnings presentation, Feb 18, 2016
Slide 1: Hindalco Industries Ltd Q3 FY2016
HINDALCO INDUSTRIES LTD Q3 FY2016
Slide 2: Forward Looking & Cautionary Statement
Forward Looking & Cautionary Statement Certain statements in this report may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the
Slide 3: Highlights and Financial Performance Review
Highlights and Financial Performance Review – Aluminium Business Copper Business
Slide 4: Hazy Macroeconomic Environment
Hazy Macroeconomic Environment Growth in China slowed down to 6.8% in Q4 2015 – the slowest since 2009 Acute risk aversion in financial markets in 2016 so far; Equity markets joined commodities in the downfall Labour market conditions improving in advanced economies, but manufacturing remains
Slide 5: Commodities - Challenging times
Commodities -Challenging times… YOY… Aluminium LME 24% MJP (Relevant Al Premium) 75% Aluminium realisations declined sharply during 2015, an outcome of sharp drop in LME and a vertical fall in Premium The impact led to over USD 700/tonne drop in Aluminium realisations as compared with Q3 FY 15 H
Slide 6: Aluminium: Prices bottoming out?
Aluminium: Prices bottoming out? Global aluminium market projected to experience small deficits from 2016 – with China in surplus and rest of the world in deficit Closures of high-cost smelters have accelerated Over 4 mtpa capacity closed in China US has curtailed over 1 mtpa Capacity during
Slide 7: Q3 FY16: Highlights… Strong Operational Performance
Q3 FY16: Highlights… Strong Operational Performance Strong Volume growth as facilities ramp up Aluminium (India) Annualised Metal volumes at 1.2 Mn tonnes COP on declining trend Strong Auto sheet Ramp up -- up 52% YOY Novelis Global FRP shipments at 779 KT – strong show in seasonally weak
Slide 8: Q3 FY16: Standalone Highlights
Q3 FY16: Standalone Highlights… YOY… Company revenues declined 5% as commodity prices dropped sharply Aluminium revenues up 17 % on account of higher volumes despite over 24% drop in LME and 75% decline in Premium Copper revenues down 22% on account of 27% decline in LME PBIDTA at Rs 922 Cr,
Slide 9: Financial Performance: Standalone Hindalco
Financial Performance: Standalone Hindalco Change Change (`) Cr Q3 FY16 Q3 FY15 Q2 FY16 % YoY %QOQ Net Sales 8,150 8,603 -5% 8,925 -9% Other Income 250 213 17% 418 -40% PBITDA 922 1,136 -19% 1,020 -10% Depreciation 308 216 43% 296 4% Interest 582 447 30% 616 -6% PBT 31 472 -93% 109 -72% PAT 40 359 -
Slide 10: Financial Performance: Standalone Hindalco (9M)
Financial Performance: Standalone Hindalco (`) Cr 9M FY16 9 M FY15 Change % YoY Net Sales 25,650 25,153 2% Other Income 862 652 32% PBITDA 3,014 3,221 -6% Depreciation 936 599 56% Interest 1801 1,171 54% PBT before exceptional 278 1,451 -81% PBT 278 1,020 -73% PAT 251 766 -67% EPS (`) 1.22 3.71 -67%
Slide 11: Aluminium Business
ADITYA BIRLA HINDALCO Aluminium Business
Slide 12: Al: External Drivers
Al: External Drivers Q3FY16 Q3 FY15 Q2 FY 16 LME ($/t) 1,495 1,968 1,589 INRUSD 65.9 61.9 65 MJP 90 375 100 Realisations declined sharply as both LME and Premium dropped Re mildly supportive but much higher depreciation in other currencies led to sharp fall in global cost curve YOY …Coal cost at
Slide 13: Al: Robust Production Performance
Al: Robust Production Performance From Greenfield projects (Figures in Kt = ’000 tonnes) Up 19% Up 36% Alumina* (incl. Utkal) yoy Metal yoy 705 296 637 644 628 593 264 269 241 217 364 155 316 330 117 129 274 338 93 70 341 147 148 148 140 141 319 320 314 290 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q3FY15
Slide 14: Al: Operational Performance
Al: Operational Performance… Mahan & Aditya operating at design efficiencies… highest ever production… COP on declining trend with efficiency gains kicking in, Softening energy prices too contributing… Utkal among the lowest cost alumina refineries globally Gare Palma mines – Mining started at I
Slide 15: Aluminium: Financial Performance
Aluminium: Financial Performance Net Sales (` Cr) 4,248 384 4,173 EBIT (` Cr) 3,636 81 29 Q3 FY15 Q2 FY16 Q3 FY16 Q3 FY15 Q2 FY16 Q3 FY16 YOY – Revenue up 17% on the back of higher volumes YOY -EBIT declined on account of sharp drop in realisation & jump in depreciation; However, sequentially EBIT
Slide 16: Novelis
Novelis oa NOVELIS
Slide 17: Novelis - Q3 FY16 Highlights
Novelis- Q3 FY 16 Highlights Q3 FY16 Shipments at 779 kt, up 3% YoY Continued strong demand in Can segment Strong Auto growth Q3 FY16 EBITDA before MPL of $ 238 Million, up 4% YoY Highest ever EBITDA before MPL performance for a third quarter Strong performance driven by shipment growth
Slide 18: Novelis - Q3 FY16 Highlights
Novelis- Q3 FY 16 Highlights Improving Product Portfolio Strong Auto growth, 52% YoY, with strong pull from Ford F-150 Additional lines commissioned in US and Germany on schedule to produce shipments late CY 16
Slide 19: Copper Business
Copper Business
Slide 20: Cu: Supportive Industry Trends
Cu: Supportive Industry Trends… Impact Q3 FY 16 Vs. Q3 FY 15 (YoY) TCRC Higher LME ($/t) Lower Exch. Rate (`/$) Favorable Acid Price Slightly Higher DAP Realization Stable
Slide 21: Steady Performance
Cathode CC Rods DAP 90 94 94 9% 11% 40 82 36 Q3 FY 15 Q3 FY 16 Q3 FY 15 Q3 FY 16 Q3 FY 15 Q3 FY 16 Steady Performance
Slide 22: Copper: Financial Performance
Copper: Financial Performance Net Sales (` Cr) EBIT (` Cr) 4,976 4,757 396 350 348 3,905 Q3 FY15 Q2 FY16 Q3 FY16 Q3 FY15 Q2 FY16 Q3 FY16 Weak LME and removal of export incentives negated the benefits of higher Tc/Rc
Slide 23: ABML Update
ABML Update Strategic review underway; phase 1 completed Nifty mine ore production at 394 kt in Q3 Copper production at 11 KT in Q3 highest since the sink-hole incident LME down 12% YoY and 6% QoQ in AUD terms Continued Focus on Cost Optimisation
Slide 24: Our Focus
Our Focus … Cost saving and cash conservation initiatives across operations Focus on logistics Operational efficiencies Inventory reduction Captive coal mines start and ramp up… Leverage tail winds in the downstream business… thrust on value addition across businesses
Slide 25: VAP Focus: Hirakud FRP
VAP Focus … Hirakud FRP – Hot metal integration – Saves Reheating & Freight Cost State of the art Rolling Facility.. The only facility capable of producing CBS in India Significant demand potential
Slide 26: VAP Focus: Mouda Foil plant
VAP Focus… Mouda Foil plant – Gearing up to roll out world class high end foils First Foil Hub in India – For State of the art foil production Ultra thin gauge foils for exports.. Wide variety of high end applications
Slide 27: In Summary
In Summary … Strong operational performance in Q3FY16, but external environment worsened further New factories ramping up well and are stabilizing. Copper business likely to maintain its steady performance Novelis expected to build momentum from its focus on premium portfolio Focus on operational ex
Slide 28: Thank you
Thank you REGISTERED OFFICE Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 030 Telephone- +91 22 6662 6666 Website www.hindalco.com E mail hindalco@adityabirla.com Corporate Identity No. L27020MH1958PLC011238
Hindalco Industries — Q3 FY2016 Earnings Presentation on 6ix