Slide 1: Vedanta Ltd.
Vedanta Ltd. Tom Albanese Chief Executive Officer August 2016
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: Commodity prices driven by dollar strength, low interest rates and recovery in China
Commodity prices have been driven by dollar strength, low interest rates and recovery in China Dollar strength vs commodities US interest rates vs commodities 3000 102 3000 1.2 100 2800 2800 1.0 98 0.8 2600 96 2600 94 0.6 2400 92 2400 0.4 90 2200 2200 0.2 88 2000 86 2000 0.0 Jan-15 May-15 Oct-15 Mar
Slide 4: Vedanta: A Global Diversified Natural Resources Company
Vedanta: A Global Diversified Natural Resources Company • Portfolio of large, structurally low-cost, long-life Tier-I assets, that EBITDA Mix for Q1 FY2017 delivered strong free cash flow – Significant ramp-up at Aluminium, Power and Iron ore 11% progressing well with minimal incremental capex 12% 3
Slide 5: Large, low cost and diversified asset base
Large, low cost and diversified asset base FY2016 R&R Life EBITDA Rs. Cr (years) Production ($mn) Key highlights 46.9 3,504 • India’s largest private-sector crude oil producer Oil & Gas 15+ 1 mmboe ($535mn) • Strong FCF generation even at low oil prices with opex of $6.5/bbl Zn - • Positioned on the
Slide 6: Continued Focus on Strong FCF Generation Through Disciplined Ramp-up
Continued Focus on Strong FCF Generation Through Disciplined Ramp-up Presented at FY2016 results Progress during Q1 FY2017 Copper Eq. Production Ramp-up of BALCO-II smelter completed, EBITDA $3.6 $2.3 +30% rolled product facility bn bn growth $1.5 $0.6 $1.0 re-started; Capex bn bn bn Strong free
Slide 7: Vedanta Ltd-Cairn India Merger: Revised and Final Terms
Vedanta Ltd-Cairn India Merger: Revised and Final Terms Revised and final terms Strategic rationale for the merger Cairn India minority shareholders will receive for each equity share Diversified portfolio de-risks earnings volatility and drives held, 1 Equity Share in Vedanta Ltd. and 4 Redeema
Slide 8: Vedanta Limited: Strong credit metrics
Vedanta Limited: Strong credit metrics Credit profile for Indian Peers1 100% 90% Peer 4, AA+ 80% Peer 3, AA+ 70% Peer 2, AA- 60% Gearing3 50% Peer 1, AA- 40% 30% 20% Vedanta Ltd., AA- 10% 0% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 20.0 Net debt/EBITDA2 Vedanta’s credit metrics to further improv
Slide 9: Vedanta Limited: An attractive value proposition
Vedanta Limited: An attractive value proposition 30% High growth Low multiple Vedanta Ltd 2 Year EBITDA CAGR2 20% Peer 1 Peer 6 Peer 4 Peer 7 10% Peer 3 Peer 5 0% Peer 2 Low growth High multiple -10% 4.0 5.0 6.0 7.0 8.0 9.0 EV/EBITDA (EBITDA for CY 2017) Vedanta trades at lower multiple, while offer
Slide 10: Strategic Priorities Remain Unchanged
Strategic Priorities Remain Unchanged Strategic Priorities Focus Areas for FY 2017 • Disciplined ramp-up of new capacities in Aluminium, Power and Iron Ore Production growth and asset • Zinc: Ramp-up volumes at Rampura Agucha U/G and develop optimisation Gamsberg • O&G: Enhance gas production; EOR a
Slide 11: Business Update
2S vedanta Business Update
Slide 12: Zinc and Silver: Fundamentals supporting performance
Zinc and Silver: Fundamentals supporting performance CY2016 Global Zinc Cost curve Refined Zinc inventory (mt) at 6 year low US$/t 1.8 2,800 2,000 1.5 2,500 1,700 Zinc Intl 1.2 Hindustan Zinc 2,200 1,400 0.9 1,900 1,100 0.6 1,600 800 0.3 1,300 500 0.0 1,000 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100
Slide 13: Zinc India Well-positioned to reap benefits of strong fundamentals
Zinc India Well-positioned to reap benefits of strong fundamentals Zinc India Rampura Agucha Mine – Longitude Vertical Section Projects RAM U/G main shaft crossed 900mtrs against the final depth of 950mtrs; winder erection work commenced during the quarter Extension of RAM open pit: Pre-strippin
Slide 14: Zinc International – First ore production in early CY 2018 at Gamsberg
Zinc International – First ore production in early CY 2018 at Gamsberg Gamsberg Project update Project timeline Large, low-cost project with long mine life Targeting zinc production of 250ktpa in Phase-1 Feasibility Full Construction Ramp-up Study production Significant potential for further e
Slide 15: Oil & Gas: Low-cost producer with growth optionality
Oil & Gas: Low-cost producer with growth optionality Q1 FY2017 Results Mangala EOR, world’s largest polymer program yielding results EOR production reached 42 kboepd, 31% higher q-o-q Rajasthan production stable at 167 kboepd in Q1 Rajasthan water flood opex further reduced to $4.4/boe; blen
Slide 16: Aluminium: Strong ramp-up underway
Aluminium: Strong ramp-up underway Q1 FY2017 Results Aluminium Costs and Margins (in $/t, for Q1 FY2017) Record quarterly production at 244kt Q4’16 1,516 134 65 1,705 (554) (570) (307) (61) $223/t Ramp-up at BALCO II 325kt smelter completed Jharsuguda-II: 1st line ramp-up impacted by a power o
Slide 17: Power: 9GW portfolio operational
Power: 9GW portfolio operational Q1 FY2017 Results Power Generation Capacity – c. 9GW 1980 MW TSPL: Unit-I and Unit-II operated at an availability of CPP:5.1GW IPP: 3.6GW 72% in Q1 • 1,215MW Jharsuguda • 600MW Jharsuguda • 3x600MW Jharsuguda (of Unit-III put to commercial production in August an
Slide 18: Iron Ore and Copper: Strong cost positions
Iron Ore and Copper: Strong cost positions Iron ore: Steady production at Goa Copper Cathodes: Goa production ramped up in Q1, run rate of 0.8 mt per month Strong performance in Q1, spot Tc/Rc remains robust Karnataka 0.8 mt production FY2017 expected production at 400kt Engaging with the
Slide 19: Strategic Priorities Remain Unchanged
Strategic Priorities Remain Unchanged Strategic Priorities Focus Areas for FY 2017 • Disciplined ramp-up of new capacities in Aluminium, Power and Iron Ore Production growth and asset • Zinc: Ramp-up volumes at Rampura Agucha U/G and develop optimisation Gamsberg • O&G: Enhance gas production; EOR a
Slide 20: Appendix
= vedanta Appendix
Slide 21: Vedanta Ltd. – Cairn India merger: Transaction timetable
Vedanta Ltd. – Cairn India merger: Transaction timetable Key Event Expected date BSE, NSE and SEBI approvals sought Completed BSE, NSE and SEBI approvals Completed Application to High Court in India Completed Vedanta plc posting of UK Circular August 2016 Vedanta plc EGM September 2016 Vedanta Limit
Slide 22: Safety and Sustainability
Safety and Sustainability Health, Safety and Environment Building a Zero Harm Culture LTIFR (per million man-hours worked) HSE Charter launched, followed across the group 0.44 0.42 0.41 Business COO’s Forum formed to avoid repeat high potential incidents 0.39 Leadership Coaching Programme –
Slide 23: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. Crore) 30 June2016 31 March 2016 30 June 2015 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 45,322 1,216 44,106 42,256 1,356 40,900 39,948 1,285 38,662 Standalone Zinc India 3,911 26,839 (22,928) - 35,277 (35,277) -
Slide 24: Balance Sheet and Maturity Profile
Balance Sheet and Maturity Profile Maturity Profile of Term Debt ($7.8bn) (as of 30th June 2016) Subsidiaries Standalone 1.9 1.6 1.6 0.6 0.7 0.6 1.0 0.8 0.9 0.2 0.4 0.3 1.3 0.9 1.0 0.5 0.6 0.6 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 & Later External term debt of $7.8bn ($4.9bn at Standalone and $2
Slide 25: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $ 7.8bn Debt Breakdown (as of 30th Jun 2016) (as of 30th Jun 2016) Short Term Loans - USD Debt breakdown as of 30 June 2016 (in $bn) 3% External term debt 7.8 Money market Bonds-INR Instruments – Working capital 2.0 21% IN
Slide 26: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q1 Q4 Full Year OIL AND GAS (boepd) FY 2017 FY 2016 % change YoY FY2016 FY 2016 Average Daily Total Gross Operated Production (boepd)* 206,455 217,935 -5% 206,170 212,552 Average Daily Gross Operated Production (boepd) 196,861 209,738 -6% 197,039 203,703 Rajasthan 166,943
Slide 27: Segment Summary – Zinc India
Segment Summary – Zinc India Q1 Q4 Full Year Production (in ’000 tonnes, or as stated) FY 2017 FY 2016 % change YoY FY2016 FY 2016 Mined metal content 127 232 -45% 188 889 Refined Zinc – Total 102 187 -45% 154 759 Refined Zinc – Integrated 101 187 -46% 154 759 Refined Zinc – Custom 1 - - - - Refined
Slide 28: Segment Summary – Zinc International
Segment Summary – Zinc International Q1 Q4 Full Year Production (in’000 tonnes, or as stated) FY 2017 FY 2016 % change YoY FY2016 FY 2016 Refined Zinc – Skorpion 24 26 -8% 27 82 Mined metal content- BMM 19 15 28% 15 63 Mined metal content- Lisheen - 29 - - 81 Total 43 70 -39% 42 226 Financials (In R
Slide 29: Segment Summary – Aluminium
Segment Summary – Aluminium Q1 Q4 Full Year Particulars (in’000 tonnes, or as stated) FY 2017 FY 2016 % change YoY FY2016 FY 2016 Alumina – Lanjigarh 275 269 2% 211 971 Total Aluminum Production 244 232 6% 226 923 Jharsuguda-I 129 132 -2% 123 516 1 Jharsuguda-II 28 20 46% 19 76 245kt Korba-I 63 62 2
Slide 30: Segment Summary – Power
Segment Summary – Power Q1 Q4 Full Year Particulars (in million units) % change FY 2017 FY 2016 FY2016 FY 2016 YoY Total Power Sales 3,010 3,070 -2% 3,391 12,121 2 Jharsuguda 600 MW(FY2016 nos are for 2400 MW) 892 2,266 NM 1,906 7,319 BALCO 270 MW3 - 99 -100% - 169 BALCO 600 MW1 607 499 1,025 MALCO
Slide 31: Segment Summary – Iron Ore
Segment Summary – Iron Ore Q1 Q4 Full Year Particulars (in million dry metric tonnes, or as stated) % change FY 2017 FY 2016 FY2016 FY 2016 YoY Sales 2.6 0.5 NM 2.6 5.3 Goa 2.1 - - 1.6 2.2 Karnataka 0.5 0.5 1% 1.0 3.1 Production of Saleable Ore 3.2 0.2 NM 2.8 5.2 Goa 2.4 - - 1.9 2.2 Karnataka 0.8 0.
Slide 32: Segment Summary – Copper India
Segment Summary – Copper India Q1 Q4 Full Year Production (in ’000 tonnes, or as stated) % change FY 2017 FY 2016 FY2016 FY 2016 YoY Copper - Mined metal content - - - - Copper - Cathodes 100 98 2% 102 384 Tuticorin power sales (million units) 60 175 -66% 68 402 Financials (In Rs. crore, except as s
Slide 33: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 62.9% Sesa Iron Ore Konkola Sterlite Copper (Tuticorin) Copper Vedanta Ltd Power (2,400 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Subsidiaries of Vedanta Ltd 59.9% 64.9% 51% 100% 100% 100%