Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q2 FY12 Earnings Presentation
31 slides from Hindalco Industries's earnings presentation, Nov 10, 2011
Slide 1: Hindalco Industries Ltd Investor Presentation Q2 FY12
Hindalco Industries Ltd Investor Presentation Q2 FY12 November 10, 2011
Slide 2: Presentation Structure
Presentation Structure Highlights & Financial Performance Performance Review & Outlook Projects Update 2
Slide 3: Highlights and Financial Performance
Highlights and Financial Performance 3
Slide 4: H1 FY12: Highlights
H1 FY12: Highlights Aluminium Steady performance despite severe cost EBIT India pressures 5% Projects progressing well Adj. Novelis Momentum continues on the back of EBITDA higher EBITDA per ton 10% India Strong operating performance though EBIT Copper production impacted by shutdown 14% smelter 4
Slide 5: Standalone Results at a glance
Standalone Results at a glance… ` Cr Q2 FY11 Q2 FY12 Change (%) Net Sales 5,860 6,272 7 PBITDA 780 845 8 PBT 556 604 9 PAT 434 503 16 EPS (`) 2.27 2.63 16 ` Cr H1 FY11 H1 FY12 Change (%) Net Sales 11,038 12,303 11 PBITDA 1682 1,890 12 PBT 1,229 1,407 14 PAT 968 1,147 18 EPS (`) 5.06 5.99 18 5
Slide 6: Performance Review & Outlook
Performance Review & Outlook 6
Slide 7: Key Business Drivers and Impact
Key Business Drivers and Impact Change ( %) Driver H2 FY 12 Vs H2 FY Impact 11 Aluminium LME 20 Average Copper TC/RC >20 Exchange (2) Rate (`/$) Indian coal prices 30 7
Slide 8: Al: Business Environment
Al: Business Environment $/t LME `/t 1,16,387 2800 1,13,176 120000 1,09,754 2600 1,05,110 110000 2400 97,097 2200 100000 2000 90000 1800 80000 While LME has started to 1600 1400 70000 soften…. 2089 2343 2500 2603 2399 1200 60000 Q2 Q3 Q4 Q1 Q2 FY11 FY11 FY11 FY12 FY12 Input prices continued to rem
Slide 9: Aluminium Demand: Perceptible slowdown
Aluminium Demand: Perceptible slowdown Global demand holding steady so far … Growth moderation in India Daily World Al. Consumption (kt) Stagnant demand in H1 FY 12 140 128 120 109 132 100 80 60 40 20 0 Jul-10 Jul-09 Sep-09 Sep-10 Jul-11 Sep-11 Mar-10 Jan-09 Mar-09 Jan-10 Jan-11 Mar-11 May-09 Nov-09
Slide 10: Al: Operational Performance
Al: Operational Performance Alumina production affected by … Metal production up 8% bauxite availability & quality … Aluminium (kt) Alumina (kt) 284 264 69.93 688 667 H1 FY11 H1 FY12 H1 FY11 H1 FY12 But we sold more specials Maximize domestic sale of metal Composition of Hydrate / Alumina sales Expo
Slide 11: Aluminium Business: Financial Performance
Aluminium Business: Financial Performance Q2 FY11 Q2 FY12 Change (` cr) (%) Net Sales & 1,911 2,213 16 Operating Revenue EBIT 424 429 1 (` cr) H1 FY11 H1 FY12 Change (%) Net Sales & 3,778 4,306 14 Operating Revenue EBIT 976 1,028 5 11
Slide 12: LME outlook remains clouded
LME outlook remains clouded Continued excess supply • World production expected to exceed demand conditions by 0.8 mn tones in 2011, 1.2 mn tones in 2012 Macro risks • Recurring episodes of risk aversion accentuated • Vulnerability of Europe and US to negative events • Upward shift in cost curve lik
Slide 13: Novelis H1 Performance
Novelis H1 Performance Shipments nearly flat … Adj. EBITDA up 10% 1600 (kt) 1400 1,483 1,489 650 ($ mn) 607 1200 600 554 1000 550 800 500 600 450 400 400 350 200 300 0 H1 FY11 H1 FY12 H1 FY11 H1 FY12 13
Slide 14: Novelis Update (Q2 FY12)
Novelis Update (Q2 FY12) Shipments Down 2% to 720 Kilotonnes Net Sales Up 14% to $2.9 Billion Strong Adjusted EBITDA Up 3% to $301 Million Free Cash Flow Before CapEx of $237 Million Liquidity of $993 Million Net Income of $120 Million Three large mill expansions (Brazil 220 kt, Korea
Slide 15: Novelis: Adjusted EBITDA Trend
Novelis: Adjusted EBITDA Trend (Millions) Quarterly EBITDA TTM EBITDA $350 $1,150 $300 $1,100 $250 $1,050 Quarterly TTM $200 $1,000 $150 291 306 301 $950 280 238 $100 $900 $50 $850 $0 $800 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Driving Consistent & Predictable Results 15
Slide 16: Copper: Operational Performance
Copper: Operational Performance Copper production down 13% Impact of lower production was offset 190 Cathode Production (kt) by … 170 170 150 148 Stronger Tc/Rc 130 110 90 70 Higher by-product credits 50 H1 FY11 H1 FY12 Focused Marketing approach Copper Production lower due to planned shutdown 16 De
Slide 17: Copper Business: Financial Performance
Copper Business: Financial Performance Q2 FY11 Q2 FY12 Change (` cr) (%) Net Sales & 3,951 4,062 3 Operating Revenue EBIT 129 148 15 H1 FY11 H1 FY12 Change (` cr) (%) Net Sales & 7,265 8,002 10 Operating Revenue EBIT 253 293 16 17
Slide 18: ABML Update
ABML Update Nifty Sulfide Production declined 23% EBIT - impacted by lower due to sharp fall in ore grade production, cost pressures and Cu in conc. (Tones) Ore Grade (%) AUD strength 35000 2.9 2.83 2.8 30000 29,491 2.7 25000 44.6 2.6 AUD (Mn) 20000 22,562 2.5 15000 2.4 2.32 2.3 10000 2.2 14.9 5000
Slide 19: Copper: Consumption moderating but Tc/Rc likely to be under pressure
Copper: Consumption moderating but Tc/Rc likely to be under pressure 10000 LME Cu ($/t) 9000 LME under pressure due to macro 8000 risks and growth concerns 7000 7,347 World refined copper consumption 6000 expected to grow 4.4% in 2011 (vs. 5000 11.3% last year) 4000 Far East Spot 29.528.2 Spot
Slide 20: Our three strategic pillars enabling us face this challenging environment
Our three strategic pillars enabling us face this challenging environment Cost Balanced VAP Focus Leadership Portfolio Our Position on Expected to help in a Slowdown impacting cost curve getting downturn demand in certain affected by India- Novelis and India- segments (India specific cost Co
Slide 21: Projects Update
AT ADITYA BIRLA Projects Update
Slide 22: Greenfield Projects Update
Greenfield Projects Update Expected Project Progress completion •Gearing for commissioning Mahan Aluminium, • 16,500 people at site Early 2012 MP •Forest clearance for coal block awaited • Applied for tapering linkage for coal Utkal Alumina, • 10,000 people at site Second half Orissa • Boiler #1 hyd
Slide 23: Activity at Sites: Mahan smelter
Activity at Sites: Mahan smelter Pot room “A” inside view Pot room “B” inside view Alumina Silos Central Passage 23
Slide 24: Activity at Sites: Mahan CPP
Activity at Sites: Mahan CPP Unit # 1 and 2 CHP TP-04 Cooling Tower DM Plant 24
Slide 25: Activity at Sites: Utkal
Activity at Sites: Utkal Predisilication Area Digestion area Precipitation area STG1: EOT Crane erection 25
Slide 26: Brownfield Projects Update
Brownfield Projects Update Project Progress Expected completion • Strong progress Hirakud Smelter • ~90% procurement completed Expansion I Early 2012 • Civil work in advanced stage • ~2,800 people at site Hirakud FRP • Placement of equipments in progress Early 2012 Brownfield projects on the drawing
Slide 27: Activity at Sites: Hirakud FRP
Activity at Sites: Hirakud FRP Cold Mill Erection Cold Mill Coil Inspection System Hot Mill Table Roll Foundation Slitter Foundation 27
Slide 28: Thank you
Thank you 28
Slide 29: 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 30: Aluminium Production
Aluminium Production In Tonnes Q2FY11 Q2FY12 Variance Alumina 347,071 332,383 -4% Metal 123,325 143,315 8% FRP 54,042 52,439 -3% Extrusions 9,637 7,154 -26% Wire Rods 24,158 24,442 1%
Slide 31: Copper Production
Copper Production Production Units Q2 FY11 Q2 FY12 variance Copper Cathodes MT 94,104 74,588 (21%) CC Rods : Own MT 43,274 33,972 (21%) Production lower due to bi-annual shutdown