Slide 1: Investor Presentation
Hindalco Investor Presentation November 12, 2016 ADITYA BIRLA =
Slide 2: Forward Looking & Cautionary Statement
ADITYA BIRLA 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 diff
Slide 3: Economy and industry at glance; Key business highlights; Operational and financial review
Economy and industry at glance Key business highlights Operational and financial review • Aluminium (India) • Copper • Novelis 3
Slide 4: Global Economy – Uncertain Times, Easy money rules
Global Economy – Uncertain Times, Easy money rules • US outlook mixed , Advance Estimates for US GDP reported an increase of 2.9% (YoY) in Q3 2016. In Q2, real GDP rose 1.4%, • Fed interest rate hike fears resurfacing, volatility increased post Presidential election • Europe – growth continued to re
Slide 5: IMF is bullish on base metals prices
IMF is bullish on base metals prices Robust Demand Globally expected to grow at 5% in 2016 US demand expected to gather momentum Chinese demand growth over 7%, driven by stimulus in construction sector and tax incentives in automobile sector Domestic demand is expected to gain pace post goo
Slide 6: Aluminium key macro drivers Q2 FY17
Realisations were broadly stable as the impact of marginal rise in LME and supportive rupee was negated by sharp decline in local market premium Industry costs continued to remain depressed • However, both energy and alumina prices have started hardening • In India, sharp surge in imports contin
Slide 7: Copper key macro drivers Q2 FY17 vs Q2 FY16
Demand from China continues to remain lacklustre depressing the LME prices Mine supply continues to remain robust despite lower LME For Indian smelters TC/RC were stable LME lower by 10% Sulphuric acid prices dropped sharply DAP realisations lower Key macro drivers (Q2 FY 17 vs Q2 FY 16) T
Slide 8: Q2 FY17 - A strong operating performance
Q2 FY17-. A strong,operating performance
Slide 9: Aluminium, Novelis and Copper highlights
Aluminium EBITDA up 192% YoY on strong volumes, Aluminium significant cost efficiencies achieved across operations, input prices largely supportive Coal security and improved power cost visibility – Locked in significant portion of annual coal requirement in recent auction at an attractive price
Slide 10: Hindalco consolidated financial performance
YOY Sharply lower Cu realisations, Net Sales Rs. 9,562 Cr Flat negated impact of higher Al volumes Strong gains in Aluminium operations on the back of higher volumes, PBITDA Rs. 1,493 Cr 39% efficiency gains & lower input costs Sharply up due to robust operational performance and marginally lo
Slide 11: Performance review — Aluminium India
ADITYA BIRLA | HINDALCO Performance review — Aluminium India
Slide 12: Aluminium India production growth
Alumina (KT) includes Utkal Metal (KT) 726 320 628 269 Q2FY 16 Q2FY 17 Q2 FY 16 Q2 FY 17 Strong Production growth. Mahan and Aditya Production(KT) Q2FY16 Q2FY17 ramped up and operating at design capacities Wire Rods 29 40 Efficiency gains across the plants, VAP production rising FRP 62 68 Sign
Slide 13: Utkal alumina production
Utkal Production (KT) 375 338 Cash cost of Alumina amongst the lowest cost refineries of the world Long distance bauxite conveyor proved its mettle during monsoon Q2 FY 16 Q2 FY 17 Delivered an EBITDA of Rs 170 Cr in Q2, FY17 13
Slide 14: Performance review – Copper
Utkal production (KT) 375 338 Cash cost of Alumina amongst the lowest Performance review – Copper cost refineries of the world Long distance bauxite conveyor proved its mettle during monsoon Q2 FY 16 Q2 FY 17 Delivered an EBITDA of Rs 170 Cr in Q2 FY17 13
Slide 15: Copper production review
Cathode (KT) CC Rods (KT) 100 106 38 42 Q2FY 16 Q2FY 17 Q2FY 16 Q2FY 17 DAP (KT) Cathode production bounced back post maintenance shutdown in Q1 FY 17 Sequentially production jumped 63% registering highest ever quarterly production CC Rods production up 12% (YoY) in line with our thrust on val
Slide 16: Performance review – Novelis
Utkal production (KT) 375 338 Cash cost of Alumina amongst the lowest Performance review – Novelis cost refineries of the world Long distance bauxite conveyor proved its mettle during monsoon Q2 FY 16 Q2 FY 17 Delivered an EBITDA of Rs 170 Cr in Q2 FY17 13
Slide 17: Novelis performance review
Aluminium Auto sheet demand continued to be robust but can market increasingly competitive. Significant cost reduction through productivity, asset utilisation and better metal mix Continued ramp up of automotive sheets and operational efficiencies to enhance the performance US$ 350/T EBITDA
Slide 18: Financial performance review
Utkal production (KT) 375 338 Cash cost of Alumina amongst the lowest cost refineries of the world Financial performance review Long distance bauxite conveyor proved its mettle during monsoon Q2 FY 16 Q2 FY 17 Delivered an EBITDA of Rs 170 Cr in Q2 FY17 13
Slide 19: *Rounded of to nearest decimal
*Rounded of to nearest decimal 19
Slide 20: Aluminium India revenue and EBITDA
Revenue (Rs Cr) EBITDA (Rs Cr) Utkal EBITDA (Rs Cr) 4,930 871 4,591 244 4,496 808 170 277 95 Q2 FY 16 Q1 FY 17 Q2 FY 17 Q2 FY 16 Q1 FY 17 Q2 FY 17 Q2FY16 Q1FY17 Q2FY17 Robust operational performance on the back of efficiency gains and higher volumes 20
Slide 21: Copper net sales and EBITDA
Net Sales (Rs Cr) EBITDA (Rs Cr) 5,071 366 366 4,635 264 3,571 Q2 FY 16 Q1 FY 17 Q2 FY 17 Q2 FY 16 Q1 FY 17 Q2 FY 17 YOY – EBITDA maintained despite sharp fall in overall realisations Sequentially – Sharp bounce back after planned maintenance shutdown 21
Slide 22: Novelis adjusted EBITDA and net sales
Adjusted EBITDA* (US$ Adjusted EBITDA excluding MPL at $ Net Sales (US$ Bn) Mn) 270 270 Mn up 14% YOY 2.5 2.4 236 MPL at negative 14 Mn sharply lower against negative $54 Mn in Q2 FY 16 Surpassed $ 1.05 Bn EBITDA on TTM basis Net loss $ 89 Mn, primarily on account of $112 Mn loss on extingui
Slide 23: ABML divestment completed in July 2016
ABML divestment completed in July 2016 1 Metals X share for every 4.5 ABML shares and A$ 0.08 cash for every ABML share – represents 32% premium based on stock prices traded on the offer date. The transaction yielded a gain of Rs 145 crore and is included in the Hindalco quarterly accounts as ex
Slide 24: Domestic industry demand drivers in India
National Capital A project of this The Solar Cities Enhanced Domestic Industry Goods Policy magnitude across initiative plans a capacities would would be self intends to boost 100 cities would min.10% reduction require skilled / sufficient to meet manufacturing of need the support of in conventional
Slide 25: Key takeaways
All plants at design All plants running at full stream Capacity Significant operational efficiencies achieved Third consecutive quarter of strong operating performance on the back of Robust Operational strong operational & efficiency gains, aided by benign energy prices Performance Copper strong bou
Slide 26: Thank you
Utkal production (KT) 375 Cash cost of Alumina amongst the lowest Thank you 338 cost refineries of the world Long distance bauxite conveyor proved its REGISTERED OFFICE mettle during monsoon Century Bhavan, 3rd Floor, Dr. Annie Q2 FY 16 Q2 FY 17 Besant Road, Worli, Mumbai 400 030 Telephone +91 2