Jsw Steel Limited · NSE:JSWSTEEL
Jsw Steel — Investor Presentation (July 2009)
27 slides from Jsw Steel's investor presentation, Jul 1, 2009
Slide 1: JSW Steel Limited – The Challengers
Ys Jaw Steel Limited thay A. ee THE CHALLENGERS July 01, 2009
Slide 2: Group Overview
Group Overview 2
Slide 3: O.P. Jindal Group and JSW Group – Overview
O.P. Jindal Group and JSW Group – Overview P R Jindal Sajjan Jindal Ratan Jindal Naveen Jindal Jindal Jindal Steel & Jindal Saw Stainless Power Ltd. Power Steel Infrastructure Others JSW Energy Limited JSW Steel Limited South West Port Limited Jindal Praxair Oxygen Co. Pvt. Limited Vijayanagar Miner
Slide 4: JSW Steel at a Glance
JSW Steel at a Glance y Flagship company of JSW Group Pellets y One of the leading steel company with consolidated sales of Rs. 16,105 Cr. / $3,161 Slabs million in FY2009 y Integrated steel producer in South India HR Coils y Focused steel manufacturer with integration across the value chain Hot Rol
Slide 5: Creating Value Through Continuous Growth
Creating Value Through Continuous Growth 2009 y Enhanced steel making capacity to 7.8 MTPA 2008 y Iron Ore mines acquired in Chile y Galvalume line set up 2009 2005 2008 y Enhanced steel making capacity to 2.5 MTPA. y Commissioning of Colour 2007 Coating Line at Tarapur 2006 2007 2002 y Commissionin
Slide 6: Key Investment Highlights
Key Investment Highlights 6
Slide 7: JSW Steel: Competitive Advantages
JSW Steel: Competitive Advantages 11 Location Advantage 22 Flexible Product Mix 33 Low Conversion Cost 44 Customer Loyalty 55 Low Specific Investment Cost 7
Slide 8: Location Advantage
Location Advantage Proximity to suppliers, ports and well connected road and rail network enable cost and time optimization for raw materials and finished goods. y Vijayanagar plant is located close to the iron ore rich belt of the Bellary – Hospet region y Iron ore from VMPL and NMDC, within 20-40
Slide 9: Diversified Product Range: Product-Mix Leverage
Diversified Product Range: ProductMix Leverage Installed Capacity – Mar-09 Plain/Pre-painted Plain/Pre-painted Flat Flat Long Long Alloy Alloy Steel Steel Galvalume Galvalume 5.3 5.3 mtpa mtpa 7.8 Mtpa 2.5 2.5 mtpa mtpa (68%) (68%) (32%) (32%) Plain/Pre-painted Plain/Pre-painted Galvanized Galvaniz
Slide 10: Diversified Sales Mix By Product and End Use
Diversified Sales Mix By Product and End Use Product Mix By Type – FY09 Volume Product Mix By End Use – FY09 Volume PPGI & Others Galvalume PPGL Auto 2% 2% 3% 10% GP/GC 17% CR/CRCA 9% Manufacturing HRC 30% 45% Semis- Billets Infrastructure 8% & Semis- HRP Construction Slabs 7% 58% 9% 10
Slide 11: Ranked 8th among top World Class Steelmakers
Ranked 8th among top 32 “World Class” Steelmakers Low cost operation with Severstal 100% captive raw material Potential to improve further due to: Posco y Scaling up capacities y Increasing raw material security BaoSteel 7.95 Arcelor Mittal 7.82 NLMK 7.77 Nucor 7.61 Efficient & low conversion cost 7
Slide 12: Strong Customer Base
Strong Customer Base Domestic Sales Network Pan India Presence JSW Shoppe Own Stock Dealer Tie-Up Consignment Service (67) Yards (23) (161) Agents (7) Centre y 2/3rd of Domestic sales to Direct Manufacturers and balance through Trade Segment y Expanding customer base by new addition of plate & pipe
Slide 13: Major Projects Commissioning Schedule
Major Projects Commissioning Schedule New Hot Strip Mill (Phase I) Vijayanagar Works FY FY 2010 2010 Beneficiation (Phase I) 3.2 MTPA Expansion FY FY 2011 2011 Beneficiation (Phase II) 300 MW Power Plant Vasind & Tarapur FY FY 2010 2010 30 MW Power Plant Salem Works FY FY 2010 2010 Blooming Mill 13
Slide 14: Overseas Presence
Overseas Presence Asset Strategic Fit • Plate and Pipe Mill in USA • Utilization of slabs (currently working at low produced in India capacity utilization level) Steel Operations • Service Centre in UK • Outlet for selling products from India in European markets • Coal mines in Mozambique • Provide
Slide 15: Operating and Financial Performance
Operating and Financial Performance 15
Slide 16: Financial Summary
Financial Summary Rs. Cr. / USD Million Consolidated Standalone Particulars FY 09 FY 08 FY 09 FY 08 Total Income 16,104.71 12,605.23 14,158.42 11,566.61 $3,160.9 $2,474.0 $2,778.9 $2,270.2 EBITDA 3,253.50 3,631.74 3,092.67 3,506.85 $638.6 $712.8 $ 607.0 $688.3 Cash Profit 2,097.88 3,058.74 2,295.42
Slide 17: Production and Sales
Production and Sales Crude Steel Production Saleable Steel Sales Million Tonnes Million Tonnes 3% 1% Y-o-Y % Y-o-Y % Crude 3.405 3.428 Crude Steel, 3.724 Steel, 3.627 0.861 0.994 0.291 0.291 0.542 0.293 1.962 1.599 FY 07-08 FY 08-09 FY 07-08 FY 08-09 HR Coils & Plates Rolled: Long Semis Value Added
Slide 18: EBITDA Analysis
EBITDA Analysis Rs. Cr. / USD Million FY09 FY08 EBITDA 3,092.7 3,506.9 $607.0 $ 688.3 EBITDA Margin 21.8% 30.3% Less: CER Income (48.6) (111.1) $(9.5) $(21.8) Less: FCCB Gain & Others (102.4) (5.6) $(20.1) $(1.1) Adjusted EBITDA 2,941.7 3,390.1 $577.4 $665.4 Adjusted EBITDA Margin 20.8% 29.6% Conven
Slide 19: Adj. Long-term Debt Gearing and Networth
Adj. Longterm Debt Gearing and Networth Standalone (FY09) Consolidated (FY09) Rs. Cr. / USD Million Rs. Cr. / USD Million 10,047 14,631 $1,972 $2,872 678 FX Loss 1628 $133 FX Loss $320 3,828 FCL $751 7,376 FCL $1,448 7,959 8,077 $1,562 $1,585 5,542 RTL $1,088 5,627 RTL $1,104 Adj LT Debt Networth A
Slide 20: Strategy
Strategy 20
Slide 21: Way Forward …
Way Forward … Sustainable GROWTH… ...Creating VALUE y Consolidate position in domestic steel y Expand global presence industry with focus on with value addition closer enhancing capacities to market at competitive cost y Raw material Integration y Enhance value through to protect from cost rich prod
Slide 22: Global Development and Steel Scenario
Global Development and Steel Scenario 22
Slide 23: Quick Supply Side Corrections Ensure no Glut in Market
Quick Supply Side Corrections Ensure no Glut in Market World Monthly Crude Steel Production Global Steel: Capacity Utilization (Y-o-Y % Change) (%) Source: Worldsteel/WSD. 23
Slide 24: Widened Spread Between Production and Apparent Consumption
Widened Spread Between Production and Apparent Consumption … Indicating Destocking of Inventory Crude Steel Production vs. Apparent Consumption (Million Tonne) Source: WSD. 24
Slide 25: Global Steel Industry Tumbling Down the Cost Curve
Global Steel Industry Tumbling Down the Cost Curve … Due to Fall in raw Material Prices World Cost Curve for Hot Rolled Band Source: WSD. 25
Slide 26: Steel Prices Seem to Have Bottomed Out
… Steel Prices Seem to Have Bottomed Out. Scrap Price Movement … Steel Price Movement USD / tonne USD / tonne Shredded / Rotterdam export FOB $/t Source: Worldsteel. 26
Slide 27: Forward Looking and Cautionary Statement
Forward Looking and Cautionary Statement Certain statements in this report concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The