Vedanta Limited · NSE:VEDL
Vedanta — Sesa Sterlite — Investor Presentation (June 2014)
26 slides from Vedanta's investor presentation, June 2014
Slide 1: Sesa Sterlite Limited Corporate Presentation
Sesa Sterlite Limited Corporate Presentation June 2014
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forwa
Slide 3: Sesa Sterlite: Investment Highlights
Sesa Sterlite: Investment Highlights • One of the world’s largest diversified natural FY2014 EBITDA Breakup³ resource companies Copper Aluminium 5% – Operations across Base Metals, Iron 7% Ore, Silver, Oil & Gas and Commercial Power • Portfolio of scalable tier-1 assets generating O&G 54% Zinc India
Slide 4: Successful Strategy of Organic Growth and Value-Accretive M&A
Successful Strategy of Organic Growth and Value-Accretive M&A over 10 years Cairn India M&A Sesa Goa VS Dempo Zinc Intl Liberia iron ore assets RA Mine: 3.75mt Chanderiya: BALCO: 245kt Al Chanderiya: RA mine:5mt RA mine: 6mt SK Mine: 1.5mt Dariba: 100kt Pb Rajasthan: 20
Slide 5: Tier-1 Asset Portfolio
Tier-1 Asset Portfolio R&R FY2014 Competitive Position on Cost Curve Quartiles Positioning Life1 Production Capacity2 I II III IV Oil & Gas (Cairn India) 225+ 3 Top 20 global independent E&P; Platts 2013: 15 218kboepd Size of circle denotes Fastest growing energy company globally kboepd EBITDA contr
Slide 6: CEO's First Impressions
CEO’s First Impressions Rajasthan Oil & Gas, India Chaired monthly Executive Committee meetings and visited operations since joining the Group in Sep 2013 First Impressions Dynamic teams, welcome to change Significant capabilities – exploration, engineering and project execution, production
Slide 7: CEO's Priorities
CEO’s Priorities Aluminum Smelter, Jharsuguda, India Operational excellence Improve business performance: Aluminium: Operationalise remaining smelter capacity and work on bauxite sourcing Iron Ore: Restart operations in Goa Enhance performance of well-performing assets Zinc-India: Transiti
Slide 8: India: Strong Fundamentals for Demand
India: Strong Fundamentals for Demand Low Per Capita Consumption (Metals - CY 2013 per capita consumption in kg; Oil - CY2012 per capita consumption in barrels) 15.4 India World China 6.6 7.2 4.2 4.6 3.5 2.7 1.5 1.9 0.5 1.0 0.4 Aluminum Copper Zinc Oil Urbanization increasing Increasing Labour Force
Slide 9: India's Unexplored Potential - Metals
India’s Unexplored Potential - Metals India: Shared geology and mineral India reserves ranking Global non-ferrous exploration spending has fallen potential with Africa & Australia Global ranking¹ 5th Coal 25 USD Bn Growth % 80% R&R: 295 bn tonnes 60% 20 40% 6th Zinc 15 20% R&R: 50 mn tonnes 10 0% -2
Slide 10: India's Unexplored Potential – Oil & Gas
India’s Unexplored Potential – Oil & Gas India drilled ~6,700 exploratory wells since inception; U.S drills as many wells in less than 3 years¹ • 78% basins yet to be well explored U.S. 1,800 • ~130 Bn barrels of resource in ‘yet to find’ category Operating Rigs 1,400 • 32% basins yet to be offered
Slide 11: Harnessing India's Resource Potential
Harnessing India’s Resource Potential Sesa Sterlite operates in the key mineral rich states of India (% of India’s reserves) ¹ Madhya Andhra State Jharkhand Orissa Chhattisgarh Rajasthan Karnataka Goa Pradesh Pradesh Bauxite - 51% - - 21% - - - Iron Ore 14% 17% 10% - 7% - 41% 7% Coal 29% 24% 16% 18%
Slide 12: Capital Allocation and Returns
Capital Allocation and Returns World class assets and operational excellence to deliver strong, stable and sustainable cash flows Improve Capacity Utilization (Aluminium & Power, Iron Ore) Strengthen Enhance Strong Shareholder Returns Balance Sheet Asset Portfolio • Sterlite 2003 market cap • Debt R
Slide 13: Well-Invested Assets Driving Cash Flow Growth
Well-Invested Assets Driving Cash Flow Growth Positive Free Cash Flow with production ramp- Cash Flow and Growth Capex Profile - $bn up Free Cash Flow-FY² M&M Capex O&G Capex¹ $2.3bn free cash flow (post growth capex) in FY2014 4.0 Capex up to FY20173: $4.7bn 3.7 Oil & Gas: c.$3.0bn1 Prove
Slide 14: Sustainability: Core to our Business
Sustainability: Core to our Business Safety Significant reduction in LTIFR Focus is on eliminating fatalities Behavioral based safety programmes introduced Environment Significant investments (US$250mn+ over last 3 years) Higher technical standards, more recycling rate and zero-discharge f
Slide 15: Key Strategic Priorities remain unchanged
Key Strategic Priorities remain unchanged Disciplined capital allocation: Low-risk and phased development Production growth across Sustained operational excellence and cost efficiencies portfolio with a focus on returns Active engagement with Governments Production ramp-up from well-invested
Slide 16: Summary: Building on Operational Momentum
Summary: Building on Operational Momentum Diversified portfolio of high-quality world-class assets Cash flows ramping up from well-invested assets to drive deleveraging Focus on delivering operational excellence and exploration upside Sustainability is core to our operations and long term va
Slide 17: Appendix
S sesa sterlite a vedanta company Dy, Appendix
Slide 18: Zinc India: Brownfield Expansion
Zinc India : Brownfield Expansion Rampura Agucha: Rampura Agucha Mine – Isometric View Evaluating optimizing the RAM open pit, to ensure consistent output from the mine Delivered steady increase in underground mine development rates Record mined and refined metal production Maintained lowe
Slide 19: Oil & Gas: A world class asset getting better
Oil & Gas: A world class asset getting better Rajasthan Rajasthan – A World Class Asset (production in kboepd) Operations: Strong execution focus 250 200kboepd rate and cumulative production of over 200 200 million barrels achieved 7% production growth driven by rapid well construction - 150 129
Slide 20: Oil & Gas: Rajasthan – Jewel in the crown
Oil & Gas: Rajasthan – Jewel in the crown Rajasthan Block – 31 discoveries to date Rajasthan 3 Year Plan: $2.6bn net capex Shakti Bhagyam N-I North Shakti NE Rajasthan Development: $2.4bn net capex to drive 150% RRR and 7-10% N-C-West-A production CAGR1 Mangala MBA: 180-200kbopd, net capex of $1.6
Slide 21: Iron Ore: Regaining momentum
Iron Ore : Regaining momentum Karnataka Geologic Potential similar to Pilbara Banded Haematite Quartzite Formations Mining restarted end Dec’2013 Annual capacity capped at 2.29mt Produced 1.5mt in Q4 Sales: e-auction in the domestic market Goa Mining ban lifted conditionally in April 2014
Slide 22: Aluminium: Putting capacity to work
Aluminium : Putting capacity to work Operations Aluminium Costs and Margins (in $/t, for FY2014) Smelters delivered high operating efficiencies 276 84 2,134 2nd quartile costs with third-party bauxite and alumina 1,773 Captive bauxite can High ingot premiums of $276/t significantly reduce this
Slide 23: Other Assets: Significant part of the portfolio
Other Assets: Significant part of the portfolio Zinc International Skorpion Mine and Refinery Working on extending life of assets Lisheen: Extension beyond FY2015 depends on discovery of new ore Skorpion: Refinery conversion to tap feed sources in large sulphide belt, including BMM - Technical
Slide 24: Maturity Profile
Maturity Profile Term Debt Maturity Profile (in $bn) Diversified Funding Sources (as of 31 March 2014) (as of 31 March 2014) Money Market Instruments- Short Term 7%, Loans - Bonds-INR - Standalone Subsidiaries 2.4 11%, 19%, 2.2 Convertible 0.6 Bonds-USD 1.0 - 10% Term Loans- 1.2 USD - 27%, 0.9 0.8 T
Slide 25: Entity wise Debt and Cash
Entity wise Debt and Cash Net Debt Summary ($ mn) 31 March 2013 (Proforma) 31 March 14 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Sesa Sterlite Standalone 6,830 494 6,336 6,479 409 6,070 Zinc India - 3,929 (3,929) - 3,984 -3,984 Zinc International - 197 (197) - 200 -200 Cairn India - 3,
Slide 26: Group Structure
Group Structure Vedanta Resources Plc Divisions of Sesa Sterlite 79.4% 58.3% Iron Ore (Sesa Goa) Konkola Copper Smelting (Tuticorin) Copper Sesa Sterlite Mines (KCM) Power (2,400 MW Jharsuguda) Aluminium (VAL aluminium and power assets) Subsidiaries of Sesa Sterlite 58.9% 64.9% 51% 100% 100%