Hindalco Industries Limited · NSE:HINDALCO

Hindalco Industries — Q2 FY18 Earnings Presentation

30 slides from Hindalco Industries's earnings presentation, Nov 3, 2017

  1. Slide 1: Investor Presentation – Q2 FY18

    Hindalco Investor Presentation – Q2 FY18 November 3, 2017 Mumbai Excellence by Design

  2. Slide 2: 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

  3. Slide 3: Agenda

    Agenda 1 Key Highlights 2 Economy & Industry 3 Result Highlights 4 Operational and Financial Performance  Aluminium (India)  Copper  Novelis Excellence by Design 3

  4. Slide 4: Key Highlights

    Key Highlights Excellence by Design

  5. Slide 5: Key Highlights (1/2)

    Key Highlights (1/2) Financial performance  Excellent financial performance across segments with Y-o-Y EBT (before exceptional items) up by 30% to Rs. 713 crore Deleveraging  Prepaid project debt of Rs. 5,686 crore at Hindalco standalone and Rs. 2,280 crore at Utkal - Till date total prepayment Rs

  6. Slide 6: Key Highlights (2/2)

    Key Highlights (2/2) Copper  Q2 FY18 EBITDA at Rs. 467 crore, increased 28% Y-o-Y on account of favorable macro and higher by-product realization, partly offset by lower volumes due to operational issues  CC Rod sale at 40 Kt in Q2 FY18 vs 42 Kt in Q2 FY17 due to subdued market demand Novelis  Re

  7. Slide 7: Economy and Industry

    Economy and Industry Excellence by Design

  8. Slide 8: Economy

    Economy Global Economy ○ Global growth is projected to rise to 3.6 % in CY2017 vs. 3.2% in CY2016 and further to 3.7 % in CY2018 ○ In Euro area, Japan, emerging Asia and Russia growth outcomes in the first half of 2017 were better than expected Domestic Economy ○ Recently RBI has revised the growth

  9. Slide 9: Aluminium Industry

    Aluminium Industry Global Aluminium Demand / Aluminium Price Trend (USD/t) Supply is largely balanced Market Balance in mt 2,030 2100 2130 1.5 1.6 1857 1,902 1,931 1,914 1,887 1,904 1,666 1,737 1,728 1,791 0.2 -1.0 -1.3 -2.1 2015 2016 2017 China World Ex. China  Demand in World excluding China is e

  10. Slide 10: Aluminium Industry Drivers

    Aluminium Industry Drivers ○ Stronger rupee and increase in input costs moderated the impact of increase in Aluminium LME price ○ Regional premium moderated as compared to previous quarter ○ Demand in domestic market showed signs of improvement from September’17 Key macro drivers Q2 FY17 Q2 FY18 YoY

  11. Slide 11: Copper Industry

    Copper Industry ○ Rally in copper LME in Q3 CY 2017 mainly driven by robust economic and manufacturing activities in China, Europe and U.S. and demand from financial investors  LME price of copper surged from a range of USD 6,400/ t during Sept’17 end to USD 7,000/t in mid Oct’17 ○ Spot TCRC is low

  12. Slide 12: Result Highlights Q2 FY18 - Strong Operating Performance

    Result Highlights Q2 FY18 - Strong Operating Performance Excellence by Design

  13. Slide 13: Q2 FY18 – Standalone Highlights

    Q2 FY18 – Standalone Highlights Net Profit EBITDA Utkal EBITDA Revenue Rs. 393 crore Rs. 1,577 crore Rs. 201 crore Rs. 10,308 crore (Y-o-Y down (Y-o-Y up 6%) (Y-o-Y up 18%) 11%) • Higher • Higher aluminium Aluminium volume, • Exceptional sales partly supportive provision of • Higher offset by macros

  14. Slide 14: Operational Performance Aluminium (India)

    Operational Performance Aluminium (India) Excellence by Design

  15. Slide 15: Production Trend

    Production Trend Alumina (KT) including Utkal VAP incl. Wire Rod (KT) 1,441 1,437 (2)% (2)% 243 239 726 724 712 (2)% 121 119 119 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18  Metal production up by 2% and Metal (KT) Alumina production down by 2% 628 647 2% ◊ New p

  16. Slide 16: Utkal

    Utkal Production (KT)  Plant continues to operate 1% 754 764 optimally, thereby 375 384 380 maintaining its position 1% amongst the lowest cash Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 cost producers in the world Excellence by Design 16

  17. Slide 17: Operational Performance Copper

    Operational Performance Copper Excellence by Design

  18. Slide 18: Production

    Production Cathode (KT) CC Rods (KT) (10)% 204 172 (7)% 79 79 106 109 19% 96 42 40 39 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 DAP (KT) ○ Cathode & DAP production were (30)% 167 impacted due to certain 118 operational issues (29)% 73 67 51 ○ CC rod production w

  19. Slide 19: Operational Performance Novelis

    Operational Performance Novelis Excellence by Design

  20. Slide 20: Key Highlights

    Key Highlights Total Shipments (KT) ○ Total flat rolled product shipments grew 4% to 802 Kt 4% 1,587 1,529 ○ Aluminium Auto Sheet demand continued to be robust 4% 773 785 802  Automotive shipments Y-o-Y grew by 12%. Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 ○ Can Y-o-Y shipments grew by 5% with posit

  21. Slide 21: Financial Performance

    Financial Performance Excellence by Design

  22. Slide 22: Financial Highlights – Standalone

    Financial Highlights – Standalone (Rs. crore) Description Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 Revenue from Operations 9,562 10,407 10,308 17,721 20,715 Earnings Before Interest, Tax and Depreciation (EBITDA) Aluminium 808 875 957 1,679 1,832 Copper 366 322 467 630 789 Other Income 319 207 154 53

  23. Slide 23: Aluminium Standalone

    Aluminium Standalone Revenue (Rs. crore) EBITDA (Rs. crore) 1,832 10,221 18% 1,679 9,521 957 9% 4,930 5,008 5,213 808 875 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 • Y-o-Y Revenue up due to higher volume and realization • Higher EBITDA on the back of supportive

  24. Slide 24: Utkal

    Utkal EBITDA (Rs. crore) 492 18% 291 264 86% 201 170 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 • Strong performance on back of stable operations • 18% Y-o-Y growth in Q2 FY18 on the back of higher international alumina prices partly offset by higher input costs Excellence by Design 24

  25. Slide 25: Copper

    Copper Revenue (Rs. crore) EBITDA (Rs. crore) 10500 789 28% 8206 630 467 5403 5097 25% 4635 366 322 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 • Higher revenue as compared to Q2 FY17 and EBITDA up by 28% Y-o-Y, on the back of supportive macro and higher by-produc

  26. Slide 26: Novelis

    Novelis Revenue (USD billion) Adjusted EBITDA* (USD million) 591 538 18% 5.5 12% 4.7 17% 10% 289 302 270 2.7 2.8 2.4 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 • Y-o-Y Revenue up due to higher volumes and Aluminium LME • EBITDA grew by 12% Y-o-Y primarily on acco

  27. Slide 27: Hindalco: Sustainable Performance

    Hindalco: Sustainable Performance Stronger Balance Sheet ○ Deleveraging exercise continues - Rs. 7,966 crore prepaid till date in FY18 + Rs. 1,031 pre paid in FY17 Robust Operational ○ Robust performance on the back of stable aluminium plant Performance operations along with supportive macros Effect

  28. Slide 28: Thank You

    Thank You REGISTERED OFFICE Ahura Centre, 1st Floor, B Wing Mahakali Caves Road Andheri (East), Mumbai 400 093 Telephone- +91 22 6691 7000 Website: www.hindalco.com E mail: hindalco@adityabirla.com Corporate Identity No. L27020MH1958PLC011238 Excellence by Design

  29. Slide 29: Appendix

    Appendix Excellence by Design

  30. Slide 30: Sales Volume

    Sales Volume Aluminium Metal sales in all form Copper sales (KT) (KT) 608 628 3% (9)% 198 164 3% 319 329 299 102 105 93 20% Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 Q2 FY17 Q1 FY18 Q2 FY18 H1 FY17 H1 FY18 Excellence by Design 30

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