Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q4 FY2016 Earnings Presentation
33 slides from Hindalco Industries's earnings presentation, May 21, 2016
Slide 1: Investor Presentation – Q4 & FY 2016
Investor Presentation – Q4 & FY 2016 Hindalco Industries Ltd … A Global Aluminium and Copper Producer… 1
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
Slide 3: Contents
Contents.. Economy & Industry… Business Highlights … Operational & Financial Review • Aluminium • Copper 3
Slide 4: Economy Update
Economy Update.. Global Recovery Weak, growth seems to be decelerating to ~3% US growth tapering off and for 2016 now estimated at 2% against 2.4% in 2015 European Union & Japan sputtering & under negative interest rate policy Potential Fed rate & Brexit possibility unnerving financial marke
Slide 5: Aluminium Industry Update
Aluminium Industry Update.. Demand – Robust demand Global demand continued to remain robust and expected to grow at ~4% Indian demand rising and is expected to grow smartly on the back of expected pick up in industrial activity, infrastructure spend and focus on power transmission and distribu
Slide 6: Industry Update
Industry Update.. IMF All (Q4 FY16 vs. Q4 FY15) Commodity IMF Fuels IMF Metals Index Index Index Aluminium Copper Iron ore Crude oil -16% -20% -20% -24% -27% -37% -37% Commodities Meltdown 6
Slide 7: Industry Update
Industry Update.. LME ($/t) In early 2016, the prices bottomed out and later 2,054 surged primarily due to strong restocking demand 1,857 1,550 from China post holidays Of late this has encouraged aggressive smelter 1,466 restarts in China This is expected to cap the price recovery in the Dec-
Slide 8: Highlights
Highlights…. Q4 FY 16 – A Strong operating performance 8
Slide 9: Q4 FY 16: Operational Highlights
Q4 FY 16: Operational Highlights… Strong Volume growth. Greenfield projects achieved full ramp up, efficiencies improved Aluminium Supportive input costs especially coal and crude derivatives VAP (FRP and Extrusion) production up 28% Record Automotive shipments up 22% YOY Novelis Global FR
Slide 10: Q4 FY 16: Standalone Highlights
Q4 FY 16: Standalone Highlights… YOY The company revenue declined 8% due to sharp fall in Aluminium and copper realisations Revenue Aluminium revenues up 14% on the back of higher volumes and better product mix Copper revenues down 25% owing to lower Copper LME PBIDTA rose by 27% with strong
Slide 11: Highlights – FY: A Watershed Year
Highlights…. FY 16 – A Watershed Year… all greenfield projects ramped up 11
Slide 12: FY 16: Operational Highlights
FY 16: Operational Highlights… Record Production- up 36%, surpassed 1 Mn tonnes mark Aluminium Improved cost competency with the full ramp up of all greenfield projects VAP focus - 12% rise in production of FRP and extrusions, 39% jump in wire rod output Record FRP shipments at 3.12 Mn tonne
Slide 13: FY 16: Financial Highlights
FY 16: Financial Highlights… Consolidated revenues declined 4%, yet crossed 1 lac Crore mark once again Revenue Standalone revenue were broadly stable despite sharp fall in realisations Consolidated PBIDTA lower by 1% only notwithstanding the macro headwinds PBIDTA Standalone PBIDTA – Rs 4,3
Slide 14: Performance Review – Aluminium India
Performance Review – Aluminium India 14
Slide 15: Aluminium Industry Drivers
Aluminium Industry Drivers Driver Q4 Q4 Change FY 16 FY 15 Change Industry cost curve fell sharply… FY16 FY15 % % Lower crude prices led to relief on carbon costs LME 1515 1801 (16%) 1592 1889 (16%) Alumina prices declined Premium 90 370 (76%) 120 375 (68%) (MJP) In India, decline in coal co
Slide 16: Production Trends – Quarterly
Production Trends…. Quarterly Alumina* (kt) Metal (kt) (Kt) Q4FY15 Q4FY16 307 703 632 242 Wire Rods 22 38 FRP 52 69 Q4 FY15 Q4 FY16 Q4 FY15 Q4 FY16 Extrusions 10 11 *Includes Utkal Strong Production growth. After Mahan, Aditya too ramped up to full capacity VAP production rising with improved demand
Slide 17: Production Trends – Annual
Production Trends…. Annual Alumina* (kt) Metal (kt) (Kt) FY15 FY16 2680 2259 1133 836 Wire Rods 90 124 FRP 226 256 FY15 FY16 FY15 FY16 Extrusions 40.4 42.6 *Includes Utkal Strong Production growth. Greenfield plants operating at designed capacities. VAP production ramping up 17
Slide 18: Al Financial Performance - Quarterly
Al Financial Performance - Quarterly Net Sales (Rs Cr) EBIT (Rs Cr) 4,738 517 4,248 4,142 306 YOY QOQ Revenue 14 Revenue 12 81 % % EBIT 68 EBIT 538 % % Q4 FY15 Q3FY 16 Q4 FY16 Q4 FY15 Q3 FY16 Q4 FY16 Strong Production growth. Greenfield plants fully ramped up Lower coal and crude derivative prices w
Slide 19: Al Financial Performance - Annual
Al Financial Performance - Annual Net Sales (Rs Cr) EBIT (Rs Cr) 17,125 1,349 Revenues increased primarily on the back of sharp jump in volumes 14,105 Notwithstanding strong operational performance in a 880 difficult macro environment …. EBIT declined sharply on account of higher depreciation
Slide 20: Performance Review – Novelis
Performance Review – Novelis 20
Slide 21: Highlights - Novelis
Highlights - Novelis FY 16 – Shipment 3.12 Mn tonnes Q4 FY 16 Vs Q4 FY 15 Enriching product mix EBIDTA without MPL $ 963 Mn Shipments up 4% to 788kt Record automotive shipments up 22% Excluding metal price lag, Adjusted EBITDA $277 million up 29% Up 16% sequentially from Q3FY16 Negative me
Slide 22: Novelis – Auto focus
wo NX ADITYA BIRLA Novelis — Auto focus... \ oa = Novelis automotive sheet shipment CAGR 31% FY 12-FY16 = Early adoption of mix shift to automotive delivering timely returns = Outlook for aluminum sheet demand remains strong driven by favorable substitution trends towards aluminum globally = Experie
Slide 23: Performance Review – UAIL Refinery
Performance Review – UAIL Refinery 23
Slide 24: Utkal Alumina Update
Utkal Alumina Update Utkal EBITDA ( Rs Crore) Utkal produced 1.4 Mn tonnes of alumina in FY16 34% higher than in the previous year FY15 260 Cash cost of Alumina amongst the lowest cost FY16 714 refineries of the world Utkal sold 130 KT alumina to third parties. Long distance bauxite convey
Slide 25: Performance Review – Copper
Performance Review – Copper 25
Slide 26: Industry Drivers
Industry Drivers Q4 FY 16 Impact FY 16 Vs FY Vs. Q4 FY Impact (YoY) 15 15 Industry drivers broadly supportive… TCRC Higher Higher TC/RC were strong, however benchmark for LME ($/t) Lower Lower 2016 has softened Exch. Rate By product prices, especially sulphuric acid Favorable Favorable (Re/$)
Slide 27: Copper - Production Trends
Copper - Production Trends…. Q4 FY 16 Vs Q4 FY 15 FY 16 Vs FY 15 100 107 40 386 388 151 158 324 93 36 299 69 Q4 FY15 Q4 FY16 Q4 FY15 Q4 FY16 Q4FY15 Q4FY16 FY 15 FY 16 FY 15 FY6 FY 15 FY 16 Cathode DAP/NPK CC Rods Cathode CC Rods DAP/NPK Q4 FY 16 Production declined due to operational issues. Being a
Slide 28: Copper – Financial Performance
Copper – Financial Performance Revenue ( RsCrore) FY15 20,451 ( Rs Crore) Revenue EBIT FY16 17,209 16% Q4 FY15 5,238 390 Q1 FY16 4,614 344 EBIT ( Rs Crore) Q2 FY16 4,757 350 6% FY15 1,516 Q3 FY16 3,905 348 Q4 FY16 3,932 377 FY16 1,419 Stable performance even as Weak LME and removal of export incenti
Slide 29: Aditya Birla Minerals Ltd Update
Aditya Birla Minerals Ltd… Update October 2015 - Completed sale of Mount Gordon Assets April 2016 – Expressed intention to accept revised offer of Metals X, an ASX listed company Off market takeover of ABML 1 Metals X share for every 4.5 ABML shares and A$ 0.08 cash for every ABML share – re
Slide 30: Our Focus
Our Focus - Plant stabilisation and Operating efficiency Supply Chain logistics optimisation Leverage potential demand in Value added products across businesses Proactive working capital management Cost savings and cash conservation across operations 30
Slide 31: In Summary
In Summary - Culmination of large investment program .All greenfield projects running at designed capacities Interest and depreciation almost peaked Softening interest rates augurs well for the company Exceptional financial performance in Q4 FY 16 On the back of volume gains following the
Slide 32: Thank you
Thank you REGISTERED OFFICE Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 030 Telephone- +91 22 6662 6666 Website www.hindalco.com E mail hindalco@adityabirla.com Corporate Identity No. L27020MH1958PLC011238
Slide 33: Annexure 1 - Financials
Annexure 1 - Financials - Standalone Consolidated (In Rs. crore) Q4FY16 Q4FY15 Q3FY16 FY16 FY15 FY16 FY15 Revenue from Operations 8,668 9,372 8,150 34,318 34,525 1,00,054 1,04,281 Other Income 204 230 250 1,066 882 1,211 1,105 Profit Before Interest, Tax and Depreciation (PBITDA) 1,371 1,078 922 4,3
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