Vedanta Limited · NSE:VEDL
Vedanta — FY2015 Earnings Presentation
37 slides from Vedanta's earnings presentation, Apr 29, 2015
Slide 1: Vedanta Limited FY 2015 Results
Vedanta Limited (formerly known as Sesa Sterlite Ltd./Sesa Goa Ltd.) FY 2015 Results 29 April 2015 Results conference call details are on the last page of this document
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from rates and metal prices; from future integration of acquired publicly available sources that have not been independently businesses; and from numerous other matters of national, regional verified. and gl
Slide 3: Making a positive contribution in FY2015
Making a positive contribution in FY2015 Communities: Social Investment Contributing to India’s Oil Production Rs.171 crore 27% Payment to Exchequer No. of Employees (Direct and Indirect) Rs. 27,900 crore 69,000 Safety 5 fatalities in FY2015 Fatalities Focus on bringing in a culture of zero-harm
Slide 4: FY2015 Results Highlights
FY2015 Results Highlights Operations EBITDA Mix for FY2015 Zinc-India: Record full year mined metal production ─ Underground conversion better positioned 7% 4% Aluminium & Alumina: Record full year production — Started new Jharsuguda-II and Korba-II smelters in 11% FY2015; next stage of ramp up
Slide 5: Building Momentum on Delivering our Strategic Priorities
Building Momentum on Delivering our Strategic Priorities Strategic Priority What we Achieved Focus Areas Production growth Achieved record annual production in Achieve full capacity across businesses across portfolio with a alumina, aluminium and at Copper - India Al & Power: Ramp-up pots; sec
Slide 6: Resilient Portfolio in Volatile Commodity Environment
Resilient Portfolio in Volatile Commodity Environment Diversified Portfolio with Low Cost Assets… EBITDA Mix for FY2015 Competitive Position on Global Cost Curve I II III IV 7% 4% Size of circle denotes Zinc EBITDA contribution and India % denotes EBITDA 11% 50% margin in FY2015 39% Oil & Gas 59% Zi
Slide 7: Well-Invested Assets Driving Production Growth
Well-Invested Assets Driving Production Growth Total Production (copper equivalent kt) 2,500 Zinc-Lead Silver Copper Aluminium Power Iron Ore Oil & Gas 2,000 Copper Equivalent Production (kt) 1,500 1,000 500 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12PF³ FY13 FY14 FY15 Near Near Term Term Notes:
Slide 8: India: Strong Growth Forecast
India: Strong Growth Forecast Building growth momentum India: Fastest Growing Major Economy in 20151 ● Pick up in investments and lower oil prices ● Continuing reforms: Insurance, Coal and MMDR bills 7.5 passed India 7.5 7.2 ● Lower inflation providing headroom for interest rate cuts 6.3 China 6.8 7
Slide 9: FY2015 Finance Review
FY2015 Finance Review DD Jalan Chief Financial Officer
Slide 10: Financial Highlights
Financial Highlights ● Attributable PAT (before exceptional items) remains stable in a volatile commodity price environment ● Q4 EBITDA lower on account of lower oil prices; strong EBITDA margin maintained for FY2015 ● Gross debt reduced ● Non-cash charge of Rs. 19,956 crore, largely due to impairme
Slide 11: EBITDA Bridge
EBITDA Bridge FY2015 vs. FY2014 (In Rs. Crore) ● Controllable – Rs.362 crore 25,603 ● Uncontrollable – Rs. 927 1,698 712 450 crore 981 995 24,624 1,289 114 22,226 Non Controllable Rs. (979)crore Controllable Rs. (2,398) crore FY 14 (PF) LME/ Brent Premium/ Tc Currency Profit Adjusted Volume COP Othe
Slide 12: Income Statement – Variances
Income Statement – Variances Lower finance cost ─ Refinanced debt at lower cost In Rs. Crore FY FY Q4 Q4 Lower depreciation post re-alignment of 2015 2014 FY2015 FY 2014 useful life of metal and mining assets EBITDA 22,226 25,603 3,986 6,665 ─ Partially offset by higher depreciation at Finance C
Slide 13: Non-Cash Impairment Charge in Q4
Non-Cash Impairment Charge in Q4 Oil and Gas Non-cash impairment charge taken, following carrying value test in light of steep decline in crude oil price: Present value of long term future cash flows based on oil price of $60/bbl in FY2016, increasing to $84/bbl in FY2020, and an annual escala
Slide 14: Maturity Profile
Maturity Profile Term Debt Maturity Profile (in $bn) Diversified Funding Sources for Term Debt (as of 31 March 2015) (as of 31 March 2015) Subsidiaries Standalone Short Term Loans - USD Money Market 3% Instruments- INR 12% Bonds-INR - 23% 1.3 0.5 0.5 0.6 0.4 Term Loans- 1.0 1.1 0.2 0.6 0.5 0.4 0.5 U
Slide 15: Optimising Capex to drive Cash Flow Generation
Optimising Capex to drive Cash Flow Generation Continued growth in Free Cash Flow with production ramp-up Cash Flow and Growth Capex Profile - $bn o Free cash flow post capex of Rs. 3,425 crore Oil & Gas Capex¹ Zinc Capex M&M Capex² Free Cash Flow³ Prioritised capital to high-return, low- 3.0 ri
Slide 16: Financial Priorities
Financial Priorities Disciplined Deleveraging Cost Savings Group Focused on Capital & Reduction Structure shareholder Allocation: in Borrowing Simplification returns; focus Optimising Cost on capex, focus on maintaining/ FCF growing dividends VEDANTA LIMITED – FY2015 RESULTS PRESENTATION 16
Slide 17: FY2015 Business Review
FY2015 Business Review Tom Albanese Chief Executive Officer
Slide 18: Oil & Gas
Oil & Gas FY2015 Results Rajasthan Block – 12 discoveries Gross Average Production: 211,671 boepd since resumption; 6 in FY2015 o Cambay production up 8% yoy o Ravva production up 31% yoy in Q4; crosses 30,000 barrels of oil mark after 3.5 years o Aishwariya field crosses the 30,000 boepd mark for
Slide 19: Zinc India
Zinc India FY2015 Results Rampura Agucha Mine Isometric Record full year mined metal production of 887 kt o Refined metal lower at 734 kt due to lower mined metal in Added: Added legend for clarity H1, as per plan of current Open Lower silver production due to lower grades at Sindesar Khurd pit
Slide 20: Zinc International
Zinc International FY2015 Results Production Break-up Lower Production at 312 kt BMM Lisheen Skorpion ─ Lower Lisheen production; expected to end production in mid FY 2016 ─ Unplanned disruptions at Skorpion in Jan; now 125 normalised 102 Q4 FY2015 COP higher at $1,500/t Outlook 172 150 FY2016
Slide 21: Aluminium
Aluminium FY2015 Results Aluminium Costs and Margins (in $/t, for FY2015) Record production of c.1mt at alumina refinery Value added production Record Aluminium production, new Jharsuguda-II and increased to 51% Korba-II smelters started up CoP higher at $1,755/t due to higher alumina and coal
Slide 22: Other Assets – Power, Iron Ore and Copper - India
Other Assets – Power, Iron Ore and Copper - India Power Iron Ore Copper India - Tuticorin Smelter: Jharsuguda 2,400MW: Karnataka: Record production; 91% capacity 39% PLF during the year due to Recommenced mining @ 2.3 mtpa utilisation low demand in Feb 2015 To commence supplying power to
Slide 23: Strategic Priorities
Strategic Priorities Asset optimisation Operating at full capacity Strengthening the Balance Sheet Reduce Gearing; maximise free cash flows Simplification of the Group structure Protect and preserve our License to Operate Identify next generation of Resources Continue to add R&R Focused on maximizin
Slide 24: Appendix
AZ vedanta Appendix
Slide 25: Roadmap to 2.3mt Aluminium production
Roadmap to 2.3mt Aluminium production FY 16 Exit FY 16 Exiting Capacity Capacity Additional Capacity Grand total Aluminium Balco1 JSG1 Balco2 JSG2 JSG2 JSG2 JSG2 245kt 500kt 325kt 312kt 312kt 1.7mt 2.3mt 312Kt 312 t Lanjigarh Imports Lanjigarh Lanjigarh Alumina 3.4mt 5.0mt 1mt 1.4mt 1mt 1 3mt Captiv
Slide 26: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. Crore) 31 March 2014 31 December 2014 31 March 2015 Company Cash & Cash & Cash & Net Debt Net Debt Debt Net Debt Debt LI LI LI Debt Vedanta Limited 38,943 2,459 36,484 38,480 693 37,787 37,636 840 36,796 Standalone Zinc India - 23,943 (23,943) - 26,355 (26,355) - 27
Slide 27: Segment Summary – Oil and Gas
Segment Summary – Oil and Gas Q4 Q3 Full Year % change % change OIL AND GAS (boepd) FY 2015 FY 2014 FY2015 FY 2015 FY 2014 YoY YoY Average Daily Total Gross Operated 22,4294 232,884 -4% 228,622 220,876 226,808 -3% Production (boepd)* Average Daily Gross Operated Production 215,553 224,429 -4% 218,90
Slide 28: Segment Summary – Zinc India
Segment Summary – Zinc India Q4 Q3 Full Year % change % change Production (in’000 tonnes, or as stated) FY 2015 FY 2014 FY2015 FY 2015 FY 2014 YoY YoY Mined metal content 269 200 34% 242 887 880 1% Refined Zinc – Total 217 182 19% 196 734 749 -2% Refined Zinc – Integrated 217 179 21% 192 721 743 -3%
Slide 29: Segment Summary – Zinc International
Segment Summary – Zinc International Q4 Q3 Full Year % change % change Production (in’000 tonnes, or as stated) FY 2015 FY 2014 FY2015 FY 2015 FY 2014 YoY YoY Refined Zinc – Skorpion 17 33 -50% 26 102 125 -18% Mined metal content- BMM 16 12 31% 13 59 67 -11% Mined metal content- Lisheen 37 38 -3% 41
Slide 30: Segment Summary – Copper India
Segment Summary –Copper India Q4 Q3 Full Year % change % change Production (in’000 tonnes, or as stated) FY 2015 FY 2014 FY2015 FY 2015 FY 2014 YoY YoY Copper - Mined metal content - 1 -100% - - 18 -100% Copper - Cathodes 97 98 -1% 99 362 294 23% Tuticorin power sales (million units) 158 144 10% 164
Slide 31: Segment Summary – Iron Ore
Segment Summary – Iron Ore Q4 Q3 Full Year Particulars (in million dry metric tonnes, % change % change FY 2015 FY 2014 FY2015 FY 2015 FY 2014 or as stated) YoY YoY Sales - 0.0 - 0.1 1.2 0.0 - Goa - - - - - - - Karnataka - 0.0 - 0.1 1.2 - - Production of Saleable Ore 0.3 1.5 -79% 0.0 0.6 1.5 -59% Go
Slide 32: Segment Summary – Aluminium
Segment Summary – Aluminium Q4 Q3 Full Year Particulars (in’000 tonnes, or as % % FY2015 FY2014 FY2015 FY2015 FY2014 stated) change change Alumina – Lanjigarh 274 227 21% 244 977 524 86% Total Aluminum Production 229 200 15% 224 877 794 10% Jharsuguda-I 131 135 -3% 133 534 542 -1% 1 Jharsuguda-II 14
Slide 33: Segment Summary – Power
Segment Summary – Power Q4 Q3 Full Year % % Particulars (in million units) FY2015 FY2014 FY2015 FY2015 FY2014 change change Total Power Sales 2,547 2,093 22% 2663 9,859 9,374 5% Jharsuguda 2400 MW 1,525 1,701 -10% 1873 7,206 7,625 -5% BALCO 270 MW 18 84 -79% 0.2 89 390 -77% BALCO 600 MW1 10 10 MALCO
Slide 34: Sales Summary
Sales Summary Sales volume Q4 FY2015 Q4FY2014 FY2015 FY2014 Zinc-India Sales Refined Zinc (kt) 223 184 736 751 Refined Lead (kt) 37 37 129 121 Zinc Concentrate (DMT) - - - - Lead Concentrate (DMT) - - - - Total Zinc (Refined+Conc) kt 223 184 736 751 Total Lead (Refined+Conc) kt 37 37 129 121 Total Z
Slide 35: Sales Summary
Sales Summary Q4 Q4 Sales volume FY2015 FY2014 Q4 Q4 FY2015 FY2014 Sales volume FY2015 FY2014 FY2015 FY2014 Power Sales (mu) Iron-Ore Sales Jharsuguda 2,400 MW 1,525 1,701 7206 7625 Goa (mn DMT) - - - - TSPL 690 - 1213 - BALCO 270 MW 18 84 89 390 Karnataka (mn DMT)1 - 0.0 1.2 0.03 BALCO 600 MW 10 -
Slide 36: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 62.9% Iron Ore (Sesa Goa) Konkola Copper Smelting (Tuticorin) Copper Vedanta Ltd. Mines (KCM) Power (2,400 MW Jharsuguda) Aluminium (VAL aluminium and power assets) Subsidiaries of Vedanta Ltd 59.9% 64.9% 51% 100% 100%
Slide 37: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 6:00 PM (IST) on Thursday, 29 April 2015. The dial-in numbers for the call are given below: Event Telephone Number Mumbai main access +91 22 3938 1088 India – 6:00 PM (IST) Mumbai standby access +91 22 6746 8388 Singapore – 8:30