Vedanta Limited · NSE:VEDL
Vedanta — Investor Presentation (March 2024)
70 slides from Vedanta's investor presentation, Mar 20, 2024
Slide 1: Vedanta Investor Meet 2024
VEDANTA INVESTOR MEET 2024 Driving the nation’s progress through value creation DESH KI ZAROORATON KE LIYE | = vedanta transforming for good ai ZINC, LEAD ALUMINIUM COPPER RON, STEEL & | Yo ERRO ALLOYS > & SILVER ELECTRONICS
Slide 2: Forward Looking Statement
Forward Looking Statement 1 The views expressed here may contain information derived from publicly available sources that have not been independently verified. 2 No representation or warranty is made as to 3 This presentation contains 'forward-looking statements' – that is, statements related to fut
Slide 3: Chairman's Message
Chairman’s Message Anil Agarwal Chairman, Vedanta Limited 3 Sensitivity: Internal (C3)
Slide 4: India's Growth & Vedanta
India’s Growth & Vedanta India is the next Vedanta is 25 years young, global growth aggressive on growth. Our engine products act as raw material to 6000+ companies in India Energy transition & IR Vedanta offers right 4.0 would be mineral country and right intensive industry India’s growth boosting
Slide 5: Building the Nation
Building the Nation Natural Resources & Electronics have important Electronic manufacturing role for an Atmanirbhar is strategic for India’s Bharat MAKE IN INDIA import substitution Natural Resources account for 50% of India’s imports Our best-in-class management team including 100+ expats and Need
Slide 6: Vedanta Ahead
Vedanta Ahead Uniquely diversified Demerger will create Pure Play verticals to India holds huge Vedanta as Indian company across the pure play companies provide a menu of Resource potential. Institution – will get resource spectrum – unlocking true value choices for Haven’t explored to different lev
Slide 7: Vedanta: A Growth-Focused Organisation
Vedanta: A Growth – Focused Organisation Navin Agarwal Vice Chairman, Vedanta Limited 7 Sensitivity: Internal (C3)
Slide 8: Vedanta – a champion of India's natural resources, well-positioned for growth
Vedanta – a champion of India’s natural resources, is well-positioned to capitalise on India’s economic growth Global demand for Minerals from Energy Technologies (2022 – 2050) CAGR 8.1%1 4.2x 4.5x GDP Target (Real) $3.75 tn $7 tn 3.3x 3.4x 3.1x 3.2x CAGR 8.8% 1.8x Per capita 1.2x income (Real) $2.4
Slide 9: Sustainable and Profitable Operations – a commitment to business excellence
Sustainable and Profitable Operations – a commitment to business excellence and superior shareholder returns FY24e financials Legacy of business excellence Superior shareholding returns 1st quartile in global 13 $bn 81% Revenue 17.5 $bn cost curve across key segments Dividend over the last decade 3-
Slide 10: Vedanta – India's natural resources custodian is poised for Significant Growth
Vedanta – India’s natural resources custodian is poised for Significant Growth On track to commission ongoing growth project/s; @ consensus prices, potential to deliver yearly revenue >30 $bn Aluminium Capacity (MTPA) Zinc India Capacity (KTPA) Zinc International Capacity (KTPA) Oil and Gas Producti
Slide 11: Robust Growth Profile with min. 30% lower capex compared to peers
Robust Growth Profile with min. 30% lower capex compared to peers Discovery Stage Concept Stage Execution Stage DIP Lanjigarh: Project 2 – 5 MTPA refinery expansion ESL: 1.3 Balco - 435 ktpa Smelter & MTPA 180 ktpa RP Project Lanjigarh: Jharsuguda: Additional 1 MTPA ESL: 10 MTPA 5 to 6 MTPA 1.8 to 2
Slide 12: Our Technology and Projects Partners
Leveraging best in class solutions: Our Technology and Projects Partners 12
Slide 13: Vedanta's Growth engine – Powered by proven leadership team
Vedanta’s Growth engine – Powered by proven leadership team Our CEOs Our Functional Heads Arun Misra Navin Jaju Ajay Goel Ritu Jhingon Executive Director CEO- Iron Ore Chief Financial Officer Director - Group Comm & 35+ years of experience of 18+ years of experience across 24+years of rich leadershi
Slide 14: On track to deliver $7.5 Billion + Annual EBITDA
Key Takeaways Vedanta well Positioned for Exponential Growth across the businesses On track to deliver $7.5 Billion+ Annual EBITDA With equal commitment to maximising value for our shareholders 14 Sensitivity: Internal (C3)
Slide 15: ESG – At core of Vedanta
ESG – At core of Vedanta Priya Agarwal Hebbar Non-Executive Director, Vedanta Limited 15 Sensitivity: Internal (C3)
Slide 16: Our commitment to excellence – our path to leadership
ESG Our commitment to excellence – our path to leadership Transforming Communities Key Highlights as on Dec’2023 Aim 1 Keeping community welfare at the core of business decisions Aim 2 Empowering over 2.5 million families with enhanced 1 million 0.7x skillsets Families skilled Water Positivity Aim 3
Slide 17: Solidifying our ESG commitment with S&P CSA ranking upgrade
Sustainability Leadership Solidifying our ESG commitment with S&P CSA ranking upgrade S&P CSA rankings 3 Vedanta Limited1 Among 238 global companies 1 Hindustan Zinc Hindustan Zinc 1 Among 238 global companies 1 Vedanta Aluminium2 Most sustainable aluminium producer Vedanta Limited Overall S&P CSA s
Slide 18: Vedanta's social impact
Vedanta’s social impact 136+ 50 Million+ 1300+ INR 5000 Cr Initiatives and Projects Lives Villages Social impact investment Impacted reached over the next 5 years Empowering communities, transforming lives, and facilitating nation building through sustainable and inclusive growth. Flagship Projects
Slide 19: Value Accretion
Value Accretion Committed to delivering all roundESG performance ↑ Ajay Goel Chief Financial Officer, Vedanta Limited 19 Sensitivity: Internal (C3)
Slide 20: Unparalleled and inimitable asset base with replacement cost > $50 billion
Unparalleled and inimitable asset base with replacement cost > $50 billion Jharsuguda Smelter → 1.8 MTPA Iron Ore Mines: 13 MTPA BALCO Smelter → 0.6 MTPA • Karnataka mines • Goa Mines Lanjigarh Refinery → 2 MTPA • WCL Captive Power → 4.2 GW Pig Iron Capacity: 1 MTPA Coal mines → 3.6 MPTA Steel Capac
Slide 21: Strong portfolio of low-cost and long-life assets with exploration upside
Strong portfolio of low-cost and long-life assets with exploration upside FY2023 FY2024e Full Competitive Position on Cost POSITIONING R&R Life1 Production Production Capacity2 Curve Quartiles5 Aluminium 2,291kt ~2.3mnt ~3mtpa Strategically located large-scale assets with integrated power I II III I
Slide 22: Driving Success: Balanced Capital Allocation – Growth & Deleveraging
Driving Success: Balanced Capital Allocation – Growth & Deleveraging FY26/27e All building blocks in place for Particulars UoM FY24e FY25e (Annual) EBITDA augmentation Group EBITDA $bn 5.0 6.0 6.5 – 7.5 ($bn) ~ 25% CAGR FCF (pre growth Capex) $bn 2.8 3.5 – 4.0 4.0 – 5.0 7.5 Growth Capex $bn 1.5 1.8
Slide 23: Vedanta Resources Balance sheet – De-leveraged and Reprofiled
Vedanta Resources Balance sheet – De-leveraged and Reprofiled Net debt at VRL Standalone Maturity restructured through Liability Management (LM) ($bn) Pre Post ($mn) 9.7 4,135 8.3 7.7 6.0 6.2 1,769 1,108 1,268 918 756 784 645 150 - Mar-22 Sep-22 Mar-23 Sep-23 Est. FY25 FY26 FY27 FY28 FY29 Mar-24 VRL
Slide 24: Vedanta Group short term Debt Management
Vedanta Group short term Debt Management quite comfortable with healthy cash flows Vedanta Resources Long Term Debt Maturities Vedanta Limited Long Term Debt Maturities Loans Bonds ($bn) Subsidiaries Standalone ($bn) 0.8 2.0 0.7 3.0 0.2 2.2 1.1 1.3 1.3 0.9 FY 25 FY 26 FY27 FY 25 FY 26 FY27 onwards o
Slide 25: EBITDA of FY25e 6 $bn 35% Growth
Key take-aways FY25: A Year of transformative Growth EBITDA of FY25e 6 $bn 35% Growth Consistent focus on deleveraging leading group ND/EBITDA trend towards <1.25x 25 Sensitivity: Internal (C3)
Slide 26: Shaping our portfolio for the future: Demerger
Demerger Shaping our portfolio for the future Ajay Agarwal President Finance 26 Sensitivity: Internal (C3)
Slide 27: Today - Operating Companies with Asset Managers
Today - Operating Companies with “Asset Managers” Aluminum Oil & Gas Steel & Ferrous Copper Largest capacity in India with India’s largest private sector Vedanta Inc / One of the largest Indian private One of the largest custom captive power, integrated coal crude oil producer VRL sector exporter of
Slide 28: Tomorrow - Streamlined pure-play Asset Owner model
Tomorrow - Streamlined pure-play “Asset Owner” model Vedanta Inc / VRL 62% 62% 62% 62% 62% Aluminum Power Base Metals Oil & Gas Steel & Ferrous Largest capacity in India with captive power and an alumina Diversified portfolio of India’s largest private sector One of the largest Indian One of the lar
Slide 29: Rationale for A Simpler Vedanta
Rationale for “A Simpler Vedanta” Valuation: Capital markets 6 pure-play businesses with a high perceive a capital allocation risk 1 1 degree of homogeneity. World-class which results in a discount to assets with global scale and best-in- intrinsic fair value class cost positions Liquidity and growt
Slide 30: Vedanta Inc – A bouquet of world class diversified assets
Vedanta Inc – A bouquet of world class diversified assets Indicative combined near term valuation SPTL (71.37%) Total combined valuation ~ $ 40 - 43Bn Power Products Attributable Valuation ~ $ 25 - 30 Bn KCM One of the world’s largest Copper 21 18 $ Bn 15 (79.4%) producer 12 9 Attibutable Valuation
Slide 31: From Mine to Market – An Integrated Approach
Aluminium From Mine to Market – An Integrated Approach John Slaven, Chief Executive Officer, Vedanta Aluminium 31 Sensitivity: Internal (C3)
Slide 32: Vedanta's Compelling Competitive Advantage delivering strong performance
Vedanta’s Compelling Competitive Advantage delivering strong performance Vertically integrated, strategically located assets creating unrivalled, unequalled competitive advantage 3QFY24 Production 599KT (ARR: 2.36 MTPA) Located in mineral rich province EBITDA margin of $578/T in 3QFY24 Serving Custo
Slide 33: Demonstrated track record of Operational Excellence in Volume and Cost
Demonstrated track record of Operational Excellence in Volume and Cost, Powerful cash generation engine Planned ~2x growth in EBITDA to deliver exceptional value creation Production Volume (in KTPA) Cost of Production (in $/T) $/T EBITDA 3,000 2,653 2,429 100 ~1,000 150 25 2,370 2,149 2,291 2,059 2,
Slide 34: Driving profitable growth through balanced vertical integration
Driving profitable growth through balanced vertical integration Projects underway to achieve ~3 MTPA of Integrated Supply Aluminum Value Chain – Existing Post Expansion Bauxite Alumina VAP Bauxite VAP Alumina 3 MTPA 2 MTPA 1.4 MTPA 12 MTPA 2.6 MTPA (Overland) (Captive) (61%) (Captive) (83%) 6 MTPA 3
Slide 35: Key takeaways
Key takeaways Vertically-integrated supply Exclusive focus on value- ~3MTPA production at $1,000/T chain enabling industry-leading added products to meet EBITDA margin delivering costs. From mid Q1 to lowest sophisticated customer needs in exceptional value creation overall rapidly growing Indian Ma
Slide 36: Zinc India: A legacy of leadership
Zinc India A legacy of leadership Arun Misra Executive Director Vedanta Limited 36 Sensitivity: Internal (C3)
Slide 37: Zinc India: Key Strengths
Zinc India : Key Strengths • World’s 2nd largest integrated zinc producer and 5th leading silver producer Smelting Capacity • Fully integrated India’s only zinc-lead-silver producer over five decades of expertise in mining and smelting • 2nd highest zinc R&R base globally with average grade of Zinc
Slide 38: Zinc India: Vision, Mission and Growth Narrative
Zinc India: Vision, Mission and Growth Narrative Vision to be the world’s largest and most admired Zinc, Lead & Silver Company 01 02 03 Capacity Expansion Mine Portfolio with long life Cost Optimization • Roaster of 160 Ktpa at Debari: FY2025 • Innovative technology and advanced • Efficient ore haul
Slide 39: Zinc India: Vision, Mission and Growth Narrative
Zinc India : Vision, Mission and Growth Narrative MISSION: Enhance stakeholder value, be the lowest cost producer & maintain market leadership 04 05 Expanding VAP Portfolio Sustainable Future • Ramp up of 30kt Alloy plant • RE power delivery agreement to cater • Forward integration through 510 Ktpa
Slide 40: Vedanta Zinc India and Iron and Steel Business
Vedanta Vedanta Zinc Iron and India SteelBusiness Business Arun Misra Executive Director Vedanta Limited 40 Sensitivity: Internal (C3)
Slide 41: Sesa Goa Overview
Sesa Goa Overview Liberia (WCL) Karnataka (IOK) Goa (IOG) Sesa Coke Includes Bomi (currently producing), Bea and Mano iron Includes Bicholim iron ore mine and Cudnem iron ore mine Includes two merchant coke Includes A. Narrain iron ore mine (first production expected mid-2024) plants in Gujarat and
Slide 42: Sesa Goa: Growth
Sesa Goa : Growth Saleable Iron Ore (Mnt dmt) Production Volume (Mnt) IOK WCL IOO IOG Mining 55 VAB Coke 4 • VAB – 0.4 MTPA DIP • IOK – 15 MTPA EC Enhancement 600 10 • 1 MTPA Green-steel Expansion • WCL – 31 MTPA Expansion 4X 3X • IOO – Captive Consumption Ramp-up • IOG – EC Enhancement to 4 MTPA 18
Slide 43: ESL at a Glance
ESL at a Glance Integrated Platform - EBITDA 3 MTPA 5.5 MTPA 65% ~2,300 UP TO 20 - 30%(1) 3MTPA- 500 mn$ 15MTPA Operational Installed 100% Captive Captive Power Acres Lower Capex 10 MTPA- 2 bn$ Highlights Expansion Capacity Iron Ore in Odisha (Thermal, of Land for gas based Potential (by Dec-24) (c.
Slide 44: FACOR's Growth Vision: India's largest Ferrochrome producer by 2027
FACOR’s Grow th Vision Poised to be the India’s largest Ferrochrome producer by 2027 with 500 KTPA capacity LEASE LEASE PERIOD RESERVE RESOURCE MINES AREA (Ha) (year) (Mn ton) (Mn ton) 45 & 33 MVA Furnaces Osthapal 73 2035 19.6 17.5 K'ggta 24 2058 0.33 1.5 100 MW Power Plant Kathpal 113 2030 0.5 1.1
Slide 45: Key Takeaways – A Diversified Growth
Key Takeaways – A Diversified Growth HZL Iron Ore ESL FACOR • Robust EBITDA margin of ~50% • Capacity ramp up • Potential for a • Poised to be • Soon to be World’s 3rd largest silver at Liberia from low-cost India’s 2 to 31 MTPA expansion Largest producer • Capacity expansion into GREEN Ferrochrome
Slide 46: Base Metals: Unlocking the potential of reserves' powerhouse
Base Metals Unlocking the potential of reserves’ powerhouse Chris Griffith Chief Executive Officer, Vedanta Base Metal 46 Sensitivity: Internal (C3)
Slide 47: Base Metals Assets Overview
Base Metals Assets Overview Highly scalable base metal portfolio of multinational future-facing assets Locations of Key Operations Asset Base Zinc International Copper Sector KCM Black Mountain Copper India Mining UAE Fujairah Gold INDIA • Underground Mining • Silvassa Refinery 220 • Underground & S
Slide 48: Vedanta Zinc International – Vision to be 1MTPA producer at <1,200$/t
Vedanta Zinc International – Vision to be 1MTPA producer at <1,200$/t Strong pipeline of projects to tap on ~35 MT R&R Cost & Mine Portfolio Ramping up Exploration Capacity Ramping up Drive cost and margin profitability with long life to enhance R&R Expansion Gamsberg mine EBITDA potential Optimisat
Slide 49: Copper Sector Vision
Copper Sector Vision To become 1 million tonnes custom copper producer by 2030 Custom smelting & refining of Copper Fujairah State of the Art >2X increase in Copper India Ramp up cathode UAE & Greenfield expansion Profitability profitability (EBITDA volume to ~500ktpa Saudi KSA project in Saudi Arab
Slide 50: Konkola Copper Mines: brownfield expansion to +300ktpa by 2031
Konkola Copper Mines Low-cost brownfield expansion to achieve +300ktpa production by 2031 Project and Execution plan to achieve 300 ktpa KDMP ramp up to Cost & Drive cost and margin Mine Portfolio Strong R&R with high Capacity achieve mined profitability EBITDA potential with long life copper grade.
Slide 51: Key takeaways
Key takeaways Aspiring to become a premier Heading towards Unlocking further potential with 1 MTPA Copper producer 1 MTPA Zinc production assets like KCM in Zambia, providing this additional avenue for by 2030 milestone by 2030 at <US$1,200/t growth 51 Sensitivity: Internal (C3)
Slide 52: Oil & Gas: Fueling India's Growth
Oil & Gas Fueling India’s Growth Steve Moore Deputy Chief Executive Officer, Vedanta Oil and Gas 52 Sensitivity: Internal (C3)
Slide 53: Vision: Cairn Oil & Gas | Fuel for Change
Vision : Cairn Oil & Gas | Fuel for Change Assets, Acreage & R&R • Cairn has 62 blocks Contribute over • (5 PSC, 46 OALP, 10 DSF, 1 CBM) • >60,000 sq. km Acreage • R&R 1.2 bnoe 50% Key Enablers People of India’s Oil Technology & Gas Production Partners Safe & Sustainable Production 53 Sensitivity: I
Slide 54: Exploration Portfolio – Overview
Exploration Portfolio – Overview Rajasthan: North-East: Western Offshore, Eastern Offshore 1112 8 OALP blocks 12 OALP blocks 1540 North (HF-GV) Cambay: 12 OALP blocks Rajasthan North-East GK-GS Cambay RJ PSC, 404 MB Mahanadi Ravva Unconventional, Western Offshore: PSC, 304 7 OALP blocks KG Eastern O
Slide 55: Strong Reserve and Resource Base
Strong Reserve and Resource Base Convert PR → Resources → Reserves (Mmboe) Production Potential (Kboepd Gross) 300 Long Term Mid Term Short Term 2P Developed Reserves 2C Discovered Resources 250 Exploration Exploration (1) 5,000 200 150 668 2C Resources New Exploration/ > Appraisal Near Execution 51
Slide 56: Key takeaways
Key takeaways Rich set of acreage Strong Reserve & Robust exploration comprising of Onshore & Offshore Resource portfolio of 1.2 portfolio with over 5 billion fields across India million barrels to drive short barrels of prospective and mid term volume growth - infill resource portfolio wells, EOR a
Slide 57: Power: Powering a Brighter Future
Power Powering a Brighter Future Vibhav Agarwal Chief Executive Officer, Vedanta Power 57 Sensitivity: Internal (C3)
Slide 58: Thermal Opportunity – Explosive growth ahead
Thermal Opportunity – Explosive growth ahead Globally - RE installed capacity vs Thermal Opportunity – Thermal Power remains dominant 1 RE % share in power generation mix2 Need for Capacity Addition1 Non-RE RE Installed RE Capacity (GW) Capacity Addition Peak Power - Demand 1600 50% required by FY32
Slide 59: Asset Portfolio
Asset Portfolio Operating Capacity : 2580 MW MEL : 1000 MW Athena : 1200 MW 4780 MW FY24 FY25 FY26 FY27 4780 MW running at full efficiency Talwandi Sabo Power Jharsuguda Meenakshi Energy Athena Operational Growth Limited 1980 MW IPP 600 MW Limited 1000 MW 1200 MW 4th largest Punjab Odisha Andhra Pra
Slide 60: Accelerating growth in EBITDA, Revenue (FY24-FY27)
Accelerating growth in EBITDA, Revenue (FY24-FY27) FY24 FY27 Share of Revenue FY 24 Share of Revenue FY 27 TSPL JSG TSPL JSG ATHENA MEENAKSHI All figures are 4541 in ₹ Cr 6099* 30% Revenue ₹ 6910 crore 2.2X ₹ 15000 88% 1222 crore 8% 6148* 40% 3404 22% EBITDA ₹ 1050 crore 3.4X ₹ 3500 811 crore 12% *R
Slide 61: Key takeaways
Key takeaways Already a significant Power Business to Growth roadmap of Capacity expansion RE switchover of player in the Power be a major Power Business beyond ~5 GW metal business to Sector with ~5 GW contributors to includes foray into driven through enable captive capacity bottom line of Nuclear
Slide 62: People practices: Building a future-ready organization
People practices Building a future-ready organization Madhu Srivastava Chief Human Resources Officer 62 Sensitivity: Internal (C3)
Slide 63: People: Our Biggest Asset
People: Our Biggest Asset 13,000 75,000+ 21% 33 28% 50+ Executives Total Gender Average Leadership Locations Workforce Diversity Age Diversity Next set of 3000 leaders are Company with diverse Professionally driven company - home grown through our demographics – Nationality, Each business having ful
Slide 64: Talent Building Initiatives
Talent Building Initiatives Demography Emerging V-Lead Women Leaders Women Leadership High Potential talent 5000+ Development 200 75 Identification Engineers V-Desire Potential Unlock Employee 120 60+ leadership assessment, Centric Initiative coaching and executive 100 education Expats/ Advisor Tale
Slide 65: Industry leading Policies & Programs
Industry leading Policies & Programs • Market Benchmarked, best in class reward programs including fixed and variable remuneration Wealth (Bonus, Stock Options, Incentive Programs) Creation • Wide coverage through ESOPs Stock options, 1/3rd executives covered Parenthood Policy Benefits for Transgend
Slide 66: Appreciation & Awards
Appreciation & Awards 5 Group Companies (Cairn, VLL, BALCO, Sesa, Copper and Runaya) identified as “Companies with Great Managers 2023” – 5th consecutive year Managerial Awards Brandon Hall Group Gold award for excellence in the Talent Management Vedanta as a Group Certified as ‘Kincentric Best Empl
Slide 67: Vedanta Promising a Bold tomorrow
Conclusion Vedanta Promising a Bold tomorrow FY25e EBITDA: Cost Leadership: Further Consistent explorations and Doubling Power (IPP) 10% CoP reduction target in development leads to O&G 6 $bn, 35% Growth Capacity to ~5 GW volume augmentation Aluminum & Zinc India 3 MTPA Aluminum + Zinc International
Slide 68: Vedanta Resources to further deleverage by $3 bn over next 3 years
Key Highlight Vedanta Resources to further deleverage by $3 bn over next 3 years and bring its standalone debt below $3 bn. 68 Sensitivity: Internal (C3)
Slide 69: Vedanta – Investment Proposition
Vedanta – Investment Proposition Diversified Low-Cost Robust Financial Looking Ahead – Strategic approach to Sustainable Model Delivery capital allocation Superior Quality of Assets: Growth Trajectory 40+ ongoing growth projects with a plan to spend 15+ $50+ bn 25+ 15%+ $6bn in capex Commodities rep
Slide 70: Thank You
Growth Deleveraging Thank You Investment Demerger Proposition 070 9 Sensitivity: Internal (C3)