Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q1 FY2016 Earnings Presentation
31 slides from Tata Steel's earnings presentation, Aug 11, 2015
Slide 1: Results Presentation
Results Presentation Financial quarter ended 30th June 2015 11th August 2015
Slide 2: Disclaimer
Disclaimer Statements in this presentation describing the Company‟s performance may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those directly or indirectly expressed, inferred or implied. Important facto
Slide 3: Tata Steel Group – Health and Safety (H&S)
Tata Steel Group – Health and Safety (H&S) 1.2 0.95 0.9 0.78 0.68 0.60 0.56 0.6 0.44 0.40 0.3 0 FY10 FY11 FY12 FY13 FY14 FY15 Q1FY16 • Committed to ensuring all Tata Steel sites are sustainably fatality free on our way to „being the benchmark in H&S in our industry‟ • Competence development programm
Slide 4: Continued focus on engaging with communities and improving quality of life
Tata Steel’s continued focus on engaging with communities and improving quality of life Primary health care services delivery to nearly 1,35,000 Q1 FY16 Spend Rs Crs people through static and mobile clinics Health 2 ~49,000 students in Jharkhand being catered through mid- Education 8 day meal pr
Slide 5: Agenda
Agenda SN Particulars 1 Overview 2 India & SE Asia performance 3 Europe performance 4 Key developments
Slide 6: Global headwinds continue to impact the steel industry
Global headwinds continue to impact the steel industry Iron ore fines and hard coking coal (US$/tonne) Manufacturing PMIs across geographies 360 65 320 IODEX 62% Fe, CFR China 60 280 Premium hard coking coal FOB Australia 240 55 Expansion 200 50 160 45 Contraction 120 Eurozone India 40 80 UK Singapo
Slide 7: With elevated exports depressing steel prices
With elevated exports depressing steel prices China’s steel exports (MnT) India – Steep rise in Net imports yoy (in Kt) 120 3,000 2,770 101 100 2,500 26 80 2,000 1,763 1,646 58 66 60 28 1,500 18 1,104 1,124 14 40 15 1,000 15 24 658 20 14 16 500 23 27 15 16 - - FY13 FY14 FY15 Q1 FY16 Q1 FY15 Q1 FY16
Slide 8: Key highlights – Quarter ended 30th June’15
Key highlights – Quarter ended 30th June’15 1 Higher deliveries yoy across key geographies despite weak demand environment 2 Net steel realisations for Indian operations declined less than the market 3 European performance impacted by relative strengthening of GBP against Euro 4 Monetisation of non-
Slide 9: Financial Performance – Quarter Ended 30th June’15
Financial Performance – Quarter Ended 30th June’15 Figures in Rs. Crore unless specified Q1 FY16 Q4 FY15 Q1 FY15 Figures in Rs. Crore unless specified India Europe SE Asia Others Group Group Group & Elimn Deliveries (Mn T) 2.14 3.44 0.69 0.05 6.33 7.06 6.46 Turnover 9,094 17,855 2,262 1,090 30,300 3
Slide 10: Debt movement in the quarter ended 30th June’15
Debt movement in the quarter ended 30th June’15 Rs. Crores 82,380 -9,116 80,701 -294 1,973 73,265 -149 73,116 Gross Debt Mar Loans Movt Forex impact Gross Debt Jun Cash & Cash Eq Net Debt Jun 15 Derivatives Underlying Net 15 15 Debt Jun 15 Capex incurred of Rs.3,243 crores in Q1 FY16 without incre
Slide 11: Group EBITDA Bridge Q1 FY2016 vs. Q1 FY2015
Group EBITDA Bridge Q1 FY2016 vs. Q1 FY2015 Rs.Crores 4,286 -3,914 697 3,035 1,452 -207 -9 247 -353 2,053 1,835 -733 -484 Non-Controllable: (Rs.2,451 crores) Controllable: Rs.1,200 crores Q1 FY'15 Revenue -Price Regulatory Material -Price Actuarial Others Adjusted Revenue - Material - Manufacturing
Slide 12: Agenda
Agenda SN Particulars 1 Overview 2 India & SE Asia performance 3 Europe performance 4 Key developments
Slide 13: India and SE Asia – Modest recovery impacted by elevated imports
India and SE Asia – Modest recovery impacted by elevated imports India GDP growth Correction in steel prices continues with elevated 9.0% imports 8.0% 8.4% 7.5% 7.0% Local demand during the quarter continues to be 6.7% 6.7% tepid 6.0% 6.6% 5.0% 4.0% Government intervention on imports – key to
Slide 14: Resilience in the face of market pressure
Resilience in the face of market pressure Steel sales (in kt) FAMD sales (in kt) 2,103 2,143 51 327 336 31 760 768 19 21 742 756 13 10 9 7 274 283 Q1 FY15 Q1 FY16 Q1 FY15 Q1 FY 16 Automotive and Special Products Branded Products, Retail & Solutions Ferro Chrome Ferro Manganese Silico Manganese Pyrox
Slide 15: KPO Phase–1: On-track to commission India’s largest greenfield project
KPO Phase–1: On-track to commission India’s largest greenfield project Aerial shot of Kalinganagar Plant, Odisha Front view of Blast Furnace Twin Wagon Tippler Raw Material Handling System Conveyer Belt Rs.21,500 crores invested in the project as of June 30, 2015 15
Slide 16: SE Asia – Business update
SE Asia – Business update NatSteel Holdings Deliveries increased ex-China despite higher imports across the region Export driven strategy with focus on select niche markets is yielding results Launch of new product (carpet reinforcement ) for faster execution in construction projects Tata Stee
Slide 17: Business Outlook
Business Outlook Recovery in automotive steel demand – driven by higher sales of M&HCV, new model launches and upgradation of norms Modest recovery in construction and infrastructure sector but credit/ liquidity issues of buyers remains a concern. Rural demand remains subdued. Continue to expand ret
Slide 18: Agenda
Agenda SN Particulars 1 Overview 2 India & SE Asia performance 3 Europe performance 4 Key developments
Slide 19: Modest growth offset by higher imports
Modest growth offset by higher imports GDP – Eurozone and UK (y/y%) Exchange rates 2.2 4% Euro per GBP 2.0 US$ per GBP 2% 1.8 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 1.6 -2% Eurozone 1.4 -4% UK 1.2 -6% 1.0 08 09 10 11 12 13 14 15 16 EU sector PMIs EU apparent steel demand (annualised, Mt) 70
Slide 20: Market and operational improvements
Market and operational improvements Focused on developing sustainable performance Further progress in market differentiation and operational performance Next stage in refocus on high-value markets such as aerospace at Speciality and Bar – now world‟s 3rd largest supplier of aerospace steels Cust
Slide 21: Longs business update
Longs business update On August 2, the UK-based long products business together with its associated distribution activities started operating as a stand-alone wholly-owned subsidiary of Tata Steel Combines strength of Tata Steel with a flexible and more focused operational approach. Also enables
Slide 22: EBITDA bridge Q1 FY2016 vs. Q1 FY2015
EBITDA bridge Q1 FY2016 vs. Q1 FY2015 £ million 150 3 months to Selling Jun 2014 Result Cost Production 100 Volume Manufacturing Central Changes £103m £(15)m & Other 3 months to £(188)m £4m £(13)m Jun 2015 £174m 50 £65m 0 (50) (100) EBITDA impacted by currency changes and higher imports UK sales
Slide 23: Business Outlook
Business Outlook Expectation that eurozone economy will grow by +1.5% and UK economy by +2.6% in 2015; significant uncertainty persists Steel demand in the EU is expected to grow at a modest pace in 2015 in line with activity in the steel-using sectors. It is anticipated most of the increase will be
Slide 24: Agenda
Agenda SN Particulars 1 Overview 2 India & SE Asia performance 3 Europe performance 4 Key developments
Slide 25: Mining update – India
Mining update – India All our iron ore, chromite and manganese mines (except Malda) in Odisha are currently operational. Supplementary Lease Deeds have been executed for Joda East, Khondbond, Joda West, Manmora, Bamebari and Tiringpahar extending the lease period to March 31, 2030 and for Gomard
Slide 26: Direct Shipping Ore, Canada – Project update
Direct Shipping Ore, Canada – Project update Despatches re-commenced since June 2015 and 170 Kt has been dispatched in Q1 FY16 Several cost reduction initiatives undertaken in logistics and operations in current price regime Significant progress in the construction of the wet processing plant
Slide 27: Pension update
Pension update Tata Steel had made a proposal to UK unions in late 2014 on reducing certain benefits (and consequently liabilities) in the British Steel Pension Scheme. After a stalemate was reached in discussions, the unions had balloted their members for industrial action and subsequently announ
Slide 28: Appendix
a TATA TATA STEEL Appendix
Slide 29: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations All figures in Rs. Crore Particulars Q1 FY16 Q4 FY15 Key Reasons Net sales 9,006 10,523 Lower volumes due to seasonality coupled with lower realizations Other operating income 88 112 Previous quarter includes one-time sales tax incentive Increase in finished goods
Slide 30: Consolidated Results – QoQ Variations
Consolidated Results – QoQ Variations All figures in Rs. Crore Particulars Q1 FY16 Q4 FY15 Key Reasons Lower deliveries in India, Europe and Thailand coupled with lower Net sales 29,900 33,337 realisations on India and Singapore Other operating income 400 329 Increase largely in Europe Changes in in
Slide 31: Contact Information
Contact Information For investor enquiries contact: For media enquiries contact: Devang Shah Kulvin Suri Tel: +91 22 6665 0530 Tel: +91 657 664 5512 / Email: devang.shah@tatasteel.com +91 92310 52397 Email:kulvinsuri@tatasteel.com Ramvikas Nag Bob Jones Tel: +91 22 6665 0557 Tel: +44 207 717 4532 Em