Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q1 FY2015 Earnings Presentation
29 slides from Tata Steel's earnings presentation, Aug 13, 2014
Slide 1: Results Presentation First Quarter Ended 30th June 2014
Results Presentation First Quarter Ended 30th June 2014 13th August 2014
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 could differ materially from those expressed or implied. Important factors that could make a difference
Slide 3: Tata Steel Group – Health and Safety
Tata Steel Group – Health and Safety Lost Time Injury Frequency (LTIF) 3.5 3.06 3 2.5 2.35 2.10 2 1.5 1.31 0.95 1 0.78 0.68 0.60 0.56 0.46 0.5 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Q1FY15 Reduction continues in lost time injuries with Q1FY15 performance 18% better than FY14 Ambition to
Slide 4: Tata Steel continues to focus on engaging with communities and improving quality of life
Tata Steel continues to focus on engaging with communities and improving quality of life India Europe Primary health care services delivered to Almost 7,000 children participated in the more than 85,000 people through static eighth annual Tata – Kids of Steel clinics as well as mobile medical va
Slide 5: Financial Performance
o 1S) < © S —_ (2) =— —_ 7) Ou i 1S) < © & LL <p TATA TATA STEEL
Slide 6: Key highlights
Key highlights Strong and growing presence in India Strong growth delivered with 11% YoY increase in Turnover and 13% YoY increase in EBITDA Investment in brands and pan-India marketing footprint yielding results in sluggish market Value-added downstream processing enriching product mix and im
Slide 7: Financial Highlights Quarter Ended 30th June’14
Financial Highlights Quarter Ended 30th June’14 Deliveries Turnover 6.46 36,427 Rs. Crore 6.08 Mn T 0.07 0.07 32,805 1,173 0.86 1.08 1,010 4,045 3,908 3.14 3.20 20,741 18,432 2.00 2.10 9,455 10,468 Q1 FY14 Q1 FY15 Q1 FY14 Q1 FY15 India Europe SE Asia Others India Europe SE Asia Others EBITDA Rs. Cro
Slide 8: Financial Performance Quarter Ended 30th June’14
Financial Performance Quarter Ended 30th June’14 Figures in Rs. Crore unless specified Q1 FY15 Q4 FY14 Q1 FY14 Figures in Rs. Crore unless specified India Europe SE Asia Others Group Group Group & Elimn Deliveries (Mn T) 2.10 3.20 1.08 0.08 6.46 7.62 6.08 Turnover 10,468 20,741 4,045 1,173 36,427 42
Slide 9: Debt Movement and Pension update
Debt Movement and Pension update 81,609 204 81,040 -773 68,540 67,728 -12,500 -812 Gross Debt Mar 14 Net borrowing Forex Impact Gross Debt Jun 14 Cash & Cash Eq* Net Debt Jun 14 Forward Covers Underlying Net Debt Jun 14 * Includes current investments Total liquidity of ~Rs.18,800 crores Capex in
Slide 10: Financing and deleveraging initiatives
Financing and deleveraging initiatives Successful dual tranche debut USD bond issue of US$ 1.5 billion USD 500 million 4.85% Unsecured Bonds due on January 31, 2020 USD 1 billion 5.95% Unsecured Bonds due on July 31, 2024 Unlocking value through divestments of non-core assets Divestment of Dha
Slide 11: Operating Performance: India and South East Asia
Operating Performance : India and South East Asia
Slide 12: India and SE Asia – business environment
India and SE Asia – business environment Robust growth expected across key end-use segments (FY12 – FY21 Projected CAGR (%)) Decisive general elections results and Infrastructure and Construction 8.5 9.5 signs of economic growth augurs well for Engineering and Fabrication 7.5 8.8 the domestic stee
Slide 13: India – Superior volume growth in target segments
India – Superior volume growth in target segments Steel sales (in kt) Strong volume growth in Auto segment 2,103 2,005 16% growth over the last year versus 288 273 flattish growth for automotive steel 759 744 and 12% growth in automotive industry 759 677 Hi-End sales (Skin panel, Hi-tensile, 281
Slide 14: South East Asia – Operational improvement ongoing
South East Asia – Operational improvement ongoing NatSteel Holdings Profitability affected by price pressure due to imports and sticky scrap prices Strategy to focus on export markets, value added products and cost reduction initiatives Tata Steel Thailand Steel plant yield improved further wi
Slide 15: KPO Phase–1 project update
KPO Phase–1 project update Blast Furnace Site View We have spent about Rs.17,600 crores on the project by the end of Q1 FY’15 of which about Rs.1,300 crores was spent in the last quarter We continue to engage with the local community to improve their livelihood, education, health and vocational
Slide 16: Business Outlook
Business Outlook India: Pro-investment policies announced by the new government are likely to trigger new growth cycle While the near term outlook remains sluggish due to seasonal factors; macro conditions are expected to improve in H2 South East Asia Construction outlook remains positive in t
Slide 17: Operating Performance: Europe
Operating Performance: Europe
Slide 18: Europe – business environment
Europe – business environment PMIs for main steel using sectors in EU 70 PMIs continue to indicate growth, although 60 Expansion rates are more modest for the eurozone 50 Contraction 40 Automotive The depreciation of the euro and strong 30 Machinery Construction economic performances seen elsewh
Slide 19: EBITDA bridge: Q1 FY’15 vs. Q1 FY’14
EBITDA bridge : Q1 FY’15 vs. Q1 FY’14 £ million 100 £9m £99m £37m £91m 50 £16m £(119)m £65m 0 (50) 3 months Selling Cost Changes Production Manufacturing Central 3 months to to Jun 2013 Result Volume & Other Jun 2014 3
Slide 20: Improved product mix and cost focus driving performance
Improved product mix and cost focus driving performance Performance improvements continue Similar operational performance to a year ago EBITDA continued to improve, despite lower y-o-y spreads Rigorous approach to costs led to further £30m savings in Q1 Enhanced customer offering Maintained
Slide 21: European business outlook
European business outlook Latest Eurofer forecast for steel demand in EU revised upwards to +3.7% for 2014, but growth expected to decelerate in the second half of calendar year Growth of European steel market forecast to be 2.9% in CY 2015 as it continues to stabilise Rising imports hampering
Slide 22: Key Developments
TATA Key Developments TATA STEEL
Slide 23: Raw Material Projects
Raw Material Projects Direct Shipping Ore Project, Canada Sales to re-commence from August onwards Wet Processing plant to be commissioned in Q4 FY’15 - will facilitate year-long operations Enhancement in iron reserves through exploration and JV for Howse deposit provides an option to increase
Slide 24: Regulatory update
Regulatory update All our iron ore and coal produced from our mines is used for captive consumption The company has been operating its mines with all statutory clearances, such as environmental clearance, forest clearances, consent to operate etc. and also submitted applications for the renewal
Slide 25: Thank You
qe TATA Thank You TATA STEEL 25
Slide 26: Appendix
Appendix TATA TATA STEEL
Slide 27: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations All figures in Rs. Crore Particulars Q1 FY15 Q4 FY14 Key Reasons Seasonally lower volumes partly offset by higher realisation and better Net sales 10,378 12,042 product mix from Steel division Other operating income 91 149 Last quarter includes one-off income Chan
Slide 28: Consolidated Results – QoQ Variations
Consolidated Results – QoQ Variations All figures in Rs. Crore Particulars Q1 FY15 Q4 FY14 Key Reasons Declined in line with lower volumes at India and Europe partially offset Net sales 36,143 42,018 by higher realisation Other operating income 284 410 Decline mainly in India and Europe Changes in i
Slide 29: Contact Information
Contact Information For investor enquiries contact: For media enquiries contact: Samita Shah Kulvin Suri Tel: +91 22 6665 7307 Tel: +91 657 664 5512 / Email: samita.shah@tatasteel.com +91 92310 52397 Email:kulvinsuri@tatasteel.com Subhra Kanti Das Bob Jones Tel: +91 22 6665 7382 Tel: +44 207 717 453