Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q1 FY2019 Earnings Presentation
30 slides from Tata Steel's earnings presentation, Aug 13, 2018
Slide 1: Results Presentation
Results Presentation Financial quarter ended June 30, 2018 August 13, 2018 1
Slide 2: Safe harbor statement
Safe harbor statement 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. Impo
Slide 3: Committed towards excellence in Health and Safety
Committed towards excellence in Health and Safety Reduced by 86% 3.06 2.35 2.10 1.31 0.95 0.78 0.68 0.60 0.56 0.44 0.39 0.58 0.46 0.42 FY08 1QFY19 FY06 FY07 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 LTIFR* of Tata Steel group reduced to 0.42 *LTIFR is Lost time injury frequency Rate per mill
Slide 4: Engaging with neighbouring communities and improving their quality of life
Engaging with neighbouring communities and improving their quality of life CSR Spend India (Rs. crores) 232 Education: Health & Sanitation: 204 194 171 ✓ Delivered 2 more Model Schools under 30 ✓ Recorded 80,000 footfall in Static 53 Model School Construction Project in and mobile clinics, and healt
Slide 5: Key highlights
Key highlights Consolidated Deliveries of Consolidated Consolidated revenues of 6.55 million EBITDA of EBITDA/t of Rs.37,833 tonnes Rs.6,559 crores Rs.10,011/t crores Binding India growth Kalinganagar Acquisition of agreement with higher than Phase II Bhushan Steel thyssenkrupp market underway compl
Slide 6: Agenda
Agenda Business Environment Operational Performance Financial Performance Appendix 6
Slide 7: Global economy remained strong; Chinese steel industry shows strong demand growth
Global economy remained strong; Chinese steel industry shows strong demand growth ▪ Economic growth remained strong, however, increasing tariff actions, elevated oil prices and weakening currencies are a matter of concern ▪ World ex China steel production grew by ~13 mn tons in 1HCY18 vs. demand gro
Slide 8: Global steel spreads remained resilient despite the uncertainty amidst tariff actions
Global steel spreads remained resilient despite the uncertainty amidst tariff actions ▪ Chinese exports increased in Jun’18 quarter with higher steel production and depreciating yuan; inventories have seen declined to Jan’18 levels and exports have moderated in July’ 18 ▪ Steel prices softened due t
Slide 9: Indian steel prices remained strong during 1QFY19 with robust steel demand
Indian steel prices remained strong during 1QFY19 with robust steel demand Steel production, demand and imports (mn tons) ▪ Economic activities accelerated in 1QFY19 Crude Steel Production 30 Apparent Finished Steel Usage 2.6 2.8 Imports 2.6 ▪ Steel demand grew by 9.2%YoY driven by 25 26.7 26.3 25.9
Slide 10: Europe apparent steel demand growth improved in Jun'18 quarter
Europe apparent steel demand growth improved in Jun’18 quarter ▪ European Union economy grew 2.2%YoY in Jun’18 quarter ▪ EU apparent steel demand is estimated to have grown by 3.8%YoY in Jun’18 quarter, however, the market share of imports appears to have jumped to 24% from 16% in Mar’18 quarter ▪ U
Slide 11: SE Asia Rebar spreads rose amidst decline in scrap prices
SE Asia Rebar spreads rose amidst decline in scrap prices ▪ Long steel demand remained weak in Singapore and Thailand; construction sector remained sluggish ▪ South East Asia rebar prices were stable; spreads improved with decline in scrap prices Construction Growth (% Change, YoY) South East Asia r
Slide 12: Agenda
Agenda Business Environment Operational Performance Financial Performance Appendix 12
Slide 13: Tata Steel India – continues to deliver market beating growth
Tata Steel India – continues to deliver “market beating” growth Crude Steel Production Volume (mn tons) ▪ Domestic sales grew by 14%YoY against steel market growth of 9%YoY 3.18 3.07 2.94 Automotive Branded & Retail 1Q 4Q 1Q Delivery volumes break-up (mn tons) 0.97 FY19 FY18 FY18 0.95 0.87 0.57 0.57
Slide 14: Tata Steel India – setting standards at multiple levels
Tata Steel India – setting standards at multiple levels Market leading branded portfolio Unparalleled Pan India reach Branded products sales contributes Touches 2.5 million customers every 47% of total sales; continues to grow year across India Market leader in Auto Steel Most enriched product mix F
Slide 15: Tata Steel India – continued focus on operational efficiencies and minimizing environmental impact
Tata Steel India – continued focus on operational efficiencies and minimizing environmental impact 1.00 0.88 Specific dust emission (kg/tcs) 0.57 0.50 0.44 0.41 0.41 59% reduction since FY13 FY 13 FY 14 FY 15 FY 16 FY17 FY18 1QFY19 5.92 5.58 5.54 4.39 3.83 3.68 3.59 Specific water consumption (m3/tc
Slide 16: Tata Steel Europe – improving offering to customers
Tata Steel Europe – improving offering to customers ▪ Deliveries in were 2% higher YoY, but 4% lower than the seasonally strong March quarter ▪ Launched three new products during the quarter, included a new automotive offering and a defect- free cold forming steel for applications like cranes and ot
Slide 17: Tata Steel Europe – continued focus on operational efficiencies and minimizing environmental impact
Tata Steel Europe – continued focus on operational efficiencies and minimizing environmental impact 2.07 1.97 1.95 1.96 CO2 emission intensity (tCO2/tcs) 1.92 1.94 1.91 7.7% reduction since FY13 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 1QFY19 5.40 5.03 4.99 4.93 4.96 4.89 4.78 Specific energy intensity*
Slide 18: Tata Steel SEA – volumes maintained despite weaker markets
Tata Steel SEA – volumes maintained despite weaker markets ▪ Production was lower on QoQ basis due to planned shutdowns at Tata Steel Thailand ▪ Deliveries were marginally lower on QoQ basis with continued weakness in long steel demand; partially offset by improved deliveries at Nat Steel Singapore
Slide 19: Other key developments
Other key developments Kalinganagar ✓ Work on the project has already started including enabling and area grading plant – 5MTPA ✓ Cold roll mill complex prioritized to improve product mix expansion ✓ Expected timelines: 48 months from zero date ✓ Successfully completed acquisition of Bhushan Steel L
Slide 20: Business outlook
Business outlook India: Europe: demand is SEA: demand is ✓ Steel consuming sectors growth expected to expected to grow by expected to remain remain strong; demand from automotive sector 2.1% in 2018 driven sluggish in 2018. Steel expected to remain healthy. by growth of the demand ✓ India may remain
Slide 21: Agenda
Agenda Business Environment Operational Performance Financial Performance Appendix 21
Slide 22: Financial Performance
Financial Performance Consolidated India Rs Crores 1QFY19 4QFY18 1QFY18 1QFY19 4QFY18 1QFY18 Total revenue from operations 37,833 36,132 30,973 16,405 16,281 14,422 Raw material cost1 15,520 13,210 13,037 4,947 4,211 4,482 Change in inventories (1,520) 467 (1,967) (655) 102 (905) EBITDA 6,559 6,579
Slide 23: Financial Performance contd..
Financial Performance contd.. Bhushan Europe 2 SEA Others & Eliminations 3 Rs Crores Steel 1QFY19 4QFY18 1QFY18 1QFY19 1QFY19 4QFY18 1QFY18 1QFY19 4QFY18 1QFY18 Turnover 16,429 16,208 14,079 2,108 2,604 2,631 1,995 286 1,013 477 1 Raw material cost 7,585 7,089 7,044 1,116 1,940 1,818 1,380 (69) 93 1
Slide 24: Consolidated Debt movement
Consolidated Debt movement ₹ Crores 2,926 116,615 984 1,134 16,413 3,011 103,529 13,086 92,147 Gross Debt for New Re-classification FX Working Gross Cash, Bank Net Debt BSL* loan of an operating Impact capital & Debt & Current Debt Mar'18 acquisition lease to financial Others Jun'18 Investments Jun'
Slide 25: Group EBITDA movement – 1QFY19 Vs. 4QFY18
Group EBITDA movement – 1QFY19 Vs. 4QFY18 ₹ Crores 1,432 100 153 6,579 6,659 1199 4QFY18 Selling Result Cost Changes Volume/Mix Others 1QFY19 ▪ Better realisations across the geographies improved selling result ▪ Increase in cost mainly in Raw material cost ▪ Volume/mix impact is lower deliveries in
Slide 26: Tata Steel India EBITDA movement – 1QFY19 Vs. 4QFY18
Tata Steel India EBITDA movement – 1QFY19 Vs. 4QFY18 ₹ Crores 925 160 74 5,118 4,823 396 4QFY18 Selling result Cost Volume/Mix Others 1QFY19 ▪ Selling results increased mainly due to better steel realisations ▪ Increase in cost mainly due to higher raw material costs and external purchases ▪ Adverse
Slide 27: Tata Steel Europe EBITDA movement – 1QFY19 Vs. 4QFY18
Tata Steel Europe EBITDA movement – 1QFY19 Vs. 4QFY18 £27mn £1mn £183mn £46mn £7mn £129mn £24mn 4QFY18 Selling Cost Production Manufacturing Central 1QFY19 Result Changes Volume & Other ▪ Improved selling result improved with favourable market conditions and selling price increases ▪ Cost Changes ha
Slide 28: Agenda
Agenda Business Environment Operational Performance Financial Performance Appendix 28
Slide 29: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations Rs Crores 1QFY19 4QFY18 Key Reasons Income from operations 16,154 15,903 Increase in realisation partly offset by lower volumes Other operating income 251 378 Lower EPCG credit in 1Q Raw materials consumed 4,576 3,998 Higher consumption due to higher production an
Slide 30: Consolidated Results – QoQ Variations
Consolidated Results– QoQ Variations Rs Crores 1QFY19 4QFY18 Key Reasons Income from operations 37,434 35,701 Better realisations across the geographies and consolidation of Bhushan Steel; partly offset by lower deliveries Other operating income 399 432 Primarily in India Raw materials consumed 12,5