Vedanta Limited · NSE:VEDL
Vedanta — Investor Presentation (November 2017)
30 slides from Vedanta's investor presentation, November 2017
Slide 1: Vedanta Limited Investor Presentation November 2017
Vedanta Limited Investor Presentation November 2017 Elements for a Sustainable Future VEDANTA LIMITED – OIL & GAS | ZINC | POWER | ALUMINIUM | IRON ORE | COPPER VEDANTA LIMITED – Investor Presentation, Nov 2017
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements
Slide 3: Vedanta - A world-class natural resources powerhouse
Vedanta - A world-class natural resources powerhouse Overview Group Structure Vedanta Resources Plc • World’s 6th largest diversified 50.1% resources company and the largest in India 79.4% • Only global player with significant Konkola Copper Mines (KCM) Vedanta Ltd2 operations, expertise and majorit
Slide 4: A diversified resources company with attractive commodity mix
A diversified resources company with an attractive commodity mix, market leading growth and strong balance sheet Commodity diversification1 Attractive commodity mix Global demand CAGR 2017-30E Aluminium 2.8% 87% of O&G India 2.2% Vedanta’s Lead 2.2% Q2 FY18 EBITDA Zinc 2.0% Peers2 Nickel 1.6% Copper
Slide 5: Vedanta Businesses
Vedanta Businesses Zinc – India • India’s only miner of Zinc-Lead, and the world’s second largest integrated Zinc- Lead producer • Assets in South Africa and Namibia Zinc Intl. • Gamsberg in South Africa is one of the world’s largest undeveloped zinc deposits • India’s largest private sector oil pro
Slide 6: Capital Allocation: Focus on Shareholder Returns
Capital Allocation: Focus on Shareholder Returns World class assets and operational excellence to deliver strong and sustainable cash flows Production growth and asset optimization Strong Shareholder Returns Maintain Strong Balance Sheet Grow Existing Businesses • Announced dividend policy at • Cont
Slide 7: Strategic Framework
Strategic Framework Near Term Priority Medium Term Priority (FY18-20) (FY20+) Deliver Selectively pursue growth Ramp up to Design Capacity superior options shareholders Well-invested assets ramping High quality portfolio with up by FY2020 to deliver attractive brownfield growth returns with indu
Slide 8: Strategic Framework: Ramp-up to Design Capacity
Strategic Framework: Ramp-up to Design Capacity Remaining Total expanded Near-term expansions capex, $mn1 capacity Zinc Expansion to 1.2mt mined Zn-Pb metal 1.2mt Zn-Pb 603 India Silver to 750t 750t Ag Zinc Gamsberg project (250kt) and Skorpion pit 270 400kt International extension Various p
Slide 9: Strategic Framework: Selectively Pursue Growth Options
Strategic Framework: Selectively Pursue Growth Options Future growth options Zinc Expansion to Zn-Pb to 1.5mtpa India Silver production of 1,000t + Zinc Gamsberg Phase 2 & 3 (350kt incremental) Intl. Swartberg (75kt) 300-500 kboepd Oil & Gas Accompanied by continued exploration Aluminium
Slide 10: Cairn Oil & Gas: $1bn Capex to Deliver 300 kboepd
Cairn Oil & Gas : $1bn Capex Initiated to Deliver 300 kboepd at $5 per boe Enhanced Execution Strategy Gross production Net capex (kboepd) ($mn) Fundamental shift to ‘Integrated Project Development’ with in-built risk and reward mechanism to drive 275-300 300 300 incremental value from project sch
Slide 11: Copper India: 400kt Expansion
Copper India: 400kt Expansion Business Case Project Details Robust future for copper in India: Incremental project cost of c.$576mn, excluding cost of Per capita copper consumption of 0.5kg in India vs c.$141mn already invested 1.9kg globally Project on hold since 2010 pending statutory Gr
Slide 12: Sustainable Development – Focused on Building a Zero Harm Culture
Sustainable Development – Focused on Building a Zero Harm Culture Safety LTIFR – (per million man-hours worked) Regrettably 2 fatalities from 2 incidents during H1 FY18 0.89 High Potential (HIPO) Incident reduced by 46% in H1 Reinvigorated Leadership Action Program initiated towards 0.52 0.4
Slide 13: Strategic Priorities
Strategic Priorities Production Growth and Asset optimisation Optimise Capital Allocation and Maintain Strong Balance Sheet Protect and preserve our License to Operate Identify next generation of Resources VEDANTA LIMITED – Investor Presentation, Nov 2017 13
Slide 14: Business Review
Business Review Operational Excellence VEDANTA LIMITED – Investor Presentation, Nov 2017
Slide 15: Q2 FY2018 Results Highlights
Q2 FY2018 Results Highlights Operations: Record volumes with ramp-up on track EBITDA mix High zinc-lead and record silver volume at Zinc India Q2 FY2018 7% Highest quarterly production at BMM in last 4 years; 6% Gamsberg on track for mid CY18 production 8% Aluminium smelters continue ramp up,
Slide 16: Zinc Market Overview
Zinc Market Overview Supply Shortage Leading to Multi-year low spot TCs Declining stocks at LME & SHFE warehouses $/tonne mn tonne $/tonne 1.40 4,000 400 1.20 3,500 350 300 3,000 Spot TCs dipped 1.00 250 to $25/mt in 2,500 0.80 Oct’17 200 2,000 0.60 150 1,500 100 0.40 1,000 50 0.20 500 0 0.00 0 Oct
Slide 17: Zinc India
Zinc India Q2 FY2018 Results MIC at 219kt; refined zinc-lead production at 230kt Refined silver production at a record high of 140 tonnes CoP at $984/t; impacted by high input commodity prices Projects – key highlights Capacity expansion to 1.2mtpa MIC by FY2020 on track RAM U/G mine main
Slide 18: Zinc International
Zinc International Q2 FY2018 Results Significant progress at 250kt Gamsberg project Total production at 42kt: On target for first production by mid CY2018, with ramp-up to its Skorpion at 23kt: highest in last 3 quarters full mining capacity in the next 9-12 months following full mobilization
Slide 19: Zinc International Outlook
Zinc International Outlook FY18 FY19 FY20 Indicative Prod (kt) 150-160 240-260 410-430 Consolidated Outlook COP ($/t) <1,500 <1,200 <1,100 Project on track and progressing as per plan Gamsberg First production by mid CY2018 and on budget for capex target of $400mn 250kt Production@ FY19 producti
Slide 20: Cairn Oil & Gas
Cairn Oil & Gas Q2 FY 2018 Results MPT: Facility modifications Gross average production at 180,955 boepd Rajasthan production at 153,238 boepd Offshore production at 27,718 boepd Commenced 15 wells infill drilling campaign at Mangala with first well brought in Sept 2017; 4 wells online curre
Slide 21: Aluminium
Aluminium Q2 FY2018 Results Aluminium Costs and Margins (in $/t, for Q2 FY2018) Record Aluminium production of 401kt and Alumina 269kt Q1 ‘18 1909 98 62 2,070 (745) (607) (373) (72) $271/t (172) (339) (240) Aluminum CoP at $1,857/t, higher q-o-q due to high 2,012 78 63 2,153 (718) power cost on
Slide 22: Power
Power Talwandi Sabo Power Limited (TSPL) Other IPPs 1,980 MW Thermal Power Plant (3 units of 660 BALCO 600MW: Q2 PLF of 27% on account of MW each) temporary coal shortage Plant availability of 87% in the quarter; Targeting Jharsuguda 600MW: Low PLF of 7%. Impacted due to the shut down of the
Slide 23: Iron Ore and Copper India
Iron Ore and Copper India Q2 FY2018 Results Iron Ore Volumes: Sales of 0.7mt and production of 1.2mt (Goa and Karnataka) Lower production and sales on a q-o-q basis due to monsoons Karnataka to achieve full allocation production in Q3 FY2018 production allocation: 5.5mtpa at Goa & 2.3mtpa at
Slide 24: Appendix
vedanta transforming elements Appendix
Slide 25: Guidance
Guidance Segment FY18e Comments Earlier guidance on CoP for FY2018 was Zinc-Lead Integrated: 950kt marginally higher than FY17 CoP. Zinc India Silver volume: +500 tonnes Revised guidance due to input CoP ($/t): $900-950/t commodity inflation Zinc-Lead volume: c.160kt Zinc International Gamsberg expe
Slide 26: Optimising Capex to drive Cash Flow Generation
Optimising Capex to drive Cash Flow Generation Prioritised capital to high-return, low-risk projects to Growth Capex Profile and Free Cash Flow pre capex - $bn maximize cash flows 2.8 Oil & Gas Zinc H1 Capex spent $0.3bn, H2 FY 2017 expected at 2.4 Al & Power $0.8bn Copper Optionality Capex Re
Slide 27: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. crore) 30 Sept 2017 30 June 2017 30 Sept 2016 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 38,232 12,375 25,857 42,711 16,698 26,013 41,285 2,114 39,171 Standalone Cairn India1 NA NA NA NA NA NA 0 24,339 (24,339) Ca
Slide 28: Strong Credit Profile and Balance Sheet at VEDL
Strong Credit Profile and Balance Sheet at VEDL Maturity Profile of Term Debt (Rs.36,927 Crore) (as of 30th Sept 2017) 8.4 Subsidiaries Standalone 6.8 6.4 3.2 6.5 2.2 2.3 4.5 Rs. ‘000 Crore 4.3 3.8 0.7 2.2 5.2 4.6 4.1 3.6 2.3 2.7 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 & Later Term debt of Rs. 36,
Slide 29: Segment Summary – Power
Segment Summary – Power Power Generation Capacity – c. 9GW IPP: 3.6GW CPP:5.1GW • 600MW Jharsuguda (of • 1,215MW Jharsuguda 2400MW plant) • 3*600MW Jharsuguda (of • 1,980MW TSPL 2400MW plant) • 2*300MW BALCO (of 41% • 540MW BALCO 1200MW plant) • 270MW BALCO 59% • 274MW HZL Wind Power • 2*300MW BALCO
Slide 30: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 50.1% Sesa Iron Ore Sterlite Copper (Tuticorin) Konkola Copper Vedanta Ltd Power (600 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 51% 100