Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q1 FY2023 Earnings Presentation
33 slides from Tata Steel's earnings presentation, Jul 26, 2022
Slide 1: Submission of revised Investor Presentation to exchanges
July 26, 2022 The Secretary, Listing Department The Manager, Listing Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalal Street, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 001. Mumbai - 400 051. Mahara
Slide 2: Tata Steel Results Presentation, quarter ended June 30, 2022
TATA STEEL RESULTS PRESENTATION Financial quarter ended June 30, 2022 July 25, 2022 “In a free enterprise, the community is not just another stakeholder, but is, in fact, the very purpose of its existence” – J.N. Tata, Founder, Tata Group Jubilee Park, Jamshedpur, India
Slide 3: Safe harbour statement
Safe harbour 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. Imp
Slide 4: Overview
Overview 1 Performance update 2 1QFY23 Results 3
Slide 5: Tata Steel is focused on creating sustainable value
Tata Steel is focused on creating sustainable value Consolidate Leadership in position as global Sustainability cost leader Leadership in Robust financial India health Leadership position Become culturally in technology future ready and digital 4
Slide 6: Committed towards excellence in Safety & Health of our employees
Committed towards excellence in Safety & Health of our employees Safety remains a top priority Health is a key focus area LTIFR1 reduction by 2.10 69% in the last 15 years 1.31 Health check ups 0.95 0.780.68 0.690.720.730.65 0.600.56 0.58 0.440.39 0.460.47 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY1
Slide 7: Improving quality of life of our communities
Improving quality of life of our communities Key areas for CSR initiatives 5.5 lakh+ lives1 reached out ▪ Spent more than Rs.1,200 crores2 since FY19 on Signature Rural & Urban Dignity for the programmes at regional scale as well as programmes for Education Disabled Communities proximate to our oper
Slide 8: Focused on growth in India with future investments set to drive sector leading returns
Focused on growth in India with future investments set to drive sector leading returns Crude steel production (MTPA) Upstream › Pellet capacity to increase from 7 to 13 MTPA (TSK Ph II) › Iron ore mining to double from 30 to 60-65 MTPA 40 Flats › 2.2 MTPA CRM complex close to commissioning (TSK Ph I
Slide 9: Upstream Assets: Responsible and Smart mining driving cost leadership
Upstream Assets : Responsible and Smart mining driving cost leadership ▪ One of the largest miners in India, with annual despatch1 of ~39 100 tonne dumper at Noamundi mines, India mn tons of Iron ore, Coal, Manganese & Chrome ore ▪ Focus on Sustainability : Solar power, rainwater harvesting and Elec
Slide 10: Optimised portfolio: 2.2 MTPA CRM & 5 MTPA expansion to drive product mix
Optimised portfolio : 2.2 MTPA CRM & 5 MTPA expansion to drive product mix enrichment in flats TSK 5 MTPA expansion commissioning by end FY24 Market share in Hi-end Auto / Engg. to grow 1QFY23 FY23 FY24 ▪ Increase in high end Products for Automotive and Engineering Pellet CRM : CRM : 5 MTPA ▪ Focuss
Slide 11: Optimised portfolio: Ramp up in long products to drive high margin retail business
Optimised portfolio : Ramp up in long products to drive high margin retail business ▪ NINL1 acquistion completed on 4th July 2022 ▪ Capacity growth to 10 million tons ▪ Leverage strong portfolio of retail brands and extensive distribution network to drive scale and profitability ▪ Will benefit from
Slide 12: Expanding Downstream capacities and widening reach digitally
Expanding Downstream capacities and widening reach digitally Tubes Wires Aashiyana2 Tata Structura used at Sir Visvesvaraya Tata Steel LRPC1 strands used at Jio ‘Aashiyana’ registered ~77% YoY growth Railway Terminal, Karnataka World Centre, Maharashtra in gross revenue in first quarter Note : 1. LR
Slide 13: Pursuing sustainability through multiple pathways: Net zero by 2045
Pursuing sustainability through multiple pathways : Net zero by 2045 Long term Pursuing low Circular Economy Responsible supply Key focus areas decarbonization carbon integrated, part of chain & improving roadmap created technologies business model disclosures India Europe Climate Change Water Circu
Slide 14: Pioneering initiatives that enable diversity & inclusion and empower people
Pioneering initiatives that enable diversity & inclusion and empower people ▪ Strong leadership pipeline ~ 90% home grown leadership talent. Providing leadership talent for organic & inorganic growth across Tata group ▪ 100+ year old learning & development set up focused on creating future ready lea
Slide 15: Performance update 1QFY23
Overview 1 Performance update 2 1QFY23 Results 14
Slide 16: Moderation in steel prices across key regions and input cost dynamics weigh on spot spreads
Moderation in Steel prices across key regions and input cost dynamics weigh on spot spreads ▪ Global steel prices have moderated in the Global steel prices have moderated Coking coal continues to be volatile April – June period on slowdown in global HRC prices ($/t) Prices ($/t) growth and regulatio
Slide 17: India recovering but supply imbalance; EU moderated on inflation and supply chain disruptions
India recovering but supply imbalance; EU moderated on inflation and supply chain disruptions India Europe ▪ Apparent steel consumption declined by ~4% QoQ. ▪ Supply chain disruptions primarily due to Russia – Ukraine Exports volumes were down by ~40% due to levy of crisis and elevated inflation hav
Slide 18: India: Resilient business model drives ramp up of domestic deliveries
India1: Resilient business model drives ramp up of domestic deliveries Steel domestic deliveries (mn tons) Highest market share, Catering to ~87% of domestic market 4.36 Service centers for last 250+ distributors and 3.50 3.68 point processing 14,600+ dealers 50+ Product Application Strong market Co
Slide 19: India: New products developed in 1QFY23 across customer segments
India1: New products developed in 1QFY23 across customer segments LCV2 Wheel Rim Springs for automotive Fuel tank (HR SPFH540, application (Galvannealed with Mn / Si) Chrome free) for 2 wheelers Rim (Galvano) Wire Rope (5.5 – 8 .0 Wire mesh for Washing Machine mm) construction Panel application Tran
Slide 20: Tata Steel Europe: Transformation program and long term contracts yielding results
Tata Steel Europe : Transformation program and long term contracts yielding results Transformation programme Diversified product mix Automotive Engineering Governance & Structure Functional Vs Value Delivery Value Chain & Enablement EBITDA (in £ million) Packaging Construction 621 431 328 290 150 1Q
Slide 21: Tata Steel Consolidated: EBITDA margin improvement despite surge in coal costs
Tata Steel Consolidated1: EBITDA margin improvement despite surge in coal costs (All figures are in Rs. Crores unless stated otherwise) 1QFY23 4QFY22 1QFY22 Key drivers for QoQ change: Production (mn tons)2 7.74 7.62 7.88 ▪ Deliveries: were down 17% driven by lower volumes Deliveries (mn tons) 6.62
Slide 22: Consolidated EBITDA stood at Rs 14,348 crores
Consolidated EBITDA1 stood at Rs 14,348 crores Rs. Crores 1,368 ▪ Selling Result: Primarily due to better steel 2,495 realisations across geographies 1,963 15,891 707 14,348 ▪ Cost Changes: Primarily due to increase in coking coal prices resulting in rise in consumption cost across entities ▪ Volume
Slide 23: Volatility in commodity prices drives increase in working capital and debt
Volatility in commodity prices drives increase in working capital and debt 782 Rs. Crores 6,136 82,597 118 - 75,561 28,093 54,504 Gross Debt Addition of Loan FX Impact Gross Debt Cash, Bank & Net Debt Mar'22 new leases movement and Others Jun'22 Current Jun'22 Investments Note : Cash balance include
Slide 24: Key metrics are at investment grade levels
Key metrices are at investment grade levels EBITDA Margin (%)1 EBITDA / ton (Rs.)1 Interest Coverage Ratio (x)1,2 Gross & Net Debt (Rs. crore) 22,717 26.2% 12.4 21,626 11.7 Good Good Good Good 23.7% 1,16,328 19.8% 1,00,816 92,147 88,501 18.9% 82,597 11,110 10,838 75,561 94,879 1,04,779 17.2% 9,337 1
Slide 25: Outlook
Outlook Steel demand Steel prices Raw material prices ▪ China steel demand is likely to ▪ Heightened volatility to persist ▪ Coking coal prices to remain find support as COVID as concerns over inflation and range bound & volatile, thermal restrictions ease and pave way growth collide with supply cha
Slide 26: Annexures
Annexures Jubilee Park, Jamshedpur, India
Slide 27: Tata Steel Standalone: Continued focus on operational efficiencies and minimizing environmental impact
Tata Steel Standalone: Continued focus on operational efficiencies and minimizing environmental impact Meramandali Coke Rate (kg/thm) Specific Energy Consumption (Gcal/tcs) Specific Fresh Water Consumption (m3/tcs) Good Good Good 399 4.76 6.83 386 6.61 4.29 6.46 6.39 376 6.36 6.31 4.16 4.15 4.14 6.2
Slide 28: Tata Steel Long Products: Key operating parameters
100 40 55 70 85 100 40 55 70 85 2QFY20 2QFY20 Coke rate 3QFY20 3QFY20 4QFY20 4QFY20 1QFY21 1QFY21 2QFY21 2QFY21 Power consumption 3QFY21 3QFY21 4QFY21 4QFY21 1QFY22 1QFY22 2QFY22 2QFY22 3QFY22 3QFY22 4QFY22 4QFY22 1QFY23 92 1QFY23 84 Good Good 40 60 80 100 120 140 160 180 40 70 100 130 160 PCI rate
Slide 29: Tata Steel Standalone: Operating performance
Tata Steel Standalone1: Operating performance (All figures are in Rs. Crores unless stated otherwise) 1QFY23 4QFY22 1QFY22 Key drivers for QoQ change: Production (mn tons) 4.73 4.73 4.45 ▪ Revenues: were up on per ton basis driven by better Deliveries (mn tons) 3.89 4.97 3.99 realisations but were d
Slide 30: Tata Steel Europe: Operating performance
Tata Steel Europe: Operating performance (All figures are in Rs. Crores unless stated 1QFY23 4QFY22 1QFY22 otherwise) Key drivers for QoQ change: Liquid Steel production (mn tons) 2.44 2.31 2.67 ▪ Revenues: increased on absolute basis (in £) and per Deliveries (mn tons) 2.14 2.40 2.33 ton basis driv
Slide 31: Tata Steel Long Products: Operating performance
Tata Steel Long Products: Operating performance Key drivers for QoQ change: (All figures are in Rs. Crores unless stated otherwise) 1QFY23 4QFY22 1QFY22 ▪ Revenues: increased driven primarily by higher steel Total revenue from operations 1,994 1,799 1,688 realisations and product mix Raw material co
Slide 32: Tata Steel Thailand: Operating performance
Tata Steel Thailand : Operating performance (All figures are in Rs. Crores unless stated 1QFY23 4QFY22 1QFY22 otherwise) Key drivers for QoQ change: Saleable Steel production (mn tons) 0.31 0.34 0.35 Deliveries (mn tons) 0.31 0.34 0.35 ▪ Volumes: production and sales were marginally lower. Total rev
Slide 33: Investor relations contact
Investor relations contact Investor enquiries : Hriday Nair Pavan Kumar Email: hnair@tatasteel.com Email: pavan.kumar@tatasteel.com 32