Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — FY2014 Earnings Presentation
37 slides from Hindalco Industries's earnings presentation, May 29, 2014
Slide 1: Investor Presentation FY14 Performance and Financial Review
INVESTOR PRESENTATION FY14 Performance and Financial Review May 29, 2014
Slide 2: Contents
Contents Highlights Aluminium Business Copper Business Projects 2
Slide 3: Highlights
HIGHLIGHTS 33
Slide 4: Global recovery continues, but so do the risks
Global recovery continues, but so do the risks … GDP Growth Projections (%) 3.0 Advanced economies are World 3.6 driving the gradual recovery 5.2 ASEAN 4.9 in economic conditions 4.4 Financial markets, however, India 5.4 remain vulnerable to risks: 7.7 China 7.5 Geopolitical (Ukraine) 1.5 Japa
Slide 5: Aluminium: Emergence of deficit after years of excess supply
Aluminium: Emergence of deficit after years of excess supply With ~3 Mtpa capacity closures since 2012 and consumption expected to grow at 5-6% p.a., World Aluminium market shifting to deficit scenario, especially in World Ex-China 3.3 World Primary Aluminium – Market balance (Mn tonnes) 2.7 Project
Slide 6: Aluminium Industry: Key developments
Aluminium Industry: Key developments Japanese Ingot Premium Changes to LME warehousing rules (cif, $/t) 367 305 243 249 250 246 postponed due to Court intervention Physical shortages and continuation of stocks locked in financing deals have LME & SHFE – Divergent Paths ($/t) 2200 2,177 2100 LME
Slide 7: Aluminium Industry: Early signs of recovery
Aluminium Industry: Early signs of recovery… LME appears to have bottomed out Physical premium expected to be strong Environmental issues, policy interventions to curb unbridled growth, Lower SHFE and tighter credit… resulting in curtailments within China If Indonesia’s bauxite exports dry u
Slide 8: Highlights: FY14
Highlights: FY14 Q4 FY14 vs. FY14 vs. FY13 Strong All-round Performance Q3 FY 14 Aluminium Metal Volume (Upstream) 11% 13% Standalone Revenue 16% 7% Standalone EBITDA 34% 13% Consolidated Revenue 9% Consolidated PBIDTA 5%
Slide 9: Strong Operational Result
Strong Operational Result… FY14 EBITDA up 13%, driven by better EBITDA (` Crore) operational results in both Al and Cu 844 Sequential improvement in EBITDA has 629 540 continued; Q4 EBITDA up 34% 478 Significant jump in Depreciation & Interest – Higher by `395 crore in FY14 Trend will contin
Slide 10: FY14: Snapshot of the year
FY14: Snapshot of the year World class projects with tight supply chain logistics.. set to deliver …. Aluminium Ramping up … Not only primary metal but also ready to (India) produce…. world class VAP Strong Exit quarter EBIT margin.. Strategic initiatives playing out well; firmly leading & d
Slide 11: Financial Performance: Standalone
Financial Performance: Standalone Q4 Q4 Change Q3 Change Change ` Cr FY14 FY13 FY14 FY13 YoY FY 14 %QOQ %, YoY Net Sales 8,435 6,994 21% 7,273 16% 27,851 26,057 7% EBITDA 844 643 31% 629 34% 2,492 2,204 13% Other 212 231 (10)% 204 4% 1,124 983 14% Income PBITDA 1,057 874 21% 834 27% 3,616 3,187 13%
Slide 12: Segmental Performance – FY14
Segmental Performance – FY 14 Aluminium Greenfield Copper SALES 36% 64% EBIT 50% 50% C.E 24% 62% 13% *Standalone 12
Slide 13: Aluminium Business
ALUMINIUM BUSINESS Aditya Aluminium, Lapanga, Odisha 13
Slide 14: FY14 was a historic year for us
FY14 was a historic year for us Six new facilities, all new-edge ‘Last-Man Standing’ assets, are on stream! H’kud H’kud Mouda Utkal Mahan Aditya Exp. FRP Foils Expansion programme pursued since FY09 has is ready to deliver…. Creating a ‘New Hindalco’, Higher volumes, Improved efficiencies, Bette
Slide 15: Al: Rising Volumes
Al: Rising Volumes …. Production (Kt) Alumina (Kt) FY13 FY14 % 429 465 349 376 Alumina 1,320 1,619 23 Metal 542 613 13 Q1 Q2 Q3 Q4 FY14 FY14 FY14 FY14 FRP 220 238 8 Extrusions 34.5 38.2 11 Metal (Kt) 175 158 Alumina output includes 277 kt at Utkal 139 140 Metal output includes 57 kt at Mahan & A
Slide 16: Al: Key Performance Drivers
Al: Key Performance Drivers LME dipped sharply, but depreciation of rupee cushioned the impact FY13 FY14 LME ($/t) 1,976 1,773 INRUSD 54.32 60.50 LME (`/Kg) 107.3 107.3 Higher volumes Higher VAP sales Energy cost pressures have continued Existing operations’ performance improved; but the r
Slide 17: Al: Financial Performance (Standalone, w/o Utkal)
Al: Financial Performance (Standalone, w/o Utkal) Quarterly Trend FY14 Performance Net Sales (` Cr) Net Sales (` Cr) 3,025 2,211 2,343 2,471 FY13 8779 14% 10,050 FY14 Q1 Q2 Q3 Q4 FY14 FY14 FY14 FY14 EBIT (` Cr) EBIT (` Cr) 350 249 FY13 930 166 170 FY14 934 Q1 Q2 Q3 Q4 FY14 FY14 FY14 FY14
Slide 18: Novelis: Highlights
NOVELIS : HIGHLIGHTS Undisputed leader in Auto & Can FRP 18
Slide 19: Auto and Recycling: Key Strategies
Auto and Recycling: Key Strategies… Auto Share of Novelis Portfolio Average Recycled Content in Novelis Products 80% 80% > 25% 70% 60% 50% 6% 50% 43% 39% 40% 33% 30% FY13 FY20 FY10 FY12 FY13 FY15 FY20 North America FRP Auto Demand Targets North America Aluminum Auto FRP Demand Estimates (Kt) 1425 In
Slide 20: Novelis: Shipments at a 3-yr high
Novelis: Shipments at a 3-yr high Shipments up 4% yoy 2,895 kt 2,786 kt Record production and South America 447 shipments in Asia and South 395 9% America on the back of Asia successful ramp-up of strategic 562 640 13% projects Declining beverage can activity Europe 861 911 and increased com
Slide 21: Novelis: Strong Cash Management in a tough environment
Novelis: Strong Cash Management in a tough environment Adj. EBITDA ($Mn) Oversupply induced pricing pressures in North America and 961 Asia FY13 8% However, registered a strong finish to the year with Q4 FY14 EBITDA of FY14 885 $250 Mn Excellent cash management FY13 FY14 FCF before Capex ($Mn) 2
Slide 22: Novelis: Strategic Goals on track
Novelis: Strategic Goals on track … Invested $2 Bn in last Auto Share in Product Sustainability : Goal of 3 years to solidify Portfolio to lead the 80% recycling content Global Leadership Light-weighting trend by 2020 Project SIG Auto Share in Portfolio (%) – First Cast, May 2014 FY10 4% FY14 9% FY1
Slide 23: Copper Business
ADITYA BIRLA COPPER BUSINESS
Slide 24: Cu: Mixed Industry Trends
Cu: Mixed Industry Trends… FY14 vs. Impact FY13 (YoY) TCRC Higher LME ($/t) Lower Exch. Rate Favourable (`/$) Significantly Acid Price lower DAP Weaker Realization
Slide 25: Cu: Robust Operational Performance
Cu: Robust Operational Performance Higher production Improved Cu-III performance post shutdown sustained Cathode (kt) DAP (kt) 229 315 329 209 FY13 FY14 FY13 FY14 Steadily improving performance from virtually same asset base
Slide 26: Cu: Financial Performance
Cu: Financial Performance Quarterly Trend FY14 Performance Net Sales (` Cr) Net Sales (` Cr) 4,817 5,422 3,636 3,974 17305 3% FY13 FY14 17848 Q1 Q2 Q3 Q4 FY14 FY14 FY14 FY14 EBIT (` Cr) EBIT (` Cr) 22% Planned 300 318 s/d 239 FY13 768 81 FY14 938 Q1 Q2 Q3 Q4 FY14 FY14 FY14 FY14
Slide 27: Performance Review ABML
RP, Performance Review ABML tn ¥ . Al J“ = Pe irs >» fe all MINERALS
Slide 28: ABML: Performance Update
ABML: Performance Update Nifty copper production down 10% to 44kt in FY14 Impact of lower grade (2.08% in FY14 vs. 2.33% in the previous year) Performance was supported by – 8% reduction in Nifty site costs Slight improvement in LME in A$ terms EBITDA for FY14 maintained at A$52 Mn – sam
Slide 29: Highlights: Consolidated Results, FY14
Highlights: Consolidated Results, FY14 Revenues up 9% at `87,695 crore on the back of higher volumes in Aluminium (India) and Novelis PBITDA increased 5%; Aluminium margins came under pressure Impact was cushioned by higher profitability in Copper segment Revenue (` crore) EBIT (` crore) FY13
Slide 30: Financial Performance: FY14 (Consolidated)
Financial Performance: FY14 (Consolidated) ` Cr FY14 FY13 Change FY14 ($ mn) Net Sales 87,695 80,193 9% 14,514 PBITDA 9,303 8,849 5% 1,540 Depreciation (3,553) (2,861) 24% (588) Financing charge (2,702) (2,079) 30% (447) PBT before exceptional items 3,049 3,909 (22)% 505 Exceptional items (396) … …
Slide 31: Projects: On Stream
PROJECTS : ON STREAM Utkal Refinery Aditya Smelter Hirakud FRP Mahan CPP 31
Slide 32: Mahan: Scaling up
Mahan: Scaling up Metal Production (kt) 29 18 7 Q2 Q3 Q4 FY 32 FY14 FY14 14
Slide 33: Utkal: Gaining momentum
Utkal: Gaining momentum Alumina Production (kt) 147 87 41 Q2 Q3 Q4 FY14 FY14 FY14 33
Slide 34: Aditya: Ramping up
Aditya: Ramping up…. 34
Slide 35: Summing up - FY15 Year of Consolidation
Summing up- FY 15.. Year of Consolidation Transition from Investment phase to Consolidation phase….. Uncertainty over access to captive coal when Challenges – from business Mahan and Aditya are ramping up environment and some Appreciating rupee… growth pangs … Depreciation & Interest burden fr
Slide 36: Thank you
Thank you REGISTERED OFFICE Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 030 Telephone- +91 22 6662 6666 Website www.hindalco.com E mail hindalco@adityabirla.com 36 Corporate Identity No. L27020MH1958PLC011238
Slide 37: Forward Looking & Cautionary Statement
Forward Looking & Cautionary Statement Certain statements in this report 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 to the