Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q3 FY2022 Earnings Presentation
32 slides from Tata Steel's earnings presentation, Feb 4, 2022
Slide 1: Results Presentation: Third quarter and nine months ended December 31, 2021
Results Presentation Third quarter and nine months ended December 31, 2021 February 04, 2022 1
Slide 2: 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 3: 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 3
Slide 4: Committed towards excellence in Safety & Health of our employees
Committed towards excellence in Safety & Health of our employees LTIFR1 reduction by Safety remains a top priority 3.06 75% since FY06 2.35 ▪ Strengthening contracted employee safety management via 2.10 training, well-being program and rating assessment 1.31 0.95 0.78 0.68 0.69 0.72 0.76 0.60 0.56 ▪
Slide 5: Improving quality of life of our communities
Improving quality of life of our communities 24 lakh+ 33,300+ Key areas for CSR initiatives Lives reached out1 Hours of volunteering1 Rural & Urban Dignity for the ▪ Spent more than Rs.1,400 crores2 since FY17 on Education Disabled Signature programmes at regional scale as well as programmes for Com
Slide 6: Sustainability is deeply embedded in our ecosystem
Sustainability is deeply embedded in our ecosystem Long term Pursuing low Circular Economy Deploying Responsible Improving decarbonization carbon integrated as part Supply Chain Policy transparency and roadmap created technologies of business model across value chain disclosures 2025 goals 2030 goal
Slide 7: Progressing towards sustainability goals
Progressing towards sustainability goals Sustainable Ironmaking Responsible Supply chain Circular Economy First of its kind global trial to inject Coal First global steel producer to join the Sea Exporting LD slag to make cement, Bed Methane gas in Blast Furnace to Cargo Charter & to deploy bio-fuel
Slide 8: Moderation in steel prices and volatile raw material prices weighed on steel spot spreads
Moderation in steel prices and volatile raw material prices weighed on steel spot spreads ▪ Steel prices moderated across key regions Regional steel prices moderated Raw material prices off peak, but volatile including the western markets but remain HRC prices ($/t) Prices ($/t) US Domestic elevated
Slide 9: In India and Europe, steel demand continued to recover but global cues weighed on margins
In India and Europe, steel demand continued to recover but global cues weighed on margins India Europe ▪ Apparent steel consumption improved by ~13% QoQ ▪ Steel demand in Europe is back to pre-COVID levels. driven by ongoing economic recovery Supply – demand gap has narrowed. Though auto is still su
Slide 10: India: Steady increase in domestic deliveries drives improvement in product mix
India1: Steady increase in domestic deliveries drives improvement in product mix ▪ Crude steel production increased by ~2% QoQ and ~4% YoY ▪ Domestic deliveries were higher by ~2% QoQ and during the first nine months of the financial year, domestic deliveries have witnessed a steady pickup driving i
Slide 11: India: Market leadership in chosen segments
India1: Market leadership in chosen segments ▪ Building on “Body in White” tear ▪ Micro-segmentation approach in down studies with passenger the MSME3 segment helps to vehicle manufacturers increase the downstream branded play by 31% Auto BPR2 ▪ First domestic supplier to do such 1 in every 3 1st in
Slide 12: India: Bottom-up initiatives drive growth in Tata Tiscon
India1: Bottom-up initiatives drive growth in Tata Tiscon Growth in Tata Tiscon retail sales 53% FY21 FY22 4,051 24% 53% 144% 44% Tata Tiscon is proud to be selected as the Q1 Q2 Q3 9MFY22 Brand of the Decade 2021-2022 in the infrastructure TMT Rebars Category Extended Brand reach Pan India distribu
Slide 13: India: New products developed across customer segments
India1: New products developed across customer segments Auto: Control arm Auto: Reinforcement Auto: Front Door Grade (SPFH Grade (SGACUD) Outer Grade 590B) (JSC340PN-3) Auto: Hood Inner Auto: Differential Gear Auto: Round Grade and Pinion through cold Straight Length. for (JSC270CC) forging route Co
Slide 14: India: 5 MTPA TSK Phase II expansion driving value accretive growth
India: 5 MTPA TSK Phase II expansion driving value accretive growth CRM complex capability Width (in mm) Thickness (in mm) Capacity (in MTPA) Pickling Line and Tandem Cold rolling Mill 1,870 0.3 - 2.3 2.2 Continuous Annealing Line 1,870 0.3 - 2.3 0.9 Continuous Galvanizing Line (non-auto) 1,560 0.3
Slide 15: Neelachal Ispat Nigam Limited: Strategic platform to ramp up Long products business
Neelachal Ispat Nigam Limited : Strategic platform to ramp up Long products business Steelmaking capacity of ▪ Will benefit from significant growth in infrastructure pan 1 million ton India and retail housing growth in semi urban India ▪ Leverage existing capability of retail brands and distribution
Slide 16: India: New initiatives are progressing well
India: New initiatives are progressing well Aashiyana1 Service & Solutions Steel Recycling Business New Material Business SCRAP GOES DIGITAL !! Easy Online Fast FerroHaat® Shipping Shipping Superior Trustworthy Building Service 150+ Materials Providers 80% registered Market Market vendors reach Info
Slide 17: Business outlook for 4QFY22 remains stable despite volatile raw material prices
Business outlook for 4QFY22 remains stable despite volatile raw material prices Steel demand Steel prices Raw material prices ▪ Global steel demand to continue ▪ Asian steel prices are expected ▪ Coking coal prices to be driven to grow in 4QFY22 on the back of to be driven by improving by supply dyn
Slide 18: Pathway for our future financial strategy
Pathway for our future financial strategy Target 9MFY22 performance ▪ Investment grade financial metrics; ▪ Net debt to EBITDA is <1.0x strong earnings and cashflow ▪ Consolidated EBITDA of Rs.48,655 crores performance ▪ Generated free cash flow of Rs.13,214 crores ▪ US$2 bn+ gross debt reduction ▪
Slide 19: Tata Steel Consolidated: Steady EBITDA performance
Tata Steel Consolidated1: Steady EBITDA performance (All figures are in Rs. Crores unless stated otherwise) 3QFY22 2QFY22 3QFY21 Key drivers for QoQ change: Production (mn tons)2 7.76 7.77 7.74 ▪ Deliveries: lower volumes in India on account of Deliveries (mn tons) 7.01 7.39 7.41 moderation in expor
Slide 20: Tata Steel Standalone: Operating performance
Tata Steel Standalone1: Operating performance (All figures are in Rs. Crores unless stated otherwise) 3QFY22 2QFY22 3QFY21 Key drivers for QoQ change: Production (mn tons) 4.64 4.56 4.43 ▪ Revenues: remained largely stable as increase in net Deliveries (mn tons) 4.25 4.42 4.49 realisations mostly of
Slide 21: Tata Steel Europe: Operating performance
Tata Steel Europe: Operating performance (All figures are in Rs. Crores unless stated 3QFY22 2QFY22 3QFY21 otherwise) Key drivers for QoQ change: Liquid Steel production (mn tons) 2.57 2.56 2.59 ▪ Volumes: remained broadly flat amidst supply chain Deliveries (mn tons) 2.16 2.14 2.11 issues in steel
Slide 22: Consolidated EBITDA stood at Rs 15,890 crores
Consolidated EBITDA1 stood at Rs 15,890 crores Rs. Crores ▪ Selling Result: Primarily due to better steel realisations across key entities 3,638 17,810 5,600 15,890 ▪ Cost Changes: Primarily due to increase in 110 152 coking coal consumption cost across entities ▪ Volume/Mix: Primarily due to lower
Slide 23: Generated free cash flows of Rs.6,338 crores in 3QFY22
Generated free cash flows of Rs.6,338 crores in 3QFY22 Rs. Crores 15,853 2,045 591 4,025 158 3,012 6,338 Reported EBITDA Working capital Finance cost (net) Taxes paid Non-cash & Others Capex Free Cash Flow 3QFY22 3QFY22 movement Note : Additionally, ~Rs 45 crores cash generated from equity proceeds
Slide 24: Debt repayment of ~Rs.17,376 crores in 9MFY22, Net debt to EBITDA below 1.0x
Debt repayment of ~Rs.17,376 crores in 9MFY22, Net debt to EBITDA below 1.0x 88,501 Rs. Crores 106 84,237 5,894 35 1,524 13,1131 5,530 78,163 10,2641 580 51 5,953 72,603 9,3031 342 75,3892 73,9732 9,7341 68,8602 62,8692 Gross Debt Addition of Loan FX Impact Gross Debt Addition of Loan FX Impact Gros
Slide 25: 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) 27.9% 22,627 11.2 1,16,328 18.9% 1,00,816 17.2% 19.8% 92,147 88,501 83,014 1,04,779 14.5% 72,603 11,110 94,879 9,337 10,838 7,129 3.9 3.9 72,367 69,215 75,38
Slide 26: Annexures
TATA STEEL TATA '# WeAlsoMakeTomorrow Annexures
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 434 420 7.29 399 5.55 386 6.83 376 6.8 367 367 6.61 364 361 360 354 35
Slide 28: Tata Steel Long Products
Tata Steel Long Products Crude Steel production (k tons) Steel Sales (k tons) Steel sales volume slightly lower on 171 175 173 164 168 166 QoQ basis due to maintenance shutdown 3QFY22 2QFY22 3QFY21 3QFY22 2QFY22 3QFY21 Wire Rod sales mix enrichment New products developed (Nos) High Carbon Alloy 14 C
Slide 29: Tata Steel Long Products: Strong operating cashflows drive reduction in net debt
Tata Steel Long Products: Strong operating cashflows drive reduction in net debt Consolidated financial statements Key drivers for QoQ change: 3QFY22 2QFY22 3QFY21 (All figures are in Rs. Crores unless stated otherwise) ▪ Revenues: stable with improved steel and DRI Total revenue from operations 1,6
Slide 30: Tata Steel Long Products: consistent improvement in key operating parameters
Tata Steel Long Products: consistent improvement in key operating parameters (all figures are indexed; 1QFY20=100) Coke rate1 PCI rate Crude Steel Yield2 100 95 160 145 106 Good Good 102 Good 85 130 102 70 100 98 55 70 94 40 40 90 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 2QFY22
Slide 31: Tata Steel SEA: Strong performance with higher steel prices
Tata Steel SEA1: Strong performance with higher steel prices (All figures are in Rs. Crores unless stated 3QFY22 2QFY22 3QFY21 otherwise) Key drivers for QoQ change: Saleable Steel production (mn tons) 0.38 0.33 0.39 Deliveries (mn tons) 0.39 0.39 0.40 ▪ Volumes: production was higher QoQ; Sales vol
Slide 32: Investor relations contact
Investor relations contact Investor enquiries : Pavan Kumar Email: pavan.kumar@tatasteel.com 32