Vedanta Limited · NSE:VEDL
Vedanta — Debt Investor Presentation (October 2019)
28 slides from Vedanta's debt investor presentation, Oct 3, 2019
Slide 1: Vedanta - Transforming Elements
oe vedanta transforming elements ER | ALUMINIUM & POWER | COPPER | IRON ORE-& STEEL .
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: Company Overview
Company Overview
Slide 4: Vedanta - A World-Class Natural Resources Powerhouse
Vedanta - A World-Class Natural Resources Powerhouse Overview Group Structure World’s 6th largest diversified resources company and the largest in India Portfolio of large, diversified, structurally low-cost assets geared towards base metals and oil Vedanta Resources Vedanta Part of India’s pr
Slide 5: Economic and Social Impact
Economic and Social Impact Vedanta’s GDP Contribution • Highest ever contribution to the exchequer of c.6Bn USD in FY2019 2.2% Induced Impact The impact operations that captures the consumption; impacting GDP is equivalent to 2.20 percent of India’s GDP • C.44Mn USD invested in social investment ben
Slide 6: Attractive Commodity Mix Ideally Positioned in Favorable Geography
Attractive Commodity Mix Ideally Positioned in Favorable Geography Significant Presence in Commodities with Leading Global Demand Growth in favorable Geography Focus is on the Right Commodities: Base Metals & Oil World Aluminium 2.8% O&G India 2.2% 90% of Nickel 2.2% Vedanta Group’s Zinc 1.7% FY2019
Slide 7: Vedanta growth trajectory – Focus on growth projects
Vedanta growth trajectory – Focus on growth projects Well invested and consolidated assets : driving growth Acq Zinc Intl FY 2013- Cmd 1.5mt mill 18 at SK mine FY 2012 √ Cmd 1,980MW TSPL Cmd 2,400 MW FY2010 JHA FY2012 √ Exp 1.2 mt zinc Acq VS Dempo FY 2011 Acq Cairn India √ Cmd 250kt Gamsb
Slide 8: Significant Production Ramp-up across all businesses
Significant Production Ramp-up across all businesses Zinc India Zinc International Oil & Gas Aluminium Steel Growth projects Ramp-up of Gamsberg 250 kt Achieve 1.5 Mtpa Expansion to 1.2 including: Jharsuguda II total production in FY20 (Full potential) in smelter from 2.0 Mtpa - Enhanced o
Slide 9: Strategy to Enhance Long Term Value
Strategy to Enhance Long Term Value Continue Focus on World Class ESG Performance Augment Our Reserves & Resources Base Delivering on Growth Opportunities Optimise Capital Allocation & Maintain Strong Balance Sheet Operational Excellence VEDANTA RESOURCES LIMITED – FY2019 INVESTOR PRESENTATION 9
Slide 10: FY2019 Review & Growth Plan
vedanta transforming elements INVESTOR FY2019 Review & Growth Plan
Slide 11: Heading Towards – Zero Harm, Zero Waste, Zero Discharge
Heading Towards – Zero Harm, Zero Waste, Zero Discharge Safety Environment Sustainability • One fatality in Q4 (14 in FY2019) • 92% waste recycling in FY 2019 • Reusing 60% tailings as ‘paste- fills’ for void replacement at • Safety focus across business: • 14.5% reduction in GHG Zinc India undergro
Slide 12: Zinc India: On-track for 1.2Mtpa, planning for 1.35Mtpa underway
Zinc India: On-track for 1.2Mtpa, planning for 1.35Mtpa underway Record Underground Mine Performance FY2019 Record production of Underground (kt) OC (kt) Mined metal from UG mines, up 29% y-o-y 223 Silver at 21.8 million ounces, up 22% y-o-y 426 544 Lead metal at 198kt, up 18% y-o-y 638 936 72
Slide 13: Zinc International: Growth Plan for > 500ktpa Zinc Production
Zinc International: Growth Plan for > 500ktpa Zinc Production Value Addition 148ktpa >370 ktpa 500 ktpa 650 ktpa Incl. Gamsberg Incl. Gamsberg Incl. Gamsberg Current Phase 1 Phase 2 Phase 3 FY20 +3 yrs +5 yrs BMM 70kt BMM 65kt BMM 60kt BMM 70kt Gamsberg Ph1 250kt Skorpion 66kt Skorpion 110kt Gamsber
Slide 14: Oil & Gas: Opportunities across life cycle
Oil & Gas: Opportunities across life cycle 10 Year PSC Extension $ 3.2bn Gross Capex Exploration 51 OALP Blocks Approval for Rajasthan & Ravva PSC Growth Capex driven through Integrated Rajasthan Extension as per GoI policy, subject to Partnership model with global oil field KG Offshore certain cond
Slide 15: Oil & Gas: Continuing to Execute on our Growth Strategy
Oil & Gas: Continuing to Execute on our Growth Strategy • Rich project portfolio comprising of enhanced oil recovery, tight oil and tight gas • Focus on cutting edge technology enabling world class recovery rates Development Projects • Projects generate IRR of > 20% at oil price of $ 40/bbl • Number
Slide 16: Oil & Gas: Solidifying Long-Standing Reputation of Adopting Cutting Edge Technology
Oil & Gas: Solidifying Long-Standing Reputation of Adopting Cutting Edge Technology for world class recovery rates Resources Reserves Production World Class Resource Base Production being ramped up – Increasing Gas Mix (As at March 2019) Gross Average Volume (kboepd) • Hydrocarbon Initially in Place
Slide 17: Aluminium: Significant progress on Strategic levers
Aluminium: Significant progress on Strategic levers Mar’19 COP at $ 1,700/t FY2019 2,018 2,025 • Structural Reduction in Aluminium Cost 1,934 1,776 • Achieved Alumina Peak run rate of 1.8 Mtpa during the year • Increased Local Bauxite supply met 30% of requirement • Ramped Up Lanjigarh volume and lo
Slide 18: Aluminium – Moving towards Structural Cost Reduction
Aluminium – Moving towards Structural Cost Reduction Local Bauxite Imported Alumina ~50% Alumina Aluminum Capacity 2 Mine capacity Index linked pricing MTPA FY20 requirement achieved: 3 MTPA; LTC signed of 4 Mtpa supplies as per Alumina price indices state policy have softened since Expect
Slide 19: Aluminium – Moving towards Structural Cost Reduction (cont.)
Aluminium – Moving towards Structural Cost Reduction (cont.) Secured Linkage 90% Coal Margin Improvement Initiatives 72% coal requirement secured from • Increase value added production E-Auction linkage & captive • Focus on higher domestic sale block Balance • Tranche V linkage • Long term contr
Slide 20: Electrosteel Turnaround Performance
Electrosteel Turnaround Performance FY2019 Asset turnaround strategy • Record production of 1,199kt; up 17% y-o-y • Ever highest sales of 1,185kt; up 15% y-o-y Achieved run rate • Industry leading margin at $115/t up 116% y-o-y Current of c1.5 Mtpa Hot Metal Production • VAP sale at 85%, up 8% y-o
Slide 21: Copper Zambia: Update
Copper Zambia : Update Background The winding-up proceedings were brought by ZCCM, a minority shareholder in KCM and the representative of the Government of Zambia. ZCCM had chosen a route to exclude Vedanta, by having a Provisional Liquidator appointed ex-parte. Current situation In Zambia, Ved
Slide 22: Self funded Capex Delivering Superior Returns
Self funded Capex Delivering Superior Returns Growth CAPEX Profile, $bn Oil & Gas Zinc Al & Power Copper Other Optionality Full year Capex guidance 0.7 1.0 1.2 1.5 1.4 0.2 1.1 0.1 0.1 0.1 0.8 0.7 0.1 0.5 0.4 0.6 0.01 0.1 0.2 0.3 0.5 0.2 0.3 0.2 0.1 0.1 0.5 0.6 FY2016 FY2017 FY2018 FY2019 FY2020e FCF
Slide 23: Financial snapshot
Financial snapshot EBITDA FCF post capex EBTIDA Margin* Contribution to Exchequer $ 3.4 bn $ 1.2 bn 29% $ 6.2bn Down 14% y-o-y Up 29% y-o-y Industry leading margin Highest till date * Excludes custom smelting at Copper India, Copper Zambia and Zinc-India operations EBITDA Bridge ESL 113 (In $ mn) Al
Slide 24: Strong Financial and Returns Profile
Strong Financial and Returns Profile Term Debt Maturities - $12.6 bn (as of 31 Mar 2019) Liquidity 3.5 – Cash and investments @ $ 5.7 billion 3.2 rated Tier I by CRISIL; 2.0 2.4 1.5 – Undrawn line of credit c. $ 1.0 billion 1.7 0.4 1.7 US$ billion Net Interest 1.2 2.0 1.3 1.8 Interest Income –
Slide 25: Appendix
RZ vedanta transforming elements Appendix PRESENTATION FY2019
Slide 26: Structured Investment Transaction
Structured Investment Transaction Counterparties : CIHL, a WOS of Vedanta Limited & Volcan Investments Limited Nature of transaction : Purchase of economic interest in ~24.71 million shares (~1.8% of outstanding shares) of AA Plc Shares represent Volcan’s entitlement under POEMS Ownership &
Slide 27: CIHL Treasury Investment Transaction: Superior Returns with an Early Exit
CIHL Treasury Investment Transaction: Superior Returns with an Early Exit Background Purchase of economic interest in ~24.71 million shares (~1.8% of outstanding shares) of Anglo American Plc by CIHL from Volcan Investments through a Structured Investment Transaction (Dec’18) Investment Transactio
Slide 28: FY 2020 Guidance
FY 2020 Guidance Segment FY20 Production FY20 CoP Mined Metal and Finished Metal: c 1.0 Mtpa Zinc India < $1,000/t excluding royalty Silver: 750 - 800 tonnes Skorpion and BMM: >170kt ZI COP (excl Gamsberg) : $1,400/t Zinc International Gamsberg: 180 - 200kt Gamsberg: c $1,000/t Oil & Gas Gross Volum