Jsw Steel Limited · NSE:JSWSTEEL
Jsw Steel — Investor Presentation (February 2018)
48 slides from Jsw Steel's investor presentation, February 2018
Slide 1: JSW Steel Limited Investor Presentation
JSW Steel Limited Investor Presentation February 2018
Slide 2: Agenda
Agenda Overview Value Performance Guidance Business Proposition Overview Environment 2
Slide 3: JSW Group – overview
JSW Group – overview Presence across the core sectors Market cap of listed businesses ($13.3 bn^) JSW Steel*: India’s leading integrated steel producer (Steel making capacity: 18 MTPA) JSW Energy 2.3 JSW Energy*: Engaged across the value chain of power business (Operational plants’ capacity: 4,531 M
Slide 4: JSW Steel – India's leading steel manufacturer
JSW Steel – India’s leading steel manufacturer Integrated steel manufacturing Installed capacity 18 MTPA, at facilities – from raw material strategic locations in South and processing plants to value-added West India Leading steel Integrated product capacities manufacturer in manufacturing proce
Slide 5: Transformational journey to market leadership
Transformational journey to market leadership FY2002 FY2010 FY2017 CAGR FY2002–FY2017: 18% Capacity (MTPA) 1.6 7.8 18.0 Capacity increased to 18MTPA in Mar 2016 Production (MTPA) 1.3 6.0 15.8 CAGR FY2002–FY2017: 18% Revenue (USD mn) 268 3,006 9,336 CAGR FY2002–FY2017: 27% EBITDA (USD mn) 43 641 1,87
Slide 6: Combination of Organic and Inorganic growth
Combination of Organic and Inorganic growth Key new projects by 2020 Dolvi: Capacity expansion to 10 MTPA, 1.5MTPA Coke Oven at Dolvi Coke Projects Limited Vijayanagar: BF-3 revamp & upgradation, CRM-1 complex capacity expansion, Pipe Conveyor System for Iron ore 2016 and new Water Reservoir 200
Slide 7: JSW – JFE strategic partnership
JSW – JFE strategic partnership JSW Steel: Focused expansion plans in India Optimized capital structure through deleveraging Value creation Access to cutting edge technologies for both the One of the largest FDI in the Indian JFE: Metals and Mining space – Equity partners Presence in growi
Slide 8: Balanced corporate strategy
Balanced corporate strategy Maintain market share through selective organic and inorganic growth Undertake brownfield expansions at low specific investment cost per ton Selective Consider inorganic opportunities that are value accretive Growth Diversification of Increase proportion of high m
Slide 9: Strong and balanced Board comprising experts of eminence & integrity
Strong and balanced Board comprising experts of eminence & integrity Chairperson—Emeritus Executive Directors Independent Directors Nominee Directors Seshagiri Rao M.V.S Malay Mukherjee N.Jayaram, IAS Savitri Devi Jindal Joint Managing Director & 40yrs of rich experience in Nominee Director of KSIID
Slide 10: FY17 performance on sustainability matrixes
FY17 performance on sustainability matrixes 1st iron & steel company in India to get an Environment Product Declaration certificate as per ISO 14025 for hot rolled steel strips 8,73,635 at Vijayanagar Material Recycled 4.12 MT Waste heat utilized GJ 1st Prize for Fair Business Practices to JSW S
Slide 11: Agenda
Agenda Overview Value Performance Guidance Business Proposition Overview Environment 11
Slide 12: A platform of strength and agility
A platform of strength and agility 1 Strong fundamentals to boost India steel demand 2 Multi-location manufacturing facilities 3 Diversified product profile 4 Domestic market leader with significant export presence 5 Strong sales and marketing platform 6 Focus on operational efficiency 7 Strategic e
Slide 13: Strong fundamentals to boost India steel demand
1 Strong fundamentals to boost India steel demand Strong economic growth with improving fundamentals Potential for substantial growth in steel consumption(2)(4) India’s GDP growth continues to register stellar performance in a world o World per capita consumption was ~208 Kgs in 2016 seeing re
Slide 14: Multi-location manufacturing facilities
2 Multi-location manufacturing facilities Geographically diversified with manufacturing facilities in South and West India Strategic overseas presence Vasind & Tarapur (JSCPL*) Dolvi: 5 MTPA JSW Steel ownership: 90% 1.18 MTPA GP/GC Acquisition cost: $810mn 3.5 MTPA Blast Furnace 0.5 MTPA C
Slide 15: Diversified Product Profile
3 Diversified Product Profile Slabs HRC HR Plates GC CRC Wide offering of Flat and Long products Colour Billets Blooms TMT Wire Coated Rods Continuously Diversified portfolio to address growing demand for value-added steel increasing value Commissioned new facilities to further enrich product mi
Slide 16: JSW Steel Branded Portfolio
JSW Steel Branded Portfolio 16
Slide 17: Domestic market leader with strong export presence
4 Domestic market leader with strong export presence 11.4% 13.4% 6.9% 3.3% 4.5% 2.6% India Finished Steel Penetrating further to capture growing domestic demand with Consumption Growth(1) unique marketing strategy – pan India retail network with more than 8,500 outlets (includes JSW Connect, JSW S
Slide 18: Strong sales and marketing platform
5 Strong sales and marketing platform Multi-sectoral volume growth Segmented approach to address different retail segments Optimizing market mix and product mix to derive ‘JSW explore’ maximum benefit from sector growth Branded, multiple product service center Metro / for steel solutions Lever
Slide 19: Focus on operational efficiency
6 Focus on operational efficiency Coke Making: Recovery and Non-recovery Coke Ovens Agglomeration: Pelletisation and Beneficiation Plants Diverse Iron Making: Blast Furnace, Corex, Sponge Iron (DRI) blend of Steel Making: Basic Oxygen Furnace (BOF), Electric Arc Furnace (EAF), Conarc Resulti
Slide 20: Strategic expansion aided by strong project execution
7 Strategic expansion aided by strong project execution Strong project execution capabilities … Major new & on-going Projects Experienced in-house project management team Vijayanagar Works: Supported by cross-functional team (commercial, finance and BF-3 revamp & upgradation, CRM-1 complex c
Slide 21: Proven ability to acquire and turnaround assets
8 Proven ability to acquire and turnaround assets JSW Steel has a proven track record of acquiring troubled assets and turning them around in record time by closely integrating them with its existing operations – thus creating synergies and optimising cost Case Study: Turnaround strategy at JSW Ispa
Slide 22: Robust financial profile
9 Robust financial profile Increased capacity to 18MTPA in 2016 from 1.6MTPA in 2002 Strong track record of volume growth Delivered 20% sales volumes in FY17 growth despite weak economic growth and sluggish domestic demand Resilient operations with improved EBITDA margin marked by several prod
Slide 23: Historical EBITDA per ton – JSW Steel Standalone
EBITDA (Rs per ton) Q1FY11 8,686 Q2FY11 6,268 Q3FY11 6,279 Q4FY11 9,546 Q1FY12 8,340 Q2FY12 6,887 Q3FY12 6,569 Q4FY12 7,151 Q1FY13 8,402 Q2FY13 7,028 Q3FY13 6,054 Q4FY13 6,985 Q1FY14 6,859 Q2FY14 7,137 Q3FY14 7,478 Q4FY14 8,052 Q1FY15 8,545 Q2FY15 8,534 Q3FY15 6,988 Q4FY15 5,469 Q1FY16 5,398 Q2FY16
Slide 24: Agenda
Agenda Overview Value Performance Guidance Business Proposition Overview Environment 24
Slide 25: Key highlights – Q3 FY18
Key highlights – Q3 FY18 Highest ever Crude Steel production: 4.11 million tonnes, up by 7% YoY Highest ever Saleable Steel sales: 3.97 million tonnes, up by 9% YOY Standalone Highest ever Operating EBITDA : `3,573 crores, up by 29% YoY performance Highest ever PAT : `1,126 crores Net Debt
Slide 26: Quarterly volumes – standalone
Quarterly volumes – standalone Crude Steel Production Steel Sales +7% +4% +9% +1% YoY QoQ QoQ YoY 4.11 3.86 3.94 3.97 3.92 3.64 Q3 FY17 Q3 FY18 Q2 FY18 Q3 FY17 Q3 FY18 Q2 FY18 Q3 FY17 Q3 FY18 Q2 FY18 Q3 FY17 Q3 FY18 Q2 FY18 Flat 2.83 2.81 2.89 Flat 2.79 2.80 2.83 Long 0.74 0.88 0.77 Long 0.73 0.90 0
Slide 27: 9 months volumes – standalone
9 months volumes – standalone Crude Steel Production Saleable Steel Sales +2% +5% YoY 11.70 11.96 11.40 10.82 9M FY17 9M FY18 9M FY17 9M FY18 9M FY17 9M FY18 9M FY17 9M FY18 Flat 8.43 8.46 Flat 8.07 8.20 Long 2.39 2.48 Long 2.28 2.51 Semis 0.47 0.69 All figures are in million tonnes 27
Slide 28: Quarterly sales highlights – consolidated
Quarterly sales highlights – consolidated +12% 2% 3.61^ YoY 4.03^ QoQ 3.96^ 41% 43% 40% 30% 26% 21% 2.85* 2.84* 2.92* 14% 22% 24% 23% 12% 15% 32% 30% 32% 57% 54% 54% 37% 37% 34% Q3 FY17 Q3 FY18 Q2 FY18 Q3 FY17 Q3 FY18 Q2 FY18 OE Retail Auto Exports VASP Special products Other products Overall sale
Slide 29: Retail segment highlights for Q3 FY18
Retail segment highlights for Q3 FY18 902 863 943 481 465 521 421 398 422 Q3 FY17 Q3 FY18 Q2 FY18 Branded sales Others Front Side Back Side Added 100 new Retailers to the network taking total Retailer count to 8,600 (exclusive and non-exclusive). JSW now has footprint across New Product Launched :
Slide 30: Financials – standalone
Financials – standalone ` crore Particulars Q3 FY18 Q2 FY18 Q3 FY17 9M FY18 9M FY17 Revenue from operations 16,453 14,986 14,583 46,535 39,962 Operating EBITDA 3,573 2,927 2,762 8,698 8,539 Other Income 43 49 78 140 174 Finance Cost 892 919 901 2,718 2,680 Depreciation 769 772 747 2,273 2,240 Profit
Slide 31: Operating EBITDA movement – standalone
Operating EBITDA movement – standalone ` crore 2,065 (1,325) (179) 3,573 2,762 250 EBITDA Volume NSR Cost Others EBITDA Q3 FY17 Q3 FY18 31
Slide 32: Operational performance – JSW Steel Coated Products
Operational performance – JSW Steel Coated Products Million tonnes Volumes Q3 FY18 Q2 FY18 Q3 FY17 9M FY18 9M FY17 Production 0.35 0.43 0.43 1.22 1.29 Sales 0.51 0.59 0.43 1.59 1.27 ` crore Key P&L data Q3 FY18 Q2 FY18 Q3 FY17 9M FY18 9M FY17 Revenue from Operations 3,034 3,416 2,437 9,510 7,020 Ope
Slide 33: Operational performance – US Plate & Pipe Mill
Operational performance – US Plate & Pipe Mill Production (net tonnes) Q3 FY18 Q2 FY18 Q3 FY17 9M FY18 9M FY17 Plate Mill 59,623 52,315 42,291 1,77,428 1,28,937 Utilization (%) 24% 22% 18% 24% 18% Pipe Mill 15,109 11,488 11,585 38,159 28,432 Utilization (%) 11% 8% 8% 9% 7% Sales (net tonnes) Q3 FY18
Slide 34: Financials – consolidated
Financials – consolidated ` crore Particulars Q3 FY18 Q2 FY18 Q3 FY17 9M FY18 9M FY17 Revenue from operations 17,861 16,848 15,312 50,686 42,619 Operating EBITDA 3,851 3,036 2,821 9,504 9,010 Other Income 42 39 33 122 96 Finance Cost 923 950 921 2,818 2,821 Depreciation 852 851 868 2,522 2,552 Profi
Slide 35: Net debt movement – consolidated
Net debt movement – consolidated 786 ` crore 850 42,764 339 293 42,068 Net Debt* New Loan Taken Repayments Fx Impact Movement in Cash Net Debt* as on Sep'17 & Cash Equivalents as on Dec'17 Particulars 31.12.2017 30.09.2017 Cash & cash equivalent (` crore) 1,456 1,163 Net Debt/Equity (x) 1.68 1.87 Ne
Slide 36: Q3 FY18 Results – Drivers of Performance
Q3 FY18 Results – Drivers of Performance Production volume increased 4% QoQ, aided by a 13% QoQ increase in long products driven by higher utilisation at Volumes Dolvi and improved water availability at Salem Consolidated Sales volume increased by 2% QoQ, driven by 14% QoQ increase in Export vol
Slide 37: Outlook
Outlook Domestic economic activity likely to see an uptick post the slowdown induced by key structural reforms Government impetus on infrastructure investment and better credit delivery (bank recapitalisation) likely to boost steel demand. Roads and highways, railways, metro projects, water and
Slide 38: Agenda
Agenda Overview Value Performance Guidance Business Proposition Overview Environment 38
Slide 39: Volume guidance for FY18
Volume guidance for FY18 +4.4% YoY % +4.9% 16.50 YoY % 15.80 15.50 14.77 FY17 FY18 E FY17 FY18 E Crude Steel Production Saleable Steel Sales All figures are in million tonnes 39
Slide 40: Rolling Capex Plan: FY18-21
Rolling Capex Plan: FY18-21 26,815 3,235 18,815 18,815 Equity: 19,200 8,815 8,000 7,000 Equity: FY18: Debt: 530 3,000 2,700 4,200 1,050 10,000 8,000 Debt: FY17: 4,300 2,800 5,000 Rolling Capex FY17 capex Capex Ind-AS Mining Expansion/ Other cost Rolling Capex FY18 Capex * FY19-FY21 (FY17-FY18) outfl
Slide 41: Key Projects
Key Projects Total project cost – `15,000 crore Total capacity will be increased from 5 MTPA to 10 MTPA. The major Dolvi: increasing steel facilities to be set-up under the expansion project are: 4.5 MTPA Blast furnace with 5 MTPA Steel Melt Shop making capacity to 10 5.75 MTPA Sinter plant, 4
Slide 42: Key Projects contd. …
Key Projects contd. … Total project cost – `2,000 crore Vijayanagar: CRM-1 CRM1 complex capacity will be increased from 0.85 MTPA to 1.80 MTPA complex capacity alongwith two Continuous Galvanizing Line of 0.45 MTPA each, a new expansion 1.2 MTPA Continuous Pickling Line for HRPO products Commissi
Slide 43: Agenda
Agenda Overview Value Performance Guidance Business Proposition Overview Environment 43
Slide 44: Global economy
Global economy GDP growth - IMF projections for 2017 and 2018 (%YoY) Manufacturing PMI 2017E 2018E 62 US Eurozone Japan China 7.4% 6.8% 59 6.7% 6.6% 2.7% 2.3% 2.4% 2.3% 2.3% 56 2.2% 4.9% 4.7% 1.8% 3.9% 1.2% 3.7% 53 50 World AMEs US Euro Japan EMEs India China 47 Area Jan-15 Jun-15 Nov-15 Apr-16 Sep-
Slide 45: Global steel scenario
Global steel scenario Global finished steel demand growth estimates (%YoY) China steel production and export 80 15 2017 F 2018 F Room for positive surprise? 60 6.8 10 5.7 4.8 4.8 4.5 4.3 40 5 2.8 2.6 3.0 3.0 2.5 20 1.6 0.0 1.1 1.4 0.0 0 0 World World China US EU ASEAN MENA India Jan-15 Jun-15 Nov-15
Slide 46: Indian economy
Indian economy Gross Value Added y/y Gross Fixed Capital Formation y/y 7.6% 7.4% 6.8% 6.7% 5.9% 6.4% 4.7% 6.1% 3.0% 5.6% 5.6% 1.7% 1.6% -2.1% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 H2 18E Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 H2 18E Vehicle sales and Industrial production picking up Industry (GVA) Growth
Slide 47: Forward looking and cautionary statement
Forward looking and cautionary statement Certain statements in this report concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The
Slide 48: Thank you
Thank you 48