Slide 1: Channelling growth opportunities – Q2 FY2019 Investor Presentation
Channelling growth Vedanta Limited opportunities OIL&GAS|ZINC&SILVER|ALUMINIUM|POWER|IRONORE|STEEL|COPPER I N V E S T O R P R E S E N T A T IO N - Q 2 F Y 2 0 1 9 31 October 2018
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: Contents
Contents Q2 FY2019 Review Venkat, CEO Financial Update Arun Kumar, CFO Growth Projects and Business Deep Dive Venkat, CEO O&G Business Sudhir Mathur, CEO - Cairn Oil & Gas VEDANTA LIMITED – Q2 FY2019 INVESTOR PRESENTATION 3
Slide 4: Q2 FY2019 Review
Q2 FY2019 Review Venkat Chief Executive Officer VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|STEEL|COPPER
Slide 5: Health, Safety, Environment and Sustainability
Health, Safety, Environment and Sustainability Safety Water Management • 3 fatalities in Q2 FY19 Water risk mitigation measures for water self-sufficiency Environment and Sustainability • Dariba, HZL - uses treated water from Sewage • HZL - 1st in Environment category, DJSI global rankings for Treat
Slide 6: Q2 FY2019 Business Highlights
Q2 FY2019 Business Highlights Zinc India Zinc International O&G Aluminium Refined Zn-Pb: 212kt BMM: 13kt Aluminium: 494 kt Production Gross average: 186 kboepd Silver: 172 tonnes Skorpion: 15kt Alumina: 348 kt Costs CoP ex. royalty: $1,034/t CoP: $2,428/t RJ blended: $7.4/bbl CoP: $2,018/t EBITDA Rs
Slide 7: Q2 FY2019 Business Highlights (cont’d)
Q2 FY2019 Business Highlights (cont’d) Power Iron Ore and Steel Copper India Iron Ore Electrosteel Power sales: 3,514MU Production Karnataka Iron Ore: 1.4mt ESL: 285kt Cathodes: 15kt TSPL availability: 94% Costs TSPL margin: Re 1/unit IOK CoS: $9.0/t EBITDA/t $90/t CoP: - EBITDA Rs. 378 cr Rs.98 cr
Slide 8: Financial Update
Financial Update Arun Kumar Chief Financial Officer VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|STEEL|COPPER
Slide 9: Q2 FY2019 Financial Snapshot
Q2 FY2019 Financial Snapshot Revenue EBITDA FCF Net Debt Rs. 22,705 cr Rs. 5,342 cr Rs. 3,550 cr Rs. 26,357 cr Up 5% y-o-y Down 8% y-o-y Strong FCF Down 12% q-o-q Gross Debt ND/EBITDA1 Dividend ROCE1 Rs. 66,372 cr 1.0x Rs. 17 per share 15.8% Up 2% q-o-q Remains strong Attractive yield of c.7%2 Robus
Slide 10: EBITDA Bridge (Q1 FY2019 vs. Q2 FY2019)
EBITDA Bridge (Q1 FY2019 vs. Q2 FY2019) (In Rs. crore) Aluminum (764) Zinc & Lead (744) Brent 66 6,529 1,441 442 124 5,469 71 10 66 5,342 185 Market & Regulatory Operational Rs. (1,060) crore Rs. (61) crore Q1 FY19 LME/ Brent Input Currency Regulatory Adjusted Volume Cost & Mktg Others Q2 FY19 / Pre
Slide 11: Net Debt for Q2 FY2019
Net Debt for Q2 FY2019 (In Rs. crore) FCF Post Capex Rs. 3,550 crore 29,910 3,892 3 26,357 2,288 82 2,548 Net Debt 1st Jul CF from WC Movements Buyers Credit Capex Translation Net Debt 30th Sep Operations Repayments & Others VEDANTA LIMITED – Q2 FY2019 INVESTOR PRESENTATION 11
Slide 12: Growth Delivering Superior Returns
Growth Delivering Superior Returns Growth Capex Profile, $bn Oil & Gas Zinc Al & Power Copper Optionality Capex 1.8 Lanjigarh 4mt refinery expansion (Phase 1) 0.6 ESL 2.5mt expansion Towards Zinc India expansion to 0.9 0.3 1.2mt MIC Outstanding capex at Gamsberg 0.8 0.1 0.01 0.02 to be spent in H2 F
Slide 13: Balance Sheet Strength
Balance Sheet Strength Forex Currency Impact Term Debt Maturities - Rs. 44,096 Crore ($6.1 bn) (as of 30 Sep 2018) $ debt at 7% of portfolio - Subsidiaries 10.0 12.5 11.2 fully hedged Standalone 4.6 ~Rs 600 crore per year 6.3 3.8 increase with every Rupee Rs. ‘000 Crore 5.8 depreciation 2.1 8.0 2.8
Slide 14: Capital Allocation: Focus on Shareholder Returns
Capital Allocation: Focus on Shareholder Returns 3 year average TSR >100% 78% 53% -36% FY16 FY17 FY18 H1 FY19 6% CAGR production growth1 Superior Shareholder Returns Strong Balance Sheet Attractive Brownfield Investments Dividend Yield (%)2 ND/EBITDA<= 1 Capex, $bn ROCE 10.5% 15.0% 17.5% 15%+ 7.2% 6
Slide 15: Growth Projects and Business Deep Dive
Growth Projects and Business Deep Dive Venkat Chief Executive Officer Sudhir Mathur CEO –Cairn Oil & Gas VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|STEEL|COPPER
Slide 16: Zinc India: On-track for ramp-up to 1.2mt MIC
Zinc India: On-track for ramp-up to 1.2mt MIC RA UG: Mid shaft loading system RA UG full shaft MIC production trend, kt Zawar new production, commissioned in end Q2 Underground 2mtpa mill: Zawar mill SK: Material hoisting from shaft Open pit Civil & erection commissioning SK: New 1.5mt mill commissi
Slide 17: Zinc International: Gamsberg starts trial production
Zinc International: Gamsberg starts trial production 250kt Gamsberg project 450-500 Production (kt) • 100% of pre-stripping completed in July 250 • Trial production of concentrate commenced in end September 75 • Crusher commissioned; 750kt of ore stockpile built ahead of plant feed FY18 FY19 FY20 Ph
Slide 18: Aluminium: Progress on structural reduction in costs
Aluminium: Progress on structural reduction in costs COP, $/t 2,018 1,500 Coal Alumina Bauxite initiatives ramp-up sourcing Other Q2 FY2019 Target H1 FY19 Steps Mid term plan Progress Coal security • 3.2mt additional linkage from Tranche IV auction; Tranche V, VI expected in mid term Coal 49% (Q2
Slide 19: Oil & Gas Business Strategy
Oil & Gas Business Strategy Exploration • For the first time, a sustainable and large portfolio mix comprising 41 OALP Blocks opportunities across O&G lifecycle Rajasthan KG Offshore Ravva • Acquisition of 41 blocks in OALP establishes Cairn as one of the largest acreage holder in the country Apprai
Slide 20: OALP: Provides 6x jump in acreage in India
OALP: Provides 6x jump in acreage in India Presence • 41 blocks, mostly in established basins • Onshore 33 blocks, Offshore 8 blocks Prospective resource base • Potential of ~1.4 - 4.2 bn boe of resources • Blocks closer to existing infrastructure facilitating ease of cost effective monetization • ~
Slide 21: Exploration: High impact prospects across basins
Exploration: High impact prospects across basins Onshore Offshore Rajasthan Rajasthan Tight Oil KG Offshore Ravva Exploration Appraisal 4 Fields Work Program Wells: 7-18 Wells: 2 Wells: 9-16 (V&V, MBH, DP & Shakti) Resources Target, Reserves – 17 mmboe 300-600 190 300 mmboe Resources – 50 mmboe Cape
Slide 22: Monetizing resources with best in class technology
Monetizing resources with best in class technology All Reserve & Resources Numbers in mmboe Rajasthan Offshore 85 32 200 28 40 250 1,093 51 458 Growth Projects 418 469 Production Existing Liquid B&A MBA Tight Tight RJ EUR Production Existing & Offshore (Till Mar'18) Wells Handling Polymer ASP Oil Ga
Slide 23: Growth Projects: Wells hook up to add volumes
Growth Projects: Wells hook up to add volumes Timeline Capex Project Partner Wells EUR Rigs ($ Million) Jun 18 Sep 18 Dec 18 Mar 19 Mangala Infill Halliburton 100 45 18 1 3 10 2 22 11 45 21 Bhagyam & Aishwariya Halliburton 140 42 40 2 10 2 19 6 33 13 42 23 Polymer BH-GE MBA ASP Facilities: Under 905
Slide 24: Delivering on our Strategic Priorities
Delivering on our Strategic Priorities Optimise Capital Augment our Operational Allocation & Maintain Reserves & Excellence Strong Balance Sheet Delivering on Resources base • Volume growth and Preserve our License • Improving cash flows Growth • Well developed asset optimisation to Operate Opportun
Slide 25: Appendix
Appendix VEDANTA LIMITED OIL&GAS|ZINC&SILVER|ALUMINIUM| POWER|IRONORE|STEEL|COPPER
Slide 26: FY 2019 Guidance
FY 2019 Guidance Segment FY19 Production and CoP Zinc-Lead Integrated > FY18 production ; Silver: 650 - 700 tonnes Zinc India H2 COP: $950-975/t excluding royalty Skorpion and BMM: 150kt Zinc Gamsberg: 75kt International COP: ZI (excl Gamsberg) : $1,850 – 1,950, Gamsberg: $800 - $1,000/t H2 Gross Vo
Slide 27: Income Statement
Income Statement Depreciation & Amortization In Rs. crore Q2 FY’19 Q2 FY’18 Q1 FY’19 Higher primarily on account of higher charge at Zinc India due Revenue 22,705 21,590 22,206 to higher ore production, acquisition of new businesses and EBITDA 5,342 5,776 6,529 higher charge at Oil & Gas due to reve
Slide 28: Entity Wise Cash and Debt
Entity Wise Cash and Debt 30 Sept 2018 (Rs Cr) 30 June 2018 (Rs Cr) 30 Sept 2017 (Rs Cr) Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited Standalone 44,754 8,050 36,704 43,263 5,888 37,375 38,232 12,375 25,857 Cairn India Holdings Limited1 2,912 7,101 (
Slide 29: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $6.1bn Debt Breakdown (as of 30 September 2018) (as of 30 September 2018) 11% Debt breakdown (in $bn) (Rs. in 000’ Cr) Term debt 6.1 44.1 Term Loans-INR Working capital 0.4 3.3 Bonds-INR Short term borrowing 2.2 16.0 31% P
Slide 30: EBITDA Bridge (Q2 FY2018 vs. Q2 FY2019)
EBITDA Bridge (Q2 FY2018 vs. Q2 FY2019) (In Rs. crore) Copper (396) Zinc & Lead (355) Brent 643 ElectroSteel 168 Aluminium 209 Aluminium 121 Zinc & Lead (582) Others (19) 270 977 6,134 481 5,776 842 223 227 84 5,342 Market & Regulatory Operational Rs. 358 crore Rs. (708) crore Q2 FY18 LME/ Brent / I
Slide 31: Project Capex
Project Capex Capex3 Spent up to Mar Spent in H1 Unspent as at Capex in Progress Status ($mn) 20185 FY20195 30 Sept 186 Cairn India1 – Mangala Infill, Liquid handling, Bhagyam & 1,991 183 179 1,629 Aishwariya EOR, ASP, Tight Oil & Gas etc Aluminium Sector Line 3: Fully capitalised Line 4: Fully Capi
Slide 32: Segment Summary – Zinc India
Segment Summary – Zinc India Q2 Q1 H1 Production (in ’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Mined metal content 232 219 6% 212 444 Refined Zinc – Integrated 162 192 (16%) 172 334 Refined Lead – Integrated1 49 38 30% 42 91 Refined Saleable Silver - Integrated (in tonne
Slide 33: Segment Summary – Zinc International
Segment Summary – Zinc International Q2 Q1 H1 Production (in’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Refined Zinc – Skorpion 15 23 (35%) 10 25 Mined metal content- BMM 13 20 (32%) 15 29 Total 28 42 (34%) 25 54 Financials (In Rs. crore, except as stated) Revenue 541 853
Slide 34: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q2 Q1 H1 OIL AND GAS (boepd) FY 2019 FY 2018 % change YoY FY 2019 FY 2019 Average Daily Total Gross Operated Production 196,010 190,389 3% 204,710 200,366 (boepd)* Average Daily Gross Operated Production (boepd) 185,296 180,955 3% 194,986 190,431 Rajasthan 155,194 153,238
Slide 35: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q2 Q1 H1 OIL AND GAS (boepd) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Average Daily Production Gross operated 185,926 180,955 3% 194,986 190,431 Oil 177,026 173,408 2% 185,914 181,446 Gas (Mmscfd) 53 45.3 18% 54 54 Non operated – Working Interest 181 - - 89 135 Working
Slide 36: Segment Summary – Aluminium
Segment Summary – Aluminium Q2 Q1 H1 Production (in’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Alumina – Lanjigarh 348 269 30% 325 673 Total Aluminum Production 494 401 23% 482 976 Jharsuguda-I 137 99 39% 136 273 Jharsuguda-II 1 216 157 37% 204 420 245kt Korba-I 64 65 (2%)
Slide 37: Aluminium profitability
Aluminium profitability $/t Q1 ‘19 2,259 72 97 2,428 (840) (718) (377) (69) $425/t (146) (268) 10 Q2 ‘19 2,057 2,223 (875) 51 115 (764) (379) (61) (135) 144 (247) (238) Realisation LME Alumina EBITDA Int Power Other Hot PBT Addition Conversion Dep Premium & others Value Metal Ingot Operating costs V
Slide 38: Segment Summary – Power
Segment Summary – Power Q2 Q1 H1 Production (in million units) FY 2019 FY 2018 % change YoY FY2019 FY 2019 Total Power Sales 3,514 2,950 19% 3,315 6,830 Jharsuguda 600 MW 124 93 35% 164 289 BALCO 600 MW 480 132 - 656 1,137 MALCO - - - - - HZL Wind Power 185 143 29% 139 324 TSPL 2,725 2,582 6% 2,355
Slide 39: Segment Summary – Power (contd.)
Segment Summary – Power (contd.) Power Generation Capacity – c. 9GW IPP: 3.6GW CPP:5.1GW • 600MW Jharsuguda (of • 1,215MW Jharsuguda 2400MW plant) • 3*600MW Jharsuguda (of 2400MW plant) • 1,980MW TSPL 41% • 540MW BALCO • 2*300MW BALCO (of • 270MW BALCO 1200MW plant) 59% • 2*300MW BALCO (of 1200 MW p
Slide 40: Segment Summary – Iron Ore and Steel
Segment Summary – Iron Ore Particulars (in million dry metric tonnes, or Q2 Q1 H1 as stated) FY 2019 FY 2018 % change YoY FY 2019 FY 2019 Sales 0.4 0.7 (51%) 1.4 1.8 Goa 0.1 0.1 (14%) 1.0 1.2 Karnataka 0.2 0.6 (59%) 0.4 0.6 Production of Saleable Ore 1.4 1.2 16% 1.4 2.8 Goa - 0.4 - 0.2 0.2 Karnataka
Slide 41: Segment Summary – Copper India
Segment Summary – Copper India Q2 Q1 H1 Production (in ’000 tonnes, or as stated) FY 2019 FY 2018 % change YoY FY 2018 FY 2018 Copper - Cathodes 15 106 (86%) 24 40 Tuticorin power sales (million units) - 4 - - - Financials (In Rs. crore, except as stated) Revenue 2,376 6,237 (62%) 2,797 5,173 EBITDA
Slide 42: Sales Summary
Sales Summary Sales volume Q2 FY2019 Q2 FY2018 Q1 FY2019 H1 FY 2019 Zinc-India Sales Refined Zinc (kt) 160 193 170 331 Refined Lead (kt) 49 39 42 91 Total Zinc (Refined+Conc) kt 160 193 170 331 Total Lead (Refined+Conc) kt 49 39 42 91 Total Zinc-Lead (kt) 209 232 212 422 Silver (moz) 5.2 4.7 4.5 9.7
Slide 43: Sales Summary
Sales Summary Sales volume Q2 FY2019 Q2 FY2018 Q1 FY2019 H1 FY2019 Sales volume Q2 FY2019 Q2 FY2018 Q1 FY2019 H1 FY 2019 Power Sales (mu) Iron-Ore Sales Jharsuguda 600 MW 124 93 164 289 Goa (mn DMT) 0.1 0.1 1.0 1.2 TSPL 2,725 2,582 2,355 5,081 Karnataka (mn DMT) 0.2 0.6 0.4 0.6 BALCO 600 MW 480 132
Slide 44: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of a 1 Rs depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ INR 600 crs / year Commodity prices – Impact of a 10% increase in Commodity Prices H1 FY19 H1 FY19 Commodity Average price EBITDA ($mn) Oil ($/bbl) 75 62 Zinc ($/t)
Slide 45: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 50.1% Sesa Iron Ore Sterlite Copper Konkola Power (600 MW Jharsuguda) Copper Vedanta Ltd Mines (KCM) Aluminium (Odisha aluminium and power assets) Cairn Oil & Gas* Subsidiaries of Vedanta Ltd 64.9% 51% 100% 100% 90% Z
Slide 46: Earnings Conference Call Details
Earnings Conference Call Details Earnings conference call is scheduled at 6:30 PM (IST) on Oct 31, 2018. The dial-in numbers for the call are given below: Event Telephone Number Mumbai main access: Earnings conference call on Oct 31, 2018 India – 6:30 PM (IST) +91 22 7115 8015 +91 22 6280 1114 Toll