Vedanta Limited · NSE:VEDL
Vedanta — JP Morgan India Summit 2019
31 slides from Vedanta's conference presentation, Sep 19, 2019
Slide 1: September'19
| Grete . transforming elements
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: 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 8
Slide 9: Heading Towards – Zero Harm, Zero Waste, Zero Discharge
Heading Towards – Zero Harm, Zero Waste, Zero Discharge Safety Environment Sustainability 1st ever Dry Tail Stacking Plant in Zinc India selected as Member of 3 fatality in Q1 FY2020 the Indian Zinc Industry is set to “FTSE4Good Emerging Index” for be commissioned at Zawar Mine New safety KP
Slide 10: 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 11: Zinc India: Strong Momentum in Silver Production
Zinc India: Strong Momentum in Silver Production Fastest Growing Silver Company with a CAGR of 18% Ranked 9th Globally in Primary Silver Production Silver prices up ~15% in last 3 months 2000 Hindustan Zinc 1200 Silver in tonnes 1500 silver production in tonnes 1000 1000 750-800 1000 679 800 558 453
Slide 12: Zinc India: Production Grows as Projects Approach Completion
Zinc India: Production Grows as Projects Approach Completion Performance Update Confident of Achieving 1.2 Mtpa MIC Capacity in FY20 Finished Metal Production, up 3% y-o-y Rampura Agucha Shaft commissioning in Q3 Stable Production from underground mine, up 1% y-o-y Rapid development crew to
Slide 13: Zinc International: Gamsberg Continued Performance Ramp Up
Zinc International: Gamsberg Continued Performance Ramp Up Mining Processing Operating at design capacity to deliver ore of 330ktpm • June Exit throughput at 450 tph, target of 500 tph by Q2 Blast improvement to increase crusher throughput • Advanced Process Control to ensure optimal recovery
Slide 14: Zinc International: Consistent Performance
Zinc International: Consistent Performance Performance Update Gamsberg Overall production at 60kt, up 134% y-o-y Gamsberg production at 23kt, ramp up going on COP of $1,597/t, down 32% y-oy (10kt in Jun’19) 277 BMM 248 224 219 Production at 19kt, up 24% y-o-y (Best quarter in last 5 quarters
Slide 15: Oil & Gas: Robust Portfolio across Lifecycle
Oil & Gas: Robust Portfolio across Lifecycle EXPLORATION APPRAISAL DEVELOPMENT PRODUCTION 51 OALP Blocks 8 Rajasthan Fields B&A Polymer Rajasthan (V&V, MBH, DP, MBA ASP Rajasthan KG Offshore Shakti, SW-1, Tight Oil (ABH) Ravva Ravva Guda S-7, NP, SL-1) Tight Gas (RDG) Cambay 10 Satellite Fields KG O
Slide 16: Oil & Gas: Portfolio being monetized to drive multi-fold growth
Oil & Gas: Portfolio being monetized to drive multi-fold growth $ 3.2bn Gross Capex Global Partnership Model Monetizing 400 million barrels Executing in Partnership with Global Companies Targeting resource addition from exploration & appraisal Key Partners: Halliburton, Schlumberger, GE-Bake
Slide 17: Oil & Gas: Production - Ramp Up Plan
Oil & Gas: Production - Ramp Up Plan Production Ramp Up (kboepd) Key Growth Projects ~260-270 Incremental Gross Capex EUR Project Partner Production (kboepd) 200 ($ Million) (mmboe) 180 [H2 exit over Q1] Mangala Infill, Bhagyam & Halliburton 240 58 20 Aishwariya Polymer Wells: BH-GE MBA ASP Faciliti
Slide 18: Oil & Gas: Exploration – OALP An Unprecedented Growth Opportunity
Oil & Gas: Exploration – OALP An Unprecedented Growth Opportunity 41 blocks in OALP I, 10 in OALP II & III 51 ~60,000 sq.km. acreage Well Diversified 40 Onshore Mostly proven oil and gas basins, both 11 Offshore conventional / unconventional play 5.6 ~$ 800 Million Capex commitment in Explor
Slide 19: Oil & Gas: Exploration – Augmenting Resource Base
Oil & Gas: Exploration – Augmenting Resource Base Work Investment Resources Program Partner Status ($ Million) (mmboe) (Wells) Rajasthan Drilling from 60 300-600 7-18 Schlumberger Q2 FY20 Exploration Rajasthan Schlumberger Drilling from 75 200 14 / Halliburton Q2 FY20 Tight oil Appraisal 2 Discoveri
Slide 20: Aluminium: Achieving Design Structure
Aluminium: Achieving Design Structure Structural Reduction in Cost, down 8% y-o-y Alumina Refinery setting new records Production: 1,912 1,810 1,764 Highest ever Lanjigarh Alumina production, up 37% y-o-y Lanjigarh COP: COP at $284/t, down 17% y-o-y. Lowest in last 2 years Coal Q4 FY19 Q1 FY19 Q
Slide 21: Aluminium: Significant progress on Strategic levers Continues
Aluminium: Significant progress on Strategic levers Continues 2,102 1,810 1,764 1,500 Coal Alumina Bauxite Initiatives Ramp Up Sourcing Others Q3 FY19 Q4 FY19 Q1 FY20 Target Initiatives Action Plan Increase Linkages through participation in Tranche V & VI Coal Target coal security 90% of require
Slide 22: Electrosteel: New Vision To Forge A Stronger Future
Electrosteel: New Vision To Forge A Stronger Future Performance Update Way Forward Feasibility study concluded for doubling the Production: capacity Production of 323kt, up 34% y-o-y On track to launch the capacity enhancement Sales at 273kt, up 16% y-o-y project in FY20 VAP sale at 90% vs
Slide 23: Other Assets: Iron ore & Copper India
Other Assets: Iron ore & Copper India Iron ore Copper India Karnataka sales at 1.2 mt; higher than last year Favourable order from NGT in Dec 2018 Continuously Engaging with Government for resumption of Goa mining Supreme court directed to file writ petition with Pig iron production at 178
Slide 24: Financial Update
vedanta transforming elements <b
Slide 25: 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 26: Financial snapshot (Q1FY20)
Financial snapshot (Q1FY20) EBITDA Att PAT EBTIDA Margin* ND/EBITDA c.746Mn USD c.194Mn USD 27% 1.3x Down 20% y-o-y Down 12% y-o-y Industry leading margin Lowest among Indian peers * Excludes custom smelting at Copper India, Copper Zambia and Zinc-India operations EBITDA Bridge (In USD Mn) IOB 20 ES
Slide 27: Balance Sheet
Balance Sheet Term Debt Maturities - ₹ 38,532 Crore ($5.6 bn) (as of June 30, 2019) Liquidity – Cash and investments @ 4.4Bn USD 11.7 10.3 rated Tier I by CRISIL; 8.5 3.5 – Undrawn line of credit c.704Mn USD ₹ ‘000 Crore 4.9 2.9 6.2 Net Interest – Reducing q-o-q 1.0 3.0 6.8 Interest Income – R
Slide 28: Appendix
Appendix
Slide 29: 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 30: CIHL Treasury Investment Transaction – Accounting Impact
CIHL Treasury Investment Transaction – Accounting Impact Structured investment is Marked-to-market (MTM) at each reporting date with gain/loss recognized in the income statement. Forex MTM gain/loss including forex derivative is also recognized in the income statement. Net Consideration from Unwindi
Slide 31: 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