Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q2 FY2019 Earnings Presentation
34 slides from Tata Steel's earnings presentation, Nov 13, 2018
Slide 1: Exchange submission cover letter
TATA November 13, 2018 The Secretary, Listing Department The Manager, Listing Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, 5th Floor, Plot No. C/1, Dalai Street, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 001, Maharashtra, In
Slide 2: Results Presentation: Financial quarter ended September 30, 2018
TATA STEEL T TATA a T Results Presentation Financial quarter ended September 30, 2018 November November 13, 13, 2018 1
Slide 3: Safe harbor statement
Safe harbor statement TATA STEEL 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 im
Slide 4: Committed towards excellence in Health and Safety
Committed towards excellence in Health and Safety TATA STEEL Reduced by 1.31 69% 0.95 0.78 0.68 0.60 0.56 0.58 0.44 0.46 0.44 0.39 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 1HFY19 ▪ LTIFR* of Tata Steel group reduced to 0.44 ▪ World Steel Association (WSA) has recognized Tata Steel’s Process
Slide 5: Engaging with neighbouring communities and improving their quality of life
Engaging with neighbouring communities and improving their quality of life TATA STEEL Tata Steel Standalone – CSR Education: Health & Sanitation: Spend (Rs. crores) 232 ✓ Under Thousand Schools Programme, ✓ 2,31,046 footfalls recorded in 171 204 194 primary health care clinics, mobile 117 support ex
Slide 6: Key highlights
Key highlights TATA STEEL •• • Tata Steel India Tata Steel Consolidated volumes at 4.32 mt, standalone TSK Phase II EBITDA of 58% of group EBITDA/t at expansion on Rs.9,000 crores deliveries Rs.19,241/t track 4 ► Definitive Tata Steel India Bhushan Steel European agreement for sales growth normalise
Slide 7: Agenda
Agenda TATA STEEL Business Environment Operational Performance Financial Performance Appendix 6
Slide 8: Global steel demand was resilient with steady economic growth
Global steel demand was resilient with steady economic growth TATA STEEL ▪ Economic growth remained steady on improved investment activities in developed economies and stabilization in emerging economies; ▪ Steel demand remained resilient with an estimate to grow at 3.9%YoY during CY2018 ▪ Steel pro
Slide 9: Chinese steel prices witnessed some seasonal softness
Chinese steel prices witnessed some seasonal softness TATA STEEL ▪ Apparent demand grew by 7.7%YoY in 9MCY18 compared to 6%YoY growth estimate for full year 2018; exports moderated to ~6 mn tons per month level ▪ Crude steel production increased by 6.1%YoY in 9MCY18. Production growth was higher in
Slide 10: Indian steel prices buoyant with robust domestic demand
Indian steel prices buoyant with robust domestic demand TATA STEEL Steel production, demand and imports (mn tons) ▪ Domestic steel demand growth was robust despite Apparent finished steel usage Crude steel production Imports monsoon driven seasonality. -o- 28 1.9 2.1 2.2 26 26.1 26.7 26.1 26.4 ▪ Eco
Slide 11: Europe apparent steel demand supported by growth across sectors
Europe apparent steel demand supported by growth across sectors TATA STEEL ▪ Eurozone economy grew 1.9%YoY and 0.3%QoQ during July-Sep 2018 quarter ▪ EU steel demand remained healthy driven by growth in main steel-using sectors ▪ However, imports continued to grow much faster than the domestic deliv
Slide 12: SE Asia Rebar spreads improved marginally
SE Asia Rebar spreads improved marginally TATA STEEL ▪ Long steel demand remained weak in Singapore and Thailand as construction sector remained sluggish ▪ South East Asia rebar spreads have softened in recent months with correction in rebar prices Construction Growth (% Change, YoY) South East Asia
Slide 13: Agenda
Agenda TATA STEEL Business Environment Operational Performance Financial Performance Appendix 12
Slide 14: Tata Steel Standalone – continues to deliver strong growth
Tata Steel Standalone – continues to deliver strong growth TATA STEEL Crude Steel Production Volume (mn tons) Deliveries grew by 7% QoQ as against 2.1%QoQ industry growth 3.26 3.18 3.20 Automotive Branded & Retail 2Q 1Q 2Q 0.57 0.57 0.96 0.97 0.94 FY19 FY19 FY18 Deliveries break-up (mn tons) 0.47 To
Slide 15: Industrial Products, Projects & Exports (IPPE)
Industrial Products, Projects & Auto IPPE Exports (IPPE) Branded & Retail Downstream TATA STEEL Products Key markets Key strategy ✓ IPPE contributes ~40% of Tata Steel ▪ Active engagement to develop future standalone deliveries products and partnering with Industry L&E PEB Cold Rollers Leaders (Engi
Slide 16: Tata Steel Standalone – setting standards at multiple levels
Tata Steel Standalone – setting standards at multiple levels TATA STEEL Market leading branded portfolio Unparalleled Pan India reach* Branded products sales contributes Touches 2.5 million customers every 41% of total sales year across India Market leader in Auto Steel Most enriched product mix Aut
Slide 17: Tata Steel Standalone – continued focus on operational efficiencies and minimizing environmental impact
Tata Steel Standalone – continued focus on operational efficiencies and minimizing environmental impact TATA STEEL 1.00 0.88 0.57 0.50 Specific dust emission (kg/tcs) 0.44 0.41 0.41 0.37 63% reduction since FY13 FY 13 FY 14 FY 15 FY 16 FY17 FY18 1Q 2Q FY19 FY19 479 455 443 381 360 348 358 356 Coke R
Slide 18: Tata Steel Europe – improving offering to customers
Tata Steel Europe – improving offering to customers TATA STEEL ▪ 2QFY19 production was impacted by two unplanned outages, shutdowns for ongoing upgradation program and annual maintenance in seasonally weaker quarter ▪ Continues to strengthen sales mix with higher-value differentiated product sales e
Slide 19: Tata Steel Europe – continued focus on operational efficiencies and minimizing environmental impact
Tata Steel Europe – continued focus on operational efficiencies and minimizing environmental impact TATA STEEL 2.07 1.97 1.95 1.96 1.95 CO2 emission intensity (tCO2/tcs) 1.92 1.94 5.8% reduction since FY13 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 1H FY19 5.40 5.03 4.99 5.06 4.89 4.93 4.96 Specific energy
Slide 20: Bhushan Steel – integration is underway
Bhushan Steel – integration is underway TATA STEEL ▪ 2QFY19 production was flattish with focus on improving operational KPIs including safety, maintenance and environmental practices ▪ Sales volume increased by 34%QoQ as improved marketing strategy helped in inventory reduction Crude Steel Productio
Slide 21: Tata Steel SEA – volumes maintained despite weaker markets
Tata Steel SEA – volumes maintained despite weaker markets TATA STEEL ▪ Overall production improved on QoQ basis ▪ Overall sales volumes increased 8%QoQ; primarily due to better exports by Nat steel; sales volumes at Thailand were broadly stable on QoQ basis Saleable Steel Production Volume (mn tons
Slide 22: Other key developments
Other key developments TATA STEEL ✓ Cold roll mill (CRM) complex prioritized to improve product mix; Area grading and enabling activities of Kalinganagar – CRM complex has been completed phase II (5MTPA ✓ Enabling work on rest of the project is in advanced stage; Engineering of all other process pla
Slide 23: Business outlook
Business outlook TATA STEEL India: Europe: SEA: ✓ Demand expected to be stable; ✓ EU steel demand recovery is ✓ Construction demand in supported by continued government expected to continue; expected Singapore remains spending on infrastructure programs to grow by 2.2% in 2018 sluggish Steel ✓ Deman
Slide 24: Agenda
Agenda TATA STEEL Business Environment Operational Performance Financial Performance Appendix 23
Slide 25: Financial Performance
Financial Performance TATA STEEL Consolidated Standalone Rs Crores 2QFY19 1QFY19 2QFY18 2QFY19 1QFY19 2QFY18 Total revenue from operations 43,544 37,833 32,464 17,902 16,405 14,221 Raw material cost1 17,692 15,520 12,981 5,338 4,947 4,530 Change in inventories (150) (1,520) 1,308 (142) (655) 919 EBI
Slide 26: Financial Performance contd..
Financial Performance contd.. TATA STEEL 2 3 Europe Bhushan Steel SEA Others & Eliminations Rs Crores 2QFY19 1QFY19 2QFY18 2QFY19 1QFY19 2QFY19 1QFY19 2QFY18 2QFY19 1QFY19 2QFY18 Turnover 15,929 16,429 15,006 5,862 2,108 2,963 2,604 2,424 888 286 814 Raw material cost1 6,974 7,585 6,637 3,113 1,116
Slide 27: Consolidated Debt movement
Consolidated Debt movement TATA STEEL ₹ Crores 3,528 79 1,16,615 1,18,680 1,542 14,478 1,04,202 Gross Loans FX Others Gross Cash, Bank Net Debt movement Impact Debt & Current Debt Jun'18 Sep'18 Investments Sep'18 26
Slide 28: Group EBITDA movement – 2QFY19 Vs. 1QFY19
Group EBITDA movement – 2QFY19 Vs. 1QFY19 TATA STEEL ₹ Crores 1,261 970 9,000 296 909 352 6,514 1,302 1QFY19 Selling Cost Volume/Mix BSL - Inventory FX impact Others 2QFY19 Result Changes fair valuation on acquistion ▪ Selling results improved on account of better realisations across the geographies
Slide 29: Tata Steel Standalone EBITDA movement – 2QFY19 Vs. 1QFY19
Tata Steel Standalone EBITDA movement – 2QFY19 Vs. 1QFY19 TATA STEEL ₹ Crores 656 299 196 6,113 5,118 155 1QFY19 Selling result Cost Volume/Mix Others 2QFY19 ▪ Selling results improved with better steel realisations ▪ Cost impact reflects primarily higher raw material costs ▪ Favourable volume/mix i
Slide 30: Tata Steel Europe EBITDA movement – 2QFY19 Vs. 1QFY19
Tata Steel Europe EBITDA movement – 2QFY19 Vs. 1QFY19 TATA STEEL £10mn £183mn £62mn £120mn £124mn £11mn 1QFY19 Selling Cost Volume/mix Central 2QFY19 Result Changes & Other ▪ Selling result improved on account of better realisations ▪ Cost changes impacted by: a) higher raw material & energy costs,
Slide 31: Agenda
Agenda TATA STEEL Business Environment Operational Performance Financial Performance Appendix 30
Slide 32: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations TATA STEEL Rs Crores 2QFY19 1QFY19 Key Reasons Income from operations 17,580 16,154 Higher deliveries and marginal increase in realisations Other operating income 322 251 Higher exports benefits Raw materials consumed 4,769 4,576 Higher consumption of coal in-line
Slide 33: Consolidated Results – QoQ Variations
Consolidated Results– QoQ Variations TATA STEEL Rs Crores 2QFY19 1QFY19 Key Reasons Income from operations 42,947 37,434 Consolidation of Bhushan Steel and higher volumes in Tata Steel Standalone Other operating income 597 399 Primarily at Tata Steel Standalone Bhushan Steel consolidation for full q
Slide 34: Contact
Contact TATA STEEL Investor enquiries : Sandep Agrawal Tel: +91 22 6665 0530 Email: Sandep.agrawal@tatasteel.com 33