Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q3 FY2017 Earnings Presentation
34 slides from Tata Steel's earnings presentation, Feb 7, 2017
Slide 1: Results Presentation
Results Presentation Financial Quarter ended 31st December 2016 February 07, 2017 1
Slide 2: Safe harbor statement
Safe harbor statement 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 implied. Impo
Slide 3: Tata Steel is committed towards excellence in Health and Safety
Tata Steel is committed towards excellence in Health and Safety LTIFR* data for Tata Steel Group Ambition: 1 Committed to fatality free sites, on a sustained 0.9 basis. 0.8 Being the Benchmark in H&S in our industry 37% Key Focus areas: 0.7 Reduction Deploying management systems to embed and 0
Slide 4: Focused on engaging with communities and improving quality of life
Focused on engaging with communities and improving quality of life Primary health care services to nearly CSR Spend -India (Rs. Crs) Nearly 1,200 students mainstreamed to 3,60,000 people through static and mobile regular schools clinics Completed 1st of the 30 Model Schools in 212 Promoted s
Slide 5: Awards & recognitions conferred in various categories
Awards & recognitions conferred in various categories World Steel Association recognised Tata Steel for setting highest standards of health and safety at workplace. Tata Steel conferred with ‘Sustainable Manufacturing of Make in India’ Award at the Make in India Awards 2016 Tata Steel has been decla
Slide 6: Agenda
Agenda I Consolidated Financial Performance II India & SE Asia performance III Europe performance IV Appendix 6
Slide 7: Global Steel | Sustained rally in steel prices
Global Steel | Sustained rally in steel prices $/ MT HRC regional realizations (US$/t) 600 Rising cost curve, better than expected demand in China and 550 reflation expectations supported sustained rally in steel prices. 500 450 Coking coal prices doubled but corrected post supply relaxations in
Slide 8: China Steel | Fundamentals improving with higher visibility on supply discipline
China Steel | Fundamentals improving with higher visibility on supply discipline, emission curbs and supportive demand PMI China Manufacturing PMI 52 Supply-side rationalisations, emission curbs, focus on closure of small 51.5 scrap feeding steel makers and industry consolidation drive eased 51 gl
Slide 9: Highlights for the quarter
Highlights for the quarter Consolidated revenues of Rs. 29,392 crores, up 7% q/q and 14% y/y India deliveries grew 14% q/q and 27% y/y outperforming domestic market; Europe deliveries increased by 3% q/q Realisations increase across geographies Consolidated EBITDA of Rs. 3,550 crores, up 19%
Slide 10: Strategic Developments
Strategic Developments Executed definitive agreement for acquiring 100% share in Brahmani River Pellets Limited, a step towards securing competitive logistics for the Kalinganagar plant. Executed definitive agreements with Creative Port Development Private Limited for the development of ‘Subarna
Slide 11: Quarterly Financial Performance as per Ind-AS 1
Quarterly Financial Performance as per Ind-AS1 Rs Crores Consolidated India Q3FY17 Q2FY17 Q3FY16 9mFY17 9mFY16 Q3FY17 Q2FY17 Q3FY16 9mFY17 9mFY16 Deliveries(MT) 6.11 5.65 5.81 17.16 17.47 2.99 2.62 2.35 7.76 6.82 Turnover 29,392 27,471 25,767 83,269 81,249 14,106 11,718 10,145 36,148 30,961 Raw mate
Slide 12: Quarterly Financial Performance as per Ind-AS 1
Quarterly Financial Performance as per Ind-AS1 Rs Crores Europe SEA Others & Eliminations Q3 Q2 Q3 9m 9m Q3 Q2 Q3 9m 9m Q3 Q2 Q3 9m 9m FY17 FY17 FY16 FY17 FY16 FY17 FY17 FY16 FY17 FY16 FY17 FY17 FY16 FY17 FY16 Deliveries(MT) 2.37 2.30 2.73 7.20 8.36 0.65 0.65 0.65 1.95 2.03 - - - - - Turnover 12,537
Slide 13: Consolidated EBITDA Bridge – Q2FY17 vs Q3FY17
Consolidated EBITDA Bridge – Q2FY17 vs Q3FY17 Rs Crores 4,129 793 105 144 3,104 1,569 Q2 FY17 Selling Result Cost Changes Volume/Mix Others Q3 FY17 Note: Consolidated EBITDA consists of EBITDA across four operating entities –TSI, TSE, NSH & TSTH Higher realisations across locations on the back of
Slide 14: Consolidated Debt Bridge – 9 months ended 31st December’16
Consolidated Debt Bridge – 9 months ended 31st December’16 Rs Crores 2,310 775 524 232 84,316 902 467 84,752 8,072 81,987 76,680 Gross Debt Loans Movt Finance lease Forex impact Disposal of UK Gross Debt Loans Movt Forex Impact & Gross Debt Cash, Bank & Net Debt Dec'16 Mar'16 obligation Longs Busine
Slide 15: Consolidated Cash Flow Bridge – 9 months ended 31st December’16
Consolidated Cash Flow Bridge – 9 months ended 31st December’16 Rs Crores 11,298 5,094 1,292 5,624 2,880 3,317 5,988 981 335 950 117 3359 Opening cash & Operating Cash Changes in Direct taxes paid Capex Monetisation & Net sales of Net Debt Interest paid Dividend Others Closing cash & cash equivalent
Slide 16: Agenda
Agenda I Consolidated Financial Performance II India & SE Asia performance III Europe performance IV Appendix 16
Slide 17: India Steel | Demand postponement on demonetisation drive
India Steel | Demand postponement on demonetisation drive PMI IIP & Manufacturing PMI % India Production Index rose by 5.7% in November’16 in the month 56 12 10 demonetisation was announced, after declining steadily in the previous 54 8 few months. 52 6 4 50 2 Significant impact on rural sales a
Slide 18: India Steel | Net steel trade position turning favorable
India Steel | Net steel trade position turning favorable Rebar Rebar HRC – Rebar Price HRC Steel production in India achieved double digit growth during the quarter on 117 a y/y basis. Consumption growth during the quarter however remained 21.4% anaemic at ~3% y/y. Driven by higher international
Slide 19: Tata Steel India | Strong growth reflects the strength of the franchise
Tata Steel India | Strong growth reflects the strength of the franchise Volumes in KT 20% 399 13% 352 333 937 11% 13% 846 827 47% 17% 1351 1154 920 271 307 272 Q3FY16 Q3FY17 Q2FY17 Transfers IPPE BPRS Auto 20% y/y growth in sales to the Automotive segment as we partner with auto companies in their
Slide 20: Tata Steel India | Some facts we are proud of
Tata Steel India | Some facts we are proud of 1 out of every 7 Individual house builders build their homes with Tata Tiscon rebars 3 among every 4 medium & heavy commercial vehicles run on chassis made from TS HR coil 1 in every 3 GC roofs in rural India is made with Tata Shaktee 1 in every 2 LPG cy
Slide 21: Tata Steel India | Our track record of improving operational efficiencies
Tata Steel India | Our track record of improving operational efficiencies and minimising environmetal impact Coke rate (kg/thm) PCI rate (kg/thm) 168 180 490 175 470 496 487 483 155 450 479 443 468 122 123 126 455 455 135 116 117 430 110 443 410 115 380 93 390 91 95 81 370 364 350 75 FY07 FY08 FY09
Slide 22: Tata Steel India | EBITDA Bridge – Q2FY17 vs Q3FY17
Tata Steel India | EBITDA Bridge – Q2FY17 vs Q3FY17 Rs Crores 161 3,393 1,129 208 105 2,000 Q2 FY17 Revenue Cost Vol/Mix Others Q3 FY17 Average net realization increased on the back of global recovery in steel prices Adverse impact of increase in coal prices contained by ramp up at Tata Steel Ka
Slide 23: South East Asia | Business environment
South East Asia | Business environment Singapore Manufacturing PMI & Thailand Manufacturing Index 12 10 Average spreads continued to improve during the quarter in line 8 with international steel prices. 6 4 2 0 Singapore construction market contracted by 4% in the last -2 quarter due to less num
Slide 24: Tata Steel South East Asia | Business Update
Tata Steel South East Asia | Business Update Nat Steel Holdings Profitability improved on supportive international steel prices, higher volumes and better downstream spread management Continue to focus on cost optimization initiatives and export driven strategy with Canada recently developed as
Slide 25: India & South East Asia | Business Outlook
India & South East Asia | Business Outlook Higher visibility on supply side reforms in China, global manufacturing recovery & optimism in the US coupled with I prevailing low steel inventory levels is expected to sustain steel prices As the impact of demonetisation tapers, improvement in demand is e
Slide 26: Agenda
Agenda I Consolidated Financial Performance II India & SE Asia performance III Europe performance IV Appendix 26
Slide 27: Europe Steel | Market Context
Europe Steel | Market Context EU market supply (Mt, import share %) Eurozone and UK economies improved in first 3 quarters of 20 20% 18 2016, but main driver of growth continued to be services. 16 15% 14 Growth of European steel-using sectors remains mixed – 12 10% 10 construction and machinery
Slide 28: Tata Steel Europe | Improving offering to customers
Tata Steel Europe | Improving offering to customers European strategy continues to be focused on developing differentiated products and services which improve our customers’ competitiveness Sales of differentiated products 13% higher and their value- add almost 30% higher than a year ago, with s
Slide 29: Tata Steel Europe | EBITDA Bridge – Q2FY17 vs Q3FY17
Tata Steel Europe | EBITDA Bridge – Q2FY17 vs Q3FY17 180 £ millions £40m 160 140 £116m £(40)m 120 £(11)m 100 £40m £92m 80 £(34)m £3m £74m 60 40 20 0 Q2FY17 Selling result Cost changes Production volume Manufacturing Central & Others Q3FY17 Selling Result improved following favourable market condit
Slide 30: Europe | Business Outlook
Europe | Business Outlook EU economy expected to grow gradually. UK economic growth expected to remain steady despite I referendum result. The weaker pound will benefit UK exporters. II European steel demand expected to remain stable in 2017 in line with modest economic growth III European steel mil
Slide 31: Agenda
Agenda I Consolidated Financial Performance II India & SE Asia performance III Europe performance IV Appendix 31
Slide 32: Standalone Results – Q/Q Variations
Standalone Results – Q/Q Variations Rs Crores Q3 FY17 Q2 FY17 Key Reasons Gross sales 13,972 11,639 Higher deliveries and higher realisations Other operating income 134 79 Mainly on account of export benefits Changes in inventories (488) 159 Inventory build up Purchases of finished, semis & other pr
Slide 33: Consolidated Results – Q/Q Variations
Consolidated Results – Q/Q Variations Rs Crores Q3 FY17 Q2 FY17 Key Reasons Gross sales 29,279 27,392 Higher realisations across locations; higher deliveries at India, Europe and Singapore Other operating income 113 79 Mainly at Tata Steel India Changes in inventories (1,535) (999) Inventory build u
Slide 34: Contact
Contact Investor enquiries : Devang Shah Tel: +91 22 6665 0530 Email: devang.shah@tatasteel.com Media enquiries: Kulvin Suri Tel: +91 657 664 5512 / +91 92310 52397 Email: kulvinsuri@tatasteel.com Rob Simpson Tel: +44 207 717 4404/ +44 7990 786531 Email: rob.simpson@tatasteel.com 34