Jsw Steel Limited · NSE:JSWSTEEL
Jsw Steel — Investor Presentation (February 2023)
52 slides from Jsw Steel's investor presentation, February 2023
Slide 1: Corporate Presentation
Corporate Presentation February 2023
Slide 2: 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 3: Agenda
Agenda Sustainability 5 Overview 8 Key Investment Highlights 13 Digitalisation at JSW Steel 38 Appendix 42 JSW Steel Corporate Presentation: February 2023 3
Slide 4: Agenda
Agenda Sustainability 5 Overview 8 Key Investment Highlights 13 Digitalisation at JSW Steel 38 Appendix 42 JSW Steel Corporate Presentation: February 2023 4
Slide 5: Sustainability Framework and Priorities
Sustainability Framework and Priorities 17 Focus Areas Governance & Oversight By Board-level Business Responsibility And Climate Change: Biodiversity: No Net Loss for Biodiversity Sustainability Committee • Aligned to India’s Nationally Determined Contributions for Climate Change as per Ms. Fiona Pa
Slide 6: Climate Change: Emission Target and Initiatives
Climate Change: Emission Target and Initiatives Derivation of carbon emission target for 2030 Planned/ Potential initiatives to reduce CO2 intensity • The Sustainable Development Scenario (SDS) (a) requires direct Energy Transition from thermal to Renewable in steel making emission intensity of crud
Slide 7: Agenda
Agenda Sustainability 5 Overview 8 Key Investment Highlights 13 Digitalisation at JSW Steel 38 Appendix 42 JSW Steel Corporate Presentation: February 2023 7
Slide 8: JSW Group: Key Verticals
JSW Group: Key Verticals • India’s largest steel producer • Capacity of 4.8 GW (Hydro, • Capacity of 130,000 klpa • Ports capacity of 158 mtpa • Capacity of 29.2 mtpa, growing Renewable and Thermal) • Only fully-automated, water- • Operations across East, to 38.5 mtpa • Growing to 20 GW by 2030 base
Slide 9: JSW Steel: Among India's Leading Steel Manufacturers
JSW Steel: Among India’s Leading Steel Manufacturers One of the leading steel players Diversified product portfolio Integrated manufacturing process in India • Extensive product portfolio • Most geographically diversified steel • From raw material processing plants HRC, CRC, Coated, Tinplate, Electr
Slide 10: Transformational Growth and Value Creation
Transformational Growth and Value Creation India Capacity (mtpa) Total Revenue (₹ 000’s Cr) EBITDA (₹ 000’s Cr) CAGR FY02-22: 15% CAGR FY02-22: 25% CAGR FY02-22: 28% 147.9 27.7 25.8 119.0 39.0 18.0 18.0 18.0 18.0 85.0 80.4 73.4 73.9 19.0 20.1 7.8 14.8 11.9 10.6 19.5 1.6 4.2 1.6 0.3 FY02 FY10 FY18 FY
Slide 11: Improving Near Term Outlook Post Recent Volatility
Improving Near Term Outlook Post Recent Volatility H1 FY23 H2 FY23 Near Term Outlook Strong external headwinds Margins recovered in Q3 FY23; Healthy demand drivers in India impacted EBITDA healthy outlook for Q4 • Sharp decline in steel price after • Best ever quarterly domestic • India’s infrastruc
Slide 12: Agenda
Agenda Sustainability 5 Overview 8 Key Investment Highlights 13 Digitalisation at JSW Steel 38 Appendix 42 JSW Steel Corporate Presentation: February 2023 12
Slide 13: Key Investment Highlights
Key Investment Highlights 1 Size, Scale & Growth Leading steel producer in India with near-term growth to take domestic capacity to 37 mtpa 2 Efficiency Lowest cost of conversion in India, one of the lowest globally. Strong domestic iron ore linkage Strong margins further enhanced by significant dow
Slide 14: Leading and Most Geographically Diversified Steel Producer in India
1 Leading and Most Geographically Diversified Steel Producer in India India International Europe Rajpura BPSL Chandigarh Bawal Piombino, Italy BPSL Kolkata Kalmeshwar Plate & Coil Mill, Anjar USA Khopoli Vasind & Tarapur BPSL Jharsuguda: 3.5 mtpa Dolvi: 10 mtpa Raigarh: 0.95 mtpa (JISPL) Ohio: 1.5 m
Slide 15: BPSL- Facilities and Capacities Overview
1 BPSL- Facilities and Capacities Overview Chandigarh Kolkata Expansion Plan Cold Rolled Steel Strips and Value added: CRCA, GI/GL Precision Tubes Crude Steel Capacity 5.00 3.50 mtpa Jharsugudha Netrabandha Integrated Steel Plant with Iron Ore Mine: 82mt 3.50 Captive Power Plant Reserves 2.75 Downst
Slide 16: Strong Fundamentals for India Steel Demand
1 Strong Fundamentals for India Steel Demand Significant room for Healthy Steel Demand Outlook in India growth in steel India Steel: Strong Fundamentals (mt) consumption in India China, Government Capex (INR tn)# Production-Linked Crude Steel Crude Steel Finished Steel 667 Incentive Scheme* Capacity
Slide 17: Near-term Growth to Take India Capacity to 37 mtpa
1 Near-term Growth to Take India Capacity to 37 mtpa Near-term growth in JSW Steel’s India steel capacity (mtpa) • 5 mtpa Dolvi expansion commenced integrated operations in FY22 and has been fully ramped-up 1 2 JISPL Vijayanagar Expansion BPSL within a year 37.0 • 5 mtpa brownfield expansion at Vija
Slide 18: One of the Lowest Costs of Conversion Globally
2 One of the Lowest Costs of Conversion Globally Resilient business model based on continued focus on cost leadership WSD Aggregate Ranking(a) Leading position on global conversion cost curve – Conversion cost of c.$136/tonne in FY22 # 5 ranked in Asia Technology, analytics and innovation continue t
Slide 19: Strong Domestic Iron Ore Linkage
2 Strong Domestic Iron Ore Linkage 13 Captive iron ore mines ensuring adequate raw material Raw material security supply Steel Plants • Won 6 iron ore mines in Karnataka through auctions in 2016 and 2018, and 3 Karnataka – 9 mines Mines mines in FY20. • c.216 MnT of aggregate JV and Associates- Stee
Slide 20: Digital Logistic Management System (DLMS) - Odisha Mines
2 Digital Logistic Management System (DLMS) - Odisha Mines Non-DLMS DLMS Integration with i3MS Parking Management 1 5 Permit details generated in i3MS (Day of despatch activities) and fetched Entry control through RFiD authentication and Boom Barrier/ 2 Integration with SAP traffic lights DO creatio
Slide 21: Strong Margins Further Enhanced by Downstream Capacities
Strong Margins Further Enhanced by Significant Downstream Capacities Producing 3 Value Added and Special Products Coated Products Colour Coated Products Tin Plate Pipes & Tubes, Roofing, Oil Can, Non-oil Can, Appliance, Roofing, Food Cans General Engg., Solar, Sandwich panel Appliance, Colour Coater
Slide 22: Strong focus on building brands and increasing value added sales
3 Strong focus on building brands and increasing value added sales • Super premium, colour coated coils & sheets, with a 20 year warranty Colour Coated • Premium colour coated coils & sheets, with a 15 year warranty. • 3 variants - Cool Roof, Anti Dust & High Gloss • High quality Al-Zn alloy & colou
Slide 23: Strong focus on building brands and increasing value added sales
3 Strong focus on building brands and increasing value added sales • Tinplate coils and sheets with high strength and formability, used in food and non-food packaging • Al-Zn coated coils and sheets designed for complete requirement of solar structures (purlin, rafter, bracers, etc.) • Galvanised st
Slide 24: Supporting India's Transition To Green Energy
3 Supporting India’s Transition To Green Energy Rotor Blades Supplying Steel for Wind Mills • JSW Steel is on the way to become one of the preferred and leading suppliers to the wind sector Nacelle Rotor Hub • JSW currently supplies HR Plates for Tubular Tower which is Gear box being used for Top, M
Slide 25: JSW Steel: Making Cars Safer for You
3 JSW Steel: Making Cars Safer for You Focus on safer, lighter and fuel efficient cars Door Impact beams B Pillars • Indian automotive industry is evolving to adopt Front Cross Member consumer demand for 5-star rated cars for safety • JSW Steel is working closely with auto makers to make cars safer,
Slide 26: Environment: Targets and Strategy
4 Environment: Targets and Strategy SD Targets FY05 FY30 Targets Improvement Strategic Approach • Transition from thermal to renewable energy • Specific Energy • Reduction of fuel rate in BF and DRI GCal/tcs 6.94 5.65 19% Climate • Increased use of scrap in steel making Change • GHG Emissions 3.39 1
Slide 27: Health & Safety
4 Health & Safety JSW is committed to providing a safe and healthy working environment and achieving an injury- & occupational illness-free workplace. Our vision is to achieve ‘Zero Harm’ Building a Culture of Health & Safety JSW’s Roadmap to Vision 000 Zero Zero Zero major injury harm incidents Hea
Slide 28: Our Communities
4 Our Communities Key Intervention Areas Maternal and Child Healthcare Miyawaki Forest Health & Agriculture Nutrition Water, Environment & Education Sanitation 400 bed Maternal & Child Healthcare wing at Developing a Miyawaki Forest in Salem to Waste Skill VIMS Ballari Medical College being built by
Slide 29: Communities: Catalysing Greater Good through Collaborations
4 Communities: Catalysing Greater Good through Collaborations Partnering ‘Department of Drinking Water & Devising a first-of-its-kind Climate Sanitation’ Govt. of India through ISC for a Solutions Marketplace in India with ICC PPP model in Sanitation across 2 locations Initiated wildlife project to
Slide 30: Sustainability Initiatives & Recognitions
4 Sustainability Initiatives & Recognitions ‘SEED’ - Decarbonisation Initiative Recognitions JSW Steel upgraded to CDP A climate rating. JSW Steel is the only manufacturing company from India, and one of three • Initiative at Vijayanagar for Decarbonisation steel companies globally to achieve this •
Slide 31: Environmental Performance
4 Environmental Performance Specific Energy Consumption (Gcal/tonne) GHG Emission Intensity (tCO2/tcs) Specific Freshwater Consumption (m3/tcs) 2.75 6.59 6.56 4.13 3.79 6.38 2.59 6.24 2.52 2.50 2.49 2.60 2.41 2.45 6.04 2.37 5.90 2.37 FY18 FY19 FY20 FY21 FY22 9M FY23 FY18 FY19 FY20 FY21 FY22 9M FY23
Slide 32: Strong Board and Experienced Management Team
5 Strong Board and Experienced Management Team Chairperson - Emeritus Chairman and MD Savitri Devi Jindal Sajjan Jindal JSW-JFE partnership Partnership overview Executive Directors • 14.99% minority stake bought by JFE in 2010 • Access to cutting edge technologies Seshagiri Rao M.V.S Jayant Acharya
Slide 33: Proven Track Record of Efficient Organic and Inorganic Growth
6 Proven Track Record of Efficient Organic and Inorganic Growth Combination of organic and inorganic growth 2002-2005 2006 2007 2009 2010 2011-2012 • Capacity expanded from • Capacity increased to • Capacity • 3.5 mtpa (HSM-2) • 49.3% stake in • Capacity 1.6 mtpa to 2.5 mtpa 4.8 mtpa increased • JSW
Slide 34: Prudent Capital Allocation: Strong Financial Growth
7 Prudent Capital Allocation: Strong Financial Growth Strong track record of volume growth Track record of Operating Revenues (₹ 000’s Cr) 146.4 12.63 12.56 15.80 16.27 16.69 16.06 15.08 20.34 17.25 119.0 18.93 14.68 15.55 15.60 14.90 14.95 15.51 84.8 12.25 73.2 73.3 79.8 12.03 60.5 53.0 46.0 FY15 F
Slide 35: Prudent Capital Allocation: Uninterrupted Dividends
7 Prudent Capital Allocation: 10 Year TSR CAGR of 25%, and Uninterrupted Dividends Uninterrupted Dividends ROCE 29.8% 20.0 17.35 19.6% 19.5% 15.0 16.4% 14.8% 10.0 11.9% 9.6% 5.0 6.3% 0.0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY15 FY16 FY16 FY18 FY19 FY20 FY21 FY22 Dividend Poli
Slide 36: Debt Profile and Credit Ratings
8 Debt Profile and Credit Ratings Net Gearing (ND/Equity) within Leverage (ND/EBITDA) within the stated cap of 1.75x the stated cap of 3.75x Diversified Funding Sources 1.75x 4.50x 1.38x 1.48x 1.34x 3.75x 3.51x 1.17x 1.09x 2.60x 2.61x Bonds and 2.40x Foreign 0.83x INR debt, debentures currency Loans
Slide 37: Agenda
Agenda Sustainability 5 Overview 8 Key Investment Highlights 13 Digitalisation at JSW Steel 38 Appendix 42 JSW Steel Corporate Presentation: February 2023 37
Slide 38: Digitalization: JSW's Approach & Impact Created
Digitalization: JSW’s Approach & Impact Created Wave 4 and Digital Vision-2026* Expand and scale Digital to best-in-class: – Enhance Sales, Marketing, branding, Customer service and eCommerce – Existing plants – Continue digital projects – New plants – ACCIL, JSW-ISPL, JSW- BPSL – Support functions
Slide 39: JSW Steel's Digital Focus Areas
JSW Steel’s Digital Focus Areas Additional Focus Technologies Used Core Systems (SAP, SalesForce, Mining Microsoft Azure, DarwinBox), IoT, AI/ML, Analytics, Cloud/Edge Computing, RPA, Intelligent Cameras Safety, Security, Sustainability led Governance R&D → Leveraging JSW Digital team, Tech Finance
Slide 40: Digital Solutions for Projects
Digital Solutions for Projects Digital Initiatives for project monitoring at 5mtpa Vijayanagar expansion Monthly Drone based analytics report covering: • Critical/Near critical packages • Plan, actual and forecasts • Critical issues requiring attention 3D, 4D and 5D BIM Modelling: • Virtual model of
Slide 41: Agenda
Agenda Sustainability 5 Overview 8 Key Investment Highlights 13 Digitalisation at JSW Steel 38 Appendix 42 JSW Steel Corporate Presentation: February 2023 41
Slide 42: Global Steel
Global Steel Crude Steel Production – Jan-Nov (mt) Crude Steel Demand (mt) China Steel Production and Export (mt) Jan-Nov CY20 Jan-Nov CY21 Jan-Nov CY22 CY21 CY22F (Dec 22) CY23F (Dec 22) China Crude Steel Production (LHS) 150 10 -3.7% -0.5% Exports (RHS) 8 100 1,939 1,691 1,856 1,847 -1.4% 0.6% 6 1
Slide 43: Indian Steel QoQ Trend
Indian Steel Production and Consumption (mt) Steel Imports (mt) Steel Exports (mt) Q2 FY23 Q3 FY23 Finished Semis Finished Semis +4.5% QoQ Trend +6.0% 2.26 3.74 31.39 0.41 30.04 29.86 +46.6% -26.7% 1.54 1.17 28.17 QoQ QoQ 1.12 0.15 1.80 0.04 1.85 1.32 -64.7% +101.8% 0.39 1.39 2.58 0.18 YoY 1.09 YoY
Slide 44: FY23 – Key Strategic Priorities & Outlook
FY23 – Key Strategic Priorities & Outlook • Committed to Sustainability targets with focus on 5 key areas: Climate Change, Water Security, Waste, Air Emissions, Biodiversity • Maintain healthy margins despite challenging external environment: • Leverage low conversion cost advantage • Optimise raw m
Slide 45: FY23 Guidance
FY23 Guidance All fig. in million metric tonnes FY23 Crude Steel Particulars Sales Production Consolidated Indian Operations 23.60 22.60 Joint Control Entity: JSW Ispat Special Products Ltd.* 0.70 0.70 Indian Operations incl. Joint Control 24.30 23.30 JSW Steel USA Ohio* 0.70 0.70 Total Combined Vol
Slide 46: Annual Capex Update
Annual Capex Update Capex guidance for FY23 reduced to ₹ 15,000 cr in July 2022. ₹ 5,000 cr moved to FY24 & FY25 ₹ crore Actual Spent 20,000 19,124 14,198 9,728 FY22 FY23 FY24 FY25 Particulars ₹ Cr Unspent Capex including creditors & acceptance 33,259 Sinter plant and other facilities to support 5mt
Slide 47: Key Project Updates - Vijayanagar
Key Project Updates - Vijayanagar 5mtpa brownfield project • Construction activities for all packages underway • Equipment erection commenced for all packages • Project to be completed by end of FY24 Coke Oven Plant • 1.5 mtpa Coke Oven battery: Battery A commissioned in September 2022. Battery B ex
Slide 48: Key Project Updates – BPSL & Other Downstream
Key Project Updates – BPSL & Other Downstream Phase-I expansion to 3.5 MTPA • Phase-I expansion completed • Ramp-up in progress Phase-II expansion to 5 MTPA • Long lead-time items ordered (new Wire Rod Mill-2 and SMS-2, PCI upgradation for BF-1 & 2, Lime Calcination Plant-6) • Civil work & Structura
Slide 49: Case study: Turnaround Strategy at JSW Ispat's Dolvi plant
Case study: Turnaround Strategy at JSW Ispat’s Dolvi plant JSW Steel has a proven track record of identifying, acquiring and integrating assets creating synergies and optimizing costs Completed initiatives – December 2010 FY2016 – 2017 FY2018 – 2022 FY2011 – 2015 • Plant under maintenance • Infusion
Slide 50: Awards & Recognitions
Awards & Recognitions • Rated at Leadership Level (A-) by CDP • JSW Steel included in the Dow Jones Sustainability Index for Emerging Markets • WSA Steel Sustainability Champions for 4th consecutive year in 2021 • Corporate Governance & Sustainability Vision Awards 2020 2020 & 2021 • “Steelie Award“
Slide 51: Our Steel is Helping Build Key Infrastructure in India
Our Steel is Helping Build Key Infrastructure in India Solar Project: Contributed 9.1 GW High Speed Rail (Mumbai - Ahmedabad) Wind Project: Contributed 620MW c.90kT supplied Expressways and Highways: Over 1,145km Metro Projects: c.41km of metro project of roads. Over 121km of expressways lines (Mumb
Slide 52: THANK YOU
THANK YOU Investor Relations Contact: ir.jswsteel@jsw.in