Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q2 FY2015 Earnings Presentation
30 slides from Tata Steel's earnings presentation, Nov 12, 2014
Slide 1: Results Presentation
Results Presentation Second Quarter Ended 30th September 2014 12th November 2014
Slide 2: Disclaimer
Tata Steel Slide 2 Disclaimer 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 could differ materially from those expressed or implied. Important factors that coul
Slide 3: Tata Steel Group – Health and Safety
Tata Steel Slide 3 Tata Steel Group – Health and Safety Lost Time Injury Frequency (LTIF) 3.5 3.06 3 2.5 2.35 2.10 2 1.5 1.31 0.95 1 0.78 0.68 0.60 0.56 0.5 0.40 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 H1 FY15 Reduction continues in lost time injuries with H1FY15 performance 28% better than
Slide 4: Engaging with communities and improving quality of life
Tata Steel Slide 4 Tata Steel continues to focus on engaging with communities and improving quality of life India Europe Primary health care services delivery to nearly Dutch national football team Telstar based near the 2,15,000 people in areas of operation through static IJmuiden site hosted a
Slide 5: Financial Performance
Financial Performance
Slide 6: Key highlights
6 Key highlights Stable deliveries with an increase in net realisation per tonne in a Stable performance seasonally weak monsoon quarter in India despite Successful cost management to minimise impact of disruption in weaker macro mining and FAMD operations Share of value-added downstream produ
Slide 7: Financial Highlights Quarter Ended 30th September'14
Tata Steel Slide 7 Financial Highlights Quarter Ended 30th September’14 Deliveries Turnover 6.48 6.50 Mn T Rs Crore 0.03 0.08 36,645 35,777 0.96 0.95 1,396 1,080 4,179 3,710 3.46 3.36 21,149 20,202 2.04 2.11 10,785 9,921 Q2 FY14 Q2 FY15 Q2 FY14 Q2 FY15 India Europe SE Asia Others India Europe SE Asi
Slide 8: Financial Performance Quarter Ended 30th September'14
Tata Steel Slide 8 Financial Performance Quarter Ended 30th September’14 Figures in Rs. Crore unless specified Q2 FY15 Q1 FY15 Q2 FY14 Figures in Rs. Crore unless specified India Europe SE Asia Others Group Group Group & Elimn Deliveries (Mn T) 2.11 3.36 0.95 0.08 6.50 6.46 6.48 Turnover 10,785 20,2
Slide 9: Debt Movement and Pension update
Tata Steel Slide 9 Debt Movement and Pension update 2,626 82,822 81,609 204 81,040 -844 -773 68,347 67,412 -14,475 -935 Gross Debt Mar Net borrowing Forex Impact Gross Debt Jun Net borrowing Forex Impact Gross Debt Cash & Cash Net Debt Sep Forward Underlying Net 14 14 Sep 14 Equivalents 14 Covers De
Slide 10: Balance sheet undergoing structural improvement
Tata Steel Slide 10 Balance sheet undergoing structural improvement Improving Liquidity Successful refinancing of US$ 7 billion Longer Maturity Diversifying investor base Reduction in Net debt Monetisation of non-core assets Rating upgrades Derisking the balance sheet
Slide 11: Operating Performance: India and South East Asia
Operating Performance : India and South East Asia
Slide 12: India and SE Asia – Business environment
Tata Steel Slide 12 India and SE Asia – Business environment Robust growth expected across key end-use segments (FY12 – FY21 Projected CAGR (%)) While slow GDP growth has bottomed Infrastructure and Construction 8.5 9.5 out and PMI rebounded from October, Engineering and Fabrication 7.5 8.8 steel
Slide 13: Resilient business model continues to deliver
Tata Steel Slide 13 Resilient business model continues to deliver Steel sales (in kt) Product mix improved further with higher share of CR, Galva and 2,110 2,038 downstream operations 264 342 704 756 Sales to Auto segment jumps by 30% 797 722 • Hi-End sales (Skin panel, Hi-tensile, GA) increased
Slide 14: South East Asia – Operational improvement ongoing
Tata Steel Slide 14 South East Asia – Operational improvement ongoing NatSteel Holdings Higher deliveries Profitability affected by price pressure due to imports and sticky scrap prices Strategy to focus on export markets, value added products and cost reduction initiatives Tata Steel Thailand
Slide 15: KPO Phase–1 project update
Tata Steel Slide 15 KPO Phase–1 project update HSM SMS We have spent about Rs.18,900 crores on the project by the end of Q2 FY’15 of which about Rs.1,300 crores was spent in the last quarter We continue to engage with the local community to improve their livelihood, education, health and vocatio
Slide 16: Business Outlook
Tata Steel Slide 16 Business Outlook India The reforms announced by the new government are yet to translate into on the ground economic revival Steel consumption levels expected to improve post the weaker monsoon period Rising imports likely to keep the domestic prices in check Strong headwi
Slide 17: Operating Performance: Europe
Operating Performance: Europe
Slide 18: Europe – Business environment
Tata Steel Slide 18 Europe – Business environment PMIs for main steel using sectors in EU Economic activity in the EU is gradually 70 recovering. PMIs show that the economy 60 Expansion continues to struggle to gain momentum 50 mainly because of external factors Contraction 40 Automotive Machinery
Slide 19: EBITDA bridge Q2 FY2015 vs. Q2 FY2014
Tata Steel Slide EBITDA bridge Q2 FY2015 vs. Q2 FY2014 £ million Cost Changes Central 3 months £(10)m Manufacturing & Other to Sep 2014 Production £(2)m Volume £(7)m 3 months to Sep Selling £92m 2013 Result £55m £(94)m £150m EBITDA improved by £37 million from prior year Q2 Selling Result impact
Slide 20: Financial and product mix improvements drive performance
Tata Steel Slide 20 Financial and product mix improvements drive performance Performance improvements continue Year-on-year EBITDA and EBIT improvement Improving spread, but steel prices constrained by rising imports Production and deliveries higher than Q1 levels Extended summer maintenance
Slide 21: Potential sale of Long Products Europe and distribution activities
Tata Steel Slide 21 Potential sale of Long Products Europe and distribution activities Announced MoU with Klesch Group on Oct 15 to start detailed due diligence for the potential sale of Long Products Europe business and associated distribution activities Memorandum covers Scunthorpe steelworks,
Slide 22: Business outlook
Tata Steel Slide 22 Business outlook Steel demand is expected to grow in the EU by +2.6% in 2014, according to Eurofer Latest 2014 forecast revised down because of decelerating growth in second half of year Growth expected to remain stable (+2.4%) in 2015 in line with a mild rise in activity o
Slide 23: Key Developments
TATA Key Developments TATA STEEL
Slide 24: Raw Material Projects
Tata Steel Slide 24 Raw Material Projects Direct Shipping Ore Project, Canada Despatches re-commenced from August 2014. 250 Kt has been dispatched to the port. Polymer trials underway for winter shipments. Wet Processing plant to be commissioned in Q4 FY’15 - will facilitate year-long operations
Slide 25: Regulatory update
Tata Steel Slide 25 Regulatory update All our mines in Odisha and Jharkhand are operating with all statutory clearances and we have submitted the applications for renewal of mines well before the expiry of the leases as stipulated by law. In Odisha, our Joda East, Katamati, Bamebari and Joda Wes
Slide 26: Thank You
Tata Steel Slide 26 Thank You
Slide 27: Appendix
Appendix TATA TATA STEEL
Slide 28: Standalone Results – QoQ Variations
28 Standalone Results – QoQ Variations All figures in Rs. Crore Particulars Q2 FY15 Q1 FY14 Key Reasons Higher volumes and better product mix with higher realisation from Steel Net sales 10,701 10,378 division partly offset by lower Ferro-alloys sales Other operating income 84 91 At par with the pre
Slide 29: Consolidated Results – QoQ Variations
29 Consolidated Results – QoQ Variations All figures in Rs. Crore Particulars Q2 FY15 Q1 FY15 Key Reasons Declined mainly due to lower volumes and realisation in Europe and Net sales 35,503 36,143 South East Asia partly compensated by India Other operating income 274 284 At par with the previous qua
Slide 30: Contact Information
Tata Steel Slide 30 Contact Information For investor enquiries contact: For media enquiries contact: Samita Shah Kulvin Suri Tel: +91 22 6665 7307 Tel: +91 657 664 5512 / Email: samita.shah@tatasteel.com +91 92310 52397 Email:kulvinsuri@tatasteel.com Subhra Kanti Das Bob Jones Tel: +91 22 6665 0530