Tata Steel Limited · NSE:TATASTEEL
Tata Steel — Q2 FY2020 Earnings Presentation
27 slides from Tata Steel's earnings presentation, Nov 6, 2019
Slide 1: Results Presentation
Results Presentation Financial quarter and half year ended September 30, 2019 November 06, 2019 1
Slide 2: Safe harbor statement
Safe harbor Statements in this presentation describing the Company’s performance may be statement “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: Committed towards excellence in Safety, Health & Sustainability
Committed towards excellence in Safety, Health & SAFETY HEALTH SUSTAINABILITY Sustainability ▪ Launched safety campaign on ▪ Organized an awareness ▪ Tata Steel ranked 4th in the DJSI elimination of Commonly campaign ‘Be a Heart Hero’ on assessment 2019 amongst 27 Accepted Unsafe Practices World Hea
Slide 4: Engaging with neighbouring communities and improving their life quality
Engaging with TSL Standalone – CSR Spend (Rs. crores) neighbouring ▪ 1000 Schools Projects –1,370 schools and over 1,00,000 children supported in Odisha and Jharkhand 315 communities Education ▪ 30 Model schools – 21 schools completed, 17 handed over 232 and improving ▪ Pre-Metric coaching support –
Slide 5: Key performance highlights and updates
Key performance highlights and updates 2QFY20 – key performance Reorganizing India indicator Financial Health footprint ▪ Indian operations contributed ▪ US$ 525 million of financing ▪ Reorganizing to drive scale, 63% out of consolidated tied up, further extending the synergies and simplification de
Slide 6: Global macro and business environment
World GDP growth (% YoY) and Global macro ▪ Economic growth slowdown was broad- global manufacturing PMI World trade growth (3MMA, % YoY) and business based; World trade remained weak as 56 JPMorgan Global Manufacturing PMI World GDP Growth (RHS) 4.5 6 trade frictions outweighed accommodative enviro
Slide 7: India macro and business environment
India macro ▪ Economic activities remained soft Bank credit/loan growth (YoY%, 3MMA) Key sectors growth* (% Change, YoY) and business amidst: a) persistent liquidity issues, Industry ex infra Vehicle loan environment b) weakness in investment and 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 17.5% SME loan con
Slide 8: Europe macro and business environment
Europe macro and business ▪ Eurozone GDP grew by 1.1%YoY in Eurozone GDP (%, YoY) EU key steel consuming sectors (%YoY) 2QFY20 while expanded marginally 15% Construction environment on QoQ basis 3.0 Automotive Mechanical Engineering 2.6 10% ▪ Rising trade protectionism and 2.2 5% overhang of Brexit
Slide 9: Consolidated operational and financial performance
Consolidated (All figures are in Rs. Crores unless stated otherwise) 2QFY20 1QFY20 2QFY19 operational Production (mn tons)1 6.95 7.15 6.73 and financial Deliveries (mn tons) 6.53 6.34 6.80 performance Total revenue from operations 34,579 35,947 40,897 Raw material cost2 14,864 16,127 15,903 Change i
Slide 10: Consolidated Adjusted EBITDA movement
Consolidated ₹ Crores Adjusted 5,530 EBITDA1 movement ▪ Selling results reflects sequentially lower steel prices across 98 geographies 219 47 4,018 1,781 ▪ Lower costs across geographies due to lower material prices ▪ Volume/mix impact due to higher deliveries at Tata Steel BSL and Tata Steel Europe
Slide 11: India: Quarterly production and delivery volumes
Tata Steel Crude Steel Production Volume (mn tons) ▪ Crude Steel production was flat on QoQ basis; total deliveries India1: grew by 4% Quarterly 4.50 4.50 4.30 ▪ Despite the slowdown, deliveries in Branded Products & Retail segment and Industrial Product & Projects segment were production largely ma
Slide 12: India: Half yearly production and delivery volumes
Tata Steel Crude Steel Production Volume (mn tons) ▪ Production is up by ~13%YoY; deliveries increased by 6%YoY to India1: Half 8.10 mn tons 9.00 yearly 7.95 ▪ Slowdown in Automotive sector countered by higher sales to production construction and engineering segments, and exports and delivery ▪ Indu
Slide 13: Tata Steel India: Creating sustainable value
Tata Steel Key business segments’ highlights India1: Automotive ✓ Tata Steel has been awarded “Quality Certificate” by Toyota for exhibiting above Creating and Special target performance in quality sustainable products ✓ Multiple trials initiated with Tata Steel BSL for enhancing supplies to key OEM
Slide 14: Tata Steel Standalone: Financial performance
Tata Steel (All figures are in Rs. Crores unless stated otherwise) 2QFY20 1QFY20 2QFY19 Standalone: Total revenue from operations 14,871 16,091 17,902 Financial Raw material cost1 5,151 5,272 5,338 performance Change in inventories (366) (544) (142) EBITDA 3,546 4,098 6,113 Adjusted EBITDA2 3,331 4,
Slide 15: Standalone: EBITDA movement
Tata Steel ₹ Crores Standalone: EBITDA1 4,277 movement ▪ Selling results reflects sequentially lower steel realizations ▪ Cost improvement is primarily due 199 to lower material cost and better 130 3,331 operational efficiencies 1,137 138 ▪ Volume/mix impact primarily due to higher exports ▪ Others
Slide 16: Tata Steel Standalone: Key sustainability parameters
Tata Steel Coke Rate (kg/tcs) Specific Energy Intensity (Gcal/tcs) Specific Water Consumption (m3/tcs) Standalone: Key 7.29 Good Good Good 5.54 443 434 sustainability 6.36 6.31 6.01 399 4.75 5.77 381 5.68 5.67 5.67 5.67 4.39 363 361 360 4.27 352 348 4.13 parameters 3.83 3.68 3.27 3.23 FY15 FY16 FY17
Slide 17: Tata Steel Kalinganagar Phase 2 expansion
Tata Steel Key ▪ Tata Steel Kalinganagar Phase 2 expansion is underway, the Cold Rolling Mill (CRM) complex and Kalinganagar updates Pellet plant have been prioritized to improve product mix and bring cost efficiency Phase 2 ▪ Project progress: expansion o Pickling Line and Tandem Cold Rolling Mill
Slide 18: Update on digitalization initiatives
Update on ✓ Connected Workforce solution for real time visibility to avoid access to hazardous zones & digitalization Safety auto-activation of emergency response if required initiatives ✓ Video Analytics based road safety solution ✓ ~25% YoY additional chrome production at Sukinda through higher as
Slide 19: Tata Steel BSL: Consolidated performance and key updates
Tata Steel BSL: (All figures are in Rs. Crores unless stated otherwise) 2QFY20 1QFY20 2QFY19 Consolidated Crude Steel production (mn tons) 1.07 1.12 1.05 performance Deliveries (mn tons) 1.04 0.86 1.14 and key updates Total revenue from operations 4,555 4,333 5,862 Raw material cost1 2,719 2,905 3,1
Slide 20: Tata Steel Long Products: Consolidated performance and key updates
Tata Steel Long (All figures are in Rs. Crores unless stated otherwise) 2QFY20 1QFY20 2QFY19 Products: Production (‘000 tons) Consolidated - Crude Steel 150 121 NA performance - Sponge 172 172 95 Deliveries (‘000 tons) and key updates - Steel 118 93 NA - Sponge 141 135 93 Total revenue from operatio
Slide 21: Tata Steel Long Products: key actions and initiatives
Tata Steel Long ▪ Commenced mining from captive iron ore mines; ramping up to cater to full requirement of steel making Products: key business of Tata Steel Long Products actions and ▪ Started operations at DRI Kilns and pellet plant initiatives ▪ Continuous focus on integration and stabilization of
Slide 22: Tata Steel Europe: performance and key updates
Tata Steel Europe: (All figures are in Rs. Crores unless stated otherwise) 2QFY20 1QFY20 2QFY19 performance Liquid Steel production (mn tons) 2.45 2.65 2.43 and key updates Deliveries (mn tons) 2.29 2.26 2.27 Total revenue from operations 14,035 14,495 15,929 Raw material cost1 6,431 7,332 6,974 Cha
Slide 23: Consolidated debt movement
Consolidated Rs. Crores Debt movement 643 630 1,11,549 3,639 3,922 153 1,06,636 1,06,952 2,845 4,596 1,00,816 1,100 taken at Tata Gross Debt Gross Debt movement Steel Europe Others Gross Debt lease obligations Loan movement Net Debt of UML's steel and Others Cash, Bank & as per IndAS 116 FX Impact I
Slide 24: Business Outlook
Business Outlook ▪ Global steel demand is expected to remain weak due to broader economic slowdown and increasing trade barriers Steel ▪ India steel demand is expected to improve in 2HFY20 with the end of monsoon, increase in the Demand government spending and improvement in liquidity ▪ Steel demand
Slide 25: Annexure – I: Standalone QoQ Variations
Annexure – I: Rs Crores 2QFY20 1QFY20 Key Reasons Standalone Income from operations 14,487 15,813 Primarily due to lower realisation on per ton basis QoQ Variations Other operating income 385 279 Primarily due to higher export related benefits with higher exports Higher purchase pellet cost and coke
Slide 26: Annexure – II: Consolidated QoQ Variations
Annexure – II: Rs Crores 2QFY20 1QFY20 Key Reasons Income from operations 33,954 35,382 Primarily due to lower realisation across geographies Consolidated Other operating income 625 565 Primarily at Standalone QoQ Variations Raw materials consumed 13,676 14,491 Lower primarily at Europe and Tata Ste
Slide 27: Contact
Contact Investor enquiries : Sandep Agrawal Tel: +91 22 6665 0530 Email: sandep.agrawal@tatasteel.com 27