Slide 1: Vedanta Ltd.
Vedanta Ltd. Tom Albanese Chief Executive Officer June 2016
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statements. We do not undertake to update our forward-looking publicly available sources that have not been independently verified. statements. We caution you that reliance on any forward-looking statem
Slide 3: Commodity prices have been driven by USD, interest rates and China
Commodity prices have been driven by USD, interest rates and China Dollar strength vs commodities US interest rates vs commodities 3000 102 3000 1.2 100 2800 2800 1.0 98 0.8 2600 96 2600 94 0.6 2400 92 2400 0.4 90 2200 2200 0.2 88 2000 86 2000 0.0 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jan-15 Apr
Slide 4: Vedanta: A Global Diversified Natural Resources Company
Vedanta: A Global Diversified Natural Resources Company • Portfolio of large, structurally low-cost, long-life Tier-I assets, that delivered EBITDA Mix for FY2016 strong free cash flow in FY2016 3% – EBITDA of $2.3bn, and margin of 30%1 15% – Strong free cash flow of $1.8bn, driven by opex and capex
Slide 5: Large, low cost and diversified asset base
Large, low cost and diversified asset base FY2016 R&R Life EBITDA (years) Production (Rs. Crore) Key highlights 46.9 • India’s largest private-sector crude oil producer Oil & Gas 15+ 1 3,504 mmboe • Strong FCF generation even at low oil prices with opex of $6.5/bbl 2 • Positioned on the 1st decile o
Slide 6: Zinc: Vedanta well positioned to benefit from strong fundamentals
Zinc: Vedanta well positioned to benefit from strong fundamentals Zinc India assets size and profitability vs peers $2,500 Zinc fundamentals positive after Century and Lisheen closures, with CY 2016E zinc C1 cost curve production expected to fall in 2016 Zinc Intl* $2,000 Zinc India $1,500 Vedanta i
Slide 7: Ramp-up at Aluminium, Power & Iron Ore Underway
Ramp-up at Aluminium, Power & Iron Ore Underway Copper Eq. Production +30%1 EBITDA $3.7bn $2.3bn growth Capex $1.5bn $0.6bn $1.0bn Strong free cash flows from: Copper Eq. Production (kt) Ramp up of capacities at Vedanta Ltd’s Aluminium, Power and Iron ore businesses These are well invested ass
Slide 8: Vedanta: An attractive value proposition
Vedanta : An attractive value proposition 30% High growth Peer2 20% 2 Year fwd EBITDA CAGR2 Peer3 VED 10% Peer1 Peer5 0% 0% Peer4 Peer7 -10% Peer6 Bubble size denotes EBITDA margin2 -20% 4.0 5.0 6.0 6.5x 7.0 8.0 High EV/EBITDA10.0 9.0 EV/EBITDA (EBITDA for CY 2016) Source: Bloomberg Note 1: Peers in
Slide 9: Strategic Priorities Remain Unchanged
Strategic Priorities Remain Unchanged Strategic Priorities Focus Areas for FY 2017 • Disciplined ramp-up of new capacities in Aluminium, Production Growth and Asset Power and Iron Ore optimisation • Zinc: Ramp-up volumes from Rampura Agucha U/G and develop Gamsberg • O&G: Enhance Gas production, EOR
Slide 10: Business Update
2S vedanta Business Update
Slide 11: Oil & Gas: Low-cost producer with growth optionality
Oil & Gas: Low-cost producer with growth optionality Demand supply dynamics slowly turning Oil Demand/Supply and Quarterly Balance (mb/d) Oil market surplus is expected move back to deficit by end of next year Surplus / (Deficit) RHS World production World consumption Supply is now more responsi
Slide 12: Zinc: Well-positioned to reap benefits of strong fundamentals
Zinc: Well-positioned to reap benefits of strong fundamentals Zinc India : Steady growth Zinc International: Closure of Lisheen; Focus on Gamsberg Strong zinc and lead production and record silver production in FY 2016 Production of 226kt FY16 Lisheen had a safe, detailed and fully-costed clos
Slide 13: Aluminium and Power: Strong ramp-up underway
Aluminium and Power: Strong ramp-up underway Aluminium: Ready to reap benefits from earlier investment Power: Entire 9 GW power portfolio operationalized TSPL: Unit-III synchronized in March 2016, expected to be Record production of 923kt capitalized in Q1 FY2017 Aluminium COP at $1,431 for Q4
Slide 14: Iron Ore and Copper: Strong cost positions
Iron Ore and Copper: Strong cost positions Iron ore: Mining re-started after 3 years Copper Cathodes: Goa operations ramped up in Q4; achieved exit run rate of Positioned in the lowest cost quartile, with strong Tc/Rc and 0.8 million tonne per month acid realization Costs restructured, with op
Slide 15: Strategic Priorities Remain Unchanged
Strategic Priorities Remain Unchanged Strategic Priorities Focus Areas for FY 2017 • Disciplined ramp-up of new capacities in Aluminium, Production Growth and Asset Power and Iron Ore optimisation • Zinc: Ramp-up volumes from Rampura Agucha U/G and develop Gamsberg • O&G: Enhance Gas production, EOR
Slide 16: Appendix
Appendix = vedanta
Slide 17: Safety and Sustainability
Safety and Sustainability Safety 1 fatality in Q4 FY2016; 9 fatalities in FY2016 LTIFR (per million man-hours worked) Focus on bringing in a culture of Zero-Harm 0.52 0.50 0.45 Making Better Risk Decisions (MBRD) training program for line 0.43 managers Implementation of Safety Performance st
Slide 18: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. Crore) 31 March 2015 31 December 2015 31 March 2016 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 37,636 840 36,796 42,645 3,055 39,590 42,448 1,341 41,107 Standalone Zinc India - 27,192 (27,192) - 28,214 (28,214) -
Slide 19: Balance Sheet and Maturity Profile
Balance Sheet and Maturity Profile Maturity Profile of Term Debt ($8bn) (as of 31st March 2016) 2.3 Subsidiaries Standalone 1.0 1.6 1.6 0.7 0.7 1.0 0.8 0.8 0.4 0.2 0.3 1.2 0.9 0.9 0.5 0.6 0.6 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 & Later External term debt of $8bn ($4.7bn at Standalone and $3.3b
Slide 20: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $ 8bn Debt Breakdown (as of 31 March 2016) (as of 31 March 2016) Short Term Loans - USD 3% Debt breakdown (in $bn) Money market External term debt 8.0 Instruments – Bonds-INR INR 15% 22% Working capital 1.9 Inter company l
Slide 21: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q4 Q3 Full Year OIL AND GAS (boepd) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Average Daily Total Gross Operated Production (boepd)1 206,170 224,294 -8% 211,843 212,552 220,876 -4% Average Daily Gross Operated Production (boepd) 197,039 215,553 -9%
Slide 22: Segment Summary – Zinc India
Segment Summary – Zinc India Q4 Q3 Full Year Production (in ’000 tonnes, or as stated) % change % change FY 2016 FY2015 YoY FY 2016 FY 2016 FY2015 YoY Mined metal content 188 269 -30% 228 889 887 0% Refined Zinc – Total 154 217 -29% 206 759 734 3% Refined Zinc – Integrated 154 217 -29% 206 759 721 5
Slide 23: Segment Summary – Zinc International
Segment Summary – Zinc International Q4 Q3 Full Year Production (in’000 tonnes, or as stated) % change % change FY 2016 FY2015 FY 2016 FY 2016 FY2015 YoY YoY Refined Zinc – Skorpion 27 17 61% 13 82 102 -20% Mined metal content- BMM 15 16 -1% 17 63 59 7% Mined metal content- Lisheen - 37 -100% 21 81
Slide 24: Segment Summary – Aluminium
Segment Summary – Aluminium Q4 Q3 Full Year Particulars (in’000 tonnes, or as stated) FY 2016 FY2015 % change YoY FY 2016 FY 2016 FY2015 % change YoY Alumina – Lanjigarh 211 274 ‐23% 218 971 977 ‐1% Total Aluminum Production 226 229 ‐2% 234 923 877 5% Jharsuguda-I 123 131 ‐6% 131 516 534 ‐4% 1 Jhars
Slide 25: Segment Summary – Power
Segment Summary – Power Q4 Q3 Full Year Particulars (in million units) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Total Power Sales 3,391 2,547 33% 2,934 12,121 9,859 23% Jharsuguda 2400 MW 1,906 1,525 25% 1,593 7,319 7,206 2% BALCO 270 MW - 18 -100% 41 169 89 89% BALCO 600 MW
Slide 26: Segment Summary – Copper India
Segment Summary – Copper India Q4 Q3 Full Year Production (in ’000 tonnes, or as stated) % change % change FY 2016 FY2015 FY 2016 FY 2016 FY2015 YoY YoY Copper - Mined metal content - - - - - - - Copper - Cathodes 102 97 6% 89 384 362 6% Tuticorin power sales (million units) 68 158 -57% 40 402 641 -
Slide 27: Segment Summary – Iron Ore
Segment Summary – Iron Ore Q4 Q3 Full Year Particulars (in million dry metric tonnes, or as stated) % change % change FY 2016 FY2015 FY 2016 FY 2016 FY2015 YoY YoY Sales 2.6 1.5 5.3 1.2 Goa1 1.6 - 0% 0.6 2.2 - - Karnataka 1.0 - - 0.9 3.1 1.2 - Production of Saleable Ore 2.8 0.3 1.4 5.2 0.6 Goa 1.9 -
Slide 28: Group Structure
Group Structure Vedanta Resources Plc Divisions of Vedanta Limited 79.4% 62.9% Sesa Iron Ore Konkola Sterlite Copper (Tuticorin) Copper Vedanta Ltd Power (2,400 MW Jharsuguda) Mines (KCM) Aluminium (Odisha aluminium and power assets) Subsidiaries of Vedanta Ltd 59.9% 64.9% 51% 100% 100% 100%