Jsw Steel Limited · NSE:JSWSTEEL
Jsw Steel — Investor Presentation (May 2019)
31 slides from Jsw Steel's investor presentation, May 2019
Slide 1: JSW Steel Limited Investor presentation May 2019
JSW Steel Limited Investor presentation May, 2019 Confidential
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS BEING PRESENTED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. This presentation and accompanying slides (the “Presentation”) is
Slide 3: JSW Group and company overview
JSW Group and company overview Key highlights Appendix
Slide 4: JSW Group – overview
JSW Group – overview JSW Steel* JSW Energy – Among India’s leading integrated – Engaged across the value chain of steel producers (Installed crude steel power business production capacity: ~18 MTPA) – Operational capacity: 4,543 MW – Market capitalisation of US$10 bn(a) – Market capitalisation of US
Slide 5: JSW Steel – among India's leading steel manufacturers
JSW Steel – among India’s leading steel manufacturers – Integrated steel manufacturing – Installed crude steel capacity of ~18 facilities – from raw material MTPA, at strategic locations in processing plants to value-added South and West India product capacities One of the leading Integrated steel p
Slide 6: Transformational journey to market leadership
Transformational journey to market leadership Capacity (MTPA) Total revenue (US$m)(a) (b) EBITDA (US$m) 12,283 2,740 18.0 18.0 10,608 2,139 7.8 2,818 601 1.6 251 40 FY02 FY10 FY18 FY19 FY02 FY10 FY18 FY19 FY02 FY10 FY18 FY19 Market cap (US$m)(c) FY02 FY10 FY19 10,010 • Adopting industry leading Tech
Slide 7: Key credit highlights
Key credit highlights 1 One of the leading domestic steel player and well placed to benefit through the cycle 2 Strong business profile diversified by region, markets and products 3 Strong focus on operational efficiency with best-in-class conversion costs 4 Robust financial profile and stable cash
Slide 8: One of the leading domestic steel players well placed to benefit through the cycle
One of the leading domestic steel player and well placed to benefit 1 through the cycle JSW Steel is a leading player in India Buoyant steel market conditions FY18 FY19 • Gross fixed capital formation continues to grow with the Government focus on infra development 15.6MT 15.8MT Standalone saleable
Slide 9: Key highlights
Key highlights JSW Group and Appendix company overview
Slide 10: Strong business profile diversified by region, markets and products
2 Strong business profile diversified by region, markets and products Geographically diversified with manufacturing facilities in South and Flexibility to judiciously shift between domestic and international markets West India along with strategic overseas presence based on market conditions India F
Slide 11: Strong business profile diversified by region, markets and products (continued)
Strong business profile diversified by region, markets and products 2 (continued) HR GC/GL/ Color Slabs HRC CRC Plates GI Coated Wide offering of flat and long products Billets RCS/Blooms Bars/Rods Wire Rods Diversified portfolio to address growing demand for value-added steel Commissioned new f
Slide 12: Strong focus on operational efficiency with best-in-class conversion costs
Strong focus on operational efficiency with best-in-class conversion 3 costs Parameter(a) Ongoing cost benefit initiatives Project Description Expanding Vijayanagar Works 10 / 10 9 8 9 7 6 6 Capacity Blast Furnace • Revamp and upgrade of Blast Furnace-3 at Vijayanagar from 3 MTPA to 4.5 Location in
Slide 13: Robust financial profile and stable cash flows
4 Robust financial profile and stable cash flows Strong track record of volume growth Positive momentum in operating revenues 31.7% 20.9% 15.8% 12,253 15.55 15.60 10,584 14.70 8,752 12.30 6,647 FY16 FY17 (a) FY18 (a) FY19 FY16 FY17 FY18 FY19 Consolidated saleable steel (MTPA) Operating revenue (US$m
Slide 14: Prudent leverage management
5 Prudent leverage management Publicly stated financial policies Focused leverage Diversify Improve debt management funding sources maturity profile Strong y-o-y profitability improvement -> reduction in net leverage Diverse sources of funding(d) (e) 6,101 6,265 5,695 7,552 Bonds and debenture
Slide 15: Proven track record of growth through organic and inorganic expansions
Proven track record of growth through organic and inorganic 6 expansions Combination of organic and inorganic growth Key new projects 2007 2009 2011 2013 2015 2017 India • 3.8 MTPA • 49.3% stake in • 14.3 MTPA post • CRM2 – Phase 2 • 74% stake in Praxair’s(c) • Dolvi: Increasing steel making capacit
Slide 16: Case study: Turnaround strategy at JSW Ispat's Dolvi plant
Proven track record of growth through organic and inorganic 6 expansions (continued) 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 December 2010 Completed initiat
Slide 17: Detailed capex plan
Proven track record of growth through organic and inorganic 6 expansions (continued) Detailed capex plan… …based on a well thought-out guidelines / strategic rationale 7,043 7,043 826 Pellet plant, Coke ovens, captive power 926 Focus on return metrics instead of pure capacity addition plant, pipe
Slide 18: Experienced management with strong parentage
7 Experienced management with strong parentage Chairperson — Emeritus Promoter Director Savitri Devi Jindal Sajjan Jindal Chairman and JSW-JFE partnership Managing Director Partnership overview • 14.99% minority stake bought by JFE in 2010 • Access to cutting edge technologies Executive Directors •
Slide 19: Conclusion
Conclusion One of the largest steel manufacturers in India(a) Market leadership One of the largest steel exporters in India(a) 53% share of VASP and special products(b) Geographically diversified with manufacturing facilities in South and West India Focus on flat steel products (approximately 75% of
Slide 20: Appendix
Appendix JSW Group and Key highlights company overview
Slide 21: Strong momentum in steel prices with positive spread
Strong momentum in steel prices, with increase faster than raw material cost rise leading to positive spread Steel prices have trended upward since Q4 CY15 (a) (b) Raw material price trends (US$/tonne) 120 160 350 140 300 100 120 250 USD/t rebased to 100 100 200 80 80 150 60 60 100 40 20 50 40 0 0 S
Slide 22: Reducing Chinese steel exports and strong domestic consumption growth
Reducing Chinese steel exports supplemented with strong fundamental for domestic consumption growth Significant room for improvement in per-capita China steel exports (MTPA) Positive India steel consumption environment consumption in India 111.6 1,106 108.1 92.9 97.5 90.7 steel products per capita)
Slide 23: Consolidated financials
Consolidated financials (a) (a) Particulars (US$m) FY16 FY17 FY18 FY19 Operating revenue 6,647 8,752 10,584 12,253 (b) Operating EBITDA 925 1,760 2,139 2,740 % margin 13.9% 20.1% 20.2% 22.4% Profit before tax (357) 741 1,100 1,619 Profit after tax (70) 501 884 1,088 (c) Shareholder’s equity 2,714 3,
Slide 24: Standalone financials
Standalone financials (a) (a) (b) Particulars (US$m) FY16 FY17 FY18 FY19 Crude steel production 12.56 15.80 16.27 16.69 Saleable Steel sales (MT) 12.13 14.77 15.62 15.76 Operating revenue 5,802 8,082 9,617 11,093 Operating EBITDA 905 1,639 1,951 2,661 % margin 15.6% 20.3% 20.3% 18.5% EBITDA/ Ton (IN
Slide 25: Volume guidance for FY20
Volume guidance for FY19 +1.5% +1.5% YoY % YoY % 16.95 16.69 16.00 15.76 FY19 FY20E FY19 FY20E Crude Steel Production Saleable Steel Sales All figures are in million tonnes 24
Slide 26: Key Projects
Key Projects Total project cost – `15,000 crore (USD $2,169M) Total capacity will be increased from 5 MTPA to 10 MTPA. The major facilities to be set-up under the expansion Dolvi: increasing steel making capacity project are: to 10 MTPA 4.5 MTPA Blast furnace with 5 MTPA Steel Melt Shop 5 MT
Slide 27: Key Projects
Key Projects Total project cost – `2,000 crore (USD $289M) Vijayanagar: CRM-1 complex CRM1 complex capacity will be increased from 0.85 MTPA to 1.80 MTPA along with two Continuous capacity expansion Galvanizing Line of 0.45 MTPA each, a new 1.2 MTPA Continuous Pickling Line for HRPO products C
Slide 28: Key Projects
Key Projects Total project cost – `5,200 crore (USD $752M) Vijayanagar: Manufacturing Pellet plant 8 MTPA Integration Coke oven battery 1.5 MTPA Commissioning: by March 2020 Total project cost – `975 crore (USD $141M) Dolvi – Captive Power Instal 175 MW WHRB and 60 MW CPP to harness flue
Slide 29: JSW Steel Branded Portfolio
JSW Steel Branded Portfolio 28
Slide 30: Performance on sustainability metrics
Performance on sustainability metrics Deming Award for Vijayanagar Works JSW Steel included in the NIFTY 50 Index 2018 1 Recognised as one of the “Steel Sustainability Waste gas Champion” by World Steel Association Material recycled 3.29 MT 96% utilization rate for FY18 2017 1 Golden Peacock Innovat
Slide 31: Thank you
Thank you