Hindalco Industries Limited · NSE:HINDALCO
Hindalco Industries — Q3 FY12 Earnings Presentation
33 slides from Hindalco Industries's earnings presentation, Feb 9, 2012
Slide 1: Hindalco Industries Ltd. Investor Presentation Q3 FY12
Hindalco Industries Ltd. Investor Presentation Q3 FY12 February 9, 2012
Slide 2: Presentation Structure
Presentation Structure Financial Highlights Performance Review & Outlook Projects Update 2
Slide 3: Highlights and Financial Performance
Highlights and Financial Performance 3
Slide 4: Q3 FY12: Highlights
Q3 FY12: Highlights Steady performance despite severe cost pressures Portfolio strategy depicted its benefits as upstream businesses witnessed severe margin squeeze Aluminium – Robust operational performance in the face of severe cost inflation Copper – Strong all-round performance Novelis – Solid P
Slide 5: Financial Performance (Standalone, Q3)
Financial Performance (Standalone, Q3) ` Cr Q3 FY11 Q3 FY12 Change (%) Net Sales 5,975 6,647 11 PBITDA 801 805 1 PBT 579 551 (5) PAT 460 451 (2) EPS (`) 2.41 2.35 (2) ` Cr 9M FY11 9M FY12 Change (%) Net Sales 17,013 18,950 11 PBITDA 2,483 2,695 9 PBT 1,807 1,958 8 PAT 1,429 1,597 12 EPS (`) 7.47 8.3
Slide 6: Performance Review & Outlook
Performance Review & Outlook 6
Slide 7: Key External Drivers
Key External Drivers Aluminium LME ($/t) Other Drivers 2400 2,343 2,364 (vis-à-vis year-ago period) 2350 2300 2250 Q3 9M 2200 2,176 FY12 FY12 2150 2100 2050 Coal 2000 2,089 1950 F/c Oil and Q3 FY11 Q3 FY12 9M FY11 9M FY12 carbon costs Exchange Rate (`/$ ) Copper TCRC 52 51 50.92 50 Acid and DAP 49 4
Slide 8: Tough Phase for the Aluminium Industry
Tough Phase for the Aluminium Industry Macro risks and overhang of stocks have pushed LME below cost for many smelters ($/t) Industry Cash Cost Curve 2900 4000 (Q4, 2011) LME ($/t) 2700 3500 3000 2500 2500 LME @ 2,026 2300 2000 2,026 1500 2100 1000 1900 500 Percentage of capacity 1700 0 1500 0% 50%
Slide 9: Al: Higher Production
Al: Higher Production Alumina (kt) Metal (kt) 7% 8% Q3 FY11 320 Q3 FY11 136 Q3 FY12 343 Q3 FY12 146 FRP (Tonnes) Extrusions (Tonnes) 20% Q3 Q3 FY11 46,188 9,292 FY11 Q3 23% 7,190 Q3 FY12 55,598 FY12 Alupuram under 9 lockout
Slide 10: Al: Sales Performance and Mix
Al: Sales Performance and Mix Soft patch in Indian growth But we managed to sell more story metal and more VAP VAP Others India IIP (%, yoy) 9% 9.6 8.6 Q3 FY11 55 79 133 kt 7.9 6.8 7.0 Q3 FY12 58 87 146 kt 0 100 200 3.0 Export 0.5 Domestic 87% 83% Resulting in lower domestic 10 sales Q3 FY11 Q3 FY12
Slide 11: Aluminium Financials
Aluminium Financials Q3 Q3 ` Cr Change (%) FY11 FY12 Net Sales 1,977 2,236 13.1 EBIT 465 310 (33.4) ` Cr 9M FY11 9M FY12 Change (%) Net 5,754 6,543 13.7 Sales EBIT 1,441 1,338 (7.2) Cost pressures Soft LME 11 Adverse mix
Slide 12: Al. LME: Volatility may continue …
Al. LME: Volatility may continue … Al Market Balance (Mn ton) Softer demand and smelter closures are expected to leave market in a 3.3 small surplus in 2012 Dec-end global stocks ~101 days of consumption (vs. 88 days at end- Sep) 1.0 0.7 0.5 Financing deals viable so far 2009 2010 2011 2012
Slide 13: Performance Highlights (Novelis)
Performance Highlights (Novelis)
Slide 14: Novelis Highlights
Novelis Highlights Shipments Down 9% to 648 Kilotonnes Net Sales down 4% to $2.5 Billion Adjusted EBITDA down 11% to $213 Million Free Cash Flow Before CapEx of $ 186 Million Liquidity of $ 857 Million Net loss of $12 Million Three large mill expansions (Brazil 220 kt, Korea 350 kt and
Slide 15: Novelis Highlights
Novelis Highlights Short term softness impacted EBIDTA 15
Slide 16: Novelis Highlights – Q3 comparisons
Novelis Highlights – Q3 comparisons Evident Strength of Improved Business Model 16
Slide 17: Copper: Operational Performance
Copper: Operational Performance Cathode Production (kt) Strong Operating Performance 88 coupled with …. 80 Stronger Tc/Rc Q3 FY11 Q3 FY12 Higher by-product credits CC Rod Production (kt) 38 Focused Marketing approach 27 Led to strong financial performance… Q3 FY11 Q3 FY12 17
Slide 18: Copper Financials
Copper Financials ` Cr Q3 FY11 Q3 FY12 Change (%) Net Sales 4,000 4,418 10.5 EBIT 143 216 51.1 ` Cr 9M FY11 9M FY12 Change (%) Net Sales 11,265 12,420 10.3 EBIT 396 509 28.4 TCRC, Higher output, better Mix, improved recovery, By product revenues Cost Pressures, declining grades 18
Slide 19: ABML Performance
ABML Performance Decline in Nifty Grade (%) Drop in LME (A$/t) 2.92 2.41 8,724 7,416 Q3 FY11 Q3 FY12 Q3 FY11 Q3 FY12 Production subdued Cu in conc. (Tonnes) 15,077 15,414 Challenging times, especially in the face of cost pressures & subdued LME 15077 11617 Q3 FY11 Q3 FY12 Nifty Mt Gordon 19
Slide 20: Projects
© Projects Projects — Strong progress on Ground ADITYA BIRLA ate
Slide 21: Mahan Smelter
Mahan Smelter Pot Lines Smelter Pot Tending Machine 21 Cathode Sealing Shop Fume Treatment Center
Slide 22: Mahan CPP
Mahan CPP Power Plant View Power House Building 22 Switch Yard ESP
Slide 23: Utkal Refinery
Utkal Refinery Erection of Rod Mill Digestor and Heat Exchanger Power Plant under erection Coal Mill 23
Slide 24: Aditya Smelter & CPP
Aditya Smelter & CPP Pot Room Cathode Sealing Shop Power Plant Chimney Power House Building 24
Slide 25: Other Projects under implementation
Other Projects under implementation Project Hirakud Expansion Brownfield expansion from 161ktpa to 213 ktpa Hirakud FRP First Can body stock Project in India Aditya Refinery 1.5 Mn tpa alumina refinery Jharhand smelter Third fully backwardly integrated smelter in pipe line 25
Slide 26: Hirakud FRP facility
Hirakud FRP facility Cold Mill Erection Cold Mill Hot Mill Hot Mill Control Panel
Slide 27: Novelis Projects…
Novelis Projects… Project Brazil Expansion 220 KT incremental capacity for can body stock 190 KT Recycling line & 100 KT CES coating line Korea Expansion 350 KT incremental FRP capacity North America 200 KT incremental capacity to target Auto segment 27
Slide 28: Summing Up
Summing Up Macro environment may continue to remain adverse for the next few quarters Cost pressures continuing, especially w.r.t. coal and crude- derivatives Conversion businesses’ contribution will become critical if macro risks affect metal prices Managing projects and their ramp-up to be
Slide 29: Thank you
ADITYA BIRLA HINDALCO Thank you
Slide 30: Forward Looking & Cautionary Statement
Forward Looking & Cautionary Statement Certain statements in this report 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 could make a difference to the
Slide 31: Aluminium Production
Aluminium Production In Tonnes Q3FY11 Q3FY12 Variance Alumina 320,310 343,086 7% Metal 135,829 146,374 8% FRP 46,188 55,598 20% Extrusions 9,292 7,190 -23% Wire Rods 23,672 25,247 7% 31
Slide 32: Copper Production
Copper Production Production Units Q3 FY11 Q3 FY12 variance Copper Cathodes MT 80,224 87,748 9% CC Rods : Own MT 26,996 38,426 42% 32 Strong Operational Performance
Slide 33: Novelis
Novelis Income Statement Reconciliation to Adjusted EBITDA Net Income (loss) Attributable to Our Qi FY10 Q2 FY10 Q3 FY10 Q4 FY10 Qi Q2 Q3 FY11 Q4 FY11 FY11 Qi Q2 Q3 FY12 FY12 FY12 - Purchase accounting an price ceiling, net Kcommon Shareholder 143° 195 68 (1) 405 50 62 (46) 50 116 62 120 (12) - Inte