Vedanta Limited · NSE:VEDL

Vedanta — Annual Investor Conference - CLSA FY16 (November 2015)

27 slides from Vedanta's conference presentation, Nov 16, 2015

  1. Slide 1: Commodities – A Global Perspective

    Commodities – A Global Perspective Tom Albanese Chief Executive Officer Vedanta Ltd. November 2015

  2. 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

  3. Slide 3: Vedanta Ltd: A Global Diversified Natural Resources Company

    Vedanta Ltd: A Global Diversified Natural Resources Company EBITDA Mix1 for H1 FY2016 • Portfolio of large, structurally low-cost, long-life Tier-I assets: 0% − Significant near term growth with well-invested asset base not requiring 13% large capex 7% − Well positioned to capitalize on India’s and

  4. Slide 4: Recent volatility in commodities mainly driven by China

    Recent volatility in commodities mainly driven by China Commodity Price Performance & Chinese Stock Index (rebased to 100) Announcement made by peer to cut 110 PBOC rate cut % ∆ June- %∆ Zinc production Sep October 100 Aluminium ‐10% ‐5% 90 Copper ‐14% ‐1% Iron Ore ‐8% ‐13% 80 Oil ‐27% 0% 70 Zinc ‐2

  5. Slide 5: China: Recalibration of economy and growth

    China: Recalibration of economy and growth China Investment in absolute to grow at 6% CAGR “Soft landing” for China 8.0 49% 7.0 48% • New normal: down shifting from high speed 6.0 47% growth to moderate growth 5.0 46% 45% 4.0 • Lower growth on higher base 3.0 44% 43% − Investment to GDP has peaked,

  6. Slide 6: Vedanta: Taking measures to maximise cash flows and deleverage

    Vedanta: Taking measures to maximise cash flows and deleverage Positive FCF at each segment is a top priority  Cost in 1st/2nd quartile of the global cost curve across all major businesses  Cost restructuring and optimisation at all businesses: Group-wide assessment Strong focus on opex completed,

  7. Slide 7: Cost and Marketing Savings

    Cost and Marketing Savings Case Studies – Cost / Marketing Initiatives  Announced c.$1.3 bn savings program in March 2015 Polishing Filter Package over 4 years  Alternate methodology of modifying existing − c.$800 mn in cost and c.$500 mn in marketing infrastructure and using new media for treatme

  8. Slide 8: India: Macro and Regulatory Update

    India: Macro and Regulatory Update Strong Macroeconomic Indicators  India is the fastest growing major economy (IMF)  India was no.1 FDI destination in H1 CY2015 (EY) − Capital inflows of US$31 bn in H1 CY2015  Lower inflation, lower energy costs and further interest rate cuts to fuel economic gr

  9. Slide 9: Oil: Volatility in short-term, with stability and improved market dynamics in medium term

    Oil: Volatility in short-term, with stability and improved market dynamics in medium term Current Demand and Supply Dynamics mb/d Supply growth is slowing $/bbl 5 40  The world is using more oil. High-cost supply — 30 primarily non-OPEC — is being forced out 4 20  Current supply surplus is not mat

  10. Slide 10: Zinc: Attractive Fundamentals

    Zinc: Attractive Fundamentals Zinc market is expected to be in a state of deficit Concentrate deficit supporting zinc prices ‘000 mt  Zinc has strong fundamentals in the commodity 500 Concentrate Surplus (+) Deficit (‐) complex 400 2018  Significant zinc capacity to go offline globally: 300 Dugald

  11. Slide 11: Aluminum: Cost curve suggests 50%+ of world's capacity at loss

    Aluminum: Cost curve suggests 50%+ of world’s capacity at loss Global Demand and Supply Dynamics Aluminium Cost Curve 2,500  Capacity closures by several major producers Jharsuguda BALCO 2,000  Cost curve suggests >50% of world capacity at loss based on current LME + Premium, will drive supply adj

  12. Slide 12: Copper and Iron Ore

    Copper and Iron Ore Copper market to witness supply deficit in the medium term  Recent mine closures of about 745kt, would mean deficit in 2016  Chinese housing demand to rebound on back of government stimulus and rate cuts Tuticorin Smelter  Positioned in the lowest cost quartile  Strong TC/RC

  13. Slide 13: Our Strategic Priorities remain unchanged and we are well positioned to benefit from long term growth

    Our Strategic Priorities remain unchanged and we are well positioned to benefit from long term growth Aluminium consumption to rise with growth in  Diversified portfolio and high quality workforce population and urbanisation 60,000 9 have enabled us to endure previous down cycles 2050 population le

  14. Slide 14: Appendix

    Appendix = vedanta

  15. Slide 15: Safety and Sustainability

    Safety and Sustainability Safety LTIFR (per million man-hours worked)  2 fatalities in Q2 FY2016; 6 fatalities in H1 FY2016  LTIFR for H1 higher due to shift to ICMM 2014 Health & Safety methodology: restricted injuries considered as LTI unlike earlier  Focus on bringing in a culture of Zero-Harm

  16. Slide 16: Entity Wise Cash and Debt

    Entity Wise Cash and Debt (in Rs. Crore) 30 September 2014 30 June 2015 30 September 2015 Company Net Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Debt Vedanta Limited 40,187 3,143 37,044 40,164 1,263 38,901 39,394 2,194 37,200 Standalone Zinc India - 25,412 (25,412) - 27,519 (27,5

  17. Slide 17: Maturity Profile

    Maturity Profile Maturity Profile of Term Debt ($7.3bn) FY16 maturities : (as of 30 September 2015) • $0.52bn term loans committed • $0.9bn term loans approved in-principle, subject to final Subsidiaries Standalone approval 1.5 1.5 1.5 1.3 1.0 0.6 0.6 0.9 0.4 0.6 0.5 0.9 0.9 0.2 0.9 0.6 0.4 0.3 FY20

  18. Slide 18: Debt Breakdown & Funding Sources

    Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $ 7.3bn Debt Breakdown (as of 30 September 2015) (as of 30 September 2015) Short Term Loans - USD 4% Debt breakdown (in $bn) Money market External term debt 7.3 Instruments – INR 16% Working capital 2.2 Bonds-INR - 28% Int

  19. Slide 19: Timeline: Merger of Vedanta Ltd and Cairn India Ltd

    Timeline: Merger of Vedanta Ltd and Cairn India Ltd Event Completion BSE, NSE and SEBI approvals sought  Q2 CY2015 BSE, NSE and SEBI approvals  Q3 CY2015 Vedanta plc posting of UK Circular  Q4 CY2015 Application to High Court in India  Q4 CY2015 Vedanta plc EGM  Q4 CY2015 Vedanta Limited and Ca

  20. Slide 20: Segment Summary – Oil & Gas

    Segment Summary – Oil & Gas Q2 Q1 H1 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 2,14,247 2,04,128 5% 2,17,935 2,16,081 2,15,301 0% Average Daily Gross Operated Production (boepd) 2,05,361 1,94,508 6% 2,0

  21. Slide 21: Segment Summary – Zinc India

    Segment Summary – Zinc India Q2 Q1 H1 Production (in ’000 tonnes, or as stated) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Mined metal content 240 213 13% 232 472 376 26% Refined Zinc – Total 211 181 17% 187 398 321 24% Refined Zinc – Integrated 211 174 22% 187 398 312 28% Refi

  22. Slide 22: Segment Summary – Zinc International

    Segment Summary – Zinc International Q2 Q1 H1 Production (in’000 tonnes, or as stated) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Refined Zinc – Skorpion 17 27 -38% 26 42 60 -30% Mined metal content- BMM 16 16 - 15 31 31 - Mined metal content- Lisheen 30 36 -17% 29 60 72 -17% T

  23. Slide 23: Segment Summary – Aluminium

    Segment Summary – Aluminium Q2 Q1 H1 Particulars (in’000 tonnes, or as stated) FY 2016 FY 2015 % change YoY FY2016 FY 2016 FY 2015 % change YoY Alumina – Lanjigarh 272 226 20% 269 541 460 18% Total Aluminum Production 233 222 5% 232 464 424 9% Jharsuguda-I 130 138 -6% 132 262 270 -3% 1 Jharsuguda-II

  24. Slide 24: Segment Summary – Power

    Segment Summary – Power Q2 Q1 H1 Particulars (in million units) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Total Power Sales 2,718 2,028 34% 3,070 5,789 4,627 25% Jharsuguda 2400 MW 1,554 1,653 -6% 2,266 3,820 3,807 0% BALCO 270 MW 28 1 - 99 128 71 80% BALCO 600 MW 158 - - - 15

  25. Slide 25: Segment Summary – Copper India

    Segment Summary – Copper India Q2 Q1 H1 Production (in ’000 tonnes, or as stated) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Copper - Mined metal content - - - - - - - Copper - Cathodes 94 100 -6% 98 193 166 16% Tuticorin power sales (million units) 118 183 -35% 175 293 319 -8%

  26. Slide 26: Segment Summary – Iron Ore

    Segment Summary – Iron Ore Q2 Q1 H1 Particulars (in million dry metric tonnes, or as stated) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Sales 0.6 0.6 5% 0.5 1.2 1.1 8% Goa - - - - - - - Karnataka 0.6 0.6 5% 0.5 1.2 1.1 8% Production of Saleable Ore 0.8 0.3 - 0.2 1.0 0.3 - Goa 0

  27. Slide 27: 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%

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