Vedanta Limited · NSE:VEDL
Vedanta — Investor Presentation (December 2023)
41 slides from Vedanta's investor presentation, Dec 19, 2023
Slide 1: Corporate Presentation December 2023 – Transforming Together
CORPORATE PRESENTATION December 2023 VEDANTA LIMITED TRANSFORMING TOGETHER Inclusive. Responsible. Value-accretive delivery Sensitivity: Internal (C3)
Slide 2: Vedanta Limited – Overview
Vedanta Limited – Overview Globally diversified natural resources powerhouse Aluminium | Zinc-lead-silver | Oil & Gas | Iron & Steel | Power | Copper Ferro Chrome | Nickel | Semiconductor and Display $18 Bn $4.4 Bn FY23 Revenue FY23 EBITDA $11 Bn $14 Bn Dividend over the last decade Capex over the l
Slide 3: Group Structure
Group Structure Listed Entities VEDL Standalone Assets Vedanta Resources Limited Vedanta Limited (63.7%) Vedanta Limited (63.7%) Konkola Copper Mine (79.4%) Aluminum Oil & Gas Zinc & Silver Iron & Steel Copper • Largest capacity in India with captive power and an • India’s largest private • One of l
Slide 4: Investment Case
Investment Case 1 World-class natural resources powerhouse 2 Well positioned to capitalize on India’s growth 3 Proven track record of operational Vedanta is excellence with well invested assets uniquely positioned to 4 Disciplined capital allocation framework deliver long term sustainable 5 Committe
Slide 5: World class diversified natural resource powerhouse
1a World class diversified natural resource powerhouse ALUMINIUM BUSINESS LANJIGARH | JHARSUGUDA | KORBA 2 MTPA 1.8 MTPA 0.6 MTPA INDIA ZINC-LEAD-SILVER BUSINESS SMELTERS: CHANDERIYA → 675 KTPA DARIBA→ 360 KTPA DEBARI → 88 KTPA MINES: RAMPURA AGUCHA | ZAWAR | RAJPURA DARIBA | SINDESWAR KHURD | KAYAD
Slide 6: Tier-1 low-cost and long-life assets with exploration upside
1b Tier-1 low-cost and long-life assets with exploration upside FY2023 FY2024e Competitive Position on Cost Curve POSITIONING R&R Life1 Full Capacity2 Production Production Quartiles5 I II III IV Zinc India Largest integrated zinc-lead producer 25+ 1,032kt 1075-1100 kt 1.2mtpa Zinc International One
Slide 7: Well-positioned to capitalise on India's economic growth & natural resources potential
2a Well-positioned to capitalise on India’s economic growth & natural resources potential India is amongst the fastest growing economy globally and is slated to be the world’s third largest economy by 2027, as per IMF Real GDP CAGR of World Largest Economies (2022 to 2028) 6.1% 4.1% 1.8% 1.7% 1.4% 1
Slide 8: Proven track record of operational excellence
3a Proven track record of operational excellence Zinc-Lead Silver Copper Aluminium Steel Power Iron Ore Oil & Gas 2,000 1,800 Strong EBITDA Performance Total Production Copper Equivalent (kt) 1,600 1,400 $ 4.4 bn 1,200 1,000 800 600 400 $0.3 bn 200 FY2004 FY2023 0 FY2015 FY2004 FY2005 FY2006 FY2007
Slide 9: Well invested and consolidated assets driving growth
3b Well invested and consolidated assets driving growth Commissioned 1,980MW TSPL Acquired ESL Vedanta IPO Acquired SESA Goa Tuticorin Smelter Expansion of Zinc India Acquired KCM Commissioned 245 kt Al Acquired Cairn India Acquired FACOR Acquired Australian Cu smelter and 540 MW to 1.12 mtpa and 17
Slide 10: Aluminium Business Vision
Aluminium Business 100% integrated aluminum producer Vision First quartile cost curve producer “Be 3 MTPA Top 3 primary Aluminium producer in the world Aluminium ex-China producer with Producer with 30% low carbon ‘green’ Aluminium best-in-class mix cost position ” A digitally-enabled operator Vedan
Slide 11: Aluminium business: Set to be among top 3 globally
Aluminium business: Set to be among top 3 globally* delivering superior value for all its 3c stakeholders 100% Targeting value accretive growth to cater sunrise sectors INTEGRATION Aluminium Production (MTPA) Backward & Forward COST 2.50 LEADERSHIP Structural Intervention, 1st Quartile 2.29 1.96 1.9
Slide 12: Aluminium Business: Vision to be 3 MTPA Aluminium producer
Aluminium Business: Vision to be 3 MTPA Aluminium producer Aluminium Value Chain – Existing Post Expansion (< 2 years) Target Outcome Bauxite Alumina Smelting Bauxite Alumina Smelting ~6 MTPA Aluminium Aluminium (50% – domestic 2 MTPA 9 MTPA 51 MTPA procurement) (45% Captive) 2.3 MTPA (Captive Bauxi
Slide 13: Zinc Business Vision
Zinc Business Hindustan Zinc to be: Largest integrated zinc-lead company & top 3 silver producer Vision – Lowest cost producer for mines and smelters “Be the world’s Increase VAP contribution to 30% and enter new segments-fertilizers & batteries largest and most admired Vedanta Zinc International
Slide 14: Zinc India: Our strength and our pride
3d Zinc India: Our strength and our pride | Paving way for greater growth 01 02 03 Capacity Mine Portfolio Cost Expansion with long life Optimization Ramping up underground Ramping up Exploration Drive production mines and smelters to enhance R&R efficiency Refined Metal Production Reserves and Reso
Slide 15: Zinc International: Poised to deliver significant value
3d Zinc International: Poised to deliver significant value Current Operations VZI to deliver 500+ KTPA MIC run rate within 2 years Gamsberg Expansion (Phase – 2) VZI Production (kt) Gamsberg Operations: BMM Gamsberg o One of the world's largest Zinc deposits $466 mn 500+ o Phase 1 → 250 KTPA MIC cap
Slide 16: Oil & Gas: Rich portfolio mix spread across basins
Oil & Gas: Rich portfolio mix spread across basins; focus on augmenting R&R to increase 3e production volume Vision Key Drivers for augmenting R&R Production (kboepd) Key Drivers for augmenting R&R > 50% of India’s domestic production 300 Infill wells Exploration PSC/OALP Maximize resource potential
Slide 17: Iron & steel: Potential to create long term growth
3f Iron & steel: Potential to create long term growth 4 MTPA 12 MTPA 225 KTPA 12 KTPA STEEL & Pig Iron IRON ORE FERRO ALLOY NICKEL ▪ Expansion at Bokaro / Goa ▪ Production ramp up in Liberia ▪ Greenfield at Bellary ▪ Charge Chrome plant (CCP) ▪ Capacity expansion ▪ Reserves and Resources expansion ▪
Slide 18: Semiconductor and Display Business
Semiconductor and Display Business: diversifying our portfolio into technology sector 3g with semiconductor and display business India Semiconductor demand expected to outgrow global Global Flat Panel Display market to grow to ~USD 130 demand by 8% with 60%+ from mobile segment by 2026 Bn by 2027, I
Slide 19: Disciplined capital allocation framework
4a Disciplined capital allocation framework Optimize o Intend to deleverage at group level Key Strategic Priority Leverage Ratio o Leverage ratio at Vedanta Limited to be maintained below 1.5x through cycle Project Capex o Volume augmentation, cost reduction or creating value added products are key
Slide 20: Emphasis on superior and consistent shareholder returns while investing for growth
4b Emphasis on superior and consistent shareholder returns while investing for growth Dividend $mn 159 199 159 1,058 1,223 1,002 205 504 2,246 4,700 ₹ crore 37,730 Dividend payout of >$11 Bn1 (~ ₹85,000 cr) over last 10 years 16,727 7,099 7,880 7,005 964 1,216 1,038 1,450 3,531 FY2014 FY2015 FY2016
Slide 21: Our commitment to excellence – our path to leadership
ESG Our commitment to excellence – our path to leadership ESG Pillars Transforming Communities Transforming Planet Transforming Workplace Aim 1 Keeping community welfare at the core of Aim 4 Net-carbon neutrality by 2050 or sooner Aim 7 Prioritizing safety and health of all business decisions employ
Slide 22: Empowering communities with focused actions
Empowering communities with focused actions Highlights 16.1 million ₹ 226 crore 5700+ Total Beneficiaries CSR Spend in 1HFY24 Operational Nandghar Healthcare Drinking water > 1700 crore spent on CSR > 30 Initiatives and sanitation activities since 2020 > 15 Initiatives ₹ crore Community 454 Children
Slide 23: Net-Zero Carbon by 2050 or Sooner - Roadmap
5b Net-Zero Carbon by 2050 or Sooner - Roadmap AIM TO REDUCE 25% ABSOLUTE GHG EMISSIONS BY FY2030 ▪ 80 projects in planning or implementation stage during FY24 FY Emissions (mnt of CO2e) ▪ 40% in advanced stages of planning Decarbonization Initiatives - 25% vs ▪ Project Mix: Growth FY21 baseline o R
Slide 24: ESG Ratings: significant improvement across key external ratings
5c ESG Ratings: significant improvement across key external ratings Percentile Ranking Risk Score (Lower the better) ESG Rating ESG Rating 98% 47 BB 80 B 80 B 80 44 B 60 B- 60 89% 39.6 86% CCC 40 CCC 40 C 40 2020 2021 2022 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 ▪ Ranks 6th among top
Slide 25: Board of Directors with a global and diversified experience
5d Board of Directors with a global and diversified experience Anil Agarwal Navin Agarwal Arun Mishra DD Jalan Executive Director Non-Executive Non-Executive Executive 35+ years of Independent Chairman Vice Chairman experience of Director four decades of four decades of leading in various 40+ years
Slide 26: Experienced management team
5e Experienced management team Ajay Goel Arun Misra John Slaven Madhu Srivastava Chief Financial Officer Executive Director VEDL CEO Aluminium Group CHRO CA, CS and WTD & CEO - Zinc Harvard Business School, PGDM – IIM A Exp: 22 years B.Tech. – IIT Kharagpur MBA Exp: 23 years Exp: 35 years Exp: 37 ye
Slide 27: People – our biggest asset
5f People – our biggest asset OUR KEY FOCUS AREAS Next Set of 4000 Empowering Company with rd Working with Leaders are women - 1/3 Professionally diverse best global home grown of our new hires driven company - demographics – Each business business through our are women Nationality, having strong pa
Slide 28: Robust financial profile with improving ROCE, increasing cash flow and a stronger balance sheet
6b Robust financial profile with improving ROCE, increasing cash flow and a stronger balance sheet Revenue ($ bn) EBITDA ($ bn) Profit after tax1 ($ bn) 3.3 17.6 18.1 6.1 1.8 13.0 4.4 1.4 9.8 3.4 0.9 2.3 FY16 FY19 FY22 FY23 FY16 FY19 FY22 FY23 FY16 FY19 FY22 FY23 Net debt / EBITDA (x) FCF post capex
Slide 29: Strategy to enhance long term value
Strategy to enhance long term value Optimise capital Operational Delivering on STRATEGIC Committed to ESG Augment reserves excellence and allocation & growth PRIORITIES leadership & resources base maintain strong cost leadership opportunities Balance Sheet o Achieve net o Disciplined o Focus on full
Slide 30: To sum up:
To sum up: Provider of increasingly 01 important minerals that are critical to energy transition Ongoing expansion at HZL; Scope for higher silver recovery Aluminium backward integration, higher production, higher VAP → additional $1bn Organic earnings underpinned through-cycle annual EBITDA 02 by s
Slide 31: Appendix
VEDANTA LIMITED INVESTOR PRESENTATION November 2023 Appendix Sensitivity: Internal (C3)
Slide 32: 2QFY24 Operational Highlights
2QFY24 Operational Highlights Resilient operational performance backed by aggressive cost reduction Aluminium Zinc Iron and Steel Other Highlights Cast house, Jharsuguda Dariba Smelting Complex, HZL Coke oven plant, ESL Steel Fumer Plant, Chanderiya RD Mill Aluminium 10% lowerProduction y-o-y, Zinc
Slide 33: Significant cost reduction across key businesses
Significant cost reduction across key businesses Aluminum CoP ($/t) Zinc India CoP ($/t) ZI - Gamsberg CoP ($/t) - 615 $/t y-o-y - 122 $/t y-o-y - 16 $/t y-o-y Oil and Gas – Opex ($/boepd) ▪ Strong cost improvement measures ▪ 150+ $/t cost improvement over last 3 quarters ▪ 25% reduction in Aluminum
Slide 34: Vedanta Limited announced demerger into 6 different entities
Strategic Update Vedanta limited announced demerger into 6 different entities Vedanta Limited ▪ Display 1 ▪ Hindustan Zinc Limited ▪ Vedanta Stainless ▪ Semiconductors (FACOR & Nicomet) ✓ Direct investment opportunity in India focused, pure play commodities businesses Vedanta Aluminium 2 ▪ Including
Slide 35: Income statement
Income statement ▪ Depreciation & Amortization: Increased by 4% q-o-q 2Q 1Q 2Q In ₹ Crore largely due to higher depletion charge at Oil & Gas FY24 FY24 FY23 Business. Revenue from operations 38,546 33,342 36,237 Other operating income 399 391 417 EBITDA 11,834 6,975 8,038 ▪ Finance Cost: Increased b
Slide 36: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net debt / EBITDA Debt breakdown 1.88 Gross Debt In $bn In ₹ 000’ crores 1.64 1.28 Term debt 8.05 67.00 1.01 0.89 Working capital 0.19 1.60 0.46 Short term borrowing 0.71 5.87 Total consolidated debt 8.95 74.47 FY20 FY21 FY22 FY23 1QFY24 2QFY24 Cash and Cash Equivale
Slide 37: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Long Term Debt of $8.1 Bn Long Term Debt Maturities : ₹ 67K crore ($8.1 bn) (as of Sep 30, 2023) (as on Sep 30, 2023) Standalone Subsidiaries 0.1% In ₹ 000’ crore 21% 16% 34.0 Bonds INR Term Loan INR Term Loan Fx 15.8 Bonds Fx
Slide 38: Growth capex profile
Growth capex profile $bn Oil & Gas Zinc Al Other Total 1.7 0.3 1.2 Volume augmentation, cost 1.1 0.2 0.6 reduction and creating value 0.1 added products are key 0.8 0.8 guiding principles for all capex 0.1 0.7 0.5 0.1 0.7 0.5 0.1 0.1 0.3 0.2 0.2 0.1 0.3 0.5 0.3 0.3 0.5 0.5 0.0 0.1 0.5 0.1 0.0 0.4 0.
Slide 39: Awards and Accolades
Awards and Accolades Recognitions towards our commitment to excellence 50+ Gold & Rank - 1 at Confederation Society of Silver awards Most Active Fire and Security of Indian Industry Energy Engineers under 22nd Chapter Industry in Association (CII) National & Managers Convention on Certificates Marke
Slide 40: Disclosures & publications
Disclosures & publications Sustainability Report Tax Transparency Report Integrated Annual Report TCFD Report Sustainability Report - FY2023 Tax Transparency Report - FY2023 Integrated Annual Report - FY2023 TCFD Report FY2023 40 Vedanta Limited Investor Presentation December 2023 Sensitivity: Inter
Slide 41: Cautionary statement and disclaimer
Cautionary statement and disclaimer 01 The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any fo