Vedanta Limited · NSE:VEDL
Vedanta — Kotak Conference February 2016
28 slides from Vedanta's conference presentation, Feb 22, 2016
Slide 1: Commodities – A Global Perspective
Commodities – A Global Perspective Tom Albanese Chief Executive Officer Vedanta Ltd. February 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: 2015: A year of volatile financial and commodity markets
2015: A year of volatile financial and commodity markets Volatility has spiked in 2015 Commodities price and forecast (indexed to 100) Downward movement in commodity prices in 2015 140 Forecast till 20192 Emerging markets index also witnessed correction, down 17% 120 Sector expected to recover i
Slide 4: Global cost curves coming down
Global cost curves coming down Depreciating producer currencies contributed to lower costs of Aluminum: Alumina price reduction is a major catalyst production for commodities US$/t Producers also reducing others costs, as well as benefiting 2,000 from lower input commodity prices 1,800 However
Slide 5: India: Resource potential and favorable macro
India: Resource potential and favorable macro India offers huge reserves potential India: Shared geology and mineral India: Global R&R Ranking¹ India has favorable geology, yet to be fully explored potential with Africa & Australia Geology similar to resource-rich Australia and Africa 5th Coal R
Slide 6: Vedanta: A Global Diversified Natural Resources Company
Vedanta: A Global Diversified Natural Resources Company EBITDA Mix for 9M FY2016 1% • Portfolio of large, structurally low-cost, long-life Tier-I assets: – Significant near term growth with well-invested asset base not 15% requiring large capex 8% 48% – Well positioned to capitalize on India’s and A
Slide 7: Relentless focus on opex, capex and FCF optimisation in current market environment
Relentless focus on opex, capex and FCF optimisation in current market environment Pragmatic decisions in current market Cost and marketing savings program benefits conditions US$mn Maintained 1st/2nd quartile cost positions across 58 205 major businesses 147 Cost restructuring and optimisation
Slide 8: Business Update
2S vedanta Business Update
Slide 9: Oil: Low price environment, but we are better placed
Oil: Low price environment, but we are better placed Current Demand and Supply Dynamics Oil Demand/Supply and Quarterly Balance (mb/d) Oil market faces the prospect of a third successive year of surplus Surplus / (Deficit) (RHS) World production 100 World consumption 3.0 Supply is now more respo
Slide 10: Zinc: Well placed to benefit from attractive fundamentals
Zinc: Well placed to benefit from attractive fundamentals Zinc has the strongest fundamentals across commodities Global zinc concentrate deficit supporting zinc prices (kt) Mine closures, supply shortages to support prices, c.5% of global 800 Concentrate Surplus (+) Deficit (‐) mined zinc alread
Slide 11: Aluminum: Low-cost producer, ramping up production
Aluminum: Low-cost producer, ramping up production Global Demand and Supply Dynamics Vedanta: Roadmap to 2.3mtpa Aluminium Capacity (in ktpa) Capacity closures by several major producers Ramp-up from 1 325 2,320 Cost curve suggests >45% of world capacity at loss based on current April, approvals
Slide 12: Copper and Iron Ore
Copper and Iron Ore Copper market to witness supply deficit in the medium term Fundamentals of copper have improved given recent mine closures and copper inventories are dropping Chinese housing demand to rebound on back of government stimulus and rate cuts Strong TcRc environment, though 2016
Slide 13: Power
Power Power Generation Capacity: Q3 FY2016 Coal Mix (5.5mt) Vedanta: Efficient operator of thermal power plants c. 9 GW Power vertical set up to leverage synergies across the 9GW Linkage E-auction Imports Captive Commercial portfolio Power Power c.6 GW c. 3 GW 1980 MW TSPL Plant in Punjab: 22%
Slide 14: Strategic Priorities to counter challenging market
Strategic Priorities to counter challenging market Production Growth and Asset optimisation − Disciplined approach towards ramp up: positive FCF at each segment a top priority Delever the Balance Sheet − Optimising opex and capex to maximise cash flows − Deliver cost and marketing savings of US$1.3b
Slide 15: Appendix
Appendix = vedanta
Slide 16: Safety and Sustainability
Safety and Sustainability Safety LTIFR (per million man-hours worked) 2 fatalities in Q3 FY2016; 8 fatalities in FY2016 (YTD) LTIFR for 9M 2016 higher due to shift to ICMM 2014 Health & Safety methodology Focus on bringing in a culture of Zero-Harm 0.52 0.52 Making Better Risk Decisions (MBR
Slide 17: Entity Wise Cash and Debt
Entity Wise Cash and Debt (in Rs. Crore) 31 March 2015 30 September 2015 31 December 2015 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta Limited 37,636 840 36,796 39,394 2,194 37,200 42,645 3,055 39,590 Standalone Zinc India - 27,192 (27,192) - 30,404 (30,404
Slide 18: Balance Sheet and Maturity Profile
Balance Sheet and Maturity Profile Maturity Profile of Term Debt ($7.9bn) (as of 31st December 2015) Subsidiaries Standalone 1.7 1.6 1.6 1.1 1.2 0.6 0.6 0.6 0.5 0.7 0.6 0.3 1.1 0.9 1.0 0.6 0.5 0.5 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 & Later External term debt of $7.9bn ($4.6bn at Standalone an
Slide 19: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $ 7.9bn Debt Breakdown (as of 31 December 2015) (as of 31 December 2015) Short Term Loans - USD 3% Debt breakdown (in $bn) Money market External term debt 7.9 Instruments – INR 16% Bonds-INR Working capital 2.1 23% Inter c
Slide 20: 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 Application to High Court in India Q4 CY2015 Vedanta plc posting of UK Circular Q1 CY2016 Vedanta plc EGM Q1 CY2016 Vedanta Limited and Ca
Slide 21: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q3 Q2 9M OIL AND GAS (boepd) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Average Daily Total Gross Operated Production (boepd)1 211,843 228,622 -7% 214,247 214,663 219,757 -2% Average Daily Gross Operated Production (boepd) 202,668 218,900 -7% 205,361
Slide 22: Segment Summary – Zinc India
Segment Summary – Zinc India Q3 Q2 9M Production (in ’000 tonnes, or as stated) % change % change FY 2016 FY2015 YoY FY 2016 FY 2016 FY2015 YoY Mined metal content 228 242 -6% 240 700 618 13% Refined Zinc – Total 206 196 5% 211 605 517 17% Refined Zinc – Integrated 206 192 8% 211 605 504 20% Refined
Slide 23: Segment Summary – Zinc International
Segment Summary – Zinc International Q3 Q2 9M Production (in’000 tonnes, or as stated) % change % change FY 2016 FY2015 FY 2016 FY 2016 FY2015 YoY YoY Refined Zinc – Skorpion 13 26 -49% 17 55 86 -35% Mined metal content- BMM 17 13 34% 16 48 44 10% Mined metal content- Lisheen 21 41 -50% 30 81 113 -2
Slide 24: Segment Summary – Aluminium
Segment Summary – Aluminium Q3 Q2 9M Particulars (in’000 tonnes, or as stated) FY 2016 FY2015 % change YoY FY 2016 FY 2016 FY2015 % change YoY Alumina – Lanjigarh 218 244 -10% 272 760 703 8% Total Aluminum Production 234 224 5% 233 697 648 8% Jharsuguda-I 131 133 -2% 130 392 403 -3% Jharsuguda-II 1
Slide 25: Segment Summary – Power
Segment Summary – Power Q3 Q2 9M Particulars (in million units) % change % change FY 2016 FY 2015 FY2016 FY 2016 FY 2015 YoY YoY Total Power Sales 2,934 2,663 10% 2,718 8728 7312 19% Jharsuguda 2400 MW 1,593 1,873 -15% 1,554 5,413 5681 -5% BALCO 270 MW 41 0 28 169 71 137% BALCO 600 MW 368 0% 158 526
Slide 26: Segment Summary – Copper India
Segment Summary – Copper India Q3 Q2 9M 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 89 99 -11% 94 282 266 6% Tuticorin power sales (million units) 40 164 -75% 118 334 483 -31% F
Slide 27: Segment Summary – Iron Ore
Segment Summary – Iron Ore Q3 Q2 9M Particulars (in million dry metric tonnes, or as stated) % change % change FY 2016 FY2015 FY 2016 FY 2016 FY2015 YoY YoY Sales 1.5 0.1 - 0.6 2.7 1.2 126% Goa1 0.6 - 0% - 0.6 - 0% Karnataka 0.9 0.1 - 0.6 2.1 1.2 78% Production of Saleable Ore 1.4 0 - 0.8 2.4 0.3 -
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%