Vedanta Limited · NSE:VEDL
Vedanta — Investor Presentation (August 2023)
39 slides from Vedanta's investor presentation, Aug 19, 2023
Slide 1: Corporate Presentation August 2023 – Vedanta Limited
CORPORATE PRESENTATION AUGUST 2023 VEDANTA LIMITED TRANSFORMING TOGETHER Inclusive. Responsible. Value-accretive delivery Sensitivity: Internal (C3)
Slide 2: Vedanta Limited – Overview
Vedanta Limited – Overview A 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
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 • One of the largest Indian • One of the largest custom •
Slide 4: Investment Case
Investment Case : Producer of commodities that are increasingly important to energy transition 1 World-class natural resources powerhouse 2 Well positioned to capitalize on India’s growth 3 Proven track record of operational excellence with well invested assets Vedanta is uniquely positioned to deli
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 DEBARI | CHANDERIYA DARIBA | VIZAG | RAMPURA AGUCHA | ZAWAR MINE | RAJPURA DARIBA & SINDESWAR KHURD OIL & GAS BUSINESS EAST ASIA Glass MAN
Slide 6: Portfolio provides commodities critical to energy transition
2a Our portfolio provides commodities that are critical to energy transition Mineral Vedanta’s presence intensity vs Clean conventional energy shift tech Key mineral for clean energy technologies Electric vehicles 5x Fe Al Cu Zn 3.2x 4.2x 3.1x 3.3x Solar PV 5x Pb Ni Ag 3.4x 1.8x 4.5x Offshore wind 9
Slide 7: Well positioned to capitalise on natural resource potential and India's growth
Well positioned to capitalise on global natural resource potential and India’s growth 2b outlook (2/2) India is the fastest growing major economy in the world 2030 2022 2030 CAGR 8.1% 2022 $7tn economy GDP(Real) $3.75 tn $7 tn 5th Largest economy CAGR 7.7% ($3.75 tn) Per capita Zinc, Aluminium and O
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 Tuticorin Smelter Vedanta IPO Acquired SESA Goa Acquired Cairn India Expansion of Zinc India Acquired FACOR Acquired KCM Commissioned 245 kt Al Acquired Australian Cu smelter and 540 MW of 1.2 mtpa and 250
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 2.60 LEADERSHIP Structural Intervention, 1st Quartile 2.29 1.96 1.9
Slide 12: Aluminium Business: Vision to be 3 MTPA producer
3c Aluminium Business: Vision to be 3 MTPA Aluminium producer Aluminium Value Chain – Existing Post Expansion (< 2 years) Bauxite Alumina Smelting Bauxite Alumina Smelting ~6 MTPA Aluminium Aluminium (50% – domestic 2 MTPA 9 MTPA 51 MTPA Minimal impact procurement) (45% Captive) 2.3 MTPA (Captive Ba
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 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 potenti
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 ▪ Started mines in Liberia ▪ Greenfield at Bellary ▪ Charge Chrome plant (CCP) ▪ Started Operations ▪ Reserves and Resources Expansion ▪ VAP
Slide 18: Semiconductor and Display Business
Semiconductor and Display Business: Thriving to create value and explore untapped 3g opportunities 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, Indian market to ~USD 11 Bn in
Slide 19: Disciplined capital allocation framework
4a Disciplined capital allocation framework o Intend to deleverage at group level Key Strategic Priority Optimize Leverage Ratio o Leverage ratio at Vedanta Limited should not be more than 1.5x Project Capex o Volume augmentation, cost reduction or creating value added products are key guiding princ
Slide 20: 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: Progressing well on our key ESG aims
5a Progressing well on our key ESG aims Uplifting over 100 mn Net carbon neutrality Achieving net water women & children through by 2050 or sooner positivity by 2030 Education, Nutrition, Healthcare & Welfare Women & Children to be uplifted GHG intensity (tCO2e/t of metal) Water Positivity Ratio (%)
Slide 22: 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 23: 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 ▪ Vedanta among top 10
Slide 24: 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 25: Experienced management team
5e Experienced management team Sonal Shrivastava Arun Misra John Slaven Madhu Srivastava Group CFO Executive Director VEDL CEO Aluminium Group CHRO B.Tech., MBA and WTD & CEO - Zinc Harvard Business School, PGDM – IIM A Exp: 26 years B.Tech. – IIT Kharagpur MBA Exp: 23 years Exp: 35 years Exp: 37 ye
Slide 26: 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 27: Robust financial profile with improving ROCE and 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 28: 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 29: 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 30: Appendix
VEDANTA LIMITED INVESTOR PRESENTATION August 2023 Appendix Sensitivity: Internal (C3)
Slide 31: 1QFY24 Operational Highlights
1QFY24 Operational Highlights Strong existing business performance; New venture – A step towards India’s self reliance Operational Highlights Other Highlights ▪ Aluminium o Metal Production grew 2% y-o-y and 1% q-o-q o Hot metal CoP lower by 27% y-o-y and 6% q-o-q ▪ Zinc India o Achieved highest-eve
Slide 32: Income statement
Income statement ▪ Depreciation & Amortization In ₹ Crore 1Q 4Q 1Q o 1QFY24 reduced by 8%QoQ largely due to decrease in FY24 FY23 FY23 amortization at HZL Revenue from operations 33,342 37,225 38,251 o 1QFY24 increased by 3% YoY mainly due to capitalization of Other operating income 391 705 371 asse
Slide 33: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net debt / EBITDA Debt breakdown 1.88 Gross Debt As on As on 1.28 (₹ 000’ crores) 30 June 2023 31 March 2023 1.01 Term debt 62.5 54.5 0.89 0.46 Working capital 4.8 2.7 Short term borrowing 6.2 8.9 FY'20 FY'21 FY'22 FY'23 1Q Total consolidated debt 73.5 66.2 FY'24 Cas
Slide 34: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Long Term Debt of $7.6 Bn Long Term Debt Maturities : ₹ 62,486 crore ($7.6 bn) (as of 30th Jun’23) (as on 30th Jun’23) 0.1% Standalone Subsidiaries 16% 28.5 In ₹ 000’ crore 21% Bonds INR Term Loan INR 10.6 Term Loan Fx Bonds Fx
Slide 35: Growth capex profile
Growth capex profile $bn Oil & Gas Zinc Al Other Total 1.7 0.3 1.2 1.1 Volume augmentation, cost 0.2 0.6 0.1 reduction or creating value 0.8 0.8 added products are key guiding 0.1 0.5 0.1 0.7 0.5 principles for all capex 0.1 0.3 0.2 0.2 0.1 0.5 0.3 0.3 0.5 0.5 0.0 0.5 0.1 0.0 0.4 0.2 0.2 0.12 FY2018
Slide 36: 1QFY24 Awards and Accolades
1QFY24 Awards and Accolades Recognitions towards our commitment to excellence 21st Greentech National Award International Excellence Award for Manufacturing Great Place to Safety Award by Best Occupational by Quality Circle Competitiveness Work British Safety Health Practices Forum of India by IRIM
Slide 37: 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 38 Vedanta Limited Investor presentation August 2023 Sensitivity: Interna
Slide 38: 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
Slide 39: Thank you
Thank you Vedanta Limited Investor presentation August 2023 Sensitivity: Internal (C3)