Vedanta Resources — FY2024 Earnings Presentation
36 slides from Vedanta Resources's earnings presentation, May 31, 2024
Slide 1: Vedanta Resources Limited Earnings Presentation FY 2023-24
VEDANTA RESOURCES LIMITED EARNINGS PRESENTATION FY 2023-24
Slide 2: Cautionary statement and disclaimer
Cautionary statement and disclaimer 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 forwa
Slide 3: Business Performance
FY 2023-24 Business Performance Vedanta Resources Limited FY24 Investor Presentation
Slide 4: Our commitment to excellence – our path to leadership
ESG Our commitment to excellence – our path to leadership Transforming Communities Key Highlights FY’24 Aim 1 Keeping community welfare at the core of business decisions 1.4 million Aim 2 Empowering over 2.5 million families with enhanced 0.7x skillsets ( 40% y-o-y) Water Positivity Families skille
Slide 5: High Impact initiatives drive sustainability leadership
Sustainability Leadership High Impact initiatives drive sustainability leadership S&P CSA rankings 3 Vedanta Limited1 Among 238 global companies 1Hindustan Zinc Hindustan Zinc 1 Among 238 global companies 1 Vedanta Aluminium2 Most sustainable aluminium producer Vedanta Limited - S&P CSA Ranking CDP
Slide 6: Empowering communities with focused actions
Empowering communities with focused actions 17.40 million 53 Mn$ 6000+ Highlights Total Beneficiaries CSR Spend in FY24 Nand Ghars Healthcare Drinking water > 251 Mn$ spent on CSR > 32 Initiatives and sanitation activities since 2020 > 12 Initiatives $ Million Community 57 Children’s 54 53 Infrastru
Slide 7: H2FY24 Operational Highlights
H2FY24 Operational Highlights Strategic Growth via Enhanced Volume, Cost Optimization, and Efficient Project Execution Aluminium Zinc India Iron and Steel Other Highlights Cast house, Jharsuguda Dariba Smelting Complex, HZL Coke oven plant, ESL Steel Train-I Refinery, Lanjigarh HZL Silver H2FY25 10%
Slide 8: FY24 Highlights
FY24 Highlights Leveraging cost efficiency to offset commodity prices and boost margins Aluminium Zinc India Others Silver Growth Continues • HZL is the only silver producer in India and is now the 3rd largest silver producer globally • With FY24 production of 746 MT, the production increased by c.5
Slide 9: Aluminum and Zinc are among the lowest cost producers globally
Cost Leadership Aluminum and Zinc are among the lowest cost producers globally Aluminium Cost ($/t) 2,653 ✓ Stands in the first quartile of the global cost curve. ✓ Sustained cost reduction for 7 consecutive quarters > ✓ 940$/t reduction in CoP in last 7 quarters ✓ Beat annual CoP guidance of $1800/
Slide 10: Aluminium Business
Aluminium Business Highest ever production, with 50%+ improvement in annual margin Aluminium Production (kt) +3% y-o-y Key Highlights: ▪ Record annual Production at 2,370 kt, up by 3% y-o-y 2,291 2,370 +5% y-o-y ▪ Highest Domestic sales at 978 kt, up 26% y-o-y 1,173 1,197 ▪ Annual aluminium CoP lowe
Slide 11: Commissioned 1.5 MTPA alumina refinery unit at Lanjigarh
Project update (2 → 5 MTPA refinery) Commissioned 1.5 MTPA alumina refinery unit at Lanjigarh The 2 to 5 MTPA Expansion Project has achieved a Glimpses of Train-1 (1.5 MTPA) Expansion Project at Lanjigarh remarkable milestone by production of 1st Alumina from Train-I of 1.5 MTPA Expansion Project co
Slide 12: Zinc India
Zinc India Historic-high silver & metal production with strong cost resilience ▪ Positioned in 1st decile of global zinc mines cost curve ▪ Highest-ever annual mined metal, refined metal and silver ▪ Consecutive 5 quarters of cost optimisation with lowest zinc production at 1,079 kt, 1,033 kt and 74
Slide 13: Zinc International
Zinc International Focus on production enhancement and cost reduction Total MIC Production VZI to deliver 500+ KTPA MIC run rate within 12-15 months Gamsberg (Phase – 2) VZI Production (kt) Gamsberg (kt) BMM (kt) 65 BMM Gamsberg - 45% y-o-y $466 mn 500+ 208 61 Approved Capex 450 150 100 31 37 147 4
Slide 14: Oil & Gas
Oil & Gas Enhancing Reserve and Resources to secure future profitability Gross Production (kboepd) 200 Key highlights: 150 ▪ FY24 production at 128 kboepd, natural decline in the MBA fields 141 143 has been partially offset by infill wells brought online in Mangala, 134 128 100 121 Aishwariya and RD
Slide 15: Iron and Steel
Iron and Steel Driving performance with consistent production growth, paving ways for future capacities Karnataka Iron Ore VAB Steel Ferrochrome Sales (MnT) Production (KT) Saleable production (kt) Ferro Chrome production (kt) 80 831 1,386 5.9 1,285 67 +23% y-o-y 696 5.0 +29% y-o-y 3.4 692 702 684 4
Slide 16: Finance Update
FY2023- 24 ESG Finance Update Vedanta Resources Limited FY24 Investor Presentation
Slide 17: FY24 financial snapshot
FY24 financial snapshot Revenue EBITDA EBITDA Margin1 FCF (Pre-capex) $ 17,128 million $ 4,718 million 32% $ 2,155 million 6% y-o-y 2nd highest ever 315 bps ROCE2 Net Debt3 Net Debt/EBITDA Maturity3 25% $ 5,588 million 2.6x c. 3 Years 512 bps Deleveraged $1.6 bn in FY24 vs 2.8x in FY23 vs c. 1
Slide 18: EBITDA Bridge (FY24 vs. FY23)
EBITDA BRIDGE (FY24 vs. FY23) (In $ mn) 11% vs Rebased EBITDA Alum (682) Zinc (628) Oil & Gas (231) Market & Regulatory $ (368) Mn 18 Ex rate: FY24 ₹ 82.78 VS FY23 ₹ 80.27 Vedanta Resources Limited Note: Others include impact of favorable arbitration award in Oil and Gas Business FY24 Investor Prese
Slide 19: Net Debt Walk FY24
Net Debt Walk FY24 (In $mn) FCF post Capex $ 746 million 19 Vedanta Resources Limited FY24 Investor Presentation Sensitivity: Internal (C3)
Slide 20: Balance sheet and debt breakdown
Balance sheet and debt breakdown Net Debt / EBITDA Debt breakdown Reduced to 2.6x in FY24 vs 3.3x in FY20 Gross Debt In $bn Term debt 13.81 3.3 Working capital 0.32 2.8 2.8 2.6 1.9 Short term borrowing 0.20 Total consolidated debt 14.33 Cash and Cash Equivalents 1.98 FY20 FY21 FY22 FY23 FY24 Net Deb
Slide 21: FY25 key objectives
FY25 key objectives A transformative year on many fronts Aluminium Zinc • Bauxite: Increasing domestic bauxite mix including operationalizing Sijimali mine HZL: • Ramp-up of underground mines capacity to 1.25 MTPA • Alumina: Completing refinery expansion to 5 MTPA • Fumer plant: Ramp up to produce 3
Slide 22: Robust Growth Profile with min. 30% lower capex compared to peers
Robust Growth Profile with min. 30% lower capex compared to peers Discovery Stage Concept Stage Execution Stage DIP Lanjigarh: Project 2 – 5 MTPA refinery expansion ESL: 1.3 Balco - 435 ktpa Smelter & MTPA 180 ktpa RP Project Lanjigarh: Jharsuguda: Additional 1 MTPA ESL: 10 MTPA 5 to 6 MTPA 1.8 to 2
Slide 23: Continued disciplined investment in value adding growth
Continued disciplined investment in value adding growth ($ Bn) FY growth capex guidance 1.2 0.7 1.1 2.0 1.7 Growth Capex profile Oil & Gas 1.9 Zinc 0.3 Al & Power Other 1.4 1.2 0.1 0.8 0.2 0.8 0.7 0.1 0.7 0.5 0.2 0.2 0.4 0.1 0.3 0.3 0.3 0.5 0.0 0.0 0.4 0.1 0.3 0.4 0.2 0.2 FY2020 FY2021 FY2022 FY2023
Slide 24: FY25 Production and Cost Guidance
FY25 Production and Cost Guidance Oil and Gas Aluminium Average Gross 120-140 kboepd Alumina 2.7-3.0 Mnt Volume Aluminium 2.3-2.4 Mnt Opex $13-14/boe CoP1 $1,625/t - $1,725/t Zinc International Zinc India Gamsberg 160 - 180 kt Mined Metal 1,100 - 1,125 kt BMM 60 – 70 kt Finished Metal 1,075 – 1,100
Slide 25: Appendix
VEDANTA RESOURCES LIMITED EARNINGS PRESENTATION FY24 Appendix Sensitivity: Internal (C3)
Slide 26: Income statement
Income statement In $ Mn FY24 FY23 ▪ Depreciation & Amortization: decreased by 7% y-o-y largely due to lower depletion charge at Oil & Gas Revenue from operations 17,128 18,141 Business partially offset by higher depreciation in EBITDA 4,718 4,608 Aluminium for pots capitalization. Depreciation & am
Slide 27: Project capex
Project capex Approved Spent up to Spent in Unspent4 as on Capex in Progress (In $ mn) Status Capex2 FY233 FY24 Mar 31, 2024 Cairn India1 – Mangala, Bhagyam & Aishwariya infill, 904 337 246 321 OALP, ABH infill, RDG infill, Offshore infill etc Aluminium Sector Jharsuguda VAP capacity expansion and o
Slide 28: Entity-wise Cash and Debt
Entity-wise Cash and Debt (In $ mn) Mar 31, 2024 Mar 31, 2023 Company Cash & Cash Cash & Cash Debt Net Debt Debt Net Debt Eq Eq Vedanta Limited Standalone 5,067 286 4,781 5,114 896 4,218 Cairn India Holdings Limited1 220 143 77 324 196 128 Hindustan Zinc Limited 1,015 1,221 (206) 1,441 1,206 235 Zin
Slide 29: Vedanta Resources Balance sheet – De-leveraged and Reprofiled
Vedanta Resources Balance sheet – De-leveraged and Reprofiled Net debt at VRL Standalone Maturity restructured through Liability Management (LM) ($bn) Pre Post ($bn) 9.7 4.1 8.3 7.7 6.0 1.8 1.1 0.9 0.9 0.8 0.8 0.6 0.2 0.0 FY25 FY26 FY27 FY28 FY29 Mar-22 Sep-22 Mar-23 Mar-24 VRL has de-leveraged its
Slide 30: Funding sources and term debt maturities
Funding sources and term debt maturities Diversified Funding Sources for Long Term Debt of $13.8 Bn Long Term Debt Maturities : $13.8 bn (as of Mar 31, 2024) (as on Mar 31, 2024) Standalone Subsidiaries 4.2 13% 21% 3.8 In $ Bn Bonds INR 3.1 Term Loan INR Term Loan Fx 2.7 2.3 Bonds Fx 2.0 36% 30% 1.8
Slide 31: Segment summary
Segment summary Zinc India FY24 FY23 Aluminium (in ’000 tonnes, or as stated) FY24 FY23 (in ’000 tonnes, or as stated) Mined metal content 1,079 1,062 Integrated metal 1,033 1,032 Alumina – Lanjigarh 1,813 1,793 Refined Zinc – Integrated 817 821 2,370 2,291 Refined Lead – Integrated1 216 211 Total A
Slide 32: Segment summary- continue
Segment summary- continue Oil and Gas (kboepd) FY24 FY23 Steel (in ‘000 tonnes, or as stated) FY24 FY23 Total Production 1386 1,285 Average Daily Gross Operated Production 127.5 142.6 Pig Iron 203 192 (kboepd) Billet Production 997 947 Rajasthan 106.5 119.9 Ravva 10.8 11.8 Billet Consumption (inter
Slide 33: Sales summary
Sales summary Sales volume FY24 FY23 Sales volume FY24 FY23 Sales volume FY24 FY23 Power Sales (mu) Zinc-India Sales Iron ore sales Jharsuguda 2,771 3,048 Refined Zinc (kt) 817 821 Goa (mn dmt) 0.3 0.7 TSPL 10,278 10,744 Refined Lead (kt) 216 211 Karnataka (mn dmt) 5.9 5.0 HZL Wind power 394 395 Tot
Slide 34: Currency and commodity sensitivities
Currency and commodity sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ $ 40- 45 mn/year Commodity prices – Impact of a 10% increase in Commodity Prices FY24 Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 83 65 Zinc ($/t) 2,475
Slide 35: Group structure
Group structure As of 31-Mar-24 Listed entities Vedanta Resources Ltd Unlisted entities Divisions of Vedanta Limited ⚫ Sesa Iron Ore 61.95% ⚫ Sterlite Copper ⚫ Power (600 MW Jharsuguda) Vedanta Ltd ⚫ Aluminium (Odisha aluminium and power assets) ⚫ Cairn Oil & Gas* Subsidiaries of Vedanta Ltd ⚫ Athen
Slide 36: Awards and Accolades
Awards and Accolades Recognitions towards our commitment to excellence National Vedanta Excellent and Business Leader Certification for Jharsuguda won in Kincentric Distinguished of the Year Award in 'Digital 3 categories at the Best Employer Category at 37th Smart Manufacturing Transformation in Ou