Nmdc Limited · NSE:NMDC
Nmdc — Non-Deal Roadshow (April 2019)
34 slides from Nmdc's roadshow presentation, Apr 10, 2019
Slide 1: Cover letter to stock exchanges: Investor (Non-Deal) Presentation
lf' ~it~ R:t~'ls NMDC Limited (1f'Rtl ~ C6'T '\3'i!PI) (A GOVT. OF INDIA ENTERPRISE) ~ <l>llli(1ll: ·~ ~" 10-3-311~. ~ ~. lffiffij ~. tc::-<1<111c::-5oo 028. Regd. Office : 'Khanij Bhavan' 10-3-311/A, Castle Hills, Masab Tank, Hyderabad - 500 028. NMDC ~~~I Corporate Identity Number: L 13100AP1958 G
Slide 2: NMDC Limited Investor (Non-Deal) Presentation
NMDC LIMITED (A Govt. of India Enterprise ) Sede % Sake Se .. Investor (Non-Deal) Presentation
Slide 3: Disclaimer
• This presentation is issued by NMDC Limited (the "Company") for general information purposes only, without regard to specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form part of any offer or invitation or induc
Slide 4: Section A: Industry Overview
ae Section A: Industry Overview
Slide 5: One of the Largest Users of Steel but Low Steel Penetration Levels
One of the Largest Users of Steel but Low Steel Penetration Levels(1 ) 1 • 737 499 I • 97 89 64 56 41 41 36 26. 25 South Germany Russi a Turkey Mexico Italy China USA Japan Korea India Apparent Steel Use<212017 (mn tonnes) • Per Capita Steel Use (kgs) With per capital steel consumption of 75 Kgs aga
Slide 6: Crude steel production by country
(mn tonnes) 831 38 34 21 China J. Japan India USA Russia s. Korea Germany Turkey Brazil Ukraine znd largest as per 2018 data Notes:.1. World Steel Association. 2. Apparent steel use is defined as sum of net industry shipments within a given country, plus its imports minus exports.3. World Steel Asso
Slide 7: India Steel Consumption Expected to Grow at a CAGR of ~7.4% over next 12 years
India Steel Consumpti on is Expected to Grow at a CAGR of --7.4°/o -over the next 12 years (mn to nnes) 230 71.0 73.5 73.9 77.0 84.0 91.0 82.0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY31 Consumption in terms of Crude Steel: 255 MTPA J Notes:.l. World Steel Association. 2. Apparent steel use is defined a
Slide 8: Indian Steel (FY'18)
INDIA N STEEL (FY'18) • India's capacity of crude steel increased from 22 MTPA in FY'92 to 122 MTPA in FY'16 . CAGR of 5.1 % till 2000 & CAGR of 8.3 % from 2000 to 2016. From 2010 to 2016, capacity increased from 75to125 MTPA @8.8% CAGR. • Crude steel production capacity reached 137.98 MT, a growth
Slide 9: Section B: Company Overview
3 2 Company Overvi . Section B
Slide 10: NMDC overview: India's largest iron ore producer
Over 60 years of Experience Consistent majority ownership of the Govt. of India for over 6 decades Rich Heritage Classified as Navratna CPSE providing significant Operational [ flexibility Production of over 35 MT in FY 2018 ~ India's Largest Iron Production of 32 MT in FY 2019 (Prov) Ore Producer M
Slide 11: NMDC: Over 60 Years of Experience in the Mining Industry
NMDC: Over 60 Years of Experience in the Mining Industry : _ ; ~- . 2016: Commissioning of Pellet 2019: Buyback of plant & buy back for 25% equity INR 100 millions, shares sale of 2012: Government of India 2010: Govt of India divested sold 10% stake through the 8% of its stake. Offer for Sale mechan
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Slide 13: Investment highlights
0 Largest Producer of Iron Ore in India CD Large Asset Base IT] Low - Cost Producer of Iron Ore 0 Strong Domestic & International Customer Base OJ Strong Management and Govt. of India Parentage 0 Ro bust & Sustained Financial Performance 0 Superior Corporate Governance Standards 0 CSR Initiatives
Slide 14: NMDC's production exceeded 30 MT; historic production at key mining locations
In FY 2013-14, NMDC's production exceeded 30.00 MT for the first time since inception. Produced 34 MT in 2016-17 and 35.5 MT in FY 2017-18 Location of NMDC's principal mining facilities Historic production at key mining locations 30.4 28.6 34.0 35.6 32.5 c: 100% - 0 u ::J "C 0 80% .... 60% Q. - IV I
Slide 15: Reserves and Resources of NMDC Limited as on 1.4.2018 as per UNFC
_,. ~~es and Resonttes of NMDC Limited as on 1.4.2018 as per UNFC ~; ·· (Cut off Grade -45% Fe) Proved Reserves Propable Reserve Grand Total Total Reserves Resources (Reserve+ ML Valid Iron Ore Tenement (1 11) (121 & 122) Complex Resource) up to Q ty Fe% Q ty Fe % Q ty Fe% Q ty Fe% Qty Fe % Chhattis
Slide 16: Operating cost per ton of production; factors enabling low cost
Operating cost per ton of Production Factors enabling low cost of production of NMDC • Highly mechanized mines leading to lower wastage 22.6 25.0 • Access to relatively large talent pool in India 20.7 18.9 :!::: 20.0 16.0 • Cost management through cost centre wise monitoring and ~ 14.2 control pract
Slide 17: Key domestic and international customers
Key domestic customers Key international customers \ . ! J. } Essar ~- - South Japan JSWISPAT I Welspun JSWSteel • Japanese steel mills (LT KIOCL contract) • POSCO, South Korea (LT contract) Offtake in domestic and export markets (mt) 40 35 33.48 • Long Term Contracts with Key International C ustome
Slide 18: Key terms of domestic and export supply contracts
Key terms of domestic supply contracts Key terms of export supply contracts • Domestic supply contracts are generally for a duration of 5 years • Exports to Japanese I South Korean steel mills are through MMTC which is the canalising agency under long term contracts. - The quantity allocation is don
Slide 19: Best in Class Management Team; Strong GoI Support
Best in Class Management Team Consisting of Govt. Representative Directors & Independent Directors Strong Gol Support 100% 90% 90% 9()% 90% 13efore joining NMDC, wai. Addi. Chief N Baijendra Kumar Secretary to C hief Minis ter of 80':{, 80°0 0 8U u 80 "o 80°0 Chhattisgarh. ?S"u 72°0 72"o Chairma n C
Slide 20: Sales, Revenue and EBITDA
Sales (mtpa) Revenue (US$mm) EBITDA on Sales (US$mm) 2,500 40 1,500 80% l 35.620 36.080 61 .5% 70% 35 32.390 2,000 1765.20 30.520 28.840 1659.27 60% 30 1,000 1,500 50% 25 1261 .38 1215.62 40% 20 922.47 1,000 500 30% 15 20% 10 10% 500 5 0 I 0% 2014-15 2015-16 2016-17 2017-18 2018-19 0 2014-15 2015-16
Slide 21: Shareholding pattern and key shareholders
Market cap": US$ 4.66 bn 1 9 3.38 ·( 0. 73 0 31 £ :=-. ·-__ 3.90 Key Shareholders Other Than Gol as on % Shareholding 13.96 30.03.2019 LIFE INSURANCE CORPORATION OF 12.9% INDIA LICI NEW ENDOWMENT PLUS-GROWTH 2.03% FUND ADITYA BIRLA SUN LIFE TRUSTEE 1.17% PRIVATE LIMITED EDGBASTON ASIAN EQUITY TRUST
Slide 22: Dividend payout
1,200 1,000 800 600 400 200 2014 -15 2015 -16 201G-1 7 2017-18 2018-19 • Dividend payout (Incl. DDT) • % ot PAT •%of l:QUITY Exchange rate used for conversion: INR 70 =US$ 1 • Figures for 2018-19 are Provisional
Slide 23: Committees and corporate governance
COMMITTE ES: i) AUDIT COMMITTE E: Majority Members are Independen t Directors and also Chaired by an Independen t Director ii) NOMINATI ON & REMUNERA TION COMMITTE E - Consist of three Independen t Directors with Director Personnel as a special invitee iii) CSR & SUSTAINAB ILITY COMMITTE E - Headed
Slide 24: CSR initiatives: Livelihood & Learning
/ _,<ff ---· ' ' ~ I I '' I \ I I \ I I I • I I y I I I I .,. I I / / / ~ ' ' Livelihood & Learning ·---- - • NMDC's CSR goals aim at emancipation, improvement in the standard of living and quality of life of its stakeholders towards nation building. • The approach is holistic and oriented towards c
Slide 25: Section D: Growth Strategy
Slide 26: Mining capacity ramp-up by FY22
I Mines Project Existing Mining Mining Capacity Capacity Ramp up by FY 22 Kirandul 14 21 Existing BacheIi I 15 17 Operating Mines Donimalai 14* 14* Kumarswamy - Sub total 43 I 52 Greenfield Mines Deposit 13 0 10 (JV with CMDC) - -- · - ·----- -- -- Deposit4 0 5 Sub total 0 15 --=====~ Gra nd Total 4
Slide 27: Evacuation capacity: railways, roads and slurry pipeline
Railways 28 28 Road 3 3 Bailadila Sector (Including JV with Essar Slurry Pipeline 8 8 CMDC) Doubling of KK Line 12 NMDC's Slurry Pipeline 15 Donimalai Sector 14 1, 14 Grand total 53 80 NMDC has planned for sufficient evacuation capacity to meet the requirements of production ramp up •
Slide 28: Steel plant and slurry pipeline projects
• Cost Estimate: US$ 2218 mn (under revision) • Likely commissioning by 2019-20 (H2) • Flat Products like HR plates, HR Sheets, HR Coils, automotive steel and API Grade Steel of about 2.7 MT • Logistic Advantage - location near iron ore mine- centralized location for transportation to customers at R
Slide 29: Overall view of 10 MTPA integrated steel plant at Nagarnar
OVERALL VIEW Of 10 MTPA INTEGRATED STEEL PLANT AT NAGARNAR
Slide 30: Slide 30
Slide 31: Mining allocation through auction route
~ All Mining allocation to be done through auction route, however reservation is available for NMDC (being a public sector company) under section 17A(2A} of MMDR Act, 2015. ~ Renewal of leases expiring by Mar 2020, for private miners is only through auction route while MMDR Act provides for extensio
Slide 32: Tremendous potential for growth in steel sector
~ Tremendous potential for growth in Steel Sector. ~ NMDC being largest iron ore player with integrated mining solutions is better positioned to take advantage of opportunities in iron and steel ind ustry which is expected to grow with CAGR of 7.4°/o. ~ Targeted Increase in steel capacity by more th
Slide 33: National Mineral Policy 2019 reinforces NMDC's exploration competency
}- NMP, 2019 reinforces the core competency of NMDC in exploration as it provides edge over other mining companies through Right of First Refusal at the time of auction or seamless transition from RP to PL to ML or auctioning of composite RP cum PL cum ML in virgin areas on revenue sharing basis. }-
Slide 34: Thank You
THANK YOU *— or