Vedanta Limited · NSE:VEDL
Vedanta — Q3 FY2021 Earnings Presentation
43 slides from Vedanta's earnings presentation, January 2021
Slide 1: Q3 FY2021
Q3 FY2021 January 2021 Sensitivity: Internal (C3)
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from statement involves risk and uncertainties, and that, although we publicly available sources that have not been independently verified. believe that the assumption on which our forward-looking statements
Slide 3: Contents
Contents Section Presenter Page Q3 FY21 Review & Business Update Sunil Duggal, CEO 4 Financial Update Arun Kumar, CFO 18 Appendix 25 VEDANTA LIMITED – Q3 FY2021 INVESTOR PRESENTATION 3 Sensitivity: Internal (C3)
Slide 4: Q3 FY2021 Review & Business Update
Q3 FY2021 Q3 FY2021 Review Sunil Duggal | Chief Executive Officer & Business Update Sensitivity: Internal (C3)
Slide 5: Key Highlights: Q3 FY2021
Key Highlights: Q3 FY2021 ▪ Aluminium Sustained lower cost of production at $1,387/t and EBITDA margin of 28% ▪ Zinc India Highest ever quarterly ore production of 4.0 Mnt and record mine development of 27km Lowest 9M cost of production since transition to UG operation ▪ Zinc International Gamsberg
Slide 6: Step changes towards better ESG performance
Step changes towards better ESG performance Vedanta Dow Jones Sustainability Index Ranking Improves to 12th Globally (20th in 2019) Ltd. Ranked 2nd in Asia Pacific Region in metals and mining sector (7th in 2019) Hindustan Dow Jones Sustainability Index Ranking 2nd Globally (5th in 2019) Zinc Ltd. C
Slide 7: Heading Towards – Zero Harm, Zero Waste, Zero Discharge
Heading Towards – Zero Harm, Zero Waste, Zero Discharge Safety Program Update Environment Update ▪ Group wide review of permit to work Water ▪ ~7.5 million m3 of water and isolation procedure conservation savings over three years 3 fatalities in Q3 ▪ Safety Alert Dashboard for improving implementati
Slide 8: Aluminium: Record Cost Performance
Aluminium: Record Cost Performance Structural Reduction in Cost Performance Update 1,769 Quarter Performance: 1,691 1,387 ▪ Aluminium production 503 kt*, up 5% y-o-y and 6% q-o-q 1,288 1,315 ▪ Aluminium COP $ 1,387/t, down 18% y-o-y and up 8% q-o-q ▪ Lanjigarh production 407 kt, down 14% y-o-y and 1
Slide 9: Aluminium: Significant progress on Strategic levers Continues
Aluminium: Significant progress on Strategic levers Continues COP $/t 1,690 1,300-1,350 c. 1,200 FY20 FY21e Target (2-3 years) ✓ Lanjigarh operational excellence, ✓Lanjigarh capacity expansion from significantly reducing COP ~2 Mtpa to 5 Mtpa* ✓ Optimised local and global bauxite ✓ Radhikapur (West)
Slide 10: Zinc India: Completed 1.2 Mnt Mined Metal
Zinc India: Completed 1.2 Mnt Mined Metal Project Activities Sustained production post-transition to fully UG mining company Optimize Operations: 50 kms development 1,500 target. Reduction in waste dilution factor UG% 39% 53% 76% 100% 100% 1,200 and achieving benchmark recovery Faster stope turnarou
Slide 11: Zinc India: Strong Momentum in Silver Production
Zinc India: Strong Momentum in Silver Production 1,000 Maintaining our position globally as a leading silver producer Fastest Growing Silver Company Silver Production in tonnes 800 2019 Target 2015 2018 679 Rank - 9 Rank - 6 Top 3 Rank - 18 610 558 373 610 635 453 425 1,054 995 1,257 FY16 FY17 FY18
Slide 12: Zinc International: Gamsberg Positioning for Long Term Value Creation
Zinc International: Gamsberg Positioning for Long Term Value Creation Continued Performance Ramp up Performance Update ▪ Highest ever Production at 43kt, up 39% y-o-y and 600 23% q-o-q. 469 380 ▪ COP at $1,240, down 13% y-o-y and almost flat q-o-q 279 due to better recoveries, cost control measures
Slide 13: Oil & Gas: Focus on Delivery of Growth Projects
Oil & Gas: Focus on Delivery of Growth Projects Growth Projects OALP ▪ Drilling: ▪ Gas Terminal: New gas facility commissioned; o Rajasthan: Oil discovery notified in the first well gas production being ramped up by ~15 kboepd (KW2-Updip-1); evaluation on-going to establish ▪ Aishwariya Barmer Hill:
Slide 14: Iron ore: Increasing YTD Profitability by ~75%
Iron ore: Increasing YTD Profitability by ~75% Iron Ore Goa Value Added Business Iron Ore Karnataka ▪ Capitalised opportunity of rising ▪ Benefitted by domestic steel ▪ Production up 21% y-o-y and prices and International coal Global prices by increasing sales in Q3 prices down 1% q-o-q ▪ Mobilized
Slide 15: Other Assets: ESL Steel and FACOR
Other Assets: ESL Steel and FACOR ESL Steel FACOR Performance Update Margin Improved By 2.5x Post Acquisition ▪ Ever highest quarterly 372 kt hot metal Complete Turnaround Performance production since acquisition ▪ Operationalized and enhanced production in 2 mines ▪ Robust margin of ~22% in Q3, hig
Slide 16: Creating Value: New Business Model – Integrated Procurement & Marketing
Creating Value: New Business Model – Integrated Procurement & Marketing Single face for selling of Consolidated buying for key commodities majority spends across businesses – Economies of scale, value buying Focus on digitalization & Move to E-Commerce sales Strategic Buying through touch for connec
Slide 17: Project Pratham: Digital First
Project Pratham: Digital First Digital Transformation, R&D and Innovation driving business value Smart Manufacturing and Project Disha: Integrated Advance Process Control Data and Decision Platform enabling analytics-led driving volume increments decisions and monetizing and asset optimization wealt
Slide 18: Finance Update
Q3 FY2021 Finance Update Arun Kumar | Chief Financial Officer Sensitivity: Internal (C3)
Slide 19: Financial snapshot Q3
Financial snapshot Q3 EBITDA Attributable PAT (before exceptional ND/EBITDA items & tax on dividend) ₹ 7,695 cr ₹ 3,017 cr 1.5x Up 18% q-o-q Up 51% q-o-q Maintained at low level EBITDA Margin * ROCE # Cash & Cash Equivalents 39% c.13% ₹ 27,055cr Industry leading margin Continuing double digit Liquid
Slide 20: EBITDA Bridge (Q3 FY2020 vs. Q3 FY2021)
EBITDA Bridge (Q3 FY2020 vs. Q3 FY2021) (In ₹ crore) Oil & Gas (1437) Aluminum 606 Oil & Gas (368) Aluminum 143 RPO (256) Zinc, Lead & Silver 650 Others 215 IOB 180 PP (55) ESL 177 451 321 530 1079 338 8,243 1,244 7,695 6,531 Al 283 TSPL (65) IOB 133 HZL 265 Cairn (86) Market & Regulatory ₹ 1,712 cr
Slide 21: EBITDA Bridge (Q2 FY 2021 vs. Q3 FY 2021)
EBITDA Bridge (Q2 FY 2021 vs. Q3 FY 2021) (In ₹ crore) Aluminium 795 Zinc, Lead & Silver 462 IOB 142 AL (131) Electrosteel 161 Cu (28) 1,658 182 … 115 … 15 7,877 31 213 7,695 6,531 Al (208) IOB 193 ZI 23 Cairn 17 Market & Regulatory ₹ 1,346 crore Q2 FY 21 LME/ Brent / Input Currency Regulatory & Adj
Slide 22: Net Debt for Q3 FY 2021
Net Debt for Q3 FY 2021 (In ₹ crore) Inventory ,Debtors and others (1,082) Creditors / Customers advance (1,773) 3,108 67 35,357 6,684 27,190 6,425 2,013 2,855 FCF Post Capex ₹ 1,557Cr Net Debt CF from WC Capex Dividend Inter co. Translation Net Debt 1st Oct’20 Operations Movements Paid loan to & Ot
Slide 23: Balance Sheet
Balance Sheet Term Debt Maturities : INR 53,864 Cr ($7.4bn) (as at 31 Dec 2020) ▪ Liquidity 38% – Cash and cash equivalents at ₹ 27,055 crore 20.6 26% ▪ Net Interest – 14.3 18% 7.7 ▪ Interest Income – Returns ~6.0%. 14% ₹ ‘000 Crore 4.7 9.5 ▪ Interest Expense – Maintained ~7.8% 7.7 3% 4.5 12.9 ▪ Ave
Slide 24: Strategy to Enhance Long Term Value
Strategy to Enhance Long Term Value Continue Focus on World Class ESG Performance Augment Our Reserves & Resources Base Operational Excellence and Cost Leadership Optimise Capital Allocation & Maintain Strong Balance Sheet Delivering on Growth Opportunities VEDANTA LIMITED – Q3 FY2021 INVESTOR PRESE
Slide 25: Appendix
Q3 FY2021 Appendix Sensitivity: Internal (C3)
Slide 26: Income Statement
Income Statement Depreciation & Amortization Q3 Q3 Q2 In ₹ Crore FY’21 FY’20 FY’21# • Depreciation q-o-q remained flat. Revenue from operations 22,498 21,126 20,804 • Lower y-o-y majorly on account of Oil & Gas Other operating income EBITDA^ 237 7,695 234 6,531 303 6,531 assets impairment in Q4 FY 2
Slide 27: Entity Wise Cash and Debt
Entity Wise Cash and Debt (In ₹ crore) Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 Company Cash & Cash & Cash & Debt Net Debt Debt Net Debt Debt Net Debt Cash Eq Cash Eq Cash Eq Vedanta Limited Standalone 33,824 2,993 30,831 32,790 1,967 30,823 36,569 3,808 32,761 Cairn India Holdings 2,826 1,127 1,699 3
Slide 28: Inter Company Loan
Inter Company Loan Below is the summary details of Inter Company Loan (“ICL”) extended by overseas subsidiaries (CIHL) of Vedanta Limited to Vedanta Resources Limited and its wholly owned subsidiary during the year: ICL outstanding* $ 956mn $ 207mn due in June 2021 $ 300mn due in June 2022 Repayment
Slide 29: Debt Breakdown & Funding Sources
Debt Breakdown & Funding Sources Diversified Funding Sources for Term Debt of $7.4bn Debt Breakdown (as of 31st Dec 2020) (as of 31st Dec 2020) Debt breakdown as of (in $bn) (₹ in 000’ Cr) 31st Dec 2020 1% Term debt 7.4 53.9 Term Loans-INR 13% Working capital 0.5 3.3 Bonds-INR Short term borrowing 0
Slide 30: Segment Summary – Zinc India
Segment Summary – Zinc India Q3 Q2 9M Production (in ’000 tonnes, or as stated) FY 2021 FY 2020 % change YoY FY2021 FY 2021 Mined metal content 244 235 4% 238 684 Integrated metal 235 219 7% 237 674 Refined Zinc – Integrated 182 178 2% 180 520 1 Refined Lead – Integrated 52 41 28% 57 153 Refined Sal
Slide 31: Segment Summary – Zinc International
Segment Summary – Zinc International Q3 Q2 9M Production (in’000 tonnes, or as stated) FY 2021 FY 2020 % change YoY FY2021 FY 2021 Refined Zinc – Skorpion - 11 - - 1 Mined metal content- BMM 16 18 (13)% 16 43 Mined metal content- Gamsberg 43 31 39% 35 103 Total 59 60 (2)% 51 147 Financials (In ₹ Cro
Slide 32: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q3 Q2 9M OIL AND GAS (boepd) FY 2021 FY 2020 % change YoY FY2021 FY 2021 Average Daily Gross Operated Production 159,621 172,189 (7%) 165,045 161,157 (boepd) Rajasthan 132,174 145,075 (9%) 132,296 130,813 Ravva 16,770 13,360 26% 21,610 20,132 Cambay 10,677 13,754 (22%) 11
Slide 33: Segment Summary – Oil & Gas
Segment Summary – Oil & Gas Q3 Q2 9M OIL AND GAS (boepd) FY 2021 FY 2020 % change YoY FY2021 FY 2021 Average Daily Production Gross operated 159,621 172,189 (7%) 165,045 161,157 Oil 136,687 153,472 (11%) 142,150 140,528 Gas (Mmscfd) 138 112 23% 137 124 Non-operated- Working interest 432 596 (28%) 29
Slide 34: Segment Summary – Aluminium
Segment Summary – Aluminium Q3 Q2 9M Particulars (in’000 tonnes, or as stated) FY 2021 FY 2020 % change YoY FY2021 FY 2021 Alumina – Lanjigarh 407 476 (14)% 462 1,345 Total Aluminum Production 497 483 3% 473 1,438 Jharsuguda-I 132 139 (5)% 131 396 Jharsuguda-II* 218 203 7% 200 617 245kt Korba-I 68 6
Slide 35: Aluminium profitability
Aluminium profitability $/t Q2 ‘FY21 1,704 47 66 1,817 (534) (479) (275) (51) 477 (139) (333) 5 1,288 Q3 ‘FY21 1,387 1,916 68 2,027 43 603 484 300 76 565 136 323 105 245 LME Ingot Value Other Realisation Alumina Power Conversion EBITDA Dep Int PBT Premium addition Hot & Others Metal VEDANTA LIMITED
Slide 36: Segment Summary – Power
Segment Summary – Power Q3 Q2 9M Particulars (in million units) FY 2021 FY 2020 % change YoY FY2021 FY 2021 Total Power Sales 2,066 2,282 (9)% 3,998 7,910 Jharsuguda 784 7 - 807 2,277 BALCO 395 387 2% 418 1,217 HZL Wind Power 67 68 (2)% 107 286 TSPL 820 1,820 (55)% 2,666 4,130 Financials (in ₹ crore
Slide 37: Segment Summary – Iron Ore and Steel
Segment Summary – Iron Ore Particulars (in million dry metric tonnes, or Q3 Q2 9M as stated) FY 2021 FY 2020 % change YoY FY2021 FY 2021 Sales 1.78 1.72 3% 1.49 4.28 Goa 0.58 0.20 - 0.16 1.32 Karnataka 1.20 1.52 (21)% 1.33 2.96 Production of Saleable Ore 1.44 1.19 21% 1.46 3.85 Goa - - - - - Karnata
Slide 38: Segment Summary – Copper India
Segment Summary – Copper India Q3 Q2 9M Production (in ’000 tonnes, or as stated) FY 2021 FY 2020 % change YoY FY2021 FY 2021 Copper - Cathodes 25 20 22% 25 66 Financials (In ₹ crore, except as stated) Revenue 2,664 1,835 45% 2,904 6,945 EBITDA (31) (61) (15)% (11) (105) Copper LME Price ($/MT) 7,16
Slide 39: Sales Summary
Sales Summary Sales volume Q3 FY2021 Q3 FY2020 Q2 FY2021 9M FY2021 Zinc-India Sales Refined Zinc (kt) 182 172 181 526 Refined Lead (kt) 53 41 57 155 Total Zinc-Lead (kt) 235 213 238 681 Silver (tonnes) 183 153 203 532 Zinc-International Sales Zinc Refined (kt) 0 6 0 1 Metal in Zinc Concentrate (kt)
Slide 40: Sales Summary
Sales Summary Q3 Q3 Q2 9M Sales volume Q3 Q3 Q2 9M Sales volume FY 2021 FY 2020 FY 2021 FY2021 Power Sales (mu) FY 2021 FY 2020 FY 2021 FY2021 Iron-Ore Sales Jharsuguda 784 7 807 2277 TSPL 820 1,820 2,666 4130 Goa (Mn DMT) 0.6 0.2 0.2 1.3 BALCO 395 387 418 1217 Karnataka (Mn DMT) 1.2 1.5 1.3 3.0 HZL
Slide 41: Currency and Commodity Sensitivities
Currency and Commodity Sensitivities Foreign Currency - Impact of ₹ 1 depreciation in FX Rate Currency Increase in EBITDA INR/USD ~ ₹ 600 crore / year Commodity prices – Impact of a 10% increase in Commodity Prices YTD FY 2021 Full Year Impact on Commodity Average price EBITDA ($mn) Oil ($/bbl) 39 6
Slide 42: Group – Present Debt Structure
Group – Present Debt Structure ($ bn) Vedanta Resources (Consolidated) Volcan 9M FY21 9M FY21 EBITDA 2.5 EBITDA - Net Debt 11.8 Net Debt 0.2 Vedanta Resources (Standalone) 9M FY21 % EBITDA - Divisions of Vedanta Limited Net Debt 7.0 59% 55.1% ⚫ Sesa Iron Ore ⚫ Sterlite Copper Vedanta Ltd (Consolidat
Slide 43: Results Conference Call Details
Results Conference Call Details Results conference call is scheduled at 6:30 PM (IST) on January 29, 2021. The dial-in numbers for the call are given below: Event Telephone Number Earnings conference call on January 29, 2021 India – 6:30 PM (IST) India: +91 7045671221 Toll free: 1800 120 1221 Univer