Tata Steel Limited · NSE:TATASTEEL
Tata Steel — 9M FY2012 Earnings Presentation
29 slides from Tata Steel's earnings presentation, Feb 9, 2012
Slide 1: Consolidated Financial Results Nine months ended 31st December 2011
9th February, 2012 Consolidated Financial Results Nine months ended 31st December 2011 Result Presentation
Slide 2: Agenda
Agenda Introduction and consolidated highlights Global business environment Performance of Indian and SE Asian operations Performance of European operations Group financial performance Project update Outlook 2
Slide 3: Tata Steel Group – Safety Performance
Tata Steel Group – Safety Performance Lost Time Injury Frequency (LTIF) 3.5 • Common Health & Safety 3.06 3 management system being 2.5 2.35 introduced across Tata Steel by 2.10 2 March 2012 1.5 1.31 0.95 1 0.78 0.66 • Lost time injury frequency rate of 0.5 0.66 for 9MFY12 representing 0 15% improve
Slide 4: Group Financial Highlights
10.00 Group Financial Highlights Deliveries Mn T Turnover US$ mn 17.9 18.0 18639 16006 Q3 5.90 5.84 Q3 6239 Q3 Q3 5482 Q2 6.06 Q2 6.12 Q2 6181 Q2 5399 Q1 5.90 Q1 6.05 Q1 Q1 6219 5125 9M FY11 9M FY12 9M FY11 9M FY12 EBITDA US$ mn PAT * US$ mn 934 2337 2496 906 Q2 40 Q3 366 Q3 189 Q3 636 Q2 555 Q2 373
Slide 5: Agenda
Agenda Introduction and consolidated highlights Global business environment Performance of Indian and SE Asian operations Performance of European operations Group financial performance Project update Outlook 5
Slide 6: Economic indicators showing signs of improvement
Economic indicators showing signs of improvement China and ex-China crude steel Eurozone manufacturing PMI production and capacity utilisation 140000 100 60 90 120000 80 55 100000 70 50 80000 60 50 45 60000 40 40 40000 30 20 20000 35 10 0 0 30 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
Slide 7: Raw materials and steel prices
Raw materials and steel prices Iron ore and coking coal prices have softened HRC spot prices, US$/tonne 250 450 1,300 1,100 200 350 900 150 250 700 100 150 500 50 50 300 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 I/O spot fi
Slide 8: Agenda
Agenda Introduction and consolidated highlights Global business environment Performance of Indian and SE Asian operations Performance of European operations Group financial performance Project update Outlook 8
Slide 9: Indian steel market
Indian steel market Indian total fixed investment (billion 2004-05 Rupees, Y/Y % change) Y/Y % change Billon 2004-05 rupees ESTIMATE/ 5,100 FORECAST 25% 2008-09 2009-10 2010-11 4,600 2011-12 20% Indian steel demand has remained 4,100 Y/Y % chg (RHS) 3,600 15% soft, however pro-growth policies of 3
Slide 10: Performance – Tata Steel India
2.00 0.00 Performance – Tata Steel India Production Mn T Deliveries Mn T 1.75 1.73 1.64 1.65 1.62 1.71 Q3 FY11 Q2 FY12 Q3 FY12 Q3 FY11 Q2 FY12 Q3 FY12 Turnover US$ mn EBITDA & EBITDA/Tonne 550 534 526 350 1,548 1,580 500 491 330 1,394 310 326 450 319 303 290 400 270 250 350 230 300 210 250 190 Q3 FY
Slide 11: Operating performance – Tata Steel India
Operating performance – Tata Steel India Flat products 917 914 940 741 730 665 Flat products volume increased 3% y-o-y in line with increase in production volume Long products sales dropped in Q3 FY12 Q3 FY11 Q2 FY12 Q3 FY12 Flat Products sales (in kt) Net realizations (in US$/tonne) due to lowe
Slide 12: Ferro Alloys & Minerals Division – Tata Steel India
Ferro Alloys & Minerals Division – Tata Steel India Quarterly deliveries, net realisation and operating profit Higher production in ferro chrome 1400 60 conversion units resulted in higher 1,182 1,195 1200 1,087 ferro alloys sales 50 1000 33 40 800 28 30 600 Increased domestic market focus led 1
Slide 13: Performance – South East Asia
2.00 0.00 Performance – South East Asia Production Mn T Deliveries Mn T 0.72 0.73 0.78 0.79 0.64 0.66 Q3 FY11 Q2 FY12 Q3 FY12 Q3 FY11 Q2 FY12 Q3 FY12 Turnover US$ mn EBITDA US$ mn 588 586 5 550 -2 Q3 FY11 Q2 FY12 Q3 FY12 -3 Q3 FY11 Q2 FY12 Q3 FY12 13 Conversion Rate INR/USD – 53.06
Slide 14: Updates on South East Asian operations
Updates on South East Asian operations NatSteel Holdings Singapore performed better on account of better scrap-rebar gap management and its conversion cost reduction programme. Downstream sales were best ever. Order book expanding in Singapore. Key MRT and Housing Board Projects are underway F
Slide 15: Agenda
Agenda Introduction and consolidated highlights Global business environment Performance of Indian and SE Asian operations Performance of European operations Group financial performance Project update Outlook 15
Slide 16: European Steel Market – Output in steel using industries continue to grow, except construction
European Steel Market – Output in steel using industries continue to grow, except construction Steel using sector output (index 2005 = 100) European Steel Service Centre Stocks (mt, months of supply) 130 Mt 2.6 3.4 Months supply 120 Stock levels 3.2 2.4 110 3.0 Months 2.2 supply 2.8 100 2.0 2.6 90 2
Slide 17: Performance – Tata Steel Europe
2.00 0.00 Performance – Tata Steel Europe Production Mn T Deliveries Mn T 3.66 3.62 3.57 3.53 3.39 3.35 Q3 FY11 Q2 FY12 Q3 FY12 Q3 FY11 Q2 FY12 Q3 FY12 Turnover US$ mn EBITDA US$ mn 3,988 3,870 95 3,302 74 -147 Q3 FY11 Q2 FY12 Q3 FY12 Q3 FY11 Q2 FY12 Q3 FY12 17 Conversion Rate INR/USD – 53.06
Slide 18: Continuing the transformation in Europe
Continuing the transformation in Europe Future profitability of Europe dominated by focussed investment (such as energy efficiency) and reduced cost base in steelmaking hubs Major changes Announced turnaround ahead of the current crisis, to ensure our recovery is timed to already started the mar
Slide 19: Long Products Restructuring Update
Long Products Restructuring Update Queen Bess Blast Furnace taken out of production in Sept 2011; Bloom 750 caster Key physical closed in Oct 2011 – both two weeks ahead of original plan changes Bloom and Billet Mill closed since mid October’11 Manpower reduced from 7,223 to 6,683 by end of De
Slide 20: Outlook for Tata Steel in Europe
Outlook for Tata Steel in Europe Raw material purchasing prices have eased in Q3, with some suppliers moving to an intra-quarter pricing mechanism Raw material Reduced lag between pricing and income statement impact, but not eliminated situation altogether; should improve the margin spread at en
Slide 21: Agenda
Agenda Introduction and consolidated highlights Global business environment Performance of Indian and SE Asian operations Performance of European operations Group financial performance Project update Outlook 21
Slide 22: Group financial performance – Q3 FY12
Group financial performance – Q3 FY12 Figures in US$ mn unless specified Q3 FY12 Q3 FY11 Tata Steel Tata Steel South East Tata Steel Tata Steel India Europe Asia Group (*) Group (*) Deliveries (Mn T) 1.62 3.35 0.66 5.84 5.90 6,239 5,482 Turnover 1,580 3,870 586 Reported EBITDA 491 (147) (2) 366 636
Slide 23: Net debt movement and liquidity position
Net debt movement and liquidity position Net debt movement (US$ mn) 10,000 9,523 548 764 777 281 9,000 8,759 8,492 171 158 8,000 7,000 Net debt on 30-9- Incr. in Decr. in curr. New debts Repayments Exchange adj. Net debt on 31- Fwd cover Underlying net 11 Cash&Equiv. invest. 12-11 debt Liquidity pos
Slide 24: Pensions Management – European Operations
Pensions Management – European Operations Figures in £ mn Mar-11 Jun-11 Sep-11 Dec-11 Total Scheme Retirement Benefit Assets 16,090 16,401 16,164 16,817 Total Scheme Retirement Benefit Liabilities (15,743) (16,051) (16,058) (16,727) Net Pension Surplus (BSPS &SPH) 347 350 106 90 Pension Asset Compos
Slide 25: Agenda
Agenda Introduction and consolidated highlights Global business environment Performance of Indian and SE Asian operations Performance of European operations Group financial performance Project update Outlook 25
Slide 26: Jamshedpur expansion update
Jamshedpur expansion update Equipment erection of Blast Furnace completed and other related facilities like Blowers nearing completion Integrated trial of Converter and TSCR Mill is in progress Ladle Furnace No. 2 & Hot Metal De-sulphurisation LD#3 – Converter Station No. 1 hot commissioned
Slide 27: Agenda
Agenda Introduction and consolidated highlights Global business environment Performance of Indian and SE Asian operations Performance of European operations Group financial performance Project update Outlook 27
Slide 28: Business outlook from Q4 FY'12 onwards
Business outlook Steel demand in India is expected to improve with RBI indicating pro-growth monetary policy. Prices are firm and with traditionally strong volumes in the fourth quarter, profitability should improve Outlook for steel demand in Europe remains stable, however strengthening prices
Slide 29: Thank You
TATA Thank You TATA STEEL