Tata Steel Limited · NSE:TATASTEEL
Tata Steel — FY2013 Earnings Presentation
42 slides from Tata Steel's earnings presentation, May 23, 2013
Slide 1: Annual Results Presentation, Financial Year Ended 31st March 2013
May 23, 2013 Annual Results Presentation Financial Year Ended 31st March 2013
Slide 2: Disclaimer
Disclaimer Statements in this presentation describing the Company’s performance may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference
Slide 3: Tata Steel Group – Health and Safety
Tata Steel Group – Health and Safety Lost Time Injury Frequency (LTIF) Reduction continues in lost time injuries with FY13 performance 3.5 3.06 12% better than FY12 3 2.5 2.35 2.10 Further strengthening of fatality 2 prevention best practices at 1.5 1.31 Kalinganagar site 0.95 1 0.78 0.68 0.60 0
Slide 4: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 4
Slide 5: Global market environment
Global market environment Global crude steel production & capacity utilisation Steel demand outlook (% y/y change) 140 100% 10% Crude steel production (Mt, LHS) 7.8 7.6 130 7.0 Capacity utilisation (%, RHS) 5.7 5.9 90% 120 5% 4.5 3.3 3.5 2.9 3.0 2.6 2.5 2.9 3.2 110 1.9 80% 1.2 100 0% -0.5 70% 90 80
Slide 6: Raw materials and steel prices
Raw materials and steel prices Iron ore fines (US$/tonne) HRC spot price (US$/tonne) 200 1,000 150 900 100 800 Spot CFR China (62%) 50 700 Contract FOB Brazil 600 0 2010 2011 2012 2013 2014 500 Hard coking coal (US$/tonne) 350 400 Germany domestic 300 300 Russia export (FOB Black Sea) 250 USA domest
Slide 7: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 7
Slide 8: Group Financial Highlights
Group Financial Highlights Financial Year Ended 31st March’13 Deliveries Turnover Mn T 1,34,712 Rs. Crore 24.23 24.14 1,32,900 Q4 Q4 6.22 Q4 6.56 Q4 33,999 34,650 Q3 5.84 Q3 5.83 33,103 Q3 32,107 Q3 Q2 6.12 Q2 6.07 Q2 32,798 Q2 34,133 Q1 6.05 Q1 5.68 Q1 33,000 Q1 33,821 FY12 FY13 FY12 FY13 EBITDA PA
Slide 9: Key Drivers
Key Drivers Financial Year Ended 31st March’13 India 2.9mtpa expansion implemented : 1million tonnes of steel produced and sold 850ktonnes with minimal impact on net realisations Significant increase in EBITDA/tonne despite weak market conditions Successfully diversified customer base across s
Slide 10: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 10
Slide 11: India and South East Asian economy and steel market
India and South East Asian economy and steel market GDP growth and PMI for India PMI’s for SEA countries 12% 65 60 10% 60 55 8% Expansion 55 6% 50 50 Contraction 4% GDP, y/y% (LHS) 45 Singapore Indonesia 2% 45 PMI (RHS) Vietnam 0% 40 40 2008 2009 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Tot
Slide 12: 3 MTPA Expansion at Jamshedpur
3 MTPA Expansion at Jamshedpur TSCR Production is fully ramped up Additional production of 1 million tonnes achieved in FY’13 Coke Oven Battery no. 11 is expected to be commissioned by Q2 FY’15 TSCR 600 3 MTPA ramp up in FY’13 All figures in kt 509 524 500 463 416 426 374 387 386 377 400 340 2
Slide 13: Tata Steel India – Flat Products
Tata Steel India – Flat Products 5,000 Sector Mix All figures in kt Quarterly Movement 4,492 1600 1,502 1,459 244 4,000 312 1,256 60,000 3,735 3,538 69 415 258 1200 1,087 109 198 402 972 999 3,000 394 1,214 40,000 844 987 800 39,608 36,679 35,374 2,000 1,074 764 762 20,000 212 400 189 204 1,000 1,04
Slide 14: Tata Steel India – Long Products
Tata Steel India – Long Products Segmental Deliveries All figures in kt Quarterly Movement 2,992 3,000 2,880 2,899 1000 60,000 107 148 405 336 806 814 800 337 804 2,500 769 777 800 295 359 330 2,000 355 40,000 467 584 600 38,557 36,268 36,703 1,500 689 400 1,000 20,000 1,723 1,500 1,136 200 500 - 0
Slide 15: Tata Steel India – Ferro Alloys & Minerals SBU
Tata Steel India – Ferro Alloys & Minerals SBU Segmental Deliveries (in kt) Quarterly Movement 1,297 200 70,000 1,268 180 1,200 1,152 65,317 417 480 150 135 348 62,780 800 102 100 60,917 60,000 81 587 508 416 60 63 55 400 47 50 37 33 29 388 16 15 13 15 264 309 0 0 50,000 FY11 FY12 FY13 Q4 FY12 Q3 FY
Slide 16: Tata Steel India – Tubes SBU
Tata Steel India – Tubes SBU Segmental Deliveries All figures in kt Quarterly Movement 378 387 120 60,000 400 366 106 101 94 106 108 135 300 80 88 89 44,289 200 87 43,707 43,622 40,000 40 100 181 172 165 0 0 20,000 FY11 FY12 FY13 Q4 FY12 Q3 FY13 Q4 FY13 Commercial Tubes Precision Tubes Structural Tu
Slide 17: Tata Steel India - Global Wires SBU
Tata Steel India - Global Wires SBU Yearly Volumes Quarterly Movement 600 565 160 60,000 556 149 535 535 520 518 140 500 125 120 400 50,000 49,269 49,670 48,895 300 80 200 40,000 40 100 0 0 30,000 FY11 FY12 FY13 Q4 FY12 Q3 FY13 Q4 FY13 Production (kt) Sales (kt) Deliveries ('000 t) NR (Rs./t) The
Slide 18: Tata Steel India - Continuous Improvements
Tata Steel India - Continuous Improvements All figures in Rs. Crore Savings on Improvement Initiatives Initiative Wise Break Up 2,000 1,840 46 244 1,560 308 1,500 162 1,061 42 1,000 81 233 1,596 1,398 500 828 1,083 - FY11 FY12 FY13 Cost Cutting Value Addition DMAIC/SIP TOC Marketing Initiative KVHS
Slide 19: KPO Project Update
KPO Project Update Status Update as of Apr-13 : • 49% of concrete work completed • 44% of structural fabrication work completed • 24% of structural erection work completed Monsoon plan in place to continue the project work in the coming months Refractory work in Coke Oven Battery 2 Progress on
Slide 20: South East Asia – Updates
South East Asia – Updates NatSteel Holdings Best performance in the last 10 years backed by strong demand in Singapore Implementation of energy saving technologies made NatSteel's EAF one of the most energy efficient worldwide Loss-making Brisbane, Sunshine Coast and Townsville operations of N
Slide 21: Key Accolades & Awards
Key Accolades & Awards 1. The Deming Grand Prize by JUSE, Japan 2. Prime Minister’s Trophy for the year 2010-11 3. TSL is the only Indian company to win Fortune magazine’s World’s Most Admired Company award 5 years in a row 4. ‘Best Managed Board in India ~Aon Hewitt – Mint Study 2012 5. CII-ITC Sus
Slide 22: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 22
Slide 23: European economy and steel market
European economy and steel market GDP growth in Eurozone and UK PMI’s for EU countries 6% 65 4% 60 2% 55 Expansion 0% 50 -2%2007 2008 2009 2010 2011 2012 2013 2014 45 Contraction -4% 40 Eurozone (y/y % chg) Eurozone France -6% UK (y/y % chg) 35 Germany The Netherlands -8% Eurozone (q/q % chg) 30 UK
Slide 24: European operations – EBITDA bridge Q4
European operations EBITDA bridge Q4FY2013 vs Q3FY2013 TSE EBITDA as per I-GAAP GBP million 150 3 months to Mar 100 2013 Other 50 3 months £69m Cost £71m to Dec Changes 2012 0 £(50)m Selling Result £86m (50) £(75)m £20m (100) £21m Manufacturing Volume (150) 24
Slide 25: European operations – EBITDA bridge FY2013
European operations EBITDA bridge FY2013 vs FY2012 TSE EBITDA as per I-GAAP GBP million 400 Other 200 £(165)m £232m £563m £89m 0 12 months 12 months to Mar to Mar (200) 2012 £(756)m 2013 (400) Cost Changes £375m Selling (600) Result £(160)m Volume (800) Manufacturing 25
Slide 26: Delivery of our differentiation strategy in Europe
Delivery of our differentiation strategy in Europe • Rebuilt BF4 – State of the art furnace improves delivery Operational performance and energy efficiency Excellence • Reduced controllable costs by £200 million • Foundations for operational performance laid out • 17 new products launched in FY13; r
Slide 27: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 27
Slide 28: Group Financial Performance – Q4 FY13
Group Financial Performance – Q4 FY13 Figures in Rs. Crore unless specified Q4 FY13 Q3 FY13 Tata Steel Tata Steel SE Others Tata Steel Tata Steel India Europe Asia Group (*) Group (*) Deliveries (Mn T) 2.28 3.42 0.80 6.56 5.83 Turnover 10,771 19,166 3,486 1,227 34,650 32,107 EBITDA 3,714 613 224 (18
Slide 29: Group Financial Performance – FY13
Group Financial Performance – FY13 Figures in Rs. Crore unless specified FY13 FY12 Tata Steel Tata Steel SE Others Tata Steel Tata Steel India Europe Asia Group (*) Group (*) Deliveries (Mn T) 7.48 13.07 3.11 24.13 24.22 Turnover 38,199 78,012 13,829 4,672 1,34,712 1,32,900 EBITDA 11,698 764 483 (29
Slide 30: Standalone Results – QoQ Variations
Standalone Results – QoQ Variations All figures in Rs. Crore Particulars Q4 FY13 Q3 FY13 Key Reasons Net sales 10,603 9,268 14% increase in sales due to increase in volumes of FP Impact of higher realisation in LP due to higher finished goods sale Other operating income 168 102 Higher sale of non-fe
Slide 31: Consolidated Results – QoQ Variations
Consolidated Results – QoQ Variations All figures in Rs. Crore Particulars Q4 FY13 Q3 FY13 Key Reasons Net sales 34,180 31,822 7% increase due to increase in volumes in both TSI and TSE Other operating income 470 286 Increase due to electricity buy-back arrangement with ESKOM for TSKZN and sale of n
Slide 32: Impairment
Impairment In 2007, Tata Steel acquired the European business at a premium to its book value and the difference of £2.2 billion was accounted for as goodwill The goodwill was allocated to the different business units based on the expected valuations of each unit In Q4 FY13, following an annual
Slide 33: Tata Steel Group – Debt Position
Tata Steel Group – Debt Position Net Debt Movement (Rs. Crore) 23,570 8,229 64,941 66,074 3,314 59,897 5,260 1,836 55,421 21,839 54,405 10,652 1,016 Gross Debt Loans Loans Reval. Gross Debt Loans Loans Reval. Gross Debt Cash & Net Debt Forward Underlying Mar 12 taken repaid Impact Dec 12 taken repai
Slide 34: Tata Steel Group – Cash Flow
Tata Steel Group – Cash Flow Cash Movement (Rs. Crore) 15,224 12,247 2,045 645 10,652 13,324 2,797 198 Cash & Cash Eq Apr Cash Flows from Capex Other Investing Cash Flows from Changes in Forex effect Cash & Cash Eq 12 Operating Activities Cash Flows Financing Activities Marketable Mar 13 securities
Slide 35: Pensions Status – European Operations
Pensions Status – European Operations IAS 19 Valuation Figures in £ mn Mar-12 Dec-12 Mar-13 Total Scheme Retirement Benefit Assets 17,166 17,677 18,674 Total Scheme Retirement Benefit Liabilities (16,955) (17,599) (18,391) Net Pension Surplus (BSPS &SPH) 211 78 283 Pension Asset Composition – BSPS 2
Slide 36: Agenda
Agenda Global Business Environment Consolidated Highlights Performance of Indian and South East Asian Operations Performance of European Operations Group Financial Performance Key Developments 36
Slide 37: Raw Material Projects
Raw Material Projects Benga Project, Mozambique Shipment started in June-12 : About 0.3mt of hard coking coal shipped in 2012 Delays in ramping up rail and port infrastructure have affected Phase I progress • Coking coal volume of 1mt and thermal coal volumes of 250kt expected in 2013 Phase II
Slide 38: M & A Developments
M & A Developments Corporate restructuring aimed at monetising value and streamlining operations Period Entity Details Aug’12 Tata Steel Europe Sold the 50% stake in HKS Scrap Metal BV in Netherlands to the JV partner Oct’12 Tata Steel Europe Sold Vlietjonge BV, a long products distribution unit in
Slide 39: Financing Developments
Financing Developments KPO Project Finance of Rs 22,800 crores Financial closure achieved with a consortium of 21 banks SGD 300 Million 4.95% Fixed Rate Senior Unsecured Notes Due 2023 Lowest coupon ever achieved on a 10-year international bond issue for an Indian private sector company Others
Slide 40: Business Outlook
Business Outlook India: Market conditions are stable, no significant improvement noticed Auto sector challenges continue We will continue to focus on the LCA and SME segment to drive volumes Export markets are under pressure, sales will be opportunistic Europe: Macro-economic conditions fo
Slide 41: Thank You
qp TATA Thank You TATA STEEL
Slide 42: Contact Information
Contact Information For investor enquiries contact: For media enquiries contact: Samita Shah Prabhat Sharma Tel: +91 22 6665 7371 Tel: +91 92345 10689 Email: [email protected] Email: [email protected] Subhra Kanti Das Bob Jones Tel: +91 22 6665 7382 Tel: +44 207 717 4532 Email: su