Tata Steel Limited · NSE:TATASTEEL
Tata Steel — H1 FY2007 Earnings Presentation
33 slides from Tata Steel's earnings presentation, Oct 30, 2006
Slide 1: Analyst Meet
Analyst Meet October 30, 2006 1
Slide 2: Presentation Outline
Presentation Outline Highlights Operational Performance Status of Growth Projects Outlook for the year 2
Slide 3: Highlights (H1 FY 07 vs H1 FY 06)
Highlights (H1 FY 07 vs H1 FY 06) Highest ever Production and Sales, both standalone and consolidated Highest ever Turnover and PAT, both standalone and consolidated Consolidated Turnover ↑ 17% at Rs. 12,789 crores Consolidated EBITDA ↑ 7% at Rs. 3,839 crores Consolidated PAT ↑ 3% at Rs. 2
Slide 4: Financial Performance (Q2 FY 07 vs Q2 FY 06)
Financial Performance (Q2 FY 07 vs Q2 FY 06) Rs. Crores Q2 FY 2005-06 Q2 FY 2006-07 Stand Alone Consolidated Stand Alone Consolidated 4,395 5,632 Turnover 4,725 6,548 1,770 1,881 EBITDA 1,882 2,019 44% 36% EBITDA Margin 43% 33% 1,045 1,113 Net Profit After Tax 1,101 1,138 26% 21% Net Profit Margin 2
Slide 5: Financial Performance (H1 FY 07 vs H1 FY 06)
Financial Performance (H1 FY 07 vs H1 FY 06) Rs. Crores H1 FY 2005-06 H1 FY 2006-07 Stand Alone Consolidated Stand Alone Consolidated 8,357 10,930 Turnover 9,115 12,789 3,389 3,597 EBITDA 3,541 3,839 45% 36% EBITDA Margin 42% 32% 1,970 2090 Net Profit After Tax 2,055 2,151 26% 21% Net Profit Margin
Slide 6: Presentation Outline
Presentation Outline Highlights Operational Performance Status of Growth Projects Outlook for the year 6
Slide 7: Operational Highlights (H1 FY 07 vs H1 FY 06)
Operational Highlights (H1 FY 07 vs H1 FY 06 ) Production 4% 5% 10% In mtpa 2.54 2.64 2.45 2.34 2.37 2.16 Hot Metal Crude Steel Saleable Steel H1 FY 06 H1 FY 07 Represent increase in production in H1FY’07 vs H1 FY’06 7
Slide 8: Rising Operational Efficiency
Rising Operational Efficiency Raw Material Consumption Coke and Fuel Rate Consumption Ton/ ton of Saleable steel Fuel Rate (Coke rate + Injection) 4 Kg/thm 3.39 600 589 584 3.06 3 70 90 500 2 519 400 494 1 300 0 H1 FY'06 H1 FY'07 H1 FY'06 H1 FY'07 Coke Rate Coal Injection 8
Slide 9: Rising Operational Efficiency
Rising Operational Efficiency Power Consumption Labour Productivity Kwhrl/tss Tcs/man/year 450 418 403 350 345 311 400 300 350 250 300 200 250 200 150 150 100 H1 FY'06 H1 FY'07 H1 FY'06 H1 FY'07 9
Slide 10: Increasing Steel Sales (H1 FY 07 vs H1 FY 06)
Increasing Steel Sales ( H 1 FY 07 vs H1 FY 06 ) Figures in kt Sales ↑12% Semis, 21 , 1% HR, 627 , 27% Semis, 49 , Longs, 813 , 2% 36% HR, 532 , 26% Longs, 628 , 31% Galv, 232 , 10% CR, 607 , 26% Galv, 265 , CR, 580 , 28% 13% H 1 FY 06 :2.05 mill ton H1 FY 07 : 2.29 mill ton 10
Slide 11: Marketing Highlights (H1 FY 07 vs H1 FY 06)
Marketing Highlights (H1 FY 07 vs H1 FY 06) Sales to the Automotive Sector ↑ 30% at 404 kt Galvanized products sales to automotive sector ↑ 53% at 19.5 kt Technical approval from Global auto majors New products commercialized – BH180 for Tata Motors / Bajaj, GA with Hyundai Concept of Pric
Slide 12: Auto Market Share
Auto Market Share HR Auto CR Auto 200 100% 240 80% 175 200 80% 60% 150 160 125 52% 60% 40% 39% 100 120 40% 75 40% 80 50 45% 20% 40 20% 25 0 0% 0 0% H1 FY'06 H1 FY'07 H1 FY'06 H1 FY'07 '000 Tonnes Market Share (%) '000 Tonnes Market Share (%) Galv Auto Total Auto 20 40% 420 100% 16 34% 360 80% 300 12
Slide 13: Market Share in Focus Segments
Market Share in Focus Segments CRCA ( Auto Ancillaries) Galvanized (Construction) 140 60% 92 26% 28% 35% 120 44% 50% 90 39% 28% 100 88 40% 21% 80 86 30% 60 14% 20% 84 40 7% 82 20 10% 80 0% 0 0% H1 FY'06 H1 FY'07 H1 FY'06 H1 FY'07 '000 Tonnes Market Share (%) '000 Tonnes Market Share (%) Rebars Speci
Slide 14: Enhancing Focus on Branded Products
Enhancing Focus on Branded Products Tata Shaktee GC + Tata Steelium CR + Tiscon ‘000 mt 500 459 450 425 400 350 300 250 200 H1 FY'06 H1 FY'07 Revenue : All Branded Products Rs. Crores 1915 2,081 H1 FY'06 H1 FY'07 14
Slide 15: Profit Center Operations: Net Operating Profit
Profit Center Operations : Net Operating Profit (H1 FY 07 vs H1 FY 06) Net Operating Profit – Rs Crores Tubes Wires 17 34 13 20 ‘000 tonnes ‘000 tonnes 159 H1-FY 06 H1-FY 07 142 155 156 151 131 144 114 Prodn. Sales Prodn. Sales Bearings FAMD Million Nos. 11 10 ‘000 tonnes 295 297 914 859 H1 FY 06 H1
Slide 16: Key Financial Ratios: Tata Steel standalone
Key Financial Ratios : Tata Steel standalone H1 FY 06 Category Unit H1 FY 07 44.79% EBITDA Margin * % 42.38% Profitability 26.03% Net Profit Margin * % 24.59% 35.58 Earnings per Share Rs. 36.41 46.82% Shareholder Return on Equity % 34.85% 23,440 Returns Market Capitalisation Rs. Crores 31,093 1,350
Slide 17: EBITDA Margins: Tata Steel Vs Global Steel peers
EBITDA Margins : Tata Steel Vs Global Steel peers 50% 45% 42% 42% 40% 40% 35% 33% 30% 30% 28% 25% 23% 22% 19% 20% 20% 18% 18% 16% 15% 10% 5% 0% Tata Steel N AM (*) P J Apr - March 2005 Apr - March 2006 Apr- Sep 2006 AM (*) represents Jan-June 2006 17
Slide 18: EBITDA Margins: Tata Steel Vs Domestic Steel peers
EBITDA Margins : Tata Steel Vs Domestic Steel peers 50% 42% 42% 45% 42% 40% 40% 38% 36% 35% 35% 33% 32% 32% 31% 30% 30% 26% 25% 25% 23% 23% 19% 20% 17% 15% 10% 7% 5% 0% Tata Steel S I E J Apr - March 2005 Apr - March 2006 Apr-June 2006 Apr- Sep 2006 18
Slide 19: Key Financial Ratios (Consolidated)
Key Financial Ratios (Consolidated) Net Debts / Equity (*) EBITDA / Gross Interest 2.5 40 2.01 2.0 30 24 1.5 20 1.0 0.5 0.21 10 3 0.0 0 '02 '03 '04 '05 '06 H1'07 '02 '03 '04 '05 '06 H1'07 Earnings Per Share (Rs per share) Return on Equity (%) 75 65 68 75% 48 50 38 50% 34% 28 25 25% 15% 5 0 0% '02 '0
Slide 20: Ranking of World Class Steel Makers: WSD
Ranking of World Class Steel Makers : WSD Ranking 2001 2002 2003 2004 2005 2006 1 Tata Steel Posco Posco Posco Tata Steel Tata Steel 2 Usinor Nucor Bao Steel Severstal Posco Posco 3 Posco Tata Steel Tata Steel Bao Steel Severstal Bao Steel 4 Gerdau Gerdau Nucor Tata Steel Bao Steel Severstal Blue 5
Slide 21: Presentation Outline
Presentation Outline Highlights Operational Performance Status of Growth Projects Outlook for the year 21
Slide 22: Long Term Strategic Plan
Long Term Strategic Plan – 4 mtpa Strong base in India – 30+ mtpa – Single location – Multi location & De-integrated manufacturing – National - Primary steel making in countries rich in multinational – Small & vulnerable iron ore and coal / gas – Strong & secure Ownership / Tie up of strategic raw m
Slide 23: Summary of Progress on Major Projects
Summary of Progress on Major Projects Ongoing 1.8 mtpa expansion at Jamshedpur Construction work on “H” Blast Furnace, Sinter Plant #4 in progress To be commissioned by June 2008 To 10 mtpa steel capacity at Jamshedpur Improved raw materials Enhanced Blast furnace productivity New Stee
Slide 24: Summary of Progress on Major Projects
Summary of Progress on Major Projects Kalinganagar Steel Project, Orissa Land lease deed executed No objection certificate for plant area received from Government of Orissa Environmental clearance in advanced stage Topographic Survey and geological mapping over lease area completed Order
Slide 25: Summary of Progress on Major Projects
Summary of Progress on Major Projects Chattisgarh Project – Rail connectivity – EIA study Under progress – DPR – Water allocation approved Jharkhand Project – Topography survey of land completed – Water allocation under progress Bangladesh Project – Cabinet to consider our proposal after the n
Slide 26: Summary of Progress on Major Projects
Summary of Progress on Major Projects Iran Project • Satisfactory discussions for : – Supply of iron ore pellets – Allocation of land Bluescope JV Building Solutions – Pune plant operational since August 2006 – Construction nearing completion in Delhi and Chennai plant – Production likely to c
Slide 27: Summary of Progress on Major Projects
Summary of Progress on Major Projects Ferro Chrome Project, South Africa Order placed for major equipments Erection and commissioning work in progress To be commissioned by Nov 2007 Titania Project, Tamil Nadu Feasibility study for water and power completed MOU to be finalised by Nov 2
Slide 28: Presentation Outline
Presentation Outline Highlights Operational Performance Status of Growth Projects Outlook for the year 28
Slide 29: Global Steel Industry
Global Steel Industry World crude steel production Ç 9.3% yoy (77 MT) at 903 MT in Jan-Sep 2006 9 China production Ç 18.4% yoy (48 MT) at 308 MT Prices continue to be cyclical: but at a higher mean level Global apparent steel use forecast to grow by 9 % yoy (92 MT) at 1121 MT in 2006 and 5 % i
Slide 30: HR (FOB) Prices - International
HR (FOB) Prices - International US Midwest UK CIS China 900 Sep ’06 800 US$ 672 Sep ‘06 US$ 634 700 600 Sep ’06 US$ 512 636 624500 532 454 481400 Sep ‘06 475 US$ 490 453 300 408 A u g -0 4 A u g -0 5 A u g -0 6 A p r-0 4 J u n -0 4 O c t-0 4 D e c -0 4 F e b -0 5 A p r-0 5 J u n -0 5 O c t-0 5 D e c
Slide 31: Outlook for the year
Outlook for the year Production / sales ↑ 500,000 tonnes Ongoing cost reduction programme Prices likely to hold Continued integration of Millennium Steel 1.8 mtpa under execution 31
Slide 32: Tata Steel and Corus – A unique partnership
Tata Steel and Corus – A unique partnership Recommended acquisition of Corus via Scheme of Arrangement initiation of a global partnership through a friendly transaction Acquisition price £4.55 / USD 8.69 per Corus share in cash Equity value of Corus of USD 8.23 bn(1) Clear and compelling i
Slide 33: Thank You
<p TATA Thank You 33 TATA STEEL — ts