INVESTOR PRESENTATION - September 2021 - Tata Steel
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
INVESTOR PRESENTATION
September 2021
1
Safe harbour statement
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 may differ
materially from those directly or indirectly expressed, inferred or implied. Important factors that could
make a difference to the Company’s operations include, among others, economic conditions affecting
demand/supply and price conditions in the domestic and overseas markets in which the Company
operates, changes in or due to the environment, Government regulations, laws, statutes, judicial
pronouncements and/or other incidental factors.
2
Overview
Global scale of operations
▪ Flagship company of Tata Group
India1 ▪ Highly integrated and profitable India operations
▪ One of the lowest cost producer in the world
▪ Integrated steel producer having 34 MTPA steelmaking
▪ Steelmaking capacity: 19.6 MTPA with 5 MTPA
capacity with operations in India, Europe and Southeast Asia Kalinganagar Phase II expansion underway
61%
▪ Product portfolio includes Flats (HR, CR, Galvanised,
Coated), Longs (Wire Rods, Rebar), Wires and Tubes
▪ Key Consolidated financials of FY2021:
▪ Raw material linkage – 100% integration in Iron ore
o Revenues : Rs.1,56,294 crores / US$21 billion
and ~25-30% integration in Coking coal
o EBITDA : Rs.30,892 crores / US$4.2 billion
o PAT : Rs.8,190 crores / US$1.1 billion Europe ▪ Steelmaking capacity: 12.4 MTPA at Netherlands and
UK
31%
▪ Market Capitalisation: Rs.1.74 trillion / US$24 billion2 ▪ Product Portfolio includes Strip Products (HR, CR,
Galvanised, Coated, Plated & Precision), Tubes,
▪ Constituent of: Nifty50, BSE Sensex and MSCI India Electrical steel
Southeast ▪ Steelmaking capacity: 2.15 MTPA across Singapore
▪ Credit Ratings: Asia and Thailand
o S&P BB CreditWatch Positive 8%
▪ Product portfolio includes Rebars, Wires and Wire
o Moody’s Ba2 Stable Rods, Semi-finished steel
4…
Steel deliveries in FY21
1. Tata Steel India (Tata Steel standalone, Tata Steel BSL and Tata Steel Long Products); 2. As per Bloomberg on 3 rd September 2021; HR – Hot Rolled; CR – Cold Rolled; 3
Exchange rate: US$ = Rs.74.2096; 1 Crores = 10 million
Tata Steel is focused on creating sustainable value
Consolidate
Leadership in Robust financial
position as global
India health
cost leader
Leadership position
Leadership in Become culturally
in technology
sustainability future ready
and digital
4
Our strategy is pivoted around capitalizing on India growth story…
Targeting value accretive growth in India India to be the dominant manufacturing
base for Tata Steel going forward
2010: 22 MTPA 2020: 34 MTPA 2030F: 55 MTPA
Production capacity (MTPA)
29%
57%
73%
India Europe South –East Asia
Optimizing product portfolio is a key target
in India
Production capacity (MTPA)
Flat Long
30
15.6
10
3.7 2.9 4
TSK –
2018 TSBSL TSLP 2020 2025 (organic / 2030
Phase II 2010 2020 2030F
Inorganic)
/ EAF
5
TSBSL – Tata Steel BSL; TSLP – Tata Steel Long Products.; TSK – Tata Steel Kalinganagar; EAF – Electric Arc Furnace
…with future investments focussed upon sector leading returns
India Steel New & Allied
Production Business
Downstream
Portfolio in India
› Complete 5 MTPA Kalinganagar › Cold Rolled Products – From 4.3 MTPA to 6.5 MTPA › Electric arc furnace low carbon Steel
expansion
› Ductile Iron Pipes - From 0.2 MTPA to 1 MTPA › Composites
› Raw Material expansion to 50 › Tinplate – From 0.4 MTPA to 1 MTPA › New Materials Business
MTPA of Iron Ore
› Tubes – From 1.3 MTPA to 2 MTPA › Commercial mining
› Wires – From 0.45 MTPA to 1 MTPA
6
Continuous focus to attain and retain leadership in chosen segments for strong
market presence
Leadership position in chosen Market share
segments in India FY18 FY21
▪ 1 in every 3 outer panels
Preferred 40 brands across customer Over Rs.10,000 45%4 58%4
▪ 2 in every 3 wheels
supplier for auto segments contribute >1/3rd crores / US$1.3 billion
customers of India revenue of annual retail sales ▪ 1 in every 2 LPG
40% 52%
cylinders in India
Service centers for last 250+ distributors and ▪ 2 in every 3 continuous
55% 62%
point processing 14,600+ dealers welding electrodes
▪ Tata Shaktee - 1 out of 2
35% 45%
50+ Product Application Strong GC roofs
distribution Covering 95%
Engineers districts across India ▪ Tata Tiscon – Rs.7,500
network
crores/US$1 billion plus 14% 15%
brand
100% fleet covered by 6 Hubs1 and 14
▪ Tata Astrum - 1st in the
vehicle tracking system spokes2 world laser marking on 18% 21%
HR Coils (2019)
TOC3 enabled ▪ Tata Steelium - 1st in
18% 15%
supply chain branding CR (2003)
1. Hubs: large warehouses, 2. Spokes: Small warehouses ; 3. Theory of constraints; 4. Auto flat product market share; ECA: Emerging customer accounts (small & medium enterprises); GC -
7
Galvanised Corrugated; All % market share include Tata Steel BSL from FY19 onwards; Exchange rate: US$ = Rs.74.2096; 1 Crores = 10 million
We are investing in capabilities to attain leadership position in adjacent businesses
Services & Solutions New Material Business Commercial Mining
Composite Graphene
Medical Materials
› Servitizing steel to de-risk business › Capitalizing future needs of existing › Chrome business
o Pravesh – Doors and windows segments while adding new ones › Mine Developer and Operator business
o Nest-in – solutions for society › Strategic minerals play
8Continuous structural and operational improvements key to achieve our financial goals
Global cost leader Among the lowest 3 on the global HRC cash cost curve
All figures are in Rs. crores
5 year cost savings at Transformation programme at
Tata Steel India operations Tata Steel Europe
Cost and Supply chain Optimisation Overhead cost reduction
6,545
332 5,369 2,252 2,177
1,916 505
3,556 542
1,590 960
755
4,298 1,635
3,406 2,801 3,274 1,292
2,594
FY17 FY18 FY19 FY20 FY21 FY20 FY21
TSN TSUK
TSL TSBSL TSLP
9
TSL: Tata Steel Standalone; TSBSL: Tata Steel BSL; TSLP: Tata Steel Long Products; TSN: Tata Steel Netherlands; TSUK: Tata Steel UK; 1 Crores = 10 millionAll key metrices continue to improve
EBITDA Margin (%)1 EBITDA / ton (Rs.)1 Interest Coverage Ratio (x)1,2 Gross & Net Debt (Rs. crore)
22,779 8.9
30.3%
1,16,328
1,00,816
92,147 88,501 84,237
18.9% 19.8%
83,014 1,04,779
17.2%
11,110 94,879
14.5%
12.2%
9,337 10,838 3.9 3.9
7,129 3.4 4.1 72,367 69,215 75,389 73,973
6,267
2.4
Net Gross
FY 17 FY 18 FY 19 FY 20 FY 21 1Q FY 17 FY 18 FY 19 FY 20 FY 21 1Q
FY 17 FY 18 FY 19 FY 20 FY 21 1Q FY 17 FY 18 FY 19 FY 20 FY 21 1Q
FY22 FY22
FY22 FY22
Net Debt / EBITDA (x)3 Net Debt / Equity (x) Credit Rating
5.91 1.72 7
BBB-/ Baa3 Investment Grade
6
BB+/ Ba1 S&P
1.43 1.42 Moody's
1.37 5
BB/ Ba2
4.25 4
BB-/ Ba3
3.20 3.19 2.44 3
1.59
0.91 B+/ B1
0.98
2
B/ B2
1
FY 17 FY 18 FY 19 FY 20 FY 21 1Q FY 17 FY 18 FY 19 FY 20 FY 21 1Q
FY22 FY22 0
B-/ B3
Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21
FY17 FY18 FY19 FY20 FY21 Aug’21
All data is on consolidated basis; 1. FY20 and FY21 includes Southeast Asia (SEA) Operations which is reclassified as continuing operations; 2. Interest Coverage Ratio: EBITDA / Interest; 10
3. 1QFY22 based on 12 trailing month EBITDA; 1 Crores = 10 millionPathway for our future financial strategy
▪ Investment grade financial metrics; strong earnings and cashflow performance
▪ US$2 billion+ gross debt reduction while prioritize off-shore debt pre-payment
Short-term ▪ Continued focus on capital allocation, cashflow and working capital management
(FY22 targets)
▪ Capex of ~Rs.10,000-12,000 crores / ~US$1.3-1.6 billion
Target Leverage Target RoIC Dividend Policy
Net Debt/EBITDA at 2x Progressive dividend
15%
Interest Cover at 4x policy; robust pay-out
Medium-term
(Across cycle
targets)
RoIC: Return on Invested Capital 11Sustainability is deeply embedded in Tata Steel ecosystem
Key achievements 2025 goals 2030 goals
▪ TSI: AchieveWe aspire for leadership position in identified technology areas
Use of low-quality Iron ore, Technologies for generation Technologies for Water Use of AI to drive process
coal and ferro alloy minerals /usage of green/blue H2 in neutrality through Reduce, excellence and ‘first time right’
steel value chain Reuse & Recycle in steel value chain
Low Quality Hydrogen Water Digital
Raw Materials
Carbon Capture and Coatings
Mobility
Utilization
Technologies for CO2 Material leadership in Breakthrough coating solutions
Capture, Storage and mobility domain serving needs better than
Utilisation competition
13Becoming culturally future ready will provide the platform for future value creation
Strengthening enablers for Future of ‘Work’, ‘Workforce’ and ‘Workplace’
Culture of Safety, Continuous
Agility, Innovation and
improvement, Ethics & Giving
Technology leadership
back to the community
Certified as
India’s Best
Digital and Anaytics as a Workplaces by Progress towards
way of life ‘Great Place to benchmark productivity
work’ for the 4th
time
Unique policies deployed to Enabling capabilities and
drive diversity and inclusion career to unleash potential
14Our efforts are recognized globally and nationally
TSL and TSE
recognized as Safety & Health Excellence Recognized as the
‘Sustainability Recognition 2020 for world's most ethical
Champions’ by Digitalization of Process companies for the
Worldsteel (4th Safety Performance 10th time by
time in a row) Indicators (PSPI) Ethisphere Institute
Rated ‘A-’ 3 Assets recognized
(Leadership band) Certified as the as Global Lighthouses
for our Climate Best Workplace in by WEF (Jamshedpur,
Change and Supply Manufacturing 2021 Kalinganagar and
Chain disclosure IJmuiden)
Rated amongst Dun & Bradstreet Recipient of Prime
top 5 Steel Corporate Award Minister’s Trophy for
Companies 2019 in the 11 times (out of 25) for
globally. category of the Best Performing
Corporate Social Integrated Steel Plant
Responsibility
15
TSL: Tata Steel Limited, TSE: Tata Steel EuropeWe are on our way to build the Tata Steel of the Future
▪ Most respected and preferred supplier by discerning customers
▪ Be one of the lowest cost producer globally
▪ Strong focus on Free cash flow to create shareholder value
Most respected and ▪ Leadership in sustainable practices: low carbon business model at scale
valuable steel company
in the world by 2030
▪ Recognized as technology & innovation leader by customers, peers,
employees and investors
▪ Culture and values for the next generation and global benchmark in
corporate citizenship
16You can also read
