jsw group - analyst meet presentation · 2016. 8. 5. · jswsl - jsw steel limited ......

Analyst Meet Presentation

Q2 FY11

Analyst Meet Presentation

Q2 FY11

Key Developments

Economic and Steel

Scenario

Performance Highlights

Projects Update

Agenda

2

Key Developments

3

FCD of ` 4800 Crores issued to JFE converted to 32mn

equity shares Debt prepayment of ` 2,603 crores

` 2,197 crores currently invested in MFs/FDs will be used in lieu

of tied up loans draw down for Capex

Coke Oven 4 (Battery A) commissioned on 4th Oct 2010

Generation from 300 MW captive power plant started

Highest ever quarterly sales – by volume (1.583mnt) and

value (` 6,184 crores)

Strengthening Balance Sheet

Potential Equity Infusion of ` 2,488 Crores over 21 months

` 1,588 Crores – Promoters warrants

` 600 crores – 3mn GDRs plus 1mn shares to JFE

` 300 crores – 2mn shares to JFE on conversion of outstanding FCCBs

4

Consolidated total net debt - equity ratio has improved to 0.80 at

Sep’ 2010 end from 1.60 at Jun’ 2010 end

Impact of FCCBs conversion

Outstanding FCCBs – ` 1,230 crores, if converted will simultaneously

increase equity and reduce debt.

Consolidated weighted average debt cost has come down by

58bps to 6.13% during Q2 FY11

Awards

5

Global HR Excellence Awards – organisation with

innovative practices from APHC

Fastest Growing Steel Company from ASAPP Media

Information Group

Star Performer 2008-09 – Basic Iron and Steel Large

Enterprise from EEPC

Regional Award 2007-08 Gold Trophy –Large Enterprise

Top Exporter from EEPC

APHC - ASIA Pacific Human Resource Management Congress

EEPC –Engineering Exports Promotion Council

6

Economic & SteelScenario

Global Economy

-0.6

1.92.5

3.1

3.94.2

4.6 4.8

-3.2

0.00.6

1.3

2.1 2.32.6 2.72.5

4.04.7

5.1

6.06.3

6.87.1

Jan-0

9

Apr-

09

Jul-09

Oct-

09

Jan-1

0

Apr-

10

Jul-10

Oct-

10

Annual GDP growth (% YoY)

World

Adv. economies

Emg. and developing economies

2009

Actu

al

2010 GDP Forecast Dates

Global economy remains on recovery path, GDP forecast for 2010

continuously upgraded

Source: IMF

-2.9

4.9

-4.8

2.9

0.3

8.1

-6

-4

-2

0

2

4

6

8

10

Mar-

09

Jun-0

9

Sep-0

9

Dec-0

9

Mar-

10

Jun-1

0

World

Adv. economies

Emg. and developing economies

Actual Quarterly GDP growth (% YoY)

7

Source: MOSPI, Reuters, SIAM

Indian Economy

5.8

%

6.0

%

8.6

%

6.5

%

8.6

%

8.8

%

Q4 F

Y09

Q1 F

Y10

Q2 F

Y10

Q3 F

Y10

Q4 F

Y10

Q1 F

Y11

GDP (% YoY)

Power

90

100

110

120

130

140

150

160

170

180

Jan-0

9

Mar-

09

May-0

9

Jul-09

Sep-0

9

Nov-0

9

Jan-1

0

Mar-

10

May-1

0

Jul-10

Vehicle Sales

Non-Food Credit

Vehicle Sales

Non-Food Credit

3MMA, Jan 2009 = 100

Aug-10

GDP growth remains robust and domestic consumption growth is intact

8

Source: WSA

Global Steel Trends

Crude Steel Production (mnt) Steel Demand (% YoY growth)

13%

9%

7%

8%

5%5%

4%

14%

World BRIC China India

2010 E 2011 E

Year World BRIC China India

2009 1125 641 542 55

2010 E 1272 696 579 60

2011 E 1340 730 599 68

Global Steel Demand (mnt)

9

121

121

125

118

114

113

112

Mar-

10

Apr-

10

May-1

0

Jun-1

0

Jul-10

Aug-1

0

Sep-1

0

573

781

634

563

752715

505

710

623

475

685

610

450

500

550

600

650

700

750

800O

ct-

09

No

v-0

9

De

c-0

9

Ja

n-1

0

Fe

b-1

0

Ma

r-1

0

Ap

r-1

0

Ma

y-1

0

Ju

n-1

0

Ju

l-1

0

Au

g-1

0

Se

p-1

0

Oct-

10

N.America domestic FOB US Midwest mill Europe import CIF S.European port

Russia Black Sea export FOB China export FOB Shanghai

Source: SBB (All figures are in USD/ton)

HRC Prices

Producers raised

prices in April &

May to cover higher

raw material costs

10

Source: SBB , Macquarie Research (All figures are in USD/ton)

Raw Material Prices

91

177

130

155163

249

200

218

265

448

324

383

345

395

495

435

200

250

300

350

400

450

500

60

90

120

150

180

210

240

270

Oct-

09

Nov-0

9

Dec-0

9

Jan-1

0

Feb-1

0

Mar-

10

Apr-

10

May-1

0

Jun-1

0

Jul-10

Aug-1

0

Sep-1

0

Oct-

10

Indian Iron Ore 63% Fe dry / China import CFR N.China port Australian Spot HCC FOB (RHS)

Scrap / Shredded / Rotterdam export FOB (RHS) China Coke export FOB (RHS)

11

2.9

2.5

3.3

4.3

5.0

5.7

4.6

2.8 3

.0

Jan-1

0

Feb-1

0

Mar-

10

Apr-

10

May-1

0

Jun-1

0

Jul-10

Aug-1

0

Sep-1

0

Source: Mysteel, WSA (All figures are in million tons )

Chinese Steel Market

Production vs. consumption (mnt)

49

46

54

47

43

53

45

40

42

44

46

48

50

52

54

56

Jul-09

Aug-0

9

Sep-0

9

Oct-

09

Nov-0

9

Dec-0

9

Jan-1

0

Feb-1

0

Mar-

10

Apr-

10

May-1

0

Jun-1

0

Jul-10

Aug-1

0

Sep-1

0

Finished Steel Production

Apparent Steel Consumption

Monthly Exports (mnt)

Monthly finished steel production reduced to

46.5mnt in Sep’ 10 from 54.5mnt in May’ 10

Withdrawal of export rebate in July

coupled with reduced production resulted

in lower exports

12

0.6

8

0.6

8

0.6

2

0.7

3

0.6

8

0.6

8

0.9

7

0.8

2

0.9

7 1.0

1

0.4

6

0.3

6

Oct'

09

Nov' 0

9

Dec' 0

9

Jan' 1

0

Feb' 1

0

Mar' 1

0

Apr' 1

0

May' 1

0

Jun' 1

0

Jul'

10

Aug' 1

0

Sep' 1

0

25.9

27.227.0

29.8

Finished Steel Production Apparent Steel Consumption

Apr -Sep' 09 Apr - Sep' 10

4%

10%

Source: JPC (All figures are in million tons )

Indian Steel Market

H1 Production vs. Consumption (mnt) Monthly Imports (mnt)

*Production and consumption figures netted off for double counting effect

13

HighlightsOperating & Financial

14

1.5411.571 1.574

Q2 '10 Q2 '11 Q1 '11

Crude Steel

2%--

0.217

0.264

0.309

Q2 '10 Q2 '11 Q1 '11

Rolled : Long

22%

-15%

0.923

1.271

1.093

Q2 '10 Q2 '11 Q1 '11

Rolled : Flat

38% 16%

Production – Q2 FY 11

All numbers are in million tons

YoY %

QoQ %

YoY % QoQ %YoY %QoQ %

15

0.399

0.573

H1 '10 H1 '11

Rolled : Long

44%

1.794

2.364

H1 '10 H1 '11

Rolled : Flat

32%

2.917

3.144

H1'10 H1'11Crude Steel

8%

Production – H1 FY 11

YoY %

YoY %

YoY %

16


0.179

0.281

0.225

Q2 '10 Q2 '11 Q1 '11

Rolled : Long

57% 25%

0.405

0.0860.107

Q2 '10 Q2 '11 Q1 '11

Semis

-79%

-20%

0.379

0.451

0.346

Q2 '10 Q2 '11 Q1 '11

Value Added

19% 30%

0.870

1.215

0.859

Q2 '10 Q2' 11 Q1 '11

Rolled : Flat

40% 41%

1.454

1.583

1.191

Q2 '10 Q2 '11 Q1 '11

Total Sales

9%33%

Saleable Steel Sales – Q2 FY 11

YoY %QoQ %

YoY % QoQ % YoY % QoQ %

YoY %

QoQ %

YoY % QoQ %

17


0.334

0.506

H1 '10 H1 '11

Rolled : Long

51%

0.716

0.193

H1 '10 H1 '11

Semis

-73%

0.7450.797

H1 '10 H1 '11

Value Added

7%

1.725

2.074

H1 '10 H1 '11

Rolled : Flat

20%

2.775 2.774

H1 '10 H1 '11

Total Sales

Saleable Steel Sales – H1 FY 11

YoY %YoY %

YoY % YoY %

18


Focus on Retail Sales

0.3220.901

JSW Shoppe

Rolled:

Long

Rolled: HR

Products

45%

14%

41%

% Share through JSW Shoppe-Q2 FY 11

(Excluding Semis) MnT, % Share

74%26%

Sales through JSW Shoppe-Q2 FY 11

(In ‘000 tons)

Q2 FY 10 Q2 FY 11

128

322152%

Value Added:

Flat

19

Financials – Q2 FY11 (Standalone)

20

Particulars Q2 FY 11 Q2 FY 10 Growth

` Cr. ` Cr. %

Net Sales 5,713 4,554 25%

Op. EBITDA (excl. Fx Variance) 998 1,189 -16%

Op. EBITDA Margin (excl. Fx Variance) 17.3% 26.0%

EBITDA 1,156 1,167 -1%

EBITDA Margin 20.0% 25.5%

Less: Net Finance Charges 199 228 -13%

Less: Depreciation 332 281 19%

Profit Before Tax 624 658 -5%

Profit after Tax 445 452 -1%

Financials – H1 FY11 (Standalone)

21

Particulars H1 FY 11 H1 FY 10 Growth

` Cr. ` Cr. %

Total Income 10,360 8,448 23%

Op. EBITDA (Excl. Fx Variance) 2,130 1,940 10%

Op. EBITDA Margin (Excl. Fx Variance) 20.4% 22.8%

EBITDA 2,190 2,154 2%



Less :Depreciation 650 552 18%

Profit Before Tax 1,130 1,154 -2%

Profit After Tax 796 792 1%

` Cr.

EBITDA MOVEMENT – Q2 FY 11 (Standalone)

22

1,167 1,156

98

(1014)

536

206

(16)

179

EBIDTA Q2'10 Volume Cost NSR Mix CER/Other Income

Fx Variance EBIDTA Q2'11

Operational & Financial Performance - USA

USD Mn

23

Production (NT) Q2 FY 11 Q2 FY 10 Growth

Plate Mill 37,699 48,895 -23%

Pipe Mill 9,495 16,845 -44%

Sales (NT) Q2 FY 11 Q2 FY 10 Growth

Plate Mill 23,040 38,689 -40%

Pipe Mill 11,970 17,822 -33%

Particulars Q2 FY 11 Q2 FY 10

Turnover 36.40 41.49

EBITDA + Other Income 0.85 (21.03)

Profit After Tax (13.14) (25.13)

Financials Q2 FY 11 (Consolidated)

24

Particulars Q2 FY 11 Q2 FY 10 Growth

` Cr. ` Cr. %

Total Income 5,972 4,757 26%

EBITDA 1,186 1,075 10%



Profit Before Tax 546 449 21%


Financials – H1 FY11 (Consolidated)

25

Particulars H1 FY 11 H1 FY 10 Growth

` Cr. ` Cr. %

Total Income 10,830 8,770 23%

EBITDA 2,265 2,003 13%



Profit Before Tax 993 762 30%


Net Total Debt Movement (Consolidated)

Cash and Cash equivalent - ` 544 Crs.

FD/Mutual Fund - ` 2,477 Crs.

` Cr.

26

16,510

12,188

569

(377)

(2330)(334)

(1850)

Net Total Debt as

on Jun'10

New Loan Taken Repayments Prepayments Fx Variance Movement in

FD/MF

Net Total Debt as

on Sep'10

* Not Annualized

Financial Ratios

27

Particulars Q2 FY 11 Q2 FY 10


PAT Margin 7.7% 9.9%

Diluted EPS (`) -Standalone* 23.13 23.69

ROCE 12.1% 16.3%

Particulars 30.9.2010 30.06.2010

Net Total Debt/Equity (x) 0.48 1.15

Net Total Debt/EBITDA (x) 1.64 2.59

Net Total Debt/Equity-Consolidated (x) 0.80 1.60

Net Total Debt/EBITDA-Consolidated (x) 2.65 3.61

UpdateProjects

28

West Bengal Projects – overview

29

Projects Zero dateImplementation

period

4.5 mtpa Greenfield HRC plant Apr 2011 36 months

660 MW power plant (26% stake in SPV) Apr 2011 36 months

2.4 mtpa Kulti Sitarampur coking coal mines

developmentJan 2011 39 months

2.6 mtpa Ichhapur thermal coal mines development

(26% stake in SPV)Jan 2011 39 months

JSWSL - JSW Steel Limited

WBIDC - West Bengal Industrial development corporation limited/

WBMDTC - West Bengal mineral development and trading corporation limited

RTL - Rupee term loan, FCL –Foreign currency loans, ECB – External commercial borrowing

West Bengal Projects – financing

30

Means of Financing ` crores

Equity

JSWSL/Strategic Partners/IPO 5,327

WBIDC/WBMDTC 6

Debt - RTL/FCL/ECB* 10,667

Total 16,000

Investments ` crores

Steel Project cost (Debt to Equity – 2:1) 15,350

Equity stake in Power plant SPV - project cost ` 3,300 crores (Debt to Equity – 3:1) 215

Equity stake in coking coal mines SPV - project cost ` 1,350 crores (Debt to Equity – 3:1) 337

Equity stake in thermal coal mines SPV - project cost ` 1,500 crores (Debt to Equity – 3:1) 98

Total 16,000

JSWSL

JSWBSL JSWEBLWBIDCL/WBMDTC

JSWEL

SPV 1 SPV 2

West Bengal Projects: structure

31

JSWSL – JSW Steel Ltd.

JSWEL – JSW Energy Ltd.

WBIDCL – West Bengal Industrial development corporation limited

WBMDTC – West Bengal mineral development and trading corporation limited

JSWBSL – JSW Bengal Steel Ltd. (implementing steel project)

JSWEBL – JSW Energy (Bengal) Ltd. (implementing power project)

SPV 1 – Implementing development of coking coal mines

SPV2 – Implementing development of thermal coal mines

94%

(Min

)

6% (Max) 26%

Su

bsid

iary

100%

Proposed

74%

Su

bsid

iary

100%

Proposed

As on Jun 10 As on Sep 10

Blast Furnace

32


SMS (Phase II)

33


Beneficiation Plant

34


LCP

35

Q & A Session

36

Forward Looking and Cautionary Statement

37

Certain statements in this report concerning our future growth prospects are forward lookingstatements, which involve a number of risks, and uncertainties that could cause actual results todiffer materially from those in such forward looking statements. The risk and uncertaintiesrelating to these statements include, but are not limited to risks and uncertainties regardingfluctuations in earnings, our ability to manage growth, intense competition within Steel industryincluding those factors which may affect our cost advantage, wage increases in India, our ability toattract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-timeframe contracts, our ability to commission mines within contemplated time and costs, our ability toraise the finance within time and cost client concentration, restrictions on immigration, our abilityto manage our internal operations, reduced demand for steel, our ability to successfully completeand integrate potential acquisitions, liability for damages on our service contracts, the success ofthe companies in which the Company has made strategic investments, withdrawal offiscal/governmental incentives, impact of regulatory measures, political instability, legalrestrictions on raising capital or acquiring companies outside India, unauthorized use of ourintellectual property and general economic conditions affecting our industry. The company doesnot undertake to update any forward looking statements that may be made from time to time by oron behalf of the company.

38

Thank you

jsw group - analyst meet presentation · 2016. 8. 5. · jswsl - jsw steel limited ......

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