Vedanta Resources Plc: Corporate · PDF fileone vision . one vedanta . VEDANTA RESOURCES PLC...
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one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Cautionary Statement and DisclaimerThe views expressed here may contain information derived from publicly
available sources that have not been independently verified.
No representation or warranty is made as to the accuracy, completeness,
reasonableness or reliability of this information. Any forward looking
information in this presentation including, without limitation, any tables,
charts and/or graphs, has been prepared on the basis of a number of
assumptions which may prove to be incorrect. This presentation should not
be relied upon as a recommendation or forecast by Vedanta Resources plc
and Vedanta Limited (formerly known as Sesa Sterlite Ltd.)and any of their
subsidiaries. Past performance of Vedanta Resources plc and Vedanta
Limited (formerly known as Sesa Sterlite Ltd.) and any of their subsidiaries
cannot be relied upon as a guide to future performance.
This presentation contains 'forward-looking statements' – that is,
statements related to future, not past, events. In this context, forward-
looking statements often address our expected future business and financial
performance, and often contain words such as 'expects,' 'anticipates,'
'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward–looking statements by
their nature address matters that are, to different degrees, uncertain. For
us, uncertainties arise from the behaviour of financial and metals markets
including the London Metal Exchange, fluctuations in interest and or
exchange rates and metal prices; from future integration of acquired
businesses; and from numerous other matters of national, regional and
global scale, including those of a environmental, climatic, natural, political,
economic, business, competitive or regulatory nature. These uncertainties
may cause our actual future results to be materially different that those
expressed in our forward-looking statements. We do not undertake to
update our forward-looking statements. We caution you that reliance on
any forward-looking statement involves risk and uncertainties, and that,
although we believe that the assumption on which our forward-looking
statements are based are reasonable, any of those assumptions could prove
to be inaccurate and, as a result, the forward-looking statement based on
those assumptions could be materially incorrect.
This presentation is not intended, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta
Resources plc and Vedanta Limited (formerly known as Sesa Sterlite Ltd.)
and any of their subsidiaries or undertakings or any other invitation or
inducement to engage in investment activities, nor shall this presentation
(or any part of it) nor the fact of its distribution form the basis of, or be
relied on in connection with, any contract or investment decision.
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Konkola Copper
Mines (KCM)
62.9%
Vedanta Resources Plc
Zinc India(HZL)
AustralianCopper Mines
Cairn India
79.4%
Subsidiaries of Vedanta Ltd
Sesa Iron Ore
Sterlite Copper (Tuticorin)
Power (2,400 MW Jharsuguda)
Aluminium
(Odisha aluminium and power assets)
Divisions of Vedanta Limited
Talwandi Sabo Power (1,980 MW)
MALCO Power
(100 MW)
Skorpion & Lisheen -
100%BMM -74%
Zinc International
51Bharat Aluminium (BALCO)
Western Cluster
(Liberia)
Notes: Shareholding based on basic shares outstanding as on 31 March 2016
Group Structure
62.9%
100%64.9%
Vedanta Ltd
59.9%
79.4%
Unlisted entitiesListed entities
100% 100%100%51% 100%
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Management Team
Executive Directors
Management team
Tarun JainDirector, Vedanta Ltd
Dilip GolaniGroup Director, Management Assurance and Information Technology
M SiddiqiGroup Director,
Projects
R Kishore KumarChief Executive Officer,Iron Ore Business
Roma BalwaniPresident, Group Sustainability , CSR and Communications
Deshnee NaidooChief Executive Officer Zinc
International
Anil AgarwalGroup Chairman
Navin AgarwalExecutive Vice
Chairman
Tom AlbaneseChief Executive
Officer
Steven DinChief Executive Officer and Director, Konkola
Copper Mines
Abhijit PatiChief Executive
Officer, Aluminium Business
Sudhir MathurActing Chief Executive Officer, Cairn India Ltd
Samir CairaeChief Executive Officer of Diversified Metals (India)
Sunil DuggalChief Executive Officer,
Hindustan Zinc
P RamnathChief Executive Officer,
Vedanta Limited-Copper Business
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Our Global Footprint
Copper
Our key operations include:
Oil & Gas
Zinc-Lead-Silver
Captive thermal power plant
Iron Ore
Aluminium
Power
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Vedanta: A Global Diversified Natural Resources Group
46%
24%
5%
8%
14%
3%
Zinc Oil & Gas AluminiumPower Copper Iron Ore
EBITDA Mix for FY2016
– EBITDA of $2.3bn, and margin of 28%1
– Portfolio of large, structurally low-cost, long-life Tier-I assets, that delivered strong free cash flow in FY2016
– Strong free cash flow of $1.7bn, driven by opex and capex optimization and working capital initiatives not requiring large capex
– Positively contributing to India and Africa
Contribution of $3.2bn towards taxes and royalties in FY2016
Direct and Indirect employment of c.70,000
One of the largest employers in Zambia
Community investment of $37mn benefiting 2.25mn people in India in FY2016
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Large, low cost and diversified asset baseR&R Life(years) Production
EBITDA ($mn) Key highlights
Oil & Gas 15+ 46.9 mmboe1
570• India’s largest private-sector crude oil producer
• Strong FCF generation even at low oil prices with opex of $6.5/bbl
Zinc – India 25+Zn - 759kt
2
Ag - 14moz995
• Positioned on the 1st decile of the cost curve
• Rampura Agucha is the largest zinc-lead mine globally; significant production of silver from SK mine
Zinc Intl. 20+ 226kt3
68• Gamsberg is one of the world’s largest undeveloped zinc deposits
• Developing Gamsberg with a modular and flexible approach to maximise value
Copper – India NA 384kt 337• One of the world’s most efficient custom smelters, operating consistently above 90% utilisation rate
• Strongly positioned on the 1st quartile of the cost curve
Copper – Zambia NA 117kt4
(18)• One of the world’s highest grade copper mines
• Ramp-up at Konkola mines to deliver higher volumes
Iron Ore 20+ 5.2dmt5
73• Goa operation on 1st quartile of the cost curve
• Largest iron ore exporter in India pre-ban, significant ramp-up in FY2017
Aluminium NA 923kt6
107• Significant ramp up of capacities in FY 2017
• Integrated capacity with captive power
Power NA 12,121MU7
196• 9,000 MW fully operational, of which 3,600 MW commercial power
• Poised to benefit from structural power shortage in India
1. Vedanta Ltd working interest 2. Refined zinc total production (does not include 145kt refined lead) 3. Refined zinc from Skorpion (82kt) and mined metal from BMM and
Lisheen (63kt and 81kt, respectively) 4. Integrated production 5. Production of saleable ore 6. Total aluminum production (does not include Lanjigarh 971kt of Alumina) 7. Total
power sales
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Benefits of a Diversified Portfolio
40
50
60
70
80
90
100
110
120
130
Jun-15 Jul-15 Sep-15 Nov-15 Dec-15 Feb-16 Apr-16 May-16 Jul-16
Com
mod
ity p
ric
es
(15 J
une 2
015 =
100)
Aluminium Zinc Copper
Iron Ore 62% Silver Brent Oil
Vedanta’s diversified portfolio significantly reduces volatility
Source: Company filings, Bloomberg1. Vedanta Commodity Basket is a weighted average of commodity prices, weights are based on actual FY2016 revenue mix. Copper India revenues based on realized Tc/Rc’s.
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Continued Focus on Strong FCF Generation Through
Disciplined Ramp-upPresented at FY2016 results
FY2015 FY2016 FY2017eOil & Gas Zinc India Zinc Intl Copper Iron Ore Power Aluminium
Strong free cash flows from:
− Ramp up of capacities
at Vedanta Ltd’s
Aluminium, Power and
Iron ore businesses
− These are well invested
assets requiring
marginal incremental
capex
Continued strong cash flows
from HZL and Cairn and cost
optimization across the
businesses
$3.7 bn
$2.3 bn
$1.5 bn
$0.6 bn
+30% growth
$1.0 bn
Co
pp
er
Eq. P
rod
uct
ion
(kt
)
Copper Eq. Production
Capex
EBITDA
Progress in FY2017
Ramp-up of BALCO-II smelter
completed, rolled product
facility re-started;
Jharsuguda-II: 1st line ramp-
up impacted by power
outage, 3rd line start-up
moved forward from Q4 to
Q2
Goa iron ore production
scaled to 40% of allocated
capacity in Q1
Ramp-up of power volumes
at BALCO and TSPL; 3rd unit of
TSPL to be capitalized in Q2
On track to deliver significant
EBITDA growth in FY2017
Ramp-up will generate higher free cash flow and enable de-leveraging
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Ethos of Innovation and Technology
• Vedanta has created a web based innovation and technology platform Eureka for incubating ideas with a corpus of
Rs. 200 crores to fund research
• These include process efficiency, reduce cycle time, increase product yield or improve safety standards
• Vedanta has instituted quarterly innovation awards that will recognize and reward ideas that are game changers
“Sustainability is the heart of our business. High efficiency technology and safe practice ensure maximum recovery as well
as zero waste. Eureka helps create the discourse on this.”
- Ajay Dixit, CEO Power and Head Innovation Cell, Vedanta
Source- TOI Article- Top down cheer for bottom up Innovation, Aug 18 2016
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Social License to OperateSustainable Development Model Sustainable Development Model–
Responsible Stewardship, Building Strong
Relationship, Adding & Sharing value
Strategic Focus - Inclusion of a 4th Pillar –
Strategic Communication leveraging
Sustainable Development
Aligning Sustainable Development with the
Business Goals
Alignment - Aligning with companies’
business goals, mission and values
Maintaining social license to operate
Stakeholder Communication – Enhanced
transparency on Sustainable Development
issues
Sustainable Development Model: underpins License to
Operate
Sustainable Development Framework
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Our Sustainable FutureEnvironmental Management
• Zero “higher category” (Cat 4 & 5) environmental incidents
in FY2016
• Safe and successful closure of the Lisheen mine in FY2016
• Focus on resources efficiency, process innovation and
technological interventions on Waste, Water and Energy
• Climate Change
– Signed the Paris Pledge for Action
– Evaluating and updating our Carbon Strategy
– TSPL sets Guinness Record for planting 200,000
saplings in 1 hour
• Vedanta Ltd. awarded with CII- Sustainable Plus Platinum
level rating
Community Relations
• Working towards implementation of the Sustainable Development Goals
• Social Impact Assessment completed for HZL and Cairn India sites
• Executed group wide project – 50 Model Angandwadi’s (childcare
centers)
• Extending WBCSD - WASH pledge: Safe access to Water, Sanitation and
Hygiene for communities
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Mission
Committed to the Prime Minister’s national vision of eradicating child
malnutrition, providing education, healthcare and empowering women
with skill development.
Vedanta’s Flagship Project
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Timeline
1979
Sterlite Cables Ltd. acquires ShamsherSterling Corporation and becomes SterliteIndustries Ltd.
1986
Sterlite Industries Ltd. makes an initial public offering
1988
Sterlite Industries Ltd. commissions first privately developed copper smelter in India
1997
Sterlite Industries Ltd. acquires Copper Mines of Tasmania and ThalangaCopper Mines
1999
Sterlite Industries Ltd. acquires a 51% stake in BALCO
2001
Sterlite Industries Ltd. acquires a 26% stake in Hindustan Zinc Ltd. and a further 20% interest through an open market offer
2002
Vedanta Resources becomes the first Indian company to be listed on the London Stock Exchange
2003
Vedanta Resources acquires a 51% stake in KonkolaCopper Mines in Zambia
2004
Vedanta Resources acquires a 51% controlling stake in Sesa Goa Ltd.
2007
Vedanta Resources acquires Anglo American’s portfolio of zinc assets
2010
Vedanta Resources acquires a 58.5% controlling stake in Cairn India
2011
Merger of SterliteIndustries Ltd. and Sesa Goa to create Sesa Sterlite Ltd.
2013
Anil Agarwal acquires Shamsher Sterling Corporation
2015
Sesa Sterlite Ltd. changed its name to Vedanta Ltd.
Vedanta Resources Plc announced the merger of its subsidiaries Vedanta Ltd and Cairn India Ltd.
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
Strategic Priorities Remain Unchanged
Production growth and asset optimisation
De-lever the balance sheet
Identify next generation of resources
Simplification of the group structure
Protect and preserve our license to operate
• Disciplined ramp-up of new capacities in Aluminium, Power and Iron Ore• Zinc: Ramp-up volumes at Rampura Agucha U/G and develop Gamsberg• O&G: Enhance gas production; EOR at other fields
• Disciplined approach to exploration• Continue to enhance our exploration capabilities: Dedicated exploration
cell formed
• Vedanta Limited and Cairn India merger approved by all sets of shareholders
• Achieving Zero harm: reduce fatal, environment and social incidents• To obtain local consent prior to accessing resources• Resource Efficiency Improvement – Water, Energy, Waste and Carbon• Community need based development projects
• Reduce gross debt • Continued optimisation of opex and capex• Continued discipline around working capital
Strategic PrioritiesFocus Areas for FY 2017
one vision . one vedanta .VEDANTA RESOURCES PLC – CORPORATE PRESENTATION
ContactsUK Office India Office
Vedanta Resources Plc- Head Office16 Berkeley StreetLondon, W1J 8DZUnited KingdomPhone: +44 020 7499 5900
Vedanta Resources Plc - MumbaiVedanta House 75 Nehru Road, Vile Parle EastMumbai, Maharashtra, 400099IndiaPhone: +91 22 6646 1000
Group Communications
Roma BalwaniPresident – Sustainability, CSR and CommunicationsTel: +91 22 6646 [email protected]
FinsburyDaniela FleischmannTel: +44 20 7251 [email protected]
Investor Relations
Ashwin BajajDirector – Investor RelationsAnshu GoelVice President – Investor RelationsRadhika AroraAssociate General Manager – Investor Relations
Tel: +44 20 7659 4732Tel: +91 22 6646 [email protected]