Analyst Presentation - Jindal Steel & Power Ltd7.4 lakh MT Crude steel production in Q1 FY 15 – increase of . 4%. over Q1 last year 7.5 lakh MT sold Q1 in FY 15 – increase of

Q1 FY’15

Analyst Presentation

6th August, 2014

DISCLAIMER

This presentation may contain certain forward looking statements concerning JSPL’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements.

The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and the target countries for exports, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions with respect to investments, fiscal deficits, regulations, etc., interest and other fiscal costs generally prevailing in the economy. Past performance may not be indicative of future performance.

The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company.

2

Jindal Steel & Power Limited

HIGHLIGHTS

INDIAN

ECONOMY AT A

GLANCE

Q1

FY’15

INDUSTYRY

DEVELOPMENTS

OPERATIONAL

PERFORMANCE

FINANCIAL

PERFORMANCE

PROJECTS

UPDATE

3

PRESENTATION OUTLINE


4

Key Highlights: Q1 FY14-15


Standalone EBITDA improves from 25% to 33%.

Standalone PAT margin improves from 7% to 9%.

Finished goods Inventory Reduction by 27%

Finished Steel sales grew by 11%

Retails sales grew by 284%

Captive power generation increased by 29%

7.4 lakh MT Crude steel production in Q1 FY 15 – increase of

4% over Q1 last year

7.5 lakh MT sold in Q1 FY 15 – increase of 4% Q1 last year

8% growth in NSR of Steel in Q1 FY 15 vs Q1 FY 14

Over 25% growth in Retail Dealer network from March 2014

1.24 lakh MT steel exported - increase of 6% over Q1 last

year

5



Raigarh – Modernization of BF – 1 completed

– Revamp of EAF - 1 completed in 15 days

– Slag Processing plant commissioned

Angul

– Coal Gasification plant commissioned.

– DRI plant commissioned - Production started

– Use of syn gas in Re heating furnace Plate Mill, Lime and Dolo Kilns & SMS

in place of LDO/HSD.

– Started dispatch of CGP By products in the market

Oman

– Jindal Shadeed commissioned its state of the art 2 MTPA Steel Melting

Shop, first & largest integrated Steel Plant in Oman, on 23rd April 2014

6



HIGHLIGHTS

INDIAN

ECONOMY AT A

GLANCE

INDUSTYRY

DEVELOPMENTS

OPERATIONAL

PERFORMANCE

FINANCIAL

PERFORMANCE

PROJECTS

UPDATE

7



8

Indian Economy – Dawn of a NEW ERA (14-15) Likely new Policy trends (1/2)


Economic Growth – Top of the Agenda (5.5 to 6% during FY14-15)

Focus on Inflation Control

Focus on Infrastructure & Manufacturing

De –Regulation of Economy

Divestment of Public Sector

Dilution of “Land Bill” for Infrastructure & Housing

Speedier “Environmental & Forest Clearances”

Reduction of Subsidies

9

Indian Economy – Dawn of a NEW ERA (14-15) Likely new Policy trends (2/2)


Reduced size of Government

Enhanced participation and ownership of foreign companies

Simplification of Tax Regime & introduction of GST

Larger role and delegation for State Government

Increased E - Governance

Empowerment & accountability of Bureaucracy

Transparency in allocation of Mines & Minerals

10

IIP


In Apr'14 IIP grew by 3.4% while in May'14 it rose 4.7% (the highest since October 2012)

Improved performance of manufacturing, mining and power sectors and higher output of capital goods

11

IIP sector wise


General Manufacturing

Electricity Mining

-0.60

0.10

-1.90 -0.50

3.40

4.70

Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

-1.60 -0.70 -3.70 -1.20

2.60

4.80

7.50 6.50

11.50

5.40

11.90

6.30

Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

0.40 0.70

1.40

-0.40

1.20

2.70

12

Positive Indications


Index of 8 core industries grows at 7.3% in June, fastest since October last year

Electricity Sector: Latest estimates show growth at 15.7% in June, compared with 6.3% in May

Steel Sector: Growth of 4.2% in June as compared to 2% in May

Cement Sector: Grew at 13.6% in Jun against 8.7% in May

Economic Survey expects India's economy to expand by 5.4 - 5.9% this fiscal

Copyright @ 2014 Jindal Steel & Power Limited 13

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HIGHLIGHTS

INDIAN

ECONOMY AT A

GLANCE

Q1

FY ‘15

INDUSTYRY

DEVELOPMENTS

FINANCIAL

PERFORMANCE

FINANCIAL

PERFORMANCE

PROJECTS

UPDATE

14

Asia’s dominance in Global Steel Space


971

1343

1607

2003 2008 2013

Crude Steel Production

Rest of World

Asia67% 58%

46% Fig: Mega Tonne

186

336

515

175

247

302

151

195 225

88

126 132

30

43 58

2003 2008 2013

Per Capita Finished Steel Consumption (Kg)

China

Russia

World

Brazil

India

885

1221

1481

2003 2008 2013

Finished Steel Consumption

66% 58%

51%

Finished Steel Consumption

2003 - 13 CAGR

World 5.30%

Rest of the World (ex Asia) 1.50%

Asia 8.00%

China 11.3%

India 8.30%

Rest of Asia 1.50%

- Asia accounted for 90% of the average incremental consumption during the decade - CY 13: Asia accounted for more then 66% of Crude production & Steel consumption

Jan – June Global Steel performance


801

540

84

54.4 59

23 13 8

821

555

87

53.9 60

22 14 8

World Asia EU CIS North America South America Middle East Africa

MillionTonne

Jan - June '13 Jan - June '142.5%

2.9%

3.8%

1.7%

9.3% 1.2%

1 %

2.6%

Production

Production trend of Indian Steel Industry

77

20 20

81

21 21

CY (12 Vs 13) Jan-March (13 Vs 14) April-June (13 Vs 14)

India

India: - Steel production (April- June’14) up by 1.1% (y-o-y) - Steel production (Jan- April’14) up by 1.6% (y-o-y)

5.0%

1.6% 1.1%


Price trend – Long products


April ‘14 – July ‘14: Price movement: Domestic Prices: - TMT & WR prices on

uptrend. International Prices: - ~ 9% decrease in TMT (FOB

China) - ~ 5% decrease in Wire rod

(FOB China)

440

460

480

500

520

540

560

30000

32000

34000

36000

38000

40000

42000

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Last week Latest

Pri

ces

( R

s/M

T-B

asic

)

Price Movement : TMT & Wire Rod Domestic (Delhi-Rs/MT) Vs International ($/MT)

TMT Rebar-Delhi

Wire Rod-Delhi

TMT Rebar-FOB China

Wire Rod -FOB China

Domestic

International

Price trend – Flat product


April ‘14 – July ‘14: Price movement: Domestic Prices: - 1-1.5 % decrease in HRC - 1-2% decrease in Plate International Prices: - ~1-2.5 % decrease in

HRC & Plate (FOB-China)

500

505

510

515

520

525

530

535

540

545

550

34000

35000

36000

37000

38000

39000

40000

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Last week Latest

Ex W

/Y R

s/M

T

HRC & Plate Price Movement : Domestic (Delhi -Rs/MT) & International (FOB China - $/MT)

HR Coil-Delhi

HR Plate-Delhi

HR Coil-FOB China

HR Plate-FOB China

International

Domestic

HIGHLIGHTS

INDIAN

ECONOMY AT A

GLANCE

Q1

FY ‘15

INDUSTYRY

DEVELOPMENTS

OPERATIONAL

PERFORMANCE

FINANCIAL

PERFORMANCE

PROJECTS

UPDATE

19



20

Business Achievements…


In FY14 In FY 15

5.5 MTPA

2800 MW

~2x

~2.8x

2 MTPA add

Steel - India 3 MTPA

Power 1000 MW

Oman 0 MTPA

Pellet 4.5 MTPA 9 MTPA ~2x

In terms of Capacity addition ..another JSPL is added to JSPL

21

JSPL - Raigarh


12,100 Cr. 3.5 MTPA Liquid Steel 2.35MTPA Finished Steel 851 MW 5200 Investment Capacity Steel Power Workforce

22

Process Flow Diagram - Raigarh


23

JSPL - Angul


18500 Cr. + 1.5 MTPA Steel 1.2 MTPA Finished Steel 810 MW 2723 Investment Capacity Capacity Power Workforce

24

Process Flow Diagram - Angul


Product usage

Ship Building Line Pipes High End Structural

Boilers Wind Mills Engineering Pressure Vessels

Coal Gasification Gas Based DRI EAF

Plates Plate Mill Slab Caster

Link Link Link

Link Link Link

25

JSPL - Patratu


1,764 Cr. 1.6 MTPA Finished Steel 1373 Investment Capacity Workforce

26

Process Flow Diagram – Patratu


Bar Mill Processing Panther TMT Rebar

WRM Processing Wire Rod

Rebar Service Centre Processing Taking Shape Cut & Bend

27

JSPL - Barbil


2,388Cr. 9 MTPA Pellet 660 Investment Capacity Workforce

28

Process Flow Diagram – Pellet Plant


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Steel - Production & Sales


7.4 lakh MT Crude

steel production for

Q1 FY 15 (4% growth

over Q1 last year)

7.5 lakh MT sold in Q1

FY 15 (4% increase

over Q1 last year)

7.7

6.9

7.7 7.9

7.1

7.4

8.2

7.3 7.4

6.0

6.5

7.0

7.5

8.0

8.5

Q1 Q2 Q3 Q4

Production of Crude Steel (in Lakh MT)

FY 13 FY 14 FY 15

6.3 6.8

7.9

9.7

7.2 8.0 8.1 8.2

7.5

-

2.0

4.0

6.0

8.0

10.0

12.0

Q1 Q2 Q3 Q4

Total Sales (in Lakh MT)

FY13 FY14 Fy 15

30

Product wise Steel Sales


89

57

13 17

10

142

79

145

147

96

63

6

18 13

143

93

128

166

-

20

40

60

80

100

120

140

160

180

200

Structural MLSM Conv Wld Beam Rail TMT Wire Rod Semis Plates

Q1 FY 14 Q1 FY 15

Growth uniform across products

(volume in 000’ MT)

31

Focus on growth in Exports


19

104

140

170

119

138

150 141

124

-

20

40

60

80

100

120

140

160

180

Q1 FY 13 Q2 FY 13 Q3 FY 13 Q4 FY 13 Q1 FY 14 Q2 FY 14 Q3 FY 14 Q4 FY 14 Q1 FY 15

Export Sales (in MT) 4% growth in Export Sales in Q1 FY 15 (vs Q1 FY 14)

32

JSPL’s Retail – Another Quantum jump


682 3,534 7,359

17,845 17,092 19,832

35,315

51,899

65,773

93,325

118,225

159,025

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Q1 FY 13 Q2 FY 13 Q3 FY 13 Q4 FY 13 Q1 FY 14 Q2 FY 14 Q3 FY 14 Q4 FY 14 Q1 FY 15 Q2 FY 15 Q3 FY 15 Q4 FY 15

Retail Sales (MT)

65,773 MT Channel sales in Q1FY 15 26% Growth in Retail Sales volume

over Q4

33

JSPL’s Retail – Network growth


Growth in Distributor Network (from 5 – 41)

Growth in Dealer Network (from 267 to 1472)

5

15 17 20 23 25 25 30

40 41 41 41 41 41 41 41

0

20

40

Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

267 357 495 511 532 571 653 721 759

955 1014 1128 1216 1261 1360

0

200

400

600

800

1000

1200

1400

Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

1472

34

OVERSEAS OPERATIONS – Q1 UPDATE


Production HBI (MT): 353,727 Sales (MT): 312,046 Sales (Million USD): 111 EBITDA (million USD): 22

OMAN

Production (MT): 69,914 Sales (MT): 59,166 Sales (Million USD): 6 EBITDA (million USD): (1)

SOUTH AFRICA

Production (MT): 111,565 Sales (MT): 99,616 Sales (Million USD): 7.5 EBITDA (million USD): (5)

MOZAMBIQUE

Production (MT): 42,145 Sales (MT): 85,636 Sales (Million USD): 15 EBITDA (million USD): 3

Wollongong Coal Ltd

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HIGHLIGHTS

INDIAN

ECONOMY AT A

GLANCE

Q1

FY ‘15

INDUSTYRY

DEVELOPMENTS

OPERATIONAL

PERFORMANCE

FINANCIAL

PERFORMANCE

PROJECTS

UPDATE

36

Financial results – standalone Q1 FY15


Particulars (Rupees in Crores) For the Quarter ending %

30.06.2014 31.03.2014 30.06.2013 Y ON Y Q ON Q

Turnover-Total 3,584 3,813 3,425 4.6% -6.0%

EBITDA 1,192 972 848 40.6% 22.7%

Depreciation 415 316 304 36.8% 31.6%

Finance costs 428 405 232 84.8% 5.8%

PBT 370 385 319 16.2% -3.9%

Profit after Tax 306 431 239 28.2% -28.9%

Cash Profit 786 777 555 41.4% 1.1%

CAPEX 720 1,101 1,228

37

Financial Ratios – standalone Q1 FY15


Ratio (%) 2014-15 2013-14 2013-14 2013-14

Q1 Q4 Q1 Annual

Raw Material to turnover 26.7 31.6 34.8 32.5

EBITDA to turnover 33.3 25.5 24.7 27.6

Profit before tax to turnover 10.3 10.1 9.3 11.0

Profit after tax to turnover 8.5 11.3 7.0 8.9

Debt Equity Ratio 1.8 1.8 1.6 1.8

Current Ratio 0.7 0.9 1.0 0.9

Interest Service Coverage Ratio 2.1 2.2 2.4 2.2

Debt Service Coverage Ratio 1.2 1.3 1.8 1.3

38

Financial results – Consolidated Q1 FY15


30.06.2014 31.03.2014 30.06.2013 Y ON Y Q ON Q

Turnover-Total 4,978 5,267 4,540 9.6% -5.5%

EBITDA 1,626 1,314 1,305 24.6% 23.8%

Depreciation 667 514 422 58.2% 29.8%

Finance costs 535 423 268 100.1% 26.5%

PBT 517 396 669 -22.8% 30.4%

Profit after Tax 402 378 501 -19.8% 6.2%

Cash Profit 1,149 947 929 23.7% 21.3%

CAPEX 2,172 2,832 2,568

Particulars (Rupees in Crores)For the Quarter ending %

39

Financial Ratios – Consolidated Q1 FY15


FY15 FY14 FY14 FY14

Q1 Q4 Q1 Annual

Raw Material to Turnover (%) 26.9 29.5 30.7 31.1

EBITDA to turnover (%) 32.7 24.9 28.7 28.9

Profit before tax to turnover (%) 10.4 7.5 14.7 12.6

Profit after tax to turnover (%) 8.1 7.2 11.0 9.5

Debt Equity Ratio 1.7 1.7 1.3 1.7

Current Ratio 0.8 0.8 1.0 0.8

Interest Service Coverage Ratio 2.3 2.7 3.4 2.7

Debt Service Coverage Ratio 1.4 1.6 3.0 1.6

Ratio

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HIGHLIGHTS INDIAN

ECONOMY AT A

GLANCE

Q1

FY ‘15

INDUSTYRY

DEVELOPMENTS

OPERATIONAL

PERFORMANCE

FINANCIAL

PERFORMANCE

PROJECTS

UPDATE

41

Raigarh Blast Furnace - I


42

Jindal Shadeed, Oman


43

Jindal Shadeed, Oman


Barbil Pellet Plant


Angul - Coal Gasification Plant


• India’s largest Coal Gasification Plant • 225,000 NM3/H • Supplier: Lurgi • Designed on high ash coal

Angul -Coal Gasification Plant


Angul - DRI, SMS, Plate Mill


Angul - DRI


Angul – Steel Melting Shop (SMS)


Angul – Plate Mill


• 1.2 MTPA 5m wide Plate Mill • India’s widest Plate Mill • Can roll upto 5m wide Plates • Supplier: Siemens VAI • 1.4 KM long shop

Angul – 6 x 135 MW Captive Power Plant


Angul – 6 x 135 MW Captive Power Plant


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For any information please contact: - D.Balasubramanyam – Head of Investor Relations Tel: - 011-26739166 Mobile: - 8130755166 Email: - [email protected] Ms. Pallavi Kumari – Investor Relations Tel : - 011-26739165 Mobile:-8800094171 Email: - [email protected]

THANK YOU

Documents

Analyst Presentation - Jindal Steel & Power Ltd7.4 lakh MT Crude steel production in Q1 FY 15 – increase of . 4%. over Q1 last year 7.5 lakh MT sold Q1 in FY 15 – increase of