jindal steel and power ltd - · pdf filejindal steel and power ltd ... jsw steel/jsw energy...

May, 2015

Jindal Steel and Power Ltd

Investor Presentation

Copyright @ 2015 Jindal Steel & Power Limited 1

Jindal Steel & Power Limited Building the Nation of Our Dreams

Aerial View of Raigarh Plant Copyright @ 2015 Jindal Steel & Power Limited 2

O P Jindal Group

Jindal Saw Mr. P.R. Jindal

JSL Limited Mr. Ratan Jindal

JSW Steel/JSW Energy Mr. Sajjan Jindal

Jindal Steel & Power (JSPL) Mr. Naveen Jindal


Ownership Structure - O P Jindal Group


Mr. Naveen Jindal – Chairman

• Ranked amongst the Asia’s 25 Hottest People in Business by the Fortune Asia magazine for turning a struggling steel company into one of Asia’s blue-chip giants

• Conferred with the Ernst and Young Entrepreneur of the Year Award 2010 in the field of Energy and Infrastructure

• India’s Best CEO by the BT-INSEAD-HBR Study of the top value creators for the period 1995 to 2011 by the Business Today

• Featured among the top ten of India Inc's Most Powerful CEOs 2011 by IMRB survey for Economic Times-Corporate Dossier

Mr. Ravi Uppal – Managing Director & Group CEO

• Over 36 years of experience in engineering and infrastructure

• Previously whole-time Director and President & CEO – Power at Larsen & Toubro Group. Also held senior positions at ABB and Volvo India.

• Advanced MBA from Wharton, MBA from IIM Ahmedabad, and B.Tech. from IIT Delhi

Mr. Anand Goel – Chief Advisor

• Over 36 years of experience with the O.P. Jindal Group

• Master's Degree in Business Administration from BITS, Pilani

• Member of the National Steel & National Mining committees of FICCI and National Mining Committee of CII

Group Executive Committee - JSPL

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Mr. Rajesh Bhatia – CEO Global Ventures

• Over 25 years of experience in the field of Finance, Accounts, Taxation, Administration, Commercial and Business Development.

• Played an important role in JSPL's overseas acquisitions in Australia, Indonesia, South Africa, Mozambique, Madagascar, Mongolia & Oman, apart from arranging financing from domestic and international lenders for various projects.

Group Executive Committee - JSPL

Mr. V K Mehta – ED Marketing

• Over 36 years of experience in marketing

• Previously, he was working with SAIL, Kolkata as its Executive Director,, Marketing and was also on the Board of Directors of Mjunction and SAIL-SCI Shipping Co.

Mr. Rajeev Bhadauria – Director Group HR

• More than 28 years as an HR professional across Public and Private sectors

• Previously President HR – Reliance ADA Group and Regional HR head – NTPC

• Post Graduate in Industrial Relations from the Power Management Institute, NTPC and LLB from Allahabad University

Group Executive

Committee

Senior Management Committee

Core Management

Team

UniCo

For each Location

ManCo

For each Business

Business Segments

Global Ventures

Mines & Minerals

Power

Steel & Cement

Moving Towards Plural Leadership

Strategic Governance Structure Operational Governance Structure

Implementation of Strategic & Operational Governance Structure


Steel & Cement

Power Mines & Minerals

Global Ventures

Current Capacities – Domestic & Global

Business Segments

5.75 MTPA Steel* 3.11 MTPA* 5085 MW 2 MTPA Steel 6.20 MTPA-

Mining * Domestic ** Includes 600 MW - synchronized & will be commissioned in FY16 *** Light Gauge Steel

Construction Material &

Solution

Cement/

Road solutions/ LGS***


Capacity in deail

Raigarh

SMS 3.25MTPA

BF 1.67 MTPA

DRI 1.32 MTPA

Plate Mill 1.00 MTPS

RUBM 0.75 MTPA

MLSM 0.70 MTPA

CPP 851 MW

Angul

SMS 2.5 MTPA*

DRI 1.8 MTPA

CGP 225,000 Nm3/Hr

Plate Mill 1.2 MTPA

CPP 810 MW

Barbil

Pellet Plant

9 MTPA

Patratu

WRM 0.60

MTPA

Rebar Mill 1.0 MTPA

Oman

SMS 2.0 MTPA

HBI 1.5 MTPA

JPL

Tamnar 2800 MW

Tamnar 600** MW

Mining

Iron Ore 3.11

MTPA

Coal Overseas

6.20 MTPA

Capacity at a Glance – Plant wise

* Rated Capacity ** To be commissioned

Power Hot Metal Liquid Steel Finished Steel


Investment Rationale

• Ability to secure raw materials - ensuing coal block & Iron ore auctions.

• Superior Diverse Product profile - Large Global Resource base.

• Strong market position - supported by recently commissioned capacities in Steel & Power.

• Ability to Sweat enhanced capacities - generate Higher revenue in FY16 and beyond.

• Diversified Cash flows and Group’s healthy financial flexibility.

• Attractive Valuation - Intrinsic value of the company – in Steel (45K Cr) and Power (20K Cr) not reflected in its market cap (14K Cr*).


Shareholding of JSPL from FY11 to FY15

Number of share holder s (Retail /HNI) increases by 15% in 2Q FY15

31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15

Promoters 58.41% 58.91% 59.13% 60.41% 60.41% 60.48% 61.10% 61.29%

Institutional Investors 29.54% 28.96% 27.45% 26.45% 27.15% 25.91% 23.59% 22.66%

Public and other share holding 12.05% 12.13% 13.42% 13.14% 12.44% 13.61% 15.32% 16.05%

Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Number of share holders 1,23,842 1,26,678 1,32,311 1,35,593 1,35,237 1,55,060 1,67,846 1,66,370

1,23,842 1,26,678 1,32,311 1,35,593 1,35,237 1,55,060

1,67,846 1,66,370

-

50,000

1,00,000

1,50,000

2,00,000

31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15

Number of share holders

Number of share holders


JSPL - Raigarh

3.25 MTPA Liquid Steel 2.45MTPA Finished Steel 851 MW Capacity Steel Power


13

Rail Universal Beam Plant, Raigarh

Plant Installed

Capacity (Ton)

Covered area (Sq. Mts)

Angul (Odisha)

84,000 32,000

Plant Installed

Capacity (Ton)

Covered area (Sq. Mts)

Punjipatra (Raigarh)

1,20,000 60,000

Structural Steel Division


JSPL - Angul

2.5 MTPA Steel 810 MW Capacity Power


2.3 MTPA – SMS Concast 8 strand billet caster

DRI Plant, Angul


Key Features of DRI & CGP at Angul

1) The DRI - Coal Gasification route is being used

for the first time in the world and has the

advantage of using high ash coal.

2) The technology of Coal Gasification Plant has

been taken from Lurgi( South Africa and Germany)

for producing syn gas from coal using a process

known as - Fixed bed dry bottom coal gasification

process.

3) The DRI plant is the first ( Technology - Midrex

USA) in the world to produce cold/hot DRI using

synthesis gas.


Special Grade Plates – Angul

Developed steel grades for various critical applications like boilers, ship building,

petroleum pipes, high strength grades for automotive and earth movers, structural steel

for oil exploration platforms, grades for making warships , ballistic launch applications

and bullet proof vehicles, stainless steel low thickness plates for nuclear application


JSPL - Barbil

9 MTPA Pellet Capacity


JSPL - Patratu

Wire Rod- .60 MTPA Bar Mill- 1.00 MTPA

Finished Steel = 1.60 MTPA


Logistics in JSPL

Capable of handling 35 MTPA of cargo.

Good connectivity to all our plants.

IR’s approval for purchase of special rakes for transportation of 260m. Long rails under SFTO policy- for DFC project.

Getting dedicated BOY rake for iron ore fine transport for Nayagarh to Barbil.


Fabricated Structures Hot Rolled Plates

and Coils Parallel Flange Beams

Wire Rods Power

Angles and Channels

TMT Rebars Rails

JSPL Product Range


23

• Fixed Price

• Fixed Length

•Fixed Weight

Foray into retail space…

43 DISTRIBUTORS

31 JSPL sales team 1747 Dealers

28 out of 29 states

264 Distributor ASOs

5 out of 7 Union territories

450 districts out of 671

Key Customers


COUNTRY / PRODUCT WISE PERFORMANCE 2014 -15

USA/CANADA, 24%

MEXICO, 4%

AFRICA, 5%

NEPAL/ BANGLADESH/ SRILANKA,

24%

EU, 0%

MIDDLE EAST, 42%

S.E ASIA, 1%

SEMIS

STRUCTURAL

PREFAB

RAIL

PLATE

WRT/TMT


Continued Impetus on Construction Material and Solution business

Speed Floor 6000 MT pr annum

LGS 12000 MT pr annum

Cement 0.7 MTPA

Road Stabilizer

0.7 MTPA

Bricks & Pavers

3.7 Lakh/day

EPS Panels

1.9 Lakh Sqm pa

LWA

3 Lakh m3 pa

Welded Mesh 12000 MT pr annum

Cut & Bend 48000 MT pr annum

26 29 May 2015 V1 Ravi Uppal

BACK

Power Capacity at a glance


311 MW

96.43% subsidiary of JSPL

JINDAL POWER LIMITED

EUP -I 1000MW (4 X 250)

EUP -II 1200MW (2 X 600)

EUP -III 1200MW (2 X 600*)

*600 MW Synchronized, Await Commissioning


Particulars Net Sales

(Cr.) PAT (Cr.)

Generation (MU)

PLF

Year 2014-15 3228 (171) 10636 93% (EUP 1)

Year 2013-14 2457 1107 8282 92%

Year 2012-13 2510 1113 7973 91%

Year 2011-12 3,040 1765 8589 98%

JPL Financials


JPL Financials – 4QFY 15 & FY14-15

Particulars FY FY Growth

(%)

Quarter 3 Growth (%) 2014-15 2013-14 2014-15 2013-14

Turnover 3,228 2,457 31% 774 539 43%

EBITDA 1,653 1,511 9% 335 280 20%

EBITDA% 51% 62% - 43% 52% -

PBT (Before Exceptional) 1106 1407 -21% 213 275 -23%

PBT 2 1407 178 275

PAT (171) 1107 97 218

Depreciation + Amortization

521 274 90% 131 74 77%

Cash Profit 543 1411 313 299

Generation (million units)

10636 8282 28% 2692 1882 43%

PLF (%) - 4X250 MW 93% 94% - 82% 85% -

PLF (%) - 3X600 MW 21% NA NA 24% NA NA


Evacuation of Power

These Transmission Lines would help in evacuation of Power for JPL

Region

Present Inter-Regional Transfer Capacity

Anticipated transmission capacity addition

Available Transfer Capacity

LTA/MTOA Transmission line name Additional Capacity

Time frame

Chhattisgarh Area

(W#3) 9700 MW 6862 MW 765 kV D/C Raipur -Wardha Line-I 2500MW Commissioned

765 kV D/C Raipur -Wardha Line-II 2500 MW Jun'15

WR to NR 4900 MW 5157 MW 765 kV Gwalior -Jaipur Line - I

2500 MW Aug’15

765 kV Gwalior -Jaipur Line - II

Champa-Kurukshetra HVDC Line 3000 MW June’16

WR to SR 1550MW 1350 MW 765kV D/C Kolhapur-Narendra line 1940 MW Oct'15


Corporate Office, Jindal Africa Copyright @ 2015 Jindal Steel & Power Limited 32

Developing a coal mine

(3 MTPA) in

Mozambique’s coal-rich

Moatize region

Coal resources

estimated at 1.2 bn

tonnes including coking

coal

Mozambique, Africa

JSPL’s Kiepersol Colliery produces Anthracite

coal, sold domestically and internationally Plans

to ramp up capacity

South Africa, Africa

Botswana, Africa Acquired CIC Energy in 2012 for 120 mn USD

Coal Mine with Resource of over 3 bn MT (high

grade thermal coal)

Proposed Cement Plant

Madagascar, Africa

Acquired 82.04% controlling

stake in Wollongong Coal

(Erstwhile Gujarat NRE coking

coal Limited)

Australia

1.5 MT HBI & 2 MT SMS Plant –

plans to make it an Integrated

Steel Plant

Shadeed, Oman Medium to large size

deposits of prime hard

coking and low ash – low

sulphur thermal coal for

open-cast operation

Indonesia, Asia

Summary of International Operations


OMAN

OVERSEAS OPERATIONS – FY15 & Q4 FY15

SOUTH AFRICA

MOZAMBIQUE WOLLONGONG COAL Ltd


Particular 4QFY15 FY15

Production HBI (MT) 368,690 14,19,671

Production Steel* (MT)

189,757 534,211

Sales HBI (MT) 122,513 783,324

Sales Steel (MT) 166,136 490,071

Sales (Million USD) 111 512

EBITDA (million USD) 32 119

PAT (Million USD) 6 52


Production ROM (MT) 169,026 501,051

Production Prime Products/Middling

121,131 378,534

Sales Prime Products/ Middling (MT)

107,835 461,481

Sales (Million USD) 7.22 36.33

EBITDA (Million USD)

(2.12) (0.54)


Production (ROM MT) 288,157 1,312,400

Sales Coking Coal (MT) 93,563 306,280

Sales (Million USD) 9.00 37.45

EBITDA (Million USD): (5.20) (13.47)


Production (MT) 39,172 175,585

Sales (MT) Nil 171,202

Sales (Million USD) -- 18.87

EBITDA (Million USD): -- (17.96)

- - 29 May 2015

Oman

- -

South Africa

Underground Anthracite and Lean Bituminous Coal mine


- -

Wollongong Coal Ltd.- Australia

• DRI Production : 1.5 MTPA gas based Midrex Technology

• Major products : HBI & HDRI

• Rolling Mill expected to be commissioned by Jan 2015

• SMS Production : 0.5 MT in FY15

• Highest Plant & Operational availability in 2014

Sohar, Oman


• Potential Resource: 2 bn MT

• Grade: Semi Hard coking coal , High Grade Thermal Coal

• Current Mining @ 3 MTPA run rate

• 3 MTPA Coal Washery commissioned

Mozambique, Africa


Unique unmatched location with significant strategic advantages

Unique Geographic Location

• Wollongong (80 kms. South of Sydney) • Experienced mining

community available

• Port Kembla: Less than 20 kms with sufficient coal handling and Cape size capacity

• Easy and reliable

connectivity through Rail and Road

Wollongong Coal Limited- Australia


• Southern Africa head office is based in Johannesburg, South Africa

• Operations include Kiepersol Colliery outside the town of Piet Retief in Mpumalanga province

• The mine produces high-quality anthracite coal, sold nationally and internationally

• Underground mining which can be expanded to 1.2 MTPA capacity annually

South Africa, Africa


Thermal Coal Asset

• Large size deposit of low ash – low sulphur thermal coal for open cast operation

• Coal mining license obtained in 2009 for 10 years till March 2018 for over 35.9 square Kilometres

• Permit received from the Ministry of Forest for the entire concession area

• MoU signed with Bupati Barito to develop road for coal hauling

• 139 hectares acquired for the first phase of mining

• Acquired 17.7 hectares for the development of captive coal terminal for coal handling and

barge loading at Barito River

Coking Coal Asset

Exploration License over 100 square kilometre in Central Kalimantan

Medium to large size deposits of prime hard coking and thermal coal for open-cast operation Pit Sampling

Indonesia, Asia


Consolidated Financials at a Glance


FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

INCOME STATEMENT

Revenue 5,539 10,913 11,152 13,194 18,351 19,807 19,286 19,401

EBITDA 2,253 5,908 5,232 6,398 6,935 6,669 5,776 5,483

PAT 1,251 3,007 3,635 3,804 4,002 2,912 1,894 -1,278

Cash Profit 1,810 4,194 4,760 5,115 5,575 4,593 3,876 2,064

BALANCE SHEET

Gross Block 10,680 14,928 21,109 29,317 35,802 45,912 63,056 70,301

Net Worth 3,824 7,021 10,387 14,088 17,931 21,150 21,191 19,306

Borrowings 6,996 8,113 8,605 13,987 17,058 24,618 36,368 45,501

Net Debt 6,225 7,091 8,436 12,854 15,616 24,430 35,419 42,929

SIGNIFICANT RATIOS

EBITDA Margin (%) 41 54 47 48 38 34 30 28

Net Profit to Sales (%) 23% 28% 33% 29% 22% 15% 10% -7%

Return on Net Worth (%) 34% 43% 35% 27% 22% 14% 9% -13%

Long Term Debt Equity

Ratio1.74 1.03 0.59 0.7 0.61 0.77 1.29 2.17

EPS (INR/Share) (a) (b) 13.54 32.44 39.05 40.75 42.42 31.13 20.53 -14.00

(Exceptional Item in FY15 = Rs. 1,912 Cr)

Financial Results – Standalone FY15

Higher interest depreciation costs drags profitability


Particulars (Rupees in Crores) For 12M ending

31.03.2015 31.03.2014

Turnover-Total 13,390 13,826

EBITDA 3,943 4,012

EBITDA % 29% 29%

Depreciation 1,786 1,221

Finance costs 2,072 1,337

Profit before tax & exceptional item 168 1,601

Exceptional item 808 -

Profit before Tax (639) 1,601

Profit after Tax (PAT) (311) 1,292

Cash Profit after exceptional item 1,844 2,644

CAPEX 3,249 5,514

Financial Results - Consolidated FY15

Exception Item (levy on coal) results in loss on consolidated basis.

*Adjusted


Particulars (Rupees in Crores) For 12M ending

31.03.2015 31.03.2014

Turnover-Total 19,401 19,286

EBITDA 5,483 5,776

EBITDA % 28% 30%

Depreciation 2,733 1,829

Finance costs 2,607 1,501

Profit before tax & exceptional item 369 2,512

Exceptional item 1,912 -

Profit before Tax (1,543) 2,512

Profit after Tax (1,278) 1,910

Cash Profit after exceptional item 2,064 3,876

CAPEX 5,705 11,520

Way Forward


Capital Efficiency

Major drive on “Customer Focus” & Key Account Management

Exit from “Non Core” & “Non Performing” businesses

Maximize Asset Utilization & drive Operational Excellence


Organizational Priorities

Reduce dependence on thermal coal by going through BoF route.

Operational Efficiency with an aim to Reduce overall costs in Steel

production.

Commissioning of Head Hardening Rail project in Raigarh

Optimize capacity utilization of Angul and Patratu plants

Increase steel product sales in contiguous states.

Steel Business

Key Focus Areas in FY16


Secure permission for movement of Fe fines stockpile to JSPL Barbil

Participate in the Auctions of coal blocks (phase 3) and Iron ore mines.

Ensuring coal & Iron ore availability through participation in E-auction

Mines & Minerals

Ensuring adequate coal procurement for JPL.

Signing of Bilateral ,short and long Term PPA’s.

Power Business



Increase Production in WCL Mine, Australia .

Cash Break Even in Mozambique, WCL Mine.

Global Business

Increasing Turnover exponentially by Sweating of enhanced capacitates.

Generate higher EBITDA as a number to bring down Net Debt.

Look at avenues to generate Cash flow through non operational route.

Financial / General



Making Sustainability a Focus Priority


9 PILLARS OF CSR

A Responsible Corporate Citizen


A Responsible Corporate Citizen


• Central Electricity Authority (CEA) confers JPL with

Top awards for “Early Completion of Thermal Power

Projects” for FY 13-14 under a scheme by MoP.

• Gold Shield awarded to Unit -2 of 600 MW.

• Silver Shield awarded to Unit-1 of 600 MW .

.

Recent Award and Accolades for JPL


2014 Shrishti Global Award -2014 Global HR Excellence Award-2014

2013 International Safety Award with merit 2014 by British Safety Council, UK. World CSR Congress Award 2013 Greentech CSR Award 2013

2012 Golden Peacock National CSR Award 2012

2011

Ranked No.1 as Wealth Creator in India over a 10- year period (Business World)

Awarded the Dun & Bradstreet- Rolta Corporate Awards 2011

Ranked 3rd in the Metals Category of Business World’s India’s Most Respected Companies Survey

Received the Forbes Asia’s ‘Fabulous 50’ International Award

Golden Peacock Innovation Management Awards

Greentech Award for 1st Position in Metal & Mining Industries

World HRD Congress CSR Award on women empowerment

2010

Rated the World’s 2nd Largest Value Creator by Boston Consulting Group (BCG), based on Total Shareholder Return from 2005-2009, and the largest Value Creator in Mining and Materials category

Received the Forbes Asia’s ‘Fabulous 50’ International Award

Golden Peacock Innovation Management Awards

CSR Excellence Award 2010 by ASSOCHAM for promoting and propagating Corporate Social Responsibility initiatives

2009

Received the CNBC’s Most Promising Entrant into the Big League at IBLA

National Energy Conservation Award

Golden Peacock Innovation Award 2009

Winner of ‘Shrishti Green Cube Award 2009

SAIL HR Excellence Award 2009

Other Award and Accolades


SAFETY INDUCTION ON-THE-JOB SAFETY TRAINING

SAFETY REVIEWS SAFETY AUDITS / INSPECTIONS

Health & Safety Best Practices


TOOL BOX MEETINGS SAFETY AWARDS/REWARDS

MEDICAL EXAMINATIONS/ WORLD CLASS PPEs MOCK DRILLS

Health & Safety Best Practices


RMHS - Angul


Railway Siding- Angul


Oxygen Plant- Angul


Jindal Shadeed, Oman – Rolling Mill under Construction


Jindal Shadeed, Oman -Rolling Mill under Construction


JPL – 4x600 MW


Marketing Network


Mr. D.Balasubramanyam Head of Investor Relations Tel: 011-26739109, Mobile: 8130755166 Email: [email protected]

For any information please contact : -

Mr. Nishant Baranwal Investor Relations Tel: 011-26739178, Mobile: 8800690255 Email: [email protected]


THANK YOU


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