analyst meet presentation · 2017. 4. 28. · net imports apparent finished steel consumption grew...

1

Analyst Meet PresentationQuarter Ended March 31, 2012

2

Agenda

Business Environment

Operational Performance

Projects Update

GuidanceFinancial Performance

3

Agenda



Projects Update


4

2012 growth outlook is cautiously optimistic

Global economy: a multi-speed world

Source: IMF, Reuters, JSW Steel

US continues to recover albeit slowly

EU is in mild recession with re-emergence of sovereign debt issues

China growth has slowed down to 8.1% in Jan-Mar 2012

Asia is exposed to downside risk with weak external demand

Purchasing manager’s index and Industrial production data lack clearindication

30

40

50

60

70

80

Ap

r-0

7

Oct

-07

Ap

r-0

8

Oct

-08

Ap

r-0

9

Oct

-09

Ap

r-1

0

Oct

-10

Ap

r-1

1

Oct

-11

Ap

r-1

2

US Mfg EU China India Japan

Purchasing managers Index

-1%

1%

3%

5%

7%

9%

Wo

rld

AM

Es

EMEs

Euro

Are

a

US

Jap

an

Ch

ina

Ind

ia

Sep 11 Jan 12 Apr 12

GDP growth rate outlook for 2012

-35.0

-25.0

-15.0

-5.0

5.0

15.0

25.0

35.0

Ap

r-0

7

Oct

-07

Ap

r-0

8

Oct

-08

Ap

r-0

9

Oct

-09

Ap

r-1

0

Oct

-10

Ap

r-1

1

Oct

-11

Ap

r-1

2

Euro Zone US Japan China India

Industrial Production (% YoY growth)

5

Global steel scenario

Source: World Steel Association, JSW Steel

World steel demand is expected to grow by 3.6% in CY2012 vs. 5.5% in CY2011

Mar 2012 crude steel production rose to 132.2 million tonnes reflecting seasonal strength

However Jan-Mar 2012 crude steel production grew by only 0.1% YoY to 376.7 million tonnes

Steel demand continues to grow but at slower rate

11

3.4

10

7.1

12

0.9

12

0.5

12

4.6

118.

31

14

.41

13

.11

12

.3 11

7.4

11

4.6

11

6.2

12

8.1

11

8.4

12

9.9

12

6.7

130.

012

7.7

127.

31

24

.31

22

.91

23

.511

5.4

11

7.1 1

23

.61

20

.91

32

.2

64%

68%

72%

76%

80%

84%

85

95

105

115

125

135

Jan

-10

Feb

-10

Mar

-10

Ap

r-1

0M

ay-1

0Ju

n-1

0Ju

l-1

0A

ug

-10

Sep

-10

Oct

-10

No

v-1

0D

ec-

10

Jan

-11

Feb

-11

Mar

-11

Ap

r-1

1M

ay-1

1Ju

n-1

1Ju

l-1

1A

ug

-11

Sep

-11

Oct

-11

No

v-1

1D

ec-

11

Jan

-12

Feb

-12

Ma

r-1

2

World crude steel production (million tonnes) Capacity Utilisation (%)

42

73

94

151

649

1422

-1.5% 0.0% 1.5% 3.0% 4.5% 6.0% 7.5%

Russia

India

US

EU

China

World

Finished Steel Demand Outlook - CY2012 (Bar size shows % YoY

growth whereas figures in bars shows demand in million tonnes)

6

China: shifting focus towards domestic consumption

Source: World Steel Association, MySteel, JSW Steel

GDP growth slowed down to 8.1% in Jan-Mar 2012 due to weakerexternal demand, and slowing FAI and real estate market

Retail sales marginally picked up to 15.2% in Mar 2012, Consumerprice index is much lower than peak of 6.5% in Jul 2011

Public housing, gradual policy loosening and shift of focus towardsdomestic consumption to ensure economic growth rate at +8%

In Mar 2012, finished Steel production grew by 3.6% whereasapparent consumption increase by a 2.7%

Warehouse inventories have fallen in Mar 2012

Chinese economy likely to grow at 8%+ in 2012

-10%

10%

30%

50%

Jan

-09

Ap

r-0

9

Jul-0

9

Oct

-09

Jan

-10

Ap

r-1

0

Jul-1

0

Oct

-10

Jan

-11

Ap

r-1

1

Jul-1

1

Oct

-11

Jan

-12

Apparent Steel Consumption (% YoY)Crude Steel Production (% YoY)

0.10

0.18

0.26

0.34

0.42

-1.0

1.0

3.0

5.0

7.0

Jan

-08

Ap

r-0

8

Jul-0

8

Oct

-08

Jan

-09

Ap

r-0

9

Jul-0

9

Oct

-09

Jan

-10

Ap

r-1

0

Jul-1

0

Oct

-10

Jan

-11

Ap

r-1

1

Jul-1

1

Oct

-11

Jan

-12

Net exports (million tonnes)Months suppply at the warehouses of 25 major cities (RHS)

10

13

16

19

22

3

4

5

6

7

No

v-1

0

Jan

-11

Mar

-11

May

-11

Jul-

11

Sep

-11

No

v-1

1

Jan

-12

Mar

-12

CPI (% YoY) Retail Sales (% YoY, RHS)

7

Raw materials: prices dropped

Source: Steel Business Briefing, Platt‘s, Industry data, JSW Steel(All figures are in USD/tonne)

Raw materials prices looks to be range bound

120

135

150

165

180

195

06-

Jun

-11

04

-Ju

l-11

01-

Au

g-1

1

29-

Au

g-1

1

26-

Sep

-11

24

-Oct

-11

21

-No

v-1

1

19

-De

c-1

1

16

-Jan

-12

13-

Feb

-12

12

-Ma

r-1

2

09

-Ap

r-1

2

07

-May

-12

Indian Iron Ore 63% Fe dry -China CFR

20

9 22

5

33

0

310

28

5

23

5

20

6

160

190

220

250

280

310

340

370

Oct

-10

No

v-1

0

De

c-1

0

Jan

-11

Feb

-11

Mar

-11

Ap

r-1

1

May

-11

Jun

-11

Jul-

11

Au

g-1

1

Sep

-11

Oct

-11

No

v-1

1

De

c-1

1

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

May

-12

Australian HCC Quaterly Contract FOBAustralian Spot HCC FOB

Supply of coking coal from new (Mozambiqueand Mongolia) and un-conventional (US andCanada) sources has quickly found acceptanceamong steel producers

Lower demand growth outlook and absence ofany natural calamity has lead to improvementin supply-demand scenario

HCC contract price have come down to ~$205-210/t for 1QFY12

HCC spot prices dropped below $210/t in Mar2012 but has seen a marginal increase sincethan with BMA’s Force Majeure and seasonaldemand expectations from China

Iron ore prices are range bound

8

Steel prices

Source: Steel Business Briefing, World Steel Dynamics, JSW Steel

Steel prices should remain at current levels

World Hot Rolled Band cost curve

HRC prices in Europe and Asia increased in Jan-Mar 2012 after correcting in Oct- Dec 2011

Inter -regional price spreads are now at sustainable level with recent correction in US market

Steel inventories are at reasonable levels

March 2012 world HRB cost curve supports current steel prices

500

580

660

740

820

900

980

Jan

-10

Ap

r-1

0

Jul-

10

Oct

-10

Jan

-11

Ap

r-1

1

Jul-

11

Oct

-11

Jan

-12

Ap

r-1

2

HR

C p

rice

s (U

SD/t

on

ne

)

North America domestic FOB Europe import CIFRussia export FOB China export FOB

9

31.9 34

.5

34.4 36

.5Flat steel

Consumption*Long Steel

Consumption

FY11 FY12

7.9%5.7%

India steel scenario

Source: Joint plant Committee JSW Steel (All figures are in million tonnes)*Netted off for double counting effect

Indian steel demand growth is expected to track GDP growth

63.3

66.468

.7 70.9

Finished Steel Production*

Apparent Finished Steel Consumption*

FY11 FY12

8.4%6.8%

-0.20

0.00

0.20

0.40

0.60

0.80

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

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1

Jul-

11

Oct

-11

Jan

-12

Ap

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Net Imports

Apparent finished steel consumption grew by 6.8% in FY12, despite very low demandin 1HFY12

Flat steel consumption growth remained higher than long steel consumption growth

FY12 steel imports grew by 2.4% to 6.83 million tonnes whereas steel exports increasedby 11.1% to 4.04 million tonnes

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Agenda



Projects Update


11

Key highlights

Steel for Rear axle shaft & stub axles for MCV & HCV

Steel for Crank Shafts for MCV & HCV

C-Mn Steel for load bearing inner components

Bake Hardened Steel for three wheelers

High Strength Steel for wheel rim applications

New product

approvals

Highest ever crude steel production: 2.07 million tonnes

Highest ever sales volume in a quarter: 2.31 million tonnes

Highest ever gross turnover in a quarter: ` 10,291 crores

Production/sales

Total 18.6 million tonnes of iron ore was sold, out of 25 million tonnesinventory and NMDC production, through e-auctions till Mar 2012 end

The company purchased 10.7 million tonnes of iron ore in e-auctions andreceived 75% of it till Mar 2012 end

Iron ore e-auction

update

12

Karnataka Iron ore update

The Central Empowered Committee (CEC) classified iron ore mining leasesinto three categories viz. ‘A’, ‘B’ and ‘C’

The CEC recommended opening of category ‘A’ and ‘B’ mines

The Hon’ble Supreme Court accepted CEC recommendation for openingcategory ‘A’ mines with certain conditions

Category ‘B’ mines as recommended by CEC, if approved by the Hon’bleSupreme Court, and Category ‘A’ mines together on commencement ofoperation are expected to improve availability of iron ore

13

0.28

0.46

0.37

4QFY11 4QFY12 3QFY12

Rolled : Long

1.33

1.491.39


Rolled : Flat

1.65

2.07

1.94


Crude Steel

YoY % QoQ %

13% 8%

Production – 4QFY12

All figures are in million tonnes

YoY % QoQ %

67% 26%

YoY % QoQ %

26% 7%

14

1.13

1.52

FY11 FY12

Rolled : Long

6.43

7.43

FY11 FY12

Crude Steel

Production – FY12


4.945.36

FY11 FY12Rolled : Flat

YoY %

16%

YoY %

9%

YoY %

34%

15

0.41

0.45

0.41


Value Added1.73

2.31

1.91


Total Sales

Saleable steel sales – 4QFY12


1.39

1.76

1.44


Rolled : Flat

YoY % QoQ %

33% 21%YoY % QoQ %

27% 22%

YoY %

9%

QoQ %

9%

0.070.09

0.10


Semis

YoY % QoQ %

21% -14%

0.27

0.46

0.36


Rolled : Long

YoY % QoQ %

70% 28%

16

4.705.95

FY11 FY12

Rolled : Flat

1.64 1.68

FY11 FY12

Value Added

6.10

7.82

FY11 FY12

Total Sales

Saleable Steel Sales – FY12


0.340.41

FY11 FY12

Semis

1.06

1.46

FY11 FY12

Rolled : Long

YoY %

28% YoY %

27%

YoY %

2%

YoY %

38%

YoY %

19%

17

280

350

31 Mar 2011 31 Mar 20121.40 0.38

Others JSW Shoppe

JSW Shoppe

Rolled: Long

Rolled: HR Products

43%

Domestic sales

excluding semis

(million tonnes,

% Share)

Value Added: Flat

78% 22%

41%

38%

21%

% Share through JSW Shoppe – 4QFY1225%

JSW Shoppe has expanded its footprint to 152 districts

271

384

4QFY11 4QFY12

42%

Sales through JSW Shoppe (In ‘000 tonnes)

No. of JSW Shoppe

18

Agenda



Projects Update


19

Projects' update

3QFY12 4QFY12

CPP -IV (300 MW): commissioned at Vijayanagar in Mar 2012

Beneficiation Plant – 2 (Phase II): will be commissioned in FY13 in phased manner

3QFY12 4QFY12

20

Projects' progress contd..

HSM – 2 (Phase II): will be commissioned by Sep 2012

21

Projects' progress contd..

3QFY12 4QFY12

Cold Rolling Mill -2: will be commissioned by FY14 end

Coke oven plant (at Dolvi for JSW Ispat): will be commissioned by FY14 end

3QFY12 4QFY12

22

Agenda



Projects Update


23

Financials (standalone)

* Not Annualized

Particulars 4QFY12 4QFY11 Growth FY12 FY11 Growth

Gross Turnover 10,291 7,615 35% 34,658 25,092 38%

Net Sales 9,511 7,032 35% 32,060 23,125 39%

Operating EBITDA 1,652 1,653 - 5,631 4,777 18%

EBITDA (` per tonne) 7,149 9,539 7,205 7,832

Other Income 48 61 -20% 179 235 -24%

Finance Cost 368 212 73% 1,186 854 39%

Depreciation 472 383 23% 1,708 1,379 24%

Exceptional Items 199 - (821) -

Profit Before Tax 1,060 1,119 -5% 2,095 2,779 -25%

Tax 307 286 7% 469 768 -39%

Profit after Tax 752 833 -10% 1,626 2,011 -19%

Diluted EPS (`) 33.35* 36.67* 71.42 96.33

ROCE 13.4% 17.9% 11.9% 13.3%

` Crores

24

EBITDA movement – standalone

` Crores

1,653 1,652

519

180

(589) (6)(105)

EBITDA4QFY11

Volume NSR Cost Mix Others EBITDA4QFY12

25

Net debt movement – standalone

` Crores

13,504

12,771

2,209

(1,693)(291)

(958)

Net Debt

as on Dec'11

New Loan Taken Repayments Forex Gain Movement in FD /

MF

Net Debt

as on Mar'12

Particulars 31.03.2012 31.12.2011

Cash & cash equivalent (` Crores) 3,159 2,201

Net Debt/Equity (x) 0.69 0.75

Net Debt/EBITDA (x) 2.27 2.41

26

Particulars Jan-Mar’12 Jan-Mar’11 Sep-Dec’11

Net Sales 2,783 2,648 2,668

EBITDA 294 406 246

Net profit After Tax (141) 70 (309)

Sales (million tonnes) Jan-Mar’12 Jan-Mar’11 Sep-Dec’11

HR Coils 0.61 0.67 0.60

Downstream products 0.10 0.04 0.08

Production (million tonnes) Jan-Mar’12 Jan-Mar’11 Sep-Dec’11

HR Coils 0.59 0.73 0.59

Downstream products 0.10 0.05 0.08

` Crores

Operational performance – JSW Ispat Steel Ltd

27

Particulars 4QFY12 4QFY11 3QFY12

Turnover 105.24 27.75 94.04

EBITDA + Other Income 42.56 4.57 3.59

Profit After Tax 27.66 (16.25) (10.06)

Sales (NT) 4QFY12 4QFY11 3QFY12

Plate Mill 65,795 27,627 66,309

Pipe Mill 24,482 4,875 17,443

Production (NT) 4QFY12 4QFY11 3QFY12

Plate Mill 108,183 12,197 65,956

Utilization (%) 44% 5% 28%

Pipe Mill 22,541 4,776 17,785

Utilization (%) 16% 3% 13%

USD mn

Operational performance – US Plate & Pipe Mill

28

Operational performance – Chile

Particulars 4QFY12 3QFY12

Production (Tonnes) 172,580 191,432

Sales (Tonnes) 101,199 148,040

Turnover 13.58 20.09

EBIDTA 0.89 4.06

Profit Before Tax (1.33) 2.09

Profit after Tax (0.85) 0.89

USD mn

29

Consolidated financials

Particulars 4QFY12 4QFY11 Growth FY12 FY11 Growth

Gross Turnover 10,930 7,792 40% 36,720 25,829 42%

Net Sales 10,153 7,209 41% 34,124 23,862 43%

EBITDA 1,887 1,653 14% 6,102 4,868 25%

Other Income 24 47 -48% 77 190 -60%

Finance Cost 455 259 76% 1,427 1,060 35%

Depreciation 528 429 23% 1,933 1,560 24%

Exceptional Items 200 - - (825) - -

Profit Before Tax 1,129 1,012 12% 1,993 2,438 -18%

Tax 310 288 7% 500 779 -36%

Share of Associates and Minority Interest

(50) 70 (956) 95

Profit after Tax 770 794 -3% 538 1,754 -69%

` Crores

30

17,734

16,644

2,217

(1,959)(457)

(891)

Net Debtas on Dec'11

New Loan Taken Repayments Forex Gain Movement in FD / MF

Net Debtas on Mar'12

Net debt movement – consolidated

` Crores

Particulars 31.03.2012 31.12.2011

Cash & cash equivalent (` Crores) 3,265 2,374

Net Debt/Equity (x) 0.98 1.08

Net Debt/EBITDA (x) 2.73 3.05

31

Agenda



Projects Update


32

1.46

1.80

FY12 FY13 E

Sales: Rolled Long

5.95

6.82

FY12 FY13 E

Sales: Rolled Flat

7.82

9.00

FY12 FY13 E

Saleable Steel Sales

Guidance for FY13


7.43

8.50

FY12 FY13 E

Crude Steel Production

YoY %

23%YoY %

15%

YoY %

14%

YoY %

15%

33

Forward looking and cautionary statement

Certain statements in this report concerning our future growth prospects are forward looking statements,which involve a number of risks, and uncertainties that could cause actual results to differ materially fromthose in such forward looking statements. The risk and uncertainties relating to these statements include,but are not limited to risks and uncertainties regarding fluctuations in earnings, our ability to managegrowth, intense competition within Steel industry including those factors which may affect our costadvantage, wage increases in India, our ability to attract and retain highly skilled professionals, time andcost overruns on fixed-price, fixed-time frame contracts, our ability to commission mines withincontemplated time and costs, our ability to raise the finance within time and cost client concentration,restrictions on immigration, our ability to manage our internal operations, reduced demand for steel, ourability to successfully complete and integrate potential acquisitions, liability for damages on our servicecontracts, the success of the companies in which the Company has made strategic investments, withdrawalof fiscal/governmental incentives, impact of regulatory measures, political instability, legal restrictions onraising capital or acquiring companies outside India, unauthorized use of our intellectual property andgeneral economic conditions affecting our industry. The company does not undertake to update anyforward looking statements that may be made from time to time by or on behalf of the company.

34

Thank you

analyst meet presentation · 2017. 4. 28. · net imports apparent finished steel consumption grew...

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