· pdf file · 2016-03-31projects update operational performance ... / financial...

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Results Presentation Quarter Ended Dec 31, 2012

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Agenda

Business Environment

Projects Update Operational Performance

Financial Performance

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Global economy is expected to grow by 3.5%* in 2013

Global economy

Source: Bloomberg, Industry data * World Economic Outlook update by IMF

Global economic condition appears to have bottomed out, Nov 2012 IP data has turned positive

US – Despite uncertainities on resolution of fiscal cliff and front-loaded tax increases, economy continues to grow

Europe – Economic weakness continues but risk associated to possibility of EU break-up has receded

Japan – Outlook improves with recent fiscal and monetary policy measures

China – Economic stabilization is in progress, GDP grew by 7.9% YoY in Oct-Dec 2012

Policy actions and external trade rebalancing to drive varied pace of growth across markets

-25.00

-15.00

-5.00

5.00

15.00

25.00

Ap

r-07

Sep

-07

Feb

-08

Jul-

08

De

c-08

May

-09

Oct

-09

Mar

-10

Au

g-10

Jan

-11

Jun

-11

No

v-11

Ap

r-12

Sep

-12

Eurozone US Japan China India

Industrial Production (% YoY growth)

4

Indian economy

Source: Central Statistical Organisation, Bloomberg, Reuters, JSW Steel

GDP growth is expected to be ~6% in FY14

Business sentiment has improved on the back of policy reforms/growth inducing measures by GOI

However, measures to contain the twin deficits would be key in the forthcoming budget

Overall WPI has fallen for third successive month; core inflation is below 4.5%

Expectations are ripe for a possible rate cut by the RBI

-3.0

0.0

3.0

6.0

9.0

12.0

Ap

r-07

Au

g-07

De

c-07

Ap

r-08

Au

g-08

De

c-08

Ap

r-09

Au

g-09

De

c-09

Ap

r-10

Au

g-10

De

c-10

Ap

r-11

Au

g-11

De

c-11

Ap

r-12

Au

g-12

De

c-12

Ch

ange

-%

Yo

Y

Overall WPI Core Inflation

-15.0

-7.5

0.0

7.5

15.0

22.5

40

45

50

55

60

65

Jan

-07

Jun

-07

No

v-07

Ap

r-08

Sep

-08

Feb

-09

Jul-

09

De

c-09

May

-10

Oct

-10

Mar

-11

Au

g-11

Jan

-12

Jun

-12

No

v-12

PMI IIP (% YoY, 3 mma, RHS)

5 Source: World Steel Association, Steel Business Briefing * Demand growth outlook by World Steel Association

World crude steel production grew by just ~1.2% in 2012 vs. demand growth estimate of 2.1%*

Capacity utilization has dropped below 75%

Finished steel inventories are low in most of the key markets

During Oct–Dec 2012, average HRC prices fell up to 5% QoQ across key markets (except China)

Global steel demand is expected to improve in 2013

Global steel scenario

60%

70%

80%

90%

85

95

105

115

125

135

Ap

r-10

Jun

-10

Au

g-10

Oct

-10

De

c-10

Feb

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r-11

Jun

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Au

g-11

Oct

-11

De

c-11

Feb

-12

Ap

r-12

Jun

-12

Au

g-12

Oct

-12

De

c-12

World crude steel production (mmt)Capacity Utilisation (%) -RHS

500

560

620

680

740

800

860

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Oct

-12

Jan

-13

HR

C p

rice

s ($

/to

nn

e)

North America Domestic ExW Europe import CIF

Black Sea export FOB China export FOB

6

0

8

16

24

32

40

10

12

14

16

18

20

Ap

r-11

Jun

-11

Au

g-11

Oct

-11

De

c-11

Feb

-12

Ap

r-12

Jun

-12

Au

g-12

Oct

-12

De

c-12

Retail Sales of consumer goods (% YoY)Invt. in real estate development (YTD, % YoY) - RHS

China

Source: World Steel Association, MySteel, National Bureau of Statistics of China

GDP grew by 7.9% YoY during Oct-Dec 2012 vs. 7.4% YoY during Jul-Sep 2012

Both sentiment and economic data have started to improve in China

Retail sales, Industrial production continues to uptrend

PMI, Urban FAI and real estate investment remains steady

Crude Steel production is up 3.1% in 2012, warehouse inventories to finished steel consumption ratio is low

Economic stabilization is in progress

350

410

470

530

590

650

710

-12%

-5%

2%

9%

16%

23%

30%

Jan

-10

Jun

-10

No

v-10

Ap

r-11

Sep

-11

Feb

-12

Jul-

12

De

c-12

Annualized Crude Steel Production (mmt) -RHSCrude Steel Production (% YoY)Apparent Steel Consumption (% YoY)

7

22

1

33

0

31

0

28

0

23

0

20

5 22

1

17

0

16

5

100

140

180

220

260

300

340

380

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Oct

-12

Jan

-13

Australian HCC Quaterly Contract FOBAustralian Spot HCC FOB

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

Raw material prices to be less volatile in 2013

Iron ore prices surged to ~$159/t with restocking demand in China before holidays; however it has started falling and expected to be in $120-130/t range in 2013

HCC spot prices have improved to ~$165/t and is expected be in $160-170/t range in 2013

HCC quarterly contract prices are settled at ~$160-165/t for Jan-Mar 2013

Raw material prices

80

100

120

140

160

180

200

10

15

20

25

30

35

40

Sep

-10

No

v-10

Jan

-11

Mar

-11

May

-11

Jul-

11

Sep

-11

No

v-11

Jan

-12

Mar

-12

May

-12

Jul-

12

Sep

-12

No

v-12

Jan

-13

Iron ore inventory at 50 smaller mills in China (mmt)IODEX 62% Fe $/dmt / North China import CFR - RHS

8

India steel scenario

Source: Joint Plant Committee (All figures are in million tonnes) *Gross of double counting

FY14 – demand to improve on the back of reforms, imports are a concern

Apparent finished steel consumption grew by 4.4% in 9MFY13

Finished steel production increased by 3.6% in 9MFY13

9MFY13 finished steel imports increased by 16.2% to 5.79 million tonnes whereas steel exports grew by 24% to 3.78 million tonnes

Imports from countries under FTA (South Korea and Japan) continues to be higher

54.7

4

56.8

3

56.7

2

59.3

4

Finished Steel Production*

Apparent Finished Steel Consumption*

9MFY12 9MFY13

3.6%4.4%

4.98

0.6

6

0.94

3.05

5.79

0.98 1.16

3.78

Overall Finsished Steel Import

Imports from Japan

Imports from South Korea

Overall Finsished Steel Exports

9MFY12 9MFY13

16.2%

48.6%23.0%

24.0%

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Karnataka Iron ore update

R&R plans are approved for 20 mines and are under preparation for rest of the mines

12 mines have accepted all the conditions stipulated by the Hon’ble Supreme Court to consider re-commencement of mining

Category ‘B’

On approval of Reclamation & Rehabilitation (R&R) plans by CEC, 6 mines (capacity of ~3.3 MTPA) have resumed operations

These mines have produced ~0.71 million tonnes till Dec 31, 2012 (yet to be put for auction)

Another 4 mines (capacity of ~1.8 MTPA) are in various stages of approvals and expected to commence production by Mar 2013

Category ‘A’

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Agenda




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Projects' update

Corex-II: was shut down for capital repairs and capacity enhancement, has resumed production on Jan 15, 2013

CGL-1 at Vasind: was shut down for adding online skin pass facility to cater appliance grade products, has recommenced operations on Jan 1, 2013

Value added flat steel projects:

Coated product capacity ehancement at downstream facilties (Vasind and Tarapur) from 0.925 MTPA to 1.2 MTPA

New Cold Roll Mill of 2.3 MTPA at Vijayanagar

Non-Grain Oriented Electrical Steel facility of 0.2 MTPA at Vijayanagar

Above projects to take share of value added products portfolio to 40-50% of overall capaciites over next two years

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Projects' update contd..

Corex–II: Resumed operations on Jan 15, 2013 post capital repairs and capacity enhancement

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Projects' progress

Cold Rolling Mill -2: Phase I will be commissioned by FY14 and Phase II by FY15

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Projects' progress contd..

New Galvanizing line at Tarapur Up-gradation of Colour coating line at Tarapur

Colour coating line at Vasind Railway Siding Project at Vasind

New line

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4 MTPA Pellet plant (at Dolvi for JSW Ispat): will be commissioned in FY14

Projects' progress contd..

1 MTPA Coke Oven (at Dolvi for JSW Ispat): will be commissioned in FY14

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Agenda




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Key highlights

The scheme of merger has been approved by:

the Competition Commission of India,

NSE and BSE

Court convened meetings of equity and preference shareholders of both the companies to be held on January 30, 2013

JSW Steel –JSW Ispat

merger update

Crude steel production: 2.09 million tonnes (8% YoY)

Saleable steel sales: 2.17 million tonnes (14% YoY)

Net Sales: ` 8,275 crores (5% YoY)

Operating EBIDTA: ` 1,314 crores (5% YoY)

PAT: ` 137 crores

Inferior quality of iron ore with low Fe, high alumina and manganese impacting productivity by 20 percent

Operational/ financial

Steel for Steering Knuckle, Front Axle Beam and Axle Hub

Steel for High Pressure Boiler Application

Cold Rolled Low Carbon EDD steel for PV exposed panel

Cold rolled High Strength steel for PV structural and safety applications

Cold Rolled Low carbon Bake Hardened Steel for 3 wheelers

New product

approvals

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0.37

0.48 0.45

3QFY12 3QFY13 2QFY13

Rolled : Long

1.39 1.57

1.45


Rolled : Flat

1.94

2.09 2.17


Crude Steel

YoY QoQ

13% 8%

Production – 3QFY13

All figures are in million tonnes

YoY QoQ

31% 8%

YoY QoQ

8% -4%

19

1.06

1.36

9MFY12 9MFY13

Rolled : Long

5.36

6.41

9MFY12 9MFY13

Crude Steel

Production – 9MFY13


3.87

4.63

9MFY12 9MFY13 Rolled : Flat

YoY %

20%

YoY %

20%

YoY %

29%

20

0.41 0.37 0.42


Value Added

1.91

2.17 2.17


Total Sales

Saleable steel sales – 3QFY13


1.44

1.66 1.66


Rolled : Flat

YoY QoQ

14% -%

YoY QoQ 15% -%

YoY

-11%

QoQ

-13%

0.10 0.08

0.11

3QFY12 3QFY13 2QFY13 Semis

YoY QoQ

-25% -27%

0.36 0.43 0.40


Rolled : Long

YoY QoQ 18% 6%

21

4.19

4.99

9MFY12 9MFY13

Rolled : Flat

1.23 1.20

9MFY12 9MFY13

Value Added

5.50

6.45

9MFY12 9MFY13

Total Sales

Saleable Steel Sales – 9MFY13


0.32

0.24

9MFY12 9MFY13

Semis

0.99

1.21

9MFY12 9MFY13

Rolled : Long

YoY %

17% YoY %

19%

YoY %

-3%

YoY %

22%

YoY %

-25%

22

330

380

31 Dec 2011 31 Dec 2012

1.26 0.45

Others JSW Shoppe

JSW Shoppe

*It is a subject of case study at various global B- Schools

Rolled: Long

Rolled: HR Products

43%

Domestic sales

excluding semis

(million tonnes,

% Share)

Value Added: Flat

74%

26%

28%

46%

26%

% Share through JSW Shoppe – 3QFY13

15%

JSW Shoppe: A unique retail marketing model for steel*

No. of JSW Shoppe

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Agenda




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Financials – standalone

* Not Annualized

Particulars 3QFY13 3QFY12 Growth 9MFY13 9MFY12 Growth

Gross Turnover 9,121 8,498 7% 28,688 24,367 18%

Net Sales 8,275 7,860 5% 26,139 22,549 16%

Operating EBITDA 1,314 1,253 5% 4,612 3,979 16%

Other Income 57 46 24% 207 131 58%

Finance Cost 455 327 39% 1,282 819 57%

Depreciation 498 444 12% 1,446 1,236 17%

Exceptional Items (327) (500) (497) (1,020)

Profit Before Tax 91 27 236% 1,593 1,035 54%

Tax (46) (141) 365 161

Profit after Tax 137 168 -19% 1,228 874 41%

Diluted EPS (`)* 5.76 7.18 53.95 38.07

` Crores

25

Operating EBITDA movement – standalone

` Crores

1,253 1,314

172

(394)

180 34

69

EBITDA3QFY12

Volume NSR Cost Mix Others EBITDA3QFY13

26

Net debt movement – standalone

* Net Debt excludes Acceptances

` Crores

Particulars 31.12.2012 30.09.2012

Cash & cash equivalent (` Crores) 1,774 2,338

Net Debt/Equity (x) 0.86 0.75

Net Debt/EBITDA (x) 2.68 2.35

14,586

16,810 2,328

(847)

179 564

Net Debt*as on Sep'12

New Loan Taken Repayments Forex Gain Movement in FD / MF

Net Debt*as on Dec'12

27

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 from those 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 manage growth, intense competition within Steel industry including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, our ability to commission mines within contemplated 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, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which the Company has made strategic investments, withdrawal of fiscal/governmental incentives, impact of regulatory measures, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry. The company does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the company.

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Thank you

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