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Hindalco q4 fy11-12_presentation

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  • 1. Hindalco Industries Ltd Investor Presentation Standalone FY12
  • 2. Presentation Structure Highlights Performance Review Projects Progress2
  • 3. Highlights and Financial Performance3
  • 4. FY12: Highlights Strong performance despite severe cost pressures Portfolio strategy depicted its benefits as upstream business witnessed margin squeeze Aluminium – Record production efficiency gains production, Copper – Strong all-round performance Financing strengthened… Largest NCD offering in the recent times (Rs 3,000 Crore) Long Tenor, Attractive pricing Preferential warrant allotment to promoter (~ Rs 2,160 Crore) p ( ,4 Projects - In advanced stages
  • 5. Financial Performance (Standalone, FY 12) (Unaudited) Change ` Cr FY11 FY12 (%) Net Sales 23,859 26,597 11.5 PBITDA 3,502 3,721 6.2 PBT 2,595 2 595 2,737 2 737 5.5 55 PAT 2,137 2,237 4.7 EPS (`) 11.17 11.69 4.7 5
  • 6. Financial Performance (Standalone, Q4) (Unaudited)` Cr Q Q4 FY11 Q Q4 FY12 Change (%) g ( )Net Sales 6,846 7,647 11.7PBITDA 1,019 , 1,025 , 0.6 .PBT 787 779 (1.0)PAT 708 640 (9.7) (9 7)EPS (`) 3.70 3.34 (9.7) Q4 PBITDA maintained despite lower rupee LME and input cost surge 6
  • 7. Robust Financial Performance… LME ($/t) PBITDA (` cr) 2700 1100 2600 2603 1045 1025 1000 2500 2400 2400 900 Improved quarterly 2300 845 performance through… 800 805 2200 2177 Higher volumes & VAP 2100 700 2089 Better efficiencies 2000 600 1900 1800 500 Q1 Q2 Q3 Q47 -----------FY12-----------
  • 8. Business Environment8
  • 9. FY12: A Challenging Year Year started on an optimistic note with strong LME pricing amidst strong investor appetite During the year LME rally fizzled out as global macro economic concerns re- emerged Cost push however continued especially energy push due to geo-political continued, geo political concerns & India specific coal issues Physical demand continued to remain strong even as inventory overhang continued… Of late, slowdown in China has clouded the demand outlook9
  • 10. Al. LME: Softened again2700 2,663 World aluminium market had a LME Al ($/t)2600 750+kt surplus in Q1, 2012 p25002400 Consumption growth only 3.3%2300 in Q1 vs. 9.6% in 20112200 Macro-risks holding back LME 2,0472100 when 25-30% of global capacity2000 has cost above ruling LME abo e19001800 Global inventory at 12.7 mn tonne (102 days); return on n-11 ul-11 t-11 b-12 r-11 y-11 g-11 p-11 v-11 c-11 n-12 r-12 r-12 Jun Feb May Aug Oct Nov Dec Apr Mar Apr Sep Jan Ju warehousing deals positive at Cost curve supports current present LME level 10
  • 11. Al: Cost pressures way ahead of LME Relative Increase (FY12 over FY11) >40% 40% 30% >30% >25% ~20% 8% Rupee LME Coal Caustic Crude FO derivatives11
  • 12. Performance Review12
  • 13. Key External DriversAluminium LME ($/t) Other Drivers 2,500 (vis-à-vis year-ago period) Q4 FY12 FY12 2,317 2,257 Coal C l 2,177 FO and carbon costs Q Q4 F11 Q Q4 FY12 FY11 FY12Exchange Rate (`/$ ) Copper TCRC 50.28 Sulphuric Acid 47.92 realization 45.56 Significant Cost p g f pressure 45.27 continues Q4 FY11 Q4 FY12 FY11 FY12 13
  • 14. Al: Mitigating cost pressures Higher production through asset sweating and continuous improvement in efficiencies ffi i i Domestic sales up 5% to 489 kt Overall metal sales up 6% to 568 kt 8% increase in special alumina /hydrate sale, even as standard alumina sale declined on higher captive use Strong operational performance helped us tide over the rough external environment 14
  • 15. Al: Physical Performance - Annual Alumina Output (kt) Metal Output (kt) 7%FY11 1,353 FY11 538 Ever highestFY12 1,355 , FY12 574 700 900 1100 1300 1500 200 300 400 500 600 Rolled Product Sales Extrusion Sales (Tonne) (Tonne) 3% FY11 35,033 35 033FY11 195,163 14% FY12 30,023FY12 201,254 Alupuram plant under lockout till Q3 15
  • 16. Al: Physical Performance – Quarter Alumina Output (kt) Metal Output (kt) 4% Q4 FY11 344 Q4 FY11 139 Q4 FY12 345 Q4 FY12 144 Rolled Sales (Tonne) Extrusions Sales (Tonne) Q4 FY11 49,766 Q4 FY11 7,518 16% 12% Q4 FY12 8,744 8 744 Q4 FY12 55,68916
  • 17. Al: Revenue break up (Rs Crore) Metal Chemicals FRP and Foils 767 783 10% 3,209 , 19% 4,044 4 044 2,924 3,409 FY11 FY12 FY11 FY12 FY11 FY12 Extrusions Others Strong top line 489 growth… 552 313 Primarily driven by 516 higher l hi h volumes & improved mix FY11 FY12 FY11 FY1217
  • 18. Aluminium Financials ` Cr FY11 FY12 Change (%) Net Sales 7,965 9,041 13.5 EBIT 2,004 1,822 (9.1) ` Cr Q4 FY11 Q4 FY12 Change (%) Net Sales 2,211 2 211 2,499 2 499 13.0 13 0 EBIT 562 484 (14.0)18
  • 19. Copper Performance 19
  • 20. Cu: Performance Drivers Output was affected by inferior But performance lifted through concentrate grade & planned various initiatives … shutdown … More VAP: Higher proportion of CCR Cathode output (kt) productionFY11 336 Optimization of the marketing mix Greater value from selenium and ‘waste-to-wealth’ initiativesFY12 330 Increased usage of external scrap 150 200 250 300 350 Improved recovery and efficiencies20
  • 21. Cu: Revenue Drivers (Rs Crore) Cathode CCR 7,488 , 7,239 6,261 10% 5,683 FY11 FY12 FY11 FY12 Fertilizers & Acids Precious Metals & others 3,047 1,028 56% 31% 1,949 782 FY11 FY12 FY11 FY1221 Robust business model delivered strong numbers
  • 22. Copper Financials `Cr FY11 FY12 Change (%) g ( ) Net Sales 15,902 17,575 10.5 EBIT 602 802 33.2 ` Cr Q4 FY11 Q4 FY12 Change (%) Net S l Sales 4,637 4 637 5,154 1 4 11.1 11 1 EBIT 206 293 42.5 22
  • 23. Projects Progress23
  • 24. Utkal Refinery Heat Exchanger erected Turbine alignment in progress CHP Stacker and Reclaimer Erection of Rod Mill 24
  • 25. Mahan Smelter & CPP Pot Line Inside view Fume Treatment Centre Turbine T bi Power Pl P Plant Vi View 25
  • 26. Aditya Smelter & CPP Pot Room Switch Yard Cooling Tower Power Plant Chimney 26
  • 27. Hirakud FRP Hot Mill Cold Mill 27
  • 28. Summary…. India-specific cost p p pressures continue – especially p y relating to coal Operational excellence helped us tide over these challenging times Robust business model delivering results 28
  • 29. Thank you