Results Presentation: Fourth Quarter and Financial Year Ended March 31, 2022 May 03, 2022
Results Presentation: Fourth Quarter and Financial Year Ended March 31, 2022 May 03, 2022
Results Presentation: Fourth Quarter and Financial Year Ended March 31, 2022 May 03, 2022
PRESENTATION
Fourth quarter and Financial year
Ended March 31, 2022
2
Overview
1 Performance update
2 4QFY22 Results
3
A year of record performance and strategic progress
▪ Best in Class CO2 footprint in all ▪ Highest ever annual delivery volumes at
geographies 18.27 mn tons
Others:
▪ 100% solid waste utilisation, Best ever ▪ 5 MTPA Expansion on track, NINL 38%
India:
specific water consumption acquisition to close in 1QFY23 62%
Note : 1. India includes Tata Steel Standalone and Tata Steel Long Products. Deliveries on proforma basis without intercompany eliminations. 2. Awarded by WorldSteel, fifth time in a row. 3. Subject
to shareholder approval. MTPA – million tons per annum and NINL is Neelachal Ispat Nigam Limited 4
Some milestones we are proud of
29.4 million tons of Inland shipping to drive 3 sites included in WEF’s Best manufacturing company
Iron ore mined supply chain efficiencies Lighthouse network to work for in 2021
50+ transgender employees Pan India dealers & Rs 1,468 crores sales, >100% 16.75 Lac+ Sq. ft
onboarded Distributor - 15,800+ YoY growth construction
125 new products >120 patents filed and Expanding high value Improvement savings of
developed granted API sales Rs 5,486 crores
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Awareness First Aid
Campaigns refreshers
1. Lost Time Injury Frequency Rate per million-man hours worked, for Tata Steel Group; 2. Cumulative till 31 st Mar 2022 6
Improving quality of life of our communities
315
Grassroots Rural Grassroots
232 222 Governance Sports
193
India
▪ TSI: Achieve specific fresh-water
6.7
consumption of <1.5 m3/tcs, aim
Progress despite ▪ TSI: Achieve specific freshwater for water neutrality
2.8 steady growth in
capacity
consumption of 2 m3/tcs
Water ▪ TSE: EU benchmark for water
FY05 FY22 intensity
India
100% Solid waste ▪ TSI : Achieve material efficiency
Circular utilisation at TSJ ▪ Build 5 MTPA recycling business
and TSK of 99%
economy
India
Developed
Biodiversity mgmt.
▪ Develop / Implement Biodiversity ▪ Aspire for no net loss of
plan Management Plan for operations biodiversity
Biodiversity
TSI – Tata Steel India (Tata Steel standalone and Tata Steel Long products); TSJ: Tata Steel Jamshedpur, TSK – Tata Steel Kalinganagar, TSE – Tata Steel Europe; material efficiency is defined as
percentage of crude steel and co-products (by-products) material out of total output material 8
Leadership in India on the back of value accretive growth
Crude steel production (MTPA) Upstream › Pellet capacity to increase from 7 to 13 MTPA (TSK Ph II)
2018 TSM TSLP 2021 Flats Longs 2030 › Tinplate – From 0.38 MTPA to 1.0 MTPA
› Ductile Iron Pipes – From 0.2 MTPA to 1 MTPA
Note : TSM – Tata Steel Meramandali, TSLP – Tata Steel Long Products, TSK – Tata Steel Kalinganagar, MTPA – million tons per annum, NINL is Neelachal Ispat Nigam Limited
9
Optimised portfolio : 2.2 MTPA CRM & 5 MTPA expansion to drive product mix enrichment
2.2 MTPA CRM complex to be commenced in 4QFY23 High end Products for Automotive & Engineering
Continuous Galvanizing
1,560 0.3 - 2.3 0.53
Line (non-auto) 2x
27%
L&E PEB
FY20 FY21 FY22 LT
Note : HR HT – Hot rolled HI tensile (>540 MPa), CR & Coated HT – Cold rolled & Coated Hi-Tensile (>440 Mpa), PEB – Pre-engineered buildings, L&E – Lifting and Excavation 10
Optimised product portfolio : Ramp up long products to drive high margin retail business
▪ NINL Share purchase agreement completed; ▪ Leverage strong portfolio of retail brands and extensive
Transaction to close in 1QFY23 distribution network to drive scale and profitability
Neelachal Ispat Nigam Limited
▪ Capacity to be expanded to 10 MTPA ▪ Will benefit from significant pan India growth in infra &
retail housing growth in semi urban India
Steelmaking capacity Land Bank of
of >1 million ton 2,500 acres Pan India distribution
network
1 Performance update
2 4QFY22 Results
12
Geopolitical tensions in Europe and COVID in China have weighed on steel operating landscape
▪ Steel prices in western markets rose steeply Steel prices moved higher esp. in west Heightened volatility in raw material prices
in the January – March period on tight supply HRC prices ($/t) Prices ($/t)
US Domestic
and recovering demand 2,500
Germany domestic
Premium Low Vol HCC CFR China
China export FOB Premium HCC, Australia FoB
600
2,000 China domestic Iron Ore-62% Fe, China CFR
India Europe
▪ Apparent steel consumption improved by ~4% QoQ driven ▪ Steady growth in steel consuming sectors; Automotive
by ongoing economic recovery. Consumers though remain sector recovering but continues to face shortages related
watchful after price increases towards end of the quarter to semiconductors
▪ Automotive production especially in passenger and ▪ Ongoing Russia – Ukraine crisis has constrained
commercial vehicles improved while Infrastructure / traditional steel supply into Europe leading to renewed
Construction goods witnessed steady growth supply – demand imbalances
Key steel consuming sectors* Key steel consuming sectors (%, YoY growth)
1500%
100%
Machinery Construction
Capital Goods Infrastructure/ construction goods Automotive
Vehicles (units)
150 61%
50%
100
0%
50 -39%
-50%
0 -100%
Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Sep-21
Jan-22 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22
Sources: Bloomberg, SIAM, Joint Plant Committee, MOSPI, CMIE, Eurostat and Tata Steel
*Figures of Industrial Production for Capital Goods, Infrastructure/Construction, consumer durables and railways are rebased to Nov'18=100 using FY12 index based sector weights; number of units 14
produced as per SIAM; growth of key steel consuming sector is calculated by removing sub-segments which do not consume steel
Highest ever annual production and deliveries in India1
Crude Steel Production (mn tons)
Highest ever
4.90 4.81 4.75
▪ Production crossed 19 million tons for FY21 16.92
4.67
4.42 FY21 17.30
▪ Highest ever deliveries at 18.27 million
tons, up 6% YoY
FY22 18.27
0.76
0.50 0.51
0.68 0.78 FY21 1.17
0.66 5.71 4.77 2.00 3.66
▪ Domestic deliveries crossed 15.6 million 1.51
1.30 1.45
tons with broad based improvement
1.79 Tubes,
across segments 1.62 1.59 Wires etc.
FY22 1.41 6.38 5.29 2.56 2.64
0.38 0.35 0.35
4QFY22 3QFY22 4QFY21
1. India includes Tata Steel Standalone and Tata Steel Long Products on proforma basis without inter-company eliminations; Tata Steel Standalone numbers have been restated from April 1, 2019
to reflect Tata Steel BSL’s merger into Tata Steel 15
Tata Steel Europe : Transformation program and focus on product mix yielding results
Automotive Engineering
Governance
& Structure
Packaging Construction
877
811
TSUK TSN
16
Tata Steel Long Products : Product mix enrichment to drive value maximisation
(All figures are in Rs. Crores unless stated otherwise) 4QFY22 3QFY22 4QFY21 Key drivers for QoQ change:
Production (mn tons)2 7.62 7.76 8.02
▪ Deliveries: were up 14% driven by increase in India
Deliveries (mn tons) 8.01 7.01 7.83 and Europe operations
Total revenue from operations 69,324 60,783 50,028
Raw material cost3 24,873 24,086 16,665 ▪ Revenues: increased driven by higher prices in
Europe and higher deliveries in India and Europe
Change in inventories 2,757 (3,960) (1,642)
Employee benefits expenses 6,056 5,683 5,391 ▪ Raw Material cost: increased primarily due to higher
Other expenses 20,607 19,080 15,430 Coking Coal prices across key entities. However, in
EBITDA 15,174 15,853 14,290 Europe the rise was offset by decline in Iron ore
Adjusted EBITDA4 15,891 15,890 13,933
▪ Change in inventories: inventory value decreased
Adjusted EBITDA per ton (Rs.) 19,832 22,663 17,797 due to liquidation across geographies
Other income 292 60 272
Finance cost 1,099 1,532 1,866 ▪ Other expenses: increased due to provision related to
Tata Steel Mining, rise in consumption of stores &
Pre exceptional PBT 12,139 12,359 10,348
spares and power and fuel
Exceptional items (gain)/loss 274 193 991
Tax expenses 2,030 2,567 2,195 ▪ Exceptional item: for the quarter primarily relate to
Reported PAT 9,835 9,598 7,162
provision for impairment of non current assets
Other comprehensive income 519 887 (1,031)
1. Figures for previous periods have been regrouped and reclassified to conform to classification of current period, where necessary. 2. Production Numbers: Standalone & Tata Steel Long Products -
Crude Steel Production, Europe - Liquid Steel Production; SEA - Saleable Steel Production. 3. Raw material cost includes raw material consumed, and purchases of finished and semi-finished products.
4. Adjusted for fair value changes on account of revaluation gain/loss on external/ internal company debts/ receivables at TS Global Holdings and FX rate movement on loan given to offshore entity
18
Consolidated EBITDA1 stood at Rs 15,891 crores
Rs. Crores
1. EBITDA adjusted for revaluation gain/loss on external/ internal company debts/ receivables at Tata Steel Global Holdings and FX rate movement on loans to T Steel Holdings
19
Generated free cash flows of Rs.13,971 crores in 4QFY22
Rs. Crores
1,425
4,589
2,696
1,637
3,308
15,174
13,971
Reported EBITDA Working capital Finance cost (net) Taxes paid Non-cash & Others Capex Free Cash Flow 4QFY22
4QFY22 movement
Note : In addition, ~Rs 1,210 crores of cash has been kept in escrow towards acquistion of Neelachal Ispat Nigam Limited
20
Generated free cash flows of Rs 27,185 crores for the year
Rs. Crores
63,830
9,618
4,348
11,902
2,809 3,064
10,522
27,185
Reported EBITDA Working capital Finance cost (net) Taxes paid Non-cash & Others Dividend Capex Free Cash Flow
FY22 movement FY22
Note : In addition, ~Rs 553 crores has been utilised to repay hybrid perpetual securities and investments offset by equity proceeds on partly paid shares
21
Debt repayment of ~Rs. 15,232 crores in the last 12 months, Net debt to EBITDA at 0.8x
Rs. Crores
88,501
387
13,113 15,232 75,561
1,905
75,389
24,513
51,049
Gross Debt Addition of Loan FX Impact Gross Debt Cash, Bank & Net Debt
Mar'21 new leases movement and Others Mar'22 Current Mar'22
Investments
22
Key metrices are at investment grade levels
EBITDA Margin (%)1 EBITDA / ton (Rs.)1 Interest Coverage Ratio (x)1,2 Gross & Net Debt (Rs. crore)
1,16,328
19.8%
1,00,816
17.2% 92,147 88,501
18.9% 1,04,779 75,561
11,110
94,879
9,337 10,838
12.2%
3.9 3.9 75,389
6,267 69,215
4.1
2.4 51,049
Net Gross
FY 18 FY 19 FY 20 FY 21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22
Net Debt / EBITDA (x) Net Debt / Equity (x) Credit Rating
BBB-/ Baa3
7
5.91 Investment Grade
1.43 1.42 BB+/ Ba1
6 S&P
1.37
Moody's
BB/ Ba2
5
BB-/ Ba3
4
0.98
3.20 3.19 2.44 3
0.52 B+/ B1
0.80 2
B/ B2
1
FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 B-/ B3
0
Apr-17 FY18 Apr-18 FY19
Apr-19 FY20
Apr-20 FY21
Apr-21 FY22
Apr-22
All data is on consolidated basis; 1. FY20 and FY21 includes Southeast Asia (SEA) Operations which is reclassified as continuing operations; 2. Interest Coverage Ratio: EBITDA / Interest
23
Business outlook for 1QFY23 : Strong underlying momentum despite short term volatility
▪ Global steel demand to remain ▪ Asian steel prices are expected ▪ Coking coal prices to remain
broadly stable in CY22 driven by to be range bound as COVID volatile
stimulus measures focused on related restrictions weigh on
infrastructure projects especially China domestic demand as well
in World ex-China as output
▪ Seaborne iron ore prices to
remain range bound, lower china
▪ Indian steel prices to remain demand due to COVID vs.
▪ India steel demand to remain resilient, supported by strong impact of weather and labour
robust due to government push international prices and input shortages on major suppliers
on infrastructure spending and costs which remain elevated
gradual revival in auto production
▪ European steel prices are ▪ European power and energy
expected to be volatile driven by costs to remain high due to ban
▪ EU Steel demand to sustain supply demand imbalances. on Russian coal imports and
above pre-COVID levels. Russia Some moderation as reallocated moderate as renewable energy
– Ukraine and energy pose risk quotas partially offset supply picks up
constrained supply from Russia
and Ukraine
24
Annexures
Meramandali
Coke Rate (kg/thm) Specific Energy Consumption (Gcal/tcs) Specific Fresh Water Consumption (m3/tcs)
7.29
399
5.55
386
6.83
376
6.8
367
367
365
6.61
364
354
353
6.39
352
349
348
348
6.31
6.27
6.24
4.76
4.76
6.01
5.76
5.68
5.67
5.63
4.29
5.61
4.16
4.15
5.43
4.14
4.02
3.68
3.42
3.35
3.27
2.80
2.25
2.18
FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22
CO2 Emission Intensity (tCO2/tcs) Specific Dust Emission (kg/tcs) Solid Waste utilisation (%)
0.97
2.99
0.94
2.93
100
100
100
100
100
100
99.7
99
2.84*
97
2.82*
96
2.76
0.84
2.65
2.54
87.2
84.4
2.45
2.44
2.38
2.30
2.29
2.29
0.72
2.27
78
2.26
0.66
68
0.62
0.60
0.57
0.26
0.49
0.48
0.41
0.37
0.33
0.29
FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22
* CO2 Emission Intensity was higher mainly due to lower capacity utilization than FY20, however, total emission was lower.
Note : Tata Steel Meramandali solid waste utilisation restated for prior years as standards aligned 26
Tata Steel Long Products: Key operating parameters
70 100 98
55 70 94
40 40 90
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
Power consumption3 Electrode consumption3 Oil consumption at Mill4
99 175
100 180 110
Good Good 89 Good
160
85 90
140
120 70
70
100 50
55 80
30
60
40 40 10
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1. Increased due to lower hot metal production volume because of BF shutdown; 2. Maintained through smooth operation and more production despite BF disruption; 3. Increased due to higher
arcing; 4. Increased due to lower availability of Blast Furnace gas on account of BF maintenance shutdown 27
Tata Steel Standalone1: Operating performance
(All figures are in Rs. Crores unless stated otherwise) 4QFY22 3QFY22 4QFY21
Key drivers for QoQ change:
Production (mn tons) 4.73 4.64 4.56
▪ Revenues: increased by 15% driven by higher volumes
Deliveries (mn tons) 4.97 4.25 4.50
Total revenue from operations 36,681 31,964 27,355 ▪ Raw Material cost: increased primarily due to increase
Raw material cost2 12,647 11,030 6,406 in coking coal prices and consumption of higher
imported coal
Change in inventories 1,826 (1,693) (196)
Employee benefits expenses 1,723 1,553 1,503 ▪ Change in inventories: Finished & Semi-Finished
goods quantity decreased
Other expenses 8,251 8,906 7,954
EBITDA 12,363 12,167 11,722 ▪ Employee benefits expenses: higher on account of
Adjusted EBITDA3 11,766 12,179 11,722 increase in Salaries and wages incl. bonus
Adjusted EBITDA per ton (Rs.) 23,690 28,631 26,054 ▪ Other expenses: were lower due to decline in royalty
Other income 506 280 223 and favourable FX movement
Finance cost 646 644 914
▪ Finance cost: was broadly stable
Pre exceptional PBT from continuing operations 10,715 10,444 9,589
Exceptional items (gain)/loss 76 181 (949) ▪ Exceptional item: for the quarter primarily reflects
charge relating to Employee Separation Scheme and
Tax expenses 2,799 2,579 2,409 net impairment on ICD / investments
Reported PAT 7,839 7,683 8,130
Other comprehensive income 348 154 364
1. Tata Steel Standalone numbers have been restated from April 1, 2019 to reflect Tata Steel BSL’s merger into Tata Steel; Figures for previous periods have been regrouped and reclassified to
conform to classification of current period, where necessary 2. Raw material cost includes raw material consumed, and purchases of finished and semi-finished products 3. Adjusted for fair value
changes on account of FX rate movement on loan given to offshore entity 28
Tata Steel Europe: Operating performance
Total revenue from operations 26,389 22,769 17,258 ▪ Revenues: increased with improved steel realisations
and sales mix
Raw material cost1 9,364 10,599 7,798
Change in inventories 902 (2,184) (579) ▪ Raw Material cost: declined as coal consumption cost
due to higher prices was more than offset by lower iron
Employee benefits expenses 3,855 3,673 3,360 ore prices
Other expenses 7,939 7,747 5,557
▪ Change in inventories: inventory value decreased on
EBITDA 4,349 2,942 1,194 liquidation
EBITDA per ton (Rs.) 18,135 13,642 4,841 ▪ Other expenses: increased primarily due to higher
1. Raw material cost includes raw material consumed, and purchases of finished and semi-finished products energy costs
29
Tata Steel Long Products: Operating performance
1. Raw material cost includes raw material consumed, and purchases of finished and semi-finished products
2. EBITDA/Steel deliveries
30
Tata Steel Thailand : Operating performance
31
Investor relations contact
Investor enquiries :
Hriday Nair Pavan Kumar
Email: hnair@tatasteel.com Email: pavan.kumar@tatasteel.com
32