Tata Steel Limited has informed the Exchange about Investor Presentation
The Secretary, Listing Department BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001. Maharashtra, India. Scrip Code: 500470
Dear Sir, Madam,
January 24, 2024
The Manager, Listing Department National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051. Maharashtra, India. Symbol: TATASTEEL
Sub: Submission of Press Release and Investor Presentation to be made to Analysts/Investors
Please find enclosed herewith the press release titled “Tata Steel reports Consolidated EBITDA of Rs 16,771 crores for the first nine months of the financial year” and investor presentation to be made to Analysts/Investors on the Financial Results of Tata Steel Limited for the quarter and nine months ended December 31, 2023
This presentation is being submitted in compliance with Regulation 30(6) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, as amended.
These are also being made available on the Company’s website www.tatasteel.com
This is for your information and records.
Thanking you.
Yours faithfully, Tata Steel Limited
Parvatheesam Kanchinadham Company Secretary & Chief Legal Officer (Corporate & Compliance)
Encl.: As above
Mumbai, January 24, 2024
Tata Steel reports Consolidated EBITDA of Rs 16,771 crores for the first nine months of the financial year
Highlights:
▪ Consolidated Revenues for the first nine months of the financial year were at Rs 1,70,483 crores. EBITDA
stood at Rs 16,771 crores, with an EBITDA margin of around 10%.
▪ Consolidated Revenues for the Oct – Dec quarter stood at Rs 55,312 crores. EBITDA was up 47% QoQ to
Rs 6,334 crores and the EBITDA margin was 11%.
▪ The company has spent Rs 4,715 crores on capital expenditure during the quarter and Rs 13,357 crores for
9MFY24. The phased commissioning of the 5 MTPA expansion at Kalinganagar has commenced.
▪ Net debt stands at Rs 77,405 crores. Our group liquidity remains strong at Rs 23,349 crores, which includes
cash & cash equivalents of Rs 10,825 crores.
▪
India1 revenues were Rs 35,011 crores and were broadly stable on QoQ basis
o Crude steel production was around 5.35 million tons and was higher by 7% on QoQ as well as YoY basis.
o Deliveries at 4.88 million tons were marginally higher QoQ driven by rise in domestic deliveries (+3%
QoQ and +10% YoY). Broad based improvement was witnessed across key end use segments.
o EBITDA was Rs.8,302 crores which translates into an EBITDA margin of 24%.
▪ UK revenues were £603 million and EBITDA loss stood at £159 million. Liquid steel production was 0.72 million tons while deliveries stood at 0.64 million tons. Deliveries were lower QoQ due to subdued demand.
▪ Netherlands revenues were £1,239 million and EBITDA loss stood at £117 million. Liquid steel production was broadly stable at 1.19 million tons but lower on YoY basis due to the reline of one of the blast furnaces at Ijmuiden. Deliveries stood at 1.30 million tons and were up 5% QoQ basis.
▪ Tata Steel on 19th January, announced that we will commence statutory consultation on the proposed restructuring of the UK business as part of its transition to an economically and environmentally sustainable future.
Financial Highlights:
Key Profit & Loss account items (All figures are in Rs. Crores unless stated otherwise) Production (mn ton)3 Deliveries (mn ton) Turnover Reported EBITDA Reported EBITDA per ton (Rs. Per ton) Adjusted EBITDA4 Adjusted EBITDA per ton (Rs. Per ton) PBT before exceptional items Exceptional Items (gain)/loss Reported Profit after Tax
3QFY23 7.56 7.15 57,084 4,154 5,806 2,727 3,812 243 (160) (2,502) 1.Tata Steel Standalone numbers have been restated from April 1, 2022, to reflect merger of Tata Steel Long Products Limited, Tata Steel Mining Limited, Tata Metaliks Limited, Tinplate Company of India Limited and S&T mining with Tata Steel; Figures for previous periods have been regrouped and reclassified to conform to classification of current period, where necessary; 2. India includes Tata Steel Standalone and Neelachal Ispat Nigam Limited on proforma basis adjusted for intercompany purchase and sale; 3. Production numbers for consolidated financials are calculated using crude steel for India, liquid steel for UK & Netherlands and saleable steel for South East Asia; 4. Adjusted for changes on account of FX movement on intercompany debt / receivables
Consolidated 2QFY24 7.31 7.07 55,682 4,315 6,106 4,147 5,869 160 6,899 (6,511)
India1,2 2QFY24 5.02 4.82 34,884 6,920 14,372 6,456 13,407 4,748 12,993 (8,837)
3QFY24 5.35 4.88 35,011 8,302 17,016 8,292 16,996 5,798 21 4,429
3QFY23 5.00 4.74 34,059 4,892 10,326 4,321 9,121 2,562 7 1,786
3QFY24 7.58 7.15 55,312 6,334 8,864 5,742 8,035 2,262 334 522
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Management Comments:
Mr. T V Narendran, Chief Executive Officer & Managing Director:
“Global operating environment has been complex, with economic slowdown in China and geopolitics weighing on commodity prices in general. During this quarter, China has exported between 7 to 8 million tons of steel every month, which is the highest since 2015 and this has adversely impacted global steel prices as well as profitability. Despite this context, Tata Steel India has delivered better margins aided by higher deliveries as well as realisations on a QoQ basis. Our domestic deliveries for the quarter stood at 4.78 million tons and were up 3% QoQ and 10% YoY. Among the key segments, Automotive and well-established brands such as Tata Tiscon, Tata Steelium and Tata Astrum had best ever 3Q sales. The consistent growth in India deliveries has been aided by crude steel production being close to 5 million tons across the quarters in this financial year. The phased commissioning of our 5 MTPA capacity expansion at Kalinganagar is underway. Moving to Europe, our deliveries in Netherlands were up while UK moved lower QoQ due to subdued demand as well as operational issues given the ageing assets. We will commence statutory consultations with the unions in the UK as a step towards our transition to an EAF based sustainable business. We continue to undertake multiple initiatives across geographies to progress on our sustainability journey. I am happy to share that Tata Steel Meramandali and Tata Steel Kalinganagar sites have now received ResponsibleSteelTM certification and we now have three certified sites in India including Jamshedpur.”
Mr. Koushik Chatterjee, Executive Director and Chief Financial Officer:
“Tata Steel Consolidated revenues for the quarter stood at Rs 55,312 crores and EBITDA was Rs 6,334 crores, an increase in margins by around 300 bps QoQ. India EBITDA was Rs 8,302 crores, a QoQ margin increase of 400 bps while subdued demand dynamics weighed on margins in UK and Netherlands. The UK business continues to face production shortfalls arising from the end-of-life condition of several of its heavy end assets. In Netherlands, we expect BF#6 to restart by the end of January. Cashflow from operations in India rose sharply to Rs 9,016 crores while consolidated cash flow from operations were lower at Rs 7,879 crores. Our Net debt stands at Rs 77,405 crores and the group liquidity position remains strong at Rs 23,349 crores. Moving to strategic initiatives, we have largely fulfilled our plan to simplify our India footprint, having now completed the merger of Tinplate Company of India and Tata Metaliks into Tata Steel. Our announcement on 19th January in relation to Tata Steel UK follows detailed discussions with and careful consideration of the alternative proposal from the representative body of the UK trade unions and their advisor. The company’s analysis shows that partial continuity of blast furnaces until completion of transition to the EAF is not affordable and engineering studies have found that building the EAF in an already operating steel melt shop is not feasible. Tata Steel is acutely aware of the impact of its proposal to wind down the heavy end in Port Talbot on individuals and the local community associated with our steel works, we will meaningfully consult with our employees and work to provide them with a fair, dignified and considerate outcome. Tata Steel proposes to commit in excess of £130 million to a comprehensive support package for affected employees. This is in addition to the £100 million funding for the Transition Board set up by the company along with the UK and Welsh governments. Tata Steel has begun engineering design work on the EAF and discussions with National Grid for supporting infrastructure with a target to commission the EAF by 2027.”
Disclaimer
Statements in this press release describing the Company’s performance may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those directly or indirectly expressed, inferred, or implied. Important factors that could make a difference to the Company’s operations include, among others, economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets in which the Company operates, changes in or due to the environment, Government regulations, laws, statutes, judicial pronouncements and/ or other incidental factors.
For queries and information
Sarvesh Kumar, Chief Corporate Communications, Tata Steel, sarvesh.kumar@tatasteel.com
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About Tata Steel
• Tata Steel group is among the top global steel companies with an annual crude steel capacity of 35 million tonnes
•
per annum. It is one of the world's most geographically diversified steel producers, with operations and commercial presence across the world.
• The group recorded a consolidated turnover of ~US$30.3 billion in the financial year ending March 31, 2023. • A Great Place to Work-CertifiedTM organisation, Tata Steel Limited, together with its subsidiaries, associates,
and joint ventures, is spread across five continents with an employee base of over 77,000.
• Tata Steel has announced its major sustainability objectives including Net Zero Carbon by 2045. • The Company has been on a multi-year digital-enabled business transformation journey intending to be the leader in ‘Digital Steel making by 2025’. The Company has received the World Economic Forum’s Global Lighthouse recognition for its Jamshedpur, Kalinganagar and IJmuiden Plants.
• Tata Steel aspires to have 25% diverse workforce by 2025. The Company has been recognised with the World
Economic Forum’s Global Diversity Equity & Inclusion Lighthouse 2023.
• The Company has been a part of the DJSI Emerging Markets Index since 2012 and has been consistently ranked
amongst top 10 steel companies in the DJSI Corporate Sustainability Assessment since 2016. • Tata Steel’s Jamshedpur Plant is India’s first site to receive ResponsibleSteelTM Certification. • Received Prime Minister’s Trophy for the best performing integrated steel plant for 2016-17, 2023 Steel Sustainability Champion recognition from worldsteel for six years in a row, 2022 ‘Supplier Engagement Leader’ recognition by CDP, Top performer in Iron and Steel sector in Dun & Bradstreet's India's top 500 companies 2022, Ranked as the 2023 most valuable Mining and Metals brand in India by Brand Finance, and ‘Most Ethical Company’ award 2021 from Ethisphere Institute.
• Received 2023 ERM (Enterprise Risk Management) Award of Distinction at the RIMS ERM Conference 2023, ‘Masters of Risk’ - Metals & Mining Sector recognition at The India Risk Management Awards for the seventh consecutive year, and Award for Excellence in Financial Reporting FY20 from ICAI, among several others.
Photographs: Management and Plant facilities | Logos: Files and usage guidelines
Website: www.tatasteel.com and www.wealsomaketomorrow.com
Follow us on:
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tatasteelltd
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GR WTH WITH PURPOSE
Tata Steel Results Presentation
Financial quarter ended December 31, 2023
January 24, 2024
Safe harbour statement
Statements in this presentation describing the Company’s performance may be “forward looking
statements” within the meaning of applicable securities laws and regulations. Actual results may
differ materially from those directly or indirectly expressed, inferred or implied. Important factors that
could make a difference to the Company’s operations include, among others, economic conditions
affecting demand/supply and price conditions in the domestic and overseas markets in which the
Company operates, changes in or due to the environment, Government regulations, laws, statutes,
judicial pronouncements and/or other incidental factors
2
Structural trends are reshaping global steel industry dynamics over time Safe harbour statement
China’s transition to consumption led growth
Focus on Decarbonisation across sectors
Geopolitical events / conflicts
Technological progress over time
Shaping dynamics in the near to long term
Global Steel trade
Rise in protectionism
Heightened volatility
Productivity and competitiveness
Greening and Circularity
Increase in cost of operations
Energy transition
3
India steel remains a bright spot aided by the economic growth cycle Safe harbour statement
India steel demand forecast (in mn tons)
120
Urbanisation
Megacities
Connectivity
FY23
FY24
FY26
FY28
FY30
Apparent steel use and GDP per capita
646
China
Japan
444
Germany
379
Russia
288
USA
279
109
Brazil
81
India
136
UK
0
GDP Per Capita (US$, current prices), 2022
80,000
2 2 0 2 , ) g k ( a t i p a C
r e P U S A
National Infra plan (NIP)
Affordable housing etc.
Capex cycle
Rise in Consumption
Evolving needs
Rise in living standards
s t n e m g e s
s s o r c a
e s u d n e
l e e t s n
i
k c i t p U
Source : Estimates, World Steel Association, ASU – Apparent Steel Use
4
Tata Steel is focused on creating sustainable value Safe harbour statement
Leadership in Sustainability
Leadership in India
Robust financial health
Consolidate position as global cost leader
Leadership position in technology & digital
Become future ready
5
We are committed to ‘Zero harm’ Safe harbour statement Journey towards excellence in Safety & Health of employees1
Safety workshops involving Senior Leadership
69% LTIFR*
In the last 15 years
Fatalities
7
4
4
5
3
FY20
FY21
FY22
FY23 9MFY24
8 0 Y F
9 0 Y F
0 1 Y F
1 1 Y F
2 1 Y F
3 1 Y F
4 1 Y F
5 1 Y F
6 1 Y F
7 1 Y F
8 1 Y F
9 1 Y F
0 2 Y F
1 2 Y F
2 2 Y F
3 2 Y F
Control Room
4 2 Y F M 9
› Working committee for ‘AI in Safety’ established to deploy best
practices among Tata Group Companies. Gen AI based weekly alert for immediate action on high-risk observations
*Lost Time Injury Frequency Rate per million-man hours worked, for Tata Steel Group, Fatalities covers Tata Steel Standalone, SE Asia and Europe; TSML included from 1st Sep’23 and Tinplate Company of India Ltd (TCIL) and Tata Metaliks (TML) included from 1st Oct’23
› Wellness portal & 2 apps launched to provide one stop access to
health & wellbeing initiatives and drive better coverage
Note : 1. Employees refers to Permanent and Contract workforce
6
Improving quality of life of our communities Safe harbour statement Social capital and scalable change models to enable deep societal impact
33 Lakh+
Lives Impacted1
>Rs 1,600 crores spent2 since FY20
481
406
334
222
193
FY20
FY22
9MFY24
1 Cumulative as on 9MFY24; 2 CSR Spending by Tata Steel Standalone. 9MFY24 includes TSLP, TCIL and TML spend
Rural & Urban Education
Structured learning for 7 lac+ children
Samvaad'23 convened 2,700+ people from 150 tribes
Tribal Identity
Public Health & Nutrition
14,500+ high risk pregnant women prevented from maternal mortality
Grassroots Governance
Improved participation in Gram Sabha
Dignity for Disabled
10,000+ PwD impacted through initiatives
36.14 million cubic feet water storage capacity created
Water Resources
Gender & Youth Empowerment
2,600+ women trained in leadership
Climate resilient Livelihoods
13,000+ households adopted climate resilient agri practices
Grassroots Sports
8,400+ player trained in sporting activities
Public Infrastructure
250+ community structures created/renovated
Note : TSLP – Tata Steel Long Products, TCIL – Tinplate Company of India Limited, TML – Tata Metaliks, CSR – Corporate Social Responsibility
7
Aligned with the UN SDG framework to ensure a better future Safe harbour statement 68 targets have been prioritised across 15 UN SDGs
Relevant
Targets 3 / 7
Agriculture and allied activities
Skill development
Community enterprises
Households covered via improved agricultural practices (nos.)
Youth skilled and gainfully engaged through various courses (nos.)
Women engaged in micro - enterprises (nos.)
FY21
FY22
FY23
FY21
FY22
FY23
FY21
FY22
FY23
9MFY24
87,600
9MFY24
1,225
9MFY24
1,112
Note : SDG – Sustainable Development Goals
8
Our Journey so far… Safe harbour statement
Consistent growth at India operations…
…with industry leading profitability
in million tons
9
9
10
12
11
16
17
17
18
19
Average India EBITDA margin : 26%
32%
39%
32%
24%
22%
18%
26% 27%
21%
20%
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
Share price performance above benchmark
Tata Steel
Nifty
BSE Metal
Indexed Dec’14
600
400
200
0 2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source : Bloomberg, Prices as of 12th Jan 2024
9
Business update
Tata Steel Meramandali received ResponsibleSteelTM certification
Sustainability is at the core of our strategy Safe harbour statement Our sustainability framework guides deployment of sustainability initiatives across value chain
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Note : HR: Human Resource, POSH: Prevention of sexual harassment, SC: Supply Chain, ABAC: Anti-Bribery and Anti-Corruption , AML: AntiMoney Laundering
11
11
Net Zero by 2045 Safe harbour statement Route and Pace of decarbonisation to be calibrated across geographies
Pursuing Multiple Initiatives
Higher scrap charge
Higher Renewable energy use
Reducing ash in Coal
Steel – permanent material in the circular economy
▪ Key engineering and construction material
▪ Essential for economic
development & decarbonisation
Multilocation EAF
Progress on Hydrogen usage
Nature based solutions (biomass etc.)
Partnering with Academia
Cleaner fuel i.e. Natural gas etc.
Upscaling CCU pilots
Lower Alumina in Iron ore
New smelting technology
Note : CCU – Carbon Capture & Utilisation, EAF – Electric Arc Furnace
12
12
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Safe harbour statement TSUK: Pursuing decarbonisation to reduce 50 mn tons CO2e over a decade
▪ Decarbonisation plan → Transition to EAF based steelmaking
▪ Statutory consultations with the Unions have been initiated
▪ Partnering with Henry Royce Institute at Manchester for advanced materials research and at Imperial
College London for research in Sustainable Design & Manufacturing
1
Existing configuration
3
Green steel configuration
▪ BF – BOF based steelmaking with downstream
capacity of around 3 million tons
2
Intermediate financially viable configuration
▪ Sustains significant market presence across steel end
use segments in UK
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
▪ EAF with steelmaking capacity of 3 MTPA
o Carbon emission intensity of around 0.4 tCO2
per ton of crude steel
o Economically and Environmentally viable
solution, with the UK government support of £500 million
o Utilise locally available scrap → recycling
Note : 1. Post transition to EAF, BF - Blast Furnace, BOF – Basic Oxygen furnace, EAF – Electric Arc Furnace, TSUK – Tata Steel UK
13
13
Safe harbour statement TSI: Pursuing sustainability through multiple initiatives
▪ We are committed to responsible growth and the key levers for decarbonisation are carbon reduction
through Process improvement, Carbon direct avoidance and Carbon Capture and Utilisation
▪ Our Jamshedpur plant is the 1st site in India to achieve ResponsibleSteelTM
▪ Focus on greening energy mix
Process improvement
Carbon reductions through Carbon Direct Avoidance
▪ Improvement in blast furnace fuel
▪ Increase in steel scrap usage
rates across sites
during steelmaking
▪ Increase of PCI injection to
▪ Bio-char injection at the blast
optimise coke rate
furnace
▪ Coke dry quenching across
▪ Hydrogen injection at the blast
locations
furnace
▪ Waste heat utilisation
▪ Green electricity + EAF
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Carbon Capture & Utilisation
▪ CCU pilot plant in Jamshedpur to capture CO2 from blast furnace gas
▪ CO2 converted to Methanol or
Ethanol
▪ Mineral carbonation of slag and
other intiatives
▪ CO2 sequestration
Note :TSI – Tata Steel India, PCI – Pulverised Coal Injection, EAF – Electric Arc Furnace, CCU – Carbon Capture & Utilisation
14
14
Tata Steel is scaling up to capitalise on India growth opportunity Tata Investments set to drive sector leading returns
2x
capacity growth in India
Dominant manufacturing base
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
62%
>75%
India share (%)
~21 MTPA
40 MTPA
India
UK
Netherlands
SE Asia
0.75
EAF
TSK / TSM / NINL
5
TSK Ph 2
~21 MTPA
5
16
40 MTPA
NINL / EAF
Flats (A)
~16 MTPA
~27 MTPA
Longs (B)
~5 MTPA
~13 MTPA
Crude Steel (A+B)
~21 MTPA
40 MTPA
Upstream
36 MTPA Iron ore
60 - 65 MTPA
Tubes Wires
Tinplate
DI Pipe
Downstream
1 MTPA
0.45 MTPA
0.38 MTPA
0.20 MTPA
~4 MTPA
~1 MTPA
~1 MTPA
~1 MTPA
Note : TSK – Tata Steel Kalinganagar, EAF – Electric Arc Furnace, TSM – Tata Steel Meramandali, NINL – Neelachal Ispat Nigam Limited and DI – Ductile Iron
15
15
Tata Commenced phased comissioning of 5 MTPA expansion at Kalinganagar The largest ‘Blast furnace’ in India at 5,870 cubic metres
First Slab cast at SMS Caster #2 at Kalinganagar
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
6 MTPA capacity Pellet plant at Kalinganagar
Power systems at 5 MTPA blast furnace
Note : SMS – Steel Melting Shop
16
16
2.2 MTPA CRM complex to drive product mix enrichment Tata FHCR coils production commenced
Continuous Annealing Line
Widest cold rolling mill in India with capacity of 2.2 million tons per annum
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Future ready portfolio
High Tensile steel to meet lightweighting & safety needs
Advanced steel to serve Infra and Energy segments
▪ Receiving approvals from automotive OEMs for cold
rolled steel
▪ Continuous Galvanizing lines capable of doing
multiple coatings*
▪ Two “new” primary coatings* - ZAM and AlSi, to be
rolled out
Note : *1st in India, FHCR – Full hard cold rolled steel, OEM – Original Equipment Manufacturer, ZAM – Zinc Aluminum Magnesium, AlSi – Aluminum Silicon, CGL – Continuous Galvanising Line
17
17
Capacity growth to aid continued strong presence across segments
Leadership in chosen segments
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Customer engagement & investment in technology
Multiple routes to connect, transact & engage
Delivering superior experience on multiple points of “friction”
Developing long term partnership with SMEs
Services & Solutions: “Serving Consumers better” & “Extend Differentiation”
18
18
Tata Focus on innovation to remain supplier of choice in chosen segments
Focus on product innovation and Servitization across segments
Embracing Digitisation & Industry 4.0 → Digital steelmaking
Partnering with start-ups, research institutions and academia
Ecosystem to drive innovation at scale
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Consistently filed 100+ patents for the last 5 years
500+ New Products developed in last 5 yrs.
Remote operations and real time data analysis
Centres for innovation (Mobility, Mining etc.)
19
19
Tata Auto: Consolidating the position of “Preferred Steel Supplier” Product mix and enhanced services to meet needs of the future
▪ Makes up 24% of domestic
▪ Shift to Hi-strength steels to cater
deliveries
to emerging needs
Auto as % of total deliveries
Auto High-end sales up 8% YoY in 9MFY24
24%
24%
24%
FY22
FY23
9MFY24
▪ Partnering with customers in
▪ Focus on enhancing downstream
value creation
processing capability
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Note : HR – Hot Rolled, CR – Cold Rolled, GA – Galvannealed
20
20
Tata Retail: Poised to grow 2x in high margin business Leveraging pan India growth and branded presence especially Tata Tiscon
▪ Envisaged capacity growth at
▪ Strong cash flow generation
NINL and EAF
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
▪ Enhanced Phygital reach to the
▪ Developing strong ecosystem to
market
deliver superior experience
>11% YoY increase in YTD Revenues via
10,000+ Dealers
11K+ Unique customers per month
Influencers
Note : EAF – Electric Arc Furnace, NINL - Neelachal Ispat Nigam Limited, Influencers refers to Architect, Contractors & Engineers
21
21
Tata Downstream: Value added growth for product mix enrichment Set to grow by 2x – 4x
Tubes
Wires
Tinplate
Ductile Iron Pipes
Wide product portfolio incl. HAR & ERW tubes
Application of tubes in a structure at Kolkata
One out of three tyre manufacturers in India use Tata Wiron
Application in growing packaging industry
Tata Ductura, Tata Ductura, designed to last transportation of for years water and other uses
Leading manufacturer of pipes and tubes
Largest Carbon Spring Wire manufacturer
Market leadership in domestic tinplate industry
Leading manufacturer of Ductile Iron Pipe
Note : HAR – High Aspect Ratio, ERW – Electrical Resistance Welded
22
22
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Financial management to enable returns across cycle Tata
Value Drivers
Balance sheet management
▪ Optimise capital structure and cost
▪ Target Net Debt to EBITDA <2.5x across cycle
▪ Proactive financing & asset – liability match
Capital allocation
▪ Value accretive investments (ROIC : 15%)
▪ Portfolio restructuring
Operational excellence
▪ Minimize working capital
▪ Continuous improvement programs
1600
1400
1200
1000
800
600
400
200
0 Jan-18 Jan-18
Outcome
Bond spreads converged to Investment grade
Tata Steel Abja 5.45 (2028)
Jul-18 Jul-18
Jan-19 Jan-19
Jul-19 Jul-19
Jan-20 Jan-20
Jul-20 Jul-20
Jan-21 Jan-21
Jul-21 Jul-21
Jan-22 Jan-22
Jul-22 Jul-22
Jan-23 Jan-23
Jul-23 Jul-23
Jan-24 Jan-24
Total Shareholder Returns (%)
27
15
17
14
16
13
Source : Bloomberg for Total Shareholder Returns as on 12th Jan 2024, ROIC – Return on Invested Capital, IG – Investment Grade, HY – High Yield
23
23
5 years
10 years
25 years
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Value accretive consolidation with multiple benefits Tata
Unlisted
Listed
Tata Steel Mining (TSML)
S&T Mining
Indian Steel & Wire Products
TSLP Swap ratio 6.7
TCIL Swap ratio 3.3
Tata Metaliks Swap ratio 7.9
TRF Ltd. Swap ratio 1.7
Filing of scheme with Stock Exchanges (Reg. 37)
Filing of 1st motion application with National Company Law Tribunal (NCLT)
Shareholders meetings and creditor meetings ( if any)
Final hearing / order of NCLT
No objection letter from Stock Exchanges
ISWP
TRF
Order of NCLT on first motion application
Filing of the second motion application with NCLT
TSML, TSLP, TCIL, TML and S&T mining
Filing with Registrar to make scheme effective
Note : TSLP – Tata Steel Long Products, TCIL – Tinplate Company of India Ltd, S&T Mining – SAIL & Tata Steel JV, Swap ratio is number of Tata Steel’s shares offered in exchange for one share of merging entity
24
24
e t a d p U e c n a m r o f r e P
e t a d p U s s e n i s u B
Performance Update
Identifying and developing sporting talent among rural youth, India
Elevated input costs and volatile steel prices have weighed on global steel spot spreads across most regions ▪ Global steel prices were mixed in the Oct – Dec’23 period across key regions. US / EU prices increased towards the end of the quarter while Asia was relatively subdued
▪ Raw material prices moved higher during the quarter, with Coking coal prices up nearly 20% to $330/t levels while Iron ore prices moved similarly to around $140/t levels ▪ Overall, Steel spot spreads were under pressure for most of the quarter. However, US and EU steel spot spreads have witnessed improvement since November
▪ In China, steel production continued to outpace demand on sustained concerns about economic activity. This led to steady exports of around 7 – 8 million tons per month
China Steel spot spreads (Domestic, Export)
EU Steel spread including energy, carbon costs
HRC spot gross spreads ($/t)
HRC spot gross spreads ($/t)
600
450
300
150
0 Dec-20
China domestic Spreads
China export Spread
1,000
EU Steel spot spread
EU spread (with Energy, Carbon)
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
Dec-23
750
500
250
0 Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
Dec-23
Sources: World Steel Association, IMF, Bloomberg, Steelmint; China HRC export spread = China HRC export FOB – 1.65x Iron Ore (62% Fe CFR) - 1x Coal (Premium HCC CFR); China HRC domestic spot spread is with China HRC domestic prices; EU HRC spot spreads = HRC (Germany) - 1.6x iron ore (fines 65%, R’dam) - 0.8x premium hard coking coal (Aus) - 0.1x scrap (HMS, R’dam) ; EU spot spread incl. energy = EU HRC spot spread – Carbon cost – 0.5 x NG ($/Mwh) – 0.15 x Electricity ($/Mwh)
2626
India steel demand continued to improve while EU demand was subdued given the operating landscape marked by slowdown and geopolitics
India ▪ Indian apparent steel consumption was up around 11% on
Europe ▪ EU manufacturing PMI was 43 - 44 during Oct – Dec’23
YoY basis in 3QFY24 aided by government spending
indicating deceleration in economic activity
▪ Automotive and Infrastructure & Construction segments
continued to improve during the quarter
▪ Construction & Machinery demand was subdued on elevated interest rates. Auto was driven by backlogs
Key steel consuming sectors*
Key steel consuming sectors (%, YoY growth)
Capital Goods
Infrastructure/ construction goods
Automotive
150
100
50
0 Apr-19
Machinery
Construction
Vehicles (units)
100%
50%
0%
-50%
Jan-20
Oct-20
Jul-21
Apr-22
Jan-23
Oct-23
Apr-19
Jan-20
Oct-20
Jul-21
Apr-22
Jan-23
Oct-23
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 produced as per SIAM; growth of key steel consuming sector is calculated by removing sub-segments which do not consume steel, ECB – European Central Bank
Note : All data is on consolidated basis; 1. FY20 and FY21 incl. Southeast Asia Operations which is reclassified as continuing operations; 2. Interest Coverage Ratio: EBITDA / Interest, LTM basis
27
Steady increase in India sales to chosen segments Domestic deliveries up 3% QoQ and 10% YoY
Business Verticals
mn tons
4.74 0.64
1.46
1.86
0.39 0.38
3QFY23
4.82
0.72
1.62
1.87
0.41 0.20 2QFY24
4.88
0.78
1.63
1.96
0.41 0.10 3QFY24
Auto and ancillaries
1.2
1.2
1.0
End use sectors
Retail : Individual housebuilders
0.7
0.8
0.7
Construction & Infrastructure
1.3
1.2
1.2
3QFY23 2QFY24 3QFY24
3QFY23 2QFY24 3QFY24
3QFY23 2QFY24 3QFY24
Energy and Engg. goods
Consumer Durables and Packaging
0.7
0.7
0.7
0.3
0.3
0.3
Trade and Commercial
0.5
0.5
0.6
3QFY23 2QFY24 3QFY24
3QFY23 2QFY24 3QFY24
3QFY23 2QFY24 3QFY24
Automotive
BPR
IPP
Transfers
Exports
Note: India including Tata Steel Standalone and Neelachal Ispat Nigam Limited, BPR – Branded Products and Retail, IPP – Industrial Products and Projects, Transfers to Tubes, Wires and Others
Note : 3QFY23 is estimates based on FY23 breakup, Auto and ancillaries incl. B2B and ECA sales, Wire & Specialty steel sales; Retail is B2C includes Tiscon, Shaktee, Galvanised Plain Retail, Tubes and Wires; Construction & Infra is B2B sales to construction companies; Energy incl. Oil & Gas, Wind, Solar etc.; Engineering incl. Shipbuilding, Railways and Capital Goods etc.; Consumer Durables is sales to Furniture, Appliances; Packaging incl. Tinplate, High Tensile steel strapping ,LPG, Drums & Barrels and Trade & Commercial is sales to rerollers, fabrication etc., B2B – Business to Business, ECA – Emerging Corp. accounts, B2C – Business to 28 Consumer and LPG – Liquefied Petroleum Gas
Tata Steel Consolidated
(All figures are in Rs. Crores unless stated otherwise)
Production (mn tons)1
Deliveries (mn tons)
Total revenue from operations
Raw material cost2
Change in inventories
Employee benefits expenses
Other expenses
EBITDA
Adjusted EBITDA3
Adjusted EBITDA per ton (Rs.)
Other income
Finance cost
Pre-exceptional PBT
Exceptional items (gain)/loss
Tax expenses
Reported PAT
Other comprehensive income
3QFY24
2QFY24
3QFY23
Key drivers for QoQ change:
7.58
7.15
55,312
22,126
321
6,527
20,075
6,334
5,742
8,035
228
1,881
2,262
334
1,406
522
1,041
7.31
7.07
55,682
25,147
756
5,917
19,594
4,315
4,147
5,869
228
1,959
160
6,899
(228)
(6,511)
(774)
7.56
7.15
57,084
28,231
1,791
5,342
17,671
4,154
2,727
3,812
271
1,768
243
(160)
2,905
(2,502)
(3,629)
▪ Revenues: were broadly stable QoQ as effect of slightly higher volumes was offset by lower realisations esp. in UK and Netherlands
▪ Raw Material cost: declined on lower raw material
costs and purchases in India and Netherlands
▪ Change in inventories: primarily relates to decline in
inventory value at Europe
▪ Other expenses: were marginally higher on royalty, freight and power related expenses at Tata Steel Standalone
▪ Exceptional items: relates to redundancy cost at
Netherlands
▪ Other comprehensive income: primarily relates to
foreign currency translation differences
1. Production Numbers: Standalone & Neelachal Ispat Nigam Limited - Crude Steel Production, Europe - Liquid Steel Production; SEA - Saleable Steel Production. 2. Raw material cost includes raw material consumed, and purchases of finished and semi-finished products. 3. Adjusted for changes on account of FX movement on intercompany debt / receivables
2 9
29
Consolidated 3QFY24 EBITDA1 stood at Rs 5,742 crores EBITDA margin was at 10%
465 -
1,097
-
▪ Selling Result: driven by lower realisations in
UK and Netherlands partly offset by India
▪ Cost Changes: given drop in raw material
costs in India and Netherlands
944
977
5,742
▪ Volume/Mix: primarily driven by higher deliveries in India and Netherlands
▪ Others: relates to improved performance of
Indian subsidiaries
Selling Result
Cost Changes
Volume/Mix
Others
Adjusted EBITDA 3QFY24
4,147
Adjusted EBITDA 2QFY24
1 EBITDA adjusted for changes on account of FX movement on intercompany debt / receivables
Net debt stood at Rs 77,405 crores Group liquidity remains strong at Rs 23,3491 crores
89,723
337
2,494
665
88,230
10,825
in Rs crores
77,405
Net Debt Dec'23
Gross Debt Sep'23
Movement in leases
Loan movement
FX Impact and Others
Gross Debt Dec'23
Cash, Bank & Current Investments
Note : All data is on consolidated basis; 1. FY20 and FY21 incl. Southeast Asia Operations which is reclassified as continuing operations; 2. Interest Coverage Ratio: EBITDA / Interest, LTM basis
1 Group liquidity includes cash & cash equivalents and undrawn fund-based lines
313131 31 31
Key financial credit metrices EBITDA Margin (%)1
EBITDA / ton (Rs.)1
Interest Coverage Ratio (x)1,2
Gross & Net Debt (Rs. crore)
26.2%
21,626
11.7
18.9%
19.8%
12.2%
13.4%
9.8%
11,110
6,267
11,358
10,838
7,832
3.9
4.1
5.2
3.2
2.4
1,16,328
1,00,816
88,501
1,04,779
75,561
84,893 88,230
94,879
75,389
77,405
67,810
51,049
Net
Gross
FY 19
FY 20
FY 21
FY22
FY23
9MFY24
FY19
FY20
FY21
FY22
FY23
9MFY24
FY19
FY20
FY21
FY22
FY23
9MFY24
FY19
FY20
FY21
FY22
FY23
9MFY24
Net Debt / EBITDA (x)2
Net Debt / Equity (x)
Credit Rating
5.91
1.43
1.42
3.19
3.23
2.44
2.07
0.98
0.78
0.61
0.52
FY19
FY20
FY21
0.80 FY22
FY23
9MFY24
FY19
FY20
FY21
FY22
FY23
9MFY24
Investment Grade
S&P
Moody's
7 BBB-/ Baa3
6 BB+/ Ba1
BB/ Ba2 5
e BB-/ Ba3 l 4 t i T s 3 i x B+/ B1 A
2 B/ B2 1
B-/ B3 0 Dec-19
FY19 FY20 FY21 FY22 FY23 9MFY24
Dec-22
Dec-21
Dec-23
Dec-20
Note : All data is on consolidated basis; 1. FY20 and FY21 incl. Southeast Asia Operations which is reclassified as continuing operations; Interest Coverage Ratio: EBITDA/ Interest 2. EBITDA on LTM basis
323232 32
Annexures
Robotics Wagon Tippler at India operations
Tata Steel Standalone Continued focus on operational efficiencies and minimizing environmental impact
Coke Rate (kg/thm)
Specific Energy Consumption (Gcal/tcs)
2 6 3
5 6 3
8 5 3
9 4 3
Good
0 4 3
0 0 . 6
5 9 . 5
5 8 . 5
3 6 . 5
Good
8 7 . 5
Specific Fresh Water Consumption (m3/tcs)
Specific Fresh Water Consumption (m3/tcs)
Good
1 5 . 3
0 2 . 3
4 8 . 2
4 7 . 2
9 4 . 2
FY20
FY21
FY22
FY23
9MFY24
FY20
FY21
FY22
FY23
9MFY24
FY20
FY21
FY22
FY23
9MFY24
CO2 Emission Intensity (tCO2/tcs)
Specific Dust Emission (kg/tcs)
Solid Waste Utilisation (%)
9 4 . 2
2 5 . 2
0 5 . 2
4 4 . 2
Good
6 4 . 2
8 5 . 0
9 4 . 0
3 4 . 0
7 3 . 0
Good
5 3 . 0
1 9
0 0 1
9 9
8 9
Good
0 0 1
FY20
FY21
FY22
FY23
9MFY24
FY20
FY21
FY22
FY23
9MFY24
FY20
FY21
FY22
FY23
9MFY24
Note : CO2 emission intensity calculated as per worldsteel methodology
3 4
34
Tata Steel Standalone1
(All figures are in Rs. Crores unless stated otherwise)
Production (mn tons)
Deliveries (mn tons)
Total revenue from operations
Raw material cost2
Change in inventories
Employee benefits expenses
Other expenses
EBITDA
Adjusted EBITDA3
Adjusted EBITDA per ton (Rs.)
Other income
Finance cost
Pre-exceptional PBT
Exceptional items (gain)/loss
Tax expenses
Reported PAT
Other comprehensive income
3QFY24
2QFY24
3QFY23
Key drivers for QoQ change:
5.13
4.88
34,682
13,452
(922)
1,867
12,036
8,257
8,247
16,903
329
1,058
6,013
(10)
1,370
4,653
168
4.91
4.82
34,185
14,457
570
1,864
10,427
6,996
6,531
13,564
824
1,137
5,089
12,993
610
(8,514)
193
4.94
4.74
33,929
16,394
401
1,763
10,235
5,335
4,764
10,054
724
1,117
3,240
7
869
2,364
(44)
▪ Revenues: were marginally higher on improved
volumes and steel realisations
▪ Raw Material cost: decreased primarily driven by
movement in inventory value of chrome ore, excluding this raw material cost was flat
▪ Other expenses: increased on royalty, FX impact and
rise in fuel related costs, repairs and maintenance
▪ Other Income: was lower given conversion of
intercompany loan into equity on 29th Sep’23, leading to decline in interest income
▪ Exceptional items: primarily relates to Employee separation scheme. 2Q relates to impairment of investment value in UK operations
▪ Tax expenses: moved higher in line with profitability
3 1. Tata Steel Standalone numbers have been restated from April 1, 2022, to reflect merger of Tata Steel Long Products Limited, Tata Steel Mining Limited, Tata Metaliks Limited, Tinplate Company of India Limited and S&T mining with 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 5 material consumed, and purchases of finished and semi-finished products 3. Adjusted for changes on account of FX movement on intercompany debt / receivables
35
TSUK
TSN
Key operating parameters
Coke Rate (kg/thm)
Specific Energy Consumption (GJ/tcs)
4 2 3
1 9 2
7 3 3
0 0 3
6 3 3
Good
0 0 3
7 1 3
5 7 2
1 1 3
9 7 2
Good
CO2 Emission Intensity (tCO2/tcs)
Good
9 . 3 2
.
8 9 1
8 . 2 2
.
2 0 2
1 . 3 2
.
4 0 2
3 . 3 2
.
5 9 1
7 . 2 2
.
0 1 2
5 2 . 2
6 7 1
.
4 1 . 2
7 7 1
.
6 1 . 2
8 7 1
.
8 1 . 2
6 7 1
.
2 1 . 2
0 8 1
.
FY20
FY21
FY22
FY23
9MFY24
FY20
FY21
FY22
FY23
9MFY24
FY20
FY21
FY22
FY23
9MFY24
Specific Fresh Water Consumption (m3/tcs)
Specific Dust Emission (kg/tcs)
Solid Waste Utilisation (%)
7 . 8
7 . 8
8 . 9
2 . 5
8 . 4
2 . 5
5 . 6
9 . 4
CY19
CY20
CY21
CY22
Good
2 . 3 1
5 . 6
CY23
*
Good
Good
4 . 0
3 . 0
3 0
.
3 . 0
3 0
.
2 0
.
3 . 0
2 0
.
3 . 0
2 0
.
9 9
9 9
9 9
9 9
9 9
9 9
9 9
8 9
9 9
8 9
CY19
CY20
CY21
CY22
CY23
*
CY19
CY20
CY21
CY22
CY23
*
Note : TSUK and TSN report KPIs on a calendar basis aligned to regulatory requirements in their geographies, TSN parameters have been affected by ongoing reline of one of the blast furnaces, CO2 emission intensity as per worldsteel methodology, *CY23 is an estimate, Solid waste utilisation for TSN revised to include use of byproducts and waste
3 6
36
3QFY24
2QFY24
3QFY23
Key drivers for QoQ change:
Tata Steel Netherlands
(All figures are in Rs. Crores unless stated otherwise)
Liquid Steel production (mn tons)
Deliveries (mn tons)
1.19
1.30
1.19
1.23
1.52
1.40
Total revenue from operations
12,923
12,961
14,348
Raw material cost1
Change in inventories
Employee benefits expenses
Other expenses
EBITDA
EBITDA per ton (Rs.)
5,350
1,250
3,068
4,469
(1,215)
(9,370)
7,049
(39)
2,536
4,560
(1,145)
(9,303)
7,034
727
2,255
4,410
(78)
(556)
1. Raw material cost includes raw material consumed, and purchases of finished and semi-finished products; Figures prior to inter value chain eliminations
▪ Revenues: were broadly similar with higher volumes
being offset by drop in steel realisations
▪ Raw Material cost: was lower QoQ driven by lower
coking coal & iron ore consumption cost and decline in external purchase of slabs
▪ Employee benefits expenses: increased on wage
revisions and actuarial assumptions driven movement in Other Long Term Employee Benefits (OLEB)
▪ Other Expenses: decreased primarily on lower bulk
gas related costs
3 7
37
3QFY24
2QFY24
3QFY23
Key drivers for QoQ change:
Tata Steel UK
(All figures are in Rs. Crores unless stated otherwise)
Liquid Steel production (mn tons)
Deliveries (mn tons)
Total revenue from operations
Raw material cost1
Change in inventories
Employee benefits expenses
Other expenses
EBITDA
0.72
0.64
6,294
3,255
105
1,210
3,381
0.76
0.73
7,288
3,876
312
1,121
3,346
0.72
0.66
7,130
3,749
730
944
3,183
(1,657)
(1,367)
(1,475)
EBITDA per ton (Rs.)
(26,063)
(18,802)
(22,340)
1. Raw material cost includes raw material consumed, and purchases of finished and semi-finished products; Figures prior to inter value chain eliminations
▪ Revenues: declined on lower deliveries as well as drop
in realisations
▪ Raw Material cost: decreased as lower production led
to drop in consumption of raw materials
▪ Change in Inventories: was primarily driven by
inventory built up
▪ Other Expenses: marginally increased on emission
rights related costs partly offset by decline in bulk gas and electricity costs
▪ Employee benefits expenses: increased as 2Q included interest credit on surplus pension assets relating to British Steel Pension Scheme
3 8
38
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Investor enquiries
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