View
3
Download
0
Category
Preview:
Citation preview
VEDANTA RESOURCES PLCVEDANTA RESOURCES PLC
Interim Results Presentation
for the six months ended
30 September 2012
7 NOVEMBER 2012
Cautionary Statement and Disclaimer
The views expressed here may contain information derived from publicly available sources that have not been
independently verified.
No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this
information. Any forward looking information in this presentation including, without limitation, any tables, charts
and/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. This
presentation should not be relied upon as a recommendation or forecast by Vedanta Resources plc ("Vedanta").
Past performance of Vedanta cannot be relied upon as a guide to future performance.
This presentation contains 'forward-looking statements' – that is, statements related to future, not past, events. In
this context, forward-looking statements often address our expected future business and financial performance,
and often contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward–
looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties
arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in
interest and or exchange rates and metal prices; from future integration of acquired businesses; and from
numerous other matters of national, regional and global scale, including those of a environmental, climatic, natural,
political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future
results to be materially different that those expressed in our forward-looking statements. We do not undertake to
update our forward-looking statements.
This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of
an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta or any
of its subsidiary undertakings or any other invitation or inducement to engage in investment activities, nor shall
this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection
with, any contract or investment decision.
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 2
Overview
Navin Agarwal
Deputy Executive
Chairman
H1 FY2013 Highlights
Operations
� Significant production growth across the portfolio
− 23% increase in integrated production at Copper Zambia
− Record production at Cairn India driven by 35% higher output at Rajasthan block
� Strong cost performance despite industry-wide inflationary trends
� State-wide restriction on iron ore mining in Goa
Financial
� EBITDA of $2.6bn; EBITDA margin 47%1� EBITDA of $2.6bn; EBITDA margin 47%1
� Underlying EPS of $0.972
� Free Cash Flow of $1.4bn3; Cash and Liquid Investments of $7.2bn
� Interim Dividend of 21 US cents per share, up 5%
Corporate
� Group simplification on track for completion in CY2012
Note: 1. Excludes custom smelting at Copper and Zinc-India operations
2. Based on profit for the year after excluding special items and other gains and losses, and their resultant tax and minority interest effects
3. Free Cash Flow before Growth Capex
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 4
Optimising Group Structure
Restructuring on track for completion in CY2012
� Consolidates and simplifies group structure,
eliminates cross-holdings
� Delivers significant synergies up to $200mn/yr
� Reduces debt service liability at plc by $5.9bn
Event Completion
BSE and NSE approval � Apr 2012
Konkola Copper Mines
Vedanta Resources
Sesa Sterlite
58.3%79.4%
5FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Note: Shareholding based on basic shares outstanding
Competition Commission approval � Apr 2012
Vedanta / Sesa / Sterlite / MALCO shareholder approvals
� Jun 2012
Foreign Investment Promotion Board approval
� Jun 2012
Supreme Court of Mauritius approval � Sep 2012
High Courts of India approval / Transaction completion
� CY 2012
Zinc-
Lead-
Silver
�HZL
�Zinc Int’l
Iron Ore
�Sesa Goa
�WCL
Oil & Gas
�Cairn
India
Copper
�Tuticorin
�CMT
Alumi-nium
�BALCO
�VAL
Power
�Talwandi
Sabo
� Jharsuguda
�BALCO
�MALCO
Tier-1 Diversified Asset Portfolio
Positioning CapacityR&R Life1 Sustainable Cost Position
Largest integrated zinc-lead producer 1mtpa 25+ Lowest Quartile
One of the largest undeveloped zinc deposits
400ktpa 20+2
Lower Half
One of the largest silver producers 16mozpa 25+ By-product
India’s largest private-sector crude oil producer
260kboepd3
17 Lowest Quartile
Largest Indian iron ore producer-exporter,
Zinc India
Zinc Intl.
Silver
Oil & Gas
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Largest Indian iron ore producer-exporter, developing large deposits in Liberia
20.5mtpa 18 Lowest Quartile
World class fully-invested operations 400ktpa 24+5
Lower Half
Strategically located large-scale assets 2.3mtpaCurrently Lower Half; LowestQuartile with Captive Bauxite
Iron Ore4
Copper Zambia
Aluminium
Note: 1. At capacity, as per R&R as at 31 March 2012
2. Including Gamsberg
3. Capacity expected for the assets that are currently producing, subject to approvals
4. Excluding Liberia
5. Mine life of Konkola Deeps
Large, Low-Cost, Long-Life, Scalable Assets
6
Strong and Consistent Profitability
33% 33%
41%
59%
55%
35%
43%45%
41%
47%
Group EBITDA margin¹ Average LMEX
Brent Crude Oil ($/bbl)
Consistent Profit Margins
33%
34%
38%
54%
56%
Iron Ore
Zinc- International
Power
Zinc- India
Integrated
Oil & Gas²
EBITDA Margins by SegmentH1 FY2013
50%
20%
5%
5%
4%
Share of EBITDA
7FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Notes: 1. Excludes custom smelting at Copper and Zinc-India operations, which represents c.4% of Group EBITDA
2. Oil & Gas EBITDA margins have been calculated after adding back Rajasthan royalties and profit sharing with government to revenues. EBITDA margin based on
reported revenues was 79%
Consistent Profitability driven by Asset Quality and Diversification
1,636
3,319
29
109
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 H1
FY13
11%
24%
32%
47%Group¹
Aluminium
Copper Zambia
Integrated
Copper Australia 1%
6%
4%
$2,562mn
Key Strategic Priorities
� Deliver industry-leading production growth across our portfolio
� Continue to add reserves and resources to drive long-term value
� Complete the simplification of the Group structure
� Minority buyouts of HZL and BALCO
� Reduce gearing from free cash flow
8FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Long-Term Value Creation with a Focus on Sustainability
Financials
D.D. Jalan
Chief Financial Officer
� Strong growth in EBITDA and Free Cash Flows
− Cairn India has contributed to the diversity and scale of cash flow generation
� Positive Free Cash Flows post growth capex
Financial Highlights
$mn or as stated H1 FY2013 H1 FY2012 % change
EBITDA 2,562 1,721 49%
EBITDA margin1 (%) 47% 37% -
Underlying Attributable PAT2 264 189 40%
Underlying EPS($/share)2 0.97 0.69 40%Underlying EPS($/share)2 0.97 0.69 40%
Free Cash Flow before Growth Capex 1,438 746 93%
Growth Capex 954 1,195 (20)%
Free Cash Flow after Growth Capex 484 (449) -
Interim Dividend (USc/share) 21.0 20.0 5%
Notes: 1. Excludes custom smelting at Copper and Zinc-India operations
2. Based on profit for the year after excluding special items and other gains and losses, and their resultant tax and minority interest effects
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 10
EBITDA Reconciliation
H1 FY2013 vs. H1 FY2012 ($mn)
1,721
1,290
170
572,562
(539) (26) (110)
Zinc $(218)mn
Copper $(143)mn
Aluminium $(133)mn
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 11
1,721
EBITDAH1 FY2012
Cairn India FX and Others
Prices Cash Costs Volume excl. Iron Ore
Volume Iron Ore
EBITDAH1 FY2013
Commodity Linked
$(18)mn
Aluminium $(133)mn
2,562
(663)
(468)
EBITDA to PAT
H1 FY2013 ($mn)
US$383mn of amortisation at Cairn India
937
171
(122)
264
(236)
(136)
(766)
EBITDA Depreciation Amortization Net Interest Expense
FX, Embedded Derivatives and Special Items
Tax PAT MinorityInterest
AttributablePAT
Underlying Attributable PAT¹
25%
Underlying Attributable
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Notes: 1. Based on profit for the year after excluding special items and other gains and losses, and their resultant tax and minority interest effects
12
18%
Attributable
Well-Invested Capex Driving Cash Flow Growth
� $18.7bn invested over last 3 years
− $8.6bn Capex
− $10.0bn for acquisitions of Cairn India, Zinc
International and Liberia
� Capex estimates:
− $2.1bn on metals and mining up to FY2015
− $1.2bn2 on Rajasthan oil and gas up to FY2014
for development and exploration3
� Flexibility in capex
− $1.8bn4 for metals and mining up to FY2015
1.4
3.7
1.8
2.52.3
2.7
3.43.3
Free Cash Flow-H1¹ Free Cash Flow-H2¹ Capex Capex Flexibility
Cash Flow and Growth Capex Profile - $bn
� Lanjigarh refinery, Tuticorin 400kt, and India
Iron ore expansions3
� 1.25mt Jharsuguda smelter completion
− $0.8bn2 for oil and gas capex
up to FY2014 – ex-Rajasthan
� Liberia and Gamsberg – Phased capex
13FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
1.0
1.9
0.3
0.2
1.0
1.0
1.4
1.21.3
FY2010 FY2011 Proforma
FY2012
H1
FY2013
H2
FY2013
FY2014e FY2015e
Positive Free Cash Flows to drive Deleveraging
Notes: 1. Free cash flow after sustaining capex but before growth capex
2. Capex net to Cairn India; part of FY2014e capex is subject to Government of India approval; FY2015e capex has not been announced
3. Subject to approvals
4. Further capex of $0.2bn in FY 2016
Strong Financial Profile
� Cash and Liquid Investments of $7.2bn, with additional $3.1bn undrawn lines of credit
� Credit ratings of BB/Ba3/BB1
� Proforma (including Cairn) LTM Net Debt:EBITDA of 1.97x
� Net Gearing ratio 34%
2.4 3.3 3.3
4.0
4.5
Debt Maturity Profile ($bn) as of 30 September 20122
$1.6bn - Refinancing tied-up$0.9bn - Working capital facilities$0.1bn - Repaid in October 2012
$50 mn - Prepaid in October 2012$500 mn - Refinancing tied-up$200 mn - To be repaid through internal sources
14FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Notes: 1. Issue credit Ratings as per S&P, Moody’s and Fitch respectively
2. Debt numbers shown at face value
3. Convertibles at Vedanta Plc of $883mm due in FY2017 (with a put option in April 2013) and $1,250mm due in FY2017 (with a put option in July 2014) shown at
put dates
0.8 0.5 0.1 0.5 0.8
2.2 0.9
1.3
1.5 1.3 2.5
0.4 1.4
0.5
0.6
2.4 3.3 3.3
1.0
1.4
FY2013 FY2014³ FY2015³ FY2016 FY2017³ FY2018 and later
Debt at VED plc Convertibles at Put Date Debt to be transferred from VED plc to Sesa Sterlite Debt at Subsidiaries
Financial Outlook
� Asset quality, diversification and cost control continue to drive margins and cash flows
� Goa iron ore mining suspension: Limited impact of fixed costs
� FY 2013 maturities tied up
� Impact of Sesa Sterlite merger on a pro-forma basis:
H1 FY2013 ($mn or as stated) Proforma Actual
15FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Notes: 1. Based on profit for the year after excluding special items and other gains and losses, and their resultant tax and minority interest effects
2. Debt numbers at Face Values, as of 30 September 2012, net of intercompany receivable
3. Interest paid on external debt net of interest income on inter-company receivable
H1 FY2013 ($mn or as stated) Proforma Actual
EBITDA 2,562 2,562
Underlying Attributable PAT1 314 264
Underlying EPS($/share)1 1.15 0.97
Free Cash Flow after Growth Capex 515 484
Debt at plc2 3,835 9,736
Interest cost at plc3 91 247
Business and
Operations
M.S. Mehta
Chief Executive Officer
Aluminium16%
Copper
Aluminium4%
Copper11%
Zinc-India20%
Power5%
Continued Growth and Diversification
FY2004 (IPO)
Aluminium5%
Copper24%
Iron Ore18%
Power3%
H1 FY2012 H1 FY2013
Copper29%
Zinc India55%
EBITDA: $323mn
Zinc-Int.5%
Iron Ore5%
Oil & Gas50%
Zinc-India38%
Zinc-Int.12%
EBITDA: $1.7 bn EBITDA: $2.6bn
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 17
4%
Proximity to Rapidly Growing Markets
Other Far East and
Asia
Middle East and Africa
11%
Rest of the World7%
Vedanta Revenues by GeographyH1 FY2013
80%
Strong Market Positioning in IndiaH1 FY2013 India Market Shares
#1 #1 #1 #1 #2#1
18FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
India62%
China16%
Asia4%
36%
16%
40% 40%
5%
Zinc Lead Silver Copper Aluminium Oil
Notes: Rank excludes imports. Oil & Gas production numbers considered instead of sales.
Source: Wood Mackenzie, Indian Ministry of Petroleum and Natural Gas, IBIS, company sources
H1 Production Growth and Cost Performance
29%
(17)%
59%
66%
(5)%
23%
13%
9%
(47)%
18%
Oil & Gas¹
Zinc India - Zinc²
Zinc India - Lead²
Zinc India - Silver²
Zinc Intl
Copper Zambia²
Copper Australia
Copper India
Iron Ore³
Aluminium
H1 FY2013 Production (% change vs. H1 FY2012)
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 19
Notes: 1. Working Interest
2. Integrated production
3. Sales
18%
64%
Aluminium
Power
(2)%
(7)%
1%
(18)%
(34)%
Zinc India - Zinc
Zinc Intl
Copper Zambia²
Aluminium
Commercial Power
Delivering significant production growth and cost reduction across the portfolio
H1 FY2013 Dollar Unit Costs (% change vs. H1 FY2012)
Sustainability – Integral to our Business
� Safety
− Sustained reduction in LTIFR: 0.87 in
LTM H1 FY2013 vs. 0.99 in FY2012
− Focus on safety culture to eliminate fatalities
due to low-probability high-impact events
� Climate Change – Carbon Disclosure Project
− 8th among the 38 FTSE 350 material companies
− Scored 76 versus 62 in 2011
� Sustainability Framework – Scott Wilson
Review
− 21 of 29 recommendations implemented
LTIFR(per million man hours)
-54%
Vedanta
1.9 1.7
1.5
1.1 0.99
0.87
2.1
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 LTM H1 FY2013
Peer Average
− 21 of 29 recommendations implemented
− Final sign-off audit in June 2013
� Communities
− 3.1 million people benefited through community
development programmes in collaboration with
NGOs and government administration
− Focus: Health and Nutrition, Education, Women
Empowerment, Water & Sanitation, and
Sustainable Livelihood
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 20
Source: Peer average of last reported numbers for FTSE-100 metal companies who
report LTIFR
Oil & Gas
Oil & Gas H1 FY2012 H1 FY2013
Average Daily Gross Operated Production (boepd)
170,867 207,105
Rajasthan 125,189 169,486
Ravva 36,997 30,591
Cambay 8,680 7,028
Average Daily Working Interest Production (boepd)
99,429 128,335
Rajasthan 87,633 118,641
Ravva 8,324 6,883
Cambay 3,472 2,811
Brent (US$/boe) 114.8 108.9
Average realizations – oil & gas(US$/boe)
101.9 98.0
Operations and Development
� H1 gross production 21% higher at 207,105 boepd
− Low cost operator
� Cairn India declares maiden dividend
� Rajasthan block ramped-up by 35% to c.175kbopd
− More than 20% of India’s domestic crude
production
� Rajasthan block basin potential of 300kbopd1
− Development on track to achieve significant part
of 240kbopd by CY20131
Exploration and New Ventures
� India
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
878
1,290
H1 FY2012¹ H1 FY2013²
Note: 1. Subject to approvals
2. Subject to South African regulatory approvals
Note: 1. Prior to completion of acquisition, numbers are in Indian GAAP as
reported by Cairn India Ltd
2. Numbers post acquisition, in IFRS
EBITDA ($mn)
21
� India
− KG-ONN-2003/1, largest onshore discovery in KG
basin to date - appraisal drilling in Q1 FY2014
− Ravva operating for more than 15 years,
additional exploratory well drilling planned in H1
FY2014
� International
− Sri Lanka: Opened up frontier Mannar basin with
two discoveries - phase 2 exploration drilling in
mid CY2013
− South Africa: Farm-in agreement in offshore
Block 12 in proven Orange Basin, with 60% stake
and as operator
125
c.175
2401
3001
At Acqn.Dec 2012
Apr-12 Sometime in CY 2013
BasinPotential
Gross In Place Gross EUR
Rajasthan Block Update
Fast Track Development and Production Ramp-up
� Sold more than 120 mn boe of crude to Indian refiners
− Generated gross revenues of more than US$11bn to date
� Mangala field production at approved FDP capacity over last two
years
− Currently producing c.150,000 bopd post government approval
− Polymer EOR implementation expected to commence in FY2015
� 70 mn bbls booked as gross 2P reserves
� Bhagyam field currently producing at c.25,000 bopd
− Focus on drilling wells and de-bottlenecking of pipeline
� Aishwariya field development in progress
Rajasthan Gross Production(in kbopd)
Rajasthan Resource and Value Potential(in mn boe)
Under Development
Future Development & Prospective Resource
2,168 2,010
3,100
7,278
1,044
165530
1,739
MBARS BH+19 Disc. Exploration Total
Gross In Place Gross EUR� Aishwariya field development in progress
− Expected to commence production by end FY2013
Underexplored basin with significant exploration upside
� Block’s potential resource estimated at 7.3 bn boe gross in-place
− Expected Ultimate Recovery (EUR) at 1.7 bn boe
− Resource base supports basin production potential of 300,000
bopd
� Exploration potential estimated at 530 mn boe gross recoverable
risked prospective resource
− “Drill-Ready” preparation at advanced stage
22FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Note: 1. Subject to approvals2. Gross EUR Includes EOR (Enhanced Oil Recovery) potential of 308 mmbbls (70mmbbls booked as reserves)
(in mn boe)
Zinc
Zinc-India
� Strong ramp-up of lead and silver production
− FY2013 expected integrated production of 11.3moz
silver and 100kt lead
� Mined metal in line with mine plan: FY2013 production
expected to be more than FY2012
� Maintained lowest quartile cost position
� Kayar and RA underground mining from FY2014
� Focused on R&R net addition at existing mines
� Feasibility study underway for next leg of growth
Zinc-India H1 FY2012 H1 FY2013
Mined Metal (kt) 398 377
Refined Zinc (kt) 378 324
Refined Lead (kt)1 33 58
Silver – Integrated (moz)1 3.09 5.58
Zinc LME 2,236 1,906
Zinc CoP2 ($/t) 861 845
Zinc-International H1 FY2012 H1 FY2013
Mined Metal – Lisheen & BMM (kt) 157 147
Refined Zinc – Skorpion (kt) 76 73
658504
214
135
871
638
H1 FY2012 H1 FY2013
India International
Zinc-International
� H1 production volumes in line with mine plan
− FY2013 volumes expected to be 420kt
� Significant cost reduction driven by on-going efficiency
improvement programs
� 186mt Gamsberg project
− Feasibility study by FY2013
− Phased development
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
EBITDA ($mn)
Refined Zinc – Skorpion (kt) 76 73
CoP ($/t) 1,164 1,087
Notes: 1. Includes captive consumption
2. Excluding royalty
23
Iron Ore
India
� Karnataka mining ban – regulatory reviews underway to
allow mining to resume
− Some other mines have been allowed to resume
− CEC has approved our R&R plan at a provisional
capacity of 2.29mtpa
� Goa mining ban from 11 September 2012
Liberia
� Aeromagnetic survey completed; scoping study underway
Iron Ore H1 FY2012 H1 FY2013
Sales1 5.8 3.1
Goa 4.0 3.0
Karnataka 1.8 0.1
Production 5.5 3.7
Pig iron - Production (kt) 126 121
Met coke - Production (kt) 128 146
Average Net Sales Realizations ($/t) 79.6 69.6
Note: 1. Iron ore sales includes captive consumption of 0.1 mt in H1 FY2012 and
0.2 mt in H1 FY2013. Sales of iron ore from Karnataka were 0.06 mt in
H1 FY2013 through court sponsored e-auctions of inventory.
� Aeromagnetic survey completed; scoping study underway
− c.3x upside to earlier 1bn tonnes R&R est.
− Potential for ramp-up to 27mtpa
� Favourable project parameters: Two brownfield assets,
capex flexibility, proximity to port, low opex ($30-35/t)
� First shipment expected in FY2014
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 24
307
115
H1 FY2012 H1 FY2013
EBITDA ($mn)
Copper-India/Australia
� Strong mined volumes at Australia
− Stabilized mining operations
� Strong operating performance: higher refined volumes at
Tuticorin
− Efficient copper recovery
− Overall improved operational efficiencies
� EBITDA lower due to lower sulphuric acid realizations,
partially made-up by higher volumes
Copper-India/Australia H1 FY2012 H1 FY2013
Mined Metal 11 13
Refined Metal – India (kt) 161 175
Copper LME 9,057 7,785
Copper Tc/Rc realization 13.4 11.8
Conversion cost – India (c/lb) (3.3) 6.3
.
� 160MW CPP Project - First 80MW synchronised
− Captive power expected to further lower gross costs
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
EBITDA ($mn)
25
34 33
128
75
162
108
H1 FY2012 H1 FY2013
Copper Australia Copper India
Copper-Zambia
� Integrated production up 23%
− Ramp-up at Konkola due to faster mine development
− Higher volumes from Nchanga
� Bottom shaft loading commissioned at KDMP shaft#4
− Shaft equipping complete, waste hoisting commenced
− Platform for 25-30% annual growth in mined metal
Copper-Zambia H1 FY2012 H1 FY2013
Mined Metal 76 86
Refined Metal – Integrated 68 83
Refined Metal - Custom Smelting 34 27
Copper LME 9,057 7,785
CoP – Integrated ($/lb) 2.24 2.26
244185
H1 FY2012 H1 FY2013
� Nchanga 3mt West Mill commissioned
� Integrated copper production targets
− 175kt in FY2013
− 200kt in FY2014
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
EBITDA ($mn)
26
Aluminium
� Continued focus on operational efficiency
− VAL and BALCO smelters operating at rated capacity
− Improving trend in specific consumption parameters
− Value added product sales up 11%, at 215kt
� Delivering 11% EBITDA margin
− 2nd quartile costs at $1,873/t, without bauxite linkage
− Increase in premiums supported realisations
� Committed to an integrated Aluminium Strategy
− Well invested plant with world-class technology,
captive power and infrastructure at benchmark
Aluminium and Alumina H1 FY2012 H1 FY2013
Aluminium Production (kt) 324 382
BALCO 121 123
VAL 203 259
Aluminium LME 2,495 1,947
Aluminium COP ($/t) 2,282 1,873
BALCO 2,036 1,871
VAL 2,427 1,874
Alumina Production (kt) 451 423
Alumina COP ($/t) 364 340
Power – BALCO 270MW
Sales (mu) 811 684
Realisation (Rs/unit) 3.3 3.0
Cost of Generation (Rs/unit) 2.2 2.6captive power and infrastructure at benchmark
project costs
− Working with government on bauxite allocation to
enable efficient operations at Lanjigarh refinery
� Projects
− BALCO 1200MW: 1st unit synchronization in Q3
FY20131
− BALCO 325kt smelter - First metal in Q4 FY2013
− BALCO 211mt coal block mining in FY20131
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
91106
H1 FY2012 H1 FY2013
EBITDA ($mn)
27
Note: 1. Subject to approvals
Cost of Generation (Rs/unit) 2.2 2.6
Power
� Sales growth driven by 2,400MW Jharsuguda power plant
− Three 600MW units operating, 4th unit under trial run
− 80% availability and operating near design efficiencies
− 50% PLF in H1, constrained by transmission
� Working with transmission authorities to
overcome current short term restriction
� Additional 1000MW transmission capacity by Q4
FY2013
� Strong cost performance: Cost of generation trend
reflects benefits of plant stabilisation and improving coal
scenario
Power H1 FY2012 H1 FY2013
Total Sales (mu) 2,851 4,680
SEL 1 2,404 3,879
MALCO & HZL WPP 446 801
Realisation (USc/u) 8.2 6.8
Cost of generation (USc/u) 6.2 4.1
Realisation (INR/u) 3.7 3.7
Cost of generation (INR/u) 2.8 2.2
Notes: 1. Includes units generated under trial run of 288mu in H1 FY2012 vs. 339mu in H1
FY2013
scenario
� 1st 660 MW unit of 1,980MW Talwandi Sabo on track for
synchronisation by Q2 FY2014
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
51
121
H1 FY2012 H1 FY2013
EBITDA ($mn)
28
Summary
Key Strategic Priorities
� Deliver industry-leading production growth across our portfolio
� Continue to add reserves and resources to drive long-term value
� Complete the simplification of the Group structure
� Minority buyouts of HZL and BALCO
� Reduce gearing from free cash flow
5,353
EBITDA (US$mn) Free Cash Flow (US$mn) Underlying EPS (USc/share)
29FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
323
5,353
FY2004 (IPO)
FY2012 proforma
+42% CAGR
Note: FY2012 numbers are proforma with Cairn India for full year
353
3,128
FY2004 (IPO)
FY2012 proforma
+32% CAGR
27
209
FY2004 (IPO)
FY2012 proforma
+29% CAGR
Appendix
Entity Wise Financials
H1 FY2013 ($mn or as stated)VED
Consol HZL Zinc-Intl SesaSIIL
(incl CMT) KCM BALCO VALSEL & TSPL
Cairn India VED Plc1
Others & Elim
EBITDA 2,562 532 135 115 111 185 32 74 81 1,290 12 (4)
Depreciation (663) (63) (66) (19) (22) (94) (20) (73) (30) (275) (3) 1
Amortization (468) (3) (43) (37) 0 0 (3) 0 0 (383) 0 0
Special Items (7) 0 0 (4) 0 (1) 0 0 0 0 (2) 0
Net Interest Income (Expense) (236) 194 1 (18) 124 (21) 0 (179) (20) 28 (223) (123)
FX and Embedded Derivative MTM (129) 0 0 2 (20) 0 (7) (64) (17) (19) (4) 0
Profit before Tax 1,059 660 27 40 194 70 2 (242) 13 642 (218) (128)
Effective Tax Rate (%) 11.5 13.9 18.5 37.5 21.6 31.4 -50.0 0.0 46.2 -10.3 -0.9 -3.9
Tax (122) (92) (5) (15) (42) (22) 2 0 (6) 66 (2) (7)
Profit after Tax 937 568 22 25 152 48 4 (242) 7 709 (219) (135)
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Attributable (%) 18.3 37.7 45.5 56.0 58.6 79.2 25.0 87.6 57.1 49.8 100.0 88.1
Attributable PAT 171 214 10 14 89 38 1 (212) 4 353 (219) (119)
Underlying Attributable PAT 264 214 10 15 97 39 2 (156) 14 362 (214) (119)
As of 30 September 2012
Property Plant and Equipment2 17,250 1,794 515 588 517 2,123 1,915 5,375 2,549 1,827 51 (4)
Mining Reserve 6,129 69 276 1,109 4 - 28 - - 4,644 - -
Exploratory Assets 10,759 - 171 177 - - - 42 - 10,370 - -
Note: 1. Includes Vedanta plc and Investment companies at 100% attributable and MALCO at 94.8% attributable
2. Includes Capital Work in Progress
31
Proforma Entity Wise Financials – with Sesa Sterlite
H1 FY2013 ($mn or as stated)VED
ConsolVED Plc1
Others& Elim KCM
Sesa Sterlite Consol
Sesa Sterlite Standalone
Cairn India HZL
Zinc-Intl. BALCO TSPL TSMHL2
Others & Elim
EBITDA 2,562 0 0 185 2,377 359 1,290 532 135 32 0 0 29
Depreciation (663) 0 1 (94) (571) (139) (275) (63) (66) (20) 0 0 (8)
Amortization (468) 0 0 0 (468) (37) (383) (3) (43) (3) 0 0 0
Special Items (7) (2) 0 (1) (4) (4) 0 0 0 0 0 0 0
Net Interest Income (Expense) (236) (61) (73) (21) (81) (91) 28 194 1 0 0 (165) (49)
FX and Embedded Derivative MTM (129) (4) 0 0 (125) (94) (19) 0 0 (7) (5) 0 (1)
Profit before Tax 1,059 (67) (72) 70 1,128 (5) 642 660 27 2 (5) (165) (29)
Effective Tax Rate (%) 6.2 0.0 -5.6 31.4 3.5 0.0 -10.3 13.9 18.5 -50.0 0.0 0.0 -37.9
Tax (66) 0 (4) (22) (40) 0 66 (92) (5) 2 0 0 (11)
Profit after Tax 993 (66) (76) 48 1,088 (5) 709 568 22 4 (5) (165) (40)
Proforma Entity Wise Financials assuming completion of Group Structure Simplification
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Attributable (%) 24.5 98.5 97.4 79.2 31.7 60.0 34.3 37.9 50.0 25.0 60.0 58.2 57.5
Attributable PAT 243 (66) (74) 38 345 (3) 243 215 11 1 (3) (96) (23)
Underlying Attributable PAT 314 (60) (74) 39 409 50 250 215 11 2 0 (96) (22)
As of 30 September 2012
Property Plant and Equipment3 17,250 - (26) 2,123 15,153 7,921 1,827 1,794 515 1,915 1,138 - 43
Mining Reserve 6,129 - - - 6,129 1,109 4.644 69 276 28 - - 4
Exploratory Assets 10,759 - - - 10,759 218 10,730 - 171 - - - -
Note: 1. Includes Vedanta plc and Investment companies
2. Twin Star Mauritius Holdings Limited (SPV holding the 38.7% stake in Cairn India with associated debt of $5.9bn)
3. Includes Capital Work in Progress
32
Entity-Wise Cash and Debt Details
Net Debt Summary ($mn)
30 Sep 2011 31 Mar 2012 30 Sep 2012
Company Debt Cash & LI1 Net Debt Debt Cash & LI1 Net Debt Debt Cash & LI1 Net Debt
Vedanta plc2 6,340 942 5,398 9,263 184 9,080 9,259 43 9,216
Sterlite standalone incl. CMT 636 769 (134) 544 758 (214) 457 569 (112)
Zinc India - 3,384 (3,384) - 3,574 (3,574) - 3,698 (3,698)
Zinc International 28 306 (278) 9 215 (206) - 208 (208)
BALCO 618 26 592 711 49 662 692 0 692
Sterlite Energy Ltd 910 15 895 1,175 37 1,138 1,284 6 1,278
Others3 52 196 (144) 74 23 52 117 29 88
Sterlite Consolidated 2,244 4,696 (2,452) 2,513 4,655 (2,142) 2,550 4,510 (1,960)
Vedanta Aluminium Ltd 2,825 15 2,811 3,505 85 3,420 3,652 5 3,647
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Vedanta Aluminium Ltd 2,825 15 2,811 3,505 85 3,420 3,652 5 3,647
Copper Zambia 765 - 765 750 42 708 769 4 765
Sesa Goa 867 220 647 681 118 563 657 81 576
MALCO 16 17 (1) - 6 (6) - 21 (21)
Cairn India - - - 244 1,797 (1,553) 119 2,499 (2,381)
Total (in $mn) 13,056 5,889 7,1664 16,955 6,885 10,0645 17,006 7,163 9,8356
Debt numbers at Book Values, as of 30 September 2012
Note: 1. Cash and Liquid Investments; Vedanta plc had an additional $265million of undrawn credit facilities as of 30 September 2012
2. Includes Investment Companies
3. Others include: VGCB, Fujairah Gold, and SIIL investment companies
4. Includes $2 million debt related derivative
5. Includes $6 million debt related derivative
6. Includes $8 million debt related derivative
33
Entity-Wise Cash and Debt (Sesa Sterlite Proforma)
Net Debt Summary ($mn)
30 Sep 2011 31 Mar 2012 30 Sep 2012
Company Debt Cash & LI1 Net Debt Debt Cash & LI1 Net Debt Debt Cash & LI1 Net Debt
Vedanta plc2 6,340 942 5,398 6,521 184 6,337 6,506 43 6,463
KCM 765 0 765 750 42 708 769 4 765
Sesa Sterlite Standalone 4,820 1,024 3,797 5,248 978 4,270 5,336 673 4,663
Zinc International 28 306 (278) 9 215 (206) - 208 (208)
Zinc India 0 3,384 (3,384) 0 3,574 (3,574) - 3,698 (3,698)
Cairn India - - - 244 1,797 (1,553) 119 2,499 (2,381)
Balco 618 26 592 711 49 662 692 - 692
Talwandi Sabo 434 8 425 657 5 653 714 3 711
TSMHL3 - - - 2,741 0 2,741 2,753 - 2,753
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 34
Debt numbers at Book Values, as of 30 September 2012
Note: 1. Cash and Liquid Investments; Vedanta plc had an additional $265million of undrawn credit facilities as of 30 September 2012
2. Includes Investment Companies
3. Twin Star Mauritius Holdings Limited (SPV holding the 38.7% stake in Cairn India with associated debt of $5.9bn). Since the table above shows external debt, it
does not include the $3.1 bn inter-company receivable at Vedanta Plc from TSMHL.
4. Others include: CMT, VGCB, Fujairah Gold, and SIIL investment companies
5. Includes $2 million debt related derivative
6. Includes $6 million debt related derivative
7. Includes $8 million debt related derivative
TSMHL - - - 2,741 0 2,741 2,753 - 2,753
Others4 52 200 (148) 74 43 31 118 35 83
Sesa Sterlite Consolidated 5,952 4,947 1,004 9,683 6,660 3,023 9,731 7,116 2,615
Total (in $mn) 13,056 5,889 7,1665 16,955 6,885 10,0646 17,006 7,163 9,8357
82
(1,612)
10,064
174
954 173 9,835
Net Debt Reconciliation
H1 FY2013 ($mn)
Opening Net Debt(1 Apr 2012)
Cash Flow from Operations¹
Sustaining Capex Project Capex Shareholder and Minority Dividends
Others Closing Net Debt(30 Sep 2012)
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Note: 1. Excludes sustaining capex
35
Group Simplification to Reduce Debt at plc
� Post group structure simplification, debt service
liability at plc reduces by 61% to $3.8bn
� Debt service cost at Vedanta reduces from $500mn
to $190mn in FY2013
� Payout-based dividend policies at subsidiaries to
result in significantly higher dividends to plc
Debt Service Liability at plc ($bn)
9.7
3.8
(2.8)
Debt transferred to Sesa Sterlite;
guarantee continued by
Vedanta
36FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
(3.1)
Service Liability Pre Transaction
Service Liability Post Transaction
Note: Debt numbers at Face Value, and as of 30 September 2012
Intercompany receivable created
at Vedanta, from Sesa Sterlite
Project Capex
Capacity Completion TimeCapex
(US$mn)Spent up to 31
March 2012 Spent
H1 FY2013Unspent as
on 30-Sep-12Capex in progressCopper Sector
160 MW CPP at Tuticorin 160 MW 1st unit synchronised in Q2 FY 2012-13 132.8 125.4 17.4KCM KDMP Project 7.5mtpa Q3 FY 2012-13 973.0 830.2 36.5 106.3
Aluminium SectorBALCO - Korba II Smelter 325ktpa Ist Metal tapping by Q4 FY 2012-13 720.0 596.1 70.5 53.5BALCO - Korba 1200 MW CPP 1200 MW Ist unit synchronisation in Q3 FY 2012-
13,thereafter one unit every quarter1,100.0 803.8 44.6 251.6
Balco - Coal Block 211mt 150.0 12.0 1.2 136.8Power Sector
Sterlite Energy 2,400 MW 4th unit under Trial run 1,900.0 1,651.7 60.7 187.6Talwandi 1980 MW IPP 1,980 MW Ist unit synchronisation in Q2 FY 2013-14 2,150.0 973.5 253.3 923.2
Zinc SectorHZL - Zinc & Lead Dariba Project SK mine work progressing, Smelter &
CPP completed900.0 799.8 16.6 83.6
Iron OrePig Iron Expansion 375 ktpa Completed 150.0 138.7 7.7 3.6
InfrastructureVizag General Coal Berth 150.0 58.7 44.8 46.5Paradeep Multi Cargo Berth 88.0 - 88.0
37FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Paradeep Multi Cargo Berth 88.0 --
88.0
Total Capex in Progress 8,413.8 5,989.8 553.3 1,880.7Capex Flexibility
Copper SectorSIIL Smelter 400 ktpa EC awaited 367.2 109.8 5.4 252.1
Aluminium SectorVAL - Lanjigarh Debottlenecking 1.0 mtpa Approval pending, on hold 150.0 73.7 1.4 74.9VAL - Lanjigarh Refinery (Phase II) 3.0mtpa Approval pending 1,570.0 825.2 - 744.8VAL - Jharsuguda (Smelter II) 1.25mtpa 2,920.0 2,280.8 99.6 539.6
Iron OreSesa Iron Ore mine Expansion 36mt Approval pending, on hold 500.0 128.9 17.7 353.4
Total Capex Flexibility 5,507.2 3,418.4 124.1 1,964.8Improvement and Enabling Capex
KCM 306.7 249.5 29.8 27.4Zinc India 291.2 120.8 94.0 76.4
ZI – Gamsberg 24.0 0.0 2.6 21.4Western Cluster- Liberia 97.1 27.5 14.5 55.1Total Improvement and Enabling Capex 719.0 397.8 140.9 180.3Total Capex 14,640.0 9,806.0 818.3 4,025.8Cairn India 2,260.5 161.2 136.0 1,963.3Total Capex (Including Cairn) 16,900.5 9,967.2 954.3 5,989.1
Credit Metrics
FY2012 LTM H1 FY2013 Covenant
Net Debt/EBITDA 1.9x 2.0x < 2.75x
EBITDA/Net Interest Expense1 11.1x 8.6x > 4.0x
Tangible Net Worth ($bn) 4.5 4.5 > 3.0
Net Assets/Debt 2.47x 2.38x > 1.75x
Gearing2 35% 34%
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Note: 1. Interest includes Capitalized Interest
2. Gearing is calculated as Net Debt divided by the sum of Net Debt and Equity
38
EBITDA Sensitivities
Commodity prices – Impact of a 10% increase in Commodity Prices (LME/Prices in $/t, or as stated)
Commodity
H1 FY2013
Average price
H1 FY2013 EBITDA
($mn)
Oil ($/bbl) 109 150
Zinc 1,906 87
Aluminium 1,947 77
Copper 7,785 73
Iron Ore 70 22
Lead 1,974 16
Silver ($/oz) 29.6 13
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Foreign Currency - Impact of a 10% depreciation in FX Rate
Currency
H1 FY2013
Average FX rate
H1 FY2013 EBITDA
($mn)
INR/USD 54.737 66
39
Sales Summary
Sales volume H1 FY2012 H1 FY2013
Zinc-India Sales
Refined Zinc (kt) 376 322
Refined Lead (kt) 29 55
Zinc Concentrate (DMT) - -
Lead Concentrate (DMT) 10 -
Total Zinc (Refined+Conc) kt 376 322
Total Lead (Refined+Conc) kt 39 55
Total Zinc-Lead (kt) 415 377
Silver (moz) 2.6 5.0
Zinc-International Sales
Refined Zinc (kt) 74 70
Zinc Concentrate (MIC) 118 110
Total Zinc (Refined+Conc) 192 180
Lead Concentrate (MIC) 44 37
Sales volume H1 FY2012 H1 FY2013
Iron-Ore Sales
Goa (mn DMT) 4.0 3.0
Karnataka (mn DMT) 1.8 0.1
Orissa (mn DMT) 0.0 -
Total (mn DMT) 5.8 3.1
MetCoke (kt) 112 133
Pig Iron (kt) 123 117
Copper-India Sales
Copper Cathodes (kt) 78 91
Copper Rods (kt) 81 80
Sulphuric Acid (kt) 284 328
Phosphoric Acid (kt) 81 82
Copper-Zambia Sales
Copper Cathodes (kt) 103 107
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Lead Concentrate (MIC) 44 37
Total Zinc-Lead (kt) 236 216
Aluminium Sales
Sales - Wire rods (kt) 120 147
Sales - Rolled products (kt) 29 28
Sales - Busbar and Billets (kt) 28 36
Total Value added products (kt) 177 211
Sales - Ingots (kt) 131 167
Sales - Total (kt) 308 377
Copper Cathodes (kt) 103 107
Power Sales (mu)
SEL 2,404 3,879
Non-SEL 446 801
Total sales 2,851 4,680
BALCO 270 MW 811 684
Power Realisations (USc/mu)
SEL 7.8 6.3
Non-SEL 9.8 8.8
Average Realisations 8.2 6.8
BALCO 270 MW 7.3 5.5
Power Costs (USc/mu)
SEL 6.3 4.1
Non-SEL 5.6 4.1
Average costs 6.2 4.1
BALCO 270 MW 4.8 4.8
40
Proposed New Group Structure
Konkola Copper
Mines (KCM)
58.3%
Vedanta Resources
Sesa Sterlite
79.4%
� Iron Ore (Sesa Goa)
� Copper Smelting (Tuticorin)
� Power (2,400MW Jharsuguda)
� Aluminium (VAL aluminium assets)
Divisions of Sesa Sterlite
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
100%64.9%
Zinc India (HZL)
AustralianCopper Mines
Cairn India
58.8%
Subsidiaries of Sesa Sterlite
Option to increase stake
to 94.4%
Unlisted entitiesListed entities
Note: Shareholding based on basic shares outstanding
Talwandi Sabo Power (1,980MW)
100%
VAL Power and MALCO Power
(1,405MW)
100%
Skorpion & Lisheen -100%
BMM -74%
100%
Zinc International
51%
Bharat Aluminium (BALCO)
Option to increase stake
to 100%
51%
Western Cluster (Liberia)
Option to increase stake
to 100%
41
Vedanta Group Structure
Konkola Copper
Mines (KCM)
54.6%
Vedanta Resources(Listed on LSE)
Madras Aluminium (MALCO)
94.8%70.5%
29.5% Sterlite Industries(Listed on BSE, NSE and NYSE)
VedantaAluminium
(VAL)
79.4%
Sesa Goa (Listed on BSE
and NSE)
55.1%
3.6% Cairn India Ltd(Listed on BSE
and NSE)
38.7%
20.1%
FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012
Zinc IndiaCopperAluminium Iron ore Power
KEY
51.0% 100%64.9%
Zinc India(HZL)(Listed on BSE
and NSE)
AustralianCopper Mines
Bharat Aluminium (BALCO)
Sterlite Energy
100% 51%
Skorpion and Lisheen
Black Mountain
100% 74%
Zinc International
Liberia Iron Ore Assets
Oil & GasZinc International
Note: Structure as at 30 September 2012
42
Recommended