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Tata Steel (Thailand)
Welcomes
Financial Analysts Team
14th May, 2013
1
2
Agenda
• Safety, Environment & Corporate
Citizenship
• Economic Situation.
• Steel Business in Global &Thailand in
Q4-FY’13
• TSTH Performance in Q4- FY’13 & Fy13
• Business Outlook for FY’14Tata Steel(Thailand)
3
Safety & Environment : Best Ever Performance in FY’13
Good
Good
FY'10 FY'11 FY'12 FY'130
0.5
1
1.5
2
2.5
3
3.5 3.24
1.31
0.770.47
Loss Time Injury Frequency Rate
FY'09 FY'10 FY'11 FY'12 FY'130
0.2
0.4
0.6
0.8
1
1.2
0.57
0.827
0.961
0.814
0.614
Co2 Emission(Tons per ton of cast steel)
“Grow Smart with Tata Steel”
“Grow Smart with Tata Steel” book corner has been granted to 158 schools. In FY’14, CSR plans to grant book corners to 20 schools in north & central region and near 3 plants
SISCO “Blood Donation ”
On March 19th, 39 SISCO employees and
sub-contractors have donated blood to
Thai Red Cross, Saraburi Branch. The
total blood amount equals 15,200CC.
NTS Supported New Medical Center
ProjectDuring March 19th – 21st, Granted 10,000 THB and 1,200 set of Tata Drinking Water for Somdej Phraborom Ratchathevi Na Sriracha Hospital, under Royal Thai Red Cross Society, in order to support the new medical center project.
SCSC’s National Children Day Activity
SCSC supported gifts for 4 primary schools
in Rayong province on the occasion of
National Children’s Day. The company also
supported Multiple-Handicap children by
providing material for their skill
development.
.
Community Welfare : Highlight in Q4 FY’13
5
Agenda
• Safety, Environment & Corporate
Citizenship
• Economic Situation.
• Steel Business in Global & Thailand in
Q4 FY’13.
• TSTH Performance in Q4 FY’13
• Business Outlook for FY’14 Tata Steel(Thailand)
6
Showing strong recovery post floods, Thailand has registered a robust 6.4% growth in 2012… f/c > 5% in Cy13
Baht 2.2 Trillion investment in Infrastructure & private construction to boost construction … will help steel & cement demand
7
Agenda
• Safety, Environment & Corporate
Citizenship
• Economic Situation.
• Steel Business in Global &Thailand in
Q4 FY13.
• TSTH Performance in Q4 FY’13
• Business Outlook for FY’14 Tata Steel(Thailand)
8
ASEAN has shown a better steel growth at 7% than rest of the world…
… expect that 5+% growth rate will be sustained in 2013 led by Thailand, Indonesia and Malaysia.
10,758
14,012 14,647
16,614 17,360
5,175
8,087 9,057
11,293
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2009 2010 2011 2012 2013 (EST)
Thou
sand
s Consumption Import
Source : ISIT - Iron & Steel Institute of Thailand
In Thailand, Steel demand (LP+FP) grew by 12% in 2012 over 2011… but imports grew by 25% !
Irrational imports especially from China have caused big damage to the revenue of Thai steel producers…
Forecast
12%
25%
5 %
9
?? %
?
Source : ISIT - Iron & Steel Institute of Thailand
… & impact is severe in Long Products, where the import growth is 26% on a much smaller market !
4,144
4,620 4,761
5,355
5,656
1,135
1,718 1,970
2,483
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2009 2010 2011 2012 2013 (EST)
Thou
sand
s
Consumption Import
Unfair imports from China in Wire rods & Bars have put an intense price & volume pressure – Emergency situation & help required to protect Thai long producers.
12 %
26 %
6 %
?
11Tata Steel(Thailand) 1
Quite evidently, 2012 has been a tough year for the steel companies across the world & in SE Asia
12
Agenda
• Safety, Environment & Corporate
Citizenship
• Economic Situation.
• Steel Business in Global & Thailand in
Q4 FY’13.
• TSTH Performance in Q4 FY’13 & Fy13
• Business Outlook for FY’14 Tata Steel(Thailand)
13
4%
Lower steel prices in 2012
v/s 2011
Despite tough business conditions in 2012, TSTH has shown a remarkable recovery in Q4 Fy13 and in Fy13 …
Tata Steel(Thailand)
Q4 FY'12 Q4 FY'13 FY'12 FY'130
200
400
600
800
1000
1200
1400
283 312
1138 1175
Deliveries(KT)
Q4 FY'12 Q4 FY'13 FY'12 FY'130
200
400
600
800
1000
1200
1400
299 315
1164 1167
Production (KT)
Q4 FY'12 Q4 FY'13 FY'12 FY'130
5000
10000
15000
20000
25000
30000
6438 6371
25994 24822
Turnover (MB)
10%
3%
5%
14
… Corrected for one time impairment charge, Q4 FY’13 has seen the completion of “Turnaround” of TSTH
EBITDA (THB Mn) PBT(THB Mn)
PAT (THB Mn) Cash Profit (THB Mn)
Includes impact of impairment / obsolescence 3600 MB
Qtr4 FY'12 Qtr4 FY'13 Qtr4 FY'13 underlying
67
345 345Qtr4 FY'12 Qtr4 FY'13
Qtr4 FY'13 underlying
(222)
(3538)
62
Qtr4 FY'12 Qtr4 FY'13Qtr4 FY'13 underlying
(240)
(3556)
44
Qtr4 FY'12 Qtr4 FY'13 Qtr4 FY'13 underlying
1
273 273
Includes impact of impairment / obsolescence 3600 MB
15
Responding fast to demand recovery in construction, TSTH rebar domestic sales have increased by 12% in Fy 13 over Fy12
Sa
les
Vo
lum
e in
KT
R
ev
enu
e in
Billio
n B
ah
t Revenue recovery in domestic sales with best ever H2 Fy13 performance
Fy 11 Fy12 Fy13
1128Kt 1056 Kt 1128 Kt
Q1 FY'11 Q2 FY'11 Q3 Fy'11 Q4 FY'11 Q1 FY'12 Q2 FY'12 Q3 FY'12 Q4 FY'12 Q1 FY'13 Q2'FY'13 Q3 FY'13 Q4'FY'130
50
100
150
200
250
300
350
400
0
1
2
3
4
5
6
7
8
9
250291 279
309 300 291
200
266230
284 290 298
47
41
20
5229
18
18
17
27
1119.7 13.1
6.19
6.76
5.95
7.85
7.557.12
5.03
6.48
5.9
6.386.21 6.37
Imp Vol(KT) Domestic Vol(KT) Revenue in BB
Domestic Sales
Export Vol (KT)
16
*
% High end Mix has taken a slight dip due to Chinese imports … expecting to see improvement post AD help
Tata Steel (Thailand) successfully launched and delivered Seismic resistant Rebars for Earthquake prone areas - First time in Thailand
FY'08 FY'09 FY'10 FY'11 FY'12 FY'13 -
50.0
100.0
150.0
200.0
250.0
300.0
350.0
-5%
0%
5%
10%
15%
20%
25%
30%
15%16%
19%
23%28%
26%
SBQ Cut & Bend Small Section Special WR Product Domestic Sales% Total Sale
Marginal drop in volume due to impact on SPWR from cheap
imports
17
TSTH has strengthened its leadership position in Rebars,
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q12009 CY 2010 CY 2011 CY 2012 CY 2013
CY
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
0%
10%
20%
30%
40%
50%
60%
247,969 222,766
385,884
819,112
623,439
209,056
384,484 418,033
388,488
452,859
591,381
265,075
460,572
414,737 373,102
495,339 500,288
115,238132,191
153,656 152,677189,371
128,700159,152 156,850 169,830 174,324
155,053
98,155138,310
106,403
157,046174,347 186,318
46%
59%
40%
19%
30%
62%
41%38% 44% 38%
26%
37%
30%
26%
42%35% 37%
29%
36%
38%
40%42%
31%
37%
37%
34%
38%
33%
26%
28%
24%
32%
34% 34%
Dom. Rebar Martket Consumption (ISIT) TSTH Rebar Sales (Rebar+CAB) MS% (ISIT)MS% (Cement+OIE)
18
…while, its share in Wire rods has dropped due to imports
Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Q1 Q12010 CY 2011 CY 2012 CY 2013 CY
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
10%
15%
20%
25%
30%
35%
387,185
105,381
401,935
134,548
404,077
96,912
355,623
86,701
410
80,682
443,851
99,637
343,755
72,384
427,901
80,786
448,196
81,522
431,793
85,840
458,211
61,119
533,199
60,295
491,757
66,344
64,81079,493
98,606 97,711 81,932127,540
83,504148,923 141,509 140,170 194,980
298,372 260,345
19
Post impairment at one of its subsidiaries, TSTH aims to maintain its improvement trend in Fy14
EBIDTA (THB Mn) PBT(THB Mn)
PAT (THB Mn) Cash Profit (THB Mn)
Includes impact of impairment / obsolescence +DTA w/o 3886 MB
FY'12 FY'13 FY'13 underlying
258
642 642FY'12 FY'13 FY'13 underlying
(1350)
(4219)
(620)
FY'12 FY'13 FY'13 underlying
(1581)
(4556)
(670)
FY'12 FY'13 FY'13 underlying-353
258 258
Includes impact of impairment / obsolescence 3600 MB
Note : Fy 12 figures include one time impact
20
Agenda
• Safety, Environment & Corporate
Citizenship
• Economic Situation.
• Steel Business in Global & Thailand in
Q4 FY’13.
• TSTH Performance in Q4 FY’13 & Fy13
• Business Outlook for FY’14 Tata Steel(Thailand)
21
Business outlook & guidance for Fy14
While, steel market remains challenging in 2013, we expect Thailand to be resilient and construction growth will help drive steel demand. Imports from China remain our single biggest concern and we expect a definite support from MoC to protect the survival of Thai longs steel industry.
Continuing on its path of steady improvement over the last 5 quarters, TSTH has registered a PBT positive performance in Q4 Fy13 thereby signaling a successful turnaround of its underlying business operations. It shows the result of company’s focused approach, tight vigil on working capital and return of confidence of its people in making a value creating steel business.
Post the “impairment” in its loss making subsidiary, TSTH is well positioned in terms of strength of its balance sheet. Our liquidity is robust to meet the debt obligations and we are now singularly focused on improving the utilization of our competitive assets. Notwithstanding the price volatility being witnessed by the steel business in SE Asia, on the back of operations and commercial excellence, we remain confident to turn in a higher EBITDA performance in Fy14.
22
Keeping improvement momentum of Q4 Fy13, TSTH estimates a PBT+ve performance in Fy14
1. Improve sales by 10% to reflect construction growth (can be higher if AD help comes)
2. Continue focus on high end product mix at 25 % of sales with Cut & bend products, Seismic rebars, special wire rods & sections
3. Enhance EBITDA to make value creating steel business.
Focus areas for Fy14
23
Thank You