1 Analyst Meet Presentation Quarter Ended March 31, 2012
1
Analyst Meet PresentationQuarter Ended March 31, 2012
2
Agenda
Business Environment
Operational Performance
Projects Update
GuidanceFinancial Performance
3
Agenda
Business Environment
Operational Performance
Projects Update
GuidanceFinancial Performance
4
2012 growth outlook is cautiously optimistic
Global economy: a multi-speed world
Source: IMF, Reuters, JSW Steel
US continues to recover albeit slowly
EU is in mild recession with re-emergence of sovereign debt issues
China growth has slowed down to 8.1% in Jan-Mar 2012
Asia is exposed to downside risk with weak external demand
Purchasing manager’s index and Industrial production data lack clearindication
30
40
50
60
70
80
Ap
r-0
7
Oct
-07
Ap
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8
Oct
-08
Ap
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9
Oct
-09
Ap
r-1
0
Oct
-10
Ap
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1
Oct
-11
Ap
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2
US Mfg EU China India Japan
Purchasing managers Index
-1%
1%
3%
5%
7%
9%
Wo
rld
AM
Es
EMEs
Euro
Are
a
US
Jap
an
Ch
ina
Ind
ia
Sep 11 Jan 12 Apr 12
GDP growth rate outlook for 2012
-35.0
-25.0
-15.0
-5.0
5.0
15.0
25.0
35.0
Ap
r-0
7
Oct
-07
Ap
r-0
8
Oct
-08
Ap
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9
Oct
-09
Ap
r-1
0
Oct
-10
Ap
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1
Oct
-11
Ap
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2
Euro Zone US Japan China India
Industrial Production (% YoY growth)
5
Global steel scenario
Source: World Steel Association, JSW Steel
World steel demand is expected to grow by 3.6% in CY2012 vs. 5.5% in CY2011
Mar 2012 crude steel production rose to 132.2 million tonnes reflecting seasonal strength
However Jan-Mar 2012 crude steel production grew by only 0.1% YoY to 376.7 million tonnes
Steel demand continues to grow but at slower rate
11
3.4
10
7.1
12
0.9
12
0.5
12
4.6
118.
31
14
.41
13
.11
12
.3 11
7.4
11
4.6
11
6.2
12
8.1
11
8.4
12
9.9
12
6.7
130.
012
7.7
127.
31
24
.31
22
.91
23
.511
5.4
11
7.1 1
23
.61
20
.91
32
.2
64%
68%
72%
76%
80%
84%
85
95
105
115
125
135
Jan
-10
Feb
-10
Mar
-10
Ap
r-1
0M
ay-1
0Ju
n-1
0Ju
l-1
0A
ug
-10
Sep
-10
Oct
-10
No
v-1
0D
ec-
10
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1M
ay-1
1Ju
n-1
1Ju
l-1
1A
ug
-11
Sep
-11
Oct
-11
No
v-1
1D
ec-
11
Jan
-12
Feb
-12
Ma
r-1
2
World crude steel production (million tonnes) Capacity Utilisation (%)
42
73
94
151
649
1422
-1.5% 0.0% 1.5% 3.0% 4.5% 6.0% 7.5%
Russia
India
US
EU
China
World
Finished Steel Demand Outlook - CY2012 (Bar size shows % YoY
growth whereas figures in bars shows demand in million tonnes)
6
China: shifting focus towards domestic consumption
Source: World Steel Association, MySteel, JSW Steel
GDP growth slowed down to 8.1% in Jan-Mar 2012 due to weakerexternal demand, and slowing FAI and real estate market
Retail sales marginally picked up to 15.2% in Mar 2012, Consumerprice index is much lower than peak of 6.5% in Jul 2011
Public housing, gradual policy loosening and shift of focus towardsdomestic consumption to ensure economic growth rate at +8%
In Mar 2012, finished Steel production grew by 3.6% whereasapparent consumption increase by a 2.7%
Warehouse inventories have fallen in Mar 2012
Chinese economy likely to grow at 8%+ in 2012
-10%
10%
30%
50%
Jan
-09
Ap
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9
Jul-0
9
Oct
-09
Jan
-10
Ap
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0
Jul-1
0
Oct
-10
Jan
-11
Ap
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1
Jul-1
1
Oct
-11
Jan
-12
Apparent Steel Consumption (% YoY)Crude Steel Production (% YoY)
0.10
0.18
0.26
0.34
0.42
-1.0
1.0
3.0
5.0
7.0
Jan
-08
Ap
r-0
8
Jul-0
8
Oct
-08
Jan
-09
Ap
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9
Jul-0
9
Oct
-09
Jan
-10
Ap
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0
Jul-1
0
Oct
-10
Jan
-11
Ap
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1
Jul-1
1
Oct
-11
Jan
-12
Net exports (million tonnes)Months suppply at the warehouses of 25 major cities (RHS)
10
13
16
19
22
3
4
5
6
7
No
v-1
0
Jan
-11
Mar
-11
May
-11
Jul-
11
Sep
-11
No
v-1
1
Jan
-12
Mar
-12
CPI (% YoY) Retail Sales (% YoY, RHS)
7
Raw materials: prices dropped
Source: Steel Business Briefing, Platt‘s, Industry data, JSW Steel(All figures are in USD/tonne)
Raw materials prices looks to be range bound
120
135
150
165
180
195
06-
Jun
-11
04
-Ju
l-11
01-
Au
g-1
1
29-
Au
g-1
1
26-
Sep
-11
24
-Oct
-11
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-No
v-1
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19
-De
c-1
1
16
-Jan
-12
13-
Feb
-12
12
-Ma
r-1
2
09
-Ap
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07
-May
-12
Indian Iron Ore 63% Fe dry -China CFR
20
9 22
5
33
0
310
28
5
23
5
20
6
160
190
220
250
280
310
340
370
Oct
-10
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1
May
-11
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct
-11
No
v-1
1
De
c-1
1
Jan
-12
Feb
-12
Mar
-12
Ap
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2
May
-12
Australian HCC Quaterly Contract FOBAustralian Spot HCC FOB
Supply of coking coal from new (Mozambiqueand Mongolia) and un-conventional (US andCanada) sources has quickly found acceptanceamong steel producers
Lower demand growth outlook and absence ofany natural calamity has lead to improvementin supply-demand scenario
HCC contract price have come down to ~$205-210/t for 1QFY12
HCC spot prices dropped below $210/t in Mar2012 but has seen a marginal increase sincethan with BMA’s Force Majeure and seasonaldemand expectations from China
Iron ore prices are range bound
8
Steel prices
Source: Steel Business Briefing, World Steel Dynamics, JSW Steel
Steel prices should remain at current levels
World Hot Rolled Band cost curve
HRC prices in Europe and Asia increased in Jan-Mar 2012 after correcting in Oct- Dec 2011
Inter -regional price spreads are now at sustainable level with recent correction in US market
Steel inventories are at reasonable levels
March 2012 world HRB cost curve supports current steel prices
500
580
660
740
820
900
980
Jan
-10
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Oct
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Ap
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2
HR
C p
rice
s (U
SD/t
on
ne
)
North America domestic FOB Europe import CIFRussia export FOB China export FOB
9
31.9 34
.5
34.4 36
.5Flat steel
Consumption*Long Steel
Consumption
FY11 FY12
7.9%5.7%
India steel scenario
Source: Joint plant Committee JSW Steel (All figures are in million tonnes)*Netted off for double counting effect
Indian steel demand growth is expected to track GDP growth
63.3
66.468
.7 70.9
Finished Steel Production*
Apparent Finished Steel Consumption*
FY11 FY12
8.4%6.8%
-0.20
0.00
0.20
0.40
0.60
0.80
Ap
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9
Jul-
09
Oct
-09
Jan
-10
Ap
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Jul-
10
Oct
-10
Jan
-11
Ap
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1
Jul-
11
Oct
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Jan
-12
Ap
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2
Net Imports
Apparent finished steel consumption grew by 6.8% in FY12, despite very low demandin 1HFY12
Flat steel consumption growth remained higher than long steel consumption growth
FY12 steel imports grew by 2.4% to 6.83 million tonnes whereas steel exports increasedby 11.1% to 4.04 million tonnes
10
Agenda
Business Environment
Operational Performance
Projects Update
GuidanceFinancial Performance
11
Key highlights
Steel for Rear axle shaft & stub axles for MCV & HCV
Steel for Crank Shafts for MCV & HCV
C-Mn Steel for load bearing inner components
Bake Hardened Steel for three wheelers
High Strength Steel for wheel rim applications
New product
approvals
Highest ever crude steel production: 2.07 million tonnes
Highest ever sales volume in a quarter: 2.31 million tonnes
Highest ever gross turnover in a quarter: ` 10,291 crores
Production/sales
Total 18.6 million tonnes of iron ore was sold, out of 25 million tonnesinventory and NMDC production, through e-auctions till Mar 2012 end
The company purchased 10.7 million tonnes of iron ore in e-auctions andreceived 75% of it till Mar 2012 end
Iron ore e-auction
update
12
Karnataka Iron ore update
The Central Empowered Committee (CEC) classified iron ore mining leasesinto three categories viz. ‘A’, ‘B’ and ‘C’
The CEC recommended opening of category ‘A’ and ‘B’ mines
The Hon’ble Supreme Court accepted CEC recommendation for openingcategory ‘A’ mines with certain conditions
Category ‘B’ mines as recommended by CEC, if approved by the Hon’bleSupreme Court, and Category ‘A’ mines together on commencement ofoperation are expected to improve availability of iron ore
13
0.28
0.46
0.37
4QFY11 4QFY12 3QFY12
Rolled : Long
1.33
1.491.39
4QFY11 4QFY12 3QFY12
Rolled : Flat
1.65
2.07
1.94
4QFY11 4QFY12 3QFY12
Crude Steel
YoY % QoQ %
13% 8%
Production – 4QFY12
All figures are in million tonnes
YoY % QoQ %
67% 26%
YoY % QoQ %
26% 7%
14
1.13
1.52
FY11 FY12
Rolled : Long
6.43
7.43
FY11 FY12
Crude Steel
Production – FY12
All figures are in million tonnes
4.945.36
FY11 FY12Rolled : Flat
YoY %
16%
YoY %
9%
YoY %
34%
15
0.41
0.45
0.41
4QFY11 4QFY12 3QFY12
Value Added1.73
2.31
1.91
4QFY11 4QFY12 3QFY12
Total Sales
Saleable steel sales – 4QFY12
All figures are in million tonnes
1.39
1.76
1.44
4QFY11 4QFY12 3QFY12
Rolled : Flat
YoY % QoQ %
33% 21%YoY % QoQ %
27% 22%
YoY %
9%
QoQ %
9%
0.070.09
0.10
4QFY11 4QFY12 3QFY12
Semis
YoY % QoQ %
21% -14%
0.27
0.46
0.36
4QFY11 4QFY12 3QFY12
Rolled : Long
YoY % QoQ %
70% 28%
16
4.705.95
FY11 FY12
Rolled : Flat
1.64 1.68
FY11 FY12
Value Added
6.10
7.82
FY11 FY12
Total Sales
Saleable Steel Sales – FY12
All figures are in million tonnes
0.340.41
FY11 FY12
Semis
1.06
1.46
FY11 FY12
Rolled : Long
YoY %
28% YoY %
27%
YoY %
2%
YoY %
38%
YoY %
19%
17
280
350
31 Mar 2011 31 Mar 20121.40 0.38
Others JSW Shoppe
JSW Shoppe
Rolled: Long
Rolled: HR Products
43%
Domestic sales
excluding semis
(million tonnes,
% Share)
Value Added: Flat
78% 22%
41%
38%
21%
% Share through JSW Shoppe – 4QFY1225%
JSW Shoppe has expanded its footprint to 152 districts
271
384
4QFY11 4QFY12
42%
Sales through JSW Shoppe (In ‘000 tonnes)
No. of JSW Shoppe
18
Agenda
Business Environment
Operational Performance
Projects Update
GuidanceFinancial Performance
19
Projects' update
3QFY12 4QFY12
CPP -IV (300 MW): commissioned at Vijayanagar in Mar 2012
Beneficiation Plant – 2 (Phase II): will be commissioned in FY13 in phased manner
3QFY12 4QFY12
20
Projects' progress contd..
HSM – 2 (Phase II): will be commissioned by Sep 2012
21
Projects' progress contd..
3QFY12 4QFY12
Cold Rolling Mill -2: will be commissioned by FY14 end
Coke oven plant (at Dolvi for JSW Ispat): will be commissioned by FY14 end
3QFY12 4QFY12
22
Agenda
Business Environment
Operational Performance
Projects Update
GuidanceFinancial Performance
23
Financials (standalone)
* Not Annualized
Particulars 4QFY12 4QFY11 Growth FY12 FY11 Growth
Gross Turnover 10,291 7,615 35% 34,658 25,092 38%
Net Sales 9,511 7,032 35% 32,060 23,125 39%
Operating EBITDA 1,652 1,653 - 5,631 4,777 18%
EBITDA (` per tonne) 7,149 9,539 7,205 7,832
Other Income 48 61 -20% 179 235 -24%
Finance Cost 368 212 73% 1,186 854 39%
Depreciation 472 383 23% 1,708 1,379 24%
Exceptional Items 199 - (821) -
Profit Before Tax 1,060 1,119 -5% 2,095 2,779 -25%
Tax 307 286 7% 469 768 -39%
Profit after Tax 752 833 -10% 1,626 2,011 -19%
Diluted EPS (`) 33.35* 36.67* 71.42 96.33
ROCE 13.4% 17.9% 11.9% 13.3%
` Crores
24
EBITDA movement – standalone
` Crores
1,653 1,652
519
180
(589) (6)(105)
EBITDA4QFY11
Volume NSR Cost Mix Others EBITDA4QFY12
25
Net debt movement – standalone
` Crores
13,504
12,771
2,209
(1,693)(291)
(958)
Net Debt
as on Dec'11
New Loan Taken Repayments Forex Gain Movement in FD /
MF
Net Debt
as on Mar'12
Particulars 31.03.2012 31.12.2011
Cash & cash equivalent (` Crores) 3,159 2,201
Net Debt/Equity (x) 0.69 0.75
Net Debt/EBITDA (x) 2.27 2.41
26
Particulars Jan-Mar’12 Jan-Mar’11 Sep-Dec’11
Net Sales 2,783 2,648 2,668
EBITDA 294 406 246
Net profit After Tax (141) 70 (309)
Sales (million tonnes) Jan-Mar’12 Jan-Mar’11 Sep-Dec’11
HR Coils 0.61 0.67 0.60
Downstream products 0.10 0.04 0.08
Production (million tonnes) Jan-Mar’12 Jan-Mar’11 Sep-Dec’11
HR Coils 0.59 0.73 0.59
Downstream products 0.10 0.05 0.08
` Crores
Operational performance – JSW Ispat Steel Ltd
27
Particulars 4QFY12 4QFY11 3QFY12
Turnover 105.24 27.75 94.04
EBITDA + Other Income 42.56 4.57 3.59
Profit After Tax 27.66 (16.25) (10.06)
Sales (NT) 4QFY12 4QFY11 3QFY12
Plate Mill 65,795 27,627 66,309
Pipe Mill 24,482 4,875 17,443
Production (NT) 4QFY12 4QFY11 3QFY12
Plate Mill 108,183 12,197 65,956
Utilization (%) 44% 5% 28%
Pipe Mill 22,541 4,776 17,785
Utilization (%) 16% 3% 13%
USD mn
Operational performance – US Plate & Pipe Mill
28
Operational performance – Chile
Particulars 4QFY12 3QFY12
Production (Tonnes) 172,580 191,432
Sales (Tonnes) 101,199 148,040
Turnover 13.58 20.09
EBIDTA 0.89 4.06
Profit Before Tax (1.33) 2.09
Profit after Tax (0.85) 0.89
USD mn
29
Consolidated financials
Particulars 4QFY12 4QFY11 Growth FY12 FY11 Growth
Gross Turnover 10,930 7,792 40% 36,720 25,829 42%
Net Sales 10,153 7,209 41% 34,124 23,862 43%
EBITDA 1,887 1,653 14% 6,102 4,868 25%
Other Income 24 47 -48% 77 190 -60%
Finance Cost 455 259 76% 1,427 1,060 35%
Depreciation 528 429 23% 1,933 1,560 24%
Exceptional Items 200 - - (825) - -
Profit Before Tax 1,129 1,012 12% 1,993 2,438 -18%
Tax 310 288 7% 500 779 -36%
Share of Associates and Minority Interest
(50) 70 (956) 95
Profit after Tax 770 794 -3% 538 1,754 -69%
` Crores
30
17,734
16,644
2,217
(1,959)(457)
(891)
Net Debtas on Dec'11
New Loan Taken Repayments Forex Gain Movement in FD / MF
Net Debtas on Mar'12
Net debt movement – consolidated
` Crores
Particulars 31.03.2012 31.12.2011
Cash & cash equivalent (` Crores) 3,265 2,374
Net Debt/Equity (x) 0.98 1.08
Net Debt/EBITDA (x) 2.73 3.05
31
Agenda
Business Environment
Operational Performance
Projects Update
GuidanceFinancial Performance
32
1.46
1.80
FY12 FY13 E
Sales: Rolled Long
5.95
6.82
FY12 FY13 E
Sales: Rolled Flat
7.82
9.00
FY12 FY13 E
Saleable Steel Sales
Guidance for FY13
All figures are in million tonnes
7.43
8.50
FY12 FY13 E
Crude Steel Production
YoY %
23%YoY %
15%
YoY %
14%
YoY %
15%
33
Forward looking and cautionary statement
Certain statements in this report concerning our future growth prospects are forward looking statements,which involve a number of risks, and uncertainties that could cause actual results to differ materially fromthose in such forward looking statements. The risk and uncertainties relating to these statements include,but are not limited to risks and uncertainties regarding fluctuations in earnings, our ability to managegrowth, intense competition within Steel industry including those factors which may affect our costadvantage, wage increases in India, our ability to attract and retain highly skilled professionals, time andcost overruns on fixed-price, fixed-time frame contracts, our ability to commission mines withincontemplated time and costs, our ability to raise the finance within time and cost client concentration,restrictions on immigration, our ability to manage our internal operations, reduced demand for steel, ourability to successfully complete and integrate potential acquisitions, liability for damages on our servicecontracts, the success of the companies in which the Company has made strategic investments, withdrawalof fiscal/governmental incentives, impact of regulatory measures, political instability, legal restrictions onraising capital or acquiring companies outside India, unauthorized use of our intellectual property andgeneral economic conditions affecting our industry. The company does not undertake to update anyforward looking statements that may be made from time to time by or on behalf of the company.
34
Thank you