A Vision to Execute Better. Everyday. JSW Steel Limited Q1 FY - PowerPoint PPT Presentation

A Vision to Execute Better. Everyday. JSW Steel Limited Q1 FY 2019-20 Results Presentation July 26, 2019 1

Key highlights – Q1 FY20  Revenue fromoperations: ₹ 19,812 crore  OperatingEBITDA : ₹ 3,716 crore Consolidated  NetProfit: ₹ 1,008 crore performance  NetDebtto Equity: 1.35x andNetDebt toEBITDA : 2.72x  DilutedEarningPerShare : ₹ 4.25 pershare  Secured3 more captive ironore minesinKarnatakaauctions Operational  Operationalised 4 th captive (outof 6 existing) ironore mine performance  Pipe conveyorforironore transportation inVijayanagarfullyoperationalised Ranked7 th amongstTop34 WorldClassSteelmakersbyWorldSteel Dynamics  Dolvi Works wins “Digitalization Award” in the 7 th CII National Excellence Practice Other highlights  Competition 2

Agenda Financial Business Operational Projects Update Performance Environment Performance 3

Global economy GDP growth - 2019 projections in Apr and Jul 2019 (%YoY)  IMF’s Global GDP forecast for 2019 revised to 3.2% from 3.3% CY19F (Apr-19) 7.3% earlier 7.0% CY19F (Jul-19) 6.3% 6.2%  Despite tight labor markets, US growth outlook has softened. 4.4% 4.1% Fed’s recent commentary and dovish stance signals possible 1.3% 3.3% 3.2% 1.0% 0.9% 2.6% interest rate cuts in near future 1.8% 1.9% 2.3% 1.3%  Euro area growth remains weak on the back of contraction in World AMEs US Euro Area Japan EMDEs India China industrial growth, subdued private consumption and trade / political uncertainties Index of Industrial Production (%YoY)  Japan faces headwinds of external trade weakness and 11 US Eurozone China Japan softening domestic consumption 6  Chinese growth remained stable in Q2 CY2019. Calibrated fiscal and monetary policy measures likely to support growth 1  Resolution of trade tensions to stabilise global growth – -4 geopolitical tensions are added risks Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Recovery to be underpinned by resolution of trade tensions and accommodative central bank policy measures Source: IMF (July 2019), Eurostat, METI Japan, Federal Reserve, NBS China 4

Global steel Global finished steel demand growth estimates (%YoY) China Steel Production and Export 100 12 China Crude Steel Production (LHS) Exports (RHS) CY18 CY19F India is the fastest growing 8.3 10 80 steel market 7.1 8 60 6 40 2.1 2.2 2.0* 4 1.7 1.3 1.0 20 2 0 0 Sep-16 Sep-17 Sep-18 Jun-16 Dec-16 Mar-17 Jun-17 Dec-17 Mar-18 Jun-18 Dec-18 Mar-19 Jun-19 World China World ex/China India HRC prices US$/t Raw Material Price Trend N.America ExW N.Europe ExW 1,200 HCC Premium LV (USD$/mT) (RHS) Iron Ore 62% Fe ($/dmt) (LHS) China FOB Black Sea FOB 1,000 150 400 800 300 100 600 200 50 400 100 200 0 0 Jun-16 Nov-16 Apr-17 Sep-17 Feb-18 Jul-18 Jan-19 Jun-19 Jun-16 Nov-16 Apr-17 Sep-17 Feb-18 Jul-18 Dec-18 Jun-19 Steel supply-side calibration expected to be supportive for steel spreads Source: WSA , Bloomberg, Platts Note : * China continued to close most of its outdated induction furnaces in 2017, a category which was not captured in official statistics. While nominal 5 steel demand growth in 2018 stood at 7.9%, the dynamics of steel using sectors suggest growth of 2.0% in real terms. Accordingly, real global growth in 2018 is 2.1%.

Indian economy Industry (GVA) Growth and Gross Fixed Capital Formation  Economic activities during the quarter were weak, mainly driven (YoY) Industry (GVA) Growth (YoY) Gross Fixed Capital Formation (YoY) by a general lackof creditavailability 13.3% 12.2% 11.8% 11.8% 11.7%  Gross fixed capital (GFC) formation has slowed down, but 9.8% 9.3% 9.2% 8.1% structurally it is likely to expand and gain momentum given the 8.0% 7.0% 7.0% 6.7% 6.9% government’s thrust on building infrastructure through higher 4.2% 3.9% 3.6% publicinvesting 0.8%  IIPgrowthand manufacturingPMIhasweakened Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 20E IIP - Use Based (Consumer) Total Vehicle Production vs. IIP  Weaker automotive volumes pose a further down side risk and 170 Durables Non-Durables IIP (YoY) (lhs) near term outlook is mixed. Consumer durables outlook is mixed Total Vehicle Production ( '000s) (rhs) due to lowerpenetration. 150 8% 2400  Government’s announced outlays in budget is positive for the 1600 underlyingconsumerandrural demand 3% 130 800  Sub-par monsoon is a source of risk , while interest rates have -2% 0 110 downwardbias Jun-16 Mar-17 Dec-17 Sep-18 Jun-19 Jun-16 Jan-17 Aug-17 Mar-18 Oct-18 May-19 Higher government spend to spur investment demand, ensuring timely access to credit will be key 6 Source: CSO India, SIAM

Indian steel – Q1 FY20 Production and Consumption (mt) Imports (Mnt) Exports (Mnt) -12.6% -22.0% 1.90 1.51 4% 6.9% 2.14 1.94 50 2. 71 % 0.24 69 % 00 2. 0.54 27.91 % of imports 0.14 26.82 67 % 25.19 23.57 from FTA 50 1. 66% 0.50 65 % countries 63 % 1.90 00 1. 1.72 61 % 1.40 1.01 59 % 60% 0. 50 57 % 00 0. 55 % 1Q FY19 1Q FY20 Crude Steel Production Finished Steel Consumption Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Finished Semis Q1 FY19 Q1 FY20 Finished Semis Exports (kt) from Japan and South Korea Post Section 232 Post Section 232 Imports have increased Imports have reduced by 191 kt by 260 kt India USA 1,288 1,017 826 1,028 Q1 CY18 Q2 CY19 Q1 CY18 Q2 CY19 Imports from FTA countries at zero duty causing injury to domestic industry and need effective remedial measures 7 Source: JPC, FTD (US Census Bureau)

Agenda Business Operational Financial Projects Environment Performance Performance Update 8

Quarterly volumes-standalone Crude Steel Production Steel Sales 2% 3% -2% -13% YoY QoQ YoY QoQ 4.24 4.29 4.17 4.11 3.83 3.75 Q1 FY19 Q1 FY20 Q4 FY19 Q1 FY19 Q1 FY20 Q4 FY19 Q1 FY19 Q1 FY20 Q4 FY19 Q1 FY19 Q1 FY20 Q4 FY19 2.67 3.08 Flat 2.73 Flat 2.87 2.91 3.01 0.93 1.04 Long 0.87 Long 0.93 1.05 0.99 0.15 0.18 Semis 0.23 All figures are in million tonnes 9

Quarterly sales highlights – consolidated -3% -15% YoY QoQ 4.31^ 3.76^ 3.66^ 22% 12% 17% 45% 51% 53% 3.36* 3.30* 3.04* 12% 16% 14% 20% 31% 16% 29% 16% 31% 56% 55% 35% 33% 31% 55% Q1 FY19 Q1 FY20 Q4 FY19 Q1 FY19 Q1 FY20 Q4 FY19 OE Retail Auto Exports VA Special prodcuts Other products  Exports increased by 34% YoY  Domestic sales declined due to weaker economic activity and general lack of credit availability  Automotive Steel Sales increased by 4.6% QoQ, despite an overall decline in Passenger and Commercial Vehicle Production All figures are in million tonnes. * Domestic sales, ^ Total sales (JSW Steel Standalone + JSW Steel Coated Products after netting-off inter- company sales). Value added and Special products (VASP) include HRPO, CRFH, CRCA, ES, Galvanised, Colour Coated and Special Bars and 10 Rounds. Special products include HR special, TMT Special and WR Special

Retail segment highlights -12% -2% QoQ YoY 1,059 953 934 497 434 458 562 519 476 Q1 FY19 Q1 FY20 Q4 FY19 Others Branded Products All figures in charts are in kt  Branded Sales volume increased by 5.6% YoY  Retail sales decreased by 2.3% YoY due to sluggish demand and tight liquidity conditions  Engaged with over 5,200 influencers and contacted 3,000+ end consumers 11

Product/ Grade approved in Q1 FY20 65C1000(Electrical Steel) 50SP890(Electrical Steel) 65C350(Electrical Steel) General purpose geared motor Alternator Electric Motor SAE 1055M(Long Product) ASME_SA675(Long Product) SA 836(Long Product) Rings for reactor system Shaft Forging Forgings for pipe hangers 12

Agenda Business Operational Financial Projects Environment Performance Performance Update 13

Financials – standalone ` crore Particulars Q1 FY20 Q1 FY19 Q4 FY19 Revenue from operations 17,499 18,964 19,701 Operating EBITDA 3,726 4,822 4,341 Other Income 162 167 83 Finance Cost 963 866 956 Depreciation 806 819 865 Profit Before Tax 2,119 3,304 2,603 Tax 696 966 858 Profit after Tax 1,423 2,338 1,745 Diluted EPS ( `) * 5.89 9.67 7.22 * Not Annualized 14

Operating EBITDA movement – standalone ` crore 4,822 99 1,312 3,726 315 EBITDA Volume NSR Cost EBITDA Q1 FY19 Q1 FY20 15

Operational performance – JSW Steel Coated Products Million tonnes Volumes Q1 FY20 Q1 FY19 Q4 FY19 Production (Galvanised/ Galvalume) 0.43 0.43 0.43 Sales 0.45 0.43 0.49 ` crore Key P&L data Q1 FY20 Q1 FY19 Q4 FY19 Revenue from Operations 2,990 3,031 3,184 Operating EBITDA 172 122 86 Profit after Tax 70 42 7 16

Operational performance – US Plate & Pipe Mill Production (net tonnes) Q1 FY20 Q1 FY19 Q4 FY19 Plate Mill 83,516 80,777 81,290 Utilization (%) 36% 35% 34% Pipe Mill 23,093 14,021 22,996 Utilization (%) 17% 10% 17% Sales (net tonnes) Q1 FY20 Q1 FY19 Q4 FY19 Plate Mill 57,032 65,809 63,890 Pipe Mill 23,195 14,574 23,785 USD mn Key P&L data Q1 FY20 Q1 FY19 Q4 FY19 Revenue from Operations 98.61 91.82 114.78 EBITDA 2.00 10.69 5.83 Net tonnes = 0.907 metric tonnes 17