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Tata Steel (Thailand) Welcomes Financial Analysts 9 th August, 2012.

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Presentation on theme: "Tata Steel (Thailand) Welcomes Financial Analysts 9 th August, 2012."— Presentation transcript:

1 Tata Steel (Thailand) Welcomes Financial Analysts 9 th August, 2012

2 Agenda Safety, Environment & Corporate Citizenship Economic Situation. Steel Business in Thailand in Q1 Fy13. TSTH Performance in Q1 Fy13 Business Outlook for Q2 - FY13 Tata Steel(Thailand) 1

3 Safety & Environment : First ever quarter in 6 years to have zero LTIFR 2 Tata Steel(Thailand) Strengthened Safety and Environment management across all sites Effective handling of the situation arising out of blast at BST (neighbouring site) in May 2012. Lost Time Injury Frequency Rate (LTIFR)CO2 EMISSION RATE

4 4 1. Grow Smart with Tata Steel Project aimed to encourage the self learning system for the children in the rural areas – will help sustainable development of communities Covered 138 Schools in 27 provinces till date. Plan to cover 400 schools across Thailand. The book corners for 139 th – 143 rd schools will be handed over in September 2012. 2. Environmental Conservation TSTH pays attention to use the natural resources efficiently, as well as managing the surrounding environment. N.T.S. staffs organized an Environmental Preservation Project on an occasion of National Tree Day. 3. Serving communities around us Providing medical care, safety and vocational training to residents. Corporate Citizenship: Responsibility towards Society 4. Supporting non-profit organizations support local government office.

5 TCOC : Conducting business with integrity and transparency across all functions. 95% employees are formally trained on TCOC. Regular Communication on TCOC with talk in Thai language for thorough understanding Corporate Citizenship: Responsibility towards Society Continue communicate to employee about linkage between current events and TCoC. TCoC Monthly Newsletter

6 Agenda Safety, Environment & Corporate Citizenship Economic Situation. Steel Business in Thailand in Q1 Fy13. TSTH Performance in Q1 Fy 13 Business Outlook for Q2 - FY13 Tata Steel(Thailand) 5

7 1.Eurozone crisis and China slowdown having an effect on Thailand. 2.Recovery still dependent on completion of announced schemes within Sept before new budget comes into effect. 3.Inflation and interest rate is stable. Tata Steel(Thailand) Thailand GDP expected to recover from floods to register 5-5.5% growth …however, just 3.3% growth in Q1Fy13 Growth YOY 5.4%2.5%- 2.2%7.8%0.1%5.5% f/c Flood 6

8 Agenda Safety, Environment & Corporate Citizenship Economic Situation. Steel Business in Thailand in Q1 Fy13. TSTH Performance in Q1 Fy13 Business Outlook for Q2 - FY13 Tata Steel(Thailand) 7

9 8 Jan – May 2012 consumption is in line with annual estimates but inordinate import growth is a worry ISIT : Iron & Steel Institute of Thailand 2012 5000 (Estimate) Higher imports phase

10 tons Alloy Steel Carbon Steel Specially, imports from China have increased in last 1 year … with a significant increase in Alloy steel category 1.Importers taking advantage of Zero duty on Alloy steel v/s Carbon steel at 5% and importing Carbon steel wire rods with Chromium and Boron addition. 9 Tata Steel(Thailand)

11 Chinese Import Price Trend Tata Steel(Thailand) 10 Apr-11May-11Jun-11Jul-11Aug-11Sep-11Oct-11Nov-11Dec-11Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12 HC Imports Price ($)755750760 755775 722705700695690685710695670650 Apr-11May-11Jun-11Jul-11Aug-11Sep-11Oct-11Nov-11Dec-11Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12 LC Imports Price ($)730720 740760 720680 690 680650620600

12 11 … these imports have adversely impacted Wire rods and bars prices and volumes ISIT : Iron & Steel Institute of Thailand Long ('000 Tonne)Jan-May'11Jan-May'12Change '12/'11 Production 1,555 1,6375.3% Import 793 89613.0% Export 371 368-0.8% Apparent Consumption 1,976 2,1669.6% Import20112012 % Jan- May % May JanFebMarAprMayJanFebMarAprMay(12/11) Billet 183,311 79,659 64,491 49,443 53,432 81,673 100,700 132,617 113,925 109,321 25%105% Slap 208,236 161,679 139,426 239,487 161,175 184,863 174,028 112,083 207,029 182,198 -5%13% All other semi(s) 5,462 20,422 5,101 13 8,050 13,187 25,247 48,329 38,702 156 222%-98% Bars 48,130 41,771 50,064 56,556 39,602 54,101 42,242 69,866 44,572 55,471 13%40% Section 2,912 1,756 3,800 1,506 1,884 1,942 3,174 3,425 2,510 2,479 14%32% Wire rod (LC/HC) 57,714 42,945 61,955 81,593 70,139 78,319 51,107 93,604 67,156 106,638 26%52%

13 Agenda Safety, Environment & Corporate Citizenship Economic Situation. Steel Business in Thailand in Q1 Fy13. TSTH Performance in Q1 Fy13 Business Outlook for Q2 - FY13 Tata Steel(Thailand) 12

14 13 Revenue & Volume Performance : Domestic + Export Sales Volume in KT Accident at a site near SCSC has affected the rebar sales in Q1 Fy13. Chinese imports have caused serious injury in Q1 Fy 13. Revenue in Billion Baht 258

15 Market leader in main Long products 1.Tata TISCON rebar sales affected by accident at a neighbouring site in May 12. 2.Special Wire Rods volume under pressure due to Chinese imports Wire Rods 14 Tata Steel(Thailand) Market Position : #1 Market Position # 1 Source : Market demand : ISIT & Office of Industrial Economics TSTH Sales : Company source Market share %

16 Richer Product Mix helping revenue % of Total dom. Sales Special Bar Quality (SBQ) sales have been affected by Chinese imports. Tire Cord trials look promising (only Thai company to make) 15 Tata Steel(Thailand) Volume in KT

17 17 1) Revenue : June 12 adversely affected owing to accident at SCSC. 2) Contribution : Q1 Fy13 better than Q4 Fy12. 3) EBITDA : Steady improvement in EBITDA over Q4 Fy12 however getting affected by increase in imports from China Turnaround momentum maintained with better than Q4 Fy12 results in Q1 Fy13 despite accident at SCSC

18 Agenda Safety, Environment & Corporate Citizenship Economic Situation. Steel Business in Thailand in Q1 Fy13. TSTH Performance in Q1 Fy13 Business Outlook for Q2 - FY13 Tata Steel(Thailand) 17

19 TSTH expects a better Q2 & second half on the back of economic recovery … expects Govt support to stop Chinese imports. Improvement in production by +23% in Q2 over Q1. Higher Sales by +16% in Q2 over Q1. Maintain high end product sales mix at 30%. Stay EBITDA +ve & Cash profit +ve. Looking at strategic partnership options at NTS

20 "Market conditions in the first half of the calendar year have been challenging due to slow recovery in domestic demand and increasing imports from China. Against this backdrop, company has delivered further improvement in its underlying EBITDA over Q4 Fy12 and has come into cash profit in Q1Fy13. Although the global economy remains fragile, we expect Thailand to be resilient and construction demand should kick in. While imports remain our biggest concern, for the remainder of the year, we will continue to remain alert in operations to take advantage of the market opportunities that will come up as price recovery happens and deliver a sustained cash profit performance". 19 Comment from TSTH

21 20 Thank You


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