JSW Energy Limited Investor Presentation February 2019
Agenda Overview Value Proposition Operational Appendix Highlights 2
JSW Group – Overview USD 13 Billion group with presence across the core sectors JSW Steel* : India’s leading integrated steel JSW Energy*: Engaged across the value chain producer (Steel making capacity: 18MTPA) of power business (Operational plants’ capacity: 4,541MW) JSW Cement: Manufacturer of PSC, OPC JSW Infrastructure : Engaged in development and GGBS cement (Operational plants’ and operations of ports (Operational capacity: capacity: 12.8MTPA) 75MTPA) Group Market Cap (USD 10,729 mn**) JSW Energy 1,546 JSW Steel 9,182 As on February 4, 2019 *Listed company. ** USD/ INR = 72 3
JSW Energy – Presence across the Value Chain Currently Operational Transmission Line – JV with Operational Capacity : 4,541 MW Power MSETCL : two 400KV transmission lines Power Transmission Generation JV Rajasthan (Lignite): Kapurdi and with Toshiba, Japan for Equipment Mining manufacturing of super-critical Jalipa mines (operational with Manufacturing steam turbines and generators capacity of 7MTPA and 6MTPA respectively); mineable reserves of 441mn tonnes Power trading Engaged in power trading since June 2006 Handled trading volume of ~3.5bn units in FY18 4
Established Energy Company with 4,541 MW Operational Capacity Barmer: 1,080MW Baspa II (300MW) & Karcham Wangtoo (1,091MW) Configuration : 8 X 135MW Units operating: Baspa II since 2003 and Units operating: since 2010 3 Karcham Wangtoo since 2012 Technology: Sub-critical pithead Lignite based TPP Technology & Fuel Source: Hydro Fuel Source: Captive Lignite mines of BLMCL 1 Power Offtake : Long Term PPA Power Offtake: Long Term PPA Asset Value to JSW Energy: INR 92,750mn/ Project Cost: INR 71,650mn/ $995mn 2 $1,288mn 2 EV/Associated Businesses ^ Renewable Energy ^ Entering businesses for manufacture of Electric Vehicles (EV); EV Cars Commissioned ~10 MW solar power projects across rooftop planned to be launched in 3-4 years and ground-mounted segments within the JSW Group, and COO appointed; Team being built; Partnerships being explored exploring other group captive capacities MOUs signed with Gujarat and Maharashtra Governments Vijayanagar: 860MW Ratnagiri: 1,200MW Configuration : 2 X 130MW and 2 X 300MW Configuration : 4 X 300MW Units operating: since 2000 3 Units operating: since 2011 3 Technology: Sub-critical TPP Technology: Sub-critical TPP Fuel Source: Gas & Imported Thermal Coal Fuel Source: Imported Thermal Coal Power Offtake: Long Term PPA & Merchant Power Offtake: Long Term PPA & Merchant Project Cost: INR 30,957mn/ $430mn 2 Project Cost: INR 55,161mn/ $766mn 2 Proximity to load centre/fuel source/infrastructural facilities 1) Long term FSA with BLMCL for supply of lignite from its captive mines; BLMCL is a 49:51 JV between JSW Energy (Barmer) Ltd (subsidiary of JSW Energy) and Rajasthan Government undertaking, 2) USD/ INR = 72, 3) denotes start of first unit in respective fiscal year; TPP – Thermal Power Plant, ^ New businesses segments currently under 5 development/implementation
Proven Track Record FY12 FY18 CAGR FY12 – 18: 10% Capacity (MW) 2,600 4,531 CAGR FY12 – 18: 8% Net Generation (MUs) 13,594 21,816 CAGR FY12 – 18 : 5% Total Revenue INR 62,654mn / $870mn INR 85,140mn / $1,183mn CAGR FY12 – 18: 12% EBITDA INR 15,944mn/ $221mn INR 32,276mn/ $448mn CAGR FY12 – 18: 20% PAT* INR 1,701mn/ $24mn INR 4,960mn*/ $69mn Diversifying fuel sources Fuel Type Thermal Coal Thermal Coal, Lignite, Hydro Power Generation, O&M, Power Generation, O&M, Presence across the value chain Business Segment Transmission, Trading, Coal Mining Transmission, Trading, Coal Mining and Equipment Manufacturing and Equipment Manufacturing Despite turbulent sector dynamics, delivering sustainable growth driven by focused execution and balanced strategy USD/ INR = 72, *Before exceptional items 6
Sound Corporate Governance Ensures regular review of audit plans, significant audit findings, adequacy of internal audit system, compliance with applicable regulations by the Company and its subsidiaries Audit Committee Comprises of six Non-Executive Directors Identifies qualified persons and recommends to the Board the appointment, removal and evaluation of Directors Compensation and Responsible for drafting policy on specific remuneration packages for Executive Directors and approving the payment Nomination & of remuneration to managerial personnel Remuneration Formulate criteria for independence of Director, evaluation of Independent Directors, policy on Board diversity Committee Comprises of four Non-Executive Directors Stakeholders Responsible for the functioning of the investor grievances redressal system Relationship Comprises of two Non-Executive Directors and one Executive Director Committee Periodically reviews risk assessment and minimisation procedures Risk Management Committee Comprises of three Non-Executive Directors and two Executive Directors Formulates and recommends to the Board a CSR Policy including list of projects and programs Corporate Social Responsibility (CSR) Strong commitment towards CSR Committee Comprises of four Non-Executive Directors and one Executive Director All key committees in place, having adequate independent director representation 7
Agenda Overview Value Proposition Operational Appendix Highlights 8
Value Proposition Efficient Capital Allocation and Execution Capabilities 1 2 Portfolio of Efficient Operating Assets Diversified Fuel Tie-up 3 Balanced Mix of Off-take Arrangements 4 Robust Financial Profile 5 9
Efficient Capital Allocation and Execution Capabilities 1 Project cost of select power plants set up by other players in the industry 1 st COD Power project Capacity Project cost ` mn/MW MW $mn/MW Year Lanco (Amarkantak) 600 2009 52.3 0.73 Lanco (Udupi) 1,200 2010 46.7 0.65 Aryan Coal (Kasaipalli) 270 2011 50.0 0.69 Barmer Tata Power/DVC (Maithon) 1,050 2011 52.4 0.73 (2010-2013): Adhunik (Padampur) Ratnagiri 540 2013 61.8 0.86 1,080 MW @ (2011-2012): INR 66.34mn 1 /MW GMR EMCO (Warora) 600 2013 62.5 0.87 1,200 MW @ Vijayanagar (~$0.92mn/MW) GMR (Kamalanga ) 1,050 2013 INR 45.97mn/MW 62.1 0.86 (2010): (~$0.64mn/MW) Dhariwal (Chandrapur) 600 2014 600 MW @ 62.2 0.86 INR 32.78mn/MW Vijayanagar DB Power (Janjgir-Champa) 1,200 2014 70.2 0.98 (~$0.46mn/MW) (2000-2001): JPVL (Nigrie) 1,320 2014 79.2 1.10 260 MW @ 1 250 Neyveli (Barsingsar) 2010 INR 43.42mn/MW 70.0 0.97 1 (~$0.60mn/MW) Giral (Rajasthan) 250 2011 76.9 1.07 Leveraging upon strong project execution and project management expertise, and infrastructure 1) High capital cost due to CFBC boilers for lignite based power plant 10 USD/ INR = 72
2 Portfolio of Efficient Operating Assets JSW Energy Standalone 1 JSW Energy Standalone PLF All India private sector thermal power plants' PLF* 93% 83% 84% 81% 67% 64% 62% 61% 61% 61% 61% 59% 56% 55% Among the best-run private sector power plants in India The Company’s hydro power plant, Karcham-Wangtoo in FY13 FY14 FY15 FY16 FY17 FY18 9M FY19 Himachal Pradesh, reported its highest ever generation in FY18 since its commissioning in 2011 Barmer Hydro Barmer 2 and Hydro 94% 90% 86% 86% 85% 85% 83% 82% 80% 78% 51% 24% 24% 14% Q1 FY18 Q2 FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Healthy PLFs driven by O&M and execution expertise *Source-CEA 1) Includes Vijaynagar (860MW) and Ratnagiri (1,200MW) plants 11 2) Deemed PLF
3 4 Diversified Fuel Tie-up and Balanced Mix of Off-take Arrangements Power off-take arrangements – optimal mix of long term Fuel sources – contracts & merchant power sales (return optimisation) …. o Imported coal o Lignite Long term: o Hydro Stable cashflows, pre-defined 19.6% o returns Renewable (RE) 80.4% Insulated from inflation and fuel price movement, declining tariff 0.2% Short term: 30.6% Ability to capitalise on better RE realisations Hydro 23.8% Ability to respond to demand Lignite fluctuations and shortages Imported coal 45.4% Long Term Short Term …. with aim to tie -up over 85% of capacity under long term 4,541MW PPAs Lower fuel risk, resilience to sector dynamics. Commenced domestic coal usage at Vijaynagar plant. 12
5 Sound Financial Profile FY18 Return on Capital Employed 2 (RoCE) FY18 EBITDA Margin 1 48.6% 9.5% 7.9% 7.7% 37.9% 7.4% 6.6% 6.4% 29.3% 27.0% 22.7% 22.8% JSW Energy R Power Adani Power NTPC CESC Tata Power JSW Energy CESC R Power NTPC Tata Power Adani Power (standalone) (Standalone) Healthy Margins and Return Ratios Source: Stock exchange filings – FY18 results 13 (1) Calculated as EBITDA/ Revenue, where EBITDA includes Other Income, (2) Calculated as EBIT/ Average Capital Employed
5 Sound Financial Profile FY18 Net Debt/EBITDA 1 (x) FY18 Net Debt/Equity (x) 8.5 6.9 6.2 59.0 5.2 3.5 2.6 2.5 1.4 1.2 1.0 0.5 JSW Energy CESC NTPC R Power Tata Power Adani Power JSW Energy CESC NTPC R Power Tata Power Adani Power (Standalone) (Standalone) Well capitalised Balance Sheet, adequately positioned to tap growth opportunities Source: Stock exchange filings – FY18 results 14 (1) EBITDA includes Other Income
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