#1Welspun Corp Limited Investor Presentation Q4 FY23 WELSPUN CORP Pipes & Steel#2WELSPUN CORP Pipes & Steel M ( a p Song the water way s HAR GHAR SE HAR DIL TA WELSPONT HarDil Welspun amrubis Disclaimer For any financial disclosures, the information contained herein is provided by Welspun Corp Limited (the "Company"), although care has been taken to ensure that the information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the information is subject to change without notice, its accuracy, fairness or completeness is not guaranteed and has not been independently verified unless specifically provided and no express or implied warranty is made thereto. You must make your own assessment of the relevance, accuracy and adequacy of the information contained in this presentation and must make such independent investigation as you may consider necessary or appropriate for such purpose. Neither the Company nor any of its directors assume any responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information or opinions contained herein. By preparing this presentation, none of the Company, its management, and their respective advisers undertakes any obligation to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent. This document is for informational purposes and does not constitute or form part of a prospectus, a statement in lieu of a prospectus, an offering circular, offering memorandum, an advertisement, and should not be construed as an offer to sell or issue or the solicitation of an offer or an offer document to buy or acquire or sell securities of the Company or any of its subsidiaries or affiliates under the Companies Act, 2013, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, both as amended, or any applicable law in India or as an inducement to enter into investment activity. No part of this document should be considered as a recommendation that any investor should subscribe to or purchase securities of the Company or any of its subsidiaries or affiliates and should not form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This document is not financial, legal, tax, investment or other product advice. With respect to any ESG related disclosures, the information contained in our disclosures, statements or reports are specific to the Company and not audited or confirmed to be compliant with any general or standard benchmark. A number of statements in such disclosure or statements may contain forward-looking statements including statements about the Company's strategic priorities, financial goals and aspirations, organic growth, performance, organizational quality and efficiency, investments, capabilities, resiliency, sustainable growth and Company management, as well as the Company's overall plans, strategies, goals, objectives, expectations, outlooks, estimates, intentions, targets, opportunities, focus and initiatives. 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Such forward-looking statements are not guarantees of future performance and actual results, performances or events may differ from those in the forward-looking statements as a result of various factors and assumptions. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of the management of the Company on future events. No assurance can be given that future events will occur, or that assumptions are correct. The Company does not assume any responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. Reproduction, distribution, republication and retransmission of material contained herein is prohibited without the prior consent of the Company 2#3Sales Volumes at a Glance: Q4 FY23 HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun Note: Pipe Sales volumes include Saudi Arabia operations MAX PIG IRON 107 KMT LINE PIPES 345 KMT (+28% YoY) min TMT BARS 16 KMT DRI 1 KMT DI PIPES 23 KMT BILLETS SS BARS 2,783 MT (+123% YoY) SS PIPES 1,079 MT (-7% YoY) 49 KMT (+173% YoY) UP down WELSPUN CORP Pipes & Steel 3#4Consolidated Financial Results for Q4 FY23 WELSPUN CORP Pipes & Steel PARTICULARS (Rs Cr) Q4 FY-23 Q3 FY-23 QOQ Q4 FY-22 YOY Total Revenue from Operations 4070 2402 69.4% 2011 102.4% Other income 62 8 677.0% 402 -84.5% Reported EBITDA 483 174 176.8% 474 1.9% Depreciation and Amortisation Finance Cost 91 80 13.4% 63 44.0% 95 70 34.5% 30 216.4% Profit before tax and share of JVS 297 24 1161.5% 380 -21.9% Share of profit/(loss) from Associates and JVs 29 29 -3.1% 13 120.0% Tax expense 85 30 186.3% 130 -34.2% Non-controlling interest 4 (0) 27 -84.8% PAT after Minorities, Associates & JVs 236 23 915.2% 236 -0.1% Basic EPS from Continuing Operations 9.0 0.9 916.1% 9.0 -0.3% HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun Note: Prior period figures are restated wherever necessary Reported EBITDA in Q4 FY22 included Other Income of Rs. 359 crores from gain on Saudi IPO 4#5Consolidated Financial Performance WELSPUN CORP Pipes & Steel PARTICULARS FY-13 FY-14 FY-15 FY-16 FY-17 FY-18 FY-19 FY-20 FY-21 FY-22 FY-23 Revenue (INR Cr) 9083 7705 8451 7380 6035 7587 8954 9957 7153 6505 9758 EBITDA (INR Cr) 919 844 951 891 737 815 708 1276 1152 1023 805 Basic EPS 6.1 2.8 2.6 5.8 1.0 6.0 2.6 25.6 29.8 16.8 7.9 Net Worth (INR Cr) 2750 2957 2799 2799 2809 2854 2798 3215 4209 4528 4844 Net Debt/(Cash) (INR) 2314 2568 1910 1355 1106 422 286 32 (447) (173) 1138 Net Debt/Equity 0.84x 0.87x 0.68x 0.48x 0.39x 0.15x 0.10x 0.01x -0.11x -0.04x 0.23x Consistent Performance over the last 10 years: EBITDA in the range of INR 800-1200 crores per annum from Line Pipes Business HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun Note: Prior period figures are restated wherever necessary; All numbers of this sheet are based on IND-AS disclosures Reported EBITDA in FY22 included Other Income of Rs. 359 crores from gain on Saudi IPO From FY19 figures are pertaining to continuing operations only (excluding PCMD) LO 5#6Sales Volume Mix: Line Pipes (Long Term Trend) 635 646 632 510 393 764 650 WELSPUN CORP Pipes & Steel 629 626 578 573 India 506 500 413 423 Saudi 254 343 190 99 86 USA 123 265 236 217 222 255 197 180 237 165 138 106 96 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun India volumes close to 600 KMT Total volumes close to 1 million MT per annum consistently -India (KMT) USA (KMT) -Saudi (KMT) 6#7Dare to Commit! Guidance for FY24 . Top line of INR 15,000 Cr (growth of -50%) • EBIDTA of INR 1,500 Cr (growth of - 90%) • Only Maintenance Capex • • • Strong focus on growth of Sintex, DI Pipes and WSSL ROCE of 16% + (from 7% in FY23) Increase in DJSI ESG rating to 60+ Guidance reflecting solid business fundamentals HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun WELSPUN CORP Pipes & Steel 7#8Guidance Revenue (Rs. crore) 7,705 8,451 9,957 8,954 7,380 7,587 6,035 7,153 6,505 9,758 EBITDA (Rs. crore) 15,000 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24* ROCE 7.4% 8.7% 8.0% 8.8% 6.4% 951 844 891 815 737 708 WELSPUN CORP Pipes & Steel 1,276 1,152 1,023 805 1,500 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24* 32.1% 22.6% 21.3% 16.0% 11.0% 7.3% FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24* HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun Major Capex done and now volumes have to be ramped up of the greenfield plants and acquisitions FY24* Guidance 8#9HAR GHAR SE HAR DIL TAK WELSPUN HarDilWelspun WCL: Line Pipes WELSPUN CORP Pipes & Steel Top 3 Among Line Pipe Manufacturers globally 50+ Approvals from O&G majors; Qualifies for global bidding 15+ million metric ton Pipes delivered since inception with multiple repeat orders 2.2 mn MT Pipes Capacity 6 manufacturing facilities in 3 countries Used in Oil & Gas, Water industry & Structurals 9#10Approvals & Accreditations: Line Pipes WELSPUN CORP Pipes & Steel OIL & GAS TRANSPORTATION BR PETROBRAS TOTAL Chevron ओएनजीसी ConocoPhillips British Gas PTTEP Reliance Industries Limited OnGc TC Energy गेल इंडियनऑयल IndianOil bp 5 GAIL William's Enterprise Products KINDER MORGAN INC. CENBRIDGE GGAZPROM MOGE أرامكو السعودية saudi aramco HAR GHAR SE HAR DIL TAK WELSPUN #HardWalipun قطر للبترول Qatar Petroleum Statoil CPOC PERU LNG ExxonMobil PLAINS ALL AMERICAN PIPELINE LP ENERGY TRANSFER NG Energy Partners LP OTHERS 5 SAIPEM Dow FLUORⓇ ODEBRECHT Agip BECHTEL M eni المؤسسة العامة لتحلية المياه المالحة Saline Water Conversion Corporation 10#11Global Supply Chain SUPPLIER COUNTRY Dillinger France & Germany VAGB Austria Posco South Korea Nippon Japan JFE Japan Bao China HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun WELSPUN CORP Pipes & Steel More than 2 million metric tons of plates procured in last 10 years Healthy Relationships with Suppliers across the world: A key factor for our Global Leadership Position#12HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun SCALE FOCUS WELSPUN CORP Pipes & Steel Welspun Corp: Transforming into a Conglomerate EXISTING NEW BUSINESS Large Diameter Pipe and Coating New Energy Sintea pure Minisa pure Biassa Pur Pig Iron and DI Pipes Specialty Steel Billets & TMT ABG Shipyards Plastic Products Amongst the Top 3 manufacturers globally One of the largest standalone single location facility Integrated producer from steel-making to finished products One of the largest players in the Key Growth Market of Western India One of the largest shipyard infrastructure in India Acquisition of a national brand - Sintex BAPL Oil & Gas & New Energy *Through Forward Integration Jal Jeevan Mission Greenfield Nuclear, Defense & Power Infra & Housing New Business Opportunity B2C Acquisitions 12#13Manufacturing Facilities: Pipes & Steel WELSPUN CORP Pipes & Steel CAPACITY INDIA US SAUDI ARABIA TOTAL PRODUCTS / CITY ANJAR MANDYA BHOPAL JHAGADIA LITTLE ROCK DAMMAM LSAW 350 350 HSAW 250 150 305 350 375 1430 ERW/HFIW 200 175 375 Line Pipes (KMT) 1255 525 375 2155 TMT Bars (KMT) 350 350 DI Pipes (KMT) 400 400 SS Bars (KMT) SS Pipes (KMT) 150 18 150 18 HAR GHAR SE HAR DIL TAK WELSPUN HarDil Welspun 13#14Line Pipes: Key Drivers WELSPUN CORP Pipes & Steel • INDIA Expansion of National Gas Grid Pipeline driven by increasing LNG capacities City Gas Distribution (CGD) network Strong export outlook with focus on Australia, Central America, South East Asia and Middle East Demand returning in the Water sector with moderating steel prices USA Rig count close to pre-pandemic levels Permian basin expected to be the key growth driver due to geopolitical reasons At least 3 more large gas pipelines planned from Permian to Gulf coast; 5 new LNG terminals being added for export of gas Big focus on New Energy including Carbon Capture, Hydrogen and Ammonia pipelines SAUDI ARABIA Saudi Aramco to boost oil production from 10 million to 13 million barrels a day by 2027 Saudi Aramco to boost gas production by more than 50% by 2030 Huge capex in distribution of Desalinated water; 7 large water infrastructure projects planned; Total demand exceeding 3 MN MT over 3 years HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun Source: Government websites, news articles, market intelligence 14#15Ductile Iron Pipes: Huge focus on creating drinking water supply infrastructure in India Our Focus Market is West, Central and North India JK HP PJ HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun UK HR WDIPL, Anjar RJ UP BR Gui JH WB MP CG OR MH TG Goa KA AP Legend: Focus Market Phase 1 Received State Approval KE TN EWIitions WELSPUN CORP Pipes & Steel 15#16Specialty Steel: SS Pipes Outlook Robust demand expected going forward Key Drivers • · • Make in India initiative by the government providing push to local manufacturing High value business and a differentiated import-substitution play with obvious synergies with existing business and capabilities, characterized by superior margins and resilient demand High Entry Barriers due to technology capabilities as well as approvals and accreditations required from customers, process licensors, and EPC players Implementation of BIS and the proposal for Anti-Dumping Duty on substandard and cheap imports to lay a strong foundation for substantial growth Sectors & Demand Critical applications in key sectors like Power, Nuclear, Defense, Petrochemicals etc. • Demand Estimate: -65 KMT in Domestic Market and -25 KMT in Exports per Annum Visible Turnaround • Product acceptability both in the domestic and export market Moving towards higher value added grades such as Nickel Alloy, Duplex & Super Duplex Only facility which is fully integrated from SS Steel to Pipes HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun Source: News articles, Market intelligence, Internal estimates WELSPUN CORP Pipes & Steel 16#17WELSPUN CORP Pipes & Steel TMT: Our Differentiated Strategy Forward Integration from Billets to TMT • Growth Drivers Infrastructure: Massive spending expected in the sector including - ⚫ PM Gati Shakti National Master Plan: an expected outlay of INR 100 lakh Cr • Pradhan Mantri Awas Yojana-Urban's (PMAY-U) 'Housing for All' mission • Private Sector Capital Expenditure Individual House Builders Welspun Strategy Sharp focus on • Branding and creating a robust distribution network - B2C segment Presence in High growth Western India (especially Gujarat) region where Welspun enjoys a strong brand presence HAR GHAR SE HAR DIL TAK WELSPUN #HardWelspun *3 MN MT per Annum demand expected in Gujarat for TMT rebars Synergy with our steel business Source: News articles, Market intelligence, Internal estimates 17#18Nauyaan Shipyard (erstwhile ABG Shipyard) Metal/metal scrap not required for business purposes is being disposed off which would result in a steady cash flow Not exploring any capital intensive options like ship building Assessing low capex, non-cyclical, high return and value accretive propositions Potential to Enter New Businesses - Ship Recycling and Repair HAR GHAR SE HAR DIL TAK WELSPUN PHSDWelspun WELSPUN CORP Pipes & Steel 18#19WELSPUN CORP Pipes & Steel Sintex BAPL - Plastic Products Manufacturing Locations. • Kalol Gujarat Nalagarh Himachal Pradesh Namakkal Tamil Nadu Uluberai West Bengal Butibori (Nagpur) Maharashtra • High Brand recall for Sintex across the country, current market share in Water Tanks estimated to be 8-10% Widespread sales network of approximately 900 Distributors and 13,000 Retailers Leverage network to increase market share in Year 1 . Guwahati* Assam Combined Capacity: 70,000 MT HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun Under contract manufacturing Bineneo BIATE ACE Reno atva Sintentatva TITUS Sints HERO PUF Sint PUF Sintea pure 19#20Transaction Rationale - Sintex BAPL WELSPUN CORP Pipes & Steel HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun 1. Growth Driver: Entry into the Consumer Segment through a Super Brand which is well known across the country and has a premium positioning 2. Extensive Distribution Network: Widespread Distribution and Retail Network is in line with Welspun Group's Mission "Har Ghar Welspun" 3. Strategic Acquisition: Net acquisition cost for the Plastic Products business at INR 406 crores 4. Diversification of Product Portfolio: WCL will expand its presence in providing Water related solutions (through Line Pipes & DI Pipes for water transportation and Tanks for storage) Sintex Antimicrobial Sinter 18001212144 20#21WELSPUN CORP Pipes & Steel Sintex Antimicrobial Sintexpure 1800 25 2744 The Way Forward Sintex BAPL • • Re-energize distribution network, product & brand and combine with WCL's strength in Supply Chain efficiencies Efforts to regain lost Market Share which was historically as high as 23-25% Strong and experienced Management team already in place • No immediate large capex requirement envisaged, will assess and organically strengthen the business over the next few months Sintex Antimicrobial Sintexpure 1800 121 2764 HAR SHAD SE HAR DIL TAK WELSPUN HarDiWelspun 21 21#22Sustainability Strategy • Energy Efficiency Water Intensity • Health & Safety • Human Capital • Renewable Energy • Waste Intensity • Gender Diversity • . Impacting Lives in CSV Sustainable Supply Chain Hydrogen Pipelines Carbon Capture Projects HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun WELSPUN CORP Pipes & Steel Ranked in the Top 7% in Steel Industry by S&P Global's Dow Jones Sustainability Index (DJSI) Corporate Sustainability Assessment World Er 22 22#23Sustainability Targets ASPECTS WELSPUN CORP Pipes & Steel FY 2020-21 FY 2021-22 FY 2022-23 GOAL 2025 GOAL 2030 GOAL 2040 Carbon Neutrality 0% RE 0% RE 0% RE 10% RE 20% RE Carbon neutral % Renewable Energy (RE) Water Neutrality Water Intensity 0.63 KL/MT 0.64 KL/MT 0.57 KL/MT 0.55 KL/MT 0.40 KL/MT Water neutral Waste to Landfill Impacting Lives in CSV Sustainability Supply Chain - % suppliers assessed as per ESG compliant Code of Conduct HAR GHAR SE HAR DIL TAK WELSPUN HarDiWelspun 1.53 MT Zero waste to landfill Zero waste to landfill 1 MT Zero waste to landfill Zero waste to landfill 1,60,735 1,95,375 0% assessed 50% critical suppliers assessed 5,07,848 100% critical suppliers assessed 5,00,000 10,00,000 100% critical suppliers assessed 100% (all suppliers) On track to achieve Water Intensity targets Project Plan for Renewable Energy Note: Sustainability targets for Line Pipes India business Impacting Lives in CSV through Welspun Foundation 20,00,000 100% (all suppliers) 23#24Thank You! Welspun Corp Limited CIN: L27100GJ1995PLC025609 For further queries, contact Name : Mr. Gaurav Ajjan Email: [email protected] www.welspuncorp.com