Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — FY2005 Earnings Presentation
29 slides from Larsen & Toubro's earnings presentation, May 2004
Slide 1: Larsen & Toubro Limited Performance Review FY'05
LARSEN & TOUBRO LIMITED Performance Review FY’05
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward looking statements concerning L&T’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The r
Slide 3: Performance Highlights
Performance Highlights • Order book growth catches up in Q4 • Strong revenue growth at 37% • PBDIT growth at 21% – Increase in staff expenses and Sales & administration expenses well absorbed – Lower E&C margins result in lower profit growth • PAT grows at 18% – Lower investment income – Lower forei
Slide 4: Impressive growth in top line
Impressive growth in top line % Q4'05 Q4'04 Rs. Billion FY'05 FY'04 change 59.48 32.32 Order Booking * 149.65 132.59 13 43.09 35.87 Sales 132.69 98.07 35 Other Income 1.23 1.33 - Operational 2.83 2.66 6 0.03 0.26 - Others 4.13 1.39 197 44.35 37.46 Total Revenue 139.65 102.12 37 - - Order Backlog * 1
Slide 5: Sustained Growth in New Orders
Sustained Growth in New Orders CAGR 21% 149.31 160 130.83 140 107.83 120 84.46 Rs. Billion 100 80 60 40 20 0 2001-02 2002-03 2003-04 2004-05 E&C Electricals Others CAGR 21% 19% 21%
Slide 6: Strong revenue growth over the last four years
Strong revenue growth over the last four years 133.62 CAGR 33% 140 120 98.89 100 73.54 Rs. Billion 80 57.29 60 40 20 0 2001-02 2002-03 2003-04 2004-05 E&C Electricals Others CAGR 35% 18% 22%
Slide 7: Segmental Revenues
Segmental Revenues FY'05 FY'04 Others Others Elect. 6% Elect. 7% 9% 10% E&C E&C 85% 83% Rs. Billion 04-05 03-04 E&C 114.30 82.46 Electricals & Electronics 11.56 9.58 Others 7.76 6.85
Slide 8: Segmental EBITDA
Segmental EBITDA FY'05 FY'04 Others Others 9% 7% Elect. Elect. 14% 14% E&C E&C 77% 79% Rs. Billion 04-05 03-04 E&C 8.27 6.69 Electricals & Electronics 1.47 1.23 Others 0.91 0.61
Slide 9: PAT grows strongly
PAT grows strongly Q4'05 Q4'04 Rs. Billions FY'05 FY'04 % change 5.30 4.50 PBDIT* 10.81 8.90 21 12.0% 12.0% PBDIT/Revenue* 7.9% 8.7% 0.16 0.14 Interest 0.54 0.37 46 0.30 0.23 Depreciation 0.94 0.84 12 4.84 4.13 PBT* 9.33 7.69 21 1.65 1.51 Tax - Current 3.21 2.81 14 (0.15) (0.24) - Deferred (0.19) (0
Slide 10: Cash Flow Statement
Cash Flow Statement Rs. Billion 2002-03 2003-04 2004-05 Operating Profit 9.09 7.59 9.67 Change in Working Capital 3.05 (3.02) (5.74) Operating Cash Flow 12.14 4.57 3.93 Direct Taxes (Paid) / Refund (0.41) (1.27) (2.81) Investments in fixed Assets (0.86) (0.55) (1.49) Interest (Net) (1.94) (0.73) (0.
Slide 11: Balance Sheet
Balance Sheet Rs. Billion FY'05 FY'04 Net Worth 33.69 27.75 Loan Funds 18.59 13.24 Deferred Tax Liabilities 2.18 2.37 Total Sources 54.46 43.36 • Net capex at Rs.1.5 bn Net Fixed Assets 10.60 9.67 • Working capital increase • contained at Rs.5.74 bn (16% of Net Intangible Assets 0.22 0.48 incrementa
Slide 12: Improving Resource Utilisation
Improving Resource Utilisation 100 3 2.50 80 2.2 2.5 1.85 2 60 1.49 53.23 1.26 1.5 40 40.26 42.13 44.68 38.86 1 20 0.5 0 0 00-01 01-02 02-03 03-04 04-05 Funds Employed Ex. Cem (Rs. Billion) Asset Turnover Ratio 160 ...compensates for lower margins 25.00% 20.70% 20.70% 140 20.00% 120 15.87% 133.62 15
Slide 13: Segment Review
Segment Review
Slide 14: Engineering & Construction
Engineering & Construction % Q4'05 Q4'04 Rs. Billion FY'05 FY'04 change Order Booking : (1) 49.50 26.48 Domestic 113.48 97.98 16 4.04 1.45 Export 16.90 18.82 (10) 53.54 27.93 Total 130.38 116.80 12 Gross Sales: 30.73 25.88 Domestic 90.50 68.96 31 6.87 5.13 Export 23.55 13.07 80 37.60 31.01 Total (2)
Slide 15: Sector-wise Order Backlog
Sector-wise Order Backlog 100% 13 9 17 18 23 80% 48 35 33 46 60% 35 10 10 40% 8 21 25 21 23 20 20% 8 17 17 16 14 8 5 0% 00-01 01-02 02-03 03-04 04-05 Process Oil & Gas Power Infrastructure Others
Slide 16: Recent developments
Recent developments • Approval received for Stami Carbon equipment –Completes the product range for fertilizer plants • Collaborative efforts with ISRO –First set of Solar Panel Deployment mechanism successfully qualified for “Edusat” –Honeycomb deck structures –Angular motion simulators • Qualified
Slide 17: Engineering & Construction
Engineering & Construction % Q4'05 Q4'04 Rs. Billions FY'05 FY'04 change 37.71 31.18 Total Revenues (1) 114.30 82.46 39 0.26 0.35 Excise Duty 0.77 1.54 37.45 30.83 Net Revenues 113.53 80.92 4.37 3.61 EBITDA 8.27 6.69 24 11.6% 11.6% EBITDA/Tot. Rev. 7.2% 8.1% 4.19 3.45 EBIT 7.67 6.13 25 - - Segment A
Slide 18: Electrical & Electronics
Electrical & Electronics Q4'05 Q4'04 Rs. Billions FY'05 FY'04 % change 3.32 2.89 Total Revenues 11.56 9.58 21 0.23 0.22 Excise Duty 0.91 0.76 3.09 2.67 Net Revenues 10.65 8.82 21 0.47 0.47 EBITDA 1.47 1.23 20 14.2% 16.3% EBITDA/Tot. Rev. 12.7% 12.8% 0.44 0.44 EBIT 1.36 1.13 20 - - Segment Assets 3.6
Slide 19: Other Businesses
Other Businesses Q4'05 Q4'04 Rs. Billions FY'05 FY'04 % change 2.39 2.14 Total Revenues 7.76 6.85 13 0.02 0.04 Excise Duty 0.09 0.15 2.37 2.10 Net Revenues 7.67 6.70 14 0.34 0.22 EBITDA 0.91 0.61 49 14.2% 10.3% EBITDA/Tot. Rev. 11.7% 8.9% 0.32 0.20 EBIT 0.83 0.53 57 - - Segment Assets 2.54 2.67 - -
Slide 20: Consolidated Results
Consolidated Results
Slide 21: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account FY'04 FY'05 Rs Billions L&T Group L&T L&T Group YoY Var. 112.80 Total Income 137.88 151.04 34 10.67 PBDIT* 10.62 13.67 29 9.21 Profit before Tax* 9.33 10.52 14 (3.01) Tax Provision (incl. dividend tax) (3.02) (2.88) 6.20 PAT* 6.31 7.64 23 Gain on transfer/sale of N
Slide 22: Consolidated Balance Sheet
Consolidated Balance Sheet FY'04 FY'05 Rs Billions L&T Group L&T L&T Group YoY Var. 26.47 Net Worth 33.69 33.16 6.69 0.54 Minority Interest - 1.05 0.51 2.14 Deferred Tax Liability 0.95 1.38 (0.76) 27.69 Loan Funds 18.59 34.54 6.85 56.84 SOURCES 53.23 70.13 13.29 21.40 Net Fixed Assets 10.83 22.15 0.
Slide 23: Performance of Subsidiaries
Performance of Subsidiaries Business subsidiaries FY'04 Rs. Million FY'05 % Change • Growth in revenues mainly contributed by: 7904 Total Income 11484 45.3 – L&T Infotech 1273 PBDIT 1879 47.6 – Zubair Kilpatrik, an acquisition 413 PAT 886 114.5 during the year in the Middle East – L&T Oman 8693 Tota
Slide 24: Performance of Subsidiaries
Performance of Subsidiaries Infrastructure Development Property Development FY'04 FY'05 FY'04 Rs. Million FY'05 % Change Rs. Million % Change 487 Total Income 587 20.4 841 Total Income 300 (64.3) 379 PBDIT 452 19.2 519 PBDIT 197 (62.0) -6 PAT 51 370 PAT 117 (68.4) Total Funds Total Funds 4784 Employ
Slide 25: Performance of L&T Infotech
Performance of L&T Infotech FY'04 (Rs. Billion) FY'05 % Change 3.78 Total Revenues 5.81 54 0.43 Operating Profit (PBDIT) 0.83 93 11.4% % to Sales 14.3% 0.27 Depreciation/Amortisation 0.26 0.03 Financing Costs 0.03 0.13 PBT 0.53 0.12 PAT 0.46 3.3% PAT/Sales 8.0% • Robust revenue growth of 54% • Opera
Slide 26: Outlook
Outlook
Slide 27: Promising investment scenario
Promising investment scenario • Metal sector is on an aggressive growth mode driven by high metal prices and capacity utilization levels • Power sector opportunities are looking attractive –Hydro power, nuclear and thermal capacities are on the anvil –Continuing thrust on enhancing transmission capa
Slide 28: Revenues and margins
Revenues and margins • Engineering and Construction –A fair growth in revenues with a healthy backlog as at end FY 05 • High revenue base resulting from strong growth over last two years • Late receipt of orders could have an impact on revenue growth –Margins will show improvement • Measures put in
Slide 29: Strategic Initiatives
Strategic Initiatives • Technology centre being established for process plant equipment and strategic sectors • New engineering centers established in New Delhi and Abu Dhabi • China presence improved for market reach and procurement initiatives • Exploratory work on to establish manufacturing prese