Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q3 FY2008 Earnings Presentation
47 slides from Grasim Industries's earnings presentation, Jan 22, 2008
Slide 1: Grasim Industries Limited Performance Review Q3FY08
Grasim Industries Limited Performance Review Q3FY08 22nd January 2008
Slide 2: Cautionary Statement
Cautionary Statement Statements in this “Presentation” describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or impl
Slide 3: Consolidated Financial Performance – Q3FY08
Consolidated Financial Performance – Q3FY08 % l Net profit at record high of Rs.722 Crs., Rs. Crs. Change up by 29% TOTAL REVENUE 4,358 19 l Consolidated revenue up by 19% PBIDT 1,471 24 l PBIDT up by 24% with improved (including minority share) performance from all business segments Interest 51 (6)
Slide 4: Consolidated Financial Performance – 9MFY08
Consolidated Financial Performance – 9MFY08 % l Consolidated revenue up by 23% Rs. Crs. Change l PBIDT up by 35% with improved TOTAL REVENUE 12,383 23 performance from all business segments PBIDT 4,108 35 Ø VSF business PBIDT up by 67% (including minority share) Ø Cement business PBIDT up by 21% Int
Slide 5: Consolidated Financial Performance
Consolidated Financial Performance (Rs. Crores) Q3 FY08 Q3 FY07 % Chg. 9MFY08 9MFY07 % Chg. FY07 Net Turnover & Op. Income 4,358.3 3,668.1 19 12,382.8 10,068.3 23 14,178.4 Other Income 90.5 64.9 39 276.6 167.5 65 245.6 PBIDT 1,471.3 1,182.5 24 4,108.4 3,050.4 35 4,290.1 Interest 51.0 54.5 (6) 161.8
Slide 6: Standalone Financial Performance – Q3FY08
Standalone Financial Performance – Q3FY08 % l Net profit at record high; up by 35% Rs. Crs. Change l Revenue up by 15% TOTAL REVENUE 2,630 15 l PBIDT up by 29% with improved PBIDT 921 29 performance from all business segments Ø Historically high operating profit by VSF Interest Charges 23 (13) busin
Slide 7: Standalone Financial Performance – 9MFY08
Standalone Financial Performance – 9MFY08 % l Revenue up by 23% Rs. Crs. Change l PBIDT up by 43% with improved TOTAL REVENUE 7,596 23 performance from all business segments Ø VSF business PBIDT up by 77% PBIDT 2,644 43 Ø Cement business PBIDT up by 21% Ø Normal operations in Chemical business Inter
Slide 8: Standalone Financial Performance
Standalone Financial Performance (Rs. Crores) Q3 FY08 Q3 FY07 % Chg. 9MFY08 9MFY07 % Chg. FY07 Net Turnover & Op. Income 2,629.9 2,280.2 15 7,595.8 6,185.3 23 8,680.3 Other Income 65.0 44.4 47 190.9 132.1 45 209.7 PBIDT 921.4 713.4 29 2,644.3 1,847.2 43 2,619.0 Interest 23.4 26.9 (13) 79.8 75.2 6 11
Slide 9: Segmental Performance – Q3FY08
Segmental Performance – Q3FY08 Revenue Mix Consolidated PBIDT Mix Sponge IronOthers Others VSF & 2% VSF & Chemical 5% 5% Chemical Sponge Iron 25% 24% 3% Textiles * 2% Cement Cement 67% 67% (Rs.4,358 Crs.) (Rs.1,471 Crs.) (* Minority Share 16%) Revenue Mix Standalone PBIDT Mix Sponge Iron 9% VSF & Sp
Slide 10: Financial Highlights
IGRASTM) Financial Highlights 10
Slide 11: Grasim Consolidated Financials
Grasim Consolidated Financials 9M l Strong Balance sheet (Rs. Crores) FY05 FY06 FY07 FY08 l ROAvCE increased from 18% in FY05 to Net Turnover 9,292 10,224 14,106 12,327 33% in 9MFY08 PBIDT 2,272 2,337 4,290 4,108 l Return on equity at 35% PAT (After Minority share) 880 1,041 1,968 2,012 l Debt-equit
Slide 12: Grasim Standalone Financials
Grasim Standalone Financials 9M l Strong Balance sheet (Rs. Crores) FY05 FY06 FY07 FY08 Ø Low gearing at 0.34 Net Turnover 6,229 6,653 8,608 7,542 Ø Adjusted gearing even lower at 0.18 PBIDT 1,785 1,597 2,619 2,644 Ø Comfortable interest cover PAT 886 863 1,536 1,565 l Standalone ROCE in 9MFY08 at 4
Slide 13: Business Review – Q3FY08
Business Review – Q3FY08 § VSF § Chemicals § Cement § Sponge Iron 13
Slide 14: Viscose Staple Fibre: Q3FY08 Highlights
Viscose Staple Fibre : Q3FY08 Highlights Q3FY08 Q3FY07 % Chg. l Record operating profit of Rs.334 crores Capacity (TPA) 270,100 266,450 1 on back of robust volumes and higher Production (MT) 70,839 68,784 3 realisation Sales Volumes (MT) 68,552 67,061 2 Net Revenue (Rs Crs.) 805.9 653.7 23 l Capacit
Slide 15: Viscose Staple Fibre: Outlook
Viscose Staple Fibre : Outlook l Volume outlook is positive, driven by consumer preference for comfort clothing l Prices to remain firm in the short term; but resistance seen at these levels l Margins likely to see some decline in short to medium term Ø Cost pressure on value chain Ø Rising pulp pri
Slide 16: Chemical: Q3FY08 Highlights & Outlook
Chemical : Q3FY08 Highlights & Outlook l Production up by 68% Q3FY08 Q3FY07 % Chg. Caustic Capacity (TPA) 258,000 190,800 35 Ø Lower production in Q3FY07 due to Caustic Production (MT) 50,452 29,962 68 shutdown of a captive power plant Caustic Sales Volumes (MT) 49,978 29,337 70 l Lower caustic pric
Slide 17: Cement: Q3FY08 Highlights
Cement : Q3FY08 Highlights Q3FY08 Q3FY07 % Chg. l Production and volumes growth Grey Cement restricted due to capacity constraint Production Mn. MT 3.69 3.67 1 Ø Despite high capacity utilisation at 112% Sales Volumes* $ Mn. MT 3.76 3.72 1 Ø Capacity constraint to resolve with Realisation Rs./MT 3,2
Slide 18: Cement: Outlook
Cement : Outlook l Demand expected to grow at about 10% in the long term l Capacity announcement of around 90 Mn. tons over three years [FY08 - FY10] Ø If materialises in total as per announced schedule, may result in surplus Ø Prices may come under pressure from end FY09 l Cost pressure on account
Slide 19: Sponge Iron: Q3FY08 Highlights and Outlook
Sponge Iron : Q3FY08 Highlights and Outlook l Production up by 22% Ø Maintenance shutdown in corresponding quarter Q3FY08 Q3FY07 % Chg. l Sales volume lower by 8% Capacity (TPA) 900,000 900,000 -- Ø Liquidation of stock in Q3FY07 Production (MT) 142,701 116,996 22 l Increase in sponge prices helped
Slide 20: Capex
IGRASTM) Capex 20
Slide 21: Capex plans
Capex plans l Capex Summary Rs. Crores Total Net Cash Outflow Project Capex * Cost FY08 FY09 Cement 5,123 4,085 2,871 1,133 - Kotputli (4.5 Mn. TPA) & Shambhupura (4.4 Mn. TPA) Projects, 3,276 2,529 Rajasthan,(incl. 96 MW TPP) - 2 Nos. Thermal Power Plants (75 MW ) 402 212 - Grinding unit – Dadri, U
Slide 22: UltraTech Cement Performance Review
UltraTech Cement Performance Review 22
Slide 23: UltraTech: Consolidated Financial Performance – Q3FY08
UltraTech: Consolidated Financial Performance – Q3FY08 (Rs. Crores) l Net turnover increased by 17% due to Q3 Q3 % FY08 FY07 Chg. improved realisation and higher RMC sales Net Turnover * 1,422.7 1,220.2 17 l Operating profit higher by 23% led by Other Income 21.4 16.9 27 higher realisations and impr
Slide 24: UltraTech Consolidated: Highlights
UltraTech Consolidated: Highlights Q3 Q3 l Effective capacity utilisation of 102% % Chg. FY08 FY07 l Domestic sales volume up by 6% Production (Mn. MT) l Decline in exports volume of cement Cement 3.60 3.59 -- to meet domestic demand Sales volumes (Mn. MT) Cement - Domestic * 3.40 3.21 6 l Higher re
Slide 25: Summary
IGRASTM) Summary 25
Slide 26: Summary
Summary l Grasim – A VSF and Cement major Ø With strong competitive edge Ø Global size operations Ø Consolidating leadership position with strong organic growth pipeline l Domestic leadership in Cement Ø Capex of Rs.9,100 Crs. on capacity expansions, captive power plants, RMC and modernisation Ø Foc
Slide 27: Plant Locations – Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bathinda(G) Proposed Cement Projects Panipat Proposed Grinding Units Bhiwani Grey Cement plants Kotputli T Dadri Grinding Units (G) Shambhupura Jodhpur T Gwalior B Bulk Cement Terminal Jawad Bharuch Durgapur(G) UltraTech Cement Plants F Jafrabad Magdalla (G
Slide 28: Thank You
1G RASTM! ADITYA BIRLA GROUP Thank You
Slide 29: Annexures
Grasim Industries Limited Annexures
Slide 30: Annexures
Annexures § Consolidated and Standalone Financial § Consolidated and Standalone Profitability § Segmental Performance – Q3 & 9M FY08 § VSF Summary § Chemical Summary § Cement Summary § Sponge Iron Summary § UltraTech Performance 30
Slide 31: Financial Snapshot
Financial Snapshot Standalone Consolidated (Rs. Crores) FY04 FY05 FY06 FY07 9MFY08 FY05 FY06 FY07 9MFY08 Gross Block $ 5,802 6,052 6,417 7,974 9,887 11,312 11,927 14,481 17,905 Net Block $ 3,213 3,204 3,307 4,593 6,390 6,294 6,411 8,468 11,646 Goodwill - - - - - 1,958 1,773 1,922 1,986 Cement Subs.
Slide 32: Profitability Snapshot
Profitability Snapshot Standalone Consolidated (Rs. Crores) FY04 FY05 FY06 FY07 9MFY08 FY05 FY06 FY07 9MFY08 Gross Turnover 6,130 7,201 7,638 9,613 8,525 10,776 11,746 15,714 13,886 Net Turnover 5,213 6,229 6,653 8,608 7,542 9,292 10,224 14,106 12,327 PBIDT 1,504 1,785 1,597 2,619 2,644 2,272 2,337
Slide 33: Segmental Performance – Q3FY08
Segmental Performance – Q3FY08 Standalone Rs. Crores PBIDT Margin ROAvCE (%) Business Revenue PBIDT PBIT Capital Employed (%) (PBIT basis) Q3FY08 Q3FY07 Q3FY08 Q3FY07 Q3FY08 Q3FY07 Q3FY08 Q3FY07 Q3FY08 Q3FY07 Q3FY08 Q3FY07 VSF 806 654 334 223 41.5 34.2 313 205 1,489 1,181 92.6 75.1 Chemical 117 77 4
Slide 34: Segmental Performance – 9MFY08
Segmental Performance – 9MFY08 Standalone Rs. Crores PBIDT Margin ROAvCE (%) Business Revenue PBIDT PBIT Capital Employed (%) (PBIT basis) 9MFY08 9MFY07 9MFY08 9MFY07 9MFY08 9MFY07 9MFY08 9MFY07 9MFY08 9MFY07 9MFY08 9MFY07 VSF 2,308 1,666 906 512 39.3 30.7 843 459 1,489 1,181 83.3 56.2 Chemical 320
Slide 35: Viscose Staple Fibre: Summary
Viscose Staple Fibre : Summary Q3 FY08 Q3 FY07 % Chg. 9M FY08 9M FY07 % Chg. FY07 Capacity TPA 270,100 266,450 1 270,100 266,450 1 270,100 Production MT 70,839 68,784 3 209,072 179,061 17 246,833 Sales Volumes MT 68,552 67,061 2 208,131 182,137 14 250,725 Net Revenue Rs. Crs. 805.9 653.7 23 2,307.5
Slide 36: Chemical: Summary
Chemical : Summary Q3 FY08 Q3 FY07 % Chg. 9M FY08 9M FY07 % Chg. FY07 Capacity TPA 258,000 190,800 35 258,000 190,800 35 258,000 Production MT 50,452 29,962 68 142,046 89,610 59 136,685 Sales Volumes MT 49,978 29,337 70 142,484 90,121 58 137,830 Net Revenue Rs. Crs. 116.7 76.9 52 320.4 225.4 42 319.
Slide 37: Cement: Summary
Cement : Summary Q3 FY08 Q3 FY07 % Chg. 9M FY08 9M FY07 % Chg. FY07 Grey Cement Capacity Mn. MT 13.12 13.12 -- 13.12 13.12 -- 13.12 Production Mn. MT 3.69 3.67 1 11.16 10.54 6 14.42 Sales Volumes * Mn. MT 3.76 3.72 1 11.26 10.59 6 14.52 Avg. Realisation Rs./MT 3,215 2,918 10 3,156 2,824 12 2,867 Whi
Slide 38: Sponge Iron: Summary
Sponge Iron : Summary Q3 FY08 Q3 FY07 % Chg. 9M FY08 9M FY07 % Chg. FY07 Capacity TPA 900,000 900,000 -- 900,000 900,000 -- 900,000 Production MT 142,701 116,996 22 427,510 357,503 20 525,183 Sales Volumes MT 135,205 147,339 (8) 416,870 399,184 4 571,127 Net Revenue Rs. Crs. 244.3 196.0 25 674.9 514
Slide 39: UltraTech: Consolidated Financial Performance
UltraTech: Consolidated Financial Performance (Rs. Crores) Q3 FY08 Q3 FY07 % Chg. 9MFY08 9MFY07 % Chg. FY07 Cement Production (Mn. MT) 3.60 3.59 0.4 10.85 10.46 4 14.63 Sales Volume(Mn. MT): Cement-Domestic* 3.40 3.21 6 10.22 9.49 8 13.35 Cement-Exports 0.26 0.36 (28) 0.69 0.94 (27) 1.27 Clinker 0.7
Slide 40: Press Release Mumbai, January 22, 2008
Press Release Mumbai, January 22, 2008 GRASIM, THE ADITYA BIRLA GROUP’s FLAGSHIP COMPANY PERFORMANCE FOR Q3 FY2008 Consolidated Net Profit : Rs. 722 Crs. 29% Consolidated Net Revenues : Rs 4,358 Crs. 19% Consolidated Financial Performance: Rs. Crores Q3 Q3 % 9 Months 9 Months % FY08 FY07 Change FY08
Slide 41: Highlights of Grasim's operations: Q3FY08
Highlights of Grasim’s operations: Q3FY08 Q3FY07 % Change Production - Viscose Staple Fibre M.T. 70,839 68,784 3% Cement Mn. M.T. 3.69 3.67 1% White Cement M.T. 105,123 91,722 15% Sponge Iron M.T. 142,701 116,996 22% Caustic Soda M.T. 50,452 29,962 68% Sales Volumes - Viscose Staple Fibre M.T. 68,55
Slide 42: Cement Capex plan and Sponge Iron business
Cement Capex plan The capex plans of both Grasim and UltraTech are progressing satisfactorily. The Company’s aggregate cement capacity (including that of its subsidiaries) will stand augmented by 17 million tons at 47 million tons, upon completion of all expansions. Besides, both the Company and its
Slide 43: Unaudited Financial Results – Consolidated
UNAUDITED FINANCIAL RESULTS st FOR THE QUARTER ENDED 31 DECEMBER 2007 I. CONSOLIDATED RESULTS : Rs in Crores Three Months Three Months Nine Months Nine Months Year Ended 31st Ended 31st Ended 31st Ended 31st Ended 31st December 2007 December 2006 December 2007 December 2006 March 07 ( Audited ) Net
Slide 44: Standalone Results
-2- II. STANDALONE RESULTS : Rs. in Crores Three Months Three Months Nine Months Nine Months Full Year ended 31st ended 31st ended 31st ended 31st ended 31st December 2007 December 2006 December 2007 December 2006 March 2007 ( Audited ) Net Sales / Income from Operations 2,629.93 2,280.22 7,595.75 6
Slide 45: Segment Reporting – Consolidated
-3- III. SEGMENT REPORTING - CONSOLIDATED Rs. in Crores Three Months Three Months Nine Months Nine Months Full Year ended 31st ended 31st ended 31st ended 31st ended 31st December 2007 December 2006 December 2007 December 2006 March 2007 1. SEGMENT REVENUE a Fibre & Pulp 912.20 736.79 2,634.23 1,932
Slide 46: Segment Reporting – Standalone
-4- IV. SEGMENT REPORTING - STANDALONE Rs. in Crores Three Months Three Months Nine Months Nine Months Full Year ended 31st ended 31st ended 31st ended 31st ended 31st December 2007 December 2006 December 2007 December 2006 March 2007 (Audited) 1. SEGMENT REVENUE a Fibre & Pulp 805.92 653.74 2,307.5
Slide 47: Notes
-5- V. NOTES 1 Consolidated Results have been prepared in accordance with Accounting Standard on Consolidated Financial Statements (AS-21), Accounting Standard on Accounting for Investments in Associates (AS-23), and Accounting Standard on Financial Reporting of Interest in Joint Ventures (AS-27) is