Welspun Corp Limited · NSE:WELCORP
Welspun — Q2 FY22 Earnings Presentation
35 slides from Welspun's earnings presentation, Oct 28, 2021
Slide 1: Cover letter to stock exchanges: Business Update and Investors' Presentations
WELSPLJN CORP PPES LF~D ZLLTES WCI/SE~~2021 October 28, 2021 To, BSE Ltd. I National Stock Exchange of India Ltd. Department of Listing, (Symbol: WELCORP, Series EQ) P. J. Towers, Dalal Street, I Mumbai 400 001. — Exchange Plaza, Bandra-Kurla (Scrip Code: Complex, 051. Bandra (E), Mumbai - 400 Equit
Slide 2: Business Update: Well Poised for the Future
BUSINESS UPDATE Well Poised for the Future October 28th, 2021, Mumbai: Welspun Corp Ltd. (WCL), flagship Company of the Welspun Group, announced its consolidated financial results for the quarter ended September 30th, 2021. Strong Net Cash Position of Rs. 1,022 cr Current Order Book of 579 KMT,
Slide 3: Business Update: Tax, Dividend and Business Outlook
BUSINESS UPDATE 7. Corporate Tax Rate The company has fully utilized its existing tax credits in FY21 and has switched to the new corporate tax rate of 25.17% in FY22 from the existing 34.94% (both including surcharges) in India. 8. Dividend During Q2 FY22, the company paid a dividend of ~ INR 130 c
Slide 4: Business Update: India gas grid and pipe demand
BUSINESS UPDATE With the country aiming to increase the share of gas in its energy basket to 15% by 2030 from the current level of 6%, 15,369 km of pipelines are under various stages of construction at present. Taken together with the 17,126 km of existing pipelines, these would help create a basic
Slide 5: Business Update: Saudi Arabia and EPIC IPO
BUSINESS UPDATE Saudi Arabia We have a confirmed order book of 222 KMT in our Saudi JV with steel for all orders in hand fully secured. At these level of oil prices we are optimistic and are seeing Saudi Aramco in the process of finalizing few projects. We being an LTA holder are expecting to receiv
Slide 6: Business Update: Welspun Steel acquisition terms
BUSINESS UPDATE Finance Due diligence : Ernst & Young LLP, Legal Due Diligence : Economic Law Practice For every 100 equity shares of Face Value of INR 10 each held in WSL, shareholders of WSL will receive 81 (Eighty One) 6% Cumulative Redeemable Preference Share of Face Value of INR 10 each of
Slide 7: Business Update: Ductile Iron Pipe project and ESG
BUSINESS UPDATE prudent practice, detailed due diligence will be exercised with a clear oversight by the Board. Since the Company has a judicious capital allocation policy, every proposal has to first meet the internal thresholds for ROI and profitability before being considered for acceptance. 12.
Slide 8: Business Update: Operating EBITDA reconciliation and performance snapshot
BUSINESS UPDATE Detailed reconciliation of Operating EBITDA is provided hereunder: Figures in Rs. Cr Reconciliation of Operating EBITDA Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 Reported EBITDA 195 203 240 398 437 Treasury income (34) (33) (12) (67) (25) Profit on sale of Land (incl. interest) - - (42) - (
Slide 9: Business Update: Balance sheet and Saudi financials
BUSINESS UPDATE Figures in Rs. Cr Consolidated Balance Sheet - Key figures Sep-21 Jun-21 Mar-21 Net Fixed Assets (incl CWIP) 1,923 1,753 1,683 Net Current Assets 1,753 2,018 2,133 Net Debt / (Net Cash) (1,022) (853) (620) Net Worth 3,856 3,910 3,793 ROCE (pre-tax) 16.2% 16.7% 17.9% ROCE (pre-tax) =
Slide 10: Business Update: Conference call and About Welspun Corp
BUSINESS UPDATE Q2 FY22 Investor / Analyst conference call: WCL management would be happy to answer investor queries on a conference call. Please find details below: Date: Friday, 29th October 2021 Time: 10:00 AM IST Dial in details: Primary Access: +91 22 6280 1325 / +91 22 7115 8226 Internatio
Slide 11: Welspun Corp Limited
Welspun Corp Limited Investor Presentation | October 2021
Slide 12: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”), which have been prepared by Welspun Corp Limited (the “Company” or “WCL”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any
Slide 13: Q2 FY22 – Key Messages
Q2 FY22 – Key Messages • O&G sector in India continues to be strong, seeing pick-up in the Water sector • Weakness in US on environmental opposition, revival expected in the medium term Business Outlook • High Oil Prices a big positive, Saudi Aramco in process of finalizing a few projects • Flare up
Slide 14: Q2 FY22 at a Glance
Q2 FY22 at a Glance Global Production Global Sales Global Order Book Active Bids - Outlook 166 KMT 180 KMT 579 KMT 1,393 KMT EBITDA Op EBITDA / Ton EPS Net Cash Position Rs. 11,350 / Rs. 195 crs Rs. 3.3 Rs. 1,022 crs USD 153 Note: Pipe Sales & Production volumes, Order Book and Future Bids include S
Slide 15: Financial Results for Q2 FY22
Financial Results for Q2 FY22 Particulars (Rs Cr) Q2FY22 Q2FY21 YoY Pipe Sales Volume (KMT) 180 249 -27.8% Total Income from Operations 1,306 1,158 12.8% Operating EBITDA 161 187 -13.7% EBITDA 195 240 -18.7% Depreciation 54 52 4.4% Finance cost 18 15 22.1% Profit before tax and share of JV 123 173 -
Slide 16: Robust Balance Sheet with Net Cash Position in excess of INR 1000 crores
Robust Balance Sheet with Net Cash Position in excess of INR 1000 crores Particulars (Rs Cr) 31-Mar-20 30-Jun-20 30-Sep-20 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 Gross Debt 995 479 335 660 771 816 1,230 Cash & Cash Equivalents 963 677 990 974 1,391 1,670 2,252 Net Debt / (Cash) 32 (198) (655) (314)
Slide 17: Diversification of Product Portfolio
Diversification of Product Portfolio • Global Leadership Position in this Segment Large Diameter • Focus on expanding customer base and presence Existing Pipes Business • No Capex spend apart from regular maintenance • Greenfield Project at Anjar with capacity of 400 KMPTA Greenfield Ductile Iron Pi
Slide 18: Operational Performance: Pipes (Capacity and Volumes)
Operational Performance: Pipes (Capacity and Volumes) Achieved > 1,000 KMT of Sales CONSOLIDATION PHASE Volume in previous 8 out of 9 years 1,850 2,200 2,425 2,425 2,425 2,555 2,555 2,555 2,555 2,425 2,425 2,425 1100 1082 1279 1502 1100 1450 1450 1018 1019 1152 1003 950 641 695 816 909 833 936 371 9
Slide 19: Financial Performance
Financial Performance 2nd Highest EBITDA in FY21 despite being a Pandemic year Particulars FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 H1FY22 Sales Volume (KMT) 1,018 1,019 1,152 1,100 936 1,082 1,279 1,502 1,003 356 Revenue (INR cr) 9,083 7,705 8,451 7,380 6,035 7,587 8,954 9,957 6,440 2,605 EBITD
Slide 20: Sales Volume Mix
Sales Volume Mix Consistent Performance in India 764 635 646 632 650 629 626 578 510 500 393 413 423 236 255 222 217 265 180 254 165 197 237 138 123 106 96 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 India (KMT) USA (KMT) Saudi (KMT) Investor Presentation 10
Slide 21: Our ESG Journey
Our ESG Journey Environmental & Social Detailed Benchmarking Mapping universe of Arrive at baseline Formulation of a Public reporting and versus peers on ESG issues, objectives and scenario in line with strategic roadmap disclosures of ESG factors risk and prioritizing WEF metrics and outlining key
Slide 22: Sustainability Targets
Sustainability Targets Aspects FY 2020-21 Goal 2025 Goal 2030 Goal 2040 Carbon Neutrality 10% RE 20% RE Carbon neutral - % Renewable Energy (RE) Water Neutrality 0.63 KL/MT 0.55 KL/MT 0.40 KL/MT Water neutral - Water Intensity Zero waste to Waste to Landfill 1.53 MT 1.00 MT 0 MT landfill Impacting L
Slide 23: ESG Initiatives in Q2 FY22
ESG Initiatives in Q2 FY22 Several management interventions with ESG at the core: ‒ MoU with BP India Pvt Ltd. to jointly explore carbon emission mitigation and reduction opportunities in WCL’s energy, logistics, mobility and waste management activities ‒ Project for Installation of 300 KW Solar Pan
Slide 24: ESG activity photos: EV logistics, Daan Utsav, tree plantation, vaccination
Electric Vehicle in Logistics Daan Utsav Drive across Locations Anjar Bhopal Tree Plantation on World Environment Day Vaccination of Employees Mandya Mumbai 14
Slide 25: Strategy for Long Term Value Creation
Strategy for Long Term Value Creation 1 Business Growth & Diversification to improve Earnings Predictability and Enhance Margins 2 Delivering on Growth Plans and Operational Excellence 3 Maintain Balance Sheet Strength 4 Continue to integrate Digital Technologies into all areas of Business 5 Thrust
Slide 26: Welspun Corp at a glance
Welspun Corp at a glance Top Among Line Pipe Manufacturers globally 3 50+ Approvals from O&G majors; Qualifies for global bidding 15+ Pipes delivered since inception with multiple repeat orders MN MT 6 manufacturing facilities Used in Oil & Gas and 2.55 mn MT Pipes Capacity in 3 countries Water indu
Slide 27: Our Manufacturing Facilities
Our Manufacturing Facilities INDIA UNITED STATES SAUDI ARABIA Capacity India US Saudi Arabia (in KMT) Total Products / City Anjar Dahej Mandya Bhopal Little Rock Dammam LSAW 350 350 - - - - 700 HSAW 250 50 150 305 350 375 1,480 ERW/ HFIW 200 - - - 175 - 375 SAW Pipes (KMT) 1,655 525 375 2,555 DI Pip
Slide 28: Our Business Moat
Our Business Moat Global Leadership Accreditations Expertise Among Top 3 Line Pipe Approvals: 50+ O&G majors; Executed critical & complex projects Manufacturers globally Qualifies for global bidding worldwide Customer Centricity Supplier Relationship Innovation Delivered 15+ mn MT Pipes with Long te
Slide 29: Approvals & accreditations from marquee customers is a significant entry barrier
Approvals & accreditations from marquee customers is a significant entry barrier Oil & gas Transportation Others Investor Presentation 19
Slide 30: Key Milestones
Key Milestones 4th year of >1mn MT volumes; 350 KTPA LSAW mill at Anjar order book at record high 300 KTPA HSAW mill at Saudi JV with Wasco Energy Ltd for Arabia CWC plant 350 KTPA HSAW Achieves Net mill at Arkansas, US Cash Balance Won 1,700 KM Keystone project from Trans Sheet Canada
Slide 31: Product Information
Product Information HSAW Pipes LSAW Pipes (Helically welded) (Longitudinally welded) ERW Pipes DI Pipes (Electric Resistance (Ductile Iron) Welded) 18 – 140 inch 16 – 60 inch 80– 1200 mm 1.5 – 20 inch diameter, 6 mm to diameter, diameter, K7 and diameter, 4 mm to 25 mm 6 mm to 43 mm K9 class 14 mm t
Slide 32: Unique Manufacturing Advantage: India
Unique Manufacturing Advantage: India INDIA : 20+ YEARS OF EXPERTISE Strategically Located Plants …to cover West, South and Central India • All-round capability: Pipes, bends, internal and external coating, Concrete Weight Coating • Location advantage: Ideal to cater to export and domestic businesse
Slide 33: Unique Manufacturing Advantage: US & Saudi
Unique Manufacturing Advantage: US & Saudi US: DOMINANT PLAYER IN LINE PIPES SAUDI: ONE OF THE LARGEST PIPE PLANTS • Largest and most modern spiral (HSAW) mill • Location Advantage: • Patented manufacturing technologies • Proximity to Dammam Port • Strategic location, west of the Mississippi river •
Slide 34: Board of Directors & Management Profile
Board of Directors & Management Profile Board of Directors Management Team B.K.Goenka - Non-Executive Chairman & Promoter Director Vipul Mathur - Managing Director & CEO, Member of Board • Amongst India’s most dynamic businessmen • Well-known figure in the global pipe industry; Associated with Welsp
Slide 35: Thank You
Thank You Welspun Corp Limited CIN: L27100GJ1995PLC025609 www.welspuncorp.com For further information, please contact: Mr. Gaurav Ajjan gaurav_ajjan@welspun.com October 2020