Asian Paints Ltd. · NSE:ASIANPAINT
Asian Paints — H1 FY2004 Earnings Presentation
34 slides from Asian Paints's earnings presentation, Oct 30, 2003
Slide 1: Asian Paints (India) Limited Investor Conference H1 FY2004
1 Asian Paints (India) Limited Investor Conference H1 - FY’2004 October 30, 2003
Slide 2: Structure of the Presentation
2 Structure of the Presentation • A Perspective • Financial & Operating Performance • Initiatives • Looking ahead
Slide 3: Asian Paints
3 Asian Paints Among the Top 10 India’s largest paint Decorative Coatings company & leaders companies in the world in 10 overseas markets Operates in 24 countries Group revenue of with 30 paint mfg facilities around US $ 430 mn & with mfg capacity of market capitalisation 330 mn ltrs/annum of US$ 62
Slide 4: Asian Paints - Recognitions
4 Asian Paints - Recognitions • Has once again ranked Asian Paints among the ‘200 Best under a Billion’ companies in the World in 2003. Asian Paints is the only paint company in the world to have received this recognition • The prestigious Ernst & Young ‘Entrepreneur of the Year- Manufacturing’ has
Slide 5: Structure of the Presentation
5 Structure of the Presentation • A Perspective • Financial & Operating Performance • Initiatives • Looking ahead
Slide 6: Stand alone Profit & Loss statement H1-FY 2004
6 Asian Paints (India) Ltd – Stand alone Profit & Loss statement H1-FY 2004 (Rs. million) 1H FY 04 1H FY 03 Growth Net Sales* 8730.86 7706.00 13.3 % Other income 98.06 63.15 55.3 % Material Cost 4893.66 4016.05 21.85% PBDIT 1439.17 1407.19 2.27 % Interest 29.21 49.00 - 40.49 % Depreciation 231.47 22
Slide 7: Stand alone Margins - H1 FY'2004
7 Asian Paints (India) Limited – Stand alone Margins - H1 FY’2004 1H FY’04 1H FY’03 Matl. Cost / Net Sales 56.05 % 52.16 % PBDIT/Net Sales 16.48 % 18.26 % PBT/ Net Sales 13.5 % 14.66 % PAT/ Net Sales 8.65% 9.1 % Interest cover 49.3 28.7 (PBDIT/ Interest)
Slide 8: Explanation of P & L: H1-FY'04
8 Asian Paints (India) Limited (Stand alone) Explanation of P & L : H1-FY’04 • Profitability was affected due to – Higher material cost from the paints division – Significantly lower contribution from the chemicals business • Processing charges from APPG & APICL increased by 20 % to Rs. 35.12 millio
Slide 9: Explanation of P & L: H1-FY'04
9 Asian Paints (India) Limited (Stand alone) Explanation of P & L : H1-FY’04 • Other income has increased by 55.8 % due to: – Interest received on income tax refund of Rs. 21.14 mn – Income from Home Solution was Rs. 14.30 mn compared to Rs. 5.92 million for the corresponding period • Interest cost
Slide 10: Stand alone Segment Results – H1 FY'04
10 Asian Paints (India) Ltd – Stand alone Segment Results – H1 FY’04 (Rs. million) PAINTS 1H FY 04 1H FY03 Growth Seg. Revenue 8219.29 7173.37 14.6 % Seg. Result* 1362.87 1286.20 6.0 % Seg. result/Sales 16.6 % 17.9 % OTHERS (Chemicals) 1H FY 04 1H FY03 Growth Seg. Revenue 572.89 579.40 - 1.1 % Seg.
Slide 11: Stand alone Profit & Loss statement Q2-FY 2004
11 Asian Paints (India) Ltd – Stand alone Profit & Loss statement Q2- FY 2004 (Rs. million) Q2 FY 04 Q2 FY 03 Growth Net Sales * 4942.30 4257.82 16.08 % Other income 54.10 34.71 55.86% Material Cost 2766.26 2223.59 24.41 % PBDIT 862.13 803.35 7.32 % Interest 14.69 19.00 - 22.68 % Depreciation 116.76
Slide 12: Unaudited abridged balance sheet H1-FY'04
12 Unaudited abridged balance sheet of Asian Paints (India) Limited - H1-FY’04 (Stand alone) FUNDS EMPLOYED (Rs in mn) APPLN OF FUNDS (Rs in mn) Shareholders Funds: Fixed assets: Share capital 962.79 Gross block 6252.73 Resv & Surp 4560.67 Less : Depr 2773.59 Def Tax Liab (Net) 569.01 CWIP 46.85 352
Slide 13: Explanation of the unaudited balance sheet
13 Explanation of the unaudited balance sheet of Asian Paints (India) Limited - H1-FY’04 (Stand alone) • Loans have reduced from Rs. 1549.79 mn to Rs. 1055.5 mn – Due to strong operating cash flows inspite of significant investments made in the last financial year • Net block declined by Rs. 209 mn
Slide 14: Interim Dividend
14 Interim Dividend • The Board of Directors of the company has recommended payment of an interim dividend of Rs. 3.50 /share ( 35 %) on the increased equity. • The company believes that the dividend payout ratio will be maintained going forward
Slide 15: Consolidated Profit & Loss Account - H1 FY'2004
15 Asian Paints - Consolidated Profit & Loss Account - H1 FY’2004 (Rs. million) H1 FY 04 H1 FY 03 Growth Net Sales 11051.99 8460.39 30.6 % Other income 105.67 62.31 69.6 % Material Cost 6247.49 4452.9 40.3 % PBDIT 1606.05 1510.32 6.3 % Depreciation 309.28 246.86 25.3 % Interest 84.00 71.76 17.0 % Go
Slide 16: Explanation of the consolidated P&L statement
16 Explanation of the unaudited P&L statement of Asian Paints Consolidated - H1-FY’04 • Previous year figures are not comparable as they do not include financials of Berger International Limited(BIL), Singapore and SCIB Chemical S.A.E, Egypt. • Period considered for overseas subsidiaries is Jan-Jun
Slide 17: Asian Paints Consolidated Revenue breakup
17 Asian Paints Consolidated Revenue breakup Net Sales of Asian Paints - H1 FY'2003 Net Sales of Asian Paints - H1 Paints (India) FY'2004 Paints (India) 7% 5% 5% 17% Paints Paints (Overseas) (Overseas) Chemicals Chemicals 78% 88%
Slide 18: Paints Business - India
18 Paints Business - India Overall Paints value growth has been 14.6% Decorative Coatings • Exterior finishes continues to grow over 25 % • Good performance in East & South • Product Developments initiated – Expanded Exterior range with textured variant and primer – Launched Satin Enamel across seve
Slide 19: Paints Business - India: Industrial Coatings
19 Paints Business - India Industrial Coatings • The business has registered impressive growth rate in excess of 20 % • Road Markings range launched – Vast potential in this segment due to significant investment by the government in highways and roads
Slide 20: Raw Materials
20 Raw Materials • Prices for Titanium dioxide, an important raw material has been rising over the last quarter and is presently around USD 1850 /ton • Since crude prices were soft during the quarter, it had a deflationary effect on most downstream solvents except Ortho-Xylene • The prices of all ve
Slide 21: International Operations - H1 FY'2004
21 International Operations - H1 FY’2004 • Volume sales increased by 10%*. • Value paint sales decreased in INR by 3%* due to – Appreciation of the Rupee by 3% to USD on average exchange rates – Depreciation in the Jamaican dollar to the USD by 19% – Depreciation in the Egyptian pound to the USD by
Slide 22: International Operations - H1 FY'2004
22 International Operations - H1 FY’2004 Net Paint Sales Region 2003 2002 +/- LY Real Growth Actuals Actuals % % South Pacific 208 193 8% -1% S Asia 160 130 23% 26% GCC 439 414 6% 9% Africa/Europe 155 185 -17% 7% S E Asia 308 322 -4% -1% Caribbean 549 618 -11% 3% All values in millions of INR Real g
Slide 23: International Operations – H1 FY'2004
23 International Operations – H1 FY’2004 • Supply chain initiatives across units have improved profitability of the operations. – Group-wide sourcing for key raw materials effected. • Overhead costs kept under control • Steps undertaken to substitute high cost debt with cheaper options. Benefits to
Slide 24: Structure of the Presentation
24 Structure of the Presentation • A Perspective • Financial & Operating Performance • Initiatives • Looking ahead
Slide 25: 5th paint plant in India
25 5th paint plant in India • The fifth paint plant will be situated in South India • Asian Paints is still awaiting approvals at Pondicherry. Hence an alternate site in Tamil Nadu is being considered • In this financial year, Capital Expenditure towards the fifth plant will be around INR 350 millio
Slide 26: International Initiatives
26 International Initiatives Acquisition of Taubmans, Fiji • Acquisition will help Fiji operations consolidate leadership position • Taubmans is the 4th largest paint company in Fiji and leader in Samoa. Licensing Arrangement in Indonesia • This is the first licensing initiative in Asian Paints grou
Slide 27: Purchase of 9.2% stake in ICI (India) Ltd
27 Purchase of 9.2% stake in ICI (India) Ltd • Cost of the transaction is Rs. 770.9 million, funded through internal accruals of Asian Paints (India) Ltd • Asian Paints does not intend to destabilise the current management of ICI (India) Limited • Asian Paints has purchased this stake from the Govt.
Slide 28: Structure of the Presentation
28 Structure of the Presentation • A Perspective • Financial & Operating Performance • Initiatives • Looking ahead
Slide 29: The Indian Economy
29 The Indian Economy • Significant investment in infrastructure, boom in retail credit and good monsoons should drive growth for the economy • The existence of new drivers like positive demographic changes in income & population and BPO opportunities will help GDP growth sustain at 6% plus level •
Slide 30: Asian Paints - India operations
30 Asian Paints - India operations Decorative Business Unit • Decorative coatings will continue to perform well in the second half – Emphasis on top-line growth and increasing market share – Focus to largely maintain operating margins of the previous financial year • Outlook for Raw material – Overa
Slide 31: Asian Paints - India operations
31 Asian Paints - India operations • Industrial Business will also continue to grow due to the overall buoyancy in the market – Automotive coatings, Road markings and CRP Coatings will continue its good performance • Chemicals business should perform better than the first half of the current financi
Slide 32: International operations
32 International operations Targets for International Operations stated at time of acquisition • Sales growth of at least 10% /year for next 2 years • Excess of 3% PAT margin by calendar year 2004 Outlook for the balance period positive – Expected volume growth 15% – Expected real value growth 10%.
Slide 33: Our vision
33 Our vision “ Asian Paints aims to become one of the top five Decorative coatings companies world- wide by leveraging its expertise in the higher growth emerging markets. Simultaneously, the company intends to build long term value in the industrial coatings business through alliances with establi
Slide 34: End...
CPR ORR eR ee End... asianpaints
Asian Paints (India) — H1 FY2004 Earnings Presentation on 6ix