Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q1 FY2018 Earnings Presentation
47 slides from Larsen & Toubro's earnings presentation, Jul 28, 2017
Slide 1: Investor Presentation - Q1 FY18
1 Investor Presentation - Q1 FY18 July 28, 2017
Slide 2: Disclaimer
2 Disclaimer This presentation contains certain forward time and cost over runs on contracts, our looking statements concerning L&T’s future ability to manage our international business prospects and business profitability, operations, government policies and actions which are subject to a number of
Slide 3: Presentation Outline
3 Presentation Outline L&T Overview Business Overview Group Performance The Environment & the Outlook
Slide 4: L&T – At a Glance
4 L&T – At a Glance India’s largest E&C company with interests in Projects, Infrastructure Development, Manufacturing, IT & Financial Services ` FY 17 Group Market Cap Credit Ratings Professionally Revenues: ₹ 1100 Bn (28h July, 2017): CRISIL: AAA / Stable Managed Company (approx.US$ 17 Bn) ₹1623 Bn
Slide 5: L&T - At a Glance: Market Cap
Mar '04 71 Sept '04 106 Mar '05 129 Sept '05 200 Mar '06 334 Sept '06 356 L&T - At a Glance Mar '07 459 Sept '07 807 Mar '08 884 Sept '08 715 Mar '09 394 Sept '09 989 Mar '10 979 Sept '10 1,237 Mar '11 1,007 Sept '11 830 Mar '12 800 Sept '12 980 L&T Market Cap (Amt. ` Bn) Mar '13 840 Sep'13 730 Mar'
Slide 6: L&T – Shareholding Pattern
6 L&T – Shareholding Pattern Mutual Others, Major Institutional Shareholders % Shares Funds & Pvt. 4% Insurance Govt. Life Insurance Corporation of India 17.6% Financial Cos., Administrator of the SUUTI 4.0% Institutions 17% & Insurance Companies, HDFC Mutual Fund 3.5% L&T 26% ICICI Prudential Mutua
Slide 7: Experienced Management Team
7 Experienced Management Team A M Naik S. N. Subrahmanyan Group Executive Chairman Chief Executive Officer and Managing Director • BE [Mech] • B.SC ENGG (CIVIL), MBA (Finance) • Joined L&T in March 1965 • Joined L&T in November 1984 • Diverse and vast experience in general • Vast experience in Desig
Slide 8: Corporate Governance
8 Corporate Governance L&T’s essential character revolves around values based on transparency, integrity, professionalism and accountability. Four-tier Governance Structure
Slide 9: Sustainability
9 Sustainability Sustainability Report 2016 released with Sustainability Roadmap 2021 ‘GRI Checked’ externally assured & ‘In Accordance - Comprehensive’ highest level of disclosure in public domain Thrust Areas: Energy Conservation Renewable Energy GHG Emissions Water Efficiency Material M
Slide 10: Sustainability – Environment & Social
10 Sustainability – Environment & Social Green Product Portfolio CSR Highlights 17 Green Buildings at L&T Campuses + 49.2 Theme: Building India’s social infrastructure million sq. ft. constructed for clients Working in 3 states across India on Integrated Over 76 million units of energy conse
Slide 11: Presentation Outline
11 Presentation Outline L&T Overview Business Overview Group Performance The Environment & the Outlook
Slide 12: Builders to the Nation
12 Builders to the Nation Vizag Steel Plant Turbine Rotor, Gujarat 88m Rail Bridge Jammu Udhampur Wankhede Stadium, Mumbai Baha’i Temple, Delhi Mumbai International Airport Oil & Gas Equipment Vivekanand Bridge, Kolkata Kakrapar Nuclear Power Plant, Guj ITC Grand Chola Hotel, Chennai Sri Sathya Sai
Slide 13: International Footprint – Marquee Jobs
13 International Footprint – Marquee Jobs Stadium at Barbados Salalah Airport, Oman Twin Towers, Dubai Marina NMC Speciality hospital, Abu Dhabi Bhukara Hotel, Uzbeckistan World’s Longest Conveyer, Bangladesh Bulk Cement Terminal, Colombo Fabrication Facility, Oman Punatsangchhu HEP, Bhutan Sheikh K
Slide 14: E&C Delivery Platform
14 E&C Delivery Platform One of Asia’s largest vertically integrated E&C Companies Design & Engineering EPC Projects Manufacture & Construction Fabrication Single point responsibility for turnkey solutions
Slide 15: Quality Customer Mix
15 Quality Customer Mix MIAL Indian Coastguard
Slide 16: Multiple Alliances & Joint Ventures
16 Multiple Alliances & Joint Ventures Alliances Joint Ventures Pre Qualifications Befula Investments Note: Some of these are project specific alliances & pre qualifications
Slide 17: L&T’s Business Structure
17 L&T’s Business Structure LARSEN & TOUBRO LTD. BUSINESS VERTICALS SUBSIDIARIES, JVs & ASSOCIATES BUILDINGS & FACTORIES L&T HYDROCARBON ENGINEERING TRANSPORTATION INFRASTRUCTURE FINANCIAL SERVICES HEAVY CIVIL INFRASTRUCTURE IT & TECHNOLOGY SERVICES WATER & EFFLUENT TREATMENT INFRASTRUCTURE SPVs (BO
Slide 18: Presentation Outline
18 Presentation Outline L&T Overview Business Overview Group Performance The Environment & the Outlook
Slide 19: Performance Highlights – Q1 FY18
19 Performance Highlights – Q1 FY18 Strong Operational Parameters in challenging times
Slide 20: Key Financial Indicators
20 Key Financial Indicators Amount in ₹ bn Particulars Q1 FY17 Q1 FY18 Var Order Inflow 297 264 -11% Order-Book 2574 2629 2% Revenue from Operations 219 240 10% EBITDA 19 21 9% Profit After Tax 6.1 8.9 46% Cash flow from operations -9.2 3.9 +13 bn Net Worth 447 514 +67 bn Borrowings 915 979 +64 bn G
Slide 21: Q1 FY18 Order Inflow/Order Book
21 Q1 FY18 Order Inflow/Order Book Amount in ₹ bn Order Inflow Q1 FY17 Q1 FY18 • Order inflow reflects muted capex 132 79 environment 297 165 264 185 • Trend of higher public sector outlay vis-a-vis reduced private sector Dom Intl Dom Intl capex continues • 12% Yoy growth in domestic order Order Boo
Slide 22: Group Performance – Sales & Costs
22 Group Performance – Sales & Costs • Domestic execution picks up ` Billion Q1 FY17 Q1 FY18 % Var FY17 • Revenue growth led by Infra, Revenues 219 240 10% 1,100 Hydrocarbon and E&A businesses MCO Exp. 137 153 12% 727 • Variation in MCO charge mainly due to Fin. Charge Opex* 13 14 5% 54 higher mater
Slide 23: Group Performance – EBITDA to PAT
23 Group Performance – EBITDA to PAT ` Billion Q1 FY17 Q1 FY18 % Var FY17 EBITDA 18.9 20.6 9% 111 • Increase in interest cost primarily due Fin. Cost (3.2) (3.7) 12% (13) to higher proportion of interest bearing customer advances Depreciation (4.6) (5.5) 19% (24) • Depreciation increase due to asset
Slide 24: Segment Performance Analysis
24 Segment Performance Analysis
Slide 25: Segment Composition
25 Segment Composition Heavy Electrical & Infrastructure Power Engineering Automation Buildings & Factories Process Plant Electrical Standard EPC – Coal & Gas Equipment Products Transportation Infra Heavy Civil infra Nuclear Power Plant Electrical Systems Equipment & Equipment Thermal Power Plant Wa
Slide 26: Q1 FY18 Order Inflow/Order Book Break-up
26 Q1 FY18 Order Inflow/Order Book Break-up E&A Hydrocarbon 3% Services HE 5% 2% 21% Order Inflow Power ₹ 264 Bn 2% Others 10% Infrastructure 57% Power HE 5% 4% E&A 1% Hydrocarbon 9% Others 6% Infrastructure 75% Order Book ₹ 2629 Bn
Slide 27: Q1 FY18 Revenue Break-up
27 Q1 FY18 Revenue Break-up E&A Hydrocarbon IT & TS 11% Fin. HE 5% 11% Services 3% 9% Devl. Proj. 3% Power 7% Others 7% Infrastructure 44% 34% Revenue ₹ 240 Bn 66% Domestic International
Slide 28: Infrastructure Segment
28 Infrastructure Segment Amount in ` bn Net Revenues EBIDTA • Transportation Infra and other Businesses deliver revenue growth • Higher growth witnessed in domestic market • Quarterly variation in margins primarily due to job mix and cost overruns on extended stay in a few projects
Slide 29: Power Segment
29 Power Segment Amount in ` bn Net Revenues EBIDTA • Sector challenges hindering business growth • Subdued revenues arising out of low order book • Margins reflective of competitive environment • JV companies’ profits consolidated at PAT under equity method
Slide 30: Heavy Engineering Segment
30 Heavy Engineering Segment Amount in ` bn Net Revenues EBIDTA • Revenues affected by lower order book • Quarterly margin variation is subject to job progress • Low capacity utilisation in Forgings business (consolidated at PAT level under equity method)
Slide 31: Electrical & Automation Segment
31 Electrical & Automation Segment Amount in ` bn Net Revenues EBIDTA • Growth in Standard Products business obtained from Agri. and Retail sectors • Inline execution drives growth in project business • Margin step-up due to improvement in operational efficiencies
Slide 32: Hydrocarbon Segment
32 Hydrocarbon Segment Amount in ` bn Net Revenues EBIDTA • All challenged legacy jobs closed out • Better execution progress on current order book leads to revenue growth • Improved margins obtained on efficient execution. PY included some closure costs of legacy jobs
Slide 33: IT & Technology Services Segment
33 IT & Technology Services Segment Amount in ` bn Net Revenues EBIDTA • IT Revenue growth mainly driven by BFS, Energy & Utilities and CPG, Retail & Pharma verticals • Transportation and Telecom & Hi-Tech verticals grow within Tech. Services business
Slide 34: Developmental Projects Segment
34 Developmental Projects Segment Amount in ` bn Net Revenues EBIDTA • Segment includes Power Development, Hyderabad Metro and Kattupalli Port (currently under divestment process) • IDPL (Roads & TL) consolidated at PAT level under Equity method • Revenue impacted by slower construction progress in
Slide 35: Others Segment
35 Others Segment Amount in ` bn • Segment constitutes Net Revenues EBIDTA Metallurgical and Material Handling (MMH), Industrial Products & Machinery (IPM), Realty and Shipbuilding (SHBD) businesses • Revenue Growth in SHBD and MMH offset by lower demand in IPM and Realty • Realty business adversely
Slide 36: L&T Finance Holdings (I-GAAP)
36 L&T Finance Holdings (I-GAAP) Amount in ` bn ` Billion Q1 FY17 Q1 FY18 % Var Networth 72.54 85.83 18% • Healthy growth in disbursements across lending Consolidated Debt 544.13 619.74 14% businesses (incl. Pref Cap) Loans and Advances 581.61 681.80 17% • Strong inflows witnessed in Mutual Fund Ave
Slide 37: Presentation Outline
37 Presentation Outline L&T Overview Business Overview Group Performance The Environment & the Outlook
Slide 38: The Environment & the Outlook
38 The Environment & the Outlook Private Public Sector Award Working Digitisation / Operational Capex Outlay Deferrals Capital Infra Productivity Excellence Industrial Segment Robust GCC Quarterly Operating Prospect Slowdown Offtake Volatility Leverage Base Domestic Payments & Execution Clearances O
Slide 39: Thank You
39 Thank You RENTS | veut 5 © LARSEN & TOUBRO
Slide 40: Annexures
40 Annexures RENTS | veut 5 © LARSEN & TOUBRO
Slide 41: Group Profit & Loss Extracts
41 Group Profit & Loss Extracts L&T & L&T Group Fin. Devl. ` Billion IT & TS Others (Incl. Services Projects Q1 FY18 Q1 FY17 % Var Eliminations) Income from Operations 25.4 22.9 8.3 183.3 239.9 218.7 10% EBITDA 5.2 2.8 (0.4) 12.9 20.6 18.9 9% Other Income 0.2 0.9 0.1 2.6 3.8 3.1 25% Interest Expense
Slide 42: Balance Sheet
42 Balance Sheet Incr / ` Billion Jun-17 Mar-17 (Decr) Equity & Reserves 514 502 12 Non Controlling Interest 40 36 4 Borrowings - Financial Services 640 631 9 Development Projects 160 150 10 Others 179 159 20 Sources of Funds 1,534 1,478 56 Fixed Assets 166 169 (3) (Tangible / Intangible / Goodwill)
Slide 43: Group Cash Flow
43 Group Cash Flow ` Billion Q1 FY18 Q1 FY17 Operating Profit 21.3 20.1 Changes in Working Capital (9.5) (23.3) Direct Taxes paid (7.8) (6.0) Net Cash from Operations (A) 3.9 (9.2) Investments in Fixed Assets (Net) (9.4) (12.0) Net Purchase of Long Term & Curr. Inv. (18.3) (15.7) Loans/Deposits made
Slide 44: Share in Profit/(Loss) of JVs/Associates
44 Share in Profit/(Loss) of JVs/Associates ` Billion Q1 FY18 Q1 FY17 MHPS JVs 0.44 0.26 IDPL & Subs. (0.41) (1.60) Others (0.40) (0.40) Total (0.37) (1.74) • MHPS JVs: PAT improvement consequent on better utilisation of manufacturing facilities • IDPL Group: Improved IDPL group operations due to re
Slide 45: Other Comprehensive Income (OCI)
45 Other Comprehensive Income (OCI) Amount in ` bn Changes arising out of Q1 FY18 Q1 FY17 Re-measurement of defined benefit plans (0.13) (0.03) for employees MTM of investment in Debt instruments 0.05 (0.19) Foreign Currency Translation Reserve 0.23 0.04 Hedging Reserve 1.42 (1.02) Total 1.56 (1.20)
Slide 46: Concessions Business Portfolio – 21 SPVs
46 Concessions Business Portfolio – 21 SPVs Transmission Lines: Portfolio: 1 project (482 Km) - Operational Roads and Bridges: Project Cost: ₹ 13.5 bn Portfolio: 15 projects (1661 Km); 13 Operational Project Cost: ₹ 161 bn Balance Equity Commitment (June 2017): ₹ 14 Bn Equity Invested (June 2017): ₹
Slide 47: Major Opportunities
47 Major Opportunities Roads & Highways Railways Water - NH & SH - Metros - Lift Irrigation schemes - Special Bridges - DFCC (next phase) - Water Treatment (Incl. Desal) - Tunnels - Station development - Effluent & Waste water Treatment - Expressways (Incl. Namami Gange) - Elevated Corridors - Inlan