Asian Paints Ltd. · NSE:ASIANPAINT
Asian Paints — UBS India Conference 2017
43 slides from Asian Paints's conference presentation, Nov 17, 2017
Slide 1: UBS India Conference
UBS India Conference Mumbai, India November 17, 2017
Slide 2: Disclaimer
Disclaimer This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expre
Slide 3: Group Overview agenda
Group Overview Economic Environment – Q2 FY18 Financial Performance – Q2 FY18 Business Review – Q2 FY18 Risks and Outlook
Slide 4: Group at a glance
1 Over 3 rd Largest Paint No. USD 2 Billion 3 Company in Asia Paint Company Times nearest Group revenue in India Competitor in India 10th Largest Coating Company In the World Part of Operations in 25 30 50 16 Paint Manufacturing BSE share Years of Market countries Leadership in India Plants S&P SENS
Slide 5: 10th largest coatings company in the world
16.0 14.3 14.0 12.0 10.7 10.0 10th largest in the World In Billion USD 8.0 7.4 6.0 4.8 4.0 4.3 4.2 4.1 3rd largest in Asia 3.6 2.9 2.6 2.0 2.1 1.9 1.6 1.5 - 0.9 0.9 0.8 0.8 0.8 0.7 Sherwin Williams has completed the acquisition of Valspar. It is now * Coating World 2017 Rankings (only revenue from c
Slide 6: Global presence by country
Bahrain Egypt Nepal UAE Bangladesh Oman India Ethiopia Singapore Sri Lanka Indonesia Solomon Islands Vanuatu Samoa Fiji Tonga
Slide 7: Strong Brands
Strong Brands... sos asianpaints BERGER SG ircn OO Taubmans APCO®
Slide 8: Vision statement
“To be the fore runner of inspiring décor and to actively empower customers to create their dream homes”
Slide 9: Company strengths and principles
Belief in fostering the principles of trust and transparency Ability to adapt itself to the changing environment Dynamic professional management team focused towards delivering stakeholder value with highest levels of corporate governance Innovative strategies in the marketplace Efficient
Slide 10: Innovations and offerings
Small Packs Exterior Paint Segment Consumer and Dealer helpline Colour Next (Prediction of Colour trends through in-depth research Special effect and textured paints Signature Stores / Colour Ideas store / AP Homes Samplers Beautiful Homes Guide Water Proofing and Wallpaper busines
Slide 11: Innovative retailing strategy
Signature Stores in Colour Ideas Stores AP Homes Metros • Innovative retailing strategy showcasing latest product and solution offerings enabling consumers to get inspired, try and decide • Strong presence in all product segments, servicing over 45,000 dealers
Slide 12: Supply chain and manufacturing
State of the art Supply Chain system using cutting edge latest technology for efficient management and execution World Class, large manufacturing facilities with latest automation technologies Largest single location paint manufacturing capacities at Rohtak (Haryana) and Khandala, (Maharashtra
Slide 13: Research and Technology facility
Dedicated Research and Technology facility at Turbhe (Near Mumbai) with over 150 scientists Supports company strategy around Technology development, Sustainable new products, Green products, Value re-engineering for productivity improvement and cost optimization Our scientists had won the Roon
Slide 14: Changing with times
Changing with times oP. So ; ; asianpaints asianpaints
Slide 15: Business structure
• Decorative Coatings – India • Industrial Coatings – India • PPG Asian Paints • Asian Paints PPG • International Operations • Home Improvement Business – India • Sleek FY 2016 - 2017 • Ess Ess • Chemical Business • Adhesives Exited Caribbean operations and discontinued manufacturing of Phthalic Anh
Slide 16: Decorative Coatings India
Largest business unit of the company Primarily operates in four segments Interior Wall finishes Exterior Wall finishes Metal Finishes (Enamels) Wood Finishes Introduced new categories like water-proofing, wallpapers & adhesives Product for every price point and requirement
Slide 17: Industrial Coatings JVs with PPG
Asian Paints participates in the Industrial Coatings segment, through two 50:50 JVs with PPG Inc. of USA PPG Asian Paints (For Auto Coatings) The Auto segment is catered through our JV (PPG AP) Second largest supplier to the auto segment in India Now, the largest player in auto refinish se
Slide 18: International Operations
6.6% 10.4% Contributes about 13% to the group turnover 31.6% Caribbean Began by establishing presence in Fiji in 1978 Middle East & Africa 52.5% Asia Presence in 15 countries spread over 4 regions South Pacific Middle East & Africa : UAE, Bahrain, Oman, Egypt & Ethiopia FY 2016-2017 Asia : Nep
Slide 19: Home Improvement Business
In 2012, Asian Paints announced plans to consider opportunities in the area of Home Improvement and Décor Entered Kitchen space in India in Aug’13 by acquiring 51% stake in Sleek International Sleek is a major organized player in the modern kitchen solution space with pan India presence Enga
Slide 20: Chemical Business
Asian Paints manufactures Pentaerythritol (Penta) at its plant in Tamil Nadu More than 50% consumed internally Discontinued manufacturing of Phthalic Anhydride at the Ankleshwar (Gujarat) plant by August 2017 to augment the manufacturing capacity of paints, synthetic resins and emulsions Con
Slide 21: Consolidated Net Sales and Net Profit
Consolidated Net Sales and Net Profit (` Crores) Operating Income ( ` Crores) 2,200 1,939 17,085 2,000 18,000 1,800 16,000 1,600 14,000 CAGR 1,400 CAGR 12,000 16.6% 1,200 21.3% 10,000 1,000 8,000 800 6,000 3,670 600 281 4,000 400 2,000 200 0 0 2006-2007 2016-2017 2006-2007 2016-2017
Slide 22: Market Cap and Dividend Payout Ratio
Market Cap (` Crores) 1,09,713 Dividend Payout Ratio CAGR 10,000 30.23% 60% 54% 54% 53% 52% 51% 53% 9,000 51% 7,336 49% 50% 46% 47% 8,000 39% 7,000 40% 6,000 30% 5,000 4,000 20% 3,000 10% 2,000 1,000 0% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 0 2006-20
Slide 23: Awards and recognition
Ranked 8th amongst “Top 100 Most Innovative Companies in the world” by Forbes (Aug 2017) 5th consecutive appearance by Asian Paints in the elite list Ranked amongst 'India's Most Respected Companies’ by Business World Magazine (Aug 2017) Makes it to the Forbes India’s List of “Super 50 compa
Slide 24: Economic Environment agenda
Group Overview Economic Environment – Q2 FY18 Financial Performance – Q2 FY18 Business Review – Q2 FY18 Risks and Outlook
Slide 25: Indian and global economy
INDIAN ECONOMY Challenging year for the Indian Economy Disruptions on account of demonetization and rollout of GST within a span of 7 months. GDP growth trend has been on a downward trajectory with the Q1 growth rate falling to a low of 5.7%. Monsoon, though 5% below normal, has been largely
Slide 26: Financial Performance agenda
Group Overview Economic Environment – Q2 FY18 Financial Performance – Q2 FY18 Business Review – Q2 FY18 Risks and Outlook
Slide 27: GST and accounting note
Consequent to the introduction of Goods and Services Tax (GST) with effect from 1st July, 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2013, unlike Excise Duties, lev
Slide 28: Financials - Q2 FY18 Results
Financials - Q2 FY18 Results oP. Consolidated (= Crores) | Q2Fy18 | Q2FY17| Gr(%) | 6MFY18|6MFY17| Gr(%) Revenue from Operations | 4274.18] 3757.66] 13.7%| 8083.97] 7384.93 9.5% PBDIT 801.13] 705.41] 13.6%] 1466.5] 1521.57 9.5% PBDIT (%) 18.7%] 18.8% 18.1%| 20.6% PAT 593.66] 494.76] 20.0%| 1034.4] 1
Slide 29: Dividends
In FY 2017-18 Interim Dividend of ` 2.65 per share (265%) In FY 2016-17 Total Dividend of ` 10.30 per share ( 1030 %) Final dividend of ` 5.65 per share (565%) One time Special dividend of ` 2 per share (200%) for celebrating 75 years of Excellence at Asian Paints Interim dividend of `
Slide 30: Growth over Last Year
25.0% 22.2% 19.9% 20.0% 18.2% 18.2% 18.3% 16.1% 16.3% 14.6% 15.0% 13.2% 12.6% 12.9% 12.2% 11.8% 11.5% 10.2% 10.5% 10.2% Growth over Last Year 10.0% 8.6% 7.5% 7.2% 7.7% 6.7% 6.4% 6.0% 5.5% 5.0% 2.3% 2.6% 0.0% The growth % in Q2FY18, Q1FY18, 12MFY17, Q4FY17, Q3FY17, Q2FY17 & Q1FY17 is as per the new I
Slide 31: Business Review agenda
Group Overview Economic Environment – Q2 FY18 Financial Performance – Q2 FY18 Business Review – Q2 FY18 Risks and Outlook
Slide 32: Decoratives Business
DECORATIVES BUSINESS Decorative Paints business in India registered high single digit volume growth in Q2FY18 Recovery from Q1 which was affected by the impact of destocking due to GST However, the impact of GST continued through July and a recovery of sorts was seen only in September On a s
Slide 33: Industrial and Home Improvement Business
INDUSTRIAL BUSINESS PPG-Asian Paints (PPG-AP) Subdued demand in the Auto OEM and General Industrial business segment Even the Auto Refinish segment continued to witness challenging conditions in the market Asian Paints PPG (AP-PPG) Performance of the Industrial coatings JV was satisfactory Und
Slide 34: International Business
INTERNATIONAL BUSINESS Financials of the current quarter include the financials of Causeway Paints, Sri Lanka which was acquired by Berger International Private Ltd (BIPL), our wholly owned subsidiary, on 3rd April 2017 Hence the numbers are not comparable with the financials of the previous qua
Slide 35: Capex and new plants
Total capex at the Standalone level for FY18 estimated to be about ` 1200 crores ` 1000 crores towards the two new paint manufacturing facilities being built at Vizag (Andhra Pradesh) and Mysuru (Karnataka) Setting up 5,00,000 KL/annum plant at Vizag at an investment of ` 1785 crores and 6,00,
Slide 36: Risks and Outlook agenda
Group Overview Economic Environment – Q2 FY18 Financial Performance – Q2 FY18 Business Review – Q2 FY18 Risks and Outlook
Slide 37: Outlook and risks
There are signs of some recovery towards the latter half of Q2FY18 Coupled with a good monsoon and settling down of the trade channel from the initial hiccups of GST rollout, we are hopeful of better demand conditions in the second half of the year Raw material prices continue to be higher and
Slide 38: Thank you
de asianpaints Thank you
Slide 39: Standalone Q2 & H1 FY 2017-18
STANDALONE Q2 & H1 FY 2017-18 ` In Crores 39
Slide 40: Standalone Q2 & H1 FY 2017-18 notes
STANDALONE Q2 & H1 FY 2017-18 Consequent to the introduction of Goods and Services Tax (GST) with effect from 1st July, 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2
Slide 41: Consolidated Q2 & H1 FY 2017-18
CONSOLIDATED Q2 & H1 FY 2017-18 ` In Crores 41
Slide 42: Consolidated Q2 & H1 FY 2017-18 notes
CONSOLIDATED Q2 & H1 FY 2017-18 Consequent to the introduction of Goods and Services Tax (GST) with effect from 1st July, 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act,
Slide 43: Key Ratios
KEY RATIOS oP asianpaints Standalone % to Revenue from Operations|Q2 FY 18/Q2 FY 17|6M Fy 18 |6M Fy 17 Material Cost (including excise) 57.8% 60.1% 59.4% 58.9% PBDIT 20.0% 17.8% 18.3% 19.6% PBT after Exceptional Item 19.5% 18.0% 18.1% 19.7% PAT 13.1% 12.2% 12.1% 13.5% Consolidated % to Revenue from