Welspun Corp Limited · NSE:WELCORP
Welspun — Investor Presentation (October 2022)
35 slides from Welspun's investor presentation, Oct 1, 2022
Slide 1: Intimation of Schedule of Analyst / Institutional Investor Meetings
WCL/SEC/2022 October 1, 2022 To, BSE Ltd. National Stock Exchange of India Ltd. Department of Listing, Exchange Plaza, P. J. Towers, Dalal Street, Bandra-Kurla Complex, Mumbai – 400 001. Bandra (E), Mumbai – 400 051. (Scrip Code: Equity - 532144), (Symbol: WELCORP, Series EQ) (NCD– 948505, 960468, 9
Slide 2: Introduction to Welspun Corp
Introduction to Welspun Corp Date: 1st October, 2022 1
Slide 3: Disclaimer
Disclaimer For any financial disclosures, the information contained herein is provided by Welspun Corp Limited (the “Company”), although care has been taken to ensure that the information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the information is su
Slide 4: Agenda
Agenda • Overview • Product Portfolio and Global Capacities • Global Customers and Supply Chain • WCL Transformation Underway o Line Pipes o Ductile Iron Pipes o Specialty Steel o TMT o ABG Shipyard • Financial Performance: 10 Year Horizon • Summary • Mission Mid-Term 3
Slide 5: Overview
Overview Amongst the largest LDP manufacturers globally with more than 15,000 KM pipes supplied since inception One of the largest LDP1 players Globally diversified presence Deep relationships with globally with an installed with strategically located marquee global clients; capacity of ~2.5 MN MTPA
Slide 6: Global Footprint
Global Footprint Supplied pipes in 6 out of 7 continents (except Antarctica) LOCATION INDIA • Anjar, Gujarat • Dahej, Gujarat • Jhagadia, Gujarat • Mandya, Karnataka • Bhopal, Madhya Pradesh UNITED STATES • Little Rock SAUDI ARABIA • Dammam 5
Slide 7: Product Portfolio – Pipe Vertical
Product Portfolio – Pipe Vertical HSAW Pipes (Helically Welded) LSAW Pipes (Longitudinally Welded) 18-140 inch diameter; 6-27 mm thickness 16-60 inch diameter; 6-50.8 mm thickness Utility for: Onshore Oil, Gas & Water Utility for: Onshore/Offshore Oil, Gas & Transmission Transmission ERW Pipes (Elec
Slide 8: Product Portfolio – Steel Vertical
Product Portfolio – Steel Vertical TMT Rebars (Thermo Mechanically Pig Iron & Ductile Iron (DI) Pipes Treated) 80-1,200 mm diameter; K7 & K9 class 8 mm – 32 mm Utility for: Potable water distribution Utility for: Infrastructure and Housing construction SS Bars (Stainless Steel) SS Pipes and Tubes (S
Slide 9: Global Capacities
Global Capacities Capacity India US Saudi Arabia Total Products / City Anjar Dahej Mandya Bhopal Jhagadia Little Rock Dammam LSAW 350 350 700 HSAW 250 150 305 350 375 1,430 ERW/ HFIW 200 175 375 Line Pipes (KMT) 1,605 525 375 2,505 DI Pipes (KMT) 400 400 TMT Rebars (KMT) 350 350 SS Bars (KMT) 150 15
Slide 10: Global Customers
Global Customers Approvals from 50+ Oil and Gas Majors across the world 9
Slide 11: Global Supply Chain
Global Supply Chain Healthy Relationships with Suppliers across the world: A key factor for our Global Leadership Position Name Country Dillinger France and Germany VAGB Austria More than 2 Posco South Korea MN MT of Nippon Japan plates procured JFE Japan in last 10 years Bao China 10
Slide 12: WCL Transformation Journey Underway
WCL Transformation Journey Underway The Way Forward: Business Growth & Diversification Strategy Existing New Planned Large Business Diameter Pipe Pig Iron and Plastic and Coating Ductile Iron Specialty Steel TMT ABG Products (DI) Pipes (Sintex BAPL) New Energy One of the One of the One of the One of
Slide 13: Line Pipes
Line Pipes 12
Slide 14: Line Pipes: Key Drivers
Line Pipes: Key Drivers India USA Saudi Arabia • Saudi Aramco to boost oil • Rig count almost close to pre- • Expansion of National Gas production from 10 million to pandemic levels 13 million barrels a day by Grid Pipeline • Permian basin expected to be • City Gas Distribution (CGD) 2027 the key gr
Slide 15: Line Pipes: Key Drivers – New Energy
Line Pipes: Key Drivers New Energy This is the future for pipelines Hydrogen: • WCL is a part of a key international committee drafting the specifications for these pipelines • Undertaking critical long lead tests on existing pipeline order to certify compatibility to carry 100% Hydrogen – Will give
Slide 16: Line Pipes: Global Order Book Position
Line Pipes: Global Order Book Position Order Book and Outlook providing visibility for next several quarters As of 20th Sept'22 Confirmed Order Book MT Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Line Pipes • Confirmed Order India Book of ~1 MN MT LSAW 1,25,000 Valued at USD 1.7 Bn (including Saudi HS
Slide 17: Ductile Iron Pipes
Ductile Iron Pipes 16
Slide 18: Ductile Iron Pipes: Market Overview
Ductile Iron Pipes: Market Overview Our Focus Market will be West, Central and North India 17
Slide 19: Ductile Iron Pipes: Market Overview
Ductile Iron Pipes: Market Overview Huge focus on creating drinking water supply infrastructure in India Value in INR (crores) Central Expenditure JJM FY 2019- FY 2022- Total Exp. Balance S.No. State FY 2020-21 FY 2021-22 Budget 20 23 YTD Till Date Amount H A B C D E F G C-H (D+E+F+G) Uttar 1 62,963
Slide 20: Ductile Iron Pipes: Competitive Landscape
Ductile Iron Pipes: Competitive Landscape Capacity S.no Company Name Plant Location (MT) 1 Jindal Saw Ltd Kutch, Gujarat 5,00,000 2 Welspun DI Pipes Ltd Kutch, Gujarat 4,00,000 3 Srikalahasti Pipes Ltd* Chitoor, AP 3,50,000 4 Electrosteel Castings Ltd Khardah, WB 2,80,000 5 Electrosteel Steels Ltd B
Slide 21: Specialty Steel
Specialty Steel 20
Slide 22: Specialty Steel: SS Pipes Outlook
Specialty Steel: SS Pipes Outlook Robust demand expected going forward Key Drivers Sectors • Make in India initiative by the government Critical applications in key sectors like providing push to local manufacturing Power, Nuclear, Defense, Petrochemicals • High value business and a differentiated e
Slide 23: Specialty Steel: Snapshot of Performance
Specialty Steel: Snapshot of Performance Consistent improvement in performance since last few quarters Pipes Dispatches (MT) Dometic Exports 1,500 1,162 Visible Turnaround 881 210 • Pipes and Tubes 1,000 91 692 Healthy order book of 1,750 MT1 515 111 358 Product acceptability both in the 500 78
Slide 24: TMT
TMT 23
Slide 25: TMT: Our Differentiated Strategy
TMT: Our Differentiated Strategy Forward Integration from Billets to TMT Growth Drivers Welspun Strategy • Infrastructure: Massive spending expected in the sector • Sharp focus on including – Branding and creating a robust distribution network - B2C segment PM Gati Shakti National Master Plan: a
Slide 26: ABG Shipyard
ABG Shipyard 25
Slide 27: ABG Shipyard: Assets Overview
ABG Shipyard: Assets Overview Land: 165 Acres Water front: ~1,000 m Slip way: 220m X 25m Slip Dock: 450m X 40m with rails and dock gate Largest Ship lift system in world with the capacity of 33,000 MT Partially completed Ship transfer system with fluidized bed of 27,000 MT capacity Dedicated product
Slide 28: ABG: Value Accretive Transaction
ABG: Value Accretive Transaction • Transaction at Attractive Terms • Total cost of acquisition: INR 659 Cr (plus applicable taxes) • The partially built obsolete ships and scrap in excess of 150,000 MT • Potential of unlocking significant acquisition cost within 12-15 months at current scrap value 2
Slide 29: ABG: Business Opportunities
ABG: Business Opportunities Potential to enter new businesses • Defense Ship Building 1 • Commercial Ship Building Shipbuilding • Electric Ships 2 • Ship Breaking Green Steel • Ship Repair 3 Offshore wind and Oil & Gas structures 28
Slide 30: ABG: Defense Outlay
ABG: Defense Outlay Large opportunities in India Defense sector Robust order book by the The key focus area major players in the industry Order book Competition (INR cr) Mazagon Dock Shipbuilders Ltd 43,000 Garden Reach Shipbuilders and Engineers 24,000 Cochin Shipyard 8,600 Goa Shipyard 15,000 • Ca
Slide 31: Financial Performance: 10 Year Horizon
Financial Performance: 10 Year Horizon Consistent Performance resulting in a Strong Balance Sheet INR FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Sales Volumes (KMT) India 635 646 632 510 650 764 629 578 626 506 USA 217 236 255 393 180 222 413 423 123 99 Saudi 165
Slide 32: Dividends
Dividends Strong Cash Flows used for Deleveraging, Reinvesting for Growth and Rewarding Shareholders Consistent Dividend paying Company (Face Value = INR 5 per share) INR FY18 FY19 FY20 FY21 FY22 Dividend Per Share 0.5 0.5 10.5 5.0 5.0 Basic EPS - Consolidated (Cont. Ops) 6.0 2.6 25.6 24.1 16.8 Payo
Slide 33: Summary
Summary • Robust demand for Line Pipe for next 3 to 5 years • 1 MN MT of confirmed and profitable order book, • The new ventures are in start-up stage and will execution spread over 4 to 6 quarters, bringing require incubation period of 2 more quarters clear earnings visibility • Volatile commodity
Slide 34: Mission Mid-Term
Mission Mid -Term • Top line of INR 15,000 Cr + • Sustainable EBIDTA of INR 1,600 Cr to INR 1,800 Cr • ROCE of 18% + • Net Cash Positive driven by strong Free Cashflows • DJSI ESG ratings to upwardly move from 41 to 60 • Dominant player in B2B and B2C segment in line with group vision of “Har Ghar W
Slide 35: Thank You!
Thank You! Connect with us: /TheWelspunGroup /WelspunGroup /welspungroup /company/welspun-group 34