Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q1 FY2008 Earnings Presentation
43 slides from Grasim Industries's earnings presentation, Jul 28, 2007
Slide 1: Grasim Industries Limited – Performance Review Q1FY08
Grasim Industries Limited A VSF and Cement Major Performance Review Q1FY08 28th July 2007
Slide 2: Cautionary Statement
Cautionary Statement Statements in this “Presentation” describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or impl
Slide 3: Consolidated Financial Performance – Q1FY08
Consolidated Financial Performance – Q1FY08 % z Consolidated revenue up by 26% Rs. Crs. Change z PBIDT higher by 41% TOTAL REVENUE 4,063 26 ¾ Historically highest operating profits by Cement and VSF Businesses PBIDT 1,369 41 (i l di minority (including i i share) h ) ¾ Normal operations in VSF and C
Slide 4: Consolidated Financial Performance
Consolidated Financial Performance (Rs. Crores) Q1FY08 Q1FY07 % Chg. FY07 N Turnover Net T & Op. O Income I 4 062 9 4,062.9 3 212 6 3,212.6 26 14 173 8 14,173.8 Other Income 101.4 49.2 106 245.6 PBIDT 1,369.2 972.6 41 4,290.1 Interest 56.0 52.9 6 228.6 Gross Profit 1,313.2 919.7 43 4,061.5 Depreciat
Slide 5: Standalone Financial Performance – Q1FY08
Standalone Financial Performance – Q1FY08 % z Strong growth in revenue, up by 29% Rs. Crs. Change ¾ Volume growth and higher realisation in T T REVENUE TOTAL 2,445 29 C Cement nt and nd VSF Businesses B in z PBIDT up by 56% PBIDT 860 56 ¾ Historically y highest g profits byy Cement and p VSF Busines
Slide 6: Standalone Financial Performance
Standalone Financial Performance (Rs. Crores) Q1FY08 Q1FY07 % Chg. FY07 N Turnover Net T & Op. O Income I 2 444 8 2,444.8 1 891 7 1,891.7 29 8 675 7 8,675.7 Other Income 67.7 37.5 81 209.7 PBIDT 859.9 551.0 56 , 2,619.0 Interest 28.5 23.8 20 111.8 Gross Profit 831.4 527.2 58 2,507.2 Depreciation 85.
Slide 7: Segmental Performance – Q1FY08
Segmental Performance – Q1FY08 Revenue Mix Consolidated PBIDT Mix Sponge IronOthers VSF Others VSF 5% 2% 18% Chemical 21% 6% 2% S Sponge IIron Chemical 3% 2% Textiles * 1% Cement 69% Cement 71% (* Minority Share 17%) (Rs.4,063 Crs.) (Rs.1,369 Crs.) Revenue Mix Standalone PBIDT Mix Sponge Iron 9% VSF
Slide 8: Financial Highlights
Financial Highlights 8
Slide 9: Grasim Consolidated Financials
Grasim Consolidated Financials Q1 z Strong Balance sheet (Rs. Crores) FY05 FY06 FY07 FY08 z ROAvCE increased from 18% in FY05 to Net Turnover 9,292 10,224 14,102 4,045 35% in Q1FY08 PBIDT 2,272 2,337 4,290 1,369 z Return on equity at 38% PAT ((After Minorityy share)) 880 1,041 , 1,968 , 670 z Debt-e
Slide 10: Grasim Standalone Financials
Grasim Standalone Financials Q1 z Market cap. of Rs.242 Bn.* ($ 6 Bn.) (Rs. Crores) FY05 FY06 FY07 FY08 ¾ 5 years’ CAGR 53% Net Turnover 6,229 6,653 8,604 2,427 z Low gearing at 0.43 PBIDT 1,785 1,597 2,619 860 ¾ Adjusted gearing even lower at 0.11 PAT 886 863 1,536 512 z Comfortable interest cover
Slide 11: Business Review – Q1FY08
Business Review – Q1FY08 VSF Chemicals Cement Sponge Iron Textiles 11
Slide 12: Viscose Staple Fibre: Q1FY08 Highlights
Viscose Staple Fibre : Q1FY08 Highlights % z Production up by 52% Q1FY08 Q1FY07 Chg. ¾ Plants operated at 102% capacity utilisation Capacity (TPA) 270,100 266,450 1 ¾ Q1FY07 was impacted by water shortage at Production (MT) 68,755 45,194 52 Nagda Sales Volumes (MT) 69,396 51,957 34 Net Turnover (Rs
Slide 13: Viscose Staple Fibre: Outlook
Viscose Staple Fibre : Outlook z Volume outlook remains positive z Margins may see some decline in the medium to 900 $ / Ton long term 850 835 ¾ VSF prices may see some decline from current levels 810 ¾ Rising input costs, costs mainly pulp and sulphur 800 770 785 z Capacity expansion plans to meet
Slide 14: Chemical: Q1FY08 Highlights
Chemical : Q1FY08 Highlights z Production up by 39% % Q1FY08 Q1FY07 Chg. ¾ Normal operations during the quarter Caustic Capacity (TPA) 258 000 258,000 190 800 190,800 35 ¾QQ1FY07 was impacted p byy water shortage g Caustic Production (MT) 42,843 30,738 39 z Lower ECU realisations Caustic Sales Volum
Slide 15: Cement: Q1FY08 Highlights
Cement : Q1FY08 Highlights Q1 Q1 % z Production up by 8% FY08 FY07 Chg. ¾ Higher capacity utilisation at 118% Greyy Cement Capacity Mn. TPA 13.12 13.12 -- z Sales volume higher by 12% against Production Mn. MT 3.86 3.56 8 sector growth of 9% in domestic market Sales Volumes* Mn. MT 3.90 3.50 12 Real
Slide 16: Cement: Outlook
Cement : Outlook z Domestic cement consumption grew by 9% in Q1FY08 z Capacity announcement of around 90 Mn. tons over three years [FY08 - FY10] ¾ If materialised in total, may result in surplus ¾ Prices to come under pressure from mid-FY09 z Demand D d expected d to grow at about b 10% iin the h ll
Slide 17: Sponge Iron: Q1FY08 Highlights and Outlook
Sponge Iron : Q1FY08 Highlights and Outlook z Production higher by 9% ¾ Use of alternate fuels with higher realisation % Q1FY08 Q1FY07 Chg. z Realisation R li i up by b 22% ¾ Uptrend in global scrap prices Capacity (TPA) 900,000 900,00 -- 0 z Higher g realisation p partiallyy offset byy higher g Pro
Slide 18: Textiles: Q1FY08 Highlights and Outlook
Textiles : Q1FY08 Highlights and Outlook % z Increased realisation offset by higher Q1 Q1 Chg. FY08 FY07 raw material prices and fixed expenses Sales Volumes z Efforts on to improve profitability - Fabrics (lac Mtrs.) 34 33 2 ¾ Setting up 8 MW thermal power plant, - Synthetic Yarn (MT) 980 1,143 (14
Slide 19: Capex
Capex 19
Slide 20: Capex plans
Capex plans z Capex Summary Rs. Crores Total Net Cash Outflow Project Capex * Cost FY08 FY09 C Cement t 5 123 5,123 4 085 4,085 3 390 3,390 675 - Kotputli & Shambhupura Projects, Rajasthan, 3,276 2,529 4.4 Mn. TPA each, (incl. 96 MW TPP) - 2 Nos. Thermal Power Plants (75 MW ) 402 212 - Grinding Grin
Slide 21: Subsidiary Companies Performance
Subisidiary Companies Performance UltraTech SDCC 21
Slide 22: UltraTech: Consolidated Financial Performance – Q1FY08
UltraTech: Consolidated Financial Performance – Q1FY08 (Rs. Crores) z Net Turnover up by 17% due to Q1 Q1 % FY08 FY07 Chg. improved realisation Net Turnover* 1,367.6 1,168.6 17 z PBIDT up by 19% Other Income 27.5 10.0 176 z Other income includes Rs.8 Crs. from PBIDT 462 7 462.7 388 2 388.2 19 sale o
Slide 23: UltraTech Consolidated: Highlights
UltraTech Consolidated: Highlights Q1 Q1 z Effective capacity utilisation at 104% % Chg. FY08 FY07 z Domestic sales volume up by 5% Production (Mn. MT) z Overall volume flat with decline in Cement 3.91 3.88 1 exports Sales volumes (Mn. MT) Cement - Domestic * 3.67 3.48 5 z Sequentially, domestic rea
Slide 24: SDCC Performance - Q1FY08
SDCC Performance - Q1FY08 (Rs. Crores) z Production down by 4% due to breakdown Q1 Q1 % in DG set FY08 FY07 Chg. g Cement Production 2.26 2.36 (4) z Combined volume of cement and clinker Sales Volumes up by 16%, aided by clinker exports - Cement C 2 32 2.32 2 27 2.27 z Operating O i profit fi increa
Slide 25: Summary
Summary 25
Slide 26: Summary
Summary z Grasim – A VSF and Cement major ¾ With strong competitive edge ¾ Consolidating leadership position with strong organic growth pipeline ¾ Global size operations z Domestic leadership in Cement ¾ Capex of Rs.9,100 Crs. on capacity expansions, captive power plants, RMC and modernisation d i t
Slide 27: Plant Locations – Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bathinda(G) Proposed Cement Projects Panipat Proposed Grinding Units Bhiwani Grey cement plants Kotputli T Dadri Grinding Units (G) Shambhupura Jodhpur T Gwalior B B lk C Bulk Cement T Terminal i l Jawad Bharuch Durgapur(G) UltraTech Cement Plants F Jafraba
Slide 28: Thank You
GRAS ITM! ADITYA BIRLA GROUP Thank You
Slide 29: Annexure
Grasim Industries Limited Annexure
Slide 30: Annexure - 1
Annexure - 1 Consolidated and Standalone Financial snapshot Consolidated and Standalone Profitabilityy snapshot p Segmental Performance – Q1 FY08 VSF Summary Chemical Summary Cement Summary Sp n Ir Sponge Iron nSSummary mm r Textiles Summary UltraTech Performance SDCCL Performanc
Slide 31: Financial Snapshot
Financial Snapshot Standalone Consolidated (Rs. Crores) FY04 FY05 FY06 FY07 Q1FY08 FY05 FY06 FY07 Q1FY08 Gross Block 5,802 6,052 6,417 7,974 8,527 11,312 11,927 14,481 15,320 Net Block 3,213 3,204 3,307 4,593 5,064 6,294 6,411 8,468 9,228 Goodwill - - - - - 1,958 1,773 1,922 1,926 Cement Subs. Inves
Slide 32: Profitability Snapshot
Profitability Snapshot Standalone Consolidated (Rs. Crores) FY04 FY05 FY06 FY07 Q1FY08 FY05 FY06 FY07 Q1FY08 Gross Turnover 6,130 7,201 7,638 9,608 2,759 10,776 11,746 15,709 4,589 Net Turnover 5,213 6,229 6,653 8,604 2,427 9,292 10,224 14,102 4,045 PBIDT 1,504 1,785 1,597 2,619 860 2,272 2,337 4,29
Slide 33: Segmental Performance - Q1FY08
Segmental Performance - Q1FY08 Rs. Crores ROAvCE (%) Business Revenue PBIDT PBIDT Margin (%) PBIT Capital Employed (PBIT basis) Q1FY08 Q1FY07 Q1FY08 Q1FY07 Q1FY08 Q1FY07 Q1FY08 Q1FY07 Q1FY08 Q1FY07 Q1FY08 Q1FY07 VSF 708 446 256 114 36.6 26.0 236 98 1,226 1,048 77.5 38.3 Chemical 92 72 28 18 32.5 25.
Slide 34: Viscose Staple Fibre: Summary
Viscose Staple Fibre : Summary Q1 FY08 Q1 FY07 % Chg. FY07 Capacity TPA 270,100 266,450 1 270,100 Production MT 68,755 45,194 52 246,833 Sales Volumes MT 69,396 51,957 34 250,725 Net Turnover Rs. Crs. 699.9 439.7 59 2,294.6 A Avg. R Realisation li i R /MT Rs./MT 94 455 94,455 78 983 78,983 20 85 729
Slide 35: Chemical: Summary
Chemical : Summary Q1 FY08 Q1 FY07 % Chg. FY07 Capacity TPA 258 000 258,000 190 800 190,800 35 258 000 258,000 Production MT 42,843 30,738 39 136,685 Sales Volumes MT , 42,872 30,712 , 40 137,830 , Net Turnover Rs. Crs. 86.3 71.0 22 313.0 Avg. Realisation Rs./MT 17,254 19,252 (10) 19,444 PBIDT Rs. C
Slide 36: Cement: Summary
Cement : Summary Q1 FY08 Q1 FY07 % Chg. FY07 Grey Cement Capacity Mn. MT 13.12 13.12 -- 13.12 Production Mn. MT 3.86 3.56 8 14.42 Sales Volumes * Mn MT Mn. 3 90 3.90 3 50 3.50 12 14 52 14.52 Avg. Realisation * Rs./MT 3,083 2,726 13 2,867 White Cement C Capacity it TPA 475,000 475 000 475,000 475 000
Slide 37: Sponge Iron: Summary
Sponge Iron : Summary Q1 FY08 Q1 FY07 % Chg. FY07 Capacity TPA 900 000 900,000 900 000 900,000 -- 900,000 900 000 Production MT 138,136 126,941 9 525,183 Sales Volumes MT 139,706 , 140,912 , ((1)) 571,127 , Net Turnover Rs. Crs. 218.8 175.3 25 749.6 Avg. Realisation Rs./MT 14,753 12,054 22 12,629 PB
Slide 38: Textiles: Summary
Textiles : Summary Q1 FY08 Q1 FY07 % Chg. FY07 Net Turnover Rs. Crs. 55.4 52.7 5 254.8 PBIDT Rs. Crs. 1.2 1.2 -- 4.6 PBIDT Margin % 2.1% 2.2% -- 1.8% PBIT R Crs. Rs. C (1 8) (1.8) (0 1) (0.1) -- (4 6) (4.6) Capital Employed Rs. Crs. 136 95 42 126 ROAvCE ((PBIT Basis)) % ((5.6)% ) ((0.6)% ) -- ((4.2)
Slide 39: UltraTech: Consolidated Financial Performance
UltraTech: Consolidated Financial Performance (Rs. Crores) Q1 FY08 Q1 FY07 % Chg. FY07 Cement Production (Mn (Mn. MT) 33.91 91 33.88 88 1 14.63 14 63 Sales Volume(Mn. MT): Cement-Domestic* 3.67 3.48 5 13.35 Cement-Exports 0.23 0.35 (34) 1.27 Clinker 0.53 0.54 (3) 2.50 T l Volumes Total V l 4 43 4.43
Slide 40: SDCC: Financial Performance
SDCC : Financial Performance (Rs. Crores) Q1 FY08 Q1 FY07 % Chg. FY07 N Turnover Net T 74 7 74.7 62 5 62.5 20 261 8 261.8 Other Income 1.0 1.9 (49) 4.6 PBIDT 18 8 18.8 12 8 12.8 47 61 0 61.0 PBIDT Margin % 25.2% 20.5% -- 23.3% Interest 0.1 0.3 -- 1.2 Depreciation 1.6 1.5 2 6.3 PBT 17.1 10.9 57 53.5
Slide 41: Unaudited Financial Results for the Quarter Ended 30th June 2007
UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30th JUNE 2007 I. CONSOLIDATED RESULTS : Three Months Three Months Full Year ended 30th ended 30th ended 31st June 2007 June 2006 March 2007 ( Audited ) Net Sales / Income from Operations 4,062.85 3,212.62 14,173.79 Other Income 101.42 49.19 245.64 E
Slide 42: Segment Reporting - Consolidated
-2- III. SEGMENT REPORTING - CONSOLIDATED Rs. in Crores Three Months Three Months Full Year ended 30th ended 30th ended 31st June 2007 June 2006 March 2007 ( Audited A dit d ) 1. SEGMENT REVENUE a Fibre & Pulp 818.00 525.02 2,725.25 b Cement 2,827.66 2,341.20 9,957.75 c Sponge Iron 218.99 175.36 751
Slide 43: Notes
-3- V. NOTES 1 Consolidated Results have been prepared in accordance with Accounting Standard on Consolidated Financial Statements (AS-21), Accounting Standard on Accounting for Investments in Associates (AS-23), and Accounting Standard on Financial Reporting of Interest in Joint Ventures (AS-27) is