Pidilite Industries Limited · NSE:PIDILITIND
Pidilite Industries — FY2009-10 Earnings Presentation
40 slides from Pidilite Industries's earnings presentation, 2010
Slide 1: Investor Presentation FY'09-10
Investor Presentation FY’09-10 1
Slide 2: Presentation Structure
Presentation Structure Overview of the Company Performance Factors affecting Business Highlights Key Trends Business Review Consolidated Results Trends for 2010-11 Key Investment Considerations 2
Slide 3: Indian Operations: An Overview
Indian Operations : An Overview Established in 1959 Pioneer in consumer and industrial specialty chemicals. Strong market position in most products "Fevicol" ranked as # 1 Household care brand. Ranked as # 1 company in chemical segment by Business Today (2009) Strong geographical presence 9 Branches
Slide 4: Global Operations: An Overview
Global Operations : An Overview Exports to more than 80 countries. Major exports to Middle East, Africa, USA & Europe Export Turnover of Rs 1.9 Bn in FY 2009-10 CAGR growth of 25% over last 5 years 13 Overseas subsidiaries – (4 Direct and 9 Step down) Total Revenue from Overseas subsidiaries of Rs 2
Slide 5: Performance
Pidilite Performance
Slide 6: Key Factors affecting Business
Key Factors affecting Business Industrial & Consumer demand in India remained muted in H1 & picked up in H2. Global slowdown impacted Exports in H1. Demand situation for overseas subsidiaries remained mixed : Strong growth in Brazil and Thailand US and Middle East showing uncertain recovery Raw Mate
Slide 7: Standalone Performance Q4'09 vs Q4'10
Standalone Performance Q4’09 vs Q4’10 Net Turnover up by 17%. Excl “Others” Net Turnover is up by 23%. Gross Profit up by 27% over LY mainly due to lower material costs. Input cost however is showing increasing trend. Higher AS&P spend in Q4’10 impacted margins. Forex gain / (loss) in Q4’10 is (Rs 1
Slide 8: Standalone Performance FY'09 vs FY'10
Standalone Performance FY’09 vs FY’10 Net Turnover up by 15%, excluding ”Others”. Gross Profit up by 28% mainly due to lower raw material cost Control on costs, lower interest and depreciation charges and favorable forex has resulted in doubling of PBT. Note : Gross Profit = Net Turnover less Materi
Slide 9: Working Capital Management
Working Capital Management Substantial improvement in Inventory and Debtors Cash Conversion Cycle showing continuous improvement Note : Operating Working Capital excl Advance Tax, Dividend and Forex translation
Slide 10: Cash Flow Statement
Cash Flow Statement Higher Operating Profit coupled with reduction in Working Capital resulted in better Cash Flow from Operating activities. Surplus Cash presently parked in various Short term Debt instruments of Mutual Funds. * Operating Profit is Profit before Depreciation & Interest adjusted for
Slide 11: Sustainable Growth
Sustainable Growth 5,000 24,000 CAGR 20,000 EBITDA & PAT (Rs. Millions) 4,000 Turnover 18% Turnover (Rs. Millions) EBITDA 24% 16,000 3,000 PAT 31% 12,000 2,000 8,000 1,000 4,000 - - 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Turnover EBITDA PAT Sustainable Growth y-o-y
Slide 12: Return on Capital Employed
Return on Capital Employed 50% 41% 40% 33% 30% 30% 29% 29% 30% 28% 28% 27% 26% 21% 20% 16% 10% 0% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 ROCE (%) Adj ROCE % Delivering high Return on Capital Employed Consistently Note : ROCE = EBIT / Capital Employed Adj ROCE is calculated after excluding C
Slide 13: Consistent Dividend Payout
Consistent Dividend Payout 50.0% 39.7% 40.0% 37.6% 36.9% 35.4% 30.2% 30.0% 27.5% 20.0% 10.0% 0.0% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Dividend Payout Ratio Note : Dividend Payout =Dividend (incl Dividend Tax) / PAT
Slide 14: Share Price Performance
Share Price Performance 700 600 500 400 300 200 100 - Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 BSE PIL Outperformed the Benchmark Index
Slide 15: Business Review
Pidilite Business Review 15
Slide 16: Business Review
Business Review Consumer & Bazaar Products Speciality Industrial Chemicals International Businesses PCR Project
Slide 17: Consumer & Bazaar Products
Consumer & Bazaar Products Consumer & Bazaar Products accounts for 77% of Company’s revenue. Consist of following product segment o Adhesive & Sealants (49% of Company’s revenue) Leadership position in Adhesive and Sealant Segment Established Brands Extensive distribution network in place o Construc
Slide 18: Major Brands
Major Brands Adhesive & Sealant Construction Chemical Art Materials & Others
Slide 19: Consumer & Bazaar Products
Consumer & Bazaar Products 16000 Revenue - Rs mn * 14817 EBIT - Rs mn * 5000 12894 3849 12000 4000 3000 2546 8000 2000 4000 2762 3223 1000 596 625 0 0 Q4 FY Q4 FY 2008-09 2009-10 2008-09 2009-10 Revenue up by 17% in Q4 and 15% in FY. Higher AS&P spend in Q4 impacted margin. EBIT up by 5% in Q4. EBIT
Slide 20: Consumer & Bazaar Products
Consumer & Bazaar Products Total Revenue Adhesive & Sealants FY’09 : Rs 12894mn • All markets– domestic, exports and rurban FY’10 : Rs 14817mn have shown good growth. 100% • Business grew by 11% over LY. 80% 64% 63% 60% Construction & Paint Chemicals 40% 20% 23% 24% • Construction sector remained un
Slide 21: Specialty Industrial Chemicals
Specialty Industrial Chemicals Industrial Chemical accounts for 23% of Company’s revenue Consist of following sub-segment o Industrial Adhesive (7% of Company’s revenue) Leadership position in Adhesive Extensive range of products catering to packaging, cigarettes, stock labels, stickers, footwear et
Slide 22: Specialty Industrial Chemicals
Specialty Industrial Chemicals 5000 Revenue - Rs mn * 4653 EBIT - Rs mn * 1000 915 4108 4000 800 3000 600 531 2000 400 1261 247 937 120 1000 200 0 0 Q4 FY Q4 FY 2008-09 2009-10 2008-09 2009-10 35% jump in Revenue in Q4 (strong growth in both domestic & export business). FY Revenue up by 13% as H1 re
Slide 23: Specialty Industrial Chemicals
Specialty Industrial Chemicals Total Revenue Industrial Adhesives FY’09 : Rs 4108mn FY’10 : Rs 4653mn • Good Sales growth driven by both domestic and export market. 100% Industrial Resins 80% 33% 35% • Moderate Sales growth 60% 35% 34% • Growth in Domestic Business, export 40% remained low. 20% 29%
Slide 24: Others
Others This Segment consists of Vinyl Acetate Monomer (VAM) operations. Since the price of bought out VAM was lower than in-house production cost, the company has opted to import. Possibility of utilizing the VAM plant for other product is being evaluated.
Slide 25: International Business
International Business Q4 Growth at constant rate of exchange is 18%. Bangladesh & Egypt add another 12% to Topline growth. FY sales at constant rate of exchange is 6.3%. H2 growth is at 11% vs 3% growth in H1.
Slide 26: International Business
Pidilite EBITDA (before exception a ae val uaa items) -Rs mn FY'o9 | FY'10 FY'09 | FY'10 North America (16) (2) (43) 26 South America (32) 8 (111) 98 Middle East & Africa (20) (1) (36) (32) South & South East Asia (4) 23 (24) 16 Total (71) 27 (214) 107 EBITDA (post exception Q4 Q4 YTD YTD items)- Rs
Slide 27: International Business
International Business Higher Sales, coupled with saving in Costs (in USA and Brazil) has resulted in Rs 107mn EBITDA (pre exceptional items). Post exceptional, EBITDA was Rs. 57mn as against loss of Rs. 214mn. Overseas unit, in aggregate earned cash profits.
Slide 28: International Business
International Business USA: “Sargent Art” manufactures and sells quality Art Materials and Educational market. “Cyclo” sells Automotive aftermarket chemicals for domestic and international market. Business turned cash positive. Brazil: “Pulvitec” is into Adhesive and Sealants business. Topline growt
Slide 29: Exports
Exports Effect of Slowdown in major economies seen in many product categories. Export of Consumer & Bazaar Product grew by 11% over LY. Pigments orders from Developed markets were lower as compared to LY. However there were some signs of recovery with orders in Q4 picking up.
Slide 30: PCR Project
PCR Project All equipment at site Detailed engineering of Monomer and Polymer plant completed Pilot plant capable for making 1 tonne per day to be completed in May’10.
Slide 31: Consolidated Results
Pidilite Consolidated Results
Slide 32: Consolidated Results
Consolidated Results 10% increase in Sales. Better Raw Material prices coupled with Cost management resulted in EBITDA going up by 76% over LY Profit more than doubled compared to LY. Note : 32 Gross Profit = Net Turnover less Material Cost ROCE = EBIT / Capital Employed
Slide 33: Trends for 2010-11
Pidilite Trends for 2010-11
Slide 34: Key Trends for 2010-11
Key Trends for 2010-11 o Improving economic sentiments. o Revival in Infrastructure sectors resulting in new projects. o All input costs increasing. o Interest rate hardened and expected to increase further. o Currency expected to remain at current level vs USD. o Government expected to withdraw inc
Slide 35: Key Trends for 2010-11
Key Trends for 2010-11 o Margins to be under pressure due to increase in input costs. o Price increase actions underway. o Import of VAM likely to remain economical vs manufacture. o Increase in Advertising & Sales promotion activities to stimulate demand will impact margins. o Effective tax rate to
Slide 36: Key Investment Considerations
Key Investment Considerations o High market share and strong position in most products and segments. o Strong portfolio of brands. o Majority sale from products and segment pioneered in India. o Track record of consistent growth. o Attractive return on capital employed. o Consistent dividend payout.
Slide 37: 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 38: Annexure
Pidilite Annexure 38
Slide 39: Audited Financial Results for the Year Ended 31.03.2010
PIDILITE INDUSTRIES LIMITED REGD. OFFICE : 7th Floor, Regent Chambers, Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai - 400 021 AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31.03.2010 (Rs. in lac} Standalone Consolidated Unaudited Audited Audited Sr. Particulars For the Quarter For the Year For the
Slide 40: Segment Wise Revenue, Results and Capital Employed
a Do REPORTING OF SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED (Rs. in lac} Standalone Consolidated Unaudited Audited Audited Particulars For the Quarter For the Year For the Year ended ended ended 31.03.2010 31.03.2009) 31.03.2010 31.03.2009 31.03.2010) 31.03.2009) [Segment Revenue ja) Consum
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