Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q3 FY2005 Earnings Presentation
47 slides from Grasim Industries's earnings presentation, Jan 28, 2005
Slide 1: Grasim Industries Limited Performance Review – Q3FY05
Grasim Industries Limited Performance Review – Q3FY05 28th January, 2005
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: Financial Performance – Q3FY05
Financial Performance – Q3FY05 (Rs. Crores) Financial Highlights : Q3FY05 % z Excellent overall performance Total Revenue 1,560 17 z Revenue up by 17% z PBIDT up by 22% PBIDT 414 22 ¾ Excellent performance from Sponge Interest Charges 35 (11) Iron and Chemical business ¾ Satisfactory performance fro
Slide 4: Financial Performance Q3FY05 – contd…
Financial Performance Q3FY05 – contd… (Rs. Crores) z Net profits up 33% Q3 Q3 % z Q3FY05 EPS at Rs.23.7 FY05 FY04 Chg. z UltraTech Net Turnover & Op. Income 1,559.7 1,332.0 17 ¾ Successful transition to “UltraTech” Brand Other Income 21.5 20.7 4 ¾ Synergy realisation efforts initiated PBIDT 414.1 33
Slide 5: Financial Performance Summary
Financial Performance Summary (Rs. Crores) Q3FY05 Q3FY04 % Chg. 9MFY05 9MFY04 Chg. % FY04 Net Turnover & Op. Income 1,559.7 1332.0 17 4,604.9 3,680.1 25 5,233.3 Other Income 21.5 20.7 4 65.3 108.3 (40) 180.3 PBIDT 414.1 339.6 22 1,285.0 962.0 34 1,475.3 Interest and Finance Charges 35.2 39.4 (11) 10
Slide 6: Segmental Performance Summary – Q3FY05
Segmental Performance Summary – Q3FY05 Revenue Mix PBIDT Mix Sponge Iron 16% VSF Others VSF 31% 3% 39% Sponge Iron 24% Chemical Cement 6% Chemical 43% Textiles Cement 8% 4% 26% (Rs.1,560 Crs.) (Rs.414 Crs.) z VSF (incl. Chemical) contributed 37% (41%) to Revenue and 47% (51%) in PBIDT mix z Cement c
Slide 7: Segmental Performance – Q3FY05
Segmental Performance – Q3FY05 Rs. Crores PBIDT Margin Capital ROAvCE (%) Revenue PBIDT PBIT Business (%) Employed# (PBIT basis) Q3FY05 Q3FY04 Q3FY05 Q3FY04 Q3FY05 Q3FY04 Q3FY05 Q3FY04 Q3FY05 Q3FY04 Q3FY05 Q3FY04 VSF 489.6 482.5 160.7 148.2 32.8 30.7 146.0 135.1 963 812 67.9 67.4 Chemical 94.9 83.9
Slide 8: Segmental Performance – 9MFY05
Segmental Performance – 9MFY05 Rs. Crores PBIDT Margin Capital ROAvCE (%) Revenue PBIDT PBIT Business (%) Employed# (PBIT basis) 9MFY05 9MFY04 9MFY05 9MFY04 9MFY05 9MFY04 9MFY05 9MFY04 9MFY05 9MFY04 9MFY05 9MFY04 VSF 1,495.4 1,267.7 486.8 406.6 32.6 32.1 444.5 368.0 963 812 68.9 61.2 Chemical 248.7
Slide 9: Business Review – Q3FY05
Business Review – Q3FY05 VSF Chemicals Cement Sponge Iron Textiles 9
Slide 10: Viscose Staple Fibre : Highlights
Viscose Staple Fibre : Highlights % z Plant operating at full capacity Q3FY05 Q3FY04 Chg. ¾ Production up by 3% Capacity (TPA) 251,850 220,775 14 Production (MT) 63,558 61,447 3 z Sales volume down 12% YoY Sales Volumes (MT) 55,956 63,938 (12) ¾ Lower off take by P/V yarn producers Net Turnover (Rs
Slide 11: Viscose Staple Fibre : Outlook
Viscose Staple Fibre : Outlook z Volumes likely to pick up ¾ Duty drawback benefits revised from 7.2% to 10.1% ¾ Reduction in PSF prices to benefit P/V yarn sales in domestic market z Margins to remain range bound z Expected increase in fibre demand post MFA abolition z Efforts for market enlargemen
Slide 12: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary Q3 Q3 % 9M 9M % FY05 FY04 Chg. FY05 FY04 Chg. FY04 Capacity TPA 251,850 220,775 14 251,850 220,775 14 251,850 @ Production MT 63,558 61,447 3 184,648 159,841 16 221,005 Sales Volumes MT 55,956 63,938 (12) 177,350 166,513 7 229,110 Net Turnover Rs. Crs. 489.7 482.3 2 1,
Slide 13: Chemical : Highlights and Outlook
Chemical : Highlights and Outlook % z High capacity utilisation - at 90%; Q3FY05 Q3FY04 Chg despite lower availability of captive power Caustic Capacity (TPA) 190,800 190,800 -- z Sales volume matched production Caustic Production (MT) 42,719 44,741 (5) Caustic Sales Volumes (MT) 43,170 44,426 (3) z
Slide 14: Chemical : Summary
Chemical : Summary Q3 Q3 % 9M 9M % FY05 FY04 Chg. FY05 FY04 Chg. FY04 Capacity (Caustic) MT 190,800 190,800 -- 190,800 190,800 -- 190,800 Production (Caustic) MT 42,719 44,741 (5) 119,802 114,406 5 157,541 Sales Volume(Caustic) MT 43,170 44,426 (3) 120,318 114,342 5 156,967 Net Turnover Rs. Crs. 94.
Slide 15: Cement : Highlights
Cement : Highlights % z Sales volume up 8% (Industry avg. 12%) Q3FY05 Q3FY04 Chg. ¾ Outperformed industry average in East Grey Cement ¾ Lower than industry growth in North and West Capacity (Mn TPA) 13.12 12.92 2 z Realisation up 7% YoY Production (Mn MT) 3.11 2.92 7 ¾ However, sequentially down by
Slide 16: Cement : Highlights (contd.)
Cement : Highlights zCement : Highlights (Contd..)contd.. Q3FY05 - Zone wise growth z Margins down from 16.6% to 15.8% due Grasim Industry 32% 35% to sharp increase in cost 26% 25% ¾ Increase in prices of petcoke, imported 19% coal and indigenous coal 13% 12% 15% ¾ Higher packing expenses due to ris
Slide 17: Cement : Outlook
Cement : Outlook z Revival in demand during the quarter ¾ Industry growth soared to 12% in Q3FY05 ¾ Recovery in southern markets ¾ Renewed activity in the infrastructure sector ¾ Continued strong demand from the housing sector z Average growth in FY05 to be around 8% z Price outlook encouraging, as
Slide 18: Cement : Summary
Cement : Summary Q3 Q3 % 9M 9M % FY05 FY04 Chg. FY05 FY04 Chg. FY04 Grey Cement Capacity Mn. MT 13.12 12.92 2 13.12 12.92 2 # 13.12 Production Mn. MT 3.11 2.92 7 9.14 8.65 6 11.85 Sales Volumes Mn. MT 3.19 2.95 8 9.27 8.73 6 11.96 Net Turnover Rs. Crs. 623.8 536.3 16 1,878.4 1,565.4 20 2,226.0 Avg R
Slide 19: Cement Consolidated : Highlights
Cement Consolidated : Highlights Q3FY05 9MFY05 FY04 Grey Cement Grasim 42% SDCC 3% Capacity (Mn TPA) 31.2 31.2 31.2 Production (Mn MT) UltraTech 55% Clinker 0.9 2.6 3.2 Cement 6.7 19.0 24.8 Cement Capacity - 31.2 Mn. Ton Sales Volumes (Mn MT) Clinker 0.9 2.6 3.2 Grasim 48% Cement 6.8 19.0 24.9 SDCC
Slide 20: Sponge Iron : Highlights
Sponge Iron : Highlights % z Impressive performance continued Q3FY05 Q3FY04 Chg. Capacity (TPA) 900,000 900,000 -- z High capacity utilisation (80% vs 73%) Production (MT) 180,687 164,700 10 ¾ Despite constrained gas availability Sales Volumes (MT) 196,735 170,823 15 ¾ Higher use of naptha and propa
Slide 21: Sponge Iron : Outlook
Sponge Iron : Outlook % z Business outlook remains positive Q3FY05 Q3FY04 Chg. Capacity (TPA) 900,000 900,000 -- ¾ Continuing firm outlook for steel sector Production (MT) 180,687 164,700 10 ¾ Firm trend in Global scrap prices Sales Volumes (MT) 196,735 170,823 15 Net Turnover (Rs Crs.) 262.7 156.9
Slide 22: Sponge Iron : Summary
Sponge Iron : Summary Q3 Q3 % 9M 9M % FY04 FY05 FY04 Chg. FY05 FY04 Chg. Capacity TPA 900,000 900,000 -- 900,000 900,000 -- 900,000 Production MT 180,687 164,700 10 560,595 467,587 20 687,272 Sales Volumes MT 196,735 170,823 15 570,154 471,031 21 676,921 Net Turnover Rs. Crs. 262.7 156.9 67 740.2 40
Slide 23: Textiles : Highlights and Outlook
Textiles : Highlights and Outlook Q3 Q3 % z Fabric volumes down 3% FY05 FY04 Chg. ¾ Lower off take from OTC segment Sales Volumes - Fabrics (lac Mtrs.) 36 37 (3) ¾ Sharp rise in volumes in RMG segment - Synthetic Yarn (MT) 1277 1,504 (15) z Yarn volumes down by 15%; production Net Turnover (Rs Crs.)
Slide 24: Textiles : Summary
Textiles : Summary Q3 Q3 % 9M 9M % FY05 FY04 Chg. FY05 FY04 Chg. FY04 Net Turnover Rs. Crs. 59.3 55.1 8 184.0 167.3 10 228.0 PBIDT Rs. Crs. 1.6 1.9 (14) 8.8 8.3 6 13.4 PBIDT Margin % 2.7% 3.4% -- 4.8% 4.9% -- 5.9% PBIT Rs. Crs. (1.6) (1.9) -- (0.9) (2.5) -- (0.2) Capital Employed Rs. Crs. 107 111 (4
Slide 25: Financial Highlights
Financial Highlights 25
Slide 26: Profitability Snapshot
Profitability Snapshot PBIDT & PBIDT Margin 9M (Figures in Rs. Crores) FY99 FY03 FY04 28.3 28.0 30 FY05 1350 PBIDT PBIDT Margin (%) Gross Turnover 4,325 5,412 6,130 5,307 1100 24.7 PBIDT (Rs. Crs.). 25 PBIDT Margin (%) Net Turnover 3,757 4,606 5,213 4,593 850 1475 20.2 20.8 1285 600 1136 PBIDT 674 1
Slide 27: Financial Snapshot
Financial Snapshot Networth Cap.Employed Debt Equity Ratio (Figures in Rs. Crores) FY99 FY03 FY04 Cap.Employed/Net Worth (Rs. Crs.) 8000 7253 1.13 Gross Block 4,937 5,594 5,802 7000 1.02 6304 1.00 6000 5673 5412 Net Block 3,354 3,264 3,213 Debt Equity Ratio 5037 5052 4976 0.52 5000 0.76 0.76 0.57 0.
Slide 28: Financial Snapshot contd.. Rising Returns
Financial Snapshot contd.. (Rs. Billion) (%) Rising Returns 140 25 21.5 23 120 21.5 21 100 19 80 17 15 60 13 10.1 11 40 9 20 5.3 7 0 5 FY99 FY00 FY01 FY02 FY03 FY04 9M/05 Market Capitalisation ROAvCE ROAvNW z Focused capital allocation strategy – major investments in Cement & Fibre z ROAv.CE improve
Slide 29: Grasim: Capex under implementation
Grasim: Capex under implementation Rs. Crores Capex Cash Outflow plan FY05 FY06 Cement - Power plants (3 Nos, 77MW) 277 16 201 - Grinding unit in North (1 Mn. MT) 100 10 90 - De-bottlenecking/Blending 61 35 26 - RMC’s / Bulk terminal 19 14 5 - Modernization 232 83 149 Cement Total 689 158 471 VSF -
Slide 30: Subsidiary Company: UltraTech Cement
Subsidiary Company UltraTech Cement Limited (Consolidated) Performance Review – Q3FY05 30
Slide 31: UltraTech (Consolidated) Financial Performance - Q3 FY05
UltraTech (Consolidated) Financial Performance - Q3 FY05 (Rs. Crores) z Q3FY05 has ended with pretax loss of Q3FY05 9MFY05 FY04 Rs.24.8 Crs. Net Turnover & Other 715.6 2,042.0 2,335.1 z Net loss at Rs.16.4 Crs, after Income PBIDT 63.2 246.7 366.5 accounting for brand transition PBIDT Margin (%) 8.9%
Slide 32: UltraTech (Consolidated): Q3FY05 Highlights
Ultra Tech (Consolidated ): Q3FY05 Highlights Q3FY05 9M FY05 FY04 z Successfully migrated to UltraTech Capacity (Mn TPA) 17.0 17.0 17.0 brand Production (Mn MT) Clinker 0.8 2.3 2.9 z Capacity utilisation at 99% during the Cement 3.4 9.3 12.2 quarter Sales volumes (Mn MT) z Sales volume at 4.2 Mn MT
Slide 33: UltraTech (Consolidated): Q3FY05 Highlights contd..
Ultra Tech (Consolidated ): Q3FY05 Highlights contd.. Export Performance : Cement & Clinker zExport Performance (Lac MT) ¾ Export up by 8% in 9M FY05 Q3 9M ¾ Decline of 13% in Q3FY05 on FY05 FY05 FY04 diversion to domestic market Middle East 9.2 24.0 21.7 ¾ Profitable export opportunity driven by Sr
Slide 34: UltraTech Outlook
UltraTech Outlook z Cost and efficiency improvement ¾ Power cost reduction ÖLignite based thermal power plant of 92MW capacity planned at GCW ¾ Fuel cost reduction ÖUse of petcoke ¾ Logistics Cost reduction z Reduce leveraging and interest costs z Improve performance of subsidiary company z Synergy
Slide 35: Consolidated Financial Performance – Q3FY05
Grasim Industries Consolidated Financial Performance – Q3FY05 35
Slide 36: Consolidated Segmental Performance – Q3FY05
Consolidated Segmental Performance – Q3FY05 Revenue Mix PBIDT Mix Sponge Iron Others Others 11% 2% VSF 6% 21% VSF Sponge Iron 20% 33% Chemical 4% Textiles 2% Cement Chemical 60% Cement 34% 7% (Rs.2,374 Crs.) (Rs.493 Crs.*) z VSF (incl. Chemical) contributed 25% to Revenue and 40% in PBIDT mix z Ceme
Slide 37: Consolidated Segmental Performance – Q3FY05
Consolidated Segmental Performance – Q3FY05 Rs. Crores PBIDT Capital ROAvCE (%) Business Revenue PBIDT Margin PBIT (%) Employed# (PBIT basis) VSF 502.5 162.0 32.2% 147.0 987.8 66.7 Chemical 94.9 33.0 34.8% 28.7 187.7 60.1 Cement 1,440.0 169.1 11.7% 67.3 6884.4 3.9 Sponge Iron 262.7 99.5 37.9% 90.7 4
Slide 38: Vision and Strategy
Vision and Strategy z To be a premium VSF and Cement Company Vision delivering superior value to stakeholders on a sustained basis z Grow and Strengthen main businesses: VSF and Cement z Sweat other assets optimally: Sponge Iron Strategy z Improve capital productivity z Market expansion thru greater
Slide 39: Plant Locations– Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bhatinda(G) Noida Gurgaon Grey cement plants T Bhiwani Jodhpur Grinding Units (G) Shambhupura Ultra Tech Cement Plants Jawad Bharuch Durgapur(G) Ultra Tech Grinding Units (G) F Jafrabad Magdalla (G) B Ultra Tech Bulk Cement Terminals Sikka F C Pipavav Nagda
Slide 40: Production Data (MT)
Production Data (MT) Q3FY05 Q3FY04 FY04 Capacity Capacity Capacity Production % Production % Production % TPA TPA TPA VSF 251,850 63,558 101 220,775 61,447 111 # 251,850 221,005 100 Caustic Soda 190,800 42,719 90 190,800 44,741 94 190,800 157,541 83 Grey Cement * 13.12 3.11 95 12.92 2.92 90 $ 13.12
Slide 41: Divisional Turnover (Qty) & Realisation
Divisional Turnover (Qty) & Realisation Quantity (MT) Realisation (Rs. /MT) Product Q3 Q3 Q3 Q3 FY05 FY04 FY04 FY05 FY04 FY04 VSF 55,956 63,938 229,110 81,066 70,306 72,269 Caustic Soda * 43,170 44,426 156,967 19,472 16,528 16,338 Grey Cement * * 3.19 2.95 11.96 1,775 1,665 1,712 White Cement 86,692
Slide 42: Thank You
GRAS ITM ADITYA BIRLA GROUP Thank You
Slide 43: Press Release Mumbai, January 28, 2005
Press Release Mumbai, January 28, 2005 GRASIM, THE ADITYA BIRLA GROUP’s FLAGSHIP COMPANY REPORTS EXCELLENT OVERALL PERFORMANCE Q3FY05 – Profit after Tax up by 33% 9MFY05 – Profit after Tax up by 32% (Rs. Crores) Q3FY05 Q3FY04 % 9M FY05 9M FY04 % FY 2004 Change Change (Audited) Net Turnover 1,559.7 1
Slide 44: Highlights of Grasim's operations
Highlights of Grasim’s operations: Q3FY05 Q3FY04 % Change FY 2004 Production - Viscose Staple Fibre M.T. 63,558 61,447 3% 221,005 Cement Mn. M.T. 3.11 2.92 7% 11.85 White Cement M.T. 87,638 82,155 7% 310,578 Sponge Iron M.T. 180,687 164,700 10% 687,272 Caustic Soda M.T. 42,719 44,741 (-) 5% 157,541
Slide 45: Press release continued: capex and business outlook
The Company has planned a capex of Rs.690 crores over FY05 and FY06. The amount will be spent on the setting up of Captive Thermal Power Plants at Vikram Cement, Jawad (50 MW), additional turbine at Rajashree Cement, Malkhed (20 MW), implementation of ongoing modernization and capacity expansion thr
Slide 46: Unaudited Financial Results for the Three Months Ended 31st December 2004
UNAUDITED FINANCIAL RESULTS FOR THE THREE MONTHS ENDED ON 31st DECEMBER 2004 Rs in Crores Three Months Three Months Nine Months Nine Months Year Ended 31st Ended 31st Ended 31st Ended 31st Ended 31st December 2004 December 2003 December 2004 December 2003 March 2004 ( Audited ) Net Sales / Income fr
Slide 47: Segments Reporting
Cont. from Page 1 Segments Reporting: Rs. in Crores Three Months Three Months Nine Months Nine Months Year Ended 31st Ended 31st Ended 31st Ended 31st Ended 31st December 2004 December 2003 December 2004 December 2003 March 2004 ( Audited ) 1. SEGMENT REVENUE a Fibre & Pulp 489.62 482.51 1,495.40 1,