Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q2 FY2019 Earnings Presentation
32 slides from Larsen & Toubro's earnings presentation, Oct 31, 2018
Slide 1: Analyst Presentation Q2/H1 FY19
1 Analyst Q2/H1 FY19 Presentation October 31, 2018
Slide 2: Disclaimer
2 Disclaimer This presentation contains certain forward retain highly skilled professionals, time and looking statements concerning L&T’s future cost over runs on contracts, our ability to business prospects and business profitability, manage our international operations, which are subject to a numb
Slide 3: Presentation Outline
3 Presentation Outline 01 Group Performance Highlights 02 Group Performance Summary 03 Segment / Key Subsidiaries 04 The Environment & the Outlook
Slide 4: Performance Highlights – Q2 FY19
4 Performance Highlights –Q2 FY19 +23% +27% +21% +9% +46%
Slide 5: Key Financial Indicators
5 Key Financial Indicators Amount in ₹ bn Q2 FY18 Q2 FY19 % Var Particulars H1 FY18 H1 FY19 % Var 287 419 46% Order Inflow 551 781 42% Order Book 2575 2812 9% Revenue from 264 321 21% Operations 503 604 20% (like-to-like) 30 38 27% EBITDA 50 67 33% 18 22 23% Reported PAT 27 34 27% Net Working Capita
Slide 6: Presentation Outline
6 Presentation Outline 01 Group Performance Highlights 02 Group Performance Summary 03 Segment / Key Subsidiaries 04 The Environment & the Outlook
Slide 7: Q2/H1 FY19 Order Inflow/Order Book
7 Q2/H1 FY19 Order Inflow/Order Book Amount in ₹ bn Order Inflow 781 551 419 • Strong tendering activity in 287 domestic market. Lower share of International order wins • Public sector continues to drive order inflows. Private sector investment remains subdued Order Book • Order Inflow growth in Q2
Slide 8: Group Performance – Sales & Costs
8 Group Performance – Sales & Costs • Revenue growth primarily contributed by Q2 Q2 % ` Billion H1 H1 % FY18 Infra, Hydrocarbon, FY18 FY19 Var FY18 FY19 Var Realty and Services 264 321 21% Revenue (like-to-like) 503 604 20% 1,197 businesses • MCO expense improves 36% 33% -3% International Rev. 35% 3
Slide 9: Group Performance – EBITDA to PAT
9 Group Performance – EBITDA to PAT Q2 Q2 % H1 H1 % ` Billion FY18 FY18 FY19 Var FY18 FY19 Var 30 38 27% EBITDA 50 67 33% 136 • Services, Heavy Engineering, Defence (4) (4) 2% Fin. Cost (8) (8) 1% (15) Engineering & Realty (4) (5) 20% Depreciation (10) (12) 18% (19) businesses drives EBITDA growth 4
Slide 10: Presentation Outline
10 Presentation Outline 01 Group Performance Highlights 02 Group Performance Summary 03 Segment / Key Subsidiaries 04 The Environment & the Outlook
Slide 11: Segment Composition
11 Segment Composition Heavy Electrical & Defence Infrastructure Power Engineering Automation Engineering Buildings & Factories (B&F) Process Plant Electrical Standard EPC- Coal & Gas Equipment Products Defence Transportation Infra (TI) Heavy Civil infra (HC) Thermal Power Plant Electrical Systems C
Slide 12: H1 FY19 Order Inflow Composition
12 H1 FY19 Order Inflow Composition Defence Engg. E&A Hydrocarbon 1.7% 3.8% 9.6% HE 3.5% Power Services 3.3% 20.4% Others 2.9% Middle East Order Inflow 6% Infrastructure ₹ 781 Bn USA & Europe 54.8% 9% ROW 8% Domestic 77%
Slide 13: H1 FY19 Order Book Composition
13 H1 FY19 Order Book Composition Power 3.3% HE 1.8% Defence Engg. 4.3% E&A 1.1% Hydrocarbon 9.9% Order Book ₹ 2812 Bn Others 2.0% Middle East 13% Infrastructure USA & Europe 77.6% 1% ROW 8% Domestic 78%
Slide 14: H1 FY19 Revenue Composition
14 H1 FY19 Revenue Composition E&A 4.4% Hydrocarbon Services Defence Engg. 11.7% 26.3% 2.8% Revenue HE ₹ 604 Bn 1.3% Power Others 3.5% Middle East 4.7% 18.1% USA & Europe 10.1% Infrastructure 45.3% ROW 5.4% Domestic 66.4%
Slide 15: Infrastructure Segment
15 Infrastructure Segment Amount in ₹ bn Net Revenue 22% • Strong growth witnessed across business verticals 7.4% EBITDA Margin 6.8% • Pickup in domestic execution • Margin reflects stage of Net Revenue execution & job mix 16% 7.3% EBITDA Margin 6.8%
Slide 16: Power Segment
16 Power Segment Amount in ₹ bn Net Revenue 36% • Limited opportunities and aggressive competition in the sector continues to impact business performance 5.4% EBITDA Margin 6.0% • Revenue decline reflects low order book Net Revenue • Profits of MHPS and other JV 38% companies are consolidated at PAT
Slide 17: Heavy Engineering Segment
17 Heavy Engineering Segment Amount in ₹ bn Net Revenue 52% • Revenue growth predominantly driven by Oil & Gas and Nuclear sectors • International markets 22.8% EBITDA Margin 24.2% showing strong traction • Global competence, better Net Revenue working capital management and job status yields strong
Slide 18: Defence Engineering Segment
18 Defence Engineering Segment Amount in ₹ bn Net Revenue 6% • Execution of tracked gun order contributing to 10.6% EBITDA Margin 25.0% revenues • Margin variation due to stage of execution and job Net Revenue mix 9% 5.3% EBITDA Margin 18.9%
Slide 19: Electrical & Automation Segment
19 Electrical & Automation Segment Amount in ₹ bn Net Revenue 14% • Revenue growth mainly from Product business 15.3% EBITDA Margin 17.8% arising out of higher offtake from Buildings and Industrial verticals Net Revenue • Margin growth led by 14% operational efficiencies & improved realisation 12.9%
Slide 20: Hydrocarbon Segment
20 Hydrocarbon Segment Amount in ₹ bn Net Revenue 38% • Higher Order Book and efficient execution leads to EBITDA Margin strong revenue growth 10.7% 9.9% • Margin variation due to execution stage and job Net Revenue mix 38% 8.7% EBITDA Margin 8.5%
Slide 21: Developmental Projects Segment
21 Developmental Projects Segment Amount in ₹ bn Net Revenue 6% • Segment includes Power Development business, Hyderabad Metro and Kattupalli Port (until divestment) • Nabha Power revenue enhanced 32.2% EBITDA Margin 4.3% by higher PLF; PY includes lumpy revenue Net Revenue • Hyderabad Metro: Partia
Slide 22: IT & Technology Services Segment
22 IT & Technology Services Segment Amount in ₹ bn Net Revenue • Strong growth by LTI & LTTS 32% • Focus on client mining and product offerings based on Digital & Other new technologies • LTI Q2 revenue growth led by 21.7% EBITDA Margin 24.1% BFS, CPG, Retail & Pharma and High-Tech, Media & Entertai
Slide 23: Others Segment
23 Others Segment Amount in ₹ bn Net Revenue 67% • Segment comprises Industrial Products & Machinery (IPM) and Realty business; PY includes Welding Products Business 19.7% EBITDA Margin 23.1% • Revenue & Margin growth largely contributed by Realty Net Revenue business 60% • Modest Revenue growth in
Slide 24: L&T Finance Holdings
24 L&T Finance Holdings Q2 FY18 Q2 FY19 % Var ` Bn H1 FY18 H1 FY19 % Var 26.1 33.3 27% Total Income 49.4 64.8 31% 3.4 5.6 65% PAT 6.8 11.0 61% Mutual Fund Average AUM 527.4 737.5 40% Net Loan Book 656.9 833.4 27% Gross Stage 3 Assets 11.0% 7.1% -385bps Net Stage 3 Assets 5.4% 2.8% -261 bps Networth
Slide 25: Presentation Outline
25 Presentation Outline 01 Group Performance Highlights 02 Group Performance Summary 03 Segment / Key Subsidiaries 04 The Environment & the Outlook
Slide 26: The Environment & the Outlook
The Environment & the Outlook PSU Capex Inflation Central & State Govt. Spends MOAT Multilateral Funding Land Acquisition / ROW Budgetary Allocations Bharatmala / Infra Value Operational Consumption trends thrust Monetisation Excellence Global Protectionist Policies Client Payments & Robust Clearanc
Slide 27: Thank You
27 Thank You Turn overleaf for Annexures
Slide 28: Group Profit & Loss Extracts
28 Group Profit & Loss Extracts L&T & L&T Group Fin. Devl. ` Billion IT & TS Others (Incl. Services Projects H1 FY19 H1 FY18 % Var Eliminations) Income from Operations* 69.0 62.0 27.9 444.8 603.6 504.4 20% EBITDA 15.1 14.1 5.2 32.4 66.8 50.4 33% Other Income 1.8 1.4 (0.1) 3.6 6.7 7.7 -13% Interest E
Slide 29: Balance Sheet
29 Balance Sheet Incr / ` Billion Sep-18 Mar-18 (Decr) Equity & Reserves 563 549 14 Non Controlling Interest 61 52 9 Borrowings - Financial Services 853 752 100 Development Projects 184 178 6 Others 199 145 54 Sources of Funds 1,860 1,676 183 Fixed Assets 127 128 (1) Intangible Assets & Investment P
Slide 30: Cash Flow
30 Cash Flow Q2 FY19 Q2 FY18 ` Billion H1 FY19 H1 FY18 42.5 30.7 Operating Profit 70.4 52.2 (7.4) (10.0) Changes in Working Capital (39.1) (44.5) (11.0) (9.0) Direct Taxes paid (20.5) (16.9) 24.1 11.7 Net Cash from Operations (A) 10.9 (9.2) (7.2) (7.6) Net Investment in Fixed Assets (incl. Intangibl
Slide 31: Share in Profit/(Loss) of JVs/Associates
31 Share in Profit/(Loss) of JVs/Associates Q2 FY18 Q2 FY19 ` Bn H1 FY18 H1 FY19 0.33 0.39 MHPS JVs 0.77 0.81 (0.92) (0.88) IDPL & Subs. (1.33) 1.67 (0.50) (0.35) Special Steels and Heavy Forgings (1.01) (0.71) (0.02) (0.13) Others 0.10 (0.14) (1.11) (0.96) Total (1.48) 1.63
Slide 32: Concessions Business Portfolio – 14 SPVs
32 Concessions Business Portfolio – 14 SPVs Transmission Lines: Portfolio: 1 project (482 Km) - Operational Roads and Bridges: Project Cost: `15 bn Portfolio: 10 projects (1048 Km) 10 Operational Project Cost: `108 bn Balance Equity Commitment (Sep 2018): ` 8 Bn Equity Invested at SPV level (Sep 201