Carborundum Universal Limited · NSE:CARBORUNIV
Carborundum Universal — Investor Presentation (December 2019)
69 slides from Carborundum Universal's investor presentation, December 2019
Slide 1: Making Materials Matter Investor Presentation December 2019
MAKING MATERIALS INVESTOR PRESENTATION December ’2019 MATTER
Slide 2: Contents
CONTENTS 1 MURUGAPPA GROUP & CUMI - OVERVIEW 2 BUSINESS SEGMENTS 3 FINANCIALS, STRATEGY & CLOSING REMARKS
Slide 3: Contents
CONTENTS 1 MURUGAPPA GROUP & CUMI - OVERVIEW 2 BUSINESS SEGMENTS 3 FINANCIALS, STRATEGY & CLOSING REMARKS
Slide 4: Murugappa Group: 50000+ employees
oe 50000+ employees OPIN PTL Agri& Farm inputs Engineering & Consumer Materials Sciences durables MAKING MATERIALS MATTER en Financial Services
Slide 5: Murugappa Group: Business Portfolio
MURUGAPPA GROUP : BUSINESS PORTFOLIO Agriculture Engineering Finance Diversified
Slide 6: Murugappa Group: Global Presence
MURUGAPPA GROUP : GLOBAL PRESENCE India • 41 Locations All Major Segments USA Russia, China Nutraceuticals, Electro Minerals, Industrial France Abrasives Ceramics Industrial Chains Tunisia Phosphoric Marketing & Acid ME Distribution Bases in Materials, Thailand Abrasives Materials, Abrasives Argenti
Slide 7: Murugappa Group: Values & Belief
MURUGAPPA GROUP : VALUES & BELIEF
Slide 8: Universal Grinding Wheel, UK
Universal Grinding Wheel ,UK
Slide 9: Carborundum Universal Limited: 65 Years of Industry Leadership
CARBORUNDUM UNIVERSAL LIMITED : 65 Years of Industry Leadership INR 26.6 Bn Revenue USD 380 Mn ABRASIVES FY 19 : 14% growth YOY INR 3.6 Bn PBIT INDUSTRIAL ELECTRO USD 52 Mn CERAMICS MINERALS FY 19: 10% growth YOY REFRACTORIES INR 60.9 Bn Market Cap USD 870 Mn As on 27 Nov 19 28 20,000 + 5000+ Locati
Slide 10: CUMI – A Materials Science Company
CUMI – A MATERIALS SCIENCE COMPANY Surface Engineering Materials & Process Engineering Heat Wear & Materials Containment Corrosion Science & Protection solutions Materials Management Science Materials Materials Chemistry Physics Mission Critical Applications Materials science - an interdisciplinary
Slide 11: We Engineer Materials Science Solutions for an Enduring Planet
WE ENGINEER MATERIALS SCIENCE SOLUTIONS FOR AN ENDURING PLANET Abrasives Surface Engineering Electro minerals Wear & Materials Heat Containment Corrosion Science & Protection Solutions Management Ceramics & Refractories Composites Mission Critical Applications M A K I N G M A T E R I A L S M A T T E
Slide 12: CUMI – History
CUMI – HISTORY Milestones 1954 - 63 Tripartite agreement between Carborundum Company, USA, Universal Grinding Wheel Company, UK and the Murugappa Group, India. Acquired a Coated Abrasives facility from Ajax Products Pvt. Ltd. Bonded Abrasives facility set up at Chennai, India. Coated Abrasives facil
Slide 13: CUMI – History
CUMI – HISTORY 1984 - 93 Silicon Carbide plant at Koratty Expansion of Bonded Abrasives plant at Hosur, India with a modern facility for vitrified grinding wheels. Silicon Carbide plant at Koratty, India & Refractories plant at Ranipet, India. Industrial Ceramic Industrial Ceramics plant at Hosur, I
Slide 14: CUMI – History
CUMI – HISTORY 2004 - 13 Monolithic Refractory facility in Jabalpur, India. Volzhsky Abrasives Works, Russia. Manufacturing facility in China Foskor Zirconia (Pty) Ltd, South Africa. Thin Wheels at Uttarkhand, India Volzhsky Abrasives Works, Russia Thukela Refractories Isithebe Pty Ltd, South Africa
Slide 15: Our Leadership Team
Our Leadership Team M M Murugappan Chairman N Ananthaseshan Managing Director Ninad Gadgil Rajesh Khanna Sergey Kostrov V G Rajendran Jayan P S Arul Rajkumar Abrasives Ceramics VAW Refractories Electro Minerals Human Resources
Slide 16: Key Subsidiaries & Joint Ventures
KEY SUBSIDIARIES & JOINT VENTURES Volzhsky CUMI Australia Sterling Foskor Zirconia Murugappa Wendt Abrasive Abrasives Morgan India Works Thermal Ceramics Subsidiary Subsidiary Subsidiary Subsidiary Joint Venture Associate Minerals, Abrasives Industrial Ceramics Bonded Non Std Minerals Thermal Cerami
Slide 17: Global Footprint
GLOBAL FOOTPRINT RUSSIA USA CHINA EUROPE UAE THAILAND AUSTRALIA INDIA SOUTH AFRICA Manufacturing Facility Marketing Office
Slide 18: Domestic Presence
DOMESTIC PRESENCE TVT BONDED SPR COATED HSR BONDED UTK BONDED Roorkee EAL - COATED WENDT STERLING MMN RESIN BONDED BONDED Okha, Bhatia Jabalpur Kolkata EMD - KOCHI HOSUR RANIPET JABALPUR • TPM Consistency Award – SPR Plant Hosur (2) Thiruvottriyur • TPM Consistency Award – MMN Plant Kakanad Ranipet
Slide 19: A Resilient Organisation Built on Strong Fundamentals
A RESILIENT ORGANISATION BUILT ON STRONG FUNDAMENTALS APPLICATION HYDEL POWER ABRASIVES 7 DSIR LABS NEW-AGE MATERIALS DEVELOPMENT BAUXITE MINE ELECTRO MINERALS SURFACE TECHNOLOGY ORGANIC & INORGANIC NEW PROCESSES CENTRE GRWOTH CERAMICS; REFRACTORIES 60 + MATERIALS & THERMAL POWER TECHNOLOGY PLATFORM
Slide 20: Market Position Cemented Over Time
MARKET POSITION CEMENTED OVER TIME ACCOMPLISHMENTS CORE STRENGTHS 1 Largest Abrasives Player in India 10,000+ Retail Touch Points 5 Plants with JIPM Certification 1 Largest SiC Producer in Europe 7 DSIR Labs 2 Second largest Metallized Cylinders 260 Patents Producers in the World 5 Overseas Marketin
Slide 21: Business Portfolio
BUSINESS PORTFOLIO CUMI Revenue : INR 26.5 bn FY -19 EBIT : INR 3.8 bn Financials Capital Employed : INR 18.1 bn Abrasives Electrominerals Ceramics & Refractories Revenue : INR 11.2 bn Revenue : INR 10.2 bn Revenue : INR 6.0 bn EBIT : INR 1.4 bn EBIT : INR 1.3 bn EBIT : INR 1.1 bn Capital Employed:
Slide 22: CUMI – Shareholding Pattern
CUMI – SHAREHOLDING PATTERN 2% 4% 6% Promoters Financial Institutional Investors 42% 22% Mutual Funds FII Body Corporates Insurance Companies 24% Equity Share Capital INR189.3 Mn As on Oct 2019 M A K I N G M A T E R I A L S M A T T E R
Slide 23: Solution Development – Across 60+ Technology Platforms
SOLUTION DEVELOPMENT – ACROSS 60+ TECHNOLOGY PLATFORMS Materials for the Future 3 Appli- Core Adjacent Transformational cation 2 Materials Oxides Graphene Metals C Boron N Cotton Polyester Carbide Nitride PF Resin Diamond Paper Glass Fibre Particle Size Firing/Sin Electro Slip 1 Processing Capabilit
Slide 24: Building the Future: Core and Adjacencies
BUILDING THE FUTURE Core Adjacencies 1 Strong growth potential in Core Industries. Focus is to increase market share, and expand product Leverage resources & capabilities to increase presence in Adjacencies 2 offerings Auto & Component Construction Bearings General Engineering Defence Aerospace STRE
Slide 25: Contents
CONTENTS 1 MURUGAPPA GROUP & CUMI - OVERVIEW 2 BUSINESS SEGMENTS 3 FINANCIALS, STRATEGY & CLOSING REMARKS
Slide 26: Abrasives: Engineering Surfaces
‘ ‘ ‘ ‘ Abrasives: ‘ Engineering Surfaces ‘ ‘
Slide 27: Engineering Surfaces
ENGINEERING SURFACES Abrasives: An indispensable part of Core Industries Coated Bonded & Super Abrasives Adjacencies Sheets & Power Tool Mass Precision Metal, CBN & Machines Power Coolants Auto-after Rolls Accessories Market Abrasives Tools Diamond Wheels Auto & Component Construction Bearings Gener
Slide 28: Market Leader in India, Ready to Tap Global Markets
MARKET LEADER IN INDIA, Ready to tap momentum in Global Markets India ~$ 0.5 Bn Abrasives 9%-10% CAGR N.America ~$4.5 Bn 3%-4% CAGR Stand Alone ME ~$0.3 Bn JVs / Subs Operations 5%-6% CAGR ROW $5 Bn 3%-4% CAGR Mfg. Marketing US, ME, China VAW 3 Plants in Chennai; Hosur. Uttarakhand, Kolkatta Wendt S
Slide 29: Dominant Player in India Market; Ready to Increase Global Share
Dominant Player in India Market; Ready to increase share in Global markets • Strong Fundamental Drivers: Abrasives - Consolidated Sales (INR Mn.) • Automotive & Construction (Private Consumption driven) 12000 • Infrastructure & Heavy Industries (Govt. fiscal policy & Private 10000 Investments driven
Slide 30: Core & Adjacencies Backed by Strong Economic Fundamentals
Core & Adjacencies backed by Strong Economic Fundamentals; Transformational Products driven by Emerging trends Aerospace; Railways CAGR >15% expected India: Among fastest growing auto markets in the World Fused Alumina & Azure S based High precision grinding wheels for super General & Heavy Engineer
Slide 31: Abrasives: Core and Adjacencies
ABRASIVES Core Adjacencies 1 Sheets & Rolls; Discs (Fibre, cloth, PSA, Velcro, Flap); Flaps, Mops & Belts; Non Woven Pads; Dressing Rolls ( Non woven abrasives; Metal working fluids; Masking Tapes; Carbide Cutting Tools; Vit. CbN ; 2 Electroplated); Precision Bonded wheels; Thin wheels; Film Backed
Slide 32: Electro Mineral Division
‘ ‘ Electro ‘ ‘ Mineral ‘ Division ‘ ‘
Slide 33: Workhorse Minerals for Industry and Performance Materials for the Future
ELECTROMINERALS Workhorse Minerals for the industry and Performance materials for the future Brown Fused Bubble Zirconia CUMI Blue White Fused Alumina Silicon Carbide Alumina Zirconia Alumina Floor Laminates Refractory & Investment Bonded Coated Diesel Silicon wafer Abrasives Ceramic slicing casting
Slide 34: Global Leadership in Silicon Carbide; Domestic Leader in Fused Alumina
Global Leadership in Silicon Carbide; Domestic Leader in Fused Alumina Products; Significant growth potential in ‘Minerals of the Future’ EMD Indian Market Size: White Fused Alumina ~40,000 TPA Stand Alone Subs Operations Brown Fused Alumina ~60,000 TPA Global Market Size: Foskor Volszhky Silicon Ca
Slide 35: Sweat Existing Assets in Fused Alumina to Gain Global Share
Sweat existing assets in Fused Alumina to gain global market share; Tap growth potential in ‘Minerals of the Future’ EMD- Consolidated Sales (INR Mn.) • Steady growth driven by Silicon Carbide, and Fused Alumina products • Strong domestic demand from Abrasives, and Refractories, driven by 12000 1000
Slide 36: Sweat Existing Assets; Increase Value-Added Materials
Sweat existing assets; Increase Value-Added materials; Build capabilities in ‘New-Age’ Minerals Electronics India: 7%-8% GDP; strong performance in Core CAGR 3% expected (global) Industries will drive demand for Abrasives, Refractories, Ceramics Potential in Back & Green SiC High purity minerals Aer
Slide 37: New Products: Innovation Pyramid as Growth Driver
NEW PRODUCTS: INNOVATION PYRAMID AS GROWTH DRIVER Core Adjacencies 1 Fused Alumina ( Brown, White); Silicon Carbide Macros & Micros; alumina Zirconia, HPA; ABV+, Semi-Friables, Surface Treated Grains; Solgel grains; Monoclinic Zirconia; Yittria Stabilized Zirconia; 2 Zirconia Bubbles, Azure S Mg Sta
Slide 38: Industrial Ceramics & Super Refractories
‘ ‘ Industrial ‘ ‘Ceramics &‘ Super Refractories ‘ ‘
Slide 39: Industrial Ceramics: Co-Created Materials
INDUSTRIAL CERAMICS Co-Created Materials : Wear, Corrosion & Mission Critical Wear Ceramics Technical Ceramics Grinding Lined Equipment Wear Resistant Media Engineered Metallized Liners Ceramics Ceramics Mining & Metals Power Generation Power Distribution SOFC Automotive Medical Ceramics
Slide 40: Industrial Ceramics
Industrial Ceramics IC Stand Alone Subs Operations CUMI 1 Plant in India Australia (P). CME; USA Ltd Mfg. Marketing • Second largest Metallized Cylinders Producer In the World • ~70% Revenues from Overseas Markets • Preferred supplier to global players in Power Generation, Distribution and Transmiss
Slide 41: New Products & Materials: Growth Drivers
NEW PRODUCTS & MATERIALS : GROWTH DRIVERS Core Adjacencies 1 Alumina Tiles and liners; Rubber Backed Ceramics; Metallized Cylinders for Vacuum Interrupters; SOFC Basalt & Wear Plates; Castables; Composites (FRP Ceramics) Welding pins; night vision rings; armours; Metallized Devices for 2 Structural
Slide 42: Increase Wallet Share in Core Industries; Break Out Growth
Increase wallet share in Core industries; Break out growth in clearly identified areas Clean & Renewable Energy; BSVI >10% CAGR expected Potential in oxygen sensors; Solid Oxide Regulations on SF6 breakers Fuel Cells – structural & functional Smart grids & Small scale electricity generation ceramics
Slide 43: Refractories & Composites
REFRACTORIES & COMPOSITES Heat Containment, Wear and Corrosion Resistance Fired Products Monolithic Products Precast Shapes Composites Ceramic Industries Cement Industry Glass Industry Steel Industry Gas Industry Power Generation
Slide 44: Expand Product Basket in Core Industries; Develop Composites
Expand product basket in Core Industries; Leverage design capabilities to expand global play; Develop capabilities & capacities in Composites Refractories Stand Alone Subs Operations 2 Plants in Chennai; 1 plant Volszhky Abrasive Works at Jabalpur Mfg. • Strong design capabilities • Preferred suppli
Slide 45: Ceramics & Composites: Future Growth Areas
Ceramics & Composites : Future Growth Areas Consolidated Sales (INR Mn.) • Ceramics (double digit) growth rates to be focus area for CUMI in future 7000 6000 5000 • High margin Business with potential for scale in global markets 4000 3000 4817 5025 6044 • Next wave of growth from Composites – Growth
Slide 46: Increase Offering to Core; Focus on Composites
Increase Offering to Core; Focus on Composites as a key growth driver for the future Composites India: 7%-8% GDP; strong performance in Core CAGR 8%-10%expected Potential in windmills; railways; FRP body Industries for Electric Vehicles; TMT bars Core: Cement; Glass, Carbon Black, Petrochemicals, Fe
Slide 47: New Products & Design Solutions; Composites Growth Drivers
NEW PRODUCTS & DESIGN SOLUTIONS; COMPOSITES – THE GROWTH DRIVERS Core Adjacencies 1 High Alumina; Mullite; SiC; Zirmul; Insulation bricks, Monolithics, Complex Shapes, Acid Resistance bricks, Magnesia bricks Bricks; Flow Control products (slide gate); Tap hole Clay; Trough Mass; Refractory Managemen
Slide 48: Key User Industries Customer Base
‘ ‘ Key User Industries ‘ ‘ Customer ‘ Base ‘ ‘
Slide 49: Automobile
Latex paper for Fine & Super finishing films Masking tapes for Non woven rolls for Grinding Wheels Sanding for surface finishing auto-after sanding & deburring for Bearings Automobile Refractories for Carbon Black Metalized Ceramics fr semi conductors SiC microgrit for Diesel Paper & Cloth belts Par
Slide 50: Construction
Resin taper cut wheels Ceramic Locating pins for Home Décor & White fused Alumina for welding joints welding applications Accessories Micro grits for laminates Construction Power Tool DIY Kits Accessories Metal Bonded Wheels Metal bonded wheels for glass grinding for concrete drilling Resin bonded w
Slide 51: Iron & Steel
PCPF Lance and impeller Mullite, High Alumina Anti-corrosive paints linings Refractories Iron & Steel Rubber backed Coke Oven Ceramics for Material Handling Laddle nozzles Iron Ore Limestone Coal Insulation Firebricks Slidegate Basic Oxygen Furnace Ladle (Refining) Continuous Casting Blast Furnace N
Slide 52: Cement
Rubber backed Ceramics Alumina Zirconia for Metal Iceramic Grinding for Material Handling Matrix Composites Media Cement Castables for walls/ roofs/ linings/ ducts Ceramic Lined Equipment Insulation materials Low cement castabls for kiln hoods & Nose rings ABR IC SR EMD M A K I N G M A T E R I A L S
Slide 53: Coal Washeries & Power Generation
Ceramic GM for Ceramic LE for FRP Components for Flue High Alumina Metallized Ceramics for particle size reduction Material Handling Gas Desulpherization Vaccum Interrupters, transmission tubes, and HV Relays Coal Washeries & Power Generation Coal Wahsery Power Generation T&D Ceramic GM for particle
Slide 54: Renewable and Clean Energy
FRP Nacelle cover for FRP Composite car For Battery windmills body applications Renewable and Composites Graphene Clean Energy SiC Micros For PV Wafer Ceramic for solid oxide slicing fuel cells ABR IC SR EMD SiC Micros SOFC M A K I N G M A T E R I A L S M A T T E R
Slide 55: Aerospace
Porus wheels for creep-feed White Fused Alumina for grinding Microblasting Aerospace Silicon Carbide micros for Semicondustors Thermal spray powders for turbine hot section components Plasma powder coating for turbine blades CNC cutters for Precision Hybrid Wheels for precision components components
Slide 56: Contents
CONTENTS 1 MURUGAPPA GROUP & CUMI - OVERVIEW 2 BUSINESS SEGMENTS 3 FINANCIALS, STRATEGY & CLOSING REMARKS
Slide 57: Financials
‘ ‘ ‘ ‘ Financials ‘ ‘ ‘
Slide 58: Proven Track Record in Financials
Proven Track Record in Financials Consolidated Sales (INR Mn.) • Steady growth, Consistent margins 30000 25000 • Growth driven by Core industries in fastest growing Economy of the World 20000 15000 • Diversity in customer base & geographies 26556 21999 23579 10000 20187 20244 5000 0 FY 15 FY 16 FY 1
Slide 59: Proven Track Record in Financials: Financial Strength
Proven Track Record in Financials Return Ratios 2 19.7% 20.8% 23.00% Financial Strength 1.75 21.00% 16.9% 17.6% 1.5 1.2 19.00% 17.00% 1.25 1.3 1.4 15.00% 1 1.1 1.2 13.00% • 65 years of unbroken dividend payout 0.75 11.00% 0.5 12.7% 9.00% • Strong and consistent returns on 0.25 7.00% capital 0 5.00%
Slide 60: Innovation
‘ ‘ ‘ ‘ Innovation ‘ ‘ ‘
Slide 61: Digital Offerings - Smart Products for Customers
Digital Offerings - ‘Smart Products’ for Customers; IoT implementation underway in manufacturing Locations Sensor embedded Lined Equipment Smart Grinding Wheels Industry 4.0 in Factories • ‘Smart products’ under • Sensor embedded grinding • Ecosystem of connected devices development wheels • Apps, a
Slide 62: Contribution to India's Space Mission
Contribution to India’s Space Mission CUMI’s Contribution to India’s Space Mission Since 2004 CUMI Super Refractories has been providing the lining for the flame deflector tunnel at ISRO’s launchpad at Sriharikota. This is critical to deflect the extreme heat during launch of a spacecraft. The linin
Slide 63: Closing Remarks on Strategy
‘ ‘ ‘ ‘ Closing Remarks ‘ on Strategy ‘ ‘
Slide 64: Our Strategy Brief
Our Strategy Brief Distribution Reach Materials & Processing Capabilities • Expand product offering to Core Strong industries (Cast Basalt, Wear Plates) Balance • Break-out growth in 1) Non-oxides 2) Sheet & Composites 3) Semi-conductor Cash Flow Cost Position substrates & wafers 4) Medical Ceramics
Slide 65: Making Society Matter
‘ ‘ Making ‘ ‘ Society ‘ Matter ‘ ‘
Slide 66: Corporate Social Responsibility: Health, Education & Infrastructure
CORPORATE SOCIAL RESPONSIBILITY : HEALTH, EDUCATION & INFRASTRUCTURE Education CUMI supports Vellayan Chettiar School, Chennai and Murugappa Polytechnic, Chennai through AMM Foundation. Educates and trains approximately 8000 students . Community Developing appropriate technologies through the Muruga
Slide 67: Making Youth Matter: CUMI Center for Skill Development
MAKING YOUTH MATTER : CUMI CENTER FOR SKILL DEVELOPMENT Sensor embedded Lined Equipment Total No. of Students till date : 346 Total No. of pass-outs : 150 Ongoing batch : 196 CCSD Hosur, declared as “Best Establishment of the Region” by Directorate General of Training, MSDE, Govt. of India - October
Slide 68: Accolades
ACCOLADES Recognition Sensor embedded Lined Equipment • CSIR Diamond Jubilee Technology Award • Golden Peacock award for Innovation (2019)/ Corporate Governance (2017)/corporate Ethics (2016)/CSR (2016) • ‘Most Diversified Exporter’ Award by ECGC (Runners up) • ICAI /SAFA – awards for Annual Report
Slide 69: Thank You
‘ ‘ ‘ ‘ THANK ‘ YOU ‘ ‘
Carborundum Universal — Investor Presentation (December 2019) on 6ix