Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — H1 FY2006 Earnings Presentation
32 slides from Larsen & Toubro's earnings presentation, October 2005
Slide 1: Larsen & Toubro Limited Analyst Briefing
LARSEN & TOUBRO LIMITED Analyst Briefing October 2005 1
Slide 2: Disclaimer
Disclaimer Disclaimer This presentation contains certain forward looking statements concerning L&T’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statem
Slide 3: Performance Highlights of H1 06
Performance Highlights of H1 06 z Order booking grows by 61% z Sales growth of 15% z Improvement in operating margins in all segments drive growth in PBDIT (27%) and PAT (32%) z Improvement in resource utilisation sustained z Divestures from non core / marginal businesses z Outlook for the year - Or
Slide 4: Order Booking and Sales
Order Booking and Sales % Q2 06 Q2 05 Rs. Billions H106 H105 change FY05 49.51 28.37 Order Booking* 88.12 54.69 61 149.65 34.01 30.03 Sales 65.56 56.92 15 132.69 Other Income 0.92 0.78 -Recurring/Operating 1.42 1.21 17 2.92 1.32 3.60 -Others 1.54 3.70 (58) 4.04 36.25 34.41 Total Revenue 68.52 61.83
Slide 5: Details of other Income
Details of other Income FY05 Rs. Million H1'06 H1'05 68 Hire Income from plant & machinery / lease rental 15 22 734 RMC freight and pumping charges 380 317 132 Commercial leadership fees from IJVs 36 66 1278 Miscellaneous Income 688 459 602 Dividend from Subsidiaries 245 285 109 Dividend from Associ
Slide 6: Net Income
Net Income % Q2 06 Q2 05 Rs. Billions H106 H105 change FY05 2.18 1.81 PBDIT (w/o profit on divestures) 4.16 3.28 27 10.81 6.2% 5.9% PBDIT/Revenue 6.2% 5.6% 7.9% 0.15 0.13 Interest 0.25 0.23 0.54 0.26 0.22 Depreciation 0.55 0.43 0.94 1.77 1.46 PBT 3.36 2.62 28 9.33 0.57 0.63 Tax - Current 1.10 1.00 3
Slide 7: Segmental Review
Segmental Review 7
Slide 8: Segmental Revenues
Segmental Revenues H1'06 H1'05 Others 7% Others 7% Elect 11% Elect. 9% E&C E&C 84% 82% 8
Slide 9: Segmental EBITDA
Segmental EBITDA H1'06 H1'05 Others Others 13% 13% Electrical Electrical 19% 22% E&C E&C 65% 68% 9
Slide 10: Engineering & Construction
Engineering & Construction 10
Slide 11: Engineering & Construction
Engineering & Construction % Q2 06 Q2 05 Rs. Billion H1 06 H1 05 FY 05 change Order Booking : 34.74 19.72 Domestic 58.14 34.81 67 113.48 8.15 4.29 Export 16.29 10.99 48 16.90 42.89 24.01 Total 74.43 45.80 63 130.38 Gross Sales: 21.29 19.29 Domestic 42.45 37.79 12 90.50 6.63 6.28 Export 11.73 10.49 1
Slide 12: Major Orders booked during H1 06
Major Orders booked during H1 06 z Blast furnace for Tata Steel of 2.5 MTPA capacity and a Sinter plant – Rs 1001 crores z EPC contract for Rajkot pipeline project – Rs 176 crores z Construction of residential buildings in Dubai – Rs 339 crores z Export of critical equipment to various countries – R
Slide 13: Engineering & Construction
Engineering & Construction % Q2 06 Q2 05 Rs. Billion H1' 06 H1'05 FY 05 change 27.96 25.60 Total Revenues (1) 54.25 48.37 12 114.30 0.23 0.13 Excise Duty 0.40 0.38 0.77 27.73 25.47 Net Revenues 53.85 47.99 113.53 1.77 0.99 EBITDA (2) 3.08 2.32 33 8.27 6.3% 3.9% EBITDA/Tot. Rev. 5.7% 4.8% 7.2% 1.58 0
Slide 14: Sector-wise Order Backlog
Sector-wise Order Backlog 100% 9 17 18 23 22 80% 48 35 33 60% 35 39 10 10 40% 8 6 21 21 23 20 17 20% 17 17 16 14 16 5 0% '01-02 '02-03 '03-04 '04-05 H1 05-06 Rs Bn 119 138 165 177 193 Process Oil & Gas Power Infrastructure Others 14
Slide 15: Electricals & Electronics
Electricals & Electronics 15
Slide 16: Electricals & Electronics
Electricals & Electronics % Q2 06 Q2 05 Rs. Billion H1' 06 H1'05 FY 05 change 3.40 2.63 Domestics Sales 6.26 4.92 27 10.59 0.39 0.19 Exports 0.73 0.36 103 0.97 3.79 2.82 Total Revenues (1) 6.99 5.28 32 11.56 0.31 0.24 Excise Duty 0.56 0.45 0.91 3.48 2.58 Net Revenues 6.43 4.83 33 10.65 0.58 0.42 EBI
Slide 17: Other Businesses
Other Businesses 17
Slide 18: 'Others' Segment
‘Others’ Segment % Q2 06 Q2 05 Rs. Billion H1'06 H1'05 FY'05 change 2.52 1.82 Total Revenues (1) 4.75 3.68 29 7.76 0.01 0.02 Excise Duty 0.03 0.05 0.09 2.51 1.80 Net Revenues 4.72 3.63 30 7.67 0.32 0.20 EBITDA 0.63 0.45 40 0.91 12.7% 11.0% EBITDA/Tot. Rev. 13.3% 12.2% 11.7% 0.31 0.18 EBIT 0.59 0.41
Slide 19: Divestments from non-core businesses
Divestments from non-core businesses z Divestments in H1 06 z L&T-Niro Ltd – (Food & Dairy Equipment business ) - Not expected to reach critical size - JV partner desired to grow by itself z L&T-John Deere Limited – (Tractor manufacturing business) - Not aligned with core business z Nashik Glass Wor
Slide 20: Subsidiaries & Associates Performance
Subsidiaries & Associates Performance 20
Slide 21: Performance of Subsidiaries - Manufacturing/Services/Construction
Performance of Subsidiaries - Manufacturing/Services/Construction H1 05 Rs. Million H1 06 % Change 5576 Total Income 7597 36.2 843 PBDIT 1024 21.5 308 PAT 390 26.4 Total Funds 11173 Employed 13925 24.6 z Growth in revenues mainly contributed z Companies covered under this by: category: - L&T Infotec
Slide 22: Performance of L&T Infotech
Performance of L&T Infotech % FY 05 (Rs. Billion) H1 06 H1 05 Change z 5000 Employees z 6 development centers 5.81 Total Revenues 3.47 2.62 32.3 z Overseas offices 0.83 Operating Profit (PBDIT) 0.41 0.36% 15.9 - USA 14.3% PBDIT / Sales % 11.9% 13.6 - Japan - Europe 0.26 Depreciation/Amortization 0.1
Slide 23: Performance of Subsidiaries-Power SPVs
Performance of Subsidiaries-Power SPVs H1 05 Rs. Million H1 06 % Change 1227 Total Income 1158 -5.6 1136 PBDIT 1050 -7.6 334 PAT 428 28.0 6834 Total Funds Employed 7332 7.3 z Above portfolio includes: - India Infrastructure Developers Ltd - HPL Cogeneration Ltd z PAT mainly contributed by HPL Cogene
Slide 24: Performance of Associates - Manufacturing
Performance of Associates - Manufacturing H1 05 Rs. Million H1 06 % Change 4607 Total Income 6693 45.3 499 PBDIT 764 52.9 194 PAT 385 98.7 Total Funds 4643 Employed 5280 13.7 z Growth in revenues mainly contributed by: z Companies covered under this category: - L&T-Komatsu Ltd - L&T-Komatsu Ltd - L&
Slide 25: L&T Infrastructure Development Projects Limited (L&T IDPL)
L&T Infrastructure Development Projects Limited (L&T IDPL) 25
Slide 26: Current Portfolio
Current Portfolio L&T IDPL - Narmada Infrastructure Company Ltd. - L&T Transportation Infrastructure Ltd. - L&T Infocity - Second Vivekananda Bridge Tollway - L&T Infocity Ascendas iiiCompany Ltd. - Vizag IT Park - GVK Jaipur Kishangarh Expressway - Hitex iiiLtd. - L&T Infocity Lanka - L&T Western I
Slide 27: Rationale behind focus on development projects
Rationale behind focus on development projects z Envisages tremendous growth potential in the Infrastructure sector z L&T is uniquely positioned to leverage this opportunity - One of the largest players with a critical mass of projects spanning Roads, Bridges, lllPorts and Airports - Impeccable repu
Slide 28: Capital source for BOOT projects
Capital source for BOOT projects z Consolidation of L&T’s holdings in SPVs in process - L&T’s holdings to be transferred to a holding company - Holding company to act as a development arm of L&T for participation in BOOT iiiprojects z Consolidation to help L&T raise capital at holding company level
Slide 29: Key Highlights of SPVs under L&T IDPL
Key Highlights of SPVs under Rs. Mn L&T’s Revenues PBDIT PAT Stake H106 H105 H106 H105 H106 H105 Narmada Infrastr.Construction 80% 129 118 112 108 10 3 Enterprise Ltd. L&T Transportation Infrastructure 100% 81 70 65 59 21 10 Ltd. L&T Western India Tollbridge Ltd. 100% 42 52 33 43 (1) 1 Kakinada Port
Slide 30: Project under Implementation-Status update
Project under Implementation-Status update z Second Vivekananda Toll Bridge (SVBTC) - Construction as per schedule, completion by April, 2007 z Bangalore International Airport - Financial Closure in June 2005 and construction started - Actual traffic exceeded the traffic estimates z Dhamra Port - Wo
Slide 31: Outlook
Outlook 31
Slide 32: Revenue and margins for FY 06
Revenue and margins for FY 06 z Engineering and Construction - New order inflow to grow by 35%+ z A fair growth in revenues with a healthy backlog as at end H1 06 - High revenue base resulting from strong growth over last two years - Late receipt of orders could have an impact on revenue growth z Ma