Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q2 FY06 Earnings Presentation
56 slides from Grasim Industries's earnings presentation, Oct 26, 2005
Slide 1: Performance Review – Q2 FY06
Grasim Industries Limited Performance Review – Q2 FY06 26th October 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: Consolidated Financial Performance – Q2FY06
Consolidated Financial Performance – Q2FY06 % z Q2FY06 turned out to be a challenging Rs. Crs. Change quarter z Consolidated revenue up by 5% TOTAL REVENUE 2,328 5 z PBIDT lower by 14% PBIDT 461 (14) ¾ Excellent performance from Grasim’s Cement Business and Chemical Business Interest Charges 54 (23)
Slide 4: Consolidated Financial Performance – H1FY06
Consolidated Financial Performance – H1FY06 % z Consolidated revenue up by 7% Rs. Crs. Change z PAT up by 17% TOTAL REVENUE 4,796 7 ¾ Excellent performance from Grasim’s Cement Business and Chemical Business PBT 718 3 ¾ UTCL performed reasonably ¾ Subdued Performance by VSF business Total Tax Expens
Slide 5: Consolidated Financial Performance - Q2FY06
Consolidated Financial Performance - Q2FY06 (Rs. Crores) Q2FY06 Q2FY05 % Chg. H1FY06 HIFY05 % Chg. FY05 (Audited) Net Turnover & Op. Income 2,327.7 2,221.7 5 4,795.8 4,501.5 7 9,317.3 Other Income 44.7 38.2 17 120.2 89.5 34 217.6 PBIDT 460.9 538.1 (14) 1,101.4 1,122.4 (2) 2,272.3 Interest 53.9 70.4
Slide 6: Consolidated Segmental Performance – Q2FY06
Consolidated Segmental Performance – Q2FY06 Revenue Mix PBIDT Mix Sponge Iron Others VSF VSF 7% 2% Others 27% 22% 7% Chemical * Chemical 4% 8% Textiles Textiles 3% 1% Cement 62% Cement 57% (Rs.2,328 Crs.) (Rs. 461 Crs.) z VSF (incl. Chemical) contributed 26% to Revenue and 35% in PBIDT mix z Cement
Slide 7: Standalone Financial Performance – Q2FY06
Standalone Financial Performance – Q2FY06 % z Revenue up by 7% Rs. Crs. Change z PBIDT down by 18% TOTAL REVENUE 1,639 7 ¾ Cement PBIDT up by 30% ¾ Stellar performance by Chemical business PBIDT 353 (18) ¾ Subdued performance by VSF business ¾ Sponge Iron business suffered Interest Charges 24 (35) z
Slide 8: Standalone Financial Performance – H1FY06
Standalone Financial Performance – H1FY06 % z Revenue up by 5% Rs. Crs. change z PAT maintained at same level TOTAL REVENUE 3,192 5 ¾ Cement PBIDT up by 20% ¾ Stellar performance by Chemical business PBIDT 793 (10) ¾ Subdued performance by VSF business, particularly in Q1 Interest Charges 50 (28) ¾
Slide 9: Standalone Financial Performance - Q2FY06
Standalone Financial Performance - Q2FY06 (Rs. Crores) Q2FY06 Q2FY05 % Chg. H1FY06 H1FY05 % Chg. FY05 Net Turnover & Op. Income 1,639.1 1,533.5 7 3,192.4 3,050.6 5 6,252.4 Other Income 30.8 30.4 1 96.3 46.7 106 167.0 PBIDT 352.7 429.8 (18) 792.5 876.1 (10) 1,784.7 Interest 23.7 36.7 (35) 50.3 69.6 (
Slide 10: Standalone Segmental Performance– Q2FY06
Standalone Segmental Performance– Q2FY06 Revenue Mix PBIDT Mix Others Sponge Iron VSF 5% 10% 30% VSF 35% Chemical Cement 6% Cement Chemical 50% Textiles 4% 49% Textiles 10% 1% (Rs.1,639 Crs.) (Rs.353 Crs.) z VSF (incl. Chemical) contributed 36% (38%) to Revenue and 45% (46%) in PBIDT mix z Cement co
Slide 11: Business Review – Q2 FY06
Business Review – Q2 FY06 VSF Chemicals Cement Sponge Iron Textiles 11
Slide 12: Viscose Staple Fibre : Highlights
Viscose Staple Fibre : Highlights % z Sales up 4% YoY; up 19% sequentially Q2FY06 Q2FY05 Chg. Capacity (TPA) 253,675 251,850 1 ¾ EU and US embargo on Chinese exports Production (MT) 50,231 61,378 (18) ¾ Focus on exports to growing textile hubs like Sales Volumes (MT) 62,776 60,517 4 Pakistan & Bangl
Slide 13: Viscose Staple Fibre : Outlook
Viscose Staple Fibre : Outlook z Volumes prospects remain positive ¾ Embargo on Chinese textile exports to help ¾ Closure of Plants in US & Russia due to operations turning unviable z Price outlook improving; selling price revised upward by Re.1/kg from Oct’ 05 z Margins expected to improve ¾ Soften
Slide 14: Chemical : Highlights and Outlook
Chemical : Highlights and Outlook % z Impressive performance continued Q2FY06 Q2FY05 Chg z Sales volume up by 8% Caustic Capacity (TPA) 190,800 190,800 -- Caustic Production (MT) 42,766 38,765 10 z ECU realisation moved up by 22% Caustic Sales Volumes (MT) 41,585 38,651 8 ¾ Firm international prices
Slide 15: Cement : Highlights
Cement : Highlights % z Excellent performance Q2FY06 Q2FY05 Chg. z Capacity utilisation impressive at 98% Grey Cement Capacity (Mn. TPA) 13.12 13.12 -- z Sales volumes up 7% YoY Production (Mn. MT) 3.21 3.04 6 ¾ Outperformed the industry in North and Sales Volumes (Mn. MT) *3.25 3.04 7 East Net Turn
Slide 16: Cement : Highlights (Contd.)
Cement : Highlights zCement : Highlights (Contd..)contd.. Q2FY06 – Zone wise Growth z White Cement 16.1% 20% 14.2% ¾ Volumes up 18% on back of healthy 10.5% domestic demand and increased market 10.0% share 7.4% 7.1% 10% 5.4% 1.5% ¾ Revenues increased by 38% helped by 1.5% 0.8% volumes and increase i
Slide 17: Cement : Outlook
Cement : Outlook z Strong demand growth of 10% during H1FY06 ¾ Turnaround in the south; demand up 21% YoY ¾ East continues to grow buoyantly, up by 17% z Demand outlook positive, expected to grow by 8% ¾ Buoyant demand from housing segment ¾ Continued thrust on infrastructure ¾ Unfolding of capex cy
Slide 18: Cement Consolidated : Highlights
Cement Consolidated : Highlights Q2FY06 Q2FY05 FY05 Cement SDCC Grasim 3% Capacity (Mn. TPA) 31.2 31.2 31.2 42% Production (Mn. MT) Clinker 0.3 0.8 3.1 Cement 6.1 5.8 26.1 UltraTech 55% 6.4 6.6 29.2 Sales Volumes (Mn. MT) Cement Capacity - 31.2 Mn. Ton Clinker 0.3 0.8 3.1 Cement 6.2 5.9 26.3 6.5 6.7
Slide 19: Sponge Iron : Highlights
Sponge Iron : Highlights z Business suffered on adverse macro developments % Q2FY06 Q2FY05 Chg. z Production severely impacted by Capacity (TPA) 900,000 900,000 -- disruptions in Natural Gas supplies Production (MT) 125,944 202,976 (38) z Sales volume declined as a result Sales Volumes (MT) 140,275
Slide 20: Sponge Iron : Outlook
Sponge Iron : Outlook z Volumes likely to improve in H2FY06 ¾ Natural gas supply getting restored though still lower from earlier levels ¾ Steel sector outlook positive z Profitability to remain under pressure in ensuing quarters due to increased input cost, though expected to be higher than Q2FY06
Slide 21: Textiles : Highlights and Outlook
Textiles : Highlights and Outlook Q2 Q2 % z Fabric volumes down 6% FY06 FY05 Chg. Sales Volumes ¾ Withdrawal from export markets due - Fabrics (lac Mtrs.) 45 48 (6) to lower realisations - Synthetic Yarn (MT) 1,591 1,600 (1) z Fabric realisations up 1% Net Turnover (Rs. Crs.) 70.7 75.5 (6) Fabric Re
Slide 22: Capex
Capex 22
Slide 23: Capex under implementation
Capex under implementation Rs. Crores Capex Cash Outflow plan FY06 FY07 Cement 951 457 437 - Power plants (3 Nos, 77MW) 330 114 160 - Grinding unit in North (1.3 Mn. MT) 115 50 65 - De-bottlenecking/Blending 144 49 94 - Modernization 362 244 118 VSF 533 214 319 - Capacity expansion (58,775 Tons) 374
Slide 24: Financial Highlights
Financial Highlights 24
Slide 25: Profitability Snapshot - Standalone
Profitability Snapshot - Standalone H1 z In last completed FY05, compared to FY99 (Figures in Rs. Crores) FY99 FY04 FY05 FY06 ¾ PBIDT has gone up 2.6 times Gross Turnover 4,325 6,130 7,201 3,663 ¾ PAT has multiplied by 8 times; CAGR of 43% Net Turnover 3,757 5,213 6,229 3,169 ¾ Over 7 times growth i
Slide 26: Financial Snapshot - Standalone
Financial Snapshot - Standalone H1 Networth Cap.Employed Debt Equity Ratio (Figures in Rs. Crores) FY99 FY04 FY05 FY06 Cap.Employed/Net Worth (Rs. Crs.) 8000 1.20 7225 6931 Gross Block 4,937 5,802 6,052 6,190 7000 1.13 6304 6000 5673 Net Block 3,354 3,213 3,204 3,219 Debt Equity Ratio 0.80 5037 5000
Slide 27: Consolidated Balance Sheet
Consolidated Balance Sheet (Figures in Rs. Crores) FY04 FY05 H1FY06 z Strong consolidated Balance Sheet as well Gross Block 10,702 11,317 11,570 z Leveraging in real term even lower, to be Net Block 6,394 6,300 6,316 viewed in the context of Goodwill 2,037 1,958 1,958 ¾ Large cash surplus Investment
Slide 28: UltraTech Cement Limited (Consolidated) Performance Review – Q2FY06
UltraTech Cement Limited (Consolidated) Performance Review – Q2FY06 28
Slide 29: UltraTech Consolidated Financial Performance-Q2FY06
UltraTech Consolidated Financial Performance-Q2FY06 (Rs. Crores) z Performance impacted by Q2 Q2 % FY05 FY06 FY05 Inc. ¾ Flood in key markets of Western and Net Turnover & Central India * 580.2 596.2 (3) 2,700.3 Other Income ¾ Shutdown at Gujarat Cement Works, PBIDT 78.5 90.6 (13) 378.9 Kovaya due t
Slide 30: UltraTech Consolidated : Q2FY06 Highlights
UltraTech Consolidated: Q2FY06 Highlights z Sales volume at 2.95 Mn. MT * Q2FY06 Q2FY05 FY05 ¾ Lower domestic volumes and clinker Capacity (Mn TPA) exports Clinker 15.50 15.50 15.50 Grinding 17.00 17.00 17.00 z Cement realisation up by 7% Production (Mn. MT) z Export prices continue to be firm, like
Slide 31: UltraTech Outlook
UltraTech Outlook z Capex plan of Rs.987 Crs. (including captive power plant of Rs.540 Crs.) z Cost and efficiency improvement ¾ Power cost reduction ÖLignite based TPP at Gujarat plant, by July 2007 ÖCo-Generation plant at APCW ÖMeasures for interim reduction of power cost at Gujarat plant ¾ Fuel c
Slide 32: Shree Digvijay Cement Company Limited (SDCC) Results
Shree Digvijay Cement Company Limited (SDCC) Results for Quarter ended 30th Sep 2006 32
Slide 33: SDCC Financial Performance - Q2FY06
SDCC Financial Performance - Q2FY06 (Rs. Crores) z Capacity utilisation at 83% Q2 Q2 % (Lac MT) z Focus on maximising Cement FY06 FY05 Chg. Cement Production 1.87 1.41 volumes; up 37% (4) Clinker Production 0.36 0.92 z Revenue up 8% Sales Volumes z Better sales mix helped improve - Cement 1.94 1.41
Slide 34: Plant Locations– Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bhatinda(G) Noida Grey cement plants Gurgaon T Bhiwani Jodhpur Grinding Units (G) Shambhupura UltraTech Cement Plants Jawad Bharuch Durgapur(G) UltraTech Grinding Units (G) F Jafrabad Magdalla (G) B UltraTech Bulk Cement Terminals Sikka F C Pipavav Nagda Hi
Slide 35: Thank You
GRAS TM ADITYA BIRLA GROUP Thank You
Slide 36: Annexures: Segmental & Business Performance Summary
Annexures Segmental & Business Performance Summary Q2/H1FY06 Consolidated performance Q2/H1FY06 Standalone performance VSF Summary Chemical Summary Cement Summary Sponge Iron Summary Textiles Summary Production Data Segmental Turnover & Realisations 36
Slide 37: Consolidated Financial Performance - Q2FY06
Consolidated Financial Performance - Q2FY06 (Rs. Crores) Q2FY06 Q2FY05 % Chg. H1FY06 HIFY05 % Chg. FY05 (Audited) Net Turnover & Op. Income 2,327.7 2,221.7 5 4,795.8 4,501.5 7 9,317.3 Other Income 44.7 38.2 17 120.2 89.5 34 217.6 PBIDT 460.9 538.1 (14) 1,101.4 1,122.4 (2) 2,272.3 Interest 53.9 70.4
Slide 38: Consolidated Segmental Performance – Q2FY06
Consolidated Segmental Performance – Q2FY06 Rs. Crores PBIDT Capital ROAvCE (%) Business Revenue PBIDT Margin PBIT (%) Employed (PBIT basis) VSF 513.7 123.3 24.0 106.9 979 44.9 Chemical 104.1 35.4 34.0 31.0 201 61.8 Cement 1,445.3 267.0 18.5 171.5 6,814 10.2 Sponge Iron 170.4 0.4 0.2 (8.2) 479 (6.7)
Slide 39: Consolidated Segmental Performance – H1FY06
Consolidated Segmental Performance – H1FY06 Rs. Crores PBIDT Capital ROAvCE (%) Business Revenue PBIDT Margin PBIT (%) Employed (PBIT basis) VSF 947.3 214.4 22.6 182.5 979 38.4 Chemical 203.6 72.9 35.8 64.1 201 63.9 Cement 3,092.2 636.5 20.6 445.5 6,814 13.3 Sponge Iron 390.8 69.5 17.8 52.5 479 21.3
Slide 40: Standalone Financial Performance - Q2FY06
Standalone Financial Performance - Q2FY06 (Rs. Crores) Q2FY06 Q2FY05 % Chg. H1FY06 H1FY05 % Chg. FY05 Net Turnover & Op. Income 1,639.1 1,533.5 7 3,192.4 3,050.6 5 6,252.4 Other Income 30.8 30.4 1 96.3 46.7 106 167.0 PBIDT 352.7 429.8 (18) 792.5 876.1 (10) 1,784.7 Interest 23.7 36.7 (35) 50.3 69.6 (
Slide 41: Standalone Segmental Performance –Q2FY06
Standalone Segmental Performance –Q2FY06 (Rs. Crores) PBIDT Margin Capital ROAvCE (%) Revenue PBIDT PBIT Business (%) Employed (PBIT basis) Q2FY06 Q2FY05 Q2FY06 Q2FY05 Q2FY06 Q2FY05 Q2FY06 Q2FY05 Q2FY06 Q2FY05 Q2FY06 Q2FY05 VSF 499.8 515.7 123.4 178.8 25.4 35.0 107.3 164.5 952 852 46.3 82.4 Chemical
Slide 42: Standalone Segmental Performance-H1FY06
Standalone Segmental Performance-H1FY06 (Rs. Crores) PBIDT Margin Capital ROAvCE (%) Revenue PBIDT PBIT Business (%) Employed (PBIT basis) H1FY06 H1FY05 H1FY06 H1FY05 H1FY06 H1FY05 H1FY06 H1FY05 H1FY06 H1FY05 H1FY06 H1FY05 VSF 918.1 1,011.1 215.1 326.1 23.8 32.4 184.0 298.5 952 852 39.7 74.8 Chemica
Slide 43: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary Q2 Q2 % H1 H1 % FY05 FY06 FY05 Chg. FY06 FY05 Chg. Capacity TPA 253,675 251,850 1 253,675 251,850 1 @ 253,675 Production MT 50,231 61,378 (18) 102,513 121,090 (15) 247,952 Sales Volumes MT 62,776 60,517 4 115,732 121,394 (5) 231,533 Net Turnover Rs. Crs. 485.1 510.0 (5
Slide 44: Chemical : Summary
Chemical : Summary Q2 Q2 % H1 H1 % FY05 FY06 FY05 Chg. FY06 FY05 Chg. Capacity (Caustic) MT 190,800 190,800 -- 190,800 190,800 -- 190,800 Production (Caustic) MT 42,766 38,765 10 78,783 77,083 2 161,966 Sales Volume(Caustic) MT 41,585 38,651 8 77,434 77,148 -- 163,111 Net Turnover Rs. Crs. 103.9 81.
Slide 45: Cement : Summary
Cement : Summary Q2 Q2 % H1 H1 % FY05 FY06 FY05 Chg. FY06 FY05 Chg. Grey Cement Capacity Mn. MT 13.12 13.12 -- 13.12 13.12 -- 13.12 Production Mn. MT 3.21 3.04 6 6.56 6.03 9 12.44 Sales Volumes Mn. MT * 3.25 3.04 7 * 6.59 6.08 8 12.63 Net Turnover Rs. Crs. * @ 681.6 616.0 11 * @ 1,380.1 1,254.5 10 2
Slide 46: Sponge Iron : Summary
Sponge Iron : Summary Q2 Q2 % H1 H1 % FY05 FY06 FY05 Chg. FY06 FY05 Chg. Capacity TPA 900,000 900,000 -- 900,000 900,000 -- 900,000 Production MT 125,944 202,976 (38) 305,760 379,908 (20) 780,341 Sales Volumes MT 140,275 189,959 (26) 283,902 373,418 (24) 772,799 Net Turnover Rs. Crs. 170.4 227.5 (25
Slide 47: Textiles : Summary
Textiles : Summary Q2 Q2 % H1 H1 % FY05 FY06 FY05 Chg. FY06 FY05 Chg. Net Turnover Rs. Crs. 70.7 75.5 (6) 121.2 124.7 (3) 249.9 PBIDT Rs. Crs. 3.4 5.0 (32) 4.3 7.2 (40) 11.9 PBIDT Margin % 4.8% 6.6% -- 3.5% 5.8% -- 4.8% PBIT Rs. Crs. 1.9 1.8 -- 1.3 0.7 -- (0.5) Capital Employed Rs. Crs. 106 108 (2)
Slide 48: Production Data (MT)
Production Data (MT) Q2FY06 Q2FY05 FY05 Capacity Capacity Capacity Production % Production % Production % TPA TPA TPA VSF 253,675 50,231 79 251,850 61,378 97 @ 253,675 247,952 98 Caustic Soda 190,800 42,766 90 190,800 38,765 81 190,800 161,966 85 Grey Cement * 13.12 3.21 98 13.12 3.04 93 13.12 12.44
Slide 49: Divisional Turnover (Qty.) & Realisation
Divisional Turnover (Qty.) & Realisation Quantity (MT) Realisation (Rs. /MT) Product Q2FY06 Q2FY05 FY05 Q2FY06 Q2FY05 FY05 VSF 62,776 60,517 231,533 72,160 79,585 79,008 Caustic Soda * 41,585 38,651 163,111 21,884 17,979 18,836 Grey Cement * * 3.25 3.04 12.63 1,927 1,865 1,874 White Cement 81,557 69
Slide 50: Press Release Mumbai, October 26, 2005
Press Release Mumbai, October 26, 2005 GRASIM, THE ADITYA BIRLA GROUP’s FLAGSHIP COMPANY RESULTS FOR Q2 FY 2006 Consolidated Financial Performance: Rs. Crores Q2 Q2 % H1 H1 % FY06 FY05 Change FY06 FY05 Change Net Revenue 2,327.7 2,221.7 4.8 4,795.8 4,501.5 6.5 Gross Profit 407.0 467.6 (13.0) 990.8 9
Slide 51: Highlights of Grasim's operations
Highlights of Grasim’s operations: Q2FY06 Q2FY05 % Change FY 2005 Production - Viscose Staple Fibre M.T. 50,231 61,378 -18% 2,47,952 Cement Mn. M.T. 3.21 3.04 6% 12.44 White Cement M.T. 87,763 69,506 26% 3,15,368 Sponge Iron M.T. 1,25,944 202,976 -38% 7,80,341 Caustic Soda M.T. 42,766 38,765 10% 1,6
Slide 52: Cement Business
As a pro-active step towards becoming self-sufficient in pulp and thereby reinforcing its competitive edge in the cellulosic manmade fibre sector, the Company, along with the overseas group companies, plans to set up fully integrated operations at Laos. To this end, the Company would develop plantat
Slide 53: Sponge Iron Business
Sponge Iron Business The performance of the Sponge Iron business was seriously constrained due to a steep escalation in the cost of production by more than 50%, arising out of disruption in supply of natural gas, use of alternate fuels and a steep rise in key input costs, viz., natural gas, iron ore
Slide 54: Unaudited Financial Results for the Quarter Ended 30th September 2005
UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30th SEPTEMBER 2005 I. CONSOLIDATED RESULTS : Rs in Crores Three Months Three Months Six Months Six Months Full Year Ended 30th Ended 30th Ended 30th Ended 30th Ended 31st September 2005 September 2004 September 2005 September 2004 March 2005 ( Audit
Slide 55: Segment Reporting - Consolidated
-2- III. SEGMENT REPORTING - CONSOLIDATED Rs. in Crores Three Months Three Months Six Months Six Months Full Year ended 30th ended 30th ended 30th ended 30th ended 31st September 2005 September 2004 September 2005 September 2004 March 2005 ( Audited ) 1. SEGMENT REVENUE a Fibre & Pulp 513.70 528.17
Slide 56: Notes
-3- V. NOTES 1 Consolidated Financial Results have been prepared in accordance with Accounting Standard on Consolidated Financial Statements (AS-21) and Accounting Standard on Financial Reporting of Interest in Joint Ventures (AS-27) issued by the Institute of Chartered Accountants of India. 2 The o