Carborundum Universal Limited · NSE:CARBORUNIV
Carborundum Universal — Investor Presentation (June 2013)
83 slides from Carborundum Universal's investor presentation, Jun 6, 2013
Slide 1: Investor Presentation
—_— | INVESTOR PRESENTATION
Slide 2: Disclaimer
DISCLAIMER The communication may contain statements relating to future business developments, company’s performance and economic performance that may p y constitute ‘forward looking g statements’. While these forward looking statements represent the company’s judgments and future expectations, a num
Slide 3: Murugappa Group: An Overview
Murugappa Group An Overview CUMI @ 2013 3
Slide 4: Murugappa Group
MURUGAPPA GROUP INR 225 Billion Conglomerate One off the O th largest l t family f il promoted, t d professionally managed, diversified business groups CUMI @ 2013 4
Slide 5: The Philosophy We Cherish
Th Philosophy The Phil h we cherish h i h The fundamental principle of economic activity is that No man you transact with will lose; then you shall not. CUMI @ 2013 5
Slide 6: Murugappa Group Today
Murugappa Group Today ~ INR 225 Billion Conglomerate One of the largest g family y promoted, p , professionally p y managed, g , diversified business Groups… CUMI @ 2013 6
Slide 7: The Spirit of the Murugappa Group
The Spirit of the Murugappa Group CUMI @ 2013 7
Slide 8: Corporate Social Responsibility: AMM Foundation
Corporate Social Responsibility AMM Foundation 1% of PAT from Group companies to AMM Foundation 4 Schools, a polytechnic; approximately 11,000 students 4 Hospitals - over 8,00,000 patients treated last year Scholarships for needy meritorious Students Research centre for technology for the rural
Slide 9: Carborundum Universal
Carborundum Universal CUMI @ 2013 9
Slide 10: Birth Of CUMI
Birth Of CUMI • Incorporated as a joint venture 1954 between Carborundum Company USA, Universal Grinding Wheel Company, UK and the Murugappa, CARBORUNDUM UNIVERSAL India USA UK • Acquired a coated abrasives facility from Ajax products Pvt Ltd • Bonded B d d abrasives b i f ilit sett up in facility i
Slide 11: Business Portfolio
Business Portfolio Sales Share PBIT Share CUMI – FY 13 Revenue :Rs. 19.4 bn EBIT :Rs. 1.8 bn Capital Employed :Rs. 15.8 bn Abrasives Ceramics Electro-minerals Revenue : Rs 8.1 bn Revenue : Rs 5.0 bn Revenue : Rs 6.7 bn EBIT : Rs 0.8 bn EBIT : Rs 0.8 bn EBIT : Rs 0.2 bn Capital Em
Slide 12: CUMI Consolidated
CUMI Consolidated 25 F Factories t i 7C Countries ti Over 4750 plus Employees. 2100 plus employees outside India Consolidated Gross Sales Rs 2042 cr (FY 12‐13 ) Market Cap ~ Rs 2250 cr. Products being sold in 43 countries CUMI @ 2013 12
Slide 13: CUMI Worldwide - By Business Verticals
CUMI World Wide- By Business Verticals RUSSIA Abrasives CANADA Ceramics Electro minerals Abrasives Ceramics CHINA Abrasives USA Abrasives THAILAND Ceramics Abrasives S. AFRICA EUROPE UAE INDIA AUSTRALIA TRI Foskor Zirconia Electro Minerals Electro Minerals Abrasives Abrasives Abrasives Ceramics Elec
Slide 14: Our Vision/Mission
OUR VISION/MISSION VIISION We will be an Admired Company in Abrasives & Technical Ceramics, driven by Innovation, Innovation to create Stakeholder Wealth. SSION Become one of the largest Abrasives (including Super Abrasives) / Technical MIS Ceramics in the Company in the World by 2020. CUMI @ 2013 1
Slide 15: Abrasives
@ murugappa ABRASIVES cumi@2013 <i>
Slide 16: Abrasives – Product Range
ABRASIVES – Product Range Thin wheels A Strong Regional Coated Abrasives Player with the complete Range of products. Bonded Super Abrasives Construction Products Metal Working Fluids Power tools CUMI @ 2013 16
Slide 17: Abrasives
ABRASIVES • Abrasives are made of hard hard, tough and wear resistant materials used to shape or finish a work-piece. Abrasives are used for diverse applications ranging from material removal, polishing and finishing in multiple industries like automobile, auto-ancillaries, fabrication, construction
Slide 18: Abrasives - Application
ABRASIVES - Application Bonded Products and other applications …. For Rough Grinding and Cutting applications:- General Engineering Fabrication Foundry and other applications …. Rolling Mills Projects Thin Wheels and other applications …. Coated Products CUMI @ 2013 18
Slide 19: Abrasives - Application
ABRASIVES - Application and other applications …. Wood working Metal working Construction Power Tools Rotary Tools Creep Feed grinding Cutting g Tool industries Notch and Slot grinding Printing and Paper Roll grinding Tungsten Carbide Roll grinding and other applications …. Ceramic and Tile grinding
Slide 20: Abrasives - Market & Strategy
ABRASIVES - Market & Strategy GLOBAL Market – 12.7 Billion $ India – $ 0.5 billion Region wise Product wise • Our Sales in FY 12 is $ 166 million ; Market Share ~ 1-2% globally • In India, our share stands at 23-25%, highest being in Bonded @ 38-40% • Abrasive being a ‘LOCAL’ business. We are curren
Slide 21: Abrasives Marketing Network
Abrasives Marketing Network Plants Plants Warehouses Institutions We have ~ 500 dealers Dealers We have ~ 1000 sub dealers Sales Mix is 40% institutions, 60% through channels to retail customers Sub Dealer Retail Customer Small Institutions CUMI @ 2013 21
Slide 22: Abrasives – Facilities
ABRASIVES – Facilities Manufacturing Marketing & Distribution Thiruvottriyur, Chennai Hosur, Tamil Nadu Sriperumbudur, Chennai Uttarkhand CUMI Middle East dia Ind CUMI Canada VAW, Russia CACCL, China Overseas Venlo Netherlands Wendt, India Wendt, Thailand/CME Sterling Abrasives, Gujarat Subs / JV’s
Slide 23: Abrasives Industry Value Chain
ABRASIVES INDUSTRY VALUE CHAIN Input Materials Manufacturing Marketing Sales and Service Internal Process Application pp Brand and access to key Capability Engineering Distribution inputs. New input Customer Low cost New Product material t i l f i facing locations Development development Organizatio
Slide 24: Abrasives – Performance
ABRASIVES – Performance Rs. Mil -2.5% Net Sales - Annual +18.7% +26.7% + 6.4% +3.6% + 29% + 24.7% 24 % % sales in India 92% 89% 80% 74% 83% 80% 79% 80% CUMI @ 2013 24
Slide 25: Industrial Ceramics
INDUSTRIAL CERAMICS CUMI @ 2013 25
Slide 26: Industrial Ceramics Product Range
INDUSTRIAL CERAMICS Product Range Wear Protection IC Engineered Metallized Ceramics Ceramics CUMI @ 2013 26
Slide 27: Industrial Ceramics
INDUSTRIAL CERAMICS • A ceramic is an inorganic, non metallic solid prepared by the action of heat and subsequent cooling CUMI is into Alumina based Industrial ceramics. cooling. ceramics There are broadly three product categories, which CUMI is into – Wear Resistant products (Tiles): These are weld
Slide 28: Industrial Ceramics Applications
INDUSTRIAL CERAMICS Applications Power P Generation G ti Coal Mill (Inner Cone, Multiport Outlet Valve, Mill Discharge Valve, Mill Inner Dia Lining, Orifices, Ventury Vanes) Bends (Tranisitions & Y- Pieces) Ash Handling g ((Bends & Slurry y Pipes) p ) Wear Resistant Products Cement Industr
Slide 29: Industrial Ceramics – Market & Our Standing
INDUSTRIAL CERAMICS – Market & Our Standing GLOBAL Market for Advanced CERAMICS Current Standing Point • Out of the total $ 13 billion market, Alumina based Ceramics • Over 6800 tons tiles and 0.8 million cylinders material is around ~ 5 billion. capacity in India Alumina based Our Market Million $
Slide 30: Industrial Ceramics – Future Strategy
INDUSTRIAL CERAMICS – Future Strategy • Currently we are in the business of Alumina based Ceramics. We constantly look at Products Competing Criteria extending g offerings g in that range g and target g newer industries. Technology, Process Metz Cylinders Capability chain • Move up the Value Chain c
Slide 31: Industrial Ceramics Facility
INDUSTRIAL CERAMICS Facility We have World Class facility based out of HOSUR, Tamil Nadu We have one of the few six sigma ceramic operations in the World CUMI @ 2013 31
Slide 32: Industrial Ceramics Industry Value Chain
INDUSTRIAL CERAMICS INDUSTRY VALUE CHAIN Design and Sales and Input Materials Manufacturing Engineering Installation Customer Internal access Application pp Process facing to key inputs. Knowledge Capability Organization EPC New input Installation / Contractors / material t i l S l Scale S Service i
Slide 33: Super Refractories
SUPER REFRACTORIES CUMI @ 2013 33
Slide 34: Super Refractories – Product Range
SUPER REFRACTORIES– Product Range CUMI Refractory Products Fired products Monolithics Precast Shapes Conventional Silicon Carbide Dense (CUMIFRAC) C t bl Castables (CUMICRETE) Insulation Nitride bonded Castables Silicon Carbide (CUMICRETE Li ht Weight) Light W i ht) Low cement Mulite (CUMILITE) cast
Slide 35: Super Refractories
SUPER REFRACTORIES • R f t Refractory iis any material t i l th thatt can withstand ith t d hi h ttemperature. high t CUMI iis into High Alumina, Silicon Carbide, Zirconia based refractories which are capable to withstand very high temperature:- Fired Refractories: Is a block of refractory ceramic
Slide 36: Super Refractories - Application
SUPER REFRACTORIES - Application Ceramic Industries Chemical Process Industries Non – Ferrous Insulators Carbon Black Aluminum Sanitaryware & Tableware Fertilizer Copper Abrasives Petro-Chem. / Refinery Zinc Wall Tiles Refractories Cement Iron & Steel Electro Ceramics Power Generation Sponge Iron (D
Slide 37: Refractory Market
REFRACTORY MARKET World Refractory Demand ($30 billion) by World Refractory Demand ($30 billion) by Regions Industry Global Refractory market - $30 Billion Global demand for refractories is projected to rise 4-5 percent per year CUMI @ 2013 37
Slide 38: Super Refractories – Market & Strategy
SUPER REFRACTORIES – Market & Strategy Current Standing Point • The Global size of Refractory business could be estimated to the extent th t t off ~ $ 30 billion billi • Over 99,500 500 tons Fired capacity in India and • Refractory is a ‘LOCAL’ business. 90% of our sales are in Russia. Around 32,000
Slide 39: Super Refractories
SUPER REFRACTORIES Ability to manufacture complex shapes and meet all surge requirements CUMI @ 2013 39
Slide 40: Refractory Industry Value Chain
REFRACTORY INDUSTRY VALUE CHAIN Input Design and Sales and Manufacturing Materials Engineering Installation Low cost Customer Application Process input / facing Knowledge Capability access Organization Installation / Energy / OE Scale Service Power Approvals capability Plant Engineering Low cost CUM
Slide 41: Ceramics – Performance
CERAMICS (Industrial Ceramics and Refractories)- Performance Rs. Mil Net Sales - Annual +9 3% +9.3% + 31% + 21% + 11.1% + 17.4% + 26.8% +20.4% % sales l iin IIndia di 54% 54% 64% 64% 62% 67% 60% 53% CUMI @ 2013 41
Slide 42: Electro Minerals
ELECTRO MINERALS CUMI @ 2013 42
Slide 43: Electrominerals – Product Range
ELECTROMINERALS – Product Range Brown Fused Alumina White Fused Alumina Silicon carbide Zirconia Specialty minerals Bonded Refractory Silicon wafer Diesel Abrasives slicing Particulate Filter Coated Metallurgical Investment Floor Abrasives casting Laminates Surface Engineering Refractories Energy &
Slide 44: Electrominerals - Application
ELECTROMINERALS - Application Refractory Bonded Abrasives Coated Abrasives Dermabrasion Semi Conductor Lapping Laminates Pressure Blasting Photovoltaic Plasma Spray Particulate Filters Metalurgical CUMI @ 2013 44
Slide 45: Electrominerals – Facility
ELECTROMINERALS – Facility 1 2 1 Bauxite mines & calcination 3 4 2 Silicon Sili carbide, bid 5400 ttpa 3 Fine powders, 11,400 tpa 5 4 Fused alumina ~22000 tpa 5 12 MW Hydel yde po power, e , Maniyar a ya CUMI @ 2013 45
Slide 46: Electrominerals – Overseas Facility
ELECTROMINERALS – Overseas Facility VAW - Russia VAW Russia – Silicon Carbide, 70000 tpa Foskor Zirconia – Fused Thukela Refractory Foskor Zirconia Zirconia, 10000 tpa TRI – 22k tpa fusion facility CUMI @ 2013 46
Slide 47: Electro Minerals – Global Capacity & Our Standing
ELECTRO MINERALS – Global Capacity & Our Standing Global Capacity and Our Share Current Standing Point • Fused Zirconia • Established leadership in Russian and Global capacity of Fused Zirconia ~ 75k tons per Indian market annum annum. With 10k tons per annum, we are the third largest in the wor
Slide 48: Electro Minerals – Future Strategy
ELECTRO MINERALS – Future Strategy Innovation Value Pyramid CUMI @ 2013 48
Slide 49: Electro Minerals – Future Strategy
ELECTRO MINERALS – Future Strategy I Innovation ti Value V l Pyramid P id C11 Nano synthesis Level 4 – Nano Powders • Alternative application in SiC apart from Ph t Photovoltaic lt i C10 • Synthetic Brown Alumina in the market C9 Level 3 – Sol gel Ultrafine Ceramics Sub Chemical powder micron powder
Slide 50: Electro Minerals Industry Value Chain
ELECTRO MINERALS INDUSTRY VALUE CHAIN Product Input Materials Technology Manufacturing Development Access to minerals,, pet p Process Capacity p y/ Customer coke, cell Capability Scale Partnership grade Alumina Development Low cost L Low costt Power P tto use Alternate Alt t R&D Location Inputs Loca
Slide 51: Electro Minerals - Performance
ELECTRO MINERALS - Performance N tS Net Sales l - Annual A l Rs Mil Rs. -8% +22% +25% +13% +97% 9 % +15.9% +21.7% CUMI @ 2013 51
Slide 52: CUMI Growth Paradigm
CUMI Growth Paradigm ked y network ally driven n Externally -Interna -E New Materials CUMI @ 2013 52
Slide 53: Competency Based on a Wide Technology Canvas
Competency based on having a very wide Technology canvas Products and Technologies Products Key Properties Applications • Grinding Wheels • Hardness • Abrasives/Grains – Material cutting and removal • Coated C t dP Products d t • Material removal • Fused Grains • Refractories • Thermal resistance •
Slide 54: Technology Platforms
Technology Platforms 40 Technology Platforms CUMI @ 2013 54
Slide 55: Financials
murugappa FINANCIALS CUMI @ 2013 =>
Slide 56: Revenue Growth
Revenue Growth 19685 19424 16007 +23% -1.3% 12823 11930+7.5% +25% 9093 +31% Rs. In Million 6210 +46% 06‐07 07‐08 08‐09 09‐10 10‐11 11‐12 12‐13 CUMI @ 2013 56
Slide 57: International Revenue Share (%)
International Revenue share (%) 60 48 51 50 45 44 44 40 31 ge Percentag 30 20 13 10 0 06‐07 07‐08 08‐09 09‐10 10‐11 11‐12 12‐13 CUMI @ 2013 57
Slide 58: Income Statement
Income Statement Income Statement Rs Million Rs. 2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 Net Sales 6210 9093 11930 12823 16007 19685 19424 Growth % 46% 32% 7.5% 25% 33% -1% EBITDA 1390 1553 1988 2435 3130 4016 2502 EBITDA % 22.4% 17.1% 16.7% 19.0% 19.6% 20.4% 12.9% Depreciation 195 3
Slide 59: Segmental Performance
Segmental Performance Net Sales (Rs. Mil) 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Abrasives 3880 5006 5325 5518 6990 8304 8093 Ceramics 1734 2199 2582 2871 3476 4565 4991 Electro minerals 830 2153 4245 4789 5979 7272 6688 Inter segment -351 351 -382 382 -370 370 -596 596 -704 704 -77
Slide 60: Consolidated Segment Trend
Consolidated Segment Trend CUMI @ 2013 60
Slide 61: Segmental Performance
Segmental Performance -2.5% Sales- Rs. Mil Abrasives PBIT Margin Abrasives 18 7% +18.7% +26.7% +3.6% + 29% + 6.4% + 24.7% Ceramics Ceramics + 9.3% + 31% + 21% + 11.1% + 17.4% + 26.8% +20.4% Electro minerals Electo Minerals +22% -8% +25% +13% +97% +21.7% +15.9% CUMI @ 2013 61
Slide 62: Performance Ratios
Performance Ratios EBITDA % 19.6 20.4 22.4 19.0 17.1 16.7 12.1 06‐07 07‐08 08‐09 09‐10 10‐11 11‐12 12‐13 PBIT % 19.2 17.5 16 4 16.4 15.8 13.8 13.7 9.2 06‐07 07‐08 08‐09 09‐10 10‐11 11‐12 12‐13 CUMI @ 2013 62
Slide 63: Performance Ratios
Performance Ratios Debt Equity Ratio 1.02 0.85 0.74 0.57 0 46 0.46 0 43 0.43 0 37 0.37 06‐07 07‐08 08‐09 09‐10 10‐11 11‐12 12‐13 Asset Turns ROCE 1.40 1.31 1.34 1.71 1.36 27.1 1.18 1.24 24.6 17.8 21.8 16.3 18.1 12.1 06‐07 07‐08 08‐09 09‐10 10‐11 11‐12 12‐13 06‐07 07‐08 08‐09 09‐10 10‐11 11‐12 12‐13
Slide 64: Capex for 12-13 – Key Investments
Capex for 12-13 – Key Investments Ultra Thin Wheels Plant in UTK ~Rs.40 Crs. Abrasives VAW Debottlenecking in Abrasives Electro-minerals CUMI blue capacity expansion FZL capacity increase ~Rs.110 Crs. VAW Maintenance and Debottlenecking Ceramics & Expansion of NbSiC capacity Refractory T
Slide 65: New Projects – Foskor Tilt Project
New Projects – Foskor Tilt Project Bubble Zirconia
Slide 66: Production Process
Production Process
Slide 67: Applications & Markets
Applications & Markets Refractory (80%) Specialty chemicals (5%) Applications Fused Cast material for Glass Industry (10%) addressed with Titanium Investment Casting (5%) existing product range Magnesia g & Calcia Double Fused pproducts ffor Refractories f Friction – Brake Linings Pigm
Slide 68: Applications & Markets - Bubble Zr
Applications & Markets- Bubble Zr Pigments Glass and Ceramics Abrasives CUMI @ 2013 68
Slide 69: New Projects – Alumina Zirconia Project
New Projects – Alumina Zirconia Project Only Alumina Zirconia plant in India Fi t pour off Alumina First Al i Zirconia Zi i CUMI @ 2013 69
Slide 70: New Projects – Lite Ceramics Bubble
New Projects – Lite ceramics Bubble C R I L bubble project : Only bubble refractory plant in the world CUMI @ 2013 70
Slide 71: Barmag Commissioned to Address the Refractory Market
Barmag commissioned to address the Refractory Market CUMI @ 2013 71
Slide 72: Thukhela Refractories
Thukhela Refractories W ki on lif Working life b beyond d RHI New range of BFA, WFA at Thukhela (TRI ) CUMI @ 2013 72
Slide 73: Volzhsky Abrasives
Volzhsky Abrasives Then Then.. Now .. Cleaner, Greener Volzhsky Abrasives CUMI @ 2013 73
Slide 74: Technology Transfer Signing Agreement
Technology Transfer Signing Agreement Technology Transfer Agreement Signing with Sheffield's CUMI @ 2013 74
Slide 75: Investor Friendly Company
Investor Friendly Company • 42.2% held by the Murugappa Group. 33% held by FII’s, MF, PE, Insurance Cos • 59 y years of unbroken track record of Profit and Dividend • Six Bonus Issues since inception – 89% of the current Equity is by way of capitalization of Reserves • Growth in the last 5 years ent
Slide 76: Market Performance Ratios
Market Performance Ratios Di id d Payout Dividend P t Ratios R ti CUMI @ 2013 76
Slide 77: Exhibition / Conference
Exhibition / Conference Refractory Exhibition in Russia - Mirstekla Glasstech Asia – Bangkok CUMI @ 2013 77
Slide 78: Exhibition / Conference
Exhibition / Conference NMD Conference, Jamshedpur, November 2012 CUMI @ 2013 78
Slide 79: CUMI Skill Development Center
CUMI Skill Development Center In order to develop alternative to contract /flexi system and ensure ready availability of Skilled Workmen, CUMI launched Skill development C t in Center i Hosur H CUMI @ 2013 79
Slide 80: Accolades
Accolades CUMI team winning i i the h S Southern h CUMI team winning i i theh IInternational i l Region Kaizen Competitions by CII. Competitions of Quality Circle Forum. CUMI has won the Safety Award of CUMI team winning the M.K.K. Nair Department of Factories, Government of K l ffor the Kerala th y
Slide 81: Corporate Social Responsibility
Corporate Social Responsibility Tie up with ANBALAYA SCHOOL (A school for physically challenged children located at Thiruvottiyur) - C d ti Free Conducting F Medical M di l Camp and Participation in World Disabled Day CUMI @ 2013 81
Slide 82: Sustainability Index
Sustainability Index Threshold of Vulnerability We are significantly above the threshold of vulnerability on all. High level of sustainability. CUMI @ 2013 82
Slide 83: CUMI @ 2013
oh murugappa CUMI @ 2013 <=>
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