Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q4 FY2010 Earnings Presentation
54 slides from Grasim Industries's earnings presentation, May 20, 2010
Slide 1: Grasim Industries Limited – Performance Review Q4FY10
Grasim Industries Limited A Cement and VSF Major Performance Review Q4FY10 20th May 2010
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: Contents
Contents Highlights Business Review Financial Performance Capex Plan Summary 3
Slide 4: Highlights – Cement Restructuring
Highlights – Cement Restructuring Demerger of Cement Business into Samruddhi Cement Ltd. (Samruddhi) All necessary approvals received including sanction from M.P. and Gujarat High Courts Scheme effective from appointed date of demerger i.e. 1st October, 2009 Grasim shareholders to get one eq
Slide 5: Highlights – Cement Restructuring
Highlights – Cement Restructuring Post Merger with Present Post Demerger UltraTech Effective 1st Oct.’ 2009 Effective 1st July 2010 UltraTech UltraTech UltraTech Grasim Grasim Grasim Public Public Public Shareholders Shareholders Shareholders Shareholders 35% Shareholders Shareholders 45% 45% Grasim
Slide 6: Highlights – Growth Plans
Highlights – Growth Plans VSF Greenfield VSF plant at Vilayat, Gujarat at an estimated investment of Rs.1,000 Crs. Cement 3.1 Mn. Tons Grinding unit at Kotputli, Rajasthan now operational, total capacity increased to 48.8 Mn. Tons Venturing into International Business - acquisition of Star Cem
Slide 7: Highlights – Quarter 4
Highlights – Quarter 4 New capacity and strong demand drive cement revenue Cement Volume Cement Realisation 9% 4% Rs./Ton 11 Mn Ton 10.36 4000 3,490 3,355 9.52 3000 9 2000 7 1000 0 5 Q4/09 Q4/10 Q4/09 Q4/10 VSF business posts an excellent performance on higher volumes and realisations VSF Volume
Slide 8: Business Review
Business Review Cement VSF Chemicals 8
Slide 9: Cement : Highlights
Cement : Highlights Quarter -4 Industry Scenario % Chg. 2009-10 2008-09 Cement demand grew by 10% in the quarter Grey Cement QoQ : Prices at peak in East, partially recovered Capacity Mn. TPA 48.75 41.55 17 - Samruddhi / Grasim 25.65 19.65 31 in South and improved in other regions - UltraTech 23
Slide 10: Cement : Highlights (Contd….)
Cement : Highlights (Contd….) Quarter -4 % Chg. Segment revenue up by 5% on higher 2009-10 2008-09 Net Revenue Rs. Crs. 4,162.1 3,956.1 5 volumes - Samruddhi / Grasim : Operating margins impacted due to Cement 2,046.0 1,861.9 10 Lower realisations on YoY basis White Cement 250.5 197.7 27 - Ult
Slide 11: Cement : Outlook
Cement : Outlook Cement demand expected to grow at 10% + for the next five years Indian economy to continue on strong growth trajectory Government initiatives to boost rural development, infrastructure and housing Surplus scenario may emerge after peak demand in Quarter 1 which is expected t
Slide 12: Viscose Staple Fibre : Highlights
Viscose Staple Fibre : Highlights Quarter - 4 Industry Scenario % Chg. Improved demand and realisations 2009-10 2008-09 Fast recovery for textiles in the emerging Capacity (TPA) 333,975 333,975 --- markets Production (MT) 81,081 59,913 35 Decline in global cotton production Sales Volumes (MT)
Slide 13: Viscose Staple Fibre : Highlights (Contd….)
Viscose Staple Fibre : Highlights (Contd….) Realisation up by 29% with improved VSF Volumes & Realisation demand, correcting sharp reduction in corresponding quarter Consequent increase in PBDIT and operating margins Sequentially, margins impacted due to higher input costs 13
Slide 14: Viscose Staple Fibre : Outlook
Viscose Staple Fibre : Outlook Demand outlook expected to be stable in the short to medium term Risk of substitution due to high VSF prices Margins likely to decline from current level Upward trend in pulp, sulphur and energy costs Large capacity expansions in China Production at Nagda p
Slide 15: Chemical : Highlights
Chemical : Highlights Quarter -4 Sales volume up by 15% on higher % Chg. 2009-10 2008-09 demand from end user industries Capacity (TPA) 258,000 258,000 - ECU realisation down by 20% due to fall Production (MT) 59,994 52,830 14 Sales Volumes (MT) 59,585 51,930 15 in caustic prices Net Revenue (Rs
Slide 16: Financial Performance
ADITYA BIRLA Financial Performance 16
Slide 17: Consolidated Revenue Growth
Consolidated Revenue Growth Quarter 4 Full Year Rs. Crs. 11% Rs. Crs. 9% Highest ever consolidated quarterly revenue Consolidated annual revenue crosses Rs.20,000 Crs. mark 17
Slide 18: Revenue Chart
Revenue Chart Rs. Crores Full Year Quarter -4 % Chg. Net Revenue % Chg. 2009-10 2008-09 2009-10 2008-09 4,221 7,019 Cement $ - 2,060 41 3,574 2,534 Viscose Staple Fibre 1,045 634 65 (6) 493 523 Chemical 120 123 (2) - 111 1,008 Sponge Iron (Sold on 22nd May 2009) - 157 - - 63 58 Others 16 12 - - (149
Slide 19: Consolidated Revenue Mix
Consolidated Revenue Mix Q4FY10 Q4FY09 Cement VSF & Chemical Sponge Iron Textile Others 19
Slide 20: Financial Performance – Quarter 4
Financial Performance – Quarter 4 * Without giving impact of cement demerger 20
Slide 21: Financial Performance – Full Year
Financial Performance – Full Year * Without giving impact of cement demerger 21
Slide 22: Consolidated PBIDT Growth
Consolidated PBIDT Growth Quarter 4 Full Year 13% 32% Rs. Crs. Rs. Crs. Highest ever annual PBIDT 22
Slide 23: PBIDT – Chart
PBIDT – Chart Rs. Crores Full Year Quarter -4 % Chg. PBIDT % Chg. 2009-10 2008-09 2009-10 2008-09 1,423 1,911 Cement $ - 637 156 1,315 514 Viscose Staple Fibre 363 108 236 (20) 125 155 Chemical 25 28 (12) (39) 135 Sponge Iron (Sold on 22nd May 2009) - (18) 148 130 Others 8 (3) 2,972 2,844 Standalone
Slide 24: Net Profit
Net Profit Rs. Crores Twelve Months Quarter -4 Net Profit 2009-10 2008-09 % 2009-10 2008-09 Grasim Standalone $ 1,756 1,648 289 385 (Before EO Gain - As reported) 1,095 978 UltraTech Cement Ltd. 232 312 12% 601 537 - Grasim's Share 54.78% 127 171 26% 618 - Samruddhi Cement Ltd. $ 312 - 401 - - Grasi
Slide 25: Grasim Financials
Grasim Financials Standalone Consolidated Strong Balance sheet FY FY FY FY (Rs. Crores) 2008-09 2009-10 2008-09 2009-10 Net worth at $2.8 Bn. (Rs.12,525 Crs.) Net Worth 9,478 7,145 11,558 12,525 Capital Employed at $5.3 Bn. (Rs.23,884 Crs.) Debt 3,395 1,038 5,893 5,599 Debt-equity at 0.34 Ca
Slide 26: Capex
ADITYA BIRLA GRASIM Capex 26
Slide 27: Capex plan
Capex plan Rs. Crores Cash Outflow Net Capex to be spent FY11 FY12 & Onward VSF Business - Vilayat Project 1,000 - Other Capex 323 Chemical Business and Misc. Capex 64 Standalone Capex 1,387 481 906 Cement Subsidiaries – Projects’ residual capex 870 - Other Capex 3,605 Total Capex 5,862 3,414 2,448
Slide 28: Capex plan
Capex plan Rs. Crores Cash Outflow Total Spent Net Capex Cost upto last to be spend FY12 & year FY11 Onward Cement Subsidiaries 4,753 278 4,475 2,933 1,542 - Residual Capex of expansion projects 870 -- 870 - Material Evacuation and Logistic Infrastructure 1,351 137 1,214 - Thermal Power Plant (25 MW
Slide 29: Summary
ADITYA BIRLA GRASIM Summary 29
Slide 30: Summary
Summary Grasim – A Cement and VSF major Leadership position in both the flagship businesses Strong competitive edge Global size operations Leading global player in VSF Integrated business model from plantation to fibre Continued focus on increasing capacities and creating differentiati
Slide 31: Plant Locations– Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bathinda(G) Panipat Bhiwani Dadri T Grey Cement plants Kotputli Aligarh Grinding Units (G) Jodhpur T Malanpur Shambhupura B Bulk Cement Terminals Jawad Bharuch Durgapur(G) UltraTech Cement Plants F Jafrabad Magdalla (G) UltraTech Grinding Units (G) F C Pipa
Slide 32: Annexure
Grasim Industries Limited Annexure
Slide 33: Annexure
Annexure Consolidated Financial Performance Standalone Financial Performance Consolidated and Standalone Financial Consolidated and Standalone Profitability Businesswise Performance Cement Summary VSF Summary Chemical Summary 34
Slide 34: Consolidated Financial Performance
Consolidated Financial Performance (Rs. Crores) Quarter -4 Full Year % Chg. % Chg. 2009-10 2008-09 2009-10 2008-09 Net Turnover & Op. Income 5,475.0 4,941.8 11 20,195.4 18,496.0 9 Other Income 66.7 41.9 59 273.6 247.4 11 PBIDT 1,500.1 1,327.4 13 6,322.3 4,779.1 32 Interest 89.8 71.2 26 334.6 306.7 9
Slide 35: Standalone Financial Performance
Standalone Financial Performance (Rs. Crores) Quarter -4 Full Year 2009-10 2008-09 2009-10 2008-09 Net Turnover & Op. Income 1,140.9 2,940.1 8,312.6 10,965.1 Other Income 55.3 29.3 235.2 214.1 PBIDT 396.2 752.5 2,972.3 2,844.5 Interest 11.2 37.2 120.4 139.7 Gross Profit 385.0 715.3 2,851.9 2,704.8 D
Slide 36: Financial Snapshot
Financial Snapshot Standalone Consolidated March March March March March March March March (Rs. Crores) 2007 2008 2009 2010 * 2007 2008 2009 2010 Gross Block $ 7,974 10,615 12,280 3,145 14,485 19,262 21,044 21,717 $ Net Block 4,597 7,054 8,308 1,829 8,472 12,922 14,219 14,553 Goodwill 1,844 1,991 2,
Slide 37: Profitability Snapshot
Profitability Snapshot Standalone Consolidated (Rs. Crores) 2006-07 2007-08 2008-09 2009-10 * 2006-07 2007-08 2008-09 2009-10 Gross Turnover 9,573 11,552 12,097 8,842 15,674 19,112 20,325 21,710 Net Turnover & Op. Income 8,644 10,325 10,965 8,313 14,142 17,141 18,496 20,195 PBIDT 2,619 3,424 2,844 2
Slide 38: Businesswise Performance – Quarter 4
Businesswise Performance – Quarter 4 Quarter -4 Consolidated Rs. Crores ROAvCE (%) Business Revenue PBIDT PBIDT Margin (%) PBIT Capital Employed (PBIT basis) 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 Cement * 4,162 3,956 1,070 1,203 25.6 30.3 862
Slide 39: Businesswise Performance – Twelve Months
Businesswise Performance – Twelve Months Full Year Consolidated Rs. Crores ROAvCE (%) Business Revenue PBIDT PBIDT Margin (%) PBIT Capital Employed (PBIT basis) 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 Cement * 15,476 13,512 4,767 3,724 30.7 27.
Slide 40: Cement : Summary
Cement : Summary Quarter -4 Full Year % Chg. % Chg. 2009-10 2008-09 2009-10 2008-09 Grey Cement Capacity Mn. TPA 48.75 41.55 17 48.75 41.55 17 - Samruddhi / Grasim 25.65 19.65 31 25.65 19.65 31 - UltraTech 23.10 21.90 5 23.10 21.90 5 Production Mn. MT 10.24 9.28 10 37.02 32.18 15 - Samruddhi / Grasi
Slide 41: Cement : Summary Contd…
Cement : Summary Contd… Quarter -4 Full Year % Chg. % Chg. 2009-10 2008-09 2009-10 2008-09 Net Revenue Rs. Crs. 4,162.1 3,956.1 5 15,475.6 13,512.1 15 - Samruddhi / Grasim : Cement 2,046.0 1,861.9 10 7,709.1 6,364.4 21 White Cement 250.5 197.7 27 840.3 655.0 28 - UltraTech - Cement 1,944.6 1,928.4 1
Slide 42: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary Quarter -4 Full Year % Chg. % Chg. 2009-10 2008-09 2009-10 2008-09 Capacity TPA 333,975 333,975 - 333,975 333,975 - Production MT 81,081 59,913 35 302,092 232,745 30 Sales Volumes MT 85,714 65,409 31 308,431 238,463 29 Net Revenue Rs. Crs. 1,044.7 634.2 65 3,574.2 2,53
Slide 43: Chemical : Summary
Chemical : Summary Quarter -4 Full Year % Chg. % Chg. 2009-10 2008-09 2009-10 2008-09 Capacity TPA 258,000 258,000 -- 258,000 258,000 -- Production MT 59,994 52,830 14 229,801 207,226 11 Sales Volumes MT 59,585 51,930 15 229,876 207,520 11 Net Revenue Rs. Crs. 120.1 122.9 (2) 492.8 522.5 (6) Avg. Re
Slide 44: Press Release: Grasim reports excellent performance for Q4 FY2010
Press Release Mumbai, 20th May, 2010 GRASIM REPORTS EXCELLENT PERFORMANCE FOR Q4 FY2010 Consolidated Net Revenue Rs.5,475 Crs. 11% Consolidated Net Profit As Reported Rs.654 Crs. 15% Like to Like Rs.763 Crs. 34% Consolidated Financial Performance: Grasim Industries Limited, an Aditya Birla Group Com
Slide 45: Dividend and highlights of consolidated operations
b) The Extraordinary item of Rs.336 crores reflects the profit on the sale of Vikram Ispat, the sponge iron unit of the Company. Dividend The Board of Directors of Grasim has recommended a dividend of Rs.30 per share, which is the same as per last year. Additionally, the Board of Directors of SCL, h
Slide 46: Brownfield expansion and cement outlook
The Company is examining various options and has a target to start Brownfield expansions of 10 million tons latest by Q4FY11 after the completion of the detailed study. Cement Outlook Industry demand is likely to grow by over 10%. The Indian economy will continue its strong growth trajectory and dri
Slide 47: Stand-alone Results
Stand-alone Results Stand-alone results also are impressive with better performance of VSF and Cement businesses. Quarter ended Year ended 31.03.09 31.03.10 % 31.03.10 * 31.03.09 31.03.10 % 31.03.10 * (Before Change (As Reported, (Before Change (As Reported, demerger) after demerger demerger) after
Slide 48: Audited Financial Results for the Year Ended 31st March 2010
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH 2010 I. CONSOLIDATED RESULTS : Rs in Crores Particulars Three Months Three Months Year Year Ended Ended Ended Ended st st st st 31 Mar. '10 31 Mar. '09 31 Mar. '10 31 Mar. '09 ( Audited ) ( Audited ) Net Sales / Income from Operations 5,385.62
Slide 49: Standalone Results
-2- II. STANDALONE RESULTS : Rs. in Crores Particulars Three Months Three Months Three Months Year Year Year Ended Ended Ended Ended Ended Ended st st st st st st 31 Mar. '10 31 Mar.'10 31 Mar. '09 31 Mar. '10 31 Mar.'10 31 Mar. '09 # ( Audited ) # ( Audited ) Net Sales / Income from Operations 1,10
Slide 50: Segment Reporting - Consolidated
-3- III. SEGMENT REPORTING - CONSOLIDATED Rs. in Crores Particulars Three Months Three Months Year Year Ended Ended Ended Ended st st st st 31 Mar. '10 31 Mar. '09 31 Mar. '10 31 Mar. '09 ( Audited ) ( Audited ) 1. SEGMENT REVENUE a Viscose Staple Fibre and Wood Pulp 1,145.77 687.88 3,940.18 2,914.6
Slide 51: Segment Reporting - Standalone
-4- IV. SEGMENT REPORTING - STANDALONE Rs. in Crores Particulars Three Months Three Months Year Year Ended Ended Ended Ended st st st st 31 Mar. '10 31 Mar. '09 31 Mar. '10 31 Mar. '09 ( Audited ) ( Audited ) 1. SEGMENT REVENUE a Viscose Staple Fibre 1,044.65 634.17 3,574.15 2,533.60 b Cement - Grey
Slide 52: Notes
-5- V. NOTES 1. The Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 to demerge the Cement Business of the Company to it's wholly owned subsidiary, Samruddhi Cement Limited (SCL), has become effective from 1st October, 2009 (the Appointed Date) on completion of the necessar
Slide 53: Statement of Assets and Liabilities
-6- 8. The Board of Directors has recommended a dividend of Rs.30 per share aggregating to Rs.309 Crs. (including dividend tax). 9. The status of investors' complaints is as under : Opening - 0, Received - 7, Resolved - 7, Closing - 0 10. Previous periods' figures have been regrouped / rearranged wh
Slide 54: Thank You
ADITYA BIRLA GRASIM Thank You