Grasim Industries Ltd. · NSE:GRASIM

Grasim Industries — Q4 FY2016-17 Earnings Presentation

38 slides from Grasim Industries's earnings presentation, May 19, 2017

  1. Slide 1: Quarterly Performance Review Quarter 4: 2016-17

    Quarterly Performance Review Quarter 4 : 2016-17 Mumbai, 19th May, 2017 Grasim Industries Limited Building, Consolidating, Growing 1

  2. Slide 2: Contents

    Contents  Highlights 3 -6  Financial Performance 7 - 12  Business Performance 14 - 19  Capex Plan 21  Merger of ABNL 23 - 24  Business Outlook 25 - 26 Glossary VSF : Viscose Staple Fiber, MT : Metric Ton, TPA : Tons Per Annum, YoY: Year on Year Comparison, CY : Current Year, LY : Last Year, YT

  3. Slide 3: Indian Economy

    Indian Economy  Indian economy to be the fastest growing economy in the world in FY18  IMF forecasts India’s growth at 7.2% in FY18 (7.1% advanced estimates in FY17)  Impact of demonetization on the economy seems to be over  Manufacturing PMI increases to 5 months high of 52.5 in March’17  Dome

  4. Slide 4: Highlights – Quarter 4: VSF Business

    Highlights – Quarter 4 VSF Business Leading Global Player Stellar performance on the back of strong sales volume supported by firm prices in the international markets Sales Volume Revenue EBITDA 133K Tons ` 1,945 Cr. ` 345 Cr. Up 2% YoY Up 12% YoY Up 30% YoY EBITDA ROAvCE 1439 26% 923 14% 464 8% FY1

  5. Slide 5: Highlights – Quarter 4: Chemical Business

    Highlights – Quarter 4 Chemical Business Largest Chlor-Alkali Producer in India - Increased chlorine supply upon commencement of new capacity in industry during the year limited Caustic production - Continued focus on Chlorine Value Added Products yielding results (Volume up 33%) Caustic Sales Volum

  6. Slide 6: Highlights – Quarter 4: Cement Business

    Highlights – Quarter 4 Cement Business India’s Largest Cement Company - Possibly the weakest fourth quarter in years, normally the best quarter for Cement industry - UltraTech’s domestic capacity utilisation at 82% vs. < 70% that of Industry Sales Volume Revenue EBITDA 14.7 Mn. Tons ` 7,020 Cr. ` 1,

  7. Slide 7: Financial Performance – Quarter 4

    Financial Performance – Quarter 4 Standalone ` Cr. Net Revenue EBITDA Net Profit 12% 49% 2,861 26% 2,546 315 556 * 440 212 Q4FY16 Q4FY17 Q4FY16 Q4FY17 Q4FY16 Q4FY17 Consolidated Net Revenue EBITDA Net Profit 6% 4% 2% 9,458 9,980 2,142 2,051 758 * 775 Q4FY16 Q4FY17 Q4FY16 Q4FY17 Q4FY16 Q4FY17 All-Rou

  8. Slide 8: Performance in Perspective

    Performance in Perspective  VSF Business _  Sales volume up by 25% over last two financial years with speedy ramp up of Vilayat project  Increase in share of specialty fibre, leveraging brand Liva to increase usage of VSF in domestic market  Continuous improvement in operating efficiencies leadi

  9. Slide 9: FY17: Robust Growth Continues at Standalone

    FY17 : Robust Growth Continues at Standalone….. Standalone ` Cr. EBITDA Net Profit Cash Profit 2629 1560 2042 1851 1000 1635 1013 556 976 FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 9

  10. Slide 10: As Well as at Consolidated level

    ….. As Well as at Consolidated level Consolidated ` Cr. EBITDA Net Profit (After Minority Interest) Total Cash Profit 6428 8333 5839 7066 3167 5143 5683 2496 1753 FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 10

  11. Slide 11: Resulting into Wealth Creation for Shareholders

    …Resulting into Wealth Creation for Shareholders Market Cap ( ` Cr.) 18th May'17 52,769 8% 31st Mar'17 48,971 36% 31st Mar'16 35,884 8% 31st Mar'15 33,272 * Source : Bloomberg 11

  12. Slide 12: Strong Financial Ratios

    Strong Financial Ratios ` Cr. Consolidated Financial Ratios Consolidated Debt / Surplus 12504 Consolidated 11438 3/31/2016 3/31/2017 9213 8902 Debt:Equity (x) 0.35 0.22 3602 2225 Mar-16 Mar-17 Net Debt: Equity (x) 0.10 -* Standalone Debt / Surplus Net Debt / EBITDA 0.51 -* 1839 2546 1603 1845 ROAvCE

  13. Slide 13: Business Performance

    Business Performance  VSF  Chemical  Cement 13

  14. Slide 14: International Fibre Price Trend

    International Fibre Price Trend $/ Kg 2.3 2.1 2.05 1.9 1.91 1.7 1.5 1.3 1.1 1.03 0.9 0.7 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 VSF Cotton PSF  VSF : Prices witnessed recovery during the quarter  Cotton : Prices firmed up driven by good demand 

  15. Slide 15: VSF: Performance

    VSF : Performance Revenue ( ` Cr.) EBITDA (` Cr.)  Volumes were up by 2% YoY 12%  Operating at full capacity 30% 345  Domestic markets recovered from demonetisation 265 effect 1,729 1,945  Realisation were up 11% YoY  Increase in global prices Q4FY16 Q4FY17 Q4FY16 Q4FY17  Rising pulp prices 

  16. Slide 16: Increasing share of Specialty Fibre

    Increasing share of Specialty Fibre FY15 FY16 FY17 31% 33% 36% 69% 67% 64% Volume : 403K Tons Volume : 467K Tons Volume : 498K Tons Specialty Fibre Grey VSF Increasing Share of Specialty Fibre on Higher Volumes 16

  17. Slide 17: Liva Brand: Creating Pull

    Liva Brand : Creating Pull - The high quality fabrics made using natural cellulosic fibres delivered through an accredited value chain - Partners assessed for their ability to deliver on Liva promise - Liva norms defined and shared Liva Accredited - Liva percentage in yarn/ fabric/ garment defined t

  18. Slide 18: Chemical: Performance

    Chemical : Performance  Volume down by 6% YoY Revenue ( ` Cr.) EBITDA (` Cr.)  Caustic Soda production impacted due to lower 11% Chlorine offtake (8%) 229  ECU realisation maintained 211 1068 84$  Higher Caustic prices offset by negative Chlorine 963 realisation 145  Chlorine realisation contin

  19. Slide 19: Cement: Performance

    Cement : Performance  Volume up by 2% despite industry witnessing subdued Revenue (` Cr.) EBITDA (` Cr.) housing demand 3%  Increased in sales from UltraTech Building Solutions (10%) stores (volume share up by 20%) 1,605 6819 7020  Continued thrust on retail market 1439  Manufacturing cost incre

  20. Slide 20: Capex

    Capex 20

  21. Slide 21: Capex plan

    Capex plan (` Cr.) Capex Cash Outflow Capex (Net of CWIP FY18 FY19 spent - as on Onward FY17 01-04-17) Standalone Vilayat Caustic Plant Brownfield expansion (144K TPA) 442 VSF : Water supply augmentation & usage reduction, Research & Development, Environment and Other 294 normal capex Chemical capac

  22. Slide 22: Merger of Aditya Birla Nuvo Limited (ABNL)

    Merger of Aditya Birla Nuvo Limited (ABNL) 22

  23. Slide 23: Amalgamation of ABNL into Grasim

    Amalgamation of ABNL into Grasim  Highlights of the merger: _  Creates a large combination of manufacturing and service businesses commanding leadership positions across Cement, Financial Services, Telecom, Textiles and Chemicals sectors  Grasim to have fast growing sectors such as financial serv

  24. Slide 24: Strong Financials Post Merger

    Strong Financials Post Merger (` Cr.) Aggregate Grasim Aditya Birla Nuvo Proforma FY17 FY17 Financials FY17 Net Revenue 36,053 + 14,408 = 50,461 EBITDA 8,333 + 1,650 = 9,983 PAT 3,167 + 908 = 4,075 (After MI) Net Debt/ (Surplus) (2,225) + 1,992 = (233) (As on 31.3.17) Net Debt to NA + 1.2 = NA EBITD

  25. Slide 25: Business Outlook: VSF Business

    Business Outlook VSF Business VSF Business:  Business outlook expected to remain stable  No major capacity addition expected in next 12-18 months globally  However, short term variations likely in utilisation level and pricing  Cotton consumption projected to be higher than production, in season

  26. Slide 26: Business Outlook: Chemical and Cement

    Business Outlook Chemical Business  Caustic demand in India expected to record stable growth  Supported by growth in user industries like Textile, Aluminium, Paper, Soap and Detergent etc.  Increase in Caustic supply expected on account of new capacity additions in the industry  May create tempo

  27. Slide 27: Thank You

    >. é Thank You 27

  28. Slide 28: Annexure - Financials

    Grasim Industries Limited Annexure - Financials 28

  29. Slide 29: Annexure

    Annexure  Consolidated Financial Performance  Standalone Financial Performance  Balance sheet  VSF Summary  Chemical Summary  Cement Summary  Organisational Structure  Plant Locations 29

  30. Slide 30: Consolidated Financial Performance

    Consolidated Financial Performance (` Cr.) Quarter 4 % Full Year % 2016-17 2015-16 Change 2016-17 2015-16 Change Net Sales & Op. Income 9,980 9,458 6 36,053 34,490 5 Other Income 269 197 36 948 662 43 EBITDA 2,142 2,051 4 8,333 7,066 18 EBITDA Margin (%) 20.9% 21.2% 22.5% 20.1% Finance Cost 176 157

  31. Slide 31: Standalone Financial Performance

    Standalone Financial Performance (` Cr.) Quarter 4 % Full Year % 2016-17 2015-16 Change 2016-17 2015-16 Change Net Sales & Op. Income 2,861 2,546 12 10,331 8,972 15 Other Income 30 57 (47) 474 358 32 EBITDA 556 440 26 2,629 1,851 42 EBITDA Margin (%) 19.2% 16.9% 24.3% 19.8% Finance Cost 8 27 (69) 58

  32. Slide 32: Balance Sheet

    Balance Sheet (` Cr.) Standalone Consolidated 31st Mar'17 31stMar'16 EQUITY & LIABILITIES 31st Mar'17 31stMar'16 16,231 13,872 Net Worth 31,387 27,429 - - Minority Interest 9,702 8,729 701 1,839 Borrowings 9,213 12,504 663 494 Deferred Tax Liability (Net) 3,518 3,025 2,256 1,591 Liabilities & Provis

  33. Slide 33: Viscose Staple Fibre: Summary

    Viscose Staple Fibre : Summary Quarter 4 % Full Year % 2016-17 2015-16 Change 2016-17 2015-16 Change Capacity KTPA 125 125 - 498 498 - Production (in '000s) MT 120 124 (3) 493 464 6 Sales Volumes (in '000s) MT 133 130 2 500 467 7 Net Revenue ` Cr. 1,945 1,729 12 7,101 6,022 18 EBITDA ` Cr. 345 265 3

  34. Slide 34: Chemical: Summary

    Chemical : Summary Quarter 4 % Full Year % 2016-17 2015-16* Change 2016-17 2015-16* Change Capacity KTPA 210 201 4 840 804 4 Production (in '000s) MT 197 208 (5) 780 756 3 Sales Volumes (in '000s) MT 194 206 (6) 784 768 2 Net Revenue ` Cr. 1,068 963 11 3,813 3,429 11 EBITDA ` Cr. 211 229 (8) 842 747

  35. Slide 35: Cement: Summary

    Cement : Summary Quarter 4 % Full Year % 2016-17 2015-16 Change 2016-17 2015-16 Change Grey Cement Capacity Mn. TPA 17.56 16.51 6 70.25 66.05 6 Production Mn. MT 14.40 14.25 1 51.00 50.57 1 Sales Volumes $ Mn. MT 14.73 14.50 2 52.40 51.33 2 White Cement & Putty Sales Volumes $$ Lac MT 3.86 3.85 - 13

  36. Slide 36: Grasim Group Structure

    Grasim Group Structure Pulp & Fibre Chemical UltraTech Cement (60.23%) Others VSF VSF JV Pulp Overseas Caustic Epoxy Domestic Overseas 498K TPA China 70K TPA Pulp JVs 840K TPA 51K TPA 3 Mn. TPA, (UAE, Bangladesh, Sri Lanka) Nagda Grey Cement Grasim Nagda Birla Jingwei Harihar AV Group NB 270K TPA Bh

  37. Slide 37: Plant Locations – Grasim & Its subsidiaries

    Plant Locations– Grasim & Its subsidiaries Bathinda(G) Jhajjar Bhiwani Panipat Dadri T Kotputli Aligarh Jodhpur Patliputra P T Malanpur Renukoot Shambhupura C Jawad P Katni Sewagram Bharuch Durgapur(G) UltraTech Cement Plants Wanakbori F Jafrabad Vilayat C Rehla Dankuni`(G) F C Nagpur UltraTech Grin

  38. Slide 38: 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

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