Carborundum Universal Limited · NSE:CARBORUNIV
Carborundum Universal — Investor Presentation (June 2017)
83 slides from Carborundum Universal's investor presentation, Jun 7, 2017
Slide 1: Carborundum Universal Investor Presentation
CARBORUNDUM UNIVERSAL INVESTOR PRESENTATION
Slide 2: Disclaimer
DISCLAIMER The communication may contain statements relating to future business developments, company’s performance and economic performance that may constitute ‘forward looking statements’. While these forward looking statements represent the company’s judgments and future expectations, a number of
Slide 3: Murugappa Group: An Overview
Murugappa Group An Overview CUMI@2017 3
Slide 4: Murugappa Group
MURUGAPPA GROUP INR 300 Billion Conglomerate One of the largest family promoted, professionally managed, diversified business groups CUMI@2017 4
Slide 5: The Philosophy we cherish
The Philosophy we cherish The fundamental principle of economic activity is that No man you transact with will lose; then you shall not. CUMI@2017 5
Slide 6: Murugappa Group Today
Murugappa Group Today ~ INR 300 Billion Conglomerate One of the largest family promoted, professionally managed, diversified business Groups… CUMI@2017 6
Slide 7: The Spirit of Murugappa Group
The Spirit of Murugappa Group CUMI@2017 7
Slide 8: Social Responsibility
Social Responsibility AMM Foundation is a non-profit organization run by the Murugappa Group 1% of PAT from Group companies to AMM Foundation 4 Schools, a polytechnic; approximately 10,500 students 4 Hospitals - around 8.15 lakh patients treated last year Scholarships for needy meritorious students
Slide 9: Carborundum Universal
Carborundum Universal CUMI@2017 9
Slide 10: Business Portfolio
Business Portfolio PBIT Share Sales Share CUMI – FY 17 Revenue :Rs. 22.3 bn EBIT :Rs. 2.8 bn Capital Employed :Rs. 16.0 bn Abrasives Ceramics Electro-minerals Revenue : Rs 10.2 bn Revenue : Rs 4.7 bn Revenue : Rs 7.7 bn EBIT : Rs 1.1 bn EBIT : Rs 0.7 bn EBIT : Rs 0.9 bn Capital Employed : Rs 4.6 bn
Slide 11: The path traversed so far
The path traversed so far… Micronisation Grain treatment Sol gel CAPABILITY Coated modernization Iso Static press Metallization Fusion Polymer Processing Injection Moulding ENABLING PROPERTIES Moulding Vitrification • Hardness Sintering Zirconia • Toughness Crude SiC MATERIAL Micro SiC • Inertness E
Slide 12: CUMI Consolidated
CUMI Consolidated – Exports its products to more than 55 countries – Over 20,000 varieties of Products – 28 manufacturing locations – 7 countries – Over 5200+employees – 1800+ outside India – Consolidated Gross Sales Rs 2232 cr (FY 16-17 ) – Market Cap~ Rs. 5600 cr plus CUMI@2017 12
Slide 13: CUMI World Wide - By Business Verticals
CUMI World Wide- By Business Verticals RUSSIA Abrasives Ceramics Electro minerals USA CHINA Abrasives Abrasives Ceramics THAILAND Abrasives S. AFRICA EUROPE UAE INDIA AUSTRALIA Foskor Zirconia Electro Minerals Abrasives Abrasives Abrasives Ceramics Electro minerals Ceramics Electro minerals Abrasive
Slide 14: Our Vision/Mission
OUR VISION/MISSION We will be an Admired Company in VISION Abrasives & Technical Ceramics, driven by Innovation, to create Stakeholder Wealth. MISSION Become one of the largest Abrasives (including Super Abrasives) / Technical Ceramics in the Company in the World by 2022. CUMI@2017 14
Slide 15: Abrasives
ok murugappa CUMI@2017 <p
Slide 16: Abrasives Business Overview
Abrasives Business Overview Engineering surfaces BUSINESS By creating precision surfaces on materials – grind to finish DEFINITION Design, manufacture and distribute Rigid and Flexible abrasives Aerospace | Automotive | Auto Comp | Bearing | Steel | Light/Heavy engineering INDUSTRIES General Enginee
Slide 17: Coated Business, Bonded Business
Standalone operations – CUMI India COATED BUSINESS BONDED BUSINESS Sriperumpudur Plant Maraimalai Nagar Plant Chennai Plant -1954 Hosur Plant - 1979 • 52 Acre • 15 Acre • Coated Plant •Processing of Cloth / Paper • Custom Built Products • Std. Vitrified Products •Manufacture of Phenolic / Alkyd Resi
Slide 18: Subsidiaries / Associates – Mfg. Locations
Subsidiaries / Associates – Mfg. Locations VOLZHSKY ABRASIVE STERLING ABRASIVES WENDT INDIA WORKS - RUSSIA CUMI@2017 18
Slide 19: CUMI Abrasives Markets
CUMI Abrasives Markets Norway Russia CANADA Poland UK USA Turkey Gulf Countries Japan / Korea Ivory Coast Bangladesh Panama Sri Lanka Brazil South Africa Australia CUMI@2017 19
Slide 20: Abrasives Industry Value Chain
Abrasives Industry Value Chain Raw Abrasives Distribution End- Application Materials Manufacturing Channel Users • Aluminum Oxide • Bonded Abrasives • Retailers • Cutting • Automobiles • Silicon Carbide • Coated Abrasives • Wholesalers • Grinding • Machinery • Zirconia • Super Abrasives • Direct Sal
Slide 21: Global Abrasives Market Size
Global Abrasives market Size Total Market Size Estimate ~ $33.0 bn, growing at a CAGR of 3-4% Europe: $3.7 bn MiddleEast: Middle East:$0.15 $0.15bnbn Coated: $1.5 bn Bonded: $1.6 bn Coated: $53 mn Super Abrasives: $0.6 bn Bonded: $70 mn Gr Rate: 2-3% Super Abrasives:$30 mn Gr Rate: 5-6% APAC: $20.0b
Slide 22: Global Abrasives Market Drivers
Global Abrasives market drivers Europe • Emergence of Central China North America and Eastern Europe as • High speed rail network Automotive hub • Increased usage in metal • Creation of satellite towns fabrication, transportation sectors India • Rapid urbanization & resultant growth in • Revival of
Slide 23: Global Abrasives Market: Success Factors
Global Abrasives market: Success factors APAC North America 1. Price 1. Innovation 2. Customer Centrism 2. Quality & Performance 3. Quality & Performance 3. Price 4. Innovation 4. Customer Centrism Europe 1. Quality & Performance 2. Innovation Middle East 3. Price 1. Customer Centrism India 4. Custo
Slide 24: Megatrend: Urbanization
Megatrend : urbanization 2012 2025 153 rural; 219 transition; 96 rural; 220 transition; 115 semi– 84 semi–urban and 33 urban districts* urban and 58 urban districts 12 very high and high performing 8 high performing states states – 50% of India’s GDP to contribute 52% of and 58% of consuming class i
Slide 25: Opportunities for CUMI Abrasives
Opportunities for CUMI Abrasives Infrastructure 100 smart cities across India Steel Industry – Roll Grinding wheels Fabrication – Thin wheel Freight corridor, Industrial Corridor Sagar mala - connectivity to the Port Gas Grids Auto & Auto Components – Crank/ Auto Refinishing – Coated Cam National Op
Slide 26: Opportunities for CUMI Abrasives
Opportunities for CUMI Abrasives Energy Scarcity Oil-1 mbpd to be added Gas – 135 bcm to be added 1000 TeraWh to be added Thermal / Nuclear will dominate Renewable energies will rise Turbine grinding Zircon alloy grinding in the nuclear energy space Fabrication Wind Mill Fabrication CUMI@2017 26
Slide 27: Opportunities for Abrasives
Opportunities for Abrasives End User Industry Major Product Segments of Abrasives Steel Industry & non-ferrous Roll grinding wheels, hot press, snagging wheels, large dia reinforce cut off wheels, metalworking fluids and so on Construction Thin wheels, power tools, sheets and rolls and super abrasiv
Slide 28: Expansion in MMN and EAL
Expansion In MMN and EAL Thin Wheel and Coated Module Capability to produce all varieties of 7” / 9” DC / RFC -to Expansion in Coated Operations - Kolkata address both Domestic and Export markets. CUMI@2017 28
Slide 29: VAW Expansion to Coated Business
VAW expansion to Coated Business CUMI@2017 29
Slide 30: Abrasives – Performance
ABRASIVES – Performance Rs. Mil Consolidated Sales - Annual 10.3% 7.3% -2.5% 6.3% 0% +18.7% +26.7% +3.6% + 6.4% + 29.0% + 24.7% % sales in India 87% 83% 75% 70% 78% 74% 74% 74% 73% 77% 83% 83% CUMI@2017 30
Slide 31: Industrial Ceramics
Industrial Ceramics CUMI@2017 31
Slide 32: Industrial Ceramics
Industrial Ceramics World Class Manufacturing Strong Technology Platform Global Reach Leadership Position in Key Markets CUMI@2017 32
Slide 33: Industrial Ceramics - Product Range
INDUSTRIAL CERAMICS - Product Range SBU Industrial Ceramics Business Wear Technical Group Ceramics Ceramics Product Lines Grinding Wear Lined Engineered Metallized Ceramics Media Resistant Equipment Ceramics Liners Bulk Material Handling Fluid Handling Vacuum Markets and Ceramic Tile/Mineral Process
Slide 34: Industrial Ceramics Product Offerings
Industrial Ceramics Product Offerings CUMI@2017 34
Slide 35: Widening of Product Offerings
Widening of Product Offerings Industrial Ceramics CUMI@2017 35
Slide 36: Inauguration of New DSIR Certified R&D
Inauguration of New DSIR Certified R&D New R&D Set up a state-of-the-art Research and Development facility for Advanced Ceramics Inaugurated by Chairman Mr M M Murugappan in presence of Director of NAL and SAC – ISRO in August 2016 CUMI@2017 36
Slide 37: Moving up the Value Chain
Strategy pursued - Moving up Value Chain Industrial Ceramics • Currently we are in the business of Alumina based Ceramics. We constantly look at Products Competing Criteria extending offerings in that range and target newer industries. Technology, Process Metz Cylinders Capability Moving up the valu
Slide 38: Impact of Megatrends
Impact of Megatrends Infrastructure Mining Power Generation • Wear Protection Urbanisation • Metallized Cylinders Power Transmission CUMI@2017 38
Slide 39: Impact of Megatrends
Impact of Megatrends Global Rebalancing Manufacturing • Wear Protection • Metallized Cylinders Emergence of • Engineered Ceramics Affluent Healthcare CUMI@2017 39
Slide 40: METZ 2.0 Project
METZ 2.0 Project Industrial Ceramics – Technical Ceramics CUMI@2017 40
Slide 41: Super Refractories
SUPER REFRACTORIES CUMI@2017 41
Slide 42: Super Refractories – Product Range
SUPER REFRACTORIES– Product Range CUMI Refractory Products Fired products Monolithics Precast Shapes Conventional Silicon Carbide Dense (CUMIFRAC) Castables (CUMICRETE) Insulation Nitride bonded Castables Silicon Carbide (CUMICRETE Fibre Refractory Light Weight) JV with Morgan Low cement Mulite (CUM
Slide 43: Super Refractories
SUPER REFRACTORIES • Refractory is any material that can withstand high temperature. CUMI is into High Alumina, Silicon Carbide, Zirconia based refractories which are capable to withstand very high temperature:- − Fired Refractories: Is a block of refractory ceramic material used in lining furnaces,
Slide 44: 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 45: Super Refractories
SUPER REFRACTORIES Ability to manufacture complex shapes and meet all surge requirements CUMI@2017 45
Slide 46: Super Refractories
SUPER REFRACTORIES Reheating Furnace – Skid & Pipe (Pre-Cast) CUMI@2017 46
Slide 47: Super Refractories
SUPER REFRACTORIES Glass Sprout and Slide Gate Tundish Nozzle Ladle Nozzle CUMI@2017 47
Slide 48: Opportunities for CUMI Ceramics (IC+SR)
Opportunities for CUMI CERAMICS (IC+SR) Coal Washeries Ceramics for Steel Reheat/ Heat Treatment Forging Furnaces Annealing Process Gas Heaters Glass Melting Furnace Gunning CUMI@2017 48
Slide 49: Opportunities for CUMI Ceramics (IC+SR)
Opportunities for CUMI CERAMICS (IC+SR) HRSG High Alumina Ceramics for Renewable Energy Super Critical Turbines Passive Fire Protection Ceramics for SOFC Gasification Projects FGD Systems CFBC Boilers CUMI@2017 49
Slide 50: Refractory Ranipet Lab
Refractory Ranipet Lab Recognized by DSIR CUMI – Ranipet : R&D lab recognized by Department of Science and Industrial Research (DSIR), Government of INDIA. CUMI@2017 50
Slide 51: Ceramics Performance
CERAMICS -(Industrial Ceramics and Refractories) Performance Rs. Mil Consolidated Sales - Annual -5.7% +9.3% +2.3% 15.6% + 31.3% -15.2% + 21.1% + 11.2% + 17.4% + 26.8% +20.4% % sales in India 44% 43% 53% 54% 53% 56% 62% 55% 55% 60% 50% 46% CUMI@2017 51
Slide 52: Electro Minerals
ELECTRO MINERALS CUMI@2017 52
Slide 53: 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 54: Electrominerals – Facility
ELECTROMINERALS – Facility 1 2 1 Bauxite mines & calcination 3 4,5,6 2 Silicon carbide, 3 Fine powders, 4 Fused alumina 5 Alumina Zirconia 7 6 Zirconia Bubble One of the worlds largest integrated 7 12 MW Hydel power, Maniyar mineral complexes in the world 8 21 MW Hydel power, Keerithode - WIP CUMI@2
Slide 55: Electrominerals – Overseas Facility
ELECTROMINERALS – Overseas Facility VAW - Russia VAW Russia – Silicon Carbide, 80,000 tpa Foskor Zirconia – Fused Foskor Zirconia Zirconia, 5000 tpa CUMI@2017 55
Slide 56: Electro Minerals: Global Capacity & Our Standing
ELECTRO MINERALS Global Capacity & Our Standing Global Capacity and Our Share Current Standing Point • Silicon Carbide • Established leadership in Russian and Indian − Global capacity is ~ 2 million tonnes. Price and market Cost movements, macro factors, keeps these • Locational advantage in Russia
Slide 57: Electro Minerals – Future Strategy
ELECTRO MINERALS – Future Strategy Innovation Value Pyramid Graphite Powders CUMI@2017 57
Slide 58: EMD Business Opportunity
EMD Business Opportunity Environment Energy Urbanization Nuclear Energy Infrastructure Euro 6 Mobile energy Transportation Demand for water Renewable energy Housing Zirconia SiC for DPF Abrasives SiC SiC and Alumina for Refractories Graphite Filtration Thermal Powders Thermal Powders CUMI@2017 58
Slide 59: Capacity Expansion
Capacity Expansion Plant 1 modernization and SF project CUMI@2017 59
Slide 60: Capacity Expansion
Capacity Expansion Both Tilt and Pot Fusion plant has been commissioned CUMI@2017 60
Slide 61: Capacity Expansion: New Bubble Zirconia Plant
Capacity Expansion New Bubble Zirconia Plant CUMI@2017 61
Slide 62: Capacity Expansion
Capacity Expansion Bubble Furnace has been started CUMI@2017 62
Slide 63: Electro Minerals - Performance
ELECTRO MINERALS - Performance Sales - Annual Rs. Mil 21.1% -10.2% 2.9% 2.8% -8.0% +21.6% +24.8% +12.8% +97.2% +159.4% +21.7% % sales in India 94% 88% 40% 20% 24% 22% 21% 22% 25% 26% 36% 36% CUMI@2017 63
Slide 64: Financials
murugappa FINANCIALS CUMI@2017 <Q
Slide 65: Revenue Growth
Revenue Growth 9% 2% -1% +8% -4% +23% +25% Rs. In Million +7.5% +31% +46% +28% CUMI@2017 65
Slide 66: International Revenue Share
International Revenue share (%) CUMI@2017 66
Slide 67: Segmental Performance
Segmental Performance Sales FY 06 FY 07 FY 08 FY 09 FY 10 FY11 FY 12 FY 13 FY 14 FY 15 FY16 FY 17 (Rs. Mil) Abrasives 3214 3880 5006 5325 5518 6990 8304 8093 8599 8590 9217 10163 Ceramics 1130 1734 2199 2582 2871 3476 4565 4991 4707 4817 4085 4724 Electro 681 830 2153 4245 4789 5979 7272 6688 8099 7
Slide 68: Performance Ratios
Performance Ratios CUMI@2017 68
Slide 69: Performance Ratios: Debt Equity Ratio
Performance Ratios Debt Equity Ratio CUMI@2017 69
Slide 70: Performance Ratios
Performance Ratios CUMI@2017 70
Slide 71: Investor Friendly Company
Investor Friendly Company • 43.76% held by the Murugappa Group, 27.41% held by FII’s, MF, PE, Insurance Cos • 63 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 over the years entire
Slide 72: GST Impact on CUMI Businesses
GST Impact on CUMI businesses Abrasives Non excise paying companies will now become more expensive. In channel products, operating prices will go up by at least 5 to 8 % with greater compliance. Industrial Ceramics and Super Refractories Nearly all sales are to corporate/ project customers. However,
Slide 73: Exhibitions and Conferences
Exhibitions and Conferences IMTEX CUMI@2017 73
Slide 74: Exhibitions and Conferences
Exhibitions and Conferences IMTEX CUMI@2017 74
Slide 75: Exhibitions and Conferences
Exhibitions and Conferences Indonesia CUMI@2017 75
Slide 76: Exhibitions and Conferences
Exhibitions and Conferences Sharjah / Dubai Steel / Fab CUMI@2017 76
Slide 77: Exhibitions and Conferences
Exhibitions and Conferences Ceramics Expo in Japan Hannover Fair 2017 CUMI@2017 77
Slide 78: Exhibitions and Conferences
Exhibitions and Conferences CUMI America participating in an Exhibition CUMI@2017 78
Slide 79: CSR
CSR Honing Skills, Helping Lives Currently 175 trainees in total undergoing the skill and technical training in the centers at Hosur and Edappally CCSD 1. Educational Sponsorship for Economically Deprived Children 2. Key Children Project-for Child Development 3. Adopted Schools and Communities in Th
Slide 80: CSR
CSR Engaging Employees and Community Environment Task Force was formed at involving employees The objective is to bring in ownership among employees towards improving environment performance The role of the Task Force is to oversee the Environment conservation, Implement new practices, Improving emp
Slide 81: Value Evolution
Value Evolution CUMI Consumer View Consumables Durable Component Material Structural Functional Active View Product Abrasives Electro Minerals Sensors View Refractories Technical Ceramics Implants Evolving from Passive to Interactive Materials… CUMI@2017 81
Slide 82: To Sum Up
To Sum Up Favorable demographics Strong domestic consumption Sustainable Positive Policy reforms GDP environment Growth ~8% for CUMI Macro economic stability India as a global bright spot CUMI@2017 82
Slide 83: Thank You
@ murugappa THANK YOU oS cuM@2017 <p>
Carborundum Universal — Investor Presentation (June 2017) on 6ix