Slide 1: Cover letter to stock exchanges
$KILP,Fd:IER Date: 11 February, 2019 The Manager The Manager National Stock Exchange of India Limited BSE Limited Exchange Plaza, 5th Floor, Phiroze Jeejeebhoy Towers, Dalal Street Plot No. C-1, Block-G Mumbai- 400 001 Bandra Kurla Complex, Bandra (E) Mumbai- 400 051 NSE Scrip Name- SKIPPER / BSE Sc
Slide 2: Q3 Performance 2018-19 Investor Presentation: Broad-basing the pyramid
Q3 PERFORMANCE, 2018 - 19 SKIPPER LIMITED INVESTOR PRESENTATION Broad-basing the pyramid
Slide 3: About Us
SKIPPER LIMITED INVESTOR PRESENTATION About Us
Slide 4: Who We Are
WHO WE ARE Skipper Limited is India’s largest and world's most competitive integrated transmission tower manufacturing company 3
Slide 5: Key Facts
K E Y FA C T S • Flagship company of • Four Power Grid • Widely respected the S.K. Bansal Group Corporation of India- player; awarded Largest (incorporated 1981). approved transmission Tower Supplier Award by tower and pole Power Grid for 3rd • Angle rolling, tower, manufacturing plants consecutive
Slide 6: Key Management
SKIPPER LIMITED INVESTOR PRESENTATION Key Management
Slide 7: Board of Directors – Whole Time
BOARD OF DIRECTORS – WHOLE TIME Sajan Kumar Bansal Sharan Bansal Devesh Bansal Siddharth Bansal Yash Pall Jain Managing Director Director Director Director Director He is the driving force A mechanical With a Master's in Heading the company's He is a B.com graduate behind the company's engineering g
Slide 8: Board of Directors – Independent
BOARD OF DIRECTORS - INDEPENDENT Mr. Amit Kiran Deb Mrs. Mamta Binani Mr. Joginder Pal Dua Mr. Ashok Bhandari Sri Pramod Kumar Shah C.A IAS (Retd.), Immediate Past Ex CMD - Allahabad C. A. He is a Fellow Chairman President ICSl Bank member of the He has profound He has held several She is one of the
Slide 9: Skipper: One-Stop Solution Provider
PRODUCT OFFERINGS SKIPPER: ONE -STOP SOLUTION PROVIDER Engineering products Polymer products Infrastructure projects Capacity: 300,000 MTPA Capacity: 51,000 MTPA M I S S•I Transmission ON Line EPC • Power Transmission Tower • UPVC Pipes • Underground Utility laying • Power Distribution Poles • CPVC
Slide 10: Global Presence
FOOTPRINTS GLOBAL PRESENCE SOUTH AMERICA Peru, Colombia, Chile, Paraguay, Panama EUROPE UK, Germany, Spain AFRICA Kenya, Egypt, Ghana, Nigeria, Zambia, Sierra Leone Guinea, South Africa, Botswana, Burundi, Angola MIDDLE EAST Jordan, Saudi Arabia, UAE SOUTH AND SOUTH EAST ASIA Nepal, Bangladesh, Sri
Slide 11: Q3 & 9M FY'19 Update
SKIPPER LIMITED Performance Update Q3 & 9M FY’19 Update
Slide 12: Financial Performance Q3 FY19
BUSINESS REPORT CARD The reason for decline in Q3 Financial Performance Q3 FY 19 Q3 Revenue impacted Rs in Mn • Consciously slowed down supplies to the customer unwilling to give secured payment terms Sl Profit & Loss Summary Q3 FY’19 Q3 FY’18 • Slower Project Execution; Sites not ready for want of
Slide 13: Financial Performance 9M FY19
BUSINESS REPORT CARD Financial Performance 9M FY 19 Rs in Mn Sl Profit & Loss Summary 9M FY’19 9M FY’18 1 Net Revenue (Excl Excise Duty) 14,374.8 14,808.7 2 Operating EBITDA (without Forex) 1,313.7 1,644.0 % of Net Revenue 9.1% 11.1% 3 Depreciation 297.0 345.6 4 Interest Expenses 765.5 545.1 5 Other
Slide 14: Segment Performance Q3 & 9M FY'19
SEGMENT REPORT Segment Performance Q3 & 9M FY’19 Q3 Q3 9M 9M Polymer Infra Segment Financial Summary FY’19 FY’18 FY’19 FY’18 9% 3% Net revenue 3,839.4 4,863.3 12,656.3 12,858.1 Engg. EBIDTA (w/o forex) 267.5 496.4 1,272.1 1,436.8 Products % of Revenue 7.0% 10.2% 10.0% 11.1% Net revenue 331.0 539.9 1
Slide 15: Engineering Products – Order Book Composition
ORDER BOOK PIE Engineering Products – Order Book Composition – December 2018 YTD Order Book YTD T&D Order Book Rs 2,638 Crores Rs 2,182 Crores 5% 43% 41% 12% T&D Breakup 83% 16% T&D Telecom Railways PGCIL SEB & Others Export Domestic – 87% Export – 13% 14
Slide 16: Engineering Products – Order Inflow Composition
ORDER STRUCTURE Engineering Products – Order Inflow Composition FY’19 Qtr Wise - Order Inflow Q3 FY’19 Order Inflow Total - 1,141 Crores Rs 506 Crores 506 410 33% 21% 14% 225 Q3 Inflow Composition 32% PGCIL SEB & Others Q1 Fy'19 Q2 FY'19 Q3 FY'19 T&D - Export Telecom & Railways Strong Bidding Pipeli
Slide 17: Introspection
SKIPPER LIMITED INVESTOR PRESENTATION Introspection
Slide 18: Challenges and Responses
BUSINESS BOTTLENECKS Slower orders from Increase in raw Power Grid, India’s material costs largest T&D company Skipper’s response: Skipper’s response: Absorbed cost increase Accelerated sectoral and customer diversification Sectoral liquidity crisis Skipper’s response: Challenges Delay in availabili
Slide 19: The Invisible Positives in the Decline
LOGICAL REASONING THE INVISIBLE POSITIVES IN THE DECLINE 1 Skipper reported consecutive q-o-q growth in order book inflow; order inflow from PGCIL 2 Skipper continued to remain profitable; cash profit of Rs 46 cr in the first nine 3 Skipper continued to increase its non- India exposure; received fir
Slide 20: Performance Outlook
BUSINESS OUTLOOK PERFORMANCE OUTLOOK Company expects to achieve revenue of last year on back of stronger execution planned in last quarter Focus on strengthening the international T&D order book to benefit from start of FY 2020 Strong rebound expected in domestic T&D action both on Ordering and Exec
Slide 21: The Big Message
BUSINESS MANTRA THE BIG MESSAGE Profitability in Conscious Sectoral Skipper Progressive a downturn is slowing down: consolidation opportunity- broadbasing a validation of Not chase to lead to next ready to strengthen Skipper’s growth at the rebound; through re- revenues and business cost of opportun
Slide 22: Core Strategy: Broadbasing Our Pyramids
Core Strategy BROADBASING OUR PYRAMIDS
Slide 23: What Is Broadbasing the Pyramid?
W H AT I S B R O A D B A S I N G T H E P Y R A M I D ? ENGINEERING PRODUCTS BUSINESS 1 2 Broadbasing the number of Broadbasing the customer mix sectors addressed within each sector (government Riding the growth of some fast- and non-government) growing segments into the long-term Riding the inflecti
Slide 24: Why We Are Broadbasing
WHY BROADBASING THE PYRAMID? WHY WE ARE BROADBASING To strengthen To be able to capitalise on To strengthen margins; some sectoral upturns competitiveness; sectors promise with speed; last person lower working faster off the standing capital cycle blocks To report a To transform To progress lower se
Slide 25: What Will Facilitate Our Broadbasing
STIMULUS BEHIND BROAD BASING THE PYRAMID? W H AT W I L L F A C I L I TAT E O U R B R O A D B A S I N G Deep knowledge capital on product manufacture, quality standards and certifications Fungible manufacturing capacity (from one product to another with no capex); only integrated manufacturer in the
Slide 26: The Impact of the Broadbasing: Four Drivers
KEY DRIVERS OF THE IDEA T H E I M PA C T O F T H E B R O A D B A S I N G : F O U R D R I V E R S Focus on Building credential and Focus on telecom Increased projects coming out and railways of PGCIL, SEB and relationship with bidding for global EPC players sectors (domestic projects private transmis
Slide 27: Broadbasing Woven Around Financial Discipline
BROADBASING WOVEN AROUND FINANCIAL DISCIPLINE Driven by the Bids for projects Believes that no Consistent philosophy of that meet basic IRR business is better resistance to chasing profitable criteria than bad volumes over growth business profits Can temporarily Geographic Invested in pre-bid and se
Slide 28: Future Ready
SKIPPER LIMITED INVESTOR PRESENTATION Future Ready
Slide 29: Broadbasing to Reduce Domestic Dependence
EXPLORING NEW GEOGRAPHIES BROADBASING TO REDUCE DOMESTIC DEPENDENCE • Opportunity-ready: Certified by prominent International certifications international organizations for confidence- Certification Country enhancing certifications CFE/LAPEM Mexico • Established traction: Working with over 100 CWB C
Slide 30: Skipper Is Clearly Poised to Be in the Winning Spot in International T&D
LEADERSHIP POSITION S K I P P E R I S C L E A R LY P O I S E D T O B E I N T H E W I N N I N G S P O T I N T H E I N T E R N AT I O N A L T & D S E C T O R • Skipper is the highest accredited manufacturers in India for supplying to global markets • Largest and lowest cost manufacturer out of India a
Slide 31: Growing Global Competitiveness
GROWING GLOBAL COMPETITIVENESS SKIPPER C H I N E S E M A N U FA C T U R E R S WHAT MAKES US MORE COMPETITIVE Currency Factor: The current rupee depreciation has made us more competitive in the export markets and is now bringing more opportunities on our way. Indian currency over last 2 years has dep
Slide 32: Considerable Increase in Bidding Volumes from International T&D
GROWING GLOBAL COMPETITIVENESS Considerable increase in Bidding Volumes from International T&D Sector Bidding Volumes 2017-18 2018-19 Change T&D sector Rs in Cr Rs in Cr % International T&D 810 2,450 202% Domestic T&D 1,625 1,280 -27% Total 2,435 3,730 53% FY 2018-19 FY 2017-18 34% 33% 66% 67% Domes
Slide 33: Global T&D Investment Opportunities
GLOBAL NEED GLOBAL T&D INVESTMENT OPPORTUNITIES According to World Energy Outlook (WEO) 2015, a total of US$ 8.4 trillion investments are expected to flow in the global T&D investments between 2015 and 2040, averaging US$320 billion per year. 32
Slide 34: T&D Industry Overview in India
INDIA STORY T&D INDUSTRY OVERVIEW IN INDIA • Historical skew between generation and T&D asset creation; shortage of power evacuation capacity • Skew correction across the last decade: substantial increase in T&D capacity amounting to 345 GW as on September 2019 which is estimated to grow at a CAGR o
Slide 35: Strong Opportunity in India's T&D Sector
DOMESTIC OPPORTUNITIES STRONG OPPRTUNITY IN INDIA’S T&D SECTOR • Planned government transmission sector investment of Rs 2.6 lakh crore in FY17-22; estimated Total line Rs 1.3 lakh crore allocated for intra-state transmission capacity. SEBs and private players to capacity drive orders • Village elec
Slide 36: Expected Transmission System Addition During 2017-22
HOW WE PERFORMED IN Q3 2018-19 EXPECTED TRANSMISSION SYSTEM ADDITION DURING 2017 -22 Transmission line Addition during 2017-18 Planned addition during Balance capacity to be As of March 2017 length(ckt. km) (till September 2017) 2017-22 added by 2022 HVDC (800/500 kV) 15,556 - 4,280 4,280 765 kV 31,
Slide 37: Reasons for Long-Term Sectoral Optimism
POSITIVE OUTLOOK REASONS FOR LONG-TERM SECTORAL OPTIMISM • India the fastest growing major global economy; expected to quadruple and emerge as a $ 10 trn economy in the next 15 years • India’s power appetite projected to increase [4]x in line with its growing economy in the next decade • India exten
Slide 38: Emerging Growth Drivers: Railways & Telecom
GAME POINT EMERGING GROWTH DRIVERS R A I LW AY S & T E L E C O M Existing capacities and capabilities fungible across sectors The greater the fungibility, the superior the return on gross block Margins-enhancing competitive advantage Will progressively enhance capacity utilisation, revenues
Slide 39: Railways Electrification
R A I LW AY E L E C T R I F I C AT I O N S E C T O R RAILWAYS ELECTRIFICATION Large and robust growth plan in the pipeline: multi-year growth outlook Projected spending of Rs 35,000 cr over a period of next 3-4 lined up for Railway Electrification in India ; 40-45% of this to get invested in Rail St
Slide 40: Skipper Is Clearly Poised to Be in the Winning Spot in Railways
LEADERSHIP POSITION S K I P P E R I S C L E A R LY P O I S E D T O B E I N T H E W I N N I N G S P O T I N T H E R A I L W AY S E C T O R • Large engineering capacity which can be deployed to make Railway Masts • Low cost base of manufacturing • One plant already approved - three more under approval
Slide 41: Telecom Tower
TELECOM SECTOR TELECOM TOWER • India needs around 100,000 additional towers to address growth China 1.4 bn 1.94 mn • National Telecom Policy aims to inspire $100 bn investment in Customers Telecom tower five years • India’s 30 per cent broadband penetration leaves large headroom • Sector added 65,00
Slide 42: Skipper Is Clearly Set to Be in the Winning Spot in Telecom
LEADERSHIP POSITION S K I P P E R I S C L E A R LY S E T T O B E I N T H E W I N N I N G S P O T IN THE TELECOM SECTOR • Large engineering capacity to support manufacturing of Telecom structures • Proximity to focus Telcos markets - East & North East • Tie up with one of world's leading tower design
Slide 43: Skipper's Polymer Business
P O LY M E R P R O D U C T S S E G M E N T SKIPPER’S POLYMER BUSINESS Polymer Plants invested 70%+ gross block Among few Indian One of few Indian manufacturing state-of-the-art less than six years companies assured companies with capacity of 51,000 manufacturing old of CPVC for pipes NSF certificati
Slide 44: Partnership with Vector Consulting
S T R AT E G I C PA R T N E R S H I P PARTNERSHIP WITH VECTOR CONSULTING Skipper Pipes partnered Vector Consulting Group VCG a leading management consulting firm in India Partnership to increase retail market share and transform supply chain Directed to gain decisive competitive advantage Objectives
Slide 45: Our USP: Theory of Constraints
THEORY OF CONSTRAINTS OUR USP • Partnering benefits: • Exponential Sales Growth & Gain in Market Skipper is the only Indian Share polymer pipe company to implement Theory of • Robust Processes & Systems in place to improve Constraints (TOC) profitability approach in an organized • Consistent availab
Slide 46: Performance Trends
SKIPPER LIMITED INVESTOR PRESENTATION Performance Trends
Slide 47: Revenue & Profitability
PERFORMANCE TRENDS REVENUE & PROFITABILITY Rs in Mn Net Sales EBITDA & Margins Rs in Mn PBT & PAT Rs in Mn EPS (FV Rs 1/-) Rs 46
Slide 48: Performance & Leverage Ratio
PERFORMANCE TRENDS PERFORMANCE & LEVERAGE RATIO Debt Equity Debt / EBITDA Times (X) Times (X) Interest Coverage ROCE Times (X) 47
Slide 49: Engineering Order Book Size
PERFORMANCE TRENDS ENGINEERING ORDER BOOK SIZE Rs in Mn 48
Slide 50: Awards and Accolades
HONORS AWARDS AND ACCOLADES AWARD: AWARD: AWARD: AWARD: THE LARGEST TOWER EMERGING POWER GLOBAL HR NO. 1 EMERGING SUPPLIER FOR 3rd EPC PLAYER EXCELLENCE BRAND IN CONSECUTIVE YEAR GIVEN BY: EPC GIVEN BY: POLYMER PIPES & GIVEN BY: WORLD WORLD HRD FITTINGS POWER GRID CONGRESS GIVEN BY: WCRC CORPORATION
Slide 51: Disclaimer and Contact
DISCLAIMER This Investor Presentation has been prepared by Skipper Limited for investors, solely for informational purposes. The information contained herein has been prepared to assist prospective investors in making their own evaluation of the Company and does not purport to be all-inclusive or to