Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q1 FY2003 Earnings Presentation
39 slides from Grasim Industries's earnings presentation, Jul 25, 2002
Slide 1: Performance Review – Q1FY03
Grasim Industries Limited Performance Review – Q1FY03 25th July, 2002
Slide 2: Financial Performance – Q1FY03
Financial Performance – Q1FY03 Rs. Crores Q1FY03 Q1FY02 % Chg. FY02 Net Turnover & Operating Income 1,135.5 1,117.2 2 4,386.7 Other Income 9.3 14.5 (36) 114.6 PBIDT 254.7 247.7 3 936.8 Interest and Finance Charges 44.2 47.5 (7) 190.3 Gross Profit 210.6 200.2 5 746.5 Depreciation 62.4 62.6 - 251.7 PB
Slide 3: Financial Performance – Q1FY03 (Contd..)
Financial Performance – Q1FY03 (Contd..) Rs. Crores Q1FY03 Q1FY02 FY02 Exceptional Items Loss on sale of Investments / Profit on transfer (18.1) of Undertaking Excess provision for taxes for earlier years 68.1 written back Loss on on closure of Mavoor units (74.3) Loss on sale of Textile Unit, Gwali
Slide 4: Performance Highlights - Q1FY03
Performance Highlights - Q1FY03 ! Consistent good performance ! Turnover improved marginally " Progressive growth in VSF volumes and improved Chemical turnover " Lower turnover in cement, trading business discontinued ! PBIDT at Rs.255 crores, up by 3%, despite weak performance of the Cement sector
Slide 5: Net Revenue Mix – Q1FY03
Net Revenue Mix – Q1FY03 Sponge Iron 8% Sponge Iron Others 9% 5% VSF 36% VSF 27% Cement Cement 49% Chemical 47% Chemical 4% 5% Textiles Textiles 6% 4% Q1FY03 (Rs.1,135.5 Crs.) Q1FY02 (Rs.1,117.2 Crs.) 5
Slide 6: PBIDT Mix - Q1FY03
PBIDT Mix - Q1FY03 Sponge Iron Others Sponge Iron 8% 2% 8% Textiles VSF -2% Textiles -1% 28% VSF 53% Chemical 3% Cement Cement 38% 60% Chemical 3% Q1FY03 (Rs.254.7 Crs.) Q1FY02 (Rs.247.7 Crs.) 6
Slide 7: Segmental Performance – Q1FY03
Segmental Performance – Q1FY03 Rs. Crores Revenue PBIDT PBIT Q1FY03 Q1FY02 Q1FY03 Q1FY02 Q1FY03 Q1FY02 Fibre 419 311 136 70 124 57 Chemical 53 44 8 8 4 4 Cement 543 559 95 148 62 116 Sponge Iron 88 101 21 21 11 11 Textile 54 69 (5) (2) (9) (6) Rs. Crores Capital Employed ROAvCE (%) Q1FY03 Q1FY02 Q1F
Slide 8: Viscose Staple Fibre
Viscose Staple Fibre % Q1FY03 Q1FY02 Chg. FY02 Capacity TPA 220,775 220,775 - 220,775 Production MT 45,458 32,757 39 176,462 Sales Volumes MT 57,776 39,011 48 181,520 Net Turnover Rs. Crs. 419 311 35 1,329 Avg. Realisation Rs./MT 66,457 72,590 (8) 68,511 PBIDT * Rs. Crs. 136 70 94 354 PBIDT Margin *
Slide 9: Viscose Staple Fibre (Contd..)
Viscose Staple Fibre (Contd..) Highlights – Q1FY2003 ! Excellent overall performance ! Capacity utilisation at 82% against 59% in Q1FY02 " Nagda Plant closed for 27 days (against 54 days in Q1FY02); water consumption reduced by 27% in production process ! Q1FY03 sales volumes at 57,776 tonnes - high
Slide 10: Viscose Staple Fibre (Contd..)
Viscose Staple Fibre (Contd..) Highlights (Contd..) ! Realisation at Rs.66.5/kg down from Rs.72.6/kg " Largely in line with fall in Global pulp prices " But, higher by Re.1/kg compared to Q4FY02 levels ! Operating margin up from 22% at 32%, despite lower realisation " Lower input costs - Pulp costs
Slide 11: Viscose Staple Fibre (Contd..) – Outlook
Viscose Staple Fibre (Contd..) Outlook ! Recovery in global economy should continue to augur well for sustained demand of VSF from export / deemed export segment ! Margin to remain stable " Globally Pulp prices are showing rising trend " Impact likely to be offset by reasonable increase in realisati
Slide 12: Cement
Cement Q1FY03 Q1FY02 % Chg. FY02 Grey Cement Capacity Mn. MT 11.37 10.36 10 # 11.37 Production Mn. MT 2.80 2.57 9 9.53 Sales Volumes Mn. MT 2.78 2.55 9 9.68 Net Turnover Rs. Crs. 505 528 (4) 1,926 Avg Realisation Rs./MT 1,736 2,034 (15) 1,917 White Cement Capacity TPA 400,000 400,000 - 400,000 Produ
Slide 13: Cement (Contd..)
Cement (Contd..) Highlights – Q1FY2003 ! Sales volumes grew by 9%,marginally higher than industry average of 8% " Strong performance in North, East & South Zones " Volumes up by 17% in North (benefit of Bhatinda Grinding Unit), 19% in East & 12% in south " Sales volumes declined by 13% in the West #
Slide 14: Cement (Contd..) – Outlook
Cement (Contd..) Outlook ! Market to double in size every 7-8 years at current GDP growth ! Infrastructure and Housing sectors to support estimated demand growth of 8% p.a. in normal year ! Infrastructure sector to remain a thrust area " Growing emphasis on roads, bridges and urban infrastructure "
Slide 15: Cement (Contd..) – Outlook (Contd..)
Cement (Contd..) Outlook (Contd..) ! Gujarat reconstruction activity to strengthen regional consumption ! No significant green field capacities underway, demand-supply balance likely in next 3 years ! Positive outlook for pricing " Economic compulsions and rising costs to ensure remunerative prices
Slide 16: Cement (Contd..)
Cement (Contd..) ! Grasim will focus on " Ensuring dominance in the identified core markets of North, South and Western corridors " Increasing share in the profitable regions and growth segments " Proactive change in product/market mix to ensure superior realisation " Enhanced capital productivity a
Slide 17: Chemical
Chemical Q1FY03 Q1FY02 % Chg. FY02 Capacity (Caustic) MT 160,600 160,600 - 160,600 Production (Caustic) MT 30,505 21,950 39 129,784 Sales Volume(Caustic) MT 30,987 20,588 51 129,051 Avg. ECU Realisation Rs./MT 13,845 17,297 (20) 14,564 Net Turnover Rs. Crs. 52 43 21 219 PBIDT * Rs. Crs. 8 8 - 28 PBI
Slide 18: Chemical (Contd..)
Chemical (Contd..) Highlights – Q1FY2003 ! Capacity utilisation higher at 76% from 55% " Plant operated at 50% capacity for 2 months in Q1FY02 due to water shortage ! Sales volume up by 51% ! ECU realisation down by 20% due to fall in Caustic Soda prices by 39% ! Margin down at 16% due to lower real
Slide 19: Chemical (Contd..) – Outlook
Chemical (Contd..) Outlook ! Capacity utilisation has picked up beginning July 02 with onset of monsoon ! Caustic Soda demand expected to remain stable at current level ! ECU realisation to remain stable at current levels " Caustic realisation under pressure in line with international prices " Hcl a
Slide 20: Sponge Iron
Sponge Iron Q1FY03 Q1FY02 % Chg. FY02 Capacity TPA 900,000 900,000 - 900,000 Production MT 142,464 166,493 (14) 559,567 Sales Volumes MT 140,070 165,217 (15) 562,334 Net Turnover Rs. Crs. 88 101 (13) 332 Avg Realisation Rs./MT 5,908 5,907 -- 5,606 PBIDT Rs. Crs. 21 21 - 51 PBIDT Margin % 24 21 15 PB
Slide 21: Sponge Iron (Contd..)
Sponge Iron (Contd..) Highlights – Q1FY2003 ! Capacity utilisation down from 74% to 63% " Continued short supplies of natural gas from GAIL ! Sales volumes in line with production, down by 15% ! Average realisation remains flat at Rs. 5,908/MT ! Margins up from 21% to 24% " Improved operational effi
Slide 22: Sponge Iron (Contd..) – Outlook
Sponge Iron (Contd..) Outlook ! Natural gas availability and prices continues to be main area of concern going forward ! Demand outlook positive with steel sector showing signs of recovery ! Rising global scrap prices and upward revision of customs duty on scrap likely to support domestic prices at
Slide 23: Textiles
Textiles Q1FY03 Q1FY02 % Chg. FY02 Divisional Turnover Rs. Crs. 53 67 (21) 268 PBIDT * Rs. Crs. (5) (2) (238) (21) PBIDT Margin * % (10) (2) - (8) PBIT * Rs. Crs. (8) (6) (38) (38) Capital Employed Rs. Crs. 133 223 (41) 133 ROAvCE (PBIT basis) % (26) (10) (20) * Before Employees Separation Cost High
Slide 24: Textiles (Contd..)
Textiles (Contd..) Outlook ! Textile business going forward " Fabric business being consolidated at one location – Bhiwani # Grasim and Graviera brands as well as their sub-brands will be manufactured at Bhiwani " Improved economies of scale and reduced labour costs to bring down production costs an
Slide 25: Capex Plan
Capex Plan Rs. Crores Total Capex Completion Amount FY03 FY04 Schedule A New Projects : - Cement Capacity Expansion - Debottlenecking/Blending 72 56 16 FY03 - Power Plants (Cement units) - Rajasthan 23 MW (AC) 71 71 -- Dec. - 02 - Tamil Nadu 12.5 MW (GS) 39 26 13 Feb. - 03 - Fibre Application Develo
Slide 26: Capex Plan (Contd..)
Capex Plan (Contd..) Rs. Crores Total Capex Amount FY03 FY04 B Modernisation : - VSF 57 51 6 - Cement 160 124 36 - Chemical 18 18 - - Textile 9 9 - - Other units 4 4 - C Other Capex 52 40 12 Total 534 424 100 ! Q1 FY 03 Capex - Rs.44 Crores " Cement 32 " Fibre 6 " Chemical 3 " Textile 2 " Others 1 2
Slide 27: Profitability & Financial Snapshot
Profitability & Financial Snapshot
Slide 28: Profitability Snapshot
Profitability Snapshot FY00 FY01 FY02 Q1FY03 Gross Turnover Rs. Crs. 4,646 5,184 5,070 1,311 Net Turnover Rs. Crs. 3,962 4,453 4,372 1,132 PBIDT Rs. Crs. 756 912 937 255 PBIDT Margin % 19.0 20.5 21.4 22.5 PBDT Rs. Crs. 500 673 747 211 PAT (before deferred tax) Rs. Crs. 251 371 438 114 PAT Margin % 6
Slide 29: Financial Snapshot
Financial Snapshot FY00 FY01 FY02 Q1FY03 Gross Block Rs.Crs. 5,206 5,312 5,371 5,402 Net Block Rs.Crs. 3,401 3,303 3,263 3,236 Equity Rs.Crs. 91.7 91.7 91.7 91.7 Net Worth Rs.Crs. 2,777 3,075 2,707 2,813 Net Worth + Deferred Tax Rs.Crs. 2,777 3,075 3,347 3,460 Avg.Capital Employed Rs.Crs. 4,759 4,81
Slide 30: Focus And Strategy
Focus And Strategy ! Focus " Deliver enhanced value to shareholders on a sustained basis " Value creation and not asset creation alone ! Strategy " Focus on core businesses – VSF and Cement " Improve asset utilisation through market expansion and better penetration " Improve margins through better e
Slide 31: Plant Locations
Plant Locations Bhatinda(G) Noida Gurgaon $ T Bhiwani Jodhpur Shambhupura Jawad Bharuch F F C Nagda F Fibre plants Raipur P Pulp plant Raigarh C S Hotgi(G) Chemical plant Hyderabad T Textiles units Malkhed Grey cement plants / Grinding Units (G) White cement plant Bangalore Harihar B Chennai Ready-m
Slide 32: Thank You
GRAS TM ADITYA BIRLA GROUP Thank You
Slide 33: Production Data (MT)
Production Data (MT) Q1FY03 Q1FY02 FY02 Capacity Capacity Capacity Production % Production % Production % TPA TPA TPA VSF 220,775 45,458 82 220,775 32,757 59 220,775 176,462 80 Pulp 70,000 18,642 107 70,000 18,267 104 70,000 71,251 102 Caustic Soda 160,600 30,505 76 160,600 21,950 55 160,600 129,784
Slide 34: Divisional Turnover – Qty & Realisation
Divisional Turnover – Qty & Realisation Quantity (MT) Realisation (Rs. /MT) Product Q1 Q1 Q1 Q1 FY03 FY02 FY02 FY03 FY02 FY02 VSF 57,776 39,011 181,520 66,457 72,590 68,511 Pulp 15,922 13,419 71,397 19658 23,914 22,327 Caustic Soda * 30,987 20,588 129,051 13,845 17,297 14,564 Grey Cement ** 2.78 2.5
Slide 35: GRASIM, the ADITYA BIRLA GROUP’s FLAGSHIP COMPANY
Press Release Mumbai, 25th July 2002 GRASIM, the ADITYA BIRLA GROUP’s FLAGSHIP COMPANY REPORTS EXCELLENT PERFORMANCE FOR Q1 – FY 2003 Turnover: Rs.1136 Crores Profit after Tax: Rs. 105 Crores (Rs. Crores) Quarter Quarter Variation Financial Ended Ended Year Ended 30.06.2002 30.06.2001 31.03.2002 (Un
Slide 36: Operations
OPERATIONS The table below indicates Grasim’s operations during the quarter: PRODUCTION / TURNOVER Products Q1 FY2003 Q1 FY2002 Variation FY 2002 Production Volumes Viscose Staple Fibre M.T. 45458 32757 39% 176462 Cement Mn.MT 2.80 2.57 9% 9.53 White Cement M.T. 63956 54211 18% 267915 Sponge Iron M.
Slide 37: Press release: business outlook
The rise in the Country’s GDP growth will have a benefactory effect on the Cement Business given its linkages with the same. Additionally, the ongoing focus on the infrastructure sector by the Government and the expected strong growth in the housing sector augur well for the Company’s Cement Busines
Slide 38: Unaudited Financial Results for the Three Months Ended 30th June, 2002
UNAUDITED FINANCIAL RESULTS FOR THE THREE MONTHS ENDED 30TH JUNE, 2002 Rs in crores Three Months Three Months Year ended Ended 30th Ended 30th 31st March 2002 June 2002 June 2001 ( Audited ) Net Sales / Income from Operations 1,135.51 1,117.16 4,386.64 Other Income 9.27 14.54 114.62 Total Expenditur
Slide 39: Segments Reporting
Cont. from Page 1 4 Segments Reporting: Rs. in Crores Three Months Year ended Ended 30th 31st March 2002 June 2002 ( Audited ) 1. SEGMENT REVENUE a Fibre & Pulp 419.02 1,328.83 b Cement 542.88 2,074.85 c Sponge Iron 87.74 331.66 d Chemicals 52.66 219.93 e Textiles 53.92 276.12 f Others 2.65 270.68 T