Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — FY2006 Earnings Presentation
57 slides from Grasim Industries's earnings presentation, Apr 27, 2006
Slide 1: Grasim Industries Limited Performance Review – FY06
Grasim Industries Limited Performance Review – FY06 27th April 2006
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: Consolidated Financial Performance – Q4FY06
Consolidated Financial Performance – Q4FY06 % z Consolidated revenue up by 17% Rs. Crs. Change z PBIDT higher by 14% ¾ VSF business performance improved TOTAL REVENUE 2,901 17 remarkably ; PBIDT up by 24% YoY ¾ Excellent performance from Grasim’s Cement PBIDT 725 14 (including minority share) Busine
Slide 4: Consolidated Financial Performance – FY06
Consolidated Financial Performance – FY06 % z Consolidated revenue grew by 10% Rs. Crs. Change z PBT higher by 20%, PAT up by 18% TOTAL REVENUE 10,200 10 ¾ Satisfactory performance by VSF business ¾ Excellent performance from Grasim’s PBIDT 2,331 3 (including minority share) Cement Business ¾ UltraT
Slide 5: Consolidated Financial Performance
Consolidated Financial Performance (Rs. Crores) Q4FY06 Q4FY05 % Chg. FY06 FY05 % Chg. Net Turnover & Op. Income 2,901.4 2,474.8 17 10,200.3 9,314.8 10 Other Income 66.8 88.8 (25) 218.7 222.1 (1) PBIDT 725.2 637.2 14 2,331.2 2,272.4 3 Interest 48.7 72.5 (33) 212.4 284.6 (25) Gross Profit 676.5 564.7
Slide 6: Consolidated Segmental Performance – FY06
Consolidated Segmental Performance – FY06 Revenue Mix PBIDT Mix Sponge Iron Others VSF VSF 6% 3% Others 21% 19% Chemical 8% Sponge Iron 5% Chemical 3% 4% Textiles 2% * Cement 66% Cement 63% (Rs.10,200 Crs.) (Rs.2,331 Crs.) z VSF (incl. Chemical) contributed 23% to Revenue and 26% in PBIDT mix z Ceme
Slide 7: Standalone Financial Performance – Q4FY06
Standalone Financial Performance – Q4FY06 % z Revenue up by 11% Rs. Crs. Change z PBIDT down by 3% TOTAL REVENUE 1,815 11 ¾ Sponge Iron business performance significantly impacted PBIDT 464 (3) z Stellar performance by cement business z VSF business performance improved Interest Charges 24 [31] rema
Slide 8: Standalone Financial Performance – FY06
Standalone Financial Performance – FY06 % z Revenue higher by 6% Rs. Crs. Change z PBIDT down by 11% TOTAL REVENUE 6,656 6 ¾ Though Satisfactory performance by VSF business, contribution lower compared to FY05 PBIDT 1,591 (11) ¾ Sponge Iron business performance Interest Charges 97 [30] significantly
Slide 9: Standalone Financial Performance
Standalone Financial Performance (Rs. Crores) Q4FY06 Q4FY05 % Chg. FY06 FY05 % Chg. Net Turnover & Op. Income 1,815.1 1,642.2 11 6,655.7 6,252.4 6 Other Income 57.5 82.5 (30) 169.1 167.0 1 PBIDT 464.0 478.1 (3) 1,590.9 1,784.7 (11) Interest 23.5 33.9 (31) 97.4 138.8 (30) Gross Profit 440.5 444.1 (1)
Slide 10: Standalone Segmental Performance– FY06
Standalone Segmental Performance– FY06 Revenue Mix PBIDT Mix Sponge Others Sponge Iron Iron 9% 6% VSF 4% VSF 28% 31% Chemical Cement 6% Cement Chemical 53% Textiles 4% 51% 8% (Rs.6,656 Crs.) (Rs.1,591 Crs.) z VSF (incl. Chemical) contributed 34% (36%) to Revenue and 39% (40%) in PBIDT mix z Cement c
Slide 11: Business Review – Q4FY06
Business Review – Q4FY06 VSF Chemicals Cement Sponge Iron Textiles 11
Slide 12: Viscose Staple Fibre : Q4FY06 Highlights
Viscose Staple Fibre : Q4FY06 Highlights % z Strong recovery during the quarter Q4FY06 Q4FY05 Chg. Capacity (TPA) 257,325 253,675 1 z Capacity utilisation at 100% Production (MT) 64,606 63,304 2 z Production up 2% Sales Volumes (MT) 60,636 54,182 12 Net Turnover (Rs Crs.) 500.7 461.7 8 z Sales volum
Slide 13: Viscose Staple Fibre : Outlook
Viscose Staple Fibre : Outlook z Demand to sustain at present higher levels ¾ Strong demand from India and South Asian Textile hubs ¾ Reduction in excise duty on VSF to increase its competitiveness against natural fibres z Production at Nagda Plant may be impacted in Q1FY07 due to likely water short
Slide 14: Chemical : Q4FY06 Highlights
Chemical : Q4FY06 Highlights % z Sales volume grew by 3% Q4FY06 Q4FY05 Chg Caustic Capacity (TPA) 190,800 190,800 -- z ECU realisation lower by 17% in the Caustic Production (MT) 42,687 42,165 1 quarter Caustic Sales Volumes (MT) 44,136 42,793 3 ¾ Lower caustic prices coupled with steep Net Turnover
Slide 15: Cement : Q4FY06 Highlights
Cement : Q4FY06 Highlights % z Excellent performance Q4FY06 Q4FY05 Chg. z Impressive capacity utilisation, at 115% Grey Cement z Sales volume up by 15% on robust Capacity (Mn. TPA) 13.12 13.12 -- demand growth Production (Mn. MT) 3.78 3.30 15 ¾ Demand momentum continues, sector up Sales Volumes (Mn.
Slide 16: Cement : Outlook
Cement : Outlook z Demand – supply gap narrowed considerably across regions ¾ Robust demand growth of 11% in FY06 Ö Propelled by impressive growth in South (up 18%) and East (up 11%) ¾ Low capacity additions in FY06 z Demand outlook positive, expected to grow by 8-9% in the long term ¾ Growing deman
Slide 17: Cement Capacity Expansion Plan
Cement Capacity Expansion Plan z Expansion of 8 Mn. TPA at two locations with capacity of 4 Mn. TPA each z Total capital outlay of Rs.2,475 Crs. z Greenfield project at Kotputli (Rajasthan) with split grinding unit ¾ Capacity 4 Mn. TPA ¾ CPP 40 MW ¾ Capital Outlay Rs.1,275 Crs. ¾ Implementation 21 M
Slide 18: Sponge Iron : Q4FY06 Highlights
Sponge Iron : Q4FY06 Highlights z Production constrained due to poor % availability of Natural Gas FY06 FY05 Chg. z Sales volume declined as a result Capacity (TPA) 900,000 900,000 -- z Realisation lower by 20% Production (MT) 109,073 219,746 (50) ¾ Weakness in scrap prices due to Sales Volumes (MT)
Slide 19: Sponge Iron : Outlook
Sponge Iron : Outlook z Volumes to remain depressed with inadequate Natural Gas supplies z Profitability to remain under pressure ¾ Lower volumes due to gas shortage ¾ Further increase in iron ore price by 10% and natural gas price by 25% from April 06 ¾ Marginal increase in realisations expected wi
Slide 20: Textiles : Q4FY06 Highlights and Outlook
Textiles : Q4FY06 Highlights and Outlook Q4 Q4 % z Fabric volumes lower by 11% FY06 FY05 Chg. Sales Volumes ¾ Intense competition from unorganised - Fabrics (lac Mtrs.) 35 39 (11) sector - Synthetic Yarn (MT) 1,711 1,828 (6) ¾ Reduced exports due to lower Net Turnover (Rs. Crs.) 64.8 65.9 (2) realis
Slide 21: Capex
Capex 21
Slide 22: Capex plans
Capex plans Rs. Crores Capex Cash Outflow Plan FY07 FY08 Cement 1,261 829 337 - Power plants (4 Nos, 102 MW, Project Cost Rs.455 Crs.) 386 - Grinding unit - North (1.3 Mn. MT, Project Cost Rs.137 Crs.) 123 - De-bottlenecking/Blending 169 - RMC’s 165 - Modernization 284 - Other projects 134 VSF 627 4
Slide 23: UltraTech Cement Limited (Consolidated) Performance Review
UltraTech Cement Limited (Consolidated) Performance Review 23
Slide 24: UltraTech : Consolidated Financial Performance – Q4FY06
UltraTech : Consolidated Financial Performance – Q4FY06 (unaudited) (Rs. Crores) z * Turnover increased by 30% Q4 Q4 % FY06 FY05 Inc. z Improvement in margins from 18.0% in Net Turnover & * 962.1 741.1 30 Q4FY05 to 23.7% in Q4FY06 Other Income ¾ Increased domestic cement realisation; PBIDT 226.5 ^ 1
Slide 25: UltraTech Consolidated : Highlights
UltraTech Consolidated: Highlights Q4 Q4 z Capacity utilisation at 88% in FY06 FY06 FY05 FY06 FY05 against 92% in FY05 Capacity (Mn TPA) 17.00 17.00 17.00 17.00 Production (Mn. MT) ¾ Shutdown at Gujarat Cement Works, Kovaya due to floods in Q2FY06 Clinker 0.34 0.40 1.33 2.67 ¾ Prolonged annual maint
Slide 26: Plant Locations– Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bhatinda(G) Noida Grey cement plants Gurgaon T Bhiwani Jodhpur Grinding Units (G) Shambhupura UltraTech Cement Plants Jawad Bharuch Durgapur(G) UltraTech Grinding Units (G) F Jafrabad Magdalla (G) B UltraTech Bulk Cement Terminals Sikka F C Pipavav Nagda Hi
Slide 27: Viscose Staple Fibre : FY06 Highlights
Viscose Staple Fibre : FY 06 Highlights % z Satisfactory performance amidst structural FY06 FY05 Chg. Capacity (TPA) 257,325 253,675 1 changes Production (MT) 228,981 247,952 (8) ¾ Abolition of MFA impacted volumes initially due to Sales Volumes (MT) 242,399 231,533 5 uncertainty associated with its
Slide 28: Chemical : FY06 Highlights and Outlook
Chemical : FY06 Highlights and Outlook z Marginal increase in production and % volumes FY06 FY05 Chg z ECU realisation up 9% Caustic Capacity (TPA) 190,800 190,800 -- ¾ Higher caustic prices during first half in Caustic Production (MT) 165,509 161,966 2 line with global trends Caustic Sales Volumes
Slide 29: Cement : FY06 Highlights
Cement : FY06 Highlights % z High capacity utilisation, at 105% FY06 FY05 Chg. z Record sales volume fuelled by higher Grey Cement demand; up 11% Capacity (Mn. TPA) 13.12 13.12 -- ¾ Outperformed the sector in North and Production (Mn. MT) 13.83 12.44 11 * 13.99 East Sales Volumes (Mn. MT) 12.63 11 N
Slide 30: Cement : FY06 Highlights contd..
Cement : FY06 Highlights contd.. zCement : Highlights (Contd..) FY06 – Zone wise Growth 25% z Margins improved considerably from 17.8% 17.8% 20% 19.7% to 24.2% on increased realisation 11.1% 11.3% 10.9% 11.1% 10.8% 15% z Operating profit up 45% buoyed by higher volumes and better realisations 6.6% 1
Slide 31: Sponge Iron : FY06 Highlights
Sponge Iron : FY06 Highlights z Production constrained due to poor % availability of Natural Gas FY06 FY05 Chg. ¾ Disruptions in Natural Gas supplies Capacity (TPA) 900,000 900,000 -- during Q2FY06 Production (MT) 505,805 780,341 (35) z Sales volume declined as a result Sales Volumes (MT) 478,291 77
Slide 32: Textiles : FY06 Highlights and Outlook
Textiles : FY06 Highlights and Outlook FY06 FY05 % z Fabric volumes lower by 13% Chg. Sales Volumes ¾ Intense competition from unorganised - Fabrics (lac Mtrs.) 134 154 (13) sector - Synthetic Yarn (MT) 6,610 6,265 6 ¾ Reduced exports due to lower Net Turnover (Rs. Crs.) 236.9 249.9 (5) realisation
Slide 33: UltraTech: Consolidated Financial Performance - FY06
UltraTech: Consolidated Financial Performance - FY06 (unaudited) (Rs. Crores) % z * Turnover higher by 13% FY06 FY05 Inc. z Operating margins improved from Net Turnover & *3,052.5 2,702.9 13 Other Income 14.1% in FY05 to 20.1% in FY06 PBIDT 607.3 ^ 378.9 60 ¾ Higher domestic and exports realisation
Slide 34: Thank You
iG RASTM| GRASTM ADITYA BIRLA GROUP Thank You 34
Slide 35: Annexure
Grasim Industries Limited Annexure 35
Slide 36: Index of Annexure
Index of Annexure Page Nos. Consolidated Profitability and Financial snapshot (3 yrs.) 37-38 Standalone Profitability and Financial snapshot (3 yrs.) 39-40 Segmental Performance – FY06 41-42 VSF Summary 43 Chemical Summary 44 Cement Summary 45 Sponge Iron Summary 46 Textiles Summary
Slide 37: Profitability Snapshot - Consolidated
Profitability Snapshot - Consolidated (Figures in Rs. Crores) FY04 FY05 FY06 Gross Turnover 9,189 10,776 11,688 Net Turnover 7,782 9,292 10,165 PBIDT 1,909 2,272 2,331 PBIDT Margin (%) 16.4% 24.5% 22.9% Int. & Fin. Charges 313 285 212 PBDT 1,596 1,988 2,119 Total Tax Expenses 286 # 442 411 PAT (Afte
Slide 38: Financial Snapshot - Consolidated
Financial Snapshot - Consolidated (Figures in Rs. Crores) FY04 FY05 FY06 z Strong consolidated Balance Sheet as well Gross Block 10,702 11,317 11,932 z Leveraging in real term even lower, to be viewed in the context of Net Block 6,394 6,299 6,419 ¾ Cash surplus Goodwill 2,037 1,958 1,958 ¾ Debts inc
Slide 39: Profitability Snapshot - Standalone
Profitability Snapshot - Standalone z EPS improved significantly from Rs.13* in (Figures in Rs. Crores) FY99 FY04 FY05 FY06 FY99 to Rs.94 in FY06 Gross Turnover 4,325 6,130 7,201 7,607 z Over 12 times growth in market cap. Net Turnover 3,757 5,213 6,229 6,620 Rs.188 Bn. (US$ 4.2 Bn.) since FY99 PBID
Slide 40: Financial Snapshot - Standalone
Financial Snapshot - Standalone Networth Cap.Employed Debt Equity Ratio (Figures in Rs. Crores) FY99 FY04 FY05 FY06 Cap.Employed/Net Worth (Rs. Crs.) 8000 7584 1.20 6931 7000 1.13 Gross Block 4,937 5,802 6,052 6,417 6304 6000 5673 0.80 Debt Equity Ratio 5037 5020 Net Block 3,354 3,213 3,204 3,307 50
Slide 41: Segmental Performance-Q4FY06
Segmental Performance-Q4FY06 Standalone (Rs. Crores) PBIDT Margin Capital ROAvCE (%) Revenue PBIDT PBIT Business (%) Employed (PBIT basis) Q4FY06 Q4FY05 Q4FY06 Q4FY05 Q4FY06 Q4FY05 Q4FY06 Q4FY05 Q4FY06 Q4FY05 Q4FY06 Q4FY05 VSF 501.5 462.0 155.7 124.0 31.1 26.9 138.1 109.1 999 1,027 58.4 49.9 Chemica
Slide 42: Segmental Performance-FY06
Segmental Performance-FY06 Standalone (Rs. Crores) PBIDT Margin Capital ROAvCE (%) Revenue PBIDT PBIT Business (%) Employed (PBIT basis) FY06 FY05 FY06 FY05 FY06 FY05 FY06 FY05 FY06 FY05 FY06 FY05 VSF 1.935.4 1,962.7 495.0 610.8 25.8 31.2 429.6 553.6 999 1,027 45.4 63.3 Chemical 386.4 351.8 125.1 10
Slide 43: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary % % Q4 FY06 Q4 FY05 FY06 FY05 Chg. Chg. Capacity TPA 257,325 253,675 1 257,325 253,675 1 Production MT 64,606 63,304 2 228,981 247,952 (8) Sales Volumes MT 60,636 54,182 12 242,399 231,533 5 Net Turnover Rs. Crs. 500.7 461.7 8 1,918.8 1,956.4 (2) Avg. Realisation Rs./M
Slide 44: Chemical : Summary
Chemical : Summary Q4 Q4 % FY06 FY05 % FY06 FY05 Chg. Chg. Capacity (Caustic) MT 190,800 190,800 -- 190,800 190,800 -- Production (Caustic) MT 42,687 42,165 1 165,509 161,966 2 Sales Volume(Caustic) MT 44,136 42,793 3 165,853 163,111 2 Net Turnover Rs. Crs. 88.7 102.6 (14) 385.0 350.9 10 Avg. ECU Re
Slide 45: Cement : Summary
Cement : Summary Q4 Q4 % % FY06 FY05 FY06 FY05 Chg. Chg. Grey Cement Capacity Mn. MT 13.12 13.12 -- 13.12 13.12 -- Production Mn. MT 3.78 3.30 15 13.83 12.44 11 Sales Volumes Mn. MT * 3.87 3.36 15 * 13.99 12.63 11 Net Turnover Rs. Crs. * @ 898.9 699.4 29 *@3,009.6 2,577.8 17 Avg. Realisation Rs./MT
Slide 46: Sponge Iron : Summary
Sponge Iron : Summary Q4 Q4 % % FY06 FY05 FY06 FY05 Chg. Chg. Capacity TPA 900,000 900,000 -- 900,000 900,000 -- Production MT 109,073 219,746 (50) 505,805 780,341 (35) Sales Volumes MT 95,949 202,646 (53) 478,291 772,799 (38) Net Turnover Rs. Crs. 109.8 281.3 (61) 633.6 1,021.4 (38) Avg. Realisatio
Slide 47: Textiles : Summary
Textiles : Summary Q4 Q4 % % FY06 FY05 FY06 FY05 Chg. Chg. Net Turnover Rs. Crs. 64.8 65.9 (2) 236.9 249.9 (5) PBIDT Rs. Crs. (1.1) 3.1 -- 3.4 11.9 (71) PBIDT Margin % (1.7%) 4.7% -- 1.4% 4.8% -- PBIT Rs. Crs. (3.1) 0.5 (3.0) (0.5) -- Capital Employed Rs. Crs. 93 101 (9) 92 101 (9) ROAvCE (PBIT basi
Slide 48: Production Data (MT)
Production Data (MT) Q4FY06 Q4FY05 FY06 FY05 Capacity Capacity Capacity Capacity Production % Production % Production % Production % TPA TPA TPA TPA VSF 257,325 64,606 100 253,675 63,304 100 # 257,325 228981 90 @ 253,675 247,952 98 Caustic Soda 190,800 42,687 89 190,800 42,165 88 190,800 165,509 87
Slide 49: Divisional Turnover (Qty.) & Realisation
Divisional Turnover (Qty.) & Realisation Quantity (MT) Realisation (Rs. /MT) Product Q4FY06 Q4FY05 FY06 FY05 Q4FY06 Q4FY05 FY06 FY05 VSF 60,636 54,182 242,399 231,533 77,133 78,178 73,786 79,008 Caustic Soda * 44,136 42,793 165,853 163,111 17,698 21,364 20,594 18,836 Grey Cement * * 3.87 3.36 13.99
Slide 50: UltraTech : Consolidated Financial Performance
UltraTech : Consolidated Financial Performance (unaudited) (Rs. Crores) Q4 FY06 Q4 FY05 % Inc. FY06 FY05 % Inc. Net Turnover & Other Income * 962.1 741.1 30 * 3,052.5 2,702.9 13 PBIDT 226.5 132.3 71 607.3 378.9 60 PBIDT Margin (%) 23.7% 18.0% -- 20.1% 14.1% -- Interest 22.3 27.0 (17) 90.2 109.3 (18)
Slide 51: Press Release Mumbai, April 27, 2006
Press Release Mumbai, April 27, 2006 GRASIM, THE ADITYA BIRLA GROUP’s FLAGSHIP COMPANY REPORTS EXCELLENT PERFORMANCE FOR Q4FY 2006 Net Profit after Tax at Rs. 347 Crs., up by 39% Proposes 200% Dividend Consolidated Financial Performance: Rs. Crores Q4 Q4 % FY06 FY05 % FY06 FY05 Change Change Net Rev
Slide 52: Dividend and highlights of operations
Dividend The Board of Directors has recommended a dividend of 200% (last year: 160%). Additionally, the Company will absorb Corporate Tax on Dividend (CTD) @ 14.025%. The total payout on this account (inclusive of CTD) would be Rs.209 crores (Rs.167 crores), an increase of 25% over the dividend paid
Slide 53: Cement Business
The integrated plantation-cum-pulp plant planned by the Company at Laos is on track. The Company would be able to source its requirement of quality pulp in adequate quantities upon implementation of this project. The Company’s Fibre production at Nagda may be impacted in the 1st quarter of FY07 due
Slide 54: Grasim Industries Limited
This would entail an investment of approximately Rs.2475 crores, which includes the cost of setting up of thermal power plants at both these places. This expansion would enable the Company cater to the increasing demand in the northern region. Additionally, the Company plans to invest around Rs.1,26
Slide 55: Audited Financial Results for the Year Ended 31st March 2006
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH 2006 I. CONSOLIDATED RESULTS : Rs in Crores Nine Months Three Months Three Months Full Year Full Year ended 31st ended 31st ended 31st ended 31st ended 31st December 2005 March 2006 March 2005 March 2006 March 2005 ( Audited ) ( Audited ) Net S
Slide 56: Segment Reporting - Consolidated
-2- III. SEGMENT REPORTING - CONSOLIDATED Rs. in Crores Nine Months Three Months Three Months Full Year Full Year ended 31st ended 31st ended 31st ended 31st ended 31st December 2005 March 2006 March 2005 March 2006 March 2005 ( Audited ) ( Audited ) 1. SEGMENT REVENUE a Fibre & Pulp 1,476.89 513.16
Slide 57: Notes
-3- V. NOTES 1 Consolidated Results have been prepared in accordance with Accounting Standard on Consolidated Financial Statements (AS-21), Accounting Standard on Accounting for Investments in Associates in Consolidated Financial Statements (AS-23) and Accounting Standard on Financial Reporting of I