Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q2 FY2008 Earnings Presentation
48 slides from Grasim Industries's earnings presentation, Oct 27, 2007
Slide 1: Grasim Industries Limited Performance Review Q2FY08
Grasim Industries Limited Performance Review Q2FY08 27th October 2007
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 – Q2FY08
Consolidated Financial Performance – Q2FY08 % Consolidated revenue up by 25% Rs. Crs. Change PBIDT up by 42% TOTAL REVENUE 3,973 25 Higher operating profit from all business segments PBIDT 1,267 42 (including minority share) Historically highest profits by VSF Business, PBT PBIDT up by 72% 1,050 52
Slide 4: Consolidated Financial Performance – H1FY08
Consolidated Financial Performance – H1FY08 % Consolidated revenue up by 26% Rs. Crs. Change PBIDT up by 41% TOTAL REVENUE 8,037 26 Higher operating profit from all business segments PBIDT 2,636 41 (including minority share) VSF Business PBIDT up by 90% PBT Normal operations in VSF business as 2,205
Slide 5: Consolidated Financial Performance
Consolidated Financial Performance (Rs. Crores) Q2FY08 Q2FY07 % H1FY08 H1FY07 % FY07 Chg. Chg. Net Turnover & Op. Income 3,972.6 3,185.5 25 8,037.2 6,400.1 26 14,178.4 Other Income 83.9 53.4 57 185.3 102.6 81 245.6 PBIDT 1,267.3 895.3 42 2,636.4 1,867.8 41 4,290.1 Interest 54.2 55.5 (2) 110.1 108.3
Slide 6: Standalone Financial Performance – Q2FY08
Standalone Financial Performance – Q2FY08 % Impressive growth in revenue supported by Rs. Crs. Change higher volumes and realisation PBIDT up by 48% despite rising input and TOTAL REVENUE 2,519 25 fuel costs Higher operating profit from all business PBIDT 862 48 segments Historically highest operati
Slide 7: Standalone Financial Performance – H1FY08
Standalone Financial Performance – H1FY08 % Strong growth in revenue, up by 27% Rs. Crs. Change PBIDT up by 52% despite rising input and TOTAL REVENUE 4,966 27 fuel costs Higher operating profit from all business PBIDT 1,722 52 segments Cement Business PBIDT up by 27% Interest Charges 56 15 Normal o
Slide 8: Standalone Financial Performance
Standalone Financial Performance (Rs. Crores) Q2FY08 Q2FY07 % H1FY08 H1FY07 % FY07 Chg. Chg. Net Turnover & Op. Income 2,519.2 2,011.4 25 4,965.8 3,905.1 27 8,680.3 Other Income 57.3 50.2 16 125.1 87.7 43 209.7 PBIDT 862.3 582.8 48 1,722.2 1,133.8 52 2,619.0 Interest 27.2 24.5 11 55.7 48.3 15 111.8
Slide 9: Segmental Performance – Q2FY08
Segmental Performance – Q2FY08 Revenue Mix Consolidated PBIDT Mix Sponge IronOthers VSF Others VSF 5% 2% 26% 23% 5% Sponge Iron 2% Chemical Chemical 3% * 3% Textiles 2% Cement Cement 64% 65% (Rs.3,973 Crs.) (Rs.1,267 Crs.) (* Minority Share 13%) Revenue Mix Standalone PBIDT Mix Sponge Iron 8% VSF Sp
Slide 10: Financial Highlights
IGRASTM Financial Highlights
Slide 11: Grasim Consolidated Financials
Grasim Consolidated Financials H1 Strong Balance sheet (Rs. Crores) FY05 FY06 FY07 FY08 ROAvCE increased from 18% in FY05 to Net Turnover 9,292 10,224 14,106 7,999 33% in H1FY08 PBIDT 2,272 2,337 4,290 2,636 Return on equity at 36% PAT (After Minority share) 880 1,041 1,968 1,290 Debt-equity reduced
Slide 12: Grasim Standalone Financials
Grasim Standalone Financials H1 Low gearing at 0.38 (Rs. Crores) FY05 FY06 FY07 FY08 Adjusted gearing even lower at 0.15 Net Turnover 6,229 6,653 8,608 4,928 Comfortable interest cover PBIDT 1,785 1,597 2,619 1,722 Standalone ROCE in H1FY08 at 40.3% PAT 886 863 1,536 1,011 Strong funding capabilitie
Slide 13: Business Review – Q2FY08
Business Review – Q2FY08 VSF Chemicals Cement Sponge Iron Textiles 13
Slide 14: Viscose Staple Fibre: Q2FY08 Highlights
Viscose Staple Fibre : Q2FY08 Highlights Q2FY08 Q2FY07 % Chg. New historical high operating profit of Capacity (TPA) 270,100 266,450 1 Rs.316 Crs., up by 81% Production (MT) 69,678 65,083 7 Sales volume up by 11% Sales Volumes (MT) 70,183 63,119 11 Upsurge in global VSF demand for comfort Net Turnov
Slide 15: Viscose Staple Fibre: Outlook
Viscose Staple Fibre : Outlook Volume outlook remains positive Prices to remain firm in the short term Margins may see some decline in the medium to long term Cost pressure on value chain Rising input costs, mainly pulp and sulphur Volume growth to help growth in operating profits Capacity expansion
Slide 16: Chemical: Q2FY08 Highlights & Outlook
Chemical : Q2FY08 Highlights & Outlook Production up by 69% Q2FY08 Q2FY07 % Chg. Normal operations during the quarter Caustic Capacity (TPA) 258,000 190,800 35 Caustic Production (MT) 48,752 28,911 69 Q2FY07 was impacted due to shutdown Caustic Sales Volumes (MT) 49,634 30,072 65 of a captive power
Slide 17: Cement: Q2FY08 Highlights
Cement : Q2FY08 Highlights Q2FY08 Q2FY07 % Chg. Cement production up by 9% Grey Cement Higher capacity utilisation at 110% Production Mn. MT 3.62 3.31 9 Cement sales volume higher by 6% Sales Volumes* $ Mn. MT 3.60 3.38 6 Realisation Rs./MT 3,173 2,822 12 RMC volumes up by 22% aided by RMC capacity
Slide 18: Cement: Outlook
Cement : Outlook Domestic cement consumption grew by 11% in H1FY08 Demand expected to grow at about 10% in the long term Capacity announcement of around 90 Mn. tons over three years [FY08 - FY10] If materialises in total as per announced schedule, may result in surplus Prices may come under pressure
Slide 19: Sponge Iron: Q2FY08 Highlights and Outlook
Sponge Iron : Q2FY08 Highlights and Outlook Production higher by 29% Use of alternate fuels enabled by improved Q2FY08 Q2FY07 % Chg. realisation Capacity (TPA) 900,000 900,000 -- Realisation up by 17% with increase in global Production (MT) 146,673 113,567 29 scrap prices and freight rate Operating
Slide 20: Capex
[GRA STM| ADITYA BIRTA GROUP Capex 20
Slide 21: Capex plans
Capex plans Capex Summary Rs. Crores Total Net Cash Outflow Project Capex * Cost FY08 FY09 Cement 5,123 4,085 3,350 715 - Kotputli (4.5 Mn. TPA) & Shambhupura (4.4 Mn. TPA) Projects, 3,276 2,529 Rajasthan,(incl. 96 MW TPP) - 2 Nos. Thermal Power Plants (75 MW ) 402 212 - Grinding unit – Dadri, U.P.
Slide 22: Subsidiary Companies Performance
Subisidiary Companies Performance UltraTech SDCC 22
Slide 23: UltraTech: Consolidated Financial Performance – Q2FY08
UltraTech: Consolidated Financial Performance – Q2FY08 (Rs. Crores) Net Turnover up by 21% led by higher Q2 Q2 % FY08 FY07 Chg. realisation Net Turnover * 1,208.2 995.8 21 PBIDT up by 31% led by better sales mix and improved realisation Other Income 22.7 12.1 87 Higher stores and spares expenses due
Slide 24: UltraTech Consolidated: Highlights
UltraTech Consolidated: Highlights Q2 Q2 Effective capacity utilisation at 85% % Chg. FY08 FY07 Lower utilisation due to planned Production (Mn. MT) maintenance and flood at GCW for a Cement 3.34 3.00 11 week Sales volumes (Mn. MT) Domestic sales volume up by 12% Cement - Domestic * 3.15 2.80 12 Cur
Slide 25: SDCC Performance - Q2FY08
SDCC Performance - Q2FY08 (Rs. Crores) Production and sales volumes declined Q2 Q2 % due to heavy rains and breakdown of DG FY08 FY07 Chg. set Production 1.56 2.03 (23) Operating profit decreased as a result Sales Volumes 1.43 2.07 (31) Realisation (Rs./MT) 2,920 2,738 7 Net profit down by 81%, to R
Slide 26: Summary
[GRA STM, ADITYA BIRTA GROUP Summary 26
Slide 27: Summary
Summary Grasim – A VSF and Cement major With strong competitive edge Global size operations Consolidating leadership position with strong organic growth pipeline Domestic leadership in Cement Capex of Rs.9,100 Crs. on capacity expansions, captive power plants, RMC and modernisation Focus on greater
Slide 28: Plant Locations – Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bathinda(G) Proposed Cement Projects Panipat Proposed Grinding Units Bhiwani Grey Cement plants Kotputli T Dadri Grinding Units (G) Shambhupura Jodhpur T Gwalior B Bulk Cement Terminal Jawad Bharuch Durgapur(G) UltraTech Cement Plants F Jafrabad Magdalla (G
Slide 29: Thank You
GRAS |_M ADITYA BIRLA GROUP Thank You
Slide 30: Annexures
Grasim Industries Limited Annexures
Slide 31: Annexures
Annexures Consolidated and Standalone Financial Consolidated and Standalone Profitability Segmental Performance – Q2 & H1 FY08 VSF Summary Chemical Summary Cement Summary Sponge Iron Summary Textiles Summary UltraTech Performance SDCC Performance 31
Slide 32: Financial Snapshot
Financial Snapshot Standalone Consolidated (Rs. Crores) FY04 FY05 FY06 FY07 H1FY08 FY05 FY06 FY07 H1FY08 Gross Block $ 5,802 6,052 6,417 7,974 9,197 11,312 11,927 14,481 16,512 Net Block $ 3,213 3,204 3,307 4,593 5,662 6,294 6,411 8,468 10,279 Goodwill - - - - - 1,958 1,773 1,922 1,907 Cement Subs.
Slide 33: Profitability Snapshot
Profitability Snapshot Standalone Consolidated (Rs. Crores) FY04 FY05 FY06 FY07 H1FY08 FY05 FY06 FY07 H1FY08 Gross Turnover 6,130 7,201 7,638 9,613 5,577 10,776 11,746 15,714 9,036 Net Turnover 5,213 6,229 6,653 8,608 4,928 9,292 10,224 14,106 7,999 PBIDT 1,504 1,785 1,597 2,619 1,722 2,272 2,337 4,
Slide 34: Segmental Performance – Q2FY08
Segmental Performance – Q2FY08 Standalone Rs. Crores PBIDT Margin ROAvCE (%) Business Revenue PBIDT PBIT Capital Employed (%) (PBIT basis) Q2FY08 Q2FY07 Q2FY08 Q2FY07 Q2FY08 Q2FY07 Q2FY08 Q2FY07 Q2FY08 Q2FY07 Q2FY08 Q2FY07 VSF 794 566 316 174 40.3 31.2 295 157 1,358 1,098 91.8 59.8 Chemical 111 77 4
Slide 35: Segmental Performance – H1FY08
Segmental Performance – H1FY08 Standalone Rs. Crores PBIDT Margin ROAvCE (%) Business Revenue PBIDT PBIT Capital Employed (%) (PBIT basis) H1FY08 H1FY07 H1FY08 H1FY07 H1FY08 H1FY07 H1FY08 H1FY07 H1FY08 H1FY07 H1FY08 H1FY07 VSF 1,502 1,012 572 289 38.5 28.9 531 255 1,358 1,098 82.7 48.6 Chemical 204
Slide 36: Viscose Staple Fibre: Summary
Viscose Staple Fibre : Summary Q2 FY08 Q2 FY07 % Chg. H1 FY08 H1 FY07 % Chg. FY07 Capacity TPA 270,100 266,450 1 270,100 266,450 1 270,100 Production MT 69,678 65,083 7 138,233 110,277 25 246,833 Sales Volumes MT 70,183 63,119 11 139,579 115,076 21 250,725 Net Turnover Rs. Crs. 783.7 558.3 40 1,483.
Slide 37: Chemical: Summary
Chemical : Summary Q2 FY08 Q2 FY07 % Chg. H1 FY08 H1 FY07 % Chg. FY07 Capacity TPA 258,000 190,800 35 258,000 190,800 35 258,000 Production MT 48,752 28,911 69 91,595 59,648 54 136,685 Sales Volumes MT 49,634 30,072 65 92,506 60,784 52 137,830 Net Turnover Rs. Crs. 108.8 76.2 43 195.1 147.2 33 313.0
Slide 38: Cement: Summary
Cement : Summary Q2 FY08 Q2 FY07 % Chg. H1 FY08 H1 FY07 % Chg. FY07 Grey Cement Capacity Mn. MT 13.12 13.12 -- 13.12 13.12 -- 13.12 Production Mn. MT 3.62 3.31 9 7.48 6.87 9 14.42 Sales Volumes * Mn. MT 3.60 3.38 6 7.49 6.88 9 14.52 Avg. Realisation Rs./MT 3,173 2,822 12 3,126 2,773 13 2,867 White C
Slide 39: Sponge Iron: Summary
Sponge Iron : Summary Q2 FY08 Q2 FY07 % Chg. H1 FY08 H1 FY07 % Chg. FY07 Capacity TPA 900,000 900,000 -- 900,000 900,000 -- 900,000 Production MT 146,673 113,567 29 284,809 240,507 18 525,183 Sales Volumes MT 141,960 110,933 28 281,666 251,845 12 571,127 Net Turnover Rs. Crs. 209.6 141.2 48 430.2 31
Slide 40: Textiles: Summary
Textiles : Summary Q2 FY08 Q2 FY07 % Chg. H1 FY08 H1 FY07 % Chg. FY07 Net Turnover Rs. Crs. 85.1 80.8 5 140.5 133.6 5 254.8 PBIDT Rs. Crs. 3.1 1.4 126 4.3 2.5 69 4.6 PBIDT Margin % 3.7% 1.7% -- 3.1% 1.9% -- 1.8% PBIT Rs. Crs. (0.3) (0.1) -- (2.2) (0.3) -- (4.6) Capital Employed Rs. Crs. 163 124 31 1
Slide 41: UltraTech: Consolidated Financial Performance
UltraTech: Consolidated Financial Performance (Rs. Crores) Q2 FY08 Q2 FY07 % Chg. H1FY08 H1FY07 % Chg. FY07 Cement Production (Mn. MT) 3.34 3.00 11 7.25 6.87 5 14.63 Sales Volume(Mn. MT): Cement-Domestic* 3.15 2.80 12 6.82 6.28 9 13.35 Cement-Exports 0.20 0.23 (14) 0.43 0.58 (27) 1.27 Clinker 0.26 0
Slide 42: SDCC: Financial Performance
SDCC : Financial Performance (Rs. Crores) Q2 FY08 Q2 FY07 % Chg. H1 FY08 H1 FY07 % Chg. FY07 Net Turnover 41.8 56.8 (26) 116.6 119.3 (2) 261.8 Other Income 1.6 0.9 80 2.5 2.7 (8) 4.6 PBIDT 3.7 10.0 (64) 22.5 22.8 (1) 61.0 PBIDT Margin % 8.7% 17.7% -- 19.3% 19.1% -- 23.3% Interest 0.2 0.4 -- 0.3 0.7
Slide 43: Press Release Mumbai, October 27, 2007
Press Release Mumbai, October 27, 2007 GRASIM, THE ADITYA BIRLA GROUP’s FLAGSHIP COMPANY PERFORMANCE FOR Q2FY 2008 Consolidated Net Profit : Rs.620 Crs. 50% Consolidated Net Revenue : Rs.3,973 Crs. 25% Consolidated Financial Performance: Rs. Crores Q2 Q2 % H1 H1 % FY08 FY07 Change FY08 FY07 Change N
Slide 44: Highlights of Grasim's operations: Q2FY08 vs Q2FY07
Highlights of Grasim’s operations: Q2FY08 Q2FY07 % Change Production - Viscose Staple Fibre M.T. 69,678 65,083 7% Cement Mn. M.T. 3.62 3.31 9% White Cement M.T. 89,733 92,766 -3% Sponge Iron M.T. 146,673 113,567 29% Caustic Soda M.T. 48,752 28,911 69% Sales Volumes - Viscose Staple Fibre M.T. 70,183
Slide 45: Cement Subsidiaries and Cement Capex plan
Cement Subsidiaries UltraTech Cement Limited (UltraTech), a subsidiary of Grasim, too bettered its performance. Sales of cement and clinker were at 3.35 million tons and 0.26 million tons respectively. Net Profit was higher at Rs.184 crores. Shree Digvijay Cement Company Limited, yet another subsidi
Slide 46: Unaudited Financial Results for the Quarter Ended 30th September 2007
UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30th SEPTEMBER 2007 I. CONSOLIDATED RESULTS : Rs in Crores Three Months Three Months Six Months Six Months Year Ended 30th Ended 30th Ended 30th Ended 30th Ended 31st September 2007 September 2006 September 2007 September 2006 March 07 ( Audited ) Ne
Slide 47: Segment Reporting - Consolidated
III. SEGMENT REPORTING - CONSOLIDATED Rs. in Crores Three Months Three Months Six Months Six Months Full Year ended 30th ended 30th ended 30th ended 30th ended 31st September 2007 September 2006 September 2007 September 2006 March 2007 (Audited) 1. SEGMENT REVENUE a Fibre & Pulp 904.03 670.81 1,722.
Slide 48: Notes
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 (AS-23), and Accounting Standard on Financial Reporting of Interest in Joint Ventures (AS-27) issued