Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q2 FY2011 Earnings Presentation
41 slides from Grasim Industries's earnings presentation, October 2010
Slide 1: Performance Review Quarter 2: 2010-11
Performance Review Quarter 2 : 2010-11 Grasim Industries Limited A Cement and VSF Major
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: Contents
Contents z Highlights z Business B i R i Review z Financial Performance z Capex Plan z Summary S 3
Slide 4: Highlights – Quarter 2: Strategic
Highlights – Quarter 2 Strategic: z Cement restructuring fully over, all cement capacities are now consolidated under UltraTech z Acquisition of ETA Star Cement, UAE completed z Work on brownfield expansion at Malkhed and Raipur with aggregate capacity of 9.2 Mn. TPA (Including 95 MW TPP and 5 split
Slide 5: Highlights – Quarter 2: Operational
Highlights – Quarter 2 Operational: z Delayed onset of monsoon prolonged water shortage at Nagda ¾ Reducing production of VSF by 9% and Caustic by 5% z Higher pulp prices eroded profitability at standalone level; However benefitted Pulp JVs z Pulp JVs also show better operating efficiency z VSF pric
Slide 6: Business Review
Business Review VSF Chemical Cement Subsidiary 6
Slide 7: Viscose Staple Fibre: Highlights
Viscose Staple Fibre : Highlights Global Industry Scenario Quarter – 2 % Chg. z Cotton shortage globally has further 2010-11 2009-10 deteriorated by damage of crops in Pakistan Capacity (TPA) 333,975 333,975 --- by floods Production (MT) 69,802 76,669 (9) ¾ Resulting in improved sentiments for VSF l
Slide 8: Viscose Staple Fibre: Highlights (Contd….)
Viscose Staple Fibre : Highlights (Contd….) Quarter – 2 z Standalone PBIDT declined by 23% % Chg. 2010-11 2009-10 ¾ Lower volumes PBIDT (Rs. Crs.) 272.8 354.4 (23) ¾ Steep increase in pulp prices PBIDT Margin (%) 31.8% 41.4% -- z Improved performance of pulp JV’s PBIT (Rs. Crs.) 246.1 327.2 (25) sup
Slide 9: Viscose Staple Fibre: Outlook
Viscose Staple Fibre : Outlook z VSF demand will continue to grow in long term ¾ Textile consumption in India is increasing with growth in population and prosperity ¾ Usage of VSF in various allied applications like Non Woven etc. globally z Besides growth, trends in China as well as prices of compe
Slide 10: Chemical: Highlights
Chemical : Highlights Quarter -2 z Production lower by 5% due to % Chg. 2010-11 2009-10 prolonged plant shutdown Capacity (TPA) 258,000 258,000 - z ECU realisation li ti up b by 2% YYoY Y lled dbby Production (MT) 54,244 56,985 (5) increase in chlorine and HCL prices Sales Volumes (MT) 51,590 59,119
Slide 11: Cement: Industry Scenario
Cement : Industry Scenario Zone wise Industry Growth Rate (YoY) z Subdued demand growth of 5% in the Growth % 24 25 20 quarter 20 ¾ Overhang O h off new capacity it off 60 mn. tons t 15 13 13 10 has affected sentiments 10 9 9 8 6 8 8 ¾ Seasonal impact and lower offtake in key 5 4 4 5 consuming state
Slide 12: Cement: Highlights
Cement : Highlights Quarter -2 % Chg. Business Performance 2010-11 2009-10 Grey Cement z Total capacity up by 13% Capacity Mn. TPA 51.75 45.65 13 ¾ Domestic D i cement grinding i di capacity i up b by - Domestic 48.75 45.65 7 7% YoY - Star Cement 3.00 - - ¾ Star Cement added 3 Mn. TPA at the end Pro
Slide 13: Cement: Financials
Cement : Financials Quarter -2 % Chg. z Revenue of Grey Cement fallen by 10% 2010-11 2009-10 despite higher volume Net Revenue Rs. Crs. - Cement 3,058 3,411 (10) ¾ White cement revenue grew by 12% - White Cement 227 203 12 z Significant decline in operating profit PBIDT R Crs. Rs. C 4 8 478 1 180 1,
Slide 14: Cement: Outlook
Cement : Outlook z Cement Demand expected to grow at 10% + for the next five years z Margins to return gradually back to normalcy sometime in FY’13 ¾ Cost leadership to be maintained ¾ Post monsoon, rise in dispatches is anticipated at better prices z Continued focus on consolidating gains from curr
Slide 15: Financial Performance
ADITYA BIRLA Financial Performance 15
Slide 16: Consolidated Revenue
Consolidated Revenue 53 3 90 384 Rs. Crorees 4741 4503 Quarter 2 Grasim Pulp JVs Textile & Inter Co. Cement (Lower Quarter 2 2009-10 Standalone Eliminations realisation) 2010-11 4741 3 90 53 (384) 4,503 16
Slide 17: Revenue Chart
Revenue Chart Rs. Crores Half Year Quarter -2 % Chg. Net Revenue % Chg. 2010-11 2009-10 2010-11 2009-10 - 4,221 Cement $ - 2,064 9 1 712 1,712 1 567 Viscose 1,567 Vi Staple S l Fibre Fib 856 851 1 (5) 239 251 Chemical 120 131 (9) - - 111 Sponge Iron (Sold on 22nd May 2009) - - - - 36 31 Others 18 16
Slide 18: Financial Performance – Quarter 2
Financial Performance – Quarter 2 * Restated figures exclude Cement business from Q2FY10 reported numbers for comparison purpose 18
Slide 19: Financial Performance – First Half
Financial Performance – First Half * Restated figures exclude Cement and Sponge Iron businesses from H1FY10 reported numbers for comparison purpose 19
Slide 20: Consolidated PBIDT
Consolidated PBIDT 49 50 702 43 ores 1630 Rs. Cro 884 Quarter-2 Pulp JVs Standalone Cement (Lower Inter Company Quarter -2 2009-10 PBIDT realisation & Elimination 2010-11 higher energy cost) 1,630 49 (50) (702) (43) 884 20
Slide 21: PBIDT – Chart
PBIDT – Chart Rs. Crores Half Year PBIDT Quarter -2 % Chg. % Chg. 2010-11 2009-10 2010-11 2009-10 - 1,423 Cement $ - 683 5 577 552 Viscose Staple Fibre 273 354 (23) (12) 63 72 Chemical 32 36 (11) - (39) Sponge Iron (Sold on 22nd May 2009) - - 146 99 Others 121 86 787 2,107 Standalone PBIDT 426 1,159
Slide 22: Net Profit (Before Extraordinary Gain)
Net Profit (Before Extraordinary Gain) Rs. Crores First Half Quarter -2 2010-11 2009-10 Grasim Share % 2010-11 2009-10 Total Net Grasim's Total Net Grasim's Total Net Grasim's Total Net Grasim's Profit share Profit share Profit share Profit share 503 433 Grasim Standalone - Continued Businesses 280
Slide 23: Grasim Financials
Grasim Financials Standalone Consolidated Full Year First Half Full Year First Half (Rs. Crores) 2009-10 2010-11 2009-10 2010-11 Net Worth 7,145 7,649 12,525 13,381 Debt 1,038 838 5,599 6,567 Capital Employed 8,435 8,741 23,884 25,937 Debt:Equity (x) 0.15 0.11 0.34 0.38 Interest Cover ^ 15.5 30.0 13
Slide 24: Capex
ADITYA BIRLA Capex 24
Slide 25: Capex plan
Capex plan Rs. Crores Net Capex Cash Outflow to be spent as on FY11 FY12 & 001.04.10 04 0 Onward VSF Business - Vilayat (120,000 TPD) and Harihar 2,139 Project (36,500 TPD) - Other Capex 334 Chemical Plant – Vilayat (182,500 TPD) 772 Chemical Business and Other Capex 134 Standalone Capex (A) 3,379 5
Slide 26: Summary
ADITYA BIRLA Summaty 26
Slide 27: Summary
Summary z Grasim – Leadership position in both Cement and VSF businesses ¾ Strong competitive edge ¾ Global Gl b l size i operations i z Leading global player in VSF ¾ Integrated business model from plantation to fibre ¾ Continued focus on increasing capacity and creating differentiation z Domestic
Slide 28: Plant Locations – Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bathinda(G) Panipat Bhiwani Dadri T Kotputli Aligarh Jodhpur T Malanpur Shambhupura Jawad Bharuch Durgapur(G) UltraTech Cement Plants F Jafrabad Magdalla (G) UltraTech Grinding Units (G) F C Pipavav Nagda Hirmi Raipur Awarpur B UltraTech Bulk Cement Termina
Slide 29: Thank You
ADITYA BIRLA GRASIM Thank You
Slide 30: Annexure
Grasim Industries Limited Annexure
Slide 31: Annexure
Annexure Consolidated Financial Performance Standalone Financial Performance Consolidated and Standalone Financial Consolidated and Standalone Profitability Businesswise Performance Cement Summary VSF Summary Chemical Summary 31
Slide 32: Consolidated Financial Performance
Consolidated Financial Performance (Rs. Crores) Quarter - 2 Half Year Full Year % Chg. % Chg. 2010-11 2009-10 2010-11 2009-10 2009-10 Net Turnover & Op. Op Income 4 503 4 4,503.4 4 741 5 4,741.5 (5) 9 621 9 9,621.9 9 875 2 9,875.2 (3) 20,194.7 20 194 7 Other Income 98.0 82.6 19 194.3 135.0 44 273.6
Slide 33: Standalone Financial Performance
Standalone Financial Performance (Rs. Crores) Quarter - 2 Half Year Full Year % Chg. % Chg. 2010-11 2009-10 2010-11 2009-10 2009-10 Net Turnover N T & Op. O Income I 962.55 962 33,024.1 024 1 (68) 11,927.0 927 0 66,113.7 113 7 (68) 88,312.6 312 6 Other Income 132.4 100.0 32 172.2 128.1 34 235.3 PBID
Slide 34: Financial Snapshot
Financial Snapshot Standalone Consolidated March March March September March March March September (Rs. Crores) 2008 2009 2010 * 2010 * 2008 2009 2010 2010 Gross Block $ 10,615 12,280 3,145 3,190 19,262 21,044 21,717 22,399 Net Block $ 7,054 8,308 1,829 1,797 12,922 14,219 14,553 15,458 Goodwill 1,9
Slide 35: Profitability Snapshot
Profitability Snapshot Standalone Consolidated Half Year Half Year (Rs. Crores) 2007-08 2008-09 2009-10 * 2007-08 2008-09 2009-10 2010-11* 2010-11 Gross Turnover 11,552 12,097 8,842 2,039 19,112 20,325 21,710 10,579 Net Turnover & Op. Income 10,325 10,965 8,313 1,927 17,141 18,496 20,195 9,622 PBIDT
Slide 36: Consolidated Businesswise Performance - Quarter 2
Consolidated Businesswise Performance - Quarter 2 Rs. Crores ROAvCE (%) Business Revenue PBIDT PBIDT Margin (%) PBIT Capital Employed (PBIT basis) 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 Cement * 3,285 3,614 478 1,180 14.4 32.5 259 984 18,901 1
Slide 37: Consolidated Businesswise Performance – First Half
Consolidated Businesswise Performance – First Half Rs. Crores ROAvCE (%) Business Revenue PBIDT PBIDT Margin (%) PBIT Capital Employed (PBIT basis) 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 2010-11 2009-10 Cement * 7,258 7,676 1,567 2,674 21.3 34.7 1,135 2,288 1
Slide 38: Cement: Summary
Cement : Summary Quarter -2 Half Year Full Year % Chg. % Chg. 2010-11 2009-10 2010-11 2009-10 2009-10 Grey Cement Capacity Mn. TPA 51.75 45.65 13 51.75 45.65 13 48.75 - Domestic 48.75 45.65 7 48.75 45.65 7 48.75 - Star Cement 3 00 3.00 - - 3 00 3.00 - - - Production Mn. MT 8.61 8.36 3 18.53 17.79 4
Slide 39: Cement: Summary Contd…
Cement : Summary Contd… Quarter -2 Half Year Full Year % Chg. % Chg. 2010-11 2009-10 2010-11 2009-10 2009-10 Net Revenue Rs. Crs. - Cement $ 3,058 3,411 (10) 6,818 7,304 (7) 15,103 - White Cement 227 203 12 440 372 18 372 PBIDT $ Rs. Crs. 478 1,180 (59) 1,567 2,674 (41) 4,767 PBIDT Margin % 14.4% 32
Slide 40: Viscose Staple Fibre: Summary
Viscose Staple Fibre : Summary Quarter -2 Half Year Full Year % Chg. % Chg. 2010-11 2009-10 2010-11 2009-10 2009-10 Capacity TPA 333 975 333,975 333 975 333,975 - 333 975 333,975 333 975 333,975 - 333 975 333,975 Production MT 69,802 76,669 (9) 139,130 139,021 - 302,092 Sales Volumes MT 67,488 73,99
Slide 41: Chemical: Summary
Chemical : Summary Quarter -2 Half Year Full Year % Chg. % Chg. 2010-11 2009-10 2010-11 2009-10 2009-10 p y Capacity TPA 258,000 , 258,000 , -- 258,000 , 258,000 , -- 258,000 , Production MT 54,244 56,985 (5) 108,937 109,216 -- 229,801 Sales Volumes MT 51,590 59,119 (13) 105,975 108,964 (3) 229,876