Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q4 FY2018 Earnings Presentation
33 slides from Larsen & Toubro's earnings presentation, May 28, 2018
Slide 1: Analyst Presentation Q4 / FY18
Builders to the nation Analyst Presentation Q4 / FY18 May 28, 2018
Slide 2: Disclaimer
2 Disclaimer This presentation contains certain forward time and cost over runs on contracts, our looking statements concerning L&T’s future ability to manage our international business prospects and business profitability, operations, government policies and actions which are subject to a number of
Slide 3: Presentation Outline
3 Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key Subsidiaries The Environment & the Outlook
Slide 4: Performance Highlights – FY18
4 Performance Highlights – FY18 Order Inflow Revenue +7% (like-to-like) +9.5% EBITDA PAT +22% +22% ROE Div/Share 13.9% ₹ 16/- (+110bps) (Payout 48%)
Slide 5: Key Financial Indicators
5 Key Financial Indicators Amount in ₹ bn Q4 Q4 % Var Particulars FY17 FY18 % Var FY17 FY18 473 496 5% Order Inflow 1430 1529 7% 366 407 11% Revenue from Operations (like-to-like) 1093 1197 9.5% 44 54 23% EBITDA 111 136 22% 13.5% 14.2% +70 bps EBITDA Margin (ex services) 10.0% 10.5% +50 bps 30 32 5%
Slide 6: Presentation Outline
6 Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key Subsidiaries The Environment & the Outlook
Slide 7: Q4/FY18 Order Inflow/Order Book
7 Q4/FY18 Order Inflow/Order Book Amount in ₹ bn Order Inflow 1529 1430 5% 496 473 • Ordering activity pre- dominantly led by public sector • Domestic inflows compensates for decline in international inflows • Private sector capex (including real estate) still muted. Order Book Nascent signs of pick
Slide 8: Key Orders won during FY18
8 Key Orders won during FY18 Order Details Client Segment Value International Integrated light rail-based Urban Transit system Govt of Mauritius Infrastructure ~ USD 520 mn Haliba Field Development EPC Contract Al Dhafra Petro-UAE Hydrocarbon ~ USD 340 mn Crude Transit Line Kuwait Oil Company Hydroc
Slide 9: Group Performance – Sales & Costs
9 Group Performance – Sales & Costs Q4 Q4 % Var ` Billion FY17 FY18 % Var FY17 FY18 366 407 11% Revenue (like-to-like) 1,093 1,197 9.5% 31% 29% -2% International Revenue % 34% 33% -1% 252 269 7% MCO Exp. 727 773 6% 13 16 18% Fin. Charge Opex* 54 60 12% 35 41 18% Staff Costs 139 153 10% 24 26 12% Sal
Slide 10: Group Performance – EBITDA to PAT
10 Group Performance – EBITDA to PAT Q4 Q4 • EBITDA growth mainly % Var ` Billion FY17 FY18 % Var FY17 FY18 contributed by Infra, Realty 44 54 23% EBITDA 111 136 22% and Fin services businesses (3) (4) 41% Fin. Cost (13) (15) 15% • Other income comprises of (7) (5) -32% Depreciation (24) (19) -19% t
Slide 11: Presentation Outline
11 Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key Subsidiaries The Environment & the Outlook
Slide 12: Segment Composition
12 Segment Composition Infrastructure Power Heavy Electrical & Engineering Automation Buildings & Factories (B&F) EPC- Coal & Gas Electrical Standard Process Plant Equipment Products Transportation Infra (TI) Thermal Power Plant Nuclear Power Plant Electrical Systems Heavy Civil infra (HC) Construct
Slide 13: FY18 Order Inflow Composition
13 FY18 Order Inflow Composition E&A Hydrocarbon HE 3.7% 10.3% 3.8% Services Power 16.7% 1.6% Others 6.8% Infrastructure 57.1% Order Inflow ₹1529 Bn Middle East 10.5% USA & Europe 6.5% ROW 6.4% Domestic 76.6%
Slide 14: FY18 Order Book Composition
14 FY18 Order Book Composition HE E&A Power 1.2% 3.6% 5.1% Hydrocarbon 10.1% Others 5.7% Infrastructure Order Book 74.3% ₹2631 Bn Middle East 16.8% ROW 7.0% Domestic 76.2%
Slide 15: FY18 Revenue Composition
15 FY18 Revenue Composition E&A IT & TS Fin. Services Hydrocarbon HE 4.4% 9.3% 8.4% 9.8% 3.2% Devl. Proj. Power 3.6% 5.2% Others 6.9% Infrastructure 49.3% Revenue Middle East 20.5% ₹1199 Bn USA& Europe 8.5% ROW 4.1% Domestic 66.9%
Slide 16: Infrastructure Segment
16 Infrastructure Segment Amount in ` bn Net Revenue & EBITDA Margin • Heavy Civil and Water businesses drives revenue growth • Pick up in domestic execution compensates for slowdown in overseas markets • Margin reflects job mix and stage of project completion
Slide 17: Power Segment
17 Power Segment Amount in ` bn Net Revenue & EBITDA Margin • Aggressive competition and limited opportunities continues to impact order inflow • Revenue decline reflects depleting domestic order book • Execution of International orders on track • Profits of MHPS and other JV companies are consolida
Slide 18: Heavy Engineering Segment
18 Heavy Engineering Segment Amount in ` bn Net Revenue & EBITDA Margin • Defence business drives revenue growth • FY18 International revenues impacted by slowdown in refining ordering • Margin difference due to variation in job execution stages
Slide 19: Electrical & Automation Segment
19 Electrical & Automation Segment Amount in ` bn Net Revenue & EBITDA Margin • Revenue growth for FY18 largely contributed by product business • Margin growth driven by Standard Products group and cost efficiencies across multiple Business Units • Undertaking signed for sale of E&A business to Schn
Slide 20: Hydrocarbon Segment
20 Hydrocarbon Segment Amount in ` bn Net Revenue & EBITDA Margin • Strong ordering activity witnessed in domestic & overseas markets • Higher revenue growth on efficient execution of international order book • Margin variance due to job stage mix
Slide 21: Developmental Projects Segment
21 Developmental Projects Segment Amount in ` bn Net Revenue & EBITDA Margin • Segment includes Power Development, Hyderabad Metro and Kattupalli Port • IDPL (Roads & TL) consolidated at PAT level under Equity method. Completed InvIT for 5 road projects in May 2018 • Partial CoD of 30Km stretch in H
Slide 22: IT & Technology Services Segment
22 IT & Technology Services Segment Amount in ` bn Net Revenue & EBITDA Margin • LTI FY18 revenue growth led by BFS, Energy & Utilities and CPG, Retail & Pharma Verticals • LTTS FY18 revenue growth led by Telecom & Hi-Tech and Transportation verticals
Slide 23: Others Segment
23 Others Segment Amount in ` bn Net Revenue & EBITDA Margin • Segment includes Metallurgical & Material Handling , Industrial Products & Machinery, Realty and Shipbuilding businesses • Revenues affected by lower offtake in Valves business, slowdown in Realty sector and delayed clearance/lower openi
Slide 24: L&T Finance Holdings (I-GAAP)
24 L&T Finance Holdings (I-GAAP) Q4 Q4 % Var ` Bn FY17 FY18 % Var FY17 FY18 22.4 29.4 31% Total Income 85.7 105.0 22% PAT attributable to Equity 2.9 3.8 33% 9.2 13.5 47% Shareholders Mutual Fund Average AUM 393.0 659.3 68% Loan Book 666.5 836.5 26% Net NPA (%) 5.0% 2.3% -268 bps Networth 77.8 125.5
Slide 25: Presentation Outline
25 Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key Subsidiaries The Environment & the Outlook
Slide 26: The Environment & the Outlook
26 The Environment & the Outlook PSU Capex Inflation Central & State Govt. Spends MOAT Multilateral Funding Land Acquisition / ROW Budgetary Allocations Bharatmala / Infra Value Operational Consumption trends thrust Monetisation Excellence Global Protectionist Client Payments & Robust Policies Clear
Slide 27: Thank You
27 Thank You RENTS | veut 5 © LARSEN & TOUBRO
Slide 28: Annexures
28 Annexures RENTS | veut 5 © LARSEN & TOUBRO
Slide 29: Group Profit & Loss Extracts
29 Group Profit & Loss Extracts L&T & L&T Group Fin. Devl. ` Billion IT & TS Others (Incl. Services Projects FY18 FY17 % Var Eliminations) Income from Operations* 111.9 100.6 42.9 943.2 1,198.6 1,100.1 9% EBITDA 22.3 12.0 2.6 98.7 135.7 111.3 22% Other Income 1.6 2.9 0.1 9.6 14.1 13.4 5% Interest Ex
Slide 30: Balance Sheet
30 Balance Sheet Incr / ` Billion Mar-18 Mar-17 (Decr) Equity & Reserves 557 502 54 Non Controlling Interest 56 36 21 Borrowings - Financial Services 752 631 122 Development Projects 178 150 28 Others 145 159 (14) Sources of Funds 1,688 1,477 211 Fixed Assets 128 132 (4) Intangible Assets & Investme
Slide 31: Group Cash Flow
31 Group Cash Flow Q4 Q4 ` Billion FY17 FY18 FY17 FY18 43.6 48.9 Operating Profit 112.5 132.5 28.1 11.9 Changes in Working Capital 43.5 (34.2) (6.6) (8.7) Direct Taxes paid (32.0) (34.0) 65.1 52.1 Net Cash from Operations (A) 124.0 64.3 (6.9) (1.0) Net Investment in Fixed Assets (incl. Intangible) (
Slide 32: Share in Profit/(Loss) of JVs/Associates
32 Share in Profit/(Loss) of JVs/Associates Q4 Q4 ` Bn FY17 FY18 FY17 FY18 0.34 0.43 MHPS JVs 1.12 1.54 0.63 (1.35) IDPL & Subs. (3.45) (4.14) (0.46) (0.44) Special Steels and Heavy Forgings (1.87) (2.23) 0.32 0.19 Others 0.25 0.46 0.83 (1.17) Total (3.95) (4.36)
Slide 33: Concessions Business Portfolio – 21 SPVs
33 Concessions Business Portfolio – 21 SPVs Transmission Lines: Portfolio: 1 project (482 Km) - Operational Roads and Bridges: Project Cost: `15 bn Portfolio: 15 projects (1661 Km)* 15 Operational Project Cost: `161 bn Balance Equity Commitment (Mar 2018): ` 11 Bn Equity Invested at SPV level (Mar 2