Ultratech Cement Limited · NSE:ULTRACEMCO

Ultratech Cement — Investor Presentation (November 2016)

61 slides from Ultratech Cement's investor presentation, Nov 30, 2016

  1. Slide 1: Corporate Dossier cover letter to exchanges

    ADITYA BIRLA 30" November, 2016 BSE Limited The Manager Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers, The National Stock Exchange of India Limited Dalal Street, “Exchange Plaza”, Bandra-Kurla Complex, Mumbai 400 001. Bandra (East), Mumbai 400 051. Tel.: 22721233/4 T

  2. Slide 2: India's Largest Cement Company Corporate Dossier

    INDIA'S LARGEST CORPORATE CEMENT DOSSIER COMPANY Stock code: BSE: 532538 NSE: ULTRACEMCO Reuters: UTCL.NS Bloomberg: UTCEM IS / UTCEM LX

  3. Slide 3: Contents

    Contents ADITYA BIRLA OPERATIONAL ECONOMIC INDIAN CEMENT ULTRATECH GROUP- AND FINANCIAL ENVIRONENT SECTOR LANDSCAPE OVERVIEW PERFORMANCE GLOSSARY Mnt – Million Metric tons Lmt – Lakhs Metric tons MTPA – Million Tons Per Annum Q1 – April-June Q2 – July-September Q3 – October-December Q4 – January-Mar

  4. Slide 4: Aditya Birla Group - Overview

    ADITYA BIRLA GROUP - OVERVIEW

  5. Slide 5: Aditya Birla Group: Indian Listed Entities

    Aditya Birla Group Premium global US$ ~41 billion Corporation conglomerate In the League of Fortune 500 Operating in 36 countries with over 50% Group revenues from overseas Anchored by about 120,000 employees from 42 nationalities Ranked No. 1 corporate in the Nielsen’s Corporate Image Monitor 2013-

  6. Slide 6: UltraTech Cement

    UltraTech Cement India’s largest cement company India’s Largest No. 1 RMC player in Market Cap FY16 Consolidated Cement Selling Brand India with ~ 100 plants of ~US$ 14 Bn Revenue ~US$ 3.9 Bn Different Products to provide complete No.1 Player of White About 1,000 million ~ 43,000 Direct & Building S

  7. Slide 7: Building Products Portfolio

    UltraTech Cement Building Products Portfolio Complete Building Solutions under one Umbrella 6

  8. Slide 8: UltraTech Journey

    UltraTech Journey UTCL Share Price Trend BSE Sensex Trend 69 MTPA 13x Current Mkt Cap – US$: 14 Bn 5x 52 MTPA - Acquisition in progress: 2011 21.20 MTPA Aug'04 Mar'08 Mar'11 Mar'14 Current Mkt Cap – - Acquisition completed: US$ :7 Bn 4.8 MTPA 42 MTPA - Commissioned 2008 brownfield projects - 7.9 - O

  9. Slide 9: Governance

    Governance Board of Directors Non-Executive Independent Executive / Non- Executive Chairman Directors Directors Mr. K M Birla Mr. G M Dave Mrs. Rajashree Birla Mr. S B Mathur Mr. K K Maheshwari- MD Mr. Arun Adhikari Mr. Atul Daga- ED & CFO Mrs. Renuka Ramnath Mr. D D Rathi Mrs. Sukanya Kripalu Mr. O

  10. Slide 10: Management Team

    Management Team Mr. KK Maheshwari- Managing Director - He is a Fellow Chartered Accountant with over 38 years of experience. Held a variety of roles in Group having exposure in multi- business, multi-geography and multi-culture. - He has brought in strong execution rigor to his work, and has conside

  11. Slide 11: Shareholding Pattern

    Shareholding Pattern Other Public GDRs, 1.7% As on 30th Sep,2016 Mutual Fund, Holding, 10.3% Insititutions, 6.1% Foreign Portfolio Investors, 20.6% Promoter Group, 61.3% Promoter Group Non-promoter Shareholding > 1% Name Holding % Name Holding % Grasim Industries Limited 60.25% Aberdeen 3.13% Turquo

  12. Slide 12: Economic Environment

    Economic Environment

  13. Slide 13: Macro Indicators

    Macro Indicators … taking towards good growth cycle Government- Continuous Focus on Improving Macro Indicators improving business sentiments GST – Bill has been cleared in FY16: Highest GDP growth in last 4 Parliament, expected to come into force years at 7.6% w.e.f. 01.04.17 FY17 GDP may shrink due

  14. Slide 14: Indian Cement Sector

    Indian Cement Sector

  15. Slide 15: Indian cement industry overview

    Indian cement industry Overview GLOBAL CEMENT CONSUMPTION Second largest market Globally with capacity of ~ 411 mtpa after China (~ 2400 MTPA). 7% India Asia (Excl. China, India) 17% Europe & Others America (Excl. USA) 2nd fastest-growing cement market globally: 57% 8% USA Compounded Average Growth:

  16. Slide 16: Indian cement industry: per capita consumption

    Indian cement industry Overview (contd…) PER CAPITA CEMENT COSNUMPTION (KG) Per Capita Cement Consumption at 200 kg lowest among the developing countries; 1780 World average ~ 580 Kg China Turkey Vietnam Consolidation in industry at regular intervals 830 World 660 580 470 Russia 355 Entry of new pla

  17. Slide 17: GDP growth v/s cement demand growth

    Indian cement industry GDP growth v/s cement demand growth Long-term average cement demand 14 growth: 1.2x of GDP 12 +ve co‐relation Cement volume growth has been weak 10 (‐) ve in past 3-4 years, led by a slowdown in co‐relation 8 infra, commercial and housing 6 However, …sustained cement consumpti

  18. Slide 18: Demand-supply trend

    Indian cement industry Demand-supply trend In MnT Incremental Supply - 188 mnt > Demand - 92 mnt S - 52 mnt < D - 100 mnt 90 406 139 420 422 444 444 Industry capacity doubled in last 392 357 368 328 354 decade 319 305 304 276 284 255 267 241 247 216 214 229 198 203 164 178 Around 50 million tonnes c

  19. Slide 19: Demand growth drivers

    Demand growth drivers Rapid Urbanisation (33% in 2011 to 40% in 2030) Housing Number of Cities(population of 1Mn.+) to grow from 53 (2011) to 87 (2030) (~60- ~65%) Rural demand rising, additional boost from urban housing on softening of interest rates Strong demand from IT / ITES, historically south

  20. Slide 20: Sector guidance

    Sector guidance Short term impact on demand due to demonetization, though Industry expected to grow 7-8% in long-term  Demand to improve with government focusing on investment & infrastructure revival and various reforms:  Government Housing Plan –  Housing for all: 20 ml Houses for urban areas a

  21. Slide 21: Sector guidance (contd)

    Sector guidance … (contd…) Capacity addition pace slowing down…. Leading towards improvement in utilization  Expected capacity addition: FY17 – FY20 ~ 40 million tonnes  Incremental demand: FY17- FY20 ~ 90 million tonnes  Setting up new Cement Capacity becoming more challenging due to :  Tougher

  22. Slide 22: UltraTech Landscape

    UltraTech Landscape

  23. Slide 23: UltraTech - A snapshot

    UltraTech - A snapshot Particulars UOM Current Growth Capacity Domestic Capacity increased > 10 fold since FY98 Grey Cement - Domestic Mtpa 66.3 to 66.3 Mtpa. Total Capacity 69.3 Mtpa - Overseas Mtpa 3.0 Proven Capabilities to Grow Organically 44 Mtpa White Cement Mtpa 0.7 and Inorganically 25 Mtpa.

  24. Slide 24: UltraTech - India Footprint

    UltraTech - India Footprint 12 Integrated Units 16 Grinding Units 6 Bulk Packaging Terminals (Sea+Rail) 2 White Cement & Putty Units 5 Jetties 6 ICU & 5 GU Under Acquisition 1 BT In-Progress Zones Zonal Capacity (mtpa) Current Post Acquisition Share in Ind. Capacity Capacity Mix Capacity North 12.8

  25. Slide 25: Operational and Financial Performance

    Operational and Financial Performance

  26. Slide 26: Economy and Industry update

    Economy and Industry update Q2 FY17 Economy Industry  Q1 17 GDP at 7.1%  Low cement demand - Lowest in last 5 quarters - Impact of widespread monsoons  Jul/Aug’16: IIP growth negative  Industry capacity utilization - YTD Aug. (-) 0.3% (LY: + 4.1%) - At it’s lowest level - Fall in manufacturing -

  27. Slide 27: Regional update

    Regional update Q2 FY17 N E W S Demand Growth Demand  Demand impacted  Low demand  Subdued demand  AP / Telangana – Drivers - Consistent rains - Bihar: flood impact - Heavy rains meaningful - Sand shortage - WB: sand issue - Festive season demand yet to come  Positive rural  Positive rural dem

  28. Slide 28: Key Highlights for the Quarter

    Key Highlights for the Quarter

  29. Slide 29: Q2 - Operating Performance

    Q2 – Operating Performance Total Sales  11.2 Mnt …. up 1% (Consistent rains put pressure on off-take) Volume Rural  Rural market contribution in overall sales ~ 38% (+ 1% YoY) Penetration  Increased to ~ 1300 store (+ 60 over Q1 17) UBS*  Share - in overall sales inched up 7.5% (+ 1.7% YoY) 28 *

  30. Slide 30: Q2 - Operating Performance

    Q2 – Operating Performance Q2 FY17 YoY Chg. QoQ Chg. Sales ` 4829/t (-) 3% (+) 3% Realization Total Costs ` 3851/t (-) 7% (+) 6% Petcoke in 71% (+) 15% (+) 2% Kiln + TPP WHRS Power 7% (+) 3% (+) 1% Share Efficiency enhancement contributed 1/3rd of cost improvements 29

  31. Slide 31: Q2 - Financial Performance

    Q2 – Financial Performance Operating margin at 21% …. + 400 bps Conserve Cash  Optimising working capital Turnover : - Reduced ~ 25% over Mar’16 EBITDA : ` 5398 Crs Op. Profit : ` 1327 Crs (-) 2% ` 1033/t  Rationalising capex spends + 19% + 17% - 50% less spent during first 6 months  Reducing net

  32. Slide 32: Acquisition update

    Acquisition update Acquisition of 21.2 mtpa Cement Capacity Central India Coastal AP HP TPP 11.4 mtpa 5.0 mtpa 4.8 mtpa 265 MW  Approval received from Competition Commission of India (CCI)  Shareholders & Creditors approval received at the Court convened meeting held on 20.10.2016  Next Steps: -

  33. Slide 33: Ind AS impact in Q2

    Ind AS impact in Q2  Sales revenue is netted-off discounts & direct sales incentives and grossed-up for excise  ESOP charge based on the fair valuation Operating EBITDA  Capitalisation of large stores & spares having life more than 1 year Impact + ` 5 Crs (-10 Crs)  M-to-M on forward cover on fo

  34. Slide 34: Operational and Financial Performance

    Operational and Financial Performance

  35. Slide 35: Sales Performance

    Sales Performance (Standalone) Q2FY17 H1FY17 Particulars CY LY % CY LY % Capacity (mtpa) 66.25 63.05 5 66.25 63.05 5 Cap Utilisation 64% 72% (8) 70% 76% (6) Domestic Sales 10.55 10.62 (1) 23.26 22.54 3 Exports & Others 0.63 0.47 34 1.12 0.96 16 Total 11.18 11.09 1 24.38 23.50 4  Domestic sales vo

  36. Slide 36: Operating Costs

    Operating Costs (Grey Cement)  Logistics cost improved 4% YoY: ` 1041/t 33%* Q216 Q217  Improvement in Lead distance  Optimisation of Plant and Market mix 7% Energy cost Lower 19% YoY 3440  Benefit of low cost fuel inventory 3188 23%*  Efficiency improvement gain 8% Total Operational Costs incl

  37. Slide 37: Logistics cost trends

    Logistics cost trends (Grey Cement) Logistics Cost `/t Logistics cost – declined 4% YoY & 4% Sequentially 1089 1081 1041  YoY Improved average lead distance: 3%  Mode of Transport: - Shrinking availability of Rail Q2 16 Q1 17 Q2 17 network - Increased share of road dispatches to 73% Mode Mix Q2 16

  38. Slide 38: Energy cost trends

    Energy cost trends (Grey Cement) Energy Cost `/t 909 YoY Energy cost declined 19%:  Increased petcoke consumption - ` 40/t 737 8%  Improved power consumption (3%) - ` 15/t 682  WHRS share in total power 7% - ` 15/t  Gain due to low cost fuel inventory Q2 16 Q1 17 Q2 17 Sequentially cost increase

  39. Slide 39: Energy cost: Power rate trends

    Energy cost: Power rate trends (Grey Cement) WHRS Usage v/s Power Rates Movement 8% 100 7% 7% 6% 95 6% 1% 5% 90 4% 2.5% 4% 3% 85 2% 2% 80 1% 0% 75 FY15 Q2 16 Q1 17 Q2 17 WHRS Share TPP Rate Average Power Rate Power cost reduction through increasing share of WHRS power:  Average power rate down 2.5%

  40. Slide 40: EBITDA movement

    EBITDA movement (India) ` crs 95 1327 83 1116 (171) 187 17 Q2FY16 Realisation Volume Energy Costs Logistics Costs Others Q2FY17 39

  41. Slide 41: EBITDA: per ton

    EBITDA: ` per ton (India) 1191 1187 1190 18% 114 132 1077 154 1024 1034 1006 1020 992 100 95 75 97 81 121 1078 1033 1057 977 929 944 936 911 885 FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 FY16 Q1FY17 Q2FY17 H1FY17 Operating Profit Other Income Total EBITDA Sustained operating profit of > ` 1000/t 40

  42. Slide 42: Income statement (Standalone)

    Income statement (Standalone) ` crs Q2 H1 Particulars CY LY % CY LY % 5398 5527 (2) Revenues (net of excise duty) 11580 11475 1 172 134 29 Other Income 323 251 28 1327 1116 19 EBITDA* 2900 2386 22 25% 20% 4 Margin (%) 25% 21% 4 137 132 (4) Finance Costs 289 272 (6) 314 335 6 Depreciation 617 620 1

  43. Slide 43: Income statement (Consolidated)

    Income statement (Consolidated) ` crs Q2 H1 Particulars CY LY % CY LY % 5709 5857 (3) Revenues (net of excise duty) 12247 12139 1 159 135 18 Other Income 310 234 32 1378 1186 16 EBITDA* 3004 2486 21 24% 20% 4 Margin (%) 25% 20% 4 150 147 (2) Finance Costs 329 297 (11) 334 354 6 Depreciation 657 65

  44. Slide 44: Financial Position

    Financial Position ` crs Consolidated Standalone Particulars 30.09.16 31.03.16 30.09.16 31.03.16 23042 21964 Shareholders Funds 22680 21632 9135 10616 Loans 6764 8250 2619 2428 Deferred Tax Liabilities 2623 2432 34796 35008 Sources of Funds 32066 32313 26134 26127 Fixed Assets 24455 24499 1110 1106

  45. Slide 45: Financial Indicators

    Financial Indicators Consolidated Standalone Indicators 30.09.16 31.03.16 30.09.16 31.03.16 0.08 0.16 Net Debt: Equity (0.02) 0.05 0.32 0.66 Net Debt / EBITDA* (0.08) 0.23 7.3 6.8 Interest Cover 7.8 7.2 13.4% 11.9% ROCE* 14.2% 12.3% 8.0% 7.4% ROIC* 8.5% 7.6% 233 206 EV (USD/t) 17.9 17.2 EV / EBITDA*

  46. Slide 46: Historical Performance Trend

    Historical Performance Trend

  47. Slide 47: Key performance trends

    Key performance trends (Consolidated) Clinker production (Million tonnes) Cement production (Million tonnes) 39.75 38.31 50.57 34.17 34.01 46.71 33.69 42.11 42.59 43.60 19.50 24.66 FY 12 FY 13 FY 14 FY 15 FY 16 H1FY17 FY 12 FY 13 FY 14 FY 15 FY 16 H1 FY17 Revenue * (` Cr) EBIDTA * (` Cr) 25281 5109

  48. Slide 48: Grey Cement Costs trends

    Grey Cement Costs trends (Standalone) Energy Cost (`/Mt) Comparative Cost Trend TPP / WHRS 1006 979 TPP Rate WHRS Rate 989 951 824 707 FY 12 FY 13 FY 14 FY 15 FY16 H1FY17 FY 12 FY 13 FY 14 FY 15 FY16 H1FY17 Fuel Mix FY12 FY13 FY14 FY15 FY16 H1FY17 Power Mix FY12 FY13 FY14 FY15 FY16 H1FY17 Imported C

  49. Slide 49: Ultra Ready

    ALL GEARED UP TO FACE THE FUTURE! WE ARE ULTRA READY a

  50. Slide 50: Income statement (Standalone) US$ Mn

    Income statement (Standalone) US$ Mn Q2 H1 Particulars CY LY % CY LY % 810 830 (2) Revenues (net of excise duty) 1738 1722 1 26 20 29 Other Income 48 38 28 199 167 19 EBITDA 435 358 22 25% 20% 4 Margin (%) 25% 21% 4 21 20 (4) Finance Costs 43 41 (6) 47 50 6 Depreciation 93 93 1 132 97 35 PBT 299 2

  51. Slide 51: Income statement (Consolidated) US$ Mn

    Income statement (Consolidated) US$ Mn Q2 H1 Particulars CY LY % CY LY % 857 879 (3) Revenues (net of excise duty) 1838 1822 1 24 20 18 Other Income 47 35 32 207 178 16 EBITDA 451 373 21 24% 20% 4 Margin (%) 25% 20% 4 22 22 (2) Finance Costs 49 45 (11) 50 53 6 Depreciation 99 99 - 134 103 31 PBT 3

  52. Slide 52: Financial Position US$ Mn

    Financial Position US$ Mn Consolidated Standalone Particulars 30.09.16 31.03.16 30.09.16 31.03.16 3459 3297 Shareholders Funds 3405 3247 1371 1594 Loans 1015 1238 393 364 Deferred Tax Liabilities 394 365 5223 5255 Sources of Funds 4814 4851 3923 3922 Fixed Assets 3671 3678 167 166 Goodwill - - 1085

  53. Slide 53: Historical Performance Trends (Standalone)

    Historical Performance Trends (Standalone) ` Crs Particulars FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 Total Sales Volume (MnT) 48.0 44.8 41.5 40.7 40.7 34.8 20.2 18.2 17.1 17.7 15.6 Net Sales 23841 22648 20078 20023 18158 13206 7050 6383 5509 4911 3299 Operating Expenses 19225 18452 16

  54. Slide 54: Historical Performance Trends (Standalone) Contd.

    Historical Performance Trends (Standalone) …Contd. ` Crs Particulars Mar’16 Mar’15 Mar’14 Mar’13 Mar’12 Mar’11 Mar’10 Mar’09 Mar’08 Mar’07 Mar’06 BALANCE SHEET Net Fixed Assets incl. CWIP 24344 23632 18650 17415 14798 12506 5201 5313 4784 3214 2678 Investments 7108 5209 5392 5109 3789 3730 1670 1035

  55. Slide 55: Historical Performance Trends (Consolidated)

    Historical Performance Trends (Consolidated) ` Crs Particulars FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 Total Sales Volume (MnT) 51.3 48.2 44.7 43.6 44.0 36.9 20.3 18.5 17.3 17.7 Net Sales 25281 24056 21443 21161 19077 13687 7175 6564 5623 4968 Operating Expenses 20390 19630 17408 16322 148

  56. Slide 56: Historical Performance Trends (Consolidated) Contd.

    Historical Performance Trends (Consolidated) …Contd. ` Crs Particulars Mar’16 Mar’15 Mar’14 Mar’13 Mar’12 Mar’11 Mar’10 Mar’09 Mar’08 Mar’07 BALANCE SHEET Net Fixed Assets incl. CWIP 25964 25186 20090 18733 15999 13505 5218 5334 4801 3234 Goodwill 1106 1053 967 734 544 471 6 6 8 9 Investments 6422 4

  57. Slide 57: Historical Performance Trends (Standalone) US$ Mn

    Historical Performance Trends (Standalone) US$ Mn Particulars FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 Total Sales Volume (MnT) 48.0 44.8 41.5 40.7 40.7 34.8 20.2 18.2 17.1 17.7 15.6 Net Sales 3579 3400 3014 3006 2726 1982 1058 958 827 737 495 Operating Expenses 2886 2770 2441 2304 210

  58. Slide 58: Historical Performance Trends (Standalone) Contd. US$ Mn

    Historical Performance Trends (Standalone) …Contd. US$ Mn Particulars Mar’16 Mar’15 Mar’14 Mar’13 Mar’12 Mar’11 Mar’10 Mar’09 Mar’08 Mar’07 Mar’06 BALANCE SHEET Net Fixed Assets incl. CWIP 3654 3547 2799 2614 2221 1877 781 798 718 482 402 Investments 1067 782 809 767 569 560 251 155 26 73 26 Net Wor

  59. Slide 59: Historical Performance Trends (Consolidated) US$ Mn

    Historical Performance Trends (Consolidated) US$ Mn Particulars FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 Total Sales Volume (MnT) 51.3 48.2 44.7 43.6 44.0 36.9 20.3 18.5 17.3 17.7 Net Sales 3795 3611 3219 3176 2864 2055 1077 985 844 746 Operating Expenses 3061 2947 2613 2450 2234 1650 769 7

  60. Slide 60: Historical Performance Trends (Consolidated) Contd. US$ Mn

    Historical Performance Trends (Consolidated) …Contd. US$ Mn Particulars Mar’16 Mar’15 Mar’14 Mar’13 Mar’12 Mar’11 Mar’10 Mar’09 Mar’08 Mar’07 BALANCE SHEET Net Fixed Assets incl. CWIP 3897 3780 3016 2812 2402 2027 783 801 721 485 Goodwill 166 158 145 110 82 71 1 1 1 1 Investments 964 699 730 707 532

  61. Slide 61: Disclaimer

    Disclaimer 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 implied. Impor

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