Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q3 FY2021 Earnings Presentation
49 slides from Larsen & Toubro's earnings presentation, Jan 30, 2021
Slide 1: Investor Presentation Q3/9M FY21
LARSEN & TOUBRO Investor Presentation Q3/9M FY21 Jan 30, 2021 1 Sensitivity : This Document is Classified as "LNT Internal Use". 1
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward retain highly skilled professionals, time and cost looking statements concerning L&T’s future over runs on contracts, our ability to manage our business prospects and business profitability, international operations, government policies which are
Slide 3: L&T Overview
L&T Overview EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 3
Slide 4: L&T – At a Glance
L&T – At a Glance India’s largest E&C company with interests in EPC Projects, Hi- Tech Manufacturing and Services. Revenues Credit Rating Market Capitalization a Professionally ₹1,455Bn CRISIL: AAA / Stable ₹ 1,912Bn Managed Corporate ICRA: AAA (Stable) FY 20 Group 25th Jan, 2021 (approx. Group (app
Slide 5: L&T – At a Glance: Market Cap
Mar '04 71 Sept '04 106 Mar '05 129 Sept '05 200 Mar '06 334 Sept '06 356 Mar '07 459 Sept '07 807 Mar '08 884 Sept '08 715 Sensitivity : This Document is Classified as "LNT Internal Use". Mar '09 394 Sept '09 989 L&T – At a Glance Mar '10 979 Sept '10 1,237 Mar '11 1,007 Sept '11 830 EPC Projects M
Slide 6: L&T – Shareholding Pattern
L&T – Shareholding Pattern Bharat ETF, Others, 6% 0.6% Govt. Mutual Financial Funds & Pvt. Institutions Insurance & Insurance Cos., Companies, 14% 21% Major Institutional Shareholders % Shares L&T 31st Dec, Employee 2020 Life Insurance Corporation of India 14.4% Trust, HDFC Mutual Fund 3.3% 14% FII'
Slide 7: Experienced Management Team
Experienced Management Team 1 2 3 4 5 6 7 8 9 Subramanian A M Naik S. N. R Shankar D. K. Sen M. V. Satish J.D. Patil S.V. Desai T.Madhava Das Sarma Group Subrahmanyan Raman Whole-time Whole-time Director Whole-time Whole-Time Whole-Time Whole-Time Chairman Chief Executive Whole-time Director & Sr. &
Slide 8: Corporate Governance
Corporate Governance L&T’s essential character revolves around values based on transparency, integrity, professionalism and accountability. • Audit Committee • Nomination & Remuneration Committee • Stakeholder’s Relationship Committee Board • Corporate Social Responsibility Committee of Directors •
Slide 9: Governance- Policies, Procedures and Guiding Principles
Governance- Policies, Procedures and Guiding Principles Important Structures & Processes Important Policies Voluntary Adoption Employee Code of Conduct EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 9
Slide 10: ESG, Sustainability & Integrated Report
ESG, Sustainability & Integrated Report <IR> 2019-20 available on www.Larsentoubro.com under Sustainability Tab In alignment with Based on International Global Reporting Integrated Reporting Initiative (GRI) Council (IIRC) framework Standards ‘In Accordance – Comprehensive Reports progress on option
Slide 11: Sustainability – Environment & Social
Sustainability – Environment & Social Green Product Portfolio – INR 324.92 Billion CSR Highlights – 1.38 million beneficiaries • In FY20, 1.06 million units of solar energy was • Theme: Building India’s Social Infrastructure harnessed at our campuses • Evolving collaborative and dynamic teaching • A
Slide 12: ESG – Defence matters
ESG – Defence matters ➢ L&T partners with the Indian Defence Research, Defence Research and Development Organisation (DRDO) and the Indian Armed Forces in the development of defence products, systems and platforms across land, sea and air operations, in line with its commitment to ‘Make in India’. ➢
Slide 13: Business Overview
Business Overview EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 13
Slide 14: Builders to the Nation
Builders to the Nation Statue of Unity, Gujarat Turbine Rotor, Gujarat 88m Rail Bridge Jammu Udhampur Wankhede Stadium, Mumbai Baha’i Temple, Delhi Mumbai International Airport Medigadda Barrage, Telangana Vivekanand Bridge, Kolkata Kakrapar Nuclear Power Plant, Guj Vizag Steel Plant Sri Sathya Sai
Slide 15: International Footprint – Marquee Jobs
International Footprint – Marquee Jobs Stadium at Barbados Salalah Airport, Oman Twin Towers, Dubai Marina NMC Speciality hospital, Abu Dhabi Bhukara Hotel, Uzbeckistan World’s Longest Conveyer, Bangladesh Bulk Cement Terminal, Colombo Fabrication Facility, Oman Punatsangchhu HEP, Bhutan Sheikh Khal
Slide 16: Value creating Integrated Business Model
Value creating Integrated Business Model Design & Precision Engineering Hi-Tech Manufacturing Realty & Infrastructure Development EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 16
Slide 17: E&C Delivery Platform
E&C Delivery Platform One of Asia’s largest vertically integrated E&C Companies Design & Engineering EPC PROJECTS Construction Manufacture & Fabrication Single point responsibility for turnkey solutions EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT In
Slide 18: Quality Customer Mix
Quality Customer Mix Indian Coastguard EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 18
Slide 19: Multiple Alliances & Joint Ventures
Multiple Alliances & Joint Ventures Alliances Pre Qualifications Joint Ventures Befula Investments Note: Some of these are project specific alliances & pre qualifications EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 19
Slide 20: Rewards and Recognitions
Rewards and Recognitions L&T’s CEO & MD, ‘Company of the Year’ SNS Gets CNBC-AWAAZ’s ‘CEO Mr. S. N. Subrahmanyan, by Business Standard for of the Year’ Award, 2019 ranked 13th on 2019 Construction Week’s prestigious Power 100 list, for 2020 ‘Firm of the Year Trophy’ for best Risk Management practice
Slide 21: L&T’s Business Structure
L&T’s Business Structure LARSEN & TOUBRO Business verticals Subsidiaries, JVs & Associates Buildings & Factories L&T Hydrocarbon Engineering Transportation Infrastructure Financial Services Heavy Civil Infrastructure IT & Technology Services Water & Effluent Treatment Infrastructure SPVs (BOTs) Powe
Slide 22: Group Performance Highlights
01 Group Performance Highlights Link: Advertisement EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 22
Slide 23: Q3 FY21- Strong sequential recovery continues
Q3 FY21- Strong sequential recovery continues Prestigious order wins Order Book at record high Revenue momentum picks up despite productivity challenges Sequential improvement in operational PAT Robust operational free cash flow Most high frequency economic indicators near pre Covid 19 levels by end
Slide 24: Key Financial Indicators
Key Financial Indicators (Amount in ₹ bn) % Var % Var % Var Q3 FY20 Q2 FY21 Q3 FY21 Particulars 9M FY20 9M FY21 (y-o-y) (q-o-q) (y-o-y) 416 280 732 76% >100% Order Inflow 1286 1248 -3% Order Book 3063 3311 8% 362 310 356 -2% 15% Revenue 1012 879 -13% 11.4% 10.7% 12.0% EBITDA (%) 11.1% 10.5% 22 11 23
Slide 25: Group Performance
Group Performance EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 25
Slide 26: Q3/9M FY21 Order Inflow/Order Book
Q3/9M FY21 Order Inflow/Order Book (Amount in ₹ bn) Order Inflow Order Book 76% -3% 8% 9M FY21 Q3 FY20 Q3 FY21 726 673 627 105 732 953 295 1248 3063 3311 9M FY20 237 179 416 850 436 1286 2337 2638 9M FY20 9M FY21 Domestic International • Strong Domestic ordering activity in Infra & Hydrocarbon, pros
Slide 27: Group Performance – Sales & Costs
Group Performance – Sales & Costs Q3 Q3 9M 9M % Var Rs Billion % Var • E&C revenues register strong FY20 FY21 FY20 FY21 QoQ growth. 362.4 356.0 -2% Revenue 1012.1 878.9 -13% • MCO expense variation largely reflective of job progress, 35% 36% International Rev. 34% 39% revenue mix and cost control in
Slide 28: Group Performance – Profit Parameters
Group Performance – Profit Parameters Q3 Q3 9M 9M % Var Rs Billion % Var • Finance cost commensurate with FY20 FY21 FY20 FY21 increased borrowings and full 41.2 42.8 4% EBITDA 112.1 92.4 -18% commissioning of Hyd. Metro (7.0) (9.6) 37% Fin. Cost (19.8) (30.6) 55% • Depreciation charge includes impac
Slide 29: Segment Performance Analysis
Segment Performance Analysis EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 29
Slide 30: Segment Composition
Segment Composition Heavy Defence Hydrocarbon Infrastructure Power Engineering Engineering Buildings & Factories (B&F) EPC- Coal & Gas Process Plant Equipment Defence Onshore Transportation Infra (TI) Thermal Power Plant Nuclear Power Plant Aerospace Offshore Heavy Civil infra (HC) Construction Equi
Slide 31: Order Inflow Composition
Order Inflow Composition Q3 FY21 Rs 732 Bn 9M FY21 Rs 1248 Bn Defence Hydrocarbon, Defence HE, 1% Engg., 1% 18% Hydrocarbon, Engg., 2% 11% Services, HE, 2% Services, 15% 25% Infrastructure, Others, 3% Others, 3% 62% Infrastructure, 57% Middle East, 3% Middle East, 6% USA & USA & Europe, Europe, Dome
Slide 32: Order Book Composition
Order Book Composition Power, 4% Middle East, Defence HE, 1% Engg., 3% 12% USA & Domestic, Europe, 1% Hydrocarbon, 80% 14% Infrastructure, ROW, 7% 74% Others, 4% 9M FY21 Rs 3311 Bn EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 32
Slide 33: Revenue Composition
Revenue Composition Q3 FY21 Rs 356 Bn 9M FY21 Rs 879 Bn Defence Hydrocarbon, Hydrocarbon, Engg., 3% 12% Services, Services, 13% 30% 36% HE, 2% Defence Engg., 3% Power, 3% Others, 6% HE, 2% Infrastructure, Infrastructure, Others, 4% 44% 40% Power, 2% Middle Middle East, 11% USA & USA & East, 12% Euro
Slide 34: Infrastructure Segment
Infrastructure Segment (Amount in ₹ bn) Net Revenue -7% Net Revenue -25% 170.3 468.5 351.9 158.3 117.4 90.1 351.1 261.8 9M FY20 9M FY21 Q3 FY20 Q3 FY21 6.1% EBITDA Margin 6.2% 6.6% EBITDA Margin 6.3% Domestic International • Strong ordering momentum in Q3, encouraging prospect pipeline • Sequential
Slide 35: Power Segment
Power Segment (Amount in ₹ bn) Net Revenue 29% Net Revenue 13% 9.0 17.4 19.6 6.9 1.4 3.4 18.2 14.0 9M FY20 9M FY21 Q3 FY20 Q3 FY21 3.4% EBITDA Margin 2.0% 3.5% EBITDA Margin 2.2% Domestic International • Award deferments seen in 9M, healthy order book on back of large wins in FY20 • Revenue increase
Slide 36: Heavy Engineering Segment
Heavy Engineering Segment (Amount in ₹ bn) Net Revenue 1% Net Revenue -23% 7.2 7.3 22.2 17.1 4.1 4.1 7.0 10.7 11.5 10.1 3.1 3.2 Q3 FY20 Q3 FY21 9M FY20 9M FY21 23.5% EBITDA Margin 20.0% 22.3% EBITDA Margin 14.2% Domestic International • Robust order wins despite a challenging environment • Better ca
Slide 37: Defence Engineering Segment
Defence Engineering Segment (Amount in ₹ bn) Net Revenue 2% Net Revenue -22% 10.0 10.2 28.9 22.6 0.9 2.2 3.2 6.1 9.1 16.5 7.0 26.7 Q3 FY20 9M FY20 9M FY21 Q3 FY21 20.9% EBITDA Margin 16.9% 18.6% EBITDA Margin 18.6% Domestic International • Multiple small value orders replenish opening order book • R
Slide 38: Hydrocarbon Segment
Hydrocarbon Segment (Amount in ₹ bn) Net Revenue 0.5% Net Revenue -8% 43.9 44.1 124.5 115.1 22.3 22.5 58.9 65.6 59.5 55.6 21.6 21.6 Q3 FY20 9M FY20 9M FY21 Q3 FY21 12.1% EBITDA Margin 12.2% 10.9% EBITDA Margin 9.1% Domestic International • Big domestic order wins in Q3 replenishes order book • Impro
Slide 39: Developmental Projects Segment
Developmental Projects Segment (Amount in ₹ bn) Net Revenue -34% Net Revenue -35% 12.4 38.7 25.1 2.3 8.1 1.9 1.1 10.1 23.2 7.0 Q3 FY20 9M FY20 9M FY21 Q3 FY21 17.3% EBITDA Margin 0.1% 12.4% EBITDA Margin 4.0% Nabha Hyd Metro • Segment includes Power Development business (Thermal and Hydro) and Hyder
Slide 40: IT & Technology Services Segment
IT & Technology Services Segment (Amount in ₹ bn) Net Revenue 7% Net Revenue 18% 60.9 65.1 157.9 187.0 19.7 20.2 13.9 13.8 27.3 31.0 9M FY20 9M FY21 Q3 FY20 Q3 FY21 21.0% EBITDA Margin 25.5% 21.0% EBITDA Margin 23.2% LTI LTTS Mindtree • LTI revenue growth led by BFS, Manufacturing, High Tech Media a
Slide 41: Others Segment
Others Segment (Amount in ₹ bn) Net Revenue 30% Net Revenue -19% 19.9 49.4 40.2 15.3 1.8 1.5 18.1 13.8 Q3 FY20 9M FY20 9M FY21 Q3 FY21 18.7% EBITDA Margin 34.3% 18.9% EBITDA Margin 24.1% Domestic International • Segment comprises Realty, Construction & Mining Equipment, Rubber Processing Machinery,
Slide 42: Financial Services Segment
Financial Services Segment Q3 FY20 Q3 FY21 % Var Rs Bn 9M FY20 9M FY21 % Var 35.5 34.0 -4% Income from Operations 104.6 100.3 -4% 3.8 1.9 -51% PAT (Net of NCI) 8.4 4.5 -47% Mutual Fund Average AUM 715.9 689.8 -4% Book 994.5 1001.0 1% Gross Stage 3 Assets 5.9% 5.1% Net Stage 3 Assets 2.7% 1.9% Networ
Slide 43: The Environment & the Outlook
The Environment & the Outlook 43 EPC Projects Hi- Tech Manufacturing Services Sensitivity : This Document is Classified as "LNT Internal Use". 43
Slide 44: The Environment & the Outlook
The Environment & the Outlook H1 FY21 H2 FY21 ➢ Covid 19 Spread contained in India, ➢ Covid 19 Spread/Lockdown though global concerns remain ➢ Economic contraction A Tale of two ➢ Resumption to pre Covid 19 economic ➢ Falling tax collections halves activity ➢ Government stimulus ➢ High frequency eco
Slide 45: Thank You
Thank You Sensitivity : This Document is Classified as "LNT Internal Use". EPC Projects Turn overleaf forServices Hi- Tech Manufacturing Annexures 45
Slide 46: Balance Sheet
Balance Sheet Incr / Rs Billion Dec-20 Mar-20 (Decr) Equity & Reserves 730 667 63 Non Controlling Interest 105 95 10 Borrowings - Financial Services 912 939 (26) Development Projects 208 202 6 Others 332 269 63 Sources of Funds 2,288 2,173 115 Fixed Assets 139 156 (17) Intangible Assets & Investment
Slide 47: Cash Flow
Cash Flow Q3 FY20 Q2 FY21 Q3 FY21 Rs Bn 9M FY20 9M FY21 45.4 35.6 42.8 Operating Profit 128.4 96.2 (11.6) (1.2) 11.4 Changes in Working Capital [(Inc)/Dec] (97.2) 6.4 (9.4) (6.8) (10.5) Direct Taxes paid (31.0) (22.3) 24.4 27.6 43.7 Net Cash from Operations (A) 0.2 80.2 (9.0) (3.6) (3.5) Net Investm
Slide 48: Segment Margin
Segment Margin 9M FY20 9M FY21 Segment (Rs Cr) EBITDA EBITDA Net Revenue EBITDA Net Revenue EBITDA % % Ex-Services business: Infrastructure Segment 46850 3083 6.6% 35191 2207 6.3% Power Segment 1739 62 3.5% 1958 43 2.2% Hydrocarbon Segment 12452 1352 10.9% 11512 1045 9.1% Heavy Engineering Segment 2
Slide 49: Share in Profit/(Loss) of JVs/Associates
Share in Profit/(Loss) of JVs/Associates Q3 FY20 Q3 FY21 Rs Bn 9M FY20 9M FY21 0.43 0.47 Boiler/Turbine JVs 1.35 0.90 0.47 (0.30) IDPL & Subs. (1.19) (1.45) (0.30) - Special Steels and Heavy Forgings (1.03) (0.73) (0.12) (0.09) Others 0.11 (0.18) 0.48 0.09 Total (0.75) (1.45) EPC Projects Hi- Tech M