Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Investor Presentation (April 2018)
35 slides from Grasim Industries's investor presentation, Apr 2, 2018
Slide 1: Investor Presentation cover letter to stock exchanges
ADITYA BIRLA GRAS Ref No. GIL/CFD/SEC/18/142/SE 2" April 2018 BSE Limited The Secretary Department of Corporate Services Listing Department Phiroze Jeejeebhoy Towers, The National Stock Exchange of India Limited Dalal Street, Exchange Plaza, Bandra-Kurla Complex, Mumbai 400 001. Bandra (East), Mumba
Slide 2: Strong Operations Large Investments
Grasim Industries Limited Strong Operations Large Investments Grasim Plant Visit 2nd April’18, Vilayat (Gujarat) 1
Slide 3: Grasim – Strong Operations Large Investments
Grasim – Strong Operations Large Investments Strong Integrated performance at Presence in the business model standalone & Right business providing EBITDA consolidated and Right market cushioning & lower level volatility Creating Strong Balance Strong potential substantial Sheet to for further shareh
Slide 4: Robust Financial Performance
Robust Financial Performance Standalone performance Standalone performance FY17 9M FY18 Net revenue Net revenue Rs. 11,253 Cr Rs. 11,206 Cr CAGR 19% Up by 50% YoY EBITDA EBITDA Rs. 2,629 Cr Rs. 2,595 Cr CAGR 15% Up by 25% YoY 3
Slide 5: Grasim's Revenue Growth superior than Manufacturing peers
Grasim’s Revenue Growth superior than Manufacturing peers Net Revenue EBITDA 40247 8333 31073 6543 19% 11253 28% 15% 2629 32% 18% 5661 23% 1523 FY 13 FY 17 FY 13 FY 17 CAGR Standalone Substantial increase in Share of Standalone Business in Total Revenue and EBITDA Standalone Grasim’s Consolidated Re
Slide 6: Building capacities
Building capacities VSF Capacity (KTPA) Caustic Soda Capacity (KTPA) 788 2.4x 4.5x 1148 498 840 334 258 FY 13 FY 17 FY21* FY 13 FY 17 FY19* Cost effectiveness Value Added Products ► Current expansion plan envisioned to cost 20% ► Augmentation of Value added products portfolio lesser than the previou
Slide 7: Strong Balance Sheet
Strong Balance Sheet Standalone debt/ surplus (in Cr) 2546 1844 AAA Zero Net Debt Rating Strong 701 Liquidity March 2017 Debt Growth without equity dilution, Liquid investment funded by internal accruals Surplus Net Cash Rs.1,844 Cr post Capex Rs.5,562 Cr in the last 5 years 6
Slide 8: Viscose: #1 VSF player in India
Viscose #1 VSF player in India 7
Slide 9: Presence in Right sector: Why Viscose
Presence in Right sector WHY VISCOSE !!! Fibre of choice Brands looking for sustainable credentials across value chain Sustainability is about responsibly marrying market place opportunities with scarce resources while caring for nature and people Consumers are increasingly willing to pay premium fo
Slide 10: VSF - the fastest growing fibre
VSF-the fastest growing fibre Global demand of competing fibres (KTPA) 6758 6%, CAGR 5300 4079 26670 26037 1%, CAGR 23598 16517 18634 VSF 14914 2%, CAGR 2012 2017 2022* Cotton Demand Share as a % of total fibre demand 6.05% 27.47% 5.39% 26.48% 4.75% PSF 23.86% 2012 2017 2022* 2012 2017 2022* India d
Slide 11: Driving domestic growth through LIVA
Driving domestic growth through LIVA Pioneering ingredient branding in global textile industry by Grasim LIVA Tagging (Mn.) Continued focus on expanding usage and application of VSF in domestic textile market to bolster the VSF demand in the textile value chain 17.62 12.63 Domestic Sales Volume (MT)
Slide 12: VSF: High backward integration
VSF: High backward integration Dissolving Power and Carbon Manufacturing Input Caustic soda Grade Pulp steam Disulphide % of total cost ~50% ~17% ~10% ~3% Requirement 55% - 60% Fully captive Fully captive Fully captive fulfillment High backward integration, encompassing over 80% of costs Significant
Slide 13: Sustainable Approach of doing Business
Sustainable Approach of doing Business Responsible Wood Sourcing Policy Reduction of water consumption 60% of the wood is certified by FSC New techniques developed No purchase of wood harvested from leading to 30 liters of water saving high conservation, Value/ Illegal Forests for every meter of Fib
Slide 14: Viscose Business
Viscose Business Presence High backward #1 VSF in the integration, player in India Right business & encompassing over Right market 80% of costs Strong focus on Sustainable Pioneering cost reduction way of doing ingredient by driving business branding efficiencies 13
Slide 15: Chemicals: #1 Caustic Soda player in India
Chemicals #1 Caustic Soda player in India 14
Slide 16: Strong Presence in High Growth Businesses
Strong Presence in High Growth Businesses Caustic soda – historical trend, projections and market share Fragment industry - 23 players Domestic consumption (MTPA) Top-3 players account for ~50% of market 4.56 3.97 29% 3.5 3.4 Grasim 3.2 3 2.8 12% DCM 2.6 2.6 2.7 11% GACL 4% Meghmani Others FY10 FY11
Slide 17: Strategic investments close to demand centres
Strategic investments close to demand centres Our manufacturing footprint Nagda Renukoot Vilayat • Expansion of VSF from ~ 0.5 mn MT to ~ 0.8 mn MT Veraval East Coast Rehla Vilayat Vilayat II • Significant demand-supply gap; Ganjam 80% of India’s import East Coast • Significant demand from Karwar (P
Slide 18: Chlorine integration, the next growth frontier
Chlorine integration, the next growth frontier Alliances & Expansion of existing VAPs New Molecules Partnerships Water Treatment • PAC, SBP • Calcium Hypo. • Long term • ACH arrangement for Plastics & • CP, Sulpho CP • ECH pipeline supply of Polymers • Chloromethanes chlorine and HCl AgChem, Dyes &
Slide 19: Levers towards leadership
Levers towards leadership 3 4 1 2 Four Principles 0 Three Two Growth Mantras Customer One engines Centricity Commodity, Think Chlor VAPs chlorine Reliability Zero Alkali improvement Chlorine Think movement Technology as application lever for cost improvement Think Safety Flawless execution 18
Slide 20: Safe and Sustainable Operations: Always first
Safe and Sustainable Operations: Always first Responsible Salt Sourcing Policy Commissioned March 2013 Pioneered using Washed Salt in India, for reduction in sludge generation Acquired world class practices from Promoting use of Renewable sources Solar as a source of energy for power requirement I
Slide 21: Chlor Alkali Business
Chlor Alkali Business Largest Aims to be the #1 Asian player 7th Largest in SBP & AlCl3 in Caustic soda Global player in Globally, by FY20 Caustic Soda in CP, PAC & PA by FY23 in India Profitably growing Competitive edge Growing in with by having East India Safety & Chlorine The Next Growth Sustaina
Slide 22: Factors influencing Grasim Valuation
Factors influencing Grasim Valuation Leadership business #No. 1 VSF and Caustic Soda producer in India Strong EBITDA from Capital Allocation Towards Standalone businesses Leadership businesses Standalone LTM EBITDA * Commitment of INR 6,440 Cr Rs. 3500 Cr. up by ~30% yoy for VSF and Caustic soda exp
Slide 23: Growth in Market Capitalization over the years
Growth in Market Capitalization over the years Rs. 1,787 Cr Market Capitalization of Grasim (1998) Demerger of Cement biz to Ultratech Cement Limited Merger of Aditya Birla Chemicals into Grasim Merger of Aditya Birla Nuvo into Grasim Demerger and Listing of Fin Serv. biz from Grasim to Aditya Birla
Slide 24: Our Top Priorities
Our Top Priorities Cost Focus Maintain and Leadership Asset Position Sweating Growing Robust Risk Consumer and Facing Governance and High Framework Growth Businesses 23
Slide 25: Grasim Vilayat Plant
Grasim Vilayat Plant VSF Chemicals 24
Slide 26: Vilayat VSF Plant
Vilayat VSF Plant 25
Slide 27: VSF – Production Process
VSF – Production Process PULP FEEDING SLURRY PRESS MATURING DRUM SPINNING RECOVERY TROUGH & AFT RIPENING CHURN MAT OPENER DRYER BALER WAREHOUSE
Slide 28: Vilayat Proposed Plant - Bird's eye view
Vilayat Proposed Plant - Bird’s eye view Project cost of Rs.3,523 Cr.; to be commissioned by FY 21
Slide 29: Expansion Project – Salient Features
Expansion Project – Salient Features 2 lines of 300 TPD each ; additional CS2 and Acid plant, CPP expansion 1st time : Continuous Pulper, Degasser system, Vertical MSFE, AFT increased width , Extended Stretch, 3-stage Acid Absorption Crystalliser, Pusher type Centrifuge etc. Basic Engg., ordering an
Slide 30: Corporate Social Responsibility – Grasim Vilayat
Corporate Social Responsibility – Grasim Vilayat Knowledge Program Scholarship to 'Girl Students' for higher education Women started their own business & Independently earning their Livelihood.
Slide 31: Vilayat Chemicals Plant
Vilayat Chemicals Plant 30
Slide 32: We make chemicals from common salt
We make chemicals from common salt Raw material Process Products Downstream Caustic soda, 1 MT Common Salt Chlorine, Chlorine products 0.9 MT (VAPs) Electrolysis Process Power / Coal (Power - 60% of Hydrogen, costs) 0.03 MT 31
Slide 33: Process Layout – Caustic Manufacturing
Process Layout – Caustic Manufacturing 32
Slide 34: Ready For Commissioning
Ready For Commissioning Chlor-Alkali Plant (March 18) 2013: Chairman Cutting Ribbon Phosphoric Acid Plant (March 18) 33
Slide 35: Q&A
Q&A 34
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