Welspun Corp Limited · NSE:WELCORP
Welspun — Investor Presentation (September 2015)
27 slides from Welspun's investor presentation, September 2015
Slide 1: Welspun Corp Ltd (WCL) Investor Presentation
World’s Leading Line Pipe Manufacturer Welspun Corp Ltd (WCL) Investor Presentation September, 2015
Slide 2: Agenda
Agenda ● Company Overview ● Key Investment Highlights ● Financial Overview 2
Slide 3: Welspun Group Overview
Welspun Group Overview Revenue: US$ 3 billion; Asset base: US$ 3.2 billion Welspun Corp Limited (WCL) Welspun India Limited Welspun Energy Limited Welspun Enterprises Limited ● Global leader in large diameter ● #1 home textiles supplier to ● India’s largest solar ● Oil & gas pipes the US Independent
Slide 4: Welspun Corp Ltd. (WCL) – Overview
Welspun Corp Ltd. (WCL) – Overview Global leader in large diameter pipe manufacturing Company Snapshot ● Among the world’s largest large diameter line pipe manufacturers with global capacity of 2.4 mn TPA strategically diversified across India, Saudi Arabia and US ● Widespread and distinguished cust
Slide 5: WCL Today: Focused and Well Positioned
WCL Today: Focused and Well Positioned Focused ● In Jan’14 we spun-off the non-pipe businesses into a new company, Welspun Enterprises Company Post ─ Significantly lower Net Debt/EBITDA* (3.7x in FY13 to 2.5x in FY15) Demerger ● Renewed focus of entire management on the pipe and plate business alone
Slide 6: Oil & Gas Industry Value Chain
Oil & Gas Industry Value Chain Oil & Gas Industry Value Chain Upstream Midstream Downstream Exploration / Production Refining & Transportation Distribution / Retail Sale Midstream Welded Line Pipes ● WCL operates in the midstream segment of the value chain ● WCL manufactures large diameter ‘horizo
Slide 7: Growth & Evolution
Growth & Evolution ● 3rd year of >1mn MT volumes; order book at record high ● JV with Wasco Energy Ltd for CWC plant ● 350 KTPA LSAW mill at Anjar ● 300 KTPA HSAW mill at Saudi Arabia ● 350 KTPA HSAW mill at Arkansas, US ● Won 1,700 KM Keystone project from Trans Canada ● First 50 KTPA HSAW mill at
Slide 8: Agenda
Agenda ● Company Overview ● Key Investment Highlights ● Financial Overview 8
Slide 9: Key Investment Highlights
Key Investment Highlights Best-in-class line pipe manufacturer with unparalleled global presence across key 1 end markets and a proven ability to successfully operate internationally 2 Deep, entrenched and long standing relationships with major pipeline transportation, oil & gas customers Signs of i
Slide 10: Best-in-Class Operator with a Diversified Global Presence
1 Best-in-Class Operator with a Diversified Global Presence AMERICAS EUROPE & CIS Canada Russia Czech Rep. Spain USA Iraq China Qatar Mexico SOUTH Bahamas Algeria UAE EAST ASIA Egypt Bangladesh Saudi Oman India AND Trinidad & Tobago AUSTRALIA Venezuela Nigeria Sudan MENA Thailand Malaysia Colombia D
Slide 11: Partnering with customers to provide end-to-end solutions
2 Partnering with customers to provide end-to-end solutions Oil & gas Transportation Others Well Established Customer Relationships across the value chain 11
Slide 12: Strong Traction in Order Book
3 Strong Traction in Order Book WCL’s order book has witnessed significant traction and provides significant cover over next year’s sales volume Order Book Position at end of the Fiscal Year (KMT) Sales Volume for the Fiscal Year (KMT) & % order book (KMT) sales (KMT) 1,030 128% 901 155% 1,152 322 1
Slide 13: Global Line Pipe Market: Poised for Rebound
3 Global Line Pipe Market: Poised for Rebound Demand for line pipes is expected to grow after a relatively subdued market over the past few years Global Line Pipe Demand (Excl. China & CIS) Global Line Pipe Demand (Incl. China & CIS) Mn Tons Mn Tons Relevant market set for Welspun 12,000.0 (6.3)% 2.
Slide 14: North America: Early Signs of Turnaround
3 North America: Early Signs of Turnaround Strong oil production trends in the US and the development of gas projects in Canada are expected to result in strong demand for pipeline in North America. US Pipeline Project Spending ($M) Long-haul Large Diameter Pipeline Project Spending ($M ) $35,000 $1
Slide 15: Pipeline Economics are Compelling at Low Oil
3 Pipeline Economics are Compelling at Low Oil The cost effectiveness of pipelines makes them an even more compelling proposition in an era of low oil, as oil companies get more sensitive to transport cost Oil Transport: Pipelines still the most preferred ● Boom in oil production and high oil prices
Slide 16: India: Improving Demand Outlook
3 India: Improving Demand Outlook India to double its gas pipeline infrastructure City Gas Distribution Projects “In order to complete the gas grid ● Several cities have announced city gas distribution across the country, an additional pipeline projects Srinagar 15,000 km of ● Expect to witness cont
Slide 17: Middle East: Gas and Water are the Primary Drivers of Growth
3 Middle East: Gas and Water are the Primary Drivers of Growth Water Injection ● FEED work for Phase-I already awarded with estimated requirement of over 600 Km pipeline in Iraq Oil pipeline ● Ministry of Oil has already tendered 2 phases of Iraq-Jordan Crude Export Pipeline (Total over 1,100 in Ira
Slide 18: WCL well positioned to benefit given healthy balance sheet
4 WCL well positioned to benefit given healthy balance sheet Improving Leverage Levels Despite Challenging Environment ● Demerger of non-pipe and plate businesses completed in 2014 4.0 Pre Demerger Post Demerger Incl. non-pipe businesses Pro forma for cash transfer ● At 2.5x net Debt/EBITDA, the Com
Slide 19: Focused Pipe Company with Professional Management Team
5 Focused Pipe Company with Professional Management Team Experienced and professional management team with deep expertise in the oil & gas industry Braja K. Mishra CEO & Managing Director Industry Veterans Years with WCL: 15 Overall Experience: 28 ● Extensive experience in the oil & gas industry; pi
Slide 20: Agenda
Agenda ● Company Overview ● Key Investment Highlights ● Financial Overview 20
Slide 21: Financial Performance Summary
Financial Performance Summary Consolidated Revenues Consolidated Operating EBITDA (1) CAGR INR mn Total: (3.5%) CAGR EBITDA Pipes: 5.1% INR mn 4.2% Margin (%) 100,000 15,110 8,500 789 11% 85,000 8,000 10.0% 1,484 9.1% 7,500 7.8% 9% 70,000 83,716 7,000 75,722 75,563 7% 55,000 6,500 7,079 7,741 7,692
Slide 22: Balanced Business Model; diversified across regions and products
Balanced Business Model; diversified across regions and products FYE March 2015 Statistics; Pipe Sales Volume: 1,152 KMT Sales by Type Sales by Industry Segment 15% 31% 14% 54% 86% LSAW HSAW ERW Oil & Gas Water Sales by Plant Sales by Region 23% 30% 22% 30% 55% 40% India US Saudi EU & MENA America I
Slide 23: Focus on cash flow and deleveraging
Focus on cash flow and deleveraging Leverage (Net Debt/ LTM EBITDA) ● As on 30 June’15, WCL had INR 30,725 million of gross debt 5.7x 5.5x 5.3x and INR 12,682 million of cash 3.3x 2.4x 2.3x 2.5x ● Debt repayment is spread evenly over next 10 years 1.9x ● 56% of debt in USD (closely matched to cash f
Slide 24: FY15 Financial Performance Summary
FY15 Financial Performance Summary Consolidated Revenues (INR Millions) ● Production (1,130 KMT) and sales (1,152 KMT) of pipes for 84,505 FY15 were at an annual record with both volumes crossing the milestone of 1mm MT mark for the third successive year 77,047 FY14 FY15 ─ 11% and 13% growth respect
Slide 25: Q1FY16 Financial Performance Summary
Q1FY16 Financial Performance Summary Consolidated Revenues (INR Millions) ● Reported production and sales of pipes for Q1 at 274 KMT and 253 KMT 19,441 14,369 ─ 29% and 17% growth respectively over Q1FY15 1Q15 1Q16 ● Production growth was driven by strong performance in the Consolidated Operating EB
Slide 26: Key Takeaways
Key Takeaways 1 Best-in-class line pipe manufacturer with strategic global presence Signs of an industry turnaround; low oil prices and low steel 2 prices driving momentum WCL is well positioned for substantial value creation going 3 forward 4 Clean balance sheet and cash flow generation (even in a
Slide 27: Thank you
Thank you Write to us on “ir_wcl@welspun.com” For further details, please contact Deepak Khetan Harish Venkateswaran Investor Relations, WCL Investor Relations, Welspun Group +91 22 66136584 +91 22 61336832 27