Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q2 FY17 Earnings Presentation
32 slides from Larsen & Toubro's earnings presentation, Nov 22, 2016
Slide 1: Analyst Presentation – Q2 / H1 FY17
Larsen & Toubro Analyst Presentation – Q2 / H1 FY17 November 22, 2016
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward looking statements concerning L&T’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The r
Slide 3: Presentation Outline
Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key subsidiaries Outlook 3
Slide 4: Presentation Outline
Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key subsidiaries Outlook 4
Slide 5: Performance Highlights – Q2 FY17
Performance Highlights – Q2 FY17 Recurring EBITDA PAT Revenue Order Book Order 41% Inflow 8% 8% 4% 11% 5
Slide 6: Presentation Outline
Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key subsidiaries Outlook 6
Slide 7: Group level Order Inflow & Order Book
Group level Order Inflow & Order Book Amount in ` Bn Order Inflows Order Book 2426 2518 12% 608 542 4% 34% 34% 730 670 311 282 66% 66% 1,756 1,788 260 297 H1 FY16 H1 FY17 H1 FY16 H1 FY17 H1 FY16 H1 FY17 Q1 Q2 Domestic International Domestic International Order Inflow growth mainly from Domestic In
Slide 8: Group Performance – Sales & Costs
Group Performance – Sales & Costs Q2 FY16 Q2 FY17 % Change ` Billion H1 FY16 H1 FY17 % Change FY16 231.24 250.11 8% Revenue from Operations 431.72 468.85 9% 1,019.64 74.51 89.30 20% International Revenue 138.99 165.53 19% 323.37 32.2% 35.7% 3% % of Revenue 32% 35% 3% 32% 150.77 164.82 9% Mfg, Cons.
Slide 9: Group Performance Summary - Profitability
Group Performance Summary - Profitability Q2 FY16 Q2 FY17 % Change ` Billion H1 FY16 H1 FY17 % Change FY16 21.31 22.98 8% EBITDA 37.72 42.03 11% 103.49 9.2% 9.2% 0.0% EBITDA Margin 8.7% 9.0% 0.2% 10.2% (4.39) (3.52) -20% Interest Expenses (8.28) (6.89) -17% (16.40) (5.29) (4.60) -13% Depreciation (9
Slide 10: Group Balance Sheet
Group Balance Sheet ` Billion Sep-16 Mar-16 Incr / (Decr) Equity & Reserve 462.41 444.54 17.86 Non Controlling Interest 31.75 27.11 4.64 Borrowings - Financial Services 568.25 545.86 22.39 Development Projects 148.10 142.03 6.07 Others 191.61 193.52 (1.90) Other Non-Current Liabilities 9.29 8.77 0.5
Slide 11: Reconciliation of Net PAT (FY 2015-16)
Reconciliation of Net PAT (FY 2015-16) Adjustments ` Billion Net Profit After Tax as per previous IGAAP 50.91 Provision for Expected Credit Loss 0.14 Gain/loss on divestment of stake in subsidiary (2.64) Provision for Employee Benefits based on constructive (0.37) obligations Gain on fair valuation
Slide 12: Components of Other Comprehensive Income (OCI)
Components of Other Comprehensive Income (OCI) ₹ Billion H1FY16 H1FY17 Changes arising out of re-measurement of defined 0.07 (0.41) benefit plans for employees MTM of investment in Debt instruments 0.02 0.28 Changes in Foreign Currency Translation Reserve (0.41) (0.29) MTM of Off-Balance Sheet Hedge
Slide 13: Group Cash Flow
Group Cash Flow Q2 FY16 H1 FY16 ` Billion Q2 FY17 H1 FY17 23.43 41.04 Operating Profit 23.04 43.50 4.00 1.04 Changes in Working Capital 20.82 (0.63) (7.90) (13.73) Direct Taxes paid (7.74) (13.33) 19.53 28.35 Net Cash from Operations (A) 36.12 29.54 (14.06) (26.49) Investments in Fixed Assets (Net)
Slide 14: Presentation Outline
Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key subsidiaries Outlook 14
Slide 15: Segment Composition
Segment Composition Electrical & Infrastructure Power Heavy Engineering Automation Buildings & Factories Process Plant Electrical Standard EPC – Coal & Gas Equipment Products Transportation Infra Heavy Civil Infra Thermal Power Plant Nuclear Power Plant Electrical Systems & Water & Effluent Construc
Slide 16: Segmental Breakup of Orders – H1 FY17
Segmental Breakup of Orders – H1 FY17 HE E&A Hydrocarbon 3% 5% 14% Services 18% Power 4% Others 6% Power HE E&A 7% Infrastructure 3% 1% 50% Order Inflow Hydrocarbon ₹ 608 Bn 8% Others Infrastructure 7% 74% Order Book ₹ 2518 Bn 16
Slide 17: Revenue Breakup – H1 FY17
Revenue Breakup – H1 FY17 Segmental Breakup Hydrocarbon IT & TS E&A 4% 10% 10% HE Fin. Services 3% 9% Devl. Proj. Power 5% 7% Others 8% Geographical breakup Infrastructure 44% 35% 65% Domestic International 17
Slide 18: Infrastructure Segment
Infrastructure Segment Amount in ` Bn Net Revenues & Margin Muted sales growth in Q2 mainly due to delayed client readiness including workfront availability and payment preparedness International jobs in Transportation and Heavy Civil Infra seeing execution ramp-up Q2 Margin decline on account
Slide 19: Power Segment
Power Segment Amount in ` Bn Net Revenues & Margin Robust revenue growth due to strong execution progress Bangladesh Jobs contributing to International Sales growth MHPS JVs operations consolidated under Equity method 19
Slide 20: Heavy Engineering Segment
Heavy Engineering Segment Amount in ` Bn Net Revenues & Margin PPN and D&A Businesses contributing to strong revenue growth Margin improvement achieved through operational efficiencies in current year 20
Slide 21: Electrical & Automation (E&A) Segment
Electrical & Automation (E&A) Segment Amount in ` Bn Net Revenues & Margin Muted industrial activity affecting Segment Business Growth in Electrical Standard Product Business offset by decline in Project Business Margin improvement due to improved realisations and favourable product mix in Ele
Slide 22: Hydrocarbon Segment
Hydrocarbon Segment Amount in ` Bn Net Revenues & Margin Revenue growth led by strong execution on increased Order Book Diminishing impact of legacy projects in Middle East Q2 Margin increase through operational improvement and claim settlement 22
Slide 23: IT & Technology Services Segment
IT & Technology Services Segment Amount in ` Bn Net Revenues & Margin Revenue growth contributed by Insurance, Auto & Aero for IT business and Industrial Products & Telecom verticals for Tech Services business Margin improvement due to higher offsite mix, improved utilization and operational exc
Slide 24: Others Segment
Others Segment Amount in ` Bn Net Revenues & Margin Weak industrial demand and low capacity utilization continues to challenge the business environment Revenue impacted by lower offtake in construction and mining equipment, delayed defence ordering and end-stage execution of current Realty proje
Slide 25: Developmental Projects Segment
Developmental Projects Segment Amount in ` Bn Net Revenues & Margin Q2 revenue decline mainly on account of lower portion of externally ordered construction jobs in Hyderabad Metro Increased revenues in Nabha Power due to higher PLF Margin improvement largely arising from Nabha Power Plant and
Slide 26: Concessions Business Portfolio – 21 SPVs
Concessions Business Portfolio – 21 SPVs Roads and Bridges: Portfolio: 15 projects (1661 Km); 13 Operational Project Cost: `161 Bn Power (Excl. Projects under DPR): Portfolio: 2 projects (1499 MW); 1 Operational Project Cost: `112 Bn Ports: Portfolio: 2 projects (18 MTPA) - Operational Project Cost:
Slide 27: L&T Finance Holdings (I-GAAP)
L&T Finance Holdings (I-GAAP) ` Billion Q2 FY16 Q2 FY17 % Change Networth 87.11 88.59 2% (Incl. Pref.Cap and Warrants) Consolidated Debt 473.85 536.89 13% Loans and Advances 514.11 608.98 18% Mutual Fund Average AUM 242.80 326.67 35% Income from Operations 35.11 40.84 16% Net NPA (%) - 120 DPD 4.05%
Slide 28: Presentation Outline
Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key subsidiaries Outlook 28
Slide 29: The Environment… … and the Outlook
INDUSTRIAL CAPACITY RAILROADS DEMONETIZATION REAL ESTATE SURGICAL STRIKE WORLD ECONOMY BREXIT CORRUPTION US FED RATES & BOND YIELDS POWER SECTOR US The Environment… ELECTIONS OVER-LEVERAGED PVT. SECTOR WATER PROJECTS ROADS AADHAR CLIMATE CHANGE … and the Outlook DEFENCE SECTOR OIL PRICES POPULAR MAN
Slide 30: Thank You
Thank You LARSEN & TOUBRO
Slide 31: Annexure-1: Group Profit & Loss
Annexure-1: Group Profit & Loss L&T & L&T Group Fin. Devl. ` Billion IT & TS Others (Incl. % Services * Projects H1 FY17 H1 FY16 Eliminations) Change Revenue from Operations 47.93 42.31 24.55 354.05 468.85 431.72 9% EBITDA 10.10 5.04 2.11 24.78 42.03 37.72 11% Interest Expenses (0.02) (0.25) (0.79)
Slide 32: Annexure-2: Share in Profit/(Loss) of JVs/Associates
Annexure-2: Share in Profit/(Loss) of JVs/Associates ` Billion H1FY17 H1FY16 FY16 MHPS JVs 0.59 0.02 0.54 IDPL & Subs. (2.94) (2.66) (8.19) Others (0.96) (0.99) (2.25) Total (3.30) (3.63) (9.90) 32