Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — FY2001 Earnings Presentation
43 slides from Larsen & Toubro's earnings presentation, May 2001
Slide 1: Analysts Meet - May 2001
WELCOME Analysts Meet -May 2001
Slide 2: Difficult Business Environment
Difficult Business Environment • Slowing Economy • High fiscal deficits & limited government spending • Investment Scenario not encouraging – Fewer opportunities – Slower pace of investments in Power and infrastructure sectors – Many core sector industries still afflicted by excess capacity • Poor g
Slide 3: Highlights of FY 2001
Highlights of FY 2001 3
Slide 4: Good performance in a challenging environment
Good performance in a challenging environment • Order Booking increases by 24% – Order backlog higher by 38% • Sales increase at 5% subdued due to low opening order backlog • Exports grow two-fold to Rs. 7.24 billion – Export of critical equipment Rs. 0.92 billion – Project Exports Rs. 3.7 billion –
Slide 5: Engineering & Construction
Engineering &Construction 5
Slide 6: Major Orders Booked - Domestic
Major Orders Booked -Domestic Rs.Millions Various Road Jobs in Orissa, Tamil Nadu & Gujarat 10440 Delhi Metro 4300 445 MW Combined Cycle Power Plant at Konaseema, AP 4070 Modernisation Work at Delhi Vidyut Board from BHEL 2035 2nd Compressor Module, HRC Platform-ONGC 1736 Flyover at Calcutta 1760 Wa
Slide 7: Major Orders Booked - Overseas
Major Orders Booked -Overseas Rs.Millions 200 MW Gas based power plant at Salalah, Oman 6000 Hospital for Ministry of Health Services, Saudi 2410 Arabia - Thinet International 168.1 MW Combined Cycle Power Project for AES 2400 Kelanitissa Pvt. Ltd., Sri Lanka Stadium Building for Govt. of Qatar 523
Slide 8: E&C - Financial Performance FY 2001
E&C - Financial Performance FY 2001 Rs. Billions FY 2001 FY 2000 % Change Order Booking 72.01 53.83 34% Sales 45.92 43.53 5% Order Backlog 96.82 70.29 38% PBDIT/Sales 11.7% 13.1% 9
Slide 9: Cement
Cement 10
Slide 10: Industry review
Industry review • 2% negative growth in consumption – Low infrastructural / development expenditure – Severe drought conditions in certain states – Gujarat earthquake • Prices remained depressed till Nov’00 • Improvement in prices since Dec’00 11
Slide 11: Divisional Performance - FY2001
Divisional Performance - FY2001 • Volume growth of 8% • Margins improved due to price improvement in the last 4 months and cost reduction measures during the year • Margins could have been better but for increase in – Power & Fuel cost – Limestone royalty – Freight cost • Continued efforts on operat
Slide 12: Improving Power consumption
Improving Power consumption kwh/MT of OPC FY 99 FY 00 FY 01 ACW 110 105 105 HCW 103 99 92 GCW 83 81 81 APCW 110 88 85 Av. for L&T 99 92 90 NCCL 107 103 97 13
Slide 13: Cement Financial Performance FY 2001
Cement Financial Performance FY 2001 FY2001 FY2000 % Change Sales - Mio. Tons Domestic 8.95 9.02 (0.8%) Exports 2.36 1.49 58.4% Total 11.31 10.51 7.6% Sales - Rs. Billions. 21.94 19.35 13.4% Net Realisation - Rs/Ton 1251 1110 12.7% PBDIT/Sales 17.1% 12.5% PBDIT/Sales(incl.Fis.benefits) 19.0% 15.9% 1
Slide 14: Other Segments
Other Segments 16
Slide 15: EBG Financial Performance FY 2001
EBG Financial Performance FY 2001 (Rs. Billions) FY2001 FY2000 % Change Sales 7.01 6.29 11% PBDIT/Sales 17.8% 21.1% 17
Slide 16: Diversified Businesses Financial Performance FY 2001
Diversified Businesses Financial Performance FY 2001 (Rs. Billions) FY 2001 FY 2000 % Change Sales 3.39 5.07 (49.6%) PBDIT/Sales 5.3% 12.7% •Drop in Sales due to closure of Glass unit till July 2000, transfer of valves business to E&C and transfer of Pithampur unit to JV with Case •Drop in margin du
Slide 17: L&T Infotech
L&T Infotech 19
Slide 18: LTITL back on growth trajectory
LTITL back on growth trajectory • Year of consolidation and growth – Management team strengthened by drawing talents from L&T • CMM SEI Level 4 obtained • 60 new customers added • Several new alliances established with technology providers • Focus on domain offering – Telecom, financial services, po
Slide 19: LTITL
LTITL Rs. Billions FY 2001 FY2000 % Change Revenue 2.51 1.67 50% PBT 0.42 0.16 163% PAT 0.36 0.15 140% 21
Slide 20: Summary Results FY 2001
Summary Results FY 2001 22
Slide 21: New Orders Booked
New Orders Booked 120 104.27 100 81.46 76.88 Rs.Billions 80 64.42 53.05 60 40 20 0 1996-97 1997-98 1998-99 1999-00 2000-01 23
Slide 22: Gross Revenues
Gross Revenues 78.25 80 72.92 74.24 70 57.68 60 53.88 Rs.Billions 50 40 30 20 10 0 1996-97 1997-98 1998-99 1999-00 2000-01 24
Slide 23: Order Backlog
Order Backlog 100 97.6 90 80 68.19 70 Rs.Billions 58.7 52.52 60 50 43.14 40 30 20 10 0 1996-97 1997-98 1998-99 1999-00 2000-01 25
Slide 24: Segmentwise Revenue
Segmentwise Revenue FY 2001 FY 2000 Others Others Elect. 4% Elect. 7% 9% 8% Cement Cement 28% E&C 26% E&C 59% 59% 26
Slide 25: Performance Indicators - FY 2001
Performance Indicators – FY 2001 FY01 FY00 % Change Order Booking 104.27 81.46 28% Sales 78.25 74.24 5% Other Income 2.09 1.75 19% Total Revenue 80.34 75.99 6% Cost of sales 70.21 66.03 6% Operating Margin 10.13 9.96 2% % to sales 12.9% 13.4% Interest 3.61 3.32 9% Depreciation 3.13 2.93 7% PBT 3.39
Slide 26: Balance Sheet
Balance Sheet Rs. Billion 31-Mar-01 31-Mar-00 SHAREHOLDERS' FUNDS Share Capital 2.48 2.48 Reserves 37.52 36.16 Net Worth 40.00 38.64 LOAN FUNDS Secured Loans 30.02 29.05 Unsecured Loans 12.62 10.69 TOTAL SOURCES 82.64 78.38 Net Block incl. CWIP 46.71 45.89 Investments 8.13 7.74 Current Assets 53.36
Slide 27: Prospects FY 2002
Prospects FY 2002 29
Slide 28: E&C Order Prospects
E&C Order Prospects Rs.Million Vivekananda Bridge, Calcutta 4250 Jaipur-Kishangarh Road Project 3000 Road packages-NHAI, State highways 4000 Stadium Projects - Yemen, AbuDhabi, Kuwait 2700 Rupsa Bridge, Bangladesh 1000 Race Track at Calcutta 1000 Water Supply Project, Oman 700 30
Slide 29: E&C Order Prospects contd..
E&C Order Prospects contd.. Rs.Million Indian Oil Corporation, Panipat/Mathura/Baroda 14000 Power Plant in Gujarat 2500 ONGC Platform Jobs 8000 BPCL Hydrocracker unit / SRU 9000 ROSA Power 12260 31
Slide 30: Outlook for Fiscal 2002 - E&C
Outlook for Fiscal 2002 - E&C • Environment continues to be tough with limited opportunities • Current Order Backlog in excess of Rs. 95 bn • Good order booking prospects in power, infrastructure and refinery segments – Timing uncertain 32
Slide 31: Outlook for Fiscal 2002 - Cement
Outlook for Fiscal 2002 - Cement • Volume growth of 8% expected. • Key demand drivers being – Reconstruction work in Gujarat – Major concretising projects to be undertaken by NHAI – Further fiscal benefits extended to the housing sector • Demand may get a further boost with – Good monsoon – Improved
Slide 32: HR Thrust
HR Thrust 34
Slide 33: HR Challenges
HR Challenges • Challenge of attracting talent • Attrition among the professionals, specially engineers • Need to nurture and retain talent/special skills • Need to identify and develop future Leaders • Improve productivity 35
Slide 34: Multi-pronged strategy to Attract & Retain Talent
Multi-pronged strategy to Attract & Retain Talent MLP Compensation Career Avenues Increases for young Movement to talent LTITL Exceptional Professionals Competence Very Good Performers & Building Hot Skilled Employees Assessment Centres 36
Slide 35: MTS & MLP
MTS & MLP Management Leaders Management Trainees (Nurturing talent from (Taking talent from outside within L&T) & nurturing within L&T) 250 MLs 40 MTs MANAGEMENT LEADERSHIP PROGRAMME (MLP) 37
Slide 36: Efforts Towards Globalisation
Efforts Towards Globalisation 38
Slide 37: Globalisation Strategy
Globalisation Strategy • Pre–Qualification • Quality Accreditation • Country / Region Focus • Exploit JV relationships 39
Slide 38: Prequalification
Prequalification • HED prequalified with – Refineries and oil & gas companies in Middle East, Far East, South Africa, Venezuala, Brazil and USA – International EPC contractors – Bechtel, Fluor Daniel, Chiyoda • E&C prequalified with Petronas, Mobil, Amoco • Construction group is well recognised in M
Slide 39: Quality Accreditation
Quality Accreditation • Quality certification obtained for export to China, UK and Europe • Cement is manufactured to satisfy British and European standards • ECC’s international operations are ISO 9001 certified • Trained manpower conversant with quality standards of Australia, UK, Denmark, Germany
Slide 40: Regional Focus
Regional Focus • Middle East • South East Asia covering ASEAN and SAARC countries 42
Slide 41: Cement Restructuring Update
Cement Restructuring Update 43
Slide 42: Cement Restructuring - Current Status
Cement Restructuring - Current Status • Due diligence by potential candidates completed • JV Agreements and other documents are under discussion with potential candidates • Binding bids to be received after finalising the documents 44
Slide 43: Thank You
Thank You 45