Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q2 FY2003 Earnings Presentation
39 slides from Grasim Industries's earnings presentation, Oct 25, 2002
Slide 1: Performance Review – Q2FY03
Grasim Industries Limited Performance Review – Q2FY03 25th October, 2002
Slide 2: Financial Performance Q2FY03
Financial Performance Q2FY03 Rs. Crores Q2 Q2 % ! Consistent strong performance - Results reflect benefits of business and financial FY03 FY02 Chg. restructuring Net Turnover & Operating 1,112.9 1,108.0 - " Closure of non-viable Fibre and Pulp plants Income at Mavoor Other Income 36.6 19.7 86 " Soft
Slide 3: Financial Performance Q2FY03
Financial Performance Q2FY03 Rs. Crores ! Higher production and turnover volumes in Q2 Q2 % all businesses FY03 FY02 Chg. ! Turnover maintained Net Turnover & Operating 1,112.9 1,108.0 - " Growth in VSF volumes and improved Income Sponge Iron & Chemical turnover Other Income 36.6 19.7 86 " Lower tur
Slide 4: Financial Performance – H1FY03
Financial Performance – H1FY03 Rs. Crores H1 H1 % ! PBIDT up by 18%, FY03 FY02 Chg. ! Interest cost down by 8% ! PBT up by 38% Net Turnover & Operating 2,248.4 2,225.2 1 ! Total tax expenses at Rs.91.5 Crs, an Income increase of over 80% Other Income 45.8 34.2 34 " Availability of certain one-time d
Slide 5: Financial Performance Summary – Q2FY03/H1FY03
Financial Performance Summary – Q2FY03/H1FY03 Rs. Crores Q2FY03 Q2FY02 % Chg. H1FY03 H1FY02 FY02 Net Turnover & Operating 1,112.9 1,108.0 -- 2,248.4 2,225.2 4,386.7 Income Other Income 36.6 19.7 86 45.8 34.2 114.6 PBIDT 286.7 211.3 36 541.4 459.0 936.8 Interest and Finance Charges 43.2 47.9 (10) 87.
Slide 6: Financial Performance Summary – Q2FY03/H1FY03
Financial Performance Summary – Q2FY03/H1FY03 Rs. Crores Q2FY03 Q2FY02 H1FY03 H1FY02 FY02 Exceptional Items Loss on sale of Investments / Profit on transfer -- -- -- (18.1) of Undertaking Excess provision for taxes for earlier years -- -- 68.1 written back Loss on closure of Mavoor units (37.4) (37.
Slide 7: Segmental Performance - Q2FY03
Segmental Performance - Q2FY03 Revenue Mix PBIDT Mix Sponge Sponge Iron Iron Others 8% 8% 9% Cement 21% VSF 36% VSF 55% Chemical Cement 7% 45% Chemical 6% Textiles 5% Q2FY03 (Rs. 1,113 Crs.) Q2FY03 (Rs. 287 Crs.) 7
Slide 8: Segmental Performance - Q2FY03 (Contd.)
Segmental Performance - Q2FY03 (Contd.) Rs. Crores Business Revenue PBIT * Capital ROAvCE (%) Employed $ (PBIT basis) VSF 414.2 145.7 790 72 Chemical 66.1 17.6 212 33 Cement 511.6 25.5 2,044 5 Sponge Iron 90.7 13.1 516 10 Textile 57.6 (4.7) 118 (15) Company as a whole $ 1,112.9 223.9 5,468 16 * Befo
Slide 9: Business Review Q2FY03
IGRASTM| Business Review Q2FYOB
Slide 10: Viscose Staple Fibre : Highlights
Viscose Staple Fibre : Highlights Q2 Q2 % ! Capacity utilisation up from 70% to 110% FY03 FY02 Chg. due to higher demand Capacity (TPA) 220,775 220,775 - ! Production up by 55% Production (MT) 60,444 38,886 55 ! Sales up 38% at 58,867 tonnes Sales Volumes (MT) 58,867 42,730 38 " Domestic sales highe
Slide 11: Viscose Staple Fibre : Outlook
Viscose Staple Fibre : Outlook ! Deemed export largely depends on pace of recovery in global economy ! Margins will be under pressure in the coming quarters " Global pulp prices showing rising trend " Efforts will be to part offset increased cost thru enhanced plant efficiency ! Grasim to focus on m
Slide 12: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary % Q2FY03 Q2FY02 H1FY03 H1FY02 FY02 Chg. Capacity TPA 220,775 220,775 - 220,775 220,775 220,775 Production MT 60,444 38,886 55 105,902 71,643 176,462 Sales Volumes MT 58,867 42,730 38 116,643 81,741 181,520 Net Turnover Rs. Crs. 414 321 29 833 632 1,329 Avg. Realisation
Slide 13: Cement : Highlights
Cement : Highlights Q2 Q2 % ! Capacity utilisation up from 86% to 91% FY03 FY02 Chg. ! Sales volumes grew by 20% against industry average growth of 13% Grey Cement " Improved performance in all the Zones Capacity1 (Mn TPA) 11.37 10.36 10 # Volumes in North up by 34% with full Production (Mn MT) 2.60
Slide 14: Cement : Highlights (Contd..)
Cement : Highlights (Contd..) Grey Cement Sales Vol. and Net T. O. MT ‘000 Rs. Crs. ! Average realisation declined by 15% V ol. G rey N et T O 700 reflecting depressed pricing environment 2700 across all zones 2200 ! Operating margin lower at 12% against 500 22% in Q2FY02 1700 ! Decline in margins r
Slide 15: Cement: Outlook
Cement: Outlook ! At current GDP growth, market to double in size every 7-8 years " Housing sectors and Infrastructure to support demand growth of 8% p.a. ! Infrastructure remains a thrust area " Growing emphasis on roads, bridges and urban infrastructure " Flyovers, expressways and concretization o
Slide 16: Cement: Outlook (Contd.)
Cement: Outlook (Contd.) ! Grasim will focus on " Ensuring dominance in the identified core markets of North, South and Western corridors " Proactive change in product/market mix to ensure superior realisation " Increasing share in the profitable and growth segments " Enhanced capital productivity a
Slide 17: Cement : Summary
Cement : Summary Q2FY03 Q2FY02 % Chg. H1FY03 H1FY02 FY02 Grey Cement Capacity # Mn. MT 11.37 10.36 10 11.37 10.36 11.37 Production Mn. MT 2.60 2.22 17 5.40 4.79 9.53 Sales Volumes Mn. MT 2.67 2.22 20 5.45 4.77 9.68 Net Turnover Rs. Crs. 465 446 4 970 974 1,926 Avg Realisation Rs./MT 1,657 1,944 (15)
Slide 18: Chemicals
Chemicals Q2 Q2 % Highlights FY03 FY02 Chg. ! Capacity utilisation up from 83% to 99% Caustic Capacity (TPA) 160,600 160,600 - " Sales volumes up by 13% Caustic Production (MT) 39,765 33,287 19 ! ECU realisation lower by 9% Caustic Sales Volumes (MT) 38,638 34,139 13 " 38% fall in Caustic prices lar
Slide 19: Chemicals : Summary
Chemicals : Summary Q2FY03 Q2FY02 % Chg. H1FY03 H1FY02 FY02 Capacity (Caustic) MT 160,600 160,600 -- 160,600 160,600 160,600 Production (Caustic) MT 39,765 33,287 19 70,270 55,237 129,784 Sales Volume(Caustic) MT 38,638 34,139 13 69,625 54,727 129,051 Net Turnover Rs. Crs. 66 61 7 118 104 219 Avg. E
Slide 20: Sponge Iron
Sponge Iron Q2 Q2 % Highlights FY03 FY02 Chg. ! Excellent performance Capacity (TPA) 900,000 900,000 - ! Capacity utilisation up from 56% to 70% Production (MT) 157,807 126,817 24 due to improved availability of Natural Sales Volumes (MT) 147,660 110,680 33 Gas " Sales volume up by 33% Net Turnover
Slide 21: Sponge Iron : Summary
Sponge Iron : Summary Q2FY03 Q2FY02 % Chg. H1FY03 H1FY02 FY02 Capacity TPA 900,000 900,000 - 900,000 900,000 900,000 Production MT 157,807 126,817 24 300,271 293,310 559,567 Sales Volumes MT 147,660 110,680 33 287,730 275,897 562,334 Net Turnover Rs. Crs. 91 67 36 178 168 332 Avg Realisation Rs./MT
Slide 22: Textiles
Textiles Q2 Q2 % Highlights FY03 FY02 Chg. ! Business remained under pressure Sales Volumes " Turnover lower by 29% - Fabrics (lac Mtrs.) 35 53 (35) " Fabric Sales volume down 35% - Synthetic Yarn (MT) 1,745 2,064 (15) " Reflects conscious strategy to move away Net Turnover (Rs Crs.) 54 77 (30) from
Slide 23: Textiles : Summary
Textiles : Summary Q2FY03 Q2FY02 % Chg. H1FY03 H1FY02 FY02 Net Turnover Rs. Crs. 54 77 (30) 107 143 268 PBIDT * Rs. Crs. (2) (2) -- (7) (3) (21) PBIDT Margin * % (3) (1) -- (6) (2) (8) PBIT * Rs. Crs. (5) (5) -- (13) (11) (38) * Before Employees Separation Cost 23
Slide 24: Capex and Financial Highlights
Capex and Financial Highlights 24
Slide 25: Capex Plan
Capex Plan Rs. Crores Total Capex Completion FY03 FY04 Schedule A New Projects : - Cement Capacity Expansion - Debottlenecking/Blending etc. 134 57 77 Dec 2003 - Power Plants (Cement units) - Rajasthan 23 MW (AC) 71 71 -- Dec. - 02 - Tamil Nadu 12.5 MW (GS) 39 26 13 Feb. – 03 - Karnataka 23 MW (RC)
Slide 26: Capex Plan (Contd..)
Capex Plan (Contd..) Rs. Crores Total Capex FY03 FY04 B Modernisation : - VSF 57 44 13 - Cement 166 104 62 - Chemical 18 18 - - Textile 9 9 - C Other Capex : 42 35 - Total 622 394 211 ! H1 FY 03 Capex - Rs.133 Crores " Cement 99 " Fibre 13 " Chemical 4 " Textile 7 " Others 10 26
Slide 27: Profitability Snapshot
Profitability Snapshot H1 PBIDT & PBIDT Margin (Figures in Rs. Crores) FY00 FY01 FY02 FY03 1000 Gross Turnover 4,646 5,184 5,070 2,615 23 800 PBIDT (Rs. Crs.). Net Turnover 3,962 4,453 4,372 2,240 21.4 PBIDT Margin (%) 20.5 PBIDT 756 912 937 541 20.2 600 19.0 PBIDT Margin (%) 19.0 20.5 21.4 24.2 19
Slide 28: Financial Snapshot
Financial Snapshot ROAvCE - RONW (%) H1 15.3 (Figures in Rs. Crores) FY00 FY01 FY02 FY03 13.5 12.9 12.8 13.8 12.3 Gross Block 5,206 5,312 5,371 5,477 10.1 10.5 8.6 Net Block 3,401 3,303 3,263 3,275 6.6 Equity 92 92 92 92 Net Worth 2,777 3,075 2,707 2,941 Net Worth + 2,777 3,075 3,347 3,594 Deferred
Slide 29: Financial Snapshot (Contd..)
Financial Snapshot (Contd..) ! Strong financial indicators " Growing profitability and cash generations " Declining interest charge and lower average interest rate " Low gearing " High interest cover and comfortable DSCR ! Fundamentally strong Balance Sheet and Cash flow position to support Company’
Slide 30: Focus And Strategy
Focus And Strategy Focus ! Deliver enhanced value to shareholders on a sustained basis ! Focus on core businesses – VSF and Cement ! Improve asset utilisation through market expansion and better Strategy penetration ! Improve margins through better efficiency and stringent cost control Cement will b
Slide 31: Thank You
GRAS TM! ADITYA BIRLA GROUP ‘Thank You.
Slide 32: Production Data (MT)
Production Data (MT) Q2FY03 Q2FY02 FY02 Capacity Capacity Capacity Production % Production % Production % TPA TPA TPA VSF 220,775 60,444 110 220,775 38,886 70 220,775 176,462 80 Pulp 70,000 18,777 107 70,000 18,407 105 70,000 71,251 102 Caustic Soda 160,600 39,765 99 160,600 33,287 83 160,600 129,78
Slide 33: Divisional Turnover – Qty & Realisation
Divisional Turnover – Qty & Realisation Quantity (MT) Realisation (Rs. /MT) Product Q2 Q2 Q2 Q2 FY03 FY02 FY02 FY03 FY02 FY02 VSF 58,867 42,730 181,520 67,550 70,034 68,511 Pulp 21,898 23,731 71,397 19,507 24,000 22,327 Caustic Soda * 38,638 34,139 129,051 14,334 15,688 14,564 Grey Cement * * 2.67 2
Slide 34: Plant Locations
Plant Locations Bhatinda(G) Noida Gurgaon $ T Bhiwani Jodhpur Shambhupura Jawad Bharuch F F C Nagda F Fibre plants Raipur P Pulp plant Raigarh C S Hotgi(G) Chemical plant Hyderabad T Textiles units Malkhed Grey cement plants / Grinding Units (G) Bangalore White cement plant Harihar B Chennai Ready-m
Slide 35: Grasim reports excellent performance for Q2 FY2003 (press release)
Press Release Mumbai, 25th October 2002 GRASIM, the ADITYA BIRLA GROUP’s FLAGSHIP COMPANY REPORTS EXCELLENT PERFORMANCE FOR Q2 - FY 2003 Turnover: Rs. 1113 Crores Profit after Tax: Rs.129 Crores (Rs. Crores) Quarter Quarter Variation Financial Ended Ended Year Ended 30.09.2002 30.09.2001 31.03.2002
Slide 36: Operations: production, turnover and net realisation
OPERATIONS The table below indicates Grasim’s operations during the quarter: PRODUCTION / TURNOVER Products Q2 FY2003 Q2 FY2002 Variation FY 2002 Production Volumes Viscose Staple Fibre M.T. 60444 38886 55% 176462 Cement Mn.MT 2.60 2.22 17% 9.53 White Cement M.T. 72797 62478 17% 267915 Sponge Iron M
Slide 37: Capex and business outlook (press release)
A capex of Rs.263 crores has been earmarked for the current year, for setting up of two power plants of 23MW and 12.5 MW capacity at Aditya Cement and Grasim (South) respectively, and ongoing modernization and capacity of plants expansion through de-bottlenecking. On implementation of these projects
Slide 38: Unaudited Financial Results for the Three Months Ended 30th September 2002
UNAUDITED FINANCIAL RESULTS FOR THE THREE MONTHS ENDED 30TH SEPTEMBER, 2002 Rs in crores Three Months Three Months Six Months Six Months Year ended Ended 30th Ended 30th Ended 30th Ended 30th 31st March 2002 September 2002 September 2001 September 2002 September 2001 ( Audited ) Net Sales / Income f
Slide 39: Segments Reporting: Three Months
Cont. from Page 1 4. Segments Reporting: Rs. in Crores Three Months Six Months Year ended Ended 30th Ended 30th 31st March 2002 September 2002 September 2002 ( Audited ) 1. SEGMENT REVENUE a Fibre & Pulp 414.23 833.25 1,328.83 b Cement 511.55 1,054.43 2,074.85 c Sponge Iron 90.71 178.45 331.66 d Che