Slide 1: Chasing sustainable growth… on strong foundations
1 Chasing sustainable growth… …on strong foundations
Slide 2: Agenda
2 Agenda India & Industry Overview Company Snapshot Current Performance Expansion Plans
Slide 3: India macro-economic environment
India macro-economic environment 3 India macro-economic environment India macro-economic environment India’s GDP grew at 7.9% in Q4FY16 (7.6% FY16), making it a rare bright spot in a slowing global economy and the fastest growing amongst large economies in the world This growth has been achieved
Slide 4: Indian cement industry is the 2nd largest in the world after China
Indian Cement industry 4 Indian cement industry is the 2nd largest in the world after China Indian Industry Overview Industry capacity just around 400 million tons, utilization around 70% New capacity becoming increasingly difficult to add due to specific challenges Increased competition for n
Slide 5: The industry has seen some consolidation on the back of a subdued market environment
Indian Cement industry 5 The industry has seen some consolidation on the back of a subdued market environment and attractive valuations Indian Industry Overview (contd.) Main revenue drivers are customer mix, product mix and brand premium Main cost drivers are power & fuel as well as logistics (
Slide 6: Growth has been subdued recently but expected to accelerate
Demand growth and outlook 6 Growth has been subdued recently but expected to accelerate Demand trends Cement Industry – Demand Drivers Housing and Infrastructure are typically the two largest Commercial Housing demand drivers for cement – c.80% 20% 58% Historically cement demand growth has tende
Slide 7: Agenda
7 Agenda Indian Industry Overview Company Snapshot Current Performance Expansion Plans
Slide 8: Group & Company background
Group & Company background 8 Reputed and respected, circa US$ 2 billion multi-industry conglomerate Present across three industry clusters – technology & automotive, home & building products and healthcare & education Businesses present across five continents with over 20,000 employees, 24 man
Slide 9: Orient Cement has an installed capacity of 8 million tons
9 Orient Cement has an installed capacity of 8 million tons, including the recently commissioned Chittapur plant • 3 mtpa integrated cement plant located at Devapur in Adilabad district of Telangana • 2 mtpa grinding unit located at Jalgaon district of Maharashtra • Greenfield 3 mtpa integrated unit
Slide 10: Primarily sold to the markets of Southern and Western India
10 Primarily sold to the markets of Southern and Western India • With a network of > 2700 dealers, our product is sold in Telangana & Maharashtra, which are our primary markets; we also sell in parts of AP, Gujarat, Madhya Pradesh, Chattisgarh & Karnataka Jalgaon, • With the commissioning of the Mah
Slide 11: Our Competitive Advantage
11 Our Competitive Advantage Structural Advantage • Geographic location with proximity to coal mines • Captive power plant with all units ensuring power security at reasonable prices • Railway siding in all plants provides logistics strength Strong Financials Lean Organization • Strong financial • S
Slide 12: Agenda
12 Agenda Indian Industry Overview Company Snapshot Current Performance Expansion Plans
Slide 13: Volumes focused on Maharashtra and AP/Telangana, with some ongoing diversification
13 Given our plant locations, our volumes continue to be focused on Maharashtra and AP/Telangana, with some ongoing diversification FY2012 FY2013 FY2014 0% 10% 0% 16% 18% 0% 25% 23% 23% 65% 61% 59% FY2015 FY2016 2% 19% 18% 5% 52% Maharashtra 22% 57% 25% AP/Telangana Karnataka Others
Slide 14: Prices in Maharashtra have been on a downward trajectory
14 Prices in Maharashtra have been on a downward trajectory – a particularly steep drop since Q1FY15 after a very brief recovery 400 Nagpur Chandrapur Nashik Jalgaon Nanded Latur Aurangabad Amaravathi 375 350 325 300 275 c.18% average price drop from June 2014 (>20% 250 drop from peak) 225 200 Jul-1
Slide 15: Capacity utilization and product mix
CAPACITY UTILIZATION AND PRODUCT MIX 15 Despite a difficult market, capacity utilization is high and product mix skewed towards PPC to maximize contribution Capacity Utilization Product mix - % sales of PPC cement 75% 75% 80% 84% 82% 73% 72% 77% 82% 74% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 F
Slide 16: Power and fuel consumption
POWER AND FUEL CONSUMPTION 16 Efficiency in operations is our key mantra – consistently improving our power & fuel consumption at Devapur & Jalgaon Power consumption (kwh/t) Fuel consumption (kcal/kg clinker) 7% 1% 78 76 76 77 73 720 721 728 724 710 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16
Slide 17: Our performance snapshot
17 OUR PERFORMANCE Our performance snapshot Last 5 year’s volumes Last 5 year’s net sales / ton Million tonnes Rs. Per tonne CAGR CAGR +3.6% -1.3% 4.09 4.20 4.08 4.42 3581 3629 3402 3763 3398 3.83 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Last 5 year’s revenue Last 5 year’s EBITDA Rs. millio
Slide 18: Key ratios Key financial metrics
18 Key ratios Key financial metrics FY2013 FY2014 FY2015 FY2016 D/E Ratio 0.13 0.34 1.09 1.23 DEBT / EBIDTA 0.31 1.26 3.39 6.52 ROE 23.1% 12.7% 21.6% 6.2% ROCE 30.0% 17.6% 28.5% 7.2%
Slide 19: Orient Cement's share price has shown stellar growth since listing in 2013
19 Orient Cement’s share price has shown stellar growth since listing in 2013 250 Orient Cement 200 150 CAGR 40.2% 100 50 0 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Feb-16 Aug-16
Slide 20: Agenda
20 Agenda Indian Industry Overview Company Snapshot Current Performance Expansion Plans
Slide 21: Chittapur plant has augmented production capacity by 3 MTPA
21 Chittapur plant has augmented production capacity by 3 MTPA Key Highlights • Best-in-class cost metrics with an projected capex outlay of around US$ 100/ tonne, including 45 MW CPP and 6 MW WHRS • Project commissioned in Sep 2015 • Best in class equipment and contractors – FL Smidth for supplying
Slide 22: Having built a highly capable plant at low cost, we are now making it deliver returns
22 Having built a highly capable plant at low cost, we are now making it deliver returns The Chittapur plant has extended Orient Cement’s market reach into Karnataka and parts of Tamil Nadu and Andhra Pradesh and helped us consolidate our strong position in Maharashtra While the stabilisation pe
Slide 23: Our future growth strategy
23 Our future growth strategy Orient Cement has set out to become a ‘relevant’ ‘national player’ by expanding its capacity to 15 million tonnes (3x) by 2020 Leveraging the foundation of our operational strength, we intend to create a diversified footprint : Any opportunistic acquisition target
Slide 24: Thank you!
CK BIRLA GROUP ORIENT CEMENT Fnank you! 24
Slide 25: Questions?
CK BIRLA GROUP ORIENT CEMENT Questions? 25