Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — FY2017 Earnings Presentation
35 slides from Larsen & Toubro's earnings presentation, May 29, 2017
Slide 1: Analyst Presentation Q4 / FY17
1 Analyst Presentation - Q4 / FY17 May 29, 2017
Slide 2: Disclaimer
2 Disclaimer This presentation contains certain forward time and cost over runs on contracts, our looking statements concerning L&T’s future ability to manage our international business prospects and business profitability, operations, government policies and actions which are subject to a number of
Slide 3: Presentation Outline
3 Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key Subsidiaries The Environment & the Outlook
Slide 4: Performance Highlights – FY17
4 Performance Highlights – FY17 Recurring EBITDA PAT Revenue Order Book Order 43% Inflow 6% 8% 5% 5%
Slide 5: Key Financial Indicators
5 Key Financial Indicators Amount in ₹ bn Q4 FY16 Q4 FY17 Var % Particulars FY16 FY17 Var % 432 473 10% Order Inflow 1360 1430 5% Order-Book 2490 2613 5% 329 368 12% Revenue from Operations 1020 1100 8% 45 43 -4% EBITDA 105 111 6% 23 30 30% Profit After Tax 42 60 43% 42 73 +₹30 bn Cash flow from ope
Slide 6: Presentation Outline
6 Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key Subsidiaries The Environment & the Outlook
Slide 7: FY17 Order Inflow / Order Book
7 FY17 Order Inflow / Order Book Amount in ` bn Order Inflow Order Book • Order inflow growth reflects 2613 muted capex environment 1360 1430 2490 5% 5% 698 • Domestic order inflow growth 434 415 703 of 10% YoY led by Heavy Civil, Water and Heavy Engg. 927 1,015 1,787 1,916 businesses • Large & dive
Slide 8: Key Orders won during FY17
8 Key Orders won during FY17 Order Details Client Segment Value International Hasbah Field Development Saudi Aramco Hydrocarbon ~ USD 1000 mn Transmission expansion Phase – XIII KAHRAMAA, Qatar Infrastructure ~ USD 800 mn Major Onshore EPC Contract Overseas Client Hydrocarbon ~ USD 600 mn Domestic 1
Slide 9: Group Performance – Sales & Costs
9 Group Performance – Sales & Costs Amount in ` bn Q4 Q4 • Planned execution of international % Var ` Billion FY16 FY17 % Var jobs contributes to revenue growth FY16 FY17 329 368 12% Revenues 1,020 1,100 8% • Revenues supported by growth in 221 253 14% MCO Exp. 674 727 8% Infrastructure, Hydrocarbon
Slide 10: Group Performance – EBITDA to PAT
10 Group Performance – EBITDA to PAT Amount in ` bn Q4 Q4 % Var ` Billion FY16 FY17 % Var • EBITDA Margin (Ex-Services) FY16 FY17 improves by 50 bps 45 43 -4% EBITDA 105 111 6% (4) (3) -32% Fin. Cost (17) (13) -19% • Decline in interest cost arising from loan repayments and efficient fund (4) (7) 70
Slide 11: Presentation Outline
11 Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key Subsidiaries The Environment & the Outlook
Slide 12: Segment Composition
12 Segment Composition Heavy Electrical & Infrastructure Power Engineering Automation Buildings & Factories Process Plant Electrical Standard EPC – Coal & Gas Equipment Products Transportation Infra Heavy Civil infra Nuclear Power Plant Electrical Systems Equipment & Equipment Thermal Power Plant Wa
Slide 13: Order Inflow (FY17) / Order Book Break-up
13 Order Inflow (FY17) / Order Book Break-up E&A Hydrocarbon HE 4% 13% 5% Services Power 16% 2% Others 5% • Order Inflow growth mainly Order Inflow contributed by Hydrocarbon ₹ 1430 Bn Infrastructure and Heavy Engineering 55% Power HE • Growth in Services Business 5% 5% E&A 1% driven by IT & TS Segm
Slide 14: FY17 Revenue Break-up
14 FY17 Revenue Break-up E&A Hydrocarbon IT & TS 9% HE 4% 9% Fin. Services 3% 8% Devl. Proj. 4% Power 6% Others • Infrastructure growth slowed 9% down by multiple constraints (demonetisation, client Infrastructure 48% liquidity, clearances and work front availability) 34% 66% Domestic International
Slide 15: Infrastructure Segment
15 Infrastructure Segment Amount in ` bn Net Revenues & Margin • Execution headwinds slow down revenue growth • Transportation Infra, Heavy Civil and Water Businesses deliver higher growth • Smart World Business Unit makes an encouraging start • Margins impacted due to delayed execution and extended
Slide 16: Power Segment
16 Power Segment Amount in ` bn Net Revenues & Margin • International projects in completion phase • Margin improvement on better execution progress and job mix • Improved performance by MHPS JVs not reflected in reported EBITDA - consolidated at PAT level under Ind AS
Slide 17: Heavy Engineering Segment
17 Heavy Engineering Segment Amount in ` bn Net Revenues & Margin • Subdued revenue growth on delay in awards and slow progress of jobs • Defence business holds promise • PY margins impacted by cost overruns and delayed deliveries. FY17 reflects turnaround in profitability
Slide 18: Electrical & Automation Segment
18 Electrical & Automation Segment Amount in ` bn Net Revenues & Margin • Low-key revenue growth in FY17 mainly due to lower industrial demand • Margin expansion obtained from favourable sales composition and operational efficiencies
Slide 19: Hydrocarbon Segment
19 Hydrocarbon Segment Amount in ` bn Net Revenues & Margin • Significant order wins in FY17 strengthens revenue visibility • Execution of international jobs propels revenue growth • Close out of challenging legacy jobs, cost optimisation and operational efficiencies drives business turnaround • Str
Slide 20: IT & Technology Services Segment
20 IT & Technology Services Segment Amount in ` bn Net Revenues & Margin • Revenue growth driven by Insurance, Auto Aero & Others for IT business; Transportation & Industrial Products verticals for Tech services business • Stable margins achieved through manpower utilisation and delivery optimisatio
Slide 21: Developmental Projects Segment
21 Developmental Projects Segment Amount in ` bn Net Revenues & Margin • Segment includes Power Development, Hyderabad Metro and Kattupalli Port (currently under divestment process) • IDPL (Roads & TL) consolidated at PAT level under Equity method • Revenues impacted by lower construction progress i
Slide 22: Others Segment
22 Others Segment Amount in ` bn • Revenue growth sustained thru Net Revenues & Margin strong execution by MMH • Weak demand slows down construction equipment & industrial products business • Demonetisation adversely affects Realty business; demand gradually improving • Shipbuilding performance cont
Slide 23: L&T Finance Holdings (I-GAAP)
23 L&T Finance Holdings (I-GAAP) Amount in ` bn ` Billion FY16 FY17 % Change • Emphasis on ROE improvement Networth 84.09 91.07 8% (Incl. Pref.Cap and Warrants) Consolidated Debt 516.16 598.11 16% • Efforts to reduce Cost to Income ratio Loans and Advances 582.56 666.48 14% Mutual Fund Average AUM 2
Slide 24: Presentation Outline
24 Presentation Outline Group Performance Highlights Group Performance Summary Segment / Key Subsidiaries The Environment & the Outlook
Slide 25: The Environment & the Outlook
25 The Environment & the Outlook
Slide 26: Thank You
26 Thank You RENTS | veut 5 © LARSEN & TOUBRO
Slide 27: Annexures
27 Annexures RENTS | veut 5 © LARSEN & TOUBRO
Slide 28: Group Profit & Loss Extracts
28 Group Profit & Loss Extracts L&T & L&T Group Fin. Devl. ` Billion IT & TS Others (Incl. Services * Projects FY17 FY16 % Var Eliminations) Income from Operations 97.31 85.45 40.27 877.07 1,100.11 1,019.75 8% EBITDA 20.19 5.92 0.61 84.03 110.75 104.63 6% Other Income 0.44 2.73 0.30 10.55 14.01 9.04
Slide 29: Balance Sheet
29 Balance Sheet Incr / ` Billion Mar-17 Mar-16 (Decr) Equity & Reserve 502 442 60 Non Controlling Interest 36 29 7 Borrowings - Financial Services 631 546 85 Development Projects 150 142 8 Others 159 193 (34) Sources of Funds 1,478 1,352 125 Fixed Assets 169 189 (20) (Tangible / Intangible / Goodwi
Slide 30: Group Cash Flow
30 Group Cash Flow Q4 FY16 FY16 ` Billion Q4 FY17 FY17 44.6 108.6 Operating Profit 44.2 113.8 7.3 0.8 Changes in Working Capital 37.6 39.8 (9.7) (32.1) Direct Taxes paid (9.2) (32.0) 42.2 77.2 Net Cash from Operations (A) 72.6 121.6 (7.5) (41.2) Investments in Fixed Assets (Net) (4.9) (28.2) (2.6) (
Slide 31: Share in Profit/(Loss) of JVs/Associates
31 Share in Profit/(Loss) of JVs/Associates ` Billion FY17 FY16 MHPS JVs 1.12 0.54 IDPL & Subs. (3.45) (8.19) Others (1.62) (2.25) Total (3.95) (9.90)
Slide 32: Other Comprehensive Income (OCI)
32 Other Comprehensive Income (OCI) OCI represents movement in components of ₹ Billion FY17 FY16 Equity (Net Worth) in Balance Sheet Changes arising out of re- Components: measurement of defined (0.25) (0.10) • Re-measurement of defined benefit benefit plans for employees (retirement) plans – Vo
Slide 33: Reconciliation of Net PAT (FY2015-16)
33 Reconciliation of Net PAT (FY2015-16) 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 Impact of fair valuat
Slide 34: Concessions Business Portfolio – 21 SPVs
34 Concessions Business Portfolio – 21 SPVs Transmission Lines: Portfolio: 1 project (482 Km) - Operational Roads and Bridges: Project Cost: `13.5 bn Portfolio: 15 projects (1661 Km); 13 Operational Project Cost: ` 161 bn Balance Equity Commitment (Mar 2017): ` 15 Bn Equity Invested (Mar 2017): ` 89
Slide 35: Major Opportunities
35 Major Opportunities Roads & Highways Railways Water - NH & SH - Metros - Lift Irrigation schemes - Special Bridges - DFCC (next phase) - Water Treatment (Incl. Desal) - Tunnels - Station development - Effluent & Waste water - Expressways Treatment (Incl. Namami - Elevated Corridors Gange) - Inlan