Grasim Industries Ltd. · NSE:GRASIM

Grasim Industries — Q1 FY2017 Earnings Presentation

37 slides from Grasim Industries's earnings presentation, Aug 11, 2016

  1. Slide 1: Quarterly Performance Review Q1 2016-17

    Quarterly Performance Review Quarter 1 : 2016-17 Mumbai, 11th August, 2016 Grasim Industries Limited Building, Consolidating, Growing

  2. Slide 2: Contents

    Contents  Highlights 3-6  Financial Performance 7 - 10  Business Performance 11 - 16  Impact of Ind AS on Grasim 17 - 19  Capex Plan 20 - 21  Business Outlook 22 - 23 Glossary VSF : Viscose Staple Fiber, MT : Metric Ton, TPA : Tons Per Annum, YoY: Year on Year Comparison, CY : Current Year, LY

  3. Slide 3: Indian Economy

    Indian Economy  IMF forecasted Indian economy growth at 7.4% in CY 2016  India remains a bright spot in global economy  IMF revised its global growth forecast for 2016 from 3.2% to 3.1%  Macro economic stability in India to cushion against global uncertainties  Reform measures by Government con

  4. Slide 4: Highlights – Quarter 1: VSF Business

    Highlights – Quarter 1 VSF Business Leading Global VSF prices marginally up on YoY basis Global Player - Supported by steady demand and low inventory level Sales Volume Revenue EBITDA 121K Tons ` 1,654 Cr. ` 322 Cr. Up by 17% YoY Up by 32% YoY Up by 131% YoY Global VSF Demand and Supply Growth 24% 2

  5. Slide 5: Highlights – Quarter 1: Chemical Business

    Highlights – Quarter 1 Chemical Business (Chlor Alkali, Chlorine Derivatives and Epoxy) Uptick in Caustic Soda prices in domestic markets Largest - Water shortage led lower production by various Indian Player manufacturers in Western/Central zone - Rupee depreciation Caustic Sales Volume Revenue EBI

  6. Slide 6: Highlights – Quarter 1: Cement Business

    Highlights – Quarter 1 Cement Business (UltraTech Cement) Market leader Subdued demand due to water shortage in India - Capacity utilisation for the industry at Q4 level Cement Sales Volume Revenue EBITDA 13.6 Mn. Tons ` 6,590 Cr. ` 1,626 Cr. Up by 6% YoY Up by 4% YoY Up by 25% Demand Growth 5.4% 5.

  7. Slide 7: Financial Performance

    Financial Performance Standalone ` Cr. Revenue EBITDA Net Profit 25% 81% 138% 2,426 321 586 1,947 324 135 Q1FY16 Q1FY17 Q1FY16 Q1FY17 Q1FY16 Q1FY17 Consolidated Revenue EBITDA Net Profit 9% 36% 64% 9,089 2,214 8,366 830 1,628 508 Q1FY16 Q1FY17 Q1FY16 Q1FY17 Q1FY16 Q1FY17 Robust Growth in Revenue, EB

  8. Slide 8: Investment in Growth and Operational Measures Yielding Results

    Investment in Growth and Operational Measures Yielding Results 600 586 EBITDA (` Cr.) 500 400 324 300 196 200 100 0 Q1 FY15 Q1 FY16 Q1 FY17 VSF Chemical Treasury & Others Note: EBITDA numbers for Q1 FY16 and Q1 FY17 are in accordance with IND AS  Standalone EBITDA have shown robust growth  Speedy

  9. Slide 9: Cash Generation in Q1 FY17

    Cash Generation in Q1 FY17 Standalone ` Cr. 1839 1835 1603 240 Reduction in Working Capital 1376 459 236 463 Cash Profit after Tax Mar-16 31-3-16 June-16 Q1FY17 Mar-16 Q4FY16 June-16 Q1FY17 Q1FY17 Debt Liquid Investments Net debt Surplus Consolidated 3791 12500 11089 9553 8709 800 Reduction in Worki

  10. Slide 10: Robust Financial Ratios

    Robust Financial Ratios ` Cr. Standalone Consolidated 31-03-2016 30-06-2016 31-03-2016 30-06-2016 Debt:Equity (x) 0.12 0.08 0.34 0.30 Net Debt: Equity (x) 0.02 - 0.10 0.04 Net Debt / EBITDA 0.13 - 0.53 0.17 ROCE (%) 10.9 14.1 (Excluding CWIP) RONW (%) 9.7 11.6 Strong Balance Sheet – Robust Financial

  11. Slide 11: Business Performance

    Business Performance  VSF  Chemical  Cement 11

  12. Slide 12: International Fibres Price Trend

    International Fibres Price Trend $/ Kg 2.3 2.1 1.9 1.76 1.7 1.63 1.5 1.3 1.1 0.9 0.90 0.7 VSF Cotton PSF  VSF : Prices marginally up on YoY basis  Steady demand along with low inventory level continues to support prices  Cotton : Shortage of good quality cotton led to spike in prices  PSF : Marg

  13. Slide 13: VSF : Performance

    VSF : Performance Revenue ( ` Cr.) EBITDA (` Cr.)  Volume up by 17% YoY EBITDA Margin 32%  Growth driven by domestic markets 131%  Aided by growth in specialty fibre segment 19%  Water shortage led shutdown at Nagda 1,654 11% 322 1,254  This year 1 month, last year 2 months 139 Q1FY16 Q1FY17 Q1

  14. Slide 14: VSF : Volume Drivers

    VSF : Volume Drivers Q1FY17 Q1FY16 39% 30% 61% 70% Grey Speciality Share of specialty fibre increased from 29% to 39%, on higher base Q1 FY17 Q1 FY16 29% 31% 71% 69% Domestic Export Increase in proportion of domestic sales from 69% to 71% on higher base 14

  15. Slide 15: Chemical : Performance

    Chemical : Performance  Increase in volume by 11% YoY Revenue ( ` Cr.) EBITDA (` Cr.)  Comparatively lower impact of water shortage at 17% EBITDA Margin 35% Nagda this year 232  Additional volume from Ganjam plant which was 904 775 172 acquired in Q2 last year 26% 22%  ECU realisation was up by

  16. Slide 16: Cement : Performance

    Cement : Performance  Volume up by 6% Revenue (` Cr.) EBITDA (` Cr.)  Enhanced presence in market place 4% EBITDA Margin 25%  Decline in total operational cost by 9% 24% 20% 1,626  Energy cost down by 24% 6,341 6,590 1,302  Higher usage of Petcoke  Improved energy consumption Q1FY16 Q1FY17 Q1

  17. Slide 17: Impact of Ind AS on Grasim

    ADITYA BIRLA GRASIM Impact of Ind AS on Grasim 17

  18. Slide 18: Ind AS Implementation w.e.f. 1st April 2016

    Ind AS Implementation w.e.f. 1st April 2016 Rs. Crs. A. Key Accounting Changes and Impact on Grasim for Q1 FY17 : Standalone Consolidated  Discounts and direct sales incentive netted from Sales Revenue Operating EBIDTA  Capitalisation of high value spares having life > 1 year -* 8  ESOP charges o

  19. Slide 19: Ind AS Implementation w.e.f. 1st April 2016

    Ind AS Implementation w.e.f. 1st April 2016 B. Changes in Consolidation method in CFS: Rs. Crs.  Joint Ventures’ (JVs) are accounted as per equity method (consolidation at PAT level) instead of line by line proportionate consolidation under previous GAAP  There is no impact at PAT Level.  However

  20. Slide 20: Capex

    ADITYA BIRLA GRASIM Capex 20

  21. Slide 21: Capex plan

    Capex plan (` Cr.) Capex Cash Outflow Capex (Net of CWIP FY17 FY18 spent - as on Onward Q1FY17 01-04-16) Standalone Vilayat Caustic Plant Brownfield expansion (144K TPA) 513 VSF : Water supply augmentation & usage reduction 87 Research & Development 76 468 Environment 97 Others 208 Chemical capacity

  22. Slide 22: Business Outlook

    Business Outlook VSF VSF Business Business:  Business environment for the Industry is improving globally  Limited capacity addition leading to higher operating rates  Cotton consumption higher than production in Season 15-16; uptrend witnessed in the prices  Textile consumption in India expected

  23. Slide 23: Business Outlook: Cement Business

    Business Outlook Cement Business  Cement demand expected to grow ~7% for FY17  Cement demand growth drivers :  Continuing Government infrastructure spending  Pick-up in rural housing on back of normal monsoon and 7th pay commission disbursement  Development activities in various states  Delay

  24. Slide 24: Thank You

    ADITYA BIRLA GRASIM Thank You 24

  25. Slide 25: Annexure - Financials

    Grasim Industries Limited Annexure - Financials 25

  26. Slide 26: Annexure

    Annexure  Consolidated Financial Performance  Standalone Financial Performance  Balance sheet  Revenue & EBITDA Chart  VSF Summary  Chemical Summary  Cement Summary  Organisational Structure  Plant Locations 26

  27. Slide 27: Consolidated Financial Performance

    Consolidated Financial Performance (` Cr.) Quarter 1 % 2016-17 2015-16 Change Net Sales & Op. Income 9,089 8,366 9 Other Income 190 133 42 EBITDA 2,214 1,628 36 EBITDA Margin (%) 23.9% 19.1% Finance Cost 204 192 6 Depreciation 436 402 9 Share in Profit of JVs & Associates 47 19 142 Earnings before T

  28. Slide 28: Standalone Financial Performance

    Standalone Financial Performance (` Cr.) Quarter 1 % 2016-17 2015-16 Change Net Sales & Op. Income 2,426 1,947 25 Other Income 48 35 36 EBITDA 586 324 81 EBITDA Margin (%) 23.7% 16.3% Finance Cost 23 41 (44) Depreciation 110 95 16 Earnings before Tax 453 188 141 Tax Expense 132 53 148 PAT 321 135 13

  29. Slide 29: Balance Sheet

    Balance Sheet Standalone Consolidated (` Cr.) 30th June'16 31stMar'16 EQUITY & LIABILITIES 30th June'16 31stMar'16 16,231 15,556 Net Worth 28,613 27,391 - - Minority Interest 9,037 8,728 1,376 1,839 Borrowings 11,089 12,500 555 519 Deferred Tax Liability (Net) 3,189 3,045 1,845 1,591 Liabilities & P

  30. Slide 30: Revenue Chart

    Revenue Chart (` Cr.) Quarter 1 % 2016-17 2015-16 Change Viscose Staple Fibre 1,654 1,254 32 Chemical 903 775 17 Others 21 25 (17) Eliminations (Inter Segment) (152) (107) Standalone Net Revenue 2,426 1,947 25 Subsidiaries Cement 6,590 6,341 4 Textiles 83 89 (7) Eliminations (Inter Company)/ Others

  31. Slide 31: EBITDA – Chart

    EBITDA – Chart (` Cr.) Quarter 1 % EBIDTA 2016-17 2015-16 Change Viscose Staple Fibre 322 139 131 Chemical 232 172 35 Others 32 13 Standalone EBITDA 586 324 81 Subsidiaries Cement 1,626 1,302 25 Textiles 2 6 (62) Eliminations (Inter Company )/Others (1) (3) Total for Subsidiaries & JVs 1,628 1,304 C

  32. Slide 32: Viscose Staple Fibre : Summary

    Viscose Staple Fibre : Summary Quarter 1 % 2016-17 2015-16 Change Capacity KTPA 125 125 - Production (in '000s) MT 114 94 22 Sales Volumes (in '000s) MT 121 103 17 Net Revenue ` Cr. 1,654 1,254 32 EBITDA ` Cr. 322 139 131% EBITDA Margin % 19.4% 11.0% -- EBIT ` Cr. 266 88 202 Capital Employed (Incl.

  33. Slide 33: Chemical : Summary

    Chemical : Summary Quarter 1 % 2016-17 2015-16 Change Capacity KTPA 210 186 13 Production (in '000s) MT 193 168 15 Sales Volumes (in '000s) MT 189 169 12 Net Revenue ` Cr. 904 775 17 EBITDA ` Cr. 232 172 35 EBITDA Margin % 25.6% 22.4% -- EBIT ` Cr. 181 132 38 Capital Employed (Incl. CWIP) ` Cr. 3,69

  34. Slide 34: Cement : Summary

    Cement : Summary Quarter % 2016-17 2015-16 Change Grey Cement Capacity Mn. TPA 17.31 15.79 10 Production Mn. MT 13.48 12.85 5 Cement Sales Volumes $ Mn. MT 13.59 12.87 6 Clinker Sales Volumes Mn. MT 0.19 0.08 White Cement & Putty Sales Volumes $$ Lac MT 2.84 2.67 6 Net Revenue ` Cr. 6,590 6,341 4 EB

  35. Slide 35: Grasim Group Structure

    Grasim Group Structure Pulp & Fibre Chemical UltraTech Cement (60.25%) Others VSF VSF JV Pulp Overseas Caustic Epoxy Domestic Overseas 498K TPA China 70K TPA Pulp JVs 840K TPA 51K TPA 3 Mn. TPA, (UAE, Bangladesh, Sri Lanka) Nagda Grey Cement Grasim Nagda Birla Jingwei Harihar AV Cell 270K TPA Bhiwan

  36. Slide 36: Plant Locations– Grasim & Its subsidiaries

    Plant Locations– Grasim & Its subsidiaries Bathinda(G) Jhajjar Bhiwani Panipat Dadri T Kotputli Aligarh Jodhpur Patliputra P T Malanpur Renukoot Shambhupura C Jawad P Katni Sewagram Bharuch Durgapur(G) UltraTech Cement Plants Wanakbori F Jafrabad Vilayat C Rehla Dankuni`(G) F C Nagpur UltraTech Grin

  37. Slide 37: Cautionary Statement

    Cautionary Statement Statements in this “Presentation” describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or impl

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