Skipper Ltd · NSE:SKIPPER
Skipper — Q3 FY2020 Earnings Presentation
45 slides from Skipper's earnings presentation, Feb 13, 2020
Slide 1: Cover letter to stock exchanges
SKILI3t1:?ER Date: 13 February 2020 The Manager The Manager National Stock Exchange of India Limited BSE Limited Exchange Plaza, 5th Floor, Phiroze Jeejeebhoy Towers, Dalai Street Plot No. C-1, Block-G Mumbai- 400 001 Bandra Kuria Complex, Bandra (E) Mumbai- 400 051 NSE Scrip Name- SKIPPER / BSE Scr
Slide 2: Q3 & 9M Performance 2019-20 Investor Presentation
Q3 & 9M PERFORMANCE, 2019 - 20 SKIPPER LIMITED INVESTOR PRESENTATION Broad-basing the pyramid
Slide 3: About Us
SKIPPER LIMITED INVESTOR PRESENTATION About Us
Slide 4: Who We Are
WHO WE ARE Skipper Limited is India’s largest and world's most competitive integrated transmission tower manufacturing company 3
Slide 5: Key Facts
K E Y FA C T S • Flagship company of • Four Power Grid • Widely respected the S.K. Bansal Group Corporation of India- player; awarded Largest (incorporated 1981). approved transmission Tower Supplier Award by tower and pole Power Grid for 3rd • Angle rolling, tower, manufacturing plants consecutive
Slide 6: Skipper: One-Stop Solution Provider
PRODUCT OFFERINGS SKIPPER: ONE -STOP SOLUTION PROVIDER Engineering products Polymer products Infrastructure projects Capacity: 300,000 MTPA Capacity: 51,000 MTPA M I S S•I Transmission ON Line EPC • Power Transmission Tower • UPVC Pipes • Railway Electrification EPC • Power Distribution Poles • CPVC
Slide 7: Global Presence
FOOTPRINTS GLOBAL PRESENCE SOUTH AMERICA Peru, Colombia, Chile, Paraguay, Panama EUROPE UK, Germany, Spain AFRICA Kenya, Egypt, Ghana, Nigeria, Zambia, Sierra Leone Guinea, South Africa, Botswana, Burundi, Angola MIDDLE EAST Jordan, Saudi Arabia, UAE SOUTH AND SOUTH EAST ASIA Nepal, Bangladesh, Sri
Slide 8: Performance Update Q3 & 9M FY'20
SKIPPER LIMITED Performance Update Q3 & 9M FY’20 Update
Slide 9: Stand Alone Financial Performance Q3 & 9M FY'20
BUSINESS REPORT CARD Stand Alone- Financial Performance Q3& 9M FY’20 Rs in Mn Sl Profit & Loss Summary Q3 FY’20 Q3 FY’19 9M FY’20 9M FY’19 1 Revenues 2,998.4 4,348.2 9,516.6 14,374.8 2 Operating EBITDA (without Forex) 330.1 270.7 1,080.0 1,313.7 % of Revenue 11.0% 6.2% 11.3% 9.1% 3 Forex Gain / (Los
Slide 10: Reasons Impacting Revenue
Reasons impacting Revenue Q3 & 9M FY’20 Revenue impacted on account of – Very limited Size contracts in domestic market has come up for offering in the past 2 years. Consciously slowed down supplies to the customer unwilling to give secured payment terms Considering the liquidity situation in
Slide 11: Performance Update
PEFRORMACE HIGHLIGHTS Performance Update Key Update Company’s In-House R&D unit has been recognised by Department of Scientific and Industrial Research (DSIR, GOI), allowing the company to avail certain expenditure (including Capital expenditure other than Land & Building) as exemption under Incom
Slide 12: Segment Performance Q3 & 9M FY'20
SEGMENT REPORT Segment Performance Q3 & 9M FY’20 Q3 Q3 9M 9M Segment Financial Summary Polymer FY’20 FY’19 FY’20 FY’19 10% Net revenue 2,284.6 3,839.4 7,860.5 12,656.3 Infra Engg. EBIDTA (w/o forex) 295.5 267.7 1,020.6 1,272.2 8% Products % of Revenue 12.9% 7.0% 13.0% 10.0% Net revenue 384.0 331.0 9
Slide 13: Improvement Trends: Op. EBITDA Margin
IMPROVEMENT TRENDS Op. EBITDA Margin (without Forex) 20.0% Engineering Stand Alone 15.0% 13.3% 12.9% 13.1% 12.9% 11.8% 11.0% 10.0% 12.2% 11.6% 11.4% 11.5% 10.6% 10.2% 7.0% 5.0% 6.2% 0.0% Q1'19 Q2'19 Q3'19 Q4'19 Q1 Fy'20 Q2 Fy'20 Q3 Fy'20 • Engineering & Stand Alone EBITDA margin are back to its norm
Slide 14: Order Book to Sales stands at 1.5X
ORDER BOOK PIE Engineering Products – Order Book Composition – Dec 2019 Total Order Book T&D Order Book Rs 2,280 Crores Rs 2,022 Crores 27% 65% 24% 27% 46% 11% Domestic T&D Domestic - Telecom & Railways Exports PGCIL SEB & Private Export Order Book to Sales stands at 1.5 X 13
Slide 15: Order Inflows & Composition
ORDER INFLOWS & COMPOSITION • Secured new orders of Rs 274 crore in Q3 FY’20 for engineering products supplies from PGCIL, SEB’s, Railways and for supplies across various export markets; Share of export inflow rose to 66% in Q3 FY’20 • YTD Engineering Order Intake of Rs 1,126 crores ; Share of Non T
Slide 16: Rising Export Share
Rising Export Share Export Order Inflow (Rs in Crores) 400 373 300 300 200 100 12M FY'19 9M FY'20 • Crossed Last year total export inflow by 24 % within the first nine months of Fy’20 • Targeting to Double the Exports inflow in comparison to last year. 15
Slide 17: Export - Positioned for Growth
Export - Positioned for Growth FY’19 FY’20 & 21 Time to ripe the benefits • Major regulatory approval done International Certifications • Established relations with 100 global EPC players Credential Establishments • Our International bidding pipeline of 3,450 crores are at the highest level in compa
Slide 18: Performance Outlook
BUSINESS OUTLOOK PERFORMANCE OUTLOOK Rebound expected in domestic T&D action both on Ordering and Execution front from next quarter onwards Focus on strengthening the international T&D order book ; Positioned to grow exports to 50% of revenue in next 2 years Desired EBITDA margin focus of 12-13% in
Slide 19: The Big Message
BUSINESS MANTRA THE BIG MESSAGE Profitability in Conscious Sectoral Skipper Progressive a downturn is slowing down: consolidation opportunity- broadbasing a validation of Not chase to lead to next ready to strengthen Skipper’s growth at the rebound; through re- revenues and business cost of opportun
Slide 20: Core Strategy: Broadbasing Our Pyramids
Core Strategy BROADBASING OUR PYRAMIDS
Slide 21: Broadbasing the Pyramid
W H AT I S B R O A D B A S I N G T H E P Y R A M I D ? ENGINEERING PRODUCTS BUSINESS 1 2 Broadbasing the number of Broadbasing the customer mix sectors addressed within each sector (government Riding the growth of some fast- and non-government) growing segments into the long-term Riding the inflecti
Slide 22: Why We Are Broadbasing
WHY BROADBASING THE PYRAMID? WHY WE ARE BROADBASING To strengthen To be able to capitalise on To strengthen margins; some sectoral upturns competitiveness; sectors promise with speed; last person lower working faster off the standing capital cycle blocks To report a To transform To progress lower se
Slide 23: What Will Facilitate Our Broadbasing
STIMULUS BEHIND BROAD BASING THE PYRAMID? W H AT W I L L F A C I L I TAT E O U R B R O A D B A S I N G Deep knowledge capital on product manufacture, quality standards and certifications Fungible manufacturing capacity (from one product to another with no capex); only integrated manufacturer in the
Slide 24: The Impact of the Broadbasing: Four Drivers
KEY DRIVERS OF THE IDEA T H E I M PA C T O F T H E B R O A D B A S I N G : F O U R D R I V E R S Focus on Building credential and Focus on telecom Increased projects coming out and railways of PGCIL, SEB and relationship with bidding for global EPC players sectors (domestic projects private transmis
Slide 25: Broadbasing Woven Around Financial Discipline
BROADBASING WOVEN AROUND FINANCIAL DISCIPLINE Driven by the Bids for projects Believes that no Consistent philosophy of that meet basic IRR business is better resistance to chasing profitable criteria than bad volumes over growth business profits Can temporarily Geographic Invested in pre-bid and se
Slide 26: Future Ready
SKIPPER LIMITED INVESTOR PRESENTATION Future Ready
Slide 27: Exploring New Geographies
EXPLORING NEW GEOGRAPHIES BROADBASING TO REDUCE DOMESTIC DEPENDENCE • Opportunity-ready: Certified by prominent International certifications international organizations for confidence- Certification Country enhancing certifications CFE/LAPEM Mexico • Established traction: Working with over 100 CWB C
Slide 28: Skipper Is Clearly Poised to Be in the Winning Spot
LEADERSHIP POSITION S K I P P E R I S C L E A R LY P O I S E D T O B E I N T H E W I N N I N G S P O T I N T H E I N T E R N AT I O N A L T & D S E C T O R • Skipper is the highest accredited manufacturers in India for supplying to global markets • Largest and lowest cost manufacturer out of India a
Slide 29: Growing Global Competitiveness
GROWING GLOBAL COMPETITIVENESS SKIPPER C H I N E S E M A N U FA C T U R E R S WHAT MAKES US MORE COMPETITIVE Higher Price : Chinese manufacturers are almost 10-15% higher priced than Indian manufacturers, owing to un favorable currency and much higher labor costs. Limited Capacities to offer : Chine
Slide 30: Increase in Bidding Volumes from International T&D
GROWING GLOBAL COMPETITIVENESS Considerable increase in Bidding Volumes from International T&D Sector Bidding Volumes Mar 2018 Dec-19 Change T&D sector Rs in Cr Rs in Cr % International T&D 810 3,450 326% Domestic T&D 1,625 700 -57% Total 2,435 4,150 70% Dec-2019 Mar 2018 17% 33% 67% 83% Domestic T&
Slide 31: Global T&D Investment Opportunities
GLOBAL NEED GLOBAL T&D INVESTMENT OPPORTUNITIES According to World Energy Outlook (WEO) 2015, a total of US$ 8.4 trillion investments are expected to flow in the global T&D investments between 2015 and 2040, averaging US$320 billion per year. 30
Slide 32: T&D Industry Overview in India
INDIA STORY T&D INDUSTRY OVERVIEW IN INDIA • Historical skew between generation and T&D asset creation; shortage of power evacuation capacity • Skew correction across the last decade: substantial increase in T&D capacity amounting to 345 GW as on September 2019 which is estimated to grow at a CAGR o
Slide 33: Strong Opportunity in India's T&D Sector
DOMESTIC OPPORTUNITIES STRONG OPPRTUNITY IN INDIA’S T&D SECTOR • Planned government transmission sector investment of Rs 2.6 lakh crore in FY17-22; estimated Total line Rs 1.3 lakh crore allocated for intra-state transmission capacity. SEBs and private players to capacity drive orders • Village elec
Slide 34: Expected Transmission System Addition 2017-22
EXPECTED TRANSMISSION SYSTEM ADDITION DURING 2017 -22 Transmission line Addition during 2017-18 Planned addition during Balance capacity to be As of March 2017 length(ckt. km) (till September 2017) 2017-22 added by 2022 HVDC (800/500 kV) 15,556 - 4,280 4,280 765 kV 31,240 2,046 27,300 25,254 400 kV
Slide 35: Reasons for Long-Term Sectoral Optimism
POSITIVE OUTLOOK REASONS FOR LONG-TERM SECTORAL OPTIMISM • India the fastest growing major global economy; expected to quadruple and emerge as a $ 10 trn economy in the next 15 years • India’s power appetite projected to increase [4]x in line with its growing economy in the next decade • India exten
Slide 36: Emerging Growth Drivers: Railways & Telecom
GAME POINT EMERGING GROWTH DRIVERS R A I LW AY S & T E L E C O M Existing capacities and capabilities fungible across sectors The greater the fungibility, the superior the return on gross block Margins-enhancing competitive advantage Will progressively enhance capacity utilisation, revenues
Slide 37: Railways Electrification
R A I LW AY E L E C T R I F I C AT I O N S E C T O R RAILWAYS ELECTRIFICATION Large and robust growth plan in the pipeline: multi-year growth outlook Projected spending of Rs 35,000 cr over a period of next 3-4 lined up for Railway Electrification in India ; 40-45% of this to get invested in Rail St
Slide 38: Leadership Position: Railway Sector
LEADERSHIP POSITION S K I P P E R I S C L E A R LY P O I S E D T O B E I N T H E W I N N I N G S P O T I N T H E R A I L W AY S E C T O R • Large engineering capacity which can be deployed to make Railway Masts • Low cost base of manufacturing • One plant already approved - three more under approval
Slide 39: Telecom Tower
TELECOM SECTOR TELECOM TOWER • India needs around 100,000 additional towers to address growth China 1.4 bn 1.94 mn • National Telecom Policy aims to inspire $100 bn investment in Customers Telecom tower five years • India’s 30 per cent broadband penetration leaves large headroom • Sector added 65,00
Slide 40: Leadership Position: Telecom Sector
LEADERSHIP POSITION S K I P P E R I S C L E A R LY S E T T O B E I N T H E W I N N I N G S P O T IN THE TELECOM SECTOR • Large engineering capacity to support manufacturing of Telecom structures • Proximity to focus Telcos markets - East & North East • Tie up with one of world's leading tower design
Slide 41: Skipper's Polymer Business
P O LY M E R P R O D U C T S S E G M E N T SKIPPER’S POLYMER BUSINESS Polymer Plants invested 70%+ gross block Among few Indian One of few Indian manufacturing state-of-the-art less than six years companies assured companies with capacity of 51,000 manufacturing old of CPVC for pipes NSF certificati
Slide 42: Partnership with Vector Consulting
S T R AT E G I C PA R T N E R S H I P PARTNERSHIP WITH VECTOR CONSULTING Skipper Pipes partnered Vector Consulting Group VCG a leading management consulting firm in India Partnership to increase retail market share and transform supply chain Directed to gain decisive competitive advantage Objectives
Slide 43: Our USP: Theory of Constraints
THEORY OF CONSTRAINTS OUR USP • Partnering benefits: • Exponential Sales Growth & Gain in Market Share Skipper is the only Indian polymer pipe company to • Robust Processes & Systems in place to improve implement Theory of profitability Constraints (TOC) approach in an organized • Consistent availab
Slide 44: Awards and Accolades
HONORS AWARDS AND ACCOLADES AWARD: AWARD: AWARD: AWARD: THE LARGEST TOWER EMERGING POWER GLOBAL HR NO. 1 EMERGING SUPPLIER FOR 3rd EPC PLAYER EXCELLENCE BRAND IN CONSECUTIVE YEAR GIVEN BY: EPC GIVEN BY: POLYMER PIPES & GIVEN BY: WORLD WORLD HRD FITTINGS POWER GRID CONGRESS GIVEN BY: WCRC CORPORATION
Slide 45: Disclaimer and contact
DISCLAIMER This Investor Presentation has been prepared by Skipper Limited for investors, solely for informational purposes. The information contained herein has been prepared to assist prospective investors in making their own evaluation of the Company and does not purport to be all-inclusive or to