Finolex Industries Limited · NSE:FINPIPE
Finolex Industries — Q4 FY2014 Earnings Presentation
19 slides from Finolex Industries's earnings presentation, May 2014
Slide 1: Finolex Industries Limited – Q4FY14 Results
Finolex Industries Limited India’s largest and backward integrated PVC pipe manufacturer Q4FY14 Results 1
Slide 2: Business performance - I
Business performance - I The company continued to enjoy strong operating performance with a growth in revenues of 14% on a YoY basis for FY14 EBIDTA margins after forex gain was 13% in FY14 vis-à-vis 12% in FY13, EBIDTA margins before forex gain was 16% in FY14 vis-à-vis 17% in FY13 PVC pipes
Slide 3: Business performance - II
Business performance - II FOREX volatility during the quarter was under control with the company’s policy of hedging bulk of its Forex exposure. Finance cost has increased because of premium paid on forward covers Forex gains for the Q4FY14 were at INR 70.39 Mn Realised Loss – INR 12.70 Mn Unrea
Slide 4: Business performance
Business performance Steady growth in volumes in the PVC pipes and fittings business at 16% CAGR. PVC pipes and fittings volumes (MT) 200000 174987 176899 160000 150730 138322 120000 112789 94358 74211 75827 80000 60364 48173 40000 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 4
Slide 5: Record-high dividend
Record-high dividend For FY14, the company has declared highest-ever dividend amount at INR 1016.2 mn (INR 7.0/per share) Consistently high payout ratio above 55% in last four years Dividend amount (INR mn) Dividend payout (%) RHS Dividend (INR/share) INR mn 8 7.0 1,200 70% 6 1,000 5.5 60% 800 4
Slide 6: Quarterly P&L
Quarterly P&L Quarterly PL (INR Q1 Q2 Q3 Q4 mn) FY13 FY14 FY13 FY14 FY13 FY14 FY13 FY14 Net Income 5,199 5,635 3,809 3,899 6,199 6,599 6,296 8,397 Cost of goods sold 3,902 4,307 2,742 2,739 4,779 4,930 4,669 6,849 Gross Profits 1,296 1,328 1,068 1,160 1,420 1,669 1,627 1,549 Gross margins (%) 25% 24
Slide 7: Quarterly Segmental P&L
Quarterly Segmental P&L Segment wise – Q1 Q2 Q3 Q4 Quarterly PL (INR mn) FY13 FY14 FY13 FY14 FY13 FY14 FY13 FY14 Segmental revenues PVC 3,896 3,627 2,779 3,245 4,406 4,911 4,555 5,347 PVC pipes 3,134 4,349 2,945 2,779 3,558 3,819 4,142 4,686 Power 395 450 514 406 616 346 546 443 Segmental profits PV
Slide 8: Profit & Loss – Key indicators
Profit & Loss – Key indicators Profit & loss account (INR mn) FY10 FY11 FY12 FY13 FY14 Net Income 14,549 19,777 20,998 21,448 24,530 Growth in sales (%) -3% 36% 6% 2% 14% Gross Profits 4,442 3,878 3,893 5,356 5,705 Gross margins (%) 31% 20% 19% 25% 23% 3,168 2,362 2,313 3,587 3,966 EBIDTA before for
Slide 9: Balance Sheet – Key indicators
Balance Sheet – Key indicators Balance Sheet (INR mn) FY10 FY11 FY12 FY13 FY14 Equity and liabilities Share capital 1,240 1,240 1,241 1,241 1,241 Reserves and surplus 4,637 4,963 5,380 5,971 6,656 Long term borrowings 1,845 1,954 1,896 1,397 2,322 Short term borrowsings (incl. loans 6,490 5,512 8,52
Slide 10: Marked improvement in Pipes margins
Marked improvement in Pipes margins Superior margin profile on back of pricing power EBIT margins for PVC pipes 10.0% 8.0% Orbital shift in 6.0% Pipe margins 4.0% 2.0% Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 10 Greater share of Pipes & fittings to bring
Slide 11: Balance sheet strengthens
Balance sheet strengthens RoE (%) RoCE (%) Net Debt:Equity (x) 30.0% 1.6 1.5 24.2% 1.4 20.0% 8.4% 1.2 10.0% 21.1% 1.0 1.0 0.8 0.9 0.0% 4.7% 0.6 0.4 -10.0% FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Fixed Asset Turnover (x) Working Capital Turnover (x) 6
Slide 12: New capacities on stream
New capacities on stream The new PVC pipe plant at Masar, Gujarat is fully operational with 50,000 MT capacity The facility has state-of-the-art extruder lines and high-speed mixers, comparable with best in the world Well designed state-of-the-art infrastructure at Masar, Gujarat 12
Slide 13: PVC pipes plant at Masar, Gujarat
PVC pipes plant at Masar, Gujarat Extrusion High speed Machines mixers Extrusion Extrusion Hall Lines 13
Slide 14: Backward integration on track
Backward integration on track Increased PVC pipe capacity now stands at 2,30,000 MT. PVC resin and Power plant capacity remains at 270,000 MT and 43 MW, respectively Capacity addition at 19% CAGR in PVC pipes vs. 1.0% in PVC resin in last four years Installed capacities (MT) – Nearing full integ
Slide 15: Distribution reach enhanced
Distribution reach enhanced New warehousing facility in Bhubaneshwar, Odisha to help increase market presence in the East. Current reach: 500 dealers & over 15,000 retail touch points • Strong distribution presence in Western and Southern India. • New warehousing facility in Bhubaneshwar, Odisha
Slide 16: Improvement in operational cycle
Improvement in operational cycle Ordering of EDC Buyers’ credit reduced to 90 days (earlier & VCM 360 days) Collection from Buyers’ credit down to INR 3220 mn in Delivery of EDC FY14 from INR 5250 mn in FY13 dealers and & VCM distributors Forex hedging increased to ~70%. (earlier <50%) PVC pip
Slide 17: FY15 - Key focus areas - I
FY15 - Key focus areas - I The new warehouse in Odisha to help increase dealer network and market share in East India Increase the captive consumption of PVC resin. Brown-field expansion in PVC pipe & fittings capacities to come at a significantly lower investment New value added product with
Slide 18: FY15 - Key focus areas - II
FY15 - Key focus areas - II Continue to focus on Irrigation and agriculture segment Huge government spending on irrigation (INR 5tn) and water management (INR 2.5tn) and shift toward organized segment are expected to deliver compounded growth for the rigid PVC pipes industry Focus on inorganic
Slide 19: For further queries:
For further queries: Finolex Industries Limited S-Ancial Advisors Pvt. Ltd. D-1/10, M.I.D.C. 503, Gundecha Chambers, Chinchwad, Pune 411 019 Nagindas Master Road, Contact No.: 020 2740 8200 Fort, Mumbai 400 001 Email: fil@s-ancial.com Contact No.: 022 6635 1001/2 19