Asian Paints Ltd. · NSE:ASIANPAINT
Asian Paints — FY2009 Earnings Presentation
35 slides from Asian Paints's earnings presentation, May 12, 2009
Slide 1: Investor Presentation Q4 & FY 2008-09
1 Investor Presentation Q4 & FY 2008-09 May 12, 2009
Slide 2: Environment – FY 2008-09
2 Environment – FY 2008-09 • Global economy under severe stress – Major financial crisis – with several causes – Credit markets at a stand-still with risk aversion – Collapse in economic growth - USA, Europe and Japan in recession • Steep fall in commodity prices with downturn in activities – Unprec
Slide 3: Environment – FY 2008-09
3 Environment – FY 2008-09 • Similar theme underway in India – Demand slowdown – export as well as domestic • Services sector, especially IT, due to protectionism in developed world • Negative export growth since Oct’08 – Relative freeze in domestic credit market – Widening fiscal and trade deficits
Slide 4: Environment – FY 2008-09
4 Environment – FY 2008-09 • And in other markets where we operate in…. – GCC – Bahrain, Oman & UAE • Pressure on Govt. budgets with significant drop in oil prices • Rapid decline in real estate & construction with freeze in credit markets – Egypt • Overall low impact but revenues from tourism and S
Slide 5: Presentation structure
5 Presentation structure • Performance: Q4 & FY 2009 • Review of Business Units • Outlook and Risks : FY 2010
Slide 6: Sales Performance Q4 2008-09
6 Sales Performance Q4 2008-09 • Demand conditions improved in Q4 after a sluggish Q3 35% – Consolidated sales grew by 30% 29.3% 30.2% 25.4% 25.4% for Q4 in value terms 25% 20% 15% 12.0% – Standalone sales grew by 26.2% 10% • Paint sales for the standalone 5% company grew by 27.6% for Q4 0% 1st Qtr
Slide 7: Profit Performance Q4 2008-09
7 Profit Performance Q4 2008-09 • Improved margins in Q4 compared to Q3 – Consolidated PBT increased by 10.3% 40% 29.0% 30% – PAT after Minority Interest increased 20% by 7% 10% 7.2% 10.3% 0% 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr -10% – Standalone PBT grew by 14.1% -20% -30% -40% -50% – Standalone PAT gre
Slide 8: Sales Performance FY 2008-09
8 Sales Performance FY 2008-09 • Value growth aided by price increases necessitated due to inflation – Consolidated sales grew by 24% for FY 2008-09 in value terms – Standalone sales grew by 25% • Paints revenue grew by 26.5% and volume by 13.4% to 491472 MTs – Industrial (including Automotive ) pai
Slide 9: Profit Performance FY 2008-09
9 Profit Performance FY 2008-09 • Demand conditions necessitated pursuit of growth with reduced margins in domestic paints business – Consolidated PAT after Minority Interest shows a reduction of 2.8% Paint Segment EBIT Margins – Consolidated PBT shows a decrease of 20% 17.9% 18.0% 3.2% for FY09 18%
Slide 10: Asian Paints Standalone - Cash Flow FY09
10 Asian Paints Standalone - Cash Flow FY09 Capex plan for FY 2008-2009 was Rs 275 Crores and actual spent was Rs 240 Crores Capex plan for FY 2009-2010 is Rs 300 Crores Major spends for Rohtak, 7th Plant land and Plant warehouses
Slide 11: Dividend
11 Dividend • Total dividend of Rs. 17.50 per share for the FY 2009 ( Rs. 17 per share in FY 2008) – Interim dividend of Rs. 6.5 per share for the FY 2009 ( Rs. 6.5 per share in FY 2008) – Final dividend of Rs. 11 per share for the FY 2009 ( Rs. 10.5 per share in FY 2008) • Dividend payout ratio of
Slide 12: Presentation structure
12 Presentation structure • Performance : Q4 & FY 2009 • Review of Business Units • Outlook and Risks : FY 2010
Slide 13: Review of Business Units
13 Review of Business Units • Decorative Business - India • Industrial Operations - India • International Operations
Slide 14: Asian Paints – Decorative Business Unit
14 Asian Paints – Decorative Business Unit • Challenging year – Demand Conditions • Year began on a buoyant note – Sales in Q2 were also higher on account of earlier Diwali and price increases across products leading to high stocks with dealers • Demand started falling in Q3, improved in Q4 – Prices
Slide 15: Asian Paints – Decorative Business Unit
15 Asian Paints – Decorative Business Unit • Challenging year – Unprecedented Inflation and volatility • Material costs spiraled and then crashed • About 20% increase in FY09 Vs FY08 • Rupee depreciation also had a negative impact • Major increase in Pigments and Monomers prices; Consumption prices
Slide 16: Asian Paints – Decorative Business Unit
16 Asian Paints – Decorative Business Unit • Focus on building strengths by: – Securing growth • Network addition • A total of 12400 Colour world have been installed which includes more than 2000 machines put up in current year. • Retailing Initiatives: – Continue to develop capability in colour and
Slide 17: Asian Paints – Decorative Business Unit
17 Asian Paints – Decorative Business Unit • Focus on building strengths by: – Capacity building for the future • Construction of the sixth Plant on schedule and the first phase should be commissioned by April 2010 • Sriperumbudur expansion to 100,000 KL per annum completed in 2008. • In the process
Slide 18: Review of Business Units
18 Review of Business Units • Decorative Business - India • Industrial Operations - India • International Operations
Slide 19: Industrial Operations
19 Industrial Operations • Serious impact on business as all sectors hit on account of a slow-down in economy during the later half of the year – Marginal growth in revenues in Industrial Liquid Paints and Powder coatings. – The sales of automotive JV (APPG) showed a negative growth • Margins were s
Slide 20: Review of Business Units
20 Review of Business Units • Decorative Business - India • Industrial Operations - India • International Operations
Slide 21: International Operations: CY2008
21 International Operations : CY2008 • International operations have grown by 30% in CY 08 in value terms – Growth • Volume growth at 20% (138970 MTs) • Strong value growth sustained in Middle East (46%) and South Asia (39%) • Over 1100 Colour World machines in all the markets • Thrust on new produc
Slide 22: International Operations: CY2008
22 International Operations : CY2008 • Overall operating performance has shown improvement – EBIT grew by 21% • Margins have improved in Middle East and South Asia • Middle East – Egypt, Oman, Bahrain & Emirates – contributes about 51% of Sales and about 81% of EBIT • Initiatives taken led to an imp
Slide 23: Presentation structure
23 Presentation structure • Performance : Q4 & FY 2009 • Review of Business Units • Outlook and Risks : FY 2010
Slide 24: Outlook and Risks for 2009-10
24 Outlook and Risks for 2009-10 • Unprecedented times for world economy with all major economies in recession at the same time • Despite policy stimuli, economic responses remain uncertain • World economy expected to witness contraction in CY 2009 • Given the interlink with global markets, growth i
Slide 25: Indian operations
25 Indian operations • Paint demand would depend upon how the economic situation unfolds – Currently reasonably buoyant in Tier II and Tier III towns • Continued focus on top line growth in decorative paints segment – Customer centricity – Colour – Providing range – Better Ambience / Shopping experi
Slide 26: International Operations
26 International Operations • Strategy would be to grow top line, focus on profitability and credit risk • Continuous review of portfolio • Middle East and South Asia regions expected to drive growth performance – Capacity being enhanced in Egypt; new plant will be commissioned next year – However,
Slide 27: Disclaimer
27 Disclaimer This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being ex
Slide 28: Thank you...
Thank you... asianpaints
Slide 29: Annexure
Annexure asianpaints
Slide 30: Consolidated P&L – Q4 FY09
Consolidated P&L — Q4 FY09 Q4 08-09 Q4 07-08 Sales & Op Income PBDIT Depreciation Profit from Operations before Interest Other Income PBIT Interest Prior period items PBT PAT before Exceptional item Exceptional item PAT before Minority interest PAT after Minority interest 1,425 179 20 159 11 170 7 0
Slide 31: Standalone P&L – Q4 FY09
Standalone P&L — Q4 FYO9 31 Rs. In Crores) O04 08-09| QO407-08] Gr % Sales & Op Income 1,100 871 26.296 PBDIT 158 135] 16.9% Depreciation 15 11 34.6% Profit from operations 143 124 15.3% before interest Other Income 9 8 9,596 PBIT 152 132 14.99% Interest 3 1} 102.6% PBT 149 131 14.1% PAT 98 85] 16.0
Slide 32: Consolidated P&L – FY 2009
Consolidated P&L —FY 2009 32 12M 08-09 12M 07-08 Sales & Op Income PBDIT Depreciation Profit from Operations before Interest Other Income PBIT Interest Prior period items PBT PAT before Exceptional item Exceptional item PAT before Minority interest PAT after Minority interest 5,463 669 74 595 52 647
Slide 33: Standalone P&L: FY2009
Standalone P&L : FY2009 33 Rs. In Crores) 12M 08-09| 12M 07-08| Gr % Sales & Op Income 4270 3419 24.956 PBDIT 561 557 0.8% Depreciation 57 44 30.696 Profit from operations 504 513 1.8% before interest Other Income 60 60 0.7% PBIT 564 573 -1.5% Interest 10 8 25.856 PBT 554 565 -1,.9% PAT 368 375 -1,9
Slide 34: Consolidated Sales breakup: FY 2009
34 Consolidated Sales breakup : FY 2009 * 50 % of Asian PPG Industries sales are included
Slide 35: Key Ratios
Key Ratios 35 Standalone Consolidated 12M 2009 12M 2008] 12M 2009 12M 2008 Mat cost/Net Sales 61.1% 5f 2% 61.7% 55.5% PBDIT/ Net Sales 13.1% 16.3% 12.3% 15.1% PBT before Exceptional itern/ Net Sales 13.0% 16.5% 7.7% 14.5% PAT before Exceptional itern / Net Sales 6.6% 11.0% 7.3% 9.4% asianpaints