Asian Paints Ltd. · NSE:ASIANPAINT
Asian Paints — Q1 FY2007 Earnings Presentation
34 slides from Asian Paints's earnings presentation, June 2006
Slide 1: Investor Presentation Q1 - FY 2007
1 Investor Presentation Q1 - FY 2007
Slide 2: Presentation structure
2 Presentation structure • Results : Q1 – FY 2007 • Results : FY 2006 • Outlook and Risks : FY 2007
Slide 3: Highlights: Consolidated Results Q1 – FY2007
3 Highlights : Consolidated Results Q1 – FY2007 • Consolidated Sales have grown by 17.3% to Rs. 7773 mn – Strong performance by the Indian Paints business and the Middle East region • PBDIT has increased by 26.3% to Rs. 1096.9 million – PBDIT/Net Sales has improved to 14.1% from 13.1 % – Most Raw Ma
Slide 4: Consolidated P&L – Q1 FY 2007
4 Consolidated P&L – Q1 FY 2007
Slide 5: Consolidated Sales breakup: Q1 FY 2007
5 Consolidated Sales breakup : Q1 FY 2007 * 50 % of Asian PPG Industries sales are included @ Period considered Jan - Mar
Slide 6: Asian Paints Standalone P&L Q1 FY 2007
6 Asian Paints Standalone P&L Q1 FY 2007
Slide 7: Asian Paints – Decorative Business Unit
7 Asian Paints – Decorative Business Unit • Demand was buoyant in almost all segments of the decorative coatings business in India • Growth recorded over a higher base which arose due to VAT implementation in the previous corresponding quarter • Raw material prices have been benign during the quarte
Slide 8: Asian Paints – Industrial & International Business Unit
8 Asian Paints – Industrial & International Business Unit • Industrial business in India grew in excess of 20% – Due to good growth registered by the automotive, powder and road markings segment. • The international business recorded satisfactory growth in excess of 10%. – All five operating regions
Slide 9: Key Ratios
STANDALONE Key Ratios CONSOLIDATED | Q1 FY 07] Q1 FY 06 | Q1 FY 07] Q1 FY 06 Mat! CostiNet Sales | 56.30%] 59.30% 57.50%] _ 60.00% EBITDA/Net Sales 16.60%] 15.50%] 14.10%] __13.10% PBT / Net Sales 14.60%] 13.20% 13.60%] __12.70% PAT / Net Sales 9.60% 8.70% 7.80% 6.60% asianpaints
Slide 10: Presentation structure
10 Presentation structure • Results : Q1 – FY 2007 • Results : FY 2006 • Outlook and Risks : FY 2007
Slide 11: Dividend
11 Dividend • Total dividend of Rs. 12.50 / share distributed for FY 2006 – Includes one time special dividend of Rs. 2.5 /share on the occasion of the 60th year of incorporation of the company – Dividend payout ratio at 62 % (before Extra Ordinary Item) • Total dividend distributed in FY 2005 was R
Slide 12: Highlights - Consolidated results – FY2006
12 Highlights - Consolidated results –FY2006 • Paint volumes for the year including international increased by 14.9% to 406,791 KL – Deco-India, Industrial-India and International volumes registered double digit volume growth • Sales growth of 17.4 % driven by – Good growth registered by Paints-Indi
Slide 13: Consolidated P&L – FY 2006
13 Consolidated P&L -—FY 2006 Rs in Mn 2005-06| 2004-05] Gr % Sales & Op Income 30,210 25,739 17.4% Other Income 320 324 -1.1% Total Income 30,531 26,062) 17.1% PBDIT 4,228 3,677 15.0% Interest 114 108 5.7% Depreciation 606 614) -12% Goodwill Amortization/Impairment 76 7? PBT after goodwill 3,431 2,
Slide 14: Consolidated Sales breakup: FY 2006
14 Consolidated Sales breakup : FY 2006 * 50 % of Asian PPG Industries sales are included
Slide 15: Asian Paints Consolidated Results FY2006
15 Asian Paints Consolidated Results FY2006 • Standalone • Industrial Operations • International Operations
Slide 16: Standalone P&L: FY2006
16 Standalone P&L : FY2006 EOI (Extra Ordinary Item) – Provision for diminution in value of Investment.
Slide 17: Standalone P&L: FY2006
17 Standalone P&L : FY2006 • Extraordinary item pertains to diminution in value on international investments of Rs. 336 million provided based on management’s assessment of the fair value of the investment – This has arisen due to erosion in the net worth of certain subsidiaries in South East Asia a
Slide 18: Paints: Decoratives India FY’06
18 Paints : Decoratives India FY’06 • Demand for decorative paints was good • Excellent growth in all wall finish products • 7000 Colour Worlds now installed in the country • Pricing FY 2006 – Deco BU increased prices in June and Nov’05 – Reduced prices in some emulsion paints in Dec’05 – Overall in
Slide 19: Paints: Decoratives India FY’06
19 Paints : Decoratives India FY’06 • New Products – Apex Ultima nationwide launch completed; the product comes with a warranty offer – Royale Play – an effect finish – launched in many markets – Quality upgrades done in Royale and Premium Emulsions – Utsav economy range of products was widened with
Slide 20: Paints: Decoratives India FY’06
20 Paints : Decoratives India FY’06 • Price of TiO2 stable for the last ten months • Prices of solvents have increased significantly • Prices of monomers, additives and vegetable oils have decreased in the last six months
Slide 21: Asian Paints Consolidated Results FY2006
21 Asian Paints Consolidated Results FY2006 • Standalone • Industrial Operations • International Operations
Slide 22: Industrial Operations
22 Industrial Operations • Sales for automotive JV (APPG) increased by 17.7% to Rs. 2798 million – Both OE and refinish segment performed well. Bilux the economy PU brand saw yet another year of impressive growth making it the largest selling brand in its category • Sales for powder coatings busines
Slide 23: Industrial Operations
23 Industrial Operations • The other industrial coatings business which is part of the standalone company services the protective coatings, road markings, floor coatings segments – This business grew by over 20% due to very good growth in the protective coatings segment
Slide 24: Asian Paints Consolidated Results FY2006
24 Asian Paints Consolidated Results FY2006 • Standalone • Industrial Operations • International Operations
Slide 25: International Operations: FY2006
25 International Operations : FY2006 • Paint value sales increased by 15.7% to Rs. 5.3 bn • Operating margins were under pressure as material costs increase was significant – Increase could be passed on to the consumer in some markets • IBU reported a higher loss (after minority interest, before goo
Slide 26: International Operations: FY2006
26 International Operations : FY2006 • The performance of the Middle East, Caribbean and South Pacific regions has been good – Performance of SCIB Paints Egypt has been excellent • South Asia and South East Asia region underperformed – Steps have been taken to reduce losses • ERP solution launched a
Slide 27: Region wise Sales Breakup
27 Region wise Sales Breakup 2005 2004 Caribb Caribbe ean an 24.9% Middle Middle 27.1% East East 36.9% 32.6% South South Pacific Pacific 12.3% 13.3% S.E. South South S.E. Asia Asia Asia Asia 8.3% 16.9% 9.0% 18.7% • Middle East region has once again registered the highest growth at 30%
Slide 28: Region wise – EBITDA & ROCE FY 2005 & FY 2006
28 Region wise – EBITDA & ROCE FY 2005 & FY 2006
Slide 29: Asian Paints Standalone - Cash Flow
29 Asian Paints Standalone - Cash Flow • Operating cash flow is higher by 40% inspite of higher tax outflow – Last year’s cash flow was affected by higher inventory levels due to lower offtake in Mar’05 in view of VAT from Apr’05 • Capital expenditure for FY’06 lower at Rs 543 mn – Estimated Capex f
Slide 30: Key Ratios
30 Key Ratios Standalone Consolidated
Slide 31: Presentation structure
31 Presentation structure • Results : Q1 – FY 2007 • Results : FY 2006 • Outlook and Risks : FY 2007
Slide 32: Outlook and Risks – FY2007
32 Outlook and Risks – FY2007 • India • Paint Industry expected to grow by over 12-13 % by value • In Decorative paints emphasis would continue to be to drive top-line growth • Demand for industrial coatings will continue to be buoyant
Slide 33: Outlook and Risks – FY2007
33 Outlook and Risks – FY2007 • International • Investments in International subsidiaries reviewed periodically and the Company is looking at rationalising its investment portfolio • The focus for international business is to grow the top-line and to improve profitability – The Caribbean, Middle Eas
Slide 34: Thank you...
Thank you... asianpaints