Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q1 FY2011 Earnings Presentation
39 slides from Grasim Industries's earnings presentation, August 2010
Slide 1: Performance Review Quarter 1: 2010-11
Performance Review Quarter 1 : 2010-11 Grasim Industries Limited A Cement and VSF Major
Slide 2: 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
Slide 3: Contents
Contents z Highlights z Business B i R i Review z Financial Performance z Capex Plan z Summary S 3
Slide 4: Highlights – Quarter 1
Highlights – Quarter 1 Cement Restructuring z Restructuring of Cement business almost complete ¾ Merger M off Samruddhi S ddhi with i h Ul UltraTech T hC Cement ffrom 1st July J l 2010 will ill b become effective ff i on 1st August 2010 Operational Highlights z Standalone businesses witnessed a reve
Slide 5: Business Review
Business Review VSF Chemical Cement Subsidiaries 5
Slide 6: Viscose Staple Fibre: Highlights
Viscose Staple Fibre : Highlights Industry Scenario Quarter – 1 % Chg. z Demand showing signs of weakening 2010-11 2009-10 ¾ Inventory I b built il up iin the h value l chain h i Capacity (TPA) 333,975 333,975 --- ¾ Continued Euro zone uncertainty Production (MT) 69,328 62,352 11 z Cotton prices con
Slide 7: Viscose Staple Fibre: Highlights (Contd)
Viscose Staple Fibre : Highlights (Contd….) Quarter – 1 z Pulp prices rise sharply but impact % Chg. 2010-11 2009-10 curtailed byy PBIDT (Rs. Crs.) 304.2 197.7 54 ¾ Captive pulp PBIDT Margin (%) 35.3% 27.4% -- ¾ Higher production volume PBIT (Rs. Crs.) 278.0 170.0 63 ¾ Lower caustic prices ROAvCE %
Slide 8: Viscose Staple Fibre: Outlook
Viscose Staple Fibre : Outlook z Textile sector recovery slowed down by Euro Zone issue z Demand outlook cautious ¾ High inventory level in the value chain cause of concern - may create pricing pressure z Operating margins may come under pressure with uptrend in pulp prices and pressure on realisati
Slide 9: Chemical: Highlights
Chemical : Highlights Quarter -1 z Despite lower capacity utilisation due to % Chg. 2010-11 2009-10 water shortage, production up by 5% Capacity (TPA) 258,000 258,000 - z Sales volume up by 9% Production (MT) 54,693 52,231 5 Sales Volumes (MT) 54,386 49,845 9 z ECU realisation was lower YoY due to N
Slide 10: Cement: Industry Scenario
Cement : Industry Scenario Zone wise Industry Growth Rate (YoY) z Moderate demand growth of 8.4% in 20 Growth % 18 16 the quarter 15 15 15 ¾ Reduced growth rate in North and East 12 10 10 10 on YoY basis 10 9 9 9 8 ¾ In South though growth rate has 6 5 4 4 improved, it continues to be the least amon
Slide 11: Cement: Highlights
Cement : Highlights Quarter -1 % Chg. Business Performance 2010-11 2009-10 Grey Cement z Cement capacity up by 7% YoY Capacity Mn. TPA 48.75 45.65 7 - Samruddhi / Grasim 25.65 22.55 14 z Cement production higher by 5%, almost - UltraTech 23.10 23.10 - touching 10 mn. mark Production Mn MT Mn. 9 92 9
Slide 12: Cement: Realisations
Cement : Realisations 4000 Rs./Ton 3,683 3 675 3,675 3,432 3,330 3,356 3000 2000 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 z Realisation suffered in line with Industry ¾ Lower L by b 7% YoY Y Y ¾ Up by 2% QoQ 12
Slide 13: Cement: Financials
Cement : Financials Quarter -1 z Lower YoY profitability % Chg. 2010-11 2009-10 ¾ Lower realisations Net Revenue Rs. Crs. 3,973.7 4,061.4 (2) ¾ Higher operating costs - Samruddhi / Grasim : Cement 1,999.3 1,988.0 1 ― Energy cost up by 24% White Cement 214.4 168.4 27 ― Freight up by 11% - UltraTech U
Slide 14: Cement: Outlook
Cement : Outlook z Cement demand expected to grow at 10% + for the next five years ¾ Indian economy to continue on strong growth trajectory ¾ Increase in consumption, consumption both in Government as well as private sector ¾ Revival in corporate capex cycle z Prices to remain under pressure due to
Slide 15: Financial Performance
ADITYA BIRLA Financial Performance 15
Slide 16: Consolidated Revenue
Consolidated Revenue 44 9 99 142 111 Rs. Crorees 5134 5119 Quarter 1 Grasim Pulp JVs Textile & Cement Discontinued Quarter 1 2009-10 Standalone Inter Co. (Lower operations 2010-11 Eliminations realisation) (Sponge) 5,134 142 44 9 (99) (111) 5,119 16
Slide 17: Revenue Chart
Revenue Chart Rs. Crores Quarter -1 Net Revenue % Chg. 2010-11 2009-10 Cement $ - 2,156 Viscose Staple Fibre 856 716 20 Chemical 119 120 (1) Sponge Iron (Sold on 22nd May 2009) - 111 - Others 19 16 - Inter Segment Eliminations (Intra Company) (29) (30) - Standalone Net Revenue (As Reported) 964 3,09
Slide 18: Financial Performance – Quarter 1
Financial Performance – Quarter 1 * Excluding Cement and Sponge Iron businesses from Q1FY10 reported numbers for comparison purpose 18
Slide 19: Consolidated PBIDT
Consolidated PBIDT 34 115 405 39 ores 1681 Rs. Cro 1464 Quarter-1 Grasim Pulp JVs Cement (Lower Discontinued Quarter -1 2009-10 2009 10 Standalone realisation & Operations 2010-11 2010 11 higher energy (Sponge Iron) cost) 1,681 115 34 (405) 39 1,464 19
Slide 20: PBIDT – Chart
PBIDT – Chart Rs. Crores PBIDT Quarter -1 % Chg. 2010-11 2009-10 Cement $ - 740 Viscose Staple Fibre 304 198 54 Chemical 31 35 (12) Sponge Iron (Sold on 22nd May 2009) - (39) Others 25 13 Standalone PBIDT 361 947 Comparable Standalone PBIDT of the present Business # 361 246 46 Subsidiaries UltraTech
Slide 21: Net Profit
Net Profit Rs. Crores Quarter -1 Grasim Share % 2010-11 2009-10 Total T t l Net N t Grasim's G i ' Total T t l Net N t Grasim's G i ' Profit share Profit share Grasim Standalone - Continued Businesses 224 138 - Discontinued Businesses $ - 393 Total 224 531 UltraTech Cement Ltd. 54.78% 245 134 419 23
Slide 22: Grasim Financials
Grasim Financials Standalone Consolidated Full Year Quarter 1 Full Year Quarter 1 (Rs. Crores) 2009-10 2010-11 2009-10 2010-11 Net Worth 7,145 7,369 12,525 13,098 Debt 1,038 866 5,599 5,565 p Capital Employed p y 8,435 , 8,485 , 23,884 , 24,670 , Debt:Equity (x) 0.15 0.12 0.34 0.33 Interest Cover ^
Slide 23: Capex
ADITYA BIRLA Capex 23
Slide 24: Capex plan
Capex plan Rs. Crores Net Capex Cash Outflow to be spent FY11 FY12 & as on 01.04.10 Onward VSF Business - Vilayat Project 1,000 - Other Capex 322 Chemical Business and Misc. Capex 130 Standalone Capex (A) 1,452 545 907 Cement Subsidiaries - Projects’ residual capex 880 - Material Evacuation and Logi
Slide 25: Summary
ADITYA BIRLA Summaty 25
Slide 26: Summary
Summary z Grasim – Leadership position in both Cement and VSF businesses ¾ Strong competitive edge ¾ Global Gl b l size i operations i z Leading global player in VSF ¾ Integrated business model from plantation to fibre ¾ Continued focus on increasing capacity and creating differentiation z Domestic
Slide 27: Plant Locations – Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bathinda(G) Panipat Bhiwani Dadri T Samruddhi Cement plants Kotputli Aligarh Samruddhi Grinding Units (G) Jodhpur T Malanpur Shambhupura B S Samruddhi ddhi B Bulk lk C Cement T Terminals i l Jawad Bharuch Durgapur(G) UltraTech Cement Plants F Jafrabad Magda
Slide 28: Thank You
ADITYA BIRLA GRASIM Thank You
Slide 29: Annexure
Grasim Industries Limited Annexure
Slide 30: Annexure
Annexure Consolidated Financial Performance Standalone Financial Performance Consolidated and Standalone Financial Consolidated and Standalone Profitability Businesswise Performance Cement Summary VSF Summary Chemical Summary 30
Slide 31: Consolidated Financial Performance
Consolidated Financial Performance (Rs. Crores) Quarter -1 Full Year % Chg. 2010-11 2009-10 2009-10 Net Turnover & Op. Income 5,118.6 5,133.7 -- 20,195.4 Other Income 96.3 52.5 83 273.6 PBIDT 1,463.7 1,680.7 (13) 6,322.3 I Interest 91 2 91.2 82 3 82.3 11 334 6 334.6 Gross Profit 1,372.4 1,598.4 (14)
Slide 32: Standalone Financial Performance
Standalone Financial Performance (Rs. Crores) Quarter -1 Full Year 2010-11 2009-10 2009-10 Net Turnover & Op. Income 964.5 3,089.6 8,312.6 Other Income 39.8 28.1 235.2 PBIDT 360.5 947.3 2,972.3 Interest 10.2 47.5 120.4 Gross Profit 350.3 899.7 2,851.9 p Depreciation 44.5 137.0 351.1 PBT (before EO g
Slide 33: Financial Snapshot
Financial Snapshot Standalone Consolidated March March March June March March March June (Rs. Crores) 2008 2009 2010 * 2010 * 2008 2009 2010 2010 Gross Block $ 10,615 12,280 3,145 3,168 19,262 21,044 21,717 22,008 Net Block $ 7,054 8,308 1,829 1,809 12,922 14,219 14,553 14,580 Goodwill , 1,991 2,001
Slide 34: Profitability Snapshot
Profitability Snapshot Standalone Consolidated Quarter 1 Quarter 1 (Rs. Crores) 2007-08 2008-09 2009-10 * 2007-08 2008-09 2009-10 2010-11* 2010-11 Gross Turnover 11,552 12,097 8,842 1,024 19,112 20,325 21,710 5,646 Net Turnover & Op. Income 10,325 10,965 8,313 964 17,141 18,496 20,195 5,119 PBIDT 3,
Slide 35: Consolidated Businesswise Performance - Quarter 1
Consolidated Businesswise Performance - Quarter 1 Rs. Crores ROAvCE (%) Business Revenue PBIDT PBIDT Margin (%) PBIT Capital Employed (PBIT basis) 2010 11 2010-11 2009 10 2009-10 2010 11 2010-11 2009 10 2009-10 2010 11 2010-11 2009 10 2009-10 2010 11 2010-11 2009 10 2009-10 2010 11 2010-11 2009 10 2
Slide 36: Cement: Summary
Cement : Summary Quarter -1 Full Year % Chg. 2010-11 2009-10 2009-10 Grey Cement Capacity Mn. TPA 48.75 45.65 7 48.75 - Samruddhi / Grasim 25.65 22.55 14 25.65 - UltraTech 23.10 23.10 - 23.10 P d ti n Production Mn MT Mn. 9 92 9.92 9 43 9.43 5 37 02 37.02 - Samruddhi / Grasim 5.29 4.91 8 19.38 - Ult
Slide 37: Cement: Summary Contd
Cement : Summary Contd… Quarter -1 Full Year % Chg. 2010-11 2009-10 2009-10 Net Revenue Rs. Crs. , 3,973.7 4,061.4 , ((2)) 15,475.6 , - Samruddhi / Grasim : Cement 1,999.3 1,988.0 1 7,709.0 White Cement 214.4 168.4 27 840.3 - UltraTech - Cement 1,833.5 1,997.7 (8) 7,239.0 PBIDT * Rs. Crs. 1,088.8 1,
Slide 38: Viscose Staple Fibre: Summary
Viscose Staple Fibre : Summary Quarter -1 Full Year % Chg. 2010-11 2009-10 2009-10 C Capacity i TPA 333 975 333,975 333 975 333,975 - 333 975 333,975 Production MT 69,328 62,352 11 302,092 Sales Volumes MT 67,302 67,418 (0) 308,431 Net Revenue Rs. Crs. 856.1 716.2 20 3,574.2 Avg. Realisation Rs./MT
Slide 39: Chemical: Summary
Chemical : Summary Quarter -1 Full Year % Chg. 2010-11 2009-10 2009-10 Capacity TPA 258,000 258,000 -- 258,000 Production MT 54,693 52,231 5 229,801 Sales Volumes MT , 54,386 49,845 , 9 229,876 , Net Revenue Rs. Crs. 118.7 120.2 (1) 492.8 Avg. Realisation Rs./MT 18,455 20,753 (11) 18,096 PBIDT Rs. C