Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q1 FY2018 Earnings Presentation
43 slides from Grasim Industries's earnings presentation, Aug 14, 2017
Slide 1: Quarterly Performance Review Quarter 1: 2017-18
Quarterly Performance Review Quarter 1 : 2017-18 Mumbai, 14th August, 2017 Grasim Industries Limited Building, Consolidating, Growing 1
Slide 2: Contents
Contents Highlights 3 -6 Financial Performance 7 -8 Business Performance 9 - 13 Capex Plan 14 - 15 Merger of ABNL 16 - 22 Business Outlook 23 - 24 Glossary VSF : Viscose Staple Fiber, MT : Metric Ton, TPA : Tons Per Annum, YoY: Year on Year Comparison, CY : Current Year, LY : Last Year,
Slide 3: Indian Economy
Indian Economy India’s GDP growth decelerated to 6.1% YoY in Q4FY17 (Q3FY17 : 7%) Although it comes on a higher revised base of 9.2% in Q4FY16 Corporate debt overhang Weak private investment activity GST led temporary disruptions To accelerate the economic growth, the government has fron
Slide 4: VSF Business - Quarter 1 Highlights
VSF Business- Quarter 1 Highlights Leading Global Player - Prices witnessed weakness in China during the quarter, recovery started towards quarter end - Destocking in domestic market ahead of GST implementation - Our plants continue to operate at full capacity Sales Volume Revenue EBITDA 121K Tons `
Slide 5: Chemical Business - Quarter 1 Highlights
Chemical Business - Quarter 1 Highlights Largest Chlor-Alkali Producer in India - Domestic Caustic prices remained firm during the quarter in line with global prices - Excess supply of Chlorine remains an overhang for the industry - Highest ever quarterly EBITDA reported by the Chemical business of
Slide 6: UltraTech - Quarter 1 Highlights
UltraTech - Quarter 1 Highlights Largest Cement Producer in India - Improved operating margins for UltraTech led by better operating efficiency - UltraTech completed acquisition of Cement plants from Jaiprakash Associates Ltd. and Jaypee Cement Corporations Ltd. with a total capacity of 21.2 Mn. TPA
Slide 7: Financial Performance – Quarter 1
Financial Performance – Quarter 1 Standalone ` Cr. Net Revenue EBITDA Net Profit 13% 6% 8% 2,426 2,740 621 586 347 321 Q1FY17 Q1FY18 Q1FY17 Q1FY18 Q1FY17 Q1FY18 Consolidated Net Revenue EBITDA Net Profit 8% 9% 7% 9,085 9,846 2,214 2,419 830 890 Q1FY17 Q1FY18 Q1FY17 Q1FY18 Q1FY17 Q1FY18 7
Slide 8: Strong Balance Sheet and Robust Financial Ratios
Strong Balance Sheet and Robust Financial Ratios Consolidated Financial Ratios Consolidated Debt / Surplus Consolidated 21835 ` Cr. 11438 31-03-2017 30-06-20117 9213 Debt:Equity (x) 0.22 0.51 10530 11305 2225 Net Debt: Equity (x) - 0.27 Mar-17 Jun-17 Standalone Debt / Surplus Net Debt / EBITDA - 1.1
Slide 9: Business Performance
Business Performance VSF Chemical Cement 9
Slide 10: International Fibre Price Trend
International Fibre Price Trend $/ Kg 2.50 2.00 1.92 1.87 1.50 1.00 0.96 0.50 - Dec-13 13 Dec-14 14 Dec-15 15 Dec-16 16 Aug-13 13 Oct-13 13 Aug-14 14 Oct-14 14 Aug-15 15 Oct-15 15 Aug-16 16 Oct-16 16 Apr-13 13 Apr-14 14 Apr-15 15 Apr-16 16 Apr-17 17 Feb-14 14 Feb-15 15 Feb-16 16 Feb-17 17 Jun-13 13
Slide 11: VSF: Performance
VSF : Performance Revenue ( ` Cr.) EBITDA (` Cr.) Volumes were maintained YoY despite 11% Destocking of inventory in domestic market by value chain ahead of GST implementation 8% Higher exports material in transit due to disruption at 1,654 1,836 Nhava Sheva in view of ransom ware attack at Sh
Slide 12: Chemical: Performance
Chemical : Performance Revenue ( ` Cr.) EBITDA (` Cr.) Volume up 4% 20% ECU realisation up by 2% 5% Higher Caustic prices 1084 Offset by negative Chlorine realisation 903 244 232 With rising production of Chlorine based value added products, impact is controlled Q1FY17 Q1FY18 Q1 FY17 Q1 FY
Slide 13: Cement: Performance
Cement : Performance Revenue (` Cr.) EBITDA (` Cr.) Volume up by 1% 7% 11% Weak quarter for the industry Energy cost up by 28% 6587 7035 1,798 1,626 Petcoke prices doubled, negated by Q1FY17 Q1FY18 Q1 FY17 Q1 FY18 Enhanced share of power from waste heat recovery Reduced power consumption
Slide 14: Capex
Capex 14
Slide 15: Capex plan
Capex plan (` Cr.) Capex Cash Outflow Net of CWIP FY18 FY19 Capex spent - as on Onward Q1FY18 (01-07-17) Standalone Vilayat Caustic Plant Brownfield expansion (144K TPA) 442 VSF : Water supply augmentation & usage reduction, 602 Research & Development, Environment & Other capex VSF capacity expansio
Slide 16: Merger of Aditya Birla Nuvo Limited (ABNL)
Merger of Aditya Birla Nuvo Limited (ABNL) 16
Slide 17: Merger of ABNL into Grasim
Merger of ABNL into Grasim _Update on the Scheme NCLT sanction received for the composite Scheme of merger of ABNL into Grasim and demerger of Financial Services business Merger of ABNL into Grasim has become effective from 1st July, 2017 Demerger of Financial Services business from Grasim ha
Slide 18: Financial Performance of ABNL – Quarter 1
Financial Performance of ABNL – Quarter 1 ` Cr. Standalone Net Revenue EBITDA Net Profit 1,233 1,233 219 130 * 158 58 Q1FY17 Q1FY18 Q1FY17 Q1FY18 Q1FY17 Q1FY18 Consolidated Net Revenue EBITDA Net Profit 3,220 3,507 430 448 304 79 Q1FY17 Q1FY18 Q1FY17 Q1FY18 Q1FY17 Q1FY18 * Excluding exceptional item
Slide 19: Aditya Birla Capital
Aditya Birla Capital Revenue EBT (` Crore) Remarks Q1FY17 Q1FY18 ∆% Q1FY17 Q1FY18 ∆% 783 1025 31% NBFC1 178 266 50% Higher lending book (38%↑ y-o-y) New business growth, cost optimization and 1072 990 (8%) Life Insurance 26 11 (60%) improvement in quality metrics 204 271 32% Asset Management2 109 11
Slide 20: Idea Cellular
Idea Cellular Revenue (14% ↓ y-o-y) & EBITDA (39%↓ y-o-y) The upheaval in the Indian wireless industry continued in Q1FY18, despite the Data Volume 1 (Mn. MB) new entrant slowly migrating from ‘Free Services’ to ‘Paid Services’ but with 99% heavily discounted unlimited voice and data pricing pla
Slide 21: Divisions (Jaya Shree, Indo-Gulf Fertilisers, Indian Rayon, Aditya Birla Insulators)
Divisions (Jaya Shree, Indo-Gulf Fertilisers, Indian Rayon, Aditya Birla Insulators) Revenue EBITDA Remarks on profitability Q1FY17 Q1FY18 ∆% Q1FY17 Q1FY18 ∆% Strike in unit from 16th May’17 till night shift of 20th 352 319 (9%) Jaya Shree 41 22 (46%) May’17 impacting operations. Lower profitability
Slide 22: Strong Financials Post Merger
Strong Financials Post Merger (` Cr.) Aggregate Grasim Aditya Birla Nuvo Proforma Q1FY18 Q1FY18 Financials Q1FY18 Net Revenue 9,846 + 3,507 = 13,353 EBITDA 2,419 + 448 = 2,867 PAT 921* + 79 = 1,000 (After MI) Net Debt 11,305 + 2,085 = 13,390 (As on 30.6.17) Net Debt to 1.2x 1.2x + 1.2x = EBITDA * Be
Slide 23: Business Outlook
Business Outlook VSF VSF Business Business: Business outlook expected to remain stable No major capacity addition expected in next 12-18 months globally However, short term variations likely in utilisation level and pricing Cotton consumption projected to be higher than production, in season
Slide 24: Business Outlook – Cement Business
Business Outlook Cement Business Favourable factors for demand growth : Likely revival of rural housing given expectation of normal monsoon Affordable housing and interest subvention scheme Infrastructure spending Challenging Factors : In the short tem : Drought in South India, sand avai
Slide 25: Thank You
ADITYA BIRLA 4 Thank You 25
Slide 26: Annexure - Financials
Grasim Industries Limited Annexure - Financials 26
Slide 27: Annexure
Annexure Consolidated Financial Performance Standalone Financial Performance Balance sheet VSF Summary Chemical Summary Cement Summary Organisational Structure Plant Locations 27
Slide 28: Consolidated Financial Performance
Consolidated Financial Performance (` Cr.) Quarter 1 % 2017-18 2016-17 Change Net Sales & Op. Income 9,846 9,085 8 Other Income 236 200 18 EBITDA 2,419 2,214 9 EBITDA Margin (%) 24.0% 23.8% Finance Cost 149 204 (27) Depreciation 443 436 2 Share in Profit of JVs & Associates (1) 47 Exceptional item (
Slide 29: Standalone Financial Performance
Standalone Financial Performance (` Cr.) Quarter 1 % 2017-18 2016-17 Change Net Sales & Op. Income 2,740 2,426 13 Other Income 66 58 14 EBITDA 621 586 6 EBITDA Margin (%) 22.1% 23.6% Finance Cost 7 23 (68) Depreciation 110 110 (0) Earnings before Tax 504 453 11 Tax Expense 156 132 19 PAT 347 321 8 O
Slide 30: Balance Sheet
Balance Sheet Standalone Consolidated ( Cr.) (` 30 th June'17 31 st Mar'17 EQUITY & LIABILITIES 30th June'17 31 st Mar'17 16,742 16,231 Net Worth 32,490 31,387 - - Minority Interest 10,059 9,702 615 701 Borrowings * 21,835 9,213 716 663 Deferred Tax Liability (Net) 3,677 3,518 2,320 2,256 Liabilitie
Slide 31: Viscose Staple Fibre: Summary
Viscose Staple Fibre : Summary Quarter 1 % 2017-18 2016-17 Change Capacity KTPA 125 125 - Production (in '000s) MT 129 114 14 Sales Volumes (in '000s) MT 121 121 0 Net Revenue ` Cr. 1,836 1,654 11 EBITDA ` Cr. 349 322 8 EBITDA Margin % 18.9% 19.3% -- EBIT ` Cr. 290 266 9 Capital Employed (Incl. CWIP
Slide 32: Chemical: Summary
Chemical : Summary Quarter 1 % 2017-18 2016-17 Change Capacity KTPA 210 210 - Production (in '000s) MT 201 193 4 Sales Volumes (in '000s) MT 199 192 4 Net Revenue ` Cr. 1,084 903 20 EBITDA ` Cr. 244 232 5 EBITDA Margin % 22.5% 25.6% -- EBIT ` Cr. 196 181 8 Capital Employed (Incl. CWIP) ` Cr. 3,779 3
Slide 33: Cement: Summary
Cement : Summary Quarter 1 % 2017-18 2016-17 Change Grey Cement Capacity Mn. TPA 17.56 16.51 6 Production Mn. MT 13.78 13.48 2 Sales Volumes $ Mn. MT 13.95 13.78 1 White Cement & Putty Sales Volumes $$ Lac MT 2.84 2.84 - Net Revenue ` Cr. 7,035 6,587 7 EBITDA ` Cr. 1,798 1,626 11 EBITDA Margin % 25.
Slide 34: Grasim Group Structure
Grasim Group Structure Pulp & Fibre Chemical UltraTech Cement (60.23%) Others VSF VSF JV Pulp Overseas Caustic Epoxy Domestic Overseas 498K TPA China 70K TPA Pulp JVs 840K TPA 51K TPA 4 Mn. TPA, (UAE, Bangladesh, Sri Lanka) Nagda Grey Cement Grasim Nagda Birla Jingwei Harihar AV Group NB 270K TPA Bh
Slide 35: Plant Locations – Grasim & Its subsidiaries
Plant Locations– Grasim & Its subsidiaries Bathinda(G) Jhajjar Bhiwani Panipat Dadri T Kotputli Aligarh Jodhpur Patliputra P T Malanpur Renukoot Shambhupura C Jawad P Katni Sewagram Bharuch Durgapur(G) UltraTech Cement Plants Wanakbori F C Rehla Dankuni`(G) Jafrabad F C Vilayat Nagpur UltraTech Grin
Slide 36: 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 37: Unaudited Consolidated Financial Results for the Quarter Ended 30-06-2017
UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER ENDED 30-06-2017 ` Crore STATEMENT OF CONSOLIDATED UNAUDITED RESULTS FOR THE QUARTER ENDED 30-06-2017 Three Months Ended Year Ended 30-06-2017 31-03-2017 30-06-2016 31-03-2017 Particulars (Audited) (Unaudited) (Unaudited) (Audited) Refer Note
Slide 38: Unaudited Consolidated Segment Wise Revenue, Results, Assets and Liabilities
UNAUDITED CONSOLIDATED SEGMENT WISE REVENUE, RESULTS, ASSETS AND LIABILITIES FOR THE QUARTER ENDED 30-06-2017 Crore Particulars Three Months Ended Year Ended 30-06-2017 31-03-2017 30-06-2016 31-03-2017 (Audited) (Unaudited) (Unaudited) (Audited) Refer Note 2(b) 1. SEGMENT REVENUE Viscose Staple Fibr
Slide 39: Notes to Financial Results
Grasim Industries Limited NOTES: 1. The Company has opted to publish Consolidated Financial Results which are reviewed by the Audit Committee and approved by the Board of Directors today. The Statutory Auditors of the Company have carried out limited review as required under SEBI (Listing Obligation
Slide 40: Notes: ABNL Key Financial Results
Grasim Industries Limited b. As the merger of ABNL is effective from 1st July, 2017, financial results for the three months ended 30th June, 2017 of ABNL are not included in the Company's results for the said period. The key numbers of Standalone and Consolidated financial results of ABNL for the th
Slide 41: Notes: Idea Cellular Spectrum Charges
Grasim Industries Limited 7. In respect of Idea Cellular Limited (Idea), an Associate of the Company: On 8th January, 2013, Department of Telecommunication (DoT) issued demand notices towards one time spectrum charges: - for spectrum beyond 6.2 Mhz in respective service areas with retrospective peri
Slide 42: Press Release: Building, Consolidating, Growing
Press Release Mumbai, 14th August, 2017 Building, Consolidating, Growing Consolidated Financial Performance Q1 FY18: Net Revenue up 8%; EBITDA up 9%; Net Profit up 7% ` Cr. Quarter ended 30.06.2017 30.06.2016 Net Revenue 9,846 9,085 EBITDA 2,419 2,214 Net Profit 890 830 Grasim has reported an all-ro
Slide 43: Cement Subsidiary - UltraTech
Cement Subsidiary - UltraTech UltraTech reported an increase in consolidated revenue by 7% at ` 7,035 Cr. EBITDA enhanced by 11% to ` 1,798 Cr. On the cost front, the increase in pet coke and fuel prices led to higher energy and logistic costs, offset to some extent by an improvement in operating ef