Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — H1 FY2013 Earnings Presentation
48 slides from Larsen & Toubro's earnings presentation, November 2012
Slide 1: Larsen & Toubro Ltd. Investor Presentation Q2/H1 FY13
Larsen & Toubro Ltd. Investor Presentation Q2/H1 FY13 November 2012
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward looking statements concerning L&T’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The r
Slide 3: Presentation Outline
Presentation Outline L&T Overview Business Structure Financial Performance Opportunities, Challenges, Outlook 3
Slide 4: Presentation Outline
Presentation Outline L&T Overview Business Structure Financial Performance Opportunities, Challenges, Outlook 4
Slide 5: L&T – Sectoral Presence
L&T – Sectoral Presence Infrastructure Hydrocarbon Power Process & Others 5
Slide 6: L&T - At a Glance
L&T - At a Glance FY 12 Group Market Cap Revenues: (26th Oct): ` 643 Bn `1047 Bn (US$ 12.8 Bn) (US$ 19.5 Bn) AAA Rating Professionally with Stable Managed outlook from Company CRISIL & AAA from ICRA India’s largest E&C company with interests in Projects, Infrastructure Development, Manufacturing, IT
Slide 7: L&T - At a Glance (Market Cap)
Mar '02 45 Sept '02 42 Mar '03 46 Sept '03 80 Mar '04 71 Sept '04 106 Mar '05 129 Sept '05 200 L&T - At a Glance Mar '06 334 Sept '06 356 Mar '07 459 Note: Market Cap as on 26th October 2012: ` 1047 Bn Sept '07 807 Amt in ₹ Bn Mar '08 884 L&T Market Cap Sept '08 715 Mar '09 394 Sept '09 989 Mar '10
Slide 8: L&T – Shareholding Pattern
L&T – Shareholding Pattern Domestic Mutual Companies, Funds, 7.1% Govt. Major Shareholders % Shares 6.7% Financial Institutions Life Insurance Corporation of India 17.7% L&T & L&T Employee Welfare Foundation 12.1% Employee Insurance Welfare Companies, Administrator of the SUUTI 8.2% Foundation, 30th
Slide 9: Experienced Management Team
Experienced Management Team A M Naik K Venkataramanan M V Kotwal Executive Chairman CEO & Managing Director President (Heavy Engineering) BE [Mech] BE [Tech] – IIT, Delhi BE [Mech], Univ. of Bombay Joined L&T in March 1965 Joined L&T in June 1969 Joined L&T in October 1968 Diverse expe
Slide 10: Corporate Governance
Corporate Governance L&T’s essential character revolves around values based on transparency, integrity, professionalism and accountability Five-tier Governance Structure Board of Directors Executive Management Committee (EMC) Independent Company (IC) Board Strategic Business Group (SBG) Business Uni
Slide 11: Journey Towards Excellence
Journey Towards Excellence • 1938: Formed as a partnership • 1952: Listed on BSE 1938 - • Commenced trading & making dairy equipment, fabrication serv., war-time ship repair 1950s • Entered construction business thro’ acquisition of ECC and started switchgear business • Emerged as one of the largest
Slide 12: E&C Delivery Platform
E&C Delivery Platform One of Asia’s largest vertically integrated E&C Companies Design & Engineering EPC Projects Manufacture & Construction Fabrication Single point responsibility for turnkey solutions 12
Slide 13: Quality Customer Mix
Quality Customer Mix MIAL Indian Coastguard 13
Slide 14: Multiple Alliances & Joint Ventures
Multiple Alliances & Joint Ventures Alliances Joint Ventures Pre qualifications Befula Investments Note: Some of these are project specific alliances & pre qualifications 14
Slide 15: L&T’s Sustainability Initiative
L&T’s Sustainability Initiative The L&T Sustainability Report 2011 is a ‘GRI Checked’ , Externally Assured, Application Level A+ report. 15
Slide 16: Sustainability – Social Measures
Sustainability – Social Measures Project Neev – Over 5000 differently abled have benefitted Social – Caring for Society THC – Thane Health Centre AHC – Andheri Health Centre 16
Slide 17: Sustainability – Environment Conservation
Sustainability – Environment Conservation % change with respect to FY 2007-08 Use of Alternate Material Use of Recycled materials 17
Slide 18: Presentation Outline
Presentation Outline L&T Overview Business Structure Financial Performance Opportunities, Challenges, Outlook 18
Slide 19: L&T’s Business Structure
L&T’s Business Structure LARSEN & TOUBRO LTD. BUSINESS VERTICALS – SUBSIDIARIES ASSOCIATE COs INDEPENDENT COMPANIES (ICs)* BUILDINGS & FACTORIES FINANCIAL SERVICES AUDCO INFRASTRUCTURE L&T KOMATSU L&T INFOTECH METALLURGICAL & MATERIAL HANDLING OTHERS INFRASTRUCTURE SPVs POWER T&D MHI JVs HYDROCARBON
Slide 20: Presentation Outline
Presentation Outline L&T Overview Business Structure Financial Performance Opportunities, Challenges, Outlook 20
Slide 21: Sustaining Profitable Growth
Sustaining Profitable Growth Order Inflow Net Sales 804 532 695 706 439 ` Billion 370 ` Billion 517 339 426 250 FY 08 FY 09 FY 10 FY 11 FY 12 FY 08 FY 09 FY 10 FY 11 FY 12 Order Book Recurring PAT 1457 44.1 1,309 36.8 31.8 1,004 27.1 ` Billion ` Billion 708 21.0 536 FY 08 FY 09 FY 10 FY 11 FY 12 FY
Slide 22: Q2 FY13 Performance Highlights
Q2 FY13 Performance Highlights 30% Order Inflows 11% Order Book 17% Sales 16% EBITDA 15% Recurring PAT 22
Slide 23: Order Inflow & Order Book – H1 FY13
Order Inflow & Order Book – H1 FY13 Amount in ` Bn Order Inflow Order Book 406 323 210 11% 26% 161 Q2 1,585 1,429 Q1 196 162 FY12 FY13 H1 FY12 H1 FY13 Core Infrastructure opportunities driving order inflows; Hydrocarbon tendering picking up; broadbased investment momentum in power and industrial cap
Slide 24: Order Inflow & Order Book – H1 FY13 Sectoral Break-up
Order Inflow & Order Book – H1 FY13 Sectoral Break-up Order Inflow: ` 406 Bn 59% 19% 11% 3% 8% Order Book: 49% 25% 9% 13% 4% ` 1585 Bn Infrastructure Power Hydrocarbon Process Others Infrastructure Power Hydrocarbon Process Others Roads and Generation Upstream Minerals & Shipbuilding Bridg
Slide 25: Order Inflow & Order Book – Geographical and Customer Break-up
Order Inflow & Order Book – H1 FY13 Order Inflow 84% 11% 5% Geographical Break-up Order Book 88% 10% 2% Domestic Middle East Others Order Inflow 32% 56% 12% Customer Profile Order Book 32% 53% 15% Public Private Concessions Business - L&T 25
Slide 26: Performance Summary - Sales to EBITDA
Performance Summary - Sales to EBITDA Q2 FY13 Q2 FY12 % Change ` Billion H1 FY13 H1 FY12 % Change FY12 Net Sales / Revenue from 131.95 112.44 17% 251.50 207.26 21% 531.71 Operations ---(A) 27.43 13.01 111% ----Export Sales 47.58 23.60 102% 62.11 99.65 83.73 19% Mfg, Cons. & Opex (MCO) 193.17 156.78
Slide 27: Sales Breakup – Operational Costs & Profitability
Sales Breakup – Operational Costs & Profitability Subcontracting Q2 FY13 charges, 21.7% (16.0%) Material cost, 46.2% Other manf. (51.0%) exp., 7.5% (7.5%) Staff Costs, 9.9% (9.6%) Sales, adm. Subcontracting charges, H1 FY13 & other Exp., 21.5% Material cost, 4.0% EBITDA, Other manf. (17.9%) 47.1% (5
Slide 28: Performance Summary – EBITDA to PAT
Performance Summary – EBITDA to PAT Q2 FY13 Q2 FY12 % Change ` Billion H1 FY13 H1 FY12 % Change FY12 14.05 12.17 16% EBITDA 24.92 23.65 5% 62.83 10.7% 10.8% -0.1% EBITDA Margins 9.9% 11.4% -1.5% 11.8% (2.35) (1.97) 19% Interest Expenses (4.63) (3.54) 31% (6.66) (2.03) (1.71) 19% Depreciation (3.96)
Slide 29: Performance Summary – Balance Sheet
Performance Summary – Balance Sheet Incr / ` Billion Sep-12 Mar-12 (Decr) Net Worth 273.92 252.23 21.69 Non-Current Liabilities 68.18 61.14 7.04 Current Liabilities 351.91 363.20 (11.29) Total Sources 694.01 676.57 17.44 Fixed Assets 87.39 83.64 3.75 Invt./ Advance against equity to S&A Cos 119.61 1
Slide 30: Performance Summary – Cash Flow
Performance Summary – Cash Flow Q1 Q2 H1 Q1 Q2 H1 ` Billion FY13 FY13 FY13 FY12 FY12 FY12 Operating Profit 13.15 15.03 28.18 11.71 13.44 25.15 Adjustments for Working Capital Changes (26.49) (3.67) (30.16) (16.07) (12.99) (29.06) Direct Taxes (Paid) / Refund - Net (2.66) (5.51) (8.17) (3.53) (5.08)
Slide 31: Segmental Analysis
Segmental Analysis 31
Slide 32: Segmental Break-up – H1 FY13
Segmental Break-up – H1 FY13 Machinery & Net Revenues Industrial Products Others Electrical & 3.9% 2.7% Engineering Electronics (5.7%) (2.0%) & 5.8% Construction (6.7%) 87.6% (85.6%) EBITDA Machinery & Industrial Others Products Engineering 6.1% 4.9% & (3.8%) (8.6%) Construction Electrical & Electro
Slide 33: Segmental Performance
Segmental Performance Segment Q2 FY13 Q2 FY12 % Change ` Billion H1 FY13 H1 FY12 % Change FY12 115.83 97.05 19% Net Revenues 220.32 177.43 24% 467.62 E&C 12.2% 12.0% 0.2% EBITDA Margins 11.6% 11.9% -0.3% 12.7% 7.80 7.37 6% Net Revenues 14.57 13.93 5% 30.67 E&E 11.1% 10.7% 0.4% EBITDA Margins 11.5% 1
Slide 34: Group Performance
Group Performance 34
Slide 35: Consolidated P&L Statement – FY12
Consolidated P&L Statement – FY12 L&T L& T & L&T Group Devl. Fin. ` Billion Other FY12 Projects S ervices FY12 FY11 % Change S&A 531.71 Income from Operations 10.67 29.97 602.49 643.13 520.44 24% 62.83 EBITDA 5.29 5.72 76.69 87.70 76.77 14% 11.8% EBITDA Margins 49.6% 19.1% 12.7% 13.6% 14.8% -1.2% (6
Slide 36: Consolidated Balance Sheet – FY12
Consolidated Balance Sheet – FY12 L&T L&T Group ` Billio n Mar-12 Mar-12 Mar-11 Inc/(Dec) Net Worth: - Dev. Projects 95.40 65.73 29.67 - Fin. Services (Including Insurance) 41.76 38.89 2.87 252.23 Others 253.81 223.75 30.07 Elimination (Dev. Proj. & Fin. Serv) (97.10) (77.86) (19.24) - Minority Inte
Slide 37: Consolidated Cash Flows – FY12
Consolidated Cash Flows – FY12 ` Billion FY 12 FY 11 Operating Profit 93.06 80.37 Changes in Working Capital (57.32) (7.94) Direct Taxes (Paid) / Refund - Net (28.52) (26.69) Net Cash from Operations 7.22 45.74 Investments in Fixed Assets (Net) - Devl. Projects (34.57) (27.31) - Others (36.47) (41.3
Slide 38: L&T Infotech Group – H1 FY13
L&T Infotech Group – H1 FY13 Amount in ` Bn Total Income Profit after Tax 18.53 2.72 14.99 1.98 24% 9.76 1.40 37% 7.62 Q2 Q2 1.05 Q1 Q1 8.77 1.32 7.37 0.93 FY12 FY13 FY12 FY13 Robust revenue growth of 28% in Q2 and 24% in H1 seen across all business segments and industry verticals Earnings aided by
Slide 39: L&T Finance Holdings
L&T Finance Holdings Amt. ` Billion H1 FY13 H1 FY12 % Change FY12 NBFCs Loans and Advances 276.64 217.42 27% 256.71 Disbursements 89.00 98.05 -9% 216.74 NIM (%) 5.52% 5.47% 0.05% 5.4% Gross NPA (%) 1.56% 1.10% 0.46% 1.3% Net NPA (%) 1.14% 0.74% 0.40% 0.9% L&T Finance Holdings (Consolidated) Total In
Slide 40: Concessions Business Portfolio
Concessions Business Portfolio Roads and Bridges: Portfolio: 19 projects; 10 operational, 9 under implementation Development: 2092 km Project Outlay: `217 Bn Power: Portfolio: 5 projects; under development / implementation Capacity: 2842 MW Project Outlay: ` 212 Bn Metro: Portfolio: 1 project; under
Slide 41: Presentation Outline
Presentation Outline L&T Overview Business Structure Financial Performance Opportunities, Challenges, Outlook 41
Slide 42: Opportunities in Infrastructure sector
Opportunities in Infrastructure sector Transportation infrastructure – Roads – combination of PPP and E&C Metro and mono rails Dedicated Freight Corridor Railways modernisation and refurbishment Railway Sidings Airports Urban Infrastructure – Residential High-rises Commercial Buildin
Slide 43: Opportunities in Hydrocarbon sector
Opportunities in Hydrocarbon sector Sector specific opportunity basket – Offshore platforms Sub-sea pipelines Deep-sea – exploration and production equipment Onshore pipelines Gas gathering stations Refineries Petrochemicals Fertilisers Geographies (current and potential) – India
Slide 44: Opportunities in Power sector
Opportunities in Power sector Generation capacity investment by Public and Private utilities Coal-fired supercritical power plants Gas fired power plants Hydel plants Solar plants Nuclear Plants Transmission & Distribution (India and GCC) Transmission Line projects AIS and GIS Substation Projects In
Slide 45: Opportunities in Process sector
Opportunities in Process sector Increase in metals consumption with industrial revival Steel and non-ferrous metal plant EPC Under-capacity in ferrous metals sector Non-ferrous metals consumption linked with industrial capex Material Handling – demand from multiple sectors Power Mining Steel Ports R
Slide 46: Challenges
Challenges Macro Situation – Political instability Policy drift Inert Bureaucracy Deteriorating Macro Economic Indicators Govt. inability to fund infrastructure / over-reliance on PPP Poor investment climate Global Slowdown Sectoral Constraints – Natural Resource Constraints across the board (coal,
Slide 47: Headwinds & Tailwinds
Headwinds & Tailwinds GDP Growth Resource Shortages High Subsidies, (Land, Fuel, Water, Worrisome Manpower) Twin Deficits, Inflation, Currency, Oil Prices Signs of Reforms, ‘Power Push’, Weak some new Outlook Investment Investment Signs Momentum (Metros, DFCC, etc) Consumption, Savings, Political De
Slide 48: Thank You
Thank You 22nd October 2012 48