Slide 1: Cover letter to stock exchanges on investors presentation
PROUD TO BE INDIAN PRIVILEGED TO BE GLOBAL HEG/SEcn'j2018 5th November, 2018 1 BSE Limited 2 National Stock Exchange of India Limited 25 th Floor, P J Towers Exchange Plaza, 5th Floor Dalal Sh"eet Plot No.C/1, G Block, Bandra - Kurla Complex MUMBAI - 400001 . Bandra (E), Scrip Code: 509631 MUMBAI -
Slide 2: Q2 of FY19 Investor Update Presentation
Q2 of FY19 Investor Update Presentation HEG Ltd © LNJ Bhilwara Group 1
Slide 3: HEG is part of LNJ Bhilwara group
HEG is part of LNJ Bhilwara group a diversified, reputed and large Indian business house having more than five decades of industrial experience and presence in Power Generation & Textiles Graphite Electrodes Power Consultancy IT Enabled Services HEG Ltd © LNJ Bhilwara Group 2
Slide 4: HEG Limited – Profile
HEG Limited – Profile HEG Limited is a leading graphite electrode manufacturer & exporter Globally The company produces two grades of graphite electrodes ‐ Ultra High Power (UHP) & High Power (HP) ‐ used in producing steel through the Electric Arc Furnace (EAF) route. Exports approximately 70%
Slide 5: World's Largest Single Site Graphite Electrode Plant
World’s Largest Single Site Graphite Electrode Plant HEG Ltd © LNJ Bhilwara Group 4
Slide 6: R&D Center
R&D Center • R&D set up to corroborate the Quality & Improvement Drives with small scale production facilities • The focus is also on development of new product lines • Development is focused towards Carbon 5
Slide 7: Capacity Build Up
Capacity Build Up Graphite Electrode Captive Power (MW) (In '000 tonne) (In '000 tonne) 120 120 100 100 100 80 77 77 77 80 80 66 60 52 60 44 40 30 40 20 14 20 14 0 0 1990 2002 2006 2009 2011 2020 2002 2006 2009 2011 2020 Probable HEG Ltd © LNJ Bhilwara Group 6
Slide 8: Graphite Electrode (GE) Industry – Our Unique Strengths
Graphite Electrode (GE) Industry – Our Unique Strengths GE‐ An indispensable material for Electric Arc Furnaces (EAF) for Steel production EAF accounts for appx 45% of total World Steel Production (Without China) High Entry Barrier – HEG the last new entrant in the world ‐1977 Uses 100 % Cap
Slide 9: Anti-pollution Campaign – Blue Sky Policy
Anti‐pollution Campaign‐ Blue Sky Policy This year the application of the restriction will be more rigid & strict. & have been advanced from 1 Oct to 31 Mar compared to 15 Oct to 15 Mar last year Export of Steel is likely to keep falling in near future. China likely to add around 200 million t
Slide 10: Anti-pollution Campaign – Blue Sky Policy
Anti‐pollution Campaign‐ Blue Sky Policy 2017 environment control was not very serious – being first year , allowed 60‐65% capacity utilization against 50% orders. but this year it will be much more stringent & the impact may be higher. Last year Environmental Policy affected 28 cities within Ch
Slide 11: Chinese Steel Exports Further Down 11% Y-o-Y Jan-Sep'18
Chinese Steel Exports Further Down 11 % Y‐o‐Y Jan‐Sep’18 Jan 7.4 4.7 5.8 CY17 Feb 4.9 CY 18 112 Mar 7.6 5.7 108 6.5 Apr 6.5 7.0 May 93 6.9 6.8 China Steel Exports Jun 6.9 (MT) 7.0 Jul 5.8 76 Aug 6.5 5.9 70 Sep 5.1 6.0 5.0 Annualized based on 8 months actuals Oct Monthly Chinese Exports in MnT CY-14
Slide 12: World Steel Scenario (Jan-Sept) 2018, MMT
WORLD STEEL SCENARIO (JAN‐SEPT) 2018, MMT % Change % Change % Change Crude Steel Production (Jan‐Sept) 2018 (Jan‐Sept ) 2016 vs.2015 2017 vs.2016 2018 vs. 2017 World ‐0.9% 5.3% 1347 4.7% China ‐2.0% 5.7% 699 6.1% World without China 0.2% 4.9% 648 3.3% Growth Areas %↑ % of world pdn Middle East 13.4
Slide 13: GE Outlook 2020
GE Outlook 2020 HEG Ltd © LNJ Bhilwara Group 12
Slide 14: Financial Snapshot
Financial Snapshot in Rs. Crore (except EPS) Q2 FY19 Q1 FY19 Q2 FY18 FY18 REVENUE FROM 1794 1587 410 2758 OPERATION EBITDA* 1389 1197 192 1734 EBITDA Margin 76.57% 75% 46.66% 63% EBIT 1371 1180 174 1661 EBIT Margin 76% 74% 43% 60% PAT 889 770 114 1081 PAT Margin 50% 49% 28% 39% EPS 222.45 192.77 28.
Slide 15: Segmental Performance – Graphite Electrodes
Segmental Performance – Graphite Electrodes in Rs. Crore Q2 FY19 Q1 FY19 Q2 FY18 FY18 Net Sales 1793 1587 407 2739 Export (% of sales) 72% 69% 63% 71% EBITDA Margin 77.20% 75.30% 42.36% 61% EBIT Margin 76.37% 74.40% 38.68% 59% Capacity utilisation at around 85% during the Quarter. Realizations o
Slide 16: Segmental Performance – Power
Segmental Performance – Power in Rs. Crore Q2 FY19 Q1 FY19 Q2 FY18 FY18 Net Sales 28.85 27.88 54.56 213.80 EBITDA Margin (16)% (6)% 36% 28% EBIT Margin (26)% (18)% 30% 23% 1. Coal availability under FSA with Coal India acutely short. Sourcing of coal from open market adversely affecting bottom line.
Slide 17: Thank You
Thank You Ms Dimple Momaya heg@adfactorspr.com +91 98207 62036 Mr.R.Rustogi, CFO & COO Mr. Gulshan Sakhuja, DGM-Corp.Finance HEG Limited Ph: +91 9910103865 Fax: +91 120 254 1575 Email: r.rustogi@lnjbhilwara.com gulshan.sakhuja@lnjbhilwara.com HEG Ltd © LNJ Bhilwara Group 16