Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — FY2006 Earnings Presentation
38 slides from Larsen & Toubro's earnings presentation, May 25, 2006
Slide 1: Analyst Presentation 2005-06
Photo LARSEN & TOUBRO LIMITED Analyst Presentation 2005-06 1 25th May, 2006
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 Performance Review FY 06 Independent Financial Statements including Segment Analysis Consolidated Financial Statements S&A Companies Key Initiatives, Opportunities & Outlook 25th May, 2006 Larsen & Toubro Limited 3
Slide 4: Performance Review FY 06
Performance Review FY 06 25th May, 2006 Larsen & Toubro Limited 4
Slide 5: Performance Highlights FY 06
Performance Highlights FY 06 Order Orderinflows inflowsatatRs Rs223 223Bn Bn‐‐up upby by49% 49% Export Exportorder orderinflows inflowsRs Rs40 40Bn Bn Order Orderbacklog backlogRs Rs247 247Bn Bn Gross GrossSales Salesgrowth growthof of12% 12% Improvement Improvementin inoperating operatingmargins ma
Slide 6: Strong Growth in New Orders in FY06
Strong Growth in New Orders in FY 06 223.18 250 CAGR 27% 200 149.76 130.83 150 107.83 Rs. Billion 100 50 0 '2002-03 '2003-04 '2004-05 '2005-06 E&C Electricals Others 25th May, 2006 Larsen & Toubro Limited 6
Slide 7: Modest Revenue growth in FY06
Modest Revenue growth in FY 06 CAGR 27% 149.94 160 133.62 140 120 98.89 100 73.54 Rs. Billion 80 60 40 20 0 '2002-03 '2003-04 '2004-05 '2005-06 E&C Electricals Others 25th May, 2006 Larsen & Toubro Limited 7
Slide 8: Major Orders Booked during Q4 06
Major Orders Booked during Q4 06 Description Client Rs Bn Critical booster and high pressure compression ONGC 7.76 modules for the Vasai East Development project. New fuel depot project at Kuwait International Kuwait Aviation 5.80 Airport Fuelling Company 520 MW Parbati Hydro Electric Project Stage
Slide 9: Performance Summary
Performance Summary Q4 06 Q4 05 Rs. Billion FY06 FY05 % Change 61.07 59.59 Order Booking 223.18 149.76 49% 46.73 43.03 Gross Sales 148.84 132.55 12% 45.94 42.41 Net Sales 146.53 130.50 12% 1.51 1.24 Other Income ‐Operating / Recurring 3.14 2.91 ‐ Others 2.32 4.07 47.45 43.65 Total Net Revenue 151.99
Slide 10: Performance Summary
Performance Summary Q4 06 Q4 05 Rs. Billion FY 06 FY 05 % change 6.94 5.31 PBDIT (w/o gain on divestitures) 14.25 10.81 32% 14.9% 12.3% PBDIT/ Net Revenue 9.4% 7.9% 0.28 0.17 Interest 0.75 0.54 0.32 0.30 Depreciation 1.15 0.94 6.34 4.84 PBT (w/o gain on divestitures) 12.35 9.33 32% 1.75 1.50 Tax ‐ (
Slide 11: Balance Sheet
Balance Sheet Gross capex at Rs.6.83 Bn Rs. Billion FY 06 FY 05 Decrease in Net Current Assets Rs 6.14 Bn Net Worth 46.40 33.69 Investments and Net current Loan Funds 14.54 18.59 assets include Deferred Tax Liabilities Cash balance of Rs.5.83 Bn 0.78 0.95 Marketable Investments of (Net) Rs
Slide 12: Cash Flow Statement
Cash Flow Statement Rs. Billion 2005‐06 2004‐05 Operating Profit 12.90 9.67 Change in Working Capital 4.09 (5.74) Direct Taxes (Paid) / Refund (3.30) (2.81) Net Cash from Operations 13.69 1.12 Investments in Fixed Assets (6.78) (1.49) Interest (Net) (0.85) (0.62) Investments in Subsidiaries/JVs (1.0
Slide 13: Segmental Performance
Segmental Performance 25th May, 2006 Larsen & Toubro Limited 13
Slide 14: Segmental Net Revenues & EBITDA
Segmental Net Revenues & EBITDA FY 06 Net Revenues FY 05 Elect. Others Elect. Others 7% 8% 6% 10% E&C E&C 83% 86% EBITDA Others Others 12% Elect 9% Elect 14% 17% E&C E&C 71% 77% 25th May, 2006 Larsen & Toubro Limited 14
Slide 15: Engineering & Construction
Engineering & Construction 25th May, 2006 Larsen & Toubro Limited 15
Slide 16: Engineering & Construction Segment
Engineering & Construction Segment Q406 Q405 Rs. Billion FY06 FY05 % chang e Orde r Booking : 46.36 49.70 Dome s tic 158.39 113.60 39% 8.19 3.95 Export 37.84 16.90 124% 54.55 53.65 Tota l 196.23 130.50 50% Ne t Sa le s 32.26 30.66 Dome s tic 98.20 89.31 10% 6.76 6.52 Export 24.60 23.55 4% 39.02 37.1
Slide 17: Engineering & Construction - Sectorwise Order Backlog
Engineering & Construction - Sectorwise Order Backlog Rs Bn 138 165 177 242 100% 17 18 23 24 80% 35 33 60% 35 35 40% 10 10 8 5 21 23 20 25 20% 17 16 14 11 0% '02-03 '03-04 '04-05 '05-06 Process Oil & Gas Power Infrastructure Others •Refineries •Platforms •Generation •Roads , Bridges •Metals & Minera
Slide 18: Electrical & Electronics
Electrical & Electronics 25th May, 2006 Larsen & Toubro Limited 18
Slide 19: Electrical & Electronics Segment
Electrical & Electronics Segment Q4 06 Q4 05 Rs. Billion FY06 FY05 % change 3.74 2.73 Dome stic Sale s 12.46 9.68 29% 0.54 0.35 Exports 1.73 0.97 78% 4.28 3.08 Total Ne t Re ve nue s 14.19 10.65 33% 0.73 0.47 EBITDA 2.39 1.47 63% 17.1% 15.3% EBITDA/Ne t Re ve nue s 16.8% 13.8% Ne t Se gme nt Asse ts
Slide 20: Other Businesses
Other Businesses 25th May, 2006 Larsen & Toubro Limited 20
Slide 21: “Others” Segment
“Others” Segment Q4 06 Q4 05 Rs. Billion FY 06 FY 05 % change 2.62 2.14 Dome stic Sale s 9.44 6.90 37% 0.01 0.01 Exports 0.10 0.08 25% 0.13 0.21 Othe r Income 0.74 0.68 9% 2.76 2.36 Total Ne t Re ve nue s 10.28 7.66 34% 0.63 0.36 EBITDA 1.64 0.96 71% 22.8% 15.3% EBITDA/Ne t Re v. 16.0% 12.5% Ne t Se
Slide 22: Consolidated Financials
Consolidated Financials 25th May, 2006 Larsen & Toubro Limited 22
Slide 23: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account FY 05 FY 06 Rs. Billion L&T Group L&T L&T Group YoY Var. 150.38 Total Income 151.99 170.19 13% 13.67 PBDIT* 14.25 18.46 35% 10.52 Profit before Tax* 12.35 14.72 40% (2.88) Tax Provision (incl. dividend (3.72) (4.47) tax) 7.64 PAT* 8.63 10.25 34% 3.53 Gain on divest
Slide 24: Consolidated Balance Sheet
Consolidated Balance Sheet FY 05 FY 06 L&T Group Rs Billions L&T L&T Group YoY Var. 33.16 Net Worth 46.40 49.64 16.48 1.05 Minority Interest ‐ 1.07 0.02 1.38 Deferred Tax Liability 0.78 1.27 (0.11) 34.54 Loan Funds 14.54 34.99 0.45 70.13 SOURCES 61.72 86.97 16.84 22.15 Net Fixed Assets 16.05 29.74 7
Slide 25: Performance of S&A Companies
Performance of S&A Companies 25th May, 2006 Larsen & Toubro Limited 25
Slide 26: Performance of Subsidiaries – Manufacturing / Services / Construction
Performance of Subsidiaries – Manufacturing / Services / Construction Rs. Billion FY 06 FY 05 % Change Total Income 16.13 10.77 49.82% PBDIT 2.81 1.94 44.99% PAT 1.27 0.89 43.08% Funds Employe d 17.78 11.36 56.54% Growth in revenues mainly contributed by: L&T Infotech Ltd L&T Finance Ltd L&T
Slide 27: Performance of Subsidiaries – Power SPVs
Performance of Subsidiaries – Power SPVs Rs. Billion FY 06 FY 05 % Change Total Income 2.21 1.90 15.76% PBDIT 2.00 1.68 19.31% PAT 0.89 1.24 ‐28.68% Funds Employe d 5.82 6.66 ‐12.64% Above portfolio includes: India Infrastructure Developers Ltd HPL Cogeneration Ltd (HPLCL) HPLCL PAT for FY05
Slide 28: Performance Overview of Associate Companies – Manufacturing
Performance Overview of Associate Companies – Manufacturing Rs. Billion FY 06 FY 05 % Change Total Income 14.74 10.96 45.30% PBDIT 1.91 1.26 52.90% PAT 1.02 0.58 98.70% Funds Employed 5.82 5.16 13.70% Growth in revenues mainly contributed by L&T Komatsu Ltd L&T Case Equipment Pvt Ltd Audco I
Slide 29: Financials of Select Operational SPVs
Financials of Select Operational SPVs Rs. Million L&T ’ s Revenues PBDIT PAT Stake FY06 FY05 FY06 FY05 FY06 FY05 Narmada Infrastructure 80% 312 276 224 203 50 22 Construction Enterprise Ltd. L&T Transportation 100% 204 157 173 122 86 50 Infrastructure Ltd. L&T Western India Tollbridge 100% 96 102 76
Slide 30: L&T Infotech and L&T Finance Performance Review FY 06
Performance Review FY 06 L&T Infotech Limited Rs. Billion FY 06 FY 05 % Change Total Revenues 8.03 5.64 42.3% PAT 0.70 0.46 52.3% PAT / Total Revenues (%) 8.7 % 8.1 % Investment in capacity build up continues Establishment of new centers at Bangalore , Chennai and Mumbai. Employee strength inc
Slide 31: L&T Infrastructure Development Projects Ltd (L&T-IDPL)
L&T Infrastructure Development Projects Ltd (L&T-IDPL) L&T‐IDPL develops projects in the infrastructure sector on a Build‐Own‐Operate‐Transfer mode Helps L&T to leverage E&C opportunities L&T‐IDPL raised equity of Rs 5.5 Bn from a group of financial investors Post money Equity valuation of R
Slide 32: Key Initiatives Opportunities & Outlook
Key Initiatives Opportunities & Outlook 25th May, 2006 Larsen & Toubro Limited 32
Slide 33: Key Initiatives
Key Initiatives Expanding Capacities Hazira manufacturing facility New manufacturing facilities – Coimbatore / Middle East / China Enhancing Capabilities Acquired Valdel and Spectrum to consolidate position in technology space Focus on strengthening competencies required in Oil & Gas ups
Slide 34: Opportunities & Outlook
Opportunities & Outlook Growing Capex plan in Minerals and Metal sector driven by high metal prices and capacity utilization levels Investments in hydro carbon sector encouraged by firm oil prices Thrust on development of new wells and revamp of existing wells More pipeline projects due to n
Slide 35: Opportunities & Outlook
Opportunities & Outlook Increased opportunities in Power sector Five Ultra mega power projects to be awarded. Additional capacity of 61000 MW targeted by March 2012 Thrust on enhancing transmission capacity Increased exports in new technology areas Coal gasifiers, gas to liquid technolog
Slide 36: Larsen & Toubro Limited
25th May, 2006 Larsen & Toubro Limited 36
Slide 37: Details of Other Income (Annexure 1)
Details of Other Income (Annexure 1) Rs. Million FY06 FY05 Hire Income from plant & machinery 27 68 RMC freight and pumping charges 809 655 Commercial leadership fees from IJVs 114 323 Technical Fees 152 23 Other Operational Income 1102 1069 Miscellaneous Income 1245 1133 Dividend from Subsidiaries
Slide 38: PBDIT Computation (Annexure 2)
PBDIT Computation (Annexure 2) Q4 06 Q4 05 Rs Billion FY 06 FY 05 PBT be fore e xtraordinary but incl. gain 6.34 4.84 dive stiture s ( as pe r statutory advt.)# 13.14 12.86 0.32 0.30 Add : De pre ciation (as pe r statutory advt.) 1.15 0.94 0.28 0.17 Add : Inte re st (as pe r statutory advt.) 0.75 0.