Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q4 FY2016 Earnings Presentation
43 slides from Grasim Industries's earnings presentation, May 7, 2016
Slide 1: Quarterly Performance Review Q4 2015-16
Quarterly Performance Review Quarter 4 : 2015-16 Mumbai, 7th May, 2016 Grasim Industries Limited Building, Consolidating, Growing
Slide 2: Contents
Contents Highlights 3-6 Financial Results 7 - 10 Business Performance 11 - 17 Capex Plan 19 Business Outlook 20 - 21 Glossary VSF : Viscose Staple Fiber, MT : Metric Ton, TPA : Tons Per Annum, YoY: Year on Year Comparison, CY : Current Year, LY : Last Year, YTD : Year to Date, EBITDA : Ear
Slide 3: Indian Economy
Indian Economy Indian economy is the only large economy reporting healthy growth GDP grew by 7.3% in Q3FY16 Global headwinds though, impacting pace of growth Exports continues to decline due to slowdown in global trade Lower utilisation of capacity and softness in commodity cycle, slowing
Slide 4: Highlights – Quarter 4: VSF Business
Highlights – Quarter 4 VSF Business Leading Price recovery in China post new year holidays in February Global Player 2016 Sales Volume Revenue EBITDA 130K Tons ` 1,729 Cr. ` 267 Cr. (Up by 10% YoY) (Up by 23% YoY) (Up by 176% YoY ) Volume (’000 Tons) 130 121 114 103 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Conti
Slide 5: Highlights – Quarter 4: Chemical Business
Highlights – Quarter 4 Chemical Business (Chlor Alkali, Chlorine Derivatives and Epoxy) Largest Rise in Caustic Soda prices in international and Indian Player domestic markets Caustic Sales Volume Revenue EBITDA 204K Tons ` 957 Cr. ` 229 Cr. (Up by 95% YoY; (Up by 123% YoY ; (Up by 319% YoY; 15% LFL
Slide 6: Highlights – Quarter 4: Cement Business
Highlights – Quarter 4 Cement Business Signs of recovery in demand with ~11.5% growth for Market leader the sector in India - Capacity utilisation for the industry increased to 71% compared to 67% last year Cement Sales Volume Revenue EBITDA 14.3 Mn. Tons ` 6,920 Cr. ` 1,478 Cr. (Up by 14% YoY) (Up
Slide 7: Financial Performance
Financial Performance Standalone ` Cr. Revenue EBITDA Net Profit* 42% 84% 8,980 77% 1,860 982 6,333 47% 174% 1,013 316% 556 2,540 1,733 493 238 180 57 Q4FY15 Q4FY16 FY15 FY16 Q4FY15 Q4FY16 FY15 FY16 Q4FY15 Q4FY16 FY15 FY16 LFL Growth 26% 21% 125% 52% 267% 59% Consolidated Revenue EBITDA Net Profit *
Slide 8: FY16 – The year in perspective
FY16 – The year in perspective….. VSF Pulp JVs Chemical Cement Volume Revenue EBITDA Margin All round Growth Across Businesses 8
Slide 9: Increasing share of Fibre & Chemical business
Increasing share of Fibre & Chemical business FY15 Revenue FY16 ` 32,838 Cr. ` 36,637 Cr. Others 1% Pulp & Pulp & Fibre Fibre 20% 21% Chemical Chemical 5% 9% Cement Cement 74% 70% EBITDA ` 5,683 Cr. ` 7,025 Cr. Others Others 3% Pulp & 1% Pulp & Fibre Chemical 5% Fibre 8% 15% Chemical 11% Cement Ceme
Slide 10: Robust Financial Ratios
Robust Financial Ratios ` Cr. Standalone Consolidated FY 2015-16 FY 2014-15 FY 2015-16 FY 2014-15 12,370 11,183 Net Worth 25,831 23,140 1,839 1,115 Debt 12,841 11,930 403 - Net Debt 4,928 6,140 0.15 - Debt:Equity (x) 0.37 0.39 0.03 - Net Debt: Equity (x) 0.14 0.20 0.22 - Net Debt / EBITDA 0.70 1.08
Slide 11: Business Performance
Business Performance VSF Chemical Cement 11
Slide 12: International Fibres Price Trend
International Fibres Price Trend $/ Kg 2.3 2.1 1.9 1.78 1.7 1.5 1.44 1.3 1.1 0.9 0.95 0.7 VSF Cotton PSF VSF : Improving trend after witnessing decline Improvement in demand with beginning of new season Cotton : Declined slightly during the quarter PSF : Uptick with increase in crude prices
Slide 13: VSF : Performance
VSF : Performance Revenue ( ` Cr.) EBITDA (` Cr.) Sales volume up by 10% 23% Strong demand from domestic segment 176% Higher sale of specialty fibre 1,729 267 Improvement in realisation helped by uptrend in 1,405 global fibre prices 97 Standalone VSF EBITDA up by 176% Q4FY15 Q4FY16 Q4 FY15
Slide 14: VSF : Volume Drivers
VSF : Volume Drivers Q4 FY16 Q4 FY15 36% 28% 64% 72% Normal Fibre Speciality Share of specialty fibre increased from 28% to 36%, on higher base Q4 FY16 Q4 FY15 32% 35% 68% 65% Domestic Exports Increase in proportion of domestic sales from 65% in Q4FY15 to 68% in Q4FY16 14
Slide 15: Pulp & Fibre JVs : Performance
Pulp & Fibre JVs : Performance EBITDA*( ` Cr.) Higher pulp sales volumes, contributed mainly by AV Revenue* ( ` Cr.) 14% Terrace Bay 127% Pulp & Fibre JVs EBITDA more than doubled to ` 75 Cr. 501 572 75 from ` 33 Cr. last year 33 Better DG pulp realisation Q4FY15 Q4FY16 Q4FY15 Q4FY16 Favorab
Slide 16: Chemical : Performance
Chemical : Performance Industry Scenario Revenue ( ` Cr.) EBITDA (` Cr.) Uptick in Caustic Soda prices 123% Lower availability of caustic in domestic markets 351 319% Increase in international prices 89 Business Performance 606 Revenue more than doubled from last year 429 140 55 (LFL up by 4
Slide 17: Cement : Performance
Cement : Performance Industry Scenario Revenue (` Cr.) EBITDA (` Cr.) Significant improvement in demand growth 3% Demand from Govt. initiatives, ‘Housing for All’ 5% 1,478 Volatile cement prices 1,435 6,595 6,920 Business Performance Q4FY15 Q4FY16 Q4 FY15 Q4 FY16 Capacity up by 7% YoY with c
Slide 18: Capex
ri —_ we i Capex 18
Slide 19: Capex plan
Capex plan (` Cr.) Capex Cash Outflow (Net of CWIP Capex spent - FY17 FY18 as on Onward FY16 01-04-16) Standalone Vilayat Caustic Plant Brownfield expansion (144K TPA) 513 VSF : Water supply augmentation & usage reduction 87 Research & Development 76 474 Environment 97 Others 214 Chemical capacity d
Slide 20: Business Outlook
Business Outlook VSF VSF Business Business: Price volatility expected to reduce Limited capacity addition in China leading to higher operating rates Cotton consumption higher than production in Season 15-16; shortfall to be met through auction in China Textile consumption in India expected t
Slide 21: Business Outlook: Cement Business
Business Outlook Cement Business Cement demand expected to grow 7% - 8% for FY17 Cement demand growth drivers : Pick up in cement concrerte roads Development of ports ‘Housing for All’ and rural housing Higher demand from states – New capital city in A.P., development activities in U.P.
Slide 22: Thank You
ri —_ we i Thank You 22
Slide 23: Annexure - Financials
Grasim Industries Limited Annexure - Financials 23
Slide 24: Annexure
Annexure Consolidated Financial Performance Standalone Financial Performance Balance sheet Profitability Trend Revenue & EBITDA Chart VSF Summary Chemical Summary Cement Summary Organisational Structure Plant Locations 24
Slide 25: Consolidated Financial Performance
Consolidated Financial Performance (` Cr.) Quarter 4 % Full Year % 2015-16 # 2014-15 Change 2015-16 # 2014-15 Change Net Sales & Op. Income 10,001 8,817 13 36,637 32,838 12 Other Income 57 110 (48) 336 539 (38) EBITDA 2,059 1,658 24 7,025 5,683 24 EBITDA Margin (%) 20.5% 18.6% 19.0% 17.0% Finance Co
Slide 26: Standalone Financial Performance
Standalone Financial Performance (` Cr.) Quarter 4 % Full Year % 2015-16 # 2014-15 Change 2015-16 # 2014-15 Change Net Sales & Op. Income 2,540 1,733 47 8,980 6,333 42 Other Income 28 51 (44) 282 348 (19) EBITDA 493 180 174 1,860 1,013 84 EBITDA Margin (%) 19.2% 10.1% 20.1% 15.2% Finance Cost 27 13
Slide 27: Balance Sheet
Balance Sheet Standalone Consolidated (` Cr.) 31st Mar'16 31stMar'15 EQUITY & LIABILITIES 31st Mar'16 31stMar'15 12,370 11,183 Net Worth 25,831 23,140 - - Minority Interest 8,484 7,682 1,839 1,115 Borrowings 12,841 11,930 959 615 Deferred Tax Liability (Net) 4,226 3,410 1,815 1,452 Liabilities & Pro
Slide 28: Profitability Trend
Profitability Trend Standalone Consolidated (` Cr.) FY FY FY FY FY FY FY FY 2012-13 2013-14 2014-15 2015-16 2012-13 2013-14 2014-15 2015-16 Net Turnover & Op. Income 5,255 5,604 6,333 8,980 27,909 29,324 32,838 36,637 EBITDA 1,523 1,246 1,013 1,860 6,543 5,491 5,683 7,025 EBITDA Margin (%) 26.8 20.8
Slide 29: Revenue Chart
Revenue Chart (` Cr.) Full Year % Quarter 4 % 2015-16 2014-15 Change 2015-16 2014-15 Change 6,022 4,974 21 Viscose Staple Fibre 1,729 1,405 23 3,436 1,701 102 Chemical 957 429 123 96 89 Others 20 22 (575) (431) Eliminations (Inter Segment) (167) (122) 8,980 6,333 42 Standalone Net Revenue 2,540 1,73
Slide 30: EBITDA – Chart
EBITDA – Chart (` Cr.) Full Year % Quarter 4 % EBIDTA 2015-16 2014-15 Change 2015-16 2014-15 Change 924 465 99 Viscose Staple Fibre 267 97 176 747 292 156 Chemical 229 55 319 189 257 Others (2) 29 1,860 1,013 84 Standalone EBITDA 493 180 174 Subsidiaries 5,109 4,776 7 Cement 1,478 1,435 3 10 33 (71)
Slide 31: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary Quarter 4 % Full Year % 2015-16 2014-15 Change 2015-16 2014-15 Change Capacity* KTPA 125 117 6 498 434 15 Production (in '000s) MT 124 111 11 464 408 14 Sales Volumes (in '000s) MT 130 118 10 467 403 16 Net Revenue ` Cr. 1,729 1,405 23 6,022 4,974 21 EBITDA ` Cr. 267 9
Slide 32: Chemical : Summary
Chemical : Summary Quarter 4 % Full Year % 2015-16 # 2014-15 Change 2015-16 # 2014-15 Change Capacity KTPA 201 113 78 804 453 78 Production (in '000s) MT 209 104 101 756 412 84 Sales Volumes (in '000s) MT 204 105 95 763 409 86 Net Revenue ` Cr. 957 429 123 3,436 1,701 102 EBITDA ` Cr. 229 55 319 747
Slide 33: Cement : Summary
Cement : Summary Quarter 4 % Full Year % 2015-16 2014-15 Change 2015-16 2014-15 Change Grey Cement Capacity Mn. TPA 16.91 15.79 7 67.65 63.15 7 Production Mn. MT 14.25 12.46 14 50.57 46.71 8 Cement Sales Volumes $ Mn. MT 14.31 12.52 14 50.88 47.09 8 Clinker Sales Volumes Mn. MT 0.19 0.26 0.45 1.08 W
Slide 34: Grasim Group Structure
Grasim Group Structure Pulp & Fibre Chemical UltraTech Cement (60.25%) Others VSF VSF JV Pulp Overseas Caustic Epoxy Domestic Overseas 498K TPA China 70K TPA Pulp JVs 840K TPA 51K TPA 3 Mn. TPA, (UAE, Bangladesh, Sri Lanka) Nagda Grey Cement Grasim Nagda Birla Jingwei Harihar AV Cell 270K TPA Bhiwan
Slide 35: Plant Locations– Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bathinda(G) Jhajjar Bhiwani Panipat Dadri T Kotputli Aligarh Jodhpur P T Malanpur Renukoot Shambhupura C Jawad P Katni Sewagram Bharuch Durgapur(G) UltraTech Cement Plants Wanakbori F Jafrabad F C Vilayat C Rehla Dankuni`(G) UltraTech Grinding Units (G) F C
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: Audited Consolidated Financial Results Q4 FY16
AUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31-03-2016 STATEMENT OF CONSOLIDATED AUDITED RESULTS FOR THE QUARTER AND YEAR ENDED 31-03-2016 ` Crore Three Months Ended Year Ended 31-03-2016 31-12-2015 31-03-2015 31-03-2016 31-03-2015 Particulars (Audited) (Unaudited) (Audited
Slide 38: Audited Consolidated Segment Wise Revenue, Results and Capital Employed
AUDITED CONSOLIDATED SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED FOR THE QUARTER AND YEAR ENDED 31-03-2016 ` Crore Particulars Three Months Ended Year Ended 31-03-2016 31-12-2015 31-03-2015 31-03-2016 31-03-2015 (Audited) (Unaudited) (Audited) (Audited) (Audited) (Refer Note 1) (Refer Note 1)
Slide 39: Notes to Financial Results
Grasim Industries Limited NOTES: 1. The figures for the quarter ended 31st March, 2016 and 31st March, 2015 are the balancing figures between the audited figures in respect of the full financial year and published unaudited year to date figures upto third quarter ended 31st December of the respectiv
Slide 40: Notes to Financial Results (continued)
Grasim Industries Limited 6. Tax expense for the year ended 31st March, 2016 are net of provision written back pertaining to earlier years amounting to ` 7.51 Crore ( Previous year ` 2.28 Crore). 7. During the quarter, UltraTech has approved signing of definitive agreements for the acquisition of id
Slide 41: Consolidated Statement of Assets and Liabilities
Grasim Industries Limited 13. Consolidated Statement of Assets and Liabilities as at 31st March, 2016: ` Crore AS AT Particulars 31-03-2016 31-03-2015 (Audited) (Audited) A. EQUITY AND LIABILITIES 1. Shareholders’ Funds (a) Share Capital 93.36 91.87 (b) Share Capital (Other than Equity) 57.98 59.17
Slide 42: Press Release: Building, Consolidating, Growing
Press Release Mumbai, 7th May, 2016 Building, Consolidating, Growing Consolidated Financial Performance Outstanding Performance led by Robust Volume Growth in all Businesses Q4 FY16: Revenue up 13%; EBITDA up 24%; Net Profit up 40% ` Cr. Full year ended Quarter ended 31.03.2016 31.03.2015 31.03.2016
Slide 43: Press Release: Outlook and Cement Subsidiary (UltraTech Cement)
The Board approved ` 513 Cr. for brownfield expansion of Caustic soda capacity at Vilayat plant from 219K TPA to 363K TPA along with a Captive Power plant of 44 MW. The expansion is expected to be completed in around 24 month’s time. On completion of the proposed expansion and debottlenecking of cap