Star Cement Ltd. · NSE:STARCEMENT
Star Cement — Q4 FY2020 Earnings Presentation
40 slides from Star Cement's earnings presentation, June 2020
Slide 1: Cover letter to stock exchanges: Investor Presentation
Date:- 06.07.2020 The Listing Department, National Stock Exchange of India Limited Exchange Plaza, C-1, Block-G Bandra Kurla complex, Bandra-East Mumbai-400 051 Stock code: STARCEMENT BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai-400 001 Stock code: 540575 Dear Sir, Subject: Investor Pre
Slide 2: Star Cement Limited Investor Presentation
Star Cement Limited (SCL) Investor Presentation Cementing growth. Branding success. BSE Scrip code: 540575 NSE Scrip code: STARCEMENT June 2020
Slide 3: Disclaimer
Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context
Slide 4: We are expanding the growth horizon and creating a differential
From North GrowthEast to East to Efficiencies From Commodity to Brand From Leveraged to Debt-Free From Capacities to Capabilities We are expanding the growth horizon and creating a differential. 02
Slide 5: The Birth of a Star
The Birth of a Star 2001 The Star was born 2005 Operations commenced Largest Cement manufacturer in NER Emerging market player In Eastern India (WB & Bihar) Strategically located Cement Manufacturing Facilities Cement Business operates under SCL & its subsidiaries Star Anti-Rust Cement
Slide 6: Counting the Stars
Counting the Stars ₹ 2227+ ₹ 1841 Crores Crores Largest private Revenue from sector investment operations in in North Eastern Region FY 2019 -20 (NER) $ Highest Market share in NER – biggest pie in the region 10 States Presence $ ~ ₹ 314+ Crores Cash and Cash equivalents $ NER – North Eastern Region
Slide 7: The Star Bandwidth
The Star Bandwidth 33.23% 66.77% Public Star Cement Ltd. (Formerly Cement Promoters Manufacturing Company Ltd.) (‘SCL’) 100% 51% 87.5% 12.5% Megha Technical & Engineers Star Cement Meghalaya Ltd. Meghalaya Power Ltd. Pvt. Ltd. (‘MTEPL’) (‘SCML’) (‘MPL’) 05
Slide 8: Strong NER Roots
Strong NER Roots Promoters have strong links with NER - a crucial factor behind SCL’s success Mr. Sajjan Bhajanka, Mr. Rajendra Mr. Sanjay Agarwal, Mr. Prem Kumar Chamaria, Bhajanka, Chairman & Managing Managing Director Director Vice Chairman & Director Managing Director Experience Experience Gradu
Slide 9: Professional Management
Professional Management Key Management personnel running the organization in a very professional manner Mr. Pankaj Kejriwal, Mr. Sanjay Kr. Gupta, Mr. Manoj Agarwal, Mr. G.M. Krishna, Director Chief Executive Officer Chief Financial Officer Chief Manufacturing Officer Education Education & Experienc
Slide 10: Journey of a Star
Journey of a Star Cumulative capacities at the end of financial years Clinker (MMT) FY 10-11 FY 18-19 FY 04-05 FY 07-08 0.80 FY 12-13 2.80 0.40 0.60 2.60 Cement (MMT) FY 07-08 FY 16-17 FY 04-05 FY 12-13 4.30 1.06 0.40 3.00 FY 10-11 FY 15-16 1.27 3.70 FY 12-13 FY 14-15 Power (MW) FY 09-10 30 8 51 08
Slide 11: What Makes Star Cement Tick?
What Makes Star Cement Tick? Dependable Strategic Location, Well-established Adequate plant raw material Beneficiaries of brand in NER with Proximity to Raw capacities to cater source and easy fiscal incentives strong consumer Materials & Market to the market availability of focus in WB & BH power S
Slide 12: Location Advantage: The Game Changer
Location Advantage: The Game Changer Arunachal Pradesh Sikkim Itanagar Gangtok 110 kms Siliguri Dispur Assam Nagaland (Guwahati) 220 km Kohima Patna Shillong Our strategically located Bihar Meghalaya plants cater to the Imphal Eastern & North Eastern Manipur Regions, giving us strong customer Aizawl
Slide 13: The Star Logistics Edge
The Star Logistics Edge Limestone mines are located within 2-3 kms of our plants, providing strong raw material linkage, easy accessibility and uninterrupted supply of raw material When compared to peers, our strategically located plants cater to the Eastern & North Eastern Regions, helping us o
Slide 14: The Star Logistics Edge
The Star Logistics Edge Untapped NER and Eastern markets have strong potential for further growth Over the last few years, cement arrivals in NER from mainland players has come down to 16% from 30% - owing to strong location advantage for the existing players in NER Strong entry barriers for n
Slide 15: The Star Fiscal Edge: Financial Incentives
The Star Fiscal Edge: Financial Incentives SCL’s plants enjoy the following fiscal benefits granted by the Government Exemption Balance Exemption period** SCML SCL-GGU SCL-LMS MPL 100% under Section 80 Income Tax IE, subject to MAT ≈ 2 years ≈ 2 years - ≈ 3 years IGST / CGST on Clinker 29% / 58% ≈ 3
Slide 16: The Mark of a Star: Branding Success
The Mark of a Star: Branding Success For Star, cement is not merely a commodity and therefore, we do not sell cement, rather we build and sell brands Star as a Brand have a very high recall value, enabling repeat customers STAR CEMENT is the most preferred brand in NER and is witnessing consis
Slide 17: Awards and Accolades
Awards and Accolades Certification of Appreciation Award for ”Best Practices in Award for ‘Most preferred ET NOW – “CSR Leadership from Office of DC, Kamrup Employee Engagement“- Cement brand’ for 5 years Award 2019” in for serving food & water to National HRD Network consecutively at the North Manu
Slide 18: The Star Shines Bright and Strong
The Star Shines Bright and Strong Enjoys a leadership position in the North East with market share of more than 23% Gradually increasing share in the Eastern region through concerted efforts Strong dealer and distributor network built over the years, steering year-on-year growth, enabling lead
Slide 19: Marketing the Star Brand
Marketing the Star Brand Innovative strategy, large distribution network, pioneering initiatives Pioneers in initiating distribution through direct network, i.e. Dealers rather than C&F agents in NER Building the Brand aggressively and innovatively in the markets of West Bengal & Bihar Consume
Slide 20: Marketing the Star Brand
Marketing the Star Brand Innovative strategy, large distribution network, digital initiatives Technical assistance to retail consumers to ensure better connect - drives demand and builds brand confidence Value-enhancing technical marketing for customers On-site technical support to customers thr
Slide 21: Retail-driven Marketing strategy
Retail-driven Marketing strategy Distribution network spread across 10 states Distribution Network While our peers adopted the wholesaler Retailers >9,000 model, we have built on our strong network Dealers >2,100 of partners over the last decade The result – Deeper penetration, greater Robust
Slide 22: Opportunities Beckon… and Star's Journey Continues
Opportunities Beckon… and Star’s Journey Continues 20
Slide 23: East India: Huge Untapped Potential
East India: Huge Untapped Potential Total Capacity (MMT) Total Production (MMT) and capacity utilization (%) 80 72 74 60 100 70 66 50 95 50 48 58 44.3 90 60 53 41 49 85 37 38.7 85 50 45 40 84 36 43 31 33 80 80 37 29 76 40 34 30 77 73 75 71 30 67 67 67 70 20 20 65 10 60 10 55 0 0 50 FY 10FY 11FY 12FY
Slide 24: East India: Huge Untapped Potential
East India: Huge Untapped Potential Per capita cement consumption in East is the lowest, Per Capita cement thus underlining huge potential for growth consumption (kgs) North Housing shortage in Urban India - Of the total housing Housing shortage in Urban & Rural shortages in urban India, East alone
Slide 25: North East Region: An Expanding Opportunity Landscape
North East Region: An Expanding Opportunity Landscape 8 states with abundant Separate Ministry for the Region – Natural Resources Doner (Development of North Eastern Region) to Limestone, Coal, Dolomite, Quartz, Granite, Sandstone, Shale boost development Central government’s infrastructure developm
Slide 26: North East Region: Opportunities Galore
North East Region: Opportunities Galore 12 11 11.3 11.3 11.3 11.3 11.3 Five-year 2007- 2012- 2017- 10 Plans 2012 2017 2022 10 9 9.4 8.8 NER Cement 7.9 Capacity (Mn 8 7 7 7.1 7.2 6.3 6.6 Tons) NER GDP 5.8 6.0 10% 13.7% 16.4% 6 5.4 Growth NER Cement 4 Demand (Mn Tons) NER Per 2 Capita 8.6% 12.4% 15.2%
Slide 27: The Star is Set to Shine Brighter: More Frontiers of Growth
The Star is Set to Shine Brighter: More Frontiers of Growth Further growth in high potential areas by leveraging operational and financial efficiencies Seize the growth opportunities in NER, Eastern Region – partner the government's initiatives to boost infrastructure Strengthen and expand dea
Slide 28: The Numbers Speak: Successful Financial Track Record
The Numbers Speak: Successful Financial Track Record In ₹ Crores 2016-17 2017-18 2018-19 2019-20 Q4 FY 19 Q4 FY 20 Net Operating Revenue 1,552 1,629 1,826 1,841 532 549 C O N S O L I D AT E D F I N A N C I A L S EBIDTA 411 526 455 424 130 132 EBIDTA Margin (%) 26.89% 32.56% 24.90% 23.02% 24.47% 24.0
Slide 29: Performance Anatomy
Performance Anatomy Net Revenue ₹ Cr. + 3% +1% 549 532 1826 1841 Q4 FY 19 Q4 FY 20 YTD FY 19 YTD FY 20 06 27
Slide 30: Performance Anatomy
Performance Anatomy PAT ₹ Cr. -5% -5% 90 299 286 86 Q4 FY 19 Q4 FY 20 YTD FY 19 YTD FY 20 • Reduction in PAT was due to mainly due increase in fuel cost 28
Slide 31: Performance Anatomy
Performance Anatomy Power & Fuel cost analysis ₹/t +35% +21% 1225 1205 989 905 YTD FY 19 YTD FY 20 Q4 FY 19 Q4 FY 20 • Increase in fuel cost has been due to higher usage of outside coal 29
Slide 32: Performance Anatomy
Performance Anatomy Freight & Forwarding Cost ₹/t -6% -13% 1270 1195 1393 1233 YTD FY 19 YTD Dec FY 20 Q4 FY 19 Q4 FY 20 • Freight Cost has been optimized due to improved road condition & better availability of vehicles 30
Slide 33: CSR – Assam, Meghalaya & West Bengal
CSR – Assam, Meghalaya & West Bengal HEALTH & SANITATION ❖ Around 6000 people of Lumshnong and Umsahi village are involved in Waste Management project ❖ Drinking water project is benefited 15000 people in Lumshnong area. Drinking water system installed 5 LP schools of Mohit Nagar area and also exten
Slide 34: CSR – Assam, Meghalaya & West Bengal
CSR – Assam, Meghalaya & West Bengal EDUCATION ❖ Dance Class started at Kala Mandir- Art & Music school in Mohit Nagar ❖ Procurement for students support program of LP to Higher Secondary is completed i.e. dictionary, encyclopedia, copy book, class room kit,etc ❖ Kits like Cricket Set, Foot ball, ba
Slide 35: Covid-19 Related Actions
Covid-19 Related Actions Prevention of outbreak from COVID-19 Routine Hygiene and Cleanliness Social Distancing Safety Measures General Administration Plant Quarantine CSR Contribution towards COVID 33
Slide 36: Covid Related Actions- GGU and LUMS
Covid Related Actions- GGU and LUMS Routine Hygiene and Cleanliness V Body temperature screening of All inbound vehicles / machineries Disinfection/ Sanitization of all every individual before each entry/ disinfected on gate sections of plant exit. Touch free (Foot operated) hand Cleaning of all W
Slide 37: Covid Related Actions- GGU and LUMS
Covid Related Actions- GGU and LUMS Occupancy in bus / winger Places earmarked at Co-op Social distancing of minimum restricted to 40% of pass- Only two personnel are being Store, Milk DC and Plant 1.5m enger capacity with social allowed in lift. Canteen for social distancing. distancing Address of
Slide 38: Covid Related Actions- GGU and LUMS
Covid Related Actions- GGU and LUMS General Administration V Providing essentials like Providing consumables items Providing Grocery fortnightly Vegetables & Fruits twice in a like Vegetables & Fruits twice for employees and for week at Staff Colony in a week at Shyam Colony contractual workers. P
Slide 39: CSR during Covid (Assam, Meghalaya & WB)
CSR during Covid (Assam, Meghalaya & WB) Food Security & Sanitizers V Food Security program : Food pkts Sanitizers prepared in-house and distribution to families. Bengal-9000, distributed among 5000 people Meghalaya-7000 Assam-5500. including police. Face Masks Face masks were prepared by In Megha
Slide 40: Thank You
Thank You Mr. Sanjay Kr. Gupta investors@starcement.co.in www.starcement.co.in