Ultratech Cement Limited · NSE:ULTRACEMCO

Ultratech Cement — Investor Presentation (February 2016)

65 slides from Ultratech Cement's investor presentation, Feb 18, 2016

  1. Slide 1: Intimation of Investor Conference letter to BSE and NSE

    18 February, 2016 BSE Limited Corporate Relationship Department Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001. Tel.: 22721233/4 Fax: 022 2272 2039/3121 Scrip Code: 532538 Dear Sir, Ultratech ADITYA BIRLA The\Manager Department tional Stock Exchange of India Limited “Exchakge Plaza”, Bandra

  2. Slide 2: India's Largest Cement Company - Corporate Dossier

    INDIA'S LARGEST CORPORATE CEMENT DOSSIER COMPANY Stock code: BSE: 532538 NSE: ULTRACEMCO Reuters: UTCL.NS Bloomberg: UTCEM IS / UTCEM LX

  3. Slide 3: Contents

    Contents ADITYA BIRLA OPERATIONAL ECONOMIC INDIAN CEMENT ULTRATECH GROUP- AND FINANCIAL ENVIRONENT SECTOR LANDSCAPE OVERVIEW PERFORMANCE GLOSSARY Mnt – Million Metric tons Lmt – Lakhs Metric tons MTPA – Million Tons Per Annum Q2 – July-September Q3 – October-December 9M – April-December H1 – April –

  4. Slide 4: Aditya Birla Group - Overview

    ADITYA BIRLA GROUP - OVERVIEW

  5. Slide 5: Aditya Birla Group

    Aditya Birla Group Premium global US$ ~41 billion Corporation conglomerate In the League of Fortune 500 Operating in 36 countries with over 50% Group revenues from overseas Anchored by about 120,000 employees from 42 nationalities Ranked 4th in global top companies for leaders and 1st in Asia Pacifi

  6. Slide 6: UltraTech Cement

    UltraTech Cement India’s largest cement company India’s Largest No. 1 RMC player in Market Cap FY15 Consolidated Cement Selling Brand India with > 100 plants of ~US$ 11 Bn Revenue ~US$ 4.0 Bn Different Products to provide complete No.1 Player of White About 1,000 million ~ 43,000 Direct & Building S

  7. Slide 7: UltraTech Cement - Building Products Portfolio

    UltraTech Cement Building Products Portfolio Complete Building Solutions under one Umbrella 6

  8. Slide 8: UltraTech Journey

    UltraTech Journey UTCL Share Price Trend BSE Sensex Trend 68 MTPA 10x Current Mkt Cap – US$: 11 Bn 5x 52 MTPA - Acquisition in progress: 2011 4.9 MTPA Aug'04 Mar'08 Mar'11 Mar'14 Current Mkt Cap – - Acquisition completed: US$ :7 Bn 4.8 MTPA 42 MTPA - Commissioned 2008 brownfield projects - 7.9 - Org

  9. Slide 9: Governance

    Governance Board of Directors Non-Executive Independent Executive / Non- Executive Chairman Directors Directors Mr. K M Birla Mr. R C Bhargava Mrs. Rajashree Birla Mr. G M Dave Mr. O P Puranmalka - MD Mr. S B Mathur Mr. Dilip Gaur - DMD Mr. Arun Adhikari Mr. Rajiv Dube Mrs. Renuka Ramnath Mr. D D Ra

  10. Slide 10: Governance (contd..)

    Governance (contd..) STRONG GOVERNANCE PLANNING OPERATIONS REPORTING COMPLIANCE STRONG PROCESS STRATEGY INTEGRITY TALENT RISK GOVERNANCE Audit Committee: All members - Independent Directors Nomination & Remuneration: Majority members – Independent Directors Stakeholders Committee: Majority members –

  11. Slide 11: Management Team

    Management Team Mr. O. P. Puranmalka- Managing Director - Mr. Puranmalka is a veteran of Indian Cement Industry with over 35 years of rich experience in the domain of marketing, technical and overall strategy of cement business of group. Under his leadership the company has forayed into areas such a

  12. Slide 12: Shareholding Pattern

    Shareholding Pattern Other Public GDRs, 1.7% As on 31st Dec,2015 Mutual Fund, Holding, 10.2% Insititutions, 7.4% Foreign Portfolio Investors, 18.9% Promoter Group, 61.7% Promoter Group Non-promoter Shareholding > 1% Name Holding % Name Holding % Grasim Industries Limited 60.25% Aberdeen 4.08% Turquo

  13. Slide 13: Economic Environment

    Economic Environment

  14. Slide 14: Macro Indicators

    Macro Indicators … taking towards good growth cycle Government- Continuous Focus on Improving Macro Indicators improving business sentiments GDP for H1 16: 7.2% and likely for Proposal for GST - simplification FY16 7.4% of tax structures World Bank forecast FY17 – 7.8% and Relaxation in FDI policies

  15. Slide 15: Indian Cement Sector

    Indian Cement Sector

  16. Slide 16: Indian cement industry - Overview

    Indian cement industry Overview GLOBAL CEMENT CONSUMPTION Second largest market Globally with capacity of ~ 404 mtpa after China (~ 2400 MTPA). 7% India Asia (Excl. China, India) 17% Europe & Others America (Excl. USA) 2nd fastest-growing cement market globally: 57% 8% USA Compounded Average Growth:

  17. Slide 17: Indian cement industry - Overview (contd)

    Indian cement industry Overview (contd…) PER CAPITA CEMENT COSNUMPTION (KG) Per Capita Cement Consumption at 200 kg lowest among the developing countries; 1780 World average ~ 580 Kg China Turkey Vietnam Consolidation in industry at regular intervals 830 World 660 580 470 Russia 355 Entry of new pla

  18. Slide 18: GDP growth v/s cement demand growth

    Indian cement industry GDP growth v/s cement demand growth Long-term average cement demand 14 growth: 1.2x of GDP 12 +ve co‐relation Cement volume growth has been weak 10 (‐) ve in past 3-4 years, led by a slowdown in co‐relation 8 infra, commercial and housing 6 However, …sustained cement consumpti

  19. Slide 19: Demand-supply trend

    Indian cement industry Demand-supply trend In MnT Incremental Supply - 188 mnt > Demand - 92 mnt S - 32 mnt < D - 50 mnt 145 120 392 409 421 424 Industry capacity doubled in last decade 357 368 319 304 283 303 276 264 241 247 255 229 216 203 214 198 164 178 Around 70 million tonnes capacity added in

  20. Slide 20: Demand growth drivers

    Demand growth drivers Rapid Urbanisation (28.7% in 2005 to 40% in 2030) Housing Number of Cities(population of 1Mn.+) to grow from 33(2005) to 68(2030) (~60- ~65%) Five year plan, housing requirement of 74 Million units Rural demand rising, additional boost from urban housing on softening of interes

  21. Slide 21: Sector guidance

    Sector guidance Industry to witness strong demand growth ahead …in line with average historical multiple of GDP  Demand to improve with government focusing on investment & infrastructure revival and various reforms:  New Government plan by 2022 –  Housing for all: 20 ml Houses for urban areas and

  22. Slide 22: Sector guidance (contd)

    Sector guidance … (contd…) Capacity addition pace slowing down…. Leading towards improvement in utilization  Expected capacity addition: FY16 – FY18 ~ 32 million tonnes  Incremental demand: FY16- FY18 ~ 50 million tonnes  Setting up new Cement Capacity becoming more challenging due to :  Tougher

  23. Slide 23: UltraTech Landscape

    UltraTech Landscape

  24. Slide 24: UltraTech - A snapshot

    UltraTech - A snapshot Particulars UOM Dec’15 Growth Capacity Domestic Capacity increased by 10 fold since Grey Cement - Domestic Mtpa 64.7 FY98 to 64.7 Mtpa. Total Capacity 67.7 Mtpa - Overseas Mtpa 3.0 Proven Capabilities to Grow Organically 35 Mtpa White Cement Mtpa 0.6 and Inorganically 25 Mtpa.

  25. Slide 25: UltraTech - India Footprint

    UltraTech - India Footprint 12 Integrated Units 14 Grinding Units 6 Bulk Packaging Terminals (Sea+Rail) Bhatinda Panipat 2 White Cement & Putty Units Jhajjar Dadri 5 Jetties KCW Aligarh BW Patliputra 2 ICU Under Acquisition AC 2 GU & 1 BT In-Progress Sewagram Wanakbori Bela VC BW Sidhi WBCW MGD Dank

  26. Slide 26: Operational and Financial Performance

    Operational and Financial Performance

  27. Slide 27: Economy Update Q3 2015-16

    Economy Update Q3 2015-16 Macro Performance  Industrial Production YTD Nov’15: 3.9% (2.5% in LY)  CAD up from 1.2% in Q1 to 1.6% in Q2  WPI inflation decline 2.2% over LY  Crude oil prices declined 70% since Jan’14 Sector Performance  Estimated Growth ~ 4.5%  Capacity utilisation ~ 65%  Weak

  28. Slide 28: Company Update

    Company Update  The Competition Appellate Tribunal set aside the CCI order and given CCI case timelines of three months to CCI for fresh order.  Construction work for grinding in Bihar and Maharashtra on track Projects Update Commissioning by Mar’16 (Capacity: 1.6 mtpa each) WHRS  Share in total

  29. Slide 29: Q3 - Encouraging performance

    Q3 – Encouraging performance YoY Change  Domestic Cement Sales Volume 11.26 Mnt + 7%  Average Realisation (Indian Operations) ` 4,866/t Flat  Petcoke Consumption 74% + 23% (-) 17%  Energy Cost ` 824/t Efficiency Gain – 5% 28

  30. Slide 30: Q3 - Encouraging performance

    Q3 – Encouraging performance  Adjusted Consolidated EBIDTA* ` 1308 Crs + 24%  EBIDTA Margin* 21% + 300 bps  Profit after tax** ` 601 Crs + 50% ` 4,254 Crs  Net Debt (-) ` 1000 Cr as on 31.12.15 * EBIDTA and Operating Margin before the impact of Bonus Act and MMDR Act ** Before the onetime impact

  31. Slide 31: Performance Q3 2015-16

    Performance Q3 2015-16

  32. Slide 32: Sales performance

    Sales performance Grey Cement Sales UTCL Consolidated Performance Particulars CY LY % Industry UTCL Domestic Sales Capacity (mtpa) 67.7 63.2 7 7.1% Cap utilisation 72% 72% - Grey Cement Sales (Mnt): 5.4% 5.0% Q3 12.4 11.8 5 4.5% * 9M 36.8 35.4 4 1.6% White Cement & Putty Sales (Lmt): 0.9% Q3 3.4 3.

  33. Slide 33: Operational Performance

    Operational Performance Cost composition (Grey Cement) Logistics Cost Q3 16 Q3 15 19% Energy Cost 17% 34% 32% 3% 3% 4% 5% Raw Materials 14% 14% Packing 26% 29% Maintenance & Others Overheads Logistics cost remained range bound: ` 1089/t  Benefits of softening oil prices partially arrested with incr

  34. Slide 34: Logistics cost trends

    Logistics cost trends (Indian Operations) Logistics Cost `/t 1093 1089 4% 1089 QoQ Like-for-like Logistics cost declined 4% 46 Railway Busy  Lead distance improved (` 31/t) Season Surcharge  Advantage of optimization of plant and 1043 market mix (` 15/t) YoY movements Q3 15 Q2 16 Q3 16  Reduction

  35. Slide 35: Energy cost trends

    Energy cost trends (Indian Operations) Improved Energy Cost: 17% YoY and Energy Cost `/t Sequentially: 9% 994 909 Saving in power costs: 17% 824  Increase usage of WHRS power to 5%  Saving in power consumption 2%  Increased petcoke usage in TPP Q3 15 Q2 16 Q3 16 and declined fuel prices Fuel Pric

  36. Slide 36: Raw Materials cost trends

    Raw Materials cost trends (Indian Operations) Raw Materials Cost `/t  YoY: Like-for-like Raw Material costs 493 improved 5% 49 DMF Levy 466  Softening prices of additives and 459 28 raw mix optimisation DMF Levy 5% 444 438  Sequentially cost improved 5%  Last quarter included prior period impact

  37. Slide 37: Financial Performance Indicators

    Financial Performance Indicators (Consolidated) Net Sales (` crs) Operating EBIDTA* (` crs) Q3 15 Q3 16 9M 15 9M 16 Q3 15 Q3 16 9M 15 9M 16 18430 1192 6108 +16% +13% 3451 +5% +5% 5832 1024 17539 3043 * Excluding Other Incomes Indian operations capacity utilisation at 70% on a higher base  UAE opera

  38. Slide 38: Income statement (Standalone)

    Income statement (Standalone) ` crs Q3 9M Particulars CY LY % CY LY % 11.26 10.51 7 Domestic Cement Sales Volume 33.73 31.87 6 5747 5488 5 Revenue 17405 16514 5 53 33 62 Other Income 197 320 (38) 1176 990 19 EBIDTA 3461 3205 8 20% 18% 2 Margin (%) 20% 19% - 126 154 18 Finance Costs 394 398 1 324 2

  39. Slide 39: Operating and Total EBIDTA per tonne

    Operating and Total EBIDTA ` pmt (Indian Operations) 1121 14% 1056 42 992 1009 996 973 931 46 178 893 81 81 77 876 39 1079 69 29 928 950 896 878 911 892 824 847 FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 FY15 Q1FY16 Q2FY16 Q3FY16 Operating Profit Other Income Total EBIDTA YoY Total EBIDTA pmt improved 14% ; S

  40. Slide 40: Income statement (Consolidated)

    Income statement (Consolidated) ` crs Q3 9M Particulars CY LY % CY LY % 6108 5832 5 Revenue 18430 17539 5 53 34 57 Other Income 180 298 (40) 1245 1058 18 EBIDTA 3631 3341 9 20% 18% 2 Margin (%) 20% 19% 1 139 164 15 Finance Costs 433 427 (1) 339 296 (14) Depreciation 992 897 (11) 767 598 28 PBT 220

  41. Slide 41: Financial Position

    Financial Position ` Crs Standalone Consolidated Particulars 31.12.15 31.03.15 31.12.15 31.03.15 20364 18858 Shareholders Funds 20642 19041 - - Minority Interest 15 18 6110 7414 Loans (Incl. Current Maturities) 8526 9829 3140 2792 Deferred Tax Liabilities 3133 2786 29614 29064 Sources of Fund 32316

  42. Slide 42: Financial Indicators

    Financial Indicators Standalone Consolidated Indicators 31.12.15 31.03.15 31.12.15 31.03.15 Shareholders fund (` crs ) 20364 18858 20642 19041 Net Debt (` crs ) 1838 2935 4254 5195 Financial Indicators Net Debt: Equity 0.09 0.16 0.21 0.27 Net Debt / EBIDTA 0.40 0.64 0.88 1.09 Interest Cover (PBIT/Gr

  43. Slide 43: Historical Performance Trend

    Historical Performance Trend

  44. Slide 44: Production trends

    Production trends (Consolidated) Clinker production Cement production (Million tonnes) (Million tonnes) 38.31 46.71 42.11 42.59 43.60 34.17 34.01 33.69 36.31 28.47 FY 12 FY 13 FY 14 FY 15 9MFY16 FY 12 FY 13 FY 14 FY 15 9MFY16 43

  45. Slide 45: Grey cement cost trends

    Grey cement cost trends (Indian Operations) Raw Material Cost Logistics Cost (`/Mt) (`/Mt) 1103 469 1075 444 419 976 399 925 348 819 FY 12 FY 13 FY 14 FY 15 9M FY16 FY 12 FY 13 FY 14 FY 15 9M FY 16 Mix FY12 FY13 FY14 FY15 9M’ 16 Rail 36% 34% 34% 29% 28% Road 61% 63% 62% 67% 69% Input material prices

  46. Slide 46: Grey cement cost trends (Contd..)

    Grey cement cost trends(Contd..) (Indian Operations) Energy Cost (`/Mt) 1006 989 Fuel Mix FY12 FY13 FY14 FY15 9M’16 979 951 10% Imported 44% 35% 26% 26% 20% Coal 878 Petcoke 26% 38% 48% 52% 69% Ind. Coal & 30% 27% 26% 22% 11% Others FY 12 FY 13 FY 14 FY 15 9M FY16 Comparative Cost Trend TPP / WHRS T

  47. Slide 47: Financial performance trends

    Financial performance trends (Consolidated) Revenue EBIDTA (` Cr) (` Cr) 5143 24065 4777 21161 21443 4565 4358 19077 18430 3631 2012 2013 2014 2015 9M FY16 2012 2013 2014 2015 9M FY16 46

  48. Slide 48: Historical Performance Trends (Standalone)

    Historical Performance Trends (Standalone) ` Crs Particulars FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 Total Sales Volume (MnT) 44.8 41.5 40.7 40.7 34.8 20.2 18.2 17.1 17.7 15.6 Net Sales 22648 20078 20023 18158 13206 7050 6383 5509 4911 3299 Operating Expenses 18453 16260 15347 14011 10540

  49. Slide 49: Historical Performance Trends (Standalone) Contd.

    Historical Performance Trends (Standalone) …Contd. ` Crs Particulars Mar’15 Mar’14 Mar’13 Mar’12 Mar’11 Mar’10 Mar’09 Mar’08 Mar’07 Mar’06 BALANCE SHEET Net Fixed Assets incl. CWIP 23632 18650 17415 14798 12506 5201 5313 4784 3214 2678 Investments 5209 5392 5109 3789 3730 1670 1035 171 483 172 Net W

  50. Slide 50: Quarterly Performance Trends (Standalone)

    Quarterly Performance Trends (Standalone) ` Crs Particulars Q3FY16 Q2FY16 Q1FY16 Q4FY15 Q3FY15 Q2FY15 Q1FY15 Q4FY14 Q3FY14 Q2FY14 Total Sales Volume (MnT) 11.47 10.77 12.14 11.81 10.98 10.35 11.70 12.18 9.98 9.22 Net Sales 5747 5621 6037 6133 5488 5379 5648 5832 4783 4503 Operating Expenses 4625 463

  51. Slide 51: Quarterly Performance Trends (Standalone) Contd.

    Quarterly Performance Trends (Standalone) …Contd. ` Crs Particulars Dec’15 Sep’15 Jun’15 Mar’15 Dec’14 Sep’14 Jun’14 Mar’14 Dec’13 Sep’13 BALANCE SHEET Net Fixed Assets incl. CWIP 24315 24237 23969 23632 23265 22811 22384 18650 18277 18027 Investments 5002 4698 5212 5209 5151 4935 5138 5392 4983 508

  52. Slide 52: Disclaimer

    Disclaimer 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 implied. Impor

  53. Slide 53: UltraTech - The Engineer's Choice

    Ultralech ; The Engineer's Choice Build beautiful

  54. Slide 54: Annexures

    Annexures

  55. Slide 55: Quarterly Performance Trends (Consolidated)

    Quarterly Performance Trends (Consolidated) ` Crs Particulars Q3FY16 Q2FY16 Q1FY16 Q4FY15 Q3FY15 Q2FY15 Q1FY15 Q4FY14 Q3FY14 Q2FY14 Total Sales Volume (MnT) 12.4 11.5 13.0 12.8 11.8 11.2 12.4 13.0 10.8 10.0 Net Sales 6108 5951 6371 6516 5832 5721 5987 6186 5137 4849 Operating Expenses 4916 4893 5170

  56. Slide 56: Quarterly Performance Trends (Consolidated) Contd.

    Quarterly Performance Trends (Consolidated) …Contd. ` Crs Particulars Dec’15 Sep’15 Jun’15 Mar’15 Dec’14 Sep’14 Jun’14 Mar’14 Dec’13 Sep’13 BALANCE SHEET Net Fixed Assets incl. CWIP 25938 25841 25541 25186 24789 24286 23821 20090 19771 19535 Goodwill 1106 1097 1072 1053 1061 1046 1024 967 906 916 In

  57. Slide 57: Historical Performance Trends (Consolidated)

    Historical Performance Trends (Consolidated) ` Crs Particulars FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 Total Sales Volume (MnT) 48.2 44.7 43.6 44.0 36.9 20.1 18.4 17.3 17.2 15.0 Net Sales 24056 21443 21161 19077 13687 7175 6564 5623 4968 3384 Operating Expenses 19630 17408 16322 14884 1099

  58. Slide 58: Historical Performance Trends (Consolidated) Contd.

    Historical Performance Trends (Consolidated) …Contd. ` Crs Particulars Mar’15 Mar’14 Mar’13 Mar’12 Mar’11 Mar’10 Mar’09 Mar’08 Mar’07 Mar’06 BALANCE SHEET Net Fixed Assets incl. CWIP 25186 20090 18733 15999 13505 5218 5334 4801 3234 2700 Goodwill 1053 967 734 544 471 6 6 8 9 10 Investments 4655 4862

  59. Slide 59: Income statement (Standalone) US$

    Income statement (Standalone) US$ Mn Q3 9M Particulars CY LY % CY LY % 871 831 5 Revenue 2637 2502 5 8 5 62 Other Income 30 48 (38) 178 150 19 EBIDTA 524 486 8 20% 18% 2 Margin (%) 20% 19% - 19 23 18 Finance Costs 60 60 1 49 42 (16) Depreciation 142 128 (11) 110 85 30 PBT 322 297 8 33 29 (13) Tax

  60. Slide 60: Income statement (Consolidated) US$

    Income statement (Consolidated) US$ Mn Q3 9M Particulars CY LY % CY LY % 926 884 5 Revenue 2792 2657 5 8 5 57 Other Income 27 45 (40) 189 160 18 EBIDTA 550 506 9 20% 18% 2 Margin (%) 20% 19% 1 21 25 15 Finance Costs 66 65 (1) 51 45 (14) Depreciation 150 136 (11) 116 91 28 PBT 334 306 9 33 30 (12)

  61. Slide 61: Financial Position US$

    Financial Position US$ Mn Standalone Consolidated Particulars 31.12.15 31.03.15 31.12.15 31.03.15 3085 2857 Shareholders Funds 3128 2885 0 0 Minority Interest 2 3 926 1123 Loans (Incl. Current Maturities) 1292 1489 476 423 Deferred Tax Liabilities 475 422 4487 4404 Sources of Fund 4896 4799 3684 358

  62. Slide 62: Historical Performance Trends (Standalone) US$

    Historical Performance Trends (Standalone) US$ Mn Particulars FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 Total Sales Volume (MnT) 44.8 41.5 40.7 40.7 34.8 20.2 18.2 17.1 17.7 15.6 Net Sales 3432 3042 3034 2751 2001 1068 967 835 744 500 Operating Expenses 2796 2464 2325 2123 1597 759 700 564 5

  63. Slide 63: Historical Performance Trends (Standalone) Contd. US$

    Historical Performance Trends (Standalone) …Contd. US$ Mn Particulars Mar’15 Mar’14 Mar’13 Mar’12 Mar’11 Mar’10 Mar’09 Mar’08 Mar’07 Mar’06 BALANCE SHEET Net Fixed Assets incl. CWIP 3581 2826 2639 2242 1895 788 805 725 487 406 Investments 789 817 774 574 565 253 157 26 73 26 Net Working Capital 34 8

  64. Slide 64: Historical Performance Trends (Consolidated) US$

    Historical Performance Trends (Consolidated) US$ Mn Particulars FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 Total Sales Volume (MnT) 48.2 44.7 43.6 44.0 36.9 20.1 18.4 17.3 17.2 15.0 Net Sales 3645 3249 3206 2891 2074 1087 994 852 753 513 Operating Expenses 2974 2638 2473 2255 1665 776 725 579

  65. Slide 65: Historical Performance Trends (Consolidated) Contd. US$

    Historical Performance Trends (Consolidated) …Contd. US$ Mn Particulars Mar’15 Mar’14 Mar’13 Mar’12 Mar’11 Mar’10 Mar’09 Mar’08 Mar’07 Mar’06 BALANCE SHEET Net Fixed Assets incl. CWIP 3816 3044 2838 2424 2046 791 808 727 490 409 Goodwill 160 146 111 82 71 1 1 1 1 2 Investments 705 737 713 537 532 24

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