India Cements Ltd. · NSE:INDIACEM
India Cements — The India Cements — Investor Presentation (July 2009)
26 slides from India Cements's investor presentation, July 2009
Slide 1: The India Cements Ltd Corporate Presentation
THE INDIA CEMENTS LTD Corporate presentation July July 2009 2009
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying slides (the “Presentation”), which have been prepared by The India Cements Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any secu
Slide 3: Company Snapshot
Company Snapshot Market leader in South and third largest group in India Banswara 1.5mt ■■ Experienced Experienced cement cement player player with with over over six six decades decades inin business business Parli Malkapur 2.4mt 1.1mt ■■ Third Third largest largest cement cement group group inin I
Slide 4: Meeting Agenda
Meeting Agenda Industry: Strong demand growth absorbing new capacities Business well positioned with new capacities completed Key Strategies Financials Summary 4
Slide 5: Indian Cement Industry Overview
Indian Cement Industry Overview Second largest cement market globally ■■ Second Second largest largest cement cement market market after after China China with with aa capacity capacity of of 225mtpa 225mtpa (CMA (CMA June’2009) June’2009) ■■ Sustained Sustained consumption consumption growth growth
Slide 6: Demand growth continuing with renewed focus on infrastructure
Demand growth continuing with renewed focus on infrastructure… Demand trend – sustained growth YoY Domestic demand Exports (Cement + Clinker) 219 201 184 158 170 133 145 123 Mtpa 104 115 9.2% CAGR* 8.2% CAGR* FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Source: CMA; *CAGR for Domestic demand; P
Slide 7: Absorbing capacities added
…. absorbing capacities added Significant FY09 new capacity absorbed…utilizations improved in Q1 Historically, capacity additions lagged demand growth... ...capacity utilizations remain at high levels Capacity additions Mtpa Inc. demand* mtpa Capacity mtpa Capacity Utilization 27 225 165 179 206 144
Slide 8: Scenario similar in South India
Scenario similar in South India (incl. Maharashtra) Demand growth Domestic demand Exports (Cement + Clinker) 94 84 76 70 63 57 Mtpa 47 51 40 44 10.1% CAGR* 9.1% CAGR FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Source: CMA; Projections for domestic demand at 10% p.a; Assuming FY10 and FY11 expo
Slide 9: Demand supply balance leading to stable pricing environment
Demand Supply balance leading to stable pricing environment Healthy demand reflected in stable prices Trivandrum Chennai Bangalore Hyderabad Mumbai 282 283 283 282 275 275 275 275 275 280 280 277 278 275 275 280 280 280 280 275 277 268 275 278 265 265 275 275 275 275 275 275 263 263 273 273 273 273
Slide 10: Meeting Agenda
Meeting Agenda Industry: Strong demand growth absorbing new capacities Business well positioned with capacities completed Key Strategies Financials Summary 10
Slide 11: Strategically located plants
Strategically located plants Proximity of plants to principal markets Strategically located and ports ■■ 66 of of 99 plants plants located located in in proximity proximity to to deficit deficit markets markets of of Tamil Tamil Nadu Nadu and and Kerala Kerala ■■ Plant Plant locations locations prov
Slide 12: Market leader in South India
Market leader in South India Commissioning of new plants expected to drive increased market share in FY11 Leadership position Strong Marketing & Distribution Market size State Market share Position (Mtpa) Andhra Pradesh 18.0 12.0% 1 Tamil Nadu 15.9 20.1% 1 Karnataka 11.7 11.0% 3 Kerala 7.9 19.8% 1 O
Slide 13: Strong management execution track record
Strong management execution track record ■■ Six Six decades decades of of experience experience ■■ Professional Professional and and experienced experienced management management Experience Experience && ■■ In-depth In-depth understanding understanding and and knowledge knowledge of of market market
Slide 14: Developed a valuable asset – Chennai Super Kings
Developed a valuable asset – “Chennai Super Kings” Brand visibility and recall to provide impetus for expansion into new markets ■■ Acquired Acquired franchise franchise rights rights to to Chennai Chennai Super Super Kings Kings ■■ Structure Structure of of payments payments i.e i.e ~INR ~INR 364mn
Slide 15: Meeting Agenda
Meeting Agenda Industry: Strong demand growth absorbing new capacities Business well positioned with new capacities completed Key Strategies Financials Summary 15
Slide 16: Key strategies so far and going forward
Key strategies so far and going forward… Focus on synergistic capacity growth, geographical diversification and cost leadership Capacity growth (FY09 14.2mtpa) Cost leadership Focus Focus on on brownfield brownfield expansions expansions with with marginal marginal 2007 2007 Continued Continue
Slide 17: Reducing dependency on grid
Reducing dependency on grid Severe power shortages leading to disruptions in production Changing mix towards cheaper and reliable sources of power 100% WHRS CECL 80% % of kwh consumed DG/HFO 60% 40% APGPCL 20% Grid 0% FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 1QFY10 Source: Company ■■ C
Slide 18: Continuous improvement in operating efficiencies
Continuous improvement in operating efficiencies Efficiency in fuel consumption Manpower reduction ….. 850 27% reduction K/Cals per tn of clinker Manpower Strength 826 4,488 in numbers 3,277 FY99 1QFY10 FY03 1QFY10 Source: Company Source: Company …..leading to increase in Reducing power consumption
Slide 19: Sustain utilization levels and maximize contributions
Sustain utilization levels and maximize contributions Ability to operate at high utilization levels Increasing share of blended cement Capacity mtpa Capacity Utilization OPC PPC 103% 77% 99% 96% 88% 84% 60% 72% 74% 66% 12.7 10.4 40% 8.8 8.8 8.8 8.8 8.8 8.9 23% FY03 1QFY10 FY03 1QFY10 Source: Company
Slide 20: Strong focus on production cost
Strong focus on production cost Average production cost per tonne 2,300 2,085 Variable Cost Other Costs Depreciation 2,147 1,879 1,726 1,660 1,587 1,640 1,605 INR / Tonne 1,520 1,246 1,067 1,100 1,109 1,121 1,021 FY03 FY04 FY05 FY06 FY07 FY08 FY09 1QFY10 Source: Company ■■ Strong Strong track track
Slide 21: Meeting Agenda
Meeting Agenda Industry: Strong demand growth absorbing new capacities Business well positioned with new capacities completed Key Strategies Financials Summary 21
Slide 22: Multi-fold increase in profitability
Multi-fold increase in profitability Combination of cost control and higher realizations reflected in bottom-line EBITDA PAT 11,235 10,441 7,443 6,403 4,785 4,305 INR Mn 2,647 2,931 1,524 1,443 1,040 332 415 32 (969) (2,282) FY03 FY04 FY05 FY06 FY07 FY08 FY09 1QFY10 EPS* EPS* -16.44 -7.18 -0.23 1.99
Slide 23: Significant EBITDA improvement
Significant EBITDA improvement Net Realizations and EBITDA per tonne 3,677 EBITDA per tonne Net realization per tonne 3,595 3,285 2,667 2,530 2,342 2,346 INR / Tonne 2,058 2,029 2,081 2,047 1,689 1,733 1,806 1,218 1,145 1,191 883 692 658 559 610 496 341 354 179 239 66 FY97 FY98 FY99 FY00 FY01 FY02 F
Slide 24: Improved leverage ratios
Improved leverage ratios Net Debt / Equity (X) Net Debt / EBITDA (X) 54.2x 9.3x 15.7x 13.5x 20.3x 13.2x 2.4x 1.4x 5.7x 0.6x 0.6x 2.5x 1.2x 1.6x FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Source: Company Source: Company Note: All numbers to FY09 are consolidated, Net Debt i
Slide 25: Meeting Agenda
Meeting Agenda Industry: Strong demand growth absorbing new capacities Business well positioned with capacities completed Key Strategies Financials Summary 25
Slide 26: To sum it up
To sum it up….. Strong Strong and and experienced experienced management management team team Market Market leader leader in in South South India India and and synergistically synergistically diversifying diversifying into into other other regions regions Strong Strong brands brands and and widening
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