Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Merger or Acquisition (October 2009)
19 slides from Grasim Industries's merger presentation, Oct 3, 2009
Slide 1: Grasim Industries Limited Investor Presentation
Grasim Industries Limited Investor Presentation October 3, 2009
Slide 2: Current Structure
Current Structure
Slide 3: Grasim Today – A Combination of Two Global Scale Businesses
Grasim Today – A Combination of Two Global Scale Businesses Grasim Cement Business VSF & Allied Chemicals Cement Division Divisions JV in Canada & Grey White Fibre & Pulp RMC Plantation at Cement Cement (India) Laos UltraTech Textiles 54.8% 100.0% Grey Cement RMC Grasim Bhiwani Textiles • Largest ce
Slide 4: VSF Has Generated Strong Cash Flows To Bolster Cement Investment
VSF Has Generated Strong Cash Flows To Bolster Cement Investment Cement (Standalone) VSF EBITDA (-) Capex(1) (Rs. Cr.) EBITDA (Rs. cr.) EBITDA (-) Capex(2) (Rs. Cr.) EBITDA (Rs. cr.) FY02 (518) 469 317 361 FY03 (79) 359 568 632 FY04 310 447 571 661 FY05 (761) 551 589 727 FY06 539 800 408 623 FY07 25
Slide 5: Grasim's Profitability Has Multiplied Supported By Cement Growth
Grasim’s Profitability Has Multiplied Supported By Cement Growth Grey Cement Capacity Standalone 11.4 12.9 13.1 13.1 13.1 13.1 16.8 19.7 16.8 22.6 Consolidated 12.5 14.0 14.2 29.7 31.2 31.2 35.0 41.6 35.0 45.7 5,500 5,422 421 4,783 4,500 4,290 363 Consolidated EBITDA (Rs. cr) 276 3,500 3,747 2,500 2
Slide 6: …To Deliver Exceptional Returns
…To Deliver Exceptional Returns Grasim’s Consolidated Performance over last 10 years Growth(1) in Grey Cement Capacity: 5.3x Growth(2) in Revenues: 4.1x Growth(2) in EBITDA: 6.4x Grasim Stock Price Growth(3) – 16.9x Sensex Growth – 4.6x Growth in Leading Cement Stocks – 5.9x ____________________ (1)
Slide 7: Both Businesses Are Now Poised For Accelerated Growth
Both Businesses Are Now Poised For Accelerated Growth • Strengthen low cost manufacturing position by further integration • Enhance profitability by moving up the value • Current expansion chain projects of ~15 mtpa nearing completion VSF • Greenfield project at Vilayat (Guj.) at a cost of Cement •
Slide 8: Proposed Restructuring
Proposed Restructuring
Slide 9: Restructuring Objectives
Restructuring Objectives Continue Strong Parentage & Grasim Sponsorship Of The Cement Business Create Platform That Enhances Financial Flexibility To Pursue Next Stage Of Growth Provide Shareholders With Direct Exposure To Pure- Pure-play Cement Business Lay The Foundation For Cement Consolidation T
Slide 10: Proposed Restructuring
Proposed Restructuring Present Post Restructuring Grasim Grasim Shareholders 35% Shareholders Demerger of the Grasim Grasim Grasim cement division Cement VSF / Others VSF / Others into Samruddhi Cement Ltd. 100% 55% 65% 55% Samruddhi UltraTech Samruddhi UltraTech Cement Cement Cement Cement Assets M
Slide 11: Restructuring Details
Restructuring Details • The cement division of Grasim is proposed to be de-merged into Samruddhi • Appointed Date for the demerger would be 1st Oct 2009 • Grasim shareholders to receive 1 equity share of Rs. 5 each of Samruddhi for each equity share held in Grasim in addition to their holding in Gra
Slide 12: Desired Next Step - Consolidation of Grasim Cement In A Single Entity
Desired Next Step - Consolidation of Grasim Cement In A Single Entity Present Post Demerger Desired Next Step UltraTech UltraTech UltraTech Grasim Grasim Grasim Public Public Public Shareholders Shareholders Shareholders Shareholders 35% Shareholders Shareholders 45% 45% Grasim Grasim Grasim VSF / C
Slide 13: A Win-Win-Win Proposition
A Win- Win-Win Proposition Preserves the essential strengths and benefits of the current structure Continuation of Grasim’s parentage Economic interest of shareholders remains the same Grasim will continue to consolidate the cement business results in its accounts Enhances financial flexib
Slide 14: Key Financials - Standalone Profit & Loss Account
Key Financials - Standalone Profit & Loss Account FY08 FY09 Q1 - FY10 (In Rs. Cr.) VSF & VSF & VSF & Cement Others Total Cement Others Total Cement Others Total Net Revenues 5,956 4,369 10,325 6,995 3,945 10,940 2,146 933 3,079 EBITDA 1,876 1,548 3,424 1,911 935 2,846 740 207 947 Margins 32% 35% 33%
Slide 15: Key Financials – Standalone Balance Sheet
Key Financials – Standalone Balance Sheet As at 30-Sep-09 As at 30-Jun-09 (Provisional) Grasim Cement (In Rs. Cr.) (Pre-demerger) VSF & Others Division Cement Division Net Fixed Assets 8,206 1,662 6,544 6,593 Investments - UltraTech 2,551 2,551 - - - Other Strategic Investments 964 964 0.1 0.7 - Liq
Slide 16: Key Advisors
Key Advisors Advisors DSP Merrill Lynch Limited Enam Securities Private Limited Fairness Opinion to Grasim DSP Merrill Lynch Limited Legal Advisors Amarchand & Mangaldas & Suresh A. Shroff & Co Report On Share Entitlement Ratio Ernst & Young Private Limited Tax Advisors Soli Dastur & Co. Bansi S. Me
Slide 17: Press Release: Grasim to Demerge Cement Business
Press Release Mumbai, October 3, 2009 GRASIM TO DEMERGE CEMENT BUSINESS GRASIM’s SHAREHOLDERS TO PARTICIPATE DIRECTLY IN A NEW SUBSIDIARY CREATES PLATFORM FOR POTENTIAL CONSOLIDATION Rs.1000 CRORES GREENFIELD VSF PROJECT, CAPACITY TO GO UP BY 25% The Boards of Directors of Grasim Industries Limited
Slide 18: Press Release continued: Scheme details
Under the Scheme, Grasim will transfer its cement businesses, including related businesses/ investments but excluding its investment in UltraTech, to Samruddhi. In consideration, Samruddhi will issue one equity share of Rs. 5/- face value each credited as fully paid-up to the shareholders of Grasim
Slide 19: Cement Sector opportunities very promising
Cement Sector opportunities very promising India is the second largest Cement Market in the World, even though its per capita consumption is just one-eighth of China. The long term outlook is promising, even though a surplus caused by new cement capacities is likely to put pressure on margins over t
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