Asian Paints Ltd. · NSE:ASIANPAINT
Asian Paints — FY2003 Earnings Presentation
35 slides from Asian Paints's earnings presentation, May 28, 2003
Slide 1: Asian Paints (India) Limited Investor Conference Annual Results 2002-2003
1 Asian Paints (India) Limited Investor Conference Annual Results : 2002-2003 May 28, 2003
Slide 2: Structure of the Presentation
2 Structure of the Presentation • A Perspective • Financial & Operating Performance – Asian Paints (India) Limited – Asian Paints Consolidated Results • Looking ahead
Slide 3: Asian Paints - Expanding Horizons
3 Asian Paints - EXPANDING HORIZONS Among the Top 10 India’s largest paint Decorative Coatings company & leaders companies in the world in 9 overseas markets Operates in 23 countries Group revenue of with 28 paint mfg facilities around US $ 450 mn & with mfg capacity of market capitalisation 330 mn
Slide 4: Excellent Manufacturing facilities
4 Strong Research Talented Excellent Manufacturing & Development Human facilities Resources Among the Top 10 Efficient Brands Decorative Coatings Management Worldwide companies in the world of WC Harnessing IT to drive efficiencies
Slide 5: Asian Paints - Recognitions
5 Asian Paints - Recognitions • Ranked Asian Paints among the ‘200 Best under a Billion’ companies in the World in 2002 • One of Asia’s leading financial magazine ranked Asian Paints as the Best Small company in India in 2002 (Small company implies MCAP below USD 500 million ) • One of Asia’s leadin
Slide 6: Structure of the Presentation
6 Structure of the Presentation • A Perspective • Financial & Operating Performance – Asian Paints (India) Limited – Asian Paints Consolidated Results • Looking ahead
Slide 7: Asian Paints – Rewarding Shareholders
7 Asian Paints – Rewarding Shareholders • Recommend issue of Bonus shares in the ratio 1:2 • Recommend payment of final dividend of Rs.6.5 (65%) per share • Total dividend for FY’03 is Rs. 11.0 (110 %) per share – Total dividend distributed in FY’02 Rs. 9.0 / share
Slide 8: Bonus: Delivering Shareholder Value
8 Bonus: Delivering Shareholder Value Illustration ofvalue accretion to an IPO subscriberifhe had held on to his shares tilldate: Shares Rs Subscription to IPO (1982) @ Rs 23 100 2300 Add, bonuses earned 1129 - Holdings in 2003 @ Rs 341.85* 1229 417,860 CAGR of capital appreciation 28.1% * NSE closi
Slide 9: Asian Paints (India) Ltd: Profit & Loss A/c 2002-03
9 Asian Paints (India) Ltd : Profit & Loss A/c 2002-03 (Rs. million) FY 03 FY 02 Growth Net Sales 15737.8 13964.9 12.7 % Other income 142.2 147.4 - 3.6 % PBDIT 2783.2 2377.7 17.0 % Depreciation 451.3 417.8 8.0 % PBIT 2332.0 1959.9 19.0 % Interest 83.5 145.8 - 42.7 % PBT 2248.5 1814.1 23.9 % Prov. fo
Slide 10: Asian Paints (India) Ltd. - Balance Sheet as on 31.03.03
10 Asian Paints (India) Ltd. - Balance Sheet as on 31.03.03 FUNDS EMPLOYED (in mn) APPLN OF FUNDS (in mn) Shareholders Funds: Fixed assets: Share capital 641.86 Gross block 6175.26 Resrv & Surp 4124.32 Less : Depr 2559.98 CWIP 18.64 Def. Tax liab(Net) 581.59 3633.92 Loans: Investments 1476.94 Secure
Slide 11: Asian Paints (India) Ltd: Segment Results
11 Asian Paints (India) Ltd : Segment Results (Rs. million) PAINTS FY 03 FY 02 Growth Seg. Revenue 14676.7 13191.2 11.3 % Seg. Result 2579.9 2188.4 17.9 % Seg. result/Sales 17.7 % 16.7 % OTHERS FY 03 FY 02 Growth Seg. Revenue 1156.7 876.7 31.9 % Seg. Result 182.9 62.9 190.8 % Seg. result/Sales 15.9
Slide 12: Asian Paints (India) Ltd – Key Ratios
12 Asian Paints (India) Ltd – Key Ratios FY’03 FY’02 EBITDA/Net Sales 17.7 % 17.0 % PBT/Net Sales 14.3 % 13.0 % PAT/Net Sales 9.1 % 8.3 %
Slide 13: Consistent margin improvement
13 Consistent margin improvement • ROCE has improved from 22.3% to 40.2 % in last 5 years 20 17.03 17.03 17.68 18 16.53 16 14 14.81 12 10 9.1 8 8.2 8.7 8.4 6 8.3 4 1998-99 1999-2000 2000-2001 2001-2002 2002-2003 PBDIT / Net Sales PAT/Net Sales
Slide 14: Profits over the years
14 Profits over the years 2800 20000 EBITDA CAGR 19.0 % 18000 EBITDA & PAT (Rs Mn) 2400 Net Sales (Rs. Mn) 16000 2000 14000 1600 Sales CAGR 13.8 % 12000 1200 PAT CAGR 16.9 % 10000 800 8000 400 6000 1999 2000 2001 2002 2003 Net Sales EBITDA PAT
Slide 15: Margin Strategy
15 Margin Strategy FirmerRM Firmer RM Price Price prices prices increase(1.25%) increase (1.25%) Margin Margin RR&&DDefficiencies efficiencies&& expansion Sourcingefficiencies efficiencies expansion Sourcing despite despite input input Controlon Control onoverhead overheadcosts costs price price inc
Slide 16: Free Cash Flow
16 Free Cash Flow Higher creditors NCD instalment Lower pmt. Debtors Free Cash Higher Acquisns Margin Cash Flow internally Expansion from ops funded Lower interest costs Lower Capex
Slide 17: Free Cash Flow - the results
17 Free Cash Flow - the results 2002-03 2001-02 Debtors turnover 13.1 11.7 Inventory turnover 7.8 9.2 Creditors turnover 10.0 14.1 NWC turnover 9.7 8.1 Debt Equity ratio 0.22 0.27 RONW (PAT/NW) 30.3 % 28.4 % ROCE (EBIT/CE) 40.2 % 37.6 %
Slide 18: Asian Paints Consolidated Results
18 Asian Paints Consolidated Results • Revenue transactions of Berger International Limited (BIL) & SCIB Chemical not considered in consolidated results • Balance sheet numbers of BIL & SCIB have been considered in consolidated financial statements • Goodwill on acquisitions of BIL & SCIB aggregatin
Slide 19: Asian Paints Consolidated Financials - FY'2003 Sales Composition
19 Asian Paints Consolidated Financials - FY’2003 • Sales Composition 6.6% 88.7 % 4.7% Paints-India Chemicals International
Slide 20: Asian Paints - Consolidated results Profit & Loss Account - FY'2003
20 Asian Paints - Consolidated results Profit & Loss Account - FY’2003 (Rs. million) FY 03 FY 02 Growth Net Sales 17287.0 14657.7 17.9 % Other income 105.7 118.9 -11.1 % PBDIT 2895.4 2383.6 21.5 % Depreciation 486.6 442.2 10.0 % PBIT 2408.8 1941.4 24.0 % Interest 137.3 201.1 - 31.7 % PBT 2271.4 1740
Slide 21: Asian Paints - Consolidated results Balance Sheet - FY'2003
21 Asian Paints - Consolidated results Balance Sheet - FY’2003 FUNDS EMPLOYED (Rs. in mn) APPLN OF FUNDS (Rs. in mn) Shareholders Funds: Fixed assets: Share capital 639.47 Gross block 8683.28 Resrv & Surp 4135.89 Less : Depr 3576.99 CWIP 29.45 Def Tax liability 665.83 5135.74 Loans: Investments 110.
Slide 22: Asian Paints Consolidated Results - Key Ratios
22 Asian Paints Consolidated Results - Key Ratios FY’03 FY’02 EBITDA/Net Sales 16.7 % 16.3 % PBIT/Net Sales 13.9 % 13.2 % PBT/Net Sales 13.1 % 11.9 % PAT/Net Sales 8.2 % 7.3 %
Slide 23: Asian Paints Financials - FY'2003 If BIL & SCIB revenue were consolidated
23 Asian Paints Financials -FY’2003 IF BIL & SCIB revenue were consolidated • Sales composition if revenues of BIL & SCIB are consolidated 5.5% 21.2 % 73.3 % Paints-India Chemicals International
Slide 24: Decorative Business Unit
24 Decorative Business Unit • All product categories registered good growth rates • Exterior finishes grew by over 30 % • 3200 ColorWorld machines installed as on Mar 31, 2003 • Rural offtake affected in northern & western regions due to severe drought • Uncertainty prevailing over VAT impacted sale
Slide 25: Decorative Business Unit
25 Decorative Business Unit • Average Raw Material prices increased by over 6% in second half of FY’03 – Titanium dioxide prices have increased by 6.3 % at USD 1700 /tonne • Finished Goods price increase of 1.25% in Sept’2002 and 3% in May’2003
Slide 26: International Operations
26 International Operations • Overseas units have performed as per expectation • Sales of international operations is Rs. 816.7 million (USD 16.8 mn) in FY’03 • Overall loss before minority interest is Rs. 27.7 million – Bangladesh operations reduced profitability by Rs. 33.03 million on account of
Slide 27: Structure of the Presentation
27 Structure of the Presentation • A Perspective • Financial & Operating Performance – Asian Paints (India) Limited – Asian Paints Consolidated Results • Looking ahead
Slide 28: Asian Paints - India operations
28 Asian Paints - India operations • Decorative coatings will continue to be the main contributor and growth driver for the company – Emphasis on top-line growth and increasing market share – Focus to maintain operating margins – Exterior segment will continue to be the key growth driver for decorat
Slide 29: Asian Paints - Evolving as a Multinational
29 Asian Paints - Evolving as a Multinational
Slide 30: International markets
30 International markets Growth Drivers Market Leaders Focus for • Bangladesh • Bahrain Turnaround • China • Barbados • Egypt • Fiji • Australia • Malaysia • Jamaica • Malta • Myanmar • Nepal • Mauritius • Singapore • Solomon Islands • Oman • Sri Lanka • Tonga • Thailand • Trinidad & Tobago • UAE •
Slide 31: Asian Paints International operations
31 Asian Paints International operations Drive Operational Efficiencies • Efficient Supply chain management • Reduce material cost • Drive efficiencies in Manufacturing • Use technology Targets for Asian Paints International • Sales growth of at least 10% /year for next 2 years • Excess of 3% PAT ma
Slide 32: Paint industry attractiveness - India
32 Paint industry attractiveness - India • Impetus given by Finance Minister to the Housing Industry – Good growth recorded by Housing Finance segment • Increased government focus on infrastructure development • Low penetration levels of paint in India • More educated consumers & increased aspiratio
Slide 33: Asian Paints will
33 Asian Paints will • Always remain committed to increasing shareholder wealth • Always remain committed to good corporate governance • Always maintain its prudent policies of cash flow management
Slide 34: Our vision
34 Our vision “ Asian Paints aims to become one of the top five Decorative coatings companies world- wide by leveraging its expertise in the higher growth emerging markets. Simultaneously, the company intends to build long term value in the industrial coatings business through alliances with establi
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