Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q3 FY2003 Earnings Presentation
36 slides from Grasim Industries's earnings presentation, Jan 27, 2003
Slide 1: Grasim Industries Limited Performance Review – Q3FY03
Grasim Industries Limited Performance Review – Q3FY03 27th January, 2003
Slide 2: Financial Performance - Q3FY03
Financial Performance - Q3FY03 (Rs. Crores) Excellent performance - Results reflect benefits of - Q3 FY03 % ! Business and financial restructuring Total Revenue 1,166.6 11 over last 3 years " Closure of non-viable Fibre and Pulp Operating Profit 299.3 39 plants at Mavoor " Software business divested
Slide 3: Financial Performance - Q3FY03
Financial Performance - Q3FY03 Rs. Crores ! Excellent overall performance with Q3 Q3 % positive contribution from all FY03 FY02 Chg. business Net Turnover & Operating 1,166.6 1,050.4 11 " Improved capacity utilisation and Income enhanced volume across all Other Income 14.2 21.6 (34) businesses excep
Slide 4: Financial Performance - 9MFY03
Financial Performance - 9MFY03 Rs. Crores 9M 9M % ! PBIDT up by 25% FY03 FY02 Chg. ! Interest cost further down by 13% Net Turnover & Operating ! PBT up by 55% 3,415.0 3,275.5 4 Income ! Total tax expenses at Rs.153 Crs, an Other Income 60.1 55.9 8 increase of 116% " Availability of certain one-time
Slide 5: Financial Performance Summary – Q3FY03/9MFY03
Financial Performance Summary – Q3FY03/9MFY03 Rs. Crores Q3FY03 Q3FY02 % Chg. 9MFY03 9MFY02 FY02 Net Turnover & Operating 1,166.6 1,050.4 11 3,415.0 3,275.5 4,386.6 Income Other Income 14.2 21.6 (34) 60.1 55.9 114.6 PBIDT 299.3 215.0 39 840.7 674.0 936.8 Interest and Finance Charges 40.5 51.4 (21) 1
Slide 6: Financial Performance Summary – Q3FY03/9MFY03
Financial Performance Summary – Q3FY03/9MFY03 Rs. Crores Q3FY03 Q3FY02 9MFY03 9MFY02 FY02 Exceptional Items Loss on sale of Investments (18.1) (18.1) (18.1) Excess provision for taxes for earlier years 68.1 68.1 68.1 written back Loss on closure of Mavoor units (36.9) (74.3) (74.3) Loss on sale of T
Slide 7: Segmental Performance - Q3FY03
Segmental Performance - Q3FY03 Revenue Mix PBIDT Mix Sponge Sponge Iron Iron Others 9% 7% (3)% VSF 35% VSF 53% Cement Cement 37% 45% Chemical 6% Textiles Textile Chemical 5% 1% 5% Q3FY03 (Rs. 1,167 Crs.) Q3FY03 (Rs. 299 Crs.) 7
Slide 8: Segmental Performance - Q3FY03 (Contd.)
Segmental Performance - Q3FY03 (Contd.) Rs. Crores Business Revenue PBIT * Capital ROAvCE (%) Employed $ (PBIT basis) Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 FY03 FY02 FY03 FY02 FY03 FY02 FY03 FY02 VSF 413.1 334.9 148.9 89.4 803 835 73.2 40.1 Chemical 68.0 57.7 10.6 4.9 207 238 19.8 8.1 Cement 545.5 498.4 76.5 55.9
Slide 9: Segmental Performance Summary - 9MFY03
Segmental Performance Summary - 9MFY03 Rs. Crores Business Revenue PBIT * Capital ROAvCE (%) Employed $ (PBIT basis) 9M 9M 9M 9M 9M 9M 9M 9M FY03 FY02 FY03 FY02 FY03 FY02 FY03 FY02 VSF 1,246.4 967.2 418.8 210.0 803 835 68.7 31.4 Chemical 186.7 162.8 32.5 25.5 207 238 20.3 14.0 Cement 1,599.9 1,536.0
Slide 10: Business Review Q3FY03
Business Review Q3FY03 10
Slide 11: Viscose Staple Fibre : Highlights
Viscose Staple Fibre : Highlights Q3 Q3 % ! Capacity utilisation up from 86% to 109% FY03 FY02 Chg. ! Production up by 28% Capacity (TPA) 220,775 220,775 - ! Sales up 21% Production (MT) 60,323 47,231 28 " Domestic sales higher by 10% even on enlarged Sales Volumes (MT) 56,798 47,122 21 base of Q3FY
Slide 12: Viscose Staple Fibre : Outlook
Viscose Staple Fibre : Outlook ! Stable domestic demand likely. Export growth will be driven by improvement in global economic activity ! Margins may come under pressure in the coming quarters " Caustic Soda and Sulphur prices showing rising trend " Efforts will be to partially offset increased cost
Slide 13: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary % Q3FY03 Q3FY02 9MFY03 9MFY02 FY02 Chg. Capacity TPA 220,775 220,775 - 220,775 220,775 220,775 Production MT 60,323 47,231 28 166,225 118,874 176,462 Sales Volumes MT 56,798 47,122 21 173,441 128,863 181,520 Net Turnover Rs. Crs. 412.9 334.7 23 1,245.8 966.9 1,328 Avg.
Slide 14: Cement : Highlights
Cement : Highlights Q3 Q3 % ! Capacity utilisation improved further from 87% to 96% FY03 FY02 Chg. ! Grey Cement sales volume up 13% against Grey Cement industry average of 7% Capacity (Mn TPA) 11.37 # 11.37 -- " Enabled by strong volume growth in South – Production (Mn MT) 2.72 2.26 20 up 33% again
Slide 15: Cement : Highlights (Contd..)
Cement : Highlights (Contd..) Grey Cement Sales Vol. and Net T. O. MT ‘000 Rs. Crs. ! Average realisation declined by 6% YoY Vol. Grey Net TO 700 reflecting depressed pricing environment 2700 across all zones except East Zone 2200 "But Av. Realisation up by 3% QoQ 500 reflecting improving pricing sc
Slide 16: Cement: Outlook
Cement: Outlook ! At current GDP growth, market to double in size every 7-8 years " Housing sectors and Infrastructure to support demand growth of 8% p.a. ! Infrastructure remains a thrust area " Growing emphasis on roads, bridges and urban infrastructure " Flyovers, expressways and concretization o
Slide 17: Cement: Outlook (Contd.)
Cement: Outlook (Contd.) Plant Wise Installed Capacity (Mn. MT) ! Grasim will focus on " Ensuring dominance in the identified core Rajashree Cement, Malkhed 3.20 markets of North, South and Western corridors Vikram Cement, Jawad 3.00 " Proactive change in product/market mix to Grasim Cement, Raipur
Slide 18: Cement : Summary
Cement : Summary Q3FY03 Q3FY02 % Chg. 9MFY03 9MFY02 FY02 Grey Cement Capacity Mn. MT 11.37 # 11.37 -- 11.37 # 11.37 11.37 Production Mn. MT 2.72 2.26 20 8.12 7.05 9.53 Sales Volumes Mn. MT 2.70 2.40 13 8.15 7.17 9.68 Net Turnover Rs. Crs. 492.0 457.3 8 1,462.3 1,430.5 1,926 Avg Realisation Rs./MT 1,
Slide 19: Chemical Highlights
Chemical Q3 Q3 % Highlights FY03 FY02 Chg. ! Capacity utilisation up from 91% to 103% Caustic Capacity (TPA) 160,600 160,600 - " Sales volumes up by 15% on improved Caustic Production (MT) 41,522 36,619 13 domestic demand Caustic Sales Volumes (MT) 41,637 36,355 15 ! ECU realisation up by 3% Net Tur
Slide 20: Chemical : Summary
Chemical : Summary Q3FY03 Q3FY02 % Chg. 9MFY03 9MFY02 FY02 Capacity (Caustic) MT 160,600 160,600 -- 160,600 160,600 160,600 Production (Caustic) MT 41,522 36,619 13 111,792 91,856 129,784 Sales Volume(Caustic) MT 41,637 36,355 15 111,262 91,082 129,051 Net Turnover Rs. Crs. 67.6 57.2 18 185.5 161.6
Slide 21: Sponge Iron
Sponge Iron Q3 Q3 % Highlights FY03 FY02 Chg. ! Excellent performance Capacity (TPA) 900,000 900,000 - ! Capacity utilisation up from 61% to 66% on Production (MT) 148,337 137,629 8 improved availability of Natural Gas and use of Naptha Sales Volumes (MT) 165,707 129,438 28 " Sales volume up by 28%
Slide 22: Sponge Iron : Summary
Sponge Iron : Summary Q3FY03 Q3FY02 % Chg. 9MFY03 9MFY02 FY02 Capacity TPA 900,000 900,000 - 900,000 900,000 900,000 Production MT 148,337 137,629 8 448,608 430,939 559,567 Sales Volumes MT 165,707 129,438 28 453,437 405,335 562,334 Net Turnover Rs. Crs. 109.8 74.2 48 288.2 242.4 332 Avg Realisation
Slide 23: Textiles
Textiles Q3 Q3 % Highlights FY03 FY02 Chg. ! Restructuring benefit showing up Sales Volumes " Business has shown positive PBIDT after 11 - Fabrics (lac Mtrs.) 32 47 (32) quarters - Synthetic Yarn (MT) 1,719 1,854 (7) " Improvement would have been more prompt but Net Turnover (Rs Crs.) 52.8 68.4 (23)
Slide 24: Textiles : Summary
Textiles : Summary Q3FY03 Q3FY02 % Chg. 9MFY03 9MFY02 FY02 Net Turnover Rs. Crs. 52.8 68.4 (23) 159.5 211.6 268 PBIDT * Rs. Crs. 2.2 (5.9) 137 (4.6) (8.5) (21) PBIDT Margin * % 4 (9) -- (3) (4) (8) PBIT * Rs. Crs. (1.5) (10.2) 85 (14.7) (21.2) (38) Capital Employed Rs. Crs. 112 203 (45) 112 203 133
Slide 25: Capex and Financial Highlights
Capex and Financial Highlights 25
Slide 26: Capex Plan
Capex Plan Rs. Crores Total Capex Completion FY03 FY04 Schedule A New Projects : - Cement Capacity Expansion - Debottlenecking/Blending etc. 134 45 89 Various dates - Power Plants (Cement units) - Rajasthan 23 MW (AC) 71 71 -- Jan 2003 - Tamil Nadu 12.5 MW (GS) 38 21 17 May 2003 - Karnataka 23 MW (R
Slide 27: Capex Plan (Contd..)
Capex Plan (Contd..) Rs. Crores Total Capex FY03 FY04 B Modernisation : - VSF 57 34 11 - Cement 250 90 160 - Chemical 19 19 - - Textile 9 9 - C Other Capex : 42 31 - Total 707 340 321 ! 9M FY 03 Capex - Rs.204 Crores " Cement 138 " Fibre 23 " Chemical 9 " Textile 8 " Others 26 27
Slide 28: Profitability Snapshot
Profitability Snapshot 9M PBIDT & PBIDT Margin (Figures in Rs. Crores) FY00 FY01 FY02 FY03 1000 24.7 Gross Turnover 4,646 5,184 5,070 3,979 23 800 PBIDT (Rs. Crs.). Net Turnover 3,962 4,453 4,372 3,401 21.4 PBIDT Margin (%) 20.2 20.5 PBIDT 756 912 937 841 600 19.0 PBIDT Margin (%) 19.1 20.5 21.4 24.
Slide 29: Financial Snapshot
Financial Snapshot ROAvCE - RONW (%) 9M 16.1 (Figures in Rs. Crores) FY00 FY01 FY02 14.5 FY03 13.5 12.9 12.8 12.3 Gross Block 5,206 5,311 5,371 5,522 10.1 10.5 Net Block 3,401 3,303 3,263 3,248 8.6 6.6 Equity 92 92 92 92 Net Worth 2,777 3,075 2,707 3,075 Net Worth + 2,777 3,075 3,347 3,733 Deferred
Slide 30: Financial Snapshot (Contd..)
Financial Snapshot (Contd..) ! Strong financial indicators " Growing profitability and cash generations " Declining interest charge and lower average interest rate " Low gearing " High interest cover and comfortable DSCR ! Fundamentally strong Balance Sheet and Cash flow position to support Company’
Slide 31: Open Offer for L & T - Current Status
Open Offer for L & T - Current Status ! Initial acquisition of 10.05% stake from Reliance on November 18, 2001 - amount invested Rs.776 Crs. ! Further acquisition of Shares from April 02 to 13th October 02 – 4.48% - amount invested Rs.197 Crs. ! Open offer announced on 14th October 2002 ! Grasim & S
Slide 32: Focus And Strategy
Focus And Strategy Focus ! Deliver enhanced value to shareholders on a sustained basis ! Focus on core businesses – VSF and Cement ! Improve asset utilisation through market expansion and better Strategy penetration ! Improve margins through better efficiency and stringent cost control Cement will b
Slide 33: Thank You
GRAS TM ADITYA BIRLA GROUP Thank You
Slide 34: Production Data (MT)
Production Data (MT) Q3FY03 Q3FY02 FY02 Capacity Capacity Capacity Production % Production % Production % TPA TPA TPA VSF 220,775 60,323 109 220,775 47,231 86 220,775 176,462 80 Pulp 70,000 18,871 108 70,000 18,629 106 70,000 71,251 102 Caustic Soda 160,600 41,522 103 160,600 36,619 91 160,600 129,7
Slide 35: Divisional Turnover - Qty & Realisation
Divisional Turnover - Qty & Realisation Quantity (MT) Realisation (Rs. /MT) Product Q3 Q3 Q3 Q3 FY03 FY02 FY02 FY03 FY02 FY02 VSF 56,798 47,122 181,520 69,137 67,210 68,511 Pulp 18,804 18,123 71,396 20,966 20,500 22,327 Caustic Soda * 41,637 36,355 129,051 13,975 13,552 14,564 Grey Cement * * 2.70 2
Slide 36: Plant Locations
Plant Locations Bhatinda(G) Noida Gurgaon $ T Bhiwani Jodhpur Shambhupura Jawad Bharuch F F C Nagda F Fibre plants Raipur P Pulp plant Raigarh C S Hotgi(G) Chemical plant Hyderabad T Textiles units Malkhed Grey cement plants / Grinding Units (G) Bangalore White cement plant Harihar B Chennai Ready-m