Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — FY2004 Earnings Presentation
49 slides from Grasim Industries's earnings presentation, Apr 28, 2004
Slide 1: Grasim Industries Limited Performance Review – FY04
Grasim Industries Limited Performance Review – FY04 28th April 2004
Slide 2: Financial Performance – FY04
Financial Performance – FY04 (Rs. Crores) Financial Highlights : FY04 % ! Excellent overall performance with Total Revenue 5,233 13 record high profits " Excellent performance from Sponge PBIDT 1,475 30 Iron " Continuing strong performance from Interest Charges 154 (9) VSF and Chemicals " Improved p
Slide 3: Financial Performance – contd…
Financial Performance – contd… (Rs. Crores) Other Highlight % ! Acquisition of Ultratech CemCo FY04 FY03 Chg. " Shareholders and Creditors of L&T Net Turnover & Op. Income 5,233.3 4,623.3 13 approved the Scheme on 3rd Feb. 2004 " High Court approved the Scheme of Other Income 180.3 115.8 56 Arrangem
Slide 4: Financial Performance – Q4FY04
Financial Performance – Q4FY04 (Rs. Crores) Highlights : Q4 Q4% ! Net profit at Rs.282 Crs, highest ever FY04 FY03 Chg. in a quarter, up 67%, helped by Net Turnover & Op. Income 1,553.2 1,219.2 27 impressive performance across all Other Income 72.1 55.7 29 businesses PBIDT 513.3 299.5 71 ! Revenues
Slide 5: Financial Performance
Financial Performance (Rs. Crores) Q4FY04 Q4FY03 % Chg. FY04 FY03 % Chg. Net Turnover & Op. Income 1,553.2 1,219.2 27 5,233.3 4,623.3 13 Other Income 72.1 55.7 29 180.3 115.8 56 PBIDT 513.3 299.5 71 1,475.3 1,135.8 30 Interest and Finance Charges 35.1 40.6 (14) 153.9 168.4 (9) Gross Profit 478.3 258
Slide 6: Financial Performance – contd…
Financial Performance – contd… ! Exceptional Items (EI) Rs. Crores Q4FY04 Q4FY03 FY04 FY03 Profit/ (Loss) on sale of shares IGFL /(MRPL) -- (208.6) 28.9 (208.6) Excess provision for taxes for earlier years written -- 40.0 -- 40.0 back Net /Total EI -- (168.6) 28.9 (168.6) ! Earning Per Share (Rs.) B
Slide 7: Segmental Performance Summary - FY04
Segmental Performance Summary - FY04 Revenue Mix PBIDT Mix Sponge Iron 12% VSF Others 33% 8% VSF 39% Sponge Iron 17% Cement Chemical Chemical 5% 45% Cement Textiles 6% Textiles 30% 4% 1% FY04 (Rs. 5,233 Crs.) FY04 (Rs. 1,475 Crs.) ! VSF (incl. Chemical) and Cement contributed 84% to Revenue (86%) !
Slide 8: Segmental Performance – FY04
Segmental Performance – FY04 Rs. Crores Capital ROAvCE (%) Revenue PBIT * Business Employed # (PBIT basis) FY04 FY03 FY04 FY03 FY04 FY03 FY04 FY03 VSF 1,765.5 1,640.8 520.4 540.2 825.1 850.6 64.3 64.5 Chemical 295.4 257.0 58.4 37.2 206.5 210.8 28.6 17.3 Cement 2,419.9 2,188.5 295.7 221.3 2,032.5 2,0
Slide 9: Segmental Performance – Q4FY04
Segmental Performance – Q4FY04 Rs. Crores Capital ROAvCE (%) Revenue PBIT * Business Employed # (PBIT basis) Q4FY04 Q4FY03 Q4FY04 Q4FY03 Q4FY04 Q4FY03 Q4FY04 Q4FY03 VSF 497.8 403.6 152.3 123.6 825.1 850.6 75.3 59.0 Chemical 79.8 70.1 16.0 5.2 206.5 210.8 31.4 9.6 Cement 715.4 588.4 133.2 58.2 2,032.
Slide 10: Business Review – FY04
TGRASTM Business Review - FYO4
Slide 11: Viscose Staple Fibre : Highlights
Viscose Staple Fibre : Highlights % ! Capacity enhanced by 14% thru FY04 FY03 Chg . debottlenecking Capacity (TPA) @ 251,850 220,775 14 ! Capacity utilisation at 100% Production (MT) 221,005 224,610 (2) Sales Volumes (MT) 229,110 227,900 1 ! Production only marginally lower despite Net Turnover (Rs
Slide 12: Viscose Staple Fibre : Outlook
Viscose Staple Fibre : Outlook ! Sales volume expected to grow on the back of strong direct/deemed export demand ! Margins expected to remain at normal levels ! Grasim will remain focused on market enlargement for its growth ! Further capacity increase possibilities are being identified ! Concerted
Slide 13: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary Q4 Q4 % % FY04 FY03 Chg. FY04 FY03 Chg. Capacity TPA @ 251,850 220,775 14 @ 251,850 220,775 14 Production MT 61,164 58,384 5 221,005 224,610 (2) Sales Volumes MT 62,597 54,459 15 229,110 227,900 1 Net Turnover Rs. Crs. 497.8 403.2 23 1,764.8 1,640.0 8 Avg. Realisation
Slide 14: Cement : Highlights
Cement : Highlights % ! Capacity utilisation at 92% (98%) FY04 FY03 Chg. ! Volume up 7% against sector avg. of 5% Grey Cement " Improved performance in South (+11%), East (+9%) and North (+8%) Capacity (Mn TPA) # 13.12 @ 12.92 2 " Volumes in West maintained Production (Mn MT) 11.85 11.09 7 ! Revenue
Slide 15: Cement : Highlights
Cement : Highlights !Cement : Highlights (Contd..)contd.. FY04 - Zone wise growth – Grasim and Industry !OPM improved to 18.5% despite sluggish 15.0% Grasim Industry pricing environment for first three quarters !Cost competitiveness maintained thru 11% 13.0% 11.0% 9% " Increased thru put and increas
Slide 16: Cement : Outlook
Cement : Outlook ! Promising Industry outlook " Price recovery seen at the end of FY04 likely to sustain till the onset of monsoon " Industry average capacity utilisation to be around 90% in FY05 " Strong growth in housing sector " Infrastructure remains a thrust area for the Govt., Road sector to w
Slide 17: Cement : Outlook Contd..
Cement : Outlook Contd.. Grasim : Plant Wise Installed Capacity (Mn. MT) ! Grasim will focus on Rajashree Cement, Malkhed & 4.20 " L&T brand transition and retaining Grinding Unit Hotgi CemCo market share Vikram Cement, Jawad & 4.20 " Realise synergy gains with CemCo Bhatinda Grinding Unit " Realign
Slide 18: Cement : Summary
Cement : Summary Q4 Q4 % % FY04 FY03 Chg. FY04 FY03 Chg. Grey Cement Capacity Mn. MT # 13.12 @ 12.92 2 # 13.12 @ 12.92 2 Production Mn. MT 3.20 2.97 8 11.85 11.09 7 Sales Volumes Mn. MT 3.24 3.02 7 11.96 11.16 7 Net Turnover Rs. Crs. 660.5 540.4 22 2,226.0 2,003.5 11 Avg Realisation Rs./MT 1,873 1,7
Slide 19: Chemical : Highlights and Outlook
Chemical : Highlights and Outlook % ! Capacity utilisation at 83% (90%) FY04 FY03 Chg " Water shortage impacted operations in Caustic Capacity (TPA) 190,800 @ 190,800 -- Q1FY04 Caustic Production (MT) 157,541 151,445 4 Caustic Sales Volumes (MT) 156967 150,825 4 ! Sales volume up 4% Net Turnover (Rs
Slide 20: Chemical : Summary
Chemical : Summary Q4 Q4 % % FY04 FY03 Chg. FY04 FY03 Chg. Capacity (Caustic) MT 190,800 @ 190,800 -- 190,800 @ 190,800 -- Production (Caustic) MT 43,135 39,653 9 157,541 151,445 4 Sales Volume(Caustic) MT 42,625 39,563 8 156,967 150,825 4 Net Turnover Rs. Crs. 80.1 70.5 14 294.6 256.2 15 Avg. ECU R
Slide 21: Sponge Iron : Highlights
Sponge Iron : Highlights % ! Excellent performance FY04 FY03 Chg. Capacity (TPA) 900,000 900,000 -- ! Capacity utilisation up to 76% from 68% Production (MT) 687,272 612,879 12 " Better gas availability during Q4, use of Sales Volumes (MT) 676,921 612,425 11 Naptha and Propane Net Turnover (Rs Crs.)
Slide 22: Sponge Iron : Outlook
Sponge Iron : Outlook % ! Sustainability of current profitability will FY04 FY03 Chg. Capacity (TPA) 900,000 900,000 -- depend on Production (MT) 687,272 612,879 12 " Global scrap prices Sales Volumes (MT) 676,921 612,425 11 " Natural Gas availability and its price Net Turnover (Rs Crs.) 638.9 406.1
Slide 23: Sponge Iron : Summary
Sponge Iron : Summary Q4 Q4 % % FY04 FY03 Chg. FY04 FY03 Chg. Capacity TPA 900,000 900,000 - 900,000 900,000 - Production MT 219,685 164,271 34 687,272 612,879 12 Sales Volumes MT 205,891 158,987 30 676,921 612,425 11 Net Turnover Rs. Crs. 232.8 118.3 97 638.9 406.1 57 Avg Realisation Rs./MT 11,157
Slide 24: Textiles : Highlights and Outlook
Textiles : Highlights and Outlook % FY04 FY03 Chg. ! Fabric sales volume up 17% Sales Volumes " Focus on premium synthetic segment - Fabrics (lac Mtrs.) 149 127 17 " Brand re-positioning efforts paying off - Synthetic Yarn (MT) 7,147 8,043 (11) Net Turnover (Rs Crs.) 228.0 218.6 4 ! Positive PBIDT F
Slide 25: Textiles : Summary
Textiles : Summary Q4 Q4 % % FY04 FY03 Chg. FY04 FY03 Chg. Net Turnover Rs. Crs. 60.7 60.8 -- 228.0 218.6 4 PBIDT * Rs. Crs. 5.2 (3.0) 13.4 (8.8) -- PBIDT Margin * % 8.5 (5.0) -- 5.9 (4.0) -- PBIT * Rs. Crs. 2.3 (6.7) -- (0.2) (22.6) -- Capital Employed Rs. Crs. 109.0 109.3 -- 109.0 109.3 -- ROAvCE
Slide 26: Financial Highlights
Financial Highlights 26
Slide 27: Profitability Snapshot
Profitability Snapshot PBIDT & PBIDT Margin 28.3 (Figures in Rs. Crores) FY99 FY02 FY03 FY04 1450 PBIDT PBIDT Margin (%) 27 1200 24.7 Gross Turnover 3,897 5,070 5,412 6,130 PBIDT (Rs. Crs.). PBIDT Margin (%) 950 23 Net Turnover 3,354 4,372 4,606 5,213 21.4 1475 700 18.9 1136 PBIDT 678 937 1,136 1,47
Slide 28: Profitability Snapshot contd..
Profitability Snapshot contd.. Interest charges - Interest Cover - Interest Rate Rs. Crs. % 2 13. 3 355 12. 14 305 11 .2 12 292 9.8 255 256 8.5 10 205 239 7.5 7.7 8 155 190 168 5.6 154 105 4.6 6 3.6 55 2.9 4 2.3 5 2 FY99 FY00 FY01 FY02 FY03 FY04 Interest (Rs.Crs.) Interest Cover Interest Rate ! Inte
Slide 29: Financial Snapshot
Financial Snapshot Av.Capital Employed - Net Worth - D/E ratio (Figures in Rs. Crores) Avg.Cap.Employed/Net Worth (Rs. Crs.) FY99 FY02 FY03 FY04 7000 0.93 1.00 0.82 5904 6000 Debt Equity Ratio Gross Block 4,937 5,371 5,600 5,807 5106 5446 5000 4759 0.62 4815 0.62 4572 0.58 Net Block 3,354 3,263 3,27
Slide 30: Financial Snapshot contd..
Financial Snapshot contd.. ROAvCE - RONW (%) - Market Capitalisation (%) Rs. Bn. 25.0 120 20.4 19.3 100 20.0 16.2 15.0 80 15.0 13.5 12.9 12.8 12.3 10.1 10.5 60 10.0 8.6 6.6 40 5.0 20 0.0 0 FY99 FY00 FY01 FY02 FY03 FY04 ROAvCE (PBIT basis)(%) RONW (%) Market Cap ! Balance Sheet reflects the focused c
Slide 31: Capex Plan
Capex Plan Rs. Crores Capex Cash Outflow planned FY05 FY06 Cement - De-bottlenecking/Blending 41 41 - - Power Plants/ RMCs 23 23 - - Modernization 113 95 18 Total Cement 177 159 18 VSF - Capacity expansion and 99 65 34 Development Centre - Modernization 173 102 46 Total VSF 272 167 80 Chemical 35 35
Slide 32: Acquisition of controlling interest in L&T Cement Business (CemCo) Progress Update
Acquisition of controlling interest in L&T Cement Business (CemCo) Progress Update 32
Slide 33: CemCo transaction structure
CemCo transaction structure ! Step 1 : Cement Business of L&T to be de merged into CemCo " L&T (EngCo) to have 20% holding in CemCo balance 80% to existing shareholders proportionately " Grasim gets 12.6% holding in CemCo; retains 15.7% holding in L&T (EngCo) " Appointed date of de-merger - 1st Apri
Slide 34: CemCo transaction structure contd.
CemCo transaction structure contd. ! Step 3B : On Grasim crossing 41.5% of CemCo " Grasim buys 8.5% holding in CemCo from L&T – (Outflow Rs. 362 crores) " Grasim sells its 14.95% stake to Employee Welfare Trusts and exits L&T (EngCo) – (Inflow Rs. 446 crores) ! FIs in-principle approval to the Schem
Slide 35: Summary of Investments in CemCo
Summary of Investments in CemCo ! Summary of Investments in CemCo Rs. Crs. Existing investment in L&T 1,028 Grasim to make Open Offer for 30% of CemCo 1,279 Grasim to acquire 8.5% of CemCo from L&T 362 Total outflow for 38.5% (30% + 8.5%) 1,641 Inflow on sale of L&T (Engco) shares to L&T Foundation/
Slide 36: Progress on CemCo transaction
Progress on CemCo transaction ! Scheme approved by shareholders and creditors of L&T on 3rd Feb.’ 04 ! Grasim deposited 100% of the gross Open Offer consideration as under " Rs.128 Crs. in December 2003 " Rs.1,151 Crs. in April 2004 ! Court approved the Scheme of Arrangement on April 22, 2004 ! Broa
Slide 37: Vision and Strategy
Vision and Strategy ! To be a premium Conglomerate with clear focus at Vision each business level, relentlessly pursuing value creation ! Grow and Strengthen main businesses – VSF and Cement ! Improve capital productivity Strategy ! Market expansion and greater penetration ! Improve margins continuo
Slide 38: Cautionary Statement
Cautionary Statement 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 impl
Slide 39: Thank You
GRAS ITM ADITYA BIRLA GROUP ‘Thank You
Slide 40: Production Data (MT)
Production Data (MT) Q4FY04 Q4FY03 FY04 FY03 Capacity Capacity Capacity Capacity Production % Production % Production % Production % TPA TPA TPA TPA VSF # 251,850 61,164 111 220,775 58,384 106 # 251,850 221,005 100 220,775 224,610 102 Pulp 70,000 10,206 58 70,000 14,205 81 70,000 55,869 80 70,000 70
Slide 41: Divisional Turnover - Qty & Realisation
Divisional Turnover - Qty & Realisation Quantity (MT) Realisation (Rs. /MT) Product Q4 Q4 Q4 Q4 FY04 FY03 FY04 FY03 FY04 FY03 FY04 FY03 VSF 62,597 54,459 229,110 227,900 74,491 68,606 72,269 67,921 Pulp 10,811 13,501 57,253 70,126 22,318 21,206 22,228 20,285 Caustic Soda * 42,625 39,563 156,967 150,
Slide 42: Plant Locations - Grasim
Plant Locations - Grasim 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 Chenna
Slide 43: Press Release Mumbai, April 28, 2004
Press Release Mumbai, April 28, 2004 GRASIM, THE ADITYA BIRLA GROUP’s FLAGSHIP COMPANY REPORTS EXCELLENT PERFORMANCE FOR FY 2004 Profit after Tax Up by 112% Declares 140% Dividend Q4 FY 2004 FY 2004 (Audited) Rs. Crs. % Rs. Crs. % Change Change Net Turnover 1,553.2 27.4% 5,233.3 13.2% Profit Before
Slide 44: Press release: Q4 results summary
On a quarter-to-quarter basis, the Q4 results have been exemplary. All major businesses recorded an all round growth by way of higher production, volumes and realizations. While Turnover was up by 27.4% at Rs. 1553.2 crores, the Profit after taxes but before Exceptional items showed a robust growth
Slide 45: Highlights of Grasim's operations
Highlights of Grasim’s operations: PRODUCTION/TURNOVER FY 2004 FY 2003 % Change Production - Viscose Staple Fibre M.T. 221005 224610 -2% Cement Mn. M.T. 11.85 11.09 7% White Cement M.T. 310578 310163 - Sponge Iron M.T. 687272 612879 12% Caustic Soda M.T. 157541 151445 4% Sales Volumes - Viscose Stap
Slide 46: VSF and Cement business review
The Company has also expanded its VSF capacity at different plants. In aggregate, the capacity has been increased by 31075 MT, raising the total VSF capacity to 251850 MT at the end of FY 2004. Cement Business The Cement Business performed well during the year. While the industry grew by 5%, the Com
Slide 47: Sponge Iron and Chemical Business
Sponge Iron Business The performance of the Sponge Iron business has been excellent. Production and Sales volumes were up by 12% and 11% at 687272 MT and 676921 MT respectively. Realisations surged by 44% to Rs.9188 per MT. Viewed in the backdrop of increased input cost due to higher usage of naptha
Slide 48: Audited Financial Results for the Year Ended 31st March 2004
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED ON 31st MARCH 2004 Rs in Crores Nine Months Three Months Three Months Full Year Full Year Consolidated Consolidated Ended 31st Ended 31st Ended 31st Ended 31st Ended 31st Financial Results Financial Results December 2003 March 2004 March 2003 March 2004 M
Slide 49: Segment Reporting
Cont. from Page 1 5. Segments Reporting: Rs. in Crores Nine Months Three Months Three Months Full Year Full Year Consolidated Consolidated Ended 31st Ended 31st Ended 31st ended 31st ended 31st Financial Results Financial Results 'December 2003 'March 2004 'March 2003 March 2004 March 2003 for the y