Grasim Industries Ltd. · NSE:GRASIM

Grasim Industries — Investor Presentation (June 2013)

49 slides from Grasim Industries's investor presentation, June 2013

  1. Slide 1: Grasim Industries Limited

    Grasim Industries Limited A VSF and Cement Major June 2013

  2. Slide 2: 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

  3. Slide 3: Presentation Structure

    Presentation Structure Introduction Business Review Capex Highlights – Quarter 4: 2012-13 Summary 3

  4. Slide 4: The Aditya Birla Group

    The Aditya Birla Group  Amongst the top business houses in India  Operations spread over 36 countries  Revenue at $42 Bn.(60% from overseas operations)  Goal is to become a US$65 Bn. Group by 2015  136,000 employees, belonging to 42 nationalities Grasim - Viscose Staple Fibre & - Cement : Ultra

  5. Slide 5: Group Driving Principles for Shareholder Value Creation

    Group Driving Principles for Shareholder Value Creation  Emphasis on cost leadership and efficiency  Create world class assets, achieve global scale  Focus on key value drivers and ensure long term availability of key inputs  Benchmarking with world class quality and cost parameter  Globally co

  6. Slide 6: The Aditya Birla Group: Leadership Across Businesses

    The Aditya Birla Group : Leadership Across Businesses Leading Global Player – Hindalco – Novelis is largest aluminum rolling company – Largest producer of carbon black – One of two largest producer of VSF – Fourth-largest producer of insulators – Fifth-largest producer of acrylic fibre Leadership po

  7. Slide 7: Grasim: Market leader across business segments

    Grasim: Market leader across business segments Leading Global Player Viscose Staple – Capacity : 370K TPA (9% Global share) Fibre – 128K TPA expansion to be commissioned by Quarter 2 FY 14 Revenue ` 54 Bn. – 21% global share at Group level (US$ 1 Bn.) – Integrated model with experience of more than

  8. Slide 8: Grasim's Global Standing

    Grasim’s Global Standing VSF Business Cement Business Global Market Share Capacity (Mn. MT) * CNBM- China 343 Lafarge- France 224 Holcim- Switzerland 218 Chinese 52% Lenzing 21% Anhui Conch- China 209 Jidong- China 130 Heidelberg- Germany 122 AVB Group 21% (Grasim 9%) Others 6% Sinoma- China 100 Cem

  9. Slide 9: Grasim's "Two Business" strategy has paid off

    Grasim’s “Two Business” strategy has paid off  Consistent cash flow generation from VSF business  Moderate capex need for VSF leading to substantial free cash flow  Cement Business – high growth business with large capex requirement  Cash surpluses from VSF gainfully used for Cement growth  Cem

  10. Slide 10: Substantial Capacity Buildup Outpacing Industry Growth

    Substantial Capacity Buildup Outpacing Industry Growth FY FY FY FY Post on 2000 Current Product / Facility Unit 2007 2010 2012 going Expansion Actual Viscose Staple Fibre „000 TPA 221 270 334 334 370 498 (Q2 FY14) Chemical (Caustic Soda) „000 TPA 176 258 258 258 441 441 Grey Cement Mn. TPA 8.20 31.1

  11. Slide 11: Strong growth in Revenue and Profits

    Strong growth in Revenue and Profits Capital Employed Revenue Profit after Tax (Excluding CWIP & (Excluding Extraordinary Items) Liquid Investment) (` Bn.) (` Bn.) (` Bn.) 249.2 250.0 279.0 30.0 300 27.0 200.0 165.2 250 25.0 185.0 21.9 150.0 200 150 20.0 100.0 100 50.0 15.0 50 0.0 0 10.0 FY09 FY10 F

  12. Slide 12: Grasim Business Mix – 2012-13

    Grasim Business Mix – 2012-13 Net Revenues - ` 279 Bn. PBIDT - ` 65 Bn. 9.5 5.0 12.2 2.2 2.4 9.3 44.7 213.2 51.4 Cement VSF Pulp & Fibre JV Chemical Others Cement VSF Chemical Others 12

  13. Slide 13: Strong Financials

    Strong Financials Standalone Consolidated (` Bn.) 2011-12 2012-13 2011-12 2012-13 Net Worth 91.0 101.2 170.7 196.6 Debt 7.2 13.0 70.4 95.6 Net debt / (Net liquid investments) (20.9) (7.4) 6.8 28.3 Capital Employed 100.6 117.6 313.2 377.4 Debt:Equity (x) 0.08 0.13 0.32 0.37 Interest Cover 36.8 21.3 1

  14. Slide 14: Presentation Structure

    Presentation Structure Introduction Business Review Capex Highlights – Quarter 4: 2012-13 Summary 14

  15. Slide 15: Viscose Staple Fibre (VSF)

    Viscose Staple Fibre (VSF) Leading global player – Capacity : 370K TPA (9% global share) Revenue ` 54 Bn. – Group is world’s largest with 21% global share (US$ 1 Bn.) – Fibre JV in China (72K TPA) – High level of backward integration

  16. Slide 16: VSF Global Scenario

    VSF Global Scenario Global Fibre Pie (84 Mn. MT)  VSF: A cellulosic fibre  4% of global fibre market  6% of global man-made fibre market Others 2%  Major Global Players‟ Capacity Cotton VSF 32% 4% „000 TPA Raw Wool 1%  AVB group (incl. Grasim) : 780  Of which Grasim : 370 Synthetic  Lenzing (

  17. Slide 17: VSF: Global Presence

    VSF: Global Presence Sweden • Domsjo pulp plant China,Hubei Canada • Fibre plant (72 K TPA) • 3 Pulp plants in in Joint Venture Joint Venture P India • 3 Fibre plants • 1 Pulp plant South East Asia • 2 Caustic soda plant • 2 Fibre plants of Group • 1 Fibre plant under Co. of 338K TPA Fibre Plant - O

  18. Slide 18: VSF: Sustainable Competitive Strengths

    VSF : Sustainable Competitive Strengths  Amongst the low cost producers globally  Highly integrated operations  Captive raw materials - Pulp & Caustic Soda  Five pulp manufacturing plants – Grasim, India : 1, Overseas JVs : 4 (Canada : 3, Sweden : 1)  Captive power and steam  Self managed wate

  19. Slide 19: VSF: 2012-13 Performance (Consolidated)

    VSF: 2012 -13 Performance (Consolidated) Global Industry Scenario (` Bn.) 2011-12 2012-13  Sluggish global economy continues to impact textiles Capacity („000 TPA) * 334 370  VSF demand showing upward trend Sales Volume („000 MT) * 307 336  Though surplus VSF capacity in China and high cotton inv

  20. Slide 20: VSF: Outlook

    VSF: Outlook  In near term, recovery of textile sector is expected to be `/ Kg. slow given the fragile global economy 130 120 119 110 107  In long term, VSF continues to hold favorable position in 100 99 90 comparison to other fibres 80 70  Preference for comfort fabric leading to increase in dem

  21. Slide 21: VSF Strategy for Growth

    VSF Strategy for Growth  Ambitious expansion plan from 334K TPA to 498K TPA is now nearing completion  Projects commissioned till May 2013  Harihar Brownfield Expansion : 36K TPA  Vilayat Chemical Expansion (Backward Integration) : 182K TPA  Greenfield project at Vilayat expected to be commissi

  22. Slide 22: Cement

    Cement Leading player in India Revenue ` 213 Bn. – Capacity: 54 Mn. TPA (US$ 4 Bn.) – 530 MW of captive power plants across all major locations – Market leader in White Cement (0.6 Mn. TPA) and Ready Mix Concrete

  23. Slide 23: Indian Cement Industry: Overview

    Indian Cement Industry : Overview  Second largest cement market in world  Cement Capacity ~ 347 Mn. TPA (March 2013)  Long term average growth has been 1.2 x of GDP  Industry capacity grew by 2.5 times in last decade  Large Domestic Market ~ 165 plants owned by 45 players East  Top 6 players c

  24. Slide 24: Indian Cement Industry

    Indian Cement Industry Top Cement Producing Countries - Per Capita Consumption - 2012 2012 Mn. Tons kgs/person 2500 2150 1800 1580 2000 1500 1500 1200 800 900 720 1000 520 600 350 500 250 240 300 195 74 70 65 60 0 0 China India USA Brazil Vietnam Turkey China Turkey Vietnam World Brazil USA India __

  25. Slide 25: Cement – Major Growth Drivers

    Cement – Major Growth Drivers  Favorable demographics with growing young population  Rising affordability - Increasing income level Housing  Rapid Urbanisation (27.8% in 2001 increased to 31.2% in 2011, likely to exceed 40% by 2030) 1  No. of Cities with population of 1Mn.+ to grow from 48 in 20

  26. Slide 26: Infrastructure Spending: Xth, XIth & XIIth Plan

    Infrastructure Spending: Xth, XIth & XIIth Plan Spending Overview $ Bln 280 Sectors X Plan XI Plan XII Plan Infrastructure Spending - XIIth Plan ($ Bln) 260 Actual Revised Estimate 260 Investment Projections 240 (2002-2007) (2007-2012) (2012-2017) 230 220 Power, Oil & Telecom 120 285 375 202 200 Irr

  27. Slide 27: Cement Sector Outlook

    Cement Sector Outlook 14 % Growth  Demand growth linked to GDP growth; 12.1 12 implementation of reforms 9.8 10 9.3  Likely growth of > 8% in the long term  Surplus supply scenario likely to continue for next 3 8 6.9 5.6 years 6 5.3 - Capacity addition pace to slowdown (Likely addition 4 of 50 Mn

  28. Slide 28: Cement Business: Key Strengths

    Cement Business : Key Strengths  Operations spread across India (17% market share)  Excellent growth record – 11 times in 15 years  From 5 Mn. TPA in FY98 to 54 Mn. TPA in FY13  Market Leadership  “UltraTech” - Premium national brand  Largest cement brand in India  Leadership in key consuming

  29. Slide 29: Cement Business: 2012-13 Performance

    Cement Business : 2012-13 Performance Industry Scenario (` Bn.) 2011-12 2012-13  Sector Capacity at 347 Mn. TPA  28 Mn. TPA capacity commissioned in FY13 Capacity (Mn. TPA) 51.8 53.9  Industry capacity utilisation estimated at 71%  Weak Demand conditions continued Sales Volume Cement and Clinker

  30. Slide 30: Cement Business: Strategy for profitable growth

    Cement Business: Strategy for profitable growth  Focus on achieving accelerated profitable growth  Aim to grow faster than the industry  To maintain the market share, 25 Mn. TPA capacity required in next five years  As a first step, expansion of 9.2 Mn. TPA at Chhattisgarh and Karnataka nearing

  31. Slide 31: Presentation Structure

    Presentation Structure Introduction Business Review Capex Highlights – Quarter 4: 2012-13 Summary 31

  32. Slide 32: Capex plan

    Capex plan Capex Work in Cash Outflow ` Bn. Capex under Progress Net FY14 FY15 spent Implemen- as on Capex onwards during tation $ 01-04-13 2012-13 Standalone VSF Expansion : Vilayat (120K TPA), Harihar (36K TPA) 21.7 Chemical Expansion : Vilayat (182K TPA) 9.7 Epoxy Project : Vilayat (51K TPA) 2.4

  33. Slide 33: Presentation Structure

    Presentation Structure Introduction Business Review Capex Highlights – Quarter 4: 2012-13 Summary 33

  34. Slide 34: Highlights – Quarter 4: 2012-13

    Highlights – Quarter 4 : 2012-13 Operational  Indian GDP growth has come down substantially in FY 13 to 5%, affecting the business performance 2009-10: 8.6% Q1 FY13: 5.5% 2010-11: 9.3% Q2 FY13: 5.3% 2011-12: 6.2% Q3 FY13: 4.7% 2012-13: 5.0% Q4 FY13: 4.8%  In VSF : - In Fibre business, volumes impr

  35. Slide 35: Financial Performance – Consolidated

    Financial Performance – Consolidated ` Bn. Full Year % Change Quarter 4 % Change Quarter 3 2012-13 2011-12 YoY 2012-13 2011-12 YoY 2012-13 279.0 252.5 11 Revenue 76.7 72.8 5 67.8 219.8 196.7 12 Operating Costs 60.9 57.0 7 54.7 65.4 63.2 4 PBIDT 17.9 18.8 (5) 14.9 49.7 48.5 2 PBT 13.8 15.0 (8) 10.8 5

  36. Slide 36: Net Profit Chart

    Net Profit Chart ` Bn. Twelve Months Quarter 4 2012-13 2011-12 % 2012-13 2011-12 % Change Change Total Grasim's Total Grasim's Total Grasim's Total Grasim's Co. share Co. share Co. share Co. share 12.3 11.8 4 Standalone PAT 3.7 2.4 53 26.8 16.2 24.0 14.5 11 UltraTech Cement 7.5 4.5 8.7 5.3 (14) (2.0

  37. Slide 37: Presentation Structure

    Presentation Structure Introduction Highlights – Quarter 4: 2012-13 Business Review Capex Summary 37

  38. Slide 38: Summary

    Summary  Businesses reported satisfactory performance, given the challenging environment  Demand growth slowdown and surplus capacities may continue to pose challenges in short term  Grasim well positioned to meet these challenges with continuous cost optimisation measures and R&D  Both business

  39. Slide 39: Organizational Structure

    Organizational Structure Pulp, Fibre & Allied Chemical UltraTech Cement * Others (60.30%) VSF Overseas VSF Pulp Overseas Chemicals Domestic Overseas- 3 Mn. 370K TPA Units 70 K TPA TPA (UAE, Bahrain, Pulp Units 441K TPA 51 Mn. TPA Bangladesh, Sri Lanka) Nagda Birla Jingwei $ AV Cell $ Nagda 11 Compos

  40. Slide 40: Thank You

    Thank You Contacts: Grasim Industries Limited (Corporate Finance Division) Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai - 400 030 Sharad Agarwal +91-22-66525062 [email protected]

  41. Slide 41: Grasim Industries Limited – Supplement

    Grasim Industries Limited - A VSF and Cement Major (Supplement)

  42. Slide 42: Supplement

    Supplement • Consolidated Financial Performance : Pg. 43 • Standalone Financial Performance : Pg. 44 • Balance Sheet - Grasim : Pg. 45 • Balance Sheet – UltraTech (Consolidated) : Pg. 46 • Consolidated Businesswise Performance : Pg. 47-48 • Cement Plant Location : Pg. 49 42

  43. Slide 43: Consolidated Financial Performance

    Consolidated Financial Performance ` Bn. Quarter 4 % Full Year % 2012-13 2011-12 Change 2012-13 2011-12 Change Net Turnover & Op. Income 76.7 72.8 5 279.0 252.4 11 Other Income 2.1 3.0 (30) 6.2 7.4 (16) PBIDT 17.9 18.8 (5) 65.4 63.2 4 PBIDT Margin 22.7% 24.8% 22.9% 24.3% Finance Cost 0.8 0.8 1 3.2 3

  44. Slide 44: Standalone Financial Performance

    Standalone Financial Performance ` Bn. Quarter 4 % Full Year % 2012-13 2011-12 Change 2012-13 2011-12 Change Net Turnover & Op. Income 14.0 14.2 (1) 52.6 49.7 6 Other Income 1.0 1.3 (22) 4.3 4.6 (6) PBIDT 3.3 3.7 (9) 15.2 17.2 (12) PBIDT Margin 22.2% 23.8% 26.8% 31.7% Finance Cost 0.15 0.07 97 0.39

  45. Slide 45: Balance Sheet - Grasim

    Balance Sheet - Grasim ` Bn. Standalone Consolidated * As on As on As on As on EQUITY & LIABILITIES 31.03.13 31.03.12 31.03.13 31.03.12 Shareholders' Funds 101.2 91.0 Net Worth 196.6 170.7 - - Minority Interest 62.2 52.3 Non-Current Liabilities 9.8 5.7 Long Term Borrowings 66.5 57.3 3.4 2.4 Deferred

  46. Slide 46: Balance Sheet – UltraTech (Consolidated)

    Balance Sheet – UltraTech (Consolidated) ` Bn. As on As on * EQUITY & LIABILITIES 31.03.13 31.03.12 Shareholders' Funds Net Worth 152.3 128.2 Minority Interest 0.8 0.6 Non-Current Liabilities Long Term Borrowings 51.7 48.4 Deferred Tax Liability (Net) 19.0 17.3 Long Term Liabilities & Provisions 1.4

  47. Slide 47: Viscose Staple Fibre: Summary (Standalone)

    Viscose Staple Fibre : Summary - (Standalone) Quarter 4 % Full Year % 2012-13 2011-12 Change 2012-13 2011-12 Change Capacity TPA 3,52,225 3,33,975 5 3,52,225 3,33,975 5 Production MT 85,992 83,439 3 3,37,492 3,21,085 5 Sales Volumes MT 95,161 94,904 1 3,36,065 3,06,917 9 Net Revenue ` Bn. 12.2 12.3

  48. Slide 48: Cement: Summary

    Cement : Summary Quarter 4 % Full Year % 2012-13 2011-12 Change 2012-13 2011-12 Change Grey Cement Capacity Mn. TPA 53.90 51.75 4 53.90 51.75 4 Production Mn. MT 11.79 11.84 42.59 42.11 1 Sales Volumes $ Mn. MT 11.76 12.06 (2) 42.75 42.60 Clinker Sales Volumes Mn. MT 0.29 0.32 (10) 0.89 1.36 (35) Wh

  49. Slide 49: Cement Plant Locations

    Cement Plant Locations PLANT LOCATION CAPACITY (Mn. TPA) NORTH • Shambhupura, Rajasthan & 5.0 Jawad, M.P. 3.0 – Aligarh GU, U.P. 1.3 Bhatinda(G) Panipat – Bhatinda GU, Punjab 1.8 Dadri – Dadri GU, U.P. 1.3 Kotputli Aligarh • Kotputli, Rajasthan 3.1 Jodhpur P – Panipat GU, Haryana 1.3 Shambhupura WES

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