Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q2 FY2018 Earnings Presentation
36 slides from Grasim Industries's earnings presentation, Nov 14, 2017
Slide 1: Quarterly Performance Review Quarter 2: 2017-18
Quarterly Performance Review Quarter 2 : 2017-18 Mumbai, 14th November, 2017 India’s New Growth Story 1
Slide 2: Forward Looking & Cautionary Statement
Forward Looking & Cautionary Statement Certain statements in this report may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the
Slide 3: Content
Content Financial Business Top Highlights Performance Performance Priorities Glossary VSF:Viscose Staple Fiber, VFY: Viscose Filament Yarn, MT : Metric Ton, K: One Thousand, TPA : Tons Per Annum, YoY: Year on Year Comparison, CY : Current Year, LY : Last Year, YTD : Year to Date, EBITDA : Earnings B
Slide 4: Highlights
Highlights Grasim:India’s Leadership Performance Indian New Growth Economy Businesses Highlights Story 4
Slide 5: Indian Economy
Indian Economy India’s GDP growth slowed to 5.7% YoY in Q1FY18 India’s industrial production grew by 4.3% YoY in Aug-17 and 0.9% in Jul-17 after contracting in Jun-17 for the first time in 4 years • Companies increased production to restock warehouses ahead of festive season In order accelerat
Slide 6: Grasim: India's New Growth Story
Grasim: India’s New Growth Story 6
Slide 7: Our Leadership Businesses
Our Leadership Businesses Viscose Chemicals No.1 VSF No.1 Caustic producer Soda producer (498 KTPA) (938 KTPA) Telecom Cement Top-3 players by No.1 producer RMS (18.9%)* in India No.4 producer Globally (ex China) Financial Services Top-5 private diversified NBFCs ($6 Bn) Top-4 AMC’s ($38 bn) *Q1FY18
Slide 8: Grasim: India's New Growth Story
Grasim: India’s New Growth Story Revenue (FY17) Viscose 16% Chemicals Viscose 8% 20% Others Chemicals 8% 10% $6bn $8bn* Financial services 18% Cement Cement 50% 70% Noted: Telecom Consolidated at PAT level ; USD/INR Rate: R.65; * : Proforma 8
Slide 9: Key Highlights: Q2FY18
Key Highlights:Q2FY18 Strong Operational Performance in all our Businesses Financial Services Viscose & Chemicals Cement Listing of Aditya Birla Capital Ltd. No.1 VSF and Chemical producer No.1 Cement producer (BSE/NSE) Ramping up of the acquired asset Chemicals capacity Expansion at NBFC
Slide 10: Financial Performance
Financial Performance Consolidated Consolidated Strong Results Revenue and Financials Q2FY18 EBITDA 10
Slide 11: Consolidated Results Q2FY18
Consolidated Results Q2FY18 (Rs. Cr) Q2FY18 Q2FY17 YOY (%) Revenue 13,646 8,386 63% Other Income 290 312 (7%) EBITDA 2,805 2,098 34% Interest 430 167 157% Depreciation / Amortisation 795 449 77% PBT 1,580 1,482 7% Profit /Loss of Equity accounted Investees (net of tax)1 (260) 57 Exceptional Item2 (8
Slide 12: Consolidated Results Q2FY18 - Segmental
Consolidated Results Q2FY18 - Segmental (Rs. Cr) Revenue YoY EBITDA YoY EBITDA (%) (%) Margins(%) Viscose* 2,119 22% 468 26% 22% Chemical* 1,168 27% 285 26% 24% Cement 6,936 20% 1,550 12% 22% Financial Services 2,677 - 361 - - - Others/Inter Segment Elimination* 746 - 141 - - • Viscose segment inclu
Slide 13: Consolidated Revenue (Q2FY18)
Consolidated Revenue(Q2FY18) Viscose Chemicals 1,168 2,119 Veraval 76 1084 VFY 200 1836 Rs.920 1740 (Rs.Cr) (Rs.Cr) Chemicals Viscose 9% 920 15% Others 5% Q2FY17 Q1FY18 Q2FY18 Q2FY17 Q1FY18 Q2FY18 Rs.13,646 Cr Financial Services Financial Services Cement Cement 20% 51% 2677 7035 6936 (Rs.Cr) (Rs.Cr)
Slide 14: Consolidated EBITDA (Q2FY18)
Consolidated EBITDA(Q2FY18) Viscose Chemicals 468 285 VFY 61 VFY Veraval 23 371 (Rs.Cr) (Rs.Cr) 244 349 Chemicals Viscose 10% 17% 213 Q2FY17 Q1FY18 Q2FY18 Others 5% Q2FY17 Q1FY18 Q2FY18 Financial Services Financial Rs. 2,805Cr Services Cement 361 13% Cement 55% 1798 1550 1378 (Rs.Cr) (Rs.Cr) Not par
Slide 15: Strong Balance Sheet and Financial Ratios
Strong Balance Sheet and Financial Ratios Consolidated Financial Ratios Consolidated Debt / Surplus ( ` Cr.) Sep-17 31-03-2017 30-09-2017 Mar-17 22,252 11,438 Net Worth 31,387 56,261 9,213 14,455 7,797 2,225 Debt:Equity (x) 0.22 0.28 Standalone Debt / Surplus ( ` Cr.) Net Debt: Equity (x) -* 0.18 Ma
Slide 16: Business Performance
Business Performance Financial Viscose Chemicals Cement Services 16
Slide 17: Viscose Industry
Viscose Industry Global Prices Trend ($/Kg) 2.3 Grey VSF Cotton PSF 2.1 1.9 1.7 1.5 1.3 1.1 0.9 Industry Data 0.7 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 India demand growth ~8% (+) higher than the global demand by 200 bps (+) VSF is the fastest growing fibre
Slide 18: Business Performance: Viscose
Business Performance: Viscose Revenue (Rs. Cr) EBITDA (Rs.Cr) EBITDA/Ton Viscose Sales Volume 134KT* 121KT 468 124KT 2,119 34,925 371 349 VFY 61 29,919 1836 VFY 200 28,843 1740 Q2FY17 Q1FY18 Q2FY18 Q2FY17 Q1FY18 Q2FY18 Q2FY17 Q1FY18 Q2FY18 VSF volumes up by 5% YoY led by Inventory restocking in do
Slide 19: Chemicals Industry
Chemicals Industry Caustic Soda Prices ($)/Ton 600 550 500 450 400 350 300 Industry Data; India landed Prices Sharp increase in International Caustic prices driven by supply constraint due to environmental considerations in China and weather disruption in US Demand from major consuming segment e
Slide 20: Business Performance: Chemicals
Business Performance: Chemicals Revenue (Rs. Cr) EBITDA (Rs.Cr) EBITDA/Ton 216KT Sales Volume 234KT* 213KT 12,130 1168 285 23 9103 11,455 1084 76 244 920 213 Q2FY17 Q1FY18 Q2FY18 Q2FY17 Q1FY18 Q2FY18 Q2FY17 Q1FY18 Q2FY18 Caustic Soda volume up by 7% YoY Capacity utilization @ 92% is ahead of ind
Slide 21: Business Performance: Cement
Business Performance: Cement Revenue (Rs. Cr) EBITDA (Rs. Cr) EBITDA Rs./Ton Sales Volume 13.7MT 1,798 1,308 13.5MT 1,187 1,156 1,550 11.2MT 1,378 7,035 6,936 5,771 Q2FY17 Q1FY18 Q2FY18 Q2FY17 Q1FY18 Q2FY18 Q2FY17 Q1FY18 Q2FY18 Volume up by 20%, EBITDA up by 13% at Rs.1,550 Cr. Energy cost up by
Slide 22: Business Performance: Financial Services
Business Performance: Financial Services Revenue Rs.2,677 Cr. and EBT Rs.373 Cr. NBFC: Consistent growth across diversified portfolio − Geographic expansion plan to drive granular growth going forward Average borrowing cost at 7.8% AMC: 4th largest in India with highest ever AAUM market shar
Slide 23: Business Performance - Other Businesses
Business Performance- Other Businesses (Rs. Cr.) Revenue EBITDA (Q2FY18) (Q2FY18) Delayed rainfall in Northern and Eastern India augurs well for the Fertilizers 561 73 coming Rabi season and thus for Fertilizer demand Strengthening the “Linen club” fabric brand & expansion of retail Textiles 326 16
Slide 24: Capital Expenditure
Capital Expenditure Capex Plan 24
Slide 25: Capex Plan
Capex Plan Capex Cash Outflow Capex (Net of CWIP FY18 FY19 spent - as on Onwards H1FY18 01-04-17) Standalone Vilayat Caustic Plant Brownfield expansion (144K TPA) 442 VSF Expansion 679 VSF : Water supply augmentation & usage reduction, Research & Development, Environment and Other 766 normal capex V
Slide 26: Our Top Priorities
Our Top Priorities Maintain our Industry Leadership positon Growing Consumer Facing and High Growth Manufacturing Businesses Invest in New Products Expanding presence in New Markets Expanding Capacities Cost focus and Asset Sweating Robust Risk and Governance Framework 26
Slide 27: Thank You
THANK YOU 27
Slide 28: Annexures
Annexures 28
Slide 29: Consolidated Financial Performance
Consolidated Financial Performance (` Cr.) Quarter 2 % Half Year % 2017-18 2016-17 Change 2017-18 2016-17 Change Net Sales & Op. Income 13,646 8,386 63 23,492 17,472 34 Other Income 290 312 (7) 526 512 3 EBITDA 2,805 2,098 34 5,224 4,312 21 EBITDA Margin (%) 20.1% 24.1% 21.8% 24.0% Finance Cost 430
Slide 30: Standalone Financial Performance
Standalone Financial Performance (` Cr.) Quarter 2 % Half Year % 2017-18 2016-17 Change 2017-18 2016-17 Change Net Sales & Op. Income 4,037 2,517 60 6,778 4,944 37 Other Income 269 330 (19) 335 388 (14) EBITDA 1,054 889 19 1,675 1,475 14 EBITDA Margin (%) 24.5% 31.2% 23.6% 27.7% Finance Cost 43 16 1
Slide 31: Balance Sheet
Balance Sheet Standalone Consolidated (` Cr.) 30th Sept'17 31st Mar'17 EQUITY & LIABILITIES 30th Sept'17 31st Mar'17 44,157 16,231 Net Worth 56,261 31,387 Non Controlling Interest 26,153 9,702 - - Borrowings related to financial services 38,639 - 2,479 701 Other Borrowings * 22,252 9,213 1,614 663 D
Slide 32: Viscose Business Summary
Viscose Business Summary Quarter 2 % Half Year % 2017-18 2016-17 Change 2017-18 2016-17 Change Capacity VSF KTPA 498 498 - 498 498 - VFY KTPA 21 - 21 - Production (in '000s) VSF MT 130 127 2 260 241 8 VFY MT 5 - 5 - Sales Volumes (in '000s) VSF MT 130 124 5 251 245 2 VFY MT 5 - 5 - Net Revenue ` Cr.
Slide 33: Chemical Business Summary
Chemical Business Summary Quarter 2 % Half Year % 2017-18 2016-17 Change 2017-18 2016-17 Change Capacity KTPA 931 840 11 931 840 11 Production (in '000s) MT 220 200 10 440 392 12 Sales Volumes (in '000s) MT 220 205 7 438 397 10 Net Revenue ` Cr. 1,168 920 27 2,252 1,823 23 EBITDA ` Cr. 285 213 34 53
Slide 34: Cement Business Summary
Cement Business Summary Quarter 2 % Half Year % 2017-18 2016-17 Change 2017-18 2016-17 Change Grey Cement Capacity Mn. TPA 92.97 69.25 34 92.97 69.25 34 Production Mn. MT 13.39 11.18 20 27.17 24.66 10 Sales Volumes $ Mn. MT 13.72 11.57 19 27.67 25.34 9 White Cement & Putty Sales Volumes $$ Lac MT 3.
Slide 35: Business and Financial Performance - Telecom
Business and Financial Performance- Telecom Revenue (Rs.Cr) Revenue Market Share 18.9% 21.8% 18.9% 17.5% 16.1% 14.8% 9,300 8,167 7,465 Q2FY17 Q1FY18 Q2FY18 The operating environment for Indian mobile operators remained challenging with unrelenting pressure on pricing, introduction of GST @18% (com
Slide 36: Grasim: Group Structure
Grasim: Group Structure Chemical UTCL (60.22%)* VSF - 498K TPA Overseas ABCL (56.0)* Others Caustic VFY - 21K TPA Pulp & VSF JVs Subsidiary Subsidiary 938K TPA Pulp - 70K TPA Nagda AV Group NB Inc. Nagda Domestic Fertilizers NBFC Broking 162K TPA 320K TPA (45.0%)* 270K TPA (100%)* (75%)* Kharach Dom