Srf Limited · NSE:SRF
Srf — Investor Presentation (September 2014)
47 slides from Srf's investor presentation, September 2014
Slide 1: SRF Limited Investor Presentation
SRF Limited Investor Presentation September 2014 Diversity. Innovation. Performance
Slide 2: Disclaimer
Disclaimer Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ mat
Slide 3: Contents
Contents Overview Business Segments Consolidated Snapshots Outlook Other Milestones 3
Slide 4: Overview
Overview
Slide 5: History & Heritage
Overview History & Heritage Our legacy since 1889 Known as one of India’s respected business houses Winner of Deming Prize Group known for philanthropic work 2004: Tyre Cord Business Run and manage some of the premiere 2012: Chemicals academic institutions of India 5
Slide 6: Operations
Overview Operations SRF is • A multi-business manufacturing entity • An Indian multinational • Engaged in the manufacture of chemical based industrial intermediates 9 plants in India 4 plants abroad 6
Slide 7: Business Leadership: early entrant in India
Overview Business Leadership SRF has been one of the early players in India to enter: Nylon tyre Belting Coated EARLY cord fabrics fabrics fabrics ENTRANT S IN Specialty chemicals INDIA Engineering Refrigerants plastics • ONLY First and the only company in India so far to have developed technology t
Slide 8: Market Rankings
Overview Market Rankings Global No. 2 Belting fabrics Nylon 6 tyre cord fabrics Tyre cord Belting Fishnet Domestic fabrics twine Market Leader Refrigerant Engineering Specialty s plastics chemicals Domestic No. 2 Packaging films 8
Slide 9: At a Glance as on 31st March 2014
Overview At a Glance as on 31st March 2014 $670 mn $51 mn 3 Revenues EBIT No of Business Segments 5,500 3 75 No of Countries with No of Countries Global Workforce Manufacturing Exporting to Consolidated, FY14 figures in $ million Plants 9 rounded off
Slide 10: Business Profile
Overview Business Profile Chemicals & Technical Textiles Packaging Films Polymers Fluorochemicals Films for Flexible • Tyre cord fabrics • Refrigerants Packaging (nylon & polyester) • Chlorinated solvents • Bi-axially Oriented • Belting fabrics Polyethylene Specialty Chemicals • Coated fabrics • Org
Slide 11: Shareholding Pattern
Overview Shareholding Pattern Shareholding Pattern (05th DII Sep’14) 13.6% % of total FIIs Prominent Shareholders 10.7% capital DSP Mutual Fund 4.21 Sundaram Mutual Fund 3.98 Promote UTI Mutual Fund 3.39 rs 52.4% Government Pension Fund 2.26 Public Global 17.7% Amansa Capital 1.53 Corporat LSV Emerg
Slide 12: Path of Progress
Overview Path of Progress Commences Commenced production of nylon production of coated Shri Ram Fibres engineering plastics fabrics renamed as SRF Ltd 1970 1979 1986 1990 Incorporated as 1974 1983 1989 Shri Ram Fibres Entered Chemicals Commenced Commissioning of Business with production operations o
Slide 13: Business Evolution
Overview Business Evolution Relative Composition (in %) of Businesses 120.0% FY11 Revenue* FY14 Revenue $579 mn $670 mn 100.0% Successful Transformation: Multiple business 80.0% 54.2% entity with focus 363.3mn 53.5% on knowledge Technical Textiles 309.3mn 60.0% based industries 40.0% Chemicals & 21.
Slide 14: Growth Levers
Overview Growth Levers Focus on building Nurture leadership innovation businesses through R&D Build and maintain Reposition market portfolio towards leadership in knowledge based business Build a Company products segments known and respected for its Continue to build new R&D capabilities De-risk fro
Slide 15: Leadership Team
Overview Leadership Team Mr. Arun Bharat Ram Mr. Ashish Bharat Mr. Kartik Bharat Chairman Ram Managing Ram Dy Managing Director Director Mr. Rajdeep Anand Mr. Sushil Kapoor Mr. Rajendra Prasad President (CTG) President & CEO President & CFO (TTB) Mr. Prashant Yadav Mr. Prashant Mehra Mr. Anurag Jain
Slide 16: Business Segments
Chemicals & Technical Textiles Packaging Films Polymers Business Segments
Slide 17: Nylon Tyre Cord Fabrics
Chemicals & Technical Textiles Packaging Films Polymers Nylon Tyre Cord Fabrics Despite increase in radialisation of bus & truck tyre segment, the demand for NTCF is expected to remain stable on account of growth in Tractor, 2 wheeler and OTR tyre segments Continues to be the domestic market leader
Slide 18: Polyester Tyre Cord Fabrics
Chemicals & Technical Textiles Packaging Films Polymers Polyester Tyre Cord Fabrics Global surplus in PTCF leading to lower realisations; yarn developed for alternate applications The only manufacturer of polyester tyre cord fabrics in India 18
Slide 19: Belting Fabrics
Chemicals & Technical Textiles Packaging Films Polymers Belting Fabrics Largest manufacturer of belting fabrics in India and second largest in the world; domestic market share ~60% Segment reporting healthy performance; anticipated improvement in infrastructure sector to provide further boost Facili
Slide 20: Coated Fabrics
Chemicals & Technical Textiles Packaging Films Polymers Coated Fabrics State-of-the-art coating line offers PVC coated fabric with Acrylic / PVDF finishes and polyurethane coated fabrics Integrated manufacturing facility from polyester yarn to fabricated articles Economic slowdown has impacted perfo
Slide 21: Laminated Fabrics
Chemicals & Technical Textiles Packaging Films Polymers Laminated Fabrics Laminated fabric is a combination of a polyester fabric with a film (PVC or another) on either or both sides Lower advertising spends on account of slowdown has led to subdued demand New modern facility in Uttarakhand, India 2
Slide 22: Technical Textiles Key Highlights
Chemicals & Technical Textiles Packaging Films Polymers Key Highlights Revenues Operating Profits 363.3 356.5 354.7 30.0 27.2 19.2 20.5 309.3 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 $ million $ million Tyre Cord Sales Trend (in MTs) 61,170 • Free cash flow generating 59,403 business with stable 55,2
Slide 23: Business Segments
Chemicals & Technical Textiles Packaging Films Polymers Business Segments
Slide 24: Fluorochemicals Business
Chemicals & Technical Textiles Packaging Films Polymers Fluorochemicals Business Refrigerant portfolio consists of R-22, R- 134a and HFC blends: R-410A, R-404A and R- 407C Over 40% share of the Indian market Only manufacturer besides being well of R-134a in India accepted worldwide Global distributi
Slide 25: Specialty Chemicals Business
Chemicals & Technical Textiles Packaging Films Polymers Specialty Strong knowledge of Chemicals Fluorination and other halogen Business More than 25 years of chemistry along with concerted experience handling fluorine focus on R&D led to molecules; one of the most development of complex hazardous ch
Slide 26: Driving Innovation through R&D
Driving Innovation through R&D since 2003 • Developing internal competencies and capabilities to create breakthrough process innovations • Equipped with state-of-the-art R&D facilities and an ingenious team of scientists and technologists • 2 R&D centres in India • Focus on developing new processes
Slide 27: Chemical Complex at Dahej
Chemicals & Technical Textiles Packaging Films Polymers Chemical Complex at Dahej • Presently developing 126 acres Operational Units out of 293 acres in Phase I • Facilities to produce multiple o Five Specialty Chemicals products with focus on plants fluorochemicals and specialty o New Global chemic
Slide 28: Chemicals & Polymers Key Highlights
Chemicals & Technical Textiles Packaging Films Polymers Key Highlights Revenues Operating Profit 200.8 99 172.5 73.3 159.3 43.8 124.5 70.2 57.8 22.8 CER 49 Ex CER 159.3 22.2 31.8 42.3 127.5 128.7 101.7 26.8 28.8 31.8 15.6 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 $ million $ million • Outlook for Spec
Slide 29: Business Segments
Chemicals & Technical Textiles Packaging Films Polymers Business Segments
Slide 30: Packaging Films Key Highlights
Chemicals & Technical Textiles Packaging Films Polymers Key Highlights Global demand-supply mismatch; product is a Industry estimated to grow at pure commodity and apprx 5% p.a. globally and goes through industry apprx 12% p.a. domestically No new capacity cycles; addition announced Second-largest E
Slide 31: Overseas Operations
Chemicals & Technical Textiles Packaging Films Polymers Overseas Operations BOPP Plant at South BOPET Plant at • Africa Set up a greenfield BOPP film plant and a vacuum metallisation plant in Thailand • Set up a greenfield BOPET film plant KwaZulu Natal, South Africa in 2013 and a vacuum metallisati
Slide 32: Packaging Films Key Highlights
Chemicals & Technical Textiles Packaging Films Polymers Key Highlights Revenues Operating Profits 145 147 58.0 110 103 4.2 1.0 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 -0.8 $ million $ million Packaging Films Capacity and • BOPP and BOPET films Utilisation Trend being commodities, go 120,000 98% 100%
Slide 33: Consolidated Snapshots
Consolidated Snapshots
Slide 34: Consolidated Financial Performance: Revenue
Consolidated Financial Performance Snapshots Trends Consolidated Revenue 667.3 669.7 630.5 579 73.3 43.8 22.8 CER 669.7 556.2 594 586.7 Ex CER FY11 FY12 FY13 FY14 Business Segments Technical 354.666 Textiles 363.333 CPB 145.166 Packaging Films 3333333 6666666 6666666 33 200. 67 147 356.5 67 103.333
Slide 35: Consolidated Financial Performance: EBIT
Consolidated Financial Performance Snapshots Trends 130.5 Consolidated EBIT 22.2 113.2 70.2 74.7 CER 108.3 42.3 50.7 Ex CER 43 50.7 32.4 FY11 FY12 FY13 FY14 Business Segments CPB Technical Textiles 49 99 57.9 31. Packaging Films 8 58.0 30.0 27.2 22.2 70.2 42.3 19.2 20.5 31.8 26.8 28.8 15.6 4.2 1.0 F
Slide 36: Consolidated PBIDT, PAT and EPS
Consolidated Financial Performance Snapshots Trends Consolidated PBIDT Consolidated PAT 159 22.2 144 81 14.8 70.2 110 63 CER CER 42.3 88 Ex CER Ex CER PBIDT Margin% 42 136.8 (Ex CER) 47 PAT Margin% 66.2 (Ex CER) PBIDT Margin% 27 88 28.4 PAT Margin% 27 73.8 67.7 22 17 14 24 9 27 11 11 13 11 13.6 7 16
Slide 37: Net Worth and Gross Block
Consolidated Financial Performance Snapshots Trends Net Worth Gross Block 340 1,019 323 292 793 257 691 632 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 $ million $ million • Dahej facility to produce multiple products with focus on specialty chemicals and fluorochemicals • Return ratios are anticipated
Slide 38: Dividend Payout, Net Debt, RONW, ROCE
Consolidated Financial Performance Snapshots Trends Dividend Payout* (%) Net Debt: Equity (x) 41.2 1.02 0.80 25.0 26.4 20.4 0.58 0.59 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 * Including Corporate Dividend Tax RONW (%) ROCE 32 94.2 CWIP in $ Mn 22 69.6 ROCE (%) 13 8 29.4 24.2 18.8 13.9 18.7 7.9 FY11
Slide 39: Outlook
Outlook
Slide 40: Technical Textiles Business Outlook
Technical Textiles Outlook Business • NTCF is expected to remain a key business in the segment and a generator of steady cash flow • Demand for NTCF to mirror Indian GDP growth as it is closely linked to the transportation sector • Improving macroeconomic environment to have a positive impact on lam
Slide 41: Polymers Business Outlook
Chemicals & Outlook Polymers Business • Expanded R-134a capacities should assist significant sales improvement in the domestic and export markets • Loss of R-22 markets due to phase down for emissive use will be compensated by increasing feedstock use by the Specialty Chemicals segment • Future pote
Slide 42: Packaging Films Business Outlook
Packaging Films Outlook Business • Robust domestic FMCG demand and fast urbanisation leading to healthy growth in demand: industry being cyclical, the situation is expected to turnaround in the near future • Focus on full utilisation of assets and incorporating more value-added products in the portf
Slide 43: Other Milestones
Other Milestones
Slide 44: Awards & Recognitions
Other Awards & Milestones Recognitions Winner of Deming Prizes for 2 businesses Chemicals Tyre Cord Business Business 2012 2004 CII-ITC SRF in Sustainabilit y Awards Forbes’ 2008 Strong Commitment ‘Best 2009, 2010 & Under a 2011 Significant Achievement Billion 2013 List’ Sustainability Prize 2011 44
Slide 45: CSR Awards
Other Awards & Milestones Recognitions CSR Awards 2012 Businessworld FICCI CSR Award Best CFO 2013 Aaj Tak Care Awards Award 2013 Greentech CSR Award 2012: ‘Best CFO’ presented by a leading Indian business magazine BusinessWorld 45
Slide 46: Concern for Community
Other Concern for Milestones Community Education Vocational Skills Undertakes up-gradation of Undertakes several initiatives government schools under to improve the employability of ‘Quality Education for All’ people especially the younger programme, covering 90 generation from the primary and middl
Slide 47: Thank you
KD oR re We always find a better way Thank you