KEC International Ltd. · NSE:KEC

KEC International — Investor Presentation (October 2013)

42 slides from KEC International's investor presentation, October 2013

1. Slide 1: KEC International Limited Corporate Presentation

   KEC International Limited Corporate Presentation October 2013

2. Slide 2: Disclaimer

   Disclaimer This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures,

3. Slide 3: Contents

   Company Profile Page 05-12 Business Business Overview Overview Page 14-22 Page 14-37 Industry Overview Page 24-29 Contents ManagementTeam Management Team Page39-40 Page 31-32 Financial Performance Page 34-37 Growth Enablers & Strategy Page 39-40

4. Slide 4: Company Profile

   Company Profile Page 05-12

5. Slide 5: KEC International - Introduction

   KEC International - Introduction EPC Major Business Portfolio Transmission Revenue andPower OrderSystem Book  An Indian multinational  6 businesses  FY13 sales: ` 6,979 cr. ($1.3bn) infrastructure EPC major  Global leader in Power  Order book: ` 10,200 cr. ($1.7bn)  Flagship company of the RPG

6. Slide 6: Business Portfolio

   Business Portfolio Power Power Cables Telecom Railways Water Transmission Systems Water Transmission Power Cables Telecom Substations Electrification Resource lines LT/HT/EHV Towers Management Water & Towers - Distribution Telecom OFC/OPGW Civil & Track Waste Water Lattice & Poles Network Cables Net

7. Slide 7: Our value drivers

   Our value drivers Vision To be a global leader in Power Transmission and Distribution EPC business and a significant player in other infrastructure business, providing superior value to all stakeholders. Culture Pillars Delivery focus Cost and profitability focus Ownership and Accountability Cross f

8. Slide 8: Historical Milestones

   Historical Milestones Structures Tower International supplied for 765 kV Railways - supply to turnkey Entry in Bhakra transmission turnkey New transmission Water Nangal project construction Zealand in Sudan Business Project, India. 1945 1950 1959 1960 1961 1968 1982 1999 2007 2009 2010 2011 Taken ov

9. Slide 9: Order Book Breakup

   Order Book Breakup Robust and Diversified Order Book – ` 10,200 crore ($1.7 bn) Business Geography Wise Wise Transmission, 76.8% Power Systems, 11.0% India, 46.0% South Asia (Excl India), 3.1% Cables, 1.5% Telecom, 2.9% MENA, 19.4% Africa & Central Asia, 18.2% Railways, 2.8% Water, 5.0% Americas, 8.

10. Slide 10: Sales Breakup – FY13

    Sales Breakup – FY13 FY13 Sales – ` 6,979 crore ($ 1.3 bn) India Business v/s Wise International Transmission, 70.2% Power Systems, 14.0% Cables, 7.9% Telecom, 2.2% India, 41.4% International, 58.6% Railways, 3.9% Water, 1.8% 10

11. Slide 11: Global Footprint

    Global Footprint EPC Projects Tower Supply Footprints in 50 countries across the globe KEC International Limited 11

12. Slide 12: KEC - Equity Share Information

    KEC - Equity Share Information Shareholding Pattern Equity Share Information  Share Price: ` 34/share *  Market Cap: ` 876 Cr. ($ 140 mn) * Promoters, 47.7%  Net Worth: ` 1,169 cr. ($ 187 mn) Institutions, 35.1%  Financial Year – April to March Public, 17.2%  Face Value – ` 2 per share  Listed

13. Slide 13: Business Overview

    Business Overview Page 14-22

14. Slide 14: Power Transmission Business

    Power Transmission Business  Global leadership  KEC’s largest business vertical  Over 5 decades of experience in turnkey construction of transmission lines  Strong international presence across multiple geographies  Capability to successfully executing projects in difficult terrain and adverse

15. Slide 15: Power Transmission Business: Capabilities

    Power Transmission Business : Capabilities Design & Engineering  In-house design centers with a strong team of over 100 design experts spread in India and Americas.  Equipped with latest softwares like BOCAD, PLS Tower, PLS Pole, PLS CADD, AUTOCAD, MICROSTATION and Google Earth. Manufacturing  La

16. Slide 16: Power Transmission Business: Capabilities

    Power Transmission Business : Capabilities Successfully executed projects in difficult terrains and adverse climatic conditions Mountains, Hills : UAE, Saudi, India, Mozambique KEC International Limited 16

17. Slide 17: Power Systems Business

    Power Systems Business  The Company’s progression from Transmission to Power Systems gives it an advantage to provide end-to-end solutions from power evacuation to distribution to consumers.  This is the second largest business vertical of the Company.  The Company undertakes EPC projects of  Su

18. Slide 18: Cables Business

    Cables Business  Fully integrated state-of-the-art manufacturing facilities in different parts of India.  Pioneered production of XLPE cables in India.  Manufactures range of power cables and telecom cables.  Manufacturing locations –  Vadodara (Gujarat) – High Tension and Extra High Voltage Po

19. Slide 19: Telecom Business

    Telecom Business  Amongst leading EPC players to provide telecom towers on turnkey basis to operators, tower management companies and utilities.  Experience in laying OFC and OPGW cables on turnkey basis and live line conditions.  Installation and commissioning of GSM/ CDMA equipment.  Extensive

20. Slide 20: Railways Business

    Railways Business  Complete turnkey solutions provider in the railways infrastructure EPC space. o Civil infrastructure including bridges, tunnels, platform, workshop modernization, station building etc. o Earthwork, new track laying and rehabilitation of existing tracks. o Railway electrification

21. Slide 21: Water Business

    Water Business  Undertakes Water Resource Management Projects - Includes construction of canals, dams, tunnels, embankments and lift irrigation schemes.  Undertakes Water and Waste Water Treatment – Includes intake system, transmission, storage, collection, treatment and disposal of waste water 

22. Slide 22: Exploring opportunities in Renewable EPC space

    Exploring opportunities in Renewable EPC space  As part of KEC’s continuous expansion strategy, the company is looking at providing Engineering, Procurement and Construction (EPC) solutions for Solar and Wind sector.  Solar Sector  In India, Solar sector has started opening up 2011 onwards  Indi

23. Slide 23: Industry Overview

    Industry Overview Page 24-29

24. Slide 24: Industry Outlook: Transmission & Distribution (T&D)

    Industry Outlook: Transmission & Distribution (T&D) The T&D industry is expected to show strong demand globally driven by -  Increase in new power generation capacities  Increasing Private Sector Investments in the sector  Investments in interconnection grids/projects by various countries  Repla

25. Slide 25: Industry Outlook: T&D (India)

    Industry Outlook: T&D (India) Power Generation Transmission Lines 88,537 107,440 78,700 88,515 54,964 69,926 (MW) (CKM) 11th Plan 11th Plan 12th Plan 11th Plan 11th Plan 12th Plan (Target) (Actual) (Target) (Target) (Actual) (Target) Source: Planning Commission – Draft 12th five year plan Source: Pl

26. Slide 26: Industry Outlook – T&D (International)

    Industry Outlook – T&D (International) Key Region Key Demand Drivers Countries South Africa, Nigeria,  Per capita electricity consumption is very low - 553 kwh v/s World average of 2,975 kwh Africa Ethiopia,  Various interconnections are being planned to improve power evacuation infrastructure Ken

27. Slide 27: Industry Outlook – Cables and Telecom

    Industry Outlook – Cables and Telecom Cables  The Current size of cables market in India is estimated to be ` 14,000 cr. ($ 2.6 bn) per annum.  The demand for power cables is mainly driven by the power sector, real estate and industries such as steel, oil & gas, chemicals etc.  The Government of

28. Slide 28: Industry Outlook - Railways

    Industry Outlook - Railways 12th five year plan (2012-17) Investment in railway sector in India* 6,000 ` 5,218 bn  Targets spend is 2x as compare to 11th plan target. $ 97 bn 5,000 4,000 Dedicated Freight Corridors (DFC) ` 2,618 bn 3,000 $ 49 bn ` 1,953 bn  Two DFCs have been planned – Eastern (18

29. Slide 29: Industry Outlook - Water

    Industry Outlook - Water Scarcity of water in India Investment in water sector in India  India has 16% of the world’s population; but only has ` 7593 bn 4% of world’s total available fresh water. * 8,000 $ 141 bn  While the availability of fresh water is almost fixed, 7,000 the demand for water is

30. Slide 30: Management Team

    Management Team Page 31-32

31. Slide 31: Highly Experienced Team

    Highly Experienced Team  Meritorious Chartered Accountant with an Advanced Management Programme from Harvard Business School.  40 years of varied experience across textile, edible oils & Engg. Industries & also geographies.  Former President of the Indian Electricals and Electronics Manufacturers

32. Slide 32: Highly Experienced Team

    Highly Experienced Team Nikhil Gupta Sanjay Chandra Dilip Shukla Executive Director - Cables Chief Executive - Railways Chief Executive - Water  Meritorious Chartered Accountant and graduate  Electrical Engineer with 30 years of  Mechanical Engineer with 31 years of in Economics. experience acros

33. Slide 33: Financial Performance

    Financial Performance Page 34-37

34. Slide 34: Financial Performance – Last 5 years

    Financial Performance – Last 5 years Net Sales Order Book 7,000 4 Yrs. CAGR 19.4% 6,979 4 Yrs. CAGR 16.4% 9,470 10,000 5,815 8,572 7,800 5,250 4,477 7,500 (` crore) 3,907 5,163 5,500 3,429 (` crore) 3,500 5,000 1,750 2,500 0 0 FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13 $ Mn 632 720 825 1071 1

35. Slide 35: Financial Performance – Last 5 years (Working Capital)

    Financial Performance – Last 5 years Inventories (Days) Receivables (Days) 28 240 218 30 27 199 24 200 183 185 179 23 24 21 160 (Days) (Days) 18 120 12 80 6 40 0 0 FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13 Gross Working Capital (Days) Net Working Capital (Days) 303 120 300 270 270 106 250 25

36. Slide 36: Profit & Loss Highlights – H1 FY14

    Profit & Loss Highlights – H1 FY14 (` Crore) ($ Millions) Particulars Growth Growth Q1 FY14 Q1 FY13 H1 FY14 H1 FY13 H1 FY14 H1 FY13 (Y-o-Y) (Y-o-Y) Net Sales 1,778 1,668 6.6% 3,524 3,032 16.2% 563 484 EBITDA 112 86 30.4% 200 189 5.8% 32 30 EBITDA Margins (%) 6.3% 5.1% 5.7% 6.2% 5.7% 6.2% PBT (exclud

37. Slide 37: Balance Sheet – H1 FY14 end

    Balance Sheet – H1 FY14 end Value Particulars ` crore $ million Net Worth 1,169 187 Gross Debt 2,041 326 Deferred Tax Liability (Net) 65 10 Total 3,275 523 Net Fixed Assets (Including Goodwill) 1,447 244 Receivables 4,067 650 Other assets (Current / Non Current) 1,596 255 Gross Working Capital 5,663

38. Slide 38: Growth Enablers and Strategy

    Growth Enablers and Strategy Page 39-40

39. Slide 39: Growth Enablers

    Growth Enablers Strong Industry Fundamentals  Power, Telecom, Railways and Water: Basic infrastructure needs for economic development of all the developing & underdeveloped countries  Each of our business has large global potential Growth Enablers Strong Balance Sheet Diversified Presence  Superi

40. Slide 40: Growth Strategy

    Growth Strategy Product Expansion  Entered in Power Systems, Railways, Cables, Telecom and Water; contributes over 25% of sales  Established new facility for EHV cables at Vadodara  Exploring opportunities in Solar and Wind EPC  Monopoles business in US; Increasing capacity at Mexico  Hardware

41. Slide 41: Summary

    Summary Strong industry fundamentals Experienced Diversified Management team Geographical presence Transforming Growing through good mix of organic into an EPC Leadership in Power and in-organic conglomerate Transmission EPC opportunities Growing presence in Financial Power Systems, performance – Ca

42. Slide 42: Thank You

    THANK YOU Registered Office RPG House, 463, Dr. Annie Besant Road, Worli, Mumbai - 400 030. Phone: +91-22-6667 0200 Email: [email protected] www.kecrpg.com

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