Asian Paints Ltd. · NSE:ASIANPAINT
Asian Paints — DSP-ML Conference, Jaipur, February 8-9, 2006
43 slides from Asian Paints's conference presentation, Feb 8, 2006
Slide 1: DSP-ML Conference
1 DSP-ML Conference Jaipur February 8-9, 2006
Slide 2: Presentation structure
2 Presentation structure • Overview of the company • Results : 9M - FY 2006 • Outlook and Risks : FY 2006
Slide 3: The Asian Paints Group
3 The Asian Paints Group Asia’s fourth Among the Top 10 largest paint Decorative Coatings company & leader companies in the world in 11 countries Operates in 22 countries Group revenue of with 29 paint mfg facilities US $ 585 million & with capacity of market capitalization 400 mn ltrs/annum of over
Slide 4: Asian Paints Group - Sales Breakup FY 2005
4 Asian Paints Group - Sales Breakup FY 2005 2.9% 19.4% 77.7% Paints-India Chemicals International Only 50% of Asian PPG (50:50 JV with PPG USA) sales have been considered in Paints India
Slide 5: Paints - India
5 Paints - India Indian Paint Market • Estimated to be around Rs. 82 billion (USD 1.9 bn) • Unorganised sector controls around 35 % of the paint market • Decorative to Industrial Coatings ratio is around 70:30 • Exterior coatings is the fastest growing segment in Decorative coatings • Automotive coa
Slide 6: The Indian Paint Market
6 The Indian Paint Market Paint Revenue Share FY 2005 35.00% 29.60% 0.20% 2.70% 12.20% 12.40% 7.90% Asian Paints Nerolac Berger Paints ICI Shalimar J&N Other Players* * Others include regional players, organised players who are not listed and the small scale sector
Slide 7: Decoratives Market in India
7 Decoratives Market in India • Very low per capita consumption • Most of the sale is for re-decoration • Painter / contractor led for long; now becoming B-I-Y (Buy It Yourself) • Virtually no D-I-Y(Do It Yourself) segment except at very low end • Fragmented retail • The exteriors segment has taken
Slide 8: Asian Paints - Decorative BU India
8 Asian Paints - Decorative BU India • Contributes 70 % to group’s revenue • Asian Paints is the leader in all segments in Decorative Paints viz – Interior wall finishes – Enamels – Exterior Finishes – Wood Finishes
Slide 9: Decorative BU: Elements of the Supply Chain
9 Decorative BU : Elements of the Supply Chain 16 Outside Manufacturing over Processing Centres 1200 SKUs 5 Manufacturing Over 450 Raw Plants Materials 6 Regional Over 250 Active Distribution Centres Packaging Materials 72 Sales Locations 18000 Dealers
Slide 10: Industrial Coatings - India
10 Industrial Coatings - India • Second largest player in industrial coatings in India • Growth in revenue in excess of 25% over past 3 years • Constitutes around 8 % of the group’s revenue* *Only 50 % of Asian PPG Industries sales have been included
Slide 11: Industrial Coatings - India
11 Industrial Coatings - India • Asian PPG Industries Ltd. – A 50:50 JV with PPG Industries of USA to manufacture automotive coatings – Second largest supplier to the auto segment in India • Asian Paints Industrial Coatings Ltd. – 100% subsidiary for Powder Coatings; Technology tie-up with Protech C
Slide 12: Industrial Coatings - India
12 Industrial Coatings - India • APL Industrial Paints business – Current business comprises of • Protective Coatings, Road Markings, and Floor Coatings – Second largest in Protective Coatings – Largest player in Road Markings within four years of entry – Dedicated manufacturing facility for protect
Slide 13: Chemicals
13 Chemicals • As a part of its backward integration strategy, Asian Paints manufactures Phthalic Anhydride (PAN) and Pentaerythritol • PAN is manufactured in Gujarat and Penta in Tamil Nadu • Chemicals business contributes 2.9 % to the group’s revenue – Its contribution to the group’s revenue has b
Slide 14: Consistent Performance: EBITDA & PAT
14 Asian Paints Limited Consistent Performance 3600 20000 EBITDA & PAT (Rs Mn) 3200 18000 2800 16000 2400 14000 2000 12000 l 1600 10000 1200 800 8000 400 6000 2000-01 2001-02 2002-03 2003-04 2004-05 Net Sales EBITDA PAT
Slide 15: Net working capital & ROCE for the last five years
15 Asian Paints Limited - Net working capital & ROCE for the last five years 80 71 60 46 39 27 38 40 36.5 41.5 33.6 37.4 20 27.9 0 FY'01 FY'02 FY'03 FY'04 FY'05 ROCE (%) NWC(in days) ROCE : EBIT/Cap.emp
Slide 16: Indian Paint Market - Trends
16 Indian Paint Market - Trends • Post liberalisation, the Indian paint market has grown by around 1.5 to 2 times real GDP growth every year • Overall paint demand will continue to be good and will be boosted by – Very low penetration levels of paint in India – Policies conducive for growth of the c
Slide 17: Indian Paint Market - Trends
17 Indian Paint Market - Trends – More educated consumers & increased aspirations for better homes & lifestyles – Increasing consumer awareness for branded products • Industrial coatings expected to grow faster – Due to increasing investments in infrastructure – Segments like Powder coatings, Road M
Slide 18: International Business Unit contributes 19% to group revenue
18 International Business Unit contributes 19 % to the group’s revenue
Slide 19: Defining the Priorities for Growth
19 Defining the Priorities for Growth Jamaica, Trinidad & Barbados Caribbean Egypt & GCC Middle East (Bahrain, UAE & Oman) Growth Leadership Regions Regions South Asia Nepal, Sri Lanka, Bangladesh South East Singapore, Malaysia South Pacific Asia Thailand & China South Pacific Islands
Slide 20: Medium Term Objectives
20 Medium Term Objectives Growth Regions – Focus on aggressive top line growth To be within the top 3 players in the defined segment in each of these markets Leadership Regions – Focus on maximizing free cash flows To be seen as a premium company and to increase market share atleast by 1 % p.a
Slide 21: Presentation structure
21 Presentation structure • Overview of the company • Results : 9M - FY 2006 • Outlook and Risks : FY 2006
Slide 22: Dividend
22 Dividend • Interim dividend of 45%(previous year : 40%) distributed for FY 2006
Slide 23: Consolidated P&L – 9M FY 2006
23 Consolidated P&L – 9M FY 2006
Slide 24: Highlights - Consolidated results 9M FY2006
24 Highlights - Consolidated results –9M FY2006 • Sales growth of 16.3 % driven by – Strong growth in decorative and industrial paints in India & the Middle East region • Better management of overhead expenditure • Pressure on margins have eased in Q3 due to softening of raw material prices
Slide 25: Asian Paints Consolidated - Key Ratios
25 Asian Paints Consolidated - Key Ratios
Slide 26: Consolidated Sales breakup: 9M FY 2006
26 Consolidated Sales breakup : 9M FY 2006 Rs in Millions * 50 % of Asian PPG Industries sales are included
Slide 27: Decorative Business - India
27 Asian Paints Consolidated Results 9M FY 2006 • Decorative Business - India • Industrial Operations - India • International Operations
Slide 28: Paints: Decoratives India: 9M FY'06
28 Paints : Decoratives India : 9M FY’06 • Demand for decorative paints has been good – Despite prolonged monsoons and short festival season • Excellent growth in all wall finish products – Impressive growth recorded by interior and exterior emulsions • New products are faring well – Apex Ultima lau
Slide 29: Paints: Decoratives India: H1 FY'06
29 Paints : Decoratives India : H1 FY’06 • Total Colour Worlds installations in the country around 6600 • Asian Paints Home Solutions now available in nine cities • Project sales now expanded across the country to cater to large institutional business • The second phase to increase the capacity of S
Slide 30: Paints: Decoratives India: 9M FY'06
30 Paints : Decoratives India : 9M FY’06 • Price of TiO2 has been stable in last nine months • Prices of solvents have increased significantly during the year but solvent prices declined marginally in Dec’05 • Prices of monomers, additives and vegetable oils have decreased in the last six months
Slide 31: Industrial Operations - India
31 Asian Paints Consolidated Results 9M FY 2006 • Decorative Business - India • Industrial Operations - India • International Operations
Slide 32: Industrial Operations - India: 9M FY'06
32 Industrial Operations- India : 9M FY’06 • Sales for Protective coatings has grown in excess of 25 % – Increased spending in infrastructure and new capacity requirements has spurred growth for protective coatings • Sales for Asian PPG, the automotive JV has increased by 19.6 % – Industry growth fo
Slide 33: Industrial Operations - India: 9M FY'06
33 Industrial Operations – India : 9M FY’06 • Sales for powder coatings has increased by 36 % – Industry has grown by 25% due to increased demand for white goods, new applications in architectural coatings and exports of automotive parts.
Slide 34: International Operations
34 Asian Paints Consolidated Results 9M FY 2006 • Decorative Business - India • Industrial Operations - India • International Operations
Slide 35: International Operations: 9M FY2006
35 International Operations : 9M FY2006 • Value sales increased by 11.3 % to Rs. 3.98 billion • Material costs increase was significant – Increase could be passed on to the consumer in some markets • Overheads and working capital satisfactory • ERP solution launched and implementation will be comple
Slide 36: Region wise Sales Breakup
36 Region wise Sales Breakup H1 FY'05 H1 - FY'06 Caribb Caribbe ean an Middle 25.7% Middle 24.0% East East 38.1% 36.2% South South Pacific Pacific 12.9% 13.6% S.E. South S.E. South Asia Asia Asia Asia 16.1% 8.4% 16.2% 8.7% • Middle East region has registered the highest growth at 22%
Slide 37: International Operations: Going ahead
37 International Operations : Going ahead • Investments in International subsidiaries reviewed periodically and the Company is looking at rationalising its investment portfolio • Middle East offers great opportunities as huge investments are likely to be made in oil, gas and construction industry. P
Slide 38: Presentation structure
38 Presentation structure • Overview of the company • Results : 9M - FY 2006 • Outlook and Risks : FY 2006
Slide 39: Environment – FY'2006
39 Environment – FY’2006 • India • GDP growth estimated at 7.5 % for FY06 • Fiscal deficit a cause for concern • Cement dispatches till date and construction industry continue to perform well • Slowdown in the automotive industry – We are optimistic of this industry’s performance in the long run • A
Slide 40: Environment – FY'2006
40 Environment – FY’2006 • India is the 4th largest economy in the world in FY04 in PPP terms • GDP of US$ 3,033 billion (PPP terms) - grew at 8.3% in FY04 • Over 50% population is under the age of 25 years • Higher services mix, increasing urbanization, growing working population and a nascent cons
Slide 41: Outlook and Risks – FY'2006
41 Outlook and Risks – FY’2006 • India • Paint Industry expected to grow 15% by value • In Decorative paints our emphasis would be to continue to grow the market • Demand for industrial coatings will continue to be buoyant • International • Manage the portfolio on a regional basis – Continue to buil
Slide 42: Outlook and Risks – FY 2006
42 Outlook and Risks – FY 2006 • Decoratives paints business in India is expected to grow by 10-12 % by volumes • Industrial business sales is expected to grow in excess of 20 % by value • International operations is expected to grow by 15 % by value in US dollar
Slide 43: Thank you...
Thank you... asianpaints
Asian Paints — DSP-ML Conference, Jaipur, February 8-9, 2006 on 6ix