Skipper Ltd · NSE:SKIPPER
Skipper — Investor Presentation (March 2015)
43 slides from Skipper's investor presentation, March 2015
Slide 1: One of the most exciting power-water sector plays in India
What makes this company one of the most exciting power-water sector plays in India today
Slide 2: Structure
Structure Corporate Business Divisions Aspirations Financials
Slide 3: Broad presentation take-aways
Historical One of India’s fastest growing companies within chosen (water and power) sectors Turnover CAGR of 28% in three years (FY11- Broad FY14) presentation Fastest growing and second largest Eastern take-aways India water transportation brand; 10% market share of the PVC pipe business in eastern
Slide 4: Strategy: broad presentation take-aways
Strategy Volume-value Progressively asset-light; profitable growth Broad focus presentation Evolving; zonal to national in one business; take-aways national to international in another Cont… Value-addition through growing Export business, Monopoles and EPC, cPVC pipes focus (water transmission)
Slide 5: Game changers
Only company in India to have complete value chain control from Angles to Tower production to Fastners to EPC resulting in control of over 80% of the cost on any Tower Line project Among the top three players in the T&D Infrastructure sector of India which is witnessing massive investments by the go
Slide 6: Game changers (cont.)
Massive investment plans announced by the government in the water transmission and distribution space for the next few years. Strong distribution network in eastern India as well as expertise in development of distribution channels in new areas. Game Strong brand presence in eastern India which will
Slide 7: Section 1: Corporate
+ CORPORAT &
Slide 8: Milestones
Milestones 1981 1990 2001 2003 1981 Company incorporated and Company entered into Set up Set up first Tube mill commenced manufacturing manufacturing Telecom LPG Cylinder unit Hamilton Poles Towers & Masts 2005 2006 Set up first Crossed Got POWERGRID approval Entered into a manufacturing Galvanizing
Slide 9: Milestones
Milestones 2007 2008 2009 Entered into value addition Started process of Conversion Got India's first order for Commissioned Uluberia of Steel Tubes as of Tower production process 800KV transmission towers unit with first PVC unit Scaffoldings from Manual to Automated from PGCIL and India's first do
Slide 10: Corporate: About us
Corporate About us Track record: Core sector play: Skipper Limited Large operating Skipper (established 1981) is space of the flagship INR 60,000 crore Power Water Company of the annually (water transmission transmission towers pipes and fittings Kolkata-based S.K. transportation and and distributio
Slide 11: Corporate: About us
Corporate About us Indian and global: Effective: Attractive sectoral Leadership: One of Exports to South Combination of proxy: Revenues India’s leading America, Europe, promoter and grew 28% CAGR in manufacturers: Africa, Middle East, professional teams the three years Power transmission South / Sou
Slide 12: Board of Directors – Promoter Directors
Board of Directors – Promoter Directors Sajan Kumar Bansal, Managing Director The driving force. His visionary leadership has helped grow the Company from a single product manufacturer to multi-unit, multi-product conglomerate (steel to plastics). Sharan Bansal, Director A mechanical engineering gra
Slide 13: Board of Directors – Independent Directors
Board of Directors – Independent Directors Amit Kiran Deb, IAS (Retired) Chairman Has held several portfolios in the West Bengal State Government (Home, Cultural & Information, Tourism and Industry) before retiring as Chief Secretary and Tourism Secretary. Possesses a profound knowledge and experien
Slide 14: Section 2: Business Divisions
Section 2 > + USS oa ASIOL iS
Slide 15: Power Division
Power Division Power T&D business Power transmission & distribution overview Out INR 754crore 64.72% performance Investment revival 2013-14 Contribution to revenues 2013-14 revenue Deficiency
Slide 16: Transmission - National deficiency & Investment Revival
Transmission - National deficiency & Investment Revival Inadequate national transmission capacity – Only 30% increase in Transmission capacity vs 50% increase in Generation capacity last 5 years Almost a third of India not connected to a power grid. Each Transmission Project takes minimum 4-5 years
Slide 17: Power consumption and Indian transmission line network
Average power consumption per capita (kVA) India China World 500 447 400 313 300 200 90 100 0 Indian transmission line network Transmission lines 10th Plan end 11th Plan end 12th Plan end (AC and HVDC systems, ckm) (est.) (est.) (est.) HVDC bipole lines 5,872 9,452 18,892 765 kV 1,704 4,164 31,164 4
Slide 18: Skipper's power transmission business – towers
Skipper’s power transmission business – towers Presence across business sub-segments – Towers, EPC, monopoles and poles Among the three largest power transmission tower manufacturers in India Economies of scale; not easy to replicate; enhances sustainability Towers account for almost 60% of a power
Slide 19: Skipper's product portfolio
Transmission towers including Towers and Monopoles Skipper’s product Distribution products including portfolio Swaged and Octagonal poles
Slide 20: Skipper's integrated value chain
Skipper’s integrated value chain Steel Billets & Design and Manufacture EPC blooms as MS & HT Angles Manufacture Projects input Complete towers 180,000 MTPA capacity MS and HT angles 95% of volumes consumed in-house; rest sold Fabrication and 175,000 MTPA capacity galvanization of complete towers an
Slide 21: Outperformance-focused business model
Outperformance-focused business model Export orders are rapidly growing – 10% of the order book in FY13 to 46% of the order book in FY15 (INR 1130 crore export order book) Higher exposure to value-added, faster-growing segment Entry barriers higher in 400 kV+ lines (prequalification, infrastructure
Slide 22: Changing order book for Towers (Domestic)
Growing value-accretion – changing order book for Towers (Domestic) Order book, 2010 (%) Order book, 2014 (%) Order book, 2015 (%) 55 71 70 30 30 29 15 0 0 132-220 kV 400 kV 765 kV 132-20 kV 400 kV 765 kV 132-20 kV 400 kV 765 kV
Slide 23: Monopoles – growing value-addition
Monopoles – growing value-addition in the tower T&D space Monopoles are self-supporting tubular structures; carry transmission lines from 11 kVA to 400 kVA; extensively used in new telecom capacities and 4G network expansion Monopoles consume low ground and aerial coverage One of the three companies
Slide 24: Distribution poles – growing value-addition
Distribution poles – growing value - addition in the tower T&D space ‘Power by 2020’ is a central government vision of reaching power to every household across the country Skipper among India’s four largest manufacturers of galvanized steel poles. Manufactures the entire basket of products in steel
Slide 25: EBIDTA margin comparison
2014-15 (9M) EBIDTA margin comparison Skipper Kalpataru KEC 19.21% 10.84% 7.81% 4.70% Skipper’s logistics cost per ton of 7.50% Average industry logistics cost per sales ton of sales
Slide 26: Higher margin: why our tower margins are better
Higher Margin 1. Scale and Size. 2. Integrated 3. Logistic Operations. Advantage. why our allows us high Tower negotiation power allows us to keep being in Eastern on raw material the profit on part all the margins are sourcing, resulting rolling mill primary steel better than low manufacturing oper
Slide 27: Transmission Tower Business unit financials
Transmission Tower Business unit financials SALES yearly (M.T.) Sales 9M (M.T.) 76310 101728 67748 64618 12-13 13-14 9M - FY 14 9M - FY 15
Slide 28: Power T&D blueprint for sustained outperformance
Power T&D Blueprint for sustained outperformance Growing the proportion of high-margin EPC business to 25 per cent of T&D turnover Increase galvanizing capacity; widen value- added production Low debt intensity for incremental revenues Growth ambition Grow revenues 32 per cent y-o-y Carve out a cons
Slide 29: Water Division
Water Division Our water transportation business INR 69crore 5.90% Contribution to 2013-14 2013-14 Sales revenue Water transmission overview Deficiency Evolution Outperformance
Slide 30: Water Transportation Industry
Water Transportation Industry Industry deficiency & Evolution Less than 50% urban population with access to piped water. Only 14% of rural income spent on agri inputs (including PVC pipes) Water utilities do not cover almost 25% of Indian population. Over USD 1 trillion allocated in 12th Plan for co
Slide 31: Skipper's water transportation business
Skipper’s water transportation business Ventured into the water transmission infrastructure (pipe) business in 2009 Captured 10% of eastern India’s market share; ranked zonal second; coveted part of a small club of quality makers Products largely comprise PVC pipes and fittings (among handful nation
Slide 32: Outperformance-driven business model
Outperformance-driven business model Competitive advantage: INR 8,500 per MT of capacity added (industry average of about INR 20,000 per MT). Achieved through Lease – out strategy of fixed infrastructure such as Land & Sheds Contemporary: 60 per cent of gross block less than 5 years old Brand positi
Slide 33: Core strengths
Graduated generic sales to brand ambassador- Core led marketing (Navjot Singh Sidhu) strengths Reducing price differential between the market leaders and us from 25% in 2009 to above 6% in 2014 Grew EBIDTA margin – 8% in 2011-12 to 11% in 2013-14 and to 19% in 2014-15 (9M) despite economic slowdown
Slide 34: PVC Pipe Business unit financials
PVC Pipe Business unit financials Yearly SALES Yearly Sales 9M Sales 9M Sales (M.T.) Rs.in Cr (M.T.) Rs.in Cr 69 55 55 5129 6430 48 5941 4934 12-13 13-14 12-13 13-14 9M - FY 149M - FY 15 9M- FY 14 9M- FY 15
Slide 35: PVC Pipes blueprint for growth
PVC Pipes Blueprint for growth Increase capacity ten-fold to 100,000 TPA by FY 18 Emerge among the top five PVC pipe makers of India Evolve from zonal to pan-national The addition of CPVC pipes to be product basket strengthens our position further in urban centres apart from the rural agricultural s
Slide 36: PVC Pipes growth ambition
PVC Pipes Growth ambition Focus on 10x installed capacity growth by FY18 and emerge as one among four players in India to have 100,000 TPA capacity. Extend from zonal to national presence Grow EBIDTA margins to among the highest among the top players in the country (14% vis-à-vis 11% today FY 2013-1
Slide 37: Section 3: Aspirations
* aespirarion
Slide 38: Corporate Aspiration
Corporate Aspiration To Grow 3x in Power T&D business and 10x in Water business Focus on asset-lightness in EPC and PVC; extend to value-addition Focus on industrialized, market-oriented and finished products and services Achieve superior returns from branded products Extend presence from zonal to n
Slide 39: Section 4: Financials
* Financidl
Slide 40: Company Financials
Company Financials (all figures Rs. In Crore) Yearly Yearly EBIDTA 9M 9M EBIDTA Net Sales 112 Net Sales 148 87 74 1042 771 610 901 12-13 13-14 12-13 13-14 9M - FY 14 9M - FY 15 9M- FY 14 9M- FY 15
Slide 41: Company financials: Profit & Loss Summary
Company financials (Contd.) Amount in INR Cr. Profit & Loss Summary FY 12-13 FY 13-14 9M FY 14 9M FY 15 Net Sales/Income from 900.34 1,041.50 610.20 770.76 Operations EBITDA 85.27 110.20 72.50 146.47 EBITDA Margin 9.47% 10.58% 11.88% 19.00% Other Income 1.42 2.14 1.25 1.57 Depreciation & Amortisatio
Slide 42: Company financials: Balance Sheet
Company financials (Contd.) Amount in INR Cr. Balance Sheet FY 12-13 FY 13-14 Net Worth 206.09 231.17 Long Term Debt 135.44 118.44 Short Term Debt (Bank CC+Related party) 268.73 268.16 Other Non Current Liabilities 18.12 21.77 Total Liabilities 628.38 639.54 Fixed Assets 329.80 346.79 Other Long Ter
Slide 43: Company financials: Cash profit, RoCE, receivables cycle
Company financials (Contd.) Cash profit (Rs. Crore) RoCE (%) Recevables Cycle (Days) 72.62 41.99 64.24 16.10 60.17 55.76 31.28 12.93 10.63 24.22 21.61 9.03 10-11 11-12 12-13 13-14 10-11 11-12 12-13 13-14 10-11 11-12 12-13 13-14