Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Investor Presentation (December 2013)
48 slides from Grasim Industries's investor presentation, December 2013
Slide 1: Grasim Industries Limited: A VSF and Cement Major
Grasim Industries Limited A VSF and Cement Major December 2013
Slide 2: Cautionary Statement
Cautionary Statement Statements in this “Presentation” describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or impl
Slide 3: Presentation Structure
Presentation Structure Introduction Business Review Capex Highlights – H1: 2013-14 Summary 3
Slide 4: The Aditya Birla Group
The Aditya Birla Group Amongst the top business houses in India Operations spread over 36 countries Revenue at $42 Bn.(60% from overseas operations) Goal is to become a US$65 Bn. Group by 2015 136,000 employees, belonging to 42 nationalities Grasim - Viscose Staple Fibre & - Cement : Ultra
Slide 5: Group Driving Principles for Shareholder Value Creation
Group Driving Principles for Shareholder Value Creation Emphasis on cost leadership and efficiency Create world class assets, achieve global scale Focus on key value drivers and ensure long term availability of key inputs Benchmarking with world class quality and cost parameter Globally co
Slide 6: The Aditya Birla Group: Leadership Across Businesses
The Aditya Birla Group : Leadership Across Businesses Leading Global Player – Hindalco – Novelis is largest aluminum rolling company – Largest producer of carbon black – One of two largest producer of VSF – Fourth-largest producer of insulators – Fifth-largest producer of acrylic fibre Leadership po
Slide 7: Grasim: Market leader across business segments
Grasim: Market leader across business segments Leading Global Player – Capacity : 378K TPA (9% Global share) Viscose Staple – 120K TPA expansion to be commissioned in phased manner in Fibre Q 4 FY 14 Revenue ` 54 Bn. (US$ 1 Bn.) – 19% global share at Group level – Integrated model with experience of
Slide 8: Grasim's Global Standing
Grasim’s Global Standing VSF Business Cement Business Global Market Share Capacity (Mn. MT) * CNBM- China 343 Lafarge- France 224 Holcim- Switzerland 218 Chinese 53% Lenzing 20% Anhui Conch- China 209 Jidong- China 130 Others AVB Group 19% Heidelberg- Germany 122 8% (Grasim 9%) Sinoma- China 100 Cem
Slide 9: Grasim's "Two Business" strategy has paid off
Grasim’s “Two Business” strategy has paid off Consistent cash flow generation from VSF business Moderate capex need for VSF leading to substantial free cash flow Cement Business – high growth business with large capex requirement Cash surpluses from VSF gainfully used for Cement growth Cem
Slide 10: Substantial Capacity Buildup Outpacing Industry Growth
Substantial Capacity Buildup Outpacing Industry Growth FY FY FY FY Post 2000 Current Product / Facility Unit 2007 2010 2012 on going Expansion Actual Viscose Staple Fibre „000 TPA 221 270 334 334 378 498 (Q4 FY14) Chemical (Caustic Soda) „000 TPA 176 258 258 258 441 441 $ Grey Cement Mn. TPA 8.20 31
Slide 11: Strong growth in Revenue and Profits
Strong growth in Revenue and Profits Capital Employed Revenue Profit after Tax (Excluding CWIP & (Excluding Extraordinary Items) Liquid Investment) (` Bn.) (` Bn.) (` Bn.) 249.2 250.0 300 279.0 30.0 27.0 200.0 250 165.2 25.0 200 185.0 21.9 150.0 150 20.0 100.0 100 50.0 15.0 50 0.0 0 10.0 FY09 FY10 F
Slide 12: Grasim Business Mix – H1 2013-14
Grasim Business Mix – H1 2013-14 Net Revenues - ` 138 Bn. PBIDT - ` 27 Bn. 0.9 0.2 4.8 1.1 9.9 4.3 21.9 101.6 20.4 Cement VSF Pulp & Fibre Chemical Cement VSF Pulp & Fibre Chemical Others 12
Slide 13: Strong Financials
Strong Financials Standalone Consolidated Full Year H1 FY Full Year H1 FY (` Bn.) 2012-13 2013-14 2012-13 2013-14 Net Worth 101.2 107.7 196.6 209.4 Debt 13.0 14.6 95.6 101.3 Net Debt (Net of liquid funds) (7.4) (4.2) 28.3 37.0 Capital Employed 117.6 126.2 377.4 400.7 Debt:Equity (x) 0.13 0.14 0.37 0
Slide 14: Presentation Structure
Presentation Structure Introduction Business Review Capex Highlights – H1: 2013-14 Summary 14
Slide 15: Viscose Staple Fibre (VSF)
Viscose Staple Fibre (VSF) Leading global player – Capacity : 378K TPA (9% global share) Revenue ` 54 Bn. – Group is world’s largest with 19% global share (US$ 1 Bn.) – Fibre JV in China (72K TPA) – High level of backward integration
Slide 16: VSF Global Scenario
VSF Global Scenario Global Fibre Pie (84 Mn. MT) VSF: A cellulosic fibre 4% of global fibre market Others 6% of global man-made fibre market VSF 2% 4% Major Global Players‟ Capacity Cotton 28% „000 TPA Raw Wool 1% AVB group (incl. Grasim) : 788 Of which Grasim : 378 Synthetic Lenzing (
Slide 17: VSF: Global Presence
VSF: Global Presence Sweden • Domsjo pulp plant China,Hubei Canada • Fibre plant (72 K TPA) • 3 Pulp plants in in Joint Venture Joint Venture P India • 3 Fibre plants • 1 Pulp plant South East Asia • 2 Caustic soda plant • 2 Fibre plants of Group • 1 Fibre plant under Co. of 338K TPA Fibre Plant - O
Slide 18: VSF: Sustainable Competitive Strengths
VSF : Sustainable Competitive Strengths Amongst the low cost producers globally Highly integrated operations Captive raw materials - Pulp & Caustic Soda Five pulp manufacturing plants – Grasim, India : 1, Overseas JVs : 4 (Canada : 3, Sweden : 1) Captive power and steam Self managed wate
Slide 19: VSF: H1 2013-14 Performance (Consolidated)
VSF: H1 2013 -14 Performance (Consolidated) H1 Global Industry Scenario (` Bn.) 2011-12 2012-13 2013-14 Overcapacity continues to prevail in China affecting global sentiments Capacity („000 TPA) * 334 352 378 Surplus DG pulp capacity built at the time of boom, affected spot pulp realisations as
Slide 20: VSF: Outlook
VSF: Outlook Rupee depreciation should improve competitiveness of `/ Kg. Indian Textile Industry Domestic Fibre Prices In long term, VSF continues to hold favorable position in 130 126 120 121 110 comparison to other fibres 100 114 90 Preference for comfort fabric leading to increase in 80 70
Slide 21: VSF Strategy for Growth
VSF Strategy for Growth Ambitious expansion plan to increase VSF capacity from 334K TPA to 498K TPA is now nearing completion Projects commissioned Harihar Brownfield Expansion : 36K TPA Vilayat Chemical Expansion (Backward Integration) : 182K TPA Greenfield project at Vilayat (120K TPA) e
Slide 22: Cement
Cement Leading player in India – Current Capacity: 55.5 Mn. TPA – Total capacity to reach 70 Mn. TPA on completion of existing projects Revenue ` 213 Bn. – 555 MW of captive power plants across all major locations (US$ 4 Bn.) – Market leader in White Cement (0.6 Mn. TPA) and Ready Mix Concrete
Slide 23: Indian Cement Industry: Overview
Indian Cement Industry : Overview Second largest cement market in world Cement Capacity ~ 357 Mn. TPA (Sep 2013) Long term average growth has been 1.2 x of GDP Industry capacity grew by 2.5 times in last decade Large Domestic Market ~ 165 plants owned by 45 players East Top 6 players con
Slide 24: Indian Cement Industry
Indian Cement Industry Top Cement Producing Countries - Per Capita Consumption - 2012 2012 Mn. Tons kgs/person 2500 2150 1800 1580 2000 1500 1500 1200 800 900 720 1000 520 600 350 500 250 240 300 195 74 70 65 60 0 0 China India USA Brazil Vietnam Turkey China Turkey Vietnam World Brazil USA India __
Slide 25: Cement – Major Growth Drivers
Cement – Major Growth Drivers Favorable demographics with growing young population Rising affordability - Increasing income level Housing Rapid Urbanisation (27.8% in 2001 increased to 31.2% in 2011, likely to exceed 40% by 2030) 1 No. of Cities with population of 1Mn.+ to grow from 48 in 20
Slide 26: Infrastructure Spending: Xth, XIth & XIIth Plan
Infrastructure Spending: Xth, XIth & XIIth Plan Spending Overview $ Bln 280 Sectors X Plan XI Plan XII Plan Infrastructure Spending - XIIth Plan ($ Bln) 260 Actual Revised Estimate 260 Investment Projections 240 (2002-2007) (2007-2012) (2012-2017) 230 220 Power, Oil & Telecom 120 285 375 202 200 Irr
Slide 27: Cement Sector Outlook
Cement Sector Outlook 14 % Growth 12.1 Demand growth in FY14 likely to be 5% linked with 12 expected GDP growth rate at ~5% 10 9.8 9.3 - Demand growth has potential to recover to + 8% on 8 6.9 improvement in economic environment 6 5.3 5.6 Surplus supply scenario likely to continue over the 4 nex
Slide 28: Cement Business: Key Strengths
Cement Business : Key Strengths Operations spread across India (17% market share) Excellent growth record – 9 times in 15 years From 8 Mn. TPA in FY2000 to ~70 Mn. TPA by FY2015 Market Leadership “UltraTech” - Premium national brand Largest cement brand in India Leadership in key consu
Slide 29: Cement Business: H1 2013-14 Performance
Cement Business : H1 2013-14 Performance Industry Scenario H1 Demand growth continued to remain sluggish in (` Bn.) 2011-12 2012-13 2013-14 line with weak macro economic indicators - Good monsoon Capacity (Mn. TPA) 51.8 53.9 53.9 - Continued weakness in Infrastructure and Housing segment Sales Vol
Slide 30: Cement Business: Strategy for profitable growth
Cement Business: Strategy for profitable growth Focus on achieving accelerated profitable growth Aim to grow faster than the industry Capacity to increase from current 54 Mn. TPA to ~70 Mn. TPA on completion of existing projects India Overseas Total Remarks Present 50.9 3.0 53.9 Under Implemen
Slide 31: Presentation Structure
Presentation Structure Introduction Business Review Capex Highlights – H1: 2013-14 Summary 31
Slide 32: Capex plan
Capex plan Capex Work in Cash Outflow Capex under Progress Net FY14 FY15 spent Implemen- as on Capex onwards during ( ` Bn.) tation $ 01-04-13 H1 13-14 Standalone VSF Expansion : Vilayat (120K TPA), Harihar (36K TPA) 21.7 Chemical Expansion : Vilayat (182K TPA) 9.5 Epoxy Project : Vilayat (51K TPA)
Slide 33: Presentation Structure
Presentation Structure Introduction Business Review Capex Highlights – H1: 2013-14 Summary 33
Slide 34: Financial Performance – Consolidated
Financial Performance – Consolidated ` Bn. Half Year % Change Quarter 2 % Change Quarter 1 2013-14 2012-13 YoY 2013-14 2012-13 YoY 2013-14 137.8 134.5 2 Revenue 68.5 66.1 4 69.4 114.3 104.1 10 Operating Costs 58.1 52.1 12 56.2 26.9 32.7 (18) PBIDT 11.4 15.1 (24) 15.5 2.1 1.6 33 Interest 1.2 0.9 37 0
Slide 35: Net Profit Chart
Net Profit Chart ` Bn. Half Year Quarter 2 % % 2013-14 2012-13 2013-14 2012-13 Change Change Total Grasim's Total Grasim's YoY Total Grasim's Total Grasim's YoY Co. share Co. share Co. share Co. share 6.4 6.6 (2) Standalone PAT 4.1 3.8 8 9.5 5.7 13.2 7.9 (28) UltraTech Cement 2.8 1.7 5.5 3.3 (49) (0
Slide 36: Presentation Structure
Presentation Structure Introduction Highlights – H1: 2013-14 Business Review Capex Summary 36
Slide 37: Summary
Summary Businesses impacted by slowdown in economy Surplus capacities will continue to exert pressure till environment improves Continuous cost optimisation measures and R&D to help meet these challenges Both businesses to consolidate leadership position On-going Capacity Expansions nearin
Slide 38: Organizational Structure
Organizational Structure Pulp, Fibre & Allied Chemical UltraTech Cement * Others (60.30%) VSF Overseas VSF Pulp Overseas Chemicals Domestic Overseas- 3 Mn. 377K TPA Units 70 K TPA TPA (UAE, Bahrain, Pulp Units 441K TPA 51 Mn. TPA Bangladesh, Sri Lanka) Nagda Birla Jingwei $ AV Cell $ Nagda 11 Compos
Slide 39: Thank You
Thank You Contacts: Grasim Industries Limited (Corporate Finance Division) Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai - 400 030 Sharad Agarwal +91-22-66525062 [email protected]
Slide 40: Grasim Industries Limited – Supplement
Grasim Industries Limited - A VSF and Cement Major (Supplement)
Slide 41: Supplement
Supplement • Consolidated Financial Performance : Pg. 42 • Standalone Financial Performance : Pg. 43 • Balance Sheet - Grasim : Pg. 44 • Balance Sheet – UltraTech (Consolidated) : Pg. 45 • Consolidated Businesswise Performance : Pg. 46-47 • Cement Plant Location : Pg. 48 41
Slide 42: Consolidated Financial Performance
Consolidated Financial Performance ` Bn. Quarter 2 % Half Year % Full Year 2013-14 2012-13 Change 2013-14 2012-13 Change 2012-13 Net Sales & Op. Income 68.5 66.1 4 137.8 134.5 2 279.0 Other Income 1.1 1.0 9 3.4 2.4 45 6.2 PBIDT 11.4 15.1 (24) 26.9 32.7 (18) 65.4 PBIDT Margin (%) 16.4% 22.4% - 19.1%
Slide 43: Standalone Financial Performance
Standalone Financial Performance ` Bn. Quarter 2 % Half Year % Full Year 2013-14 2012-13 Change 2013-14 2012-13 Change 2012-13 Net Sales & Op. Income 14.2 13.6 4 25.8 26.3 (2) 52.6 Other Income 2.1 1.9 7 2.9 2.6 12 4.3 PBIDT 4.8 5.0 (4) 7.8 8.8 (11) 15.2 PBIDT Margin (%) 29.7% 32.2% - 27.2% 30.5% -
Slide 44: Balance Sheet - Grasim
Balance Sheet - Grasim Standalone Consolidated ` Bn. * As on As on As on As on EQUITY & LIABILITIES 30th Sep'13 31st Mar'13 30th Sep'13 31st Mar'13 Shareholders' Funds 107.7 101.2 Net Worth 209.4 196.6 - - Minority Interest 65.0 62.2 Non Current Liabilities 11.1 9.8 Long Term Borrowings 70.4 66.5 3.
Slide 45: Balance Sheet – UltraTech (Consolidated)
Balance Sheet – UltraTech (Consolidated) ` Bn. As on 30th * As on 31st EQUITY & LIABILITIES Sep'13 Mar'13 Shareholders' Funds Net Worth 162.2 152.3 Minority Interest 0.5 0.8 Non Current Liabilities Long Term Borrowings 53.1 51.7 Deferred Tax Liability (Net) 20.7 19.0 Long Term Liabilities & Provisio
Slide 46: Viscose Staple Fibre: Summary (Standalone)
Viscose Staple Fibre : Summary - (Standalone) Quarter 2 % Half Year % Full Year 2013-14 2012-13 Change 2013-14 2012-13 Change 2012-13 Capacity* TPA 94,444 83,500 13 1,86,629 1,67,000 12 3,43,100 Production MT 91,995 79,798 15 1,79,687 1,63,202 10 3,37,492 Sales Volumes MT 93,025 85,312 9 1,70,544 1,
Slide 47: Cement: Summary
Cement : Summary Quarter 2 % Half Year % Full Year 2013-14 2012-13 Change 2013-14 2012-13 Change 2012-13 Grey Cement Capacity * Mn. TPA 13.48 12.94 4 26.95 25.86 4 53.90 Production Mn. MT 9.71 9.65 1 20.38 20.41 -- 42.59 $ 9.88 9.74 20.67 20.57 42.75 Cement Sales Volumes Mn. MT 1 -- Clinker Sales Vo
Slide 48: Cement Plant Locations
Cement Plant Locations PLANT LOCATION CAPACITY (Mn. TPA) NORTH 16.8 • Shambhupura, Rajasthan & 5.0 • Jawad, M.P. 3.0 – Aligarh GU, U.P. 1.3 Bhatinda(G) Panipat – Bhatinda GU, Punjab 1.8 Dadri – Dadri GU, U.P. 1.3 Kotputli Aligarh • Kotputli, Rajasthan 3.1 Jodhpur P – Panipat GU, Haryana 1.3 Shambhup
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