Tata Chemicals Limited · NSE:TATACHEM
Tata Chemicals — Non-Deal Roadshow (January 2004)
29 slides from Tata Chemicals's roadshow presentation, January 2004
Slide 1: Tata Chemicals Limited
Tata Chemicals Limited Focused Leader Inorganic Chemicals Fertilizers Established Progressive 1
Slide 2: The Tata Group
ee TATA The Tata Group TATA CHEMICALS LIMITED
Slide 3: The Tata Group
The Tata Group Comm & info systems Engineering 23% 25% Services 10% Consumer Materials products 21% 7% Chemicals Energy 5% 9% Segmental distribution - sales Figures in % 3
Slide 4: Financial insight
Financial insight USD million – FY 2003 Capital market perspective Value of assets 10,524 • 31 Tata companies listed on Gross Block 8,986 various stock exchanges Total income 11,206 • Accounts for approx 3.5% of Sales 10,774 the total market capitalization of all listed companies in India PAT 805 Ex
Slide 5: Tata Chemicals
ee TATA Tata Chemicals TATA CHEMICALS LIMITED
Slide 6: Business portfolio
Business portfolio Others 8% Urea 37% Soda ash 34% Cement Salt 7% 14% Sales distribution Figures in % 6
Slide 7: Perspective - Key businesses
Perspective - Key businesses One of the largest single site soda ash producer globally Plant capacity: 875,000 MT Soda Ash Largest market share in India Multiple product variants addressing diverse markets Pioneer in branded salt market in India Salt Largest salt brand in India High brand equity and
Slide 8: Business perspective
ee TATA Business perspective TATA CHEMICALS LIMITED
Slide 9: Sector dynamics
Sector dynamics 3000 2501 2371 2396 2500 2140 1987 1905 2005 1730 1818 1877 2000 1835 in '000 M 1684 1500 1000 500 158 99 51 43 0 FY '00 FY '01 FY '02 FY '03 Demand Domestic capacity Domestic production Imports • Demand presently short of supply, average capacity utilization of Indian industry: 81%
Slide 10: Tata Chemicals perspective
Tata Chemicals perspective • Project Manthan and other • Account manager operational efficiency concept: Single point initiatives drive down contact for key customers input and energy costs ensures well entrenched enabling company to business relationships become a strong global player as well as co
Slide 11: Salt
ee TATA Salt TATA CHEMICALS LIMITED 11
Slide 12: The Indian Salt industry
The Indian Salt industry Branded iodised Other 27% 28% Tata Salt Dandi 39% Loose 4% unbranded 73% Nirma Anapoorna 6% 23% November 2003 • Total demand for edible salt in India: 5.46 million tonnes, Demand for branded edible salt: 0.7 mil tonnes • Education and awareness gradually altering consumption
Slide 13: Tata Chemicals perspective
Tata Chemicals perspective Reorganized Highlights set-up from 1 national to 29 • Tata Salt ranked No. 6 distributors and 24 in the Brand Equity CFAs – increases survey of India’s most penetration trusted brands Revamped marketing Contributed Rs 3.5 • Ranked No. 1 in the team, specialized skills mill
Slide 14: Fertiliser
ee TATA Fertiliser TATA CHEMICALS LIMITED 14
Slide 15: The Indian fertiliser sector
The Indian fertiliser sector • Third largest producer and consumer of fertiliser in the world • Dominated by PSUs and Co operatives • Installed capacity of approximately 20 million MT • Highly complex industry with plants using a wide variety of feedstock, varying capacity, technology and vintage •
Slide 16: The Indian fertiliser sector: pricing policy
….The Indian fertiliser sector Retention pricing Group Pricing Policy - 2003 2003 - • Industry classified into 6 • Nitrogenous fertiliser groups, based on vintage segment regulated through and feedstock price controls based on stipulated norms Policy designed • Concessions based on to encourage weig
Slide 17: Tata Chemicals perspective
Tata Chemicals perspective Estimated sector Gcal/Tonne ~6.0 6 Highlights • Tata Chemicals possesses 5.8 5.73 the most efficient fertiliser 5.6 5.55 plant in India 5.53 5.53 • Least water consumption and Gcal/ tonne 5.4 5.37 5.3 effluent generation-ISO 14001 5.2 and ISO 9002 certified • Operates on b
Slide 18: Financials: 9M FY 2003-04 Financial Results
•Financials 9M FY 2003-04 Financial Results January 2004 18
Slide 19: Ratios
Ratios Q3 2003 FY2003 FY2002 CURRENT RATIO 3.56:1 3.23:1 2.63:1 DEBTORS TURNOVER RATIO 7.62:1 6.16:1 3.68:1 CREDITORS TURNOVER RATIO 5.84:1 10.7:1 10.27:1 INVENTORY TURNOVER RATIO 5.3:1 6.4:1 4.52:! OPERATING PROFIT MARGIN (operating income considered not incl of cost of goods sold) 27.5% 25.5% 26.2
Slide 20: 9M FY 2003-04 Results
•9M FY 2003-04 Results 9M FY 2003-04 Financial Results January 2004 20
Slide 21: Revenue performance
Revenue performance 9M FY 2004 Q3 FY 2004 5000 14000 4672 12580 4375 11816 12000 4000 Rs. mn 10000 Rs. mn 8000 3000 6000 2000 4000 Q3 FY2003 Q3FY2004 9M FY2003 9M FY2004 6% 7% 21
Slide 22: Profit from operations
Profit from operations 9M FY 2004 1500 Q3 FY 2004 35 4000 3651 50 3379 1167 1149 1200 28 40 3000 27 25 Rs mn 900 21 Rs mn 29 30 % 2000 29 % 600 14 20 1000 300 7 10 0 0 0 0 9M FY2003 9M FY2004 Q3 FY2003 Q3 FY2004 EBITDA Margin EBITDA Margin Marginal decline in profit from operations in Q3 FY2004 attr
Slide 23: PAT
PAT 9M FY 2004 Q3 FY 2004 2000 1880 12 600 590 5 555 4 1500 10.41 9 450 1365 Rs mn Rs mn 3.26 3 7.56 3.07 1000 6 300 % % 2 500 3 150 1 0 0 0 0 9M FY2003 9M FY2004 Q3 FY2003 Q3 FY2004 PAT EPS PAT EPS 38% 6% 23
Slide 24: Financial Management
Financial Management 12000 1.0 10000 0.8 8000 0.54 0.6 Rs mn 0.51 6000 % 9270 0.4 4000 0.29 6170 4910 0.2 2000 0 0.0 31-Dec-02 30-Sep-03 31-Dec-03 Debt Debt-equity ratio Close to 50% debt reduction between Dec 2002 and Dec 2003 24
Slide 25: Financial Management: interest cost
…Financial Management 12 25 10.1 20 9 8.4 8.5 Rs mn 15 % 6 20 10 3 5 10 8.5 0 0 Q3 FY03 Q2 FY04 Q3 FY04 Interest Cost of borrowing Over 50% decline in interest costs YOY 25
Slide 26: Perspective of proposed merger with Hind Lever Chemicals
•Perspective of proposed merger •with Hind Lever Chemicals 9M FY 2003-04 Financial Results January 2004 26
Slide 27: Hind Lever Chemicals Limited
Hind Lever Chemicals Limited Leader in its chosen product segments World-class integrated Largest STPP player manufacturing facility, with a nation-wide with high asset customer base and productivity and strong significant market Chemicals safety/environment share management systems Pioneer in ‘bran
Slide 28: Overview
Overview • Both companies possess natural operating synergies across their key operating activities in the chemicals and agri inputs sectors • The merger ratio has been defined at 2.5:1 by independent financial advisors (2.5 shares of TCL for every 1 share of HLCL) • The transaction will enable the
Slide 29: Growth outlook
Growth outlook • Exploring international markets Soda Ash • Enhancing relationships with key customers, strengthening global and domestic competitive Inorganic position chemicals Food additives • Reach out to all market segments • Expand offerings e.g. cooking soda • Capacity enhancement Fertiliser