Asian Paints Ltd. · NSE:ASIANPAINT
Asian Paints — FY2004 Earnings Presentation
34 slides from Asian Paints's earnings presentation, May 11, 2004
Slide 1: Investor Conference Annual Results - FY 2004
1 Investor Conference Annual Results - FY 2004 May 11, 2004 at Mumbai
Slide 2: Presentation structure
2 Presentation structure • Asian Paints standalone results : Q4-FY2004 • FY2004 – The year the group crossed USD 500 million in sales • Economic environment • Asian Paints Group performance FY2004 – Asian Paints standalone – APICL & Asian PPG – International Operations • Outlook and Risks
Slide 3: Asian Paints Stand alone Profit & Loss statement: Q4 - FY2004
3 Asian Paints – Stand alone Profit & Loss statement : Q4 - FY2004 (Rs. million) Q4- FY’04 Q4- FY’03 Growth % Net Sales 4168.74 3592.80 16.03 % Other Income 97.14 28.51 240.7% PBDIT 683.47 568.32 20.3 % Interest 10.37 15.98 -35.1% Depreciation 119.7 120.69 -0.8% PBT bef. EOI 553.40 431.65 28.2 % Ext
Slide 4: Asian Paints Stand alone Segment Results: Q4 - FY 2004
4 Asian Paints – Stand alone Segment Results : Q4 - FY 2004 (Rs. million) PAINTS Q4 - FY’04 Q4 - FY’03 Growth Seg. Revenue 3950.9 3317.21 19.1 % PBIT 590.49 537.47 9.9 % PBIT/Seg. Revenue 15 % 16.2 % OTHERS (Chemicals) Q4 - FY’04 Q4 - FY’03 Growth Seg. Revenue 265.52 308.99 -14.1 % PBIT (1.62) 19.13
Slide 5: Asian Paints Standalone : Q4-FY2004
5 Asian Paints Standalone : Q4-FY2004 • Paints revenue increased by 19.1% due to – Weak demand in Q4-FY2003 and uncertainty on VAT – Coming out of a drought year • Extraordinary item for provision made for permanent diminution in the value of investments in company’s subsidiary, Asian Paints (Maurit
Slide 6: Asian Paints Standalone : Q4-FY2004
6 Asian Paints Standalone : Q4-FY2004 • Conscious attempt to absorb increase in raw material cost resulted in improved sales growth • Industrial paints continued to register impressive growth in sales and profits • Chemicals business performance suffered due to loss of Phthalic production because of
Slide 7: Dividend
7 Dividend • Interim dividend of 35 % distributed in Nov’03 • Final dividend recommended of 50 % • Total dividend of 85 % on an enhanced equity • Dividend payout ratio(including tax) has increased from 53 % to 62 %.
Slide 8: Presentation structure
8 Presentation structure • Asian Paints standalone results : Q4-FY2004 • FY2004 – The year the group crossed USD 500 million in sales • Economic environment • Asian Paints Group performance FY2004 – Asian Paints standalone – APICL & Asian PPG – International Operations • Outlook and Risks
Slide 9: Asian Paints Consolidated Sales
9 Asian Paints Consolidated Sales (Rs. Million) 2002-2003 2003-04 Growth % to Total % to Total % Sales FY'03 Sales FY'04 APIL - Paints 14596.52 16269.32 11.46% 84% 72% APICL + APPG* 820.08 1017.86 24.12% 5% 4% International 739.19 4254.83 475.61% 4% 19% Chemicals 1147.56 1095.23 -4.56% 7% 5% 17303.3
Slide 10: FY 2004 - The year the group touched USD 500 million in sales
10 FY 2004 - The year the group touched USD 500 million in sales • Paints - India – On the back of impressive gains in margin expansion, the need now was to improve market share by • Aggressive posture on pricing • Increase volume sales in the economy segment – Material cost continued to rise – Indu
Slide 11: Presentation structure
11 Presentation structure • Asian Paints standalone results : Q4-FY2004 • FY2004 – The year the group crossed USD 500 million in sales • Economic environment • Asian Paints Group performance FY2004 – Asian Paints standalone – APICL & Asian PPG – International Operations • Outlook and Risks
Slide 12: Economic environment - India
12 Economic environment - India • GDP growth is estimated at 8 % for FY’04 – GDP growth for Q3-FY’04 announced recently was 10.4%, the highest since 1990 – Resurgence in all sectors • Agriculture sector is expected to grow by 9 % • Industry sector is expected to grow by 6.4 % • Services sector is ex
Slide 13: The Paint industry - FY 2004
13 The Paint industry - FY 2004 • Overall paints market is estimated to have grown by around 15 % • Decorative paints market is expected to have grown by 13% – Exterior segment has grown over by 20 % – Economy segment has done well • Industrial coatings has grown close to 20 %
Slide 14: The Decorative India market - FY 2004
14 The Decorative India market - FY 2004 • With GDP growth of 8 %, decorative coatings has had an average year due to – Extended monsoon and early festival season shortened the selling period – Many consumer goods competing for share of wallet – Prolonged transport strike affected sales in Q1 – One
Slide 15: Presentation structure
15 Presentation structure • Asian Paints standalone results : Q4-FY2004 • FY2004 – The year the group crossed USD 500 million in sales • Economic environment • Asian Paints Group performance FY2004 – Asian Paints standalone – APICL & Asian PPG – International Operations • Outlook and Risks
Slide 16: Asian Paints Standalone performance: FY 2004
16 Asian Paints Standalone performance: FY 2004
Slide 17: Decorative BU performance - FY 2004
17 Decorative BU performance - FY 2004 • Decorative paints sales increased by 10.9 % • Improved performance in North, East and Southern regions of the country – Western region, our largest market, continues to lag • Premium products did very well : – Exterior segment has grown by over 35 % – Interio
Slide 18: Decorative BU – Supply Chain
18 Decorative BU – Supply Chain • Favorable reduction in import duties and strengthening of the rupee was off set by – Titanium Dioxide prices went up marginally during the year – Considerable increase in packing material prices – After decline in prices of vegetable oils and solvents in the first h
Slide 19: Asian Paints Standalone - Industrial & Chemicals
19 Asian Paints Standalone - Industrial & Chemicals • Industrial Coatings – Industrial coatings sales have grown in excess of 40% due to impressive growth in protective and road marking paints • Chemicals Business – Net Revenue decreased by 4 % to Rs. 1,113 mn – EBIT was lower by 73 % to Rs. 49.57 m
Slide 20: Asian Paints Standalone - Working capital turns
20 Asian Paints Standalone - Working capital turns 14 13.4 12 12.6 10 13.3 9.5 10 7.6 8 8 8.2 6 4 2 0 Sales / Debtors Sales /Creditors Sales / Inventory Sales / Net W.C 2003-04 2002-03
Slide 21: Asian Paints Standalone Consistent Performance
21 Asian Paints Standalone Consistent Performance 3200 20000 EBITDA & PAT (Rs Mn) 2800 18000 Net Sales (Rs. Mn) EBITDA CAGR 10.8 % 2400 16000 2000 14000 1600 12000 Sales CAGR 11.6 % PAT CAGR 11.0 % 1200 10000 800 8000 400 6000 2000 2001 2002 2003 2004 Net Sales EBITDA PAT
Slide 22: Asian Paints Standalone – Key Ratios
22 Asian Paints Standalone – Key Ratios FY’04 FY’03 EBITDA/Net Sales 16.7 % 17.9 % PBT(bef. EOI) /Net Sales 13.7 % 14.3 % PAT/Net Sales 8.5 % 9.0 % ROCE 37.4 % 36.5 % RONW 27.8 % 29.8 % Debt : Equity 0.12 0.18
Slide 23: APICL & APPG Performance – FY 2004
23 APICL & APPG Performance – FY 2004 • APICL sales increased by 15 % to Rs. 232.78 million – APICL has entered with into a technology tie-up with Protech Chemicals, one of the top 10 powder coatings manufacturers in the world • Asian PPG sales has increased by 27 % to Rs. 1,570 million from Rs. 1,2
Slide 24: International Operations – FY 2004
24 International Operations – FY 2004 Berger Sales Composition Regionwise Sales Breakup Internati onal 68% Caribbe an 32% Middle East 22% Africa & Malta South 9% Asia 8% South SCIB S.E. Others Pacific 7% Asia 25% 14% 15%
Slide 25: International Operations- Performance
25 International Operations- Performance • Paints volumes have grown by 15% and PBT has improved from a loss of INR 30 mn to a profit of INR 17 mn before goodwill • Berger International Ltd has performed well with net profit after MI from a loss of Sing $ 1.07 million to a profit of S$ 2.16 million
Slide 26: International Operations- Performance
26 International Operations- Performance • To drive top line growth in the newly acquired companies, marketing action plans were developed for better understanding of the market and appropriate strategies were formulated. On that basis new products and Colour World has been launched • To reduce inte
Slide 27: Asian Paints - Consolidated results Profit & Loss Account - FY’2004
27 Asian Paints - Consolidated results Profit & Loss Account - FY’2004 (Rs. million) FY 04 FY 03 Growth Net Sales 22637.2 17303.4 30.1 % Other income 263.5 89.40 195 % PBDIT 3235.13 2947.59 9.8 % Depreciation 628.4 520.6 20.7 % Interest 152.0 137.3 10.7 % PBT bef. Goodwill 2493.9 2289.7 8.9 % PBT af
Slide 28: Asian Paints - Consolidated results Balance Sheet - FY’2004
28 Asian Paints - Consolidated results Balance Sheet - FY’2004 FUNDS EMPLOYED (Rs. in mn) APPLN OF FUNDS (Rs. in mn) Shareholders Funds: Fixed assets: Share capital 959.20 Gross block 8865.81 Resrv & Surp 4335.57 Less : Depr 4174.25 CWIP 46.47 Def Tax liability 533.41 4738.03 Investments 1017.18 Loa
Slide 29: Asian Paints Standalone Free Cash Flow
29 Asian Paints Standalone Free Cash Flow • Improved cash flow despite investments made during the Free Cash Flow (Rs Million) year helped by: – Improved working capital 1628.2 1364.4 performance – Lower capex 743.5 • Estimated capex and investments in FY2005 is Rs. 1.05 billion as compared to Rs. 2
Slide 30: Presentation structure
30 Presentation structure • Asian Paints standalone results : Q4-FY2004 • FY2004 – The year the group crossed USD 500 million in sales • Economic environment • Asian Paints Group performance FY2004 – Asian Paints standalone – APICL & Asian PPG – International Operations • Outlook and Risks
Slide 31: Outlook and Risks
31 Outlook and Risks • Demand outlook looks better now than it did last year at this time • In decorative paints emphasis would be to drive top-line growth and increase market share by: – Aggression on pricing and new offerings in economy segment – Enhanced focus on top-of- line products • Raw mater
Slide 32: Outlook and Risks
32 Outlook and Risks • Identified growth focus markets of Egypt, UAE, Sri Lanka, Bangladesh, Malaysia and Thailand are well positioned to gain share • Leadership markets of South Pacific, Nepal and Bahrain will continue to post good profits – Course correction in Caribbean undertaken • Niche markets
Slide 33: Outlook and Risks
33 Outlook and Risks • International in FY2005 – Sales growth of 12% in INR – 3% PAT margin before minority interest and goodwill • Asian Paints consolidated group sales is expected to grow at 12-13% in FY 2005
Slide 34: End...
34 End...