Skipper Ltd · NSE:SKIPPER
Skipper — Investor Presentation (March 2016)
53 slides from Skipper's investor presentation, March 2016
Slide 1: Updated - 3Q FY'16
Updated - 3Q FY’16 Private and confidential
Slide 2: Managing Director's message
"At Skipper, we’re here to stay with innovative strategies, tactical diversification, sustainable programmes and a robust performance to prove our mettle. Quarter-on-quarter. Year-on-year. We’re most definitely built to last!" Sajan Bansal, Managing Director, Skipper Limited
Slide 3: Presentation outline
Presentation o u t l i n e Skipper: About us PVC Products Business India: At the take off stage Investment Highlights Power Transmission & Distribution Business Financials
Slide 4: Skipper: About us
Skipper: About us Incorporated in 1981, One of the world's largest 5 manufacturing plants located Skipper Limited is the Integrated Transmission Tower across India Flagship company of the manufacturing companies with S.K. Bansal Group Angle Rolling, Tower, Accessories Awarded as the fastest growing
Slide 5: Key Market Snapshot and Growth Highlights
Key Market Snapshot Growth Highlights Particulars Amount 3yr CAGR (FY12-15) * Share price (INR) 166 • Revenue – 20% • EBITDA - 52% * Market Cap (INR Mn) 16,984 • PAT - 108% FY15 Net Income (INR Mn) 12,708 • Order Book - 43% FY15 EBITDA (INR Mn) 2,152 FY'15 Highlights FY15 PAT (INR Mn) 892 • Operatin
Slide 6: Our key milestones
Our key milestones 1981 1990 2001 2003 2005 Company incorporated Company entered into Set up LPG cylinder Set up first Tube Mill Set up first and commenced manufacturing of manufacturing unit Galvanizing Plant manufacturing Telecom Towers & Hamilton Poles Masts 2006 2007 2008 Crossed revenue of Got
Slide 7: Key milestones 2009-2015
2009 2010 2013 Got India's first order for 800KV transmission towers from PGCIL 2014 3SE EXPERIENCE THE NEW Usted with BSE, nationwide premier stock exchange @ Commisioned Uluberia Entered into backward Crossed revenue of INR Alliance aggrement with the South Americas largest TSO for exclusive suppl
Slide 8: Skipper: Business Segments
Skipper: Business Segments Engg Business PVC Infra Capacity (MTPA): 175,000 29,000 Product • Power • UPVC Pipes • Transmission Range Transmission • CPVC Pipes Line EPC Tower • SWR Pipes • Underground • Power • Fittings Utility laying by Distribution Poles HDD • Monopoles • Water EPC 7% • MS & High •
Slide 9: Growing Order Book Size
Rs in Mn Growing Order Book Size 30,000 24,485 25,000 20,000 15,000 12,913 12,708 10,415 10,000 9,004 5,457 5,000 0 FY'13 FY'14 FY'15 Order Book Net Sales Size to Sales (X) 2.5 1.9 2.0 1.5 1.2 1.0 0.6 0.5 0.0 FY'13 FY'14 FY'15
Slide 10: Our management team
Our management team The driving force behind the A mechanical engineering company’s exponential graduate, he is currently growth since the start of the heading the tower new millennium. Under his manufacturing and EPC visionary leadership, the business of the company and company has grown from a has
Slide 11: Our management team
Our management team Hseveral responsible and Joining steel Authority of India important portfolios in the WB Ltd as a Graduate Engineer in State Government such as 1959, he rose to become Home, Cultural & Information, Managing Director of Durgapur Tourism and Industry before Steel Plant and a direct
Slide 12: India: At the take-off stage
India: At the take-off stage ● One of the fastest growth trends anywhere in the world ● Set to overtake China growth rate ● Consistent growth projections over 7% ● 7.3% GDP growth in FY15 vs 6.9% in FY14 ● Macro indicators turning positive ● Improving IIP trends, Electricity showing positive trend f
Slide 13: Government reforms and macro tailwinds
● Domestically the government continues to push along the path of reforms,transparent policy making and faster project clearance. ● Launched Ambitious “Make in India” scheme and focusing on improving ease of doing business in India. ● Improving CAD & Inflation scenario. ● Stable Exchange Rate. ● Sof
Slide 14: Power Transmission Segment
Power Transmission Segment
Slide 15: India: Exponential power transmission sector opportunities
Skipper: Power transmission business India: Exponential power transmission sector opportunities ● Power-evacuation constraints and highT&D ● In each Transmission Line project losses have attracted the attention of (excluding substations), portion of towers is policy-makers for more investment in abo
Slide 16: India: Exponential power transmission sector opportunities
India: Exponential power transmission sector opportunities Establishment of dedicated green energy transmission corridors to cater to the massive renewable power generation target of 1,75,000 MW by 2022 Growing interest in tariff-based competitive bidding (TBCB) by several private sector giants such
Slide 17: Power transmission & distribution business overview
Skipper: Power transmission & Distribution business overview ● Emerged as India’s ● One of the lowest ● One of the first only company (of its cost producer of company in India to size) focusing on transmission tower in manufacture and transmission tower the world supply 800 KV manufacturing, rather
Slide 18: Plant facilities & integrated value chain
Skipper: Power transmission & Distribution business Skipper has three state-of-the art Plant Facilities & anufacturing plants in Eastern India, two at Jangalpur and one at Uluberia, all near Integrated Value Kolkata,with an installed capacity of 175,000 MTPA Chain Steel billets and Manufacture MS &
Slide 19: Fabrication and galvanization
Fabrication and MS & HT galvanization angles of complete towers and poles 180,000 95% of volumes 175,000 90% plus volume MTPA consumed MTPA through direct capacity in-house, rest sold capacity sales and the balance through EPC ● Captive galvanizing plants and angle and plate CNC lines ensure highest
Slide 20: Why our T&D margins are better than our peers?
Why our T&D margins are better than our peers ? Scale & Integrated Logistic Focused Size Operations Advantage Manufacturer Allows us high Allows us to Being in eastern Focused tower negotiation keep the profit part, all the manufacturer power on raw on rolling mill primary steel plants rather than E
Slide 21: Focused Business Model; Value Accretion
Focused Business Model ● Skipper’s current order book in the T&D segment stands at Rs.24,500 Mn (as on March 2015) and is well diversified between domestic as well as international orders ● Power Grid Corporation of India Limited (PGCIL) is our largest customer with more than 90% share of domestic o
Slide 22: Global Foot Prints
Global Foot Prints
Slide 23: Engg Segment – Performance
Engg Segment – Performance Qty in MT % Rs in Mn % 160,000 100% 150,000 12,000 20.0% 11,348 Revenue OPM % of Sales 130,000 136,527 90% Growing Order Book Size 120,000 80% 10,000 9,554 15.0% 100,000 102,269 70% 8,350 80,000 8,000 10.0% 71,952 60% 40,000 50% 6,000 5.0% FY'13 FY'14 FY'15 FY'13 FY'14 FY'
Slide 24: What prevents the entry of new players – our competitive moat
What prevents the entry ● Easy to replicate costs – not economics ● Large upfront investments in assets and of new players in the capacities / approx capex of Rs 4000 Mn for building tower capacity of our size business – our ● Challenges in large-scale industrial land availability, environmental and
Slide 25: PVC Pipes & Fittings Segment
PVC Pipes & Fittings Segment
Slide 26: Skipper: PVC products business
Skipper: PVC products business Business constitutes the manufacturing, branding and supply of PVC pipes and fittings Largest PVC pipes manufacturer in West Bengal; one of the largest capacities in eastern India Cumulative production capacity of 29,000 TPA created within only 5 years of business laun
Slide 27: Skipper: Urban rejuvenation of water take-off
Skipper: Urban rejuvenation of water take-off The government has announced massive investment plans in the water transmission & distribution space The government thrust on water, irrigation, improving sanitation, urbanization, the pvc pies pipes and fittings market to grow at a much faster pace Prog
Slide 28: Plant Facilities & Integrated Value Chain
Plant Facilities & Integrated Value Chain Skipper has Cumulative PVC production capacity of 29,000 TPA @ 15,000 MTPA located in Eastern India @ Newly-established [10,000] MTPA located in Ahmedabad, Gujarat, and Guwahati 4000 [MTPA] Plant represents first such venture to be located out of east India
Slide 29: Skipper PVC Pipes
L Skipper PVC Pipes Range of products @ ——— @ SKIPPER
Slide 30: UPVC and CPVC pipes and fittings
@ Pipes are 3m long and are available in both SCH 40 and SCH 80 A lead free variant is also available UPVC Flow Gold Pipes and Fittings @ Unaplasticised Polyvinyl Chloride Skipper High pressure UPVC solvent weld system are the most suitable and easy and economical solution for transportation and dis
Slide 31: Borewell system and Column Pipes
Borewell system and Column Pipes @ Skipper Borewell Casing Pipes : Highly recommended by experts at the highest level for its strength and longer span. They are cost-effective, light and easy to install. It offers three types: @ Casing shallow - these pipes are suitable for wells with depths upto 80
Slide 32: Competitive Advantage
Competetive Advantage INR 8000 per MT of capacity added ( industry average of about INR 20000 per MT) acheived through through Asset Light model Outperformance driven model Contemporary 60% of Gross block less than 5 years old Cost effective management; and one of the very few companies in India to
Slide 33: Business Summary Highlights
Business Summary Highlights _ With its new expansion plans, the business is expected to double its size every year for the next 3-4 years with a targeted capacity of 1,00,000 MT, within as many years Tie-ups with Sekisui and Wavin will further aid the product premiumization strategy and help open up
Slide 34: PVC products business: competitive moat
PVC products business (contd) What prevents the entry of new players in the business - our competitive moat @ Business perceptibly moving | @ Large-scale investments required towards branded products in the in building brand visibility and organized sector consumer trust @ Specialized competencies |
Slide 35: PVC pipe growth & ambition blueprint
PVC pipe growth & ambition blueprint 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 National Strengthen EBIDTA margin 300 bps to 14% The addition of CPVC pipes to the product basket strengthens our position further in plumbi
Slide 36: Advantage Skipper
Advantage Skipper
Slide 37: Advantage Skipper
Advantage Skipper Present in two of India’s high-growth businesses with potential catch-up demand plus fresh demand Increasing business synergies with potential to cross-sell products Projected increase in blended margins on account of value-added products and venture into high-growth market Backwar
Slide 38: Sizeable and growing capacities
@ Sizeable and growing capacities help serve large order sizes promptly @ Flexible production schedule to cater to varying order sizes @ Complete backward integration reduce customer exposure to commodity volatility; this fosters a stable pricing environment @ Engineering and design excellence help
Slide 39: One stop customer convenience
@ One stop customer convenience through in-house availability of products, accessories and technical services @ Strong logistics support ensuring doorstep delivery ®@ Good industrial relations; large and stable workforce @ Multiple plant locations; contemporary technology @ Several pride-enhancing c
Slide 40: Strategic plant locations in East India
@ Strategic plant locations in East India enabling adequate power availability (from DVC and WBSEB), cost-effective labour and ex-im gateway through the Kolkata port @ Large order book of Rs 24,500 Mn (as on March 2015) ensures turnover visibility for at least the next [2] years Sufficient working c
Slide 41: Financials
Financials
Slide 42: Net sales and EBITDA
Rs in Mn % Rs in Mn 15,000 2,500 20.0% 12,708 EBITDA % of Sales 16.9% 12,500 2,000 2,152 16.0% 10,415 1,500 10.6% 12.0% 10,000 9.5% 9,004 1,000 1,102 8.0% 7,500 853 500 4.0% 5,000 FY'13 FY'14 FY'15 0 0.0% FY'13 FY'14 FY'15
Slide 43: Profit and cash flow trends
Rs in Mn Rs in Mn 1500 1,366 1000 892 1000 750 500 500 269 367 187 278 250 0 0 FY'13 FY'14 FY'15 FY'13 FY'14 FY'15
Slide 44: Performance & Leverage Ratio
Performance & Leverage Ratio Times (X) Performance & Leverage Ratio Times (X) 2.50 6.00 2.00 2.00 5.00 4.74 1.70 1.94 4.00 3.51 Rs1.50 in Mn 1.59 1.28 % Rs in3.00 Mn 1.00 1.09 1.78 2.00 0.50 1.00 0.00 0.00 FY'13 FY'14 FY'15 FY'13 FY'14 FY'15 Gross Debt Equity Ratio Net Debt Equity Ratio % Debt /EBIT
Slide 45: Our ambition
@ur ambition Our medium term target : grow into a Rs 3,600 cr enterprise by 2018-19 @ Engineering Products potential of Rs 24,000 Mn @ PVC products of Rs 12,000 Mn @ SKIPPER LIMITED
Slide 46: Skipper
SKIPPER
Slide 47: Financial Performance – 9M FY'16
Financial Performance – 9M FY’16 Rs in Mn Change % Sl. No Profit & Loss Summary 9M FY 16 9M FY 15 YoY 1 Net Sales 9,396.2 7,707.6 21.9% 2 Operating EBITDA 1,277.0 1,044.6 22.2% % of Sales 13.6% 13.6% 3 Depreciation 177.9 156.5 4 Interest Expenses 414.6 429.0 5 Other Income incl. Interest Income 40.7
Slide 48: Financial Highlights – 9M FY'16
Financial Highlights – 9M FY’16 Rs in Mn Net Sales • Net Sales increased by 22% 9,396 • Multifold increase in export revenues, in line with the company’s target of 40% in total revenue. 7,708 • Falling commodity prices restricted sales value growth, even though sales volume has grown. 9M FY 16 9M FY
Slide 49: Financial Performance – Q3 FY'16
Financial Performance – Q3 FY’16 Rs in Mn Change % Profit & Loss Summary Q3 FY 16 Q3 FY 15 12 YoY % Net Sales 3,615.7 3,226.8 12.1% Net Sales Operating EBITDA 495.0 474.2 4.4% % of Sales 13.7% 14.7% 4 Depreciation 61.3 51.7 % Interest Expenses 153.1 173.3 EBITDA Other Income incl. Interest Income 8.
Slide 50: Segment Performance – Q3 & 9M FY'16
Segment Performance – Q3 & 9M FY’16 Rs in Mn Infra Profit & Loss Q3 FY Q3 FY Change Change Segment 9M FY 16 9M FY 15 2% PVC Summary 16 15 % % 10% Segment Revenue 3,272.4 2,899.1 12.9% 8,600.9 7,354.9 16.9% Segment Result Engg Products 481.4 390.1 23.4% 1,206.7 839.5 43.7% (Excl Forex) % of Revenue 1
Slide 51: Other Developments
Other Developments The Company’s third PVC manufacturing unit having an initial manufacturing capacity of 4,000 TPA got operationally commissioned at Guwahati in December 2015. The company has participated and submitted tenders worth over Rs 3,000 crores during the current financial year and exp
Slide 52: Best Industry in Water Resource Sector award
Her Excellency the Union Minister of Water Resources Shrimati Uma Bharti handing over the award of “Best Industry in Water Resource Sector ” to Mr Siddharth Bansal, Director, Skipper Limited.
Slide 53: Disclaimer
Disclaimer: This Investor Presentation has been prepared by Skipper Limited for investors, solely for informational purposes. The information contained herein has been prepared to assist prospective investors in making their own evaluation of the Company and does not purport to be all-inclusive or t