Asian Paints Ltd. · NSE:ASIANPAINT
Asian Paints — JM Financial India Conference 2011
37 slides from Asian Paints's conference presentation, Nov 17, 2011
Slide 1: JM Financial India Conference
JM Financial India Conference Mumbai 1 November 17, 2011
Slide 2: Disclaimer
Disclaimer This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expre
Slide 3: The Asian Paints Group Today…
The Asian Paints Group Today… India’s largest paint company for over four decades Operates in 17 countries with 24 paint manufacturing facilities Group revenue of INR 7706 Crores (77.06 Billion) in FY 11 3
Slide 4: Business Operations – Consolidated
Business Operations – Consolidated Sales Contribution FY 2010-11 Paints India Decorative Coatings – India 13% 5% Industrial Coatings – India APL - Paints 1% APL – Industrial Chemicals APPG* + APICL APPG International APICL 81% Chemicals India * 50% of APPG considered since it is a 50:50 JV with PPG
Slide 5: Decorative Coatings - India
Decorative Coatings - India Strong presence throughout the country across all product segments Introduced many innovative concept in the Indian paint industry like Small packs Exterior segment Home Solutions (painting solution service) Colour Next (prediction of Colour Trends through in-depth resear
Slide 6: Industrial Coatings - India
Industrial Coatings - India Asian Paints participates in the Industrial Coatings segment directly, through a 50:50 JV with PPG Inc. of US as well as through a 100% subsidiary The Auto segment is catered through our JV (APPG) Second largest supplier to the auto segment in India Now, the largest playe
Slide 7: Industrial Coatings - India
Industrial Coatings - India Asian Paints and PPG to expand their existing non-decorative coatings presence in India jointly through their current 50-50 joint venture relationship (APPG), and also by establishing a second 50-50 joint venture Industrial businesses of both Asian Paints and PPG will be
Slide 8: Chemicals
Chemicals Asian Paints also manufactures Phthalic Anhydride (PAN) and Pentaerythritol PAN is manufactured in Gujarat and Penta in Tamil Nadu More than 50% consumed internally Chemicals business contributes about 1% to the group’s consolidated revenue Its contribution to the group’s revenue has been
Slide 9: International Operations
International Operations Contributes 13% to the group turnover Began by establishing presence % sales contribution of each region – FY 2011 in Fiji in 1978 Presence in 16 countries spread 7.6% over 4 regions 15.9% Middle East Middle East Asia Caribbean 52.2% Caribbean South Pacific Islands South Pac
Slide 10: International Business Unit
International Business Unit South East Asia South Asia South Pacific Singapore Sri Lanka, Fiji, Tonga, Vanuatu, Nepal & Bangladesh Samoa & Solomon Islands Middle East UAE, Bahrain & Oman Egypt Caribbean 10 Jamaica, Barbados, Trinidad & Tobago
Slide 11: Environment : Q2 FY2011-12
Environment : Q2 FY2011-12 11
Slide 12: Environment – Q2 FY 2011-12
Environment – Q2 FY 2011-12 Global economic and macro conditions remain uncertain The quarter witnessed S&P downgrade the US AAA rating for the first time in 70 years However, in spite of the downgrade, global risk aversion led to strengthening of Dollar across the world Macro-Economic factors makin
Slide 13: Presentation structure
Presentation structure Performance: Q2 & 6M FY 2011-12 Review of Business Units Outlook and Risks 13
Slide 14: Sales Performance Q2 FY 2011-12
Sales Performance Q2 FY 2011-12 Standalone Sales & operating Income Gr rate over the same period of LY 45% 40% 37.3% 35% 28.0% 28.9% 30% 25.5% 24.0% 23.4% 25% 20% 15% 10% 6.0% 5% 0% 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 12M 1st Qtr 2nd Qtr FY11 FY11 FY11 FY11 FY 11 FY12 FY12 Standalone Net Sales at Rs. 18
Slide 15: Profit performance Q2 FY 2011-12
Profit performance Q2 FY 2011-12 Standalone Paint Segm ent EBIT Margins 25.0% 20.2% 19.9% 18.9% 20.0% 17.3% 18.0% 16.6% 16.0% 15.0% 10.0% 5.0% 0.0% 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 12M 1st Qtr 2nd Qtr FY11 FY11 FY11 FY11 FY 11 FY12 FY12 Standalone: PAT at Rs. 212.9 crores; grew by 8.5% EBIT at Rs. 30
Slide 16: Sales Performance 6M FY 2011-12
Sales Performance 6M FY 2011-12 Standalone Net Sales at Rs. 3765.7 crores; grew by 27.2% during the quarter Consolidated Net Sales at Rs. 4511.4 crores; grew by 23.9% during the quarter International Operations continue to be impacted by global slowdown and challenging market conditions Net Sales at
Slide 17: Profit Performance 6M FY 2011-12
Profit Performance 6M FY 2011-12 Standalone PAT at Rs. 463.3 crores; grew by 16.7% EBIT at Rs. 671.0 crores; grew by 14.7% Consolidated PAT after Minority Interest at Rs. 472.4 crores; grew by 8.1% EBIT at Rs. 715.8 crores; grew by 7.4% Profitability impacted due to: Significant increase in RM price
Slide 18: Dividend
Dividend Interim Dividend of Rs. 9.50 Per share for FY 2011-12 In FY 2010-11 Total Dividend of Rs. 32.00 per share Final dividend of Rs. 23.50 per share Interim dividend of Rs. 8.50 per share 18
Slide 19: Presentation structure
Presentation structure Performance : Q2 & 6M FY 2011-12 Review of Business Units Outlook and Risks 19
Slide 20: Review of Business Units
Review of Business Units Decorative Business - India Industrial Operations - India International Operations 20
Slide 21: Decoratives Business - India
Decoratives Business - India Demand Conditions Demand in Q2 impacted on account of extended rainfall In most segments, underlying demand has been good Growth has been even across markets Demand impacted marginally in Andhra Pradesh due to bandhs New launches of wood finishes have done well Royale Pl
Slide 22: Decoratives Business - India
Decoratives Business - India Retailing Initiatives The total number of colour worlds have crossed 20,000 Delhi signature store opened in September to excellent response Tremendous response to the “Happy Painting Guide” campaign Colour Idea stores continue to receive a very good response 28 Colour Id
Slide 23: Review of Business Units
Review of Business Units Decorative Business - India Industrial Operations - India International Operations 23
Slide 24: Industrial Operations
Industrial Operations Proposed Joint Venture The proposed Industrial JV with PPG on track and the scheme of merger of concerned entities filed with respective high courts APL to take the lead in the second venture and PPG to take the lead in APPG in order to utilize their respective strengths to bes
Slide 25: Review of Business Units
Review of Business Units Decorative Business - India Industrial Operations - India International Operations 25
Slide 26: International Operations
International Operations Good growth in Asian and South pacific markets Net value sales ( ` Cr) Regions 6M FY 12 6M FY 11 Gr % Caribbean 71.19 65.47 9% Middle East 294.11 288.04 2% Middle east growth subdued due to the Asia 156.50 127.15 23% uncertain macro and political environment in South Pacific
Slide 27: Presentation structure
Presentation structure Performance : Q2 & 6M FY 2011-12 Review of Business Units Outlook and Risks 27
Slide 28: Outlook and Risks
Outlook and Risks Recovery in USA and Europe uncertain, possibilities of double dip recession still exist India GDP growth revised in the region of 7 to 7.5% against earlier forecasts of 8.0% RBI has been consistently increasing Interest rates Negligible impact so far on Inflation in spite of many r
Slide 29: Outlook and Risks
Outlook and Risks Indian Operations Raw material inflation is a cause of concern, however crude showing signs of softening Lot of volatility due to supply-demand equations; some materials like Rutile continue to rise; some crude derivatives show softening Depreciation of the Rupee has impacted adver
Slide 30: Outlook and Risks
Outlook and Risks International Operations Market conditions across the Caribbean region continue to be depressed Political uncertainty in Egypt continues and market conditions are expected to remain tough The demand has been fairly good in Asia except for Singapore Raw material inflation is a globa
Slide 31: Thank you...
31 Thank you... asianpaints
Slide 32: Annexure
32 Annexure asianpaints
Slide 33: Consolidated P&L – Q2 FY2011-12
Consolidated P&L – Q2 FY2011-12 (` in Crores) Q2 FY12 Q2 FY11 Gr % Net Sales & Operating Income 2,250.78 1,810.79 24.3% Material Cost 1,350.70 1,019.73 32.5% Employee Costs 128.72 108.63 18.5% Other Expenses 448.46 350.94 27.8% Depreciation 29.97 28.41 5.5% Profit from Operations before Other Income
Slide 34: Standalone P&L – Q2 FY2011-12
Standalone P&L – Q2 FY2011-12 ` in Crores) (` Q2 FY12 Q2 FY11 Gr % Net Sales and Operating Income 1,843.6 1,469.5 25.5% Material Cost 1,091.2 813.1 34.2% Employee Remuneration 85.0 71.7 18.5% Other Expenditure 384.8 296.1 29.9% PBDIT 282.6 288.6 -2.1% Depreciation 25.0 24.1 3.4% Profit from operatio
Slide 35: Consolidated P&L–6M FY2011-12
Consolidated P&L–6M FY2011-12 (` in Crores) H1 FY12 H1 FY11 Gr % Net Sales & Operating Income 4,511.15 3,641.01 23.9% Material Cost 2,704.34 2,068.47 30.7% Employee Costs 258.77 227.51 13.7% Other Expenses 832.97 666.42 25.0% Depreciation 59.08 55.33 6.8% Profit from Operations before Other Income a
Slide 36: Consolidated Sales breakup : 6M FY2011-12
Consolidated Sales breakup : 6M FY2011-12 H1-FY'12 H1-FY'11 APL – Paints ** 3,711.16 2,925.42 Chemicals 54.56 35.22 APPG* 167.28 140.65 APICL/AP Coatings** 118.89 36.06 International 554.55 510.05 Group 4,511.15 3,641.01 *50% of Asian PPG Industries sales considered **Figures are not comparable as t
Slide 37: Key Ratios
Key Ratios Standalone Consolidated % to Sales & Op. Inc. 6M FY12 6M FY11 6M FY12 6M FY11 Material Cost/Net Sales 59.5% 55.9% 59.9% 56.8% PBDIT/Net Sales 17.0% 19.9% 15.9% 18.6% PBT/Net Sales 17.5% 19.6% 15.5% 18.1% PAT/Net Sales* 12.3% 13.4% 10.8% 12.6% * For Consolidation results, PAT is before Min