Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Q1 FY2005 Earnings Presentation
46 slides from Grasim Industries's earnings presentation, Jul 28, 2004
Slide 1: Grasim Industries Limited Performance Review – Q1FY05
Grasim Industries Limited Performance Review – Q1FY05 28th July, 2004
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: Financial Performance – Q1FY05
Financial Performance – Q1FY05 (Rs. Crores) Financial Highlights : Q1FY05 % ! Excellent overall performance across Total Revenue 1,517 30 businesses " Sponge Iron performance remained PBIDT 446 56 excellent " Sustained strong performance of VSF Interest Charges 33 (16) " Good performance of Cement m
Slide 4: Financial Performance – contd…
Financial Performance – contd… (Rs. Crores) Other Highlights Q1 Q1 % ! UltraTech CemCo acquisition FY05 FY04 Chg. completed " Open Offer completed (oversubscribed Net Turnover & Op. Income 1,517.1 1,163.4 30 1.64 times) Other Income 16.3 21.1 (23) " Management Control acquired on PBIDT 446.4 286.6 5
Slide 5: Financial Performance
Financial Performance (Rs. Crores) Q1FY05 Q1FY04 % Chg. FY04 Net Turnover & Op. Income 1,517.1 1,163.4 30 5,233.3 Other Income 16.3 21.1 (23) 180.3 PBIDT 446.4 286.6 56 1,475.3 Interest and Finance Charges 32.9 39.1 (16) 153.9 Gross Profit 413.5 247.5 67 1,321.4 Depreciation 69.8 67.0 4 273.1 PBT (b
Slide 6: Segmental Performance Summary - Q1FY05
Segmental Performance Summary - Q1FY05 Revenue Mix PBIDT Mix Sponge Iron 16% VSF Others 32% 2% VSF 33% Sponge Iron 25% Chemical Chemical 3% Cement 5% 44% Cement Textiles 37% 3% (Rs.1,517 Crs.) (Rs. 446 Crs.) ! VSF (incl. Chemical) and Cement contributed 81% to Revenue (85%) ! Sponge Iron share in re
Slide 7: Segmental Performance – Q1FY05
Segmental Performance – Q1FY05 Rs. Crores Capital ROAvCE (%) Revenue PBIT Business Employed # (PBIT basis) Q1FY05 Q1FY04 Q1FY05 Q1FY04 Q1FY05 Q1FY04 Q1FY05 Q1FY04 VSF 495.4 379.4 134.1 95.0 795.7 826.0 68.8 46.5 Chemical 72.5 53.5 7.6 6.7 194.3 197.6 15.5 13.2 Cement 682.3 573.7 127.7 68.4 2096.5 2,
Slide 8: Business Review – Q1FY05
iGRAS ITM! “7% Business Review - QIFY0b
Slide 9: Viscose Staple Fibre : Highlights
Viscose Staple Fibre : Highlights % ! Capacity utilisation at 95% of enhanced Q1FY05 Q1FY04 Chg . capacity (Q1FY04 - 71%) Capacity (TPA) @ 251,850 220,775 14 ! Coupled with benefits of enhanced Production (MT) 59,712 39,169 52 capacities, production grew by 52% Sales Volumes (MT) 60,877 49,278 24 "
Slide 10: Viscose Staple Fibre : Outlook
Viscose Staple Fibre : Outlook ! Volume outlook strong " Direct and deemed export expected to grow ! Margins expected to remain stable ! Concerted efforts to address water shortage issue " Reservoir construction at Harihar in progress 10
Slide 11: Viscose Staple Fibre : Summary
Viscose Staple Fibre : Summary Q1FY05 Q1FY04 % Chg. FY04 Capacity TPA @ 251,850 220,775 14 @ 251,850 Production MT 59,712 39,169 52 221,005 Sales Volumes MT 60,877 49,278 24 229,110 Net Turnover Rs. Crs. 495.0 379.3 31 1,764.8 Avg. Realisation Rs./MT 77,278 72,700 6 72,269 PBIDT Rs. Crs. 147.4 107.7
Slide 12: Cement : Highlights
Cement : Highlights % ! Sales up 5% against sector avg. of 2% Q1FY05 Q1FY04 Chg. " Market share improved marginally Grey Cement " Better performance in South (+10%), West (+9%) and North (+7%) Capacity (Mn TPA) # 13.12 12.92 2 " Volumes down in East (-12%) due to Production (Mn MT) 3.00 2.91 3 break
Slide 13: Cement : Highlights (Contd..)
Cement : Highlights !Cement : Highlights (Contd..)contd.. Q1FY05 - Zone wise growth ! OPM improved to 24% on increased Grasim Industry 15% realisation, despite rising coal and pet 10% 10% 9% coke prices 7% 10% 6% 5% ! Cost competitiveness maintained thru 2% 2% 5% 0% " Increased thru put and better s
Slide 14: Cement : Outlook
Cement : Outlook ! Industry " Promising industry outlook " Demand Supply equilibrium likely by CY2006 # North and East could see equilibrium by CY2005 # Balance in South and West likely by end of CY2006 " Average realisation likely to be higher by 4-5% YoY for FY05 ! Key focus points for Grasim " L&
Slide 15: Cement : Summary
Cement : Summary Q1FY05 Q1FY04 % Chg. FY04 Grey Cement Capacity Mn. MT # 13.12 12.92 2 # 13.12 Production Mn. MT 3.00 2.91 3 11.85 Sales Volumes Mn. MT 3.04 2.90 5 11.96 Net Turnover Rs. Crs. 638.5 530.0 20 2,226.0 Avg Realisation Rs./MT 1,933 1,706 13 1,712 White Cement Capacity TPA 400,000 400,000
Slide 16: Sponge Iron : Highlights
Sponge Iron : Highlights % ! Excellent performance - best ever quarter Q1FY05 Q1FY04 Chg. Capacity (TPA) 900,000 900,000 -- " strong prices and enhanced volume Production (MT) 176,932 159,741 11 ! Capacity utilisation higher at 79%; Sales Volumes (MT) 183,459 156,531 17 production up 11% Net Turnove
Slide 17: Sponge Iron : Outlook
Sponge Iron : Outlook % ! Sustainability of current profitability will Q1FY05 Q1FY04 Chg. Capacity (TPA) 900,000 900,000 -- depend on global scrap prices- Production (MT) 176,932 159,741 11 " Prices of Sponge Iron and scrap were Sales Volumes (MT) 183,459 156,531 17 down in June 04 from its peak Net
Slide 18: Sponge Iron : Summary
Sponge Iron : Summary Q1FY05 Q1FY04 % Chg. FY04 Capacity TPA 900,000 900,000 - 900,000 Production MT 176,932 159,741 11 687,272 Sales Volumes MT 183,459 156,531 17 676,921 Net Turnover Rs. Crs. 249.9 126.4 98 638.9 Avg Realisation Rs./MT 12,572 7,811 61 9,188 PBIDT Rs. Crs. 111.5 48.3 131 254.2 PBID
Slide 19: Chemical : Highlights and Outlook
Chemical : Highlights and Outlook % ! Capacity utilisation higher at 80% (57%) Q1FY05 Q1FY04 Chg Caustic Capacity (TPA) 190,800 190,800 -- on uninterrupted operations Caustic Production (MT) 38,318 27,184 41 ! Sales volume up 33% on higher captive Caustic Sales Volumes (MT) 38,497 28,886 33 demand f
Slide 20: Chemical : Summary
Chemical : Summary Q1FY05 Q1FY04 % Chg. FY04 Capacity (Caustic) MT 190,800 190,800 -- 190,800 Production (Caustic) MT 38,318 27,184 41 157,541 Sales Volume (Caustic) MT 38,497 28,886 33 156,967 Net Turnover Rs. Crs. 72.4 53.2 36 294.6 Avg. ECU Realisation Rs./MT 16,196 16,087 1 16,338 PBIDT Rs. Crs.
Slide 21: Textiles : Highlights and Outlook
Textiles : Highlights and Outlook Q1 Q1 % FY05 FY04 Chg. ! Volumes down 3% Sales Volumes " Lower off take in domestic OTC - Fabrics (lac Mtrs.) 31 32 (3) market - Synthetic Yarn (MT) 1,559 1,728 (10) " Higher volumes recorded in RMG / Net Turnover (Rs Crs.) 49.3 49.2 -- exports market Fabric Realisa
Slide 22: Textiles : Summary
Textiles : Summary Q1FY05 Q1FY04 % Chg. FY04 Net Turnover Rs. Crs. 49.3 49.2 -- 228.0 PBIDT Rs. Crs. 2.2 2.5 (10) 13.4 PBIDT Margin % 4.5% 5.0% -- 5.9% PBIT Rs. Crs. (1.1) (0.9) -- (0.2) Capital Employed Rs. Crs. 108.5 108.5 -- 109.0 ROAvCE (PBIT basis) % (4.0)% (3.5)% -- (0.2)% 22
Slide 23: Financial Highlights
Financial Highlights 23
Slide 24: Profitability Snapshot
Profitability Snapshot PBIDT & PBIDT Margin 29.5 Q1 (Figures in Rs. Crores) FY99 FY03 FY04 28.3 30 FY05 1350 PBIDT PBIDT Margin (%) Gross Turnover 3,897 5,412 6,130 1,745 1100 24.7 PBIDT (Rs. Crs.). 25 PBIDT Margin (%) Net Turnover 3,354 4,606 5,213 1,512 850 21.4 1475 600 1136 PBIDT 674 1,136 1,475
Slide 25: Profitability Snapshot contd..
Profitability Snapshot contd.. Interest charges - Interest Cover - Interest Rate Rs. Crs. % 2 13. 3 355 12. 14 305 11 .2 12 292 9.8 255 256 8.5 10.2 10 205 239 7.5 7.7 8 155 190 5.6 168 5.6 154 105 4.6 6 3.6 55 2.9 33 4 2.3 5 2 FY99 FY00 FY01 FY02 FY03 FY04 Q1FY05 Interest (Rs.Crs.) Interest Cover I
Slide 26: Financial Snapshot
Financial Snapshot Av.Capital Employed - Net Worth - D/E ratio (Figures in Rs. Crores) Avg.Cap.Employed/Net Worth (Rs. Crs.) FY99 FY02 FY03 FY04 7000 6523 1.13 5904 1.00 6000 Debt Equity Ratio 1.02 Gross Block 4,937 5,371 5,600 5,807 5106 5446 5000 4759 4815 4572 Net Block 3,354 3,263 3,270 3,218 0.
Slide 27: Financial Snapshot contd..
Financial Snapshot contd.. ROAvCE - RONW (%) - Market Capitalisation (%) Rs. Bn. 25.0 22.8 23.1 23.6 120 20.4 20.0 18.9 100 16.2 80 15.0 13.5 14.0 12.9 13.8 10.1 10.5 60 10.0 6.9 40 5.3 5.0 20 0.0 0 FY99 FY00 FY01 FY02 FY03 FY04 Q105 ROAvCE (PBIT basis)(%) RONW (%) Market Cap ! Balance Sheet reflect
Slide 28: Capex Plan
Capex Plan Rs. Crores Capex Cash Outflow planned FY05 FY06 Cement - De-bottlenecking/Blending 55 36 19 - Power plants/RMCs 22 7 15 - Modernization 110 95 15 Total Cement 187 138 49 VSF - Capacity expansion/ 62 62 - Development Centre - Modernization 146 113 31 Total VSF 208 175 31 Chemical 32 32 - O
Slide 29: UltraTech CemCo Limited – Acquisition Completed
UltraTech CemCo Limited Acquisition Completed 29
Slide 30: Acquisition of UltraTech
Acquisition of UltraTech ! Key Events " Scheme of Arrangement filed with High Court 15 Dec. 2003 " Court convened EOGM of Shareholders and Creditors of L&T to approve the scheme 3 Feb. 2004 " Scheme of Arrangement approved by High Court 22 April 2004 " Effective date of Scheme & Public Announcement
Slide 31: Open Offer for UltraTech
Open Offer for UltraTech ! Equity Capital of Ultra Tech 12.43 Cr. shares ! Total Offer Size (30%) 3.73 Cr. shares ! Eligible to Tender (67.4%) 8.39 Cr. shares ! Tendered (49.3%) 6.13 Cr. shares " No. of applications 54,500 " % of total equity tendered 49.3% " % of eligible participation 73.0% ! No.
Slide 32: Shareholding pattern in UltraTech
Shareholding pattern in UltraTech Before Open After Open Offer (%) Offer (%) Grasim & its subsidiary 12.6 51.1 Financial Institutions 29.7 11.9 Larsen & Toubro 20.0 11.5 FIIs 11.6 5.1 GDRs 4.3 2.7 Mutual Funds / Banks / Corporates 2.6 1.1 Retail Investors 19.2 16.6 TOTAL 100.0 100.0 32
Slide 33: Ultra Tech CemCo – FY04 Results
Ultra Tech CemCo – FY04 Results UltraTech UltraTech Key observations on maiden results (Figures in Rs. Crores) Standalone Consolidated! Reported earnings of UltraTech (Stand- Net Income from alone) has extra-ordinaries and certain 2,263 2,292 Operations deferred revenue expenditure carried Other Inc
Slide 34: Shree Digvijay Cement Company Limited
Shree Digvijay Cement Company Limited Results for Quarter ended 30th June 2004 34
Slide 35: Shree Digvijay Cement – Quarter Results
Shree Digvijay Cement – (Rs in Crs) Qtr ended Qtr ended % 9M ended 9M ended % 30.06.04 30.06.03 Chg. 30.06.04 30.06.03 Chg. Production (Lac MT) 1.88 2.07 (9) 5.80 5.79 -- Sales Volumes (Lac MT) - Cement 1.88 2.00 (6) 5.80 5.72 1 - Clinker 0.33 0.66 (50) 1.17 1.82 (35) NCR (Rs./MT) 1,635 1,378 19 1,4
Slide 36: Vision and Strategy
Vision and Strategy ! To be a premium Conglomerate with clear focus at Vision each business level, relentlessly pursuing value creation ! Grow and Strengthen main businesses – VSF and Cement ! Improve capital productivity Strategy ! Market expansion and greater penetration ! Improve margins continuo
Slide 37: Plant Locations – Grasim & its subsidiaries
Plant Locations– Grasim & its subsidiaries Bhatinda(G) Noida Gurgaon Grey cement plants T Bhiwani Jodhpur Grinding Units (G) Shambhupura Ultra Tech Cement Plants Jawad Bharuch Durgapur(G) Ultra Tech Grinding Units (G) F Jafrabad Magdalla (G) B Ultra Tech Bulk Cement Terminals Sikka F C Pipavav Nagda
Slide 38: Thank You
GRAS ITM ADITYA BIRLA GROUP ‘Thank You
Slide 39: Production Data (MT)
Production Data (MT) Q1FY05 Q1FY04 FY04 Capacity Capacity Capacity Production % Production % Production % TPA TPA TPA VSF 251,850 59,712 95 220,775 39,169 71 # 251,850 221,005 100 Pulp 70,000 9,538 55 70,000 8,405 48 70,000 55,869 80 Caustic Soda 190,800 38,318 80 190,800 27,184 57 190,800 157,541 8
Slide 40: Divisional Turnover (Qty) & Realisation
Divisional Turnover (Qty) & Realisation Quantity (MT) Realisation (Rs. /MT) Product Q1 Q1 Q1 Q1 FY05 FY04 FY04 FY05 FY04 FY04 VSF 60,877 49,278 229,110 77,278 72,700 72,269 Pulp 8,927 7,035 57,253 24,177 22,123 22,228 Caustic Soda * 38,497 28,886 156,967 16,196 16,087 16,338 Grey Cement * * 3.04 2.9
Slide 41: Press Release Mumbai, July 28, 2004
Press Release Mumbai, July 28, 2004 GRASIM, THE ADITYA BIRLA GROUP’s FLAGSHIP COMPANY REPORTS EXCELLENT OVERALL PERFORMANCE FOR Q1 FY 2005 Profit after Tax up by 68% (Rs. Crores) Q1FY05 Q1FY04 % Change FY 2004 (Audited) Net Turnover 1,517.1 1,163.4 30.4% 5,233.3 PBIDT 446.4 286.6 55.8% 1,475.3 Inter
Slide 42: Highlights of Grasim's operations
Highlights of Grasim’s operations: Q1FY05 Q1FY04 % FY 2004 Change Production - Viscose Staple Fibre M.T. 59712 39169 52% 221005 Cement Mn. M.T. 3.00 2.91 3% 11.85 White Cement M.T. 73228 67576 8% 310578 Sponge Iron M.T. 176932 159741 11% 687272 Caustic Soda M.T. 38318 27184 41% 157541 Sales Volumes
Slide 43: Cement Business
Cement Business The Cement business has posted an impressive performance. Production at 3 Mn. Ton is up by 3% over the corresponding period of the last year. Sales volumes are higher by 5%, against the industry average growth of 2%. The realisation for the quarter grew by 13%, which has contributed
Slide 44: Outlook
Outlook Given Grasim’s expanded capacities, leadership status in its key business segments, strategic planning and prudent financial management, it is poised for a significant growth in the years ahead. -o-O-o- Grasim Industries Limited Regd. Office: Birlagram, Nagda – 456 331 (M.P.) Corporate Offic
Slide 45: Unaudited Financial Results for the Three Months Ended 30th June 2004
UNAUDITED FINANCIAL RESULTS FOR THE THREE MONTHS ENDED ON 30th JUNE 2004 Rs in Crores Three Months Three Months Year Ended 30th Ended 30th Ended 31st June 2004 June 2003 March 2004 ( Audited ) Net Sales / Income from Operations 1,517.08 1,163.42 5,233.27 Other Income 16.26 21.06 180.34 Total Expendi
Slide 46: Segments Reporting
Cont. from Page 1 4. Segments Reporting: Rs. in Crores Three Months Three Months Year Ended 30th Ended 30th Ended 31st June 2004 June 2003 March 2004 ( Audited ) 1. SEGMENT REVENUE a Fibre & Pulp 495.42 379.43 1,765.50 b Cement 682.33 573.70 2,419.91 c Sponge Iron 249.95 126.42 638.92 d Chemicals 72