Srf Limited · NSE:SRF
Srf — Investor Presentation (September 2014)
47 slides from Srf's investor presentation, September 2014
Slide 1: SRF Limited Investor Presentation
SRF Limited Investor Presentation September 2014 Diversity. Innovation. Performance
Slide 2: Disclaimer
Disclaimer Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ mat
Slide 3: Contents
Contents Overview Business Segments Consolidated Snapshots Outlook Other Milestones 3
Slide 4: Overview
Overview
Slide 5: History & Heritage
Overview History & Heritage Our legacy since 1889 Known as one of India’s respected business houses Winner of Deming Prize Group known for philanthropic work 2004: Tyre Cord Business Run and manage some of the premiere 2012: Chemicals Business academic institutions of India 5
Slide 6: Operations
Overview Operations SRF is • A multi-business manufacturing entity • An Indian multinational • Engaged in the manufacture of chemical based industrial intermediates 9 plants in India 4 plants abroad 6
Slide 7: Business Leadership
Overview Business Leadership SRF has been one of the early players in India to enter: Nylon tyre Coated Belting fabrics cord fabrics fabrics Specialty chemicals Engineering Refrigerants plastics • First and the only company in India so far to have developed technology to manufacture R-134a, an ozone
Slide 8: Market Rankings
Overview Market Rankings Global No. 2 Belting fabrics Nylon 6 tyre cord fabrics Tyre cord Belting Fishnet Domestic Market fabrics twine Leader Engineering Specialty Refrigerants plastics chemicals Domestic No. 2 Packaging films 8
Slide 9: At a Glance as on 31st March 2014
Overview At a Glance as on 31st March 2014 Revenues EBIT No of Business Segments No of Countries with No of Countries Exporting Global Workforce Manufacturing Plants to Consolidated, FY14 figures in $ million rounded off 9
Slide 10: Business Profile
Overview Business Profile Technical Textiles Chemicals & Polymers Packaging Films Fluorochemicals Films for Flexible Packaging • Tyre cord fabrics • Refrigerants (nylon & polyester) • Bi-axially Oriented • Chlorinated solvents Polyethylene • Belting fabrics Terephthalate (BOPET) Specialty Chemicals
Slide 11: Shareholding Pattern
Overview Shareholding Pattern Shareholding Pattern (05th Sep’14) DII 13.6% % of total Prominent Shareholders FIIs 10.7% capital DSP Mutual Fund 4.21 Sundaram Mutual Fund 3.98 UTI Mutual Fund 3.39 Promoters Public 17.7% 52.4% Government Pension Fund Global 2.26 Amansa Capital 1.53 LSV Emerging Equity
Slide 12: Path of Progress
Overview Path of Progress Commences production of Commenced production Shri Ram Fibres nylon engineering plastics of coated fabrics renamed as SRF Ltd 1970 1979 1986 1990 Incorporated as 1974 1983 1989 Shri Ram Fibres Commenced Commissioning of Belting Entered Chemicals Business operations of Fabric
Slide 13: Business Evolution
Overview Business Evolution Relative Composition (in %) of Businesses FY11 Revenue* FY14 Revenue $579 mn $670 mn Successful Transformation: Multiple business 54.2% entity with focus 363.3mn 53.5% on knowledge Technical Textiles 309.3mn based industries 23.7% Chemicals & Polymers 21.4% 124.5mn 159.3m
Slide 14: Growth Levers
Overview Growth Levers Focus on building Nurture innovation leadership businesses through R&D Build and Reposition maintain market portfolio towards leadership in knowledge based business Build a Company products segments known and respected for its R&D Continue to build capabilities De-risk from ne
Slide 15: Leadership Team
Overview Leadership Team Mr. Arun Bharat Ram Mr. Ashish Bharat Ram Mr. Kartik Bharat Ram Chairman Managing Director Dy Managing Director Mr. Rajdeep Anand Mr. Sushil Kapoor Mr. Rajendra Prasad President (CTG) President & CEO (TTB) President & CFO Mr. Prashant Yadav Mr. Prashant Mehra Mr. Anurag Jain
Slide 16: Business Segments
Technical Textiles Chemicals & Polymers Packaging Films Business Segments
Slide 17: Nylon Tyre Cord Fabrics
Technical Textiles Chemicals & Polymers Packaging Films Nylon Tyre Cord Fabrics Despite increase in radialisation of bus & truck tyre segment, the demand for NTCF is expected to remain stable on account of growth in Tractor, 2 wheeler and OTR tyre segments Continues to be the domestic market leader
Slide 18: Polyester Tyre Cord Fabrics
Technical Textiles Chemicals & Polymers Packaging Films Polyester Tyre Cord Fabrics Global surplus in PTCF leading to lower realisations; yarn developed for alternate applications The only manufacturer of polyester tyre cord fabrics in India 18
Slide 19: Belting Fabrics
Technical Textiles Chemicals & Polymers Packaging Films Belting Fabrics Largest manufacturer of belting fabrics in India and second largest in the world; domestic market share ~60% Segment reporting healthy performance; anticipated improvement in infrastructure sector to provide further boost Facili
Slide 20: Coated Fabrics
Technical Textiles Chemicals & Polymers Packaging Films Coated Fabrics State-of-the-art coating line offers PVC coated fabric with Acrylic / PVDF finishes and polyurethane coated fabrics Integrated manufacturing facility from polyester yarn to fabricated articles Economic slowdown has impacted perfo
Slide 21: Laminated Fabrics
Technical Textiles Chemicals & Polymers Packaging Films Laminated Fabrics Laminated fabric is a combination of a polyester fabric with a film (PVC or another) on either or both sides Lower advertising spends on account of slowdown has led to subdued demand New modern facility in Uttarakhand, India 2
Slide 22: Technical Textiles Key Highlights
Technical Textiles Chemicals & Polymers Packaging Films Key Highlights Revenues Operating Profits 356.5 363.3 30 354.7 27.2 19.2 20.5 309.3 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 $ million $ million Tyre Cord Sales Trend (in MTs) • Free cash flow generating business 61,170 59,403 with stable contri
Slide 23: Business Segments
Technical Textiles Chemicals & Polymers Packaging Films Business Segments
Slide 24: Fluorochemicals Business
Technical Textiles Chemicals & Polymers Packaging Films Fluorochemicals Business Refrigerant portfolio consists of R-22, R-134a and HFC blends: R-410A, R-404A and R-407C Over 40% share of the Only manufacturer Indian market besides being of R-134a in India well accepted worldwide Global distribution
Slide 25: Specialty Chemicals Business
Technical Textiles Chemicals & Polymers Packaging Films Specialty Chemicals Strong knowledge of Fluorination and Business other halogen chemistry along with More than 25 years of concerted focus on R&D led to experience handling fluorine development of complex Organo- molecules; one of the most fluo
Slide 26: Driving Innovation through R&D
Driving Innovation through R&D since 2003 • Developing internal competencies and capabilities to create breakthrough process innovations • Equipped with state-of-the-art R&D facilities and an ingenious team of scientists and technologists • 2 R&D centres in India • Focus on developing new processes
Slide 27: Chemical Complex at Dahej
Technical Textiles Chemicals & Polymers Packaging Films Chemical Complex at Dahej • Presently developing 126 acres out of Operational Units 293 acres in Phase I • Facilities to produce multiple products o Five Specialty Chemicals plants with focus on fluorochemicals and o New Global Scale specialty
Slide 28: Chemicals & Polymers Key Highlights
Technical Textiles Chemicals & Polymers Packaging Films Key Highlights Revenues Operating Profit 200.8 99 172.5 159.3 73.3 124.5 43.8 70.2 57.8 22.8 CER 49 Ex CER 159.3 22.2 31.8 42.3 127.5 128.7 101.7 26.8 28.8 31.8 15.6 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 $ million $ million • Outlook for Spec
Slide 29: Business Segments
Technical Textiles Chemicals & Polymers Packaging Films Business Segments
Slide 30: Packaging Films Key Highlights
Technical Textiles Chemicals & Polymers Packaging Films Key Highlights Global demand-supply mismatch; product is a pure Industry estimated to grow at commodity and goes apprx 5% p.a. globally and apprx through industry cycles; 12% p.a. domestically No new capacity addition announced Second-largest E
Slide 31: Overseas Operations
Technical Textiles Chemicals & Polymers Packaging Films Overseas Operations BOPP Plant at South Africa BOPET Plant at Thailand • Set up a greenfield BOPP film plant and a • Set up a greenfield BOPET film plant and a vacuum metallisation plant in KwaZulu Natal, vacuum metallisation plant in Rayong, S
Slide 32: Packaging Films Key Highlights
Technical Textiles Chemicals & Polymers Packaging Films Key Highlights Revenues Operating Profits 145.2 147 58 110 103.3 4.2 1 -0.8 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 $ million $ million Packaging Films Capacity and Utilisation • BOPP and BOPET films being Trend commodities, go through the 1,50
Slide 33: Consolidated Snapshots
Consolidated Snapshots
Slide 34: Consolidated Revenue Trends
Consolidated Financial Performance Snapshots Trends Consolidated Revenue 667.3 669.7 630.5 579 73.3 43.8 22.8 CER 669.7 556.2 594 586.7 Ex CER FY11 FY12 FY13 FY14 Business Segments Technical Textiles CPB Packaging Films 200.8 363.3 172.5 159.3 145.2 147 356.5 354.7 73.3 110 124.5 43.8 103.3 309.3 22
Slide 35: Consolidated EBIT Trends
Consolidated Financial Performance Snapshots Trends 130.5 Consolidated EBIT 113.2 22.2 74.7 70.2 CER 50.7 Ex CER 108.3 42.3 43 50.7 32.4 FY11 FY12 FY13 FY14 Business Segments CPB Technical Textiles 49 99 57.9 31.8 Packaging Films 58 30 22.2 27.2 70.2 42.3 19.2 20.5 31.8 26.8 4.2 1 -0.8 28.8 15.6 FY1
Slide 36: Consolidated PBIDT and PAT
Consolidated Financial Performance Snapshots Trends Consolidated PBIDT Consolidated PAT 159 144 81 22.2 CER 14.8 CER 110 63 Ex CER 70.2 Ex CER 88 42.3 42 PBIDT Margin% 136.8 (Ex CER) 47 PAT Margin% 66.2 27 (Ex CER) 88 PBIDT Margin% 28.4 27 73.8 22 67.7 17 PAT Margin% 14 24 13 9 7 27 11 11 11 13.6 16
Slide 37: Net Worth and Gross Block
Consolidated Financial Performance Snapshots Trends Net Worth Gross Block 323 340 292 1,019 257 793 632 691 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 $ million $ million • Dahej facility to produce multiple products with focus on specialty chemicals and fluorochemicals • Return ratios are anticipated
Slide 38: Dividend Payout, Net Debt:Equity, RONW, ROCE
Consolidated Financial Performance Snapshots Trends Dividend Payout* (%) Net Debt: Equity (x) 41.2 1.02 0.8 25.0 26.4 0.58 0.59 20.4 FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 * Including Corporate Dividend Tax RONW (%) ROCE 94.2 32 CWIP in $ Mn 69.6 22 ROCE (%) 13 29.4 24.2 8 18.8 13.9 18.7 7.9 FY11 F
Slide 39: Outlook
Outlook
Slide 40: Outlook: Technical Textiles Business
Technical Textiles Outlook Business • NTCF is expected to remain a key business in the segment and a generator of steady cash flow • Demand for NTCF to mirror Indian GDP growth as it is closely linked to the transportation sector • Improving macroeconomic environment to have a positive impact on lam
Slide 41: Outlook: Chemicals & Polymers Business
Chemicals & Polymers Outlook Business • Expanded R-134a capacities should assist significant sales improvement in the domestic and export markets • Loss of R-22 markets due to phase down for emissive use will be compensated by increasing feedstock use by the Specialty Chemicals segment • Future pote
Slide 42: Outlook: Packaging Films Business
Packaging Films Outlook Business • Robust domestic FMCG demand and fast urbanisation leading to healthy growth in demand: industry being cyclical, the situation is expected to turnaround in the near future • Focus on full utilisation of assets and incorporating more value-added products in the portf
Slide 43: Other Milestones
Other Milestones
Slide 44: Awards & Recognitions
Other Awards & Recognitions Milestones Winner of Deming Prizes for 2 businesses Chemicals Tyre Cord Business Business 2012 2004 CII-ITC SRF in Sustainability Awards Forbes’ 2008 Strong Commitment ‘Best 2009, 2010 & 2011 Under a Significant Achievement Billion List’ 2013 Sustainability Prize 2011 44
Slide 45: CSR Awards
Other Awards & Recognitions Milestones CSR Awards 2012 Businessworld FICCI CSR Award Best CFO Award 2013 Aaj Tak Care Awards 2013 Greentech CSR Award 2012: ‘Best CFO’ presented by a leading Indian business magazine BusinessWorld 45
Slide 46: Concern for Community
Other Concern for Community Milestones Education Vocational Skills Undertakes up-gradation of government schools under ‘Quality Undertakes several initiatives to Education for All’ programme, improve the employability of people covering 90 primary and middle especially the younger generation schools
Slide 47: Thank you
Ze, SRrfe We always find a better way Thank you