Tata Chemicals Limited · NSE:TATACHEM
Tata Chemicals — Shareholder Meeting (September 2004)
30 slides from Tata Chemicals's shareholder meeting presentation, Sep 20, 2004
Slide 1: 65th AGM - FY2004
65thAGM - FY2004 September 20, 2004 1
Slide 2: Forward-looking statements
Some of the statements in this presentation that are not historical facts are forward looking statements. These statements are based on the present business environment and regulatory framework. We assume no responsibility for any action taken based on the said information, or to update the same as
Slide 3: Threat of the mid-'90s
Threat of the mid-‘90s Commoditised Market Threat of Imports Reduction in Tariffs Manufacturing mindset Makings Capacity Glut Poor distribution network of a crisis Serial calamities Government influence Inefficient operations Slow growth 3
Slide 4: Turnaround Strategy
Turnaround Strategy Leadership in Brand Reorganizing domestic market management distribution Cost efficiency and Successful Debt Quality initiatives Turnaround restructuring Strategy Mindset change Rightsizing Growth & Synergy 4
Slide 5: Transformation
Transformation From To Inorganic chemicals Wider product profile Manufacturing outlook Customer outlook Production driven Value driven 5
Slide 6: Revenue profile
Revenue profile STPP Other 3% 9% Soda ash NPK 21% Fertiliser 8% Sales: Rs 1,537 cr 59% Salt DAP 9% 21% Chemicals Sales: Rs 1,056 cr Urea Cement 41% 4% 25% 6
Slide 7: Consistently strong sales volumes
Consistently strong sales volumes •‘000 MT 600 •‘000 MT 800 Soda ash Salt 600 400 400 200 200 0 0 FY02 FY03 FY04 FY02 FY03 FY04 •‘000 MT •‘000 MT 600 Cement 1000 Urea 800 400 600 400 200 200 0 0 FY02 FY03 FY04 FY02 FY03 FY04 7
Slide 8: Healthy revenue streams
Healthy revenue streams 800 •Rs crore •Rs crore 300 Soda ash Salt 600 225 400 150 200 75 0 0 FY02 FY03 FY04 FY02 FY03 FY04 •Rs crore •Rs crore 150 1000 Cement Urea 120 800 90 600 60 400 30 200 0 0 FY02 F03 FY04 FY02 FY03 FY04 8
Slide 9: Robust financial position
Robust financial position Operating cash flows 500 461 436 487 Rs crore 250 0 FY0 2 FY0 3 FY0 4 Net Debt and Debt Equity ratio 800 711 0 .5 0.46 600 452 440 0 .4 Rs crore 0.28 0 .3 400 0.22 0 .2 200 0 .1 0 0 FY0 2 FY0 3 FY0 4 Net Deb t D/E (o n net b as is ) 9
Slide 10: FY2004 Business performance perspective
•FY2004 • Business performance perspective 10
Slide 11: Highlights – FY2004
Highlights – FY2004 • Largest exporter of soda ash in India • Tata Salt reaches 41% market share by Q4 of FY 2004 • Cement production crosses 100% capacity • Energy consumption of urea at 5.31 MKCal / tn - lowest in India • Market discipline enhances Urea realisations • EVA of core businesses positi
Slide 12: Performance trend
Performance trend Rs Crore 2001-02 2002-03 •2003-04 Income 1,434 1,627 2653 Profit from 376 415 460 Operations Profit before 200 262 326 Tax Profit after 127 197 221 Tax 12
Slide 13: Distribution of earnings – FY2004
Distribution of earnings – FY2004 Retention Other Other Chemicals Income Dividend 3% 4% 4% 4% Soda Ash Financial STPP 20% 7% 4% Taxes 8% Cement 4% Vacuum Overheads Salt 6% Materials 8% 59% Distribution Urea 9% 24% Complex Fertilizers Employee 32% 4% Rupee earned Rupee deployed 13
Slide 14: Operating and Financial overview
Operating and Financial overview • Operating margin : 18% Efficient • Operating cashflow : Rs 487 cr operations • Gross operating cycle : 87 days • Fixed asset turnover ratio : 1.5 • Debt equity ratio : 0.38 Financial • Interest coverage ratio : 7.65 management • Debt asset ratio : 0.20 • Return on
Slide 15: Chemicals Segment
ee Chemicals Segment TATA Chemicals TATA CHEMICALS LIMITED 15
Slide 16: Soda ash
Soda ash • Impacted by high raw material import prices and ocean freight • Coke prices more than doubled Sector • Import tariffs unchanged in Budget 2005 • May be reduced in current year in line with WTO recommendations • Increasing export outlook by Indian players • Glass sector growing at 8 – 9% •
Slide 17: Food additives
Food additives • Increasingly competitive market • National brands strengthening presence Sector • Significant potential for branded food offerings Tata Salt increases lead over competition Marketshare tops 40% - greater than combined share of next 3 players Tata Chemicals Launch of Samundar C
Slide 18: Cement
Cement • Healthy growth of construction industry fuels demand Sector • Firming up of market prices • Highest ever sales in Company’s history • Capacity utilisation tops 100% Tata Chemicals • Marketshare strengthens further – presently 6% (in the Gujarat market) 18
Slide 19: STPP
STPP • Detergent industry enjoying healthy volume growth Sector • International prices firming up • Input prices appreciating • Sales healthy Tata Chemicals • Preferred supplier status to HLL to continue • Marketshare: 87% 19
Slide 20: Fertiliser Segment
«lp Fertiliser Segment TATA Fertilise#fs N18% P(T}46% P(CS)46% P (WS)41% GROSS WT. 50.13 kg NET WT. SOkg (==) TATA Menace by TATA CHEMICALS LIMITED TATA CHEMICALS LIMITED 20
Slide 21: Urea
Urea • Healthy monsoon improves demand • Group Pricing Policy enters Stage II, Sector • Expected to encourage efficient manufacturers • Revenues healthy • Babrala plant continues to be the most efficient in India Tata Chemicals • Farm Management Services Business • Enhances association with the farm
Slide 22: Tata Kisan Kendras
Tata Kisan Kendras • Customized training to farmers & franchisees • Soil testing facility • Warehousing • Agri-input supplies • Demonstration of crop technology • Farm machines on custom Plan by 2006 hire basis •40 TKVKs • Alliance with the College of Agriculture and Life •800 TKKs Sciences, Cornell
Slide 23: Overview of the Haldia Plant
Overview of the Haldia Plant 1 Million Ton • Spread across 200 acres Site site • 19 lakh tons of material movement per year • 80% raw materials imported from 11 countries •STPP – 50 K tpa •DAP – 7 lac tpa •SSP – 1.7 lac tpa •Sulph Acid – 2.22 lac tpa •Phos Acid – 42 K tpa 23
Slide 24: DAP, Complex
DAP, Complex • Heavily impacted by spiralling raw material prices • Ammonia prices appreciated over 100% • MOP prices increased 45% Sector • Phosphoric Acid prices considered for subsidy lower than negotiated price • Sales restricted by Bihar government • Market leadership in West Bengal, Bihar and
Slide 25: Key ratio perspective
Key ratio perspective E RoACE RoANW 13.0% 13.0% F 12.7% 12.0% 12.0% 12.0% 11.8% 11.0% F 11.0% 10.1% 9.0% I 10.0% 7.3% 9.0% 7.0% C 2001-02 2002-03 2003-04 2001-02 2002-03 2003-04 I Fixed asset turnover Current asset turnover E 2.0 2.5 Times Times 2.23 2.0 N 1.5 1.50 1.5 1.54 1.21 C 1.0 0.75 0.89 1.0
Slide 26: Key ratio perspective
Key ratio perspective Debt-equity Interest coverage HLCL debt comprises Rs 260 crore suppliers credit availed at considerably low interest rates 8.00 1200 0.7 7.65 Financial 1000 0.58 0.5 0.6 0.38 6.00 0.5 800 295 0.4 management 600 400 1060 816 0.3 4.00 0.2 3.90 200 471 0.1 2.82 0 0 2001-02 2002-03
Slide 27: Recognition
Recognition Operational efficiencies •Key awards •Authority •'Excellence in Natural •GAIL •Gas Conservation' •National Energy •Ministry of •Conservation •Power •Strong Commitment •CII Exim Bank to TQM •TBEM 500+ •TBEM •Best Production •FAI Performance 27
Slide 28: Recognition
Recognition Environment and safety •Key awards •Authority •5 Star Rating •British Safety •Council •Greentech Platinum •The Greentech Superbrand •Environment Excellence •Foundation Branding and marketing Top 5 – Brand Equity Index 28
Slide 29: Strategy and Outlook
Strategy and Outlook • Modernisation program for Mithapur • Debottleneck Babrala facility • Enhance STPP capacity • Deepen pentration – reaching new geographies • Securitise inputs for DAP • Offer wider product range to farmers • Enter new segments in branded foods • Working with Government for a pr
Slide 30: Social responsibility
Social responsibility Rural Natural resource entrepreneurship, management income generation Health, education Volunteer and programmes infrastructure 30
Tata Chemicals — Shareholder Meeting (September 2004) on 6ix