Grasim Industries Ltd. · NSE:GRASIM
Grasim Industries — Investor Presentation (March 2015)
49 slides from Grasim Industries's investor presentation, March 2015
Slide 1: Grasim Industries Limited – A VSF and Cement Major
Grasim Industries Limited A VSF and Cement Major March 2015
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: Presentation Structure
Presentation Structure Introduction Business Review Capex Highlights – 9M: 2014-15 Summary 3
Slide 4: The Aditya Birla Group
The Aditya Birla Group Amongst the top business houses in India Operations spread over 36 countries Revenue at $40 Bn., Over 50% from overseas operations 120,000 employees, belonging to 42 nationalities Grasim - Viscose Staple Fibre & - Cement : UltraTech - Subsidiary (60% ) Hindalco - Alumi
Slide 5: Group Driving Principles for Shareholder Value Creation
Group Driving Principles for Shareholder Value Creation Emphasis on cost leadership and efficiency Create world class assets, achieve global scale Ensure long term availability of key inputs Benchmarking with best in class quality and cost parameter Globally competitive through innovation,
Slide 6: The Aditya Birla Group: Leadership Across Businesses
The Aditya Birla Group : Leadership Across Businesses Leading Global Player – Hindalco – Novelis is largest aluminum rolling company – Largest producer of carbon black – One of two largest producers of VSF – Fourth-largest producer of insulators – Fourth-largest producer of acrylic fibre Leadership
Slide 7: Grasim: Market leader across business segments
Grasim: Market leader across business segments Viscose Staple Leading Global Player Fibre – Capacity : 477K TPA Revenue ` 65 Bn. – Grasim commands 8% Global share; at Group level – 16% (US$ 1.1 Bn.) – Integrated model with experience of more than five decades Leading Player in India Chemical – Start
Slide 8: Grasim's Global Standing
Grasim’s Global Standing VSF Business Cement Business Global Market Share Ranking (Ex. China) Capacity (Mn. MT)* Lafarge- France 221 Holcim- Switzerland 206 Heidelberg- Germany 128 Cemex- Mexico 94 UltraTech India 63 7 ItalCementi- Italy 60 0 100 200 300 * including minority stake __________________
Slide 9: Grasim's "Two Business" strategy has paid off
Grasim’s “Two Business” strategy has paid off Consistent cash flow generation from VSF business Moderate capex need for VSF leading to substantial free cash flow Cement Business – high growth business with large capex requirement Cash surpluses from VSF gainfully used for Cement growth Cem
Slide 10: Merger of ABCIL with Grasim – Strategic Move
Merger of ABCIL with Grasim – Strategic Move Leading producer • Post commissioning of Vilayat plant, Grasim leading producer of caustic soda in India of caustic soda with installed capacity ~ 453ktpa. in India • Combined capacity ~804ktpa (incl. Jayshree - ~59ktpa, under acquisition by ABCIL) Growth
Slide 11: Substantial Capacity Buildup Outpacing Industry Growth
Substantial Capacity Buildup Outpacing Industry Growth Post FY FY FY FY Product / Facility Unit 1999-00 Current on going 2006-07 2009-10 2011-12 Expansion /Merger Viscose Staple Fibre ‘000 TPA 221 270 334 334 477 498 Chemical (Caustic Soda) ‘000 TPA 176 258 258 258 452 804* Grey Cement Mn. TPA 8.20
Slide 12: Grasim Business Mix – 9M 2014-15
Grasim Business Mix – 9M 2014-15 Net Revenues - ` 240.3 Bn. PBIDT - ` 40.3 Bn. 12.7 1.3 1.2 13.1 3.3 2.4 35.7 177.5 33.4 Cement VSF Pulp & Fibre JVs Chemical Others Cement VSF & Pulp Jvs Chemical Others 12
Slide 13: Strong Financials
Strong Financials Standalone Consolidated Nine Full Year Full Year Nine Month (` Bn.) Month 2013-14 2013-14 2014-15 2014-15 Net Worth 108 113 216 229 Debt 13 12 97 128 Net Debt (Net of liquid funds) (0.6) 1.5 34 69 Capital Employed 126 131 410 462 Debt:Equity (x) 0.12 0.10 0.34 0.42 Net Debt: Equity
Slide 14: Presentation Structure
Presentation Structure Introduction Business Review Capex Highlights – 9M: 2014-15 Summary 14
Slide 15: Viscose Staple Fibre (VSF)
Viscose Staple Fibre (VSF) Leading global player – Capacity : 477K TPA (8% global share) Revenue ` 65 Bn. – Group is one of the two largest VSF players globally with 16% share (US$ 1.1 Bn.) – Fibre JV in China (77K TPA) – High level of backward integration
Slide 16: VSF Global Scenario
VSF Global Scenario Global Fibre Pie (89 Mn. MT) VSF: A cellulosic fibre 5% of global fibre market 8% of global man-made fibre market Major Global Players’ Capacity ‘000 TPA AVB group (incl. Grasim) : 920 Of which Grasim : 477 Lenzing : 992 VSF: Industry Growth Trend (Austria, Indonesi
Slide 17: VSF: Global Presence
VSF: Global Presence Sweden • Domsjo pulp plant China,Hubei Canada JV • Fibre plant JV - • 3 Pulp plants 77 K TPA JVs India • 4 Fibre plants South East Asia • 1 Pulp plant • 2 Fibre plants of Group • 2 Caustic soda Cos. - 366K TPA plants Fibre Plant - Own Fibre Plant - JV Fibre Plant - Group Co. Pul
Slide 18: VSF: Sustainable Competitive Strengths
VSF : Sustainable Competitive Strengths Amongst the low cost producers globally Highly integrated operations Captive raw materials - Pulp & Caustic Soda Five pulp manufacturing plants – Grasim, India : 1, Overseas JVs : 4 (Canada : 3, Sweden : 1) Captive power and steam Self managed wate
Slide 19: VSF: 9M 2014-15 Performance
VSF: 9M 2014 -15 Performance 9M Global Industry Scenario (` Bn.) 2012-13 2013-14 2014-15 No respite from over supply; pricing pressure intensified with falling prices of competing fibres Capacity (‘000 TPA) 352 378 455 Decline in cotton prices due to record inventory globally and change in Chine
Slide 20: VSF: Outlook
VSF: Outlook Present pressure on realisation expected to continue in Domestic Fibre Prices `/Kg. near term `135 / Kg. Weakness in Cotton and PSF prices may further impact 125 115 116 the VSF growth rate 105 93 95 85 87 Amidst difficult conditions, new capacity additions have 75 slowed down, wh
Slide 21: VSF Strategy for Growth
VSF Strategy for Growth Expansion plan to increase VSF capacity from 334K TPA to 498K TPA completed Greenfield project at Vilayat (120K TPA) : 3 lines (99K TPA) successfully commissioned Fourth line (22K TPA) undergoing trial run Projects commissioned in FY13 and FY14 Harihar Brownfield
Slide 22: Cement
``q India’s Largest Selling No. 1 RMC player in India Different Products to provide No.1 Player of White Cement Brand complete Building Solutions & Cement based Putty Cement Leading player in India with 17% market share – Current capacity : 63.2 Mn. TPA – Acquisition of two cement units of Jaiprakas
Slide 23: Indian Cement Industry: Overview
Indian Cement Industry : Overview Second largest cement market in world Cement Capacity ~ 379 Mn. TPA (Dec 2014) Fast growing cement market : CAGR 8% (last decade) Long term average growth has been 1-1.2 x of GDP Industry capacity doubled in last decade East Top 6 players control ~ 55% o
Slide 24: Indian Cement Industry
Indian Cement Industry Top Cement Producing Countries - 2013 Per Capita Consumption - 2013 Mn. Tons kgs/person 2500 2300 1,690 1,800 1,600 2000 1,400 1500 1,200 915 1,000 725 1000 800 569 600 455 500 353 245 400 259 197 78 70 70 65 65 200 0 - India Turkey China Russia Brazil USA Vietnam China Turkey
Slide 25: Cement – Major Growth Drivers
Cement – Major Growth Drivers Favorable demographics with growing young population Rising affordability - Increasing income level Government vision of house for every family by 2022 Housing Rapid Urbanisation (27.8% in 2001 increased to 31.2% in 2011, likely to exceed 40% by 2030) 1 No. of
Slide 26: Cement Sector Outlook
Cement Sector Outlook Cement demand growth should accelerate going 14 % Growth 12.1 forward, likely to be over 8% in long term 12 - Demand revival from infrastructure projects supported 10 8.5 by regulatory reforms 8 7.1 5.7 - Housing demand to improve with higher Government 6 5.6 focus and soften
Slide 27: Cement Business: Key Strengths
Cement Business : Key Strengths Excellent growth record From 8 Mn. TPA in FY2000 to ~75 Mn. TPA by FY2016 Grew organically as well as inorganically Market Leadership “UltraTech” - Premium national brand Largest cement brand in India Leadership in key consuming markets Strong nationwi
Slide 28: Cement Business: 9M 2014-15 Performance
Cement Business : 9M 2014-15 Performance Industry Scenario 9M Moderate Cement demand growth for the quarter (` Bn.) 2012-13 2013-14 2014-15 at 3-4% v/s 8% growth in the first half - Demand from Infrastructure and capex yet to pick Capacity (Mn. TPA) 53.9 57.0 63.2 up Total cement capacity increa
Slide 29: Cement Business: Strategy for profitable growth
Cement Business: Strategy for profitable growth Capacity to increase to ~75 Mn. TPA on completion of existing projects and acquisition (Mn. Ton) India Overseas Total Expected by Present capacity 60.2 3.0 63.2 Projects under Implementation: • Grinding units in West Bengal and Bihar to 3.1 3.1 End F
Slide 30: Presentation Structure
Presentation Structure Introduction Business Review Capex Highlights – 9M: 2014-15 Summary 30
Slide 31: Capex plan
Capex plan Capex Work in Cash Outflow Capex under Progress Net FY15 FY16 spent Impleme as on Capex onwards during ( ` Bn.) n-tation $ 01-04-14 9MFY15 Standalone VSF Expansion : Vilayat (99K TPA commissioned, 21.3 22K TPA under trial run ) Chemical Expansion : Vilayat (182K TPA, commissioned) 1.0 Nag
Slide 32: Presentation Structure
Presentation Structure Introduction Business Review Capex Highlights – 9M: 2014-15 Summary 32
Slide 33: Financial Performance – Consolidated
Financial Performance – Consolidated ` Bn. Nine Month % Change Quarter 3 % Change Quarter 2 2014-15 2013-14 YoY 2014-15 2013-14 YoY 2014-15 240.3 209.1 15 Revenue 80.4 71.2 13 79.5 204.3 175.2 17 Operating Costs 68.3 60.8 12 67.7 40.2 38.4 5 PBIDT 12.6 11.4 10 12.8 4.9 3.4 43 Finance cost 1.9 1.3 49
Slide 34: Net Profit Chart
Net Profit Chart ` Bn. Nine Month Quarter 3 % % 2014-15 2013-14 2014-15 2013-14 Change Change Total Grasim's Total Grasim's YoY Total Grasim's Total Grasim's YoY Co. share Co. share Co. share Co. share 5.0 7.7 (35) Standalone PAT 0.9 1.3 (26) 14.4 8.6 13.4 8.1 7 UltraTech Cement 4.0 2.4 4.0 2.3 2 (3
Slide 35: Presentation Structure
Presentation Structure Introduction Highlights – 9M: 2014-15 Business Review Capex Summary 35
Slide 36: Summary
Summary VSF business performance remain impacted with global slowdown and decline in competing fibre prices - Ramping up of production at Vilayat to drive volumes, better product mix and profitability Cement business achieved improved performance though profitability impacted due to higher inter
Slide 37: Organizational Structure
Organizational Structure UltraTech Cement Others Pulp, Fibre & Allied Chemicals * (60.25%) VSF Overseas Pulp Overseas Chemicals Domestic Overseas VSF JV 70 K TPA 3 Mn. TPA, (UAE, Grasim 476K TPA Pulp JVs Bangladesh, Sri Lanka) Bhiwani Textiles * 18 Mn. Mtr. Nagda Birla Jingwei $ AV Cell $ Caustic Gr
Slide 38: Thank You
Thank You Contacts: Grasim Industries Limited (Corporate Finance Division) Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai - 400 030 CIN: L17124MP1947PLC000410 Sharad Agarwal +91-22-66525062 [email protected] Shirin Sancheti +91-22-66525097 [email protected]
Slide 39: Grasim Industries Limited – Supplement
Grasim Industries Limited - A VSF and Cement Major (Supplement)
Slide 40: Supplement
Supplement • Consolidated Financial Performance • Standalone Financial Performance • Balance Sheet - Grasim • Balance Sheet – UltraTech (Consolidated) • Consolidated Businesswise Performance • Cement Business Footprint 40
Slide 41: Consolidated Financial Performance
Consolidated Financial Performance ` Bn. Quarter 3 % Nine Month % Full Year 2014-15 2013-14 Change 2014-15 2013-14 Change 2013-14 Net Sales & Op. Income 80.4 71.2 13 240.3 209.1 15 293.2 Other Income 0.6 1.1 (46) 4.3 4.5 (4) 5.8 PBIDT 12.6 11.4 10 40.2 38.4 5 54.9 PBIDT Margin (%) 15.6% 15.8% - 16.5
Slide 42: Standalone Financial Performance
Standalone Financial Performance ` Bn. Quarter 3 % Nine Month % Full Year 2014-15 2013-14 Change 2014-15 2013-14 Change 2013-14 Net Sales & Op. Income 15.6 14.7 6 46.0 40.5 13 56.0 Other Income 0.3 0.3 (12) 3.0 3.2 (8) 3.8 PBIDT 2.1 2.4 (13) 8.3 10.2 (19) 12.5 PBIDT Margin (%) 13.3% 16.2% - 17.0% 23
Slide 43: Balance Sheet - Grasim
Balance Sheet - Grasim Standalone Consolidated ` Bn. As on As on * As on As on EQUITY & LIABILITIES 31st Dec'14 31st Mar'13 31st Dec'14 31st Mar'13 Shareholders' Funds 113.2 108.3 Net Worth 229.4 216.1 - - Minority Interest 74.4 69.4 Non Current Liabilities 9.3 10.0 Long Term Borrowings 67.7 76.1 5.
Slide 44: Balance Sheet – UltraTech (Consolidated)
Balance Sheet – UltraTech (Consolidated) ` Bn. * As on 31st As on 31st EQUITY & LIABILITIES Dec'14 Mar'14 Shareholders' Funds Net Worth 186.8 171.8 Minority Interest 0.2 0.2 Non Current Liabilities Long Term Borrowings 52.5 60.2 Deferred Tax Liability (Net) 24.7 22.9 Long Term Liabilities & Provisio
Slide 45: Viscose Staple Fibre: Summary (Standalone)
Viscose Staple Fibre : Summary (Standalone) Quarter 3 % Nine Month % Full Year 2014-15 2013-14 Change 2014-15 2013-14 Change 2013-14 Capacity TPA 1,13,605 94,445 20 3,15,270* 2,81,075 12 3,57,517 Production MT 1,05,834 91,818 15 2,96,611 2,71,505 9 3,61,012 Sales Volumes MT 97,001 97,049 - 2,84,317
Slide 46: Chemical: Summary
Chemical : Summary Quarter 3 % Nine Months % Full Year 2014-15 2013-14 Change 2014-15 2013-14 Change 2013-14 Capacity TPA 1,13,125 83,500* 35 3,39,375* 2,38,750 42 3,51,790 Production MT 1,06,332 76,049 40 3,08,134 2,27,041 36 3,13,479 Sales Volumes MT 1,06,516 77,634 37 3,02,661 2,28,018 33 3,14,48
Slide 47: Chemical Business Footprint – Grasim and ABCIL
Chemical Business Footprint – Grasim and ABCIL PLANT LOCATION CAPACITY (KTPA) Grasim •Nagda, M.P. 270 • Vilayat, Gujarat 183 ABCIL •Karwar, Karnataka 59 Renukoot •Rehla, Jharkhand 105 Nagda Rehla •Renukoot, U.P. 129 Vilayat •Ganjam, Orissa 59 Ganjam (under acquisition) Karwar Grasim plants 2 ABCIL P
Slide 48: Cement: Summary
Cement : Summary Quarter 3 % Nine Month % Full Year 2014-15 2013-14 Change 2014-15 2013-14 Change 2013-14 Grey Cement Capacity Mn. TPA 15.79 13.74 14 46.67 40.70 15 54.76 Production Mn. MT 11.31 10.41 9 34.26 30.79 11 43.60 Cement Sales Volumes $ Mn. MT 11.48 10.56 9 34.57 31.23 11 44.06 Clinker Sal
Slide 49: Cement Business Footprint – A Pan India Player
Cement Business Footprint – A Pan India Player PLANT LOCATION PRESENT CAPACITY (Mn. TPA) NORTH 16.8 • Shambhupura, Rajasthan 5.0 • Jawad, M.P. 3.0 – Aligarh GU, U.P. 1.3 Bhatinda – Bhatinda GU, Punjab 1.8 Panipat – Dadri GU, U.P. 1.3 Jhajjar Dadri • Kotputli, Rajasthan 3.1 Kotputli Aligarh – Panipat
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