Voltas Limited · NSE:VOLTAS
Voltas — Investor Presentation (June 2007)
76 slides from Voltas's investor presentation, June 2007
Slide 1: A global air conditioning and engineering services company
A global air conditioning and engineering services company 1
Slide 2: Serving Indian industry for over 50 years
• Serving various sectors of Indian industry and economy for over 50 years • Executed projects in over 30 countries worldwide • ISO 9001 : 2000 in all core capabilities • Three Months Performance ended 30th June 2007 : – Turnover of Rs.8337 Mn. (USD 189 Mn.) – Operating profit of Rs.838 Mn. (USD 19
Slide 3: Organization of businesses around core competencies
Organization of businesses (around its 3 core competencies) •• Electro-mechanical Electro-mechanical projects projects & & services services –– Domestic Domestic Air Air Conditioning Conditioning and and Refrigeration Refrigeration –– International International MEP MEP solutions solutions including
Slide 4: Sales turnover Rs 24508 Mn, FY2007 segment-wise
Voltas has a sales turnover of about Rs 24508 Mn (USD 557 Mn) (For twelve months ended 31st March, 2007) (excluding (excluding consignment consignment sales) sales) Segment-wise break-up (311) (98) 13677 56% 4325 18% 24% 2% (139) 402 (9) 6104 Electro Mechanical Projects & Services Engineering Produc
Slide 5: Sales turnover Rs 8337 Mn, three months to June 2007
Voltas has a sales turnover of about Rs 8337 Mn (USD 189 Mn) (For Three months ended 30th June, 2007) (excluding (excluding consignment consignment sales) sales) Segment-wise break-up (26) 1152 (85) 14% 3761 45% 40% 1% (76) 3330 (2) 94 Electro Mechanical Projects & Services Engineering Products & Se
Slide 6: Operating profits Rs 1711 Mn, FY2007
Voltas’ Operating Profits : Rs 1711 Mn. (USD 39 Mn.) ( For twelve months ended 31st March, 2007) Segment-wise break-up 40% 58% 2% Electro-Mechanical Projects and Services Engineering Products and Services Others 6
Slide 7: Operating profits Rs 838 Mn, three months to June 2007
Voltas’ Operating Profits : Rs 838 Mn. (USD 19 Mn.) (For Three months ended 30th June, 2007) Segment-wise break-up 41% 30% 27% 2% Electro-Mechanical Projects and Services Engineering Products and Services Unitary Cooling Products for Comfort & Commercial Use 7 Others
Slide 8: Consolidated performance of the Company
Consolidated performance of the Company 8
Slide 9: Number of Employees and Sales and Services
12000 300000 Number of Employees Sales and Services - Rs.lakhs 10269 (USD Mn) (557) 10000 250000 245078 8796 8000 (433) 200000 190418 5807 (328) 6000 150000 144143 5136 (302) (280) 132994 (250) 123041 109907 4329 (224) 3935 4000 (214) 100000 98428 (194) 3593 3550 (187) 94066 82434 85372 2855 2905 20
Slide 10: PAT % to Sales
8 7.59 PAT % to Sales 7 6 5 4 3.50 3.70 2.90 3 2.10 2 1.80 1.30 1 0.70 0.70 0 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 10
Slide 11: PAT % to Shareholders' Funds
50 48.9 PAT % to Shareholders' Funds 45 40 35 30 29.2 26.05 25 20.6 20 15.9 15 10 8.4 9 5 3.6 3.6 0 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 11
Slide 12: Dividend % on Equity Capital
100 100 90 Dividend % on Equity Capital 80 70 60 60 50 50 40 30 30 25 20 18 12 12 12 10 0 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 12
Slide 13: Earnings per Share
7 Earnings per Share 6 5.62 5 4 3 2.13 2 1.52 1.18 1 0.77 0.51 0.39 0.17 0.17 0 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 13
Slide 14: Debt/Equity Ratio
250 226 Debt/Equity Ratio - % 200 150 123 100 92 87 56 55 52 50 44 30 22 0 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 14
Slide 15: Net Interest
6000 (12) Net Interest - Rs. Lakhs (USD Mn) 5060 (11) 4874 5000 4000 (8) 3524 3000 (5) 2406 2000 (2) 963 (1) 1000 (0.88) 551 (0.59) (0.40) 386 (0.31) 255 180 140 0 -47 (-1) -1000 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 15
Slide 16: ROCE %
48.03 48 ROCE % 44 40 36 32 29.7 28 24 19.23 20 16 13.89 11.22 10.52 10.61 12 10 8.2 8 6.24 4 0 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 16
Slide 17: EVA %
30.00 EVA % 24.50 24.54 25.00 20.00 15.00 9.37 10.00 5.00 3.60 1.64 1.13 (0.33) 0.00 (3.18) (5.00) (5.73) (9.70) (10.00) 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 17
Slide 18: Profit before Exceptional Items and Tax, cumulative quarters
Profit before Exceptional Items and Tax 15600 Cumulative Quarters 15512 13600 June September December March 11788 11600 9600 9553 8116 7600 6382 5262 5600 5477 3698 3600 3065 3280 2406 1982 2322 2565 1369 1600 1645 1049 1390 1085 850 -400 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 18
Slide 19: Profit before Exceptional Items and Tax, cumulative annual
Profit before Exceptional Items and Tax - Cumulative Annual 15512 15000 14000 13000 12000 11788 11000 10000 9000 8000 7000 6000 5262 5000 4000 3698 3000 2406 2000 1000 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 19
Slide 20: Business Segments Performance (2002-07)
Business Segments Performance (2002-07) 20
Slide 21: Salient Observations
Salient Observations • Consolidated Corporate Operating Profit (profit before extraordinary item and tax) have been growing reasonably barring temporary aberrations. • Electro-mechanical and Engineering Services are the primary contributors to bottom line • UPBG contributes more to top line, but pro
Slide 22: Voltas' Growth Plan 2010-11
Voltas’ Growth Plan 2010-11 After previous phases a) Management of change (1997-2002) b) Embarking on growth (2003-2006) To commence a new phase c) Making organic growth self-sustaining - Driving the new vision 22
Slide 23: Corporate Management Challenges Ahead
Corporate Management Challenges Ahead • To increase the rate of consolidated growth towards CAGR of 30% top line and 40% bottom line • To achieve consistency in business-wise growth, and their contributions to top and bottom lines • To increase productivity and efficiency in all businesses, towards
Slide 24: Future Growth Plan – Business Segment-wise
Future Growth Plan – Business Segment-wise 24
Slide 25: Segment 1: Electro-mechanical Projects
Segment 1 Electro-mechanical Projects •Air conditioning and refrigeration projects (Domestic) •Electro-mechanical projects including HVAC (International) 25
Slide 26: Electro-mechanical Projects: Domestic market
Electro-mechanical Projects Domestic market • Synonymous with air conditioning in India. Pioneered and developed the Indian air conditioning industry to maturity. 25% market share • Total solutions in all air conditioning and refrigeration applications • Responsible for India’s largest and most comp
Slide 27: Executed the single largest air conditioning project in all market segments
Executed the single largest air conditioning project in all market segments 27
Slide 28: ITC Hotel, Mumbai
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Slide 29: Saifee Hospital, Mumbai
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Slide 30: Fortis Hospital, New Delhi
Fortis Hospital, New Delhi 30
Slide 31: Cinemax, Mumbai
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Slide 32: Galleria Mall, (Vashi), Mumbai
Galleria Mall, (Vashi), Mumbai 32
Slide 33: Ambi Mall, Delhi
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Slide 34: TCS Office Complex, Hyderabad
TCS Office Complex, Hyderabad 34
Slide 35: Magarpatta Cybercity, Pune
Magarpatta Cybercity, Pune 35
Slide 36: TCS IT Park, Chennai
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Slide 37: Hyderabad International Airport
Hyderabad International Airport 9 of the 11 domestic airports have been air conditioned in the recent past 37
Slide 38: Key growth opportunities in Electro-mechanical Business - Domestic Market
Key growth opportunities in Electro-mechanical Business - Domestic Market •• Air Air conditioning conditioning industry industry market market size size :: Rs Rs 3200 3200 crores crores (( to to grow grow by by 25% 25% YoY) YoY) •• In In HVAC HVAC –– Airports, Airports, multiplexes, multiplexes, mal
Slide 39: Growth strategy
Growth strategy Growth through upward migration HVAC Solutions provider Electro-mechanical Solutions provider- (Hyderabad Airport Galleria Palm Beach Mall) Cold Storages Cold Chain Provider AC&R equipment manufacture Manufacture for internal consumption + domestic domestic sales & exports Turnover t
Slide 40: Management's Key Challenges
Management’s Key Challenges •• To To encourage encourage andand stimulate stimulate upup gradation gradation from from HVAC HVAC to to integrated integrated MEP MEP in in various various segments segments •• To To establish establish Voltas Voltas in in India India as as premier premier integrated i
Slide 41: Electro-mechanical Business International Market
Electro-mechanical Business International Market • India’s largest projects exporter in the field of Electro-mechanical • An impressive track record, of having executed contracts in 30 countries world-wide. • Has earned the confidence of world leading project managers, consultants and contractors. •
Slide 42: Value Chain and Voltas' Role As MEP Contractor
Value Chain and Voltas’ Role As MEP Contractor Feasibility Design & Earthwork Civil MEP Work Test/ Commission study Drawings Construction & handover • Initiate project and appoint architect/consultant Owner • Approve designs and participate in financial negotiations during finalisation of contracts
Slide 43: Key international projects executed and under execution
Key international projects executed and under execution (During the last few years) 43
Slide 44: The turning point: New Hong Kong International Airport
The turning point : New Hong Kong International Airport (1995) Value 40 Mn USD • World’s largest passenger terminal (550,000 sq. ft) • 73 bays • 300 check-in counters • 100 aerobridges • 20 Mn passengers annually 44
Slide 45: New Hong Kong International Airport (Ducting installations)
New Hong Kong International Airport (Ducting installations) 45
Slide 46: Emirates Palace Hotel, Abu Dhabi
Emirates Palace Hotel, Abu Dhabi. Complete MEP. Value 101 Mn USD 46
Slide 47: Mall of the Emirates
Mall of the Emirates Complete HVAC. Value 20 Mn USD 47
Slide 48: Villaggio Mall, Qatar
Villaggio Mall, Qatar. MEP : Value 16.6 Mn USD 48
Slide 49: Jumeirah Beach Residence, Dubai
Jumeirah Beach Residence, Dubai, UAE MEP : Value 54 Mn USD 49
Slide 50: Burj Tower, Dubai
Burj Tower, Dubai MEP : Value 227 Mn USD - (under execution) 50
Slide 51: Bahrain City Centre
Bahrain City Centre MEP : Value 105.97 Mn USD (under execution) 51
Slide 52: Etihad Towers, Abu Dhabi
Etihad Towers, Abu Dhabi. Complete Electro-mechanical works (under execution) 52
Slide 53: Movenpick Deira Hotel and Centre Residence, Dubai
Movenpick Deira Hotel and Centre Residence, Dubai. Complete Electro-mechanical works (under execution) 53
Slide 54: Key growth opportunities in Electro-mechanical Business - International market
Key growth opportunities in Electro-mechanical Business- International market • UAE and Qatar : continuing boom in construction and infrastructure • Emerging opportunities in infrastructure development in Bahrain, Saudi Arabia, Kuwait, Jordan, S Africa and SE Asia: – sizeable potential in water & wa
Slide 55: Growth strategy
Growth strategy • Sustain and maximise growth in existing markets - UAE, Qatar & Bahrain • To penetrate into emerging geographical markets – establish sustainable presence • To increase the scale of projects undertaken – beyond present Rs 500 cr level • To play increasing role as ‘nominated contract
Slide 56: Management focus
Management focus • To achieve sustainability and consistency in business growth • To improve profitability through measures like Central Procurement, Centralised Design, Selective Manufacturing, undertaking more Design-and-Build jobs etc • Build and sustain relationships with key developers/investor
Slide 57: Segment 2: Engineering Products and Services
Segment 2 Engineering Products and Services • Textile Machinery Business • Machine Tools Business • Mining and Construction Business • Materials Handling Business 57
Slide 58: India's leading supplier of engineering & capital equipment
India’s leading supplier of engineering & capital equipment • Offers total solutions : concept to commissioning, to training and maintenance • Represents over 40 of the world’s leading manufacturers • Operates as the product support arm For 50 years, contributed to Indian industry’s modernization an
Slide 59: In Textile Machinery
IN TEXTILE MACHINERY Products Products Principals Principals Key Key Attributes Attributes Machinery Machinery && accessories in •• Lakshmi accessories in Lakshmi Machine Machine Works, Works, •• Leader Leader inin spinning spinning machinery machinery India India and and accessories accessories ••
Slide 60: In Machine Tools
IN MACHINE TOOLS Products Products // Machine Machine tools tools Principals Principals Significant Significant Attributes Attributes •• CNC CNC machining machining centres centres •• Mitsubishi Mitsubishi Heavy Heavy •• Has Has been been one one ofof the the leading leading machine machine Industri
Slide 61: In Mining and Construction
IN MINING AND CONSTRUCTION Products Products Principals Principals Significant Significant Achievements Achievements Mining Mining Equipment Equipment •• Terex Terex Mining, Mining, USA USA •• More More than than 100 100 mining mining shovels shovels supplied supplied to to Coal Coal India India Ltd
Slide 62: In Materials Handling
IN MATERIALS HANDLING Products Products Principals Principals Significant Significant Achievements Achievements •• Forklift Forklift Trucks Trucks •• BT, BT, Sweden Sweden •• One One ofof the the largest largest manufacturers manufacturers of of forklift forklift trucks trucks •• Container Container
Slide 63: Key growth areas
Key growth areas • Textile machinery: substantial substantial capacity capacity expansions expansions projected projected in in spinning, weaving, knitting with ending of export quotas • Machine tools: tools: sizeable sizeable growth growth projected projected in in automotives automotives & ancilla
Slide 64: Growth strategy in Engineering Products & Services
Growth strategy in Engineering Products & Services • Expand offerings beyond the current scope (e.g. complete machining centres in MT, spinning to post-spinning in TM, FLTs to integrated warehousing in MH) • Strengthen identity/capability as a system integrator as against agency/extended arm of Prin
Slide 65: Segment 3: Unitary Cooling Products segment
SEGMENT 3: Unitary Cooling Products segment PRODUCT RANGE: Air conditioners Commercial Refrigerators Water Coolers / Water Dispenser 65
Slide 66: The trusted name in Cooling Appliances
The trusted name in Cooling Appliances • Pioneer in the Indian air conditioner market – Leader in the institutional segment for over 50 years. – India’s no. 2 brand in air conditioners (16% overall, ) – Focus on marketing and distribution; flexible role for both in-house manufacturing and outsourcin
Slide 67: Revenue streams in cooling appliances
Revenue streams in cooling appliances • Marketing of branded room ACs, splits, specialized ACs, – Institutional segment contributes to 50% – To grow by 25% • Manufacturing and Marketing of water coolers, Commercial refrigerators – To grow by 20% • Export of room ACs / water coolers / commercial refr
Slide 68: Growth drivers in Air conditioners
Growth drivers in Air conditioners • Total market size: Rs. 3200 crores • Sizeable untapped market for room/split ACs. Penetration stands at a mere 1%. Immense potential: can be tapped through extended reach and value pricing • 25% growth in overall market, Fastest growing sector in consumer durable
Slide 69: Growth drivers in water coolers/dispensers
Growth drivers in water coolers/ dispensers • Market growing at almost 20% • Increasing awareness (individual / institutional) of water purity factors • Targeting of SOHOs with niche models • Growing usage for retail / service facilities (malls, showrooms, call centres, cyber-cafes, branded service
Slide 70: Growth drivers in Commercial Refrigerators
Growth drivers in Commercial Refrigerators • Development of the cold chain in India – Driven by the retail boom, investment being made by big corporates. • Increase in food retailing – Growth in dairy, ice cream and frozen food segment 70
Slide 71: Management focus
Management focus • Maintain market share and sustain growth beyond market growth rates • Improve profitability by optimizing product mix (focus on splits), managing manufacturing/sourcing costs, increasing revenues from service • Increase the contribution to turnover of water coolers & commercial re
Slide 72: Summary: key points
Summary: key points • All businesses have the opportunity/potential to grow • Primary focus on sustainability of business growth – 30- 35% CAGR • Simultaneously focus on increasing productivity, efficiency to improve profitability • Major challenge is to manage HR for growth • Management of Risks 72
Slide 73: Shareholding Pattern
Shareholding Pattern 31.03.2005 31.03.2005 31.03.2006 31.03.2006 31.03.2007 31.03.2007 30.06.2007 30.06.2007 Tata Tata Group Group of of companies companies 27.74 27.74 27.56 27.56 27.61 27.61 27.32 27.32 Mutual Mutual Funds Funds 16.02 16.02 9.84 9.84 6.75 6.75 5.72 5.72 Nationalised Nationalised B
Slide 74: Corporate Management
Corporate Management Managing Managing Director Director A.Soni A.Soni Executive Executive Vice Vice Presidents Presidents M.M. M.M. Miyajiwala Miyajiwala EVP EVP & & CFO CFO P.N. P.N. Dhume Dhume EVP EVP & & COO COO –– International International Operations Operations Business Business Group Group
Slide 75: Board of Directors
Board of Directors Chairman Chairman Ishaat Ishaat Hussain Hussain Managing Managing Director Director A.Soni A.Soni Directors Directors N.M. N.M. Munjee Munjee N.J. N.J. Jhaveri Jhaveri S.D. S.D. Kulkarni Kulkarni Ravi Ravi Kant Kant N.D. N.D. Khurody Khurody N.N. N.N. Tata Tata 75
Slide 76: Thank You
A TATA Enterprise VOLTAS LIMITED Thank You