Bharat Heavy Electricals Limited · NSE:BHEL
Bharat Heavy Electricals — Investor Presentation (March 2015)
41 slides from Bharat Heavy Electricals's investor presentation, March 2015
Slide 1: Investor Presentation March 2015
Investor Presentation March 2015
Slide 2: Disclaimer
Disclaimer This presentation is issued by Bharat Heavy Electricals Limited (the “Company” or “BHEL”) for general information purposes only, without regard to specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form p
Slide 3: Table of Contents
Table of Contents 1. BHEL: Overview 1 2. Investment Highlights 7 3. Financial Profile 20 4. Key Risks 23 Appendix 25 A. Business Strategy 26 B. Others 31
Slide 4: 1. BHEL: Overview
affeL Maharatna Company 1. BHEL: Overview
Slide 5: India's Flagship Engineering & Manufacturing Company
India’s Flagship Engineering & Manufacturing Company • A ‘Maharatna’ company Rich • Over 50 years of experience Heritage • Government of India (GoI) shareholding of 63.06% (1) • Integrated power plant equipment manufacturer with capability to deliver 20,000 Indian MW of power equipment per annum Eng
Slide 6: 50 Years' Journey of Engineering Excellence
50 Years’ Journey of Engineering Excellence • Incorporated as ‘Bharat • First 500 MW Unit • Crossed Market Cap. of over • Commissioned • Cumulative power projects Heavy Electricals commissioned at INR 1 trillion (US$16.7 bn) India’s first Ultra installed worldwide crossed Limited’ with 100% Tata Tro
Slide 7: One of the Only Seven "Maharatna" CPSEs
One of the Only Seven “Maharatna” CPSEs Shareholding Pattern Top Shareholders other than GoI Key Facts(1) (as on December 31, 2014) Insurance Others Shareholder % Shareholding Listed on BSE on 12th July 1998 Companies 1.32% Listed on NSE on 12th September 1998 10.52% Individuals LIC 14.49% 2.35% Sha
Slide 8: Single Source with Multiple Solutions for Infrastructure & Industrial Segments
Single Source with Multiple Solutions for Infrastructure & Industrial Segments Non Conventional Industrial Products Power Transmission Transportation Defence Energy Source & Systems • Contributes to around • Offers wide range of • Offers system range Solar PV: • Contributing strategic • Designs, man
Slide 9: Market Leader with Sustained Growth
Market Leader with Sustained Growth Turnover Economic slowdown Turnover (US$ mn) 2010’s 8,360 7,223 2000’s Emergence of Economy on high domestic 6,723 higher growth competition path 4,672 + Chinese competition 3,123 80’s 70’s Onslaught of 90’s Economy Almost a competition Post liberalization Slowdow
Slide 10: BHEL Makes Electric Utilities Installations Across India Covering Entire Range & Type
BHEL Makes Electric Utilities Installations Across India Covering Entire Range & Type Coal, Gas, Nuclear, Diesel and Hydro Projects BHEL’s Electric Utility Installed Base in India (Commissioned as on March 31, 2014) (As on March 31, 2014) Stations Sets MW Jammu and Kashmir Coal 106 382 94,985 Gas an
Slide 11: 2. Investment Highlights
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Slide 12: Investment Highlights
Investment Highlights 1 India has Strong Fundamental Drivers for Power Capex Recovery 2 ‘Make in India’ Initiative to Provide Significant Stimulus to BHEL BHEL Well-Positioned to Capture Opportunities in its Core and Emerging 3 Business Segments 4 Gradually Improving Order Book 5 Continuous Focus on
Slide 13: India has Strong Fundamental Drivers for Power Capex Recovery
1 India has Strong Fundamental Drivers for Power Capex Recovery India to Become one of the Fastest Growing India has a Low Per Capita Consumption(2) Economies(1) (kWh / Year) (Real GDP) 13,246 8.5% 7.4% 10,712 6.9% 5.1% 5,472 3,045 3,298 2,438 957 FY13 FY14 FY15AE FY16E US Australia UK World China B
Slide 14: 'Make in India' Initiative to Provide Significant Stimulus to BHEL
2 ‘Make in India’ Initiative to Provide Significant Stimulus to BHEL Priority Sectors… Strong Focus on Manufacturing… Efforts to Reduce Imports… 25 sectors identified to develop manufacturing Vision of increase in manufacturing sector Reduce reliance on imports for key sectors like capabilitie
Slide 15: Significant Growth Expected in All Business Verticals
3 Significant Growth Expected in All Business Verticals Power Thermal: Accounts for 69% of total power capacity and continues to largest contributor to new capacity addition Generation Capacity Addition(1) (GW) – 5 new UMPPs under “Plug and Play” scheme through tariff-based competitive bidding 93.
Slide 16: Significant Growth Expected in All Business Verticals
3 Significant Growth Expected in All Business Verticals Non Conventional Current gap between installed capacity and estimated potential(1) Energy Source (Solar Power) (GW) GoI plans to scale up solar power to a cumulative 100 GW by 2022, increase from JN National Solar Mission target of 20,000 MW
Slide 17: Gradually Improving Order Book
4 Gradually Improving Order Book Order Book (US$ bn) (MW) 9,627 $5.3 $4.7 6,470 $3.7 $3.5 3,934 3,583 FY12 FY13 FY14 9MFY15 FY12 FY13 FY14 9MFY15 Major Orders Received During Nine Months FY15 Power Sector Industry Sector International Operations India's first ever EPC contract for 1x800 MW rating
Slide 18: Continuous Focus on R&D
5 Continuous Focus on R&D High Spend on R&D Recent Product Development (US$ mn) • Developing India’s first coal fired Advanced Ultra Supercritical (AUSC) $200 $208 $186 power plant technology with NTPC and IGCAR $164 • Super critical boiler with an ability to switch 100% indigenous / imported coal $
Slide 19: Technology – Acquiring "Know-How" and "Know-Why" Capabilities
5 Technology – Acquiring “Know – How” and “Know – Why” Capabilities Building Indigenous Technology Capabilities Ongoing Partnerships with Leading Technology • Started with technology support from Global OEMs and Partners developed indigenous capabilities Mitsubishi Heavy Industries, Pumps, Flue Gas
Slide 20: Quality Performance Standards from BHEL Sets
6 Quality Performance Standards from BHEL Sets Superior Performance from BHEL Sets in Indian BHEL Supplied Power Plant Equipment Exhibit World Market Class Performance Plant Load Factor (Coal Based Sets) (1) Performance of 400–599MW Sets(2) (3) (For FY14) 86.80% 84.73% 85.78% 71.20% 71.70% 68.98% 68
Slide 21: Long Standing Relationships with Sector Leaders
7 Long Standing Relationships with Sector Leaders Power Sector Industry Sector International Operations DB Power Ltd. GAIL (India) Ltd. Punatsangchhu Hydroelectric Project Authority Bhutan Jindal Steel and Power Ltd. Hindalco Industries Mangdechhu Hydroelectric Project Authority (MHPA) Kar
Slide 22: Global Presence
7 Global Presence References in 76 countries and Offices in 8 countries across all six continents of the world First large turnkey project export by Indian co. – Libya (1977) Consistent Performance – 16,916 MW contracted Executing 24 Contracts in 16 Countries valued over US$ 2.5 bn Contracte
Slide 23: Strong Management and Government of India Support
8 Strong Management and Government of India Support Best in Class Management Team in Place Strong GoI Support Mr. Rao has 37 years of experience across Production, Erection & Commissioning, Commercial, • Government of India owns 63.06% (1) stake in BHEL B Prasada Rao Corporate Planning & Developme
Slide 24: 3. Financial Profile
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Slide 25: Financial Performance
Financial Performance Total Revenues(1) EBITDA and EBITDA Margin(2) (US$ mn) (US$ mn) $8,059 $8,153 21% 23% 23% 22% 16% $7,090 $1,871 $6,595 $1,769 $5,609 $1,611 $1,186 $1,033 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 EBIT(3) Net Income (US$ mn) (US$ mn) $1,737 $1,610 $1,520 $1,181 $1,110 $1
Slide 26: Strong Balance Sheet
Strong Balance Sheet Total Equity Working Capital(1) (US$ mn) (US$ mn) $5,526 $5,089 Trade Receivables Inventories Trade Payables $4,948 $5,248 $4,862 $4,234 $3,744 $3,832 $1,978 $2,254 $1,635 $3,359 $1,547 $1,817 $2,649 $4,422 $4,895 $4,700 $3,465 $3,375 ($1,268) ($1,361) ($1,472) ($1,728) ($1,626)
Slide 27: 4. Key Risks
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Slide 28: Key Risks
Key Risks • Delayed Resolution of Issues Plaguing Large Infrastructure Projects including Power Sector in India • Suboptimal Order Book due to Increasing Domestic and International Competition • Excess Domestic Manufacturing Capacities • Low Projects Finalization • Political Disturbances in Target E
Slide 29: Appendix
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Slide 30: A. Business Strategy
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Slide 31: Business Strategy for Sustaining Growth: Six Point Agenda
Business Strategy for Sustaining Growth: Six Point Agenda • Employee engagement • Managerial & Technical training • Knowledge Based Engineering • Succession Planning • Product Lifecycle Management • Internal communication, etc. • Assimilation of SC/AUSC 6 • GIS, 765/1200 kV, FACTS • High Temperature
Slide 32: Power Sector: Business Strategy and Initiatives
Power Sector: Business Strategy and Initiatives Strategy Select Initiatives Enhancing EPC business Exploiting full potential in Spares & Services area Partnerships with Power Plant Developers (including UMPPs) • Increase contribution Offering debt financing for new projects in partnership wi
Slide 33: Industry Sector: Business Strategy and Initiatives
Industry Sector: Business Strategy and Initiatives Strategy Select Initiatives Commissioned indigenous 765kV substation connecting southern India with rest of India making it a national grid • Product Development Transmission Executing ± 800kV, 6000MW UHVDC multi-terminal transmission system of
Slide 34: Continually Improving Project Execution
Continually Improving Project Execution Strategies and Initiatives Projects Execution Performance Cycle Time Reduction Commissioning/Synchronization (MW) • Increased focus on project specific value chain alignment • ‘Online Project Engineering Documentation Manager’ for 13,452 expeditious drawings /
Slide 35: B. Others
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Slide 36: JVs and Subsidiaries
JVs and Subsidiaries Government of India (“GoI”) Public 63.06% 36.94% Bharat Heavy Electricals Limited Subsidiaries Joint Ventures 50%(1) BHEL GE Gas Turbine 51% Bharat Electrical Services Pvt. Ltd. Machines Limited 50% NTPC – BHEL Power Projects Pvt. Ltd. (NBPPL) 36.49% Raichur Power Corporation Li
Slide 37: Organization Structure
Organization Structure Board of Directors Chairman and Managing Director Management Committee Corporate Functions Business Sectors Operating Units Director HEP, Bhopal Eng. / R&D TP, Jhansi Director HR HEEP & CFFP, Haridwar Director Power HPEP, Hyderabad Director Finance Trichy: HPBP, SSTP, IVP Chie
Slide 38: Nine Months Standalone Financials
Nine Months Standalone Financials Unaudited Standalone Financials Break-up for Orders Received in Nine Months FY15 (Total Orders Received in Nine Months FY15: $3,454 mn) Particular ($ mn) 9MFY14 9MFY15 International operations Key Income Statement Items 1% Industry Total Revenue(1) 4,013 2,916 15% E
Slide 39: Pan India Presence
Pan India Presence BHEL’s Operational Footprint in India Business Offices Manufacturing Units Service Centres 1 Bangalore 14 1 2 Bangalore A Chandigarh 2 Bhubaneswar B Kolkata 3 Bhopal 3 Chandigarh C Nagpur 4 Chennai 4 Goindwal D Noida 4 5 Guwahati 5 6 Haridwar E Patna 6 3 A 5 6 Ranchi 7 Hyderabad F
Slide 40: Glossary
Glossary Term Description Term Description AC Alternate Current EPC Engineering, Procurement and Construction ACEMU Alternate Current Electric Multiple Unit EPD Electro Porcelains Division AT&C Aggregate Technical and Commercial ESP Electrostatic Precipitator AUSC Advanced Ultra Supercritical FDI Fo
Slide 41: Glossary (Contd.)
Glossary (Contd.) Term Description Term Description NCES Non Conventional Energy Sources TPIA Third Party Inspection Agencies NITIE National Institute of Industrial Engineering TPP Thermal Power Plant NLC Neyveli Lignite Corporation TPS Thermal Power Station NMDC National Mineral Development Corpora
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