“sowing the seeds of tomorrow.” - tata chemicals...tcl has outperformed indian & world...
TRANSCRIPT
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“Sowing the seeds of tomorrow.”
July 2007
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Outline of Presentation
• Financial overview
• The Emerging Tata Chemicals
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FINANCIALFINANCIAL
OVERVIEWOVERVIEW
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Financials – Revenue growth
15352544
30083519
3991
515
1819
0
1,000
2,000
3,000
4,000
5,000
6,000
FY03 FY04 FY05 FY06 FY07
in R
s. c
rore
* Post consolidationNote: FY2006 Consolidated financials include BMGL’s Q4 results and IMACID’s performance over 11 months
CAGR 40%
CAGR 40%4034*
5810*
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Financials – EBIDTA
415 460 516651
781
320
158
0
200
400
600
800
1000
1200
FY03 FY04 FY05 FY06 FY07
in R
s. c
rore
809*
* Post consolidation
CAGR 28%CAGR 28% 1101*
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Profit After Tax
197 221341 353
444
75
64
0
100
200
300
400
500
600
FY03 FY04 FY05 FY06 FY07
in R
s. c
rore
428*
* Post consolidation
CAGR 27%CAGR 27% 508*
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Distribution of Rupee Earned – FY 2006 V/s 2007
Soda Ash18%
Salt8%
Urea20% Complex
Fertilizers37%
Other Income
3%
STPP4%
Others5%
Cement5%
2007
Soda Ash19%
Vacuum Salt8%
Urea19%
Complex Fertilizers
39%
Other Income
3%STPP
3%
Others5%
Cement4%
2006
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Dividend4%
Retention6%
Materials60%
Employee4%
Distribution8%
Overheads5%
Taxes9%
Financial 4%
2007
Distribution of Rupee Deployed – FY 2006 V/s 2007
Dividend4%
Retention5%
Materials62%
Employee3%
Distribution9%
Overheads5%
Taxes8%
Financial 4%
2006
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Fertilisers46%
Chemicals54%
Revenue Split - Consolidated
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Debt-Equity Perspective
1823 1865
2221 2573
-500
500
1500
2500
3500
4500
FY 2006 FY 2007
Rs.
cro
re
Total Debt Shareholder's Equity
1.41.3
0.8
2.0
5.9
0
1
2
3
4
5
6
FY 03 FY 04 FY 05 FY 06 FY 07
(%)
Reducing interest cost (% of sales)
44384044
FY 2007 Debt Split
19%
36% 44%
1%
FCCB Banks/Others
Term Loans Cash/ Packing Credit
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Credit Ratios
10.1
3.9 7.4
12.9
19.4 0.6
0.2
0.3
0.7
0.4
0
5
10
15
20
25
FY03 FY04 FY05 FY06 FY07
-
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Interest Coverage ratio Net Debt/Equity
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Financial ratios
* Post consolidation3248.4859No. of DaysCash cycle
4761.5964No. of DaysAvg Inventory
Turnover
5352.7849No. of DaysAvg Debtors Velocity
2.32.161.9TimesFixed Asset Turnover
Activity
10.112.9019.4TimesInterest Coverage
0.70.80.7TimesDebt : Equity Stability
1101809516Rs. croreEBITDA Cash Generation
2.0121.5TimesMarket to Book Value
3.63.55%Dividend Yield
11110393INRNetworth per Share
23.6219.915.8INREarnings per share
Shareholder Returns
91111%Net Profit Margin
171917%EBITDA Margin Profitability
FY 2007*FY 2006*FY 2005UnitCategory
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Financial snapshot
1 After reducing provision of USD 58.7 mn for the deficit in BMG’s pension liability)
23.62
508.0
827.0
1,100.9
5,809.6
Consolidated
86.9
196.5
320.0
1,922.3
IMACID / BMGL
20.65
444.2
630.6
781.0
3,991.0
TCL
FY 2007FY 2006
428.370.8353.0Net Income
19.9116.41EPS
100.1
145.2
599.3
IMACID / BMGL (Jan to Mar 06)
625.6512.2EBIT
809.6651.2EBITDA
4,034.43,518.6Sales
ConsolidatedTCL
(Rs in crore)
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Shareholder Returns23.6
7.0
10.910.3
19.9
15.8
8.0
5.0
6.55.5 5.5
7.0
224
4055
103
201
138
0
4
8
12
16
20
24
FY '02 FY '03 FY '04 FY '05 FY '06 FY '07
Rs.
per
sha
re
20
40
60
80
100
120
140
160
180
200
220
240
Rs
EPS Dividend Average Market Price
Improved Shareholder Returns
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The Road Ahead – The Future Tata Chemicals
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3rd largest soda ash manufacturer in the world
#1 soda ash player in India
Market leader in edible salt market
Most energy efficient urea
manufacturer in India
1/3rd stake in IMACID, Morocco
Presence in Agri inputs & Agri Solutions
Tata Chemicals today is the>>Tata Chemicals today is the>>A Typical Mithapur Salt panA Typical Mithapur Salt pan
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Global Presence
MoroccoMorocco
UKUK
IndiaIndia
KenyaKenya
NetherlandsNetherlands
Facilities
MarketsSouth Africa South Africa
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Our Major Customers
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a company with a wide array of Customers:a company with a wide array of Customers:•Detergent manufacturersDetergent manufacturers•Glass manufacturersGlass manufacturers•Builders/ Contractors/ masonsBuilders/ Contractors/ masons•Chemicals / dye / dyechem manufacturersChemicals / dye / dyechem manufacturers•Paper and newsprint manufacturersPaper and newsprint manufacturers•Textiles manufacturersTextiles manufacturers•Petroleum refinersPetroleum refiners•Food manufacturersFood manufacturers• FarmersFarmers•HousewivesHousewives
TCL today is …..The TATA Company with
the largest number of customer touch-points
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Getting where we are today was not easy
Some of the challenges we had to overcome: Global competition & lower Customs Duties
More demanding customers
Intense price competition in Soda Ash industry
Difficult regulatory environment on Fertilisers
More stringent environmental regulations
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Solutions & Responses
Improvements in Operational EfficiencyStrong Customer FocusBuilding People CompetenciesStrategic Sourcing & Improved Supply Chain
ManagementContinuous ImprovementResponsible Care & Focus on SHECultural Change
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Additionally
Visionary & Bold DecisionsBenchmarked with the BestSucceeded in de-commoditising our businesses
TKS in Fertiliser Space
Branding most commonly used commodity ‘Salt’
Relationship building though KAM for Chemicals
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“Superbrand” - Ranked # 1 food brand by Economic Times
Thrice in a row
Tata Salt’ - pioneer in branded salt market
Nationwide distribution - over 43 million households
Integrated operations at Chemical site - Embedded competitive advantage
Business with social objective – first Iodized Salt (goitre)
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Soil Testing
Crop Loans
Farm Machines
Output Purchase
Insurance of input investment
Advisory Services
589 TATA KISAN589 TATA KISAN
SANSAR OUTLETSSANSAR OUTLETS
Now offering in addition to Farm Inputs
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TCL has outperformed Indian & World Chemical Companies
0.0050.00
100.00150.00200.00250.00300.00350.00400.00450.00
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
TATACHEMICALS
INDIA - CHEMICALS
INDIA - MARKET
WORLD - CHEMICALS
WORLD - MARKET
Market Value Indexed at 100 on Jan 2000
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Fertilisers,SaltSoda Ash
New Products, New Businesses:Fresh Produce,Bio-Fuels
New Technology:Nano – Bio tech products
Decommoditisation:From agri – input to Agri BusinessFrom just salt to India’s number 1 food brandFrom traditional B to B, to Key Account partnerships
TheThe
of tomorrowof tomorrow
Where we want to be ……
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28A 160,000 Cr. market
The Fresh Produce Business
• Leveraging the TKS Network
• Focusing on what matters – the supply chain
• Partnering with TOTAL PRODUCE – 100 years of expertise
• Sequential roll-out – Punjab and West Bengal
• In 2007-08 – 2 Distribution Centres
• In 3 years – 20 Distribution Centres
• In 5 years – 40 Distribution Centres
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1. Proposed entry into both Bio Diesel and Bio Ethanol
2. Trial cultivation of non-food agricultural feedstock commenced in both cases
3. Dual approach – conventional technology & advanced new technologies (concurrent development)
4. Development of novel technologies is the responsibility of the Innovation Centre (Pune)
The Bio-fuels Business
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Existing Businesses will also Grow
De-bottlenecking of Babrala De-bottlenecking of Babrala has commencedhas commenced
A Global Bi-carb Business A Global Bi-carb Business
Is taking shapeIs taking shape
Modernisation Of MithapurModernisation Of Mithapur
Has commencedHas commenced
Magadi Output willMagadi Output willDouble in 2008Double in 2008
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1. Based in Pune
2. Focus on the Bio-Nano space
3. 20 scientists – going to 100 in 2 years time & ~500 in the longer-term
4. Current Focus Areas:
• Bio Diesel – cleaner & simpler trans - esterification
• Bio Ethanol – Enzyamatic Cellulosic conversions
• Nano Materials, Bio Materials & Advanced/Smart Materials
• 25% Research into Blue Sky areas
The Innovation Centre
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THANK YOU
Is looking forward to an exciting future!
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