cesc - investor presentation - aug 2010
TRANSCRIPT
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CESC LimitedPowering India since 1899
August 2010
www.cesc.co.in
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RPG Enterprises
8 Business Sectors, 20+ companies, 40,000+ employees, 4,00,000 + shareholders
Respond, Perform, Grow
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Infrastructure27%
Power22%Tyre
21%
Retail11%
CarbonBlack
9%
IT6%
Speciality6%
Entertainment1%Infrastructure
Power
Tyre
Retail
Carbon Black
IT
Speciality
Entertainment
KEC International
CESC
Noida Power Co.*
Integrated Coal Mining *
CEAT
CEAT SriLanka
Spencer`s Retail
Spencer`s Travel
Phillips Carbon Black
Zensar Technologies
Harrisons Malayalam
Raychem RPG
RPG Life Sciences
Saregama India
Business Sectors Companies
Revenue
FY 2009-10
`160 bn
* unlisted
RPG Enterprises Business Sectors
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RPG Enterprises - Financials( bn )
market cap as on 31stJuly10
Revenues
(FY`10)
EBIDTA
(FY`10)
Net Profit
(FY`10)
Current
Market cap
Promoter
Holding
Institutional
Holding
CESC 34.50 9.06 4.33 49.26 52% 37%
KEC International 39.50 4.07 1.90 24.99 42% 43%
CEAT 25.60 3.03 1.65 4.59 48% 31%
Phillips Carbon Black 13.50 1.91 1.23 6.40 46% 25%
Harrisons Malayalam 3.30 0.30 0.11 2.44 50% 11%
Zensar Technologies 9.50 1.70 1.27 7.96 52% 24%
RPG Life Sciences 1.60 0.32 0.12 1.35 51% 16%
Saregama India 0.99 0.13 0.01 1.30 53% 34%
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POWER BUSINESS
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CESC- An Overview
110 year old fully Integrated Energy Utility: Coal Mining - Generation -
Distribution . Other business through subsidiaries include Retail and Real Estate
Stock Listed on BSE (Code 500084); NSE (CESC)
AchievementsBudge Budge plant received outstanding performance award from the PrimeMinister
Budge Budge First Thermal Power Plant in the world registered withUNFCCC for Carbon Credit
DemandPeak System Demand 1600 MW
Area 567 sq.km area, 2.3 mn consumers, 16500 ckt km T&D network
Capacity - 4 thermal plants - 1225 MW, BBGS-III 250 MW commissioned in Q4 FY10
- PLF 93%, T&D loss less than 13.3% , Collection efficiency 99.5%
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Southern 135 MW - 1991 Titagarh 240 MW - 1984
Budge Budge - 3 x 250 MW(Phase I- 500 MW in 1999, Phase II- 250 MW in 2010
New Cossipore 100 MW - 1950
BBGS (1 & 2), SGS, TGS have a combined PLF of 93% in FY10
CESC-Generating Stations
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Operating performance:
Sales (MU)
* Excluding Export
*6424
*6948
*7206
*7593
5800
6000
6200
6400
6600
6800
7000
7200
7400
7600
7800
FY07 FY08 FY09 FY10
T & D Loss(%)PLF%(excludingpeaking Station)
22.8%
16.3%15.5%
14.7%13.9%
13.3% 13.3%
6.0%
8.0%
10.0%12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
FY01 FY05 FY06 FY07 FY08 FY09 FY10
8086
94 94 97 97 93
0
20
40
60
80
100
120
FY04 FY05 FY06 FY07 FY08 FY09 FY10
National average PLF is 90%
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4.154.03
3.81 3.74 3.763.86 3.91
4.57
4.73
3.5
3.7
3.9
4.1
4.3
4.5
4.74.9
FY04 FY05 FY06 FY07 FY08 Feb08 FY09 FY10 Aug10
Tariff (` / unit) PBT (` Bn)
Debt / Equity Ratio
Tariff & Profitability
2.11
1.42
1.060.75
0.550.65 0.70
0.00
0.50
1.00
1.50
2.00
2.50
FY04 FY05 FY06 FY07 FY08 FY09 FY10
12
2023
36
30*33
35
0
5
10
15
20
25
30
35
40
FY04 FY05 FY06 FY07 FY08 FY09 FY10
*Issue of 31.06 mn equity shares in the scheme of amalgamation withSpencers retail and 9.56 mn shares via QIP in FY08
EPS (`)
0.89
1.601.97
3.41
4.03
4.65
5.22
0.00
1.00
2.00
3.00
4.00
5.00
6.00
FY04 FY05 FY06 FY07 FY08 FY09 FY10
http://www.google.co.in/url?q=http://www.moneycontrol.com/news/rupee/rupee-bounces-off-6-week-lowcorporate-dollar-sales_471311.html&sa=X&ei=hiBNTI64BM2UrAfoqqy5Dg&ved=0CCAQpwIwAA&usg=AFQjCNH6oSHUUBP0U90_TR43dCunkSmdBAhttp://www.google.co.in/url?q=http://www.moneycontrol.com/news/rupee/rupee-bounces-off-6-week-lowcorporate-dollar-sales_471311.html&sa=X&ei=hiBNTI64BM2UrAfoqqy5Dg&ved=0CCAQpwIwAA&usg=AFQjCNH6oSHUUBP0U90_TR43dCunkSmdBA -
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Q1 FY11 Performance
7
8
9
Q1 FY11 Q1 FY10
10.82
8.09
Revenue (`Bn)
1800
1860
1920
1980
2040
2100
Q1 FY11 Q1 FY10
2443
1979
Generation (MU)
0
2
4
Q1 FY11 Q1 FY10
2.712.18
EBITDA (`Bn) PAT (`Bn )
0
0.5
1
1.5
Q1 FY11 Q1 FY10
1.1 1.05
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GROWTH STRATEGY
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Foray into infrastructure space
Coal based capacity expansion to meet growth in Kolkata circle
Entry into Hydel and other Renewables
3.
Private participation in Distribution through Franchise
4.
PAN India investment in merchant power plants (coal & gas)
2.1.
Key Growth Areas
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Planning to bid for Ultra Mega Power Projects (UMPPs) i.e 4,000 MW each
Looking at M&A route for capacity expansion
Future expansion to include alternate fuel like Gas & Nuclear
Planning to add renewable such as solar, wind, hydro etc
Aggressively looking to acquire coal assets
Generation
Acquired 600 MW thermal project in Maharashtra
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FY12-13FY13-14
FY13-14
Chandrapur,
Maharashtra
FY13-14
Haldia Phase I,
West Bengal
Dumka,
Jharkhand
Capacity (MW)
FY14-15
Dhenkanal, Orissa
30
50
65
Cost
Rs `bn
Regulated Power
Merchant Power
Cost (Rs.bn)
29
250
500
1000
1500
0
2000
10
20
30
40
50
70
60
80
Under Implementation
Generation - Growth Opportunities
Pirpainty,
Bihar
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ProjectChandrapur,
Maharashtra
Haldia Phase 1,
W.BDhenkanal, Orissa
Dumka,
JharkhandPirpainty, Bihar
Capacity (MW) 600 600 1320 1000 1000
Technology 300x2 300x2 660x2 500x2 500x2
Type Thermal Thermal Thermal Thermal Thermal
Commissioning FY12-13 FY13-14 FY13-14 FY13-14 FY14-15
Cost (`bn) 29 30 65 50 47PPA
Mix Mix Mix Mix MixMerchant
Project Status
BTG/EPC Y
Fuel Y Y Awaiting Linkage Y Awaiting Linkage
Clearances:
- Land Y Y Y Started Started
- Water Y Y Y Y
- Environment Y Y In progress In progress In progress
Generation - Project Status
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600 MW Dhariwal Infrastructure (Maharashtra)
Dhariwal Infrastructure Limited is a 600 MW Power Project located in Maharashtra, in close
proximity to state highways and railway link
The project is expected to be commissioned by FY 2013
Introduction
Coal linkage for project has been obtained from South Eastern Coal fields LimitedFuel
100% land acquired (455 acres)
Company has entered in to a water supply agreement with Govt. of Maharashtra (Water Resource
Deptt.)
Land and Water
Project has received all clearances for the project from Ministry of Environment and ForestsClearances
Dhariwal Infrastructure has awarded the EPC contract to Punj Lloyd and the BTG contract has
been awarded to Shanghai Electric Power CompanyEPC
The project is estimated to cost `29 bn and will be funded in the debt equity ratio of 75:25
Financial Closure for the project has been obtainedFinancial Closure
Evacuation of Power The power project is envisaged as a combination of long term and opportunistic power sale mix
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600 MW Haldia Phase I
Haldia Phase I is a 600 MW Power project to be setup in West Bengal
The project is based on domestic coal feedstock and is expected to be commissioned by FY 2014
The project will have a mix of both LT-PPA sales to CESC and merchant power sale
Introduction
A coal linkage for the project has been obtained from Mahanadi Coal Fields LimitedFuel
Of the nearly 345 acres required for the project, 282 acres have been acquired
Approval for drawal of water has been obtained for the projectLand and Water
Environmental clearance for the project has been obtainedClearances
The project is estimated to cost `30 bn and will be funded in the ratio of 75:25
Financial Closure for the project has been obtained
Financial Closure
Evacuation of Power Long term open access for the project from Power Grid has been obtained
Yet to be awardedEPC
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1320 MW Project Dhenkanal Orissa
Dhenkanal is a 1320 MW Power project to be setup in Orissa based on super-critical technology
The project is based on domestic coal feedstock and is expected to be commissioned by FY 2014
The project will have a mix of both Long term-PPA sales and merchant power sale
Introduction
A coal linkage has been applied for the projectFuel
Required land has been acquiredLand and Water
Terms of Reference for the project have been approved and the Environmental Impact Assessment
studies have been completedClearances
The project is estimated to cost `65 bn and will be funded in the ratio of 75:25Financial Closure
Evacuation of Power Long term open access for the project from Power Grid received.
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1000 MW Dumka Power Project Jharkhand
Dumka is a 1000 MW Power project to be setup in Jharkhand
The project is based on captive coal stock and is expected to be commissioned by FY 2014
The project will have a mix of both LT-PPA sales and merchant power sale
Introduction
A captive coal block based in Dumka, Jharkhand has been awarded for the project.
The company has obtained a prospecting license for the mineFuel
Terms of Reference for the project have been approved and the Environmental Impact Assessment
studies have been completed
Land and Water Land acquisition currently commenced for the project. The power project requires ~430acres land
Approval for drawal of water has been obtained for the project
Clearances
Yet to start the processEPC
The project is estimated to cost `50 bn and will be funded in the ratio of 75:25Financial Closure
Evacuation of Power Long Term open access for the project has been obtained
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1000 MW Pirpainty Power Project Bihar
Pirpainty is a 1000 MW Power project to be setup in Bihar
The project is based on domestic coal feedstock and is expected to be commissioned by FY 2015
The project will have a mix of both LT-PPA sales and merchant power sale
Introduction
Application for coal linkage made
Terms of Reference for the project have been approved and the Environmental Impact Assessment
studies have been completed
Land and Water Land acquisition currently commenced. The power project requires ~800acres of land
Approval for drawal of water has been obtained for the project
Clearances
Yet to start the processEPC
The project is estimated to cost `48 bn and will be funded in the ratio of 75:25Financial Closure
Evacuation of Power Application for LT open access has made to the Power Grid Corporation
Fuel
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Existing Business
Routine Capital Expenditure `5 bn per year for Kolkata business
220/132 kv Network Augmentation capex - `4.5 bn by 2011
Connectivity to National Grid to facilitate export of power Downstream transmission of power to different load centres on
commissioning of Haldia Phase I
New Licensing
Pursuing franchise opportunity in Bihar
Distribution - Growth Opportunities
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REAL ESTATE BUSINESS
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Development of premium shopping mall
3 acre of land at Central Kolkata International standard premium shopping mall planned 4 lac sq.ft retail area, 900+ car parking RTKL appointed as architects Order has been placed for turnkey project Work has started, mall expected to start operations in 2012-13
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Being a 110 year old utility CESC has a large unexploited land bank
Utilizing idle company assets for additional income generation and Capitalappreciation
Floated 100% subsidiary CESC Properties Ltd to develop real estate projects.
Real Estate
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RETAIL BUSINESS
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Snapshot
Year of Establishment
Trading Area(000 sqft)
No. of Stores in operation
Annual Turnover (` Bn)
Customer Care Associate
1996
884
208
9.06
5,000
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S ` R t il
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`9 bn food-first, multi-format retailer
Indias oldest retail chain since 1863 introducing Indian consumers to
the concept of organized retail
Formats Hyper, Super, Daily & Express
Garner 60 million footfalls per annum
Stock approximately 30000 SKUs in a typical hyper store
Has an extensive private label program across food, fashion, homeand entertainment - 20 brands and more than 6000 SKUs
Spencer`s Retail
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Chronology
FY 08-09 : Rapid growth to establish Pan India presence
FY 09-10 : Closures and consolidation
FY 10-11 : Consolidation continues, modest growth
FY 11-12 : Rapid growth to double current retail space bySeptember 2012
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Macro Environment
All retailers grew aggressively in FY 08-09 taking store rentsand salaries to unsustainable levels
Industry correction in FY 09-10
Meltdown
market for retail growth heterogeneous
rentals and salaries needed market correction
Spencers Footprint July 2010
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Regions StatesTA
(000)
Hypers >15
k
Supers3k -15k
Dailies
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Hyper & Super footprint July 10
Hypers
Supers
Mumbai(Malad)
HyderabadVizag
Vijayawada, Guntur
Kakinada
Durgapur
Gorakhpur
NCR
Hypers : Ghaziabad, GurgaonSuper : Faridabad
Vadodara
Aurangabad
Warangal
Bangalore - Hyper : Koramangala, Sarjapur; Supers: MG Rd, Mosque Rd, JPBrigade
Trichy
Manacaud
Kolkata
Hypers : South City, Mani Square, Rash Behari
Super : Avisar
Lucknow
19 Hypers 452K sqft
10 Supers 57K sqft
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Rajamundhry
Guntur Hyper launched on 2ndJuly10
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Current segment-wise sales
FMCG
StaplesHWP
Apparel
F&V
Bakery & FoodServices
Fish & Meat
The focus is on increasing sales from apparel and E&E segment.
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E&E
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Spencers Strategy
Brand traction with Sec A, A+ solid, expand reach to Sec Bwith embedded value communication
Tag line moved from taste the world to MAKES FINE
LIVING affordable to incorporate the value message
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Spencers Strategy
Drive price message harder through in-store communication
Success Measure
FY08-09 FY0910 FY1011 Objective
Revenue /Sft (in ) 695 795 925
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Spencers Strategy
Cost Reduction / Loss Reduction
Savings of `100 mn per month achieved through a combination of:
a) Closure of unprofitable stores
b) Rent re-negotiations
c) Back-end consolidation with GST coming in 2011 furtherconsolidation possible
d) Organisation de-layering
e) Operational efficiencies
Illustration:
a) Removal / de-layering of zonal structureb) DC consolidation, including shifting of DC to Hyper (Ghaziabad)
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Spencers Strategy
Margin Enhancement
To move from 19% to 21.5% GM by March 2011
Private Label penetration to be enhanced move from 10% of overall
business to 16% by March 2011
Growth in General Merchandise, net of shrinkage in consumerelectronics
High margin SKUs gourmet, liquor , patisserie to drive profitability
Reposition hyper apparel assortment
Private Label
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FMCG / Food FMCG / Non- Food
Private Label
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General Merchandise Apparel
Formal Wear Casual Wear Ethnic Wear
S i lt B d St t
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Specialty Brands - Strategy
Beverly Hills Polo Club (BHPC) affordable fashion
3 new stores opened in Delhi, Punjab & Mumbai in July10
October 09 to March 10 Revenue / sft (in `) 1025 per month
Ebitda projected for 20 stores ` 50 / Sft per month
Target is to exit March 2012 with 50 stores
Ladybird kids apparel brand
1 store planned as proof of concept
Mark Ecko Fashion apparel brand
1 store opened in Delhi in July10
Except for Mark Ecko, other brands will also be sold from Spencers Hyper
au bon pain (ABP) bakery caf chain 1 caf in main street and another in an IT park opened as proof of concept
Monitor results before further roll out
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THANK YOU
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