investor presentation template - finolex industries · 2009. 8. 31. · no part of this...
TRANSCRIPT
No part of this presentation is to be circulated, quoted, or reproduced for any distribution without prior written approval from Finolex Industries Limited, Chinchwad, Pune-411 019, India. Certain part of this presentation describing estimates, objectives and projections may be a “forward looking statement” within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.
Disclaimer
Business performance
The sales volumes for PVC declined 13% YoY to 61,826 MT and pipes and fittings declined by 10% YoY to 38,856 MT in Q3FY15.
Particulars Q3FY15 Q3FY14 Variance breakup (INR Mn.)
INR Mn. MT Rs./Unit INR Mn. MT Rs./Unit Volume
Price Total
PVC 3,664 61,826 59,263 4,911 71,238 68,938 -649 -598 -1,247
PVC Pipes & Fittings 3,480 38,856 89,561 3,819 42,974 88,868 -366 27 -339
Power (Mwh) 175 11,418 346 40,884 -171 - -171
Result update – Profit & Loss
Particulars (INR mn) Q3FY15 Q3FY14 Q2FY15
Net Sales 6,429 6,599 3,859
EBIDTA before exceptional items (110) 1,180 445
EBIDTA margins (%) -1.71% 17.90% 11.50%
EBIDTA after exceptional items (388) 1,276 385
Depreciation 146 177 149
EBIT before exceptional items (256) 1,002 296
EBIT margins (%) -3.98% 15.20% 7.70%
Other Income 14 9 86
Interest 119 188 108
PBT (639) 920 215
PBT margins (%) -9.94% 13.90% 5.60%
Tax (201) 281 77
PAT (438) 639 137
PAT margins (%) -6.81% 9.70% 3.60%
The business performance in Q3FY15 was impacted due to multiple factors:
Sharp drop in PVC prices from USD 1,000 i.e. Rs. 70,500 per MT in September 2014 to USD 780 i.e. Rs. 56,300 per MT in December 2014, resulted in inventory losses of around Rs. 100 crores. Comparatively, PVC prices were USD 1,050 i.e. Rs. 70,700 per MT in September 2013 and USD 1010 i.e. Rs. 68,100 per MT in December 2013. PVC/EDC spread further reduced to USD 455 per MT during Q3FY15 as against USD 662 per MT during Q3FY14. PVC prices (on back of crude oil prices) continuously drifted downward during Q3FY15, which put the dealers in wait-n-watch mode and to certain extent postponing purchase of pipes and fittings. This also impacted the PVC resin volumes. Crude prices dropped from $92/bbl in September 2014 to $54/bbl by end of December 2014. Captive power plant took longer than expected to resume operations. The company had to purchase power from grid, leading to higher cost of power by approx. Rs. 8 crores. The CPP has resumed operations from December 2015. Increase in other expenses by Rs. 9 crores, mainly due to current branding initiatives, plant maintenance, etc. Rupee depreciation during the quarter from Rs. 61.75 to Rs. 63.04 per dollar, the impact of which is approx. Rs. 14 crores.
Business performance (contd.)
Source: IHF and ICIS chemical weekly reports
Business scenario in charts
Lower spreads resulted in fall in margins
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PVC - EDC Delta $/MT
Source: IHF and ICIS chemical weekly reports
Business scenario in charts
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Crude ($/bbl)
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PVC ($/MT)
41% drop
22% drop
Quarterly – Profit & Loss
Quarterly PL (INR mn) Q3 Q2 Q1 Q4
FY15 FY14 FY15 FY14 FY15 FY14 FY14 FY13
Net Sales 6,429 6,599 3,859 3,899 6,627 5,635 8,397 6,296
EBIDTA before exceptional items
(110) 1,180 445 815 1,246 946 1,025 1,099
EBIDTA margins (%) -1.71% 17.90% 11.50% 20.90% 18.80% 16.80% 12.20% 17.50%
EBIDTA after exceptional items (388) 1,276 385 490 1,079 407 1,096 1,277
Depreciation 146 177 149 148 149 146 151 132
EBIT before exceptional items (256) 1,002 296 667 1,097 799 875 968
EBIT margins (%) -3.98% 15.20% 7.70% 17.10% 16.60% 14.20% 10.40% 15.40%
Other Income 14 9 86 172 52 194 62 43
Interest 119 188 108 122 268 137 217 82
PBT (639) 920 215 391 715 318 790 1,106
PBT margins (%) -9.94% 13.90% 5.60% 10.00% 10.80% 5.60% 9.40% 17.60%
Tax (201) 281 77 117 213 91 228 313
PAT (438) 639 137 274 502 226 562 793
EPS -3.5 5.1 1.1 2.2 4 1.8 4.5 6.4
Quarterly segmental – Profit & Loss Segment wise – Quarterly Q3 Q2 Q1 Q4 Profit & Loss (INR mn) FY15 FY14 FY15 FY14 FY14 FY13 FY14 FY13
Segmental revenues
PVC 3,664 4,911 2,076 3,245 4,139 3,627 5,347 4,555
PVC pipes & fittings 3,480 3,819 3,158 2,779 5,438 4,349 4,686 4,142
Power 175 346 293 406 353 450 443 546
Segmental profits
PVC -456 711 124 379 597 424 494 605
% of Revenues -12.45% 14.50% 6.00% 11.70% 14.40% 11.70% 9.20% 13.30%
PVC pipes & fittings 254 340 242 236 520 355 389 315
% of Revenues 7.30% 8.90% 7.70% 8.50% 9.60% 8.20% 8.30% 7.60%
Power -41 31 9 103 62 97 113 166
% of Revenues -23.43% 9.10% 2.90% 25.40% 17.60% 21.60% 25.50% 30.40%
Capital employed
PVC 7,221 7,806 7,277 7,400 8,480 8,203 7,775 7,462
PVC pipes & fittings 4,789 4,583 3,899 3,839 3,063 3,429 3,393 3,191
Power 2,650 2,696 2,512 2,743 3,098 3,464 3,131 3,151
Other segments 3,413 3,723 3,051 2,734 1,381 3,824 1,715 3,479
Profit & loss account (INR mn) FY11 FY12 FY13 FY14 9MFY15
Net Income 19,777 20,998 21,448 24,530 16,915
Growth in sales (%) 35.9% 6.2% 2.1% 14.4% 4.8%
EBIDTA before exceptional items 2,655 2,618 3,921 4,403 1,734
EBIDTA margins before exceptional items (%)
13.4% 12.5% 18.3% 17.9% 10.2%
EBIDTA after forex gain/(loss) 2,490 2,472 2,960 3,705 1,229
PBT 1,150 967 1,902 2,419 290
PBT (%) 5.8% 4.6% 8.9% 9.9% 1.7%
PAT 762 752 1,361 1,701 201
PAT (%) 3.9% 3.6% 6.3% 6.9% 1.2%
Profit & Loss – Key indicators
Balance sheet – Key indicators
Balance Sheet (INR mn) FY11 FY12 FY13 FY14 1HFY15
Equity and liabilities
Share capital 1,240 1,241 1,241 1,241 1,241
Reserves and surplus 4,963 5,381 5,971 6,656 7,092
Long term borrowings 1,954 1,896 1,397 2,322 2,239
Short term borrowings (incl. loans repayable in one year)
5,512 8,528 6,997 4,812 5,293
Total borrrowings 7,466 10,424 8,394 7,134 7,531
Assets
Fixed assets (Net block) 7,924 7,840 8,795 9,052 8,630
Capital WIP 722 854 506 325 269
Non current investments 1,221 1,221 1,274 1,274 1,274
Current investments 859 3,711 2,322 941 351
PVC pipes and fittings volume
46,399
51,506 53,840
29,489
42,974
50,596
58,239
31,644
38,856
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Pipes & Fittings (MT)
Branding and Advertisements
1. Advertisements on-the-move
2. Print Advertisements and TV commercials targeting Rural and Urban markets
3. Pipes display at an exhibition
1.
2. 3.
Disclaimer: All product names, logos, and brands are property of their respective owners
Accolades and awards
‘Excellence in CSR’ award by Amity Global School
Honoured by World Economic Forum (WEF) as amongst the ‘Global Growth Companies – 2014’ (in South Asia) Chosen as one of Asia’s 100 Best Marketing Brands by the WCRC Leaders Asia magazine
8.4%
24.2%
4.7%
21.1%
-10.0%
0.0%
10.0%
20.0%
30.0%
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6
FY0
7
FY0
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FY0
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FY1
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RoE (%) RoCE (%)
1.0
1.5
0.9
0.4
0.6
0.8
1.0
1.2
1.4
1.6
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FY0
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Net Debt:Equity (x)
1.2
2.8
0.5
1.0
1.5
2.0
2.5
3.0
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FY0
7
FY0
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FY0
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Fixed Asset Turnover (x)
1.8
5.3
1.0
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Working Capital Turnover (x)
Plans to reduce debt to minimal levels by FY17E, with debt repayment in the range of INR 1.25bn to INR1.5bn per annum till FY17E
Strong balance sheet
Key focus areas
Increase the captive consumption of PVC resin. No capacity addition for PVC resin
Pipes capacity to increase by 30,000 MT each year for the next two years
Improve overall return ratios via low capital outlay for the brownfield capex for PVC pipes & fittings
Continue to run PVC pipes operations with the cash-n-carry model
Increase company’s distribution reach by having more warehousing facilities across India
Healthy cash generation to aid in debt reduction over the next few years Develop solutions in the water management business
Maintain leadership position in the industry
For further queries: Finolex Industries Limited D-1/10, M.I.D.C. Chinchwad, Pune 411 019 Contact No.: 020 2740 8200
S-Ancial Advisors Pvt. Ltd. 503, Gundecha Chambers, Nagindas Master Road, Fort, Mumbai 400 001 Email: [email protected] Contact No.: 022 6635 1001/2