DALMIA CEMENT (BHARAT) LTD. Financial Results f or quarter ended June 30, 2010 August 9, 2010
DALMIA CEMENT (BHARAT) LTD.
Financial Resultsfor quarter ended June 30, 2010o qua te e ded Ju e 30, 0 0
August 9, 2010
Disclaimer
Certain statements in this presentation describing the Company'sp g p yobjectives, projections, estimates and expectations may be 'forwardlooking statements' within the meaning of applicable laws andregulations. Forward looking statements are identified, by using thewords 'anticipates' 'believes' 'expects' 'intends' and similarwords anticipates , believes , expects , intends and similarexpressions in such statements.
Although our expectations are based on reasonableassumptions, these forward-looking statements may be influencedby numerous risks and uncertainties that could cause actualoutcomes and results to be materially different from thoseexpressed or implied The Company takes no responsibility for anyexpressed or implied. The Company takes no responsibility for anyconsequence of decisions made based on such statements andholds no obligation to update these in the future.
Presentation Plan
Corporate Highlights
Standalone Financial Results
Cement Business
Integrated Sugar Business
Standalone OCL Financial Results
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Presentation Plan
Corporate Highlights
Standalone Financial Results
Cement Business
Integrated Sugar Business
Standalone OCL Financial Results
C t t UContact Us
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Strategic Initiatives Update
• Approvals have been received from all the stock exchanges
Restructuring update
• Madras High Court has accorded its approval to the Scheme of Arrangement• Listing of company expected to be completed by Q3 FY11
KKR Investment
• Expected Rs. 500 crore in Q2 FY11.• New projects to be announced in near future
ll h bl d b
• Sugar with a capacity of 22,500 TCD• Power: Cogeneration of 79 MW; Windfarm of 16.5 MW; Solar project of 10 MW in process
Existing company will house renewable energy and sugar businesses.
process
• Jointly allocated with Sunflag steel company, coal entitlement of 37% .• Located in Khappa Maharashta
Coal Block allocation to help reduce costs
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Located in Khappa, Maharashta• Expected to be operational by FY13
Key financials Post Restructuring Before Restructuring
Q1 FY11Post Restructuring(Consol) Q1 FY11
Dalmia Bharat
y g
In Rs Cr DCBL DCBL
(Integrated Sugar)Enterprises Ltd.
(Cement, Thermal Power)
Revenues 623 198 425
EBITDA 49 (17) 66EBITDA 49 (17) 66
Depreciation 40 10 30
EBIT 25 (26) 50
Before Restructuring Post RestructuringBefore Restructuring Q1 FY11
Post Restructuring(Consol) Q1 FY11
In Rs Cr DCBLDCBL
(Integrated Sugar)
Dalmia Bharat Enterprises Ltd.
(Cement, Thermal Power)In Rs Cr DCBL (Integrated Sugar) (Cement, Thermal Power)
Net Fixed Assets* 2,804 633 2,171
Net Current Assets 527 315 212
Investments 619 5 614
Net Term Debt 1,760 245 1,514
* Including WIP
Improving Shareholder Profile
33% 27% 26%
100%
11%15% 16%
33%
60%
80%
57% 58% 58%
20%
40%
0%
Jun’09 Mar’10 Jun’10
Reflecting confidence in management initiatives and strategy
Promoters Institutions Others
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CSR InitiativesEducation Livelihood
Beautician students writing Theory exams ‐ DPM
Supported 400 school children & gave cash rewards for toppers
Improved community income programs (152 beneficiaries)Health & EnvironmentHealth & Environment
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Sanitation (57 toilet constructions) Environment (320 saplings planted) Water (constructing a 90,000 litreswater tank) Infrastructure work (drain was constructed to prevent disruptive water logging) benefitted
close to 200 people whose lives were affected
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Standalone Results Highlights
• Gross Sales : Rs. 623 cr; ↑ 4% Rs. 601 N t S l R 566 ↑ 3% R 552
Income Q1’11 (YoY) Q1’10
• Net Sales : Rs. 566 cr; ↑ 3% Rs. 552 • Total Income : Rs. 576 cr; ↑ 3% Rs. 558
Profits Q1’11 Q1’10
• EBITDA : Rs. 49 cr Rs. 161 cr• Net Profit : Rs. (19) cr Rs. 59 cr
• Company• Higher cash and lower net term debt to equity to aid in current cycle• OCL contributes Rs. 19 cr to the consolidated profits of the quarter
• Cement• Cement• Volume growth helps sustain top line, EBITDA/ton at Rs. 646 for the quarter • Efficiency improvement in power consumption at 73.3 Kwh/T of cement
• Sugar• Write down of inventory valuation impacts profitability carry forward 93 000 KMT• Write down of inventory valuation impacts profitability, carry forward 93,000 KMT• Improved levy pricing and co‐gen realisations cushion impact
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Q1’11 Results – Business wisePeriod ending (Rs In crores) Cement Sugar Others Total Cement Sugar Others Total Cement Sugar Others TotalGross Sales 429 137 35 601 407 187 29 623 ‐5% 37% ‐17% 4%Net Sales 387 131 34 552 357 182 27 566
YoY%Q1'10 Q1'11
Operating Other 3 1 3 6 5 4 2 10Total Income 390 132 36 558 362 185 29 576Operating Expenses 253 113 30 397 296 208 23 527EBITDA 137 18 6 161 66 (23) 6 49EBITDA Margins % 35% 14% 16% 29% 18% ‐12% 20% 8%gOther Income (0) 16Depreciation 30 40EBIT 131 25Interest 43 62Tax Provision 29 (18)
Increase in volumes….. …Profitability impacted
Tax Provision 29 (18) Net Profit 59 (19)PAT Margin % 11% ‐3%
•Realizations: Sugar 18% ↑ ; Cement 12%
•Volume:Sugar 15% ↑ ; Cement 7% ↑
y p
•Due to write down of inventory & reduction in prices in sugar
•Rising depreciation and interest charges
*Cement includes wind farm power business; Sugar includes Cogeneration and Ethanol businesses** Previous period numbers have been reclassified/regrouped as per current quarter groupings 11
g ; g
Q1’11 Business Mix
5%
Net Revenue Mix Sugar Revenue Mix
32%89%
10%1%
63%
89%
Others Rs 28 cr
Cement* Rs. 360 cr
Sugar Rs. 182 cr
Sugar
Cogen
DistilleryOthers Rs. 28 cr
Sugar cogen contribution to the overall sugar mix has increased from 7% to 10% Y0Y
y
*Cement includes wind farm power business; Sugar includes Cogeneration and Ethanol businesses12
Key Balance Sheet Parameters (Rs. In Crore) 31‐Mar‐10 30‐Jun‐10 Equity Capital 16 16 Reserves & Surplus 1,361 1,342 Reserves & Surplus 1,361 1,342 Debt 2,850 2,854
Term Loans 2,285 2,292 Soft Loans 347 345
Working Capital 219 217 Working Capital 219 217 Deferred Tax 289 271 Total 4,517 4,484 Net Fixed Assets* 2,832 2,804 Investments 714 619 Investments 714 619 Cash and equivalents 298 532 Net Current Assets 674 529 Total 4,517 4,484 Net Term Debt to Equity 1 4 1 3
Net term debt as at year end at Rs. 1,760 cr
Net Term Debt to Equity 1.4 1.3* including CWIP
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Comfortable debt repayment obligations over next three years and cash position
Strategic and Other Investments
Liquidity Summary* (Rs Cr) 532Strategic Investments* (Rs Cr) 619
– Marketable Equity 41
– MFs 198
– Cash & Bank 293
– OCL India Ltd 377
– Subsidiary Companies 226
– Others 16
* As on June 30, 2010
• Investments in subsidiaries for growth opportunities in cement•Marketable Equity & MF
• Equity exposure market to market as at quarter end• Equity exposure market to market as at quarter end• Surplus funds parked in Debt MFs
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Integrated Sugar Business
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Cement Operating Metrics
9%
8%
Geographic Mix Q1'11Volumes ('000 T) Q1'10 Q1'11 YoY%Production 994 1,059 7%S l 959 1 023 7% 43%
27%
13%Sales 959 1,023 7%
Tamil Nadu Kerala Karnataka AP OthersNew plants ‐ contributors to volume growth
7% growth ahead of the flat regional industry growthExpanding Distribution Network
C:C ratio at 1.29
4%
Product Mix for Q1'11Per Tonne Analysis (Rs/T) Q1'10 Q1'11 YoY%Net Sales Realization 3,958 3,492 ‐12%EBITDA 1,397 646 ‐54%
Net sales realization per ton up 11% QoQEBITDA/ton up 38% QoQ64%
33%
16PPC OPC Others
Per Tonne Analysis
Particulars (Rs./T) Q1'10 Q4'10 Q1'11 YoY% QoQ%NSR 3,958 3,166 3,492 ‐12% 10%Raw Material Consumed 313 474 388Inc/(Dec) in stock 19 (63) 15Power & Fuel 1,069 967 1,023Freight Charges 485 512 560Freight Charges 485 512 560Employee Costs 169 198 244Others 582 687 664EBITDA 1,397 594 646 ‐54% 9%
i li i i d
Non‐recurring Items ‐ 142 ‐ EBITDA 1,397 452 646 ‐54% 43%
• Post capitalization manpower costs increased • Freight costs up due to increased diesel costs & lead distances• Operating leverage to come in play on higher volumes going forward• Power & fuel costs have gone up sequentially with increased coal costs
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Capacity Additions & Pricing in Q1’11Installed Capacity (MnT) June’10 Commissioned in FY11 E
Q1’11
• All India : 268 3 45
Source: CMA
• South : 100 ‐ 15• East : 41 ‐ 8
Pricing (Y-o-Y) Q1’11 (Y-O-Y) Q1’11 (Q-O-Q)
Sou ce C• Minimal capacity additions during the quarter help improving realizations• Expect 17% capacity addition in the year
Pricing (Y-o-Y) Q1 11 (Y-O-Y) Q1 11 (Q-O-Q)
• All India 2% 4% • South 11% 11%• East 3% 4%• East 3% 4%
S i l i i S h i fl i i hi h li i
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• Sequential prices up in Southern region, reflective in higher realizations.• May get impacted for the financial year on account of higher effective capacity
Sluggish Demand in the Key Markets
• All India: 7% Y‐o‐Y demand at52 MnT in 1Q’11
• South: 0.2% Y‐o‐Y demand at14.1 MnT
• East: 8% Y‐o‐Y demand at 9All MnT
• Decline in demand growth in2%
11%
16%
17%
India 7%
key markets in Q1’11:• AP declines by 7% Y‐o‐Y• Kerala declines by 3% Y‐o‐Y• TN up 2%11%
‐7%
DCBL Markets• Karnataka up 11% on lowbase
S CMA / C ti t
2%‐3%
DCBL Markets
OCL Markets
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Source: CMA / Company estimates
Low cost housing, infrastructure and industrial capex to drive demand growth
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Integrated Sugar Business
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Integrated Sugar Highlights – Q1’11
Margins remain under pressure in Q1’11
• Price reduction & write down of inventory impacts margins
• Upward revision in levy prices to Rs.18,200/tonne from Rs.13,500/tonne.
Revision in levy prices
• Contributes Rs. 13 cr to EBITDA
Multi‐fuel boilers help improved Cogen operations
• Power generation up 31% y‐o‐y in off season• Higher average realizations contribute to profits
Multi‐fuel boilers help improved Cogen operations
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Integrated Sugar Metrics
Operational Metrics Sugar Units Q1'10 Q1'11Growth%/bps
C h d TCrushed cane T ‐ ‐ ‐Recovery % ‐ ‐ ‐ Production Volume T 14,431 10,006 ‐31%Sales Volumes T 52 737 60 784 15%Sales Volumes T 52,737 60,784 15%Sales Realizations Rs/T 22,574 26,637 18%
• Processed raw sugar only, no cane crushed due to non‐availability of sugarcane
• Sales volumes rise 15% Y‐o‐Y with higher average realizations
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Integrated Sugar Metrics
Cogeneration Units Units Q1'10 Q1'11 GrowthInstalled Capacity MW 79 79 ‐ Power generated lakh kwh 275 360 31%Power Exported lakh kwh 235 314 34%
Distillery Units Q1'10 Q1'11 GrowthInstalled Capacity KLPD 80 80 ‐ Sales Volumes KL 1,204 1,127 ‐6%
• Cogen up 31% y‐o‐y, positively impacted by installation of multi‐fuel boilers
• Power exported to grid rises by over 34% helping increase utilization levels
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More than Anticipated Sugar Production in India
18 825
30Indian Sugar Demand Supply Scenario (MnT)
343740
Free Sugar Sale Price (Rs./Kg) for DCBL
18.8
5
10
15
20
16192225283134
0
5
2001 2003 2005 2007 2009 2011Production Consumption Inventory
101316
• All India sugar production estimated to touch 18.8 MnT in SY 09‐10
• U.P. , the second largest sugar producer in India is estimated to produce 5.2 MnT.
• Prices continue to correct as the industry absorbs additional supply due to revision in production estimates upwards
• Spot prices at Rs. 28/Kg in our markets
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Regulatory Update
P i i
Regulatory Changes in Q1’11
• Pricing• The weekly stipulation for sale & dispatch of non‐levy sugar changedto fortnightly in April 10 & to monthly in May 2010
• The stockholding limit on bulk consumers restored to 15 days fromThe stockholding limit on bulk consumers restored to 15 days fromMay 2010
• The Levy Rates for SY10 season has been raised by Rs. 4700/ton
• Supplies
• The levy obligation on sugar factories may be reduced from 20% to16% for SY10
• Possible Decontrol
• To scrap the system of cane area reservation• Possibility of linking cane price with sugar prices
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Sugar Outlook
Sugar Production Expected to be 23‐25 MnT in SY11
• Sugar production expected to rise by over 25% y‐o‐y in SY11• Production to outstrip demand in SY11 leading to higher inventory levels
• India’s consumption expected to continue at higher growth rate viz• India s consumption expected to continue at higher growth rate vizglobal average
Sugar Prices Likely to Face Downward Pressure in SY11• Prices to remain in a tight range in SY11, with downward pressure• Re‐imposition of import duties on raw sugar likely to check expected fall in prices
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Presentation Plan
Corporate Highlights
Standalone Financial Results
Cement Business
Integrated Sugar Business
Standalone OCL Financial Results
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Presentation Plan
Corporate Highlights
Standalone Financial Results
Cement Business
Integrated Sugar Business
Standalone OCL Financial Results
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OCL Q1’11 Results – Business wise (Rs In crores) Cement Refractory Total Cement Refractory Total Cement Refractory TotalGross Sales 328 60 388 340 69 409 4% 15% 5%Net Sales 295 56 351 298 63 361 1% 14% 3%
Q1'10 Q1'11 YoY%
Operating Other Income 1 0 1 2 1 3Total Income 296 56 352 299 64 364 1% 15% 3%Operating Expenses 190 47 237 200 60 260EBITDA 106 9 115 100 4 104 6% 51% 10%EBITDA 106 9 115 100 4 104 ‐6% ‐51% ‐10%EBITDA Margins % 36% 16% 33% 33% 7% 29%Other Income 6 3Depreciation 25 29EBIT 96 78 ‐18%EBIT 96 78 18%Interest 12 15Tax Provision 27 21Net Profit 57 42 ‐26%PAT Margin % 16% 12%
3% increase in Net Sales…
•Realizations: Cement 7% ↑; Refractory 2%
…Stable top line
•Higher realisation in cement supported the top line
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•Volume Cement 6% ; Refractory 16% ↑
OCL – Operating Metrics
11%2%
Geographic Mix Q1'11Volumes ('000 T) Q1'10 Q1'11 YoY%CementProduction 835 829 ‐1%
57%
18%
12%
11%Sales 805 757 ‐6%RefractoryProduction 16 17 6%Sales 16 19 16%
18%
Orissa W.Bengal Bihar Jharkhand OthersPer Tonne Analysis (Rs./T) Q1'10 Q1'11 YoY%Cement
• Product Mix for Q1’11: 96% PBFS • C:C ratio at 1.9
Sales Realizations 3,665 3,934 7%EBITDA 1,320 1,315 0%RefractorySales Realizations 34,086 33,343 ‐2%EBITDA 5 561 2 332 58%EBITDA 5,561 2,332 ‐58%
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OCL‐Key Balance Sheet Parameters
31‐Mar‐10 30‐Jun‐10
E it C it l 11 11 (Rs. Crs) Equity Capital 11 11 Reserves & Surplus 785 827 Debt 826 761
Long Term 721 711 o g e Working Capital Loan 105 50
Deferred Tax 120 129 Total 1,742 1,728 Net Fixed Assets 1,309 1,304 Investments 6 6 Cash & Equivalents 354 296 Net Current Assets 73 122 Net Current Assets 73 122 Total 1,742 1,728 Net Term Debt to Equity 0.5 0.5
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Presentation Plan
Corporate Highlights
Standalone Financial Results
C B iCement Business
Integrated Sugar Businessg g
Projects Update
Standalone OCL Financial Results
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Contact Us
Contact UsConference Call• Tuesday, Aug 10, 2010, at 1100 hours• Chaired by Mr. Puneet Dalmia, MD• Dial‐in Numbers:•Mumbai: +91 22 2821 3311 / 2821 8855•Delhi: +91 11 2685 2727 / 2644 8899•Chennai: +91 44 2370 2370•Bangalore: +91 80 2532 6215•Hyderabad: +91 40 2799 2211•National Access: +91 44 2370 2370
For Queries and Comments Mr Deepak Sogani (Executive Director)Mr. Deepak Sogani (Executive Director)Investor Relations ‐ Dalmia Cement (Bharat) Limited Tel: +91 11 2346 5201/ 5200 [email protected]@dalmiacement.com
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