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Disclaimer
This presentation may contain statements which reflect Managements current views and estimates and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. Responses can only be given to questions which are not price sensitive.
Operates in the protective coatings, floor coatings, road marking paints and powder coatings segment through a 100% subsidiary
Asian Paints to take the lead in the second venture and PPG to take the lead in the existing APPG JV
The arrangement is subject to regularity approvals and is expected to be completed by June 2012
Chemicals
Asian Paints also manufactures Phthalic Anhydride (PAN) and Pentaerythritol
PAN is manufactured in Gujarat and Penta in Tamil Nadu
More than 50% consumed internally
International Operations
Contributes 13% to the group turnover Began by establishing presence in Fiji in 1978 Presence in 16 countries spread over 4 regions Middle East Caribbean South Pacific Islands Asia
* Asia includes Sri Lanka, Nepal, Bangladesh and Singapore operations
7.6% 15.9% Middle East Asia 52.2% 24.3% Caribbean South Pacific
Macro Environment
Macro Environment
Volatile global environment has resulted in sharp movements in currencies, making forex management a challenge for corporates
INR depreciated by more than 19% in the current financial year till Dec 2011 Conversely, INR rose by more than 8% in the month of Jan 2012
Domestic macro indicators giving mixed signals, Inflation finally coming down
WPI dropped to 7.47% in Dec-11 after staying above 9% for most part of the year Food Inflation declined to (-3.1%) in the month of December-11 Many industries facing slowdown, however IIP for November came in at 5.9% after a negative 4.7% in Oct 11
RBI maintained key policy rates during the last monetary review leading to expectation of easing policy going into the new year Cooling off being witnessed in global economy, Euro zone uncertainty continues
Global Commodity prices have started stabilizing Crude has remained stable during the financial year at above USD 100 levels
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Presentation structure
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6.0%
Standalone
Net Sales at Rs. 2109.5 crores; grew by 20.3% during the quarter Sales growth is to be seen in the light of last year (Q3-FY11) which was 37% more than that of the earlier year (Q3-FY10) and that itself was 27% higher than that of the year before that (Q3FY-09). The Industrial business of APL was transferred to AP Coatings Ltd (A 100% subsidiary of APL) w.e.f. 1st June 2011
Consolidated
13 Net Sales at Rs. 2560.53 crores; grew by 22% during the quarter
18.0%
18.9%
16.6%
18.5%
Standalone:
PAT at Rs. 250.5 crores; grew by 21.2% EBIT at Rs. 363.4 crores; grew by 21.7% Margins maintained at last year levels despite pressure on the cost front
Consolidated:
PAT after Minority Interest at Rs. 256.86 crores; growth by 16.6 % EBIT at Rs. 389.21 crores; growth by 16% 14
Consolidated
Net Sales at Rs. 7071.68 crores; grew by 23.2% during the period
International Operations continue to be impacted by political events and macro economic uncertainty
Net Sales at Rs. 861.75 crores compared to Rs. 765.8 crores in previous year
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Consolidated
PAT after Minority Interest at Rs. 729.25 crores; grew by 11% EBIT at Rs. 1104.97 crores; grew by 10.3%
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Presentation structure
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Inflationary Impact
Material inflation significantly high compared to previous year Consumption average for 9M FY12 stood at 117.44 as against base of 100 of previous year Consumption Average Q1 114.05 Q2 116.99 Q3 121.59
Overall availability of Titanium Dioxide was comfortable although high prices remain a concern
Prices have leveled off for the time being
The high price of crude did not allow the prices of various raw materials to soften
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Expansion Plans
Khandala project construction progressing well Phase I 3,00,000 KL to be commissioned in Q4 of FY 2012-13 Rohtak Phase-II expansion initiated Phase II capacity addition of 50,000 KL by Q1 of FY 2012-13 Capital expenditure of Rs. 150 crores
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Industrial Operations
Business Environment
Industrial business, including Auto, continued to face challenging conditions High pressure on margins due to increasing material cost
Powder Business
Impacted due to slowdown in manufacturing industry Demand seems to remain subdued and challenging for the rest of the year as well
Industrial Operations
Proposed Joint Venture with PPG
On Jan 24, 2011, Asian Paints had announced about its proposed new 50:50 JV with PPG for its industrial business in India The composite scheme for Merger and Demerger was filed with the Honble High Court in Sept-11. However, as PPG Industries Inc. USA is restructuring its operations in India, the scheme has been withdrawn Revised composite scheme for Merger and Demerger, encompassing all businesses of companies as originally envisaged, will be filed shortly with the Honble High Court of Mumbai The entire process is expected to be completed by June 2012
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Penta Plant
In Dec 2011, Due to the severe cyclonic storm 'Thane' in Tamil Nadu, some equipment and materials at the Company's Penterythritol Plant at Cuddalore in Tamil Nadu had been damaged As a result of it, the plant was temporarily shut down for some days and has now been restarted The repair and reconstruction work to set right the damage caused at the plant is in progress and the same is not expected to hamper production All Assets have been fully insured by us
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International Operations
Net S ales ( R s C r)
Oman, Nepal, and Sri Lanka have registered good growth Markets in Middle East have still not bounced back from the political unrest and recessionary conditions Inflationary pressures continue to impact the profitability of international operations too
2011 +/- L Y 122.76 9% 406.39 8% 190.04 25% 56.94 17% 776.14 13%
2011 +/- L Y 11.42 -30% 57.25 -13% 17.79 -26% 11.73 -29% 98.18 -19%
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Presentation structure
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Annual Budget would be a closely watched affair after the recent concerns on policy paralysis and growth
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Internationally, World Bank has slashed Global growth outlook to 2.5% for 2012 leading to concerns of slowing growth
Political uncertainty might add to the already recessionary conditions being witnessed in the Middle East market
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Thank you...
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Annexure
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S ales & O p Inc ome Material C os t E mployee C os ts O ther E xpens es D epreciation P rofit from O perations before O ther Inc ome and Interes t O ther Income P B IT Interes t PBT C urr. & D ef. T ax P AT before Minority interes t Minority S hare P AT to parent S hareholders E PS
3M 11-12 2,560.53 1,551.35 131.76 480.06 30.68 366.68 22.54 389.21 9.03 380.18 113.76 266.43 9.57 256.86 26.78
3M 10-11 2,099.60 1,253.46 111.52 389.71 28.64 316.27 19.37 335.64 5.85 329.79 97.42 232.37 12.04 220.33 22.97
Gr % 22.0% 23.8% 18.2% 23.2% 7.1% 15.9% 16.4% 16.0% 54.4% 15.3% 16.8% 14.7% -20.5% 16.6% 16.6%
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S ales & O p Inc ome Material C os t E mployee C os ts O ther E xpens es D epreciation P rofit from O perations before O ther Inc ome and Interes t O ther Income P B IT Interes t PBT C urr. & D ef T ax P AT before Minority interes t Minority S hare P AT to parent S hareholders E PS
9M 11-12 7,071.68 4,255.69 390.53 1,313.03 89.75 1,022.66 82.31 1,104.97 24.37 1,080.60 324.73 755.87 26.61 729.25 76.03
9M 10-11 5,740.61 3,321.94 339.03 1,056.12 83.97 939.56 62.67 1,002.23 14.63 987.60 297.12 690.48 33.26 657.22 68.52
Gr % 23.2% 28.1% 15.2% 24.3% 6.9% 8.8% 31.3% 10.3% 66.6% 9.4% 9.3% 9.5% -20.0% 11.0% 11.0%
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*50% of Asian PPG Industries sales considered **Figures are not comparable as the industrial business including powder coating was transferred to AP Coatings w.e.f. 1st June, 2011
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Key Ratios
Standalone Consolidated 9M FY12 9M FY11 9M FY12 9M FY11 59.5% 57.3% 60.2% 57.9% 17.6% 18.7% 15.7% 17.8% 17.3% 18.6% 15.3% 17.2% 12.1% 12.8% 10.7% 12.0%
% to Sales & Op. Inc. Material Cost/Net Sales PBDIT/Net Sales PBT/Net Sales PAT/Net Sales*
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