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Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprint ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
Indian Economy
India is growing at about 8+% and Government targets a GDP growth of 9+%. High GDP growth would translate into double-digit cement demand growth annually. Favourable Demographics - India will contribute significantly to the world incremental Working Age Population between 2010 to 2020, leading to higher disposable income. Empowered Rural India - Rural masses, expanding Consumer class. The rural Indian economy is showing impressive growth in consumption, with a number of factors supporting this growth. These factors include increasing incomes due to good monsoons and Government initiatives and schemes like, (National Rural Employment Guarantee Scheme) employment opportunities in infrastructure and industry projects across the country and; emphasis on local employability. Rising Saving Rate - Bulk of Indias savings come from households rather than corporate, makes it a stable source of funds for Infrastructure Creation. A Stable Government at the Centre with Strong focus on growth and infrastructure development - Infrastructure Investment will be doubled in 12th Plan @ US$ 1 trillion (9.5% of GDP). India at the cusp of take-off into an exponential growth phase with GDP per capita crossing the ~$1000 threshold
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Trend in growth
Primary
Industry
Services
GDP
Composition of GDP
100 80 54 55 56 57 60 40 20 0 28 17 CY06 29 17 CY07 28 16 CY08 28 15 CY09
Primary
Industry
Services
Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
13.5%
7.2%
5.8%
5.7%
*7.5 - 8%
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Source: CMA, Research Reports & Ministry of Statistics & Programme Implementation
9.0%
7.4% 6.6%
7.2%
6.7%
6.0%
3.0%
0.0% 1979-80 to 1984-85* 1994-95 to 1999-00 1984-85 to 1989-90 1999-00 to 2004-05 1989-90 to 1994-95 2004-05 to 2009-10
Installed Capacity of the Industry has reached approximately 270 Mio tons by September 2010 Double digit capacity growth in 5 year cycle after 30 years
*
Growth based on Installed Capacity at the end of year Source: CMA and Research Reports
L im e S to n e R e s e rv e s e (m il.t.) S ta te K a rn a ta k a A n d h ra P ra d e sh G u ja ra t R a ja s th a n M e g h a la y a C h h a ttis g a rh M a d h y a P ra d e s h H im a c h a l P ra d e s h A ll In d ia R e s e rv e s 5 1 ,8 8 6 3 5 ,1 7 9 2 0 ,0 1 2 1 9 ,4 8 6 1 6 ,0 5 4 9 ,0 3 8 5 ,9 2 1 4 ,7 6 2 1 7 5 ,3 4 5 %
1 2 .0 3 3 .0 1 5 .0 3 0 .0 1 .5 1 1 .0 2 0 .0 7 .0 1 4 5 .0
-2
11
4
Central
20
10
10
CAGR 9.5%
CAGR 10.5%
38 41
30
33
2009
2010
2009
2010
Growth (%)
15
15
11
11
Growth (%)
10
13
14
South 80 60 40 20 0 2005
Growth (%) 15 5 5 9 19 13 CAGR 10.4%
West 50 40 30 20 10 0 41
CAGR 9.6%
38
43
48
54
56
60
25
28
31
34
36
2006
2007
2008
2009
2010
Growth (%)
2005
8
2006
11
2007
9
2008
9
2009
11
2010
10
East 40
CAGR 10.3%
All India
30 20 10 0
22
24
25
27
32
36
CAGR 10.1%
131
146
160
174
193
212
2005
2006
2007
2008
2009
2010
2005
2006
2007
2008
2009
2010
Price Trends
Jun10
Dec10
12
195
259
Total Demand
Installed Capacity
86
81
80
83 342 283
100 80 60 40 20
195
227
2009
2013
2014 Utilization
Total Demand
Increased capacity expansion in 2010-2011, utilization rate is expected to remain low in the near term, would gradually improve with the growth of the industry. Pressures are likely to be felt across all regions, the south and west could remain weaker as compared to the other regions.
2010 onwards demand is estimated to grow by 10%
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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GIVE A MAN ORDERS and he will do the task reasonably well. But let him set his own targets, give him freedom and authority and his task becomes a personal mission:
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprint ACL- Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Mumbai
8 5
Terminal
Chennai
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Extensive & loyal distribution network -Over 7000 dealers and 25,000 retailers
Provides access to growing Individual Housing Builders Markets.
Hub & Spoke Strategy Logistics advantage coupled catering fresh cement to the consumer
Benefits of catering fresh cement to the markets
Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Financial Performance
2008 Rs Mn Sales EBITDA PBT PAT Cash EPS (Rs.) EPS (Rs.)* 62350 19540 16617 14020 12.62 7.41 US $ Mn 1354 424 361 304 Rs Mn 70770 21220 18030 12180 13.78 7.99
Exchange Rate Rs. 45.63 from RBI
2010 Rs Mn 73902 19510 16619 12636 13.39 8.26 US $ Mn 1620 428 364 277
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Twelve Months Dec-10 5.01 17885 389 1476 775 4461 4079 3770 3535 379 1086 2449 209 2684 102 2581 20 change 4% 1% -3% -31% -1% 36% 976% 0% -21% -7% 26% -33% 210% -32% -34% 7% 2009 18.8 70769 1046 9640 2730 14230 13470 11530 19720 1512 2970 16745 224 18033 5849 12184 28 2010 19.97 73902 1273 5963 3437 16973 16101 13735 19510 1203 3872 15638 487 16619 3983 12636 26 change 6% 4% 22% -38% 26% 19% 20% 19% -1% -20% 30% -7% 117% -8% -32% 4% -
4.8 17710 400 2130 780 3270 379 3780 4500 408 860 3640 67 3970 156 2410 25
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Financial Ratios
Rs. Cr. Net Cash from Operating Activities Gearing % Dividend % Dividend Payout Ratio% EBITDA Margin (%) ROACE (%) ROE (%) 2008 966 5 110 24 31 34* 27* 2009 2129 3 120 30 30 27 20 2010 1874 1 130 31 26 23 18
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Capacity Expansion
Completed expansions : Clinker line of 2.2 mio tons each at Rauri (HP) and Bhatapara (Chhattisgarh) commissioned in December 2009. Grinding facilities of 1.5 mio tons each at Dadri (UP) and Nalagarh (HP) commissioned in March 2010. The ramp up of the plants have been as per schedule. Additional Expansions : Grinding capacity of 1.0 mio tons at Bhatapara and 1.0 mio tons at Maratha, would be completed by Q1 2011. With these expansions ACLs installed capacity would be 27 mio tons by Q1 2011.
The Company is evaluating projects for the next round of capacity expansion
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Our Shareholders
Public, 10.20 Insurance Co's, Mutual Funds & Financial Institions/Banks, 14.72
GDR, 1.13
Holcim, 45.45
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Livelihood Skill Based - ACF Sponsors vocational training to unemployed youth in trades like electric house wiring and motor winding, refrigeration and airconditioning, wielding and fabrication and radio and TV repairing. Young men who have completed their training have started their own enterprises.
Women Development - Promoted over 700 Self Help Group (SHGs) with 9,000 members. Specific skills that the women felt the need for, are offered to them. The groups are engaged in a range of income generating activities based on agriculture produce, livestock rearing, tailoring and embroidery, food processing and handicrafts.
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Content
Indian Economy Indian Cement Industry Cement Sector Outlook Ambuja Cements Limited
a. b. c. d. e. f. g. h. Vision, Mission and Philosophy Asset Footprints ACL Growth Story Long Term Strategy / Competitive Edge Financial Performance Cost Drivers Expansion Projects Shareholding
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Conclusion
Solid market position built within a period of time through organic growth and acquisitions. Strong brand image and positioning built over a period of time in the minds of the consumers. Pin-pointed positioning tied to substantial captive infrastructure to cater to markets both domestic and overseas. High use of alternative raw materials in production of blended cements. Capex plan - Both greenfield and brownfield projects are being evaluated that would enhance companys market share and maintain its position in the industry.
Industry would go through a challenging period due to over-supply situation - Ambuja is well poised and geared up to meet the challenges
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Disclaimer
Cautionary statement regarding forward-looking statements This presentation may contain certain forward-looking statements relating to the Groups future business, development and economic performance. Such statements may be subject to a number of risks, uncertainties and other important factors, such as but not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macroeconomic and political trends; (4) fluctuations in currency exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigation; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this presentation. Ambuja assumes no obligation to update or alter forward-looking statements whether as a result of new information, future events or otherwise.
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