Investor Presentation 27 th march 2006

Transcription

1 Investor Presentation 27 th march

2 MIL key highlights Industry overview Industry overview Investor presentation Strategic partnership Huber Micro inks Overview of Hubergroup Global strengths Global strategy Financial performance 2

3 MIL key highlights 15th Largest ink company in the World; 11 th Largest in USA - total revenues USD 216 Mio. International revenues exceeds 59% spread over 70 countries. One of the fastest growing Ink companies in the world. Among the fastest growing companies in India CAGR of sales exceeds 45% in 10 years. Strong R&D, process Chemistry and Technology. Wide product portfolio, Quality and cost leadership. Biggest and only fully backward integrated, seamless ink manufacturing plant in the World. Promoters and management have built market leadership in inks and have created global power house in Agro Chemical, the most profitable unlisted Company. 317

4 Industry overview Industry overview 4

5 Global consolidation in Ink Industry Year 2005 witnessed global consolidations in ink industry. Some of the major acquisitions / mergers being Siegwerk group acquired SICPA packaging ink Division( 2004E sales $400mn). CVC capital partners purchase of flint inks in July 2005 was the largest deal in ink industry. Flint ink and XSYS merged ( flint + ANI + BASF) to form the 2 nd largest Ink company.(2004 sales$2.6 Bn). Huber group acquired majority stake in Micro inks.(2004 sales $220 mn) The above consolidations are to Enhance Cost efficiencies though regional synergies. Increase Global spread and reach. Increase Growth & reduce Margin pressures. The consolidation trend expected to continue and augurs well for the printing industry Improving pricing power.. 5

6 Global Ink Industry Overview NAFTA and Europe are largest printing ink markets contributing $ 5bn each. USA and Euro Zone had a flat growth in countries namely USA, Japan,Germany, UK, France,Spain,Italy and China account for 80% of global market. Asia is the fastest growing market, excluding India it grew by 5-6 %. Indian market grew by about 12%. Total estimated India market USD 250 mn. Micro Inks is the market leader in India. Huber group is the 3rd largest in Europe. Micro Huber combine NAFTA revenues more than $150 mn, making it in Top 5 US companies. Micro Huber is present in all other geographies except Japan. Geographical break up of worldwide sales Latin Middle East America Asia Pacific1% 3% 14% Europe 34% Japan 14% North America 34% Source: 1 Company estimates Source: 2 Ink World Magazine 6

7 STRATEGIC PARTNERSHIP WITH HUBER MICRO INKS Micro inks Ltd is a JV between MHM holding GmbH and Bilakhia holding Private limited. Hubergroup has acquired 50.5% from Bilakhia Rs 675 per share. Further public offer to purchase the 20% of share Rs 675 per share has been successfully completed. Post such acquisition and open offer Equity holding of MHM holdings is 70.5% and Bilakhia Holdings 4.5%. Changes in the Board with induction of Mr. Heinrich Ringer as Executive Vice chairman & Managing Director & Ms. Ursulla Borgmann as Director. Bilakhia Huber Partnership at global level with Bilakhia participating in Huber group worldwide. Fourth Largest post merger globally. Long term sustainable model with full backward integration giving quality and cost leadership. 7

8 Overview of Hubergroup 8

9 Overview of Hubergroup MHM Holding GmbH - the parent company of the global player, the Hubergroup - can look back at more than 240 years of history. Corporation consisting of 34 companies worldwide. Over 200 international sales and delivery centers thru its subsidiaries, branches and presence of local representatives. Annual sales of approximately USD 590mn FY05. Post JV combined sales of MIL + Huber about USD 825 mn. Over 2000 employees Annual production capacity of approx. 120k metric tons. Export sales make up more than 75%. Market leader in the areas of offset printing inks and packaging inks. Strong management team, with decades of experience in ink industry. 9

10 25 companies in Europe & 9 companies outside Europe Hostmann-Steinberg Canada Brampton / Ontario / Canada Michael Huber München, Kirchheim Germany Hostmann-Steinberg USA Louisville / Kentucky / USA Micro Inks Vapi / India Hubergroup China Hongkong / China Hostmann-Steinberg Asia Bangkok / Thailand Hostmann-Steinberg Brasil São Paulo / Brasil Huber Chile Quilicura - Santiago / Chile Hostmann-Steinberg S.A. Eppindust / South Africa Hostmann-Steinberg Australia Mount Waverley / Australia 10

11 Group presence across the Globe Present in more than 100 Countries Huber + Bilakhia group Dominant presence in Asia, Europe, NAFTA. 11

12 Global Strengths 12

13 15 Production facilities across the globe Global Strengths Micro has 6 large manufacturing setups in Vapi, Gujarat in India within a range of 30 Kms and one Plant in USA. Huber has a plant each in Canada, USA, Switzerland and Italy, 2 plants in Ireland and 3 plants in Germany. Backward Integrated paste inks production facilities, presence in various product segments. Rank Company Flush Pigments & Pigment Alkali Blue Resins Additives 1 DIC 2 Flint group (Flint, BASF, ANI) 3 Toyo Ink 4 Micro Inks ( Huber + Bilakhia JV) Outsourcing from India to all Huber plants and global markets / distribution centers worldwide to lead to higher capacity utilization, revenues and profitability. 35 subsidiaries across the globe, Strong Distribution, customer support and technical team. Synergy in global R&D, in-house tested technologies to result in cost reduction. Efficiencies in global procurement thru joint buying. Superior cost - quality matrix and global reach 13

14 What micro gets Global market access. Deeper penetration in European & NAFTA. Global R&D. Complete product basket Outsourcing of pigments, resins, alkali blue to Huber Mfg. entities. Higher capacity utilization. Free cash flow. Long term sustainability and risk reduction. What Huber gets Access to unutilized capacities. Footprint in India, Asia and deeper reach in US markets. Backward integration, outsourcing of pigments, resins, alkali blue from MIL. No additional investment for backward integration and capacity creation. 14

15 Combined synergy Market access and deep penetration across all key markets- India,Asia, US, Europe, Canada. Quality and cost leadership lowest cost producer. Higher capacity utilization in India. Complete product basket. Global R&D and mutual benchmarking of best practices. Joint buying and sourcing. Global talent pool with years of Ink industry experience. 15

16 Global strategy 16

17 Business Strategy going forward Region India Europe USA and Canada Strategy Direct presence, own people employed & fully owned operations, nationwide distribution network and expansion. Focus on top customers. Presence in multiple product segments. Quality and value for money. Plans to setup more ATM s. Gain market share. Micro inks to feed European markets thru strong Huber marketing Network. Outsourcing of raw materials like pigments, resins, alkali blue, flush from India to Huber manufacturing plants. US subsidiary of Micro inks to be serviced from India. Huber Canada and USA operations to be partly serviced from India. 17

18 China Region Business Strategy going forward Strategy Products to china market to be delivered out of India. current year revenues in china to touch USD 4.5mn and expected to grow steadily. Huber to setup front end servicing plant in china. Asia pacific and Other Markets Micro inks will service customers in Asia, Latin America, Africa and Middle East thru distributor network and Huber entities. 18

19 Financial performance 19

20 MIL Consolidated Key Financials & ratios Annual Results 9 months Dec Rs mn FY FY FY FY05 FY06 Sales (Net) 6,469 7, EBITDA EBIT Interest PBT (76) PAT (188) Shareholders funds 2,761 3, Loan Funds 4,990 4, Annual Results 9 months Dec FY05 FY06 EBITDA/ Total Income (%) Diluted Earnings Per Share (Rs) (18.5) Total Loans/ EBITDA (x) Debt / Net worth

21 Financials performance review FY06 Consolidated Sales YTD Dec05 at Rs 8070 mn. Est..FY06 growth expected to be around 13%. Domestic sales YTD Dec05 is at Rs mn. Est. sales growth for FY06 to be around 13%. International revenues for YTD Dec05 is at Rs mn. International revenues for FY 06 estimated to grow at 14%. Current year EBITDA / PAT estimated lower due to Higher raw material and fuel costs on back of spiraling crude prices. Forex and hedging loss est. at Rs 180 mn for full year. One time provisioning on Inventory, receivables Rs 80 mn in Q4FY06. One time contractual payment of Rs 89 mn in Q4FY06. 21

22 New developments and guidance Major contracts signed in US Major customer addition in MIC USA with 3 year contract for USD 30 mn. Further an estimated USD 2 mn recurring business from another major customer in MIC USA MIC USA achieves turnaround. Breakeven in Ebitda for Q3FY06. YTD Dec 06 net losses down 55% (USD 3.9 mn) compared to PY. Feb and march 06 on standalone basis to achieve positive PAT. A major contract signed in Australia with an annual sales potential of AUD 7.8 mn per annum in Non-US segment. Outsourcing to Huber est. at USD mn in the first year. Overall topline growth est. between %. New contracts, outsourcing and overall market growth to contribute to earnings growth. Major risks to Ebitda margins remain raw material prices. 22

23 Thank you 23