Disclaimer. 17 th May

Transcription

1 17 th May 2010 LARSEN & TOUBRO LIMITED

2 Disclaimer This presentation contains certain forward looking statements concerning L&T s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and the target countries for exports, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions with respect to investments, fiscal deficits, regulations, etc., interest and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company. 17 th May

3 Presentation Outline L&T Parent Performance Segmental Performance Group Performance Sectoral Opportunities & Outlook 17 th May

4 Presentation Outline L&T Parent Performance Segmental Performance Group Performance Sectoral Opportunities & Outlook 17 th May

5 Performance Highlights All figures in Rs. Billion Key Parameters Q4 FY10 Q4 FY09 Change FY10 FY09 Change Order Inflow % % Order Book - 31st March 1, % Net Sales excl. RMC % % Company level EBITDA Margins 15.1% 14.0% 1.1% 13.0% 11.6% 1.4% PAT before Exc. & Extraord. Items % % PAT after Exc. & Extraord. Items % % Stellar Allround Performance 5

6 Sustaining Growth Order Inflow Net Sales 696 Rs. Billio on Rs. Billio on FY 06 FY 07 FY 08 FY 09 FY 10 FY 06 FY 07 FY 08 FY 09 FY 10 Od Order Book Recurring PAT n Rs. Billio n Rs. Billio FY 06 FY 07 FY 08 FY 09 FY 10 FY 06 FY 07 FY 08 FY 09 FY th May

7 Order Inflow & Order Book Order Inflow 35% Order Book 43% % Q4 FY09 Q4 FY10 FY09 FY10 FY09 FY10 17 th May 2010 All figures in Rs. Billion 7 7

8 Order Inflow & Order Book FY10 Sectoral Break-up Order Inflow: Rs Bn 27% 33% 20% 13% 7% Order Book: Rs Bn 33% 30% 15% 16% 6% Infrastructure Power Hydrocarbons Process Others Infrastructure Roads & Bridges Ports & Harbours Airports Railways Buildings & Factories Urban Infra Water Power Generation Equipments Electrification / Transmission & Distribution Hydrocarbons Upstream Mid & Downstream Pipelines Valves Process Minerals & Metals Bulk Material Handling Fertilizer Others Shipbuilding Defense & Aerospace Construction & Mining Eqpt. Electrical & Electronic Products Technology Services 17 th May

9 Order Inflow & Order Book FY10 Order Inflow 95% 4% 1% Order Book 93% 4% 3% Domestic Middle East Others Geographical Break-up Order Inflow 59% 38% 3% Order Book 53% 40% 7% Customer Profile Public Private Devl. Projects - L&T 17 th May

10 Performance Summary - Topline Q4 FY10 Q4 FY09 % Change Rs. Billion FY10 FY09 % Change % Net Sales % Exports Other Operational Income % Total Net Revenues % Excluding RMC Business % Net Sales % Yearly sales growth driven by execution pickup in Q4 Sales Growth driven by Building & Factories, Railways, Power T&D and Process segments Export markets yet to recover 17 th May

11 Performance Summary Operational Costs Q4 FY10 Q4 FY09 FY10 FY09 Rs Bn % to Total Net Revenues Rs Bn % to Total Net Revenues Particulars Rs Bn % to Total Net Revenues Rs Bn % to Total Net Revenues % % Manf., Cons. & Opex (MCO) % % % % Staff Costs % % % % Sales, adm. & other Exp % % % % Total Operational Costs % % Increase in MCO Expenses in Q4 led by Commodity price step-up Increase in Staff costs on account of increase in manpower, annual rewards, salary revisions and increments Reduction in SGA due to effective forex hedging and expense control 17 th May

12 Performance Summary Profitability Q4 FY10 Q4 FY09 % Change Rs. Billion FY10 FY09 % Change % EBITDA % 15.1% 14.0% EBITDA Margins 13.0% 11.6% (1.36) (0.47) 189% Interest Expenses (5.05) (4.16) 22% (1.16) (0.89) 31% Depreciation (4.15) (3.06) 35% Other Income (7.87) (4.41) Provision for Taxes (16.21) (12.31) % PAT before Exceptional Items % 0.96 (1.43) Extraordinary & Exceptional Items (Net of tax) % Profit after Tax % Yearly Margin improvement driven by favourable commodity prices for the better part of FY10 and operational cost efficiencies Increase in Interest cost due to higher average borrowings Depreciation charge in line with increased capex Increase in other income boosted by dividend from Subs. and profit on Satyam stake sale 17 th May

13 Performance Summary Balance Sheet Networth and Loan funds Rs. Billion Mar-10 Mar-09 Increase / (Decrease) includes proceeds from QIP and FCCB resp. Net Worth Gross D/E ratio: 37% Vs Loan Funds % Deferred Tax Liabilities Capex Outlay Rs Bn (Net) Segmental Net Working Total Sources Capital has improved Net Fixed Asset from 11.7% to 7.6% driven by higher Current Investments Customer advances Invt./ICDs/Loans & Increase of Rs. 2.9 Bn in Advances to S&A Cos Unallocable Corporate Net Other Investments Current Assets mainly Net Current Assets (8.99) due to increase in bank balances Total Applications th May

14 Cash Flow Statement Rs. Billion FY 10 FY 09 Operating Profit Adjustments for Working Capital Changes (21.14) Direct Taxes (Paid) / Refund - Net (15.19) (8.73) Net Cash from Operations Investments in Fixed Assets (Net) (15.60) (19.80) (Investment) / Divestment in S&A and JVs (Net) (24.89) (11.71) (Purchase)/Sale of Long Term & Current Investments (Net) (21.49) (4.91) Loans/Deposits made with S&A / Others (4.95) (12.52) Interest & Dividend Received from Investments Cash Received on sale of business (CY: PDP; PY: RMC) Net Cash used in Investing Activities (60.72) (33.09) Proceeds from Issue of Share Capital Net Borrowings (Including FCCB issue) Dividends & Interests paid (12.51) (7.43) Net Cash hfrom Financing i Activities ii Net (Dec) / Inc in Cash & Cash Equivalents 6.57 (1.89) Cash & Cash Equivalents - Opening Cash & Cash Equivalents - Closing th May

15 Presentation Outline L&T Parent Performance Segmental Performance Group Performance Sectoral Opportunities & Outlook 17 th May

16 Segmental Break-up FY10 Machinery & Industrial Products 5.7% Electrical & (7.0%) Electronics 73% 7.3% (7.4%) Net Revenues Others 1.0% (3.1%) Engineering & Construction 86.0% (82.5%) Electrical & Electronics 8.0% (7.5%) Machinery & Industrial Products 89% 8.9% (10.7%) EBITDA Others 1.0% (1.5%) Engineering & Construction 82.1% (80.3%) Figures in the bracket indicate Previous Year s Composition 17 th May

17 Engineering & Construction Segment Q4 FY10 Q4 FY09 % Change Rs. Billion FY10 FY09 % Change % Total Order Inflows % Exports Total Order Book % --- Exports % Total Net Revenues % Exports % EBITDA % 15.9% 16.0% EBITDA Margins 13.6% 13.0% Net Segment Assets % Robust Growth in Order Inflow across all sectors led by Power International Business still sluggish Improvement in Execution environment in Q4 EBITDA benefited through favourable commodity prices leveled off in Q4 Net Segment assets reduction through lower working capital 17 th May

18 Electrical & Electronics Segment Q4 FY10 Q4 FY09 % Change Rs. Billion FY10 FY09 % Change % Total Net Revenues % Exports % EBITDA % 16.6% 12.9% EBITDA Margins 15.7% 13.5% Net Segment Assets % Q4 Sales growth led by Domestic Industrial recovery; International operations still subdued Smart improvement in EBITDA margins due to: Favourable product mix Cost Rationalisation Net Segment Assets driven by improved working capital management 17 th May

19 Machinery & Industrial Products Segment Q4 FY10 Q4 FY09 % Change Rs. Billion FY10 FY09 % Change % Total Net Revenues % Exports % EBITDA % 23.1% 18.7% EBITDA Margins 22.1% 20.2% Net Segment Assets % Q4 Revenues indicative of sequential recovery Export business affected by global slowdown (Mainly valves) Improvement in EBITDA margins driven by operating leverage Smart reduction in Net Segment Assets led by allround reduction in working capital 17 th May

20 Presentation Outline L&T Parent Performance Segmental Performance Group Performance Sectoral Opportunities & Outlook 17 th May

21 Consolidated P&L Statement L&T L&T Group Rs Billion FY10 FY10 FY09 % Change Total Net Reveunes (Net Sales + Other % Operational Income) EBITDA % 13.0% EBITDA Margins 14.6% 12.4% (5.05) Interest Expenses (6.92) (5.28) (4.15) Depreciation (9.79) (7.28) 9.10 Other Income (16.21) Provision for Taxes (18.66) (14.23) PAT (before Exceptional Items) Share of profits in Associate Cos Minority Interest PAT after Minority Interest (before Exceptional Items) Extraordinary & Exceptional Items (Net of tax & Minortiy Interest) % Profit After Tax % 17 th May

22 Consolidated Balance Sheet L&T L&T Group Rs. Billion Mar-10 Mar-10 Mar-09 Inc/(Dec) Net Worth Minority Interest Loan Funds: - Financial Services Dev. Projects Others (2.85) - Deferred Payment Liabilities (0.19) 0.77 Deferred Tax Liabilities (Net) Total Sources Net Fixed Asset Current Investments Invt./ICDs/Loans & Advances to S&A Cos Other Investments (2.41) Net Current Assets Dev. Business Assets Loans towards financing activities Total Applications th May

23 L&T Infotech Revenues (Rs. Bn) PAT (Rs. Bn) FY09 FY10 FY09 FY10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY09 FY10 FY09 FY YoY Revenue e contraction o due to slowdown in US and Europe markets Q4 FY10 PAT indicative of sequential improvement 17 th May

24 Financial Services Rs. Billion FY10 Total Income FY09 % Change FY10 PAT FY09 % Change L&T Finance Limited % % L&T Infrastructure Finance Limited % % L&T Finance Revenue growth led by Rural Equipment Finance and Micro Finance PAT Margin improvement driven by Net Interest t Margin expansion Business Assets: Rs. 70 Bn L&T Infra Finance Revenue Growth driven by most infrastructure segments (Power, telecom, roads, etc) Business Assets: Rs. 43 Bn 17 th May

25 Developmental Projects (as on date) Roads and Bridges: Portfolio: 14 projects; 7 operational, 7 under implementation Development: 5328 lane km Project Outlay: Rs. 127 Bn Ports: Portfolio: 3 projects; 1 operational, 2 under implementation Capacity: 34 Mn TPA Project Outlay: Rs. 53 Bn Urban Infrastructure: Portfolio: 20 projects; 7 operational, 13 under implementation Area: 28 Mn sq. ft. Project Outlay: Rs. 89 Bn Total Project Cost (March 2010): Rs. 269 Bn Total Equity Commitment (March 2010): Rs Bn Total Equity Invested (March 2010): Rs Bn 17 th May

26 Presentation Outline L&T Parent Performance Segmental Performance Group Performance Sectoral Opportunities & Outlook 17 th May

27 Sectoral Opportunities - Infrastructure Environment Increased budgetary support Increase in pace of NHAI awards Thrust on PPP mode Water shortages Real Estate Pick-up Opportunities Roads & Bridges: National & State Highways Metros: Underground & Elevated Metros in Tier I & II cities Monorail expansion in Mumbai A few large airport prospects Railways: Rolling Stock facilities, Station Development and DFC Water: Water Supply & Sanitation/ Desalination projects Real Estate: Metro Cities Opportunities in Healthcare and Tourism Infra 17 th May

28 Sectoral Opportunities - Power Environment Power deficit and increasing energy requirements Governments plans to speed up Coal linkages Increasing Private players participation (PPP) Thrust on Supercritical power plant technology Government favoring domestic BTG manufacturers Chinese Competition Thrust on Nuclear Power (clean power) T&D capex to speed up Opportunities EPC, BTG & BOP projects for Coal Based power plants EPC projects for Gas Based Power plants Nuclear power plant construction o and equipment e supply EPC projects for T&D in India and Middle East (Including PPP) 17 th May

29 Sectoral Opportunities - Hydrocarbon Environment Crude Price stability and demand Hydrocarbon Capex picking up Intense Domestic and International Competition Middle East pick-up Small signs s of pick-up in FPSO and Rig market Opportunities EPC projects in Oil Extraction: Process Platforms, Wellhead platforms and subsea pipelines Residue Upgradation projects in Midstream & EPC jobs for Downstream projects Construction and pipeline jobs Rigs & FPSOs in Brazil, Middle East and Domestic 17 th May

30 Sectoral Opportunities - Process Environment Minerals & Metals India is net importer of steel Demand outpacing capacity PSU and Private projects still in cautious mode Fertilizers Increase in demand for Food grains and volatility in International Urea Price Availability of Natural Gas as feedstock with expected high allocation Opportunities EPC projects for capacity expansion plans for both ferrous and non-ferrous Domestic investment in Power, Mines, Ports, Metals industry to provide opportunities for Material Handling Systems Fertilizers: Feedstock Conversion & Expansion Projects 17 th May

31 Outlook Economic Robust Growth (GDP/IIP) Worrisome Fiscal Deficit Inflation is a concern Adequate liquidity but tightening policy Increasing interest rates European ripples Normal monsoon prediction Growth Drivers Power (BTG) Nuclear Power Defense Water Railways 17 th May 2010 Enablers & Strategy Sectoral Heightened Domestic & International competition Strong Power Gen. capex Middle East picking up Increasing NHAI activity T&D spends heading up Water spending likely to increase Capability Building Capacity expansion Shipbuilding facility Oman facilities BTG factories due to be commissioned soon Forging Unit coming up Horizontal & vertical integration 31

32 Thank You Some of the largest & heaviest equipments in the world have been manufactured by L&T Many of the country s prized landmarks have been built by L&T The World s largest FCC Regenerator (Wt 1320 MT) Bahai Temple, New Delhi 17th May 2010 World s First ChromiumMolybdenum-VanadiumMultiwall Ammonia Convertor India s biggest marine equipment an oil & gas processing complex The world s longest crosscountry conveyor One of the world s largest diesel hydro-treater project for a refinery Asia s highest viaduct (Konkan Railway) The world s largest coalgasifier (For China) 88-metre bridge on the Northern Railways JammuUdhampur line 32 32

33 Annexure 1: Major Orders Booked in Q4 FY10 Description Rs Bn ---- Domestic Ammonia Feedstock Conversion Projects at Punjab & Haryana for National Fertilisers Ltd Aromatics Complex at Mangalore SEZ for ONGC Mangalore Petrochemicals Ltd (OMPL) EPC project for Steam Turbine & Generators and Auxillary Packages for 1320 MW Rajpura Thermal Power Project for Nabha Power Limited MMTPA FCC Reactor regenerator Project of a grassroots fuel refinery for IOCL, Paradip East Coast Offshore platform for Gujarat State Petroleum Corporation Turnkey project including engineering, procurement, fabrication and installation of 4 Well- Platforms for MHN Re-development project, ONGC Design and construction of 36 High SpeedInterceptor Boats for Indian Coast Guard 9.77 Design & Construction of Phase I Campus at CTS SEZ Campus, Tamil Nadu for M/s. Cognizant Technology Solutions (I) Pvt. Ltd. Construction of Residential towers " The Address" for Wadhwa Group, Mumbai 5.01 Coal Handling Plant for 6X150 MW Mahan Captive Power Plant, Madhya Pradesh for Hindalco 4.00 Design, engineering, procurement, civil works, erection / construction, testing and commissioning i i of the railway works of 2X525 MW Maithon Right Bank Thermal Power Project Construction of 400 Bed, Women & Children Hospital Including Hostel Complex & Other facilities at Puducherry for Jawaharlal Nehru Institute of Post- Graduate Medical Education and Research ---- Exports Contract t for Design, Supply, Installation, ti Testing & Commissioning i i of MV Power System for Abudhabi Ports Company at Khalifa Port and Industrial Zone at Abudhabi th May

34 Annexure 2: Details of Other Income Rs. Billion FY10 FY09 Recovery from S&A / JV Companies Technical Fees / IJV Profits Others Total - Other Operational Income Interest Income Dividend from S&A Companies Income from Other Investments Profit on sale of investments Miscellaneous Income Total - Other Income th May

35 Annexure 3: Details of Extraordinary & Exceptional items (Amt in Rs. Bn) FY 10 FY 09 Exceptional Items (Net of Tax) Profit on Sale of Investment in Ultratech Cement Profit on sale of stake in Associate Company Profit on part buy-back of shares by Associate Co Provision for dimunition in Invst. in a Associate Co. (0.40) - Extraordinary Items (Net of Tax) Provision i towards Investment t in Satyam - (1.86) Profit on Sale of RMC Busines Profit on Sale of PDP Busines Reversal of provision on part sale of Invst. in Satyam Total th May

36 Annexure 4: Details of Increase in support to S&A in FY10 Investment, ICDs and Advance against Equity Increase in Support to S&A Rs. Bn L&T Power Development 8.19 Urban Infra SPVs 4.62 L&T Infra Finance 4.25 L&T Shipbuilding 3.74 Road Projects 2.58 IDPL 2.10 L&T Finance 1.25 Forgings 1.11 L&T International FZE 0.89 L&T Power (for MHI JVs) 0.51 L&T Capital (4.80) Others 1.27 Total th May