Sowing the seeds of tomorrow. July 2007 1
Outline of Presentation Financial overview The Emerging Tata Chemicals 2
FINANCIAL OVERVIEW 3
Financials Revenue growth 5810* 6,000 in Rs. crore 5,000 0% 4 GR A C 4,000 1819 4034* 515 3,000 2,000 1,000 2544 3008 3519 3991 1535 0 FY03 FY04 FY05 FY06 FY07 Note: FY2006 Consolidated financials include BMGL s Q4 results and IMACID s performance over 11 months * Post consolidation 4
Financials EBIDTA 1200 8% 2 R G A C in Rs. crore 1000 800 1101* 809* 320 158 600 400 200 415 460 516 FY03 FY04 FY05 651 781 0 FY06 FY07 * Post consolidation 5
Profit After Tax 600 7% 2 R G A C in Rs. crore 500 400 508* 428* 64 75 300 200 100 197 221 FY03 FY04 341 353 FY05 FY06 444 0 FY07 * Post consolidation 6
Distribution of Rupee Earned FY 2006 V/s 2007 Others 5% STPP 3% Other Income 3% Soda Ash 19% Cement 4% Vacuum Salt 8% Urea 19% Others 5% Other Income 3% STPP 4% Cement 5% Salt 8% Urea 20% Complex Fertilizers 37% Complex Fertilizers 39% 2006 Soda Ash 18% 2007 7
Distribution of Rupee Deployed FY 2006 V/s 2007 Retention 6% Dividend Financial 4% Retention 5% Dividend 4% Financial Taxes4% 4% Taxes 9% 8% Overheads 5% Overheads 5% Distribution 9% Materials 62% Employee 3% Materials 60% Distribution 8% Employee 4% 2006 2007 8
Revenue Split - Consolidated Chemicals 54% Fertilisers 46% 9
FY 2007 Debt Split Debt-Equity Perspective 19% 6 44% 36% 5.9 5 Reducing interest cost (% of sales) 1% Banks/Others Term Loans Cash/ Packing Credit 4 (%) FCCB Total Debt 4500 4044 3500 Rs. crore 2221 Shareholder's Equity 4438 2573 3 2 2.0 2500 1 1500 500-500 1823 FY 2006 1.3 1865 FY 2007 1.4 0.8 0 FY 03 FY 04 FY 05 FY 06 FY 07 10
Credit Ratios Interest Coverage ratio Net Debt/Equity 25 0.8 0.7 19.4 20 0.6 0.6 0.5 15 10 5 0.7 0.3 0.4 0.4 12.9 10.1 0.2 3.9 0.3 0.2 7.4 0.1 0 FY03 - FY04 FY05 FY06 FY07 11
Financial ratios Category Profitability Shareholder Returns Cash Generation Stability Activity Unit FY 2005 FY 2006* FY 2007* EBITDA Margin % 17 19 17 Net Profit Margin % 11 11 9 Earnings per share INR 15.8 19.9 23.62 Networth per Share INR 93 103 111 Dividend Yield % 5 3.5 3.6 Market to Book Value Times 1.5 2 2.01 EBITDA Rs. crore 516 809 1101 Debt : Equity Times 0.7 0.8 0.7 Interest Coverage Times 19.4 12.90 10.1 Fixed Asset Turnover Times 1.9 2.16 2.3 Avg Debtors Velocity No. of Days 49 52.78 53 No. of Days 64 61.59 47 No. of Days 59 48.48 32 Avg Inventory Turnover Cash cycle * Post consolidation 12
Financial snapshot (Rs in crore) FY 2006 TCL Sales FY 2007 IMACID / BMGL Consolidated (Jan to Mar 06) TCL IMACID / BMGL Consolidated 3,518.6 599.3 4,034.4 3,991.0 1,922.3 5,809.6 EBITDA 651.2 145.2 809.6 781.0 320.0 1,100.9 EBIT 512.2 100.1 625.6 630.6 196.5 827.0 Net Income 353.0 70.8 428.3 444.2 86.9 508.0 EPS 16.41 19.91 20.65 1 23.62 After reducing provision of USD 58.7 mn for the deficit in BMG s pension liability) 13
Shareholder Returns 23.6 24 19.9 224 200 201 180 160 15.8 16 140 138 12 8 10.9 120 10.3 103 7.0 6.5 5.5 5.0 7.0 8.0 60 55 40 40 FY '02 100 80 5.5 4 0 220 Rs Rs. per share 20 240 20 FY '03 FY '04 EPS Dividend FY '05 FY '06 FY '07 Average Market Price Improved Shareholder Returns 14
The Road Ahead The Future Tata Chemicals 15
A Typical Mithapur Salt pan Tata Chemicals today is the>> 3rd largest soda ash manufacturer in the world #1 soda ash player in India Market leader in edible salt market Most energy efficient urea 1/3rd stake in IMACID, Presence in Agri inputs & Agri Solutions Morocco manufacturer in India 16
Global Presence UK Netherlands Morocco India Kenya South Africa Facilities Markets 17
Our Major Customers 18
TCL today is.. The TATA Company with the largest number of customer touch-points a company with a wide array of Customers: Detergent manufacturers Glass manufacturers Builders/ Contractors/ masons Chemicals / dye / dyechem manufacturers Paper and newsprint manufacturers Textiles manufacturers Petroleum refiners Food manufacturers Farmers Housewives 19
Getting where we are today was not easy Some of the challenges we had to overcome: Global competition & lower Customs Duties More demanding customers Intense price competition in Soda Ash industry Difficult regulatory environment on Fertilisers More stringent environmental regulations 20
Solutions & Responses Improvements in Operational Efficiency Strong Customer Focus Building People Competencies Strategic Sourcing & Improved Supply Chain Management Continuous Improvement Responsible Care & Focus on SHE Cultural Change 21
Additionally Visionary & Bold Decisions Benchmarked with the Best Succeeded in de-commoditising our businesses TKS in Fertiliser Space Branding most commonly used commodity Salt Relationship building though KAM for Chemicals 22
Superbrand - Ranked # 1 food brand by Economic Times Thrice in a row Tata Salt - pioneer in branded salt market Nationwide distribution - over 43 million households Integrated operations at Chemical site - Embedded competitive advantage Business with social objective first Iodized Salt (goitre) 23
Now offering in addition to Farm Inputs Advisory Services Insurance of input investment Soil Testing 589 TATA KISAN SANSAR OUTLETS Output Purchase Crop Loans Farm Machines 24
TCL has outperformed Indian & World Chemical Companies Market Value Indexed at 100 on Jan 2000 450.00 TATA CHEMICALS 400.00 350.00 INDIA CHEMICALS 300.00 250.00 200.00 INDIA MARKET 150.00 100.00 WORLD CHEMICALS 50.00 Jan-06 Jan-05 Jan-04 Jan-03 Jan-02 Jan-01 Jan-00 0.00 WORLD MARKET 25
26
Where we want to be The of tomorrow New Technology: Nano Bio tech products New Products, New Businesses: Fresh Produce, Bio-Fuels Fertilisers, Salt Soda Ash Decommoditisation: From agri input to Agri Business From just salt to India s number 1 food brand From traditional B to B, to Key Account partnerships 27
The Fresh Produce Business Leveraging the TKS Network Focusing on what matters the supply chain Partnering with TOTAL PRODUCE 100 years of expertise Sequential roll-out Punjab and West Bengal In 2007-08 2 Distribution Centres In 3 years 20 Distribution Centres In 5 years 40 Distribution Centres A 160,000 Cr. market 28
The Bio-fuels Business 1. Proposed entry into both Bio Diesel and Bio Ethanol 2. Trial cultivation of non-food agricultural feedstock commenced in both cases 3. Dual approach conventional technology & advanced new technologies (concurrent development) 4. Development of novel technologies is the responsibility of the Innovation Centre (Pune) 29
Existing Businesses will also Grow De-bottlenecking of Babrala has commenced Modernisation Of Mithapur A Global Bi-carb Business Magadi Output will Is taking shape Double in 2008 Has commenced 30
The Innovation Centre 1. Based in Pune 2. Focus on the Bio-Nano space 3. 20 scientists going to 100 in 2 years time & ~500 in the longer-term 4. Current Focus Areas: Bio Diesel cleaner & simpler trans - esterification Bio Ethanol Enzyamatic Cellulosic conversions Nano Materials, Bio Materials & Advanced/Smart Materials 25% Research into Blue Sky areas 31
THANK YOU Is looking forward to an exciting future! 32
33