Analyst Presentation FY13 Mr. Arnob Mondal May 22, 2013 - PowerPoint PPT Presentation

Analyst Presentation – FY13 Mr. Arnob Mondal May 22, 2013

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 are 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. Past performance may not be indicative of future performance. 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. 2

Presentation Outline Standalone Performance Segmental Performance Presentation Outline Group Performance Sectoral Opportunities & Outlook 3

Presentation Outline Standalone Performance Segmental Performance Presentation Outline Group Performance Sectoral Opportunities & Outlook 4

Performance Highlights – FY13 25% 14% 2% Order 10% Sales Inflow EBITDA 5% PAT Order Book 5

Sustaining Profitable Growth Order Inflow Net Sales 609 880 532 804 706 439 ` Billion 695 370 ` Billion 339 517 FY 09 FY 10 FY 11 FY 12 FY 13 FY 09 FY 10 FY 11 FY 12 FY 13 Order Book Recurring PAT 1,536 47.0 1,457 44.1 1,309 36.8 1,004 31.8 ` Billion ` Billion 27.1 708 FY 09 FY 10 FY 11 FY 12 FY 13 FY 09 FY 10 FY 11 FY 12 FY 13 6

Order Inflow & Order Book Amount in ` Bn Order Book Order Inflow 880 706 279 25% 5% 212 Q4 195 171 1,536 Q3 1,457 210 Q2 161 Q1 196 162 FY12 FY13 FY12 FY13 Capabilities in a diversified business portfolio has yielded strong Order Intake Thrust being given on expansion of international footprint Strong Order book affords stable forward visibility of operations Near term non-executable orders removed from Order backlog based on management judgment 7

Profile of Orders – FY13 Sectoral Break-up Order Inflow: 30% 45% 10% 6% 9% ` 880 Bn ` Order Book: 5% 49% 28% 8% 10% ` ` 1536 Bn Infrastructure Power Hydrocarbons Metals & BMH Others Infrastructure Power Hydrocarbons Metals & BMH Others  Roads and  Generation  Upstream  Ferrous  Shipbuilding Bridges  Equipment  Mid &  Non Ferrous  Defense &  Ports  Industrial Downstream  Bulk Material Aerospace  Airports Electrification  Pipelines Handling  Construction &  Railways /  T&D  Fertilizer Mining Eqpt. Metro Rail  Electrical &  Urban Infra Electronics  Factories  Technology  Water Services 8

Order Composition – FY13 3% 6% 6% 10% 11% 14% Geographical Order Net Order Break-up Book Sales Inflow 80% 87% 83% Domestic Middle East Others 6% 13% Order Order 35% 59% Inflow Book 53% 34% Customer Profile Private Public Concessions Business - L&T 9

Performance Summary – Sales to EBITDA Q4 FY13 Q4 FY12 % Change FY13 FY12 % Change ` Billion Net Sales / Revenue from 202.94 184.61 10% 608.73 531.71 14% Operations (A) 36.50 23.35 56% ----Export Sales 121.10 62.11 95% 161.99 143.14 13% Mfg, Cons. & Opex (MCO) 479.52 410.22 17% 11.35 9.78 16% Staff Costs 44.36 36.66 21% 5.09 6.08 -16% Sales, adm. & other Exp. 20.78 22.00 -6% 178.43 159.00 12% Total Opex (B) 544.66 468.88 16% 24.51 25.61 -4% EBITDA (A-B) 64.07 62.83 2% Revenue accruals in line with expected project execution in an uncertain environment Increasing share of export sales is an outcome of thrust on Internationalisation Rise in MCO expense is a result of input costs and retained inflation Staff cost increase driven by manpower addition and compensation revisions Movement in SGA cost mainly due to non linear expense items 10

Performance Summary – Operational Costs & Profitability Q4 FY13 Subcontracting charges, Material cost, 23.8% (21.8%) 48.9% Other manf. (48.8%) exp., 7.1% (6.9%) Staff Costs, FY13 5.6% Subcontracting (5.3%) charges, Material cost, 23.8% 47.1% Sales, adm. (20.2%) (49.1%) & other Exp., Other manf. 2.5% EBITDA, exp., (3.3%) 12.1% 7.9% (13.9%) (7.9%) Staff Costs, 7.3% (6.9%) Sales, adm. & other Exp., EBITDA, 3.4% Figures in brackets indicate 10.5% (4.1%) Previous Year’s Composition (11.8%) 11

Performance Summary – Profitability Q4 FY13 Q4 FY12 % Change ` Billion FY13 FY12 % Change 24.51 25.61 -4% EBITDA 64.07 62.83 2% 12.1% 13.9% -1.8% EBITDA Margins 10.5% 11.8% -1.3% (2.81) (1.21) 132% Interest Expenses (9.82) (6.66) 47% (2.22) (1.80) 23% Depreciation (8.19) (7.00) 17% 3.74 3.14 19% Other Income 18.51 13.38 38% (5.53) (6.97) -21% Provision for Taxes (17.62) (18.42) -4% 17.69 18.77 -6% Recurring PAT 46.95 44.13 6% Exceptional / Extraordinary 0.19 0.43 2.16 0.43 Items (Net of tax) 17.88 19.20 -7% Profit after Tax 49.11 44.56 10% EBITDA margins impacted by competitive forces, cost pressures, job mix and a base level of Fixed price contracts Spike in interest charge due to higher average level of borrowings and rise in funding costs Depreciation in line with programmed capex outlay Other income mainly contributed by Subsidiary dividends, property sale gains and Treasury profits 12

Performance Summary – Balance Sheet Incr / Mar-13 Mar-12 ` Billion (Decr) Net Worth 291.42 252.23 39.19 Non-Current Liabilities 83.01 61.14 21.87 Current Liabilities 347.31 362.95 (15.64) Total Sources 721.74 676.32 45.42 Net Fixed Assets 89.02 83.64 5.38 Investments / Loans to S&A Cos 141.31 127.46 13.85 Other Non- Current Investments / Assets 9.05 8.60 0.45 Liquid Assets 70.75 86.92 (16.17) Other Current Assets 411.61 369.70 41.91 Total Applications 721.74 676.32 45.42 Total Debt: Mar’13: ` 88 Bn ; Dec’12 : ` 110 Bn; Mar’12 : ` 99 Bn Gross D/E ratio: 0.30 (Net: 0.07) Support to S&A – Mainly to Developmental Projects Segmental NWC maintained at 16% of Sales Focus is on maintaining a robust Balance sheet 13

Cash Flow Statement (Standalone Co) Q1 Q2 Q3 Q4 FY13 FY12 ` Billion FY13 FY13 FY13 FY13 Operating Profit 13.15 15.03 16.51 25.70 70.38 67.74 Focus on Cash Flow management Adjustments for NWC (26.49) (3.67) (7.57) 7.17 (30.56) (35.08) Direct Taxes (Paid) / Refund - Net (2.66) (5.51) (6.19) (4.31) (18.67) (21.85) Net Cash from Operations (16.00) 5.85 2.74 28.56 21.15 10.81 Investments in Fixed Assets (Net) (3.98) (3.72) (0.36) (3.87) (11.92) (15.97) Investments / Loans to S&A Cos (Net) (12.73) 1.81 3.20 (4.32) (12.05) (20.13) (Purchase) /Sale of Long Term & Current 9.81 6.96 3.26 (3.22) 16.81 6.47 Investments & Divestments (Net) Interest & Div. Received from Investments 4.70 2.53 2.15 2.42 11.81 10.41 Net Cash from / (used in) Investing (2.20) 7.58 8.26 (8.99) 4.65 (19.22) Activities Proceeds from Issue of Share Capital 0.21 0.53 0.65 0.24 1.63 1.93 Borrowings (Net) 11.63 6.87 (11.79) (18.53) (11.82) 23.87 Dividends & Interests paid (2.03) (12.91) (2.40) (2.37) (19.71) (15.64) Net Cash from Financing Activities 9.81 (5.51) (13.54) (20.66) (29.90) 10.16 Net (Dec) / Inc in Cash & Cash Equiv. (8.39) 7.92 (2.54) (1.09) (4.10) 1.75 14

Presentation Outline Standalone Performance Segmental Performance Presentation Outline Group Performance Sectoral Opportunities & Outlook 15

Segmental Break-up – FY13 Net Revenues Machinery & Industrial Others Products 2.3% 3.6% (1.8%) Engineering Electrical & (4.5%) & Electronics Construction 5.2% 88.9% (5.8%) (87.9%) EBITDA Machinery & Industrial Others Products 5.1% Engineering 4.9% (3.0%) & Electrical & (6.7%) Construction Electronics 84.2% 5.8% (84.8%) (5.5%) Figures in brackets indicate corresponding period of the Previous Year 16