FINOLEX INDUSTRIES LIMITED INVESTOR PRESENTATION JUNE 2016 - PowerPoint PPT Presentation

FINOLEX INDUSTRIES LIMITED INVESTOR PRESENTATION JUNE 2016

Contents Overview 3 Government Policies 17 Milestones 4 Branding 19 Business Segments 5 Balance Sheet 21 Products 6 Profit and Loss Account 22 Manufacturing Plants 7 Segmental – Profit and Loss 23 Pan India Reach 9 Q4 & FY16 Results Summary 24 Financial Highlights 10 Quarterly - Profit and Loss 29 Key Performance Indicators 11 Green Initiatives 31 Value Chain 13 Corporate Social Responsibility (CSR) 32 Business Model 14 Accolades and awards 33 Key Strategies 15 Shareholding Pattern 34 Union Budget Highlights 2016-17 16 Disclaimer: No part of this presentation is to be circulated, quoted, or reproduced for any distribution without prior written approval from Finolex Industries Limited, Chinchwad, Pune-411 019, India. Certain part of this presentation describing estimates, objectives and projections may be a “forward looking statement” within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied. 2

Back to Contents page Overview Leading brand in Largest backward One of the largest PVC 43 MW power plant Indian PVC pipe integrated pipe and resin manufacturer for captive and fittings fittings manufacturer in India consumption in in India Ratnagiri 3

Back to Contents page Milestones Incorporated as Set-up a PVC resin plant FIL started FIL proudly celebrated FIL introduced LEAD FIL started a new FIL set up a warehouse PVC pipe at Ratnagiri manufacturing PVC 25 years of its success FREE Plumbing pipes as manufacturing plant at at Delhi and Indore manufacturing pipes at Ratnagiri to and the PVC Resin per ASTM Standards Masar, near Vadodara company. Setup PVC meet its growing capacity was expanded in Gujarat. pipe plant at Pune demand and introduced from 1,30,000 MT to ASTM Pipes to cater the 2,60,000 MT. Further need of Plumbing sector expanding its product range, FIL launched ASTM fittings to its product portfolio 1981 1981 1985 1985 1994 1994 1996 1996 1999 1999 2002 2002 2006 2006 2007 2007 2008 2008 2009 200 2012 20 12 2014 2014 2015 2015 2016 2016 PVC Pipes and PVC Resin plants at FIL started a brand FIL became India’s Ratnagiri were new state-of-the-art first manufacturer of awarded the IS14001 unit for manufacturing PVC pipes and fittings certificate for FIL introduced agriculture pipes and FIL pioneered the to be awarded the ISO Environment Underground casing pipes at Urse, FIL set up a Expanded PVC Pipes concept of “ Ringfit ’ 9001: 2000 Management Sewerage Pipes as Pune with the capacity warehouse at Cuttack and Fittings capacity pressure pipes. certification. Systems. per IS: 15328 – 2003. of 28,000 MT p.a. (Odisha) to 280,000 MT PA 4

Back to Contents page Business Segments With 3 manufacturing plants having a combined With a capacity of 272,000 mtpa of PVC resins, 43 MW power plant at Ratnagiri (Maharashtra) is capacity of 280,000 mtpa FIL offers a wide range of backward integration gives FIL the unique advantage of entirely for captive use and provides uninterrupted PVC pipe & fittings for diverse applications in a consistent quality and availability of raw material. . power to FIL's production facility there. agriculture and non-agriculture sectors including With the rising internal consumption of PVC resins, housing, industrial and construction. FIL’s business model is increasingly transforming to be B2C. 5

Back to Contents page Products Agricultural Pipes & Fittings Agricultural pipes & fittings Column pipes Casing pipes Solvent Cement Plumbing & Sanitation Pipes & Fittings SWR Pipes & Fittings ASTM Pipes & Fittings CPVC Pipes & Fittings Solvent Cement Sewerage Pipes 6

Back to Contents page Manufacturing Plant PVC resin Plant at Ratnagiri Storage PVC tanks resin for raw storage material section 7

Back to Contents page Manufacturing Plant PVC pipe Extruders plant at plant Storage Extruder area for lines PVC fittings 8

Back to Contents page Pan India Reach PVC Pipe Manufacturing Unit : Masar, Gujarat Delhi Indore Masar Corporate Office: Chinchwad, Maharashtra Warehouse : Chinchwad, Maharashtra Cuttack PVC Resin, PVC Pipe Manufacturing Unit & Chinchwad Pune Captive Power plant at PVC Pipe Manufacturing Unit Ratnagiri, Maharashtra Urse Urse, Pune, Maharashtra Ratnagiri Corporate Office Works Warehouse Branch Office Dealers Over 700 dealers and 17,000+ retail touch points across the length and breadth of India 9

Back to Contents page Financial Highlights Pipes and Fittings Sales Volume (MT PA) Revenue breakup (INR Mn) Total Revenue from 19,777 20,998 21,448 24,530 24,761 24,528 Operations 14,570 11,821 10,969 10,901 10,362 8,998 194,225 173,884 165,998 164,018 140,368 129,324 FY11 FY12 FY13 FY14 FY15 FY16 Pipes Fittings Resins Sales Volume (External) (MT PA) 171,460 161,986 FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 PVC Pipe & Fittings 9,056 10,534 13,559 15,113 16,395 17,821 124,122 121,423 116,217 PVC Resin ( external sales) 8,907 9,051 7,115 8,664 7,680 6,696 106,771 Power ( external sales) 1,148 544 493 154 32 11 FY11 FY12 FY13 FY14 FY15 FY16 10

Back to Contents page Key performance indicators ROE EBITDA Margin* Gross Debt (INR mn) 10,424 15.3% 8,394 24.4% 7,466 11.9% 7,134 6,371 12.3% 2,117 FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 ROCE Debt/Equity (x) Fixed Asset Turnover (x) 2.86 27.7% 1.20 10.7% 2.29 0.20 FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 *Standalone EBITDA Margin (EBITDA before Exceptional item and other income) 11

Back to Contents page Key performance indicators standalone 77 9,578 Book Value per Share (INR ) Networth (INR Mn) 7,897 7,874 64 63 7,212 58 6,621 53 6,203 50 FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 18.8 63.94%* 62.33% Dividend payout (%) EPS (INR ) 13.7 11.0 59.73% 58.27% 57.57% 57.16% 6.1 6.1 3.9 FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 * FY16 – INR 10 per share dividend recommend by the board. 12

Back to Contents page Value chain 13

Back to Contents page Business Model PVC Pipe – Addressable Market Key revenue driver – mainly PVC pipes and Key cost components - fittings segment, with EDC, Ethylene and VCM steadily increasing in- are key raw materials house consumption of for PVC production the PVC resin Margins improvement Market wise sales are initiatives are distributed between underway, however, Agriculture (70%) and raw material prices FIL – 280,000 MT p.a. Non-agriculture (30%). movement does 25% share in organised Non-agriculture is impact operating market mainly construction margins in PVC resin segment Operating under cash-n-carry model 14

Back to Contents page Key Strategies MARGIN IMPROVEMENT CAPACITY EXPANSION Increase sales of higher margin products. Increase installed capacities of PVC pipes Scale up share of fittings in sales mix. and fittings by 30,000 MT each year till FY18E with a capex at INR 300 mn p.a CASH-N-CARRY Cash-n-carry model to keep the balance sheet light BRANDING Growing brand and quality consciousness amongst consumer 15

Back to Contents page Union Budget 2016-17 Highlights Agriculture Sector Agriculture Sector Other highlights • Allocation for Agriculture and Farmers’ welfare is INR • Implementation of 89 irrigation projects under AIBP will • Allocation for rural sector - INR 87,765 crore. be fast tracked. This will help to irrigate 80.6 lakh 35,984 crore • Every block under drought and rural distress will be ‘Pradhan Mantri Krishi Sinchai Yojana ’ to be hectares. These projects require INR 17,000 crore next taken up as an intensive Block under the Deen Dayal • year and INR 86,500 crore in the next five years. To implemented in mission mode. 28.5 lakh hectares will Antyodaya Mission be brought under irrigation. ensure that 23 of these projects are completed before Krishi Kalyan Cess, @ 0.5% on all taxable services, • • A dedicated Long Term Irrigation Fund will be created in 31st March, 2017 w.e.f. 1 June 2016 for resource mobilisation To support farmers in the aftermath of natural NABARD with an initial corpus of about INR 20,000 • • Surcharge levied at 7.5% of undisclosed income will be crore calamities, Government has revised the norms of called Krishi Kalyan surcharge to be used for assistance under the National Disaster Response Fund • Programme for sustainable management of ground agriculture and rural economy water resources with an estimated cost of INR 6,000 in April 2015 crore will be implemented through multilateral funding • Special focus has been given to ensure adequate and timely flow of credit to the farmers. Against the target of • A provision of INR 15,000 crore has been made in the BE 2016-17 towards interest subvention Allocation INR 8.5 lakh crore in 2015-16, the target for agricultural credit in 2016-17 will be an all-time high of INR 9 lakh under Prime Minister Fasal Bima Yojana INR 5,500 crore crore Focus on enhancing expenditure in priority areas of - farm and rural sector, social sector, infrastructure sector employment generation and recapitalisation of the banks. 16