I Investor Presentation t P t ti Putting in Place the Growth Enablers Putting in Place the Growth Enablers March 18, 2010 March 18, 2010
Current Structure
DCBL - A Diversified Conglomerate Public / Others DCBL Promoters OCL Promoters Public / Others 43% 57% 25 % 30 % 45% DCBL (Listed) OCL India (Listed) • Cement Capacity - 5.3 MnT Cement Capacity 5.3 MnT Cement Integrated Sugar g g Power and Others • Plants located in Orissa • 3 rd Largest in • Plants located in • Thermal power - Southern region UP 72 MW • Refractories • Cane crushing • Plants located in • Dalmia capacity - 22,500 p y , TN and AP TN and AP Refractories Refractories 100 % TCD • Capacity - 9 MnT • Cogen - 79 MW Avnija • Distillery - 80 KLPD • 9MFY10 results 100 % • 9MFY10 results • Sales Volume • Sales Volume - Dalmia Cement Ventures Sales Volume – 3 Mn T 3 Mn T 146,735 T • EBITDA - Rs • EBITDA – Rs. 73 • Plans for 10 MT of Greenfield 321 Cr Cr. cement expansion • Realization / T • Realization / T – – Rs 3,701 Rs 26,280 • EBITDA / T– • EBITDA /T – Rs.3,869 Rs 1,095 A Cement and Sugar major which has delivered outstanding results in the past with a Revenue CAGR of ~ 40%, EBITDA CAGR of ~ 64% and PAT CAGR of ~ 51%* * All CAGR numbers over the period FY05-09 3
Cement – At Inflection Point � In capacity terms, Southern India’s third largest cement p y , g 1 600 1,600 10 10 1,471 1 471 9 player with ~ 9 MT capacity 9 1,400 1,305 8 ► Strong presence in Southern markets with Tamil Nadu and 1,218 6.5 1,200 7 Kerala accounting for 74% of dispatches (YTD Dec’ 09) 1,000 866 6 Cr ► Grown at a CAGR of over 25% in last 4 years, at a pace y , p n T 800 800 5 5 Mn Rs 3.5 faster than the industry enhancing share in key markets 4 600 2.7 450 432 399 3 ► Market share of 13% in key markets 329 400 321 1.5 2 1.4 245 ► Enjoys high EBITDA / T due to premium branding, optimal 200 1 38 57 product mix and operational efficiencies p p 0 0 0 0 2005 2006 2007 2008 2009 9M'FY10 ► Associate company OCL India Ltd (in which DCBL has Revenue EBITDA Capacity 45.4% stake) has dominance in Eastern India with a capacity of 5.3 MT � Cement Business poised for accelerated growth � Cement Business poised for accelerated growth ► Industry demand to grow at CAGR of 8-9% for FY10E- FY12E ► Having consolidating position as a regional giant – Determined to develop a national footprint Determined to develop a national footprint ► Plans to raise capacity by 10 MT by FY 2013 to capitalize on sector opportunities DCBL OCL ► Exceptional project implementation track record With Large Sector Opportunity & Size, Cement business poised for Aggressive Growth 4
Sugar – Robust Integrated Business Model Rs Cr � One of the largest sugar players in UP with 22,500 TCD 500 441 450 cane crushing capacity 378 400 � Integrated operations providing consistency in performance 350 293 � 79 MW cogen capacity of which 2/3 rd is exportable 300 250 � Installing multi-fuel boilers to create flexibility to use 196 179 200 alternative fuel enabling seamless power generation 138 150 � Favorable industry dynamics with respect to demand 100 73 60 39 28 26 50 supply mismatch pp y 12 0 2005 2006 2007 2008 2009 9M'FY10 Revenue EBITDA Moving up the sugar value chain Setting up refineries near ports would help in terms of serving the Cane Raw Refined international markets Develo Sugar Sugar pment • Better realizations • Existing plant space can be g p p Focus on Focus on utilized operating synergies and Expansion through • Can buy ethanol from other Ethanol/ productivity gains new selective Downstream players, convert to down-stream Industrial opportunities products products Alcohol • Provides opportunities for plant utilization during off season A Distinct Business line with a Distinct Cycle and Different Investor Appetite 5
Power - Gearing for Independent Growth � Self sufficient for in-house power requirements – Poised for merchant power sale � S lf ffi i t f i h i t P i d f h t l ► 72 MW of thermal power plants at Dalmiapuram and Ariyalur in Tamil Nadu ► Merchant sale to increase once Ariyalur TPP stabilizes y ► Significant uptrend in EBITDA – from Rs 10 Cr in FY09 to Rs 22 Cr in 9M FY10 � Attractive Sector Outlook � Attractive Sector Outlook P Power Shortage for the Next 5 yrs Sh t f th N t 5 ► India to remain power deficit until 2017 (GW) 100 ► Demand growth (currently 1.1x GDP) rapidly 23 83 expanding as per capita consumption barely 1/4th of expanding as per capita consumption barely 1/4th of 80 11 global average 60 40 ► Private players to be winners if they have a right blend 40 of merchant / PPA and fast execution capabilities - 22 20 DCBL demonstrated project execution capabilities 0 ► Group to leverage its understanding and experience in Incremental NTPC / SEBs Private Deficit Demand CPSUs the sector to grow as an independent business Source Source – Enam Research Estimates Enam Research Estimates Critical linkage with Cement today, yet a promising independent revenue stream 6
Resultant Structure
Restructuring – Key Considerations Delink � Sugar and Cement subject to distinct business cycles � Diverse nature of technology, risk – returns, regulations and competition titi � Opportunity to carve out independent power business Unleash Growth � Favorable industry dynamics present potent opportunities for growth DCBL Realign � Create options for Fund raising to pursue aggressive growth � Need for enabling structure to achieve long term growth objectives objectives Unlock Value � Target focused investors � Target focused investors � Eliminate valuation overhang due to conglomerate nature � Enable discovery of true value of each business 8
Restructuring Objectives U l Unlock k Shareholder Value Pursue Focused & Aggressive Growth Growth Provide Objective Provide Optimal Means for Capital Investor Profile Allocation Creation of ‘pure play’, independent entities Pure play focused entities to be the building block for the next level of Growth 9
Proposed Restructuring Plan � In a composite scheme of arrangements under section 391-394 of the Companies Act, 1956 � I it h f t d ti 391 394 f th C i A t 1956 ► Entire Cement Business (including stake in OCL and WoS Avnija), Dalmia Refractory Business and Thermal Power Plants to be demerged from DCBL into Dalmia Bharat Enterprises Ltd. and its wholly owned subsidiaries subsidiaries � Shareholders of DCBL to receive additional shares in Dalmia Bharat Enterprises Ltd. in the ratio of 1:1 � Dalmia Bharat Enterprises Ltd. to be listed on stock exchanges � Existing DCBL to continue as a listed integrated sugar company � Thermal Power assets transferred to DCB Power Ventures, a subsidiary of Dalmia Bharat Enterprises Ltd. � Company to seek approvals from Shareholders, Creditors, High Court and other Regulatory authorities � Process likely to take about 6 months 10
Resultant Structure – Unlocking Value Public / Others Promoters 57 % 43 % DCBL (Listed) DCBL (Listed) Dalmia Bharat Enterprises Ltd. Dalmia Bharat Enterprises Ltd. (to be Listed) � Sugar - 22,500 TCD � Dalmia Refractories � Distillery - 80 KLPD 100 % 100 % � Real Estate � Cogeneration - 79 MW � Cogeneration 79 MW Avnija Dalmia Power Ltd. � Operating Cement Capacity - 9 MnT 74 % 26 % Dalmia Power Ventures Ltd. 100 % Dalmia Cement Ventures Ltd. � Thermal - 72 MW � Plans for10 MT of Greenfield cement projects OCL Promoters 45 % OCL India Ltd. (Listed) 25 % 25 % � Cement capacity - 5.3 Mn T Public / Others � Refractories 30 % 11
Key Financials – Each Pie to house significant size businesses Before Restructuring Before Restructuring Post Restructuring Post Restructuring 9M’FY10 (Consol) 9M’FY10 Dalmia Bharat Enterprises In Rs Cr DCBL DCBL Ltd. Revenues 1,771 471 1,300 EBITDA 413 82 331 Depreciation Depreciation 94 94 28 28 66 66 EBIT 324 54 270 Before Restructuring Post Restructuring 9M’FY10 9M FY10 (Consol.) 9M’FY10 (Consol.) 9M FY10 Dalmia Bharat Enterprises In Rs Cr DCBL DCBL Ltd. Net Fixed Assets 2,795 617 2,178 Net Current Assets 491 244 247 Investments 471 7 463 Net Debt 1,547 486 1,061 Group committed to releasing quarterly consolidated results for Dalmia Bharat Enterprises Ltd. 12
Shareholder Benefits Unlock Value Focused, Independent Entities � Rewards DCBL shareholders with a direct stake in Dalmia Bharat Enterprises Ltd. in addition to continuation of stake � Enhances Fund raising flexibility in residual DCBL � E � Enables entry of strategic partners bl t f t t i t Listing of Dalmia Bharat Enterprises Ltd. to provide � � Separation of businesses provides insulation additional liquidity to shareholders from volatility in other businesses � Convergence with industry multiples leading to stock re-rating of both companies � No more ‘conglomerate’ discount � No more conglomerate discount Val e Value Enhancement Accelerate Growth Continued Promoter Commitment � Mirror split ensures continuation of � Fast track implementation of growth plans p g p experience and understanding of the current p g Promoters to all businesses � Increased Business and Investor focus arising from creation of pure play business entities � More freedom for efficient capital allocation A Win Win Proposition 13
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