Corporate Milestones

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					10th CLSA India Forum 2007 Asahi India Glass Ltd.
Corporate Presentation

16th November, 2007
1

Index
    Corporate Profile India Story AIS Core Markets Business Operations - Auto Glass - Float Glass

- Glass Solutions
  Opportunities & Plans Strategy & Key Focus Areas



Financial Results

2

Corporate Profile
 Largest integrated glass company in India, manufacturing wide range of international quality automotive safety glass, float glass, value added glass like reflective glass, mirror, architectural processed glass and glass products.
 Jointly promoted by Labroo family (Sanjay Labroo and his parents, Brij & Kanta Labroo), Asahi Glass Co., Ltd., Japan and Maruti-Suzuki.  Commenced operations and made initial public offer of USD 468,000 in 1987, which largely remains undiluted. Shares are listed at BSE and NSE.  Promoters hold 55.6 % of paid up equity capital of AIS, and the remaining 44.4 % equity is held by public.  AIS has three operating business units : - AIS Auto Glass - AIS Float Glass - AIS Glass Solutions  AIS recorded gross sales & operating profits of USD 224.87 million & USD 41.21 million in FY 07. 3

Corporate Profile
AIS in 1987 • Single Plant at Rewari • Single Customer - Maruti Suzuki AIS in 2007 •Eleven Plants in Four Locations •Customer base which includes : •Auto OE’s, •Glass distributors and dealers spread all over the country. •Full range of automotive safety glass, float glass, architectural processed glass and glass products. •Pan India presence. •India’s largest integrated glass company with a meaningful presence in every part of the automotive and architectural glass businesses capturing value across the complete glass chain, with the following market share : •Auto – over 80 % •Float – 29 %, going to over 35 %, post Roorkee start up •Glass Solutions – estimated at 18 %, gaining leadership position within first year of operations
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• Single Product Tempered Glass • Single Location • Single business segment - Auto Glass

Corporate Profile AIS : 1987-88 TO 2006-07
Sl. No. ITEM 1987-88 2006-07

CAGR
26% 23% 25%

1.
2. 3. 4.

Gross Sales (US$'s mill.)
EBITDA (US$'s mill.) EBDT (US$'s mill.) OPM % (EBIDTA / Net Sales)

2.87
0.69 0.42 34

224.87
41.21 32.35 22

These figures contain, in brief, the story of AIS’s growth from a supplier of automotive tempered glass to Maruti Udyog (Suzuki) when we began, to the current situation of India’s largest glass company, with profitable growth flowing from all the actions taken since the birth of the organization.

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Corporate Profile – Key Initiatives
Creating Shareholder Value Business De-risking Market Capitalization growth at a CAGR of over 43 % in 19 years. AIS’s transition from Auto Glass Manufacturer supplying a single customer to becoming India’s largest glass company. Benchmarking AIS’s operational performance to global levels and setting out targets & milestones to achieve these levels. Providing stakeholder satisfaction through superior Safety, Environment, Quality, Cost, Delivery, Development, and Management Building relevant self-sufficiency in technology, going beyond product development to developing and building glass processing equipment at the lowest competitive costs.

Quest for excellence

Value to Stakeholders through SEQCDDM Technology Development

Expanded capacities for automotive safety glass, float glass and architectural processed glass at Chennai, Taloja (Mumbai), Rewari and Roorkee during FY 2004-07, spanning the entire glass value chain. 6

AIS Operations : Plant Locations
Roorkee:
1. 2. Float Glass Solutions Mirror Reflective Glass Auto Glass

Rewari:
1. 2. Auto Glass Glass Solutions

3. 4. 5.

Taloja:
1. 2. Float Glass Solutions

Chennai:
1. 2. Auto Glass Solutions

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India Story…
4th Highest GDP in PPP terms
14,000 12,000
UK

2nd Highest GDP growth 2003-2006
France Japan

10,000
In USD Bn

Canada USA Brazil Mexico

8,000 6,000 4,000

Russia

2,000 0 USA China Japan India Germany

India China 0.00 2.00 4.00 6.00 8.00 10.00 12.00

among the top 5 economies one of the fastest growing economies
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India – Consumption Driven Growth
• Rising Income level
60 yrs & above 7%

9 - 14 yrs 35%

15 - 59 yrs 58%

+

• Increasing consumerism

Increasing Consumer spend

• Largest youth population • Growing literacy rate • Large pool of professionals and technocrats

• Growing availability of retail credit

AIS Core Markets - Automotive and Real Estate / Construction Sectors among the key beneficiaries

9

Indian Automotive Industry
Government of India SIAM ACMA Automotive Mission Plan 2016
On 29.01.07, the Prime Minister released
Automobile Plan 2006 -2016 to give a road map to Indian Automobile Industry

Increase turnover to $145 billion by 2016 from $ 35 billion at present

Increase export revenue to $ 35 billion by 2016 from $ 4.1 billion at present

Provide employment to additional 25 million people by 2016

By 2016, the Automotive sector is expected to contribute 10% of the country’s GDP and 30~35% of the Industry
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Automotive Components Industry
Automotive Mission Plan 2016

ACMA VISION 20:20:1

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Achieve $20 billion in Domestic Sales

20:20:1

20

Achieve $20 billion in Exports Sales

VISION

1

20:20:1

Create 1 million additional Jobs

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Indian Automotive Industry - Growth Drivers

Higher GDP growth India’s huge geographic spread

Increasing Road Development, Golden Quadrilateral
Increasing disposable income with the service sector Easier finance schemes Replacement of aging four wheelers Graduating from Two wheeler to Four wheeler Increasing dispensable income of rural agri sector

Growing Concept of Second Vehicle in Urban Areas

Two wheeler story could be repeated in the car segment

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“INDIA” – A Base for Compact Cars
Maruti Suzuki : • New car plant to make 250,000 cars per annum (total 800,000 cars/annum) Tata Motors : • New plant to manufacture 100K car in West Bengal with an investment of US $ 0.24 Billion.

• 10 new Component JVs to support new Diesel Engine Plant.
Hyundai : • Increase capacity to 400,000 cars per annum over next 1 year. Nissan • Team up with Mahindra & Mahindra and Renault to invest in a $905 million car project in India, capacity to produce 400,000 units in seven years.

Toyota :
• Target of 200,000 units capacity by 2008. General Motors :

• New Capacity to manufacture GM Spark small car by 2007.
Nissan Compact SUV

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Real Estate – Industry Dynamics & Potential
• Market expected to grow at 33 % thru 2005-10 from $ 12 bn to $ 50 bn • Housing : current shortage seen at ~ 19.8 million housing units • 5x increase in office space over next 3-5 years • Over ~ 200 mn sq ft for organized retail by 2010 • Over ~ 50,000 new hotel rooms in the next 5 years

Indian Realty – Intact Opportunity
• Rising disposable income • Shift from rented to owned house • Easy access to financing • Nuclear families • Retail / IT / ITES / BPO • Improving regulatory framework
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Real Estate Boom – Glass Demand
• Indian Realty Plans, even assuming a 50% success rate, likely to radically alter business for construction companies and others like cement, steel, glass and increase the historical 11% p.a. growth rate to much higher levels in glass. • Architectural design for all the upcoming buildings being highly glassoriented, a massive pipe line for glass demand is building up which will be visible shortly. • Growing keenness to shrink construction time by using new products will further create huge business potential for glass products like window systems. • Drive towards energy conservation and environmental consciousness, through energy conservation building code, green building code and other safety norms, as being planned currently, will push glass and especially processed glass consumption rapidly. • Enormous potential for glass is clearly visible, considering a very low per capita glass consumption in the country, with processed glass constituting only around 7 - 8 % of the total glass consumption, unlike 15 in other countries.

AIS Operations : Auto Glass SBU



  





Largest manufacturer of world class automotive safety glass Total production capacity of approx. 3 million car sets, with state-of-the-art manufacturing facilities at Rewari and Chennai and Roorkee. Sole supplier to almost the entire Indian passenger car industry, with current market share of over 80 %. Significant presence in the after market, with a market share of approx. 50% in terms of value. Offering full range of automotive safety glass including Laminated Safety Glass, Tempered Glass for side and back lites, Value-added Glass, Defogger Glass, Encapsulated Glass. Sales made directly to OE customers and through two nation-wide distributors, with 27 depots, to the direct after market, covering the length and breadth of the country. Customers include Maruti-Suzuki, Hyundai Motors, Tata Motors, Toyota, Honda, Mahindra & Mahindra, Ford, General Motors, Hindustan Motors, Fiat India, Volvo, Eicher, Piaggio, Swaraj Mazda.

• Retaining leadership position

• Current market share of over 80 %
• Sole supplier to almost all the OEs in India • Best positioned to meet growing demand in domestic and export markets

16 Auto Glass SBU awarded the Deming Application Prize for 2007 in October, 07

Vehicle Production

Car & MUV production - Apr - Sep

1000000 900000 800000 700000 600000
Nos
7% growt 29% growt 28% growt 18% growth 14% growth

500000 400000 300000 200000 100000 0
2000-01
Catg I -4% 2%

2001-02
Catg II

2002-03
Catg III

2003-04
Catg IV

2004-05
Catg V

2005-06
MUV

2006-07
Total

2007-08

Growth over previous period growth

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Share of business in car segment
Share of Business in Cars

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 01-02 02-03 03-04 04-05
Temp Avg

05-06 06-07 Apr-07 May- Jun-07 Jul-07 Aug-07 Sep-07 Upto 07 Sep 07 Lam Avg Temp Lam
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Segmentwise Net Sales
AIS Auto Sales (Rs Lacs)

24000 22000 20000 18000 16000 14000 12000 10000

7%

81% 79%

8000 84% 6000 4000 2000 0 Apr- Sep 01 Apr- Sep 02 OEM Apr- Sep 03 OE Spares Apr- Sep 04 AFM Apr- Sep 05 Exports Apr- Sep 06 Total Sales Apr- Sep 07 80% 73% 76% 83%

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AIS Operations : Float Glass SBU
  AIS Float Glass, the erstwhile Floatglass India Ltd. (FGI), is the leading manufacturer of international quality float glass. State-of-the-art manufacturing Plant at Taloja, near Mumbai. Second plant at Roorkee has become operational from January, 2007, increasing capacity from the existing level of 500 TPD to 1200 TPD. Roorkee Plant has manufacturing facilities for world-class heat reflective glass and mirrors also. Current market share of approximately 29 % of the Indian float glass market, like to increase to over 35 %, with commissioning of the Roorkee Plant. Product range includes of float glass of thickness of 2mm – 12mm, with products like clear float glass, tinted (heat-absorbing) float glass, heat reflective glass, mirrors and Glaverbel’s product range. Country-wide sales & marketing network, comprising over 450 authorized stockists, field sales personnel, zonal offices and area representatives. Turned around performance of the erstwhile Floatglass India Ltd. (FGI) after its take over in FY 2001-02 and successfully integrated it into AIS.
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  



Indian Flat Glass Industry : Demand / Supply (MT / D)

Designed Capacity Total Supply Total Demand

2002 2775 2139 1317

2003 2775 2139 1554

2004 2700 2093 1801

2005 2700 2118 2153

2006 3250 2524 2338

2007 3640 2815 2447

4000 3500 3000 2500 2000 1500 1000 500 0 2002 2003 2004 2005 2006 2007 Designed Capacity Total Supply Total Demand

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Share of Business – Float & Sheet Glass (Flat Glass)

COMPARATIVE DOMESTIC SALES DATA
45% 40% 35% 30%
26% 39%

36%

28%

26%

25% 20% 15% 10% 5%
0%

17%

9% 3% 3%

8% 7%

0%
AIS GGL SGIL TRIVENI HARYANA GBL

Apr06-Sep06

Apr07-Sep07

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AIS Float Glass SBU - Sales & Production Quantity

Sales Qty
6000 5000

CSQM '000'

4000 3000 2000 1000 0 Apr May Jun Jul Aug Sep Average

Apr-Sep'06

Apr-Sep'07

Production Qty
6000 5000

CSQM '000'

4000 3000 2000 1000 0 Apr May Jun Jul Aug Sep Average

Apr-Sep'06

Apr-Sep'07

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AIS Float Glass SBU - Sales Distribution
DOMESTIC ZONEWISE VOLUME
100% 80% 60% 40% 20% 0%
Apr~Sep'06 Apr~Sep'07 9% 9%

18% 19%
29% 20%

44%

44%

NORTH

SOUTH

WEST

EAST

IGG

Sales by Thickness
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Apr~Sep'06 Apr~Sep'07
100%

Sales by Product

0% 32%

1% 1% 33%

12%

21%

90% 80% 70% 60% 50%

88%

79%

40% 30% 20% 10% 0% Apr~Sep'06 Apr~Sep'07

68%

65%

2~6

8~12

CLEAR

TINTED

REFLECTIVE

MIRROR

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AIS Float Glass SBU - Market Breakup

Market Breakup Sales Qty & Value
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

3% 8%

7%

2%

19% 16%

11% 15%

89%

91% 66% 74%

Sales Qty

Sales Value Apr-Sep 06

Sales Qty

Sales Value Apr-Sep 07

Dom.

AIS

Export

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Sales Realization
Rs. per CSQM (Domestic Sale)
110 100 90 80 70 60 50 40 Apr May Jun Jul Aug Sep Apr-Sep

Domestic APR-06 ~ SEP-06 Domestic APR-06 ~ SEP-06

Domestic APR-07 ~ SEP-07 Domestic APR-07 ~ SEP-07

Rs. per CSQM (Export Sale)
110 100 90 80 70 60 50 40 Apr May Jun Jul Aug Sep Apr-Sep

Export APR-06 ~ SEP-06 Export APR-06 ~ SEP-06

Export APR-07 ~ SEP-07 Export APR-07 ~ SEP-07

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AIS Operations : Glass Solutions SBU
 AIS Glass Solutions, set up as a subsidiary of AIS in 2004-05, has emerged as the largest processor in the country, within first year of its operations. Architectural processing plants located at Taloja (Mumbai), Rewari and Chennai. The 4th plant at Roorkee has become functional from September, 2007. Product range includes high quality architectural processed glass like AIS Stronglas (tempered glass), AIS Securityglas, AIS Acousticglas (laminated glass) and insulated glass units. Introducing innovative products like windows, tabletops, partitions, shelves, shower cubicles, etc.

Glass Solutions • An innovation in value addition, offering end-to-end glass solutions • Solving customer problems about glass • Enabling customers to do more with glass • Knowledge leader in glass









National sales force, comprising 32 sales personnel and over 65 channel partners, is among the most knowledgeable sale force in the country on glass.
27

AIS Glass Solutions - Sales Trend by Zone

250 200

Sales Trend by Zone

Rs Lacs

150 100 50 0 Apr-07 M ay-07
North

Jun-07
West

Jul-07
South

Aug-07
Export

Sep-07

28

AIS Glass Solutions - Sales Trend by Product

Sales Trend by Product
350 300 250

Rs Lacs

200 150 100 50 0 Apr-07 May-07 Jun-07 Jul-07 Temp Lam IGU Aug-07 Sep-07

29

AIS – Opportunities and Plans
• AIS’s core markets - automobiles and housing / construction - poised to grow at a CAGR of 10-15 %. • Auto Glass SBU to maintain leadership status in the Indian passenger car industry and grow at a CAGR of 20 %, with projected reduction in SOB from 80 % to 72 % in next few year dictated primarily by OE’s policy of developing two vendors. Growth target to be achieved through higher OE sales, increased penetration in the after market with target market share of over 50 %, and a significant increase in export sales. • AIS’s share in the Indian float glass market to increase significantly to nearly 35 %, with commissioning of the Roorkee plant. • AIS Glass Solutions to further consolidate its leadership position by significantly boosting sales and improving margins through higher value addition and new offerings for products and services.

• AIS to grow faster than market, with higher sales growth in valueadded products and focus on long term margin improvement and cash generations.
30

AIS – Strategy & Key Focus Areas
• Follow Integrated Glass Strategy and
Captively consume nearly 50 - 60 % of AIS’s total float glass production for value-added auto glass and architectural glass products De-commoditize the glass business Improve profitability by capturing end markets and delivering value-added products and services • Improve product mix in domestic markets with a high proportion of innovative, high value-added products and solutions. -

• Export value added glass to insulate AIS from demand-supply imbalance
• Improve operational efficiencies through TQM, TPM and Lean Manufacturing practices across all plants

• Build self-sufficiency in process and product development through inhouse development to reduce costs and improving development cycle.
• Explore and exploit alternative energy sources to reduce energy cost
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AIS – Goals
• AIS Mid Term Plan, spanning through the five year period from FY 2007 to FY 2011, has set out the following goals : Top line growth at a CAGR of 20 %

-

Operating profit of over 25 %
Quality of Japan at Cost of China

• This Plan will give us Scale, Decommoditization, Customer Intimacy and Operational Excellence. • It will result in an orbital change for us wherein AIS will transform itself into a multi-location, totally integrated value added glass company with leadership in technology and product range at the lowest cost.

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VISION - SEE MORE MISSION - JIKKO
AUTOMOTIVE GLASS VALUE CHAIN
Automotive glass manufacture (AIS Auto Glass) Automotive Glass distribution (AIS Map Auto) Allied Products distribution (AIS Adhesives) Auto Glass Fitment Services (WE)

Float Glass manufacture (AIS Float)

(Light grey cells indicate our existing spread of activities)

Value Added Products : Reflective : Mirror

Processing: : Laminated : Tempered : Insulated Glass : Products

Fabrication

Installation

- Projects - Distributed Markets 33

VALUE ADDED GLASS SOLUTIONS CHAIN

AIS Results Q2 FY 08 - Consolidated
Figures in Rs. Lakhs 2nd Quarter Performance 2007-08 2006-07 Comparison Q2 Q1 Q2 vs Q1 vs last Year 24648 22500 17535 10% 41% 3916 2070 1846 2415 -569 1253 684 -42 0 642 28 218 396 15.89% 7.49% -2.31% 2611 1774 837 2424 -1587 4671 3084 -19 0 3065 24 1080 1961 11.60% 3.72% -7.05% 4239 663 3576 1442 2134 95 2229 41 0 2270 29 734 1507 24.17% 20.39% 12.17% 50% 17% 121% 0% -73% -78% -8% 212% -48% 67% -127% 1216% -69% -202% -72% -4% -70% -74% -8.29% -12.90% -14.48%

Net Sales Profitability PBDIT Interest PBDT Depreciation PBT Foreign Exchange Fluctuation PBT after Foreign Exchange Fluctuation Prior period items Impairment loss /extra ordinary exp reversed PBT Current Tax net of MAT Credit Deferred tax Liability / (Asset) PAT Margins PBDIT PBDT PBT Margins with foreign exchange gain PBDIT PBDT PBT

• Performance impacted, particularly in the float business, due to rising cost of key inputs like fuel, soda ash, packing, etc. • VRS payment of Rs. 7.5 crores to contract workers considered in the results. • Rising input cost marginally offset by higher prices of float glass in Q2. • Profit includes gain on foreign exchange fluctuations. 34

-79% 16% -80% -80% 4.28% 3.77% 4.75%

20.97% 12.57% 2.77%

32.37% 24.48% 13.71%

24.72% 20.94% 12.71%

-11.40% -11.91% -10.93%

-3.75% -8.36% -9.94%

AIS Results H1 FY 08 - Consolidated
Figures in Rs. Lakhs 2007-08 H1 Net Sales Profitability PBDIT Interest PBDT Depreciation PBT Foreign Exchange Fluctuation PBT after Foreign Exchange Fluctuation Prior period items Impairment loss /extra ordinary exp reversed PBT Current Tax net of MAT Credit Deferred tax Liability / (Asset) PAT Margins PBDIT PBDT PBT Margins PBDIT PBDT PBT 47149 6527 3845 2682 4839 -2157 5924 3767 -61 0 3707 52 1298 2357 13.84% 5.69% -4.57% H1 Performance 2006-07 Comparison H2 H1 Vs H2 Last vs last year Year 41712 34944 13% 35% 8566 2255 6311 3736 2575 853 3428 63 6 3497 84 1002 2411 20.54% 15.13% 6.17% 7648 1292 6356 2826 3530 -437 3093 9 0 3102 54 995 2053 21.89% 18.19% 10.10% -24% 71% -57% 30% -184% 594% 10% -197% -100% 6% -38% 30% -2% -6.69% -9.44% -10.75% -15% 198% -58% 71% -161% -1456% 22% -776% 19% -4% 30% 15% -8.04% -12.50% -14.68%

26.41% 18.25% 7.99%

22.58% 17.17% 8.22%

20.64% 16.94% 8.85%

3.83% 1.08% -0.23%

5.77% 1.31% -0.86%

35

AIS RESULTS : Q2 & H1 FY 08 - Details
(Rs. Lakhs) S. No. Particulars AIS (Consolidated) Second Quarter Ended 30.09.07 30.09.06 Change 29652 21039 41% 24648 17536 41% 1410 1273 11% 26058 18809 39% 20890 14475 44% -814 -2432 -67% 6707 6785 -1% 5686 3216 77% 2217 1282 73% 2050 1416 45% 5044 4208 20% 5168 4334 19% 2070 3098 0 2415 0 42 641 0 64 218 27 -63 0 395 14 -27 436 1599 663 3671 4 1438 0 -41 2270 169 734 26 -166 0 1507 27 6 1528 1599 212% -16% Half Year Ended 30.09.07 30.09.06 Change 56783 42146 35% 47148 34944 35% 6159 1306 372% 53307 36250 47% 40856 29039 41% -3034 -3678 -18% 14187 13009 9% 11058 6394 73% 4113 2343 76% 3895 2731 43% 10637 8240 29% 12451 7211 73% 3845 8606 1 4838 0 61 3706 300 1298 50 -298 0 2356 36 -53 2445 1599 0 1.53 1292 5919 7 2819 0 -9 3102 231 995 45 -222 0 2053 45 16 2082 1599 0 1.30 198% 45%

1 2 3 4

5 6 7 8 9 10 11 12 13

Gross Turnover Net Turnover Other Income Total Revenue Total Expenditure a. (Increase)/Decrease in Stock-in-trade b. Materials Cost c. Power and Fuel d. Stores and Spares Consumed e. Staff Cost f. Other Expenditure Gross Profit before Depreciation, Interest and Tax Interest Gross Profit after Interest but before Depreciation and Tax Deferred Revenue Expenditure Written off Depreciation/Amortisation Impairment Loss/(Reversal) Prior Period Adjustments Profit Before Tax Provision for Taxation a. Current Tax b. Deferred Tax Liability (Net) c. Fringe Benefit Tax d. MAT Credit Entitlement Income Tax Paid for Earlier Years Profit After Tax Share of Profit of the Associates (Add)/Less : Minority Interest Net Profit Paid up Equity Share Capital (Face value of Re. 1/- each) Reserves (Excluding revaluation reserves) EPS - Basic and Diluted (in Rs. not annualised)

68%

72%

-72% -62% -70% 4%

19% 30% 30% 11%

14 15 16 17 18 19 20 21

-74% -48% -71% 0%

15% -20% 17% 0%

0.27

0.96

-71%

17%

36

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