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February 16, 2012
This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. Responses can only be given to questions which are not price sensitive.
The Asian Paints Group Today…
India’s largest paint company for over four decades
Operates in 17 countries with 24 paint manufacturing facilities
Group revenue of INR 7706 Crores (77.06 Billion) in FY 11
Business Operations – Consolidated Paints India Decorative Coatings – India Industrial Coatings – India APL – Industrial APPG APICL 81% 5% 1% APL .Paints Chemicals APPG* + APICL International 13% Sales Contribution FY 2010-11 Chemicals India International Operations * 50% of APPG considered since it is a 50:50 JV with PPG Inc. .
India Strong presence throughout the country across all product segments Introduced many innovative concept in the Indian paint industry like Small packs Exterior segment Home Solutions (painting solution service) Colour Next (prediction of Colour Trends through in-depth research) Special Effects / Textured paints Signature Store Colour Ideas Samplers .Decorative Coatings .
India Asian Paints participates in the Industrial Coatings segment directly. the largest player in auto refinish segment. through a 50:50 JV with PPG Inc. Tamil Nadu in 2008 Operates in the protective coatings. floor coatings.200 KL / year plant in Chennai. post acquisition of ICI India’s 2k auto refinish business in 2007 Commissioned a 3. of US as well as through a 100% subsidiary The Auto segment is catered through our JV (APPG) Second largest supplier to the auto segment in India Now.Industrial Coatings . road marking paints and powder coatings segment through a 100% subsidiary .
India Asian Paints and PPG to expand their existing non-decorative coatings presence in India jointly through their current 50-50 joint venture relationship (APPG).Industrial Coatings . and also by establishing a second 50-50 joint venture Industrial businesses of both Asian Paints and PPG will be part of this second JV and Asian Paints and APICL plants will toll manufacture for them Asian Paints to take the lead in the second venture and PPG to take the lead in the existing APPG JV The arrangement is subject to regularity approvals and is expected to be completed by June 2012 .
Chemicals Asian Paints also manufactures Phthalic Anhydride (PAN) and Pentaerythritol PAN is manufactured in Gujarat and Penta in Tamil Nadu More than 50% consumed internally Chemicals business contributes about 1% to the group’s consolidated revenue Its contribution to the group’s revenue has been continuously decreasing .
9% Middle East Asia 52.International Operations Contributes 13% to the group turnover Began by establishing presence in Fiji in 1978 Presence in 16 countries spread over 4 regions Middle East Caribbean South Pacific Islands Asia * Asia includes Sri Lanka.2% 24. Bangladesh and Singapore operations % sales contribution of each region – FY 2011 7. Nepal.3% Caribbean South Pacific .6% 15.
Macro Environment .
INR rose by more than 8% in the month of Jan 2012 Domestic macro indicators giving mixed signals.Macro Environment Volatile global environment has resulted in sharp movements in currencies. however IIP for November came in at 5. Inflation finally coming down WPI dropped to 7.7% in Oct 11 RBI maintained key policy rates during the last monetary review leading to expectation of easing policy going into the new year Cooling off being witnessed in global economy. making forex management a challenge for corporates INR depreciated by more than 19% in the current financial year till Dec 2011 Conversely.47% in Dec-11 after staying above 9% for most part of the year Food Inflation declined to (-3.9% after a negative 4.1%) in the month of December-11 Many industries facing slowdown. Euro zone uncertainty continues Global Commodity prices have started stabilizing Crude has remained stable during the financial year at above USD 100 levels 11 .
Presentation structure Performance: Q3 & 9M FY 2011-12 Review of Business Units Outlook and Risks 12 .
1st June 2011 Consolidated 13 Net Sales at Rs.f.0% 24.5 crores.0% 23. 2109. grew by 22% during the quarter .Sales Performance Q3 FY 2011-12 Standalone Sales & operating Income Gr rate over the same period of LY 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 12M FY11 FY11 FY11 FY11 FY 11 1st Qtr 2nd Qtr 3rd Qtr FY12 FY12 FY12 37. grew by 20.3% 6.0% Standalone Net Sales at Rs.3% 28. 2560. The Industrial business of APL was transferred to AP Coatings Ltd (A 100% subsidiary of APL) w.3% during the quarter Sales growth is to be seen in the light of last year (Q3-FY11) which was 37% more than that of the earlier year (Q3-FY10) and that itself was 27% higher than that of the year before that (Q3FY-09).e.4% 28.9% 25.5% 20.53 crores.
389.0% 20.7% Margins maintained at last year levels despite pressure on the cost front Consolidated: PAT after Minority Interest at Rs. grew by 21. 363.5% Standalone: PAT at Rs.3% 16.21 crores. 250.0% 18.0% 5.6% 18. 256.0% 10.9% 16. growth by 16.9% 17.0% 18.0% 1 Qtr 2nd Qtr 3rd Qtr 4th Qtr st FY1 1 FY1 1 FY1 1 FY1 1 1 2M FY 1 1 1 Qtr 2nd Qtr 3rd Qtr st FY1 2 FY1 2 FY1 2 20.6 % EBIT at Rs.5 crores. grew by 21. growth by 16% 14 .4 crores.86 crores.2% EBIT at Rs.Profit performance Q3 FY 2011-12 Standalone Paint Segm ent EBIT Margins 25.0% 15.0% 0.2% 19.
6% during the period Consolidated Net Sales at Rs.75 crores compared to Rs. 7071.68 crores. 861. grew by 23.Sales Performance 9M FY 2011-12 Standalone Net Sales at Rs. 765. 5875.8 crores in previous year 15 . grew by 24.2 crores.2% during the period International Operations continue to be impacted by political events and macro economic uncertainty Net Sales at Rs.
97 crores. 1034. 1104.25 crores. grew by 18. 30 crores for 9M-FY12 (Rs.1% Consolidated PAT after Minority Interest at Rs. 713.2% EBIT at Rs.Profit Performance 9M FY 2011-12 Standalone PAT at Rs. grew by 10. 15 crores in Q3-FY12) 16 . grew by 11% EBIT at Rs. grew by 17.2 crores. 729.8 crores.3% Profitability impacted due to: Significant increase in RM prices compared to previous year Price increase does not fully recover increase Unexpected depreciation of Rupee against the USD Impact of Rs.
Presentation structure Performance : Q3 & 9M FY 2011-12 Review of Business Units Outlook and Risks 17 .
Review of Business Units Decorative Business .India Industrial Operations .India International Operations 18 .
59 Cumulative price increase of 10.44 as against base of 100 of previous year Consumption Average Q1 114.05 Q2 116.e.Decoratives Business .53% during the year Price increase of 2.17% w. 2011 Overall availability of Titanium Dioxide was comfortable although high prices remain a concern Prices have leveled off for the time being The high price of crude did not allow the prices of various raw materials to soften 19 . 1st December.India Demand Conditions Good demand for decorative coatings across the country Growth in smaller towns continue to be faster than the larger cities Interior and exterior emulsions continue to lead growth Inflationary Impact Material inflation significantly high compared to previous year Consumption average for 9M FY12 stood at 117.99 Q3 121.f.
India Retailing Initiatives The total number of Colour Worlds have crossed 20.Decoratives Business .500 Delhi signature store opened in September to excellent response Tremendous response to the “Happy Painting Guide” campaign Colour Idea stores continue to receive a very good response 28 Colour Ideas stores in operation Expansion Plans Khandala project construction progressing well Phase I – 3.000 KL to be commissioned in Q4 of FY 2012-13 Rohtak Phase-II expansion initiated Phase II capacity addition of 50.00.000 KL by Q1 of FY 2012-13 Capital expenditure of Rs. 150 crores 20 .
Review of Business Units Decorative Business .India Industrial Operations .India International Operations 21 .
including Auto.f 1st June. 252.e.Industrial Operations Business Environment Industrial business. continued to face challenging conditions High pressure on margins due to increasing material cost Industrial Paints Business Figures are not comparable as industrial business including powder coating was transferred to AP Coatings w.8 crores for the Nine Months period ending Dec 2011 22 .2011 Demand for project and maintenance was buoyant in Q3 Powder Business Impacted due to slowdown in manufacturing industry Demand seems to remain subdued and challenging for the rest of the year as well Asian PPG Industries (50:50 JV for Automotive Coatings) Sales growth of 17% to Rs.
USA is restructuring its operations in India. will be filed shortly with the Hon’ble High Court of Mumbai The entire process is expected to be completed by June 2012 23 .Industrial Operations Proposed Joint Venture with PPG On Jan 24. However. encompassing all businesses of companies as originally envisaged. Asian Paints had announced about its proposed new 50:50 JV with PPG for its industrial business in India The composite scheme for Merger and Demerger was filed with the Hon’ble High Court in Sept-11. as PPG Industries Inc. the scheme has been withdrawn Revised composite scheme for Merger and Demerger. 2011.
the plant was temporarily shut down for some days and has now been restarted The repair and reconstruction work to set right the damage caused at the plant is in progress and the same is not expected to hamper production All Assets have been fully insured by us 24 . Due to the severe cyclonic storm 'Thane' in Tamil Nadu.Penta Plant In Dec 2011. some equipment and materials at the Company's Penterythritol Plant at Cuddalore in Tamil Nadu had been damaged As a result of it.
India International Operations 25 .Review of Business Units Decorative Business .India Industrial Operations .
39 8% 190.10 438.92 13.33 79.79 -26% 11. Nepal.25 -13% 17.33 66.73 -29% 98.18 -19% 26 .61 876.47 2011 +/.L Y 122.25 2011 +/.18 8.14 13% PBIT (Rs Cr) R eg ions C aribbean Middle E as t As ia S outh P acific T otal 2012 8.L Y 11. and Sri Lanka have registered good growth Markets in Middle East have still not bounced back from the political unrest and recessionary conditions Inflationary pressures continue to impact the profitability of international operations too R eg ions C aribbean Middle E as t As ia S outh P acific T otal 2012 134.05 49.International Operations Net S ales ( R s C r) Oman.04 25% 56.21 237.42 -30% 57.94 17% 776.76 9% 406.
Presentation structure Performance : Q3 & 9M FY 2011-12 Review of Business Units Outlook and Risks 27 .
Coal prices and FDI Inflation showing signs of easing. Good show by the ruling party might impact policies on Oil prices.Outlook and Risks Two Key Events to shape the outlook for the next year State Elections Annual Budget Elections in multiple states during the 4th Quarter Would impact the policies of the Central government going forward. expected to come down further Annual Budget would be a closely watched affair after the recent concerns on policy paralysis and growth Rural Demand expected to stay robust Introduction of Food security Bill expected to route spending to consumer goods 28 .
some crude derivatives show softening Depreciation of the Rupee has impacted adversely. World Bank has slashed Global growth outlook to 2. some materials like Rutile continue to rise.Outlook and Risks Overall fall in GDP growth rate might impact demand in India Weak consumer sentiments may lead to slowdown in discretionary spending in urban areas Slackening of demand being seen across many industries Raw material inflation is a global phenomena and continues to be a cause of concern Lot of volatility due to supply-demand equations.5% for 2012 leading to concerns of slowing growth Political uncertainty might add to the already recessionary conditions being witnessed in the Middle East market 29 . else softening may have been more beneficial Availability of Ti02 has eased but high prices remain a concern Internationally.
..Thank you. 30 .
Annexure 31 .
76 480.43 9.06 30.42 232.551.4% 15.2% 7.37 335. & D ef.78 3M 10-11 2.21 9.04 220.1% 15.9% 16.97 Gr % 22.7% -20.76 266.8% 18.60 1.71 28.5% 16.0% 23.68 22.253.560.Consolidated P&L – Q3 FY2011-12 (Rs in Crores) S ales & O p Inc ome Material C os t E mployee C os ts O ther E xpens es D epreciation P rofit from O perations before O ther Inc ome and Interes t O ther Income P B IT Interes t PBT C urr.6% 16.6% 32 .79 97.099.64 316.37 12.03 380.35 131.46 111.27 19.0% 54.86 26.8% 14.85 329.4% 16.2% 23.53 1.68 366.33 22. T ax P AT before Minority interes t Minority S hare P AT to parent S hareholders E PS 3M 11-12 2.18 113.3% 16.52 389.64 5.57 256.54 389.
1) 206.6% 21.7% 70.754.6 73.3 83.2 357.5 3.5 26.5 20.6 21.3 21.5 1.2 410.0% 21.2 298.8 277.5% 4.2 107.9 92.1 (0. Tax Excess/Short Provision Income Tax PAT EPS 2.4) 250.6% 21.9 25.4 (4.1 23.9% 20.3% 20.044.8 24.0% 12.1% 16.3% 33 .8% 22.5 363.1 1.& Def.2 1.5% 20.2 362.8 334.3% 21.9 337.6 294.Standalone P&L – Q3 FY2011-12 Q3 FY'12 Q3 FY'11 Gr % Net Sales and Operating Income Material Cost Employee Remuneration Other Expenditure PBDIT Depreciation Profit from operations before interest Other Income PBIT Interest PBT Curr.253.8 301.109.4 6.
66 82.31 1.53 1.87 26.25 76.0% 11.94 339.Consolidated P&L–9M FY2011-12 (Rs in Crores) S ales & O p Inc ome Material C os t E mployee C os ts O ther E xpens es D epreciation P rofit from O perations before O ther Inc ome and Interes t O ther Income P B IT Interes t PBT C urr.60 297.22 68.69 390.03 1.37 1.73 755.8% 31.12 690.321.67 1.3% 9.56 62.740.97 939.5% -20.12 83.60 324.2% 24.3% 6.002.3% 66.26 657.255.63 987.0% 34 .6% 9.23 14.03 89.104.071.61 729.056.1% 15. & D ef T ax P AT before Minority interes t Minority S hare P AT to parent S hareholders E PS 9M 11-12 7.4% 9.97 24.080.0% 11.03 9M 10-11 5.61 3.48 33.313.68 4.022.52 Gr % 23.3% 10.75 1.9% 8.2% 28.
Tax Excess/Short Provision Income Tax PAT EPS 5.3 8.4% 25.2 3.4 (2.2 (4.9 2.700.4 4.9 1.0% 13.7 62.8 74.3 1.2 74.0 875.4% 12.002.4% 12.875.3% 17.3 62.7% 16.9 24.2% 12.4 228.122.0 256.0% 18.714.2 105.9 883.0 895.5% 5.017.2 17.& Def.8) 603.2% 68.1% 114.034.3 274.1 1.8 70.6% 29.Standalone P&L – 9M FY2011-12 (` in Cr) ` 9M FY'12 9M FY'11 Gr % Net Sales and Operating Income Material Cost Employee Remuneration Other Expenditure PBDIT Depreciation Profit from operations before interest Other Income PBIT Interest PBT Curr.0) 713.494.7 1.2% 35 .0 307.6 890.0 928.5 820.
11 215.80 5.785.61 G rowth 24% 62% 17% 253% 13% 23% *50% of Asian PPG Industries sales considered **Figures are not comparable as the industrial business including powder coating was transferred to AP Coatings w.f.659.75 7.071.68 9M-F Y '11 4.42 765.82 188.P aints C hemicals AP P G * AP IC L /AP C O ** International G roup 9M-F Y '12 5.73 55.Consolidated Sales breakup : 9M FY2011-12 AP L .e.67 53. 1st June.48 252.740. 2011 36 .75 89.61 861.
2% 12.2% 57.7% 15.7% 12.9% 17.0% % to Sales & Op.8% 10.3% 17.6% 18.3% 60.6% 15.5% 57.7% 17.1% 12. Inc. Material Cost/Net Sales PBDIT/Net Sales PBT/Net Sales PAT/Net Sales* * For Consolidation results.3% 18.8% 17.Key Ratios Standalone Consolidated 9M FY12 9M FY11 9M FY12 9M FY11 59. PAT is before Minority Interest 37 .
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