jk cement corp presentation

8/19/2019 Jk Cement Corp Presentation

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FY 2015

CORPORATE PRESENTATION


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DisclaimerSafe Harbor Statement

This presentation is strictly confidential and may not be copied, published, distributed or transmitted. The information in this presentation is being provided by J. K. Cement Limited (also referred to as ‘JKC’

or ‘Company’). By attending the meeting where this presentation is being made or by reading the presentation materials, you agree to be bound by following limitations:

The information in this presentation has been prepared for use in presentations by JKC for information purposes only and does not constitute, or should be regarded as, or form part of any offer, invitation,

inducement or advertisement to sell or issue, or any solicitation or initiation of any offer to purchase or subscribe for, any securities of the Company in any jurisdiction, including the United States and India,

nor shall it, or the fact of its distribution form the basis of, or be relied on in connection with, any investment decision or any contract or commitment to purchase or subscribe for any securities of the

Company in any jurisdiction, including the United States and India. This presentation does not constitute a recommendation by the Company or any other party to sell or buy any securities of the Company.

This presentation and its contents are not and should not be construed as a prospectus or an offer document, including as defined under the Companies Act, 2013, including the rules formulated thereunder

(to the extent notified and in force) or an offer document under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended.

This presentation and its contents are strictly confidential to the recipient and should not be further distributed, re-transmitted, published or reproduced, in whole or in part, or disclosed by recipients

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No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this

presentation. Neither JKC nor any of its affiliates, advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of

this presentation or its contents or otherwise arising in connection with this presentation. The information set out herein may be subject to updating, completion, revision, verification and amendment and

such information may change materially. This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent

developments may affect the information contained in this presentation, which neither JKC nor its affiliates, advisors or representatives are under an obligation to update, revise or affirm.

This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of JKC, which are expressed in good faith and, in their opinion, reasonable.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of JKC or industry

results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Unless otherwise indicated, the information

contained herein is preliminary and indicative and is based on management information, current plans and estimates. Industry and market-related information is obtained or derived from industry

publications and other sources and has not been independently verified by us. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on

these forward-looking statements. JKC disclaims any obligation to update these forward-looking statements to reflect future events or developments.

THIS PRESENTATION IS NOT AN OFFER FOR SALE OF SECURITIES IN INDIA, THE UNITED STATES OR ELSEWHERE

Corporate Presentation2

General Introduction Company Overview Key Highlights Business Strategy Annexures

Strictly Private & Confidential


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Contents


General Introduction

Company Overview

4

Business Strategy

Key Highlights

Annexure

2

Company Overview Key Highlights Business Strategy Annexures



4/18

Business SegmentsOne of the leading grey cement producers in North India


Company Overview

General Introduction Key Highlights Business Strategy Annexures

J. K. Cement Ltd. (“JKC” or “Company”) is part of the conglomerate, JK Organisation. The company is

promoted by Mr. Yadupati Singhania and (Late) Dr. Gaur Hari Singhania. The group entered the cementmanufacturing business in 1975

One of the largest white cement manufacturer in the World with 1.20 MTPA capacity including 0.6 MTPA

White Cement Plant at Fujairah commissioned in Mar 2014. Also 2nd largest producer of wall putty in India

with installed capacity of 0.5 MTPA

Highly reputed brand with extensive nation-wide distribution

Integrated Cement manufacturing company with 7.5 MTPA grey cement capacity

Nimbahera, Mangrol and Gotan (Rajasthan): 4.5 MTPA

Muddapur (Karnataka): 3.0 MTPA

140.7 MW of Captive power (including Waste Heat Recovery of 23.2 MW)

Proximity and access to large high quality captive reserves of limestone

Expanded domestic grey cement capacity to 10.5 MTPA.

Mangrol (Rajasthan): 1.5 MTPA - Commissioned in September 2014.

Jhajjar (Haryana): 1.5 MTPA split grinding unit - Commissioned in June 2014

Greenfield Expansion in the Middle East

Fujairah (UAE): Dual process plant - 0.6 MTPA white cement or 1.0 MTPA Grey cement – Commissioned inSept ‘14

JK Cement’s LT credit rating by CARE Ratings has been AA- since FY 13

Listed on National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”) with a market

capitalization of INR 47.01bn (as of March 12, 2015)



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Journey of the CompanyMajor milestones and achievements


Company Overview


The group entered the cement business with 0.3 mtpa plant at Nimbahera,

Acquired a cement division from its affiliate through slump sale, on a going concern basis, with a capacity to manufacture

3.55 mtpa of grey cement and 0.3 mtpa of white cement along with 15 MW of captive power plant

The Company got listed on the BSE

Successfully raised INR 2,960 mn through the Follow on Public Offer (“FPO”)

Commissioned a 3 mtpa Greenfield plant in south at Muddapur, Karnataka

Company’s long term credit rating upgraded from A+ to AA- by CARE Rating.

Enhanced grey cement capacity by 0.50 mtpa, set up a 20MW coal based power plant and 13.2MW of heat recovery based

power plant at Nimbahera and enhanced white cement capacity by 0.1 mtpa at Gotan, through FPO proceeds

Acquired a 0.1 mtpa white cement unit at Gotan from Nihon Nirman and subsequently in 2009, converted the unit to

produce 0.47 mtpa grey cement

“National Award for Excellence in Cost Management – 2011” from ICAI

“Best Employer Award - 2011” from Employer’s Association of Rajasthan

Commissioned a 1.5 mtpa grey cement

capacity at Mangrol (Rajasthan)

Commissioned a 0.6 mtpa white

cement capacity at Fujairah (UAE)

Commissioned a 1.5 mtpa grinding unit for grey

cement capacity at Jhajjar (Haryana)

7.52.8 0.80.5 0.5

3.0 3.0

FY '04 FY '05 FY '07 FY '09 FY '10 FY '15

10.5Grey Cement capacity Build up



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Presence in IndiaExisting Plant locations and Market Reach


Company Overview


Cement Plant

Power Plant

Market Reach

Gotan - Nagaur (Rajasthan)

0.47 MTPA# : Grey Cement

0.60 MTPA : White Cement

0.50 MTPA: Wall Putty

7.5 MW: Thermal Power Plant

Nimbahera – Chittorgarh (Rajasthan)

3.2 MTPA : Grey Cement

20 MW: Thermal Power Plant

13.2 MW: Waste Heat Recovery

15 MW (Bamania): Thermal Plant

Mangrol - Chittorgarh (Rajasthan)

0.75 MTPA - Grey Cement

1.5 MTPA – Grey Cement

25 MW – Captive Power Plant

10 MW- Waste Heat Recovery

Muddapur - Bagalkot (Karnataka)

3 MTPA: Grey Cement

50 MW: Thermal Power Plant

Pan-India market reach in white

cement & presence in 13 states for

grey cement. 140.7MW of captive

power and captive limestone

reserves

# The grey cement capacity is interchangeable with white cement

Jhajjar - Haryana

1.5 MTPA: Grey Cement



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Key HighlightsOne of the leading grey cement producers in North India


Key Highlights

General Introduction Company Overview Business Strategy Annexures

Cement Sector on Strong Foundation with Positive Future Outlook

Sustained demand coupled with slowdown in capacity addition resulting in higher capacity utilization

Improvement in profitability, backed by higher cement prices and operating margins

Integrated manufacturing facilities at multiple locations

Plants in North & South India enable the company to serve multiple regions

140.7 MW of captive power including waste heat recovery of 23.2 MW and large captive limestone reserves at close proximity

Presence in White cement business with strong growth and profitability

White cement & wall putty segments contribute consistently to profitability and provide healthy margins & stable cash flows

Increased White cement capacity to augment current market share of ~43% (Based on FY’14 performance).

Wall putty capacity is 0.5 mtpa and plan to increase capacity by 0.2 mtpa by end of fiscal 2016.

Domestic expansion to consolidate leadership in North and improve operating efficiencies

Expansion plan to tap new markets, increase market share in North India and derive benefit from VAT incentives for entire production at Mangrol and

Haryana

North based plants operated at 85%+ and newer plants will offer better operating efficiency

Increase in share from south plant, which serves higher realization markets, will improve margins

Dual process plant in UAE to grow internationally

Cater to white cement demand in Middle East & North Africa(MENA) and infrastructure development projects in Qatar

Unit in UAE provides logistical advantage to serve GCC and MENA countries and frees up current export quantity from India for domestic sale



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Inherent StrengthsOne of the leading grey cement producers in North India


1

Key Highlights


• Over 140 MW power generationthrough coal-based & waste heatrecovery plants

• Total power requirement met at lowercost through captive generation

• JKC has access to large reserves of high-quality limestone, adjacent to themanufacturing facility

• Superior product mix as one of only 2

producers of white cement in India.• White cement & wall putty segment

contribute ~31% of top line, providingstability in cash flows and superiormargins

• Plants in Rajasthan & Karnataka gives

wider market reach covering North,West & Southern regions

• JKC’s white cement & wall putty aremarketed and sold across the country

Multi-RegionPresence

SuperiorProduct Mix

Captive PowerCaptive

LimestoneReserves



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Established BrandsWell established brands in all segments that the Company operates in


Key Highlights


2

White Cement Value Added Products

J.K. White Cement is marketed and distributed across the country White cement based Wall Putty and Water Proofing Compound

Grey Cement

Ordinary Portland Cement (OPC) is sold under the J.K. Cement brand

name, Sarvashaktiman

Portland Pozzolana Cement (PPC) and Portland Slag Cement (PSC)

variants are sold under the J.K. Super Cement brand name



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Superior Product Mix on account of White CementUnique position to leverage on high-growth, superior margin segment


Key Highlights


3

White Cement Industry in India*

Installed Capacity: 1.2 mtpa

Only 2 producers – UltraTech

Cement & JK Cement

White Cement Sales: 1.1 mtpa

Key Export Markets: South-Asia,Middle East & Africa

Entry of new players remote as:

Requirement of Special quality

limestone

High investment costs

Problems in mine allocation

Growth Drivers

White cement growing at 4-5% annually andexpected to increase on account of:

• Increase in per-capita consumption

• Demand from wall putty, registering 21%

annual growth

• Increase in demand for Housing sector

JK White Cement

Current market share: ~43% (Based on FY ‘14)

Pan-India reach with established brand

During FY 2014, White cement contributed

~31% to revenue.

Sufficient to service interest liability & tax

payout of the entire company.

9,000

12,000

15,000

18,000

21,000

3,000

3,300

3,600

3,900

FY '10 FY '11 FY '12 FY '13 FY '14

Grey White

* White cement price including wall putty

JKC’s Price Realization (INR/ton) – Grey vs White*


* Based on respective Company’s websites


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Advantageous Revenue & Market MixFinancial Performance


Increasing share of White Cement in Revenues Product Mix – Grey Cement (FY14)

Rising share from North & Central and improvement in South during

FY ‘15 to improve Realization

Market Mix evenly distributed (FY14)

Key Highlights


81% 79% 78% 74% 69%

19% 21% 22% 26% 31%

FY '10 FY '11 FY '12 FY '13 FY '14

Grey Cement White Cement (incl. Putty)

4

PPC

56%

OPC

40%

PSC

4%

57.0 61.0

15.0 12.0

20.0 18.0

8.0 9.0

FY '13 FY '14

Central

West

South

North

Rajasthan

22%

Haryana

17%

Maharashtra

14%Karnataka

11%

Westen U.P

10%

MP

9%

Delhi

7%

Punjab

6%

Others

5%



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Expansion completed in India & UAESetting up capacities in new geographies


Key Highlights


Domestic – Rajasthan & Haryana Fujairah, UAE

Nature Brownfield Greenfield- In a subsidiary, held 90% by JK Cement

along with Govt. of UAE (10%)

Capacity3.0 mtpa, with 1.5 mtpa grinding in Mangrol & 1.5 mtpa

split grinding at Jhajjar, Haryana

Dual process cement plant capable of producing 0.6

mtpa white cement or 0.9 mtpa grey cement

Commissioned

Haryana: June ’14 Mangrol: Sep ’14

Sept‘14

Features

Abundant land

Captive thermal plant of 25 MW and 9 MW WHR

Railway siding at both locations

Connectivity to road & port

Quality limestone reserves

Flexibility to switch between white & grey cement

Capital Outley & Funding

Mix

Total project cost: Rs. 1,734 Cr.

Debt: Rs.1,200 Cr.

Equity Contribution: Rs. 534 Cr.Capex incurred as of Dec ‘14: Rs. 1,608 cr

Total project cost: USD 147 mn

Debt: USD 98 mn

Equity Contribution: USD 49 mnCapex incurred as of Dec ‘14: USD 133 mn

Target Market

Haryana unit provides logistical advantage to serve the

National Capital Region and helps consolidate JK’s

leadership position in the North.

Cater to Middle East and North African white cement

demand and infrastructure development projects in

Qatar for soccer world cup

5


G l I d i C O i K Hi hli h


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Business StrategyConsolidate leadership position in white cement and capitalize on opportunities


Business Strategy

General Introduction Company Overview Key Highlights Annexures

Consolidateposition in

white cement

OperationalEfficiency

EnhanceBusiness

EnhanceEnergy

Efficiency

InternationalOpportunities

To maintain leadership position in white cement business by improving utilisation

Increasing white cement and wall putty capacity to maintain present share of revenue

All plants enjoy proximity to raw

material & growth markets

Brown field expansion

Split grinding in Haryana for logistical

advantage in National Capital Region

Enhance brand visibility further through print

& online media and consumer promotions

Expanding and Improving distribution

network

Captive power generation to provide longterm sustained source of low cost power at

fixed rate

Use of waster heat recovery to reduce

environmental impact

Dual process plant in UAE to cater to

growing markets of Middle East &

Africa

Infrastructure development demand

in Qatar for soccer world cup



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FY 2015

Thank you for your Interest

Annexures Follow

J.K. CEMENT LIMITED

Kamla Tower, Kanpur-208001

General Introduction Company Overview Key Highlights Business Strategy


15/18

Annexure 1Financial Snapshot | Income Statement & Balance Sheet


Balance Sheet (Consolidated)Income Statement (Consolidated)

Annexure


INR mn FY '12 FY '13 FY '14 9MFY15

Operating Income 25,468 29,120 27,985 24,325

Other Income 469 488 483 409

Total Income 25,936 29,608 28,441 24,734

Total Operating Expenses 20,329 23,547 24,431 21,411

EBIDTA (B’fore Excep. Items) 5,608 6,061 4,010 3,322

Interest 1,443 1398 1,526 1,508

Depreciation 1,256 1287 1,342 990

Exceptional Item 78 - - -

PBT 2,830 3,375 1,142 826

Provisions 1,085 1,070 393 (45)

PAT 1,746 2,305 749 871

INR mn FY '12 FY '13 FY '14

Equity Share Capital 699 699 699

Reserves & Surplus 1,4522 16,206 16,762

Networth 15,221 16,905 17,462

Long Term Loans 9,965 10,595 24,415

Total Borrowings 10,808 12,482 26,475

Deferred Tax Liability (net) 2,291 2,490 2,685

Other Liab & Provisions 7,440 8,152 10,867

Net Fixed Assets (Incl CWIP) 24,071 26,236 41,144

Investments 92 324 675

Cash & Cash Equivalents 4,332 3,753 4,086

Other Assets 7,264 9,764 12,193

Note: 9MFY15 numbers are on standalone basis.




16/18

Annexure 2Latest quarterly performance


Annexure


Particulars Q3 FY15 Q2 FY15 Change

(%)

Q-o-Q

Q3 FY15 Q3 FY14 Change

(%)

Y-o-Y

9M 9MChange (%)

Y-o-Y

Full Year

INR million

Dec 31,

2014

Sept 30,

2014

Dec 31,

2014

Dec 31,

2013

Dec 31,

2014

Dec 31,

2013

Mar 31,

2014Total Operating Income

(Net)6880.8 7148.7 - 3.7% 6880.8 6158.9 11.7% 21404.1 17373.8 23.2% 25467.8

EBITDA 1348.8 1316.8 2.4% 1348.8 1204.0 12.0% 4249.6 3138.8 35.4% 5166.3

PBT 775.6 830.1 - 6.6% 775.6 645.7 20.1% 2625.2 1437.1 82.7% 2857.8

PAT 543.8 540.9 0.5% 543.8 435.2 25.0% 1773.5 969.8 82.9% 1773.3

EPS – Basic & Diluted 7.78 7.74 7.78 6.22 25.36 13.87 25.36

Raw Material Cost % 15.3% 13.1% 15.3% 12.1% 13.6% 12.4% 12.2%

Power & Fuel Cost % 24.8% 24.4% 24.8% 25.3% 25.1% 26.5% 25.7%

Freight Costs % 20.5% 20.4% 20.5% 19.3% 20.0% 19.5% 19.1%

Others % 19.8% 23.7% 19.8% 23.8% 21.5% 23.6% 22.8%

EBITDA % 19.6% 18.4% 19.6% 19.5% 19.8% 18.0% 20.2%

PAT % 7.9% 7.5% 7.9% 7.0% 8.2% 5.5% 6.9%




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Annexure 3Management and KMPs


Annexure


Key Management PersonnelBoard of Directors

Yadupati Singhania Managing Director and CEO

Sushila Devi Singhania Non Executive, Non Independent Director

Paul Hugentobler Non Executive, Non Independent Director

K. N. Khandelwal Non Independent Director

K.B. Agarwal Independent Director

Suparas Bhandari Independent Director

Jayant Narayan Godbole Independent Director

Achintya Karati Independent Director

Raj Kumar Lohia Independent Director

Raghavpat Singhania Special Executive 7 years

Madhavkrishna Singhania Special Executive 4 years

A K Saraogi President (Corp. Affairs) & CFO 36 years

Rajnish Kapur Business Head (Grey Cement) 30 years

D Ravisankar President (Projects) 37 years

R. C. Shukla President (Mktng, Grey Cement) 28 years

Niranjan Mishra President (Mktng, White Cement) 28 years

Ashok Cherian Chief Inforamtion Officer 20 years

R Ganesh Head (Mktng, Grey Cement South) 34 years

Ajay Mathur Head (Mktng & Sales)- UAE Operation 24 years

Shambhu Singh AVP Legal & Company Secretary 28 years




18/18

Annexure 4Awards & Recognitions


Annexure

General Introduction Company Overview Key Highlights us ess St ategy

9th National Award for Excellence in Cost Management, 2011

(The Institute of Cost Accountants of India)

Commemorative Stamp in honor of the

Founding Father

Productivity Excellence Award 2009-10

(Rajasthan State Productivity Council)

Over All Performance Award by Indian

Bureau of Mines

Best Employer Award, 2011

Employers’ Association of Rajasthan


Best Employer Award in Northern Region, 2012

Employer’s Association of Northern India

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