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10 th CLSA India Forum 2007 Asahi India Glass Ltd. Corporate Presentation 16 th November, 2007 PowerPoint PPT Presentation

10 th CLSA India Forum 2007 Asahi India Glass Ltd. Corporate Presentation 16 th November, 2007 Index Corporate Profile India Story AIS Core Markets Business Operations - Auto Glass - Float Glass - Glass Solutions Opportunities & Plans

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10th CLSA India Forum 2007

Asahi India Glass Ltd.

Corporate Presentation

16th November, 2007


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Index

  • Corporate Profile

  • India Story

  • AIS Core Markets

  • Business Operations

    - Auto Glass

    - Float Glass

    - Glass Solutions

  • Opportunities & Plans

  • Strategy & Key Focus Areas

  • Financial Results


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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.


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Corporate Profile


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AIS : 1987-88 TO 2006-07

CAGR

Sl. No.

ITEM

1987-88

2006-07

26%

1.

Gross Sales (US$'s mill.)

2.87

224.87

23%

2.

EBITDA (US$'s mill.)

0.69

41.21

25%

3.

EBDT (US$'s mill.)

0.42

32.35

4.

OPM % (EBIDTA / Net Sales)

34

22

Corporate Profile

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

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.


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AIS Operations : Plant Locations

  • Roorkee:

  • Float

  • Glass Solutions

  • Mirror

  • Reflective Glass

  • Auto Glass

  • Rewari:

  • Auto Glass

  • 2.Glass Solutions

  • Taloja:

  • Float

  • Glass Solutions

  • Chennai:

  • Auto

  • 2.Glass Solutions


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India Story…

4th Highest GDP in PPP terms

2nd Highest GDP growth 2003-2006

among the top 5 economies

one of the fastest growing economies


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India – Consumption Driven Growth

  • Rising Income

  • level

Increasing

Consumer

spend

+

  • Increasing

  • consumerism

  • 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


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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

Achieve $20 billion in Domestic Sales

20

20:20:1

Achieve $20 billion in Exports Sales

20

VISION

20:20:1

Create 1 million additional Jobs

1


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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)

    • 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.

  • Tata Motors :

    • New plant to manufacture 100K car in West Bengal with an investment of US $ 0.24 Billion.

  • 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 andincrease the historical 11% p.a. growth rate to much higher levels in glass.

  • Architectural design for all the upcoming buildings being highly glass-oriented, 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 in other countries.


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AIS Operations : Auto Glass SBU

  • 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

  • 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.

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


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Vehicle Production


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Share of business in car segment


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Segmentwise Net Sales


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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)


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


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AIS Float Glass SBU - Sales& Production Quantity


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AIS Float Glass SBU - Sales Distribution


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AIS Float Glass SBU - Market Breakup


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Sales Realization


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AIS Operations : Glass Solutions SBU

  • 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

  • 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.

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


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AIS Glass Solutions - Sales Trend by Zone


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AIS Glass Solutions - Sales Trend by Product


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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 value-added products and focus on long term margin improvement and cash generations.


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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 in-house development to reduce costs and improving development cycle.

  • Explore and exploit alternative energy sources to reduce energy cost


Ais goals l.jpg

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 andOperational 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)

Allied Products

distribution

(AIS Adhesives)

Auto Glass

Fitment

Services

(WE)

Automotive Glass

distribution

(AIS Map Auto)

(Light grey cells indicate our existing spread of activities)

Float Glass manufacture

(AIS Float)

Value Added Products

: Reflective

: Mirror

Processing:

: Laminated

: Tempered

: Insulated Glass

: Products

Installation

Fabrication

AIS Glass Solutions Ltd.

- Projects

- Distributed

Markets

VALUE ADDED GLASS SOLUTIONS CHAIN


Ais results q2 fy 08 consolidated l.jpg

Figures in Rs. Lakhs

2nd Quarter Performance

2007-08

2006-07

Comparison

Q2

Q1

Q2

vs Q1

vs last

Year

Net Sales

24648

22500

17535

10%

41%

Profitability

PBDIT

3916

2611

4239

50%

-8%

Interest

2070

1774

663

17%

212%

PBDT

1846

837

3576

121%

-48%

Depreciation

2415

2424

1442

0%

67%

PBT

-569

-1587

2134

-127%

Foreign Exchange Fluctuation

1253

4671

95

-73%

1216%

PBT after Foreign Exchange Fluctuation

684

3084

2229

-78%

-69%

Prior period items

-42

-19

41

-202%

Impairment loss /extra ordinary exp reversed

0

0

0

PBT

642

3065

2270

-79%

-72%

Current Tax net of MAT Credit

28

24

29

16%

-4%

Deferred tax Liability / (Asset)

218

1080

734

-80%

-70%

PAT

396

1961

1507

-80%

-74%

Margins

PBDIT

15.89%

11.60%

24.17%

4.28%

-8.29%

PBDT

7.49%

3.72%

20.39%

3.77%

-12.90%

PBT

-2.31%

-7.05%

12.17%

4.75%

-14.48%

Margins with foreign exchange gain

PBDIT

20.97%

32.37%

24.72%

-11.40%

-3.75%

PBDT

12.57%

24.48%

20.94%

-11.91%

-8.36%

PBT

2.77%

13.71%

12.71%

-10.93%

-9.94%

AIS Results Q2 FY 08 - Consolidated

  • 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.


Ais results h1 fy 08 consolidated l.jpg

Figures in Rs. Lakhs

H1 Performance

2007-08

2006-07

Comparison

H1

H2

H1

Vs H2 Last

vs last

year

Year

Net Sales

47149

41712

34944

13%

35%

Profitability

PBDIT

6527

8566

7648

-24%

-15%

Interest

3845

2255

1292

71%

198%

PBDT

2682

6311

6356

-57%

-58%

Depreciation

4839

3736

2826

30%

71%

PBT

-2157

2575

3530

-184%

-161%

Foreign Exchange Fluctuation

5924

853

-437

594%

-1456%

PBT after Foreign Exchange Fluctuation

3767

3428

3093

10%

22%

Prior period items

-61

63

9

-197%

-776%

Impairment loss /extra ordinary exp reversed

0

6

0

-100%

PBT

3707

3497

3102

6%

19%

Current Tax net of MAT Credit

52

84

54

-38%

-4%

Deferred tax Liability / (Asset)

1298

1002

995

30%

30%

PAT

2357

2411

2053

-2%

15%

Margins

PBDIT

13.84%

20.54%

21.89%

-6.69%

-8.04%

PBDT

5.69%

15.13%

18.19%

-9.44%

-12.50%

PBT

-4.57%

6.17%

10.10%

-10.75%

-14.68%

Margins

PBDIT

26.41%

22.58%

20.64%

3.83%

5.77%

PBDT

18.25%

17.17%

16.94%

1.08%

1.31%

PBT

7.99%

8.22%

8.85%

-0.23%

-0.86%

AIS Results H1 FY 08 - Consolidated


Ais results q2 h1 fy 08 details l.jpg

(Rs. Lakhs)

S. No.

Particulars

AIS (Consolidated)

Second Quarter Ended

Half Year Ended

30.09.07

30.09.06

Change

30.09.07

30.09.06

Change

1

Gross Turnover

29652

21039

41%

56783

42146

35%

Net Turnover

24648

17536

41%

47148

34944

35%

2

Other Income

1410

1273

11%

6159

1306

372%

3

Total Revenue

26058

18809

39%

53307

36250

47%

4

Total Expenditure

20890

14475

44%

40856

29039

41%

a. (Increase)/Decrease in Stock-in-trade

-814

-2432

-67%

-3034

-3678

-18%

b. Materials Cost

6707

6785

-1%

14187

13009

9%

c. Power and Fuel

5686

3216

77%

11058

6394

73%

d. Stores and Spares Consumed

2217

1282

73%

4113

2343

76%

e. Staff Cost

2050

1416

45%

3895

2731

43%

f. Other Expenditure

5044

4208

20%

10637

8240

29%

5

Gross Profit before Depreciation, Interest and Tax

5168

4334

19%

12451

7211

73%

6

Interest

2070

663

212%

3845

1292

198%

7

Gross Profit after Interest but before Depreciation

3098

3671

-16%

8606

5919

45%

and Tax

8

Deferred Revenue Expenditure Written off

0

4

1

7

9

Depreciation/Amortisation

2415

1438

68%

4838

2819

72%

10

Impairment Loss/(Reversal)

0

0

0

0

11

Prior Period Adjustments

42

-41

61

-9

12

Profit Before Tax

641

2270

-72%

3706

3102

19%

13

Provision for Taxation

0

a. Current Tax

64

169

-62%

300

231

30%

b. Deferred Tax Liability (Net)

218

734

-70%

1298

995

30%

c. Fringe Benefit Tax

27

26

4%

50

45

11%

d. MAT Credit Entitlement

-63

-166

-298

-222

14

Income Tax Paid for Earlier Years

0

0

0

0

15

Profit After Tax

395

1507

-74%

2356

2053

15%

16

Share of Profit of the Associates

14

27

-48%

36

45

-20%

17

(Add)/Less : Minority Interest

-27

6

-53

16

18

Net Profit

436

1528

-71%

2445

2082

17%

19

Paid up Equity Share Capital (Face value of

1599

1599

0%

1599

1599

0%

Re. 1/- each)

20

Reserves (Excluding revaluation reserves)

0

0

21

EPS - Basic and Diluted (in Rs. not annualised)

0.27

0.96

-71%

1.53

1.30

17%

AIS RESULTS : Q2 & H1 FY 08 - Details

=======


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