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Transcript of 1 Hindusthan National Glass & Industries Ltd.. 2 DisclaimerDisclaimer Certain statements in this...
CORPORATE PRESENTATION
1
Hindusthan National Glass & Industries Ltd.
2
Disclaimer
Certain statements in this communication may be ‘forward looking statements’ within the meaning of applicable laws and regulations. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Important developments that could affect the Company’s operations include changes in the industry structure, significant changes in political and economic environment in India and overseas, tax laws, import duties, litigation and labour relations.
Hindusthan National Glass & Industries Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
Company Overview
Business Overview
Industry Snapshot
Operati ng and Financial Performance
Annexures
3
Table of Contents
Company Overview
4
4
Company overview
Market share of ~ 55% in the container glass segmentInstalled TPD capacity in India (2,925 MT) and Germany (320 MT); Planned capacity expansion to ~6,765 TPD by FY17
Manufacturing facilities in 6 locations across India, 7th facility will start by April, 2012Additionally, international manufacturing footprint through its 100% subsidiary HNG Global GmbH, Germany
Diversified end user segment including Liquor, Beer, Beverages, Food, Pharmaceuticals and others
Strong management with vast experience and domain knowledgeSuccessful history of acquiring loss-making units and turning them around
Six decades of presence in the industry has enabled the Company to develop long standing customer relations
In a capital intensive industry, the Company has been able to maintain a comfortable long term debt/ equity ratio
Dominant position
Pan India Presence
Consumption Ancillary
Competent management
Well established customer relations
Strong Balance Sheet
5
Corporate Milestones
6
1952 2001 2002 2005 2006 2007 2009 2010 2011
First 30 TPD plant
commissioned in 1952
Second 90 TPD plant
commissioned in 1964
Capacities expanded to 1,100
TPD
Acquired 700 TPD facility in
Owens Brockway India Ltd, a
subsidiary of Owens Illinois, USA. Company
renamed as Ace Glass
Acquired 320 TPD loss
making glass division from L&T at Nashik
Ace Glass Containers
merged with HNG
Established float glass plant in Halol under HNG Float
Glass
Acquired 180 TPD Neemrana unit of
Haryana Sheet Glass
Rated Best Indian Glass & Ceramics Company by Dun & Bradstreet
Work on 7th plant at Naidupeta (650 TPD) initiated – operations to commence by Q1 FY13
Nashik plant to add capacity of 650 TPD by Q4 FY12.
Acquired assets of Agenda Glas AG in May 2011; 320 TPD facility at Gardelegen, Germany
Corporate Structure
100% 100%
• Net revenues: Rs. 299 millions.
• Capital Goods & Spares Supplier to Glass Industry
• Net revenues: Rs. 10 millions.
• Mineral Supplier to Glass Industry
• Net revenues: Rs. 2,948 millions.
• Manufacturer of Float & Processed Glass
47.4%
- Consolidated net revenues: Rs. 15,678 millions.- Standalone net revenues: Rs. 15,525 millions.
7
Note: 1. All revenue figures are for FY 2011. HNG Global GmbH was acquired after March 31, 2011.
100%
Glass Equipment (India) Ltd.
Quality Minerals Ltd. HNG Global GmbH
HNG Float Glass Ltd. (HNGFL)
Acquisition of assets of Agenda
Glas AG
Hindusthan National Glass & Industries Ltd.
Business Strategy
• Acquired and turned around four loss making units over the last nine years• Planned organic expansion to ~ 6,765 TPD by FY17
• Introduced Narrow Neck Press and Blow (NNPB) technology, first in India• Sustained competitive advantage through product optimization and continuous innovation • Increasing production of light weighted bottles to enhance margins
• Presence across key user industries – liquor, beer, pharmaceuticals and food• Capitalizing on opportunities in the high growth float glass industry
• Captive power plant to improve cost efficiencies (Existing and Proposed)• Silica mining to support raw material supply chain (Proposed)• Manufacturing of glass machines & spares in 100% subsidiary GEIL
• Gained European presence, one of the largest markets for food and alco-bev industries• Access to technological strength and production processes
Capacity Expansion
Adapting new technology
Expanding product portfolio
Backward integration
International Footprint
8
Business Overview
9
9
Pan – India Presence
10
• HNG, the largest container glass
manufacturer in India has a manufacturing
capacity of 2,925 tonnes per day
• Multi-locational production facilities enable
the Company to:
Lower landed cost to customers
Provide JIT supplies
Cater to key customers across
India
Note : Further, the Company is setting up greenfield manufacturing facilities in new locations in West Bengal and Rajasthan. The total capacity is expected to grow to ~6,765 TPD by FY17 through Greenfield and Brownfield expansions in India.
RishikeshBahadurgarh
Chennai
Delhi
Neemrana
VadodaraKolkata
Puducherry
Rishra
Nashik
Mumbai
Hyderabad
Naidupeta
Bengaluru
Marketing Offices
Container Glass Plant Locations
Upcoming Greenfield Mega Project
Upcoming Brownfield Mega Project (Nashik)
Float Glass Unit
GEIL
International Presence
• Plant location: Gardelegen, Germany• Capacity: 320 TPD
11
Gardelegen
HNG Global GmbH, Gardelegen, Germany
12
• One of the most modern production facilities in Europe, with 320 tpd capacity.
• HNG Global GmbH, is located closed to the regional raw material suppliers with easy and economic
access to all key RM’s.
• The Plant is ideally located for deliveries throughout Germany and to adjacent European Countries.
• Company has 147 FTE, the average age of employees is 37 years, with 50% of the workforce below
the age group of 35 yrs.
• Germany is the largest market for Container Glass in Europe, with a share of ~ 20%.
• Company’s technological edge can also be back pedalled in HNG’s Indian operation, as Germany is
always considered as two steps ahead in terms of technology, from the rest of the World.
Expanding Scale
Present capacity of 3,245 TPD with proposed expansion to ~ 6,765 TPD by FY17
13
Location Present Capacity Expanded CapacityTo be Commissioned
byNew Furnace(N) /
Rebuild (R)RSR Furnace 1 225 280 Already started RRSR Furnace 2 240 250 Already started RRSR Furnace 6 330 450 2013-14 REAST Furnace - 650 2014-15 NBGR Furnace 3 330 - - RBGR Furnace 4 275 270 Already started RBGR Furnace 5 180 180 Already started RNMR Furnace 200 330 2015-16 RRSK Furnace 2 140 - 2012-13 RRSK Furnace 1 290 - Already started RRJSTHN Fur 1 - 650 2014-15 NRJSTHN Fur 2 - 650 2015-16 NRJSTHN Fur 3 - 350 2016-17 NPDY Furnace 1 360 550 2014-15 RNSK Furnace 1 355 545 2014-15 R
NSK Furnace 2 - 640 1st March, 2012 N
Naidupeta - 650 2012-13 NGardelegen 320 320 Already started Acquisition
TOTAL 3,245 6,765
Strong customer relationships
Caters to customers across segments
PHARMACEUTICALS
BEER
LIQUOR
FOOD
SOFT DRINKS
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HNG Float Glass Overview
• Leveraged six-decade experience in glass manufacturing • Synergies in technology – Significant part of float glass manufacturing process is similar to that of container glass• Economies of scale achieved in raw material procurement
• Created a strong distribution base with over 928 dealers spread across India
• Achieved pan-India market share of 21% in clear glass and became industry leader in the west Indian market with 30% market share in clear glass in its first year of operations
• Established a 600 TPD Greenfield Plant at Halol, Gujarat• Accomplished 100% capacity utilization in the first year of operations
Diversification within the glass sector
Extensive and expanding pan India dealer network
One of the fastest growing Float Glass companies
Commenced operations in February 2010
16
HNG Float Glass Overview
Setting up of a Mirror line, High performance Low E glass, Two float lines at Halol (Gujarat) & South India
• Second Float Line at Halol for 900 TPD for architectural glass by FY14
• Setting up additional 1,200 TPD float glass Capacity for architectural quality in South India by FY16
• Plan to commission production facility for Soft coated High performance Low E Glass by start of FY14
• Nascent industry in India with just 8 float glass lines compared to 246 in China
• Indian Float Glass industry has been growing at c.20% CAGR over the last three years
• India’s total installed capacity for float glass is ~ 4,700 TPD which results into saleable production of 3,840 TPD
• Low per capita consumption of Float Glass in India of 0.8 kg as compared to 12 kg in China and 10.4 kg in USA
Future growth plans
Industry growth drivers – low penetration of Glass and boom in the end user industry to drive growth
17
Industry Snapshot
18
18
19
Global Packaging Industry• As per World Packaging Organization, the global packaging industry at present is estimated to be USD
425 billion in revenues, with ten year historical growth at ~ 3.1% CAGR, expected to be USD 597
billion by 2014
• Projected to grow at ~ 3.5% CAGR in the next five years mainly driven by growth in emerging markets
(Asia Pacific region)
Source: Owens-Illinois, Inc. - Investor presentation, March 2010
34%
34%
27%
5%
Geography
Europe Asia, Oceana, Africa & MENorth America South & Central America
52%
15%
11%
9%
13%
End User
LiquorBeerFoodPharmaOthers
Indian Glass Packaging Industry
World glass container per capita consumption• At US$ 14 bn, Indian packaging industry has been growing at ~ 15%
over the last few years
• Expected to accelerate further with increasing urbanization,
growing middle class and expansion of modern retail
• Indian glass container market stood at US$ 1 bn plus in FY10 with a
growth of ~ 12%
• Entry barrier owing to capital intensive nature
• Top 3 players are HNG, AGI Glaspac and Piramal Glass
• Low per capita glass container consumption of 1.5 kg in India
as compared to 27.5 kg. in US and 10.2 kg. in Japan
• Strong economic drivers for end-user segments (liquor and beer,
pharmaceuticals, food, cosmetics, etc.)
South Korea
France
Spain
UK
USA
Mexico
Japan
China
Brazil
India
Indonesia
0 10 20 30 40 50 60 70 80 90 100
89
63.9
50.3
27.5
27.5
19.5
10.2
5.9
4.8
1.5
1.2
(Kg)
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Operational & Financial Snapshot
22
Operational Overview
Key Highlights
• Firm domestic demand driven by growth in end user
industries - liquor, beer, pharmaceuticals, foods and
carbonated drinks
• Manufacturing facilities located across India provide an
edge over peers who have regional presence
• Pan India distribution network
• Implementation of advanced technology enables improved
cost efficiencies
FY 2009 FY 2010 FY 2011700000
750000
800000
850000
767,971785,300
829,374
Production volume (MT)
FY 2009 FY 2010 FY 2011700000
750000
800000
850000
765,478782,584
842,246Sales Volume (MT)
23
FY 2009 FY 2010 FY 201116000
17000
18000
17,15117,344
18,332Realization (Rs. / ton)
End user segment
Volume Mix -FY11
1 Others include soft drinks
13%
9%
11%
52%
15%
Others
Pharma
Food
Liquor
Beer
Geography
44%
22%20%
29%
South
North
West
East
24
13%
46%12%
29%
SouthNorthWestEast
Production - Capacities FY11-12
Financial Performance
FY2008 FY2009 FY2010 FY20110
50
100
150
200
250
300
350
10%
15%
20%
25%
2,147 2,3593,163
2,705
21.0%
18.0%
23.3%
17.5%
EBITDA Margins
All figures stated in Rs. millions on a standalone basis
FY2008 FY2009 FY2010 FY20110
200
400
600
800
1000
1200
1400
1600
10,213
13,110 13,599
15,434Net Turnover EBITDA
FY2008 FY2009 FY2010 FY20110
20406080
100120140160180
0%
5%
10%
15%
20%
1,603
1,077
1,552
864
15.7%
8.2%11.4%
5.6%
PAT Margins
PAT
FY2008 FY2009 FY2010 FY201102468
101214161820 18.36
12.34
17.77
9.9
EPS (Rs. / share)
25
Balance Sheet
Particulars (Rs. million) Half Year ended September, 2011
Year ended March, 2011
Year ended March, 2010
Share Holders Funds 12,105 11,661 10,428
Loan Funds 10,571 63,95 5,657
Deferred Tax Liabilities 712 712 697
TOTAL LIABILITIES 23,388 18,769 16,782
Net Block + Capital Work-in-progress 17,560 13,845 11,438
Investments 2,281 1,775 1,471
Net Current Assets 3,547 3,149 3,873
TOTAL ASSETS 23,388 18,769 16,782
All figures stated in Rs. millions on a standalone basis
26
Key Balance Sheet Ratios
FY2008 FY2009 FY2010 FY20110.0
0.1
0.2
0.3
0.4
0.5
0.20
0.37 0.38 0.37
Debt/Equity Ratio
FY2008 FY2009 FY2010 FY201102468
101214161820
7.08.7
13.1 13.1
Dividend Payout
FY2008 FY2009 FY2010 FY20110%
5%
10%
15%
20%
25%
20.3%
12.0%
15.7%
7.8%
RONW
FY2008 FY2009 FY2010 FY20110%
2%
4%
6%
8%
10%
12%
14%
16%
12.2% 11.8%
15.1%
10.0%
ROCE
27
H1 FY 2012 - Financial HighlightsProfit & Loss Statement Snapshot
28
Particulars (Rs. million) H1 FY2012 H1 FY2011 Shift (%)
Total Income 8,557 7,366 16.2
EBIDTA 1,512 1,494 1.2
Margins 17.7% 20.3%
Depreciation 551 494 11.5
Interest 420 242 73.6
Profit Before Tax 541 759 -28.7
Margins 6.3% 10.3%
Tax expense 112 173 -35.3
Profit After Tax 429 587 -26.9
Margins 5.0% 8.0%
EPS (in Rs.) 4.91 6.72 -26.9
All figures stated in Rs. millions on a standalone basis
Annexures
29
* Includes 16.76% held as Treasury Shares in the Company Total 87.3 million shares Listed at: National Stock Exchange (NSE) - HINDNATGLS
Bombay Stock Exchange (BSE) - 515145Calcutta Stock Exchange (CSE)
Shareholding Pattern
Particulars % Shareholding(as on September, 2011)
Promoters 69.98
Public Shareholding
Insurance Companies 0.31
Bodies Corporate 3.93
Financial Institutional Investors 7.28
Individuals & Others* 18.50
Total 100.00
30.02
30
Ratings, Rankings & Accreditations
• Business Today Ranking (Out of 500 top listed corporates, as of October, 2011)
• In terms of Average Market Capitalization – 368th
• Rating by CARE (Credit Analysis & Research Ltd.)
• Long Term credit rating of AA+(implying high safety for timely servicing of debt obligations and carrying very low credit risk).
• Short Term credit rating of PR1(+), being the highest grade (implying the lowest credit risk).
• Rated as the best Indian Company in the Glass & Ceramics category by Dun & Bradstreet in years 2009 and 2010
• Accredited with ISO 9001:2008 certification, ensuring stringent quality standards and ISO 22000 for food and safety
• Rated at No.35, out of the best 500 companies by Inc.India (Comprehensive ranking of India’s best performing mid-sized companies) in their Sep-Oct, 2010 issue.
31
Hindusthan National Glass & Industries Ltd. (HNG)
THANK YOUFor further information please log on to www.hngindia.com or contact:
Laxmi Narayan Mandhana (CFO)
HNG
Tel: 033-2254-3100
Email: [email protected]
Anoop Poojari / Dipti Yadava
Citigate Dewe Rogerson
Tel: +91 22 6645 1211 / 1218
Email: [email protected] /