Investors Meet 22 June 2012
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Transcript of Investors Meet 22 June 2012
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Presentation to Investors
June 22nd 2012
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This presentation and the accompanying slides( the Presentation),which have been prepared byGulf Oil Corporation Limited.(the Company), have been prepared solely for in formation purposes and donot constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shallnot form the basis or be relied on in connection with any contract or binding commitment whatsoever. Nooffering of securities of the Company will be made except by means of a statutory offering documentcontaining detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Companyconsiders reliable, but the Company makes no representation or warranty, express orimplied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness andreasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may notcontain all of the information that you may consider material. Any liability in respect of the contents of, or anyomission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Companys market
Disclaimer
Certain matters discussed in this Presentation may contain statements regarding the Companys marketopportunity and business prospects that are individually and collectively forward-looking statements. Suchforward-looking statements are not guarantees of future performance and are subject to known and unknownrisks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but arenot limited to, the performance of the Indian economy and of the economies of various internationalmarkets, the performance of the industry in India and world-wide, competition, the companys ability tosuccessfully implement its strategy, the Companys future levels of growth and expansion, technologicalimplementation, changes and advancements, changes in revenue, income or cash flows, the Companysmarket preferences and its exposure to market risks, as well as other risks. The Companys actualresults, levels of activity, performance or achievements could differ materially and adversely from resultsexpressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made bythird parties included in this Presentation are not adopted by the Company and the Company is notresponsible for such third party statements and projections.
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The Hinduja Group - Introduction One of Indias premier transnational
conglomerates headquartered in London Been in existence for over 90 years Present in 10 business sectors
3
Present in 10 business sectors Present in 35 countries Employs over 50,000 personnel Many Listed Companies in the Group Turnover of the Group is several billion
dollars www.hindujagroup.com
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Hinduja Group - Worldwide
Global InvestmentBanking &
Financial ServicesInternational
TradingPhilanthropic
Activities
AutomotiveOil & GasPowerIT / ITESMediaReal EstateHealthcareProject Development
Wealth ManagementTrade FinanceCorporate Advisory ServicesConsumer BankingCorporate & Commercial BankingConsumer FinanceTransaction BankingInvestment Banking
Product Sourcing and MarketingArrange and Advise on:
Buy BacksCounter TradeDebt clearingTrade Finance
HealthcareEducationSocial WelfareArts and cultureSports
Investment BankingAsset Leasing
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Hinduja Group Investments in India
Gulf oil is arguably one of the most famous brands in the oil and lubricants industry. In India it aslo has diversified into Explosives, mining & Infrastructure & Realty
HGS
The indusind Bank in India ofers a range of servces to its ever-growing client base
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A brief about Gulf Oil Corporation
We are a multi division enterprise with business interest in Lubricants, Industrial Explosives, Mining & Infrastructure and Realty
LubricantsOne of the major lubricants manufacturer in private sector in India. On high Growth path
Explosive Accessories
Countrys largest manufacturer & in India. On high Growth path with CAGR Revenue growth of 30% in last 3 years
exporter of Detonators. Has high capacity plant at Hyderabad sprawling over 800 acres
Mining & Infrastructure
Operating in the focused sectors of Infrastructure and Mining . Has an excellent track record in the past
RealtyCompany has a substantial land bank. Currently developing a large project in Bangalore
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GOCL - Structure
PublicPromoters Institutions
Gulf Oil Corporation Limited
49.96% 5.67% 44.37%
Gulf Oil Corporation Limited( Listed in BSE & NSE)
Industrial Explosives
REAL ESTATELubricants
Mining & Infrastructure
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Financials
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Key Financials - 5 years
Income & Dividends2011-12 2010-11 2009-10 2008-09 2007-08
Turnover 1076 1003 1066 839 702EBIDTA 107 105 97 78 67
Gulf Oil Corporation Limited
Rs. In Crore
PAT 62 54 45 29 25EPS (Rs.) 6.26 6.11 6.06 3.91 3.42
Dividend 110%* 100% 90% 85% 75%Dividend Payout 41% 43% 35% 51% 52%
* Proposed
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88 51
Segment Revenue
LubesExplosives
Rs. In crore
10
822
ExplosivesConsult
-
Capital Employed2011-12 2010-11 2009-10 2008-09 2007-08
Net fixed Assets 1019 430 581 607 2004
Net
Rs. In CroreKey Financials - 5 years
Gulf Oil Corporation Limited
Net Working Capital
149 102 114 178 226
Other Assets 61 88 32 36 70
Total Capital Employed
1229 620 727 821 2300
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Networth & Loans2011-12 2010-11 2009-10 2008-09 2007-08
Capital 19.83 19.83 14.87 14.87 14.87Reserves* 1083 423 408 398 2039
Key Financials - 5 years
Gulf Oil Corporation Limited
Rs. In Crore
Reserves* 1083 423 408 398 2039Secured Loans 85 102 170 171 135
Unsecured Loans 181** 75 133 237 112
DE Ratio 0.24 0.40 0.72 0.99 0.12
*including Revaluation reserve** Cash and Cash equivalent as on 31-03-2012 Rs.187.89 crores (Prevoius year Rs.64.3 crores)
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Number of Shareholders
Share Holding Pattern(%)
60000
65000
70000
59476 61276
6666165289
49.9644.37
50000
55000
60000
2007-08 2008-09 2009-10 2010-11 2011-12
56218
5.67
Promoters
Institutions
Public
As on 31st March of each year
As on 31st March 2012
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Divisions Overview
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Lubricant DivisionLubricant Division
15
-
The year 2011The year 2011--12 12 The year 2011The year 2011--12 12
16
-
Business Performance Lubricant Division
Sales Revenues
497598
822
500
750
1000
R
s
C
r
s
37%
20%
(Rs. In Crores)
17
497
0
250
500
2009-10 2010-11 2011-12
R
s
C
r
s
-
Business Performance Lubricant Division
EBIDTA
71
90
50
75
100
R
s
C
r
s
27%
87%
(Rs. In Crores)
18
38
0
25
50
2009-10 2010-11 2011-12
R
s
C
r
s
-
42932
51106
60344
40000
60000
80000
19%
18%
Business Performance Lubricant Division
Domestic Volumes in kl
19
0
20000
40000
2009-10 2010-11 2011-12
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Comparison: Business Performance
598 867
3206
822 1004
3528
0 500
1000 1500 2000 2500 3000 3500 4000
Gulf Veedol Castrol*
R
s
.
i
n
C
r
o
r
e
s
Sales Revenue
2010-11 2011-12* Calendar Year
37%
28%
16%
10%10%
20%
30%
40%
50%
% Change Over Previous Year(Rs. In Crores)
20
69 94
738
88 77
716
0 100 200 300 400 500 600 700 800 900
Gulf Veedol Castrol*
R
s
.
i
n
C
r
o
r
e
s
PBT
2010-11 2011-12* Calendar Year
-19%
-3%
-30%
-20%
-10%
0%
10%
Revenue PBT
Gulf Veedol Castrol*
* Calendar Year
-
Comparison: Sales Performance
205 219 209
150
200
250
300
Q
t
y
i
n
K
T
Total Sales Volume
16%
21%19%
5%7%
18%
3%5%
10%
15%
20%
25%
% Change over Previous Year
21
43 66
51 69 60
72
0
50
100
Gulf Veedol Castrol*
2009-10 2010-11 2011-12* Calendar Year
-5%
3%
-5%-10%
-5%
0%
5%
Gulf Veedol Castrol*
2009-10 2010-11 2011-12
* Calendar Year
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Strengths: Product & Technology
22
-
Leveraging our Technological Prowess, Yr. 2006 Gulf Oil redefines the standard for Indias Commercial Engine Oils
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Yr. 2007 Gulf Oil redefines the standard for Indias Motor Cycle Engine Oils Drain Interval
-
Yr. 2010 Gulf Oil adds another milestones in Commercial Vehicles Segment
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Yr. 2010 Introduction of MX4 Technology in Passenger Car Segment
26
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Yr. 2011 Creating another Landmark in Passenger Vehicle Car Segment
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Gulf in continuous pursuit to Redefine Limits
28
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Yr. 2011 Redefining Limits in Commercial Segment
29
-
Capturing Gulfs Nonstop Quest for Excellence
30
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Gulf Oil Global Operations OEM Approvals
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OEM Tie-Ups: India
Ashok Leyland Volvo Penta Greaves Cotton L&T Scania Mahindra & Mahindra
32
Leyland Nissan Leyland Deere MAN Mahindra Navistar L&T Komatsu
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Sustained Growth: Evolving a Stronger Market Model
33
Primary Sales (sales to
distributors) Focus has
always been strong for
Gulf in India)
2008 onwards:
Enhanced planning &
Focus on Secondary
Sales (sales from
distributors to retailers)
initiatives
2010 onwards:
Enhanced Tertiary Sales
(sales from retailers to
mechanics & users)
Support initiatives
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Product Mix
PCMO, 6%
MCO, 16%
Others, 14%
2010-11
PCMO, 8%
Others, 15%
2011-12
DEO, 63%
MCO, 20%
DEO, 58%
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Strengths: Strong Brand
35
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Gulf & IPL
Kings XI & Chennai Super Kings- 2011
Gulf was one of the earliest brands to be associated with the Indian Premier League We continued with Kings XI & with Chennai Super Kings, IPLs most successful franchise
36
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Outdoor, Stadium Branding & Press
37
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Care, Courage, Endurance, Inspiration
& Youth are Gulfs Five Core Brand
Values
Mahendra Singh Dhoni, Indias Cricket
World Cup winning captain personifies
M.S Dhoni as the New Face of Gulf Oil in India
World Cup winning captain personifies
these qualities and was signed on in
2011 as our brand ambassador to
communicate the Gulf brand
proposition.
Theme ad campaign Launched in
January 2012 on TV.
38
-
Ad-Campaign: Truck South 2011-12 Communicating our USP of 40,000 kms
39
-
Ad-Campaign: Bike All India Targeted Youth Communicating ZNS & USP of 10,000 kms
40
-
Ad-Campaign: Brand Ad
41
-
Car Segment Gulf Max Supreme & Gulf Mahindra co-brand X-10 ( USP 10,000 kms drain Interval)
42
-
Press Conference with Chairman and MSD May12
43
-
Media Coverage for Press Conference: Print & Online
44
-
Special Signage & Shop Branding Delhi
-
Special Branding IPL- Chennai Chepauk Stadium
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Extensive Segmentwise Below-the-Line Activities:A Key Success Factor
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BTL: Activities
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Lubricants Division - Outlook for FY 12-13
Continue growth momentum of 2-3 times industry growth rate
Continue investments in brand, people & current focus segment strategies
( core products)
Retain Market Share in New Generation DEO & 4T ( motorcycle segment).
Higher growth in Car Segment- PCMO
Increase Distribution Width & Depth ( focus on higher reach in metros &
rural)
49
Increase B2B (Industrial sales) share in volumes
Strengthen Channel Capability Gulf Excellence Mantra GEM
Increase OEM tie-ups ( leveraging our long drain & technical prowess)
Reduce distribution & manufacturing costs ( CAPEX in current & new plant
in South)
Retain Profitability Levels to the extent possible
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Explosives Divisionand
Mining & Infrastructure Division Mining & Infrastructure Division
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Explosives & Mining Services business depends heavily on the Mining scenario
-
IIP Mining Index YOY Growth of Mining & Quarrying Index
-2
0
2
4
6
8
10
F06 F07 F08 F09 F10 F11 F12
-4
-2 F06 F07 F08 F09 F10 F11 F12
YOY Growth 3 yr Avg growth
The mining industry has been growing at a steady rate of 3 to 4%, but suffered a setback in F12 recording a negative growth of 2%
Coal Indias Coal production has been stagnant at 430 mn MT in F10 and F11In F12 a small growth of 1% was recorded taking production to 435 MT.
The demand for coal is increasing, but the output from Coal India, due to various reasons, is not recording the required growth
-
IIP Mining Index(Base F 2004-05=100)
120
130
140
150
160
100
110
120
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
F08 F09 F10 F11 F12
Mining is a seasonal activity and the current year trends are in line with past trends
-
Explosives
Accessories
-
OVER VIEW
First in India to manufacture various types of detonators and slurry explosives for commercial use.
Set up its detonator factory in 1967 at Hyderabad, Andhra Pradesh, India with technical assistance of internationally famous Hungarian and Yugoslavian manufacturers.
Manufactures detonators of different types, detonating cords and other accessories.
Today, GOCL is the one of the largest detonator manufacturer in the world.
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Application
ExplosivesBoosterDetonator
Detonator is the most complex to make and is very critical in application
ExplosivesThe Energy
-
Our Products
Instantaneous
Detonating FuseDetonators
Delay Non ElectricInstantaneousDelay Non Electric
Plain Electric
CDD/SDD/LDD,
EDN / EDG
Raydets /
e-DET
Dcord / cord
OD /
SOD
-
Production Performances
-
0.000
20.000
40.000
60.000
80.000
100.000
120.000
140.000
F 06 F 07 F 08 F 09 F 10 F 11 F12
M
.
N
O
S
DETONATORS
PERFORMANCE DETONATORS
0.00
1.00
2.00
3.00
4.00
5.00
F 06 F 07 F 08 F 09 F 10 F 11 F12
M
.
N
O
S
NON ELECTRIC DETONATORS
0.000
5.000
10.000
15.000
20.000
25.000
30.000
F 06 F 07 F 08 F 09 F 10 F 11 F12
M
.
M
T
R
S
DETONATING FUSE
DomesticExport
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Market Share - Accessories
Detonators22.73% 17.01%Accessories
19%
Detfuse 6.03%Raydet
GOCL OthersInternal Estimates
-
8.25%
Market Share : eeee-DET
GOCLOthers
Internal Estimates
-
Product Certifications
The Division products are certified for European markets
CE marking & certification extended to the entire range of Explosives, Detonators and Detonating Cord range of Explosives, Detonators and Detonating Cord products.
Only manufacturer in India to have such extensive coverage
-
Division has implemented Integrated Management System ( IMS )
- ISO 9001:2000 Quality Management System
Plant Certifications
- ISO 14001-2004 Environmental Management System- BS OHSAS 18001-2007 Occupational Health & Safety
Management System
We are the only Company in the industry to have IMS certifications
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Per workman Earning improved by more than 100% in last 5 year
405060708090
10073.64 81.02
87.23
79.0291.85
Revenue
400500600700 639
496404 374 336
ManpowerRs. In Crores
Nos
010203040
2008 2009 2010 2011 2012
0100200300
2008 2009 2010 2011 2012Year
Year
Year 2008 Year 2012
Per workman Earning Rs. 11.5 lakhs Rs. 27.3 lakh
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Outlook : Explosives Accessories
Mineral and Infrastructure sectors to grow multi-fold
20% average growth p.a. expected for mineral industry over the long term
KEY STRATEGIES KEY STRATEGIES
Focus on Non-electric Detonators sales and distribution
Focus on electronic detonator sales.
Increased Trade Business and exports.
-
IDLconsult( MINING & INFRASTRUCTURE DIVISION )
-
IDLconsult the mining Contracting arm of GOCL
Started in 2001. Incubated as the Mining contract Arm of Gulf Oil IDL. We knew every mine in the country for decades and had the best talent pool. One of the few Professionally managed and Listed Company offering a comprehensive
mining solutions in India. Also, the only Integrated Explosives and Mining player Reached a peak revenue of Rs. 210 crores with EBDITA of Rs.33 crores in 2008-09. Mining projects are at standstill for last 2 years, affecting revenues adversely.
Key Drivers
67
Key Drivers Growth of GDP - Government policy on Mining & Infrastructure Government owned coal companies Contracting out Over Burden removal. Private Metal mines Need for improved productivity and efficiencies. Mining Growth Rates moving up Private Coal mines and Mine Development & Operations contracts opening up Mine owners stick to their core business - while we do the mining. Full Value chain
-
Equipment & Capacity Equipment Fleet
185 Tipper Trucks (Benz/Volvo/Scania)
27 Excavators 52 other equipment related to mining Batching plant and Transit mixers Concrete boom placer
Capacity: (with current equipment) >25 Million m3 of OB Removal per
yearyear >6 Million MT of Ore handling per
year. Typical Contract Duration: 3 years. Experienced with:
Coal Iron Ore Manganese Uranium Lime stone
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Services Coal MiningAllotment
Mine Design
(Haul Road, Benches And OB Dump Area)
Blast Hole Drilling
Blasting
Construction of Infrastructure at coalmine(Roads, Bridges, Building)
Excavation
Loading
Transport AndDumping
Weighing
Crushing
Screening AndSizing
Mining Services provided by Consult Division for Coal Mines
20-25 Million m3 Over Burden Removal / yearTypically 10 Million m3 / yr per contract
-
Koyagudem, AP Best Mine at Singareni
Coal Mines
70
Best Dumpyard at Singareni
-
Metal sector : Services ProvidedAllotment
Mine Design
(Haul Road, Benches And OB Storage Area)
Blast Hole Drilling
Blasting
Construction of Infrastructure at metal mine(Roads, Bridges, Building)
Excavation
Loading
Transport AndDumping
Weighing
Crushing
Screening AndSizing
Current metal Mines:6 Iron ore mines1 Manganese mine1 Uranium mine
Completed metal mines:1 silica sand mine5 iron ore mines
7 stone quarries (road projects); dolomite
Mining Services provided by Consult Division for Metal Mines
-
Iron Ore Mines.
Iron ore mines, Kasia, Orissa
Kasia Iron ore mine The Model Mine
4 million MT iron ore annually
The Model Mine
3 D Scan of Kasia
-
Infrastructure
Delhi Metro Rail 20 Shafts and 2 km tunnel
-
Infrastructure Projects Value of projects executed : Rs ~150 crores approx. Projects covers
Roads, bridges, culverts Tunnel Residential colonies Irrigation canal
74
Key Drivers : One stop solution for a mining owner; including mining infrastructure development 200 private mining blocks to emerge with requirement of pre mining Infrastructural works Project management skills /online performance monitoring Vast experience in handling local social issues Opportunity to participate in road and Infra over next 5 years Move to General Infrastructure
-
CertificationTriple Certification for Quality, Environment & Safety Management
Systems
ISO 9001:2008
Certificate No: 12 100 39323
TMS
75
TMS
ISO 14001:2004
Certificate No: EMS 570382
BS OHSAS 18001:2007
Certificate No:OHS 570384
-
150
200
250
141.31
211.14195.65
128.89
Revenue
Mining & Infrastructure - Financials
Rs. In Crores
-50
0
50
100
2006 2007 2008 2009 2010 2011 2012
72.01 64.4450.91
10.98 17.531.81 33.1
10.65
-18.67 -21.16
RevenueEBITAEBIDTA
-
Factors leading to the dip for past 2 years
Statutory (Environment / forest etc) clearances for mining activities Karnataka effect The mining contracts in the Iron ore block of Orissa were affected due to the
statutory restrictions from the State and Central Government on account of
The overall Mining scenario in the country was negative
statutory restrictions from the State and Central Government on account of lease areas allowed for mining and environmental exigencies.
Uranium ore mining project for Uranium Corporation of India under the Department of Atomic Energy suffered due to issues with locals regarding mine displaced people as the mine is located in a tribal area.
-
Market Scenario
At 6.1%, economic growth hits 3 year low Manufacturing and Mining sector drag - Business line 1 March 2012
The mining sector recorded a contraction of 3.1 per cent in Oct-Dec 2011 compared to 6.1 per cent growth in same previous period.
This is the second consecutive quarter the sector recorded a contraction
GDP growth in % TermsQ1
2011-12Q2
2011-12Q3
2011-12Q3
2010-11Mining & Quarrying 1.8 -2.9 -3.1 6.1
Manufacturing 7.2 2.7 0.4 7.8
-
Outlook : Mining & Infrastructure
Encouraged by the government policies, Private sector share in mining is growing
Many new mines to open up in coal and metal sectors. New and greater opportunities for mining services
KEY STRATEGIESKEY STRATEGIES
Focus to build capability to operate large mines and reinforce our position as a professional mining contractor. Our track record of handling cumulatively 120 million cubic metres puts us in the top list of the Indian mining contractors
To optimise the strengths and capabilities of the division in other infrastructure Area
Discussions in advanced stages with several infrastructure and mining projects for undertaking large scale assignments to be finalised for a healthy pipeline / order position
-
The Master List released by Cabinet Committee on Infrastructure - The Financial Express, 7th March 2012
-
Things to change .
Mining sector to be back on track New opportunities in Infrastructure sector
-
Realty
-
Property Development
Bengaluru Property
-
Development at BengaluruLayout Plan
-
Development at Bengaluru
1800
-
Development at Bengaluru
-
SEZ : IT / ITES Park( 38.23 lakh SFT ) Non SEZ : Commercial Offices
( 4.32 lakh SFT )
P
i
c
t
o
r
i
a
l
r
e
p
r
e
s
e
n
t
a
t
i
o
n
o
n
l
y
Non SEZ : Retail Malls ( 4.50 lakh SFT )
Non SEZ : Hotels ( 3.50 lakh SFT )
-
Project Consultants
RSP Architects, Planners & Engineers (India) Pvt. Ltd. are the architects and MEP design consultants for the Project
Sterling Engineering and Consultancy Services Pvt. Ltd. are the Structural Consultants for the Project
CBRE - Project Management Consultants (PMC)
JMC Projects (India) Ltd. appointed as main Civil & Structural contractors for Phase-I
-
Category
Construction Area
(lakh sq. ft.)
RevenueArea
(lakh sq. ft.)
IT / ITES 18.95 11.47
IT / ITES SEZ Park at Bengaluru
CommercialSpace 1.94 1.30
Retail 2.03 1.35
Hotel 1.58 1.05
Total 24.50 15.17
-
Lease Revenue Plan for Bengaluru Project
50607080
48.2261.41
74.19
Rs. In Crores
01020304050
2014 2015 2016 2017 2018
14.07
32.69
(Excludes security deposits from lessees)
-
Sales Plan for non-SEZ area in Bengaluru Project
80
100
120119.91 Rs. In Crores
CommercialOffice
0
20
40
60
2016 2017 2018
35.91 41.2638.33 44.03Retail
Hotel
-
Lubricants Industrial Explosives Mining & Infrastructure Realty
-
Major Road work by GHMC to connect NH9 ( Mumbai - Hyderabad National Highway ) started. GOCL has also surrendered a portion of its land towards this, for which it is entitled to certain waiver in Impact Fees, which the development partner will pass on to GOCL as and when received by them in addition to revenue sharing ratio.
Town Planning of the property is being fine tuned in line with the connectorroads
Development at Hyderabad
GHMC approvals for segregation of Factory premises from property underdevelopment and security issues received.
JDA in final stages with Revenue Sharing Ratio of 35:65 with 35% to GOCL.
In total, 10.50 ml sq. ft of salable space is planned to be developed in phases.
Construction is planned to start by Dec.2012
-
Thank you