Everest Kanto Cylinder Ltd. - LPGTech.ua · EKC – Key Milestones 1978 Incorporation of Everest...
Transcript of Everest Kanto Cylinder Ltd. - LPGTech.ua · EKC – Key Milestones 1978 Incorporation of Everest...
Everest Kanto Cylinder Ltd.
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This presentation may contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, and political, economic, legal and social conditions in the countries we operate in. This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision.
• Established in June, 1978
• Began with a Joint venture with Kanto Koatsu Yoki
Manufacturing Company of Japan
• Pioneer in production and development of Industrial
and CNG cylinders with dominant market share in
South Asia and Middle East
• Largest global player in the Large Pressure Vessel
space
• Three manufacturing plants in India and one each in
Dubai, China and U.S.A.
• Existing capacity of 1 Million cylinders of all sizes
mainly by way of organic and acquisition growth
• Ambitious organic growth plans in India and China
• Almost 1500 employees on rolls worldwide
experienced in R&D, production and management
• Quality control processes approved in more than 25
countries
EKC – An Introduction
EKC – Key MilestonesIncorporation of Everest Kanto Cylinder (P) Limited 1978
First commercial production at Aurangabad Plant1981
Commissioning of Tarapur Plant1988
Development of CNG cylinder for the markets1998
Supply of CNG Cascades1998
Export to European countries1998
More than 150,000 cylinders produced and dispatched2001
Commencement of production at Dubai Plant2004
Listing of Equity Shares and Gandhidham unit goes onstream2005
Doubling of Capacity in Dubai and initiation of China Project2007
Commencement of exports to Gulf countries1986
Acquisition of CPI, U.S.A. and commencement of production in China2008
Acquisition of majority stake in gas distribution company, gas offtake expected from August 2009
2009
EKC – Product Applications
Food and Beverage
Area/Industry of
ApplicationApplications
Fire Fighting Fire Fighting Equipments in
ships,thermal power stations, hospitals,
malls, offices, cinema halls
Auto Public and Private Transport
Industrial Inert Gas, Steel, Metal Industry, Divers,
Mountainers, Power Applications
Welding Cutting and Welding Operations
Healthcare Resipratory Aid in Hospitals, MRI's, Bath
Therapy, Cryosurgery
Food freezing, Beverage Industry, Bottling
Process
EKC – Key Customer profile• Industrial Cylinders
– Praxair
– BOC India Ltd
– Inox Air Products Ltd
– Advanced Silicon
– Air Products
– Air Liquide
• CNG Cascades
– Mahanagar Gas Ltd
– Indraprashtha Gas Ltd
– Bhagyanagar Gas Ltd
– Gujarat Adani
• OEMs for CNG Cylinders
– Hyundai
– Toyota
– Suzuki
– Tata Motors Ltd
– Eicher Motors Ltd
– Ashok Leyland & Co Ltd
– Swaraj Mazda
• Special Cylinders
– Defence Department in India
– US Navy
Automobile CNG Cylinder
Jumbo Trailer Project
India & China
EKC’s Competitive Edge
• First mover advantage in CNG space in Asia
• Existing Production Capabilities & Capacities and expansion plans leading to economies of scale which gives edge over competition
• New manufacturing facilities to adopt cost effective technologies and processes
• Supply Chain Advantage – Relationship with Tenaris going back to 15 years
• Strong Customer relationship especially with OEMs and after market players
• Regulatory approvals in over 20 Countries
GLOBAL CYLINDER LANDSCAPE
The above data does not include Large sized Jumbo cylinders
1,020,000 EKC
1,000,000 (mainly industrial) BTIC, China
800,000 NK
600,000 Worthington
500,000 Cilbras
350,000 Inflex
800,000 Faber
ESTIMATED CAPACITY (Nos.. PER ANNUMNAME OF SUPPLIER
INDIAN CYLINDER MANUFACTURERS
• Everest Kanto Cylinder Ltd.
• Nitin Fire Protection Industries Ltd.
• Rama Cylinders Pvt. Ltd.
• Maruti Koatsu Cylinders Pvt. Ltd.
• Bharat Pumps and Compressors Ltd.
• Lizer Cylinders Pvt. Ltd.
GLOBAL CYLINDER MARKET
• Due to global environment concerns coupled with high crude oil prices alternative fuel like CNG would be preferred in coming years
• CNG and speciality gas vessels would provide growth drivers all across the globe
• Estimated global CNG vehicle population globally is 8.5 Million with Asian region accounting for almost 51% (4.4 Million). This represents annual global growth of more than 30% over FY 06 (5.7 Million vehicles) *
• Asian vehicle population grows by 50% over previous year ** • The population of CNG run vehicles is slated to go upto a level of 50
Million by 2020 as per IANGV
* Source : NGV June 2008 issue and Asian NGV Oct 2008 issue
** Source : NGV December 2007 issue
Global NGV growth outlook
• Benefits of Natural Gas Vehicles include� Reduced Particulate and greenhouse gas emissions and safer than most liquid
fuels
� Widespread availability of NG which can also be derived from renewable sources like biogas
� Technically proven and available at lower cost
� Can be used in all types of vehicles
� Minimal processing or refining requirements
• NGV growth has more than doubled during last five years
• As per Gas Vehicles Report dated June 2008, there are 8.5 Million vehicles worldwide and IANGV projects that this would increase to a level of 50 Million vehicles by 2020
Global NGV growth outlook
• Among top 10 countries, the number of NGVs has increased from a level of 1.7 Million in 2001 to a level of 7.6 Million in March 2008
• EKC has a significant presence in six of these countries which still have a low penetration rate of NGVs in the overall vehicle population
• International Gas Union has projected that the total global NGV population shall increase to a level of 100 -200 Million by the year 2030 and the final target shall be announced in 2009
Global NGV statistics – Top Ten countries
Asia and CIS
Rest of World0
1000
2000
3000
4000
NGV Population (in Nos.)
Asia and CIS 319 3683
Rest of World 1386 3917
March-01 March-08
• Top ten countries represent 89% of global NGV population
• Compound Annual Growth rate (CAGR) over last 7 years
- 24% globally
- 42% for Asia and CIS
• Very low penetration rate of NGV vehicles
- 6.1 % globally
- 5.9 % for Asia and CIS
- 2.0% for high growth markets like India and China
76001705Total
12035Ukraine
16022Bangladesh
20136China
2529Colombia
433370Italy
7301Iran
82225India
1533272Brazil
1650200Pakistan
1699735Argentina
March-08March-01Country
No. of NGVs (In ‘000)
ASIAN CYLINDER MARKET
• Growth areas to be concentrated in China, India, Pakistan, Iran, Bangladesh and CIS countries
• Gas availability and infrastructure creation in above countries would lead to accelerated growth in Asia
• China’s committed investments for gas infrastructure amounts to Rmb 30 Bn over 2-3 years which would increase number of gas stations from 486 to almost 2000 by 2012
• Present gas vehicle population of almost 800,000 in India is slated to increase to a level of about 1.5 Million vehicles over next 3 years
• In Iran, as against present number of 294 gas stations, 852 more are under construction and government has reduced import tariffs on NG vehicles by 30% and zero duty on components *
• Pakistan is expected to be the largest user of CNG in the world with more buses and other commercial vehicles getting converted and CNG filling stations increasing to 1923 with 1.65 Million CNG vehicles in January 2008 *.
• EKC ‘s share in overall cylinder market in Pakistan was about 40% in 2007-08 and about 60% of cylinder sales to OEMs in Iran
* Asian NGV October 2008 issue
Natural Gas Scenario to positively impact CNG business in India
• Natural Gas infrastructure spans 8000 Kms with product pipeline of 10000 Kms
• Compressed Gas Distribution (CGD) networks in 19 cities
- More than 0.8 M vehicles on CNG
- More than 0.8 M households connected
• Expression of interest for CGD in 68 cities to be implemented over 2-5 years with investment ranging from US$ 50 – 200 Million in each city
• Projected Gas Supply expected to increase from 80.5 MMSCMD to a level of about 200 MMSCMD in 2010-11
EKC – Manufacturing Facilities
86%756,081 1,020,000 14,000 596,000 410,000 GRAND TOTAL
54%2,050 4,000 4,000 --Jumbo2008USA
31%59,936 210,000 10,000 120,000 80,000
1-280 and
Jumbo2008China
52%175,531 340,000 200,000 140,000
1-280 and
Jumbo2005Gandhidham
114%223,917 196,000 -196,000 -21-2802003Dubai
112%178,418 160,000 -80,000 80,000 21-2801985Tarapur
106%116,229 110,000 --110,000 1-211978Aurangabad
Utilization
(%) Production (2008-09) TotalJumboCNGIndustrial
Capacity Actual Capacity (In Nos.)
Product Range (In Lts.)
Established /
AcquiredLocation
Capacity Utilization has been calculated for finished cylinders onlyand does not include semi finished cylinders made in China
EKC – Historical Key Financial Highlights
TURNOVER (Rs. Million)
CAGR 63%
0
2000
4000
6000
8000
10000
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
EBIDTA (Rs. Million)
0
500
1000
1500
2000
2500
3000
EBIDTA (Rs. Million) 89 288 589 1142 1527 2516
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
PAT (Rs. Million)
CAGR 130%
0
500
1000
1500
PAT (Rs. Million) 21 143 324 718 1043 1375
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
EBIDTA Margin (%)
0.0%
10.0%
20.0%
30.0%
40.0%
EBIDTA Margin (%) 12.0% 21.7% 25.0% 26.9% 28.9% 29.4%
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Brief Performance Snapshot – FY 2008-09
• Total sales for the year was at a level of 691478 Nos. representing growth of 7% over previous year
• Shift towards more high value added products (CNG and Jumbo) resulting in much higher blended realization at Rs. 12,387 per cylinder as against Rs. 8.179 in the previous year
• Product mix comprised of CNG – 72.2%, Jumbo – 17.5% and Industrial – 10.3%.• Sales Revenue rose by 62% to a level of Rs. 856.55 Cr. • International sales accounted for 71.5% of overall sale value• EBIDTA was at a level of Rs. 247.25 Cr. as against Rs. 152.48 Cr. representing a growth of 62%.• EBIDTA margin was at 29% (same as last year) despite foreign exchange fluctuation losses
aggregating to Rs. 18.88 Cr. But for this, operational EBIDTA margin would have been at a level of 31% as against 29% in the previous year.
• Interest rose to Rs. 27.17 Cr. mainly due to one time charges for arranging loan for acquisition of CPI
• Depreciation at Rs. 69.28 Cr. included amortization of goodwill of Rs. 9.02 Cr. and amortization of intangible assets amounting of Rs. 7.45 Cr.
• Profit before Tax was at Rs. 159.72 Cr. as against Rs. 131.85 Cr. in the previous year representing a growth of 21%
• Tax rate was much lower at 13.9% mainly due to more proportion of non taxable income• PAT at Rs. 137.53 Cr. rose by 32% over the previous year• EPS for the year was at Rs. 13.6 as against Rs. 10.54 in the previous year• During the year, hedge reserve amounting to Rs. 25.90 Cr. has been created in respect of the
balance period upto December 2012 with regard to the Currency option contracts
2008-09 Results Highlights
+29.0%13.6 10.5 EPS (Rs. Per Share)
30 26 PAT (US$ Million)
+31.8%1,375 1,043 PAT (Rs. Million)
29.4%28.9%EBIDTA (as % of Turnover)
+64.8%2,516 1,527 EBIDTA (Rs. Million)
187 131 Turnover (US$ Million)
+62.0%8,566 5,287 Turnover (Rs. Million)
Change2008-092007-08
2008-09 Results
5,287
8,566
-
2,000
4,000
6,000
8,000
10,000
2007-08 2008-09
TURNOVER (Rs. Million)
1,527
2,516
-
500
1,000
1,500
2,000
2,500
3,000
2007-08 2008-09
EBITDA (Rs. Million)
1,043
1,375
-
500
1,000
1,500
2007-08 2008-09
PAT (Rs. Million)
2008-09 Results HighlightsTurnover by Products
2008-09 2007-08
Industrial
15%
CNG
85%
CNG
Industrial
Jumbo
18%
Industrial
10%
CNG
72%
CNG
Industrial
Jumbo
Moving up the value chain
Q3 2009-10 Results Highlights
0.15 3.77 EPS (Rs Per Share)
0.33 8.18 PAT (US$ Million)
15.30 381.70 PAT (Rs. Million)
15.34 28.97 EBIDTA (as % of Turnover)
259.90 725.20EBIDTA (Rs. Million)
36.29 53.62 Turnover (US$ Million)
1,693.80 2,503.00 Turnover (Rs. Million)
Q3 2009-10Q3 2008-09
Q3YTD 2009-10 Results Highlights
1.27 11.50 EPS (Rs Per Share)
2.76 24.93 PAT (US$ Million)
128.80 1,163.50 PAT (Rs. Million)
18.33 31.25 EBIDTA (as % of Turnover)
856.402,064.00 EBIDTA (Rs. Million)
100.11 141.48 Turnover (US$ Million)
4,673.10 6,604.20 Turnover (Rs. Million)
Q3 2009-10Q3 2008-09
Status of Expansion Projects and
Business Outlook• Ultra Large (Jumbo) Cylinder Plant has been commissioned and commercial
production has started in Q1 2009-10. Order from an international customer for jumbo cylinders has already been executed for 280 cylinders
• Billet Piercing Plant to be operational in Q4 2009-10 and this is expected to lower cost of production thereby making the products more cost competitive
• EKC is venturing into the market for light weight CNG cylinders mainly required by OEMs in Europe and Asia and this project is expected to go into production in Q1 2010-11. This would result in much higher value addition besides providing value to customer
• Due to lower realizations for both Industrial and CNG cylinders in the domestic as well as international markets as well as due to consumption of high cost inventories, margins continued to be under pressure during the first three quarters of 2009-10.
• Given the stated policy of the Indian Government to expand the availability and distribution of CNG across many more states and cities in the coming months, it is expected that this would offer the impetus for acceleration in the conversion as well as manufacture of CNG driven vehicles and also considering the fact that the economy is expected to have a positive turnaround very soon.
Thank You