Phillips Carbon Black Limited - 2004 2009 2012 2013 1960 ... Indian Tyre Industry Overview ... Total...

Phillips Carbon Black Limited

www.pcblltd.com May 20161

A trusted Global player providing cutting edge solutions to our Partners and an exciting workplace to our People

CESC

Phillips Carbon Black

Spencer`s Retail

Firstsource Solutions

Saregama India

Harissons Malayalam

Private Power Utility

Carbon Black Manufacturer

Organized Retail

Business Process management

Music & Entertainment

Tea & Rubber Plantations


(Rs. bn )

Financials of Group companies

3


Gross

Revenues

(FY`16)

EBIDTA

(FY`16)

Net Profit

(FY`16)

Current

Market cap

(appx)

Promoter

Holding

Institutional

Holding

CESC 66.16 17.21 7.07 73 50% 42%

Firstsource Solutions 32.30 4.05 2.65 26 56% 16%

Spencer`s Retail 18.65 (0.53) (1.42) - 100% -

Haldia Energy 17.20 9.01 2.32 - 100% -

Crescent Power 1.60 0.80 0.43 - 100% -

Surya Vidyut 0.45 0.41 0.05 - 100% -

Quest 0.91 0.45 0.09 - 100% -

Phillips Carbon Black 19.13 2.30 0.23 4.1 54% 10%

Saregama India 2.15 0.25 0.08 5.2 59% 18%

Harrisons Malayalam (FY’15) 3.34 (0.21) (0.35) 1.0 50% 6%

DIL – Chandrapur

(Not fully operational)1.15 (0.58) (5.89) - 100% -

Noida Power (FY’15) 9.25 1.83 0.80 - 73% -

4

Phillips Carbon Black - at a Glance

Largest CB Capacity of 4,72,000 MT p.a. across four locations in India Co –Generation Power Plant at each location aggregating 76MWCapacity

Largest producer of Carbon Black in India and 7th largest in the WorldBusiness

Leading tyre companies around the globeCustomers

International market presence in 30 countriesExports

Stock Listed on BSE (Code – 506590); NSE (PHILIPCARB)

Award for Best Environment Management to Kochi unit by Kerala State

Government “Top Exports” award received in 2014-15 by AIRIA

Awards

Certifications ISO/TS16949:2009, ISO9001: 2008, ISO14001: 2004,OHSAS18001:2007


5

270 KT Mundra : 90 KTMundra & Durgapur : 62

KT

Kochi : 50 KT,

PCBL Capacity : 472 KT

1960 - 2004 2009 2012 2013

1960 - 2004

• Started with Phillips Petroleum Co. USA at Durgapur : 14 KT capacity

• Technical collaboration with Columbian Chemical : 78 KT

• Acquisition of CB division of Gujarat Carbon Ltd : 103 KT

• Amalgamation with Carbon & Chemicals, Ltd , Kochi : 143 KT

Rubber Black Rubber & Specialty Blacks

Specialty Blacks

Among the lead players in National Market & International Market presence

PCBL Journey


6

Market Leadership

– Largest producer of CB in India for many

years

- Ranks 7th globally by Capacity

Product Mix

- Wide Product Portfolio for Rubber black

- Presence in Specialty Black ( Plastic

Applications )

Value creating business model

– Focus on Specialty Black

- High performance Rubber Blacks

- Power plants based on tail gas

Sl.No Location CB (MT) CPP (MW)

1 Durgapur, W.Bengal 1,47,000 30.00

2 Mundra, Gujarat 140,000 24.00

3 Palej, Gujarat 95,000 12.00

4 Kochi, Kerala 90,000 10.00

Total 4,72,000 76.00

Current installed capacity for CB & CPP

Business Profile

CB is a critical raw material for Tyre Industry

Source : ATMA


7

Shareholding Pattern as on May’16

Business Profile..contd

Domestic Positioning in Capacity (KTPY)

Market Share – Domestic

and Export (Lakh MT)

Source : Notch, PCBL estimates


472

315

12085

36

0

50

100

150

200

250

300

350

400

450

500

PCBL SKI India Himadri CCIL RalsonCarbon

Promoters, 53.6%

FII, 6.5%

DII, 1.8%

Bodies Corporates,

8.6%

Retail, 25.9%

Others, 3.6%

8

CB Revenue Split (%) : FY16Revenue Split (%) : FY16

EBITDA Split ( Rs. Crs, %) : FY16

96%

4%

Carbon Black Power

76%

24%

National International

185,80%

45,20%

Carbon Black Power

Business Profile..contd


9

2

1

5

3

4

Wide range of product portfolio in rubber black

Leading speciality black player in India

Globally accepted Carbon Black brand

In house Research & Development centre

Manufacturing facilities & virtual plants strategically located

near customer locations

Highlights


10

IRAN

VIETNAM

JAPAN

S. KOREA

TAIWAN

PHILIPPINES

CHINA

AUSTRALIA

NEW ZEALAND

INDONESIA

MALAYSIA

TURKEY

UAE

KENYA

Western Europe

ISRAEL

SRILANKA

BANGLADESH

SINGAPORE

USA

THAILAND

NEPAL

SAUDI ARABIA

ETHOPIA

BRAZIL

PERU

NIGERIA

Manufacturing Facilities

Market presence/ Warehouses

Decanting Stations

Global Footprints

Eastern Europe


Customer Profile

11

AND MANY MORE …


12

Indian Tyre Industry Overview

• 39 tyre companies

• 60 tyre plants

• 11 ATMA member companies

• Rs. 50,000 crs tyre industry turnover in India

• Rs. 10,500 crs tyre exports from India

• 12% CAGR in last five years

Total Tyre Production (Lakhs Nos)

976

1192 1254 1228 1289

1462

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Source : ATMA


13

Growth Drivers

Economic growth driving demand in automobile, construction, electronics sectors

Tyre capacities migration to Asia

Long term Business tie-up with global tyre customers

Moving up the value chain in product portfolio

Growing Specialty Black business

Key Risks

Volatility in crude price

Competition from Global CB players in China, Korea, Russia

Growth Drivers & Risks


14

Business Acceleration Underway

FY13-16

Poor industry demand

Dumping from

China

Forex losses

High raw material prices

PAST 3 YEARS

FY17 Onwards

Growth in both Intl and

Dom mkt

Improving Specialty segment

Reduced Finance

cost

Low raw material prices

Now (FY16 Onwards)Steps Taken

Tyre demand

New Grades added

Cost Management

Better power rates

Specialty business

New customers added

Global penetration

• Lower capacity utilization• Decline in EBITDA

• Volume Ramp Up• Profitability Boost


Brent Crude & CBFS Price

100

150

200

250

300

350

400

450

500

BRENT CBFS

($/MT)


15

16

72% 73%

42%

69%77% 80%

28% 27%

58%

31%23% 20%

0%

20%

40%

60%

80%

100%

120%

FY11 FY12 FY13 FY14 FY15 FY16

EBITDA split (%)

Carbon Black Power

210 Crs244 Crs 119 Crs 155 Crs 230 Crs

Power Generation mitigates core business risk

233 Crs


17

Sales increase with focus on International market

• New grades of CB added in the product portfolio

• International market growth > domestic market

• Growth in tyre demand with GDP growth

• Growth in specialty business

Volume Growth

• Expansion in the customer base

• New grades added for existing customers

• Strong focus on North America and Europe

• Grades customization as per the customer’s requirement

• US FDA approved grades in specialty product portfolio

International Market growth


18

Reducing Finance cost

Borrowing cost reduction

Fall in working capital requirement despite

volume growth

Reduction in Interest cost

Fall in Crude

Prices

Efficient WC

Management


Accelerating contribution by power segment

19

Increase in Power Tariffs

CBFS Usage > CBO Usage

Carbon Black Volumes Going up

FY12 FY13 FY14 FY15 FY16

CB Production (MT Lakhs) 3.17 2.97 2.89 3.12 3.32

Power Generation (MU Lakhs) 4003 4103 3459 3420 3720

Power Export (MU Lakhs) 2719 2727 2045 1994 2248

Avg Selling Price (Rs/Kwh) 3.03 3.06 3.16 3.48 3.4

Power Sale (Rs Crs) 82.51 83.44 64.53 69.37 76.5

Power EBITDA (Rs Crs) 66 69 48 49 45

Approximately 40% of power generated is used to meet captive requirement, balance 60% is exported to grid

Growth in CB capacity utilization would increase revenue from sale of exported power

POWER BUSINESS TO GROW


20

(Rs. crs) FY11 FY12 FY13 FY14 FY15 FY16

Profit & Loss Statement

Net Sales 1690 2187 2285 2277 2485 1913

EBITDA 234 219 83 104 210 230

Depreciation 38 48 51 54 57 55

Finance Cost 31 67 72 139 138 118

PBT 164 103 (40) (88) 14 57

Tax 48 16 (19) (1) 2 34

PAT 116 87 (22) (87) 12 23

Financial Overview


21

Quantitative Summary


Particulars Q4FY16 Q3FY16 %Change (QoQ) Q4FY15 %Change (YoY)

Production (MT) 87,640 82,806 5.8% 73,520 19%

Capacity Utilization(%) 85.4% 80.7% 4.7% 71.7% 13.8%

Total Sales Volume (MT) 88,507 80,203 10% 77,207 15%

Domestic (MT) 64,153 57,596 11% 54,780 17%

Export (MT) 24,354 22,607 8% 22,427 9%

Particulars YTD Mar FY16 YTD Mar FY15 % Change

Production (MT) 332,038 311,823 6%

Capacity Utilization(%) 81% 76% 5%

Total Sales Volume (MT) 335,146 313,562 7%

Domestic (MT) 242,621 227,150 7%

Export (MT) 92,525 86,412 7%


22

Financial Summary

Particulars Q4FY16 Q3FY16 Q4FY15

Rs Crs Rs Crs Rs Crs

Net Sales (incl. other income) 461 464 599

EBITDA (before forex) 67 60 32

EBITDA% 14% 13% 5%

PBT 20 19 (4)

PAT 7 8 1

Power realization Rate (Rs/KWH) 3.0 3.3 3.5

Particulars YTD Mar FY16 YTD Mar FY15

Rs Crs Rs Crs

Net Sales (incl. other income) 1913 2485

EBITDA (before forex) 230 210

EBITDA% 12% 9%

PBT 57 14

PAT 23 13

Power realization Rate (Rs/KWH) 3.4 3.5

Outlook

Increase competitiveness in international market due to steep decline of crude

price

Auto sector growth to increase domestic demand

Initiatives in manufacturing space yielding result

Availability of domestic raw material to reduce operating capital as well as

landed cost

Growth of specialty business

23


24

Thank You


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