Presentation to Analyst / Institutional Investors Meetings [Company Update]

8/20/2019 Presentation to Analyst / Institutional Investors Meetings [Company Update]

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AIN IND IE LIMI ED

C P M 2016


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F L

F , , , . F

/

.

F . RAIN INDUSTRIES LIMITED (RAIN ) ,

C , C

.


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4

AIN GCP

C P

CP

AIN G B

M C

P C ( CPC ), C T P

( CTP ) , N , P

A , B A O , .

C

GPC.

S CPC P

2.1 T I US.

F R P

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125 M I US

M S C .

T C , A P & T

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A 3.5 M T .

A A P , K ,

M , O , T N T .

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E N A .

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F CTP P

1.3 T E

N A .

O 0.2 T CPC

B F I


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5

1998 2005 2007 2008 2016

C BC 1.5

M

CL CPC I

C

M CL C L . A CII

( 2 C ) E

$ 619

C L . ( CL)

, I 0.3 M

22 M P P A D , A P

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K , A P

AIN G , ,

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2012 2013

A E GE( C D )

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C B P

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2015

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• C 0.2 M CPC

P I .

• C FGD C .


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N A

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• 1 C F

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CPC B F ) I

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With best-in-class Facilities across Four Continents, RAIN Group supplies to customers across the World

D G P


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AIN G I

• AIN AIN CII E GE

O , C , F L .• ,

Before Now

Decentralized functioning based on Geographies Centralized Functioning


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C B P A E M

RAIN’sCalcining Kilns

Anodes

Coal Tar Pitch

RAIN’s Coal TarDistillation Plants

AluminiumSmelting

Green PetroleumCoke (By-Product

of Oil Refining)

CalcinedPetroleum Coke

Aluminium

11

22

33

55

66

77

88

99

Coal Tar (By-product ofMetallurgical Coke

Production)

AIN , A I G C E

44


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O C P C ( CPC ) I

Green Petroleum Coke -A by-product

CalcinedPetroleum Coke

Captured throughcalcining process

Overview World CPC Demand by End-useCPC is produced from GPC, a by-product of crude oil refining

Calciners compete on the basis of product quality and reliability, apartfrom the price

Availability of Anode-grade GPC has been declining as oil refinersprocess heavier, more sour crude oils

Additional worldwide CPC capacity effectively constrained by availabilityof suitable GPC (Anode Grade GPC)

Industry participants working to develop CPC from lower quality GPCsources

Every Ton of Aluminium requires ~ 0.4 Tons of CPC

Oil Refining Industry

GPC

Coke Calciners

C G C

H GPC

Aluminium Industry

CPC


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Critical in the value chain of coal tarRegional competition given logisticallimitations/high transportation costsHigh barriers to entry due to scale economies,asset intensity and know-how requirements

O C P ( C P ) I

Steel Industry Coal Tar Distillers Aluminium Industry

Pitch (incl. CARBORES) ~50%

Aromatic Oils (incl.PA/BTX) ~40%Naphthalene Oil ~10% Pitch


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Carbon for Other Diversified Applications

D E 50% G C P

• Titanium Dioxide, Graphite, Steel, etc. 9%CPC & CTP

• Wood Preservation, etc. 6%Creosote Oil

• Coatings, Pigments, etc. 4%Benzene Toluene Xylene (BTX)

• Refractory Products, Graphite, etc. 2%Carbores

• Plastic Products, Flexible PVC Products etc. 2%Phthalic Anhydride (PA)

• PA, Coating, Pharma, Mothball, Pigments, Concrete, Paper, etc. 2%Naphthalene

• Public Utilities & Industrial Customers 3%Energy

• Petroleum, Coatings, Pharma, etc. 8%Carbolic Oil and Other Products

@ Contributions to Group Revenue

@


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O C P AIN G

Key Raw Materials Naphthalene oil CarboindeneC9 feedstock

Carbolic oilAnthracene oil

Crude benzene/benzene

Products Superplasticizerchemicals

ResinsModifiers (DIPN)

PhenolSpecialty products

Crude benzene/benzene

Key Applications

Key End Markets ChemicalsAdmixture and construction

Adhesives/coatingsRubberPaper

ChemicalsAutomotive/tyresWire varnish

Carbon chemicalsCrude aromatics

Plants Candiac (CAN) Duisburg (GER)

Uithoorn (NL)

Castrop-Rauxel (GER) Duisburg (GER)

C

& M A C C


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2014 2015 2016F 2017F 2018F 2019F 2020F

26.1 27.4 28.0 28.7

30.0 30.6 31.5

26.4 27.5 28.1 28.8

30.1 30.7 31.7

P D

G C P O(M M )

Global Aluminium production is expected to grow at a CAGR of 3.5% driving incremental demand for both CPC and CTP

2014 2015 2016F 2017F 2018F 2019F 2020F

6.3 6.6 6.9 7.3

7.8 8.0 8.2

6.1 6.5 6.8

7.3 7.7 7.9

8.2P D

G A O(M M )

2014 2015 2016F 2017F 2018F 2019F 2020F

54.2 57.6 59.8

61.3 64.2 66.2

68.4

54.21 56.2759.11 61.82

64.57 66.9669.29P C

CAGR : ~3.5% (P) &(2016-20) ~4.3% (C)

G CPC O(M M )

CAGR (2015-20): ~2.8%

I O

TransportGrowth in automotive vehicle productionAluminium content in cars increasingGrowth in other transport modes, e.g. railway

5-6%

ConstructionUrbanizationHousing market recovery in mature regionsEnergy neutral buildings

3-4%

Electrical UrbanizationCopper substitution 5-6%

Machinery &Equipment

Improving industrial sentiment in mature regionsManufacturing activity and industrial growth in emergingcountries

4-5%

Packing UrbanizationEnvironmentally-friendly solutions 3-4%

A D D

CAGR : ~4.5% (P) &(2016-20) ~4.8% (C)


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B

OF O

M K

Although commodity prices recovered in H1-CY15, the prices started declining in H2-CY15 .

N

0

100

200300

400

500

600

700

800

Av. Fuel oil 1% Average EUR Fuel oil 1%

300

400

500600

700

800

900

1,000

1,100

1,200

Av. (spot price) orthoxylene Av. (spot price) orthoxylene 2009- today

100200300400500

600700800900

1,0001,1001,200

Av. benzene (spot price) Av. benzene (spot price) 2009 - today

150200250300350400

450500550600650700750800850

Av. monthly naphta (spot price) Av. monthly naptha (spot price) (2007 - today)


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30.00

40.0050.0060.0070.0080.00

D 13 M 14 J 14 S 14 D 14 M 15 J 15 S 15 D 15

B $

1.00

1.10

1.20

1.30

1.40

D 13 M 14 J 14 S 14 D 14 M 15 J 15 S 15 D 15

$ E O

F E M

L(Q415 C )

1.093

L(M 16,2015)

1.053

H(M 13, 2014)

1.393

D 2013 D 2015 $/E M

C D H2 C 15.

L(Q415 C )

66.33

L(M 19,2014)

58.43

H(D 15, 2015)

67.04

D 2013 D 2015 IN / $ M

D 2013 D 2015 B/ $ M

L(Q415 C )

74.10

L(D 30,2013)

32.58

H(D 31, 2015)

74.10

50

55

60

65

70

D 13 M 14 J 14 S 14 D 14 M 15 J 15 S 15 D 15

$ IN

1.201.30

1.40

1.50

1.60

S 13 D 13 M 14 J 14 S 14 D 14 M 15 J 15 S 15 D 15

CAD E O

L(Q415 C )

1.51

L(A 24,2015)

1.31

H(M 19, 2014)

1.56

D 2013 D 2015 CAD/E M


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• The Company has successfully completed the construction of its fourthCoal Tar Distillation Plant (CTP Plant) with a capacity of 300,000 metric

tons per annum in Cherepovets, Russia on February 11, 2016 via a Joint

Venture with PAO Severstal, Russia.

• The CTP Plant is expected to operate at about 70% of its capacity in thefirst year of its operation.

• The advanced technologies installed in this CTP Plant will enableproduction of vacuum-distilled CTP, which is a higher quality and highermargin product.

• JV Partner, PAO Severstal, has brought a long-term supply contract forthe raw material - Coal Tar into the Joint Venture.

• With majority of sales made within Russia at import parity price, there willbe no impact from devaluation of Russian Ruble.

N C D P C ,


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• During CY 2015, the Company has commissioned a new FlueGas Desulfurization (FGD) Plant at its calcining plant in

Chalmette, Louisiana, U.S.Facilitates the flexibility to process High-Sulphur GPC

while Maintaining Strict Environmental Compliance.

Restores CPC Capacity of 230,000 Tons per annum

Generates incremental energy from increased CPCvolumes.

Eligible for Higher Tariff from the Power Utility.

N FGD P C , L ,


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Solar Power Plant in Andhra Pradesh, India

The Company partnered with SunE Solar B.V. (“SunEdision”)

(www.sunedison.com) to develop a 22 MW Solar Power Plant in Dharmavaram,

Anantapur District, Andhra Pradesh, India (“the Solar SPV”). The Company

owns 51% of the shares of the Solar SPV and the remaining 49% of the shares

are owned by SunEdison. Due to delays in procurement of land, the

Government of Andhra Pradesh has extended the Scheduled Commercial

Operations Date for all such Solar Projects until March 2016.

E P

Waste-Heat Recovery Power Plant in Cement Plant at Kurnool, India:

To optimize the cost of electricity in its Cement business, the Company is commissioning a 7 megawatt (“MW”) Waste-Heat Recovery

Power Plant (“WHR Power Plant”) at its existing Cement Plant in Kurnool, India. The WHR Power Plant is nearing the completionstage and will be able to commence operations as per the initial timeline of March 2016.


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Changed CPC Sales Strategy

Intermediate Blend toIndia from USA

Central Blending in India ofUS/China/India Production

High Sulphur GPC inUSA from prevalence

of GPC production

US and India Calcining Centers

I I .


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C F P

PA(INR M )

E P

(IN )

115,039117,336

101,718

CY13 CY14 CY15

14,97812,220

13,492

CY 13 CY 14 CY 15

4,512

2,5613,233

CY13 CY14 CY15

13%10%

13%

CY13 CY14 CY15

(INR M )AEBI DA

(INR M )

A PA(INR M )

AEBI DA M

(%)


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21

34%

21%

29%

8%

5%

3%

CY 2015

Europe (Incl. CIS) Asia (Excl. Middle East)North America Middle EastAfrica Others

43%

18%

22%

8%

6%

2%

CY 2014

Europe (Incl. CIS) Asia (Excl. Middle East)North America Middle EastAfrica Others

G

E , , N A C


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E I

32%

17%

12%

5%

3%

6%

9%

5%

4%2%

5%

Aluminium 32% Specialty Chemicals 17% Construction 12%

Coatings 5% Wood preservation 3% Graphite 6%

Carbon black 9% Petroleum 5% Non-Anode 4%

Energy 2% Others 5%

34%

13%

15%

6%

6%

5%

3%

3%

3%

3%

9%

Aluminium 34% Specialty Chemicals 13% Construction 15%

Coatings 6% Wood preservation 6% Graphite 5%

Carbon black 3% Petroleum 3% Non-Anode 3%

Energy 3% Others 9%

CY 2014 CY 2015

C C , C

D , C B P .


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B C

71%19%

10%

B C 2015

CarbonChemical

Cement

74%13%

13%

EBI DA B C 2015

CarbonChemical

Cement

72% 21%

7%

B C 2014

Carbon

ChemicalCement

81%

15%

4%

EBI DA B C 2014

Carbon

ChemicalCement


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C

• Carbon Products include CPC, GPC, CTP and other derivatives of Coal Tar Distillation.

• Carbon Products revenues also include revenues from sale of energy generated through Waste-heat recovery and PetCoke Trading

• While the revenues from Carbon business declined due to lower realizations, corresponding margins improved due tochange in product mix and optimization of conversion cost.

• Commencement of operations in Russian CTP plant would contribute to growth in revenues and operating profits.

• New CPC blending facility in India and FGD plant in Chalmette, US will allow the Company to improve its capacityutilization in US as well as compete in demand growing areas such as India and its surrounding regions.

3.13 3.28 3.21

71%

83% 85%

30%

45%

60%

75%

90%

3.05

3.10

3.15

3.20

3.25

3.30

CY 13 CY 14 CY 15

Sales Volume (in Million MT) & Capacity Utilisation (%)

82,707 83,973

71,814

14%

12%

14%

6%

10%

14%

18%

60,000

65,000

70,000

75,000

80,000

85,000

90,000

CY 13 CY 14 CY 15

Revenue (in Millions) & Operating Margin (%)


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C

• Chemicals include the downstream operations of Coal Tar Distillation and are comprised of Resins, Modifiers, SuperPlasticizers and other Specialty Products

• While the revenues from Chemical business declined due to lower realizations, corresponding margins improved dueto change in product-mix and optimization of conversion cost.

• The Company through R&D in such diversified segment is constantly focusing for optimized product mix as welloptimized conversion cost.

23,936 24,629

19,616

10%

8%9%

4%

8%

12%

-

5,000

10,000

15,000

20,000

25,000

30,000

CY 13 CY 14 CY 15


0.29 0.32 0.32

65%

80%

60%

10%

30%

50%

70%

90%

0.27

0.28

0.29

0.30

0.31

0.32

CY 13 CY 14 CY 15



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C

• Revenue from Cement business increased mainly due to increase in realization.

• The Company has increased its share in non-traditional markets such as Odisha and Maharashtra from 6% in CY14 to16% in CY15.

• With the improved focus on development by Andhra Pradesh and Telangana by respective State Governments afterstate separation, the demand from these states is expected to grow in future.

• Further, after commissioning of 7 MW Waste-heat Recovery Power Plant in Kurnool, the Company would optimizecost of energy in Cement Business segment.

8,396 8,73510,288

7%5%

18%

0%

4%

8%12%

16%

20%

-

2,000

4,000

6,000

8,000

10,000

12,000

CY 13 CY 14 CY 15


2.13

2.15

2.16

61%

62% 62%

60%

61%

62%

63%

2.10

2.12

2.14

2.16

2.18

CY 13 CY 14 CY 15



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PA A PA

P PA

(INR M )

PA (A) 3,233

( ) A G P L

( ) L D EPC C 429

( ) P D D (C C 11 B ).

( ) E L 19

G E 61

L : T (16)

E , 45

L : M (45)

E I (B)

A PA (A + B) 3,233


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C D P

A D 31, 2015

( $ M ) A

N 958 F 8.21% B 2018 2021

E C

B 50 F 5.33%

2016 B D 67 F 4.05% A 2018

L J 6 F 8.50% B 2018

O D 13 F 4.53% I $ 9.6 M F L

D(IN )

12 I F 15 2012.

G D 1,106 7.85%

A : CD

39 1.36%

D 1,145 7.66%

L : C E

132

N D 1,013

$ M

D D 31, 2015 1,106

C 2016 35

C 2017 45C 2018 416

C 2019 13

L 597

• , C J . N $26.3 M

C 14 . N $ 51.4 M C 15.

• $ 5 M .

With the existing cash of US$ 132 million coupled with undrawn revolver facilities of US$ 213 million, the Company is wellplaced to meet debt servicing obligations. The major debt repayments are scheduled to start from December 2018.


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ID

IC

L

O I

( $ M )

OA D . 31, 15( $ M ) D

OO A /

( P P )

D 2010 8.00% US$ 400 373 D . 18 D . 1, 2014 2%*

D 2012 8.25% US$ 400 356 J . 21 J . 15, 2016 ( 6%#

D 2012 8.50% E 275 229& J . 21 J . 15, 2016 ( 6%#

1,075 958

* 1, 201 .# % / 2% / 0% 1 , 201 / 201 / 201& 1.0 1, 201 .

1. 1 1, 2012

• B US$ 400 D 2010 11.125% B O , CII C LLC J 2007 RCC F R P

• B US$ 400 210 D 2012

• T B N C D :

• 100% P B .• N , ,

, .

• P B .

N / B(I CII C LLC, )


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D P

Borrower CY 15 CY 16 – CY 17

US Operating Company 1,005945to

965European Operating Company 19

Indian Carbon -

Indian Cement 12 11

Holding Company (India & US) 70 50

Total Term Debt 1,106 1,006 to 1,026

US$ M

• Currently, substantial amount of Term-debt is borrowed by US Operating Company. There is minimal orzero Term-debt in Operating Companies in Europe and India.

• With completion of major Capacity Expansions, the Company is proposing to repay Term-debt of US$ 80 – 100 Million during next 18 Months through internal accruals and asset optimization.

• The Company would refinance “Senior Secured Notes” issued by US Operating Company with New Debtat US Holding Company on the strength of Carbon and Chemical assets in US, Europe and India; resultingin lower interest cost and reduction in tax outflows.


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K A F

D B

I

C E P

E &D C


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C K P I

(1)R (2)O P P O I , E L , D , , I , T (3) S R PAT A PAT:

• P A T C 2015 ₹ 697 M , ₹ 429 M ₹ 134 M , R R & C D ₹ 127 M (

₹ 7 M ( ).• P A T C 2014 ₹ 1,820 M , I

₹ 237 M , R R . 338 M , I ₹ 95 M , ₹ 814 M .

• P A T C 2013 ₹ 375 M , RUETGM I ₹ 1,304 M , ₹ 404 M .

• P A T C 2012 ₹ 1,789 M ( ₹ 1,219 M ) R .

• P A T C 2010 ₹ 1,249 M ( ₹ 898 M ).

C 2015 C 2014 C 2013 C 2012 C 2011 C 2010

R (1) 102,185 119,370 117,443 53,615 56,395 37,857

O P (2) 13,492 12,220 14,978 11,090 13,873 7,559

R PAT 3,233 885 3,845 4,577 6,641 2,407

A PA(3) 3,233 2,561 4,512 5,796 6,641 3,305

INR M


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34

4,038

4,438

2,407

6,641

4,577

3,855

885

3,233

482

760 726

179320 296

303

302 379

440 430

343 336 405

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2008P R 11.9%

2009P R 6.8%

2010P R 15.7%

2011P R 11.4%

2012P R 15.9%

2013P R 8.9%

2014P R 38%

2015P R 12.5%

R PAT B B D

C N B B : 23.83 M ( IN 2 )C A B B : IN 795 M

INR M

N :A C INR 515 M C 2009; C .

P P


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• What is the Impact of Crude Oil / Commodity price fluctuations on Rain’s businesses?o CPC and GPC prices are not indexed to Crude Oil or any other Commodity prices. They are influenced by their own supply-demand

dynamics. Although prices of both GPC and CPC fluctuate quarter on quarter, the spread between prices of GPC and CPC movesin a narrow-range.

o Sales prices of certain Carbon Products and Chemical Products manufactured by the Company are indexed to Fuel Oil or otherCommodity prices. Fuel Oil prices fluctuate differently from Crude Oil prices.

o Certain Raw Material costs and Finished Product sales prices in Coal Tar Distillation are indexed to Fuel Oil or Other Commodityprices with a lag of few months, there is no impact of falling Crude Oil or other Commodity prices on the business of Coal TarDistillation in the medium term. The Company has some exposure to the BTX and Ortho-xylene pricing.

• What is the Impact of falling Aluminium prices on the businesses carried-out by Rain?o Prices of CPC and CTP are not indexed to Aluminium prices and they are influenced by their own supply-demand dynamics.

o As CPC and CTP are critical consumables used in manufacturing of Aluminium metal, their global demand is directly proportionateto global production of Aluminium metal and not linked to Aluminium prices.

• What impact is assumed from the shut down of aluminium smelters in North America?o The contribution to group revenue from aluminium smelters in North America is ~11% in CY 2015.

o The new energy policy in North America has provided an encouragement to the smelters to rethink or defer their shut down plans inthis region.

o By the probable shut down of almost 50% CTP business by the major competitor due to unviable reasons, RAIN becomes the primeglobal player in this business segment.

o Considering the projected increase in production of Aluminium in India and the region around, the Company is uniquely place tocouple its strategic, deep-water US plant locations near low-cost raw materials with its major Indian market presence. This un-matched and unmatchable combination allows the Company to quickly tap into the growing market and re-align its global sales mixthrough its new, low-cost CPC importing and blending facilities in India.

F A


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• What is the Impact of weakening Euro (and Canadian Dollar) against US Dollars on the businesses carried-out by Rain?o The Company generates 45% - 50% of revenues from its plants located in the Euro currency zone. About 10% of revenues from

these plants are generated in US Dollars, for which costs are incurred in Euros. A 10% decline in Euro-Dollar Exchange rate wouldresult in less than 2% decline in operating profitability in US Dollar terms.

o A relatively weak Euro would make the Company’s European products more competitive in international, US Dollar denominatedmarkets, resulting in improved capacity utilization and higher operating profits.

o The above currency benefits hold true for the Company’s Canadian plants, where operating costs are incurred in currently-weakCanadian Dollars, but where sales are mare largely in US Dollars.

• What are the plans for de-leveraging the Company, considering the high-leverage?o Gross Debt of the Company has reduced by US$ 66 million from US$ 1,211 million as on Dec 31, 2014 to US$ 1,145 million as on

Dec 31, 2015. Net Debt during the same period reduced by US$ 53 million. Reduction in Gross Debt is mainly due to buy-back ofSenior Secured Notes of US$ 51.4 million, repayments of Working Capital loans of US$ 15 million and exchange rate

reinstatements. To reduce debt and optimize interest cost, the Company so far pre-paid Jr. Subordinate Notes $26.3 million in CY14and Senior Secured Notes $ 51.4 million and partly replaced by low cost debt in CY15.

o Net Debt-to-EBITDA is higher at 5X as on Dec 31, 2015; the EBITDA-to-interest for CY 2015 is at 2.3 X in weaker businessconditions .

o With no major repayments in next two-years; the Company is well positioned to meet all repayment obligations.

o The Company has options to make Bullet Repayments of US$ 373 million and US$ 585 million due in Dec.’18 and Jan.’21

respectively, partly through internal accruals and partly from fresh borrowings.

• What is the Impact of weakening Russian Ruble on the viability of Russian Tar Distillation Plant?o The weakening Russian Ruble will not impact the viability of Russian Tar Distillation plant. The finished product from the new

Russian Plant will be sold either in Russia (as an import-substitute) or exported from Russia. With conversion costs being incurredin Russian Ruble, this new plant will be more competitive in the international market

F A


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www.rain-industries.comwww.raincii.com www.ruetgers-group.com/en

I , :

I :A K P : +91 40 4040 1234D : +91 40 4040 1252

E :A .U @ .

:

P :+1 203 406 0535D : +1 203 5172 822

E :R .T @ .

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Presentation to Analyst / Institutional Investors Meetings [Company Update]

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