investor presentation - welspun 27th... · • accredited with iso 9001, ... gail* 6,642 1,328 1.6...

Welspun Group | Welspun Corp Ltd

Investor Presentation


November 2012


On The Path of Global Leadership…

WELSPUN CITY, ANJAR


Disclaimer

Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements,” including those relating to general business plans and strategy of Welspun Corp. Limited (“WCL"), its future outlook and

growth prospects, and future developments in its businesses and its competitive and regulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, inter alia including future changes or developments in

WCL's business, its competitive environment, its ability to implement its strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in India. This presentation does not constitute a prospectus, offering

circular or offering memorandum or an offer invitation, or a solicitation of any offer, to purchase or sell, any securities of WCL and should not be considered or construed in any manner whatsoever as a recommendation that any person should subscribe for or

purchase any of WCL's securities. Neither this presentation nor any other documentation or information (or any part thereof) delivered or supplied under or in relation thereto shall be deemed to constitute an offer of or an invitation by or on behalf of WCL to subscribe

for or purchase any of its securities.

WCL, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information

contained in this presentation, unless otherwise specified is only current as of the date of this presentation. WCL assumes no responsibility to publicly amend, modify or revise any forward looking statements contained herein, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this presentation, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past

performance is not indicative of future results. WCL may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation may not be copied and

disseminated in any manner.

THE INFORMATION PRESENTED HERE IS NOT AN OFFER INVITATION OR SOLICITATION OF ANY OFFER TO PURCHASE OR SELL ANY SHARES OR ANY OTHER SECURITY OF WCL.

This presentation is not for publication or distribution, directly or indirectly, in or into the United States, Canada or Japan.

These materials are not an offer or solicitation of any offer of securities for purchase or sale in or into the United States, Canada or Japan.


Welspun Group

Brief Synopsis

• One of the fastest emerging global groups, with multi-country

strategy and manufacturing facilities across geographies

• Group companies enjoy market leadership positions:

• 2nd ranked Large Diameter Pipe Company in World -

Financial Times, UK

• 2nd ranked in Home Textiles – FTT

• Relationship with marquee clients; Fortune 100 companies

like Exxon Mobil, Chevron, Shell, Bechtel, WalMart, Target etc

• Equity investment by renowned investors like Apollo, ICICI

Life, IDBI Bank, Reliance Capital, 3i (UK), Genesis (UK)

• Excellent relationship with domestic and international lenders

Key Markets

• Major exports mainly to North America, South America

Europe, Middle East, South East Asia, Africa, etc.

International Setup

• Pipe & Coating facility in Arkansas, US

• Pipe & Coating Facility in Dammam, Saudi Arabia

• Christy, UK

• Offices in Manhattan, NY and Houston, TX - US

Welspun Corp Economic Times “Emerging Company of the Year Award”

for Corporate Excellence - 2008

Welspun Corp 2nd Largest (Large Diameter) Line Pipe Manufacturer

in the World - Financial Times UK - 2008

Welspun India “ Outstanding CSR in Textiles Sector”India Shining CSR Award - Wockhardt Group 2011

Welspun Corp STAR PERFORMER – GAIL India Ltd - 2011

Welspun India Sustainability Award - Walmart - 2007

Welspun India 4 Gold Trophies for Outstanding Export Performance –

Textile Promotion Council (TEXPROCIL) - 2007

Global Recognitions

Welspun Corp Best India Manufacturing Company in the US – IACC 2011

Top Exporter for the Year 2010-2011 - EEPC

Welspun Group Ramakrishna Bajaj National Quality Merit Award for Welspun Vidya Mandir – IMC 2012

Welspun Group “ Green IT Award for 2011”

- by CIO magazine, IDG Group 2011

Welspun India “Golden Peacock Eco-Innovation Award for the year 2012 for Eco Dry Towels”


Promoter37.96%

Mutual Funds0.25%

FII21.89%

Public, Banks, Financial Institutions

and others39.90%

WCL – An Introduction• WCL, flagship company of Welspun Group, is one of the largest pipe

manufacturing companies in the world

• Incorporated in 1995, the Company offers a complete range of high grade line pipes ranging from 1/2 inch to 121 inches used inter alia for

transmission of oil & gas

• Partner of Choice for more than 50 Oil & Gas Giants across the globe

with a geographically diverse client base including Chevron, Exxon Mobil, Saudi Aramco, British Gas , Kinder Morgan etc

• International footprint

• Accredited with ISO 9001, ISO 14001 and OHSAS 18001 certifications

• Strong order book of 1.22 million MT ~ US$ 1.6 billion

57,395

73,50380,221

89,766

46,104

0

15,000

30,000

45,000

60,000

75,000

90,000

105,000

2008-09 2009-10 2010-11 2011-12 H1 2012-13

(INR Mn)

1,250US $ Mn

6,348

13,18614,461

11,120

4,084

200

3,200

6,200

9,200

12,200

2008-09 2009-10 2010-11 2011-12 H1 2012-13

(INR Mn)

104US $ Mn

Operational EBITDA

Consolidated Total Revenues

Summary Market Statistics

As of November 19, 2012 INR Mn US$ Mn(6)

Share Price (INR/ US$) 105.00 1.91

Market Capitalization * 27,664 503

Enterprise Value (7) 62,166 1,131

Shareholding Pattern, as on Sept 30, 2012

Note

1. Exchange rate FY09 US$ 1 = Rs.45.91




Note

5. Exchange rate H1 FY13 US$ 1 = Rs. 54.737

6. Exchange rate as on November 19, 2012; US$ 1 = Rs. 54.945

7. Net Debt at INR 34,502 million as on September 30, 2012

* Total # shares outstanding: 263.47 million including 35.04 million of CCD’s due for conversion in February 2013

1,637

252

(2)(1)

(1)

1,799(3)

259(3)

(4)1,765

142(4)(2)

(5)842

75(5)


WCL – An Introduction

State of the art pipe and plate manufacturing capacities worldwide

PIPES:

LSAW:•Anjar and Dahej, India

HSAW:•Anjar, Dahej and Mandya, India

•Dammam, Saudi Arabia

•Little Rock, Arkansas, USA

ERW:•Anjar, India

•Little Rock, Arkansas, USA (to be commissioned by Q4 FY13)

COATING:•Anjar and Dahej, India

•Dammam, Saudi Arabia

•Little Rock, Arkansas, USA

PLATES:• Anjar, India


Global Manufacturing Capacities

-

500

1,000

1,500

2,000

2,500

LSAW HSAW ERW Total Pipes

Plates

700

1,350

200

2,250

1,500

175

175

Manufacturing Capacities in ‘000 MTPA

New Capacities

Current Capacities

• Premier integrated set-up for manufacturing

welded pipes with state-of-the-art-technology

geared to meet the requirements of the global

industry

• The Longitudinal Pipes division (LSAW)

has a capacity of 350,000 MTPA at

Dahej

• The New Longitudinal Pipe Plant

(LSAW) plant at Anjar has a capacity of

350,000 MTPA

• The Spiral Pipes division (HSAW) at

Dahej and Anjar together have a

capacity of 550,000 MTPA

• The Spiral Pipes division (HSAW) at

Mandya (Karnataka) has a capacity of

150,000 MTPA

• The ERW Pipes division at Anjar has a

capacity of 200,000 MTPA

Anjar, Dahej and Mandya

• Manufacturing facility on a 740-acre siteadjacent to the Little Rock Port Authoritycommissioned in February 2009

• This API certified facility currently employs443 people and is capable of producing350,000 MTPA of HSAW pipes annuallyfor the use of the oil and gas industry

• It also has Coating and Double Jointingcapabilities

• The construction of the new ERW mill with175,000 MTPA capacity is underway andshould be commissioned Q4 FY13 as perthe schedule.

Little Rock, Arkansas, USA

• Manufacturing facility of 300,000 MTPA of HSAW pipes with Coating facility

• Recently commissioned coating facility of 1.0 mn sq mtrs

Dammam, Saudi Arabia

• This backward integration atAnjar, India has annual capacityto produce 1,500,000 MTPA ofPlate and Coil with plates (up to12.5 mtrs in length, 140 mmthickness and 450 mm width) andCoil (up to 2800 mm width and 25mm thickness) with strength of120,000 PSI

Plate-cum-Coil Mill

Current Capacities In ‘000 MTPA

Anjar, India

Dahej, India

Mandya,India

Dammam, Little Rock, US

Total Capacity

LSAW 350 350 700

HSAW 500 50 150 300 350 1,350

ERW 200 175* 375*

Total Pipe Capacity

1,050 400 150 300 475* 2,425

Plate & Coil 1,500

Coating (mn mtr sq)

7.75 6.5 4.5 7.0 25.75

* New Capacity to be commissioned by Q4 FY13


Growth to Infinity

Merger of coating J.V. with WCL

New Capacity at Anjar, Gujarat for HSAW & Coating

Incorporated

350,000 tons US Spiral Mill commissioned

Approvals from O&G majors for new facility

Anjar Facility , A Key Contributor

Embarked on a Growth Journey

HSAW, Dahej, Gujarat

LSAW, Dahej, Gujarat

Pipe Coating in JV with EUPEC, Germany

Dahej, Gujarat

Growth

8

2006

2005

2004

2001

2000

1998

1995

Rs. 180 mn.

Rs. 585 mn.

Rs. 2,565 mn.

Rs. 8,277 mn.

Rs. 10,385 mn.

Rs. 18,298 mn.

2007Rs. 26,834 mn.

Rs. 39,945 mn. 2008

Rs. 57,395 mn. 2009

Rs. 73,503 mn. 2010

2011Rs. 80,221 mn.

Revenue

150,000 tons Spiral Mill commissioned

- 350,000 tons LSAW capacity in Anjar commissioned

- Initiated Mandya Plant Capacity Expansion to 150,000 MT

- Initiative of Setting up new ERW Plant 175,000 tons in US

2012Rs. 89,766 mn.

Saudi Plant - capacity of 300,000 MTPA operational

100,000 MTPA HSAW Plant at Mandya operational

H1 2013Rs. 46,104 mn.

ERW Plant construction in US on schedule

Mandya plant expansion completed

* Annualized on basis of H1 FY13 Revenue

Anjar capacity expansion of 350,000 tons and HSAW capacity

of 100,000 tons in Mandya initiated

Recognized 2nd largest pipe producer in the world by Financial Times, UK


Welspun Corp Limited: Strong Value & Growth Story

Strong Industry Fundamentals1

Global Footprint3

Robust Business Fundamentals2

Execution – Strong Management Team & World Scale Capabilities4

Financials5


• Low pipeline penetration in India provides huge potential

• Natural Gas as a source of energy is growing at a rapid pace

and shall grow the demand for pipelines

• Petroleum & Natural Gas Regulatory Board (PNGRB)

– Rs. 8.5 bn J&K project awarded to GSP consortium,

- Approved 1104 km Kochi – Koottand – Bangalore- Mangalore

in 2012.

• City Gas Distribution – 200 Cities by 2015

• Liquefied Natural Gas (LNG) terminals – 18.6 MTPA through 3

existing terminals

• Water Infrastructure projects under the 12th Plan and JNNURM

Proposed pipeline of GAIL

Phase I (Under Execution)

Name of Pipeline Length (Kms)

Cost (Rs Cr)

Add. Cap (MMSCMD)

DVPL Ph -II / Vijaypur Dadri 1,109 10,764 80

Dadri - Bawana - Nangal 594 2,358 31

Chainsa - Jhajjhar - Hissar 349 1,315 35

Sub Total 2,052 14,437 146

Phase II (Approved in 2009)

Name of Pipeline Length (Kms)

Cost (Rs Cr)

Add. Cap (MMSCMD)

Jagdishpur - Haldia 2,050 7,596 32

Dabhol - Bangalore 1,414 4,994 16

Kochi - Mangalore - Bangalore 1,126 3,263 16

Sub Total 4,590 15,853 64

Grand Total 6,642 30,290 210

Company Total Length

(kms) Quantity (KMT)

(1)

Business Potential

(US$ Bn)(2)

GAIL* 6,642 1,328 1.6

RGTIL 2,628 526 0.6

IOCL 4,366 874 1.0

Total 13,636 2,728 3.2

1. Strong Industry Fundamentals Share of Expected Demand 2012 - 2017

Welspun is well placed, with global clients and state-of-

the-art technology, to capitalize on this opportunitySource GAIL India Investor Presentation , May 2012

International Demand Outlook 2012 –

2017 (Future Pipeline Projects)

Region Projects

Total Length

(kms) Quantity

(MMT)

Business Potential

(US$ Bn)(1)

North America 238 71,000 59 80

Latin America 66 38,000 32 59

Europe 153 42,000 35 79

Africa 65 24,000 20 29

Middle East 149 42,000 35 65

Asia 129 69,000 13 126

Australasia 74 22,000 3 44

Total 874 308,000 62 482

Source: www.simdex.com November 2012 data update

Source: Simdex and Industry Sources 1. Conversion rate of 200 tons/ km 2. As illustrated in the adjoining tables

Domestic Market Size

Source: *GAIL India Ltd Presentation May 2012

Source: Basic Stats Report – www.petroleum.nic.in

North America

16%Latin America

11%

Europe24%

Africa6%

Middle East13%

Asia24%

Australasia6%

Global Demand for Pipes

Source: www.simdex.com Aug 2012 data update

Relatively Few Major Players

• Highly capital intensive industry with high barriers to entry

• Niche markets effectively captured by Welspun

• Reliability and reputation for excellence are paramount, as

pipelines are used for critical applications such as oil and

gas transport

• Prospects for the industry brightening with oil prices at

sustainable levels for Oil & Gas firms.

Global Demand

• Business potential of around US$ 482 Bn (Source Simdex )

• Shale Gas rapidly increasing its share in US – 13.6 trn cu ft

by 2035 from 5.0 trn cu ft in 2010(source : EIA Energy

Outlook 2012)

• Replacement of the old pipelines in US

• US oil boom is expected to enhance pipeline demand

• Alaska Pipeline project - another boost to the demand for

pipes (35 trn cu. Ft. discovered Natural Gas till early 2012)

Domestic Demand

http://www.simdex.com/

http://www.simdex.com/


1. Strong Industry Fundamentals Business Strategy and Outlook

• Outlook for the pipe business remains positive amidst challenges in the global economy.

• Continued new pipe orders both locally and internationally during such challenging times on the back of its strong customer reach

and proven execution track record.

• Key demand markets continue to be North America, Middle East and India; potential for new markets in Latin America, Africa and

Asia driven by strong growth in energy and oil demand.

• New shale gas discoveries, potential export of oil and gas from the Americas and demand from the replacement market in the

coming years shall bode well for the industry.

• Key differentiating factor going forward - ability to offer a portfolio of high quality products to

customers.

• Confident of positive growth through higher utilization levels across manufacturing capacities.

• Saudi plant booked till the end of next year; US plant booked till November 2013.

• Strong customer relationship enables repeat orders from key customers.

• The Plates, DRI and Infra businesses continue to be challenging amidst difficult steel and infra

market conditions.


67%82%

72% 71% 66%52%

33%18%

28% 29% 34%48%

0%

20%

40%

60%

80%

100%

FY07 FY08 FY09 FY10 FY11 FY12

Export Domestic

2. Robust Business Fundamentals - Healthy Order Book Strongly Positioned

Export-Domestic Revenue Break up %

• Strong presence in 2 of the bigger Oil & Gas markets – North America and Middle

East; well positioned to take advantage of higher realization margins in Latin

American markets.

• WCL marquee clients - Exxon Mobil, Kinder Morgan, El Paso and GAIL

• Long term contract - TransCanada & Statoil, Framework Agreement - Chevron

*

* FY12 pipe exports by value are ~ 70%, but the above figure has gone down

due to consolidation of various businesses

0

200

400

600

800

1000

FY 09 FY 10 FY 11 FY 12 H1 FY13

717814

958

819

398

193

384500 507

251

Total Pipe Production Total Plate Production

Consistent Production ‘000 MT

Pipe Orders Booked Pipe Orders Executed Closing Pipe Orders

Year MT (in '000 tons) MT (in '000 tons) MT (in '000 tons)

FY 2008-09 807 695 781

FY 2009-10 824 814 791

FY 2010-11 844 909 726

FY 2011-12 1,163 835 1,029

H1 FY 2012-13 557 359 1,227

*Current Order book (1,227K MT of pipes and 20K MT of external plates) stands

at US$ 1.6 billion

Export 84%

Domestic16%

*Current Pipe Order Book – Geographical Distribution by Volume


What Sets WCL Apart From Competition

• Decade Long Experience

• One stop solution

• High Capacity Equipment to Meet Future Demand

• Proven execution and strong management experience

World’s largest diameter steel pipe producers(1)

2007 output (million tonnes)

Salzgitter/Europipe* (Germany) 1.3

Welspun (India) 1.0

JFE (Japan) 0.7

Sumitomo (Japan) 0.7

Evraz** (Russia) 0.6

Nippon Steel (Japan) 0.6

Riva (Italy) 0.6

PSL (India) 0.5

JSW (India) 0.3

ArcelorMittal (Luxembourg) 0.2

Stupp (US) 0.1

Tata/Corus (India/UK/Netherlands) 0.1

Others*** 7.3

WCL was rated 2nd largest Pipe Company in 2007 and has since reached capacity of 2.25 MTPA

• Features- Selected few companies considered for supplies that meet stringent process of qualification

- Typically customers with large requirement over a period of time

- Flexibility in pricing terms and continuous business

• Current Framework Agreements - Chevron

Framework Agreements

Global Market Expansion

Year 2000–2001 Year 2001–2002 Year 2002–2003 Year 2003–2004 Year 2004–2005

Year 2005–2006 Year 2006–2007 Year 2007–2008 Year 2008–2009

Canada

US (Trader Mkt.)

US (Projects)

Mexico

Venezuela

Columbia

Spain

Algeria

Egypt

Sudan

Qatar

Oman

Saudi Arabia

Indonesia

Malaysia

Bangladesh

Iraq

China

Russia

Year 2000–2001Year 2000–2001 Year 2001–2002Year 2001–2002 Year 2002–2003 Year 2003–2004 Year 2004–2005Year 2004–2005

Year 2005–2006 Year 2006–2007Year 2006–2007 Year 2007–2008Year 2007–2008 Year 2008–2009Year 2008–2009

Canada

US (Trader Mkt.)

US (Projects)

Mexico

Venezuela

Peru

Columbia

Spain

Algeria

Egypt

Sudan

Qatar

Oman

Saudi Arabia

Malaysia

Bangladesh

Iraq

China

Russia

Note

1. As reported by Financial Times on April 13, 2008

–Year 2009 2010

Bolivia

Year 2010-2011

Thailand

Year 2011-2012

Kuwait

2. Robust Business Fundamentals – Leadership Position

http://www.ft.com/


Canada

USA

MexicoBahamas

Trinidad & Tobago

Venezuela

Colombia

Peru

Bolivia

Spain

Czech Rep.Russia

China

IndiaBangladesh

Malaysia

Indonesia

Thailand

IraqQatar

UAESaudi Oman

Sudan

EgyptAlgeria

Nigeria

3. Global Footprint - Welspun’s Worldwide Reach

Plants

Mktg Office

Countries served

Plant Locations

Anjar, India

Dahej, India

Mandya, India

Little Rock, USA

Dammam, Saudi

Marketing Offices

Mumbai, India

Delhi , India

Houston, USA

Dammam, Saudi Arabia

Dubai, UAE

Source: Welspun Corp Ltd.

AMERICAS

MENA

SOUTH

EAST ASIA

AUSTRALIA

EUROPE & CIS

DOMESTIC


AGIP, Jordan NTPC, India

Al WASIT, UAE ONGC, India

BECHTEL, US PETRO CHINA

BRITISH GAS PETRONAS, Malaysia

BRITISH PETROLEUM PDO, Oman

CHINA NATIONAL PETROLEUM CORPORATION PGN, Indonesia

CPMEC, China QATAR PETROLEUM

CHEVRON, US (Framework Agreement) RELIANCE INDUSTRIES LIMITED, India

DOW, US SAIPEM, Italy

ELPASO, US SAUDI ARAMCO

EGYPTIAN GENERAL PETROLEUM CORPORATION SHELL, US

ENTERPRISE, US STOLT OFFSHORE – Acergy, UK

EXXON-MOBIL (GOLDEN PASS PIPELINE), US SONATRACH, Algeria

GROUP FIVE , Saudi Arabia TOTAL, France

GAIL, India TECHNIP, France

GASCO, UAE TRANSCANADA (Long Term Contract)

GASCO, Egypt UNOCAL, US

GAZPROM, Russia (STROYTRANSGAZ) PERU LNG, US (HUNT OIL)

KINDER MORGAN, US VIETSOPETRO, Russia/Vietnam

N.A.O.C. - Nigeria SWCC, India

NPCC, UAE

3. Global Footprint – Relationship with Oil & Gas Majors

3 - 5 years

Setting up plant

1-2 years

Seeking API

approval

1 year

Approval from major domestic / international

oil and gas companies

2 – 3 years

Accreditation Process

A significant entry barrier

http://www.chevron.com/

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4. Execution - Strong Management Team

Mr. B.K. Goenka is the Chairman, and the chief architect

of the Welspun Group. Today, with his entrepreneurial

ability and professionalism, he has built up one of the most

admired business conglomerates

Mr. R.R. Mandawewala is the Group Managing Director,

a key contributor in Welspun’s journey. A Chartered

Accountant by profession and with over 25 years of

experience, he has expertise varying from Textiles to SAW

pipes.

Mr. Mintoo Bhandari, serves as Director on Board

(Nominee of a shareholder) in WCL. Mr. Bhandari also

serves on the board of directors of SOURCECORP, Dish TV

India Limited and Wire & Wireless (India) Ltd. Mr.

Bhandari graduated with an BS in Mechanical Engineering

from MIT and with an MBA from the Harvard Business

School.

Mr. Akhil Jindal serves as Director, Group Strategy &

Finance. He graduated with an Engineering Degree , MBA

from Indian Institute of Management, Bangalore. Mr. Jindal

is responsible for strategic inorganic/organic initiatives

within the Group and has spearheaded large fund raisings,

cross border acquisitions, private equity raisings and

financial closure of projects exceeding over US$ 1 bn.

Mr. Vipul Mathur is the Director Sales & Marketing (Pipes).

A Science Graduate and Masters in Business Administration

(MBA) in Marketing, he has a rich experience of over 16 years in

the Oil & Gas Pipe Industry

Mr. Prashant Mukherjee serves as Director of Welded Pipes.

A Graduate in Science (Engineering, Mech) with over 24 years

experience mostly in the Oil & Gas Pipe Industry, Mr. Mukherjee

has been instrumental in implementing expansion projects in the

Company

Mr. B.R. Jaju serves as Director & CFO. A Chartered

accountant by profession, member of Company Secretary (FCS),

as well as a Law Degree (LL.B). He has a rich experience over

30 years in finance and global M&A activities. Mr. Jaju has been

awarded 3 times as Best Performing CFO in the year 2003, 2005

and 2006, by the most credible nationally renowned jury.

Mr. David J. Delie serves as President Welspun Tubular

LLC. A graduate in Science (Electrical Engineering) and a

Masters Degree in Engineering Management from the

University of Pittsburgh, he has an extensive 33-year

background in the steel and pipe industry. Mr Delie has

served on the Board of Directors of Berg Steel Pipe Corp.,

EB Pipe Coating, Inc., the American Iron & Steel Institute

(AISI).

Mr. Akbar Umatiya is Vice President & Unit Head of

Welspun Middle East LLC (Saudi Plant) A technocrat

Professional having more than 26 years of versatile experience in

various fields like Operations, Project Executions and Marketing

in India and Overseas. He has proven capability to perform in

International environment studded with a mix of diverse cultures

and to develop Technical and professional abilities for team

building to enhance superior quality work.

Mr. Braja K Mishra is the Managing Director of Welspun

Corp and is a prominent figure in the industry with long and

varied experience. Has over 25 years of experience and

posseses immense critical know-how about the pipe and

plate industry

http://www.google.co.in/imgres?imgurl=http://www.ventureintelligence.in/images/mintoo.jpg&imgrefurl=http://ventureintelligence.blogspot.com/2010/04/interview-with-mintoo-bhandari-of.html&usg=__kTRSo5cvEUnpjGOvRcb3MU2-Ss0=&h=1349&w=1241&sz=127&hl=en&start=1&zoom=1&um=1&itbs=1&tbnid=dKPXRRikJBOeUM:&tbnh=150&tbnw=138&prev=/search?q=mintoo+bhandari&um=1&hl=en&sa=N&biw=1345&bih=590&tbm=isch&ei=l_YGToOlOcOHrAe0kdiqDA


4. Execution - Proven World Scale Capabilities

LSAW Pipes ERW Pipes

HSAW Pipes Coating of Pipes



PlatesPlates

US Plant Skilled Workforce



US Plant, Little Rock Arkansas

• New ERW Mill of 175,000 MTPA capacity and Coating Line

• $80 million investment; to be commissioned by Q4 FY13 and likely to ramp up production in FY14

• By 2013, WCL to provide a complete range of HSAW & ERW pipes along with Coating and Double Jointing

facilities from the Little Rock plant

• Line Pipes from 6” to 60”

• This will create one of the best and fully integrated facilities in this part of the world.

• Commissioned in Feb’09 , state of the art HSAW, API approved mill with a Capacity of 350,000 MTPA;

Utilization ~ 60% during FY12

• Supplier to TCPL, El Paso, Enterprise, Exxon Mobil, etc

Mr . B.K. Goenka (CMD, Welspun) with Arkansas Governor Mike Beebe



Saudi Plant, Dammam

• State of the art Saudi Plant - 300,000 MTPA capacity provides a strong presence in the key Middle East pipes market

• Opportunity to locate closer to customers and cater to their specific demands

• Savings on transportation cost, and in the process improve operational efficiency

• Key supplier in the Middle East; key clients - Saudi Aramco along with other recognized Oil & Gas majors

• Recent approval from Saudi Aramco will enable WCL to cater to specific product requirements

• Capabilities to deliver pipes from 18” to 100” and of the highest quality standards to meet the stringent requirements in the Middle East market

• Coating plant with capacity of 1.0 million sq mtrs


• Technology

• Product profile

• Approvals

• Accreditations

• Serving challenging orders

• People

• Zero Harm - Safety

• Niche markets -deep offshore/ sour

pipelines

• Stringent client specifications

• Local presence in key markets

• Highly trained workforce

• Zero Tolerance – Quality Standard

Today The future

How Welspun reached here

How Welspun will sustain

Humble beginnings

Journey to become the most respected Pipe Company in the World


-

20,000

40,000

60,000

80,000

100,000

FY 09 FY 10 FY 11 FY 12 H1 FY13

57,395

73,503 80,221

89,766

46,104

5. Financials - Revenues & Margins

Sales Volume (000’ MT)

Profit After Tax (Rs. Mn)

Consolidated Revenues (Rs. Mn)

Operational EBITDA (Rs. Mn)

Notes

1. Exchange rate FY09 US$1 = Rs.45.91




5. exchange rate H1 FY13 US$1 = Rs.54.737

Notes

6. * Includes recovery of past forex provisioning ( in FY09) , which is reflected in better realization and cost of material

7. ** Includes export rebate of Rs. 734 million on receipt of favorable judgment from Honorable Supreme Court. and provision of Rs. 2,007 million on account of settlement with one of the customers thereby ending long pending litigation

8. *** FY12 operational performance impacted by foreign exchange provisions of Rs 1,244 million and provisions made towards amicable settlement with a customer of Rs 649 million. Total Foreign Exchange provision was Rs. 1,517 million

9. **** Includes Rs. 912 million of foreign exchange provisions

(3)(4)

(6)

US$ Mn 1,63717991,250 1679

(2)

(1)

US$ MnUS$ Mn

136(1)

(2)

47(3)

142(4)

45(5)

138 294 324 208(1) (2) (3) (4)

(5)470

2

75(5)

****

***

**

0

200

400

600

800

1000

FY 09 FY 10 FY 11 FY 12 H1 FY13

695816

909835

359

154

387485 531

250

Total Pipe Sales Total Plate Sales

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY 09 FY 10 FY 11 FY 12 H1 FY13

2,135

6,104 6,330

2,385

118

*


5. Financials – Balance Sheet Extract (Consolidated)

Equity & Liabilities – H1 FY13 & FY12

Particulars 30-Sep-12 31-Mar-12

Shareholders’ funds

Share capita l 1,139 1,139

Reserves and surplus 40,743 40,117

Sub-Total- Shareholders's Funds 41,882 41,256

Compulsori ly Convertible Debentures 7,884 7,884

Total Net Worth 49,766 49,139

Minority Interest 3,079 3,433

Non-current liabilities

Long-term borrowings 43,378 39,714

Deferred Tax Liabi l ties (Net) 5,343 5,036

Other long-term l iabi l i ties 3,437 3,405

Long-term provis ions 287 244

Sub-Total Non Current Liabilities 52,445 48,400

Current liabilities

Short-term borrowings 7,482 7,773

Trade payables 31,373 32,923

Other current l iabi l i ties 18,581 14,885

Short-term provis ions 1,672 1,741

Sub-Total Current Liabilities 59,108 57,322

TOTAL-Equity and liabilities 164,397 158,294

(Rs. Million)


5. Financials – Balance Sheet Extract (Consolidated)

Assets – H1 FY13 & FY12

Rs. Million 30-Sep-12 31-Mar-12

Non-current assets

Fixed assets 66,081 63,625

Goodwill on consolidation 9,888 9,888

Non-current investments 464 355

Deferred Tax Assets (Net) 80 66

Long-term loans and advances 5,312 5,061

Other non-current assets 288 357

Sub-Total- Non Current Assets 82,113 79,351

Foreign Currency Monetory Item Translation

Difference Account 459 323

Current assets

Current investments 18,245 19,431

Inventories 32,613 25,827

Trade receivables 18,377 15,260

Cash and Cash equivalents 4,420 10,255

Short-term loans and advances 6,231 5,809

Other current assets 1,938 2,038

Sub-Total- Current Assets 81,825 78,620

TOTAL-Assets 164,397 158,294

(Rs. Million)


5. Financials – Net Worth & Debt Profile

Current Net Worth

• Net Worth of the Company at the end of Q2 FY13 - Rs. 49,766 million including

Share Capital, Reserves & Surplus, and CCDs

• Gross Debt after Q2 FY13 - Rs. 57,167 million including Long Term Borrowing, Short Term

Borrowing and current portion of Long Term Borrowing

• Cash & Liquid Investment - Rs. 22,665 million including Cash & Cash Balances and

Current Investments

• Net Debt - Rs. 34,502 million

Net Debt / Net Worth - 69%


Q2 and H1 - FY13 Highlights

Consolidated Financial Summary in Q2 & H1 FY13 (Rs. Mn)

Breakdown of Production and Sales in Q2 & H1 FY13

Status of Projects

Capacity expansion of Mandya Plant completed and manufacturing underway in the newly completed facility.

Construction of ERW Plant in Little Rock, Arkansas, US on schedule and expected to be commissioned by Q4 FY13.

The above results are after taking into consideration, loss of approximately 70 days of production at the US

plant due to fire. The plant has recommenced production in the later part of September 2012 and is now in full

swing.

# Includes Rs.912 million of foreign exchange provisions for H1 FY13

Key Snapshot

• 1.22 million MT outstanding pipe

order book

• Sales up by 21% in H1 FY13 Y-o-Y

• Bagged new orders of Rs.18 billion

(212K MT of pipes, and plates) from

domestic and international Oil & Gas

majors from key markets such as

India, Africa and the Americas during

the second quarter

Particulars *Q2 FY13 Q2 FY12 *H1 FY13# H1 FY12

Sales 20,606 20,538 46,104 38,097

EBITDA 2,171 2,674 4,538 5,989

EBITDA margin 10.5% 13.0% 9.8% 15.7%

Cash PAT 1,344 1,622 2,488 3,780

Volume (in KMT) Q2 FY13 Q2 FY12 H1 FY13 H1 FY12

Production

Pipes 181 199 398 379

Plates & Coils 101 102 251 210

Sales

Total Pipes

Consolidated181 210 359 413

Plates & Coils* 102 104 250 219


Summary

2Robust Business

Fundamentals

• Strong volume growth

• Order Book in excess of US$

• 1.6 billion

• Capacities of global size

• Comprehensive product mix

Strong Management Team

with Proven Execution

Capabilities

• Recognized by the FT as the

second largest steel pipe

producer in the world in 2007

• First Indian company to supply

pipes for offshore projects in US

4 3 Global Footprint • Presence across more than

25 countries• Pre-approved with more

than 50 O&G Majors

1 Strong Industry

Fundamentals

• Capital intensive, high

barriers to entry

• North America expected to

lead demand

5 Revenues & Margins

• Maintaining profitable

growth in challenging

environment

1 Strong Industry

Fundamentals

• Capital intensive, high

barriers to entry

• North America expected

to lead demand


Welspun on the Path of Global Leadership

Scale of operations through large economic plants across the globe Scale Leadership

Adopt and innovate cutting-edge technology to satisfy stringent requirements of customers

Technology Leadership

Produce world class products at the least cost and maintain competitive edgeCost Leadership

Consistent focus on quality at all levels; be the best in delighting customersQuality Leadership

Most efficient and effective processes to achieve optimal utilizationsProcess Leadership

Best in class people : Produce extraordinary resultsPeople Leadership

Global Leadership Serve Globally, Act Locally


Thank You

For further details, please contact:

Navin Agarwal

VP - Group Strategy and Finance

Email: [email protected]

Akhil Jindal

Director – Group Strategy and Finance

Email: [email protected]

Company Website: http://www.welspuncorp.com

investor presentation - welspun 27th... · • accredited with iso 9001, ... gail* 6,642 1,328 1.6...

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