Corporate Presentation November 2009 RR Disclaimer
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RR GAMMON INDIA LIMITED Corporate Presentation November 2009 RR Disclaimer No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management of Gammon India Limited (“Company” or “Gammon”), which are expressed in good faith and in their opinion reasonable, including those relating to Gammon’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of Gammon or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in Gammon’s business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. Gammon disclaims any obligation to update these forward-looking statements to reflect future events or developments. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities of Gammon by any person in any jurisdiction, including India and the United States. Gammon may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States without registration under the U.S. Securities Act of 1933, as amended, except pursuant to an exemption from registration therefrom. This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner. 2 RR Table of Contents Page # 11 Company Overview 4 22 Construction Business 9 33 Infra Development Business 12 44 Energy – One Stop Shop 20 55 Financials 23 66 Key Highlights 26 77 Industry Overview 28 3 11 Company Overview RR Company Snapshot Key Financials (FY 09) One of the oldest construction companies in India Rs. Million Presence across Transport Engineering, Energy, Hydraulic & 52,790 Irrigation, Industrial Structures & Buildings, Power T&D, & 36,994 Environment & Pipelines Entry into new segments: 3,779 5,367 ¾ Power equipments such as Boiler, Turbine, Generators 1,387 654 (BTG) & Balance of plant (BOP) equipments and Total Income EBIDTA PAT ¾ Oil & Gas – Exploration Standalone Consolidated Market capitalization: Rs.26,746 Mn as of Nov 20, 2009 Key Milestones Shareholding Pattern (as on Sep 30,2009 ) FI ATSL merger MF 2.8% ISO Certification 8.0% FIIs 21.2% Turnover Turnover crosses USD 1 billion Crosses IPO Overseas acquisitions Rs. 100 Cr Promoters 26.2% 1922 1991 2004 2006 z z z z z z z 1962 1993 2009 Non-Institutions 23.0% nd 2 GDR Public Issue 18.8% Incorporation Current Turnover Promoters crosses Rs. (Based on shareholding data as disclosed to Stock Exchanges) took over 1,000 Cr 5 RR Landmark Structures 1. Clove leaf flyover of 5 kilometers at Hebbal, Bangalore in 2003, longest in India at that time 1 2. Urban viaduct of 2 kilometers at J.J. Hospital, Mumbai in 2002, longest in India at that time 3. Longest span Cantilever bridge of 140 meters across the river Jadukatta in Meghalaya in 2001 4. Tallest Cooling tower of 141 meter tall at Panipat in 2000, tallest in India at that time 2 5. Railway tunnel of 7 kms for Konkan Railway at Ratnagiri in 1995, longest in Asia at that time 6. First cable-stayed bridge in India at Akkar, Sikkim in 1988 7. First 500 MW thermal power station at Trombay in 1983 8. River bridge of 6 kilometers across the Ganges at Patna in 1982, longest in India at that time 3 9. First reinforced piling job in India for construction of the foundation of Gateway of India, Mumbai in 1922 4 5 6 7 8 9 6 RR Business Strategy Enhance EPC Capabilities Cost effective and timely completion Update and implement technologies and procedures in line with international standards Consistently deliver quality product Training staff for continual improvement One stop Energy shop Capture the Infra Growth Story Expand presence across the entire Capture market share in Transportation energy value chain and power infrastructure opportunity ¾ Consulting, Design & EPC ¾ Manufacturing & Supply of power equipments Strategy ¾ Transmission & Distribution ¾ Operation & maintenance Leverage partnerships with global Cover following forms of energy players to increase market share generation internationally ¾Nuclear ¾Hydro ¾Thermal ¾Non-conventional Recent Acquisitions Develop the strengths in India to cater to Indian market Turnaround our loss making subsidiaries Setup manufacturing facilities in India to compete on costs 7 RR Operating Divisions RR Construction Infra Development Energy Industrial Structures & Transport Engineering Power T & D Roads Manufacturing Buildings Roads Transmission and Multi storied buildings distribution lines and Bridges, Metro & Residential, Power EPC Flyovers sub-stations Commercial & Hospitality Ports Project electrification Rural Electrification Industrial structures Airports Ports T&D System improvement Environment & projects Energy Pipelines Water Treatment Hydro-Power Structures Nuclear Power Water supply projects Thermal Power Civil & Hydro- Cross Country Pipelines mechanical works for Hydro Power Power house Non-conventional Head race tunnel Hydraulic & Irrigation Power such as Biogas Pressure/ Surge Shaft generation Dams Lift Irrigation Intake Well structures 8 22 Construction Business RR Size & Scale Among the top 5 construction companies in India in terms Executing Projects Across India (153 Projects) of revenues SEWA HEP Stage - II Parbati Hydro Power Project Demonstrated ability to bid for and win large projects Indira Gandhi STPP Delhi Metro Rail - BC ¾ Parbati Hydroelectric project: Rs. 7,377 Mn ¾ Bridge across Godavari: Rs. 7,000 Mn Teesta HRT Chambal Bridge, Gorakhpur ¾ Secunderabad Water conveyer system: Rs. 4,359 Mn Kota Road project Sassan ¾ Design, Engg. & Const. of offshore container terminal RCC Chimney in Mumbai: Rs. 4,040 Mn Water Infra project Execution Ramp Up Kolkata Viaducts Cooling Tower Rail Road Bridge 3.8x 3.8x 140 3.9 3.8 Bridge Project 120 3.7 Vadape 100 3.6x Lift Irrigation Project 3.5x 3.6 Gonde Road 80 3.5 Godavari River Bridge 130 60 3.4 90 3.3 40 3.2 Bridge Project Kalpakkam Reactor Bldng. 20 56 65 3.1 0 3 Major Projects (As on September 30, 2009) FY06 FY07 FY08 FY09 BesidesBesides India,India, primarilyprimarily PowerPower T&DT&D projectsprojects inin countriescountries suchsuch asas Order Backlog (Rs. Bn) Book-to-bill Oman,Oman, Ethiopia,Ethiopia, Nigeria,Nigeria, Algeria,Algeria, KenyaKenya && AfghanistanAfghanistan 10 RR Diversified Order Book Total Standalone Order Book: Rs. 13,179 Crores Geographical Spread* As of 30th Sept ember 2009 3% 3% Transportation Engineering South 8% 28% Pow er Transmission and Distribution North 11% Ener gy 33% 46% Environment and Pipelines Hydro Pow er Structures 14% West Hydraulic and Irrigation 19% Industrial structures & Buildings East 15% 20% * Distribution excluding international Order book Stability & flexibility in the business model ¾ Approximately 35 % of contracts are fixed price contracts and balance have price variation clauses Strong technical, engineering and design capabilities to undertake the diverse projects ¾ Advanced Software for design and a strength of 74 qualified persons in design team ¾ We introduced several pioneering technologies in India like cantilever construction technology ; nuclear containment structure in PSC, Reinforced concrete Piles Segmental construction technique 11 33 Energy – One Stop Shop RR Italian Acquisitions Value of Acquisitions Business Focus Acquisition Cost Production* 6M CY 09 Sofinter has following major operating Sofinter Euro 50 Million Euro 206.7 Mn# companies Ansaldo Caldaie Design & Manufacturing of Steam generators Active in several industrial fields viz, energy, waste-to-energy & oil & gas related Europower to engineering, supply & construction of Turnkey power plants & operation & maintenance Itea From Waste to Energy production Manufacturing of Steam & Hydro Turbines Franco Tossi Meccanica for power utilities including nuclear Euro 40 Million Euro 47.3 Mn facilities S.A.E. Power Lines EPC focused on Power transmission