CESC Limited Powering India since 1899
October 2014 1 This presentation has been prepared by and is the sole responsibility of CESC Limited (the “Company”). By accessing this presentation, you are agreeing to be bound by the trailing restrictions.
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2 RP- Sanjiv Goenka Group
Source: Annual Reports, Company filings and ET publication dated 25th August 2014
3 CESC Private Power Utility Phillips Carbon Black Carbon Black Manufacturer Spencer`s Retail Organized Retail Firstsource Solutions Business Process management Saregama India Music & Entertainment Harissons Malayalam Tea & Rubber Plantations
4 Financials of RP- Sanjiv Goenka Group companies
(Rs. bn )
Promoter Group Gross Net Profit (FY`14) Holding as on Revenues (FY`14) 30.3.14
CESC 56.10 6.52 52%
Firstsource Solutions 31.10 1.93 57%
Phillips Carbon Black 22.98 (0.87) 53%
Spencer`s Retail 14.58 (1.66) 100%
Noida Power Company 7.85 0.89 73%
Saregama India 1.74 0.12 59%
Harrisons Malayalam 3.67 0.04 50%
Integrated Coal Mining 3.10 0.13 100%
Crescent Power 1.47 0.22 100% 5 Indian Power Sector
India Energy Demand Trend Capacity addition (Conventional energy)
Source: ICRA Power July 2014 Report Source: CRISIL Research Power Annual Review Trend in Energy Deficit Trend in peak deficit
Source: ICRA Power July 2014 Report Source: ICRA Power July 2014 Report 6 Indian Power Sector
Rising gap between ACS and ACR AT&C Losses Trend
Source: CRISIL Research Power Annual Review Source: CRISIL Research Power Annual Review Installed Capacity by Ownership Trend in Thermal PLFs
Source: ICRA Power July 2014 Report 7 Source: CRISIL Research Power Annual Review Indian Power Sector Tariff hikes in key states
Levelised tariffs of domestic coal based plants under competitive bidding Source: CRISIL Research Power Annual Review
Source: CRISIL Research Power Annual Review 8 Overview of CESC Private sector power utility company in India Power Generation Map Distributing power to city of Kolkata & adjoining areas Involved in both Generation and Distribution of electricity 80%+ energy requirement from own generation, meeting peak demand of
Jaisalmer 2000+ MW 24 MW Wind CESC Regulated Business - 1225 MW Generation, 567 sq.km. area, 2.8 mn Kutch 9 MW Solar consumers
Kolkata All three PF stations amongst top ten power plants in the country (August 2014 1225 MW TPP Mahidaad CEA Report) 26 MW Wind Chandrapur TPP Haldia 600 MW TPP 600 MW Board represented by independent directors and lender’s nominee
Shares Listed on BSE , NSE and Kolkata. GDR listed on Luxembourg
Access to International Equity & Debt market (Institutional holding at 39% as Operational Under Construction on 30.06.2014) Map not to scale 9
CESC Existing Businesses
Kolkata Distribution Independent Power Project Business Renewables
Electricity Generation 600 MW thermal power 9 MW Solar Power Plant & Distribution project in Chandrapur, in Gujarat. -1225 MW generation Maharashtra 24 MW wind power - 567 sq km area (Project cost Rs. 38 billion) plant, Rajasthan - 2.8 mn consumers - 20,400+ ckt km of 600 MW thermal power 26 MW wind power network project in Haldia, West Bengal plant under (Project cost Rs. 45 billion) construction in Gujarat
Organized Retail Real Estate Business Process Management
PAN India Organized Owns and operate Business Process Management Retail player with 1 “Quest” Shopping Mall (BPM) company in India mn+ sqft area and 125 in Kolkata stores spread over 35+ Client base includes 21 cities Fortune 500 and 9 FTSE 100 companies (as of March 31st 2014)
10 Advantage CESC
Dedicated Skilled workforce / domain expert Strong Balance with very low Diverse Sheet attrition rate Customer base 115 years of Experience
Present in Both Generation & Distribution of Electricity
11 Awards & Recognitions
Top Infrastructure Company in Power Distribution
BBGS ranked 1st National Award runner up in ICC for Best HR Environment Practices – 2013 Excellence Award Recent
Recognitions ‘The Greatest CESC Power Plants Corporate feature among top Leaders in India’ power plants in the for efforts in country environmental “Best performing protection utility – Urban”
Corporate Headquarter- “CESC House” won the Runner up award in NDTV Grundfos Mission Energy Challenge 2014 12 Web Services Mobile Apps
Improving Consumer Experience with superior customer service SMS Services
Call Centre
Branding
Communication
Enriching Consumer Experience
Social Media
13 Accolades
Environment Award 2014 by Greentech BBGS & SGS gold and TGS silver
IGCL Leadership Awards 2014 for Environment Excellence Greentech Safety Zero Waste Award 2013 by ICC Award 2013 TGS BBGS 14 Accolades (contd….)
Best Performing Power Utility –Urban 2013 Top Infrastructure Company – Innovation in by Enertia Power Distribution Award 2013 Distribution 2013- ICC by Dun & Bradstreet
Best HR Practices 2013 People Management and by NIPM Development award 2014 CESC House by IUKAN Runner up at NDTV Grundfos Mission Energy Challenge 2014 15 CESC Standalone Financials
Sales (MU) Revenue (Rs. bn)
54.1 56.09 8577 8591 8271 47.82
FY'12 FY'13 FY`14 FY`12 FY`13 FY`14 T&D Loss (%) PLF%(excluding peaking Station)
89% 88% 86% 12.1% 11.9% 11.8%
FY'12 FY'13 FY`14 FY'12 FY'13 FY`14 16 CESC Standalone Financials
PBT (Rs. Bn) Long Term Debt / Equity Ratio
8.25 0.6 0.6 7.73 0.5 6.93
FY'12 FY'13 FY`14 FY'12 FY'13 FY`14 EPS (Rs.) Dividend History
80% 70% 50 52 44 50%
FY'12 FY'13 FY`14 FY'12 FY'13 FY`14 17 Growth Opportunities Coal Mine Auction GoI intends to come out with Auction of Coal blocks
Renewables Major thrust on clean energy generation incl Wind, Solar & Hydro
Independent Power Projects Acquisition of Generation Assets & fuel security for new projects
New Power Policy Government Committed to Ensure Affordable 24x7 Power for all
18 600 MW Chandrapur Thermal Power Project, Maharashtra
First Independent Power Plant (IPP) of CESC
Constructed in Chandrapur, near Nagpur with 2x300 MW configuration
Project cost of Rs. 38 billion funded at 75:25 debt equity ratio
BTG supplied by Shanghai Electric, BoP undertaken by Punj Lloyd
Long Term PPA for 100 MW signed with TANGEDCO
First unit (300 MW) commissioned on 11th February 2014
Second unit (300 MW) commissioned on 2nd August 2014
Received the Golden Peacock Award during the 16th World Congress on Environment Management in New Delhi in July 2014
19 600 MW Haldia Thermal Power Project, West Bengal
To meet the growing need of its consumers, CESC is setting up a 600 MW (2x300) TPP in Haldia, near Kolkata
Fully regulated project approved by WBERC
Entire 600 MW power to be supplied to CESC, PPA approved by WBERC
Project include around 80 kms long 400 kV Transmission line from Haldia to CESC network
Project cost of Rs. 45 billion funded at 75:25 debt equity ratio
Coal FSA executed with subsidiary of CIL
BTG supplied by Shanghai Electric, BoP undertaken by Punj Lloyd
Project to be commissioned in 2014-15
Won the Coal Power Project of the Year award at Asian Power Awards 2014 20 Wind Power Project
Plans to increase footprints in the wind business, driven by favorable tariff regime and positive long term outlook for renewable energy
Commissioned 24 MW (2x12) wind power project in Jaisalmer, Rajasthan in FY`13
Long term PPA signed with Rajasthan Discoms
Constructing 26 MW (2x13) Wind Power Plant in Gujarat, commissioning in FY`15
CESC wind sites in Jaisalmer, Rajasthan 21 Real Estate – “Quest”
Luxury Mall built on 3 acres of land in Kolkata,
Mall inaugurated on 30th September 2013
4,15,000 sq.ft retail area, 900+ parking
Designed by RTKL (UK), construction by L&T
Houses volume retailers like Spencer’s, Starmark, Lifestyle as well as international luxury labels such Burberry, Emporio Armani, Gucci, Canali, Furla, Tumi, Rolex, Omega and much more
Fine Diners include Smoke House Deli, Bombay Brasserie, Irish House, Yauatcha & Serafina
Marking its one year anniversary, the mall has already crossed a footfall of 1 million per month
Declared ‘Best Shopping Mall of the Year – East’ at the Indian Retail and 3rd e-Retail Awards 2014 22 RETAIL BUSINESS
23 Spencer`s Retail
Rs 1450+ crs food-first, multi-format retailer since 1996 Organized retail business 125 stores spread over 35+ cities and about 1.1 mn sq ft High same store sales growth in last few years Private label program across food, fashion, home and general merchandising. Targeting growth in big box format Planning to roll out 60-80 Hypermarket stores over next four years Ranked 2nd in India’s most respected companies in Retail in a study conducted by Business World in 2013 Won the ‘Most Admired Hypermarket Retailer of the Year Award’’ at the India Retail Forum in September 2013
www.spencersretail.com 24 Spencer's Retail - three stages of evolution
• Consolidation by shutting down non- performing stores
• Improving • RPG Enterprises • 1st hypermarket • First standalone retail store profitability from • Change in brand buys a majority inaugurated inaugurated at Vadodara loss of Rs. 300 cr to positioning from stake in • 100th Foodworld loss of 1989 1995 2001 2006 2008 2009 2009 2009 2010 2013 onwards • Spencer’s enters into • Joint venture with • Spencer had • Launch of Bangalore’s • 125+ stores in agreement with DFI DFI terminated >300 stores by first hyper store, India Ltd., Hong Kong, to set the end of the launch of hyper in AP up the Foodworld chain • RPG retained 48 of year • Future focus on of supermarkets in the 93 stores & and hyper stores India launched under the • Loss for the year brand name, stood at ~Rs 290 Spencer’s Cr 2006-2009: Spencer's brand launch 2009 onwards: Consolidation and 1989 to 2005: Foodworld stage and rapid expansion performance improvement 25 Focused geographical presence & expansion plan 34 hyper stores across 5 regions ; 94 smaller stores focused in 3 main regions Planning to open 12-14 hyper stores p.a. from FY`16 Hyper defined as clear focus area 8-10 new hyper stores to be opened in FY` 14-15 Haridwar (1) • All stores currently on track for possession and Merut (1) Ghaziabad (1) opening in next year Aligarh (1) Gurgoan (1) Gorakhpur (1) Siliguri (1) • To continue with store expansion in coming years Lucknow (2) Durgapur (1) Bhopal (1) Dhanbad (1) New stores to be opened in the existing 5 regions Baroda (1) Raipur (1) Kolkata (5) • No new regions to be tapped Mumbai (1) Vishakapatnam (1) Small stores to continue as-is Vijayawada (1) • Profitable at store level Hyderabad (2) Kakinada (1) Kurnool (1) Guntur (1) Spencer's Hyper Bangalore (2) Kadappa (1) Spencer's Small stores Trichy (1) Coimbatore (1) Reaching critical scale in some geographies 26 Sales Mix (FY`13-14) E & E APPAREL 5.7% 5.8% HWP 9.4% STAPLES 20.3% LIQUOR 3.4% FRESH 15.0% FMCG 40.4% Food has highest share ~ 80% 27 Store count for Store Count 11-12 12-13 13-14 YTD Sep 14 HYPERS 26 25 34 33 (Avg 23,000 sft) (56%) (64%) (74%) (74%) SUPER 15 14 13 13 (Avg 6700 sft) (7%) (9%) (9%) (9%) DAILY 141 92 81 79 (Avg 2200 sft) (37%) (27%) (17%) (17%) ALL TOTAL 182 131 128 125 * Value contribution No of Hypers opened 6 0 9 1 No of Hypers closed 1 2 28 Operating Performance: Sales/ sqft (Rs./month) Gross Margin/ sqft (Rs./month) 1307 1340 233 249 251 1226 1060 198 FY`12 FY`13 FY`14 Q1 FY`15 FY`12 FY`13 FY`14 Q1 FY`15 Store EBIDTA/ sqft (Rs./month) Store Opex/ sqft (Rs./month) 59 59 50 192 183 190 171 27 FY`12 FY`13 FY`14 Q1 FY`15 FY`12 FY`13 FY`14 Q1 FY`15 29 Private Label FMCG / Food FMCG / Non- Food 30 Specialty Brands -Au Bon Pain Au Bon Pain is a fast casual dining concept founded in Boston in 1978 by the late Louis Kane and has over 280 cafes across the world RP-SG group is the master franchisee of Au Bon Pain, USA in India Started in 2009, in Bengaluru; Au Bon Pain Café India Limited has 27 cafes in Bengaluru, 2 in Kolkata and 1 in NCR (as on 30th June 2014) Cafes spread across High Street & Malls, Business & IT Parks, Hospitals and Universities Au Bon Pain offers a wide range of menu choices for all day parts consisting of scrumptious sandwiches, palatable soups, salads, delectable baked goods, beverages, cakes and desserts New stores planned in NCR and West Bengal in 2014-15 31 Firstsource Solutions Ltd. 32 An Overview Leading Scale . Pure play BPO company in India Player Founded . In December 2001 by ICICI Ltd, CESC acquired majority stake in FY`13 Major . CESC (56.69%), ICICI Bank (4.86%%) Shareholders . Full range of business process management services across the customer life cycle delivered through Service Offerings transaction processing, CRM, collections and receivables mgmt. Client base includes 21 Fortune 500 and 9 FTSE 100 companies (As on 31st March 2014) . Healthcare: 5 top Health insurance / managed care companies in the US and over 730+ hospitals in the US . Telecom & Media: 2 Top U.S. telecom companies, 1 large mobile service providers in the U.K., largest pay TV operator in the U.K., Leading European Telecom Service Provider, Largest pay TV operator in Australia, 3 Top 5 mobile service providers in India, Largest Telecom company in Sri Lanka, 3 leading Trade Publishers Clients . BFSI: 6 top 10 U.S. banks, 2 of the leading consumer finance companies in the U.S., largest bank and mortgage lender in the U.K., 1 large 3 motor issuers in the U.K, 1 5 private banks in India and India’s leading private life insurer 33 Global Delivery Platform UK & Ireland 6 Centers 4,203 Employees 2,265S eats India USA 22 Centers 14 Centers 17,853 Employees 3,402 Employees 16,064 Seats Philippines 3,294 Seats 3 Centers Sri Lanka 986 Employees 1 Center 703 Employees 1,608 Seats 480 Seats Employee Strength : 27,600+ | Countries:6 | Center:46 | Right-shore Delivery Model | Proximity to Clients | Business Continuity Capability As of June 30, 2014 34 Financial Performance – FY2014 (IN INR Million) FY 2013 FY 2014 Income from services 28,440 31,270 Revenue From Operations Other operating Income (255) (211) Revenue from operations 28,185 31,059 10.2% Y-o-Y Personnel and Operating Expense 25,390 27,438 Operating EBITDA 2,796 3,621 Operating EBITDA % 9.9% 11.7% Depreciation / amortization 884 757 Operating EBITDA Operating EBIT 1,912 2,864 Operating EBIT % 6.8% 9.2% 29.5% Y-o-Y Other Income / (expense) (17) (8) Interest Income / (expense), net (198) (824) Amortized (cost ) on fair value of FCCB (106) - PAT Exchange gain / (loss) on Foreign currency loan 2 - PBT 1,592 2,033 PBT (% of total income) 5.7% 6.5% 31.6% Y-o-Y Taxes and Minority Interest 126 103 PAT 1,466 1,930 PAT (% of total income) 5.2% 6.2% 35 Business Strategy FY`13 FY`14 FY`15 Expansion in Customer Management and Healthcare industry segments Cost rationalization drive to improve operational efficiency and increase Investment in people seat utilization development and delivery Full Repayment of FCCB of capabilities USD 237 mn in December 2012 with internal accruals Exiting unviable/ low and cash infusion from margin contracts CESC Debt repayment of USD 45 mn p.a. to become debt free by 2016 36 Investment Highlights Leading Power Generation & Distribution Company in India with rich experience CESC`s current project commitments ending in FY15 and cash inflow commences. Strong Balance Sheet to drive growth from FY16 Significant growth opportunities in Power sector – Generation, Transmission & Distribution, pursuant to new Govt policies, leading to higher demand, conducive environment for investment with necessary reforms Coal Sector to be positively impacted 37 Thank You 38