Corporate Presentation January 2010

8/9/2019 Corporate Presentation January 2010

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0 5000 10000 15000 20000 25000

FY05

FY06

FY07*

FY08

FY09

7864

9269

9126

10774

14017

1947

3368

5636

6529

6482

Rs. In millionSugar Business

Engineering BusinessFY07* - 12 months period from Oct 06 Sep 07

Sugar16%

Engg35%

Total20%

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4

TURBINE BUSINESSGROUP

GEAR BUSINESSGROUP

WATER BUSINESS

GROUP

EngineeringBusiness

Market leader in steamturbines upto 20 MWwith current capacity

upto 30 MW size

Largest manufacturerof High speed gears

& gear boxes in India

A leading player inthe high technologywater & waste water

business

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MumbaiPune

Kolhapur

Latur

Hyderabad

Vijaywada

Bangalore

Mysore

Naini

Corporate OfficeManufacturing FacilitiesMarketing and Service Centres

Raipur

Nagpur

Noida

AhemdabadKolkata

ManufacturingPlants

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C

AGR

FY05

FY09

PBIT

69%

Sales-35%

82

138

400

668

997

239

450

605

769

733

1626

2780

4639

5092

4752

0 1000 2000 3000 4000 5000 6000

FY05

FY06

FY07*

FY08

FY09

Turbines

Gears

Water

FY07* - 12 months period from Oct 06 Sep 076


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Power

Shortage

Industrial

Growth

Manufacturing

Growth

Replacement

market

Power Rates Kyoto Protocol

Demand Drivers -

Market Characteristics -

7

Premium on shorterdeliveries

Purchase decision basedon high levels of

technology, efficiency &lower life cycle cost

Price Sensitive market

Strong servicingcapabilities and lifetime

relationship with thecustomer is expected.

Robust designs, typicallysuited for the Indian

market are in demand

ANNUAL MARKET FOR TURBINESBELOW 15 MW IN YEAR 09-10

Demand is estimated at approx.1000 MW per annum includingadditions on account of growth,

fulfilment of gap and replacement

ANNUAL MARKET FORTURBINES BETWEEN 15

TO 30 MW IN YEAR 09-10Conservative domestic

demand estimate of about

1000 MW per annumincluding additions on

account of growth,fulfilment of gap and

replacement


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Gap between power requirement and generation getting wide - Growingrenewable energy market - huge potential for Bio mass based power

generation

Costly fuel source to influence replacement of DG to TG sets; thrust on co-

generation

Current industrial power consumption generation gap to be bridged focus on captive power generation

Additional power requirement in the country estimated at

76,500 MW in next five years; incentivisation for surplus

generation and allowing open access sale of power at

remunerative prices

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Rising Water Demand to double by 2025 from 2000 levels

Dropping Per capita fresh water availability 2000m3/yr in 1997 to 1500m3/yr in 2027

Growth potential in coming years in both major segments Municipal and Industrial

Jawaharlal Nehru National Urban Renewal Mission (JNNURM ) annual estimated water related schemesof 13-15 billion

Over 76500 MW new power generation capacities to be added in the next five years; Annual estimated

market size of Rs. 10-13 billion for water businessMajor expansion and capacity additions envisaged in steel, coal etc. estimated annual market of Rs.7-12

billion

Asian development bank & World Bank are actively promoting privatisation and commercialisationof water - through sector restructuring loans, urban water supply loans and urban infrastructure

loans

India is capable of becoming a global base for outsourcing in the future low cost manufacturing andsubstantial skilled human resources

High cost & scarcity of water driving manufacturing industry to have In-house water managementand water recycling programs

Stricter regulations for environmental compliance in terms of effluent and pollution control

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Business Perspective

Cater to wide range of customers acrosssegments like sugar, paper, co-gen,

textiles, pharma, steel

Consistently upgrading the productrange and efficiency.

The current range of product up to30MW

Manufacturing since 1968; over 2,500turbines manufactured and sold since

inception

Consistently maintained dominantmarket share. Commands over 75% of

market share for range up to 15 MW &over 20% in recently entered 15 30

MW range

Technical Perspective

Highly efficient turbines withindigenously developed tapered

twisted blades.

Fully integrated operations withstrong Engineering & Design team

Facility equipped with state of the artequipments and machine tools best inthe industry

Strong in-house R&D team and tie-upswith leading international design and

R&D establishments

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Customer Care

An extensive network of 13 Service centres

A strong team of 135 service professionals

Reaching the customer site within 24 hours ofservice call

Currently over 900 turbines serviced annually

Refurbishing

Full Speed vacuum Balancing Tunnel forbalancing turbines,

compressors/alternators up to 150 MW

Refurbishment & Residual LifeAssessment of all makes of turbines,

compressors etc. ; Overhauling &troubleshooting

Customization & upgradation of oldturbines for power output up to 150MW

catering to Asia Pacific market

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Net sales for FY 09 stood at Rs. 4.75 billion

were marginally lower than Rs.5.09 billion inFY 08. This marginal decline year on year is

the result of the severe economic slowdown

and financial crisis in the first half of the

financial year.

The order intake during the fourth quarter

registered a growth of 38% in comparison to

third quarter of FY 09.

Change in product mix, improved

efficiencies, cost reduction etc., enabled

stability of margins

Strong order in-take even under the current

economic scenario maintained strong

market share of ~75% in sub 15MW rangewhile increased market share in upto 30 MW

range

Services, spares, refurbishment 16% of the

revenue increased during FY 09 from 12%

during FY08

Outstanding order Book as on 30th September 2009 Rs. 4.95 billion

1626

2780

4639

50924752

153

418

10701280

1156

9

15

23

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1

6

11

16

21

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0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

FY 05 FY 06 FY 07* FY 08 FY 09

PBITMargin

s(%)

Rs.(Millions)

Net Sales (Rs. Million) PBIT (Rs. Million) PBIT Margins (%)


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Future Perspective

Strong Research & Development

Consistent product range expansion higher MW, higherpressure, higher temperature turbines

Spares & Services to form higher proportion of revenues

Refurbishment of all makes of turbines including overhauling& troubleshooting

A dedicated in-house Training School for development oftechnical skill in design, engineering, servicing

Customised operation and maintenance contracts (O&M)

Focus on Exports with expanding the market reach

Tie-up with GE Oil & Gas for Reciprocating Compressor

packagingTie-up with Waukesha for Gas engines

Exploring various opportunities for expanding the business


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Triveni is in the business of design, manufacture and marketing of gears and gearboxes

Highest quality - DIN 3 quality assured

The high speed gear range for steam, gas , pumps and compressor applications range above 7.5 MW-25 MW ismanufactured using technology licensed from Lufkin

State of the art design and manufacturing facility

Supplied & Commissioned the highest power (54 MW) load gear box by Triveni for a GE frame-6 gas turbine

Created new speed milestone with an order for 70,000 rpm test rig gearbox

6MW Hydel gearbox indigenously developed and commissioned

Successfully developed an off-shore flare gas compressor gearbox with integrated lube system

Own developed technology for high speed gear boxes upto 7.5 MW

Applications in power turbines, compressors, pumps etc. as a power transmission equipment

Above 25MW up to 70MW produced through a joint manufacturing programme with Lufkin

Conforms to international standards such as DIN, API & AGMA

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Over 60% market share in complete high

speed gear market across applications up to

70 MW.

Supplier to all major turbine competitors

such as BHEL, Siemens.

Major retrofitting orders executed for cement

industry, steel industry etc. Established strong

presence in this segment

Net sales for the year stood at Rs.733 million.

The expansion in PBIT margin during the year

was ~ 500 basis points.

PBIT margins at 33% in FY 09 as compared to

29% in FY 08.

Improvement in margins on account of new

products, higher share of servicing, spares,

refurbishing, exports

Revenues from spares, refurbishment and

services reached 42% of turnover

239

450

605

769

733

31

76

146

220

244

13

17

24

29

33

10

15

20

25

30

35

0

100

200

300

400

500

600

700

800

FY05 FY 06 FY 07 (*) FY 08 FY 09

PBIT

Margins(%)

Rs.(Millions)


Outstanding order Book as at 30th September 2009 Rs. 545 million


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Future Perspective

Focus on product development in high value added low speed applications

Installation of 2 meter CNC profile grinder and vertical turret lathe

Revenue growth & margin growth through Product diversification

Source for high precision loose gears for major MNCs.

On the look out for expanding the products and services to focus on OEM compressor andpumps segment

Meeting the growing gear box demand in oil & gas segment & auxiliaries for power plants

Focus on providing refurbishment and replacement solutions for domestic and export market

Consistently maintain overall gear box quality at world class standards


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Annual estimated market for Water/Waste Treatment is ~ Rs. 50 billion with an estimated growth of20-25%

Visible potential for water & waste water business in view of anticipated stringent environmental normsand scarcity of water

Market is increasing substantially in all areas- desalination, water reuse and decentralised solutions

Technology association with Siemens Water Technology Business for various products & solutions

One of the widest ranges of products & technologies offered in the Indian Market

Product lines include clarifiers, aerators, filters, membrane solutions, de-watering equipment and highpurity water systems

Over 2000 numbers of process equipments for water & waste water treatment applications, suppliedand commissioned till date

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The water business Group (WBG) delivered a 49%

increase in turnover in FY 09 at Rs. 997 million.

PBIT margins for the FY 09 at 15% at Rs. 148.3 million

WBG has achieved a CAGR of 87% in sales during the

last five years

Focus on high value jobs like major effluent recycling,

installation of high purity water system etc. for major

power plants

Executed the largest industrial desalination plant, to

date in India, for a power plant

Continue to get larger orders in the areas of high

technology applications. One of the major orders

received in FY09

o Largest UF-RO based boiler feed quality watertreatment in the country and among one of

the largest in Asia

Triveni with various orders under implementation,

has the largest order booking as on now in India for

Membrane based water/waste water treatment

plants.

82

138

400

668

997

522

46

105148

7

16

12

16

15

5

7

9

11

13

15

17

0

100

200

300

400

500

600

700

800

900

1000

FY05 FY 06 FY 07 (*) FY 08 FY 09

PBITMargins(%)

Rs.(Milli

ons)



Outstanding order Book as at 30th September 2009 - Rs. 1.99 billion 18


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Future Perspective

Key technology applications to be used in these sectors are desalination (power & municipal),high purity system, condensate polishing units (both for large sized power plants), biologicaltreatment with nutrient removal (for municipal sector), Anaerobic Treatment (ethanolmanufacturing) etc.

Triveni is capable of providing solutions across the spectrum and is gearing up further bycontinually looking forward for wider product offerings in association with global technologyleaders to strengthen the current technology range and also to add new products and solutionsto address the expanding market

With the visibility of a fast growing market, WBG is estimated to grow at a CAGR of 70 -75%in the next five years.

With the execution of high value desalination, condensate polishing units and other industrialapplication orders, WBG will pre-qualify for taking up higher value orders.


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One of the largest

sugar producer in

India

68 MW of

state-of- the art

Co-generation facility

One of the largest

single stream molasses

based distillery in the

country

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SUGAR PRODUCTION DISTILLERY

COGENERATION

SUGARBUSINESS

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Global sugar prices touched record high in the last 29 -30 years

Global sugar prices remained strong during Oct 08 - Sept 09 season ~75% increase year on year (for both raw and whites)

Cane use mix at 43% : 57% in 2009-10; estimated to remain at 40:60going forward on account of strong demand for ethanol and high crude

prices.

Lowest sucrose content at 131 kg/tone during the season lowest since1992

Lower than expected sugar cane crush for Center South region, 513million vs 530 million expected

Close to 25 30 million tonne of cane left unharvested due to climaticreasons

Sugar production in Brazil, the worlds leading sugar producer, impacted

on account of strong El-Nino pattern

Two consecutive years of deficit in global sugar position resulted in mostof the carry forward inventory exhausted

GLOBAL SUGAR INDUSTRY

Current sugar prices much higher than the average of previous quarters

Countrys estimated sugar production 15 -16 million tonnes for thecurrent season; thereby resulting in a gap of 7-8 million tonnes

Strong sugar prices movement domestically (Oct 08 Sept 09) over60% year on year

Recorded lowest yield and recoveries across the country in the last fiveyears while UP recorded lowest yield and recoveries in a decade

Sugar deficit of 7.5 million tonnes during 2008-09 between production

and consumption expected to remain more or less the same in 2009-10

India produced 14.6 million tonnes during 2008-09 season, a fall of 48%from the peak of 28.3 million tonnes achieved two seasons before.

Country witnessed a turnaround from an exporter of ~5 million in 2007-

08 season to 2.5 million tonnes of imports in 2008-09 season; imports to goup to 5 6 million in 2009-10 to bridge the production consumption gap.

INDIAN SUGAR INDUSTRY


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Increase in sugar prices,

improved profitability

TimeDowncycle Upcycle

Higher sugar

production, higher

availability of sugar

Decline in sugar prices,

lower profitability

Delayed payment to

farmers, high sugarcane

arrears

Decline in sugarcane

utilization for sugar

productionDecline in area under

sugarcane cultivation,

lower production Lower sugar production,

lower sugar availability

Higher and prompt payment

to farmers, lower arrears

Increase in area under

sugarcane cultivation,

higher productionHigher sugarcane

utilization for sugar

production

Profitability Margins :


Sugar

Power / Ethanol



Sugar

Power / Ethanol

Sugar

Power / Ethanol

Sugar

Power / Ethanol

We areHere

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Note: Years mentioned are sugar years and not calendar years. The sugar year is from October to September.

Source: ISMA/Company Estimates

Closing stock taken as a percent of consumption is one of the indicators of sugar price movement.

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Particulars 2005-06 2006-07 2007-08 2008-09 (E) 2009-10 (P)

Total Opening Stocks 4.9 3.7 10.2 9.9 3.5

Production During the Season 19.3 28.3 26.3 14.6 15.0

Imports (white sugar) 0.0 0.0 0.0 0.2 2.0

Imports (raw sugar) 0.0 0.0 0.0 2.3 4.0

Imports (raw sugar processed) 1.1 5.2Total Availability 24.1 32.0 36.5 25.8 25.7

a) Indigenous 19.3 20.2 21.7 22.3 22.8

b) Exports 1.1 1.7 4.9 0.0 0.0

Total Off Take 20.5 21.9 26.6 22.3 22.8

Total Closing Stock 3.7 10.2 9.9 3.5 2.9

% of Stock to Consumption 19% 50% 45% 16% 13%

At 16% in terms of the stock to consumption ratio, this ratio is the lowest in a decade


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99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08

08-09

(P)

Cane Area

(Million

Hectare)

2.14 2.05 2.15 2.40 2.30 2.04 2.31 2.66 2.85 2.14

Average Yield

(Tonnes/

Hectare)

57.58 54.40 57.85 55.96 54.98 60.65 58.32 59.59 56.44 51.77

Sugarcane

Production

(Million Tonnes)

123.24 111.74 124.49 134.53 126.65 124.02 134.68 158.62 160.86 110.78

Drawal (%) 39.59 40.40 44.35 44.06 36.60 41.50 45.15 56.42 46.44 41.00

Recovery (%) 9.34 9.73 9.53 9.53 9.82 9.79 9.51 9.47 9.79 8.91

Sugar

Production

(Million Tonnes)

4.56 4.39 5.26 5.65 4.55 5.04 5.78 8.48 7.32 4.05

Sugar yield and recovery in 08-09 season was the lowest in a decade

Source: UP Government Cane Department

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Deoband

(14,000 TCD)

Khatauli

(16,000 TCD)

Ramkola

(6,500 TCD)

Chandanpur

(6,000 TCD)

Sabitgarh

(7,000 TCD)

Milak

Narainpur

(6,000 TCD)

Raninagal

(5,500 TCD)

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Major facilities located in cane rich areas ofWestern Uttar Pradesh with more than 80% caneintensity fertile and irrigated land

Sugar cane catchment area for all sugar unitsunder canal irrigation both in Western & CentralUttar Pradesh - Lower dependency on monsoon

Closer to countrys major sugar consuming markets -better realizations & lower transportation cost

Long term relationship with ~ 250,000 farmers

Extensive sugar cane development programme todevelop new areas under cane cultivation in our newlocations; improving yields of cane across the units


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Crushing started late during 2008-09 season and on

account of lower yield and recoveries due to climatic

factors, the total cane crush was 3.73 million tonnes,decline of 36% compared to previous season.

Declining in yields and recoveries were a nation-wide

phenomenon during 2008-09 season

Sugar recoveries were lower at 8.98% resulting in lower

sugar production of 336,330 tonnes, decline of 42%

compared to previous season - as against a decline of 45%

across the State of Uttar Pradesh

UP experienced lowest yield and recovery in a decade

during 2008-09

Sugar cane pricing for 2006-07, 2007-08 & 2008-09 before

the Supreme Court

GoI announced FRP of Rs. 129.84 per quintal for 2009-10

season, while UP announced SAP of Rs. 165 per quintal for

normal variety.

Free Sugar realizations grew sequentially in FY 09 with a year on

year increase of 45%

Higher realizations enabled sugar business to achieve a PBIT

margin of 16% during FY 09

Sugar Season 2009-10

Extensive Cane development programme undertaken to

ensure adequate cane availability

Sugar cane yield expected to be higher than the previous

season, thereby having more cane for crushing

Triveni, with intense cane development programme,

expects to crush more sugar cane during the current

season.

Imported 90,000 tonnes of raw sugar at competitive

prices to augment sugar production in the coming season

Overall sugar production for 2009-10 expected to be higher

than 2008-09.

Sugar prices to remain firm on account of estimated lower

production


FY 04 FY 05 FY 06 FY 07 (*) FY 08 FY 09

Net Sales (Rs. Million) 4470 7676 8663 7605 8863 12529

PBIT (Rs. Million) 437 1404 1351 (900) 359 2023

PBIT Margins (%) 9.8 18.3 15.6 (11.8) 4 16

Sugar Manufactured (000 t) 444 384 381 591 580 336

FY07* - 12 months period from Oct 06 Sep 07 26


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68 MW of co-generation capacity in two units; 42

43 MW of exportable power during season and off-

season

On account of lower cane crush during the current

season, the number of days of operations for co-

generation facilities were significantly lower than the

previous season and operated only for 127 days in

FY 09 as compared to 200 days in FY 08

The co-generation units generated 172.31 million

units of power and exported 111.85 million units to

the grid.

UPERC for the next five years has revised the tariff

for the sale of power bide its order dated Sep. 2009

resulting in an increase of around Rs. 0.80 per kwh

for our plants.

Facilities eligible for carbon credits under Clean

Development Mechanism

Approx. 58000 CERs for Khatauli approved by

UNFCCC for the period April 2007 to March 2008 .

CERs for the same period for Deoband is under

process and is expected in Q3 FY10.

188

606

1339

1174

948

45

165

449476

20124

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FY 05 FY 06 FY07 (*) FY 08 FY 09

PBITMargins(%)

Rs.(Millions)

Sales (Rs. Million) PBIT ( Rs. Million) PBIT Margins (%)


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Integration of Sugar operation value addition of

by-product - molasses

160 KLPD distillery, commissioned in April 2007,

is one of the largest single stream molasses based

distillery in the country and is located at

Muzaffarnagar

Ideally located to use the molasses from two

of the major units viz., Khatauli & Deoband

Recorded 98% capacity utilization in FY 09 as

compared to 97% in FY 08

In this short span of time, started producing one

of the countrys best quality ENA

Production was lower by 39% during FY 09 as

compared to FY 08.

Significantly lower production & sales during the

quarter on account of lower than expectedalcohol prices

With significantly lower production of sugar in

2008-09, the alcohol prices were expected to rise,

however, the rise in alcohol prices were not significant

when compared with molasses prices

Average realization of alcohol for FY 09 was Rs. 28.18

per litre

Recovery increased in FY 09 to 236 Ltr/tonne of Molasses

due to much lower fermentation and distillation

efficiencies

Substantial quantity of molasses in stock - option to

process adequate quantity to manufacture alcohol

based on economic viability of alcohol prices vis--vis

molasses price28


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SUGAR MANUFACTURING

Stabilise the installed Capacity

Achieve greater raw material security

Strengthen farmer relationships Thrust on cane development and continuously improve

technology in sugar manufacturing

CO-GENERATION & DISTILLERY

Value addition of by-products to be achieved by maximumintegration of operations

Explore organic and inorganic expansions, depending onopportunities and market

TURBINES BUSINESS

Upgrade & maintain manufacturing excellence

Constant technology & developmental improvement

Using superior service as a differentiator Broaden the market for Steam Turbines

GEARS BUSINESS

Increase product range

Diversify and broaden our customer base

WATER BUSINESS

Focus on Technology

Focus on high margin equipment and solutions

SUGAR BUSINESS ENGINEERING BUSINESS

Our long-term corporate vision is to:

(a) Maintain a Top 3 position in each of our businesses within the applicable market segment

The market segment for the Turbines business is the global market while for the sugar business it is India

(b) Create value and delight for our customers and stakeholders

(c) Incorporate technology as the key differentiator to deliver growth and to sustain leadership

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For more details contact:

CN Narayanan

Triveni Engineering & Industries Ltd.

Tel. +91 120 430 8000 Fax : +91 120 431 1010

[email protected]

Gavin Desa/ Saurav Shah

Citigate Dewe Rogerson

Tel: +91 22 4007 5000

Fax: +91 22 2284 4561

[email protected] / [email protected]

Some of the statements in this presentation that are not historical facts are

forward looking statements. These forward-looking statements include our

financial and growth projections as well as statements concerning our plans,

strategies, intentions and beliefs concerning our business and the markets in

which we operate.

These statements are based on information currently available to us, and we

assume no obligation to update these statements as circumstances change.

There are risks and uncertainties that could cause actual events to differ

materially from these forward-looking statements. These risks include, butare not limited to, the level of market demand for our services, the highly-

competitive market for the types of services that we offer, market conditions

that could cause our customers to reduce their spending for our services, our

ability to create, acquire and build new businesses and to grow our existing

businesses, our ability to attract and retain qualified personnel, currency

fluctuations and market conditions in India and elsewhere around the world,

and other risks not specifically mentioned herein but those that are common

to industry.

Further, this presentation may make references to reports and publicationsavailable in the public domain. Triveni Industries Ltd. makes no

representation as to their accuracy or that the company subscribes to those

views / findings.

Disclaimer

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Documents

Corporate Presentation January 2010