lanco infratech - investor presentation 09
TRANSCRIPT
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Lanco Infratech
Investor Presentation
September 2009
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Agenda
1 Company Overview
ower us ness
3 Construction and EPC Business
n ras ruc ure us ness
5 Property Development Business
7 Experienced Management Team
3
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Agenda
1 Company Overview
ower us ness
3 Construction and EPC Business
n ras ruc ure us ness
5 Property Development Business
7 Experienced Management Team
4
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Lanco Infratech A Leading Integrated Infrastructure Player
Division of Lanco Infratech
Construction & EPC Power Infrastructure Property Development
Special Purpose Vehicles
Executed projects worthUS$1.3bn over last 3 years(FY07 - FY09)
Order book of US$2 bn
5 plants with approx. 511 MWcapacity under operation
9 plants with approx. 3,913MW capacity under
construction 2 plants with approx. 3,960
Developing approx. 163 km ofNational Highways inKarnataka
Bidding for constructing and
operating Airports, Metro RailTransport Systems and
4mm sq ft under developmentin Hyderabad, India
Developing Lanco Hills, mixedused space of high rise
residential structures, IT SEZoffice space, shopping malls
MW capacity underdevelopment
Largest private player inpower trading with 12.4%market share
,operation of roads, ports andredevelopment projects
Revenues EBITDA PAT
350
690
1,292
500
1,000
1,500
(US$mm)
98
149
189
50
100
150
200
(US$mm)
40
60
75
25
50
75
100
(US$mm)
5
32
-
FY06 FY07 FY08 FY09Note:
1 This presentation assumes an exchange rate of US$ / INR =47
2 Financial year ending March 31
3 mm indicates million
4
-
FY06 FY07 FY08 FY09
4
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FY06 FY07 FY08 FY09
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Pan India Presence
Plants under construction
Plants under development
Coal Based
Teesta
Lanco Uttaranchal
Plants under operation
Plants under construction
Vamshi - I
Vamshi - II
Vamshi Industrial
Lanco Green
GasGurgaon
Amarkant ak I & IIAmarkantak III & IV
Anpara
Plants under construction
Plants under operation
Wind
Chitradurga Konda all i - I
Kondapalli - II
Babandh
Lanco Hills
Property development
Road development
Registered off ice
HyderabadCoal mine
Udupi
81 km Bangalore Hoskote Mudbagal82 km Neelamangla Devihalli Tamil Nadu Wind
Adminis trati ve o ff ice
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Strong Push to Drive Infrastructure Growth
Infrastructure spending (2007-2012)
Government is targeting investment of >US$400 bill ion during 2007-2012
Total - US$437bn
Demand / supply gap for power
1,000 12%160 157
579 625
666 689632 691739
591
548
400
600
800
(bnkwh)
6%
9%
0
40
80(US$
bn)
79 68 65 55
5119
9 6 5
-
200
FY05 FY06 FY07 FY08 FY090%
3%
Re uirement Availabilit Deficit
Powe
r
Roa
dsandB
ridges
Telec
om
Railw
ays
Irriga
tion
Water/
sanit
ation
Ports
Airport
s
Storag
eGa
s
Central Govt. State Govt. Private sector
Commentary
Recent election mandate provides a stable coalitiongovernment which may focus on infrastructure
Per capita consumption of electricity
18.4
14.215
20
/year)
Source: Planning commission (XIth five year plan) Source: Central Electricity Authority (CEA)
Positive regulatory reforms remain a key driver of growth
Power, airports and ports are likely to be the fastest growthsectors in the foreseeable future
7.46.4
2.3 1.70.6 1.2
-
5
10
(Thousandkw
h
7
Source: UNDP, Human Development Indicators, 2007/08
In the XIth five year p lan (2007-2012), the Government targets to add 78,700 MW of generating capacity
countries
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Agenda
1 Company Overview
ower us ness
3 Construction and EPC Business
n ras ruc ure us ness
5 Property Development Business
7 Experienced Management Team
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Power Deficit Scenario
582
63 1
1,000
2004
2006
2012
Per Capita Consumption Growth (Units)Planned Vs. Installed Capacity Xth Plan (MW)
30,000
18
35
84
131
23 8
40 8
1950
1960
1970
1980
1990
2001
58% growthin XIth Plan4,481
2,691
6,676
3,553
,
7,33012,790
1,1801,3008,742
1,231
700
1,170
10,000
20,000
(MW
)
.
Pro ected 2012 eak Ener Deficit Power Deficit 2009
Source: CEA
,0
Hydro Hydro Thermal Thermal Nuclear Nuclear
Central sector State sector Private sector
(Planned) (Installed) (Planned) (Installed) (Planned) (Installed)
Source: CEA
15.9 %
(22.1)%
(23.7)%
(24.3)%
P N
UP
M H
GJ
10.6 %
(20.9)%
(21.4)%
(9.8)%
PeakDeficit States EnergyDeficit
1.63.5 3.7
15.0
2.7
15.816.0
5.0
10.0
15.0
20.0
(4.8)%
(6.2)%
(7.6)%
(10.0)%
(13.0)%
KN
T N
A P
M P
KL
(6.0)%
(7.9)%
(6.8)%
(17.2)%
(11.8)%
(9.7) (9.3)
(5.0)(5.8)
(0.7)
(4.4)
(10.4)
(4.5)
(15.0)
(10.0)
(5.0)0.0
North India West India South India East India North-East
India
9(0.9)%
(2.0)%
(3.2)%
(3.6)%
OR
CH
RJ
WB
(1.5)%
(2.6)%
(1.1)%
(3.2)%
Source: Ministry of Power Source: CEA
Winter Peak Monsoon Peak Summer Peak
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Presence Across Value Chain De-risking the Business
Fuel (Coal mining)Construction and
EPCGeneration and O&M Trading
Transmission andDistribution
Integrated presence across value chain capturing value addition across the businesses
Captive coal mine
allocated by Govt.of India to Lancoand five others
Coal to be usedfor portion of
5 completed
projects withcapacity of 514MWand 3,913MWprojects underdevelopment
5 operating
projects withcapacity of511MW and 7,873MW projectsunder
Largest private
sector player inIndian powertrading marketwith approx. 12%market share
Strategy includes
possibleexpansion intotransmission anddistribution
needs of theOrissa based2,640 MWBabandhpower plant
Strong engineeringcapability andresources spanningfeasibility studies,front-end design and
complete detaildesign with over
Generationactivities includeconventional andnon-conventional
sources of energylike coal, hydro
Covers all the fiveregions of India bycovering32 utilities from19 States
Traded 2,841mm
10 years ofexperience in designand development ofPower Projects
Handles globalsuppliers selectionand sourcin of
and wind
ended March 31,2009
Bought 5% stakein the IndianEnergy Exchangefloated by
diverse materialslike high-pressurefabricatedequipment, skids,electricaland instrumentations stems
Financial
Technologies Ltdand PowerTradingCorporation
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Focused on Power Sector with a Pan-India presence
Location of power plants Regional split of power plants1
One of the early private sector entrants in the field of power generation wi th first plant set up in 2000
Central
22.9%East
Vamshi HydroVamshi IndustrialLanco Green
Teesta
Lanco Uttaranchal
North
.
Fuel diversification of power plants1Amarkantak I & IIAmarkantak III & IV
Anpara
17.2%
South
22.4%
Konda alli - I
BabandhWind
0.1%
Gas
10.2%
Hydro
8.9%
Chitradurga
Kondapalli - IIUdupi
Plants under operation
Plants under construct ion
Plants under development
coal68.7%
Imported coal
12.1%
Capacity (MW)
511
3,913
3,960
8 384
11
Note:
1 After installation of all current projects including projects under development
Aban
Tamil Nadu Wind
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Mature Power Projects Provide Visibility into Earnings
Projected capacity addit ion
FY13
FY14
Babandh (2
Lanco is expected to increase its power generation capacity sign ificantly in next 2 years
FY12
Uttaranchal I
Amarkantak III
Babandh (2units)
Teesta
Uttaranchal II
un s
Amarkantak IV
FY10
Amarkantak I & II
Vamshi
Budhil
Udupi II
Anpara
6,404MW
8,384 MW
Current
Kondapalli II
Udupi I
3,772 MW
3,848 MW Kondapalli I
Aban
Chitradurga
Tamil NaduWind
1,994.5 MW
VamshiHydro
12
511 MW
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Project Status UpdateProjects under operation
Plant Fuel
Capacity
(MW)
Total cost
(US$mm)
Kondapalli I Gas 368 241
Aban Gas 120 93
Chitradurga Wind 3 3
Tamil Nadu Wind Wind 10 10
Vamshi Hydro Hydro 10 12Total 511 359
Projects under constructio nGovt. Financial Budgeted
Plant Fuelapproval
statusclosurestatus
Capacity
(MW)cost
(US$mm)
PPA
(Years)
Estimated
completion Current status
Amarkantak I Coal Y Y 300 275 25 Q2 FY101 Synchronization with grid completedKondpalli II Gas Y Y 366 253 Merchant Q2 FY10 / Q4 FY103 Gas turbine generator placed on the foundationVamshi Industrial Hydro Y Y 10 12 35 Q2 FY10 / Q3 FY10 EOT Crane commissioned
Amarkantak II Coal Y Y 300 285 25 Q3 FY10 Turbine, generator erection currently underprogress; Boiler Hydro test completed
Udupi I & II Imported Coal Y Y 1,0152 923 25 Q3 FY10 / Q1 FY11 Turbine, generator erection currently underprogress, Boiler Hydro Test Completed
Lanco Green Hydro Y Y 70 89 35 Q2 FY11 Pressure shaft excavation completeAnpara Coal Y Y 1,200 729 29 Q4 FY11 Boiler drum lifting completedLanco Uttaranchal I & II Hydro Y Y4 152 221 Merchant Q4 FY12 / Q4 FY13Teesta Hydro Y Y 500 638 35 Q4 FY13 Construction commenced in May 2007 and Right
bank and Left bank stabilization done
Total 3,913 3,425
Projects under development
Babandh Coal (Partly Owned) N N 2,640 3,370 Part PPA Q4 FY13 / Q1FY14 MOU signed for 1,320 MW and land acquisition inprogress
Amarkantak III & IV Coa N N 1,320 1,685 Part PPA Q4 FY13 / Q1FY14 MOU signed with Govt. of Chattisgarh;Total 3,960 5,055
13
Note:
1 Currently under litigation
2 1,200 MW upon receipt of approval
3 Q2 FY10 is for open cycle and Q4 FY10 is for combined cycle
4 For 76 MW Financial Closure is done
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Agenda
1 Company Overview
ower us ness
3 Construction and EPC Business
n ras ruc ure us ness
5 Property Development Business
7 Experienced Management Team
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In-house EPC Reduces Execution Risk/ Enhances Margins
Revenue contribut ion1 (FY09) FY09 EBIT margin comparison with other businessesEBIT contribution (FY09)
In-house EPC enables Lanco to complete projects on an accelerated basis
US$1.3bn US$166mm16%
Others.
11.8%
5.8%8%
12%
Pow er
39.1%
Development
2.3%
0.3%
Development
1.0%
Pow er
36.7%
0%
4%
EPC Power Property
DevelopmentConstructionand EPC
Constructionand EPC62.3%
Capability to take up more projects
Approx. 114 km Veeranam water supply transmission pipelineconstructed along with JV Partner, Punchak in Tamil Nadu
Balance of Plant of approx. 368 MW LANCO Kondapalli Power
List of projects executed
Lanco undertakes the EPC business of its planned projectsand profits earned during the construction period can beinjected into new projects in the form of equity contribution
.
Project in Andhra Pradesh Balance of approx. 120 MW Aban Power Project in Tamil Nadu
825 bed Asvini Hospital for Indian Navy at Colaba, Mumbai
Four laning of National Highway 31 in West Bengal
Construction of 1st phase of 100 bed hospital, college and hostel
The business model also enables the company to quotemore aggressive tariffs in the competitive bidding processthereby increasing the likelihood of getting new projectswhile maintaining acceptable profit margins
Note:
15
., ,
Construction of Railway Offices at Koparkhairane Railway Station1 Before elimination of inter segment revenues
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Agenda
1 Company Overview
ower us ness
3 Construction and EPC Business
n ras ruc ure us ness
5 Property Development Business
7 Experienced Management Team
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Leveraging Construction Expertise to Build Infrastructure Business
Awarded two National highway projects in Karnataka
Lanco has moved into selective infrastructure projects to leverage its EPC experience
Approx. 81 km stretch connecting Bangalore Hoskote
Mudbagal
A rox. 82 km stretch connectin Neelaman la Devihalli
Budgeted project cost of US$288mm
oncess on per o s o years an years respec ve y ur ngwhich toll will be collected
Construction under progress and expected to be completed by
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Agenda
1 Company Overview
ower us ness
3 Construction and EPC Business
n ras ruc ure us ness
5 Property Development Business
7 Experienced Management Team
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Property Development - An Opportunistic Play
Lanco Hills is the groups foray into property development, located in Hyderabad, spread over 100 acres andcomprises residential space, offi ce space, IT SEZ, shopping mall and two hotels with US$292mm of capitalexpenditure already incurred
Lanco Hills
Residential Developing 12 residential towers with construction on 6 towers in first phase
Construction in progress with possession of apartments to commence in Q4 2010
Office space
ce comp ex w u -up area o . mm sq
Constructing SEZ space with completion target of 2012
Constructing office space with completion target of 2010
Shopping mall Plans to build a 2.5mm sq ft of a shopping mall
Construction will be in phases
Hotels Tied up with Grand Hyatt for a 400 room, 5 star deluxe hotel
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Agenda
1 Company Overview
ower us ness
3 Construction and EPC Business
n ras ruc ure us ness
5 Property Development Business
7 Experienced Management Team
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Steady Growth History
1,2921,500
189200
Revenues EBITDA
350
690
600
900
,
(US$mm
)
98
149
100
150
(US$mm)
32
-
FY06 FY07 FY08 FY09
4
-
FY06 FY07 FY08 FY09
PAT Power projects capex and debt overview (As of March 31, 2009)
60
75
75
100
m) 3,000
4,000 3,425
2,790
4
40
-
25
50
(US$m
,
1,609
1,1811,806
0
1,000
2,000
(US$m
m
21
FY06 FY07 FY08 FY09
Source: Company filings
Capex Debt
Incurred Remaining
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Agenda
1 Company Overview
ower us ness
3 Construction and EPC Business
n ras ruc ure us ness
5 Property Development Business
7 Experienced Management Team
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Experienced Management Team
L Madhusudhan RaoExecutive Chairman
M. Tech; MS (Wayne Univ)
J Suresh KumarChief Financial Officer
Chartered Accountant
SC ManochaCEO - EPC
Mech. Engineer & Mgmt Graduate
Joined Lanco in 1989
Guided the company
through its crucial stagesof growth and mergers
Over 14 years of experience in thefinancial services sector includingM&A, corporate restructuring and
fund raising
Previously employed withJM Morgan Stanley Prasad Kandimalla
Director & Chief Executive Officer Renewable Energy, Carbon Assets
35 years experience in RelianceEnergy, Maithon Power, UtilityPowertech, L&T, BHEL and
ISGEC John Thomson
G Bhaskara RaoExecutive Vice Chairman
ME (Machine Design), B.E.(Production) from IISc
25 years of experience inconstruction industry inroect lannin
Director and Chief Executive Officer,Lanco Kondapalli
Chartered Accountant andCompany Secretary
28 years of experience from diverseindustries across companies
Masters Degree and Specialisationin Energy & Systems
Experience in financial services, IT,Management Consultancy spanningseveral countries
and implementation
G Venkatesh BabuManaging Director
Chartered Accountant andCost Accountant
K Raja GopalChief Executive Officer and Director,Lanco Amarkantak
ME, MBA (Marketing)
22 years of experience inproject development and various
Chief Executive Officer, Lanco Hills
Post graduation in EnvironmentEngineering, B.E. (Civil)
Previous work experience withIVRCL, Hyderabad MetropolitanWater Supply & Sewerage Board
15 years of experience inCommercial Banking,Corporate Advisory,Mergers & Acquisitions,Project Finance and EquityCapital Markets
functional disciplines of
manufacturing and power industries
26 years of experience
Pradeep LenkaChief Executive Officer-Thermal,Lanco Infratech Ltd
ME, 30 years of experience in
S M RoyCEO - Construction Division
Mechanical engineer and postgraduation degree in Business
23
power projects as OEM and also asIPP developer
Executed more than 15 projectsin BHEL
management from XLRIJamshedpur
40 years of experience
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