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Investor Presentation
FY 2007 – Annual Results

May 10, 2007

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Presentation structure

• Results : Q4 – FY 2007

• Results : FY 2007

• Outlook : FY 2008
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Highlights : Q4 – FY2007
• Consolidated Net sales and operating income
increased by 25.4 % to Rs. 9,589 million
– Good growth witnessed by all business units
– Volume growth has been impressive for the
quarter
• Net Profit has risen by 43 % to Rs. 666 mn
– Good performance by the Decorative Business Unit
– Improved performance by International operations
• Material costs have risen during the quarter
• Operating margins have improved due to
impressive volume growth
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Consolidated P&L – Q4 FY07

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Standalone P&L – Q4 FY07

EOI (Extra Ordinary Item) – Provision for diminution in value

of Investment.
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Presentation structure

• Results : Q4 – FY 2007

• Results : FY 2007

• Outlook : FY 2008
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Highlights - Consolidated results

–FY2007
• Paint volumes for the year including international
increased by 18.7 % to 481,976 KL
– All three business units registered in excess of 15% volume
growth
• Value Sales have grown by 21.5 % driven by
– Good growth registered by Paints-India business and the
Middle East region
• Material costs as a percentage to sales have gone up
marginally
• HR costs have risen by 17.4 % to Rs. 2621 mn
• However operating margins have been maintained due
to control on other overheads
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Consolidated P&L –FY 2007

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Consolidated Sales breakup :

FY 2007 & Q4 FY 07

* 50 % of Asian PPG Industries sales are included

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Asian Paints Consolidated Results FY2007

• Asian Paints Standalone Results

• Decorative Business – India

• Industrial Operations – India

• International Operations
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Asian Paints - Standalone P&L :

FY2007

EOI (Extra Ordinary Item) – Provision for diminution

in value of Investment.
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Asian Paints - Standalone P&L :

FY2007

• Net Sales grew by 21.7 % due to strong growth by

all segments of the paints business
• Net profit has increased by 45.7% to Rs. 2720 mn
– Due to the performance of the Decorative – India business
– In FY’2006 results, Rs. 336 million was provided towards
diminution in the value of investments in overseas units
– Adjusting for EOI, Net profit has risen by 23.5 %
• Chemicals business registered revenue growth of
12.9% to Rs. 961.5 mn (adjusting for inter segment
revenue)
– PBIT for this business increased by 105.9 % to Rs. 246.3
million
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Environment – FY2007
• India
• GDP growth at 9.0 % for FY07
– Estimated at 9.2 % for FY 08 aided by a surge in industry
and services sector
– Higher growth than FY07 predicted for services and
industrial sector
• Inflation and rising interest rates are a cause for
concern
• Manufacturing, Capital goods, consumer goods,
construction, cement, automobiles – all have
registered good growth for FY2007

Estimates : Citigroup Macroscope

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Paint Industry – India : FY 2007

• Paints industry estimated between Rs. 112 and Rs.

115 billion for FY2007
– Value growth is estimated at around 18% in FY2007
• Decorative paints estimated to have grown by
around 19 % in value
• Industrial Paints is estimated to have grown by
around 17 % in value
• Demand conditions have been good in most
segments of the paint industry
• Input costs continued its upward trend during the
year putting pressure on operating margins of paint
companies
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Asian Paints Consolidated Results FY2007

• Asian Paints Standalone Results

• Decorative Business – India

• Industrial Operations – India

• International Operations
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Paints : Decoratives India

• Demand for decorative paints was good nearly

throughout the year and in most parts of the
country
– While Southern region of the country continues to do very
well, the exceptions were Delhi and North East region
• All segments for Decorative India registered
double digit growth
• Excellent growth in all wall finish products
– Impressive growth recorded by interior and exterior
emulsions
• 8500 Colour Worlds now installed in the country
– Penetration into small towns continues
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Paints : Decoratives India

• Pricing FY 2006
– Four price increases effected during the year.
– Overall prince increase in the year was around 4.25%
– All price increases have been absorbed well by the market
• New Products
– Royale Play range expanded
– Luxury Ultra Gloss enamel launched in many markets
• Colour Next 2007 launched
– The company is beginning to be recognised as an authority in
forecasting colour trends.
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Paints : Decoratives India

• Asian Paints Home Solutions

– Added 2 cities in FY2007 i.e. Jaipur and Baroda
– APHS is now present in 12 cities in the country

• Manufacturing facility
– Ankleshwar plant has received environmental
clearance for 100,000 kl from 80,000 kl
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Paints : Decoratives India

• Price of TiO2 have been fairly stable during the year

• Prices of raw materials increased sharply in 2nd and 3rd
quarter in FY 2007
– Major increases were in Xylene, Phthalic Anhydride and vegetable
oils
• Prices of solvents have eased in Q4’FY07 due to lower
crude oil prices
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Asian Paints Consolidated Results FY2007

• Asian Paints Standalone Results

• Decorative Business – India

• Industrial Operations – India

• International Operations
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Industrial Operations

• Sales for automotive JV (APPG) increased by

23% to Rs. 3447 million
– Both OE and refinish segment performed well
– Acquired the advanced refinish business of ICI India
for a consideration of Rs. 520 million
• APPG is now the largest player in the auto-refinish
segment
– Work on new manufacturing facility for APPG has
commenced
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Industrial Operations

• Sales for powder coatings business (APICL) increased

by 22.3 % to Rs. 477 million
– Capacity expansion work underway at Baddi plant (HP) and
Sarigam plant (Gujarat)
• The other industrial coatings business which is part
of the standalone company grew by over 20 %
– The company is now the second largest in protective
coatings and the largest player in Road Markings
– Exclusive manufacturing facility for industrial coatings
commissioned near Mumbai
• First phase commissioned for 14,000 kl
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Asian Paints Consolidated Results FY2007

• Asian Paints Standalone Results

• Decorative Business – India

• Industrial Operations – India

• International Operations
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International Operations : FY2007

• Paint value sales increased by 20.8% to Rs. 6.24

billion
– Double digit value sales growth recorded by all regions
• Paint Volumes increased by 22.4 % to 94,181 KL
• PBIT for International operations increased by 457 %
to Rs. 192 million
• Input prices were buoyant throughout the year and went up
significantly
– Pressure on margins abated by leveraging economies of
scale, formulation engineering and reduction in material
losses in manufacturing
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International Operations : FY2007

• During the year, the group divested its stake in the

associate company in Philippines and its stake in the
Myanmar subsidiary
• The profitability of international operations was
impacted by the following exceptional items
– Loss of Rs. 71 mn from disposal of stake in associate
company in Philippines
– Loss of Rs. 7 million due to disposal of subsidiary in Myanmar
– Provision of Rs. 16 million for impairment of buildings of
Thailand subsidiary
– Tax expense is lower by Rs. 75 million due to write-back of
prior year taxes
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International Operations : FY2007

• New products constituted 14 % of sales turnover

• Over 600 dealer tinting systems are in operation at
overseas units
• Microsoft Navision – the ERP solution is running
successfully in most subsidiaries
• A detailed program is being implemented by all
overseas units to upgrade safety, health and
environment standards
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Region wise Sales Breakup

Caribb
CY 2006 CY 2005
ean, Middle Caribbe
24.1% East, an,
41.2% 25.9% Middle
East,
37.8%

South South
Pacific, Pacific,
11.5% 12.6%
South S.E.
S.E. South
Asia, Asia,
Asia, Asia,
9.8% 14.6%
13.3% 9.0%
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Region wise – Sales & EBIT

FY 2007
In INR million
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Asian Paints Standalone - Cash Flow

FY 2007
• Operating cash flow is
higher by 43% inspite of
higher tax outflow
– Improvements in working
capital

• Capital expenditure for

FY’07 was Rs 800 mn
– Estimated capex for FY07
was Rs. 1500 mn
• Estimated Capex for FY08
is Rs. 2750 mn
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Dividend

• Final dividend of Rs. 1 /- announced for FY 2007

– First interim dividend of Rs. 5.50 / share distributed in Nov’06
– Second interim dividend of Rs. 6.50 /share distributed in Mar’07
– Total Dividend in FY 2007 is Rs. 13 /-
• Total Dividend of 125%(Rs. 12.5 per share ) distributed
for FY 2006
– Includes one time special dividend of 25% to mark the occasion of
the 60th year of incorporation of the company
• Dividend payout ratio is 52 % for FY 2007 and Dividend
payout ratio for FY2006 was 62% (Before EOI including
special dividend)
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Key Ratios
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Presentation structure

• Results : Q4 – FY 2007

• Results : FY 2007

• Outlook : FY 2008
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Outlook– FY2008

• India
• Paint Industry expected to grow by 13 – 15 % by value
• Inflation and rising interest rates are a cause for
concern
• In Decorative paints our emphasis would continue to be
to drive top-line growth
• Demand for industrial coatings will continue to be
buoyant
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Outlook– FY2008

• International
• The focus for international business is to grow top-line
and improve profitability
– The Caribbean, Middle East, South Asia and South Pacific
regions are expected to register an improved performance
– Steps have been taken to reduce losses in the South East
Asia region
– Focus is on increasing market share through initiatives viz.
new product introductions, dealer tinting systems and also
increasing operating efficiency
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Thank you...