Hindusthan National Glass & Industries Limited

Corporate Presentation
June 2013
Industry Overview
Global Packaging Industry

• As per World Packaging Organization, the global packaging industry is expected to be USD 597 billion by 2014

with ten year historical growth at ~ 3.1% CAGR

• Projected to grow at ~ 3.5% CAGR in the medium term mainly driven by growth in emerging markets (Asia

Pacific region)

Geography End-User

5%
13%

27% 34% Liquor

Europe 9%
Asia, Oceana, Africa & ME Beer

North America Food

52%
11%
South & Central America Pharma
Others

34% 15%

Source: Owens-Illinois, Inc. - Investor presentation, March 2010

3
Packaging Industry - India

Market Overview World glass container per capita consumption in Kg.

• At USD14 bn, Indian packaging industry has been

Indonesia 1.2
growing at ~ 15% over the last few years

• Expected to accelerate further with increasing India 1.5

urbanization, growing middle class and

Brazil 4.8
expansion of modern retail
China 5.9
• Indian glass container market is estimated to be
around USD 1.1 bn and is growing at the rate of ~10% Japan 10.2

p.a.
Mexico 19.5
• Entry barriers in Indian Container Glass industry is
USA 27.5
owing to capital intensive nature
UK 27.5
• Top 3 players are HNG, HSIL and Piramal Glass

• Low per capita glass container consumption of Spain 50.3

1.5 kg in India as compared to other countries France 63.9

(refer chart alongside).
South Korea 89
• Strong economic drivers for end-user segments (liquor,
beer, pharmaceuticals, food, cosmetics etc.) 0 50 100

4
End user Industry Overview

B
e
e
r IMFL – Volume CAGR 10% Packaged Food – Volume CAGR 12%*
(Mn Cases) Region-wise Demand Region-wise Demand
(US$ Bn)
347 West North 30
315 20% 20% West
287 25 North
277 29%
250 21 29%
222
18
15
East 13
10%

South
South
25%
50% East
2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 17%
* Assuming value growth of 7% out of overall growth of ~19%
Source: Datamonitor, Capital Market Estimates Source: ASSOCHAM study, Capital Market Estimates

Beer – Volume CAGR 11% Pharmaceuticals – CAGR 13%

Region-wise Demand (US$ Bn)

(Mn Cases)
329 North 45
308 West
280 25% 20% 39
250 35
219 31
195 27
24
East
10%

South
45%
2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

Source: Datamonitor, Capital Market Estimates Source: AM Mindpower Solutions

5
Company Overview
60 Years’ Experience in the Glass Industry

Company Overview Group Structure

Incorporated in 1946, promoted by the C K Somany Group

Listed on BSE since
 Started operations with 30 TPD furnace at Rishra in 1952 HNGIL Mar 1995 & on NSE
since Apr 2009

Organic & inorganic expansion from 1,100 TPD in 2001 to ~4,300 TPD in
FY13
18.3% 100% 100% 99.7%

Market leader and the only pan-India player in the container glass
HNG Float Glass HNG Global Glass Equipment Quality Minerals
industry. Ltd GmbH (India) Ltd Ltd

New plant of 650tpd each to help consolidate position in South & West
Manufacturer of 320 TPD glass Capital Goods & Mineral Supplier to
 Brownfield expansion at Nashik, Maharashtra commissioned in Float & Processed container facility at Spares Supplier to Glass Industry
Glass Gardelegen, Glass Industry
Q1 FY13. Germany
 Greenfield expansion at Naidupeta, Andhra Pradesh
commissioned in Q2 FY13.

Catering to all segments – IMFL, Beer, Pharma & Vials, Foods &
Beverages (F&B), Cosmetics

Foray into global market through acquisition of assets of Agenda Glas

AG, Germany in May 2011

7
Shareholding

Shareholding Pattern as on date

Promoters 69.98

Public Shareholding 30.02

Insurance Companies 0.10

Bodies Corporate 4.86

Financial Institutional Investors 7.27

Individuals & Others* 17.79

Total 100.00

* Includes 16.76% held as Treasury Shares in the Company

Total 87.3 million shares

Listed at: National Stock Exchange (NSE) - HINDNATGLS

Bombay Stock Exchange (BSE) - 515145
Calcutta Stock Exchange (CSE) - 10018003

8
 Organization Structure

HNG Board

Chandra Kumar Somany

Non-Executive Chairman

Sanjay Somany Mukul Somany

VC & MD VC & MD

International North India Rest of India Strategy & Management

Operations – Plant Domestic Tech Centre –
Plant CFO– Purchase – Management Audit & SAP –
J P Kasera Operations – Marketing – Pawan
Operations – B K Garodia B K Kedia Cell – Somnath
R L Khandelia Vinay Saran Bhardwaj
L N Mandhana Ajay Kr. Rai Sengupta

Exports –
Devdutta
Hoare

Pharma &
Neemrana Plant Head– Cosmetics –
K K Sharma Sanjay Jain

Rishikesh Plant Head – Nashik Plant Head – Naidupeta Plant Head – Rishra Plant Head – Pondichery Plant Head –
V K Chitturi Indranil Chatterjee Ajay Chakraborty Pankaj Srivastava V Ramanan

Bahadurgarh Plant
Plant Operations –
Raman Poddar
Commercial Head -
S R Bansal
9
 Board of Directors

Mr. C K Somany, 79, Non-Executive Chairman

Mr. C K Somany is an expert in glass technology, he provides policy guidelines for the management and administration

He holds an F.B.I.M (London) degree and a degree in Glass Plant Instrumentation from Honeywell Brown, Minneapolis, USA

Served as the President of the All India Glass Manufacturers' Association and is associated with various charitable and philanthropic organisations

Currently the Chairman of CAPEXIL, sponsored by Ministry of Commerce & Industry, GoI

Mr. Sanjay Somany, 54, Vice-Chairman & Managing Director

Has over 30 years experience in the glass industry and is closely involved in the technical and engineering aspects of the business

He is a commerce graduate and holds a diploma in diesel engineering

Served as the President of All India Glass Manufacturers' Federation (AIGMF)

Mr. Mukul Somany, 47, Vice-Chairman & Managing Director

Over 26 years experience in the glass industry

Led the acquisition, turnaround and integration of India business of Owens Brockway and glass business of L&T Ltd, re-engineered business processes across six units

Currently the President of AIGMF, Executive Committee Member of CII (Eastern Region) & Member of CII National Council

Mr. Dipankar Chatterjee, 64, Independent Director

Chartered accountant and senior partner of LB Jha & Co., Chartered Accountants and is a member of National Council of CII

Former Chairman of CII-Eastern Region, member of the Central Council of ICAI, Chairman of the audit practices committee of ICAI

Appointed member of the Padmanabhan Committee (set up to review RBI’s supervision over banks)

Mr. Kishore Bhimani, 73, Independent Director

Noted journalist, was the Senior Assistant Editor at The Statesman and wrote columns on sports, finance and the stock market

Associated with various environmental & social NGOs and authored several books

Graduated from St Xavier’s College, Kolkata and holds a BSc (Economics) from LSE

10
 Board of Directors

Mr. Rakesh Kumar Sharma, 59, Executive Director

Over 36 years experience in general management, EPC contracts and business development across Indian corporate sector

Holds a graduate degree in Mechanical Engineering and masters in Marketing management

Prior to joining HNG, he held a senior position at L&T

Mr. Ratna Kumar Daga, 72, Independent Director

Vast experience in the fields of engineering and finance

Former Chairman of Indian Institute of Materials Management, Kolkata, President of Calcutta Junior Chamber, President of Federation of Small & Medium Industries

Holds PG degree in Business Management from the UK

Mr. Sujit Bhattacharya, 69, Independent Director

Former senior partner of Lovelock & Lewes, Chartered Accountants, advisory experience in accounting, audit standards, corporate governance, business valuation &
taxation

Fellow member of the Institute of Chartered Accountants in England & Wales, ICAI

Was nominated as the Special Director by the BIFR, Govt of India

11
Capacity Build-Up Through Organic & Inorganic Route

Over 4,500 TPD by 2015

Brownfield expansion
at Nashik and
Greenfield plant at
Naidupeta, AP Re-build of existing
furnaces

Acquired Neemrana plant

of Haryana Sheet Glass
285

Acquired L&T’s Nashik

Plant
1300

Acquired Pondicherry &

Rishikesh plants of Owens 350
Brockway 150
180 4520
320 105
30
700 2935

1100
30

1952 2001 2002 2005 2007 2008 2010 2012 2013 14-15 FY15

Total (TPD) Expansion (TPD) Acquistion (TPD)

12
Processes for Maximizing Capacity Utilization & Sales

Technological Strengths Leading to Smoother & More Efficient Operations

Diversified vendor base for raw material procurement

Captive sand beneficiation facilities

In-house furnace maintenance & refurbishment capabilities

Proven ability to run plants at high capacity utilization

Draw and pack ratios consistently among the best in the

industry

SAP Implementation for Better Integration & Standardization of Business Processes

Accurate real-time information with enhanced visibility and operational controls

Automation of report generation & month-end reconciliation

Alignment of functional objectives with corporate business plan leading to better coordination across functions, manufacturing units & marketing offices

Higher productivity through automation

Improved customer service

Cost control and uniform material code data across locations

Online tracking of production and sales-related performance data

13
Market Leader in Container Glass
 Growth Drivers

Market leader in container glass with pan-India presence, ~50% market share (including new plants in FY13)

End user segments growing at ~12% over next 3 years

Newly commissioned plants to improve market share in underserved markets

Think Glass,
Think HNG
Demonstrated track record of inorganic growth through turnaround of sick units with highly skilled manpower

Margin expansion due to higher scale & efficiency

Use of best-in-class technology with captive developmental capabilities

15
Dominant Share of Container Glass Market with Presence in All Segments

Largest Container Glass Player in ~8,600 TPD Indian Market

Presence Pan-India AP Gujarat Gujarat Pondi. UP Kerala Gujarat MH UP & Guj

Mkt. 50% 18% 10% 4% 3% 2% 2% 2% 1% 8%

Share
4,235

1,550
(TPD)

860
605
320 240 220 220 220 130

HNG HSIL Piramal Haldyn MBDL Universal Excel Janta Vitrum Others
Source: HNGIL

Presence Across Segments – Play on Indian Consumption Story High Entry Barriers due to Capital Intensity
Universal

Capital intensive business with recurring maintenance capex

Piramal

Haldyn

Vitrum

MBDL
Janta

Excel
HNG

HSIL

High customer stickiness

 Interdependence of output scale & timing
Liquor       
 Customization / bottle printing as per specs
Beer   

Significant economies of scale
Pharma      

Integrated value chain from raw material mining, glass equipment &
F&B      moulds to printing
Cosmetics   

Source: Company estimates

16
Pan-India Presence Enabling Superior Customer Service

Catering to Significant Share of Customer Requirements Pan-India Player; Competitors Mainly Regional Players

HNG's Share in the Total Requirement of Each Customer in FY13 (%)

Bajaj Corp 95%

Coca Cola 70%

Ghaziabad

United Breweries 65%

SAB Miller 60% Padra

Jambusar Vadodara

Kosamba HNG
Pepsico 60%
Piramal

Mumbai Bhongir Haldyn

United Spirit 50% Hyderabad HSIL

Naidupeta Vitrum
ABD 45% Janta
Universal
Excel
Pernod Ricard 40%
MBDL
Alleppey

John Distilleries 25%

Source: HNGIL Source: HNGIL

17
HNG Customer Base

Customer Base Across all Segments

LIQUOR

BEER

FOOD

SOFT DRINKS

PHARMACEUTICALS

18
Focus on High Volume Segments – IMFL & Beer Comprise of ~65% of Volumes

Sales Volume Mix

Volume 0.77 0.78 0.84 0.91 0.85

(MMT)

3.6% 3.9% 4.3% 4.3% 4.5%

12.5% 11.4% 10.3% 9.5% 11.3%

16.3%
17.4% 19.6% 18.2%
19.1%

12.6% 14.9%
15.1% 22.9% 16.2%

53.9% 52.3%
50.0% 47.0% 48.8%

FY09 FY10 FY11 FY12 FY13

Liquor Beer F&B Pharma C&P

19
International Operation - HNG Global Gmbh
L
o
c
a
t
i
o
n
Acquisition of 320 TPD Plant at Gardelegen, Germany
M
a
p

Germany is the largest market in EU with ~20% share

 Annual demand in Germany of 3.8 million MT/year

Acquired assets of Agenda Glas AG, one of the most modern production facilities in Europe, in May 2011.

Agenda Glas had commenced production in Feb 2010

Production capacity of 120,000 MT per year

Currently produces flint glass of various SKUs

HNG Global GmbH, is located closed to the regional raw material suppliers with easy and economic access to
all key raw materials.

The Plant is ideally located for deliveries throughout Germany and to adjacent European Countries.

Company’s technological edge is planned to be back pedaled in HNG’s Indian operations, as Germany is always
considered ahead in terms of technology.

The Finished-ware quality in Germany is of superior standards than in India and it will help us embark the
upward quality journey in India.

20
Key Financials
Balance Sheet

Balance Sheet FY09 FY10 FY11 FY12 FY13

Shareholders Fund* 935 1,043 1,166 1,158 1,001

Debt 507 566 640 2,058 2698

Deferred Tax 42 70 71 95 21

Total Liabilities 1,484 1,679 1,877 3,311 3,720

Net Block 906 1,116 1,157 1,393 2687

CWIP 82 27 228 1,157 148

Investment 105 147 178 181 181

Net Current Assets 391 387 315 580 705

Total Assets 1,484 1,677 1,878 3,311 3,720

All figures are in Rs. Crore and for HNGIL standalone
* Includes Share application

22
Profit and Loss Snapshot

Profit and Loss FY09 FY10 FY11 FY12 FY13

Net Sales 1,313 1,357 1,544 1,878 1811
EBITDA 229 306 267 298 150
Margins 17% 23% 17% 16% 8%
Other Income 9 14 6 8 6
Depreciation 77 89 103 119 198
Interest 43 47 51 92 203
PBT 118 184 119 95 -246
Margins 9% 14% 8% 5% -14%
Tax 10 28 33 4 -74
PAT 108 156 86 91 -171
Margins 8% 11% 6% 5% -9%
All figures are in Rs. Crore and for HNGIL standalone
Pls note that company has commissioned two new furnaces (30% of its present capacity) in FY13 and it will take sometime to get absorbed in the market but corresponding interest and depreciation
cost has started coming in Income statement. This has resulted in company reporting loss in FY13.
23
Financial Performance

Revenue EBITDA

2,100 350
1,878 1811 306 298
1,800 300 267
1,544
1,500 1,313 1,357 250 229

1,200 200
150
900 150

600 100

300 50

0 0
FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13

PAT EPS (Rs./Share)

200 20 18
156
150 15 12
108 10 10
86 91
100 10

50 5

0 0
FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13
-5
-50
-10
-100
-15
-150
-20
-200 -171 -20
-25
All figures are in Rs. Crore and for HNGIL standalone
Pls note that company has commissioned two new furnaces (30% of its present capacity) in FY13 and it will take sometime to get absorbed in the market but corresponding interest and depreciation
cost has started coming in Income statement. This has resulted in company reporting loss in FY13.
24
 Thank You

For further information please log on to www.hngil.com or contact:

Bikash Kumar Sipani

HNG
Tel: 033-2254-3100
Email: investor.relations@hngil.com