Bigger the challenge bigger is the opportunity to usher in disruptivechanges.
HeidelbergCement Group is one of the world's largest manufacturers of buildingmaterials with a reputation of building long-term success based on sustainable businesspractices. The Group's legacy of quality reliability and integrity remains deeplyentrenched in the operating philosophy of HeidelbergCement India. It provides us thedirection to maximise value for our stakeholders and build operational resilience tothrive despite the unprecedented challenging times.
Over the years the company has emerged stronger but the journey of excellence willcontinue unrelenting as ever. The financial year under review was clouded by uncertaintiesof epic proportions. The declining GDP growth got mirrored by our industry and the samewas visible as the volumes declined across regions. Growing liquidity crunch tougheconomic conditions slowdown in capital formation and extended monsoons posed challengesas we traversed through the year.
To top it all lockdown announced by the government towards the end of the financialyear further added resistance to the business. Given the impact of pandemic on human lifethere was no option but to declare a lockdown bringing lives and businesses to astandstill.
Irrespective of all the challenges FY2019-20 has been a year of learning bothpersonally and professionally. The circumstances tested your Company's readiness to adaptevolve sustain and progress including our agility quotient in the face of fast changingscenarios.
I am pleased to share with you that despite all odds your Company has registered astrong performance. I am proud of our CSR & OHS teams for the slew of precautionarymeasures initiated by them with profound agility to protect our people and our assets. Tomitigate the impact of the pandemic a Contingency Management and BusinessContinuity Plan' was put into place. A robust risk management process in a state of highalertness helped us respond to the fast-changing environment.
I place before you the following highlights that represent your Company's capabilitieson key parameters: operational and financial performance social responsibilitygovernance and sustainability.
Recorded highest ever profitability despite decline of 3.9% in cement sales.
Highest ever net profit of INR 2680.6 million in FY20 compared to INR 2206.6 millionin FY19.
EBITDA margin of 24.46% of revenue an increase of 155 bps compared to FY19.
Announcement of higher dividend
Total dividend proposed for FY2019-20 is INR 7.5 per equity share as compared to INR4.0 per share paid for FY2018-19.
High capacity utilization
The Company's capacity utilization stood at 86.9% in FY2019-20 as against the industryaverage of 67%.
Credit rating reaffirmed at AA+ with stable outlook.
Remained net water positive for 7th year in a row and ensured zero fatality.
HeidelbergCement is driven by the pursuit of excellence - be it our products ourprocesses or our people.
This performance has been possible due to improvement in operational efficienciespremiumization of the brand improvement in consumption factors cost control andrepayment of debt resulting in higher EBITDA and profitability. Accelerated efforts toincrease the share of renewable and alternate energy added a feather in our cap helping usreduce our power cost. Product excellence being the key technical team deliveredconsistent high quality cement. A well-coordinated teamwork of Sales and Logistics ensuredsuperior service for which our discerning customers gladly paid a premium for our cement.
It is my belief that an outstanding organization is known not only because of its sizeand market position but also by its stance on the larger narrative. We leave no stoneunturned when it comes to our commitment to the community and the environment. We havealigned our Sustainability Commitments 2030 with the UN Sustainable Development Goals(SDGs) which we will deliver for sure and not limit ourselves if we are in a position toexceed the same. Undeterred we pursue operational excellence harnessing the power ofautomation and digitisation.
Be it better productivity better logistics better people performance or betterresource utilisation - this year as well we continued to lead the excellence narrative byexample right from the quarries into the hands of the users.
friends of Earth an initiative that reaffirms our commitment to make theworld a better place to live for generations to come.
Continuing our ecological stewardship we planted and nurtured over 78000 saplings ofvarious species on reclaimed land at Patharia mines. This exemplary act on our part caughtthe attention of Federation of Indian Mineral Industries (FIMI) who awarded us for ourenvironment protection approach. To increase the green cover of our planet we motivatedour business associates to plant trees under friends of Earth programmelaunched on 15th August 2019. It was a reaffirmation of our commitment to making theworld a better place to live for our generations to come.
Riding the wave of digitization we launched EMPOWER a software that isempowering our field sales team by making online data available to them. We implementedMAGMAsoftware to digitize our land records. With many more projects in handwe forge ahead to digitize processes for improved control and accountability.
During the year we successfully managed to debottleneck our cement grinding mills atImlai and Jhansi plants thus adding close to a million tonne of grinding capacity atmarginal cost. Now the total cement grinding capacity of your company stands at 6.26million tonnes per annum.
Customer Centricity being a part of our business philosophy all teams across theorganization orchestrated and delighted our discerning customers. This has helped yourcompany to successfully build long-lasting bonds with customers and business associates.Going beyond delivering value for money our customer service team helped ourcustomers and applicators to optimize the full potential of our cement by training them onuse of best construction practices.
Our belief in inclusive growth led us to invest INR 44.7 million in CSR activitiesduring FY20 which exceeded the mandate provided under Section 135 of the Companies Act2013. In order to mitigate the adversities being faced in these challenging times by theunderprivileged section of the society the Company has recently launched a scheme wherebyit is contributing @ Re. 1 for each bag of cement sold towards the cause of feeding theunderprivileged. Serving the society - we also made cement and cemented relationships.
Amongst the various recognitions and accolades received during the year ConstructionWorld Magazine awarded your company as one of the fastest growing cement company in themedium category. These accolades stand testimony to the talent and commitment of ourpeople who relentlessly have put in efforts to propel our company from good togreat. I place on record my sincere appreciation for the contributions made by them.
Most businesses survive but only a few thrive. It does not matter if the growth numbersare big or small. What matters is how consistent they are and the direction they areheading to. All these years we have tried to bring in consistency in our results and thatmakes me hopeful of a sustainable growth trajectory in the future too. Althoughuncertainties cloud the business environment and economic outlook looks hazy I believethat your company is intrinsically strong enough to take on the challenges and usher inthe desired change.
I thank the Board of Directors Top Management of HeidelbergCement Group for theirunwavering vision for excellence. I also thank our employees Channel Partners andInvestors for bestowing their trust in us and our principles.
Jamshed Naval Cooper