Sumitomo Chemical India Limited has informed the Exchange about Investor Presentation
SCIL/SEC/2022 4th February, 2022
To, BSE Limited, Listing Department, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400001
Dear Sirs,
The National Stock Exchange of India Listing Department, Exchange Plaza, Bandra Kurla Complex Bandra East, Mumbai - 400 051
Sub: Investor Presentation on Financial Results for the quarter and nine
months ended 31st December, 2021
to Regulation 30 of
(Listing Obligations and Disclosure Pursuant Requirements) Regulations, 2015, we enclose herewith investor presentation on the Financial Results of the Company for the quarter and nine months ended 31st December, 2021.
the SEBI
Kindly do the needful to display the same on your website.
Thanking you,
Yours faithfully, For Sumitomo Chemical India Limited
Pravin D. Desai Vice President and Company Secretary
Encl: a/a
Sumitomo Chemical India Limited
Investor Presentation
February 2022
Safe Harbour
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sumitomo Chemical India Limited (the “Company”), have
been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and
shall not form the basis or be relied on in connection with any contract or binding commitment what so ever. No offering of securities of the Company will be
made except by means of a statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no
representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness
of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any
liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are
individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known
and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of
the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the
company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and
advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The
Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this
Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements
and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party
statements and projections.
2
Financial Performance & Key Highlights
3
Performance Highlights – Quarter & YTD
Revenue (Rs Crs)
+26%
707
561
Gross Profit (Rs. Crs) & Gross Profit Margin (%)
+26%
266
211
37.6%
37.6%
EBITDA (Rs. Crs) & EBITDA Margin (%)
+62%
127
78
13.9%
17.9%
PAT (Rs Crs)
+64%
89
54
9.7%
12.6%
Q3FY21
Q3FY22
Q3FY21
Q3FY22
Q3FY21
Q3FY22
Q3FY21
Q3FY22
Revenue (Rs Crs)
+14%
2,400
2,111
Gross Profit (Rs. Crs) & Gross Profit Margin (%)
+13%
903
796
EBITDA (Rs. Crs) & EBITDA Margin (%)
+18%
491
416
37.7%
37.6%
19.7%
20.5%
PAT (Rs Crs)
+20%
349
291
13.8%
14.5%
9MFY21
9MFY22
9MFY21
9MFY22
9MFY21
9MFY22
9MFY21
9MFY22
Given the seasonality in the business, it is best monitored on an annual basis
4
Consolidated Profit & Loss Account Statement – Quarter & YTD
Particulars (Rs. Crs)
Q3 FY22
Q3 FY21
Revenue from Operations COGS Gross Profit Gross Profit % Employee Expenses Other Operating Expenses Operating EBITDA EBITDA Margin Other Income Depreciation EBIT EBIT Margin Interest Profit Before Tax & Exceptional Exceptional Item Gain / (Loss)* Profit Before Tax PBT Margin Tax Net Profit Net Profit Margin Other Comprehensive Income Total Comprehensive income for the period
707.2
441.5
265.7
37.6%
51.8
87.3
126.5
17.9%
6.2
11.4
121.3
17.1%
1.6
119.7
0.0
119.7
16.9%
30.7
88.9
12.6%
0.5
89.4
560.9
349.9
211.1
37.6%
49.5
83.5
78.0
YoY
26%
26%
-6 bps
62%
13.9%
398 bps
5.4
11.1
72.4
67%
12.9%
424 bps
1.5
70.9
0.0
70.9
69%
69%
12.6%
428 bps
16.8
54.1
9.7%
0.4
54.6
64%
292 bps
64%
QoQ
-22%
-25%
-141 bps
-41%
-569 bps
-43%
-609 bps
-43%
-43%
-610 bps
-42%
-436 bps
Q2 FY22
910.4
555.5
354.8
39.0%
45.4
94.7
214.7
23.6%
7.9
10.9
211.6
23.2%
2.0
209.6
0.0
209.6
23.0%
55.4
154.2
16.9%
1.4
155.6
9M FY22
9M FY21
2,399.5
1,496.6
2,110.6
1,314.4
902.9
37.6%
151.5
260.5
491.0
20.5%
19.4
33.4
477.0
19.9%
5.4
471.6
0.0
471.6
19.7%
122.7
348.9
14.5%
0.1
349.0
796.2
37.7%
151.9
228.7
415.5
19.7%
13.9
33.1
396.3
18.8%
4.5
391.9
0.0
391.9
18.6%
100.6
291.3
13.8%
-1.4
289.9
YoY
14%
13%
-9 bps
18%
77 bps
20%
110 bps
20%
20%
109 bps
20%
74 bps
20%
Given the seasonality in the business, it is best monitored on an annual basis * Merger expenses
5
Revenue Breakup – YTD
Product Breakup
6%
11%
7%
10%
6%
12%
9MFY21
45%
43%
9MFY22
8%
10%
Geographic Breakup
2% 1%
4% 2%
3%
3%
8%
0% 0%
4% 2%
4%
1%
9MFY21
9MFY22
20%
22%
85%
81%
Insecticides
PGR
Fungicides
Herbicides
Metal Phosphides
AND & EHD*
Domestic Africa
Japan Asia (Ex. India)
Europe South America
North America Australia
Segment Breakup
Bulk & Branded
66%
69%
34%
31%
9MFY21
9MFY22
Generic
Speciality
Domestic
15%
20%
85%
80%
Exports
71%
29%
76%
24%
9MFY21
9MFY22
9MFY21
9MFY22
Bulk
Branded
* Animal Nutrition Division (AND) and Environmental Health Division (EHD)
6
Consolidated Working Capital Movement
Particulars (Rs. Crs)
Inventory (A)
Dec-21*
Sep-21*
Change (Dec-21 to Sep-21)
Mar-21*
Change (Dec-21 to Mar-21)
Dec-20*
Change (Dec-21 to Dec-20)
696.6
650.4
42.6
754.4
-57.8
544.0
152.6
Inventory Days (Inventories/ COGS* No. of days in period) (i)
145
111
166
143
Trade Receivables (B)
917.1
983.6
-66.5
848.2
68.9
916.5
0.6
Trade Receivables Days (Trade Receivables / Revenue*No. of days in period) (ii)
119
105
117
150
Trade Payables (C)
509.1
561.3
-52.2
598.3
-89.2
596.1
-87.0
Trade Payables Days (Trade Payables/ COGS*No. of days in period) (iii)
106
96
132
157
Other Financial Liabilities (D)
424.9
451.0
-26.1
349.8
75.1
379.8
45.1
Other Financial Liabilities Days (Other Current Liabilities / Revenue*No. of days in period) (iv)
55
48
48
62
Net Working Capital (A+B-C-D)
Net Working Capital Days (i + ii – iii – iv)
679.7
621.7
58.0
654.5
25.2
484.6
195.1
103
72
103
74
Key Highlights ✓ Maintained higher inventory on back of anticipated strong demand as well as to protect against increasing input cost ✓ Focused efforts towards improving collections - Collection during 9M FY22 of ~Rs. 2,512 crores as compared to Rs. 2,449 crores during 9M FY21, increased by 3% yoy ✓ Cash, Cash Equivalents and Liquid investments of ~Rs. 664 crores as on 31st December 2021
Given the seasonality in the business, it is best monitored on an annual basis * No. of Days in period: Dec-21 – 92 days, Sep-21 – 92 days, Mar-21 – 365 days, Dec-20 – 92 days
7
Sumitomo Chemical Company Limited, Japan
- An Introduction
Overview of our Parent Company
About Sumitomo
✓ Sumitomo started business in Japan in early 16th Century (400 years+)
✓ Currently several Sumitomo founded companies operate as independent listed companies with widespread shareholding and run by its professional boards
✓ Even today, all Sumitomo companies continue to follow basic business philosophy and ethical practices of Sumitomo
About Sumitomo Chemical Company Limited, Japan (SCC)
✓ SCC was founded in 1913 and undertakes several chemical related businesses as an independent listed company
✓ SCC is a leading Japanese research driven diversified chemical company listed on the Tokyo Stock Exchange with consolidated sales revenue of more than US$ 20 bn
✓ Offers diverse range of products globally in 5 business sectors: petrochemicals, energy and functional materials, IT-related chemicals and materials, pharmaceuticals and health and
crop sciences sector;
✓ SCC holds 12,600+ Patents of which ~34% are in Health & Crop Science
SCC’s Health and Crop Science Sector - Undivided Focus for Leadership in India
✓ Health & Crop Sciences Sector – Revenue of more than US$ 4.0 bn ✓ Leading R&D spenders globally among agro-solution players ✓ Strong pipeline of Agro-Solutions and Environmental Health products with very high business potential of ~US$1.4 -$1.8 bn ✓ SCC recently acquired Nufram’s distribution in Latin America thereby gaining leadership position in Latin America Generics Market Segment ✓ SCIL is flagship entity of SCC group focusing on high potential Indian market; only TG grade manufacturing site outside Japan and part of SCC’s growth strategy ✓ SCC is proud of SCIL’s achievement so far and confident of its growth potential ✓ SCC will continue to support SCIL to achieve market leadership position in Indian market
9
SCC - Growth Strategy in Health & Crop Sciences Sector - R&D
Core Competence: R&D
R&D performance data
Intellectual Capital
Sumitomo Chemical is conducting R&D based on the knowledge regarding chemical and biorational crop protection products, which is obtained after its many years of R&D activities.
Human Capital
Personnel located around the world are conducting R&D using a global network.
(Million US$)
Crop Protection Sales & Number of Issued Patent (2012-2019)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
12,600
Crop Protection Products Sales
Numbers of Issued Patents
10,118
7,128
6,256
3,792
1,978
2,627
2,170
4,528
3,611
278
123
Bayer
Syngenta
BASF
Corteva
FMC
ADAMA
2,575
2,248
2,517
37
Nufarm
Sumitomo Chemical
(Billion JPY) 40
R&D Expenses to Sales Ratio
R&D Expenses
Ratio
30
20
10
0
The Chemistry Research Center: A global discovery and innovation base for the Health & Crop Sciences Sector
'12/3
'13/3
'14/3
'15/3
'16/3
'17/3
'18/3
'19/3
'20/3
Refer SCC, Japan IR presentation and Investor handbook 2020 at SCC website
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
10
SCC - Growth Strategy in Health & Crop Sciences Sector - Distribution
Refer SCC, Japan IR presentation and Investor handbook 2020 at SCC website
11
Sumitomo Chemical India Ltd.
- Company Overview
SCIL - Vision & Mission
Journey to 11x Growth in India
Formidable Player in the Indian Agrochemicals Space
Diversified & De-risked Portfolio Across the Agro-Chem Value Chain
Strong Brand and Well- Entrenched Distribution Network
Strategically Located Manufacturing Facilities
Strong Focus on R&D, Process Innovation and Safety, Health and Environment (SHE)
Autonomous Board with Vast Industry Experience
Growth Strategies
SCIL - Vision & Mission
Vision & Values
Vision:
• To be a trusted market leader in Indian crop-
protection sector
• To develop a vibrant corporate culture
• Endeavor to achieve success and sustainability
through innovation & excellence
Core Values:
•
Innovation
• Excellence
•
Integrity
• Respect & value all stakeholders
• Customer focus
• People focus
•
Sustainability
Mission Marketing and Sales:
•
•
•
•
Further penetration into Indian market & take leadership; expand exports
Strengthen Sales Force, Distribution and Product Portfolio
Manufacturing:
Supplying the most competitive products with safe and stable operation and meet demand
Strengthen Procurement Power
• Expand Manufacturing Functions
Management & Support:
• Establishing the most efficient organization to
support business growth and alignment with SCC
• Develop administrative efficiency while ensuring
internal controls
•
Full & Strict Compliances
• Value Creation for all stakeholders
13
Journey to 11x Growth in India
Exploration Phase: 2000 – 2010
2000
Manufacturing JV with New Chemi
2002
Started EHD (Public Health) business
2005
Acquired product - ‘Sulfosulfuron’ Leader rights from Monsanto
2010
SCIL incorporated in India as EHD (HHI) distribution company
2001
Started ASD business
2003
Acquired EHD (HHI) unit from Bayer Vapi
2006
Started Animal Nutrition
Sales ~ INR 2 Bn
Robust growth driven by Organic & In-organic expansion
Acquisition of New Chemi and integration with SCIL
Expanded the business to include animal nutrition chemicals
Aggressive Growth Phase : 2011 – 2021
Setting-up new organization, control system, PCO function and innovative sales team
Acquisition of Excel Crop Care
SCIL 2.0 – 1st full year of operations
Merger completion
24.2
26.4
11.4
6.9
4.5
12.7
7.8
4.9
16.3
9.8
6.5
17.4
10.3
7.1
11%
16.9
9.0
7.9
18.2
9.7
8.5
19.4#
11.9
9.0
22.2#
13.2
10.0
Rs. Bn
ECC
SCIL
9.5
7.2
2.3 FY10-11
FY11-12
FY12-13
FY13-14
FY14-15
FY15-16
FY16-17
FY17-18
FY18-19
FY19-20
FY20-21
# Inter-company transactions are eliminated. Other operating income is included HHI – Household Insecticides
14
Formidable Player in the Indian Agrochemicals Space
5 Manufacturing Facilities
10+ Technical Actives
14,000+ Distributors
Grown 11X+* over FY11-21
Rs. Bn
13X
26.4
200+ Brands
25+ / 200+ Patents / Registrations
1,500+ Employees
s t c u d o r P y e K
Product Name Glyphosate
Profenophos
Dantotsu
Tebuconazole
Progibb
Aluminum Phosphide
Chlorpyriphos
DL-Methionine
Product Category Herbicide
Insecticide
Insecticides
Fungicides
Indicative Use Tea Gardens, non-cropped
Cotton, Soya bean
Vegetables
Wheat, Soya bean, Chilli
Plant Growth Regulator
Citrus Fruits
Fumigant
Insecticide
Warehousing of Food Grains
Paddy, Beans, Gram
Animal Nutrition
Poultry
2.3
FY11
FY21
*On an organic basis, grown 5X+
15
Diversified & De-risked Portfolio Across the Agro-Chem Value Chain
Well-Diversified across multiple dimensions
Business Segments
Products
Geographies
Customers
Crops Served
Diversified Portfolio Across Segments
Geographic Diversification with Exports to over 60 countries
7%
11%
7%
11%
FY21
45%
Insecticides Herbicides PGR Metal Phosphides Fungicides AND & EHD
19%
Generics
Speciality
32%
68%
Domestic 83%
FY21
Exports 17%
1%
21%
14%
28%
6%
Australia
North America
10%
South America
Europe
20%
Asia (Ex. India)
Japan
Africa
✓ Greater focus on high growth, stable and high profitable segments such as Herbicides, PGR,
Bio-rational products
✓ Increasing contribution from PGR segment and offerings for both Kharif and Rabi crops to
reduce seasonality in the business
✓ Top 10 products contributes less than 50% of Total Revenue
✓ No product / molecule contributes more than 15% of Total Revenue
✓ Diversified across key crops - Concentrated efforts now on fruits & vegetables, paddy and other high
✓ One of the highest proportion of environmentally-friendly products in the Industry
growth segments
16
Strong Brand and Well-Entrenched Distribution Network
✓ Strong brand with market leading position across various product categories
✓ Dual brand portfolio can offer products at all price points serving multiple
customer sub-segments
✓ In-depth knowledge of own research products, proven go-to-market strategy and deep farmer connect facilitates launch of Speciality products
✓ On-field demonstration of products, training of farmers in using the products,
building awareness among stakeholders in relation to the products
✓ Pan-India distribution network ensures strong presence with both
retailers and farmers and on-time feedback mechanism
✓ Scale and diversity of product offerings lead to superior bargaining power
with distributors and provides one-stop solution for farmers
23 States
65+ Depots
14,000+ Distributors
1 million+ Farmer Connect through 1,400+ Field / Market Development Officers
~40,000 Dealers
~600 Sales Team
Domestic
18%
Bulk & Branded Contribution (FY21)
Exports
65%
82%
Bulk
Branded
35%
17
Expanding Brand Visibility and Connect
✓ Wide range of generics and speciality products for Increased crop presence and providing crop
protection solutions
✓ More than 1,400+ Relationship managers connecting to 1 million+ farmers throughout crop cycle
✓ Over 100 brands covering maximum of crops and pest segments
✓ 14,000+ distributors, 40,000+ dealers and 68 Depots help in expanding brand visibility and connect
✓ More than 500+ Qualified and skilled managers in Sales, Marketing and customer support
✓ Company with 20+ mega brands with high brand recall
✓ Healthy geographical Brand coverage throughout India including North East and J&K
✓ Optimum use of advertising media with increased Digital Platforms presence
18
Digital Marketing Initiatives
Develop “Digital Marketing” as a parallel support to Traditional marketing system leading to improved sales.
✓ Our Digital Assets : 23 websites, engaged with 5.6 million consumers in 2020-21.
YouTube - Advantage
More than 31,000 subscribers
http://www.danitolindia.com/
http://www.naturedeep.in/
Taboli Product Launch Video with 193K views in 3 months
Conducted 168 YouTube Live sessions in 2020-21
http://danzapower.com/
http://www.vidyutindia.com/
✓ Successful campaign to introduce the QR codes of http://www.sumitomoproducts.com/ to the
retailers and farmers.
✓ Video based campaigns
to increase awareness among farmers and disseminate information on
necessary precautions to stop the spread of COVID 19.
15 Digital Launch programs of Taboli across India to introduce the product to distributors & retailers
✓ More than 5,000 downloads ✓ Rating – 4.5
19
Digital transformation & SAP Implementation
Earlier SCIL was using different SAP platforms in different parts of business. From April 2021, SCIL has completed implementation of an integrated SAP SH4 HANA system across the entity including several additional modules
Common SAP system across the entity and greater use of technology will enable greater integration, efficiencies & synergies across the organization and expected to provide long term benefits
SCIL plans to carry forward digital transformation journey across all areas with deployment of various value-added modules and systems including ‘SAP Integrated Business Planning’, ‘SAP Analytics Cloud’ and various digital interfaces to reach out to distribution channel & farmers and provide them timely information
20
Strategically Located Manufacturing Facilities
Connectivity to Major Cities and Proximity to Main Highways, Ports Reduces Logistic Time and Costs
Plant Location
Area (acres) Segment Served
Product Manufactured
Bhavnagar
~58
Gajod
~120
Tarapur
Vapi
Silvassa
~5
~6
~3
Manufacturing of Technical Grade Pesticides and Formulations Production and manufacturing of Metal Phosphides, Sulphur WDG and other WDG formulations Production and manufacturing of Active Ingredients
Formulation & Packaging
Formulation of Glyphosate and Other Speciality Products
Technical Grade Products: Chlorpyriphos, Profenophos, Glyphosate, Tebuconazole Tech, Quinalphos, Imidacloprid, Thiacloprid, Acetamiprid, Byspyribac Sodium, Aluminium Phosphide, Zinc Phosphide, Sulphur WDG, Fenpropathrin
Formulations for above TG products and several other speciality and generic products
Gujarat
Maharashtra
Gajod
Bhavnagar
Tarapur
Silvassa
Vapi
Mumbai – Head Office
5 Manufacturing Plants
4 Branches & 68 Depots Pan India
• Overall Optimal capacity utilization generally (Utilization were
impacted in Q1 due to Covid-19 related lockdown and restrictions) • Continues investments to enhance capacity as per the forecasted
demand (similar to the trends followed in past)
• Recently acquired additional land at Dahej and Bhavnagar for future
capex
Maps not to scale. All data, information, and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness
21
Capex Plans
Regular Capex Rs. 70-75 crore p.a.
Maintenance capex
Additional Capex Rs. 100-110 crore over 1-2 years for 5 products
To manufacture additional proprietary technical grade active ingredients products for our parent company SCC Japan and our global affiliates
Research & Development
Indian R&D team is working on manufacturing several off-patent products for Domestic as well as Exports to global affiliates including high growth regions such as Latin America, Africa and Asia Pacific which will entail additional capex and is under evaluation
Capacity enhancements for existing products in line with projected demand
5 products have been approved in-principle for supply to SCC and several others are in pipeline
Infrastructure enhancements for supporting future growth
Projects are being set-up at our existing sites. Target commercialization over next 2 years
Efficiency improvement projects and safety enhancement
Revenue potential of these 5 products on the above capex is Rs. 200 crore to Rs. 250 crore p.a.
Future Expansion Plans
Signed and registered agreements additional expected to be completed soon
to buy 2 land parcels and transfer process is
• ~20 acre privately owned land parcel adjoining our
existing Bhavnagar site
Sustainability initiatives, full compliance with environmental norms & renewable energy projects
Estimated margins are in line with current margins earned by SCIL for similar projects
• ~50 acre privately owned land parcel at a prime
location at Dahej within PCPIR Zone
Trials and registrations for future pipeline products
These products have growing global demand. Potential to add further capacities and additional products in medium to long term
Capex plan progressing as per schedule; commercial production is expected to start during FY 22-23
22
Strong Focus on R&D and Process Innovation
End-to-End Product Development Capabilities
✓ 3 fully equipped, DSIR approved R&D labs located at Mumbai, Bhavnagar and Gajod capable of synthesis, technical product and formulation development
✓ R&D Team comprises of 75+ qualified and dedicated engineers & scientists
of which 10+ are PhDs with more than 15 years of Experience
✓ 25+ patents granted across various geographies; 9 applications filed
✓ Product Pipeline
▪ Multiple Global Speciality Proprietary products to be launched in India
(target to launch minimum 2-3 every year)
▪ 9 new combination products
currently under development for domestic and exports (5 insecticides, 2 fungicides, 2 PGR)
/ pre-mixtures
▪ 3 Off-patent products under development for domestic and exports
▪ 5 Technical products approved for manufacturing and exports
▪ Several additional products are under discussion
✓ R&D facilities to gain capability for creating new processes and new combinations using SCC Japan’s chemistries which would help improve production processes and efficiency
D E V E L O P M E N T
F O R M U L A T I O N
23
Thrust on Safety, Health and Environment (SHE)
Quality Certifications Ensure Consistent product quality and healthy working environment at manufacturing sites
Abiding by SCC Japan’s EHS Policies
ISO:9001:2015, ISO-14001:2015 and OHSAS18001:2007 for the manufacturing sites at Bhavnagar, Gajod, Tarapur and Silvassa; ISO:9001:2015 at Vapi
A8000 Certification for Social Accountability in Bhavnagar and Gajod
Dr. Vikram Sarabhai award for developing green technology from department of Science and Technology, Government of Gujarat
Efforts focused on reducing effluent load and effluent treatment cost, for staying innovative and competitive in the market
The quality of the products is maintained and upgraded to the applicable national and international standards through rigorous pursuit of Six Sigma initiative
Focused on energy conservation and energy cost reduction: 50% of total power requirement through wind and solar power generation plants
Expanding solar power plant capacity in line with towards green energy would also help in reducing dependence on outsourced power as well as in energy cost reduction
3R Principle: Recovery – Recycle – Reuse
Safety audit, training programmes and other safety management processes and programmes are carried out/conducted at regular intervals
All the manufacturing and warehousing sites of the Company are covered by safety audit
Certificates of appreciation received ten times from jointly by Gujarat Safety Council and Dish
Government of Gujarat for achieving 10 lakh accident free man-hours
Certificates of merits received from jointly by Gujarat Safety Council and Dish Government of Gujarat for achieving 20 lakh accident free man-hours
Certificates of honour received two times jointly by Gujarat Safety Council and Dish Government of Gujarat for achieving 30 lakh accident free man- hours
Focus on purity, quality and timely delivery of products to the customer
24
Autonomous Board with Vast Industry Experience
Dr. Mukul Govindji Asher Chairman and Independent Director
▪ Professorial Fellow at Lee Kuan Yew School of Public Policy at
the National University of Singapore
▪ Advisor to Govts in Asia on tax policy & pension reforms; and to institutions including IMF, Asian Development
multi-lateral Bank, PFRDA of India, Govt of Gujarat, & World Bank
▪ Member of the panel to review Crawford School of Public Policy
at Australian National University
Bhupendranath Bhargava Independent Non-executive Director
▪ Experience of over 50 years in areas including banking,
project financing and credit rating
▪ Held directorship in several leading corporates and was on the advisory board of an independent regulatory body set up India to work on reforms in by the Government of telecommunications sector
Preeti Gautam Mehta Independent Non-executive Director
▪ 30 years of experience in corporate laws, foreign investment and collaborations, mergers and acquisitions and private equity investments, banking, franchising and hospitality
Ninad Dwarkanath Gupte Non-executive Director
▪ Experience of 43 years in management of companies operating in industrial chemicals &
fine chemicals, performance chemicals, agrochemicals
▪ Held senior positions at Excel
Industries, BASF India, Herdillia Chemicals and worked as MD of Cheminova India and Agrocel Industries and as Joint MD of Excel Crop Care
25
Autonomous Board with Vast Industry Experience
Hiroyoshi Mukai Non-executive Director
▪ Associated with Sumitomo Chemical
Group for over 30 years
▪ Holds a bachelor’s degree from the
University of Osaka, Japan
Tadashi Katayama Non-executive Director
▪ MBA from Vanderbilt University, U.S.A. and a Master’s degree from Kyoto University in Japan
▪ Associated with Sumitomo Chemical, Japan since 1992 in the Health and Crop Science business unit in various positions
Masanori Uzawa Non-executive Director
▪ MBA from University of Virginia, USA and a Bachelor’s degree from the University of Tokyo in Japan
▪ Associated with Sumitomo Chemical, Japan and has experience of over 19 years in the areas of strategy, planning crop and business development protection & other chemical businesses.
for
Chetan Shantilal Shah Managing Director
▪ Commerce graduate from the University of Mumbai and holds a master’s degree in Business Administration from North Rope University in the USA
▪ Over 43 years of industry experience in various leadership
and senior management roles
Sushil Champaklal Marfatia Executive Director
▪ Chartered Accountant with over 42 years of
industry
experience
▪ Worked with New Chemi Industries Limited for 33 years
which was later merged with the Company
Board is supported by a strong and experienced management team associated with Company since long
26
Growth Strategies
Continued Investment in R&D and Pipeline
Capacity Expansion
• Aim to invest in seamless integration of R&D between SCIL and SCC units which would help improve our production processes, enhancing yields and efficiency Introduce new products as per market demand
•
• Driving operational efficiencies maintaining highest
safety
•
standards and Responsible Care compliances Invest ~15% of consolidated EBITDA every year for upgradation of manufacturing facilities and capacity expansion to cater to strong domestic/global demand
Further Brand Development
Product Pipeline
Expand Export Business
•
Investments for marketing of new and existing products and brands
training
• On-field
demonstrations,
of farmers for building ground-level demand generation supported by digital marketing Focus on high margin brands
• • 11 products registration in process to utilization
further including product level expansion
improve
capacity
• 9 new combination products / pre-mixtures currently under development for domestic and exports (5 insecticides, 2 fungicides, 2 PGR)
• 3 Off-patent products under development
for domestic and exports
• 5 Technical products for manufacturing
and exports • Multiple Global
Speciality
Proprietary
products to be launched in India
•
•
Enhance exports in regions like Africa and Europe Leverage SCC’s Global supply chain and marketing network to drive exports
Achieving Market Leadership in India
▪
▪
▪
▪
▪
Balanced portfolio of generic and speciality products
Consolidate position as best agro-chemical marketer in India
Strive for manufacturing excellence
Set-up a strong management & team
Lay the foundation for next generation leadership
Leverage expertise in successful product launches and capacity expansions to fuel future growth
27
Financial Performance & Key Takeaways
Historical Performance Highlights
Key Takeaways
Historical Performance Highlights
Revenue (Rs Crs)
EBITDA (Rs. Crs) & EBITDA Margin (%)
PAT (Rs Crs)
+11%
2,228
2,425
2,645
1,913
487
+31%
333
291
217
145
166
11.3%
13.0%
13.7%
18.4%
345
+34%
205
FY18*
FY19
FY20
FY21
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
Networth (Rs Crs)
RoCE (%)^
Net Working Capital Days
✓ Good monsoon and availability of water boosted farmer sentiment and resulted in good growth in rabi season 2020 as well as upcoming Kharif season in 2021 in the Indian domestic market
✓ Combined entity ~2x in size
✓ Net debt free balance sheet
✓ Strong margin profile
maintained
+17%
1,541
954
1,048
1,222
25.2%
26.6%
29.1%
45.5%
131
119
115
103
✓ PAT number is after adjusting
one time merger costs
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
1. Given the seasonality in the business, it is best monitored on an annual basis since a significate portion of revenue & PAT is recorded in the first half of the year 2. Appointed date for merger of ECC and SCIL is 1st Apr’18 *Revenue is Net of Excise Duty.
^ ROCE – {EBIT/ (Net Worth + Borrowings – Cash and Cash Equivalent)}
29
✓ Additional upside to be realized on account of synergies
Consolidated Profit & Loss Account Statement
Particulars (Rs. Crs) Net Revenue from Operations COGS Gross Profit Gross Profit % Employee Expenses Other Operating Expenses Operating EBITDA EBITDA Margin Other Income Depreciation EBIT EBIT Margin Interest Profit Before Tax & Exceptional Exceptional Item Gain / (Loss)** Profit Before Tax PBT Margin Tax Net Profit Net Profit Margin Other Comprehensive Income
Total Comprehensive income for the period
EPS
1. Given the seasonality in the business, it is best monitored on an annual basis 2. Appointed date for merger of ECC and SCIL is 1st Apr’18 * Revenue net of Excise Duty; ** Merger expenses
FY21 2,644.9 1,655.4
989.5 37.4% 194.3 308.4
486.9 18.4% 18.6 46.6
458.9 17.3% 5.6
453.3 -
453.3 17.1% 107.9
345.4 13.1% 1.6
347.0 6.9
FY20 2,424.8 1,607.6 817.2 33.7% 179.3 304.7 333.2 13.7% 10.7 41.0 302.9 12.5% 5.5 297.4 -30.9 266.5 11.0% 61.8 204.7 8.4% -5.1
199.6
4.1
FY19 2,228.4 1,458.9 769.6 34.5% 158.4 320.5 290.7 13.0% 7.6 27.8 270.5 12.1% 3.7 266.8 -7.0 259.8 11.7% 94.0 165.8 7.4% 0.1
165.9
3.3
FY18 1,912.9* 1,238.7 674.2 35.2% 147.5 309.6 217.1 11.3% 30.5 23.7 223.8 11.7% 2.8 221.0 - 221.0 11.6% 75.8 145.1 7.6% 5.1
150.2
2.9
30
Consolidated Balance Sheet
Investments
Assets (Rs. Crs) Non-Current Assets (A) Property, Plant and Equipment Capital work-in-progress Right to use an Asset Other Intangible Assets Intangible Assets under Development Non-Current Financial Assets (i) (ii) Loans Deferred tax Asset (net) Non-Current tax Assets (net) Other non-current Assets Current Assets (B) Inventories Current Financial Assets Investments (i) (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances other than (iii) above (v) Loans (vi) Other financial assets Other Current Assets Total Assets (A+B)
Mar-21 Mar-20 Mar-19 Mar-18 312.7 365.7 264.8 277.6 4.5 4.3 - 31.1 1.9 0.6 4.3 10.0
360.6 282.9 6.5 34.9 1.7 3.8
318.3 277.2 3.2 - 2.1 4.9
0.1 6.0 - 18.5 17.6 2,304.3 754.4
290.2 848.2 213.3 28.8 7.7 11.4 150.3 2,670.1
0.1 5.3 1.1 20.2 4.2
0.1 7.6 - 18.8 4.4 1,745.6 1,541.7 1,345.7 609.3 680.6 588.0
0.1 7.3 - 24.8 5.1
86.0 849.8 92.6 0.9 7.9 21.8 98.6
- 671.0 50.5 0.9 5.1 15.8 117.8 2,106.2 1,860.0 1,658.4
- 551.8 73.5 0.8 3.7 10.4 96.3
Equity & Liabilities (Rs. Crs)
Mar-21 Mar-20 Mar-19 Mar-18
EQUITY (A)
Equity Share Capital
Other Equity
Non-Current liabilities (B)
Non-current Financial liabilities
Lease Liabilities
Provisions
Deferred tax liabilities (net)
Non-current Tax Liabilities
1,541.3
1,221.8
1,048.4
499.1
1,042.2
49.6
15.3
29.2
5.0
-
499.1
722.6
44.5
19.4
25.1
-
-
274.6
773.8
30.2
-
15.6
14.6
-
954.0
274.6
679.4
32.5
-
12.7
18.1
1.7
Current liabilities (C)
1,079.2
839.9
781.3
671.9
Current Financial liabilities
(i) Borrowings
(ii) Trade Payables
(iii) Lease Liabilities
(iii) Other financial liabilities
Other current liabilities
Provisions
Current tax liabilities
-
598.3
17.3
349.8
108.2
5.6
0.0
-
490.9
16.2
235.4
80.2
9.7
7.4
19.7
480.8
-
179.2
87.2
2.5
12.0
10.1
527.3
-
55.6
70.1
2.3
6.6
Total Equity & Liabilities (A+B+C)
2,670.1
2,106.2
1,860.0
1,658.4
NIL borrowings Cash, Cash Equivalents & Liquid Investments of ~Rs. 532 Crs as on 31st March 2021
1. Given the seasonality in the business, it is best monitored on an annual basis 2. Appointed date for merger of ECC and SCIL is 1st Apr’18
31
Consolidated Working Capital Movement
Particulars (Rs. Crs)
Inventory (A)
Inventory Days (Inventories/ COGS*365) (i)
Trade Receivables (B)
Trade Receivables Days (Trade Receivables / Revenue*365) (ii)
Trade Payables (C)
Trade Payables Days (Trade Payables/ COGS*365) (iii)
Other Financial Liabilities (D)
Other Financial Liabilities Days (Other Current Liabilities / Revenue*365) (iv)
Net Working Capital (A+B-C-D)
Net Working Capital Days (i + ii – iii – iv)
Mar-21
Mar-20
Mar-19
Change (Mar-21 over Mar-19)
754.4
166
848.2
117
598.3
132
349.8
48
654.5
103
588.0
680.6
73.8
134
170
849.8
671.0
177.2
128
110
490.9
480.8
117.5
111
120
235.4
179.2
170.6
35
29
711.4
691.6
-37.1
115
131
1. Given the seasonality in the business, it is best monitored on an annual basis 2. Appointed date for merger of ECC and SCIL is 1st Apr’18
32
Consolidated Cash Flow Statement
Particulars (Rs. Crs)
Net Profit Before Tax
Adjustments for: Non-Cash Items / Other Investment or Financial Items
Operating profit before working capital changes
Changes in working capital
Cash generated from Operations
Direct taxes paid (net of refund)
Net Cash from Operating Activities
Year ended 31-Mar-21
Year ended 31-Mar-20
Year ended 31-Mar19
Year ended 31-Mar-18
453.3
54.5
507.8
25.6
533.4
107.9
425.4
266.5
45.7
312.2
-9.4
302.8
81.4
221.4
259.8
18.6
278.5
-112.7
165.8
88.1
77.7
221.0
9.6
230.6
-100.0
130.6
83.1
47.4
Net Cash from Investing Activities
-257.7
-117.9
-35.3
-39.6
Net Cash from Financing Activities
-47.1
-61.4
-65.4
7.2
Net Increase /(Decrease) in Cash and Cash equivalents
Add: Cash & Cash equivalents at the beginning of the period
Cash & Cash equivalents at the end of the period
120.7
92.6
213.3
42.2
50.5
92.6
-23.1
73.5
50.5
15.0
58.6
73.6
1. Given the seasonality in the business, it is best monitored on an annual basis since a significant portion of revenue & PAT is recorded in the first half of the year 2. Appointed date for merger of ECC and SCIL is 1st Apr’18
33
Key Takeaways
Formidable Player in the Indian Agro-chem Space
Experienced Management Team and Board of Directors
Well-diversified Product Portfolio Across Agro-Chem Value Chain
Strong Brand and Well-Entrenched Distribution Network
▪ Strong / leadership position across
products and processes
▪ Ability to develop new combination products (9 under registrations and additional under development)
▪ Strong
management
autonomous experience and domain expertise
Board with
and vast
▪ Localized experience enables better understanding of market needs to drive growth
▪ Multi-product,
multi-geography,
multi-customer de-risking
▪ 23 states, 65+ depots, 14,000+ distributors, 40,000+ dealer network
▪ Access to an impressive range of own actives along with significant speciality exposure towards product products offerings at all price points serving multiple customers sub-segment
resulting
in
▪ High credibility and brand recall amongst famers and the trade on account of transparent and ethical business dealings
To Benefit from Strong Parentage of SCC Japan
State-of-the-art Manufacturing and R&D Facilities
Strong Track Record of Driving Growth
▪ Benefits from international standing of SCC Japan; most well revered brand renowned for its quality
▪ Access to SCC’s global supply chain and global R&D activities (one of the in largest development of actives and broad range of formulation research
spenders)
resulting
▪ Operates
five
manufacturing facilities with state-of-the-art plants at strategic location which helps reduce logistic time and costs
▪ Capacity not a constraint allowing for significant growth on existing investments
▪ Holds 27 patents and further 9
applications filed
▪ Grown 11X over FY11-21 driven by organic and inorganic expansion; entity 11% CAGR (including Excel Crop Care) over the same period
for merged
▪ Debt free balance sheet with strong
return ratios
34
Annexures
Awards & Accolades
Details on Merger with Excel Crop Care Ltd.
Awards & Accolades
Jamnalal Bajaj Award for “Fair Business and Practices”
First ever president’s gold shield for import substitution
First award for export of organic and inorganic chemicals
Shramveer award for improvement of product efficiency received from national level Delhi
Vishwakarma Rashtriya Puraskar received for process development
National Safety Award by Labour Ministry, Government of India for safety performance
ICMA award for innovation and purposeful programs for social progress
Shramveer Award to employees from Labour Ministry, state level received six times
First Sir P.C. Ray award for development of products and process with indigenous technology
Punjab Haryana Delhi Chamber of Commerce and Industries award for ethical business
Winner active ingredient trophy and certificate from M/s. Bayer
Trishul award for the excellent performance for exports in international markets
Shram Bhushan Award to employees received five times
Shram Ratna to employees, received seven times
Shram Shri award to employees received three times
Gujarat State Safety Certificate for safety commitment
36
Merger of Excel Crop Care to Unlock Value
Successfully and smoothly completed the merger
Pre-Merger Structure
Post-Merger Structure
SCC and its affiliates (Japan)
44.98%
Public Shareholders
SCC and its affiliates (Japan)
Public & Others
100.00%
19.98%
Excel Crop Care (ECC)
35.03%
Sumitomo Chemical India Limited (SCIL)
• SCIL issued shares to shareholders of ECC (other than itself) and to get listed (shares held by SCIL in ECC stand cancelled after merger)
• ECC’s other shareholders, received 51 fully paid-up equity
shares of SCIL of face value of INR 10 each for every 2 (two) fully paid-up equity shares of face value of INR 5 held in ECC
75%
25%
Sumitomo Chemical India Limited (SCIL)
• Equity shares of SCIL listed on the Stock Exchanges from 27th Jan’20
01
02
“Long term Commitment from SCC, Japan” 04
03
05
De-risked Portfolio Presence in both technical & formulation manufacturing and across complete range of products
Highly Complementary Offerings Spread across generics & speciality and to leverage dual brands for offerings across the price spectrum
Distribution Scale Well-entrenched pan-India network and synergies in product marketing
Operational Synergies Continuous improvement in manufacturing efficiencies, location realignment and process efficiencies to lead to margin expansion
Undivided Parent Focus Backing of a well-established parent company with single focused entity of scale to drive India expansion
37
For further information, please contact:
Company :
Investor Relations Advisors :
Sumitomo Chemical India Limited
Strategic Growth Advisors Pvt. Ltd.
CIN: L24110MH2000PLC124224
CIN: U74140MH2010PTC204285
investor.relations@sumichem.co.in
Mr. Jigar Kavaiya +91 99206 02034 jigar.kavaiya@sgapl.net
www.sgapl.net
For further information, kindly visit our new website www.sumichem.co.in
38