Sumitomo Chemical India Limited has informed the Exchange about Investor Presentation
Sumitomo Chemical India Limited
Investor Presentation
May 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)
+24%
665
534
Gross Profit (Rs. Crs) & Gross Profit Margin (%)
+31%
254
38.1%
193
36.2%
EBITDA (Rs. Crs) & EBITDA Margin (%)
+53%
109
71
13.4%
16.4%
Q4FY21
Q4FY22
Q4FY21
Q4FY22
Q4FY21
Q4FY22
Revenue (Rs Crs)
+16%
3,065
2,645
Gross Profit (Rs. Crs) & Gross Profit Margin (%)
+17%
1,157
990
37.4%
37.7%
EBITDA (Rs. Crs) & EBITDA Margin (%)
+23%
600
487
18.4%
19.6%
FY21
FY22
FY21
FY22
FY21
FY22
Given the seasonality in the business, it is best monitored on an annual basis
PAT (Rs Crs)
+38%
75
54
10.1%
Q4FY21
11.2%
Q4FY22
PAT (Rs Crs)
+23%
424
345
13.1%
FY21
13.8%
FY22
4
CSR Award from Federation of Gujarat Industries
Federation of Gujarat Industries awarded SCIL for achieving excellence in the field of “Outstanding contribution in the field of Corporate Social Responsibilities by Industry”. The award was presented in May 2022
Performance Highlights – Full Year
Key Highlights ✓ COVID-19 waves, inflation, erratic monsoon distribution, input material shortages, and shipment
delays plagued the agrochemical industry in FY22
•
Despite these headwinds, we have delivered a robust financial performance
✓ Deep marketing engagement with farmers, strong brands duly supported by trusted
relationships with channel partners allowed us to pass on the cost without affecting sales
✓ We were able to improve our operating margins despite industry-wide input cost increases
✓ FY22 revenue stood at Rs. 3,065 crore. Crossing the Rs. 3,000 crore sales mark is a significant
milestone
✓ Due to higher-cost inventory and slower receivables, the industry's working capital remained
stretched
• We have increased our inventory levels to hedge ourselves against volatile raw material
prices and logistics delays
✓ Global market prices and our industry trends suggest, there are likely to be more price increases
during the upcoming kharif season
✓ In FY22, we have launched 1 new product in Herbicides and Fungicides group each as well as 4 new products in Insecticides group; We are in the process of launching few good products in upcoming Kharif season and Rabi season
✓ Capex for proprietary technical grade active ingredients products for our parent company is on schedule, and we expect commercial production in FY23 for one project and in FY24 for second project
✓ IMD and Skymet have predicted India's fourth consecutive normal monsoon
✓ Good rabi season, higher crop realizations, good water reservoir levels and monsoon forecast –
farmers sentiments appears to be positive
5
Consolidated Profit & Loss Account Statement – Quarter & YTD
Particulars (Rs. Crs)
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
PBT Margin
Tax
Net Profit
Q4 FY22
Q4FY21
534.3
340.9
193.3
YoY
24%
31%
Q3 FY22
707.2
441.5
265.7
QoQ
-6%
-5%
36.2%
196 bps
37.6%
58 bps
FY22
FY21
3,064.6
1,908.0
1,156.6
37.7%
202.0
354.7
599.9
2,644.9
1,655.4
989.5
37.4%
194.3
308.4
486.9
YoY
16%
17%
33 bps
23%
-151 bps
19.6%
18.4%
117 bps
42.4
79.7
71.3
53%
13.4%
303 bps
4.7
13.5
62.5
68%
11.7%
407 bps
1.1
61.4
70%
11.5%
416 bps
7.3
54.1
38%
51.8
87.3
126.5
17.9%
6.2
11.4
121.3
17.1%
1.6
119.7
16.9%
30.7
88.9
-14%
26.8
44.8
581.9
19.0%
6.2
575.7
18.8%
152.2
423.5
-14%
-138 bps
-13%
-126 bps
-16%
665.1
411.3
253.7
38.1%
50.5
94.2
108.9
16.4%
7.4
11.5
104.9
15.8%
0.7
104.1
15.7%
29.5
74.7
18.6
46.6
458.8
17.3%
5.6
453.3
17.1%
107.9
345.4
13.1%
1.6
347.0
27%
164 bps
27%
165 bps
23%
76 bps
23%
Net Profit Margin
Other Comprehensive Income
Total Comprehensive income for the period
11.2%
10.1%
110 bps
12.6%
-135 bps
13.8%
2.3
76.9
3.0
57.1
35%
0.5
89.4
-14%
2.4
425.9
Given the seasonality in the business, it is best monitored on an annual basis
6
Revenue Breakup – YTD
Product Breakup
7%
11%
7%
11%
7%
11%
45%
9%
FY21
43%
FY22
9%
19%
21%
2% 2%3%
5%
1%
4%
0%
Geographic Breakup
10%
0% 1%
1% 2%
4%
4%
FY21
FY22
83%
78%
Insecticides
PGR
Fungicides
Herbicides
Metal Phosphides
AND & EHD*
Domestic Africa
Japan Asia (Ex. India)
Europe South America
North America Australia
Segment Breakup
Bulk & Branded
68%
70%
32%
FY21
30%
FY22
Generic
Speciality
* Animal Nutrition Division (AND) and Environmental Health Division (EHD)
Domestic
18%
21%
82%
79%
FY21
FY22
Exports
65%
35%
FY21
76%
24%
FY22
Bulk
Branded
7
Consolidated Working Capital Movement
Particulars (Rs. Crs)
Inventory (A)
Inventory Days (Inventories/ COGS* No. of days in period) (i)
Trade Receivables (B)
Trade Receivables Days (Trade Receivables / Revenue*No. of days in period) (ii)
Trade Payables (C)
Trade Payables Days (Trade Payables/ COGS*No. of days in period) (iii)
Other Financial Liabilities (D)
Other Financial Liabilities Days (Other Current Liabilities / Revenue*No. of days in period) (iv)
Net Working Capital (A+B-C-D)
Net Working Capital Days (i + ii – iii – iv)
Mar-22*
Dec-21*
937.8
179
843.1
100
517.2
99
399.7
48
864.0
133
696.6
145
917.1
119
509.1
106
424.9
55
679.7
103
Change (Dec-21 to Mar-22)
241.2
-74.0
8.1
-25.2
184.3
Mar-21*
754.4
166
848.2
117
591.2
130
356.8
49
654.5
104
Change (Mar-22 to Mar-21)
183.4
-5.1
-74
42.9
209.5
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 resulted in reduction in Receivable days - Collection during FY22 of ~Rs. 3,458 crores as compared to Rs. 3,139 crores during FY21,
increased by 10% yoy
✓ Cash, Cash Equivalents and Liquid investments of ~Rs. 599 crores as on 31st March 2022
Given the seasonality in the business, it is best monitored on an annual basis * No. of Days in period: Mar-22 – 365 days Dec-21 – 92 days, Mar-21 – 365 days
8
Sumitomo Chemical Company Limited, Japan
- An Overview
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$ 22.5 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;
✓ Follow principles of ‘JIRI – RITA’ which means balance between society benefits and corporate profits; Sustainability is very high priority and SCC received Ecovadis Gold rating
✓ 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$ 3.8 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
10
Sumitomo Chemical India Ltd.
- Company Overview
SCIL - Vision & Mission
Journey to 13x 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
12
Journey to 13x Growth in India in last 12 years
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
Aggressive Growth Phase : 2011 – 2021
1st full year of operations
SCIL 2.0 – Getting ready for next growth phase
Acquisition of New Chemi and integration with SCIL
Setting-up new organization, control system, PCO function and innovative sales team
Acquisition of Excel Crop Care
11%
11.4
6.9
4.5
12.7
7.8
4.9
16.3
9.8
6.5
17.4
10.3
7.1
16.9
9.0
7.9
18.2
9.7
8.5
19.4#
11.9
9.0
Rs. Bn
ECC SCIL
9.5
7.2
2.3 FY10-11
24.2
26.4
30.6
Merger completion
22.2#
13.2
10.0
FY11-12
FY12-13
FY13-14
FY14-15
FY15-16
FY16-17
FY17-18
FY18-19
FY19-20
FY20-21
FY21-22
# Inter-company transactions are eliminated. Other operating income is included HHI – Household Insecticides
13
Formidable Player in the Indian Agrochemicals Space
5 Manufacturing Facilities
14 Technical Actives
16,000+ Direct Distributors & 60+ Depots Product Name Glyphosate
s t c u d o r P y e K
Profenophos
Dantotsu
Tebuconazole
Progibb
Aluminum Phosphide
Chlorpyriphos
DL-Methionine
Grown 13X+* over FY11-22
Rs. Bn
13X
30.6
200+ 700+ Brands SKUs
25+ / 200+ Patents / Registrations
1,750+ Employees
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
FY22
*On an organic basis, grown 6X+
14
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
Insecticides
Herbicides
PGR
Metal Phosphides
Fungicides
AND & EHD
7%
11%
43%
FY22
9%
9%
21%
Generics
Speciality
30%
Domestic 78%
70%
FY22
Exports 22%
2%
45%
10%
17%
2%
Australia
North America
South America
Europe
Asia (Ex. India)
Japan
Africa
6%
18%
✓ 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 45% of Total Revenue
✓ No product / molecule contributes more than 16% 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
15
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
23 States
60+ Depots
✓ In-depth knowledge of own research products, proven go-to-market strategy and deep farmer connect facilitates launch of Speciality products
16,000+ Distributors
✓ 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
✓ Expanded teams for strategic marketing, demand generation, product
development and regulatory affairs to focus on future growth
~40,000 Dealers
~600 Sales Team
4.4 million+ Farmer Connect through 1,500+ Field / Market Development Officers
Domestic
21%
Bulk & Branded Contribution (FY22)
76%
Exports
79%
Bulk
Branded
24%
16
Expanding Brand Visibility and Connect
✓ Wide range of generics and speciality products for Increased crop presence and providing crop
protection solutions
✓ More than 1,500+ Relationship managers connecting to 4.4 million+ farmers throughout crop cycle
✓ Over 200 brands covering maximum of crops and pest segments
✓ 16,000+ distributors, 40,000+ dealers and 60 Depots help in expanding brand visibility and connect
✓ More than 600+ 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
17
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 17.2 million consumers in 2021-22.
YouTube - Advantage
More than 31,000 subscribers
http://www.danitolindia.com/
http://www.naturedeep.in/
Conducted 100s of YouTube, Facebook, Google, Zoom Video Live sessions in 2021-22
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
18
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’, ‘QR ‘Code Printing System’, ‘Adoption of Drone Technologies’ and various digital interfaces to reach out to distribution channel & farmers and provide them timely information
19
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
Gujarat
Maharashtra
Gajod
Bhavnagar
Tarapur
Silvassa
Vapi
Mumbai – Head Office
5 Manufacturing Plants
4 Branches & 68 Depots Pan India
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, Fluroxypyr, Aluminium Phosphide, Zinc Phosphide, Sulphur WDG, Fenpropathrin
Formulations for above TG products and several other speciality and generic products
• Overall Optimal capacity utilization generally • 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
projects
Maps not to scale. All data, information, and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness
20
Capex Plans
Regular Capex Rs. 70-75 crore p.a.
Maintenance capex
Additional Capex Rs. 120 crore over 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 1 year
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.
Sustainability initiatives, full compliance with environmental norms & renewable energy projects
Estimated margins are in line with current margins earned by SCIL for similar projects
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
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
• ~50 acre privately owned land parcel at a prime
location at Dahej within PCPIR Zone
Capex plan progressing as per schedule; commercial production is expected to start in Q1FY22-23 for one product & during Q1FY24 for second project involving multiple products
21
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 products coming from initiatives
▪ Global Speciality Proprietary products to be launched in India
▪ New combination
products
/
pre-mixtures
currently
under
development for domestic and exports
▪ Off-patent products under development for domestic and exports
▪ Technical products approved for manufacturing and exports
✓ 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
22
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
23
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
ICMA award for innovation and purposeful programs for social progress
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
Global CSR award from SCC for one of our Integrated Village Development Programme
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
Shramveer Award to employees from Labour Ministry, state level received six times
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
CSR Award from Federation of Gujarat Industries
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
• On-field
training
demonstrations,
of farmers for building ground-level demand generation supported by digital marketing new Extraordinary product launches underway
preparations
for
•
• Multiple products coming from initiatives • Global Speciality Proprietary products to be
•
launched in India
• New combination products / pre-mixtures currently under development for domestic and exports
• Off-patent products under development
•
for domestic and exports Technical products for manufacturing and exports
Enhance exports in regions like Africa Leverage SCC’s Global supply chain and marketing network to drive exports in Latin America, Asia and Europe
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)
+13%
2,425
3,065
2,645
2,228
1,913
600
487
+29%
333
291
217
11.3%
13.0%
13.7%
18.4%
19.6%
+31%
345
424
145
166
205
FY18*
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
Networth (Rs Crs)
RoCE (%)^
Net Working Capital Days
1,927
+19%
1,222
1,541
954
1,048
23.2%
25.3%
24.8%
29.8%
30.2%
119
131
115
104
133
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
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)}
29
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
FY22 3,064.6 1,908.0 1,156.6 37.7% 202.0 354.7 599.9 19.6% 26.8 44.8 581.9 19.0% 6.2 575.7 0.0 575.7 18.8% 152.2 423.5 13.8% 2.4 425.9
8.5
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
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
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 & other financial assets 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-22 Mar-21 Mar-20 Mar-19 Mar-18 487.6 312.7 360.6 349.6 282.9 264.8 21.1 6.5 4.5 36.4 34.9 - 4.3 1.7 1.9 14.1 3.8 4.3
365.7 277.6 4.3 31.1 0.6 10.0
318.3 277.2 3.2 - 2.1 4.9
0.1 30.8 - 21.6 9.5
0.1 6.0 - 18.5 17.6 2,522.0 2,304.3 1,745.6 588.0 754.4 937.8
0.1 5.3 1.1 20.2 4.2
356.02 843.13 57.25 21.88 0.47 174.50 131.03 3,009.6
290.2 848.2 213.3 28.8 7.7 11.4 150.3 2,670.1
86.0 849.8 92.6 0.9 7.9 21.8 98.6 2,106.2
0.1 7.6 - 18.8 4.4 1,541.7 680.6
- 671.0 50.5 0.9 5.1 15.8 117.8 1,860.0
0.1 7.3 - 24.8 5.1 1,345.7 609.3
- 551.8 73.5 0.8 3.7 10.4 96.3 1,658.4
Equity & Liabilities (Rs. Crs)
Mar-22 Mar-21 Mar-20 Mar-19 Mar-18
EQUITY (A)
Equity Share Capital
Other Equity
1,927.2
1,541.3
1,221.8
1,048.4
499.1
499.1
1428.1
1,042.2
Non-Current liabilities (B)
61.0
49.6
Non-current Financial liabilities
Lease Liabilities
Provisions
Deferred tax liabilities (net)
Non-current Tax Liabilities
24.7
22.3
13.9
-
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)
1,021.4
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
-
-
-
19.7
517.2
598.3
490.9
480.8
12.9
399.7
79.8
7.2
4.7
17.3
349.8
108.2
5.6
0.0
16.2
-
235.4
179.2
80.2
9.7
7.4
87.2
2.5
12.0
10.1
527.3
-
55.6
70.1
2.3
6.6
Total Equity & Liabilities (A+B+C)
3,009.6
2,670.1
2,106.2
1,860.0
1,658.4
NIL borrowings Cash, Cash Equivalents & Liquid Investments of ~Rs. 599 Crs as on 31st March 2022
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-22
Mar-21
Mar-20
Mar-19
937.8
179
843.1
100
517.2
99
399.7
48
864.0
133
754.4
166
848.2
117
598.3
132
349.8
48
654.5
103
588.0
134
849.8
128
490.9
111
235.4
35
711.4
115
680.6
170
671.0
110
480.8
120
179.2
29
691.6
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-22
Year ended 31-Mar-21
Year ended 31-Mar-20
Year ended 31-Mar19
Year ended 31-Mar-18
575.7
46.3
622.0
-257.6
364.4
142.6
221.8
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
-290.2
-282.7
-117.9
-35.3
-39.6
Net Cash from Financing Activities
-62.6
-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
-131.1
188.3
57.2
95.7
92.6
188.3
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, 60+ depots, 16,000+ 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 13X over FY11-22 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
Glance of various events to bring people together
Glance of various events to bring people together
36
37
38
39
40
41
42
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 / Mr. Parin Narichania +91 99206 02034 / +91 99300 25733 jigar.kavaiya@sgapl.net / parin.n@sgapl.net
www.sgapl.net
For further information, kindly visit our new website www.sumichem.co.in
43