SRF Limited has informed the Exchange about Investor Presentation
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The Corporate Relationship Department, BSE Limited 1st Floor , New Trading Ring Rotunda Building, P.J. Towers Dalal Street, Mumbai 400 001
National Stock Exchange of India Limited "Exchange Plaza" Bandra-Kurla Complex Bandra (E) Mumbai 400 051
Scrip Code- 503806
Scrip Code-SRF
SRF/SEC/BSE/NSE
Dear Sir,
22 07.2022
Presentation- Earnings Call (Un-Audited Financial Results for the quarter ended 30.06.2022)
in continuation of our letter dated 14l July, ZZ2 informing about hosting of earning call to discuss Un Audited financial results for quarter ended 30" June, 2022, please find enclosed Investors presentation, of the same for your reference an
record.
The same is also available on the Company's website i.e. www._srf.com
Thanking you
Yours faithfully,
For SRF LIMITED
RAJAT LAKHANPAL VP (CORPORATE COMPLIANCE) & COMPANY SECRETARY
Encl: As above
LIMITED
Block-C Sector-45 Gurugram 122 003 Haryana India felt: +91-124-4354400 Fax: +91-124-4354500 E-mail: info@srf.com Website:; www.srf.com
Regd. Office: Unit No. 236 & 237, 2nd loo DLF Galleria, Mayur Noida Link Road
Place
Mayur Vihar Phase-1 Extension Delhi 110091
Corporate Identity No. 11810101197091C005197
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SRF Limited
Q1 FY23 Results Presentation
July 22, 2022
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Disclaimer
Certain statements in this document may be forward-looking. Such statements are subject to certain risks and uncertainties like regulatory changes, local, political or economic developments, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn in any of the countries where SRF Limited has its manufacturing and / or commercial footprint.
SRF Limited may, from time to time, make additional written and oral forward-looking statements, including exports to shareholders. The company will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward- looking statements to reflect subsequent events or circumstances.
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Contents
Company Overview…………………………………………………………………………………… 04
Q1FY23 Results Overview………………………………………………………………………….. 10
Q1FY23 Segmental Performance……………………………………………………………….. 15
Outlook…………………………………………………………………………………………………….. 31
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COMPANY OVERVIEW
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Snapshot
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Exports to 90+ Countries
Operations in 4 Countries Countries
14 Manufacturing Facilities
7,000+ Global Workforce
12,434 cr Revenue
42% Chemicals
38% Packaging
20% Technical Textiles & Others
Note: As on 31st March 2022
3,146 cr EBITDA
1,889 cr PAT
5
Overview - Business Profile
Chemicals Specialty Chemicals
Intermediates for AI / API / Applications
Contract Manufacturing, Custom Research & Synthesis
Fluorochemicals
Refrigerants
Pharma Propellants
Industrial Chemicals
Fluoropolymers (Upcoming)
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Packaging Films
Films for Flexible Packaging
Bi-axially Oriented Polyethylene Terephthalate (BOPET)
Bi-axially Oriented Polypropylene (BOPP)
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Others a
Coated Fabrics
Laminated Fabrics
•
Tyre Cord Fabrics (Nylon & Polyester)
Technical Textiles • • •
Polyester Industrial Yarn
Belting Fabrics
Note: As on 31st March 2022
Revenue
EBIT
No of Plants
(In Rs. Crore)
(In No)
6
Manufacturing Facilities
• •
•
• •
FLUOROCHEMICALS & SPECIALTY CHEMICALS 2 National Operations
1. Rajasthan, India - Bhiwadi 2. Gujarat, India - Dahej
TECHNICAL TEXTILES 4 National Operations
1. Madhya Pradesh, India - Malanpur, Bhind 2. Tamil Nadu, India - Manali 3. Gummidipoondi 4. Viralimalai
PACKAGING FILMS 3 National Operations
1. Uttarakhand, India- Kashipur 2. Madhya Pradesh, India - Special Economic Zone (SEZ), 3. Pithampur, Indore - Bagdoon, Pithampur, Indore
LAMINATED FABRICS 1 National Operation
1. Uttarakhand, India - Kashipur
COATED FABRICS 1 National Operation
1. Tamil Nadu, India - Gummidipoondi
1 1
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1
2
3
1 2
3
2 1
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PACKAGING FILMS 3 International Operations
4. KwaZulu - Natal, South Africa 5. Rayong, Thailand 6. Jaszfenyszaru, Hungary
South Africa
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5
Thailand
Hungary
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Market Leadership Across Businesses
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Specialty Chemicals
Established relationship with marquee customers
Capability in scaling up pilot processes and creating value operational through excellence
backed
customer High levels of by engagement strong technical service, product and quality management under one roof
R&D,
Handling complex reactions - ethylation, halogenation, nitration, hydrogenation, grignard, diazotization, amination, isomerization, and organocatalysis, decarboxylation
Fluorochemicals
Packaging Films
Technical Textiles
Recognized for expertise in developing, manufacturing and marketing innovative, superior film products
Flexible business model, strong and loyal customer relationships with tailored solutions; NPD Lab to ensure future readiness
Highly efficient asset base added value offering products in close proximity to customer locations
Domestic market leader in Tyre Cord manufacturing and Belting Fabrics
40% share in India’s Nylon Tyre 2nd Cord market. largest player globally
3rd largest manufacturer of Conveyor Belting Fabrics in the world
Unique and fully integrated facilities extending across a wide range of refrigerants and industrial chemicals
Domestic leadership in HFC’s trade with strong distribution network; significant market share of Fluorochemicals India with global scale operations
in
the few global One of manufacturers for Pharma grade 134a/P - propellant in metered dose inhalers
Among the top five global manufacturers key Fluorochemicals products
for
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Growth Levers
Focus on building leadership businesses
Build and maintain market leadership in business segments
ESG initiatives in focus
Benefit the communities where we work Embrace
diversity, equity & inclusion Enhance focus on the 3R’s- Recycle, Reuse & Reduce Increase consumption of
green/renewable sources of energy
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Innovation Led Sustainable Growth
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Nurture innovation through R&D
Reposition portfolio towards knowledge-based products
Focus on building knowledge- based value-added products
Continue to build new competencies in the
chemical technology space
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Q1 FY23 Results Overview
10
Abridged Results Overview Consolidated figures
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Particulars (Rs. Crore)
Q1 FY23
Q1 FY22
% Y-o-Y
Gross Operating Revenue
3,894.7
2,699.4
EBITDA
EBITDA Margin (%)
Depreciation
Interest
ECF (Gain) / Loss
Profit Before Tax
Profit After Tax
Profit After Tax Margin (%)
Diluted EPS (Rs.)
1,029.7
26.4%
130.7
32.5
24.9
841.6
608.0
15.6%
20.51
678.2
25.1%
123.0
27.5
(7.2)
534.9
395.3
14.6%
13.34
44.3%
51.8%
6.3%
18.3%
NA
57.3%
53.8%
EPS is recalculated based on post bonus issued and paid-up capital
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Results Overview - Financial Overview Consolidated figures
Key Financial Ratios
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PARTICULARS
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
EBITDA Margin
17.59% 13.59% 20.43% 22.13% 21.42% 17.69% 19.00% 20.90% 26.05% 25.30%
PAT Margin
6.69%
4.04%
8.78%
9.51%
10.87%
8.38%
8.33%
12.70% 14.26% 15.19%
Net Debt to Equity
Net Debt to EBIDTA
Asset Turnover
Debtors Turnover
0.70
2.08
0.82
7.44
1.00
3.80
0.73
5.81
0.98
2.83
0.77
7.43
0.71
1.97
0.7
8.79
0.67
2.11
0.68
7.21
0.82
3.01
0.66
8.1
0.83
2.42
0.72
6.90
0.76
2.48
0.66
8.09
0.39
1.24
0.65
6.64
0.32
0.88
0.79
6.94
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Results Overview - Revenue & EBIT Consolidated figures
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Revenues (Rs. Crore)
■
Q1 FY22
■
Q1 FY23
3,895.1
EBIT (Rs. Crore)
■
Q1 FY22
■
Q1FY23
938.4
2,701.5
594.7
1,722.4
1,496.0
1,113.7
1,041.3
571.0
492.9
53.6
105.7 CJ
520.2
222.3
295.2
236.8
133.7
116.2
1.9
6.8
CB
PFB
TTB
Others
Total
CB
PFB
TTB
Others
Total
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
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Results Overview - Revenue Share
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Q1 FY23
44.2%
38.4%
CB
PFB
Q1 FY22
41.2%
38.5%
CB
PFB
TTB
14.7%
TTB
18.2%
Others
2.7%
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Others
2.1%
I
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
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Q1 FY23 Segmental Performance
Chemicals
Packaging Films
Technical Textiles
Others
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Chemicals Business
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,
Chemicals Business - Results Update
Consolidated figures
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PARTICULARS (Rs. Crore)
Q1 FY23
Q1 FY22
% Y-o-Y
Segment Revenues
1,722.4
1,113.7
54.7%
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
44.2%
520.2
30.2%
55.4%
41.2%
222.3
20.0%
37.4%
134.0%
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Chemicals Business Specialty Chemicals Business
Segment delivered a healthy performance driven by robust demand for flagship products
o Downstream derivatives also registered good growth leading to
better sales
New product additions further supported results
o Launched 1 new Agro product in Q1 FY23
o New product development funnel at optimal levels
Sustained focus on cost management through process optimization and resource utilization
o On-going efforts to diversify the portfolio of raw material suppliers
to de-risk RM availability
o Strong focus on initiatives that minimize the environmental cost of
production
Commissioned a state-of-the-art multi-purpose production facility (MPP4 plant) at Dahej
o Newly commissioned capacities are being progressively ramped up
Robust investments planned ~ ₹ 1200-1500 Crore over 12-18 months
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Capex Update
The Board approved several projects at the Company’s chemical facility at Dahej including:
o Dedicated facility to produce 1,000 MTPA of an advanced agrochemical intermediate at a projected cost of ₹250 crore
o Expand the intermediate product capacity that finds application in agrochemical and pharma at a projected cost of ₹72 crore
o Two technical structures for certain agrochemical
products at a projected cost of ₹78 crore
Market Trends
Rising crude, logistics issues and global shortages of some key inputs pushing up the raw material prices
‘China plus one’ strategy continues to aid India’s position as an alternate manufacturing base
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Chemicals Business
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Chemicals Technology Group
Chemicals Technology Group (CTG) is actively engaged in the development of new process technologies
Key focus on high end molecules
Strong internal competencies and capabilities
Equipped with state-of-the-art R&D facilities and an ingenious team of scientists and engineers
2 R&D centres in India – Bhiwadi, Rajasthan and Gurugram, Haryana. INDIA
10 new process patents were granted in Q1 FY23, taking the tally to 124 global patents to-date. Overall, the Company has applied for 370 patents
124
Global Patents granted
370
Patents applied
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Chemicals Business Fluorochemicals Business
Segment in structurally strong space:
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o Better
realizations and steady volumes witnessed
Market Trends
across HFCs
o HFC facilities operating at optimal utilization levels
o Dymel® HFA 134a/P (pharma grade gas) continued to
do well and reported significant growth
o Healthy
contribution from chloromethanes aided
performance
Seasonally weaker Q2 FY23 in the business, catalyst change in Q2 for R125
CMS capex well on track – to be commissioned by Q2FY23
In Q1 vehicle FY23, domestic passenger production & sales volumes increased despite ongoing supply chain & logistical challenges
Healthy market opportunities in key markets of India and USA
In the AC segment, demand and production volumes remained healthy
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Packaging Films Business
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Packaging Films Business - Results Update Consolidated figures
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PARTICULARS (Rs. Crore)
Q1 FY23
Q1 FY22
% Y-o-Y
Segment Revenues
1,496.0
1,041.3
43.7%
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
38.4%
295.2
19.7%
31.5%
38.5%
236.8
22.7%
39.8%
24.7%
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Packaging Films Business Key Highlights
Segment registered strong results on account of:
o BOPP Films delivered healthy performance
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o Increased sales from Value-Added Products (VAP), further enhanced
Market Trends
overall performance
o Continued focus on efficiencies and cost-competitive procurement to ensure the Company remains one of the lowest-cost producers in the world
Bolstered the segment’s mantra of ‘Easy to Do Business With’ strengthen its position as a major player in the global packaging industry
to
o Focus on enhancing quality and delivery of products to increase engagement with multinational customers, now present in over 100 countries
o Sudden RM price correction – hopefully bottomed out
As a market leader, the Company is driving sustainability initiatives and is working towards innovating films that have a lower environmental footprint
BOPP Film line at Indore, India expected to be commissioned in Q2FY23
BOPET films likely to witness inventory impact due to sharp drop of RM prices
Several new BOPET lines are scheduled to commence globally – to impact industry margins in the future
o Demand is trending towards global suppliers
with multi-locational facilities
Energy prices in Europe remain a challenge, at our Hungarian facility
BOPP likely to remain healthy
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Technical Textiles Business
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Technical Textiles Business - Results Update Consolidated figures
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PARTICULARS (Rs. Crore)
Q1 FY23
Q1 FY22
% Y-o-Y
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
15.8%
-13.1%
571.0
14.7%
116.2
20.4%
12.4%
492.9
18.2%
133.7
27.1%
22.5%
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Technical Textiles Business Key Highlights
Performance has been healthy, on account of:
o Increased export volumes from the Nylon Tyre Cord Fabrics (NTCF) and
Belting Fabrics segments
o Domestic NTCF volumes were subdued with steady margins
o Business continues to actively focus on improving operational excellence
and productivity parameters
o The Board has approved a project
for capacity expansion and modernization of belting fabrics operations at TTB-Viralimalai from 1,100 Metric Tons Per Month (MTPM) to 1,800 MTPM at a projected cost of ₹162 crore to be spent over a period of three years
o Belting Fabric market witnessing large opportunities and capex
tuned to maintain and enhance our market share
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Market Trends
Major consumers prefer domestic supplies owing to the uncertain environment, resulting in a decline in imports, medium term positive
Replacement domestic demand is expected to remain positive
Belting fabrics segment is expected to witness robust demand as infrastructure spend revives
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Others
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Others - Results Update Consolidated figures
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PARTICULARS (Rs. Crore)
Q1 FY23
Q1 FY22
% Y-o-Y
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
96.9%
255.6%
105.6
2.7%
6.8
6.4%
0.7%
53.6
2.1%
1.9
3.5%
0.3%
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Others - Key Highlights
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Coated Fabrics
SRF continues to be a leader in the domestic market with a focus on increased sourcing initiatives and superior operating performance
After two years of the pandemic, the segment witnessed strong domestic demand
Domestic demand for Coated Fabric is expected to remain healthy with good monsoons and resumption of events and outdoor activities
Laminated Fabrics
SRF maintained its price and volume leadership with the plant operating at full capacity in Q1 FY23 and achieving its highest-ever sales when compared with CPLY
Realizations in this sector were adversely affected due to the ongoing surplus supply scenario
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SRF’s Community Engagement
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3) t,'
Adopted 108 Anganwadis across Bhopal, Bhind and Dhar districts
Conducted summer camps in 7 locations (Mewat, Bhopal, Bhind, Bharuch, Kamrup, Bhiwadi, and Dhar) covering 149 Govt. schools reaching 4,110 students
Swachh Vidyalaya Puruskar at the state and district level awarded to 5 intervention schools in Bharuch, Bhopal and Mewat locations
~10,000 girls earned certification on completing the ‘Capgemini Coding for Girls’ program
Distributed 171 tents to flood affected locations in Assam
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Outlook
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Outlook - Chemicals Business Specialty Chemicals
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Moving up the value chain by accelerating qualifications of new molecules in Agro and Pharmaceuticals sectors, capacity utilization of newly commissioned plants to remain in focus
Working on key campaigns to go on stream
Strong investment plans converting campaign products to dedicated plants likely in next 12-18 months, pre-work on structural requirements already commenced
Focus on launch of new products from MPP4
Fluorochemicals
Positive trend likely to continue - demand in the refrigerants segment is expected to remain healthy in the near to medium term
Focus on expanding in new markets / geographies and product offerings, ramping up sales from refrigerants, blends and industrial solvents
CMS (Q2), PTFE (Q3) to aid volume growth
Focus on ESG being reinforced through multiple hybrid power procurement structures
Strong focus on effective resource utilization
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Outlook - Packaging Films Business
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SRF Altech Limited incorporated as a wholly owned subsidiary of SRF Ltd., to engage in the manufacturing of Aluminium foil – civil work in progress
Focus on enhancing sales from new BOPP film line in India and value-added products
Sudden drop in raw material prices likely impact Q2 FY23, better positions for H2 FY23
ROCE for the business remains healthy in the medium to long run
Focus on increasing pace of R&D efforts, sustainability initiatives, efficient cost structures and enhanced capabilities
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Outlook - Technical Textiles Business
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Higher operating leverage and cost optimization by capacity rationalization across various plants
Other sub-segments of Technical Textiles Business expected to make a significant contribution to the overall performance
Incremental expected to give strong returns
investments in Belting Fabrics over the next three years being made,
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About Us
Established in 1970, SRF Limited with an annual turnover of ₹12,313 crore (US$ 1.6 billion) is a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates. The company’s diversified business portfolio covers Fluorochemicals, Specialty Chemicals, Packaging Films, Technical Textiles and Coated and Laminated Fabrics. Anchored by from different a strong workforce of 7,000+ employees nationalities working across eleven manufacturing plants in India and one each in Thailand, South Africa and Hungary, the company exports to more than 90+ countries. Equipped with State-of-the- Art R&D facilities, SRF has filed 370 patents for R&D and technology so far, of which 124 have been granted. A winner of the prestigious Deming Prize for two of its businesses namely Tyre Cord and Chemicals, SRF continues to redefine its work and corporate culture with TQM as its management way.
For further information please contact 0 n
Anoop Poojari
CDR India
Tel: +91 98330 90434
Email: anoop@cdr-india.com
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Thank You
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