In continuation with the Company���s letter dated August 01, 2022, pertaining to Intimation of schedule of Earnings call to be held on Friday, 5th August 2022 at 10:00 a.m. (IST) and pursuant to Regul...
August 04, 2022
To,
National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra – Kurla Complex, Bandra (E), Mumbai -400 051
BSE Limited Corporate Relationship Department, 2nd Floor, New Trading Wing, Rotunda Building, P.J. Towers, Dalal Street, Mumbai – 400 001
Symbol: SJS
ISIN: INE284S01014
Dear Sir/Madam,
Scrip Code: 543387
Subject: Earnings Call Presentation of the Company pertaining to Q1 of FY 2022-23
In continuation with the Company’s letter dated August 01, 2022, pertaining to Intimation of schedule of Earnings call to be held on Friday, 5th August 2022 at 10:00 a.m. (IST) and pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith the earnings presentation on the unaudited Financial Results of the Company for the quarter ended June 30, 2022.
Also, this presentation will be uploaded on the website of the Company at https://www.sjsindia.com/
Request you to kindly take the above on record.
Thank you,
Yours faithfully, For S.J.S. Enterprises Limited
_____________________ Thabraz Hushain W. Company Secretary and Compliance Officer Membership No.: A51119
Encl: As mentioned above
S.J.S ENTERPRISES LIMITED
Q1FY23 EARNINGS PRESENTATION
Disclaimer
Certain statements made in this presentation relating to the Company’s objectives, projections, outlook, expectations, estimates, among others may constitute ‘forward- looking statements’ within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections etc., whether express or implied. These forward-looking statements are based on various assumptions, expectations and other factors which are not limited to, risk and uncertainties regarding fluctuations in earnings, competitive intensity, pricing environment in the market, economic conditions affecting demand and supply, change in input costs, ability to maintain and manage key customer relationships and supply chain sources, new or changed priorities of trade, significant changes in political stability in India and globally, government regulations and taxation, climatic conditions, natural calamity, commodity price fluctuations, currency rate fluctuations, litigation among others over which the Company does not have any direct control. These factors may affect our ability to successfully implement our business strategy. The company cannot, therefore, guarantee that the ‘forward-looking’ statements made herein shall be realized. The Company, may alter, amend, modify or make necessary corrective changes in any manner to any such forward looking statement contained herein or make written or oral forward-looking statements as may be required from time to time on the basis of subsequent developments and events
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Today’s Presenters
K A JOSEPH Managing Director
SANJAY THAPAR Executive Director & CEO
SAUMYA MOGANTY VP - Finance
DEVANSHI DHRUVA Head–Investor Relations
• Founded the company in
1987
• More than 34 years of
experience in aesthetics printing business
• Post graduate diploma in business administration from the St. Joseph’s College of Business Administration, Bangalore; B.Sc from Bangalore University
• Over 30 years of experience in the automotive industry
• Previously worked with
Ashok Minda Group, Minda Valeo Security Systems, Minda HUF Limited, Tata Engineering and Locomotive Company Limited (now known as Tata Motors Limited)
• Bachelor’s degree in science (mechanical engineering) from the Delhi College of Engineering
• Over 21 years of work experience in finance function
• Previously worked in audit and IT industry; currently heading finance function at SJS since 2011.
• Associate of the Institute of Chartered Accountants of India; B.Com (Honours) from Utkal University, Odisha
• Previously worked with Westlife Development Limited (McDonald’s India) and Piramal Enterprises Limited managing Investor Relations. Earlier worked as Equity Research Analyst with Dolat Capital Markets Pvt. Ltd.
• PGDM – Finance from K J
Somaiya Institute; M.Com & B.Com (Accounting & Finance) from University of Mumbai
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About SJS Enterprises
S.J.S Enterprises Limited : A Snapshot
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One of the leading players in Indian decorative aesthetics industry which has faster than underlying industry growth (1)
Rs 1,031.7 Mn Q1FY23 Revenue (2)
FY21-FY26 CAGR (1)
20%
10-12%
11-13%
12-14%
11 product categories (3)including chrome plated parts
7 End markets served(4) – 2W, PV, CD, CV, Medical devices, Farm equipment & Sanitary ware
2W
PV
CD
Aesthetics
Widest range of products(5) with presence across traditional and premium products
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3
“”Design” to delivery” aesthetics solution provider
Design
Development
Delivery
15 days to 6 months
~123 Mn Total parts Supplied (FY22)
~6,000 SKUs (FY22)
21 Countries exported to
Strong manufacturing footprint and global distribution capabilities
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5
Long-standing customer relationships
~175+ Customer Locations (as on 31st Mar 2022)
~15 yrs Average length of relationship with 10 largest customers
Note: (1) as per CRISIL Research ; (2) Consolidated revenue from operations; (3) Decals, 2D/ 3D appliques and dials, 3D lux badges, domes, overlays, aluminium badges, IML/IMDs, lens mask assembly, optical plastics and chrome-plated plastic parts; (4) 2W- Two Wheeler; PV – Passenger Vehicle; CD – Consumer Durables; CV: Commercial Vehicles; (5) As on Mar 31, 2021 as per CRISIL Research
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SJS Outperformed Auto Industry on Y-o-Y basis
Q1FY23 - Industry Production Volume1 v/s SJS YoY Sales
Industry
SJS
75.5%
53.5%
38.9%
38.4%
32.7%
29.5%
37.4%
+
Industry Scenario
•
•
Sequentially, SJS domestic sales were largely in line with 2W and PV industry production
o Going ahead domestic 2W & PV industry outlook is positive with improving chip availability and expectations
of pickup during festive season
Exports were impacted on account of: (a) Russia Ukraine war leading to lower demand as well as supply chain constraints of raw materials in EMEA region; and (b) rising fuel prices globally and inflationary environment
o
Export volume outlook remains strong over the medium-term
Despite QoQ impact on exports, SJS maintained Q4FY22 sales momentum
Note: 1) Industry Production Volumes are production in India (SIAM data)
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Q1FY23 Business & Financial Highlights
Q1FY23 Financial Performance (Consolidated)
39% YoY growth
50% YoY growth
71% YoY growth
Revenue at Rs 1,031.7 Mn –surpassed 2W and PV industry productions combined growth of 37.4% YoY
EBITDA at Rs 278.2 Mn, despite inflationary environment, on back of strong operational efficiencies; Strong margins of 26.4%
Net Profit at Rs 162.1 Mn, with a margin of 15.4%
2W and PV witnessed strong YoY growth of 75% and 29% respectively; Overall Domestic sales clocked strong YoY growth of 58%
Strong Cash & Bank position with Rs 1158.9 Mn as on 30th June 2022; Low leverage with net debt at zero
Q2FY23 started on a robust note, as we achieved revenue of around Rs 380 Mn* in July’22 on back of improvement in customer demand; We are on track to meet our FY23 YoY growth rate of 25%
Note: * Provisional number
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Q1FY23 Business Highlights (1/2)
We are just getting Started…
Current order book is ~90% of FY23 forecasted revenue
Key Customers: Growing mega accounts & driving exports
• Expanded business in USA by winning business from 2 new plants of Whirlpool
• Entered a new country – Argentina with new order win from Alladio, a leading manufacturer of domestic
appliances in Latin America
• SJS continued growing business with mega accounts by winning new orders from Continental, Marelli, Stellantis and
Whirlpool etc
• Exotech won its first business in exports market by cross selling chrome plated parts to Whirlpool
Products : Focus on new product development and technologies
• SJS continued to demonstrate strong NPD capabilities, helping it secure additional orders from customers due to its QCDD
(Quality, Cost, Design & Delivery) capability
• Our customers recognize our support as partners – SJS won the award for excellence in New Product Development
from Honda Motorcycle & Scooter India at their Annual Supplier Conference
• Despite input cost increases and supply chain constraints, SJS expanded EBITDA & PAT margins
• Strong focus on VAVE measures and operational efficiency improvement initiatives
Robust margins
We are in the process of acquiring a ~7.5 acres land at Pune to expand our chrome plating capacity
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Q1FY23 Business Highlights (2/2)
Key Customer Addition
ARGENTINA
OHIO, USA
ELECTRIC VEHICLES
Entered 2 new locations
Key Business Projects Won
ARGENTINA
OHIO, USA
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Q1FY23 Consolidated P&L
Despite inflationary trends EBITDA Margins improved 170 bps YoY and 106 bps QoQ
PAT Margin improved 280 bps YoY and 82 bps QoQ
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30-Jun-2231-Mar-2230-Jun-21IncomeRevenue from Operations1031.71041.1742.7Other Income23.312.410.3Total Income1055.01053.5752.9ExpensesCost of raw materials consumed489.6465.3320.2Changes in inventory of finished goods, WIP and stores and spares-40.07.4-11.1Employee benefits expenses136.3132.1120.0Other Expenses190.9181.7138.1Total Expenses776.8786.5567.1EBITDA278.2267.0185.9EBITDA Margin %26.4%25.3%24.7%Finance Costs6.97.77.2Depreciation & Amortisation Expenses55.254.151.1Profit Before Tax216.2205.2127.6Tax Expenses Current Tax60.555.838.8 Deferred Tax (credit)/ charge-6.4-4.2-6.1Total Tax expense54.151.632.7Profit for the year162.1153.695.0Profit Margin %15.4%14.6%12.6%Particulars (INR Mn)Quarter Ended Outlook: FY23–25 (Medium Term) FY23 (Near Term)
SJS – Outlook for FY23 - 25…(1/2)
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Organic growth expected at ~25% CAGR, maintaining best in class margins
Capacity Expansion: Expand chrome plating capacity to meet higher demand pipeline • Double the chrome plating capacity to support revenues of Rs 300 Crs from the current Rs 130 Crs capacity
• Expect capex of ~Rs 100 Crs (spread over 18-24 months) to be funded largely internally through SJS cash
flows and target ROCE of ~20%
• Higher capacity will also enable entry into global markets
Exports : Increasing global presence •
Increase presence in existing geographies and enter new geographies by leveraging strong customer relationships
• Strengthening our sales force in the international markets of Turkey, Brazil & Argentina and exploring similar
opportunities in other countries
Products : Focus on development of new technologies & advanced products •
Intend to develop and introduce Illuminated logos, In Moulded Electronic (IME) parts and other new gen technologies
• Continue to build capabilities to innovate & develop new products & increase application of products across industries
Key Customers : Growing mega accounts • Strengthen relationships with existing customers by expanding the array of products & building large mega accounts
•
Increase customer base by marketing existing products to new customers
• Cross selling opportunities between SJS and Exotech
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SJS – Outlook for FY23 - 25…(2/2)
2
Merger & Acquisitions
SJS successfully integrated Exotech business and demonstrated credible business improvement in Exotech’s FY22 performance:
• ~50% YoY growth in
Revenue, increasing from Rs 685 Mn to Rs 1,020 Mn
• Cost synergies & efficiency resulted in Exotech EBITDA margin expansion by 70 bps YoY from 12.2% in FY211 to 12.8% in FY22
SJS will continue ahead with more business accretive acquisitions & the rationale for it will be:
Build capability in adjacent / new aesthetic product categories Identified key product categories to enter / expand presence which include: • • •
IMD / IML IME (In-Mould Electronics) Plastic injection moulding / painting
Expand presence in consumer related industries Enter new segments and expand presence in other consumer related industries targeting • Appliance manufacturers • Hand held devices
Enter new geographies / OEMs for chrome plating • Expand presence in chrome plating (one of the
largest segment for aesthetics parts) • Reduces logistics costs for bulky parts • Provides direct entry into OEMs to support cross
selling opportunities
SJS Management is actively evaluating opportunities and building an M&A pipeline to give an impetus to revenue growth over and above the organic growth of ~25%
Note: 1) FY21 EBITDA Margins is excluding one time gain on sale of land to the extent of Rs 53.83 Mn
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SJS – FY23 Outlook
End Segments
FY22 Industry Domestic Vol Growth
FY23E Industry Domestic Vol Growth
Contribution to SJS Revenue (FY22)
Two Wheelers
Passenger Vehicle
(10.9%)
13.2%
15.6%
19.0%
43.3%
28.8%
❖ SJS expects ~25% YoY revenue growth on account of expected positive outlook
for 2W, PV and Consumer Durables
o Premiumisation + New Customer Wins + Exports = Higher sales growth for
SJS than industry
o High Visibility: Current order book to be executed in FY23 is ~90% of FY23
forecasted revenue
❖ Strong moat, strong margin profile and expected operating leverage to drive PAT
growth of ~30% YoY and going ahead
Note: Industry growth is domestic sales volumes; FY23E Industry Domestic Vol growth broker reports & market research
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THANK YOU
IR Contact Ms. Devanshi Dhruva | Head - Investor Relations devanshi@sjsindia.com
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