Akzo Nobel India Limited has informed the Exchange about Investor Presentation
Akzo Nobel India Limited
4 November 2022
Department of Corporate Services BSE Limited 1st floor, New Trading Ring Rotunda Building, P J Towers Dalal Street, Fort Mumbai - 400 001 Scrip Code: 500710
Dear Sir/Madam,
Sub: Investor Presentation
The Listing Department National Stock Exchange of India Ltd. Exchange Plaza, 5th floor, Bandra-Kurla Complex Bandra (E) Mumbai - 400051 Symbol: AKZOINDIA
Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed a copy of the presentation made to the investors at the investor call held on 4 November 2022 on the unaudited standalone and consolidated financial results of the Company for the quarter ended 30 September, 2022.
This is for your information and record.
Yours Faithfully, For Akzo Nobel India Limited
Harshi Rastogi Company Secretary Membership#A 13642
Encl: as above.
T +91 124 485 2400 Magnum Towers, 9th Floor Golf Course Extension Road, Sector-58 www.akzonobel.co.in Gurugram - 122 011 Haryana, India
Rog,llerod omco GeelanJahAparlmont 111 Floor 8-B M,ddlelon $\reel. Kolk■la -700 071 CIN L24292W81954PLC021516
Akzo Nobel India Ltd. – Investors Call 4th Nov 2022
Blue City given “Let’s Colour” transformation
About Us
New Group Leadership
Gregoire Poux-Guillaume took over as the new Chief Executive Officer of AkzoNobel w.e.f. November 1, succeeding Thierry Vanlancker.
Gregoire (52), a French national, is an international business leader with 25 years of experience in in building challenging business growth and improving margins.
environments,
accelerating
businesses
successful,
profitable
Previous roles include CEO of Sulzer, CEO of GE Grid Solutions Senior Managing Director of CVC Capital Partners.
(erstwhile Alstom Grid)
and
About Akzo Nobel India – a recap
~1,460 employees; 5 offices
5 manufacturing sites; Capacity augmentation & expansion plans in place
Scaling up distribution through online and offline channels
50% increase in network over recent years to cover ~5,000 towns
~20,000 Paint retailers; ~4,000 B2B customers World-class Color Centre for ASC* in Bangalore
Low-cost Innovation Centre driving differentiated products in Thane
Mohali Paints & Coatings
NOIDA Colour Centre & Coatings Office
East - Kolkata
Hyderabad Paints
Bangalore – Coatings R&D, Office
Gurgaon Paints Office
North - Delhi
Gwalior Paints
Mumbai Paints & Coatings R&D
West - Mumbai
South - Chennai
Regional offices
Manufacturing sites
R&D
* ASC – Automotive & Specialty Coatings
Investor Call - Q2 2022-23
Business Environment
India’s growth divergent, but not decoupled from global risks
Global inflation at record high
Crude prices expected to remain high despite recent corrections
Currency volatility continues
India’s growth tempered in a global recessionary environment
Sources: Inflation: Financial Times; Crude Prices: EIA; FX: AkzoNobel; GDP growth: IMF Outlook (Oct 2022)
Investor Call - Q2 2022-23
Continued progress on Grow & Deliver ambition
Here’s how we are driving Grow & Deliver
Enhance customer experience
Brand Building
Focusing on the core with consumer preferred differentiation, Customer- focused solutions; Winning in adjacencies; expanding offerings
Distribution
Expanding breadth and depth through Distribution 2.0, e-Commerce; ~150 new towns covered
Digitization
Digital first approach for consumers, Painter app, Global CRM tool, IoT in sites
Value Creation Initiatives to improve and sustain double digit profitability
People
Imbibing a people-centric culture by becoming more diverse, inclusive and empowering
Innovation
Working with startups to bring best of technology - Power of Science to Magic of Paints
Investor Call - Q2 2022-23
Decorative Paints Festive demand, successful campaigns driving growth
‘Parul aur Painter’ campaign for Dulux Aquatech: 1st Digital campaign wins prestigious IAA INDIA Awards
Economy Primer Launch & Scale Up: 1st Smart Choice Interior primer launched
Successful execution of VT Club event for top dealers
Strengthening WTP portfolio : Interior base coat; PU Coat launch with 15 years performance warranty
Investor Call - Q2 2022-23
Paint The Future India Challenge - Two LoIs signed
Startup Name
City
Winning Solution in Brief
HyperReality Technologies
Bengaluru
Collaborative platform for inspiration, visualization of your space in metaverse
Fluid AI
Mumbai
Multi-channel conversational immersive and interactive AI platform to guide consumers during their painting journey
Investor Call - Q2 2022-23
Coatings New wins and Sustainability initiatives
Marine & Protective
Powder
Industrial Coatings
Automotive & Specialty Coatings
Strong growth in Infrastructure, Oil & Gas and Power, Coastal & Navy and New Construction segments
Healthy growth across Architecture Real (conducive Estate sector), Automotive and I&C (festive demand)
Core sector driving growth across Coil segments Packaging segment B&B by driven segment
Growth across both Premium and Value Brands Strong recovery segment
industry in Auto
I&C – Industrial & Consumer B&B – Beer & Beverages
Investor Call - Q2 2022-23
Q2 and H1 2022-23 Performance
(₹ mn)
Income Revenue from operations Other income Total income
Expenses Cost of goods sold Employee benefits expense Finance costs Depreciation and amortisation expense Other expenses Total expenses
Profit before tax Tax expense Net Profit for the period
Quarter ended 30-Sep-22 30-Sep-21
H1 ended 30-Sep-22 30-Sep-21
9,262 48 9,310
5,708 753 34 196 1,737 8,428
882 228 654
7,408 31 7,439
4,426 662 30 197 1,371 6,686
753 196 557
25%
18,639 89 18,728
13,672 128 13,800
36%
11,429 1,510 58 389 3,425 16,811
1,917 494 1,423
8,034 1,261 56 377 2,522 12,251
1,549 233 1,317
* -2%
8%
^
-1%
*
17%
* indicates YoY change in OPEX/ Revenue ^ 24% PAT growth excluding 168.7 mn tax benefit of Q1 LY
Investor Call - Q2 2022-23
Q2 2022-23 Performance Strong growth momentum continues across businesses; Inflationary pressure persists
Revenue +25% | EBIT +15% | PAT +17%
Revenue
GM & GM%
EBIT & EBIT%
1 0, 00 0
9 ,0 00
8 ,0 00
7 ,0 00
6 ,0 00
5 ,0 00
4 ,0 00
3 ,0 00
9,262
25%
7,408
38.4%
3,554
19%
40.2%
2,982
4 ,5 00
4 ,0 00
3 ,5 00
3 ,0 00
2 ,5 00
2 ,0 00
1 ,5 00
1 ,0 00
5 00
CY
LY
CY
LY
4 5. 0%
4 0. 0%
3 5. 0%
3 0. 0%
2 5. 0%
1 ,2 50
1 ,0 50
8 50
6 50
4 50
2 50
9.4%
867
CY
10.1%
15%
751
LY
1 5. 0%
1 4. 0%
1 3. 0%
1 2. 0%
1 1. 0%
1 0. 0%
9 .0 %
8 .0 %
7 .0 %
6 .0 %
5 .0 %
17%
• Growth driven by pricing. • Strong double-digit growth across all 5 businesses
Inflationary pressures persisting on margins (15% Price Increase vs. 18% RM inflation)
Increase in growth-related opex managed, with 1% reduction in OPEX/ Revenue. 15% growth in EBIT.
PAT growth supported by higher other income
Values in ₹ mn
Investor Call - Q2 2022-23
OWC and Cash Flow
Improved inventory management; OWC/ Revenue @ 9.6%
Operating profit and Investments supporting capex, dividend payout
DIO
DSO
DPO
141
113
99
107
55
57
Sep-22
Sep-21
(₹ mn) Operating profit before Working cap changes Tax Working cap movements Cash Flow from Operating activities Capex Dividend (incl. Div. Tax) Investments Other movements Net increase/ (decrease) in Cash Cash & Cash equivalents at year end
H1 2022-23 H1 2021-22
2,300 (596) (342) 1,362 (404) (1,594) 1,120 (86) 399 1,842
1,702 (565) (2,189) (1,052) (232) (1,366) 2,347 (83) (387) 998
H1 P&L used to calculate OWC parameters
Investor Call - Q2 2022-23
ESG integrated in our Value Chain
Environment
• Member of Together for Sustainability (TfS) • Bringing sustainable difference through Let’s Colour
project @ Jodhpur Blue City
• All sites covered by Lloyd’s Assessment
Guided by our company purpose - People. Planet. Paint.
Governance
• Overarching policies • Good corporate governance • 50% Independent Board • • 100% Board Attendance
Independent Audit Committee
Social
•
Skill training & entrepreneurship embedding Diversity & Inclusion
• 1.5 mn beneficiaries of Aarogya Sakha, a
telemedicine initiative
• Contributing to Responsible Mica Initiative • Partnering with the startup ecosystem
through Paint the Future
• Consistent People safety performance
Investor Call - Q2 2022-23
Concluding Remarks:
•
•
•
To stay on course of Grow & Deliver ambition whilst managing macroeconomic uncertainties
Continuing focus on Brand, Innovation, Distribution, Digitization and Sustainability
Regular Investor engagements
Thank you!
Mural from Jodhpur’s “Let’s Colour” project
Safe Harbour Statement
This report contains statements which address such key issues as AkzoNobel’s growth strategy, future financial results, market positions, product development, products in the pipeline and product approvals. Such statements should be carefully considered, and it should be understood that many factors could cause forecast and actual results to differ from these statements. These factors include, but are not limited to, price fluctuations, currency fluctuations, developments in raw material and personnel costs, pensions, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures, as well as significant market disruptions such as the impact of pandemics. Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more comprehensive discussion of the risk factors affecting our business, please see our latest annual report.