SRF Limited has informed the Exchange about Investor Presentation
The Corporate Relationship Department, BSE Limited Ist 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,
04.11.2022
Presentation- Earnings Call (Un-Audited Financial Results for the quarter and half year ended 30.09.2022)
In continuation of our letter dated 01st November, 2022 informing about hosting of earning call to discuss Un-Audited financial results for quarter and half year ended 30th September, 2022, please find enclosed Investors presentation, of the same for your reference and 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
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Corporate identity No. L181010L1970PLC005197
SRF LIMITED Block-C Sector 45 Gurugram 122 003 Haryana India Tel: +91-124—4354400 Fax: +91-124—4354500 E-mail: info@srf.com Website: www.srf.com Regd. Office: Unit No. 236 & 237, 2nd Floor DLF Galleria, Mayur Place Noida Link Road Mayur Vihar Phase 1 Extension Delhi 110091
SRF Limited
Q2 & H1 FY23 Results Presentation
November 04, 2022
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
Q2 & H1 FY23 Results Overview…..…………………………………………………………….. 10
Q2 & H1 FY23 Segmental Performance……..……………………………………………….. 15
Outlook……………………………………………………………………………………………………... 31
3
COMPANY OVERVIEW
4
Snapshot
Exports to 90+ Countries
Operations in 4 Countries Countries
14 Manufacturing Facilities
7,000+ Global Workforce
12,434 cr Revenue
38% Packaging
42% Chemicals
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)
Others
Coated Fabrics
Laminated Fabrics
Packaging Films
Films for Flexible Packaging
Bi-axially Oriented Polyethylene Terephthalate (BOPET)
Bi-axially Oriented Polypropylene (BOPP)
Technical Textiles
Tyre Cord Fabrics (Nylon & Polyester)
Belting Fabrics
Polyester Industrial Yarn
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
1
2
3
1 2
3
2 1
4
PACKAGING FILMS 3 International Operations
4. KwaZulu - Natal, South Africa 5. Rayong, Thailand 6. Jaszfenyszaru, Hungary
South Africa
4
5
Thailand
Hungary
6
7
Market Leadership Across Businesses
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
8
Growth Levers
Build a Company known and respected for its R&D capabilities
Focus on building leadership businesses
Build and maintain market leadership in business segments
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
Greater focus on ESG initiatives
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
9
Q2 & H1 FY23 Results Overview
10
Abridged Results Overview Consolidated figures
Particulars (Rs. Crore)
Q2 FY23
Q2 FY22
% Y-o-Y
H1 FY23
H1 FY22
% Y-o-Y
Gross Operating Revenue
3,727.8
2,839.0
31.3%
7,622.5
5,538.4
37.6%
EBITDA
EBITDA Margin (%)
Depreciation
Interest
ECF (Gain) / Loss
Profit Before Tax
Profit After Tax
Profit After Tax Margin (%)
Diluted EPS (Rs.)
837.9
665.5
25.9%
1,867.6
1,343.6
39.0%
22.5%
139.3
44.5
36.1
618.1
481.0
12.9%
16.23
23.4%
130.3
23.4
(20.6)
532.4
382.5
13.5%
12.91
6.9%
90.4%
NA
16.1%
25.8%
24.5%
270.0
77.0
61.0
24.3%
253.2
50.8
(27.8)
6.6%
51.4%
NA
1,459.7
1,067.3
36.8%
1,089.0
777.7
40.0%
14.3%
36.74
14.0%
26.25
EPS is recalculated based on post bonus issued and paid-up capital
11
Results Overview - Financial Overview Consolidated figures
Key Financial Ratios
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
12
Results Overview - Revenue & EBIT Consolidated figures
Revenues (Rs. Crore)
Q2 FY22
Q2 FY23
1,126.4
1,830.2
1,331.0
1,071.7
557.9
466.2
86.3
100.4
3,727.8
2,842.3
517.3
251.1
EBIT (Rs. Crore)
Q2 FY22
Q2 FY23
689.2
569.2
179.5
101.4
132.8
62.9
5.8
7.6
CB
PFB
TTB
Others
Total
CB
PFB
TTB
Others
Total
Revenues (Rs. Crore)
H1 FY22
H1 FY23
7,622.8
5,543.8
3,552.6
2,827.0
2,240.0
2,113.0
1050.9
1,037.2
139.9
206.0
EBIT (Rs. Crore)
H1 FY22
H1 FY23
1,037.5
473.4
416.2
396.6
266.5
179.1
7.7
14.4
1,627.6
1,163.8
CB
PFB
TTB
Others
Total
CB
PFB
TTB
Others
Total
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
13
Results Overview - Revenue Share
Q2 FY23
49.1%
35.7%
CB
PFB
TTB
12.5%
CB
PFB
TTB
Others
2.7%
Others
3.0%
H1 FY23
46.6%
37.1%
CB
PFB
TTB
13.6%
CB
PFB
TTB
Others
2.7%
Others
2.5%
Q2 FY22
39.7%
37.7%
19.6%
H1 FY22
40.4%
38.1%
19.0%
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
14
Q2 & H1 FY23 Segmental Performance
Chemicals
Packaging Films
Technical Textiles
Others
15
Chemicals Business
16
Chemicals Business - Results Update
Consolidated figures
PARTICULARS (Rs. Crore)
Q2 FY23 Q2 FY22 % Y-o-Y H1 FY23 H1 FY22 % Y-o-Y
Segment Revenues
1,830.2
1,126.4
62.5%
3,552.6
2,240.0
58.6%
% Contribution to Revenues
49.1%
39.6%
46.6%
40.4%
EBIT
517.3
251.1
106.0%
1,037.5
473.4
119.2%
% EBIT Margins
28.3%
22.3%
29.2%
21.1%
% Contribution to EBIT
75.1%
44.1%
63.7%
40.7%
17
Chemicals Business Specialty Chemicals Business
Segment registered strong performance on account of:
New products witnessing significant traction
Downstream derivatives registered healthy growth
Successfully launched 3 new Agro products and 1 new pharma
product in H1 FY23
Strong
customer
engagement
on more
complex
and
downstream products
Commissioned a state-of-the-art MPP4 plant at Dahej during the
quarter, ramp up in process
Capex Update
The Board approved projects aggregating ₹604 crore for four new plants in the agrochemical space and capacity enhancement of an existing plant at Dahej, India:
o Likely to completed in the next ten-to-twelve months
The Board also approved a project to develop a Kilo Lab at Bhiwadi to address the needs of the Pharma market at a projected cost of ₹9.8 crore
Market Trends
Worldwide agrochemical market reported healthy growth in H1 FY23
India's growth as an alternative specialty chemical manufacturing base has been bolstered via the "China plus one" procurement strategy
Given the challenging raw material situation, continuous efforts
Elevated raw material prices, trending lower
are being made to derisk the supply chain
18
Chemicals Business
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
3 new process patents were granted in H1 FY23, taking the tally to 127 global patents to-date. Overall, the Company has applied for 378 patents
127
Global Patents granted
378
Patents applied
19
Chemicals Business Fluorochemicals Business
Segment delivered steady performance in a seasonally soft
Market Trends
quarter driven by:
Higher realizations and stable volumes across all HFCs
Dymel® HFA 134a/P (pharma grade gas) expanded to
new geographies and reported significant growth
Successfully commissioned Captive Power Plant at Dahej
R125 catalyst replacement completed successfully
With healthy demand from key markets like India, US and
Middle East, SRF to focus on optimally utilizing facilities to
maintain high market share
Structural demand improvement witnessed in the refrigerants segment
Healthy opportunities in key markets of India and USA
Trade barriers being reinforced in US market on some ref. gases
Higher inflation, rise in energy and raw material prices, and supply chain constraints remain key challenges
20
Packaging Films Business
21
Packaging Films Business - Results Update Consolidated figures
PARTICULARS (Rs. Crore)
Q2 FY23 Q2 FY22 % Y-o-Y H1 FY23 H1 FY22 % Y-o-Y
Segment Revenues
1,331.0
1,071.7
24.2%
2,827.0
2,113.0
33.8%
% Contribution to Revenues
35.7%
37.7%
37.1%
38.1%
EBIT
101.4
179.5
(43.5%)
396.6
416.2
(4.7%)
% EBIT Margins
7.6%
16.7%
14.0%
19.7%
% Contribution to EBIT
14.7%
31.5%
24.4%
35.7%
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Packaging Films Business Key Highlights
In a challenging environment, SRF has continued to focus on operational
efficiency measures to ensure it remains one of the lowest-cost producers
in the world
Market Trends
BOPET Films - multiple new lines have gone locally and globally
Segment faced several headwinds that impacted performance during the
o Industry margins are likely to remain
quarter including significant supply addition in BOPET, global demand
slowdown, rising energy costs in Europe, and sharp fall in commodity prices.
However, this trend was partially offset with a sustained demand of BOPP
Films
In H1 FY23, SRF commercialized new products in the segment
Successfully commissioned BOPP Film line at Indore (DTA II), India during
the quarter:
New line will strengthen the Company’s position in BOPP segment
within India and support overall volume growth from Q3 onwards
subdued in the near-term
High energy costs due to the current geopolitical scenario in Europe is impacting operations in Hungary
BOPP Films demand and margins remain relatively stable
Demand is trending towards global suppliers with multi-locational facilities
23
Technical Textiles Business
24
Technical Textiles Business - Results Update Consolidated figures
PARTICULARS (Rs. Crore)
Q2 FY23 Q2 FY22 % Y-o-Y H1 FY23
H1 FY22 % Y-o-Y
Segment Revenues
466.2
557.9
(16.4%)
1,037.2
1,050.9
(1.3%)
% Contribution to Revenues
12.5%
19.6%
13.6%
19.0%
EBIT
62.9
132.8
(52.6%)
179.1
266.5
(32.8%)
% EBIT Margins
13.5%
23.8%
17.3%
25.4%
% Contribution to EBIT
9.1%
23.3%
11.0%
22.9%
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Technical Textiles Business Key Highlights
Business has witnessed lower offtake in Nylon Tyre Cord Fabric
segment
Improved volumes from the Belting Fabrics and Polyester Industrial
Yarn segments contributed to the overall business
Business continues to actively focus on improving operational
excellence and productivity parameters
Market Trends NTCF demand dropped significantly in new and replacement market
Belting Fabrics is witnessing segment healthy demand with increased economic activity
26
Others
27
Others - Results Update Consolidated figures
PARTICULARS (Rs. Crore)
Q2 FY23 Q2 FY22 % Y-o-Y H1 FY23 H1 FY22 % Y-o-Y
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
100.4
2.7%
7.6
7.6%
1.1%
86.3
3.0%
5.8
6.7%
1.0%
16.3%
206.0
139.9
47.2%
31.1%
2.7%
14.4
7.0%
0.9%
2.5%
7.7
5.5%
0.7%
86.6%
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Others - Key Highlights
Coated Fabrics
SRF continues to maintain its leadership in the domestic market backed by:
Consistent demand & a strong order book
Improved contribution from the Value-Added Products
Laminated Fabrics
SRF maintained its price and volume leadership, with the plant operating optimally in Q2 FY23
Margins impacted due to surplus supply and cheap Chinese imports
29
SRF’s Community Engagement
523 unemployed youth trained under the Basic Electrician Training Program, 90% trainees have secured employment
Under the Capgemini Digital Literacy Program, 4,638 trainees earned certification
Under the Foundation’s Sports Program, 12 students won the top 3 positions in the singles and doubles categories in the Inter-district championship, Haryana
30
Outlook
31
Outlook - Chemicals Business
Specialty Chemicals
Growth momentum achieved in H1 looks sustainable given strong order book
Increased complexity and addition of new products from recently commissioned capacities in Agro and Pharmaceuticals sectors to remain in focus
Working on key campaigns to go on stream
Capex commitment remains strong and capex of Rs 1000 cr. + announced over last 6 months
Focus on launch of new products including MPP4
Fluorochemicals
Positive trend is likely to continue – demand & prices in the refrigerants segment is expected to remain healthy in the near to medium term
Refrigerant capacities post catalyst’s change be available in H2 FY23
Focus on ramping up sales of new CMS plant and product approvals for the upcoming PTFE plant
3Q FY23 to focus on order booking for US HFC sales in Q4 FY23
32
Outlook - Packaging Films Business
Aluminum Foil project remains on track
Focus on enhancing sales from new BOPP film line in India and expanding value-added product portfolio
Key raw material prices witnessing softness
Industry witnessing pressure on BOPET Film margins, value added product portfolio and customer relationships should continue to give us the edge
Focus on increasing pace of R&D efforts, sustainability initiatives, efficient cost structures and enhanced capabilities
33
Outlook - Technical Textiles Business
Future demand for NTCF likely to witness revival in H2 FY23
Belting Fabrics and PIY Business remains on a steady wicket
Cost optimization for various plants to remain in focus
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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 378 patents for R&D and technology so far, of which 127 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
Anoop Poojari
CDR India
Tel: +91 98330 90434
Email: anoop@cdr-india.com
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Thank You
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