Agro Tech Foods Limited has informed the Exchange about Investor Presentation
Agro Tech Foods Limited
29th November, 2022
The Manager, BSE Limited, Floor 25, Pheroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001. Ph. No. 022- 22721233 / 22721234 Fax No. 022-22723121 / 22721072
The Manager Listing Department National Stock Exchange of India Limited Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051. Ph.No. 022- 26598100 / 26598101 Fax No. 022-26598237 / 26598238
Codes:
BSE Scrip code 500215, Co. code NSE Symbol ATFL, Series EQ-Rolling Settlement
1311
Dear Sirs,
Sub: Disclosure under Regulation 30 of the SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015
Further to our earlier letter dated 7th November, 2022 regarding hosting of an analyst and investor meet to be held on 29th November, 2022 at Mumbai, we are enclosing a copy of the presentation proposed to be shared to analysts and investors at the said meet. The presentation would also be placed on the website of the Company.
You are requested to take this on record.
Thanking you,
Yours faithfully, For Agro Tech Foods Limited
JYOTI CHAWLA COMPANY SECRETARY
Encl. a/a.
Corp. Office: 15th Floor, Tower ‘C’, Bldg # 10, Phase II, DLF Cyber City, Gurgaon-122002. Tel: 91-124-4593700, Fax: 91-124-4593799 Regd. Office: 31, Sarojini Devi Road, Secunderabad – 500 003, India. Tel: 91-40-66650240, Fax: 91-40-27800947 Web: www.atfoods.com
CIN: L15142TG1986PLC006957
ATFL an affiliate of
• BRANDS •
Agro Tech Foods Limited Analyst Meet
November 29th, 2022
Company Strategic Vision
The Best Performing Most Respected Foods Company in India
2
Today’s Agenda
•The Last 12 Months & Next 12 Months – Overall and by Category.
•Building Blocks for the Next Rs. 500 crore of Foods.
•Why ATFL is a compelling bet for a $ 1 Billion High Quality Snack Foods Company in India.
3
The Last 12 Months & The Next 12 Months
Overall The Last 12 Months
• Steady continued growth in Foods – Q2 results of Rs. 124 crore the
closest ever to an Annual Revenue Rate of Rs. 500 crore.
• Largely able to navigate through the choppy waters of commodity prices of Q1 with the help of Pricing, Mix, Operating Leverage & softening of input costs post Q1.
• Reduced Total Revenue dependence on Mass Staples (now down to c
5% of the Total Business) in line with Strategy.
• Making clear progress towards becoming “The Best Performing Most
Respected Foods Company in India”.
A completely transformed Company post Covid19 – Foods now the dominant share of Business & Profits.
5
Overall The Next 12 Months
• Deliver strong growth in Foods boosted by an improved RTC growth. • Seek opportunities to improve A&P on Foods with greater stability in
in Edible Oils.
• Scale up Spreads to be Rs. 100 crore+ with RTE close behind. • Build Breakfast Cereals to be an A&P grade business. • Leverage the Chocolate Opportunity presented by High Quality products supported by a Best in Class Distribution Network. • Diversify Premium Staples with the objective of creating a less
volatile business and greater stability in Margin. • Maintain Mass Staples at c 5% of Total Revenues.
Accelerated movement towards a Snack Foods Company with low dependence on Oils.
6
Ready to Cook Snacks The Last 12 Months
• Post strong Growth in FY’22, RTC Popcorn sees impact of lower WFH with YTD Revenues marginally lower than PY. Impact partly mitigated by distribution expansion. With PY normalization expect to return to historical growth levels.
• Commodity headwinds largely addressed through Pricing & Mix.
• Non Popcorn range expanded with Snacking Aids (Sweet Corn/Pizza & Pasta
Sauce) and Snacking Kits (Pasta/Noodles). Both past initial seeding challenges, growing steadily and contributing to c 5% of the RTC category.
Snacking Aids
Popcorn
Snacking Kits
7
Ready to Cook Snacks The Next 12 Months
• Continue to lead Category Growth with Ready to Cook Popcorn. Expand
Distribution & continue investing in Media Support.
• Expand the penetration of Snacking Aids – Sweet Corn, Pizza & Pasta Sauces etc. Leverage ability to deliver High Quality Snacking Aids at affordable price points.
• Scale up Snacking Kits – rely on Consumer Contact as a lever of Growth.
Strengthen with non dairy protein i.e. Plant Meats.
• Initiate entry into the baking & beverage areas of Snacking. Keep evaluating opportunities to expand TAM by leveraging capabilities.
Leverage Consumer Contact, Category Building Capabilities Unique to ATFL.
8
Ready to Eat Snacks The Last 12 Months
• End of Work From Home drives strong growth in Out of Home. • Salty Snacks growth led by RTE Popcorn – biggest beneficiary of OOH. • Sweet Snacks portfolio expanded with launch of Duo Cruncheez – Sweet
now accounting for between 5% and 10% of RTE Snacks.
• Margin headwinds successfully addressed through Grammage Reduction,
Packaging Changes & Go To Market.
• Refinement of business model for Potato/Vegetable Chips underway.
Salty Snacks
Sweet Snacks
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Ready to Eat Snacks The Next 12 Months
• Continue to enhance scale in Salty Snacks categories led by Ready To Eat
Popcorn while working towards greater efficiencies in Extruded and Tortilla Chips.
• Refine business model for Potato/Vegetable Chips – seek to harness
smaller but more profitable niches.
• Seek disproportionate growth in Sweet & Savory Snacks. Enhance ability to go deeper from existing locations by reducing Packaging Material & Freight.
• Continually refine portfolio to profitably fulfill the category role as the
Conveyor Belt for ATFL distribution.
Leverage Diversified Portfolio & Distributed Manufacturing Model.
10
Spreads & Dips The Last 12 Months
• Strong Volume Growth and resultant Share Gains in Peanut Butter. Capacity
expansion work underway to meet higher demand levels.
• PB extension initiated for a Protein play with the launch of “PeAq” Peanut
Butter.
• Expanded Chocolate Spreads Range- Peanut, Almond & Hazelnut. • Clear leadership in Nut Butters with increasing presence in Chocolate Spreads - In house manufacturing and robust distribution footprint.
• Dips range being extended to include Salsa.
Nut Butters
Chocolate Spreads
+--
Dips
H IOt-1 PnnTl"I N
PEAMIIT BUTT CR
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----------
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Spreads & Dips The Next 12 Months
• Continue to build Nut Butters led by recipe based Peanut Butter –
Distribution Expansion, Media Support and Entry Level Packs.
• Undertake Capacity Expansion and Cost Reduction programs to translate
the benefit of higher Volumes into Margin Improvement.
• Keep building Chocolate Spreads for a reasonable scale. Likely No.3 Player now – Continue scaling up while also undertaking recipe modifications.
• Expand Dips (Hummus/Salsa) leveraging ability to deliver high quality
products at affordable price points. Dressings currently lower in Priority.
Leverage broadscale Spreads Manufacturing Capability & Retail Coverage to drive penetration.
12
Breakfast Cereals The Last 12 Months
• Strong Volume Growth driven by Center Filled Cereals with clear product superiority. Increased OOH and Retailing drives Visibility & Distribution.
• Category Distribution starts to nudge the 100,000 store mark.
• Continued growth in the Granola category driven by product superiority
and powerful entry level price points.
• Launch of Value Added Oats - expansion of Category Presence and
thereby benefits of increased Scale. Extruded
+--
Granola
Oats
9 · NUTRIFY-
" 0 .. EY RDA5TIO O AT $
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Breakfast Cereals The Next 12 Months
• Continue to drive Category presence with Center Filled Cereals - Superior
Product Quality & Innovation.
• Together with Distribution Expansion addressing Cereals as a Snack, build
On Shelf Presence in the primary Breakfast Cereals Category with a complete SKU line up – Low Cash Ring Packs, Resealable Bags, Boxes.
• Expand presence in the Granola & Muesli category leveraging credibility
built through our current Granola offering.
• Expand distribution of Value Added Oats driven by superior Value
Proposition.
Leverage advantage in “Cereals as a Snack” to progress towards a No.2 position in Breakfast Cereals.
14
Chocolates The Last 12 Months
• Successfully established credibility in the category with the launch of
Coconut Duo followed by the introduction of Peanut Duo.
• Category Distribution nudging 100,000 stores – fastest growth in ATFL
history.
• Strong Value Proposition combined with Superior Quality drives high level
of in store velocity across socio economic groups.
• Broad SKU line created - from Rs. 5 Bars to Rs. 200 Gift Boxes. • Capacity successfully doubled using a mix of new and used equipment. • Work underway for additional offerings to increase Revenue/Kg.
Count Lines
Bags
+--
Gifting
15
Chocolates Where to Play – Count Lines & Bags
Sales By Company (Rs. Crore)
Sales By Category (Rs. Crore)
700
500
600
2200
6000
500
1100
1100
4700
ATFL
2600
■
Mondelez
Nestle
■
Mars
■
■
Ferrero
■
Others
■
Molded
■
Count
■
Bags
Toys
■
Assortments
■
Focus on Count Lines & Bags with Differentiated Products & Right to Win.
*Management Estimates basis MCA filings & Market Understanding – Revenue at Company Sale Price.
16
Chocolates How to Win – The Importance of Cash Ring
Sales By Price Point (%)
20
25
55
Rs. 5
■
Rs. 10
■
> Rs. 10
■
Dominant share of Transactions happening at Rs. 5 /Rs. 10 price points – Key for Scale.
*Management Estimates basis Market Understanding.
.17
Chocolates How to Win – The Importance of Price/Kg
Most Competitive SKU/Kg
Rs. 5
Rs. 10
Mondelez - Non Wafer
Mondelez - Wafer
Nestle -Non Wafer
Nestle - Wafer
495
385
500
476
513
385
463
498
ATFL - Peanut Duo
625
488
Mars
X
714
Rs/Kg
> 2000
1000- 2000
+Lindt…
(+)Hershey, Ferrero (-) ATFL
(+) Mars
500 - 1000
Mondelez, Nestle, ATFL
300 - 500
ATFL has the ability to Win on both dimensions of Price – (a) Cash Ring and (b) Price/Kg.
*Management Estimates basis Market Understanding.
18
Chocolates The Next 12 Months – Expectations
• Expand Distribution of both Coconut & Peanut Duo products – long
runaway for growth.
• Use In Store Display as a lever for growth. Test the limits of growth possible through Distribution & Display before investing in Media.
• Expand Product Offering to support both Growth and Margin
Improvement – increased presence in the Rs. 500-1000/kg price range.
• Modify Grammage and Pack Sizes to further Improve Margin and create a
profitable self funding business.
• Build Capacity for a business with Annual Revenues of Rs. 100 crore +.
Leverage Superior Quality & Strong Value Proposition to drive disproportionate Growth.
19
Premium & Mass Staples The Last 12 Months – The Next 12 Months
• The Last 12 Months
• Execution underway to make Premium Staples more broad based
while providing procurement scale to Foods e.g. Oats.
• With franchising of Crystal, share of Mass Staples reduced to c 5% of
Total Revenues.
• The Next 12 Months
• Continue to make Premium Staples more broad based and support
procurement strategy for Foods.
• Hold Mass Staples at c 5% of Total Revenues to support Supply Chain.
Premium Staples
+--
Mass Staples
•
- -----
a,-... ..
I
20
The Next Rs. 500 crore
The Next Rs. 500 crore Source of Growth
• RTC & Chocolates will give the largest incremental Revenues:
• Ready to Cook is currently our largest business with a strong growth record
led by Popcorn.
• Chocolate Confectionery is a large category & ATFL has clearly
demonstrated right to win with the Coconut & Peanut Count Lines.
• RTE, Spreads and Breakfast Cereals will also contribute significantly:
• Ready to Eat Snacks steadily gaining scale led by RTE Popcorn.
• Spreads continues to see strong growth led by Peanut Butter.
• Breakfast Cereals growth powered by Center Filled Cereals.
22
The Next Rs. 500 crore Rationale for Expectations
Clear Leadership in Popcorn + Launches w/Right to Win
Leadership in RTE Popcorn + Sweet Right to Win
Right to Win in Count Lines + Network Effect
Right to Win in Cereal Snacks + Distributed Manufacturing
Ready to Cook
Chocolates
Ready to Eat
Spreads
Breakfast Cereals
Clear Leadership in Nut Butters + In House Manufacturing
*Broad Estimation of Management Expectations in terms of Source of Growth & Rationale.
23
Why ATFL is a compelling bet for a $ 1 Billion High Quality Snack Foods business in India
Why ATFL is a compelling bet for a High Quality $ 1 Billion Snack Foods Business in India
• Proven track record of a 19% CAGR in the Snack Foods business over 15
years.
• Profitable Model based on 7-8% A&P spends with demonstrated building of 3 categories already – RTC Popcorn, Peanut Butter & RTE Popcorn.
• Unique Innovation Model which replicates entrepreneurial behavior in a
structured environment delivering c 50% of growth.
•
Retail Coverage of c 0.5 MM stores at an un-matched cost with resultant SG&A % comparable to businesses already of a $1 Billion Size.
• Now largely free from the uncertainties of the Edible Oils business which
has been used to fund the Snack Foods Growth.
25
On our Way….
The Best Performing Most Respected Foods Company in India
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