S.J.S. Enterprises Limited has informed the Exchange about Investor Presentation
July 26, 2023
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 2023-24
In continuation with the Company’s letter dated July 20, 2023, pertaining to Intimation of schedule of Earnings call to be held on Thursday, July 27, 2023 at 11:00 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, 2023.
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
SJS Enterprises Limited
Q1FY24 EARNINGS PRESENTATION
SJS| 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
Q1FY24 Earnings Presentation
June 2023
2
SJS| Today’s Presenters
K A JOSEPH Managing Director
SANJAY THAPAR CEO & Executive Director
MAHENDRA NAREDI Chief Financial Officer
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
• 20+ years of experience in financial management, key accounting & financial analysis, FP&A, fundraising, M&As, legal & compliances, and strategy.
• Previously worked in Minda Corporation, Wipro & GE
• Bachelor’s degree in Law & Commerce from Rajasthan University, Chartered Accountant and Company Secretary from ICAI and ICSI
• 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
Q1FY24 Earnings Presentation
June 2023
3
SJS| Premium aesthetics products manufacturer Overview
Key Facts
Rs 1,172.5 Mn Revenue Q1FY24
26.1% EBITDA margin Q1FY24
4 Production facilities
(Bangalore, Pune, Manesar)
~2,400 Workforce
22 Countries served
175+ Customer locations (Mar’22)
6,700+ SKUs (FY23)
136 Mn Parts supplied (FY23)
Established market leader in an attractive business segment
Operates in the high value-add aesthetics market across multiple consumer-oriented end industries; increased focus on aesthetics and premium content creating opportunity throughout the component supply chain: SJS well-positioned to capitalize on the trends
Market leadership in India for Aesthetic Products
Differentiated, comprehensive product portfolio
Leading edge technologies and a wide product suite including decals, appliques/dials, overlays, logos/3D lux, aluminium badges, in-mold decoratives (IMD), optical plastics and lens mask covers for diverse applications
Demonstrated product portfolio expansion
Legacy of technology and innovation: in-house design / development
Strong in-house design and engineering capabilities and innovation track record across products, technologies and materials; history of new product development and successful commercialization supported by a dedicated R&D team
Long-standing core customer base consisting of leading OEMs
Partner, co-creator and supplier of choice to several leading OEMs in the automotive and consumer durables industry; dominant share of business in India and focused strategy to increase global presence
Well-invested, lean operations designed to support multi-fold revenue
New state-of-the-art manufacturing facility at SJS commissioned in 2018 to support future growth
Design-backed new product development
Entrenched customer relationships
Q1FY24 Earnings Presentation
June 2023
4
Q1FY24 Business & Financial Highlights
SJS| Q1FY24 Highlights
•
•
SJS automotive segment (2W+PV) grew at 18.6% YoY, compared to 2.3% YoY growth in auto industry production volumes during the quarter
Total Revenue at Rs 1,172.5 mn, 13.6% YoY growth
• Continue to generate strong cash flows & have a robust cash & cash equivalents1 at Rs 2,849.7 Mn
• Added Toyota Tsusho & Autoliv as new customers in automobile segment
•
Extended coverage of Swachh Bharat initiative for garbage cleaning from 7 to 12 surrounding villages
July’23 - SJS completes acquisition of 90.1% stake in Walter Pack India (WPI) for a consideration of Rs 2,393 Mn 6
Note: 1) Post WPI acquisition, SJS cash & cash equivalents stands at Rs 461.7 Mn and Net debt at Rs 539.8 Mn
Q1FY24 Earnings Presentation
June 2023
SJS| 15th Consecutive quarter of outperforming the Industry
Q1FY24 - Industry Production Volume1 v/s SJS YoY Sales2
Industry SJS
24.6%
15.0%
1.3%
7.0%
18.6%
2.3%
+
On account of lower growth in Consumer Durables and ‘Others’ segment
13.6%
Q1FY24 SJS exports revenue almost doubled YoY on account of new business wins and recovery in European market
Note: 1) Industry Production Volumes are production in India; 2) For SJS YoY Sales it is Consolidated numbers
Q1FY24 Earnings Presentation
June 2023
7
SJS| Q1FY24 Business Highlights Strong growth story continues…
Growing Mega Accounts - Key Business Projects Won
Adding New Customers
Q1FY24 Earnings Presentation
8
June 2023
8
SJS | ESG Framework
EHS Policy • Compliance with Laws • Prevention of Pollution • Monitoring of Environmental
& Safety Performance • Continual Improvement
Sustainable Operations
• Material Management • Energy Management • Waste Reduction • Resource Efficiency
Human Capital
Employee Engagement
• • Diversity • Health & Safety • Collaboration
Inclusive Growth • Local Community • Customer Satisfaction • Product Quality • Training & Development
Risk Management
Stakeholder Management
• • Code of Conduct • Accountability • Business Principles • Adaptation of New Technologies
SOCIAL
ENVIRONMENTAL
GOVERNANCE
Ethical Business • Business Ethics • Regulatory Compliance • Anti-competitive behaviour • Economic performance
Q1FY24 Earnings Presentation
June 2023
9
SJS | CSR – Serving the Community
Extended coverage of Swachh Bharat initiative for garbage cleaning from 7 to 12 surrounding villages
SJS sponsored, para climber – Manikandan won Bronze medal at IFSC Para climbing World Cup in Switzerland
Q1FY24 Earnings Presentation
June 2023
10
SJS| Q1FY24 Financial Performance (Consolidated)
Picking up pace…
13.6% YoY growth
12.8% YoY growth
11.1% YoY growth
• Revenue* at Rs 1,172.5 Mn on account of 24.6% and 15.0% YoY growth in PV and
2W segment respectively - outperforming the underlying industry
• EBITDA* at Rs 313.8 Mn, EBITDA margins of 26.1%,
• Net Profit* at Rs 180.0 Mn, with a margin of 15.4%
• Overall Domestic sales clocked 8.4% YoY growth; on back of 13.6% & 14.5% YoY growth in PV & 2W segment respectively - outperforming the underlying industry
Q1FY24 Earnings Presentation
11
June 2023
11
SJS| Consolidated P&L Performance
Particulars (INR in Mn) Operating Revenue
EBITDA EBITDA Margin %
Reported PAT PAT Margin %
EPS
Q1FY24
Q1FY23
1172.5
1031.7
313.8 26.1%
180.0 15.4%
278.2 26.4%
162.1 15.7%
YoY%
13.6%
12.8%
11.1%
Q4FY23
1065.7
271.8 24.8%
153.8 14.4%
QoQ%
10.0%
15.5%
17.0%
Q1FY24 Proforma1 1528.7
426.5 27.3%
246.5 16.1%
YoY%
48.2%
53.3%
52.1%
5.90
5.33
10.8%
5.05
16.7%
8.082
51.8%
• Q1FY24 financials indicate 13.6% YoY revenue growth and PAT growth of 11.1% YoY, leading to 10.8% YoY growth in EPS
•
However, Q1FY24 Proforma (incl WPI) financials indicate 48.2% YoY revenue growth and PAT growth2 of 52.1% YoY, leading to 51.8% YoY growth in EPS2
• Q1FY24 Proforma EPS2 is 37.0% higher than Q1FY24 Reported EPS, highlighting that addition of WPI is EPS accretive
Note: 1) Q1FY24 Proforma includes 90.1% consolidation for WPI (as per Indian GAAP); 2) PAT & EPS for Q1FY24 Proforma does not include interest cost of acquisition which will be effective from Q2FY24 onwards. Had the effect of lower Other Income and higher interest cost on loan for WPI acquisition been effective in Q1FY24, it would have led to a Q1 Proforma EPS growth of ~21% over Q1FY24 Reported EPS
Q1FY24 Earnings Presentation
12
June 2023
12
Future Growth Outlook
SJS | One stop aesthetics solution provider
Transforming SJS with a well diversified product suite addressing every requirement of varied customer base
PV (Interior View)
Rs 1200 – 1500 Per vehicle
Legacy Kit Value
3 - 4x growth Per vehicle
Future Kit Value
Q1FY24 Earnings Presentation
June 2023
14
SJS | One stop aesthetics solution provider
Transforming SJS with a well diversified product suite addressing every requirement of varied customer base
PV (Exterior View)
Q1FY24 Earnings Presentation
June 2023
15
SJS | One stop aesthetics solution provider
Transforming SJS with a well diversified product suite addressing every requirement of varied customer base
Two Wheeler
Rs 300 - 500 Per vehicle
Legacy Kit Value
1.5 - 2x growth Per vehicle
Future Kit Value
Q1FY24 Earnings Presentation
June 2023
16
SJS | One stop aesthetics solution provider
Transforming SJS with a well diversified product suite addressing every requirement of varied customer base
Rs 50 - 150 Per appliance
Legacy Kit Value
3 - 4x growth Per appliance
Future Kit Value
Q1FY24 Earnings Presentation
June 2023
17
Consumer Appliances
SJS| Organic growth expected at ~20-25% CAGR, with best-in-class margins
Strategy for organic growth over FY24-26
Exports : Increasing global presence • Penetrate deeper in existing geographies and enter new geographies
• Strong focus on expanding presence in ASEAN
• Strengthening our sales force in Turkey, Brazil, Argentina and Columbia 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
• Building mega accounts with existing customers by expanding the array of products
•
Increase customer base by marketing existing products to new customers and explore cross selling opportunities between SJS and Exotech
Chrome Plating : Increase chrome plating capacity through debottlenecking and partnerships
•
Increasing capacity at the existing plant through debottlenecking and partnering with external chrome plating manufacturers
• Greenfield chrome plating expansion plan to be finalized in CY24 after assessing synergies with neighbouring WPI plant
Q1FY24 Earnings Presentation
June 2023
18
SJS| Inorganic Growth Expected to Boost Organic Growth Trajectory
Merger & Acquisitions Strategy
SJS successfully integrated Exotech business and demonstrated credible business improvement in Exotech’s performance:
• 20.0% YoY growth in Revenue,
increasing from Rs 298.3 Mn to Rs 356.7 Mn in Q1FY24.
• Cost synergies & efficiency resulted in Exotech EBITDA margin expansion by 145 bps YoY from 12.0% in Q1FY23 to 13.5% in Q1FY24.
• Continuous improvement
initiatives led to a cumulative expansion in EBITDA margins by ~300 bps from FY211 to FY23.
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
Expand presence in consumer related industries Enter new segments and expand presence in other consumer related industries targeting • Appliance manufacturers • Consumer electricals
Enter new geographies / OEMs for chrome plating • Expand presence in chrome plating (largest segment)
and increase cross selling opportunities • Overcome logistics cost as bulky parts • Provides direct entry into OEMs to support cross
selling opportunities
WPI to aid in revenue growth acceleration and will be EPS accretive from FY24 itself
Note: 1) FY21 EBITDA Margins is excluding one time gain on sale of land to the extent of Rs 53.83 Mn
Q1FY24 Earnings Presentation
June 2023
19
SJS| FY24 Outlook
▪ SJS will continue to outperform the industry with gradual recovery in exports and domestic 2W markets
▪ SJS expects over 50% YoY revenue growth on account of expected positive outlook for 2W, PV and Consumer Durables
▪ Premiumisation + New Customer Wins + Exports + WPI Acquisition = Higher than industry sales growth for SJS
▪ High visibility : Current order book to be executed in FY24 is over 90% of FY24 forecasted revenue
▪ SJS expects WPI acquisition to be significantly EPS accretive in current year itself. WPI would add incremental scale to SJS given
WPI’s EBITDA is approximately one-third of SJS’ EBITDA
▪ Robust margin profile of business and WPI acquisition to drive PAT growth of ~40% YoY for FY24 as we balance higher growth with
margins
Q1FY24 Performance (INR Mn)
YoY Growth %
Revenue
EBITDA*
EBITDA margin
PAT *
PAT Margin
1,172.5
313.8
26.1%
180.0
15.4%
13.6%
12.8%
11.1%
• Continue to maintain best-in-class margins
• Strong cash flow generation leading to cash and equivalents balance of Rs 2,849.7 Mn in Q1FY24
Q1FY24 Earnings Presentation
June 2023
20
Q1FY24 Earnings Call Invite
SJS Enterprises Limited
SJS Enterprises Limited (BSE: 543387) announced its results for the quarter ended June 30, 2023, on July 26th, 2023. Following the announcement, the management team will host a conference call for investors and analysts on July 27th, 2023, at 11:00 AM IST. The call will commence with a brief discussion on the previous quarter’s performance followed by an interactive question and answer session. Call details are below:
Date
Time
27th July, 2023
11:00 AM IST | 01:30 PM HK/SG | 06:30 AM UK (London) | 01:30 AM EST USA
Duration
60 minutes
Universal Dial in
+91 22 6280 1366 | +91 22 7115 8267
International Toll Free
HK: 800 964 448 | SG: 800 101 2045 | UK: 0 808 101 1573 | USA: 1 866 746 2133
Diamond Pass Link
Diamond Pass Registration (choruscall.in)
Note: Please dial in at least 10 minutes prior to the schedule to ensure that you are connected in time. Audio and transcript will be available with in ten working days after the call on Investors page of company website (www.sjsindia.com).
For further information, please contact: Devanshi Dhruva | devanshi@sjsindia.com
Q1FY24 Earnings Presentation
June 2023
21
THANK YOU
IR Contact Ms. Devanshi Dhruva | Head - Investor Relations devanshi@sjsindia.com
Appendix
SJS| Longstanding history of design backed manufacturing excellence Evolution into a leading design and aesthetics focused business
2023
Walter Pack India Acquired 90.1% stake in WPI. Focused on IMF, IML, IMD and IME technologies for automotive and appliance sectors
2021
Exotech Plastics Acquisition completed to further complement product suite with addition of chrome products
2019-20
Introduced premium / technologically advanced products (formed dials, Optical plastics, lens mask assemblies) and expanded PV customer base with new product range
2018
New manufacturing facility commissioned with 225,000 sq.ft. area and significant capacity boost
2015-17
Entry into new product lines - IMD parts, aluminum & electro formed badges
2015
Everstone Capital acquired a majority stake; exit by Serigraph
Q1FY24 Earnings Presentation
June 2023
24
2010-14
New product addition in premium segment – 3D Lux etc.
2006
Joint Venture with Serigraph, a US based commercial printing player
1987 SJS founded by three entrepreneurs
SJS| Diverse Product Portfolio…(1/2)
Decals & Body Graphics
2D Appliques & Dials
Domes
3D Appliques & Dials
3D Lux Badges
Aluminium Badges
Q1FY24 Earnings Presentation
June 2023
25
SJS| Diverse Product Portfolio…(2/2)
Overlays
Lens Mask Assembly
Chrome plated parts
IMLs / IMDs
Optical Plastics
Aftermarket – “Transform”
Without Anti glare/ Anti Reflection
With Anti glare/ Anti Reflection
Q1FY24 Earnings Presentation
June 2023
26
SJS| Superior financial metrics and resilient business model
Revenue from Operation (INR Mn)
EBITDA (INR Mn) and EBITDA Margin (%)
5000.0
4000.0
3000.0
2000.0
1000.0
0.0
4330.5
3698.6
2372.6
2161.7
2516.2
FY 19
FY 20
FY 21
FY 22
FY 23
1,500.0
1,000.0
500.0
-
31.0%
31.2%
26.7%
643.2
686.1
797.0
985.3
26.3%
1,167.8
26.4%
FY19
FY20 EBITDA
FY21 Margin
FY22
FY23
32.0%
30.0%
28.0%
26.0%
24.0%
22.0%
PAT (INR Mn) and PAT Margin (%)
ROCE (%)
800.0
600.0
400.0
200.0
-
18.7%
18.7%
15.6%
14.9%
15.5%
376.0
412.9
477.6
550.2
672.5
FY19
FY20
FY21
FY22
FY23
PAT
Margin
20.0%
15.0%
10.0%
5.0%
0.0%
35 30 25 20 15 10 5 0
Note: FY22 and FY23 figures consolidated for SJS and Exotech (Reported financials)
28.3
26.4
31.6
27.1
33.1
FY 19
FY 20
FY 21
FY 22
FY23
Q1FY24 Earnings Presentation
June 2023
27
SJS| Experienced & Qualified Board & Management Team
K A Joseph Managing Director – Promoter & Co-founder
❖ More than 34 years of experience in aesthetics printing business
❖ Leads the manufacturing operations for the Company and has
spearheaded technological and product innovation over the years
❖ Also a director on the board of Exotech
Ramesh Chandra Jain Non-Exec Chairman & Independent Director
❖Worked for 25 years in Eicher & retired as group vice chairman
❖Received the Society of British Aerospace Companies Prize in Aircraft
Production ,1972-73 from the Cranfield University,
s r o t c e r i D
f o d r a o B
s P M K
Sanjay Thapar Executive Director and CEO
❖ Over 30 years of experience in the auto industry
❖ Previously Group Chief Strategy Officer with
Ashok Minda Group; MD of Minda Valeo Security Systems
Vishal Sharma Nominee Director
❖ MD - investments and operations with
Everstone Capital Advisors Private Limited
❖ Previously worked with BCG India (1); Sapient
Corp (now known as Publicis Sapient)
Mahendra Naredi Chief Financial Officer
❖ 20+ years of experience in financial management and analysis, key accounting and strategy. Previously worked in Minda Corp, Wipro & GE
Kevin K. Joseph Executive Director
❖ Holds a bachelor’s degree in mechanical
engineering
❖ Previously worked with Tata Elxsi Limited as
a senior design engineer
Kazi Arif Uz Zaman Nominee Director
❖ Ex-MD – private equity with Everstone
Capital
❖ Presently a partner of GestAlt Network
LLP
R. Raju Chief Marketing Officer
❖ Has over 22 years of experience in the field of marketing; Previously worked with ITW India Limited, ITW Signode India Limited etc.
Matthias Frenzel Non-Executive & Independent Director
❖ Previously worked with Visteon Electronics Germany GmbH, S-Y Systems Technologies Europe GmbH and Johnson Controls GmbH
Veni Thapar Non-Executive Independent Director
❖ Presently a partner of V K Thapar & Company,
Chartered Accountants
❖ Was on the board of Bank of India as a part-time, non-official director under the CA (2) category
Sadashiva Baligar Chief Operation Officer
❖ Previously worked with Motherson
Automotive Technologies, Automotive Manufacturers (Malaysia) SDN BHD, Toyota Kirloskar etc.
Note: (1) BCG India – Boston Consulting Group (India) Private Limited; (2) Chartered Accountant
Q1FY24 Earnings Presentation
June 2023
28