Sumitomo Chemical India Limited has informed the Exchange regarding Investor Presentation
4 SUMITOMO CHEMICAL INDIA LTD. Corporate Identity Number (CIN) - U24110MH2000PLC124224
Corporate Office: 13/14, Aradhana IDC, Near Virwani Industrial Estate, Goregaon (East), Mumbai - 400 063. Tel.: +91-22-4252 2200 / Fax : +91-22-4252 2380 URL http://www.sumichern-india.co.in
SCIL/SEC/2019-20/08 14th February, 2020
To, BSE Limited, Listing Department, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400001
Dear Sirs,
The National Stock Exchange of India Listing Department, Exchange Plaza, Bandra Kurla Complex Bandra East, Mumbai - 400 051
Sub: Investor Presentation on Financial Results for the quarter and
nine months ended 31st December, 2019
Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we enclose herewith investor presentation on the Financial Results of the Company for the quarter and nine months ended 31st December, 2019.
Kindly do the needful to display the same on your website.
Thanking you,
Yours faithfully, For Sumitomo Chemical India Limited
,0-10,1 \tai
Sushil Marfatia Executive Director
F. (cid:9)
,riEd Office: Building Np. 1, Ground Floor, Shar. Manor Co-op. Boning Society Ltd , Ch,sL aysrti As; X. Rood. Kandivli (East), Murnba; - 400 101.Tel.: +91-22-2a96 61566
SUMITOMO CHEMICAL
Sumitomo Chemical India Limited
Che
r,'
Investor Presentation !nvestor Presentation
February 2020 February 2020
Safe Harbour
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sumitomo Chemical India Limited (the “Company”), have
been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and
shall not form the basis or be relied on in connection with any contract or binding commitment what so ever. No offering of securities of the Company will be
made except by means of a statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no
representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness
of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any
liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are
individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known
and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of
the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the
company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and
advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The
Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this
Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements
and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party
statements and projections.
4.•
2
Q3 & 9M Q3 & 9M Results Presentation Results Presentation
Performance Highlights – Q3 & 9M FY20
40°
Revenue (Rs Crs)
EBITDA (Rs. Crs) & EBITDA Margin (%)
Adj PBT * (Rs Crs)
+21%
523
432
Q3FY19
Q3FY20
50
40
30
20
10
0
+150%
46
8.7%
18 4.2%
Q3FY19
Q3FY20
Revenue (Rs Crs)
EBITDA (Rs. Crs) & EBITDA Margin (%)
+10%
1,979
1,807
9MFY19
9MFY20
300
250
200
150
100
50
0
C (cid:9) )--
+11%
291
263
14.5%
14.7%
9MFY19
9MFY20
20
15
10
5
0
40
0
36
+183%
13
Q3FY19
Q3FY20
Adj PBT * (Rs Crs)
---CD--*
+8%
265
246
9MFY19
9MFY20
✓ Q3 FY20 revenue growth of 21% YoY driven by broad- based volume growth across products, geographies and business segments
✓ Good monsoon and
availability of water have boosted farmer sentiment and resulted in good growth in current rabi season in the domestic market
✓ EBITDA margins improved by 450bps to 8.7% in Q3FY20 lead by Gross Margin expansion and operational efficiencies
✓ PBT adjusted for Merger
expenses grew 183% Y-o-Y
Given the seasonality in the business, it is best monitored on an annual basis since a significate portion of revenue & PAT is recorded in the first half of the year *PBT adjusted for Merger expenses of Rs. 25.3 Crs for Q3FY20 and Rs. 29.7 Crs for 9M FY20
4
Consolidated Profit & Loss Account Statement
4o•
Particulars (Rs. Crs) Revenue from Operations COGS Gross Profit Gross Profit % Employee Expenses Other Operating Expenses Operating EBITDA EBITDA Margin Depreciation Other Income EBIT EBIT Margin Interest Profit Before Tax & Exceptional Exceptional Item Gain / (Loss)* Profit Before Tax PBT Margin Tax Net Profit Net Profit Margin Other Comprehensive Income
Total Comprehensive income for the period
EPS
Q3 FY20 523.0 356.3 166.7 31.9% 44.6 76.4 45.7 8.7% 1.3 9.7 37.3 7.1% 1.3 36.0 -25.3 10.7 2.0% 10.0 0.7 0.1% 2.1
2.8
0.01
Q3 FY19 432.2 296.4 135.7 31.4% 39.2 78.3 18.3 4.2% 2.2 7.0 13.5 3.1% 0.8 12.7 -0.2 12.5 2.9% 10.9 1.6 0.4% -2.0
-0.4
0.03
YoY 21.0%
22.8%
150.1%
176.5%
183.2%
-14.2%
-58.1%
-822.3%
9M FY20 1,979.0 1,317.8 661.2 33.4% 132.8 237.2 291.2 14.7% 5.6 28.0 268.8 13.6% 4.2 264.6 -29.7 234.9 11.9% 53.1 181.8 9.2% 1.6
183.4
3.64
9M FY19 1,806.7 1,173.5 633.2 35.0% 120.3 250.4 262.6 14.5% 5.8 20.4 248.1 13.7% 2.0 246.1 -4.2 241.8 13.4% 74.9 166.9 9.2% 0.6
167.5
3.34
YoY 9.5%
4.4%
10.9%
8.4%
7.5%
-2.9%
8.9%
9.5%
Given the seasonality in the business, it is best monitored on an annual basis since a significant portion of revenue & PAT is recorded in the first half of the year * Merger expenses of Rs. 25.3 Crs for Q3FY20 and Rs. 29.7 Crs for 9M FY20
5
Revenue Breakup – 9M FY20 Vs 9M FY19
40•
Product Breakup
5%
9%
6%
11%
8%
12%
9MFY19
49%
7%
11%
9MFY20
48%
18%
18%
Insecticides Herbicides
PGR Metal Phosphides
Fungicides AND & EHD*
Segment Breakup
73%
71%
27%
29%
9MFY19
9MFY20
Generic
Specility
Geographic Breakup
83%
84%
17%
16%
9MFY19
9MFY20
Domestic
Export
Domestic
Bulk & Branded
Exports
15%
15%
85%
85%
68%
69%
32%
31%
9MFY19
9MFY20
9MFY19
9MFY20
Bulk
Branded
*AND - Animal Nutrition Division; EHD - Environmental Health Division
6
Key Developments
Listing
✓ Equity shares of SCIL were listed and admitted to dealings on the BSE (542920) and NSE (SUMICHEM) effective from January 27,
2020
✓ The outstanding shares post listing stands at 49,91,45,736 of FV of Rs 10
✓ The listing follows the successful completion of the merger of Excel Crop Care with the Company effective from August 31, 2019
4.•
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Company Overview
Formidable Player in the Indian Agrochemicals Space
Journey to 10x Growth in India
Merger of Excel Crop Care Unlocking Value
Autonomous Board with Vast Industry Experience
To Benefit from Strong Parentage of SCC Japan
Leading Agrochemicals Player in India
Overview
Incorporated in 2000 as a wholly owned subsidiary of SCC, Japan to drive expansion of its Health & Crop Sciences business in India
Primarily engaged in manufacture and sale of speciality and generic products under Agrosolutions Division (ASD), Environmental Health Division (EHD) and Animal Nutrition Division (AND)
Strong R&D capabilities with dedicated pool of 75+ engineers and scientists capable of creating new combinations process developments and improvements
Recently Excel Crop Care, a leading player engaged in the manufacturing and marketing of Crop Protection, Soil Nutrition, Seed Treatment and Post Harvest products merged with Sumitomo Chemical India Ltd.
Strong track record of driving growth (11% CAGR over FY11-19 on pro-forma numbers) with strong return ratios (FY19 ROCE of 26%)
4o•
Diversified Product Portfolio & Segment Mix (FY19)
•
ASD
AND & EHD
19%
12%
52%
•
Insecticides PGR Metal Phosphides
9%
• •
8% Herbicides Fungicides
6%
94%
27%
73%
•
Generics
•
Speciality
s t c u d o r P y e K
Product Name Glyphosate
Profenophos
Dantotsu
Tebuconazole
Progibb
Product Category Herbicide
Insecticide
Insecticides
Fungicides
Indicative Use Tea Gardens, non-cropped
Cotton, Soya bean
Vegetables
Wheat, Soya bean, Chilli
Plant Growth Regulator
Citrus Fruits
Aluminum Phosphide
Fumigant
Warehousing of Food Grains
Chlorpyriphos
DL-Methionine
Insecticide
Paddy, Beans, Gram
Animal Nutrition
Poultry
9
Formidable Player in the Indian Agrochemicals Space
5 Manufacturing Facilities
10+ Technical Actives
13,000+ Distributors
190+ Brands
25+ / 200+ Patents / Registrations
1,500+ Employees
4o•
Grown 10X* over FY11-19
Rs. Bn
10X
22
2
FY11
FY19
*On an organic basis, grown 6X
10
Journey to 10x Growth in India
40°
Exploration Phase: 2000 – 2009
2000
Manufacturing JV with New Chemi
2002
Started EHD (Public Health) business
2005
Acquired product - ‘Sulfosulfuron’ Leader rights from Monsanto
2010
SCIL incorporated in India as EHD (HHI) distribution company
2001
Started ASD business
2003
Acquired EHD (HHI) unit from Bayer Vapi
2006
Started Animal Nutrition
Sales ~ INR 2 Bn
Robust growth driven by Organic & In-organic expansion
Acquisition of New Chemi and integration with SCIL
Expanded the business to include animal nutrition chemicals
Rs. Bn
ECC
SCIL
\
9.5
7.2
2.3 FY10-11
11.4
6.9
4.5
12.7
7.8
4.9
Aggressive Growth Phase : 2010 – 2019
Setting-up new organization, control system, PCO function and innovative sales team
Acquisition of Excel Crop Care
...
/
..........---------- ......
...-
....
Merger of Excel Crop Care with SCIL
Rs. 22.2 Bn#
16.3
9.8
6.5
+11%
17.4
10.3
7.1
16.9
9.0
7.9
18.2
9.7
8.5
19.4#
11.9
9.0
22.2#
13.2
10.0
FY11-12
FY12-13
FY13-14
FY14-15
FY15-16
FY16-17
FY17-18
FY18-19
# Inter-company transactions are eliminated. Other operating income is included HHI – Household Insecticides
11
Merger of Excel Crop Care to Unlock Value
4o•
Pre-Merger Structure
Post-Merger Structure
SCC and its affiliates (Japan)
44.98%
I
100.00%
19.98%
Excel Crop Care (ECC)
Public Shareholders
J
35.03%
Sumitomo Chemical India Limited (SCIL)
• SCIL issued shares to shareholders of ECC (other than itself) and to get listed (shares held by SCIL in ECC stand cancelled after merger)
• ECC’s other shareholders, received 51 fully paid-up equity
shares of SCIL of face value of INR 10 each for every 2 (two) fully paid-up equity shares of face value of INR 5 held in ECC
SCC and its affiliates (Japan)
Public & Others
80.3%
19.7%
Sumitomo Chemical India Limited (SCIL)
4 (cid:9)
• Equity shares of SCIL listed on the Stock Exchanges from 27th Jan’20 • Public shareholding to increase to 25% within a period of one year
from the date of listing
01
02
“Long term Commitment from SCC, Japan” 04
03
4
05
De-risked Portfolio Presence in both technical & formulation manufacturing and across complete range of products
Highly Complementary Offerings Spread across generics & speciality and to leverage dual brands for offerings across the price spectrum
Distribution Scale Well-entrenched pan-India network and synergies in product marketing
Operational Synergies Continuous improvement in manufacturing efficiencies, location realignment and process efficiencies to lead to margin expansion
Undivided Parent Focus Backing of a well-established parent company with single focused entity of scale to drive India expansion
12
Well-diversified Platform of Scale (1/2)
40•
[ (cid:9)
Parameter
1 [ (cid:9)
ECCL
1(0)[ (cid:9)
SCIL (Pre-Merger)
]
SCIL (Post-Merger)
Manufacturing Facilities
Plants in Gujarat (2) and Dadar & Nagar Haveli (1)
Plant in Maharashtra (1) and Gujarat (1)
5 plants in West India
Manufacturing Capability
Predominantly a formulation company with facilities for both formulation & technical
Manufacturing of formulations
Presence in both technical & formulation manufacturing
Distribution Capability
4,700+ distributors located across India
9,000+ distributors concentrated in few regions
Improved depth and breadth of the distributors
R&D Capability
3 fully equipped R&D facilities for synthesis and formulation of chemicals
Outsources R&D requirements
Creating new combinations using SCIL’s chemistries
Industry Sub-segments
Insecticides (44%), Herbicides (27%), Fungicides (11%), Metal Phosphides (13%), Others* (5%)
Insecticides (63%), Fungicide (8%), Herbicide (7%) & Others*(22%)
Insecticides (52%), Herbicides (19%), Fungicides (9%), Metal Phosphides (8%), Others* (12%)
*Others - Soil Nutrition, Biological,PGR etc.
13
Well-diversified Platform of Scale (2/2)
40•
[ (cid:9)
Parameter
1 [ (cid:9)
ECCL
1(0)[ (cid:9)
SCIL (Pre-Merger)
]
Product Capability
Major focus on Generics; nascent presence in Biopesticides
Major focus on Speciality Products
SCIL (Post-Merger)
Presence across complete range of products
Business Segments
Presence only in agrochemical segment
Presence in ASD, AND and EHD segments^
ASD focused with presence in AND & EHD^
Range of Crops Served
Staple crops with major presence in Kharif season
Fruits and vegetable crops covering both Kharif and Rabi season
Well diversified product range covering Kharif & Rabi crops
Customer Concentration
Top 5 customers contributes to ~12% of sales
Top 5 customers contributes to ~15% of sales
Top 5 customers contribute ~12% of sales
S&M Capability
Strong wide-spread presence with the distributors / retailers
High degree of engagement with the farmers
Strong presence with both the retailers and farmers
^ASD – Agro-solutions Division; AND – Animal Nutrition Division; EHD – Environmental health Division
14
Autonomous Board with Vast Industry Experience
4o•
Dr. Mukul Govindji Asher Chairman and Independent Director
▪ Professorial Fellow at Lee Kuan Yew School of Public Policy at
the National University of Singapore
▪ Advisor to Govts in Asia on tax policy & pension reforms; and to institutions including IMF, Asian Development
multi-lateral Bank, PFRDA of India, Govt of Gujarat, & World Bank
▪ Member of the panel to review Crawford School of Public Policy
at Australian National University
Sushil Champaklal Marfatia Executive Director
▪ Chartered Accountant with over 42 years of
industry
experience
▪ Worked with New Chemi Industries Limited for 33 years
which was later merged with the Company
Chetan Shantilal Shah Managing Director
▪ Commerce graduate from the University of Mumbai and holds a master’s degree in Business Administration from North Rope University in the USA
▪ Over 43 years of industry experience in various leadership
and senior management roles
Ninad Dwarkanath Gupte Non-executive Director
▪ Experience of 43 years in management of companies operating in industrial chemicals &
fine chemicals, performance chemicals, agrochemicals
▪ Held senior positions at Excel
Industries, BASF India, Herdillia Chemicals and worked as MD of Cheminova India and Agrocel Industries and as Joint MD of Excel Crop Care
15
Autonomous Board with Vast Industry Experience
4o•
Bhupendranath Bhargava Independent Non-executive Director
▪ Experience of over 50 years in areas including banking,
project financing and credit rating
▪ Held directorship in several leading corporates and was on the advisory board of an independent regulatory body set up by the Government of India to work on reforms in telecommunications sector
Tadashi Katayama Non-executive Director
▪ MBA from Vanderbilt University, U.S.A. and a Master’s
degree from Kyoto University in Japan
▪ Associated with Sumitomo Chemical, Japan since 1992 in the Health and Crop Science business unit in various positions
Preeti Gautam Mehta Independent Non-executive Director
▪ 30 years of experience in corporate laws, foreign investment and collaborations, mergers and acquisitions and private equity investments, banking, franchising and hospitality
Hiroyoshi Mukai Non-executive Director
▪ Associated with Sumitomo Chemical Group for over 30 years ▪ Holds a bachelor’s degree from the University of Osaka,
Japan
16
To Benefit from Strong Parentage of SCC Japan
About SCC, Japan
4o•
✓ SCC is a leading Japanese research driven diversified chemical company listed on the Tokyo Stock Exchange with consolidated sales revenue for FY19 of US$ 20.8 bn and Health & Crop
Sciences Sector of US$ 3.4 bn
✓ Offers diverse range of products globally in the fields of petrochemicals, energy and functional materials, IT-related chemicals and materials, health and crop sciences products and
pharmaceuticals
SCC’s Health and Crop Science Sector - Undivided Focus for Leadership in India
✓ SCC’s Health & Crop Sciences Sector manufactures specialized solutions as crop protection and enhancement
products, agricultural materials, and methionine
✓ SCC holds 12,600+ Patents of which ~34% are in Health & Crop Science
✓ Strong pipeline of Agro-Solutions and Environmental Health products with business potential of ~US$1.4 -$1.8 bn
✓ Current ownership in SCIL: 80.3% (to reduce to 75% within a period of one year from listing date as prescribed under
the applicable regulations)
✓ Benefits from Global presence of SCC Japan to boost exports due to global distribution channels and presence
across 40 countries
✓ Technical expertise, financial strength and market reach to witness strong improvement
✓ Inculcate Japanese practices in long term strategic planning, manufacturing proficiencies, work culture, focusing on
teamwork
✓ Development of active ingredients and broad range of formulation research
✓ Introduction of products manufactured globally and which are not currently present in Indian market
✓ Access to new active ingredients without additional capex, keeping existing SCIL facilities available for manufacture
of other molecules
3.5
3.4
3.3
3.2
Focused on developing proprietary products and technologies
SCC’s Health & Crop Sciences Sector is one of the leading R&D Spenders Globally – Key Differentiator
8.8%
8.6%
8.7%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
3.1 US$ Bn
3.2
I _
Revenue
FY17
3.4
FY18
3.4
FY19
R&D expense to Revenue
17
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Sustainable Drivers for Growth
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Diversified & De-risked Portfolio Across the Agro- Chem Value Chain
Strategically Located Manufacturing Facilities
Strong Focus on R&D and Process Innovation
Strong Brand and Well- Entrenched Distribution Network
Expanding Brand Visibility and Connect using Innovative Initiatives
Well placed to benefit from Sector Tailwinds
Thrust on Safety, Health and Environment (SHE)
(cid:9) (cid:9) (cid:9) (cid:9) Diversified & De-risked Portfolio Across the Agro-Chem Value Chain
4o•
Balanced Presence Across Key Sub-Segments of the Agro-Chem Value Chain
Geographic Diversification with Exports to over 60 countries
Insecticides Herbicides PGR Metal Phosphides Fungicides AND & EHD
8%
11%
6%
8%
FY19
49%
18%
✓ Greater focus on high growth, stable and high profitable segments
such as Herbicides, PGR, Bio-rational products
✓ Concentrated efforts now on fruits & vegetables, paddy and other
high growth segments
✓ Increasing contribution from PGR segment and offerings for both
Kharif and Rabi crops to reduce seasonality in the business
✓ One of the highest proportion of environmentally-friendly products
in the Industry
Domestic 78%
FY19
Exports 22%
8%
19%
33%
Diversified Product Portfolio with low Dependence on Individual Products
✓ Top 10 products contributes less than 50% of Total Revenue
✓ No product / molecule contributes more than 15% of Total Revenue
Well-Diversified across multiple dimensions
4%
16%
20%
1
North America
South America
• • • • • •
Europe
Asia
Japan
Africa
Business Segments
0 + 0 + 0 + 0 + 0
Crops Served
Geographies
Customers
Products
19
(cid:9) Strategically Located Manufacturing Facilities
4o•
Connectivity to Major Cities and Proximity to Main Highways, Ports Reduces Logistic Time and Costs
Plant Location
Area (acres) Segment Served
Product Manufactured
Bhavnagar
~76
Gajod
~120
Tarapur
Vapi
Silvassa
~5
~6
~3
Manufacturing of Technical Grade Pesticides and Formulation Development Production and manufacturing of Metal Phosphides, Sulphur WDG and other WDG formulations Production and manufacturing of Active Ingredients
Formulation & Packaging
Formulation of Glyphosate and Other Speciality Products
Chlorpyriphos, Profenophos, Glyphosate, Tebuconazole Tech, Quinalphos, Imidacloprid, Thiacloprid, Acetamiprid, Byspyribac Sodium, Aluminium Phosphide, Zinc Phosphide, Sulphur WDG, Fenpropathrin
Gajod
Bhavnagar
Tarapur
Silvassa
Vapi
*
Mumbai – Head Office
5 Manufacturing Plants
4 Branches & 68 Depots Pan India
2.
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tee Maharashtra
,
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, •-.:
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Maps not to scale. All data, information, and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness
20
Strong Focus on R&D and Process Innovation
End-to-End Product Development Capabilities
✓ 3 fully equipped, DSIR approved R&D labs located at Mumbai, Bhavnagar and Gajod capable of synthesis, technical product and formulation development
✓ R&D Team comprises of 75+ qualified and dedicated engineers & scientists of which 10+ are PhDs with more than 15 years of Experience
✓ 25+ patents granted across various geographies; 9 applications filed
✓ Pipeline of 9 new combination products /pre-mixtures currently under development (5 insecticides, 2 fungicides, 2 PGR) and 2 Technical products (1 Insecticide & 1 Herbicide) for manufacturing in India
✓ R&D facilities to gain capability for creating new processes and new combinations using SCC Japan’s chemistries which would help improve production processes and efficiency
✓ Feasibility of SCC Japan’s new molecule pipeline being studied and
evaluated in an Indian context
4.•
21
D E V E L O P M E N T
F O R M U L A T I O N
Strong Brand and Well-Entrenched Distribution Network
4o•
I (cid:9) I (cid:9) I (cid:9) I (cid:9) I (cid:9) I (cid:9)
✓ Strong brand with market leading position across various product categories
✓ Dual brand portfolio can offer products at all price points serving multiple
customer sub-segments
✓ In-depth knowledge of own research products, proven go-to-market strategy and deep farmer connect facilitates launch of Speciality products
✓ On-field demonstration of products, training of farmers in using the products,
building awareness among stakeholders in relation to the products
✓ Pan-India distribution network ensures strong presence with both
retailers and farmers and on-time feedback mechanism
✓ Scale and diversity of product offerings lead to superior bargaining power
with distributors and provides one-stop solution for farmers
23 States
68 Depots
13,000+ Distributors
1 million+ Farmer Connect through 1,400+ Field / Market Development Officers
~40,000 Dealers
~600 Sales Team
Domestic
18%
Bulk & Branded Contribution (FY19)
Exports
57%
43%
82%
•
Bulk
•
Branded
22
Expanding Brand Visibility and Connect
4o•
✓ Wide range of generics and speciality products for Increased crop presence and providing crop
protection solutions
✓ More than 1,400+ Relationship managers connecting to 1 million+ farmers throughout crop cycle
✓ Over 100 brands covering maximum of crops and pest segments
✓ 13,000+ distributors, 70,000+ dealers and 68 Depots help in expanding brand visibility and connect
✓ More than 500+ Qualified and skilled managers in Sales, Marketing and customer support
✓ Company with 20+ mega brands with high brand recall
✓ Healthy geographical Brand coverage throughout India including North East and J&K
✓ Optimum use of advertising media with increased Digital Platforms presence
23
Digital Marketing Initiatives
Develop “Digital Marketing” as a parallel support to Traditional marketing system leading to improved sales.
✓ Our Digital Assets : 17 websites, currently driving about 6,342 visitors everyday.
YouTube - Advantage
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http://danzapower.com/
http://progibbeasy.com/
Informative Video on Fall armyworm in Maize 48,251 views (since Jun 2019) and counting Youtube Link
Informative and Testimonial Combined Video on Pink Bollworm in Cotton and Danitol as Remedy 55,360 views (since May 2019) and counting Youtube Link
✓ Successful campaign to introduce the QR codes of http://www.sumitomoproducts.com/ to the
✓ Videos in 9 major regional languages
retailers and farmers.
✓ The campaign drove 44.44% of the website visitors through QR codes.
✓ 10 channels on YouTube with informative and testimonial videos
24
Well Placed to Benefit from Sector Tailwinds
4o•
Pesticides: Market Share by Segment
1%
5%
22%
o
PGR Seed Treatement
• •
FY18
47%
25%
Insecticides Fungicides Herbicides Source: Data from CLI 2018
• • • . (cid:9)
Highly Underpenetrated Market
Significant growth opportunity for Indian Players
Pesticide Consumption (Kg/ha)
Agrochemical Market Size (US$ bn)
13
12
< 1
7
5
5
4.1
+8%
8.1
India
China
Japan
USA
France
UK
FY16
FY25E
Yield improvement is critical for increasing food production to feed growing population and hence crop protection products are critical to reduce crop losses
Advantage India
✓ Technically Trained Manpower
✓ Supportive Government Policies
✓ Rising Population
✓ Strong Safety, Health & Environment
✓ Increasing Food Demand
✓ Legal & Regulatory Compliance
✓ Strong R&D
✓ Customer Relations Management
✓ Operating Efficiencies
✓ Increasing demand of
Horticulture & Floriculture
Policy Initiatives
I
✓ Increasing MSP’s ✓ Water management and rain-water harvesting ✓ Enhancing exports of rice and wheat ✓ M-Kisan ✓ National e-Governance Plan ✓ Pradhan Mantri Fasal Bima Yojana ✓ Amending the Insecticides Act, 1968, to be replaced by Pesticides Management Act ✓ Government’s plan to double farmer’s Income
China‘s Competitiveness Eroding
✓ Increased Capital Costs ✓ Currency Appreciation ✓ Stricter Environment
Regulations
✓ Reduction in government
subsidies
✓ Global players diversifying
supplier risk
25
Thrust on Safety, Health and Environment (SHE)
Quality Certifications Ensure Consistent product quality and healthy working environment at manufacturing sites
ISO:9001:2015, sites at Bhavnagar, Gajod, Tarapur and Silvassa; ISO:9001:2015 at Vapi
ISO-14001:2015 and OHSAS18001:2007 for the manufacturing
Abiding by SCC Japan’s EHS Policies
0
4.•
A8000 Certification for Social Accountability in Bhavnagar and Gajod
Dr. Vikram Sarabhai award for developing green technology from department of Science and Technology, Government of Gujarat
Efforts focused on reducing effluent load and effluent treatment cost, for staying innovative and competitive in the market
The quality of the products is maintained and upgraded to the applicable national and international standards through rigorous pursuit of Six Sigma initiative
Focused on energy conservation and energy cost reduction: 50% of total power requirement through wind and solar power generation plants
Expanding solar power plant capacity in line with towards green energy would also help in reducing dependence on outsourced power as well as in energy cost reduction
3R Principle: Recovery – Recycle – Reuse
Safety audit, training programmes and other safety management processes and programmes are carried out/conducted at regular intervals
All the manufacturing and warehousing sites of the Company are covered by safety audit
Certificates of appreciation received ten times from jointly by Gujarat Safety Council and Dish
Government of Gujarat for achieving 10 lakh accident free man-hours
Certificates of merits received from jointly by Gujarat Safety Council and Dish Government of Gujarat for achieving 20 lakh accident free man-hours
Certificates of honour received two times jointly by Gujarat Safety Council and Dish Government of Gujarat for achieving 30 lakh accident free man- hours
Focus on purity, quality and timely delivery of products to the customer
26
Growth Strategies & Financial Performance
Growth Strategies
Performance Highlights
Profit & Loss Account
Balance Sheet
Cash Flow
Growth Strategies
Continued Investment in R&D and Pipeline
Capacity Expansion
0 0 0 m
• Aim to invest in seamless integration of R&D between SCIL and SCC units which would help improve our production processes, enhancing yields and efficiency Introduce new products as per market demand
•
• Driving operational efficiencies maintaining highest
safety
•
standards and Responsible Care compliances Invest ~15% of consolidated EBITDA every year for upgradation of manufacturing facilities and capacity expansion to cater to strong domestic/global demand
•:.
Further Brand Development
Development of Combination Products
Expand Export Business
Gil
•
Investments for marketing of new and existing products and brands
training
• On-field
demonstrations,
of farmers for building ground-level demand generation supported by digital marketing Focus on high margin brands
• • 11 products registration in process to utilization
further including product level expansion
improve
capacity
• Pipeline of 9 new combination products / pre-mixtures currently under development (5 insecticides, 2 fungicides, 2 PGR) & 2 Technical products (1 Insecticide & 1 Herbicide) for manufacturing in India Introduction of new molecules in speciality segment leveraging SCC’s support
•
•
•
Enhance exports in regions like Africa and Europe Leverage SCC’s Global supply chain and marketing network to drive exports
4o•
i
Achieving Market Leadership in India
▪
▪
▪
▪
▪
Balanced portfolio of generic and speciality products
Consolidate position as best agro-chemical marketer in India
Strive for manufacturing excellence
Set-up a strong management & team
Lay the foundation for next generation leadership
Leverage expertise in successful product launches and capacity expansions to fuel future growth
28
Performance Highlights
40•
Revenue (Rs Crs)
EBITDA (Rs. Crs) & EBITDA Margin (%)
PAT (Rs Crs)
300 250 200 150 100 50 0
+16%
2,212
1,913
FY18*
FY19
Networth (Rs Crs)
+10%
1,048
954
11.3%
217
11.9% 264
FY18
FY19
12 10 8 6 4 2 0
+14%
166
145
FY18
FY19
RoCE (%)^
Net Working Capital Days
25.2%
25.9%
129
132
✓ Combined entity ~2x in size
✓ Net debt free balance sheet
✓ Strong margin profile maintained
✓ Additional upside to be realized
on account of synergies
FY18
FY19
FY18
FY19
FY18
FY19
1. Given the seasonality in the business, it is best monitored on an annual basis since a significate portion of revenue & PAT is recorded in the first half of the year 2. Appointed date for merger of ECC and SCIL is 1st Apr’18 *Revenue is Net of Excise Duty.
^ ROCE – {EBIT/ (Net Worth + Borrowings – Cash)}
29
Consolidated Profit & Loss Account Statement
4o•
Particulars (Rs. Crs)
Net Revenue from Operations
COGS
Gross Profit
Gross Profit %
Employee Expenses
Other Operating Expenses
Operating EBITDA
EBITDA Margin
Depreciation
Other Income
EBIT
EBIT Margin
Interest
Profit Before Tax
PBT Margin
Tax
Net Profit
Net Profit Margin
Other Comprehensive Income
Total Comprehensive income for the period
EPS
YoY
15.6%
11.7%
21.4%
17.7%
14.2%
FY19
2,211.7
1,458.9
752.8
34.0%
161.5
327.7
263.5
11.9%
27.8
27.8
263.5
11.9%
3.7
259.8
11.7%
94.0
165.8
7.5%
0.0
165.8
3.3
FY18
1,912.9**
1,238.7
674.2
35.2%
147.5
309.6
217.1
11.3%
23.7
30.5
223.8
11.7%
2.8
221.0
11.6%
75.8
145.1
7.6%
5.1
150.2
2.9
1. Given the seasonality in the business, it is best monitored on an annual basis since a significant portion of revenue & PAT is recorded in the first half of the year 2. Appointed date for merger of ECC and SCIL is 1st Apr’18 * H1 FY19 consolidated figures are based on management accounts; **Revenue net of Excise Duty
30
Consolidated Balance Sheet
4o•
Assets (Rs. Crs) Non-Current Assets
Property, Plant and Equipment Capital work-in-progress Right to use an Asset Other Intangible Assets Intangible Assets under Development Financial Assets (i) Investments (ii) Loans Non-Current tax Assets (net) Other non-current Assets Current Assets
Inventories Financial Assets
(i) Investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances other than (iii) above (v) Loans (vi) Other financial assets Other Current Assets Total Assets
Sep-19 Mar-19 Mar-18 312.7 318.6 359.1 264.8 277.2 283.7 4.5 3.2 4.5 - - 30.9 1.9 2.1 1.6 4.3 4.9 4.9
0.1 8.6 19.5 5.3 1,805.8 546.7
68.8 1,039.0 92.6 0.9 4.8 11.2 41.9 2,164.9
0.1 7.8 18.8 4.4 1,541.4 680.6
- 671.0 50.5 0.9 3.3 17.0 118.1 1,860.0
0.1 7.3 24.8 5.1 1,345.7 609.3
- 551.8 73.5 0.8 3.7 10.4 96.3 1,658.4
Equity & Liabilities (Rs. Crs)
EQUITY
Equity Share Capital
Other Equity
Non-current liabilities
Financial liabilities
Financial Liability
Provisions
Deferred tax liabilities (net)
Non-current Tax Liabilities
Current liabilities
Financial liabilities
(i) Borrowings
(ii) Trade Payables
(iii) Other financial liabilities
Other current liabilities
Provisions
Current tax liabilities
Total Equity & Liabilities
Sep-19
Mar-19
1,214.8
1,048.4
274.6
940.2
41.8
17.8
16.7
1.5
5.8
274.6
773.8
35.4
-
15.6
14.6
5.2
Mar-18
-il
954.0
274.6
679.4
32.5
-
12.7
18.1
1.7
908.2
776.1
671.9
-
759.4
78.6
38.6
5.0
26.6
19.7
596.8
63.2
87.1
2.6
6.8
10.1
527.3
55.6
70.1
2.3
6.6
2,164.9
1,860.0
'IM
1,658.4
1. Given the seasonality in the business, it is best monitored on an annual basis since a significant portion of revenue & PAT is recorded in the first half of the year 2. Appointed date for merger of ECC and SCIL is 1st Apr’18
31
Consolidated Cash Flow Statement
400
Cash Flow Statement (Rs. Cr)
Net Profit Before Tax
Adjustments for: Non-Cash Items / Other Investment or Financial Items
Operating profit before working capital changes
Changes in working capital
Cash generated from Operations
Direct taxes paid (net of refund)
Net Cash from Operating Activities
Net Cash from Investing Activities
Net Cash from Financing Activities
Net Decrease in Cash and Cash equivalents
Add: Cash & Cash equivalents at the beginning of the period
Cash & Cash equivalents at the end of the period
Sep-19
Mar-19
Mar-18
224.2
21.0
245.2
-42.0
203.3
36.0
167.3
-87.8
-36.9
42.6
50.5
93.0
259.8
18.6
278.5
-112.7
165.8
88.1
77.7
-35.3
-65.4
-23.1
73.5
50.5
221.0
9.6
230.6
-100.0
130.6
83.1
47.4
-39.6
7.2
15.0
58.6
73.6
1. Given the seasonality in the business, it is best monitored on an annual basis since a significant portion of revenue & PAT is recorded in the first half of the year 2. Appointed date for merger of ECC and SCIL is 1st Apr’18
32
Awards & Accolades
4o•
Jamnalal Bajaj Award for “Fair Business and Practices”
First ever president’s gold shield for import substitution
First award for export of organic and inorganic chemicals
Shramveer award for improvement of product efficiency received from national level Delhi
Vishwakarma Rashtriya Puraskar received for process development
National Safety Award by Labour Ministry, Government of India for safety performance
ICMA award for innovation and purposeful programs for social progress
Shramveer Award to employees from Labour Ministry, state level received six times
First Sir P.C. Ray award for development of products and process with indigenous technology
Punjab Haryana Delhi Chamber of Commerce and Industries award for ethical business
Winner active ingredient trophy and certificate from M/s. Bayer
Trishul award for the excellent performance for exports in international markets
Shram Bhushan Award to employees received five times
Shram Ratna to employees, received seven times
Shram Shri award to employees received three times
Gujarat State Safety Certificate for safety commitment
33
Key Takeaways
4.•
Formidable Player in the Indian Agro-chem Space
Experienced Management Team and Board of Directors
Well-diversified Product Portfolio Across Agro-Chem Value Chain
Strong Brand and Well-Entrenched Distribution Network
▪ Strong / leadership position across
products and processes
▪ Ability to develop new combination products (9 under registrations and additional under development)
▪ Strong
management
autonomous experience and domain expertise
Board with
and vast
▪ Localized experience enables better understanding of market needs to drive growth
▪ Multi-product,
multi-geography,
multi-customer de-risking
▪ 23 states, 68 depots, 13,000+ distributors, 40,000+ dealer network
▪ Access to an impressive range of own actives along with significant speciality exposure towards product products offerings at all price points serving multiple customers sub-segment
resulting
in
▪ High credibility and brand recall amongst famers and the trade on account of transparent and ethical business dealings
To Benefit from Strong Parentage of SCC Japan
State-of-the-art Manufacturing and R&D Facilities
Strong Track Record of Driving Growth
▪ Benefits from international standing of SCC Japan; most well revered brand renowned for its quality
▪ Access to SCC’s global supply chain and global R&D activities (one of the in largest development of actives and broad range of formulation research
spenders)
resulting
▪ Operates
five
manufacturing facilities with state-of-the-art plants at strategic location which helps reduce logistic time and costs
▪ Capacity not a constraint allowing for significant growth on existing investments
▪ Holds 27 patents and further 9
applications filed
▪ Grown 10X over FY11-19 driven by organic and inorganic expansion; entity 11% CAGR (including Excel Crop Care) over the same period
for merged
▪ Debt free balance sheet with strong
return ratios
34
For further information, please contact:
Company :
Investor Relations Advisors :
Sumitomo Chemical India Limited
Strategic Growth Advisors Pvt. Ltd.
CIN : U24110MH2000PLC124224
CIN : U74140MH2010PTC204285
Mr. Sushil Marfatia Executive Director investor.relations@sumichem.co.in
Mr. Varun Divadkar / Mr. Jigar Kavaiya 97637 02204 / 99206 02034 varun.divadkar@sgapl.net / payal.dave@sgapl.net www.sgapl.net
35