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,
29.07.2021
Presentation- Earnings Call (Un-Audited Financial Results for the quarter ended 30.06.2021)
In continuation of our letter dated 26th July, 2021 informing about hosting of earning call to discuss Un- Audited financial results for quarter ended 30th June, 2021, 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 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 Sr 237, 2nd Floor DLF Galleria, Mayur Plate Noida Link Road Mayur Vihar Phase 1 Extension Delhi 110091
Corporate identity No. L181010L1970PLC005197
SRF Limited
Q1 FY22 Results Presentation July 29, 2021
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
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 our 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 our reports 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.
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
2Q1 FY22 Results Presentation | 2
Contents
04
Company Overview
13 10
Q4 & FY21 Q1 FY22 Segmental Performance Results Overview
15
Q1 FY22 Segmental Performance
31
Outlook
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
3 Q1 FY22 Results Presentation | 3
COMPANY OVERVIEW
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Snapshot
8,400 INR Cr Revenue
2,188 Cr EBIDTA
1,198 Cr PAT
43%
Chemicals
39%
Packaging
15%
Technical Textiles
Exports to 75+ Countries
14 Manufacturing Plants
Operations in 4 Countries
7,000 Global Workforce
FY 21 numbers pertaining to continuing operations only SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 5 Q1 FY22 Results Presentation | 5
Overview - Business Profile
Revenue
EBIT
No of Plants
3,645
728
2
3,292
898
6
1,240
177
4
232
26
2
Chemicals
Packaging Films
Technical Textiles
Others
Specialty Chemicals
Films for Flexible Packaging
•
•
Bi-axially Oriented Polyethylene Terephthalate (BOPET)
Bi-axially Oriented Polypropylene (BOPP)
•
•
Intermediates for AI / API / Applications
Contract Manufacturing, Custom Research & Synthesis
Fluorochemicals
•
•
•
Refrigerants
Pharma Propellants
Industrial Chemicals
•
•
•
Tyre Cord Fabrics (Nylon & Polyester)
Belting Fabrics
Polyester Industrial Yarn
•
•
Coated Fabrics
Laminated Fabrics
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
These numbers are based on FY21 results; pertaining to continuing operations only
6 Q1 FY22 Results Presentation | 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
1 1
1
PACKAGING FILMS 3 National Operations
1. Uttarakhand, India- Kashipur 2. Madhya Pradesh, India - Special Economic Zone (SEZ), 3. Pithampur, Indore - Bagdoon, Pithampur, Indore
2
3
1 2
3 International Operations
4. KwaZulu - Natal, South Africa 5. Rayong, Thailand 6. Jaszfenyszaru, Hungary
3
2 1
4
LAMINATED FABRICS 1 National Operation
1. Uttarakhand, India - Kashipur
COATED FABRICS 1 National Operation
1. Tamil Nadu, India -
Gummidipoondi
International Operations
4
5
6
South Africa Thailand Hungary
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 7
Market Leadership Across Businesses
Speciality Chemicals
Fluorochemicals
Packaging Films
Technical Textiles
▪ Established relationship with
marquee customers
▪ Capability in scaling up pilot processes and creating value through operational excellence
▪ High levels of customer
engagement backed by strong R&D, technical service, product and quality management under one roof
▪ Handling complex reactions - halogenation, ethylation, hydrogenation, nitration, diazotization, grignard, isomerization, amination, organocatalysis, and decarboxylation
▪ Unique and fully integrated facilities extending across a wide range of refrigerants and industrial chemicals
▪ Domestic leadership in HFC’s with strong trade distribution network; significant market share of Fluorochemicals in India with global scale operations
▪ One of the few global
manufacturers for Pharma grade 134a/P - propellant in metered dose inhalers
▪ Among the top five global manufacturers for key Fluorochemicals products
▪ 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
offering value added products in close proximity to customer locations
▪ Domestic market leader in Tyre Cord manufacturing and Belting Fabrics
▪ 40% share in India’s Nylon Tyre Cord market. 2nd largest player globally
▪ 3rd largest manufacturer of
Conveyor Belting Fabrics in the world
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 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
Drive growth in new businesses De-risk from Technical Textiles Business
Q1 FY22 Results Presentation | 9
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 RESULTS OVERVIEW
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Abridged Results Overview - Consolidated
Consolidated figures
Particulars (Rs. Crore)
Q1 FY22
Q1 FY21
% Y-o-Y
Gross Operating Revenue
2,699.4
1,545.2
EBIDTA
EBIDTA Margin (%)
Depreciation
Interest
ECF (Gain) / Loss
Profit Before Tax
Profit After Tax
Profit After Tax Margin (%)
Diluted EPS (Rs.)
678.1
25.1%
123.0
27.5
(7.2)
534.9
395.3
14.6%
66.72
382.4
24.8%
104.0
43.2
9.1
226.2
176.9
11.4%
30.77
74.7%
77.3%
18.2%
-36.4%
-179.1%
136.5%
123.5%
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
11
Q1 FY22 Results Presentation | 11
Results Overview - Financial Overview
Consolidated figures
Key Financial Ratios
PARTICULARS
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
EBITDA Margin
17.59%
13.59%
20.43%
22.13%
21.42%
17.69%
19.00%
20.90%
26.05%
PAT Margin
6.69%
4.04%
8.78%
9.51%
10.87%
8.38%
8.33%
12.70%
14.26%
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
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
12
Q1 FY22 Results Presentation | 12
Results Overview - Revenue & EBIT
Consolidated figures
REVENUES (Rs. Crore)
Q1 FY21
Q1 FY22
EBIT (Rs. Crore)
Q1 FY21
Q1 FY22
5 . 1 0 7 , 2
7 . 6 4 5 , 1
7 . 3 1 1 , 1
2 . 5 0 7
3 . 1 4 0 , 1
4 . 7 7 6
9 . 2 9 4
4 . 0 4 1
7 . 3 2
6 . 3 5
C B
PFB
T T B
OT HE RS
TOTA L
3 . 2 2 2
8 . 6 3 2
7 . 0 2 2
6 . 8 8
C B
PFB
7 . 3 3 1
) 0 . 4 1 (
T T B
7 . 4 9 5
0 . 5 9 2
9 . 1
) 3 . 0 (
OT HE RS
TOTA L
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
13
Q1 FY22 Results Presentation | 13
Results Overview - Revenue Share
1.5%
9.1%
Q1 FY21
43.8%
Q1 FY22
2.0%
38.5%
45.6%
18.2%
41.2%
CB
PFB
TTB
Others
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
14
Q1 FY22 Results Presentation | 14
Q1 FY22 SEGMENTAL OVERVIEW
Chemicals
Packaging Films
Technical Textiles
Others
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Chemicals Business
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 16
Chemicals Business - Results Update
Consolidated figures
PARTICULARS (Rs. Cr)
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
Q1 FY22
1,113.7
41.2%
222.3
20.0%
37.4%
Q1 FY21
705.2
45.6%
88.6
12.6%
30.0%
% SHIFT
57.9%
151.0%
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 17
Chemicals Business
Specialty Chemicals Business
o Segment registered healthy performance over CPLY owing to: • Higher sales from exports and domestic markets •
Strong focus on adding new products to strengthen the overall product range
•
•
Increase in raw material prices and export freight rates impacted Q1, seems to be a short-term phenomenon
Focus on expanding Pharma product profile
o SRF continues to make investments in capacity expansion to maintain the growth momentum
•
•
•
Two new plants commissioned at Dahej
Successfully completed the campaigns for two key products
Existing expansion plans are on track
Market Trends
• Growth momentum in Agrochemicals is expected to continue across key markets • Visible traction in specialty chemical space •
The second wave of COVID-19 induced lockdowns resulted in disruption of supply chains, leading to an overall increase in raw material prices and export freight across geographies
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 18
Chemicals Business
Chemicals Technology Group o Chemicals Technology Group (CTG) is actively engaged in
the development of new process technologies
o Key focus on high end molecules o Strong internal competencies and capabilities o Equipped with state-of-the-art R&D facilities and an
ingenious team of scientists and engineers
o 3 R&D centres in India o 8 new process patents were granted in Q1FY22, taking the tally to 99 global patents to-date. Overall, the Company has applied for 317 patents
99
Global Patents granted
317
Patents applied
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 19
Chemicals Business
Fluorochemicals Business o Segment delivered a robust performance on account of:
• Higher sales volumes in the refrigerants and the blends segment, especially from the export markets • Uptick in Auto sales led to higher offtake in R-134a revenues • Healthy contribution from the chloromethanes segment • Domestic market in Q1 witnessed lower offtake induced by localized lockdowns
o Base effect positive witnessed in Q1 FY 22 due to nationwide lockdown in Q1 FY 21
o The Board approved projects at Dahej to be implemented in next 24 months:
•
•
Integrated expansion of the Fluorocarbon based Refrigerant capacity at an investment of ~ Rs. 550 crore
Installation of 200 KV grid at a projected cost of Rs. 135 crore, ensuring availability of stable power for future readiness
Market Trends
Production of passenger vehicles in India significantly higher when compared with CPLY
• • Demand and production volumes in the AC market also witnessed a spike •
Pharma segment continued to do well in Q1
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 20
Packaging Films Business
Packaging Films
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q2 & H1 FY21 Results Presentation | 21
Q1 FY22 Results Presentation | 21
Packaging Films Business - Results Update
Consolidated figures
PARTICULARS (Rs. Cr)
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
Q1 FY22
1,041.3
38.5%
236.8
22.7%
39.8%
Q1 FY21
677.4
43.8%
220.7
32.6%
74.8%
% SHIFT
53.7%
7.3%
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 22
Packaging Films Business
Key Highlights
o Segment continues to perform well, despite impact of COVID-19 second wave on domestic markets, owing to:
• New capacities that came on-stream in Hungary and Thailand • Growing product portfolio with two new products and increasing contribution from value-added products •
Surge in export freight rates impacted adversely
o Bolstered the segment mantra of ‘Easy to Do Business With’: Expanded market footprint to more than 100 countries
• • Continuous improvement in quality and delivery. Wider and deeper penetration with multinational customers
o Sustainability initiatives remains one of the key focus areas for the business
Market Trends
In Q1 FY22, demand for BOPET films was subdued, while demand for BOPP films remained healthy
• • Globally, several new lines are scheduled to commence in BOPET and BOPP – to impact industry margins in the future •
Preference towards Global suppliers with multi-locational facilities
•
Exports freight costs across geographies witnessing an upward trend
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
23
Q1 FY22 Results Presentation | 23
Technical Textiles Business
Technical Textiles
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 24
Technical Textiles Business - Results Update
Consolidated figures
PARTICULARS (Rs. Cr)
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
Q1 FY22
Q1 FY21
492.9
18.2%
133.7
27.1%
22.5%
140.4
9.1%
-14.0
-10.0%
-4.8%
% SHIFT
251%
NA
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
25
Q1 FY22 Results Presentation | 25
Technical Textiles Business
Key Highlights
o Segment reported a significantly improved performance on account of:
•
Improved demand in the Nylon Tyre Cord, Belting Fabrics and Polyester Industrial Yarn segments
• Re-structuring of margin profile with long-term customers
o Continued focus on enhancing operational performance across all plants
o Faced certain manpower availability issues due to COVID-19 second wave, leading to marginally lower capacity utilizations
o TTB facilities in Gummidipoondi, Manali and Gwalior have earned a 100% vendor rating from its marquee clients
Market Trends • Domestic tyre industry has gained significant momentum:
o Strong demand is observed across all TCF segments o Farm tyres segment witnessed robust demand due to normal monsoon forecast o Continual strong demand is observed in two / three-wheeler segment due to rise in personal mobility
• With the reopening of the mining sector, the belting fabric industry witnessed strong demand
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 26
Others
Others
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 27
Others - Results Update
Consolidated figures
PARTICULARS (Rs. Cr)
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
Q1 FY22
Q1 FY21
53.6
2.0%
1.9
3.6%
0.3%
23.7
1.5%
-0.3
-1.2%
-0.1%
% SHIFT
126.3%
NA
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
28
Q1 FY22 Results Presentation | 28
Others - Key Highlights
Coated Fabrics
Laminated Fabrics
• Demand for Truck Tarpaulins and awnings was adversely affected due to second wave of Covid-19
• New products being introduced in the market such as fish tank pond liners and emergency shelter / protection
• SRF maintained its volume and price leadership • Demand for signages and hoardings was adversely affected owing to the second wave of COVID-19 pandemic
• Anti-dumping duty on Chinese PVC flex
film
extended till January 31, 2022
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
29
Q1 FY22 Results Presentation | 29
Our Community Engagement
• Organized COVID-19 vaccination camps
for
the
community in Bharuch, Bhiwadi & Gurugram
• Set up of oxygen generation plant at K.K. Mehta Govt.
Hospital in Amreli district of Gujarat
• Launched Atal Tinkering Labs
(ATL) program in
collaboration with Capgemini India and NITI Aayog
• Conducted a month-long digital summer camp with
5,304 students from 11 locations
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 30
OUTLOOK
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Outlook - Chemicals Business
Specialty Chemicals • Moving
up
the
value
accelerating qualifications of new molecules in both Agro and Pharmaceuticals sectors, capacity utilization of newly commissioned plants to remain in focus
chain
by
• Working on key campaigns to be run in the next few
quarters
• ROI accretive projects involving complex chemicals and
specialty products for our global customers
Fluorochemicals • Focus on expanding in new markets / geographies and product offerings, ramping up sales from refrigerants and blends
• Managing key in-progress capexes, within timelines • Strong focus on sustainability initiatives that minimize
the environmental cost of production
Q1 FY22 Results Presentation | 32
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Outlook - Packaging Films Business
• Pressure on margins expected due to the start-up of
new lines leading to price corrections
• Re-emergence of COVID-19 in ASEAN region could
affect Thailand performance
• Unrest in South Africa in July will
impact Q2
performance of the business
• Focus on sales mix of both Thailand and Hungary recently
BOPET facilities, vertical commissioned BOPP film line in Thailand
start up of
• New BOPP film line in India on track • Focus on increasing pace of R&D efforts, sustainability initiatives, efficient cost structures, enhanced capabilities and value-added products
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 33
Outlook - Technical Textiles Business
• International capacities being rebalanced due to
certain capacity closures, providing positive
NTCF trends
• Higher operating leverage and cost optimization
by capacity rationalization across various plants
• Other
sub-segments
of
Technical
Textiles
Business
expected to make
a
significant
contribution to the overall performance
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 34
About Us
Established in 1970, SRF Limited with an annual turnover of ₹8,400 crore (US$ 1.1 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 a strong workforce of close to 7,000 employees from different nationalities working across eleven manufacturing plants in India and one each in Thailand, South Africa and Hungary, the company exports to more than 75 countries. Equipped with State-of-the-Art R&D facilities, SRF has filed 317 patents for R&D and technology so far, of which 99 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 / Karl Kolah
CDR India
Tel: +91 98330 90434 / +91 98330 10478
Email: anoop@cdr-india.com / karl@cdr-india.com
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Q1 FY22 Results Presentation | 35