Tilaknagar Industries Limited has informed the Exchange about Investor Presentation
CIN: L15420PN1933PLC133303 Registered Office: P.O. Tilaknagar, Tal. Shrirampur, Dist. Ahmednagar, Maharashtra-413 720 Corporate Office: 3rd Floor, Industrial Assurance Building, Churchgate, Mumbai, Maharashtra-400 020 Email: investor@tilind.com, Website: www.tilind.com, Phone: +91 22 22831716/18, Fax: +91 22 22046904
September 2, 2021
BSE Limited The Corporate Relationship Dept, 1st Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001. Scrip Code : 507205
National Stock Exchange of India Ltd Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai-400 051. Scrip Code : TI
Dear Sir/s,
Sub: Investor Presentation
Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”), please find enclosed herewith the Investor Presentation.
The same is available on our website www.tilind.com.
We request you to take the above information on record.
Thanking you,
Yours faithfully, For Tilaknagar Industries Limited
Amit Dahanukar Chairman & Managing Director (DIN: 00305636)
AMIT DAHANUKARDigitally signed by AMIT DAHANUKAR Date: 2021.09.02 13:24:33 +05'30' Tilaknagar Industries Ltd.
9/2/2021
Investor Presentation September 2021
Tilaknagar Industries | Investor Presentation
1
OUR DNA
Tilaknagar Industries | Investor Presentation
2
Meet the Passionate Experts
From our founding years, our story is one of obsession with customer delight.
Created by Babasaheb Dahanukar in 1933, Tilaknagar is the culmination of years of experience and knowledge coming together to create the ultimate liquor experience.
Tilaknagar Industries | Investor Presentation
3
We channel this passion into a clear purpose
To deliver rich experiences for consumers by blending decades of experience with continuous innovation.
Tilaknagar Industries | Investor Presentation
4
TILAKNAGAR AT A GLANCE
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5
About the Company
Largest premium brandy manufacturer in India with presence across all segments of IMFL
16
Manufacturing units across 11 states Owned: 4 units Tie-up: 12 units
15+
Brands across products
92%
Share of Brandy as % of total volumes
5.45 mn
Volumes (in cases) sold
86%
Share of sales to South India as % of total volumes
87% 3% 10%
Sales through: - State corporations - Distributors - Direct Sales
* All data is for FY21
Tilaknagar Industries | Investor Presentation
6
We sell millions of cases across India
MANSION HOUSE
Mansion House is a millionaire brand
(more than 4.4 mn cases sold in FY21)
Mansion House is the highest selling premium brandy in India
Manufactured across all units
A brand with a high brand loyalty driving repeat purchases
COURRIER NAPOLEON
Super premium brandy
Fast approaching millionaire brand status
(0.6 mn cases sold in FY21)
Tilaknagar Industries | Investor Presentation
7
Brandy & South India – Playing to our strengths
Market leadership in the 2nd largest IMFL segment in the largest alcohol consuming region of India
Category-wise spirits sales (in volumes)
Region-wise IMFL sales
4%
12%
19%
Whiskey
Brandy
Rum
White Spirits
65%
Rest of India 40%
60%
South India
Telangana & Andhra Pradesh contribute towards the highest IMFL consumption in India.
BRANDY CONSUMPTION MOVING TOWARDS BRAND LOYALTY AND PREMIUMIZATION
Brandy and South India have both seen an increasing trend in volume sales for the Company Brandy volume share: 82% (FY17) vs. 92% (FY21) South India volume share: 79% (FY17) vs. 86% (FY21)
Tilaknagar Industries | Investor Presentation
8
India’s undisputed Brandy king
Largest manufacturer of premium Brandy in India
Brandy is 2nd largest product segment in IMFL
Dominant presence in South India
Huge opportunity in untapped markets – both product and geography
Mansion House - India’s most sold premium brandy
Brandy is the most versatile of all IMFLs
Basket of Brandy products across premium price-points
Tilaknagar Industries | Investor Presentation
9
Our manufacturing and consumption footprint
Head office
Company-owned units: 4 units
Sales through State Corporations
Sales through Distribution
Jammu (x1)
Lease / Tied-up units: 12 units
Mohali (Punjab) (Army dedicated) – PunjabExpo Breweries
Assam (x1)
Shrirampur (Maharashtra)
West Bengal (x1)
Odisha (x1)
Mumbai
Telangana (x2)
East Godavari District (Andhra) – Prag Distilleries
Andhra Pradesh (x3)
Kuppal District (K’taka) – Vahni Distilleries
Karnataka (x1)
Kerala (x2)
Sikkim
Assam
West Bengal
Silvassa
Odisha
Maharashtra
Telangana
Goa
Karnataka
Kerala
Andhra Pradesh
Puducherry
* Sales through CSDs not included in map
Tilaknagar Industries | Investor Presentation
10
ROADMAP AND TEAM
Tilaknagar Industries | Investor Presentation
11
Our journey
At the cusp of a turnaround
Beginning
2008-2014
2014-2017
2018 onwards
Founded in 1933 as Maharashtra
Sugar Mills Ltd. (MSML) to manufacture sugar and allied products
Tilaknagar Distilleries and
Industries Ltd. (TDIL) promoted as 100% subsidiary of MSML to manufacture industrial alcohol, IMFL and sugar cubes
TDIL merged with MSML after
MSML exits sugar business and renamed to Tilaknagar Industries
Acquired subsidiaries Vahni Distilleries (Karnataka), Prag Distilleries (Andhra), Kesarval Springs Distillers (Goa) and PunjabExpo (Punjab)
Acquired seven brands from Alcobrew Distilleries for CSD segment and IFB Agro’s IMFL business (‘Volga’ vodka and ‘Blue Lagoon’ gin) for an entry into East Indian markets of West Bengal, Assam and Odisha
Commissioned expansion of 50
KLPD molasses based distillery to 100 KLPD and 100 KLPD grain based distillery
At its peak, registered net revenue
of Rs. 824 crs in FY14
Expansion project at Prag stalled
Restructuring of debt completed
Defaults in repayment to banks
and financial institutions
Sale of assets of Kesarval Springs Distillers to Indospirit Beverages Pvt. Ltd. in 2015
with EARC
One-time settlements reached with
all lenders
Enters into 10 yrs agreement to
manufacture products for Pernod Ricard products at bottling plant in Maharashtra
Achieved EBITDA margin of 10%
for FY21
Growth in volumes from 4 mn
cases in FY16 to 5.5 mn cases in FY21
Tilaknagar Industries | Investor Presentation
12
Business Strategic Roadmap
Brandy focus
Drive scale
Drive market leadership in
brandy - Mansion House sells more than 4 mn cases annually
Brandy presence across
premium price-points – MHB, CNB Green, CNB Blue, CNB Gold
Strong volumes despite
imposition of AED due to Covid-19
Further growth in existing
markets
Expansion in fast-growing new
markets across India
Bottling arrangements to drive
growth
(a) Debt adjusted for EARC balance debt of Rs. 145 crs which would be waived off in FY24 on following the repayment schedule (b) Debt adjusted for EARC balance debt of Rs. 34 crs which has been converted to equity in Apr-21
Focus on margins, cash-flows & deleveraging
Impact of operating leverage Strengthen balance sheet Debt reduced from Rs. 1,252
crs as of Mar-19 to Rs. 627 crs as of Mar-21 (a)(b)
Tilaknagar Industries | Investor Presentation
13
Our strategy to reduce debt
Volume growth in existing markets
Favorable product mix
Entry into new fast-growing brandy markets
Expansion through bottling tie-ups
Working capital efficiencies
Debt restructuring (already achieved)
Operating leverage
+
Margin expansion
+
Asset-light model
=
Cash-flow generation
Reduce debt
Tilaknagar Industries | Investor Presentation
14
Experienced and energized team at the helm
Amit Dahanukar, Chairman & Managing Director
Ajit Sirsat,
Chief Financial Officer
Varadarajan Srinivasaraghavan, General Manager – Manufacturing
45 years of age, he has over 20 years of industry experience
CMD since 2006, he graduated in
Has over 26 years of experience in Finance and Accounts across industries
electrical engineering with a masters degree in engineering management from Stanford University, U.S.A
He is a Chartered Accountant and Cost & Management Accountant
Has over 25 years of industry
experience
He is a B. Tech (Mechanical) and
looks at overall manufacturing and procurement at corporate level
Ameya Deshpande, Head – Corporate Development & Strategy
Has been an Investment Banker with Deutsche Bank and BNP Paribas and was also co- founder of a food-travel start-up called Authenticook
He has recently joined the Company in July 2021
Tilaknagar Industries | Investor Presentation
15
FINANCIALS
Tilaknagar Industries | Investor Presentation
16
Debt restructuring update
Debt as of 31-Mar-21 (a)(b)
1,252 crs
182
627 crs
Mar-19
Mar-21
EARC Term Loan
EARC debt is at 9% p.a.
Cash Credit
EARC balance debt of Rs. 145 crs will be waived
336
Other Debt
off on satisfactory repayment
70% of EARC Term Loan is repayable after 2
81
28
Trade Deposits (Unsecured)
years
(a) Debt adjusted for EARC balance debt of Rs. 145 crs which would be waived off in FY24 on following the repayment schedule (b) Debt adjusted for EARC balance debt of Rs. 34 crs which has been converted to equity in Apr-21
Settlements reached with nearly all lenders
EARC debt repayment schedule
Lender
SBI
Bank of India
IDBI Bank
Standard Chartered Bank
DCB Bank
Full settlement achieved
(Rs. Crs)
EARC Trust SC233
EARC Trust SC241
EARC Trust SC269
Total
< 1 yr
5.60
28.00
11.20
44.80
1 – 2 yrs
2 – 3 yrs
6.80
34.00
13.60
54.40
15.68
188.97
32.38
237.02
Tilaknagar Industries | Investor Presentation
17
Improving business fundamentals
Premiumisation strategy to enhance margins and cash flows
Total Volumes Sold (mn cases)
Brandy Sales (mn cases)
84%
89%
91%
92%
5.92
FY18
6.64
FY19
6.44
FY20
5.45
FY21
4.98
FY18
5.92
FY19
5.86
FY20
5.03
FY21
Share of Brandy to total volumes sold
NSR per case (Rs.)
Robust sales in South India
83%
87%
86%
86%
904
FY18
985
FY19
1,005
FY20
1,014
FY21
4.91
FY18
5.80
FY19
5.51
FY20
4.70
FY21
Share of South India sales to total volumes sold
Tilaknagar Industries | Investor Presentation
18
Focus on margins and cashflows
Most of write-offs impacting EBITDA have been undertaken
Net Revenues (Rs. Mn)
Gross Profit (Rs. Mn) and Gross Margin (%)
51%
52%
46%
49%
5,778
FY18
6,613
FY19
6,528
FY20
EBITDA (Rs. Mn) and EBITDA Margin (%)
8%
561
29
0%
-519
-8%
FY19 (a) EBITDA for FY20 is not comparable due to write-offs impacting EBITDA
FY18
FY20
5,488
FY21
10%
541
FY21
2,934
FY18
3,417
FY19
3,006
FY20
Finance Cost (Rs. Mn) and as % of Net Revenues
26%
28%
20%
1,289
FY20
1,519
FY18
1,842
FY19
2,714
FY21
13%
710
FY21
Tilaknagar Industries | Investor Presentation
19
FY21 revenues vs. FY20 revenues
Rs. Mn
FY20 Net Revenue
Brandy
Others
Brandy
Others
FY21 Net Revenue
Volume Impact
Price Impact
* Net revenue is pertaining to IMFL sales only and excludes revenues from sale of spirits and packing material
Revenues for FY21 predominantly impacted due to fall in volumes on account of Covid-19 lockdown Strong close to the year H2 FY20 vs. H2 FY21: 3.16 mn vs. 3.41 mn cases 8% volume growth Y-o-Y – higher than industry growth
Tilaknagar Industries | Investor Presentation
20
Financial Summary – Income Statement
(Rs. Mn)
Gross Revenue
Less: Excise Duty
Net Revenue
Gross Profit
Gross Margin %
Employee Costs
As % of Net Revenue
Other Expenses
As % of Net Revenue
EBITDA
EBITDA Margin %
Depreciation & Amortisation
Finance Costs
PAT
PAT Margin %
FY18
12,916
7,138
5,778
2,934
51%
220
3.8%
2,686
46%
29
0%
373
1,519
-1,511
-25%
FY19
15,255
8,642
6,613
3,417
52%
333
5.0%
2,522
38%
561
8%
367
1,842
-1,595
-24%
FY20
14,835
8,306
6,528
3,006
46%
296
4.5%
3,230
49%
-519
-8%
330
1,289
2,697
40%
FY21
14,184
8,696
5,488
2,714
49%
252
4.6%
1,921
35%
541
10%
331
710
-384
-7%
Tilaknagar Industries | Investor Presentation
21
Q1 FY22 Result Update
Tilaknagar Industries | Investor Presentation
22
Management commentary on Q1 FY22 results
From the desk of Mr. Amit Dahanukar, Chairman & Managing Director
While the last couple of years were invested in restructuring our debt, the next couple of years will be invested towards building the business to a scale which enables us to generate cash-flows which will help us in reinvesting for growth as well as comfortably servicing and reducing our debt
A favourable product-geography mix has enabled us to increase our gross margins from 44.4% in Q4 FY21 to 56% in Q1 FY22; also
leading to higher NSRs
EBITDA saw a 128% increase in Q1 FY22 compared to Q4 FY21 on the back of higher NSRs and operating leverage
EBITDA margins stood at 17% for Q1 FY22 compared to 10% for FY21
We achieved a positive PAT for the first time in many years and expect the upward trend in profitability to continue
Finance costs were down 20% in Q1 FY22 compared to Q4 FY21 due to reduction in debt levels
We have been servicing the Edelweiss ARC debt on-time and have also reached one-time settlements with all of our other lenders
While business was impacted starting 2nd week of April, we have been seeing significant improvement in volumes from mid-June
onwards
Tilaknagar Industries | Investor Presentation
23
Q1 FY22 Volumes Approaching normal levels of business; July and August touches more than 6 lacs cases
Q1 FY22 vs. Q4 FY21 – On the path to complete recovery
Cases in lacs
Since 2017, the volumes for the month of June have been outpaced by subsequent months for that financial year
Jan-21
Feb-21
Mar-21
Q4FY21
Apr-21
May-21
Jun-21
Q1FY22
Cases in lacs
Q1 FY22 vs. Q1 FY21 – 82% growth Y-o-Y
Apr-20
May-20
Jun-20
Q1FY21
Apr-21
May-21
Jun-21
Q1FY22
Tilaknagar Industries | Investor Presentation
24
Strong Q1 FY22 performance…
…Despite impact of state-level lockdowns across the country; significant margin expansion compared to a normal like-to-like quarter i.e. Q1 FY20
Volumes (in lacs):
Brandy volumes
Others
Total volumes
Financial performance (Rs. Mn):
Revenue from operations
Gross profit
Gross margin (%)
EBITDA
EBITDA margin (%)
EBIT
Finance Costs
Profit / (Loss) after tax
Q1 FY22
Q1 FY21
Y-o-Y growth %
Q1 FY20
Q1 FY22 vs Q1 FY20 growth %
Q4 FY21
Q-o-Q growth %
10.4
0.7
11.1
1,353.0
759.5
56.1%
233.7
17.3%
151.8
150.1
3.7
5.4
0.5
6.0
563.8
319.0
56.6%
24.7
4.4%
-58.4
172.4
-228
91%
27%
86%
140%
138%
-44 bps
846%
1,289 bps
NM
-13%
NM
12.1
1.5
13.6
1,350.6
649.0
48.1%
161.6
12.0%
79.3
462.2
-369.6
-14%
-54%
-18%
0.2%
17%
808 bps
45%
531 bps
91%
-68%
NM
15.8
1.4
17.2
1,923.4
854.3
44.4%
102.4
5.3%
21.3
187.1
-90.2
-34%
-51%
-36%
-30%
-11%
1,171 bps
128%
1,195 bps
611%
-20%
NM
Tilaknagar Industries | Investor Presentation
25
Disclaimer
This presentation may include statements which may constitute forward-looking statements including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Tilaknagar Industries’ future business developments and economic performance. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements.
The information and opinions contained in this presentation are current. The Company undertakes no obligation to update or revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise. Any opinions or information expressed in this presentation are subject to change without notice.
Tilaknagar Industries | Investor Presentation
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For further information, please contact: Ameya Deshpande Head – Corporate Development & Strategy Email: adeshpande@tilind.com
THANK YOU