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,
26.10.2021
Presentation- Earnings Call (Un-Audited Financial Results for the quarter and half year ended 30.09.2021)
In continuation of our letter dated 21st October, 2021 informing about hosting of earning call to discuss Un- Audited financial results for quarter and half year ended 30th September, 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 - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Corporate identity No. L181010L1970PLC005197
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 & 237, 2nd Floor DLF Galleria, Mayur Place Noida Link Road Mayur Vihar Phase 1 Extension Delhi 110091
SRF Limited
Q2 & H1 FY22 Results Presentation October 26, 2021
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 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.
including exports to SRF Limited may, from time to time, make additional written and oral forward-looking statements, 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.
Q2 & H1 FY22 Results Presentation | 2
2
Contents
04
Company Overview
13 10
Q4 & FY21 Q2 & H1 FY22 Segmental Performance Results Overview
15
Q2 & H1 FY22 Segmental Performance
31
Outlook
3
Q2 & H1 FY22 Results Presentation | 3
COMPANY OVERVIEW
Snapshot
8,400 INR Cr Revenue
2,188 Cr EBIDTA
1,198 Cr PAT
43%
Chemicals
39%
Packaging
15%
Technical Textiles
Exports to 90+ Countries
14 Manufacturing Plants
Operations in 4 Countries
7,000 Global Workforce
FY 21 numbers pertaining to continuing operations only
Q2 & H1 FY22 Results Presentation | 5 Q2 & H1 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
These numbers are based on FY21 results; pertaining to continuing operations only
Q2 & H1 FY22 Results Presentation | 6
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
Q2 & H1 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
Q2 & H1 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
Q2 & H1 FY22 Results Presentation | 9
Q2 & H1 FY22 RESULTS OVERVIEW
Abridged Results Overview - Consolidated
Consolidated figures
Particulars (Rs. Crore)
Q2 FY22
Q2 FY21
% Y-o-Y
H1 FY22
H1 FY21
% Y-o-Y
Gross Operating Revenue
2,839.0
2,100.8
EBITDA
EBITDA Margin (%)
Depreciation
Interest
ECF (Gain) / Loss
Profit Before Tax
Profit After Tax
Profit After Tax Margin (%)
Diluted EPS (Rs.)
665.5
23.4%
130.3
23.4
(20.6)
532.4
382.5
13.5%
12.91
591.8
28.2%
114.0
36.1
9.6
432.1
315.7
15.0%
10.72
35.1%
12.4%
14.3%
-35.4%
NA
23.2%
21.2%
5,538.4
1,343.6
24.3%
253.2
50.8
(27.8)
1,067.3
777.7
14.0%
26.25
3,646.0
974.3
26.7%
218.0
79.3
18.7
658.2
492.6
13.5%
16.73
51.9%
37.9%
16.1%
-35.9%
NA
62.1%
57.9%
EPS is recalculated based on post bonus issued and paid up capital
Q2 & H1 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
Q2 & H1 FY22 Results Presentation | 12
12
Results Overview - Revenue & EBIT
Consolidated figures
REVENUES (Rs. Crore)
Q2 FY21
Q2 FY22
4 . 6 2 1 , 1
2 . 1 8 8
7 . 1 7 0 , 1
9 . 2 3 8
9 . 7 5 5
1 . 2 3 3
9 . 6 5
3 . 6 8
3 . 2 4 8 , 2
0 . 3 0 1 , 2
EBIT (Rs. Crore)
Q2FY21
Q2FY22
2 . 9 6 5
6 . 9 7 4
1 . 1 5 2
4 . 4 7 1
2 . 6 4 2
5 . 9 7 1
8 . 2 3 1
2 . 0 5
8 . 8
8 . 5
C B
PFB
T T B
OT HE RS
TOTA L
C B
PFB
T T B
OT HE RS
TOTA L
REVENUES (Rs. Crore)
H1 FY21
H1 FY22
0 . 0 4 2 , 2
4 . 6 8 5 , 1
0 . 3 1 1 , 2
2 . 0 1 5 , 1
8 . 0 5 0 , 1
6 . 2 7 4
9 . 9 3 1
6 . 0 8
8 . 3 4 5 , 5
7 . 9 4 6 , 3
EBIT (Rs. Crore) H1 FY22
H1 FY21
4 . 3 7 4
0 . 3 6 2
9 . 6 6 4
3 . 6 1 4
5 . 6 6 2
2 . 6 3
6 . 8
7 . 7
8 . 3 6 1 , 1
6 . 4 7 7
C B
PFB
T T B
OT HE RS
TOTA L
C B
PFB
T T B
OT HE RS
TOTA L
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
Q2 & H1 FY22 Results Presentation | 13
13
Results Overview - Revenue Share
Q2 FY22
3.0%
Q2 FY21
2.7%
37.8%
H1 FY22
2.5%
38.1%
19.6%
39.6%
19.0%
40.4%
39.6%
H1 FY21
2.2%
41.4%
15.8%
41.9%
12.9%
43.5%
CB
PFB
TTB
Others
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
Q2 & H1 FY22 Results Presentation | 14
14
Q2 & H1 FY22 SEGMENTAL OVERVIEW
Chemicals
Packaging Films
Technical Textiles
Others
Chemicals Business
Q2 & H1 FY22 Results Presentation | 16
Chemicals Business - Results Update
Consolidated figures
PARTICULARS
Segment Revenues
Q2 FY22 Q2 FY21 % SHIFT H1 FY22 H1 FY21 % SHIFT
1126.4
881.2
27.8%
2240.0
1586.4
41.2%
% Contribution to Revenues
39.6%
41.9%
40.4%
43.5%
EBIT
% EBIT Margins
% Contribution to EBIT
251.1
174.4
43.9%
473.4
263.0
80.0%
22.3%
19.8%
21.1%
16.6%
44.1%
36.4%
40.7%
34.0%
Q2 & H1 FY22 Results Presentation | 17
Chemicals Business
Specialty Chemicals Business
o Business delivered a steady performance mainly on account of:
• Healthy demand for existing and new products • Recent capitalized projects witnessing traction
o External environment and certain operating issues:
• Rising crude prices, logistics concerns, supply chain disruptions and high price of certain key raw materials • Optimal production in certain plants impacted during the quarter
o The Board approved a capex of enhancing production capacity of a key product catering to the agrochemical industry at a
cost of Rs 27.5 crore
Market Trends
• Worldwide agrochemical market experiencing healthy growth •
‘China plus one’ strategy for procurement continues to augur well for the business
•
Several impediments like raw material inflation with historically high prices, logistics issues due to unavailability and higher shipping costs, congestion at ports, rise in crude oil prices and global plant shutdowns
Q2 & H1 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 11 new process patents were granted in H1 FY22, taking the tally to 104 global patents to-date. Overall, the Company has applied for 332 patents
104
Global Patents granted
332
Patents applied
Q2 & H1 FY22 Results Presentation | 19
Chemicals Business
Fluorochemicals Business
o Business delivered a positive performance on account of:
• Higher sales volumes and enhanced realizations across products despite impact of second wave in India • Significant sales recorded from the international markets • Healthy contribution from the chloromethanes segment •
Significant increase in the sales of Dymel® HFA 134a/P, which is SRF’s brand of Pharma Propellent
o Key projects (CMS expansion, PTFE, R32, HFCs) are on track:
• Capex witnessing increased costs due to significant inflation in steel, cement and other key items
Market Trends
• Domestic passenger vehicles and air conditioners production volumes remained subdued on account of various external
factors but remained higher than CPLY
• Auto market impacted owing to global chip shortage and logistical issues • Adverse impact from disruption in global supply chain leading to increase in freight costs and shortage / price inflation in
key raw materials
Q2 & H1 FY22 Results Presentation | 20
Packaging Films Business
Packaging Films
Q2 & H1 FY21 Results Presentation | 21
Q2 & H1 FY22 Results Presentation | 21
Packaging Films Business - Results Update
Consolidated figures
PARTICULARS
Segment Revenues
Q2 FY22 Q2 FY21 % SHIFT H1 FY22 H1 FY21 % SHIFT
1071.7
832.9
28.7%
2113.0
1510.2
39.9%
% Contribution to Revenues
37.7%
39.6%
38.1%
41.4%
EBIT
% EBIT Margins
% Contribution to EBIT
179.5
246.2
-27.1%
416.3
466.9
-10.8%
16.7%
29.6%
19.7%
30.9%
31.5%
51.3%
35.8%
60.3%
Q2 & H1 FY22 Results Presentation | 22
Packaging Films Business
Key Highlights o SRF has established itself as a global major in the Packaging Films Industry:
• Continues to be one of the largest exporters of BOPET Films from India •
Improved traction from new capacities in Hungary and Thailand
•
•
Enhanced sales of Value-Added Products (VAPs) aiding results
Expanded its portfolio with new products commercialized in H1 FY22
o Start-up of SRF’s new BOPP film line at Rayong, Thailand, making us a one-stop shop for a diverse range of specialty packaging films
offerings
o Further strengthened the mantra of ‘Easy to Do Business With’:
•
Expanded market footprint with presence now in now more than 90 countries, multi-country and multi-substrate presence
o Significant supply chain challenges, availability / price of key raw materials was a cause of concern
Market Trends •
Start up of new BOPET & BOPP lines expected to put notable pressure on industry margins going forward
• Margin of BOPET films was negatively impacted because of demand supply imbalance in H1 FY22; BOPP films demand remained positive • High logistic costs and supply chain related constraints impacted exports
Q2 & H1 FY22 Results Presentation | 23
23
Technical Textiles Business
Technical Textiles
Q2 & H1 FY22 Results Presentation | 24
Technical Textiles Business - Results Update
Consolidated figures
PARTICULARS
Segment Revenues
Q2 FY22 Q2 FY21 % SHIFT H1 FY22 H1 FY21 % SHIFT
557.9
332.1
68.0%
1050.8
472.6
122.4%
% Contribution to Revenues
19.6%
15.8%
19.0%
12.9%
EBIT
% EBIT Margins
% Contribution to EBIT
132.8
50.2
164.6%
266.5
36.2
636.6%
23.8%
15.1%
23.3%
10.5%
25.4%
22.9%
7.7%
4.7%
Q2 & H1 FY22 Results Presentation | 25
25
Technical Textiles Business
Key Highlights o TTB reported performance in line with expectations:
• Higher sales volumes from the Nylon Tyre Cord Fabrics, Belting Fabrics and Polyester Industrial Yarn segments augured well
•
Emphasis on improving operational efficiencies
o Revenue from replacement demand was healthy
o Recognition:
•
•
TTB Gummidipoondi recognized with the ‘Corona Warrior Award 2021’ for philanthropic work during the COVID-19 induced
lockdown;
TTB Gwalior has been recognized for relief work in the flood-hit areas of Bhind district, Madhya Pradesh
Market Trends • Within the domestic tyre industry, strong momentum witnessed across all areas, resulting in increased demand in the TCF sector • Belting fabric industry witnessed strong demand with the reopening of the mining sector
Q2 & H1 FY22 Results Presentation | 26
Others
Others
Q2 & H1 FY22 Results Presentation | 27
Others - Results Update
Consolidated figures
PARTICULARS
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
Q2 FY22 Q2 FY21 % SHIFT H1 FY22 H1 FY21 % SHIFT
86.3
3.0%
5.8
56.9
51.8%
139.9
80.6
73.7%
2.7%
2.5%
2.2%
8.8
-34.5%
7.7
8.6
-10.1%
6.7%
15.5%
5.5%
10.6%
1.0%
1.8%
0.7%
1.1%
Q2 & H1 FY22 Results Presentation | 28
Others - Key Highlights
Coated Fabrics
Laminated Fabrics
• SRF retains domestic market leadership, amidst weak demand, due to its focus on operational efficiency measures
• Better contributions in the domestic market by focusing
on Value Added Products
• Actively pursuing new markets like fish tank pond liners
& emergency shelter/protection
• SRF continues to retain volume and price leadership
o Sales from hot / semi hot lamination contributing
to overall performance
• Oversupply situation, leading to pressure on margins • Anti-dumping duty on Chinese PVC flex film extended
till January 31, 2022
Q2 & H1 FY22 Results Presentation | 29
29
SRF’s Community Engagement
• SRF has won the ROTARY CSR AWARD 2021 for exemplary
work in Basic Education and Literacy
• Launched the Digital Guru Portal, a collaborative platform
to promote the development of digital skills in teachers
• MOU signed between Global Edge Pvt. Ltd and SRF
Foundation to support STEM Education, Tinkering and
Coding in several schools of Bangalore
• More than 3,000 students enrolled for the training on
coding skills at Gurugram, Noida and Hyderabad
locations. Overall, the program has benefitted more than
9,000 students so far
Q2 & H1 FY22 Results Presentation | 30
OUTLOOK
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 SRF’s 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
Q2 & H1 FY22 Results Presentation | 32
Outlook - Packaging Films Business
• Expected pressure on margins leading to price
corrections, looks to be abating
• Emphasis on expanding sales from the new BOPET
lines in Thailand & Hungary with higher VAP sales;
BOPP line, which has been recently commissioned
will also contribute to the overall sales in the near
future
• 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
Q2 & H1 FY22 Results Presentation | 33
Outlook - Technical Textiles Business
• 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
Q2 & H1 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 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 90+ countries. Equipped with State-of-the-Art R&D facilities, SRF has filed 332 patents for R&D and technology so far, of which 104 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
Q2 & H1 FY22 Results Presentation | 35