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,
27.01.2022
Presentation- Earnings Call (Un-Audited Financial Results for the quarter and nine months ended 31.12.2021)
In continuation of our letter dated 21st January, 2022 informing about hosting of earning call to discuss Un- Audited financial results for quarter and nine months ended 31st December, 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
Q3 & 9M FY22 Results Presentation January 27, 2022
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.
Q3 & 9M FY22 Results Presentation | 2
2
Contents
04
Company Overview
13 10
Q4 & FY21 Q3 & 9M FY22 Segmental Performance Results Overview
15
Q3 & 9M FY22 Segmental Performance
31
Outlook
Q3 & 9M 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
Q3 & 9M FY22 Results Presentation | 5 Q3 & 9M 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
Q3 & 9M 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
Q3 & 9M 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
Q3 & 9M 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
Q3 & 9M FY22 Results Presentation | 9
Q3 & 9M FY22 RESULTS OVERVIEW
Abridged Results Overview - Consolidated
Consolidated figures
Particulars (Rs. Crore)
Q3 FY22
Q3 FY21
% Y-o-Y
9M FY22
9M FY21
% Y-o-Y
Gross Operating Revenue
3,345.9
2,146.4
EBITDA
EBITDA Margin (%)
Depreciation
Interest
ECF (Gain) / Loss
Profit Before Tax
Profit After Tax
Profit After Tax Margin (%)
Diluted EPS (Rs.)
858.5
25.7%
132.4
29.4
(33.5)
730.3
505.5
15.1%
17.06
566.3
26.4%
116.6
28.5
(21.5)
442.8
324.3
15.1%
10.96
55.9%
51.6%
13.6%
3.2%
56.1%
64.9%
55.9%
8,884.2
2,202.2
24.8%
385.6
80.2
(61.3)
1,797.6
1,283.3
14.4%
43.31
5,792.4
1,540.6
26.6%
334.6
107.8
(2.8)
1,101.0
816.8
14.1%
27.69
53.4%
42.9%
15.3%
-25.6%
2089.6%
63.3%
57.1%
EPS is recalculated based on post bonus issued and paid-up capital
Q3 & 9M 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
Q3 & 9M FY22 Results Presentation | 12
12
Results Overview - Revenue & EBIT
Consolidated figures
REVENUES (Rs. Crore)
Q3 FY21
Q3 FY22
3 . 8 2 4 , 1
9 . 5 0 9
0 . 6 7 2 , 1
0 . 2 0 8
8 . 7 3 5
0 . 7 6 3
0 . 7 0 1
7 . 3 7
1 . 9 4 3 , 3
6 . 8 4 1 , 2
EBIT (Rs. Crore)
Q3FY21
Q3FY22
2 . 9 1 4
9 . 9 8 1
2 . 4 5 2
4 . 2 1 2
5 . 3 1 1
9 . 7 6
3 . 8
6 . 8
5 . 5 9 7
5 . 8 7 4
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)
9M FY21
9M FY22
3 . 8 6 6 , 3
3 . 2 9 4 , 2
0 . 9 8 3 , 3
2 . 2 1 3 , 2
6 . 8 8 5 , 1
5 . 9 3 8
4 . 4 5 1
0 . 7 4 2
9 . 2 9 8 , 8
4 . 8 9 7 , 5
EBIT (Rs. Crore) 9M FY22
9M FY21
6 . 2 9 8
9 . 2 5 4
3 . 9 7 6
5 . 0 7 6
0 . 0 8 3
1 . 4 0 1
9 . 6 1
3 . 6 1
4 . 9 5 9 , 1
2 . 3 5 2 , 1
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
Q3 & 9M FY22 Results Presentation | 13
13
Results Overview - Revenue Share
Q3 FY22
3.2%
Q3 FY21
3.4%
38.1%
9M FY22
2.8%
38.1%
16.1%
42.6%
17.9%
41.2%
37.3%
9M FY21
2.6%
39.9%
17.1%
42.2%
14.5%
43.0%
CB
PFB
TTB
Others
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
Q3 & 9M FY22 Results Presentation | 14
14
Q3 & 9M FY22 SEGMENTAL OVERVIEW
Chemicals
Packaging Films
Technical Textiles
Others
Chemicals Business
Q3 & 9M FY22 Results Presentation | 16
Chemicals Business - Results Update
Consolidated figures
PARTICULARS
Segment Revenues
Q3 FY22 Q3 FY21 % SHIFT 9M FY22
9M FY21 % SHIFT
1428.3
905.9
57.7%
3668.3
2492.3
47.2%
% Contribution to Revenues
42.6%
42.2%
41.2%
43.0%
EBIT
% EBIT Margins
419.2
189.9
120.7%
892.6
452.9
97.1%
29.4%
21.0%
24.3%
18.2%
% Contribution to EBIT
52.7%
39.7%
45.6%
36.1%
Q3 & 9M FY22 Results Presentation | 17
Chemicals Business
Specialty Chemicals Business
o Segment delivered healthy performance during the period owing to:
Incremental revenues from exports and domestic markets
• • Expanding product portfolio offering significant to future potential • •
Sustained efforts to diversify the portfolio of raw material suppliers to reduce the risk of supply shortages Increased focus on cost reduction through process improvement, asset optimization and strategies to manage the environmental impact
o SRF continues to commit capex investments in the business’s future. New capex announcements, namely:
• Pharma Intermediates plant (PIP) at a cost of Rs. 190 crore; to strengthen SRF’s
pharma capabilities
• Dedicated facility of a key agrochemical product at a cost of Rs 61 crore
Upstream planning leading to significant reduction in time to market
Market Trends • Witnessed improved demand on account of healthy growth from global agrochemical manufacturers in strategic markets • ‘China plus one’ strategy for procurement continues to help India gain momentum as an alternate manufacturing base
•
Pressure on raw material due to increasing crude prices, logistics challenges, and global shortages of some key raw materials
Q3 & 9M 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 2 new process patents were granted in 9M FY22, taking the tally to 106 global patents to-date. Overall, the Company has applied for 351 patents
106
Global Patents granted
351
Patents applied
Q3 & 9M FY22 Results Presentation | 19
Chemicals Business
Fluorochemicals Business
o Fluorochemicals Business delivered robust performance:
Increased export volumes of HFC blends
• Higher prices of certain key refrigerant products in critical international markets • • Dymel® HFA 134a/P witnessing breakthrough in new accounts across India, Bangladesh, Argentina, and Thailand • Chloromethanes segment contributing to the overall performance
o Key projects (CMS expansion, PTFE, HFCs) are largely on track, minor COVID related delays
Market Trends • Air conditioner production volumes grew by ~40% when compared with CPLY, expected to be robust when compared to
FY 21
• Pharma segment continued to do well • Domestic passenger vehicles production volumes remained subdued on account of various external factors; 18% lower
when compared with CPLY
• Auto market has been hampered due to persistent global semiconductor shortage & continued logistical challenges
Q3 & 9M FY22 Results Presentation | 20
Packaging Films Business
Packaging Films
Q2 & H1 FY21 Results Presentation | 21
Q3 & 9M FY22 Results Presentation | 21
Packaging Films Business - Results Update
Consolidated figures
PARTICULARS
Segment Revenues
Q3 FY22 Q3 FY21 % SHIFT 9M FY22
9M FY21 % SHIFT
1276.0
802.0
59.1%
3389.0
2312.2
46.6%
% Contribution to Revenues
38.1%
37.3%
38.1%
39.9%
EBIT
% EBIT Margins
254.2
212.4
19.7%
670.5
679.3
-1.3%
19.9%
26.5%
19.8%
29.4%
% Contribution to EBIT
32.0%
44.4%
34.2%
54.2%
Q3 & 9M FY22 Results Presentation | 22
Packaging Films Business
o The Business performed very well, with both the domestic and international facilities delivering robust results:
• Volume growth owing to additional capacities in Hungary and Thailand coming on stream • Continuous focus on enhancing efficiency and cost-competitive procurement • Higher margins witnessed in BOPP segment
o SRF continues to further strengthen its position as a global major in the industry, reinforcing the PFB philosophy of 'Easy to Do
Business With'
• Growing market presence, with over 100 countries served, along with multi-country & multi-substrate presence • Constantly improving quality & delivery parameters to cater to the needs of a global customer base
o SRF Packaging Films Business – Indore conferred the Quality Sustainability Award at the international convention, organized by the
International Academy for Quality (IAQ)
o SRF Flexipak, South Africa won the prestigious ‘Sword of Honour’ from the British Safety Council
Market Trends •
BOPP demand remained buoyant boosting overall margins
• Global logistic outlook remains challenging, with raw materials freight and container availability being a concern •
Several new BOPP & BOPET lines are expected to become operational, leading to pressure on margins
Q3 & 9M FY22 Results Presentation | 23
23
Aluminium Foil – Our Rationale
• Aluminium foil widely used in food and non-food packaging is witnessing significant
Food Packaging
growth • Market size:
o Indian market size is ~ 2 lakh MTPA and expected to grow at ~8.5% p.a.,
mainly driven by food products and Pharma packaging
o Import substitution: Annual estimated imports of approx. 1 lakh MTPA. Gap expected to remain significant, due to growth and current supply positions in the domestic market
• SRF is investing in the aluminium foil segment to create business adjacencies keeping in mind growth as a core strategy, at a new site in Jaitapur, Indore, India at an approximate cost of Rs 425 crore:
Household Foil
Pharma Packaging
o Foray into Aluminum foil segment provides promising opportunities to leverage existing customer base as one-stop shop for customers with products ranging from BOPP, BOPET and Aluminum Foil
o State of the art machine with capability to produce a wide range of gauges o Management synergies due to proximity to existing sites
Strategic investment in a high potential future product offering
• Potential to emerge as an enabler to cater to demand from Electric Vehicle (EV)
space in the future
Q3 & 9M FY22 Results Presentation | 24
Technical Textiles Business
Technical Textiles
Q3 & 9M FY22 Results Presentation | 25
Technical Textiles Business - Results Update
Consolidated figures
PARTICULARS
Segment Revenues
Q3 FY22 Q3 FY21 % SHIFT 9M FY22
9M FY21 % SHIFT
537.8
367.0
46.5%
1588.6
839.5
89.2%
% Contribution to Revenues
16.1%
17.1%
17.9%
14.5%
EBIT
% EBIT Margins
113.5
67.9
67.1%
380.0
104.1
265.0%
21.1%
18.5%
23.9%
12.4%
% Contribution to EBIT
14.3%
14.2%
19.4%
8.3%
Q3 & 9M FY22 Results Presentation | 26
Technical Textiles Business
o Business showcased healthy performance despite weak demand for Nylon Tyre Cord Fabrics
o Sales volumes from the Belting Fabrics and Polyester Industrial Yarn segments were healthy, amidst a challenging market situation
o Continuous focus on enhancing operational excellence standards
o TTB facility in Manali has earned a 100% vendor rating from its marquee clients
Market Trends
• OEM demand witnessing weakness due to degrowth in automobile industry • • With the reopening of the mining sector and the recovery of the Indian economy, the belting fabric business has seen strong
Switch in customer inclination towards domestic producers has led to a major slowdown in imports
demand
Q3 & 9M FY22 Results Presentation | 27
Others
Others
Q3 & 9M FY22 Results Presentation | 28
Others - Results Update
Consolidated figures
PARTICULARS
Segment Revenues
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
Q3 FY22 Q3 FY21 % SHIFT 9M FY22
9M FY21 % SHIFT
107.0
3.2%
8.6
8.0%
1.1%
73.7
3.4%
8.3
11.2%
1.7%
45.1%
247.0
154.4
60.0%
3.7%
2.8%
16.3
6.6%
0.8%
2.7%
16.9
10.9%
1.3%
-3.3%
Q3 & 9M FY22 Results Presentation | 29
Others - Key Highlights
•
Coated Fabrics SRF maintained domestic market leadership due to improved sourcing initiatives and plant performance despite subdued demand scenario
o Contribution in the domestic market improved owing to
renewed focus on value added products
• Direct orders from institutional clients have been deferred anticipating peak in cases during the third wave of Covid-19
•
Laminated Fabrics In Q3, SRF recorded the highest-ever sales achieved as the plant operated at full capacity and continues to maintain volume & price leadership in the segment
• Upgrade from cold to swing semi-hot lamination machine will enable us to be competitive in the market, as it is believed to be the standard offering in the future
Q3 & 9M FY22 Results Presentation | 30
30
SRF’s Community Engagement
• MoU signed between Rajya Shiksha Kendra, Madhya Pradesh and SRF Foundation to transform fifty Government schools in the state
• Expanded the Basic Electrician Training Program to thirteen locations with ten new training centers established across our manufacturing facilities
• Launched Beautician, Wellness and Fashion Designing courses under a new project, to provide learning and income generation to opportunities marginalized communities in Chennai, Tamil Nadu
to women belonging
Q3 & 9M FY22 Results Presentation | 31
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
• Key campaigns underway • ROI accretive projects involving complex chemicals and specialty products for SRF’s global customers, with emphasis on Pharma products
Fluorochemicals • Focus on expanding in new markets / geographies and product offerings and balancing quantities between domestic and international markets
• Managing key in-progress capexes, within timelines
Q3 & 9M FY22 Results Presentation | 33
Outlook - Packaging Films Business
• 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
• Some pressure on margins likely owing to the start up
of new lines
• SRF’s capexes in new BOPP film and other value-
added products in India are on track
• Focus
on
increasing
pace
of
R&D efforts,
sustainability initiatives, efficient cost structures,
enhanced capabilities and value-added products
Q3 & 9M FY22 Results Presentation | 34
Outlook - Technical Textiles Business
• Higher
operating
leverage
and
cost
optimization by capacity
rationalization
across various plants
• Belting Fabrics & Polyester Industrial Yarn
sub-segments of
the Technical Textiles
Business expected to make a significant
contribution to the overall performance
Q3 & 9M FY22 Results Presentation | 35
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 351 patents for R&D and technology so far, of which 106 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
Q3 & 9M FY22 Results Presentation | 36