Shalimar Paints Limited has informed the Exchange about Investor Presentation
SHALIMAR PAINTS February 17, 2022 BSE Limited National Stock Exchange of India Ltd Corporate Relationship Department, Exchange Plaza, 5" Floor, 1* Floor, New Trading Ring, Plot No. C/1, G- Block Rotunda Building, P.J. Towers, Bandra Kurla Complex, Bandra (E), Dalal Street, Fort, Mumbai - 400 001 Mumbai — 400051 BSE Scrip Code: 509874 NSE Symbol : SHALPAINTS Subject: Intimation of Investor’s Presentation Dear Sir/Madam, Please find attached the Investor’s Presentation for the quarter and nine months ended December 31, 2021. The same is also being uploaded on the website of the Company www.shalimarpaints.com. This is for your information and records. Thanking you, Yours faithfully, For Shalimar Paints Limited \ so Shik Ln Company Secretary Encl: As above Shalimar Paints Ltd. Corporate Office: 1 Floor, Plot No. 28, Sector 32, Gurugram - 122001, Haryana SHALIMAR Regd. Office: Stainless Centre, 4" Floor, Plot No, 50, Sector 32, Gurugram - 122001, Haryana. PAINTS Call: +91 124.461 6600 Fax: +91 124 461 6659 Toll Free: 180-103-6509 Email Id: askusfdshalimarpaints.com Website: www.shalimarpaints.com CIN: L24222HR1902PLC065611 Shalimar Paints Limited
Investor Presentation February 2022
Safe Harbour
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Shalimar Paints 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 whatsoever. 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 cashflows, 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.
All Maps used in the Presentation are not to scale. All data, information and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness.
2
1902
Vision
Mission
A.N.
Turner
and Two Britishers A.N. Wright - set up Colour & Varnish Company in Howrah, West Bengal. It is the first paint manufacturing plant in the South East Asia
To persevere and excel as one of the premier paint companies of the country, a leader in product innovation and customer satisfaction. We intend to build long term our value shareholders, customers, employees and suppliers.
relationships
with
all
value
shareholder
by To maximise engaging and growing our employees, delivering innovative and superior quality product segment, building strong human engagement with our dealers & vendors
to every
customer
Company Overview
100-Year-Young Brand: Renowned for High product quality
India’s iconic structures continue to use Shalimar Paints
100+ years of establishment
India’s Oldest Brand
69,000+ KL
Production Per annum
3
Manufacturing facilities
The “Art & Science” of Paints
5,300+
Dealers network across the country
Strong Presence in
500+
Decorative & Industrial paints
Employee strength
30+
Depots
2
R&D centers for paint innovations
4
Journey so far
Shalimar Paints Colour & Varnish Co. incorporated in India
P. Johnson bought control, became part of Red Hand Composition
Became a public limited company on 27th May
Name changed to Shalimar Paints Ltd on 18th Sep
1902
1928
1961
1963
Acquires the American Paints unit in Sikandrabad near Delhi
Nasik Plant started
Sold to Jhunjhnuwalas & O.P. Jindal Group for jointly Managing it
International Paints acquires US-based Red Hand Composition
2003
1992
1989
1964
Enters into technical collaboration with KCI, Korea for pre-coated metal coatings
Chennai Plant started
Nasik Plant Re- instatement started
Cash Profit generated for FY21
Strategic stake sale to Infra.Market (24.8%)
2008
2017
2018
2020
2022
5
Deal with Infra.Market
Shalimar Paints are at the inflection point of exponential growth and partnering with Infra.Market will enable the company to pursue both organic and inorganic growth opportunities within our existing and even newer product categories.
Backed by investors including Accel, Nexus Venture Partners, Evolvence India Fund, Sistema Asia Fund and Foundamental Gmb and Tiger Global
The association with Shalimar is an important step as paints is an exciting category and Shalimar presents a unique opportunity for Infra.Market to partner with an established vintage brand in this much coveted category. Infra.Market’s technology- based supply chain solutions, will substantially add value to the robust ecosystem that Shalimar has already built, and together it will be instrumental in enhancing Infra.Market’s position as a category leader in the building material industry.”
Entry of Infra.Market into the lucrative Paints Category
Access to Next Generation Platform to increase its reach and distribution network
Fund infusion to provide Growth Capital
6
Our Product Offerings
Decorative Paints
Industrial Paints
•
An extensive range of decorative and protective paint products for interior and exterior segments
•
• Our portfolio spans across product categories and price points
catering to a wide variety of consumers
•
•
Eco friendly emulsion products certified by Griha Council
Low VOC products that is certified by National Test House (NTH)
paints that give
walls a persona
Pioneers in Industrial coatings - Introduced notable firsts in high performance coatings such as high-build zinc coatings, radiation resistant coatings for nuclear power plants, polyurethane paint for fighter aircraft and railway coaches
• One of the largest Indian players in high-performance Protective
Coatings
•
Significant presence in General Industrial (Product Finish) and Packaging coatings
7
Decorative Paints: Strategy Going Ahead
Focus on areas having significant presence
Focus on smaller Tier 3 & 4 towns and rural area
Focus on deploying Premium emulsion machines in the market
Service improvement- specially supply
Focus on research & development of newer products
Expert Program
Increase in no. of Painters
+13%
+438%
Progress over last a year
✓ Cost Reduction:
• Cost saving due to optimization of water & solvent-
based paints
✓ New Product Development:
• Newer products developed & formulations released to
plants
✓ Vendor Development:
• Newer Raw material evaluated and approved
Apr-19
Mar-20
Mar-21
✓ Quality Upgradation:
• Quality of the formulations were improved
8
Industrial Paints: Strategy Going Ahead
•
•
•
•
From Zonal Business structure to Vertical business structure alignment
Each Vertical defined with visible Key Result Areas which include:
•
•
•
•
•
Customer Retention with defined Value proposition
Gain market share across various verticals
Promoting SPL as a Service provider rather than only a paint vendor
Strong focus on Margins
Focus on new Verticals like Dealers, PEB/ OEM and Packaging
Create opportunities for growth of Team Leaders to take additional responsibilities
Market Expansion
• Upskilling the talent pool by proper training and recruitment of skilled people from relevant industries
To work on product gaps in each Vertical. Objective would be to viz:
•
•
Complete the product portfolio for Oil and Gas and regain lost ground
Focus efforts on new age technology to reduce / mitigate corrosion like Ceramic coatings, Graphene based coatings
Customer Expansion
Product Expansion
Brand Expansion
9
Historical Financial Performance
Steady Revenue growth in both the segments in this period
Unfortunate fire incident at our plants led to loss of capacity eventually resulting in declining revenues
Corrective actions initiated led to Business revival until Covid-19 disruptions
+12%
537
443
369
394
340
Mar-14 Fire incident at Howarh Plant
Nov-16 Fire incident at Nasik Plant
603
578
521
Revenue Impacted due to Covid-19 Pandemic
326
+20%
344
288
403
350
271
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Supply Side Constraints
Supply Chain Disruptions
Inadequate Product Portfolio
Intermittent Product Supply to Channel partners
Impact on the entire value chain – leading to operational and financial underperformance during the period
10
Improved supply chain management
Finished Goods
Cost Management
Customer Services
o Used simple forecasting model to plan to
produce finished goods
Challenges faced
o Distribution done through conventional
method
o Higher inventory days
o Shifted to replenishment model
Actions taken
o Identifying the reductant products and
adjusting/discontinuing the loss making product
o Redesigned distribution network
o High Supply Chain management cost
o Poor Order Management
o Dealing with multiple service producer
thus overlapping and higher cost
o Scope to improve Dispatch efficiency
o Inefficient Delivery system
o Change in Production & Sales model
along with Cost optimization strategies helped reduce supply chain management cost
o Improved product quality along with
the process improvement
o SLA’s with internal customers
o Daily review process
o Stocks accuracy
o Finished good inventory reduced by 25%-
30%
o Deployed owned/fixed vehicles
o Batch Management
Going ahead
o Liquidate non-moving Finished Goods
o Reduce MTO Stocks TAT
o Working towards reducing supply chain
o More Own / Fixed Vehicles
management cost further through Vertical Space utilization
o In-transit damages to be controlled
further
o Expand Footprints
o Process strengthening
o E_Samvaad (e_POD’s)
11
Positive outcome on financial performance
s e s n e p x E r e h t O
A D T I B E
T B P
86.8
96.7
Cost Optimization Strategies
57.0
62.5
✓ Improve Supply / RM Chain Management
FY18
FY19
FY20
FY21
✓ Improve the Product Supply to Channel partners
✓ Increase efficiencies at Depots
✓ Reduce overall company related costs
3.6
Value Creation
✓ Volume Growth in Decorative + Industrial Segments
-33.9
•
Lead to Improved Operating Efficiencies
✓ Increase dealer network and number of depots across the
FY20
FY21
country
-61.7 FY19
• Optimizing dealer margins over a period of time
-23.8
Improving Efficiencies
-56.2
✓ Lowering Working Capital requirements and improving
-109.2 FY19
FY20
FY21
profitability
12
-34.1
FY18
-67.4
FY18
360o growth strategy: started yielding results
Operating Profit Turns Positive
Improving Operating Efficiencies
EBITDA (Rs. Crs)
3.6
-33.9 FY20
FY21
Other Exp. (% to Revenue)
28.1%
19.2%
FY20
FY21
Reduction in Working Capital requirements
Healthy Operating Cashflow
Working Capital (No. of days)
61
51
FY20
FY21
Cashflow from Operating activities (Rs. Crs)
15.8
-9.3 FY20
FY21
13
Strategy Going Ahead – Product Diversification
“Launching of newer products as per the market demand & continuously improving the serviceability”
Seal-Proof
Shalimar Alkali Block Exterior Wall Primer
Pearl Lustre
Xtra Tough Anti Carbonation Coating
• Specially formulated premium quality acrylic primer with superior alkali, damp and efflorescence resistance for application on exterior and interior surfaces. It consists of a special polymer which binds with the surface seepage giving resistance
better
water
•
It has excellent hiding, whiteness & brightness. It enhances the durability of the top coat
• Shalimar Alkali Block Exterior Wall Primer is a water diluteable exterior primer based on specially designed acrylic emulsion suitable for exterior walls. It gives superior alkali and efflorescence resistance to exterior masonry surfaces
•
•
It is a Lustre Dana Finish Interior Synthetic Enamel Solvent based paint. for is designed essentially This applications on interior masonry, concrete, wooden & metal substrates to get the designer Dana finish.
It gives smooth, silky, stain resistant, washable, durable, anti yellowing & tough film
• Xtra Tough Anti-Carbonation coating is a water based, 100% acrylic, exterior coating, offering protection against carbon dioxide diffusion to your concrete structures. It has been formulated to protect and decorate concrete and masonry surfaces
• micro-porous structure of the coating acts as a barrier to Water and Carbon Dioxide but allows passing of water vapour from the substrate to the environment and becomes breathable along with the substrate
14
Profit & Loss Statement Q3-FY22
Particulars
Revenue from Operations
Cost of Materials Consumed
Purchase of Traded Goods
Changes in Inventories of Finished Goods and Work in Progress
Gross Profit
GP %
Employee Benefits Expense
Other Expenses
EBITDA
Other Income
Depreciation and Amortisation Expense
EBIT
Finance Costs
Exceptional Items
PBT
Total Tax Expense
Profit for the year
EPS
Q3FY22
Q3FY21
Q2FY22
• Revenue:
96.5
69.9
3.9
-0.5
23.1
92.5
59.0
6.2
-6.1
33.5
24.0%
36.2%
11.2
17.9
-6.0
2.6
3.4
-6.9
6.1
2.3
-15.2
0.0
-15.2
-2.81
10.1
17.6
5.8
0.1
3.3
2.5
5.0
0.0
-2.4
4.6
-7.0
-1.29
90.9
63.0
5.2
2.3
20.4
22.4%
10.8
17.4
-7.8
0.1
3.5
-11.2
5.7
0.0
-16.8
0.0
-16.8
-3.10
o Company has reported revenue growth of 4% in the quarter from Q3 FY21. Despite the lean season in the North, the company has recorded growth in Revenue from both Industrial & Decorative segments.
o Contribution from Industrial segments has marginally increased during the
quarter.
o During the quarter, the Company has taken a price hike of 7% to 10% compared to the last quarter and ~20% compared to same period last year to partially offset the increase in the raw material prices
o In the coming quarters looking at the raw material trend, company will decide on
the future pricing strategy
• Raw material cost:
o Over the last few quarters, raw material prices have seen on an increasing trend, which has contracted the Gross profit impacting the overall profitability of the company
o The prices of key raw materials have increased by more than 50% on the back of steep inflationary trend and sharp increase in commodity prices across the globe
o The company was able to absorb the increased cost by passing on the cost to the consumers through increase in average selling prices. However, due to competitive intensity need to absorb few costs internally impacting the margins of the company
o Company is continuously working on improving its product mix within the segments, which will eventually help to reduce the impact of increase in raw material costs on the company’s profitability
• Other Expenditure:
o Company has maintained the fixed cost at previous year level, however marginal
is due to secondary gifts scheme for the season.
15
Business Segment Performance
Decorative Paints
Industrial Paints
Total
Revenues* (Rs. Crs.)
Revenues* (Rs. Crs.)
Revenues* (Rs. Crs.)
300
215
206
246
237
138
99
111
130
119
438
314
317
376
356
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
Volumes (in KL ‘000)
Volumes (in KL ‘000)
Volumes (in KL ‘000)
30.5
30.2
31.1
10.5
23.7
20.8
8.7
9.2
9.6
8.3
41.0
39.8
39.4
32.4
30.0
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
*Gross Figures
16
Historical Profit & Loss Statement
Particulars
Revenue from Operations
Cost of Materials Consumed
Purchase of Traded Goods
Changes in Inventories of Finished Goods and Work in Progress
Gross Profit
GP %
Employee Benefits Expense
Other Expenses
EBITDA
EBITDA %
Other Income
Depreciation and Amortisation Expense
EBIT
Finance Costs
Exceptional Items
PBT
Total Tax Expense
Profit for the year
PAT %
EPS
FY21
325.6
198.4
21.9
2.4
102.9
31.6%
36.7
62.5
3.6
1.1%
7.2
13.3
-2.5
19.3
-2.0
-23.8
26.1
-49.9
-15.3%
-9.18
FY20
343.9
243.5
0.0
-11.2
111.6
32.4%
48.7
96.7
-33.9
-9.8%
1.4
10.9
-43.3
19.9
7.0
-56.2
-18.0
-38.2
-11.1%
-7.03
FY19
287.6
213.2
0.0
7.3
67.1
23.3%
42.0
86.8
-61.7
-21.5%
2.0
8.8
-68.5
25.1
-15.7
-109.2
-27.4
-81.8
-28.4%
-15.24
FY18
271.2
193.1
0.0
15.8
62.3
23.0%
39.4
57.0
-34.1
-12.6%
0.6
7.9
-41.3
26.0
-
-67.4
-21.8
-45.6
-16.8%
-24.04
FY17
349.8
208.5
0.0
11.0
130.3
37.3%
35.3
81.5
13.5
3.9%
2.0
8.1
7.4
22.6
-
-15.2
-5.5
-9.7
-2.8%
-5.12
17
Balance Sheet (Assets)
Balance Sheet - ASSETS
Property, Plant and Equipment
Right of Use Assets
Capital Work-in-progress
Intangible Assets
Financial Assets
(i) Loans
(ii) Other Financial Assets
Deferred Tax Assets (Net)
Other Non Current Assets
Total Non-Current Assets
Inventories
Financial Assets
(i) Investments
(ii) Trade Receivable
(iii) Cash and Cash Equivalents
(iv) Other Bank Balances
(v) Other Financial Assets
Current Tax Assets (Net)
Other Current Assets
Total Current Assets
TOTAL ASSETS
Mar-21
278.4
0.3
0.4
4.6
1.5
0.1
19.8
0.2
305.2
88.8
-
77.7
2.7
5.0
4.5
3.1
16.0
197.7
502.9
Mar-20
288.3
0.8
0.1
5.5
1.7
0.0
45.9
0.2
342.5
86.6
-
71.5
2.8
1.8
8.5
2.9
19.5
193.6
536.1
Mar-19
245.7
0.0
23.6
-
6.3
0.3
0.0
275.9
71.4
-
99.0
91.0
0.0
42.8
0.0
11.4
315.6
591.5
Mar-18
249.6
0.0
0.7
-
2.3
0.4
0.0
253.0
74.0
-
105.8
19.2
0.0
39.6
0.0
27.6
266.2
519.2
Mar-17
221.7
0.0
13.74
-
9.7
0.2
0.0
245.4
92.6
2.9
124.7
11.8
0.0
43.3
0.0
39.2
314.5
559.8
18
Balance Sheet (Equity & Liabilities)
Balance Sheet - EQUITY & LIABILITIES
Equity Share Capital
Other Equity
Total Equity
Financial Liabilities
(i) Borrowings
(ii) Lease Liabilities
(iii) Other Financial Liabilities
Provisions
Deferred Tax Liabilities (Net)
Other Non-Current Liabilities
Total Non-Current Liabilities
Financial Liabilities
(i) Borrowings
(ii) Trade payables
(iii) Other Financial Liabilities
Provisions
Other Current Liabilities
Total Current Liabilities
TOTAL EQUITY & LIABILITIES
Mar-21
10.9
212.2
223.1
24.1
0.0
0.4
6.1
0.0
0.0
30.5
99.6
111.0
28.7
4.7
5.4
249.3
502.9
Mar-20
10.9
262.0
272.9
18.2
0.9
1.4
6.1
0.0
0.0
26.7
100.7
96.1
30.2
4.5
5.1
236.5
536.1
Mar-19
11.0
294.3
305.3
18.1
0.0
0.0
6.0
-28.0
2.6
-1.3
126.8
97.6
0.0
29.9
33.3
287.6
591.5
Mar-18
4.1
134.0
138.1
24.9
0.0
0.0
6.7
-0.4
0.2
31.5
150.0
139.5
0.0
27.2
32.8
349.6
519.2
Mar-17
4.2
179.7
183.8
23.7
0.0
0.0
6.8
21.5
0.3
52.2
137.1
129.1
0.0
26.6
31.0
323.8
559.9
19
Cashflow Statement
Cash Flow Statement
Mar-21
Mar-20
Mar-19
Mar-18
Mar-17
Cash Flow from Operating Activities
Profit before Tax
(23.8)
(56.16)
(109.18)
(67.37)
(15.21)
Adjustment for Non-Operating Items
Operating Profit before Working Capital Changes
Changes in Working Capital
Cash Generated from Operations
Less: Direct Taxes paid
Net Cash from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Net increase/ (decrease) in Cash & Cash equivalent
Cash & Cash Equivalents at the beginning of the period
Cash & Cash equivalents at the end of the period
32.2
8.5
7.5
15.9
(0.2)
15.8
(6.4)
(9.5)
(0.2)
2.8
2.7
56.6
0.4
(9.6)
(9.2)
(0.1)
(9.3)
(27.9)
(45.8)
(83.0)
85.8
2.8
72.6
(36.6)
(57.4)
(93.9)
(0.1)
(94.0)
(33.7)
197.9
70.2
15.6
85.8
33.7
(33.7)
69.2
35.5
0.4
35.8
(10.5)
(17.9)
7.4
8.1
15.6
30.9
15.6
18.8
34.4
(0.1)
34.4
(16.0)
(18.9)
(0.5)
8.7
8.2
20
Balance Sheet Strength
Borrowings & Cash Balance
Debt to Equity
Net Debt to Equity
Borrowings
Cash & Cash Equivalents
161
175
145
91
121
131
15
19
5
8
1.3
0.9
1.1
0.8
0.5
0.4
0.6
0.4
0.5
0.2
Mar-17 Mar-18
Mar-19 Mar-20
Mar-21
Mar-17 Mar-18
Mar-19
Mar-20
Mar-21
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21
Working Capital (in Days)
Inventory
Debtors
Creditors
69
215
28
244
82
154
130
129
142
118
126
162
136
61
76
Mar-17
Mar-18
Mar-19
Mar-20
51
Working Capital Days
151
146
182
87
Mar-21
21
Brand Campaigning Initiatives
Shalimar has carried out various marketing campaigns from time to time to capture greater mind share of customers and generate pull effect for the brand
Focus on strengthening legacy ‘Shalimar Paints’ Brand
22
CSR Initiatives
Click here to watch video
Launched Kahaani Project
• Campaign aimed at beautifying and uplifting the village of Tauli Bhud located in Dehradun, Uttarakhand
• Empowered over 300 people and
offered livelihood generation to 24 villagers
• Through this one-of-its-kind
campaign, the language, traditions and values of the people of Tauli Bhud will now live forever, vibrantly painted on the village walls
14 wall arts
More than 8000sq.ft. painted
Support from 15 National &
4 International organisations
Artists from 7 different countries
322+ Lives impacted
Infinite smiles & memories
23
CSR Initiatives
RANG BADLAAV KE
3000+ homes painted 1000+ graffiti’s 2000+ volunteers from 80+ colleges 30+ corporates and citizens from 20+ countries countless smiles and endless memories….
24
Thank You
Company :
Investor Relations Advisors :
Shalimar Paints Limited
CIN: L24222HR1902PLC065611
Mr. Mohit Kumar Donter – Chief Financial Officer
mohit.donter@shalimarpaints.com
www.shalimarpaints.com
Orient Capital (a division of Link Group)
Mr. Rajesh Agrawal +91 99674 91495 rajesh.agrawal@linkintime.co.in Ms. Rasika Sawant: +91 95944 57518 neha.shroff@linkintime.co.in