Tega Industries Limited has informed the Exchange about Investor Presentation
TEGA TEGA INDUSTRIES INDUSTRIES LIMITED LIMITED
PART NE RS HIP S I N P RAC T I C E PART NE RS HIP S I N P RAC T I C E
Investor Presentation
Feb. 2022
1
Safe Harbor
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Tega Industries 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 cash flows, 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.
2
Tega Industries Limited – Company Overview
Immunity from Capex Cycles
▪
Cater to after-market spend recurring revenues
Continuous Design Innovation
▪
Launched DynaPrime in 2018 – a composite liner of rubber & steel
Commenced operations in India in 1978, in collaboration with Skega AB, Sweden
Leading manufacturer & distributor of specialized ‘critical to operate’ & recurring consumable products1
Catering to global mineral beneficiation, mining & bulk solids handling industry
Inorganic Strategy
▪
Successfully integrated 3 acquisitions
1.
For the global mineral beneficiation, mining & bulk solids handling industry
3
Evolution into a Global Multi-product Player
Foundation
Buyout
of
Collaboration our Promoter, Madan Mohan Mohanka with Sweden based Skega AB, and incorporation of Tega
of
Buyout by Madan Mohan Mohanka Skega AB’s entire stake in our Company leading the way for Tega to conquer new heights
Intellectual Property, Acquisition
• Grant of patent in relation to improved screen panel • Acquired Losugen Pty Ltd,
Australia
Additional Patent, Greenfield Project
• Grant of patent in relation to mosaic liners for chutes • Commissioned SEZ unit in
Dahej, Gujarat
Initial Public Offering
The shares of the company were listed on National Stock Exchange and Bombay Stock Exchange
1975
2001
2010
2013
2021
1991-92
2006
2011
2019
JV & Registration
•
JV alliance with Hosch (G.B.) Ltd.
• Application for registration of our patent for method of preparing liner
Expansion & Acquisition Tega Inds. Africa PTY (Erstwhile Beruc Ltd. South Equipment, Africa)
•
Fund Raise,Acquisition by Wagner Investment Limited, an affiliate of TA Associates Management,
• Tega
Inds.
Chile
SpA
(Erstwhile Acotec S.A,)
Product Innovation & Trademark
Grant of relation to ‘DynaPrime’
trademark in
4
Corporate Structure
Tega Industries Ltd
Material Subsidiaries1
100%
100%
100%
100%
50% JV
Tega Industries Africa Proprietary Ltd.
Tega Industries Chile SpA
Tega Holdings Pte Ltd
Losugen Pty Ltd
Hosch
Holdings Pte Ltd
1 Shown above are material subsidiaries. The company also holds other wholly owned marketing subsidiaries
5
Key Strengths
Robust fundamental
Established Track Record
Mineral Processing Industry 2020- 301 CAGR: 6.3%
•
Infrastructure growth, shift to EVs, RE, electronics, volatility hedge, etc. key demand drivers for relevant metals
• Declining ore grade enhancing demand for beneficiation
products
CAGR 12.7% Revenue from Operations FY19-21
23.3%
Operating EBITDA margin FY21
Rs 2,781 mn Robust Orderbook (31-Dec-21)
Growth Momentum
Differentiated, High Margin Business
Significant visibility
One of the Global Leaders
• 2nd largest producers of polymer-based mill liners 2
• 55+ product portfolio
Diverse Footprint
• 3 plants in India & 3 Overseas
• 18 global & 14 domestic sales offices
• 513 installation sites , ~70 countries (FY21)
• 86.42% of revenue from operations from outside India in FY21
1. Global Mineral Processing Industry Market Size in Mn tons as per F&S Report. 2. On the basis of revenues as of June 30, 2021
6
Q3 & 9M FY22 PERFORMANCE HIGHLIGHTS
7
Q3 & 9M FY22 Performance Highlights
Q3FY22
Revenue
+20%
Rs. 2,578 mn
9MFY22
Revenue
Rs. 6,617 mn
+19%
-14%
Management Commentary
❑ Impact of rise in material costs led to pressure on margin. The same will be passed on gradually being critical spares for the customers
❑ Due to disruptions in global supply
chain, substantial escalation in freight costs has also affected margins. YoY, Freight costs have increased ~40% in 9M FY22
Operating EBITDA
Rs. 1,139 mn Margin at 17.2%
PAT
-29%
Rs. 680 mn Margin at 10.3%
8
Operating EBITDA
Rs. 510 mn Margin at 19.8%
PAT
Rs. 336 mn Margin at 13%
+8%
+6%
YoY
Consolidated Financial Performance
In Rs mn
Quarter- wise trend : FY22
Revenue
Operating EBITDA
PAT
+11.7%
+33.2%
2,578
2,307
1,732
+29.6%
510
+67.0%
393
236
+48.9%
336
+89.8%
226
119
Q1 FY22
Q2 FY22
Q3 FY22
Q1 FY22
Q2 FY22
Q3 FY22
Q1 FY22
Q2 FY22
Q3 FY22
Consolidated Financial Performance
Revenue
+18.9%
6,617
5,567
Nine-Months Performance
Operating EBITDA
-14.0%
1,324
1,139
PAT
-28.6%
952
680
9M FY21
9M FY22
9M FY21
9M FY22
9M FY21
9M FY22
Q3 & 9M FY22 - Consolidated P&L
Particulars (INR mil) Revenue from operations
Cost of materials consumed Changes in inventories
Gross Margin Gross Margin % Employee benefits expense Other expenses Operating EBITDA Operating EBITDA Margin % Finance costs Depreciation and amortisation expense Other income Share of profit of joint venture PBT
Current tax Deferred tax PAT PAT Margin Basic EPS
Q3 FY22 2,577.9 1,144.9 -39.0 1,471.9 57% 350.3 611.6 510.0 20% 24.3 88.8 36.2 8.0 441.0 92.5 12.6 335.9 13% 5.7
Q3 FY21 2,141.5 1,110.7 -235.6 1,266.4 59% 324.5 470.0 471.9 22% 35.4 103.8 138.3 8.3 479.3 106.5 57.4 315.4 15% 5.6
YOY 20%
16%
8%
-8%
6%
Q2 FY22 2,307.1 1,017.1 -41.7 1,331.7 58% 369.8 568.4 393.5 17% 25.7 102.0 20.5 6.5 292.7 117.5 -50.4 225.5 10% 4.0
QoQ 12%
11%
30%
51%
49%
9M FY22 6,617.0 2,926.4 -159.5 3,850.2 58% 1,070.4 1,640.8 1,139.1 17% 86.2 295.8 117.8 20.6 895.4 279.7 -64.4 680.2 10% 11.9
9M FY21 5,566.9 2,218.5 -52.9 3,401.3 61% 910.4 1,166.8 1,324.1 24% 127.1 302.2 425.9 20.2 1,340.9 270.0 118.6 952.3 17% 16.8
YOY 19%
13%
-14%
-33%
-29%
FY21 8,055.2 3,282.4 -44.5 4,817.3 60% 1,226.7 1,715.8 1,874.8 23% 172.8 401.8 511.6 26.8 1,838.6 372.8 101.8 1,364.1 17% 24.1
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KEY INVESTMENT HIGHLIGHTS
12
Key Investment Highlights
Diverse & Innovative Products with Low Substitution Threat
1
Insulated from Capex Cyclicity of Mining Players
Strong R&D leading to Multiple Patents, with focus on Quality
3
Diverse Global Presence with Strong Global Manufacturing & Sales Capabilities
2
4
Consistent Growth with Operational Efficiency & High Repeat Business
5
Track Record of Successful Inorganic Growth Strategy
6
1. Diverse & Innovative Products
Flagship products
Sale of Products
Specialized, ‘critical to operate’ and recurring consumable products
Mill liners
Hydrocyclones
Screens & Trommels
Conveyor Products
Rapido
Spillex
DynaPrime
DynaPulp
Tega Cyclone (PExEL)
Trommel
Centrax
DynaSteel
DynaWear
Used in grinding mills for beneficiation of minerals
Used for extracting or separating slurry particles
Screening Solutions
Ceramic pulley lagging
for used Used for separation of particles according to sizes according to sizes
separation Used with conveyor belts
particles
of
Mill Liners
Hydrocyclone
Scalping screen
Trommel
Ball Mill
SAG/AG Mill
Ball Mill
Screen chute
SAG/AG Mill
Conveyor Belt
Sale of Services
Specialized Plant Audit Consultancy
Supply of Individual Spare Parts
Note: As an average of the last three Fiscals, sale of products constitutes 95.08% of revenue from operations, while sale of services and other operating revenue constitutes 2.15% and 2.77%, respectively of revenue from operations 14
14
2. Insulated from Capex Cyclicity of Mining Players
Upfront capex & After-market spend over the lifecycle of a mill
1x
Upfront Capex
Approx. split
3x
After market spend
Majority of our products are linked to the operating expenditure budget of a mining site, thus immune from capex cycle
Recurring cost for miners
74% Repeat Orders (of sale of products & services in FY21)
15
3. Strong R&D leading to Multiple Patents
Track record of bringing multiple innovative products to the market
2018 – Rapido
2018 – DynaPrime
2016 – Chutes
2015 – Trommels
R&D Capability
• In-house R&D team comprises 36 personnel
• R&D & manufacturing capabilities, allow turnaround of
customized designs in a short time, offer comprehensive solutions, & cross sellling
• Unique design & customization of products for each
customer site
• Our continuous design innovation makes our products
highly engineered “built-to-suit” rather than “off-the-shelf”
• Track record of introducing diverse and innovative products
Quality Control
• We do not rely on outsourcing: reduces our dependence on vendors, minimizes failure rates & facilitates quality assurance
• Well-crafted manufacturing process leading to high-
quality production
• Ability to match diverse customer specifications
• Multiple stages of stringent selection and approval
procedures for our products
• Certified by various customers on
quality assurance
ISO 45001:2018 India
ISO 9001:2015 India, South Africa
ISO 14001:2004 India
Strong in-house R&D has allowed us to register 8 global patents and several trademarks
16
4. Diverse Global Presence - Manufacturing & Sales Capabilities
Chile
South Africa
Australia
Commissioning/Acquisition: 2011
Product capabilities: Mill liners, Trommels, Chute liners, Screens, Pipe and pipe repair and spools
Commissioning/Acquisition : 2006
Product capabilities: Mill liners (except DynaPrime), Spillex, Screen Panel, Chute liners
Commissioning/Acquisition: 2010
Product capabilities: Chute liners and Trommels
International
manufacturing
operations
Sales & Marketing Offices
Mining activity High
India
Chile
South Africa
Australia
Dahej, Gujarat
Kolkata (Samali), West Bengal
Kalyani, West Bengal
Domestic
manufacturing
operations
Commissioning/Acquisition: 2013 Product capabilities: Mill liner, wear products, screens and trommels
Commissioning/Acquisition: 1985
Product capabilities: Mill liners, Wear products, Hydrocyclones, Screens, Trommels & Conveyor products
Commissioning/Acquisition: 1978
Product capabilities: Mill liners (except DynaPrime), Conveyor products, Chute liners & pump liners, Hydrocyclones
17
5. Consistent Growth & Long-Term Repeat Business
Robust market position
Entry barriers helps maintain high margins over time with revenues from operations growing at 12.74% CAGR FY19-21
Built Inherent Strength
Successfully maintained operational efficiency levels whilst completing acquisitions, JVs & in Chile, South Africa & strategic alliances, Australia
Forged Strong Relations
In several cases, our relationships with key customers span more than 10 years, a testimony to our business excellence
18
6. Track Record of Successful Inorganic Growth Strategy
JV in 1991
Acquisition in 2006
Acquisition in 2010
Acquisition in 2011
• Assistance
from
Hosch
• Expand operations globally
•
Increased market
share in
• Access to the Latin American
England
covering
aspects
such as planning,
layout,
overseas marketing, R&D and
procurement
of
raw
materials
• Provided
access
to
manufacturing
capabilities
Australia
by
acquiring
markets including Chile, Peru
competitor at the time
and Bolivia
and customers
in Africa’s
• Provided access to a ready
• Latin
American
countries
mining and industrial markets
platform to launch conveyor
contribute 40% of the global
• Also gave access
to the
member
countries of
the
Southern
African
Development Community
accessories & screens in that
copper production and 8% of
market
the global gold production
output according to the F&S
report
19
Key Growth Drivers Going Forward
Gain market share & customer wallet share across high growth markets
Leverage in-house R&D to grow product offerings & capitalize on future trends
Expand manufacturing capabilities to optimise economies of scale
Explore opportunities for inorganic growth
Operational efficiencies & margin expansion
• Increase our penetration & market share in North America, & Australia & South Africa
South
• Improve
penetration selling
our market cross-
by
• Continue focus on high products with quality recurring demand leading to high repeat revenues
• In-house
R&D
team focuses on upgrading our & existing variants
products
• Focus on our ability to customize our product offerings through innovation
to trends
discern • Continue emerging & proactively identify new products
• Continue
expanding
manufacturing adding capabilities capacity at our Dahej & Samali facilities in India
by
• Plan to set up a new manufacturing facility in Chile
• Expand into life cycle our
for
management customers
• Actively
pursue acquisitive opportunities & strategic alliances with complementary targets
• Seek
acquisitions that provide us with access to new technologies, or new customers, or new geographies
• Continue enhancing our operational efficiencies, to increase economies of scale, better absorb our fixed costs & strengthen our competitive position
• Focus
on
cycle
time adopting technologies in
reduction by advanced that will also result process optimisation
20
LEADERSHIP TEAM
21
Experienced Board of Directors
Madan M. Mohanka
Chairman and Executive Director
Mehul Mohanka
Managing Director and Group CEO
Syed Yaver Imam
Executive Director
Appointed: Since inception
Appointed: Jun-02
Appointed: Jul-05
Background: • Promoter, Founder and Chairman • Serves on the Board of our subsidiaries
Background: • One of the Promoters, MD & Group CEO • Chairman of the mining and construction
equipment division & Co-chair of the national committee on mining of Confederation of Indian Industry
Background: • Serves as Director - Global Product Group • Executive Director from Apr-21-present • Previously Non-Executive Director on the Board
(Jun-19 to Mar-21)
Hemant Nerurkar
Independent Director
Jagdishwar Sinha
Independent Director
Madhu Dubhashi
Independent Director
Rudolph Michael
Edge Independent Director
Appointed: Apr-14
Appointed: May-21
Appointed: May-21
Appointed: Mar-14
Background: • Associated with Tega since 2014 • Completed a degree course in metallurgy engineering from the University of Poona
Background: • Previously with The Tata Iron and Steel
Company Ltd., Tata Timken Ltd., Timken India Ltd., Schaeffler Technologies AG & Co., Ace Automation Control Equipment Private Ltd., Caparo Maruti Ltd.
Background: • Previously with Global Data Services of
Background: • Previously with FLSmidth Pvt. Ltd. as an
India Ltd.
executive vice chairman
• Bachelor’s degree in arts from University of
• Bachelor’s degree in technology (chemical
Delhi & PGDM from IIMA
engineering) from Nagpur University
22
Management Team
Mehul Mohanka
MD and Group CEO
• One of the Promoters of the Company, MD &
Group CEO
• Associated with Tega for almost two decades
• Bachelor’s degree in commerce from
University of Calcutta & a Master’s degree in Business Administration from the University of Pittsburgh
Manoj Kumar Agarwal
CA, CS
• Associated with Tega for 6+ years; Qualified
Director Global Finance, Chief Financial Officer & Company Secretary
• Previously associated with Sesa Sterlite Ltd. (now Vedanta Ltd) for almost a decade
• Bachelor’s degree in commerce from
University of Calcutta
Bhanu Sharma
Senior Vice- President – Human Resources & Administration
• Master’s degree in computer application
from Punjab Technical University
• PGDM from Management Development
Institute, Gurgaon
• Previously associated with Express
Knowledge Communications Solutions and JSW Energy
Syed Yaver Imam
Director – Global Product Group
Manoj Sinha
Director- Global Operations
Kanjanabha Bhattacharyya
President – Corporate Strategy
• Associated with Tega for four decades since joining as a Trainee in 1981 and climbed up the ladder
• Executive Director on the board of Tega Inds
• Bachelor’s degree in Civil Engineering from
Jadavpur University
• Associated with Tega for 6+ years
• Bachelor’s degree in engineering from
Sambalpur University
• Previously associated with Tata Engineering and Locomotive Company, New Holland Tractors (India) and Sterling Generators
• Bachelor’s degree in Metallurgical engineering, Jadavpur University
• PGDM from Indian Institute of
Management, Calcutta
• Previously associated with Outotec India, Boston Consulting Group (India) and Siemens VAI Metails Technology
23
THANK YOU
Mr. Manoj Kumar Agarwal
Director Global Finance, Chief Financial
Officer & Company Secretary investor.relations@tegaindustries.com
Mr. Rajesh Agrawal
Sr. Vice President
+91 99674 91495 Rajesh.Agrawal@linkintime.co.in
Mr. Nachiket Kale
+91 9920940808 nachiket.kale@linkintime.co.in