ADFFOODS

/},( )f FOODS LTD. 'ifeMiru;, tit,?, ,w;d,d .. November 14, 2019 DCS-CRD DCS-CRD National Stock Exchange of India Limited BSE Limited Exchange Plaza Department of Corporate Services Bandra Kurla Complex Phiroze Jeejeebhoy Towers Bandra (East) Dalal Street Mumbai -400 051 Mumbai -400 001 .... sY!!!bol: ADFFOODS Scrip Code: 519183 Dear Sir /Madam, Sub: Investor Presentation Enclose please find Corporate Presentation of the Company for the Half Year ended September 30, 2019. The aforementioned Presentation has been uploaded on the Company's website viz., www.adf-foods.com You are requested to the take the above on your records. Yours faithfully, valekar . Company Secretary Encl: As above Regd Off: 83/86, G.1.D.C Industrial Estate, Nadiad -387 001, India. Tel.: +91 268 2551381/82 Fax: +91 268 2565068 Email: nadiadfactory@adf-foods.com CIN: L15400GJ1990PLC014265 Corp. Off: Marathon lnnova 82, G01, Ground Floor, G. K. Road, Lower Pare!, Mumbai -400 013. INDIA. Tel. : +91 22 6141 5555, Fax: +91226141 5577 Email: info@adf-foods.com, Web : www.adf-foods.com Disclaimer This presentation and the accompanying slides (the “Presentation”), which have been prepared by ADF Foods 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 willbe made except by means ofa statutoryofferingdocument containing detailed informationabout theCompany. 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 considermaterial.Any liabilityinrespectofthecontents of,oranyomissionfrom,this Presentationisexpresslyexcluded. 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 guaranteeing 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 theCompany and theCompany isnot responsibleforsuchthird-partystatements and projections. LT 0. ?eedbu; tli.e ",<nt.d .. “ At ADF we believe in maintaining high quality standards, introducing new and innovative pr“oducts while remaining customer centric SVUL THE ORIGINAL INDIAN TASTE 1 Q2 & H1FY20 highlights 2 About the company 3 Strengths & drivers 4 Growth strategies 5 Historical financial overview Consolidated Financial highlights H1FY20 Rs in Crs Revenue (Rs Cr) EBITDA (Rs Cr) and Margin PAT (Rs Cr) and Margin 22.5% 22.3% 14.5% 13.7% 14% 8% 13% 134.6 118.2 18.5 30 17.1 26.6 H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 Exports contribute to more than 95% of revenues 6 Consolidated profit and loss statement (Rs Cr) Q2FY20 Q2FY19 YoY H1FY20 H1FY19 YoY Revenue from operations 56.9 59.7 122.7 108.7 Other income 6.7 5.5 11.9 9.4 Total Income 63.7 65.2 -2.3% 134.6 118.2 13.9% Cost of material consumed 16.1 19.9 38.6 49.7 Changes in inventories 2.0 2.9 -5.2 -11.2 Purchase of stock-in-trade 12.2 8.8 33.0 18.4 Employee expenses 3.9 3.5 9.5 8.4 Other expenses 14.7 13.7 28.7 26.3 Total Operating expenses 48.9 48.7 104.6 91.6 EBITDA 14.8 16.5 -10.2% 30.0 26.6 12.8% EBITDA margin 23.2% 25.3% 22.3% 22.5% Finance cost 0.3 0.2 0.5 0.3 Depreciation 1.3 1.1 2.7 2.2 PBT 13.1 15.2 -13.6% 26.8 24.1 11.2% PBT margin 20.6% 23.3% 19.9% 20.4% Tax Expenses (Credits) 4.0 4.8 7.9 7.0 Exceptional item -0.2 - 0.4 - PAT 9.3 10.4 -10.4% 18.5 17.1 7.8% PAT margin 14.6% 15.9% 13.7% 14.5% 7 Consolidated Balance sheet Rs in Crs Sept'19 Mar'19 Rs in Crs Sept'19 Mar'19 Share Capital 20.4 20.4 Fixed Assets incl. CWIP 78.9 70.5 Reserves 170.1 151.4 Income Tax Asset (Net) 3.1 3.2 Shareholders' Funds 190.5 171.8 Other Financial Assets 25.9 1.7 Other liabilities 12.8 10.1 Other Non Current Assets 10.2 13.9 Total Non-Current Liabilities 203.3 182.0 Total Non-Current Assets 118.0 89.3 Trade Payables 11.6 12.5 Inventories 40.5 34.6 Other Current Liabilities 1.6 2.1 Sundry Debtors 47.4 43.9 Current Tax Liabilities 1.5 1.8 Cash and Bank 23.2 18.4 Other Finnancial Liabilities 9.1 5.9 Other Financial Assets 6.9 9.0 Short Term Borrowings 17.7 - Other Current Assets 8.8 9.0 Total Current Liabilities 41.5 22.3 Total Current Assets 126.8 114.9 Total Liabilities 244.8 204.2 Total Assets 244.8 204.2 8 New product launches in FY20 ... ODS l{O. "-' f -----------~-----------~---------------------------------------, I Flavored Milk Use of Natural Flavors, No Artificial Colors and Essence : I ________________________ ::::::::::::::::_ ______________________ , I I I I I I I Focus on I Baked I changing Snacks trends 100% Vegetarian, Just Heat & Eat, Microwaveable in 90 seconds Frozen Snacks & Chutneys No Trans Fat, No Cholesterol, Vegan, Ready-to-eat Wide range of products with established brands & strong distribution Presence in 50+ countries Wide reach across allowing wide range and markets with 180+ coverage distributors • Ashoka • Truly Indian Two state-of-art manufacturing • Aeroplane • PJ’s Organic facilities at Nashik and Nadiad • Camel • Nate’s with total installed capacity of • Soul 26,000 TPA FOOD LT JC'<'di119 t/1" woitd. . • Ready-to-eat • Meal • Ready-to-cook accompaniments Skilled management with • Frozen food • Pastes, sauces in-depth industry • Flavored milk knowledge 11 Evolution of the Company Upto 2000 2391 The Flagship brand offers 1985 wide range of ready-to- cook, ready-to-eat Indian food Acquired this USDA certified organic food Launched a range of Acquired this brand brand from a US based organic products under Entered a new 1975 and launched a 2010 company offering a wide 22001166 this brand for 2019 business vertical range of pickles range of hand rolled mainstream Non-Indians of overseas primarily marketed in organic burritos to the US across the world agency Middle East market, also well known distribution for its authentic Mexican flavors Acquired 100 years old Entered beverage Acquired this brand from Launched an premium brand of 22001111 2019 category with 1969 2010 a US based company and urban centric pickles and spices . The launch of ` entered in organic, vegan brand in India brand is targeted at Badamazaaunder and protein rich food the Arabic diaspora Ashoka brand category in the US market 2001- 2011- 2017- 2010 2016 2019 12 Experienced management Bimal Thakkar Chairman, Managing Director and CEO • 30+ years of experience in domestic and export management • Instrumental role in development of Brands and new products, tapping new markets, international acquisitions, setting up of subsidiary companies in U.K. and U.S.A. Anish Jhaveri Devang Gandhi R. R. Singh Deepak Nachane CFO COO VP, Manufacturing GM, Purchase • 30+ years of experience in • 30+ years of experience in • 30+ years of experience in • 25+ years of experience in procurement, vendor development, corporate finance function for business management food industry inventory control capital intensive companies • Hold a bachelor’s degree in • Holds a master’s degree in • Chartered Accountant and hold a commerce Chemistry and PDG in F&F • Holds engineering degree in production technology & diploma in bachelor’s degree in commerce Technology business & materials management Maneck Katpitia Narayan Kadam Shalaka Ovalekar VP, International Operations GM, Works (Nasik) CS & Legal Head • 30+ years of experience in • 15+ years of experience • 15+ years of experience in international operations in factory management secretarial and legal functions • Holds bachelor’s degree in • Holds a master’s degree in • She is a CS, CWA, LLB and commerce and postgraduate in food science and holds a bachelor’s degree in marketing and sales management technology commerce 13 Board of directors Jay Mehta Ravinder Jain Non-Executive Director Independent Director • 35+yearsofrichindustrial experience • 45+yearsofexperienceinbusinessmanagement • He is the Executive Vice Chairman of Gujarat Sidhee Cement Ltd and • Has held various management position like MD of Shaw Wallace, MD Saurashtra Cement Ltd and is on the Board of various other private ofMillennium AlcobevandheadofMcDowellandCo. andpublic limited companies • Has been instrumental in developing several green field businesses in • Holdsamaster’sdegreeinbusinessmanagementfromIMDLAUSANNE, alcoholand beverage industry as wellas many well-known brands like SWITZERLANDandabachelor’s degreeinindustrial engineering McDowells Whisky,BagpiperWhisky etc. • Chemical engineer from IIT, Delhi and post graduate diploma in businessadministration fromIIM, Ahmedabad Viren Merchant Anjali Seth Independent Director Independent Director • 30+ years of experience and expertise in business management and • 30+yearsofexperienceasaprofessionallawyer pharmaceuticalandhealthcareindustry • Plays a vital role in advising and consulting with banks, financial • CurrentlyCEOofEncoreHealthcare PvtLtd. institutionsandcorporatesasalegalconsultantinmatterspertainingto • Holdabachelor’sdegreeinScience M&A, PE Investments, industrial and employees' relations, corporate governance,realestatenegotiation, legalmatters,statutoryissues, etc. • HoldsabachelorsdegreeinLaw Naresh Kothari Independent Director • 25+yearsofexperienceinbusinessbuilding andcapitalmarkets • Has held various management roles including President of Edelweiss Capital, Senior member of Management Committee, Co-Head of Edelweiss Alternative Asset Advisors, HeadofCoverage&ECM,andCo-HeadofInstitutional Equities • Holds a master’s degree from IIM Ahmedabad and a bachelor’s degree in computerscience 14 Giving back to stakeholders srotsevnI tnemnorivnE yteicoS Consistently FY17 FY18 FY19 H1FY20 rewarding Buyback of Dividend of Buyback of Interim shareholders through Rs 9.6 crore 25% Rs 30 crore dividend of dividends and 15% buybacks ▪ Solar power projects to meet ~40% of the total power requirement at the manufacturing plants at Nadiad and 100% power requirement at Nasik ▪ Invested in waste water treatment, Zero Liquid moving towards zero discharge at Dischar e manufacturing facilities ▪ Centers for women’s education, financial aid towards medical treatment of the underprivileged, residential care expenses for the physically challenged youth, contribution to environment protection by creating awareness for avoiding usage of plastic, animal welfare etc. 15 Strong industry fundamentals to drive growth Indians staying abroad (in millions) 1 Indian diaspora driving demand for ethnic RTE food There are more Indian staying outside their native country than any other nationality 172 Increasing 160 preference over 149 convenience food 2016 2019 2023 ▪ Consumers across the globe are opting for Gluten free, lactose free, veganism, vegetarianism and nutritional food options ▪ Veganism has grown 500% since 2014 in the US3 ▪ Amongst the international cuisines, Indian and Mexican cuisines are the most preferred ones. Furthermore, vegans prefer Indian cuisine given the multiple options in Indian dishes noilliB DSU ... IOODS l{O. -"' 3.3 >> 2.3 2.3 - .I .I -• -• .• (cid:127) 1990 1.2 1.2 0.5 0.5 0.9 0.4 0.4 0.8 0.7 0.6 • 2017 0.2 0.2 0 (cid:127) --· UAE USA Saudi Arabia Oman Kuwait UK Qatar Canada CAGR 7.3% ▪ Millennials prefer convenience and ready to eat food >> ▪ The global ready to eat market is expected to grow at a CAGR of 7.3% during 2016-20232 Global ready-to-eat market Eating healthy >> 37% is the new trend World vegetarian population Source: 1UN Population division, 2Research Nester, 3Rise of the Vegan 17 The only company with a presence across all categories Ready-to-eat & Cooking sauces Flavored Ready-to-cook & pastes drinks Meal Condiment Frozen food accompaniments powders With a view to evolve with consumer preference, the company has been continuously expanding its product basket with new launches every year In FY19, the company entered a new segment of flavored drinks with the launch of “Badamazza” under its Ashoka brand 18 Strong distribution network ------- Masud Sethi ....... ---------- Country manager (Canada) .......................... . - .. ..... ..... ...., ' / / .......... . .... , ,, " ' , ' -----/- / - - / -- ----.................... ' ' ',, ' \ \ Savio Almeida ~- Q / . \ Country manager (GCC, CANADA LevantCountries, Asia '·, ', \ \ Pacific & Africa) \ ,,,\ ~ EUROPE '· I '- \ NORTH I ? -- ', ~ ·, \ \ \ \ ~ I ,· -· ·-- . - . ·- --·---- -- . .... '·,., Bharat Sareen& UpinderThakur AMERICA Country managers (UK) -rt ~,- -,., ASIA ·,., Apurva Patel & Vimal Bhalla \ HO Country managers (USA) \ Mumbai MIDDLE t EAST \ I I I I I 0 / 50+ 0 SOUTH Countries AFRICA AUSTRALIA 180+ Distributors 6 Country managers 19 Manufacturing units Nadiad Facility ❑ 2 state of the art manufacturing plants located at Nashik spread across 10,100 sq. meters of area and Nadiad with a built-up area of 15,000 sq. meters ❑ Both the facilities are HACCP (Hazard Analysis and Critical Control Point) and BRC (British Retail Consortium) accredited. ❑ Successfully commissioned Effluent Treatment Plant with zero-liquid discharge at Nasik facility ❑ Installing solar panels in both the facilities for captive consumption Nashik Facility 20 Awards & recognition ‘Truly Indian’ organic product category won two silver awards in 2017 the SOFI awards of 2017, held by Specialty Foods Association, USA. Awarded ‘Best FMCG Company’ in Agri-business sector (SME Sector) at 2009 the DHL- CNBC International Awards for 2008-09 Awarded ‘Best Overall Exporter of the Year’ (SME Sector) at the 2009 DHL- CNBC International Awards for 2008-09 Accreditation of internationally recognized HACCP (Hazard 2003 Analysis and Critical Control Point) certification APEDA (Ministry Of Commerce) 1998 Award for exceptional performance in Exports Awarded prestigious ISO 9002 certification by BVQI of U. K. 1996 for export promotion Certifications and accreditations 21 Serve changing consumer needs with focus on profitability ▪ Identify latest consumer trends and preferences and develop ▪ Continue to focus export products to tap those markets of North America, opportunities Continuous Europe, Australia, Middle East ▪ In-house team of food product ▪ Deepen presence in specialists who are focused on geographies where there is innovation continuous product Focus on still low penetration of ADF development growing brands geographies ▪ Diversify and develop new New allied categories to deepen reach to ▪ Focus on profitability through existing consumers categories Premium changing product mix in favor ▪ Entered new category of milk of higher margin products product based beverage this year ▪ Strong focus on lean balance focused sheet product mix 23 Financial performance ... IOODS l{O. -"' Rs Cr EBIDTA PAT Revenue 16% 3year CAGR 29% 3year CAGR 7% 3year CAGR 49 30 202 182 165 172 36 22 31 27 14 14 I I I FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 Cash flow from EBIDTA Margins PAT Margins operations % % 15% 24% 20% 12% 44 19% 16% 9% 8% 26 21 I 18 I I FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 Standalone Financials 25 Returns ratios Return on Equity Return on Capital Employed Net Worth % % Rs in Cr 14% 210 21% 208 11% 15% 198 12% 11% 7% 7% 189 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 Standalone Financials 26 Historical profit and loss statement Standalone Consolidated (Rs Cr) FY17 FY18 FY19 FY17 FY18 FY19 Revenue from operations 165.7 163.8 187.5 201.2 201.0 231.4 Other income 5.6 18.6 14.1 6.4 18.6 14.1 Total Income 171.3 182.4 201.5 207.5 219.6 245.5 Cost of material consumed 79.1 78.2 79.1 78.2 89.3 89.3 Changes in inventories -0.9 2.8 -4.2 -0.9 1.5 -11.1 Purchase of stock-in-trade 11.4 11.4 6.5 31.2 34.2 42.0 Employee expenses 13.8 13.9 13.4 17.4 16.4 16.1 Other expenses 40.6 39.7 47.3 52.5 49.3 56.3 Total Operating expenses 144.0 146.0 152.3 179.3 179.6 192.6 EBITDA 27.3 36.4 49.2 28.2 40.0 52.9 EBITDA margin 16.0% 20.0% 24.4% 13.6% 18.2% 21.5% Finance cost 0.9 1.1 0.9 0.9 1.1 0.9 Depreciation 4.4 4.4 4.3 4.6 6.8 14.2 PBT 22.1 30.9 44.0 22.7 32.1 37.7 PBT margin 12.9% 17.0% 21.8% 11.0% 14.6% 15.4% Tax Expenses (Credits) 7.7 8.6 13.5 8.2 14.0 12.4 PAT 14.3 22.3 30.5 14.6 18.1 25.3 PAT margin 8.4% 12.3% 15.1% 7.0% 8.2% 10.3% 27 Historical balance sheet - Standalone Rs in Crs FY17 FY18 FY19 Rs in Crs FY17 FY18 FY19 Share Capital 21.6 21.6 20.4 Fixed Assets incl. CWIP 70.5 70.7 70.1 Reserves 176.1 186.8 190.0 Income Tax Asset (Net) 2.7 3.0 3.2 Shareholders' Funds 197.7 208.4 210.4 Other Financial Assets 64.5 60.3 59.6 Secured Loans 0.1 0.03 - Other Non Current Assets 0.4 0.6 3.4 Other liabilities 13.0 9.6 9.9 Total Non-Current Liabilities 210.8 218.0 220.3 Total Non-Current Assets 138.1 134.6 136.3 Trade Payables 9.0 11.0 11.0 Inventories 24.8 22.1 26.2 Other Current Liabilities 0.9 3.3 3.6 Sundry Debtors 31.4 39.8 42.2 Current Tax Liabilities - 2.5 1.8 Cash and Bank 9.4 27.6 16.4 Other Finnancial Liabilities 3.0 5.2 1.1 Other Financial Assets 8.2 3.3 8.0 Short Term Borrowings 4.4 1.3 - Other Current Assets 16.2 13.8 8.7 Total Current Liabilities 17.4 23.3 17.5 Total Current Assets 90.1 106.7 101.5 Total Liabilities 228.2 241.3 237.8 Total Assets 228.2 241.3 237.8 28 Historical balance sheet - Consolidated Rs in Crs FY17 FY18 FY19 Rs in Crs FY17 FY18 FY19 Share Capital 21.6 21.6 20.4 Fixed Assets incl. CWIP 82.3 80.2 70.5 Reserves 145.4 152.8 151.4 Income Tax Asset (Net) 2.7 3.0 3.2 Shareholders' Funds 167.0 174.4 171.8 Other Financial Assets 19.0 12.8 12.3 Secured Loans 0.1 0.03 - Other Non Current Assets 0.4 0.6 3.4 Other liabilities 13.5 10.0 10.1 Total Non-Current Liabilities 180.6 184.4 182.0 Total Non-Current Assets 104.4 96.7 89.3 Trade Payables 10.5 13.8 13.8 Inventories 25.0 23.6 34.6 Other Current Liabilities 0.9 3.3 2.1 Sundry Debtors 34.0 43.0 43.9 Current Tax Liabilities 0.04 2.5 1.8 Cash and Bank 13.7 31.6 18.4 Other Finnancial Liabilities 6.3 7.8 4.6 Other Financial Assets 8.2 4.3 9.0 Short Term Borrowings 4.4 1.3 - Other Current Assets 17.5 13.9 9.0 Total Current Liabilities 22.2 28.7 22.3 Total Current Assets 98.3 116.5 114.9 Total Liabilities 202.8 213.1 204.2 Total Assets 202.8 213.1 204.2 29 Anish Jhaveri (CFO)/ Shalaka Ovalekar (CS) ADF Foods Limited anish@adf-foods.com/ co_secretary@adf-foods.com Marathon Innova B2 –G01, G. K. Road Thank You Lower Parel, Mumbai 400 013 Pooja Dokania/ Arpit Gandhi Pareto Capital (Investor Relations) pooja.dokania@paretocapital.in/ arpit.gandhi@paretocapital.in 210, B Wing, Kanakia Wall Street Andheri East, Mumbai -400069