Ester Industries Limited · NSE:ESTER
Ester Industries — Q2 FY22 Earnings Presentation
41 slides from Ester Industries's earnings presentation, Nov 15, 2021
Slide 1: Ester Industries cover letter to exchanges
ESTER INDUSTRIES LTD. DNV·GL CIN: L24111UR1985PLC015063 1509001 Date: 15th November, 2021 BSE Limited National Stock Exchange of India Limited Department of Corporate services Exchange Plaza, Phirojee Jeejeebhoy Towers Plot no. C/1, G Block, Dalal Street, Mumbai -400023 Bandra-Kurla Complex, Bandra
Slide 2: Investor Presentation November 2021
estor Presentation JSTRIES LTD. November, 2021
Slide 3: Forward-looking statements
Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause actual results to diff
Slide 4: About Us, Ester 2.0, Investment Thesis, Business Overview, Q2 FY22
About Us Ester 2.0 Investment Thesis Business Overview Q2 FY22 Performance 3
Slide 5: Diversified business portfolio and sales mix
Sales Mix (Q2 FY22) Diversified business portfolio Polyester Comprehensive product suite Films 67% State-of-the-art manufacturing facilities Specialty Global footprint Polymers 12% Experienced management team Engineering Plastics 21% Strong Financial profile 4
Slide 6: Ester at a glance
1985 GURGAON, INDIA #3 Year of Incorporation Corporate Headquarters Business Segments* 43 COUNTRIES 556 CRISIL A- (positive outlook) Global Footprint People Credit Rating (Long Term) * PF - Polyester Film; SP - Specialty Polymers; EP - Engineering Plastics 5
Slide 7: Locations: Khatima, Gurgaon, Telangana
Haryana Uttarakhand Gurgaon Khatima Corporate Headquarter Telangana* Manufacturing facility *New BOPET Film plant under implementation 6
Slide 8: We serve more than 40 countries
We serve more than 40 Countries 7
Slide 9: Ester 2.0
ESTER INDUSTRIES LTD. Ester 2.0 Company “Specialty
Slide 10: Ester 2.0: knowledge, innovation, customization, technology
Knowledge Innovation ESTER Customization 2.0 Technology 9
Slide 11: Ester 1.0 achievements and Ester 2.0
Achievements Ester 2.0 Ester 1.0 Specialty Polymer SBU Revenues o Largely patent protected (FY12-FY16) (FY17-FY21) – high entry barriers Commoditized product 2.4% CAGR 8.8% CAGR o High sustainable portfolio margins EBITDA Limited bargaining o High growth potential power (FY12-FY16) (FY17-FY21)
Slide 12: Revenues, EBITDA, margins and PAT FY12-FY21
Revenues (Rs.cr) EBITDA (Rs.cr) 236 886 928 896 1,028 1,039 992 189 700 771 707 807 108 74 71 70 66 35 41 43 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 EBITDA Margins (%) PAT (Rs.cr) 142 23.8% 100 18.2% 31 8 4 7 5 8.0% 7.9% 9.1% 6.1% 8.1% 10.5
Slide 13: Debt, ROCE and dividend payout
Debt (Rs.cr) ROCE (%) 335 363 348 304 300 290 31% 28% 237 242 142 157 14% 8% 7% 7% 7% 3% 3% 3% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Dividend Payout (%) 37.2% 20.9%19.9% 13.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% FY12 FY13 FY14 FY15 FY16 FY17 FY
Slide 14: WACC vs FY21 ROCE
31% 9% WACC FY21 ROCE *Source: Bloomberg 13
Slide 15: Shareholding pattern
34.23% 40.86% 40.86% Mar 19 Mar 20 Mar 21 59.14% 59.14% 64.04% 1.73% 14
Slide 16: Investment thesis: specialty polymers, films, dividends
Specialty Polymers - Polyester Films - High Largely IP protected share of value added product portfolio products Rewarding shareholders with Scaling up capacities dividend Strong balance sheet 15
Slide 17: Green initiatives, focus on sustainability
Green Initiatives Focus On Sustainability BIO-BASED Fuel Consumption oo $ PVC FREE fe oa wist Wrap / Shrink Film) BIO-BASED Raw Material me Pvec FREE PAC (Transparent High B Ss PACKAGING MATERIA Reduction/ Recycling y \3 IL REPLACEMENT & lized High Barrier film) ® w=
Slide 18: Specialty Polymer
Se 4 q ESTER INDUSTRIES LTD. Specialty Polymer
Slide 19: Largely IP protected business
Customer retention High entry ensured as Largely IP High barriers – largely Marquee Export protected margin patent patent clientele oriented business business protected protected products
Slide 20: Business opportunity: stain resistant carpets
Problem Solution Business Opportunity USA, largest High cost towards carpet stain Flexible low cost solution producer of Carpets removal Ester has developed a PET based & Rugs boasts of an industry with Stain marks on (nylon) carpets given master batch, which imparts permanent spillover / spilla
Slide 21: Innovative PBT supply to global chemical leader
Regularly manufacturing & supplying Innovative Signed ‘Manufacture and Supply Agreement’ with a Polybutylene Terephthalate (PBT) polymers to a global global chemical leader in April 2019 effective 1st April chemical leader 2019 for 2 years for 400 MT per annum Ester Industries is among the only comp
Slide 22: Strong product pipeline
MB07 o MB07 is added to make polyester dye-able with deeper and darker color o Achieved customer approval after 3 years of relentless hard work o Started commercial sales with good volumes o Steady state business going forward Strong product o As committed in earlier calls, commercial sales starte
Slide 23: Applications
Consumer electronics Polyethylene Terephthalate (PET) Textile – Flame Retardant, Deep dyeable master batches, Cationic dyeable master batch Applications Products Polybutylene Terephthalate (PBT) Carpets – Stain Resistant Master Batches Carpets – Deep Dyeable Master Batch Polyethylene Naphthalate (PE
Slide 24: Specialty Polymers Q2 FY22 performance
Figs. in cr Particulars Q2 Q2 % Q1 FY22 % H1 H1 % Volumes (MT) FY22 FY21 FY22 FY21 Q2FY21 Q2FY22 Sales 884 484 82.6 861 2.7 1,745 895 95.9 (Vol's MT) MB03 92 Revenue 46 12 283.3 35 30 81 22 268.2 240 Innovative PBT 224 EBIT 17 3 467 13 32 30 5 500 284 Margins +1,430 36.9 25.0 +1,190 bps 36.4 +50 bps
Slide 25: Packaging Film Business
ESTER INDUSTRIES LTD. Packaging Film Business 24
Slide 26: Global and domestic scenario
Global Scenario: Domestic Scenario: Demand growth of 5% - 6% Strong double digit growth rate of 10%-12% pa BOPET film used in flexible packaging applications over past 5 years will continue to be the key end use sector, Low per capita consumption of BOPET; new accounting for nearly 60% of gl
Slide 27: Film business capacities and key facts
60,000 13,200 #30+ MTPA MTPA Years of experience Polyester Film Mfg. capacity Metallized Polyester Film Mfg. capacity 67,000 48,000 43 17% MTPA MTPA Export market Share of value-added Polyethylene Terephthalate BOPET Film Capacity (# of countries) products (FY21) (Polyester) chips Mfg. expansion und
Slide 28: Value added share, EBIT margins, domestic and exports
Value Added (%) EBIT Margins (%) – as per Domestic Exports segmental results 20 30 23 23 17 17 15 30 29 70 77 71 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 Product mix – despite reduction Pass through business model – in recent past, aiming towards provides protection against Balanced mix of domes
Slide 29: Applications
White Opaque High Clear Flexible Packaging Applications High Barrier Embossable Barrier Packaging Products Heat Saleable Twist Wrap Embossing Shrink film Anti - Static Lidding Metalized High Matte Label & Graphics Barrier 28
Slide 30: Packaging Film Q2 FY22 performance
Figs. in cr Particulars Q2FY22 Q2FY21 % Q1 FY22 % H1 FY22 H1 FY21 % Sales 14,591 15,000 (3.0) 15,283 (4.5) 29,874 27,630 8.01 (Vol’s MT) Revenue* 213 190 12.1 225 (5.3) 438 351 24.8 EBIT+ 28 70 (60.0) 36 (22.2) 64 124 (48.4) Margins (%) 13.1 36.8 (2,370 bps) 16.0 (290 bps) 14.6 35.3 (2,070 bps) *inc
Slide 31: New BOPET plant capex and financing
Capex of Rs.587cr to result in.. 23.8 24.3 EBITDA Margin (%) EBITDA 176 110 Revenue Internal Accruals 92 Debt 410 388 456 Capex FY24 FY25 Setting up state of the art 48,000 MTPA BOPET Film plant and 8,333 MTPA Metallized BOPET Film plant in Telangana through Wholly Owned Subsidiary Achieved fina
Slide 32: Engineering Plastics
Engineering Plastics
Slide 33: Engineering Plastics at a glance
# 350 13,500 “Gold 25+ #3 grades MTPA Winner ” Years of Diverse State-of-the- “Fastest Manufacturing experience product art growing capacity portfolio compounding Enterprise – lines Processing Engineering Polymers” 2015 32
Slide 34: Product portfolio, backward integration and unit relocation
Diverse product portfolio Backward integrated player Increasing share of high “Unit relocation” to result in margin products margin expansion Strong sector tailwinds 33
Slide 35: Applications
Switchgear Industry Polybutylene Terephthalate (PBT) MCB, MCCB, RCCB, etc. Case, Cover & other Parts Polyethylene Terephthalate (PET) Lighting Industry Switches, Sockets, LED/CFL Holders, etc. Polyamide 6 (Nylon 6) Appliances Industry Applications Knobs, Rotary Switches, Couplers, Body Parts, etc. P
Slide 36: Engineering Plastics Q2 FY22 performance
Figs. in cr Particulars Q2 FY22 Q2 FY21 % Q1 FY22 % H1 FY22 H1 FY21 % Sales 2,973 3,562 (16.5) 2,400 23.9 5,373 4,824 11.4 (Vol’s MT) Revenue 74 49 51.0 59 25.4 133 65 104.6 EBIT 18 8 125.0 22 (18.2) 40 7 471.4 Margins (%) 24.3 16.3 +800 bps 37.3 (1,300 bps) 30.1 10.8 +1,930 bps Revenue growth rem
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Slide 38: Consolidated Q2 FY22 results
Figs. in cr Particulars Q2 FY22 Q2 FY21 % Q1 FY22 % H1FY22 H1FY21 % (Rs.cr) Revenues 333 251 32.9 319 4.4 652 439 48.5 EBITDA* 59 73 (20.1) 64 (7.8) 123 126 (2.4) Margins (%) 17.7 29.1 (1,140 bps) 20.1 (240 bps) 18.8 28.7 (990 bps) PAT 33 46 (28.1) 38 (13.2) 71 75 (5.3) Margins (%) 9.9 18.3 (840 bps
Slide 39: Chairman's comments on results
Commenting on the results, Mr. Arvind Singhania, Chairman, Ester Industries said “We have had a good first half with revenues expanding ~50% over the previous year. All our businesses continue to perform well, helping us sustain the growth momentum. Specialty Polymer business delivered yet another q
Slide 40: About Us and contact details
About Us: (CIN :- L24111UR1985PLC015063) Incorporated in 1985, Ester Industries Limited (EIL) is an ISO 9001:2008,ISO 22000:2005,TS16949:2002 certified Company engaged in the manufacture of polyester films, specialty polymers, engineering plastics and polyester chips with manufacturing facilities lo
Slide 41: Thank You
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