S Chand And Company Limited · NSE:SCHAND
S Chand And — Investor Presentation (August 2018)
42 slides from S Chand And's investor presentation, Aug 21, 2018
Slide 1: Cover letter to stock exchanges
&. S Chand And Company Limited —— Corporate Office: A-27, 2nd Floor, Mohan Co-Operative Industrial Estate, New Delhi - 110044, India. S.CHAND Registered Office: Ravindra Mansion, Ram Nagar, New Delhi - 110055, India. GROUP P:+91 11 4973 1800 | F:+91 11 4973 1801 | Etinfo@schandgroup.com | www.schand
Slide 2: Investor Presentation August 2018
S Chand And Company Limited Investor Presentation August 2018 Empowering Young Minds …
Slide 3: Contents
Contents 01 FY 2017‐18 : Performance Highlights 02 Growth Strategy 03 Group Overview 04 Industry Overview 1
Slide 4: FY 2017-18: Performance Highlights
01 FY 2017‐18 : Performance Highlights 2
Slide 5: Consolidated Performance
Consolidated Performance + 18% yoy + 21% yoy + 73% yoy INR 31.1 Revenue growth Ebidta growth PAT growth Earning Per Share FY 2017‐18 FY 2017‐18 FY 2017‐18 FY 2017‐18 Summary : Consolidated FY 2018 FY 2017 YOY% FY 2017 Figures in INR Mn Audited Proforma* Audited Total Revenues 8,072 6,868 18% 6,622 E
Slide 6: Key Highlights
Key Highlights Consolidated Revenues at INR 8,072 Mn up 18%* from the previous year. o K‐12 content revenues increased 17% YOY (organic) to INR 6,355 Mn. o Higher education content revenues higher by 15% YOY (organic) to INR 1,403 Mn. o Consolidated profit after taxation at INR 1,071 Mn. Mylestone (
Slide 7: Financial Performance: FY 2017-18 (12 months)
Financial Performance : FY 2017‐18 (12 months) S Chand And Company Limited Standalone Consolidated Figure in INR Millions YE 31.3.18 YE 31.3.17 % YOY YE 31.3.18 YE 31.3.17 % YOY Revenues 3,710 3,020 23% 8,072 6,622 22% Cost of goods (net of inventory change) 1,334 1,089 2,562 1,982 Publication expen
Slide 8: Balance Sheet (as on 31.03.2018)
Balance Sheet (as on 31.03.2018) S Chand And Company Limited Standalone Consolidated Figure in INR Millions YE 31.3.18 YE 31.3.17 YE 31.3.18 YE 31.3.17 Shareholder Funds 8,600 5,020 9,997 6,412 Non controlling interests ‐ ‐ 42 132 Borrowings 512 807 1,713 1,994 Non Current Liabilities 15 13 88 71 Tr
Slide 9: Revenue Growth
Revenue Growth Revenue from operations increased by 18%* YOY to INR 8,072 Mn. 15% o K‐12 revenues higher by 17% (volume growth of 10%). 1% 2% o HE revenues higher by 15% (volume growth of 13%). 18% o Other income at INR 128 Mn, including interest income of INR 38 Mn. Figures in INR Mn. 4% K‐12 27% 2
Slide 10: Margins
Margins Gross Margins at 59.2% , reduced by ~ 170 bps YOY. o Impacted by higher paper prices and GST. o Royalty cost at 6.39% as against 6.25% in the previous year, partly impacted by reverse charge under GST. o Realigned HE product portfolio with negligible price increase (< 2% on average) to impro
Slide 11: Performance Indicators
Performance Indicators S Chand And Company Limited Consolidated Remarks Figure in INR Millions On 31.03.18 On 31.03.17 Net Debt (net of cash and bank 701* 3,416 *Excludes INR 657 Mn recognized as loan (under IND AS) ‐ being balance & current investments) estimated consideration for acquiring residua
Slide 12: Business Segments
Business Segments . Revenues up 17% YOY to INR 6,355 Mn. K‐12 o Volume growth ~ 10%. o Chhaya revenue growth at 16.6%. o K‐12 business contributes to 80% of group revenues. Higher education revenues increased by 15% YOY to INR 1,403 MN. Higher Education o Test preparation business registered 10% gro
Slide 13: Business Updates: Investment in Chetana Publications
Business Updates : Investment in Chetana Publications Investment of INR 585 Mn in Chetana Publications (India) LLP for 51% beneficial interest. o Transaction expected to close by 15th September 2018. o Chetana is a well recognised brand with strong presence in Maharashtra State Board curriculum mark
Slide 14: Business Updates: Others
Business Updates : Others Successfully launched Virtual Reality (VRX) content for K‐12 segment. o Linked to curriculum, sold as “bundled with books”. o 32 modules released for Class IX and X. o Target to release additional 50 modules in the current year and cover Class VI to VIII. Proposed merger of
Slide 15: Proposed Restructuring (under implementation)
Proposed Restructuring (under implementation) Content S. Chand And Company Limited Digital Content / Services Merger Into S Chand Wholly Owned Subsidiary Wholly Owned Subsidiary Demerger Wholly Owned Subsidiary Vikas Publishing House Nirja Publishers & Printers Destination DS Digital Private Limited
Slide 16: Growth Strategy
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Slide 17: 3-Pronged Growth Strategy
3‐Pronged Growth Strategy 2 Leverage Reach & Expand. ACCELERATE • Expand into regional markets through ACQUISITIONS & DIGITIAL acquisitions/ strategic alliances. INITIATIVES • “Phigital”to broaden reach and improve outcome. • Expand digital & service offerings to new geographies and segments. 1 Main
Slide 18: Outlook for FY 2018-19
Outlook for FY 2018‐19 CORE BIZ DIGITAL BIZ Organic Growth of 13% ‐ 14% Revenue growth > 30% Mix of Price & Volume Mylestone adoption in 300+ schools. CAPEX OTHERS ~ INR 400 MN Explore Opportunities to Expand Presence in Regional Markets (Inorganic) Shifting of print facility + Digital capex + Maint
Slide 19: Group Overview
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Slide 20: Leading Indian Education Content Company
Leading Indian Education Content Company Delivering content, services and solutions… Long operating history of over seven decades. High brand equity across multiple brands. Offerings spanning entire the …across the education spectrum Strong author relationships. education o Early learning co
Slide 21: Comprehensive Lifecycle Focused Approach
Comprehensive Lifecycle Focused Approach Early learning K ‐12 Higher education Lifecycle stages addressed by S. Chand products College and university S Chand is focused on the Consumer – both the ‘Learners’ and the ‘Educators’ – through content, innovations, empaneling leading authors, best practice
Slide 22: Business Segments
Business Segments K‐12 Higher Education Early Learning Revenue 80% of FY2018 revenues. 18% of FY2018 revenues. 2% of FY2018 revenues. contribution 40% revenue CAGR (2012‐2018) 9% revenue CAGR (2012‐2018) Target Test prep (>18 years) School students (4 ‐18 years) Children (2‐5 Years) Segment College
Slide 23: Strong Position in K-12
Strong Position in K‐12 S. Chand’s growth anchored by leadership in K‐12 Segment. Growth Strategy Consolidated leadership in CBSE/ ICSE schools as preferred content provider. More offerings in K‐12 through multiple brands. 5,378 Curriculum management. 6,355 Geographical diversification 5,427
Slide 24: Powerful Brand Connect
POWERFUL BRAND CONNECT Connecting with Learners • Art of Book making tour of the Printing Facilities • Mystudygear App • Social Media Connecting with Teachers with • Teacher Conclaves and Awards • Over 2000 Workshops • The Progressive Teacher magazine Connecting with School Leadership • Best Practic
Slide 25: Wide Geographical Reach Across The Country
Wide Geographical Reach Across The Country Pan‐India presence of sales and distribution network Distribution channel / sales ~6,600 distributors 9‐12 Sales & marketing team > 950 Distributors / Retailers K‐12 Students K‐8 Distributors Schools Students Higher Education Distributors / Retailers Studen
Slide 26: Robust Infrastructure to Cater Growing Demand
Robust Infrastructure to Cater Growing Demand Extensive network of 6,600 channel partners with pan India presence. Distributor S Chand brand ensures strong pricing power Channel among various stakeholders. Printing Infrastructure In‐house logistic and warehousing to Two printing facilities a
Slide 27: Digital & Services: Innovative Education Delivery
Digital & Services : Innovative Education Delivery In‐house Digital/ Service Platforms Digital Investments (Inorganic) • Offerings include digital classroom learning • Focus on investing in early stage edtech solutions, learning management systems and companies. curriculum management which contribut
Slide 28: Digitally Enabled Material, A Key Differentiator
Digitally Enabled Material , A Key Differentiator Hybrid Offerings or “Phigital” = Digital complementing “core” learning material. Short Multi‐media / videos to better Hybrid Offerings through E‐books, QR illustrate difficult topic to students. Codes, Mystudygear, VRX content. • Test preparation and
Slide 29: Innovate: The Journey to Tomorrow
@ Innovate : The Journey to Tomorrow Early Learning Higher Education (Test Preparation) Revolutionize Early Learning by providing “ Pre Launching India’s first Phigital book – physical book School in a Box” – an integrated program with with the power of a smartphone !! Material, Digital Content And
Slide 30: Shareholding Pattern
Shareholding Pattern Market Data On 30.06.2018 Key Institutional Investors: March 2018 % Holding Market Capitalization (Rs Mn) 12,259 Everstone Capital Partners II LLC 9.5% No. of shares outstanding (Mn) 34.97 International Finance Corporation 8.0% Face Value (Rs.) 5.0 HDFC Prudence fund 7.3% 52 wee
Slide 31: Industry Overview
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Slide 32: Indian Education Sector: Inflection Point, Strong Potential
Indian Education Sector : Inflection Point, Strong Potential Age‐wise population distribution in India : S Chand target market. Literacy rate improving with higher participation from students. (Source: IBEF Report) (Source: Technopak’s Outlook on India Schooling Segment) 500 40% 450 Potential Market
Slide 33: Increasing Household Expenditure on Education
Increasing Household Expenditure on Education Investment in India’s Education Sector. Higher share of education in discretionary spend. 6.00% (Source: IBEF Report) (Source: Technopak Research Report) 100% 10.0% 5.50% As a percentage of GDP 90% 5.0% 5.00% 80% 4.0% 4.4% 4.7% 4.7% 5.0% 5.0% 5.6% 0.0% 4
Slide 34: Large Addressable Opportunity
Large Addressable Opportunity US$90 Bn Market Size for the Indian Education Sector 6 US$6 BN Ancillary Education Segment Early education 2 Informal Education Segment S Chand operates in this segment (K‐12/ Higher Education content). Test prep 5 5 o US$20 BN Supports formal and informal education s
Slide 35: Preference towards Private, Central Curriculum Schools
Preference towards Private, Central Curriculum Schools Private schools market share increasing every year Indian K‐12 education infrastructure (Source: IBEF Report) 120% (Source: Technopak’s Outlook on India’s Schooling Segment) Number of Schools: 1.5 MN 100% 20.0% 21.2% 21.5% 22.1% 23.0% Government
Slide 36: India School Pyramid – By Affiliation & Ownership
India School Pyramid – By Affiliation & Ownership Target market is 300,000 schools ‐ growing at 8 % annually and student strength growing at 7‐8% every year. o Current coverage > 40,000 schools in target market. Intl 25‐300 Schools Schools o Total student strength in India estimated at 260 Mn. CBSE
Slide 37: Supplemental Slides
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Slide 38: Historical Performance Trend
Historical Performance Trend Increasing Contribution of K‐12 to Group Revenues. Revenue Growth = Organic Growth + Acquisitions. Early learning K12 Higher Education Other Revenue 6 ‐ Year CAGR : 29% 1,403 1,224 1,282 1,237 6,355 7,945 1,345 5,427 6,833 3,898 4,785 5,407 3,378 3,710 2,173 2,816 1,746
Slide 39: Quarterly Business Cycle
Quarterly Business Cycle 7% to 8% Revenues 4% to 5% Revenues 8% to 9% Revenues 77% to 80% Revenues Negative WC Negative WC Peak Inventory Peak Receivables Q1 April ‐ June Q2 July ‐ September Q3 October ‐ December Q4 January ‐ March o Last leg of K‐12 sales for new o Content revision/ development o S
Slide 40: Financial Performance: Q1 FY 2018-19
Financial Performance : Q1 FY 2018‐19 S Chand And Company Limited Consolidated Figure in INR Millions QE 30.6.18 QE 30.6.17 Consolidated Revenue from Operations at INR 577 Revenues 601 621 Mn , down 4.8% YOY. Cost of goods (net of inventory change) 347 277 • K‐12 content revenues at 475 Mn, same lev
Slide 41: Quarterly Working Capital Cycle
QUARTERLY WORKING CAPITAL CYCLE Working Capital • Almost all sales of K‐12 business (comprising 80% of total sales) are triggered largely in Q4 to match with school calendar implying high debtors and days for Q4 quarter / year end. However, the recoveries begin in Q4 and are completed by Q3 of the f
Slide 42: For Further Queries
For Further Queries: This presentation and the following discussion may contain “forward looking statements” by Samir Khurana S Chand and Company Limited (“S Chand” or the Company) that are not historical in nature. Group Head (Strategy & Investments) Contact No : + 91 11 4973 1800 These forward loo
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