Coromandel International Limited · NSE:COROMANDEL
Coromandel International — Investor Presentation (November 2015)
58 slides from Coromandel International's investor presentation, November 2015
Slide 1: Investor Presentation
Investor Presentation Nov, 2015 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements which may be identified by their use of words contains “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections
Slide 3: Agri Input Industry Overview, Company Update
Agri Input Industry Overview Company Update 3
Slide 4: Agri Input Industry Overview
AGRI INPUT INDUSTRY OVERVIEW 4
Slide 5: Global Scenario
Coromandel «<= GLOBAL SCENARIO
Slide 6: Global Mega Trends
Global Mega Trends Rising Food Demand • Global Food demand to increase 1.5x by 2030 • Changing dietary patterns, especially in developing countries Limited Resources • Limited land and labor availability • Degradation of soil quality High volatility in food prices with an upward trend • Global stapl
Slide 7: World N,P,K Fertilizer Market
World N,P,K Fertilizer Market "N" World Market "K" World Market Ammonia 4% Urea 6% 1% 13% UAN 29% 11% AN/CAN MOP/SOP 52% NPK NPK DAP/MAP Others 9% Others 5% 70% “N” Market is 114 Million MT “K” Market is 31 Million MT "P" World Market Global Fertiliser Industry: 6% 2% DAP/MAP 17% NPK 48% SSP India
Slide 8: Global Nutrient Consumption Outlook
Global Nutrient Consumption Outlook Million tons Nutrient 2013-2018 CAGR N 1.1% P2O5 1.7% K2O 2.1% Source: IFA
Slide 9: DAP – Global Production & Trade
DAP – Global Production & Trade 10 year CAGR Production 2.8% MM tons Exports 1.3% Global production & trade of DAP have increased China, Saudi Arabia & Morocco account for all the production increases 9
Slide 10: Indian Scenario
INDIAN SCENARIO 10
Slide 11: India's crop productivity is low by global standards
India‟s crop productivity is low by global standards - needs to increase to meet demand MT per hectare 11
Slide 12: Irrigated Area in India has been steadily increasing
Positive factor: Irrigated Area in India has been steadily increasing Mio hectares The overall net irrigated area a percent of net cropped area has increased from 34% in the early 1990s to 45% in 2011 12
Slide 13: Cropping Intensity has also steadily increased
Positive factor: Cropping Intensity has also steadily increased Mio hectares Cropping intensity has gone up from 118% in early 1970s to 140% in FY11. A continuation of this trend is likely to push up demand for fertilizers. 13
Slide 14: India's nutrient application rates will have to increase
India‟s nutrient application rates will have to increase to improve productivity Nutrient Consumption among the Asian Countries kg/ha 439 231 151 164 137 India China Srilanka Pakistan Bangladesh India‟s Nutrient consumption (Kg/Ha) is lower than countries like China (439), Bangladesh (231) and Pakis
Slide 15: Long-term demand drivers and fundamentals are strong in India
Long-term demand drivers and fundamentals are strong in India • Population growth, urbanization and resulting food demand will be primary growth drivers – Population growth – Urbanization and higher income levels – Changing dietary mix – Impact of Food Security Bill • Nutrient application rates will
Slide 16: Fertiliser Subsidy Policy
Fertiliser Subsidy Policy Phosphatics decontrolled Nutrient Based Subsidy (NBS) policy effective from April1,2010. The Salient features of NBS policy are: o Policy applicable for P&K fertilisers only and not for Urea o Subsidy is fixed based on the import prices of various nutrients adjusted for the
Slide 17: Resulted in lower subsidy component
Resulted in lower subsidy component… Share of farm gate price of Complex Fertilizers in total realization has increased and the share of subsidy has decreased. YoY Rs. Cr 2011-12 2012-13 2013-14 2014-15 2015-16 P Growth % Imported Urea 13,716 15,133 11,538 12,100 12,300 -2.7% Indigenous Urea 20,208
Slide 18: H1 Update
Coromandel «<= H1 UPDATE 18
Slide 19: Challenging agri environment
Challenging agri environment… Deficit Rains and low reservoir level Cumulative Rainfall distribution - in mm Upto Sep 30 Sub div Actual Normal % dep E & NE 1317 1438 -8% NW 511 615 -17% C 816 976 -16% South 606 716 -15% Coastal AP 623 543 15% Telangana 589 726 -19% Rayalaseema 324 368 -12% Overall 7
Slide 20: Volatile exchange rate
Volatile exchange rate…. Unexpected depreciation of Chinese yuan renminbi in Aug‟15 impacted landed cost
Slide 21: Partially offset by soft commodity prices
Partially offset by soft commodity prices… Drop in feedstock cost ie, Coal, Crude and Natural Gas in last 1 year Global softening of agri commodities, stagnant demand and agro-climatic issues in key markets led to price pressures on raw materials Outlook to remain Soft to Stable in near term 2
Slide 22: Resulted in range bound farm gate price
… resulted in range bound farm gate price Rs per MT 22
Slide 23: Lower pipeline inventory and improved MSPs led to demand revival in H1
Lower pipeline inventory and improved MSPs led to demand revival in H1… Crop MSPs (Rs / Qtl) Crop FY14-15 FY15-16 % Inc Paddy 1360 1410 4% Wheat 1450 1525 5% Pulses Lentil 3075 3325 8% Gram 3075 3350 9% Oilseeds Additional bonus on pulses led to higher Mustard 3100 3350 8% acreages :12% Safflower 30
Slide 24: China Policy Changes
China Policy Changes… China‟s shift to flat tariff structure resulted in higher exports during H1: Depreciation of the Chinese yuan renminbi (CNY) against the US dollar led to price corrections by the Chinese suppliers Introduction of 13% VAT on exports 24
Slide 25: Led to increased Phosphatics imports
…led to increased Phosphatics imports Increase in imports in H1 due to: low pipeline inventory reasonably soft international prices change in China‟s export tax policy 25
Slide 26: Urea demand has remained stable post NBS implementation
Urea demand has remained stable post NBS implementation UREA SUPPLY & DEMAND Lac MT MOP SUPPLY & DEMAND Lac MT 26
Slide 27: Resulting in skewed NPK application ratios
…resulting in skewed NPK application ratios 27
Slide 28: Outlook
Outlook Positives: Commodity prices to remain Soft to Stable in near term Phosphatics industry to continue its revival in difficult agriculture scenario North East monsoons projected above normal (> 111% of LPA) to improve reservoir levels Challenges: Phos acid availability Volatility in e
Slide 29: Company Profile
Coromandel «<= COMPANY PROFILE 29
Slide 30: Coromandel - Snapshot
Coromandel - Snapshot Rs. Cr. Key Facts : Turnover: Rs.11,306 Cr (FY14-15) Market Cap: Rs. 5400 Cr Strong credit rating: „AA +‟ (Stable outlook)‟ with CRISIL India Employees: 2712 International Linkages: FOSKAR,GCT, CANPOTEX, SQM, GETAX , QAFCO, ICL, Phoschem, OCP, YANMAR etc Internation
Slide 31: Business Structure
Business Structure DAP Sales EBITDA Phosphatic Fertilisers Complex Fertilisers /SSP/MOP 83% 66% G-Sulphur Specialty Water Soluble Fertilisers Nutrients & Organic fert Organic Manure Coromandel Technicals 17% 34% Crop Formulations Protection Agri Inputs Retail Agri Services Non subsidy EBITDA share h
Slide 32: Growth through acquisitions and JVs
Growth through acquisitions and JVs 2003 2004 2006 & 2008 2009 & 2011 2013 2014 2007 2010 Complex Demerged GFCL Fertilizers fert. Biz Acq from EID 1.5 MM Parry tons SSP Liberty Group 1MM ton SSP Capacity Crop FICOM Acq of Sabero Protection Acq Jammu Acq unit Others / JVs BAA with TIFERT JV with APGP
Slide 33: Key Strengths
Key Strengths Farm Inputs Business Fertilisers Non Subsidy Businesses Sourcing Cost Leadership Marketing Strength • Specialty Nutrients/ Water Soluble Strategic Alliances in • Low cost manufacturer • Wider reach and Fertilisers/Micro Sourcing – of Phos acid - Visak penetration Nutrients and • Long T
Slide 34: Coromandel's Fertilisers Business
Coromandel‟s Fertilisers Business 34
Slide 35: Growth Story
Coromandel Fertiliser Business Growth Story C Train Expansion LIBERTY SSP acquisition 50 Lac Mt 35
Slide 36: Global Strategic Alliances for Key raw materials
Global Strategic Alliances Alliances for Key raw materials Coromandel holds 15% stake in TIFERT – JV for Phos acid venture in Tunisia with GCT Pact with QAFCO for MOP supply of Urea and Ammonia Potash- Canada Ammonia and Sulphur Mitsui, Japan Rock Phosphate Israel , Togo FMS JV with Yanmar & co. Alg
Slide 37: State of The Art Manufacturing Facilities
State of The Art Manufacturing Facilities • Plants are strategically located in highly • High capacity utilisation levels & continuous irrigated southern Indian states and in heart modernisation of facilities of fertilizer consumption market – low • Backward integration into manufacturing freight co
Slide 38: Visak Plant, Kakinada Plant - Cost Leadership
Cost Leadership Visak Plant Visak Production (Lac Mt) Captive Phos Acid • Continuous de-bottle necking to increase production levels • Value gap - imported Vs own acid • Increased Gypsum generation • Use of various sources /grades of rocks • New belt filter technology- to use low grade rocks Sulphur
Slide 39: Marketing Network
Marketing Network Higher complex fertilizer Target Markets consumption in core markets Tertiary Market Industry Size: 3.4 Million 375 MT 250 Kg /ha 250 100 150 200 250 110 100 100 Bihar MP AP TN KN DAP Complex Marketing Channels Secondary Market Industry Size: 3.5 million MT Dealer Trade Primary M
Slide 40: Locational Advantage
Locational Advantage Nutrient Consumption (Kg/ha) Primary markets maintains the balanced nutrient ratio • Market leader in Complex fertiliser segment • 2nd largest Phosphatics player in India • Highest producer and marketer of unique fertiliser grades Presence across major consumption pockets • Plan
Slide 41: Specialty Nutrient Business
Specialty Nutrient Business 41
Slide 42: Speciality Nutrients Division (SND)
SPECIALITY NUTRIENTS DIVISION (SND) G-SULPHUR Micronutrients WSF GROMOR SULPHUR GROMOR SPRAY- Boron Foliar Segment Sulphozinc Zinc GROMOR POWER- Fertigation Micronised Sulphur Mixtures 42
Slide 43: Sulphur and WSF Business
Sulphur and WSF Business 2003-05 2006-13 2013 -> Crop and Soil Specific Business Launch Portfolio Expansion Approach with a dedicated filed team WSF Cotton G Sulphur Folibor Citrus Zinc SQM JV Banana 43
Slide 44: SND Strategy
SND Strategy Customer Lock-in through holistic precision nutrition solutions and customization to crops and regions for maximizing the profitability of the crops Leverage SQM to bring global best practices in crop nutrition management Independent & specialized marketing teams to bring crop foc
Slide 45: SND & Organic Fertiliser Business
SND & Organic Fertiliser Business Sulfur Products Market Share Micronised sulphur variant launched Sulphur products WSF Continues to be the market leader despite adverse market conditions WSF Expanded umbrella branding approach for SND products New crop specific grades introduced for cereal,
Slide 46: Crop Protection Business
Crop Protection Business Coromandel
Slide 47: Crop Protection business - Coromandel
Crop Protection business - Coromandel 2015 • Wider range of Technicals • Increased global presence and registration 2011 Sabero Merger • Strong distribution with own retail outlets 2010 completed Sabero Acquired Acquisition Pasura Bio Tech – 2009 Jammu Unit II Expansion to 2006 Latin America Acquisi
Slide 48: Crop Protection Strategy
Crop Protection Strategy Increase R&D focus Starting R&D center for crop protection business in Hyderabad Off Patent molecule synthesis and process improvements in existing range Improving souring efficiency Generate market information through China office Focus on Export Registrations t
Slide 49: Initiatives
Initiatives Operational Initiatives Jammu • Expansion of technical plant capacity at Sarigam • Umbrella branding focus through “Gromor Suraksha” • Reducing conversion & treatment cost • Expand dealer network and enhance dealer engagement activities Strategic Initiatives • Co-Marketing with MNCs – Ac
Slide 50: Mana Gromor Centers (MGCs) - Retail
Mana Gromor Centers (MGCs) - Retail 50
Slide 51: Retail Strategy
Retail Strategy Positioning Retail as a complete “Farming Solutions” platform Constantly deliver significantly improved customer value proposition Nutrient recommendations based on “Gromor Nutrient Manager” program Knowledge dissemination through Gromor Webinar, “Gromor Scientist” and Mobile
Slide 52: Retail Business Overview
Retail Business Overview • 600 centers in Andhra Pradesh and 200 centers in Karnataka- servicing more than 2 million farmers • Received Retail Excellence Award by CMO Asia in Singapore • „Retail Marketing Campaign of the Year‟ • „Retailer of the Year (Rural Impact & CSR)‟ Products & Service Offering
Slide 53: Yanmar Coromandel AgriSolutions Strategy
Yanmar Coromandel AgriSolutions Strategy • Indigenize „Walk behind‟ rice transplanters • Opening service centres across AP and Telangana • Spare part indigenization • Stakeholder and Govt engagement to improve relations • Market development through new dealer appointment • Improve direct customer re
Slide 54: Financial Performance
Financial Performance dioweenansi ee
Slide 55: Consolidated Financial Performance
Consolidated Financial Performance Turnover ( Rs. Cr) EBIDTA (Rs. Cr) & EBIDTA % PAT (Rs. Cr) & PAT % ROE & ROCE (%) 55
Slide 56: Income Statement - Consolidated
Income Statement - Consolidated Amount in Rs. Cr H1 FY2010 FY2011 FY2012 FY2013 FY 2014 FY 2015 FY 2016 Revenue before PY subsidy 6,191 7,410 9,855 8,925 10,018 11,306 5,746 YoY (Growth) -34.29% 19.69% 33.00% -9.44% 12.25% 12.86% 7.46% EBITDA before PY Subsidy 507 829 1,008 659 770 853 406 EBITDA %
Slide 57: Balance Sheet- Consolidated
Balance Sheet- Consolidated H1 FY Amount in Rs. Cr FY2010 FY2011 FY2012 FY2013 FY 2014 FY 2015 2016 Equity 1,502 1,957 2,416 2,303 2,307 2,202 2,391 Debt and Other LT liabilities 2,047 1,664 2,977 2,976 1,873 2,318 2,742 Deferred Tax Liability 86 82 67 188 189 188 182 Sources of Funds 3,634 3,702 5,
Slide 58: Thank You
Coromandel «<= THANK YOU 58
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