Ester Industries Limited · NSE:ESTER
Ester Industries — Q2 FY2021 Earnings Presentation
25 slides from Ester Industries's earnings presentation, Oct 28, 2020
Slide 1: Cover letter to stock exchanges
Date: 28th October, 2020 BSE Limited National Stock Exchange of India Limited Department of Corporate services Exchange Plaza, Plot no. C/1, G Block, Phirojee Jeejeebhoy Towers Bandra-Kurla Complex, Dalal Street, Mumbai – 400023 Bandra (E), Mumbai – 400051 Symbol : 500136 Symbol : ESTER Dear Sir Sub
Slide 2: Q2 FY21 Results Presentation
October 28th, 2020 Q2 FY21 RESULTS PRESENTATION
Slide 3: Disclaimer
Disclaimer 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 2 cause actual re
Slide 4: Q2 & H1 FY21 Performance Overview
Q2 & H1 FY21 Performance Overview
Slide 5: Financial Summary
Financial Summary Revenue (Rs. Cr) Strong recovery across businesses; 255 251 Film business revenues (up 18% q-o-q); Specialty Polymers revenues (up 12% q- 2% o-q); Engineering Plastics revenues (up Figs in cr. Q2 FY20 Q2 FY21 191% q-o-q) EBITDA (Rs. Cr) Margins (%) Improved profitability in Films a
Slide 6: Debt rationalization measures
Debt rationalization measures…. Focused on improving Debt/EBITDA (x) by paying off debt / reduced utilization of WC limits Term Debt Repayment Interest Bearing Debt (net of free Interest Bearing Debt (net of free cash) / cash) (Rs. crore) Annualized EBITDA (x) 44.1 43.6 38.3 201.3 35.2 171.5 157.4 1
Slide 7: Upgrade in External Credit Rating
….translating to upgrade in External Credit Rating Brickwork CRISIL Amount (Rs.cr) Rating Amount (Rs.cr) Rating BWR A – (stable) CRISIL A - / Stable Long – term Rating 245.97 275.70 (upgrade) (assigned) CRISIL A2 + Short – term Rating 165.30 BWR A2+ (upgrade) 135.30 (assigned) 6 411.00 Total 411.27
Slide 8: Chairman's Comments
Chairman’s Comments Commenting on the results, Mr. Arvind Singhania, Chairman, Ester Industries said “We are very pleased with our performance for the quarter which has seen sharp pick up in revenues and profitability over Q1. Film business continued its recent momentum on the back of strong demand
Slide 9: Specialty Polymers
Specialty Polymers
Slide 10: Specialty Polymer – The Catalyst
Specialty Polymer – The Catalyst 8 (+1) 22 (+3) High entry barriers - Patents Product Patent protected filed portfolio business (Product & process) 9 30,000MTPA 40%+ Production Capacity EBIT margins on achieving of adequate scale of operations
Slide 11: Specialty Polymers Business overview
Specialty Polymers • Business momentum slowly picking up steam, following challenging Q1 Revenue EBIT Margins (%) (disrupted by covid-19 led challenges) • Demand for Innovative PBT continues to remain strong; 73 36.7 17.1 38.0 • Encouraging response for new products MB – 16, MB – 07 and LMC – Figs i
Slide 12: Strong product portfolio
Strong product portfolio Partners with a Global Chemical Leader in Manufacturing innovative Polybutylene Terephthalate (PBT) Signed ‘Manufacture and Supply Agreement’ with a global chemical leader in April 2019 effective 1 st April 2019 for 2 years for 400 MT per annum Confident of renewal of
Slide 13: Patent Status
Patent Status Product approval Product Code Product Description Status of Patent Application from customer ESTER HR-03 Hot Fill PET by normal ISBM Granted in USA and India, Approved Packaging filed in Europe ESPET MB-03 Masterbatch Sulfonated PET Granted in US, India and Approved Stain Resistance in
Slide 14: Specialty Polymers – Products & Applications
Specialty Polymers – Products & Applications Rigid Packaging – Hot-fill / Beer Kegs Polyethylene Terephthalate (PET) Textile – Flame Retardant, Deep dyeable master batches, Cationic dyeable master batch Applications Polybutylene Terephthalate (PBT) Products Carpets – Stain Resistant Master Batches P
Slide 15: Polyester Films
Polyester Films
Slide 16: Polyester Film – De-Commoditizing
Polyester Film – “De-Commoditizing” ` De-commoditizing the Mfg. Capacity -57,000MTPA Strong sector fundamentals – business by changing Polyester Films & 13,200 MTPA Stable pricing environment; product mix Metalized polyester films New Capacity of 48,000 MTPA 15 to commence production by June 2022 `
Slide 17: Polyester Films Business overview
Polyester Films • Strong and consistent demand from end – user industries resulted in Revenue EBIT Margins (%) higher volumes for the quarter 805 • Favorable demand – supply scenario, higher operating leverage 20.6 36.9 22.7 resulting in better profitability & margin Figs in cr. 199* 190^ 183 41 70
Slide 18: Potential impact of Covid-19 on the Film business
Potential impact of Covid-19 on the Film business Demand growth from Consumer Staples for flexible packaging is expected to remain strong Increased focus on health & hygiene products to result in further growth in demand Raw material prices are expected to remain benign in the near term Due
Slide 19: Film Business – Expect momentum to continue
Film Business – Expect momentum to continue Industry Dynamics Market size of Domestic BOPET films ~540000 tpa Domestic demand growing at 11%-13% Incremental supply of about 65000 TPA on account of commissioning of 2 new production lines in August & November 2019 already absorbed by the market
Slide 20: Polyester Films – Products & Applications
Polyester Films – Products & Applications White Opaque High Clear Flexible Packaging High Barrier Embossable Barrier Packaging Applications Products Heat Saleable Twist Wrap Embossing Shrink film Anti - Static Lidding Metalized High Barrier Matte Label & Graphics 19
Slide 21: Engineering Plastics
Engineering Plastics
Slide 22: Engineering Plastics – Structurally positive; near term challenging
Engineering Plastics – “Structurally positive; near term challenging” #250 13,500MTPA “Estoplast” Product Portfolio Mfg. capacity Products marketed under the brand 21 Improving product / customer “Fastest Growing Enterprise mix, expanding exports & Processing (Engineering Polymers)” controlling cost
Slide 23: Engineering Plastics Business highlights
Engineering Plastics Revenue EBIT Margins (%) • Recovery in demand is much stronger & sooner than expected 161 • Q2FY21 has been the best quarter both in terms of volume & margin 5.5 15.9 5.4 Figs in cr. in the history of SBU 49 • Expect much better performance from the SBU going forward 36 2 8 9 co
Slide 24: Engineering Plastics – Products & Applications
Engineering Plastics – Products & 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
Slide 25: Investor Contacts
Investor Contacts For more information contact: About Us: (CIN :- L24111UR1985PLC015063) Incorporated in 1985, Ester Industries Limited (EIL) is an ISO Pradeep Kumar Rustagi 50001:2018, ISO 9001:2015, ISO 14001:2015, IATF (Chief Financial Officer) 16949:2016, ISO 45001:2018 and Food Safety System Es