Sumitomo Chemical India Ltd. · NSE:SUMICHEM
Sumitomo Chemical India — Q1 FY21 Earnings Presentation
40 slides from Sumitomo Chemical India's earnings presentation, Aug 8, 2020
Slide 1: Exchange filing cover letter
Corporate Office: 13/14. Aradhana IDC, 40, SUMITOMO CHEMICAL INDIA LTD. NearVirAoarti Indusl6a1 lEastt, Corporate Identity Number (CIN) - U24110Mh2000PLC124224 Murnbai - 400 063. TeL +91-22-4252 22001 Fax +91-22-4252 2380 UAL http-fiwwwsurpichern-nciia.co.in SCIL/SEC/2020-21 8th August, 2020 To, BSE
Slide 2: Sumitomo Chemical India Limited Investor Presentation August 2020
40P SUMITOMO CHEMICAL Sumitomo Chemical Sumitomo Chemical India Limited Limited Investor Presentation Presentation August 2020
Slide 3: Safe Harbour
Safe Harbour 40• This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sumitomo Chemical India Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe
Slide 4: Sumitomo Chemical Company Limited, Japan - An Introduction
410 SUMITOMO CHEMICAL Sumitomo Chemical Sumitomo Chemical Company Company Limited, Limited, Japan Japan -- An An Introduction Introduction
Slide 5: Overview
Overview 40• About Sumitomo ✓ Sumitomo started business in Japan in early 16th Century (400 years+) ✓ Currently several Sumitomo founded companies operate as independent listed companies with widespread shareholding and run by its professional boards ✓ Even today, all Sumitomo companies continue to
Slide 6: SCC - Growth Strategy in Health & Crop Sciences Sector - R&D
SCC - Growth Strategy in Health & Crop Sciences Sector - R&D Core Competence: R&D R&D performance data 4.• (Million US$) Crop Protection Sales & Number of Issued Patent (2012-2019) Sumitomo Chemical is conducting 14,000 12,600 Crop Protection Products Sales .Numbers of Issued Patents R&D based on th
Slide 7: SCC - Growth Strategy in Health & Crop Sciences Sector - Distribution
SCC - Growth Strategy in Health & Crop Sciences Sector - Distribution 4.• VV * 6144 8b5A Y 9NaA 6 sites in North America 8 sites in Europe 9 sites in Asia SCAB -..rI ... Valent Canada _ k .. ...e.. 4,0 . ...... I.. 4... SC- Italia '-:-,. ...., :).-<.. 4 • .....- C' '''' ....1.• M. • j " .L ' 0 • L'i
Slide 8: Sumitomo Chemical India Ltd. - Company Overview
Sumitomo Chemical India Ltd., - Company Overview Journey to 10x Growth Formidable Player in the Indian SCIL - Vision & Mission in India Agrochemicals Space Diversified & De-risked Portfolio Strong Brand and Well- Strategically Located Across the Agro-Chem Value Entrenched Distribution Manufacturing
Slide 9: SCIL - Vision & Mission
SCIL - Vision & Mission 4.• Vision Vision & Values & Values Mission Mission Vision: Marketing and Sales: • To be a trusted market leader in Indian crop- • Further penetration into Indian market & take protection sector leadership; expand exports • To develop a vibrant corporate culture • Strengthen
Slide 10: Journey to 10x Growth in India
Journey to 10x Growth in India 40° Exploration Phase: 2000 – 2009 Manufacturing JV with New Acquired product - 2000 Chemi 2002 Started EHD (Public Health) 2005 ‘Sulfosulfuron’ Leader 2010 business rights from Monsanto Started Animal Nutrition SCIL incorporated in India as 2001 Started ASD business 2
Slide 11: Formidable Player in the Indian Agrochemicals Space
Formidable Player in the Indian Agrochemicals Space 5 190+ Grown 10X+* over FY11-20 4.• Manufacturing Brands Rs. Bn Facilities 10X 24 10+ 25+ / 200+ Technical Actives Patents / Registrations 13,000+ 1,500+ Distributors Employees Product Name Product Category Indicative Use Glyphosate Herbicide Tea G
Slide 12: Diversified & De-risked Portfolio Across the Agro-Chem Value Chain
Diversified & De-risked Portfolio Across the Agro-Chem Value Chain Well-Diversified across multiple dimensions 0 + 0 +0 + 0 + 0 Business Segments Diversified Portfolio Across Segments Products Geographies Customers Geographic Diversification with Exports to over 60 countries Crops Served 7% Generics
Slide 13: Strong Brand and Well-Entrenched Distribution Network
Strong Brand and Well-Entrenched Distribution Network 4.• I ✓ Strong brand with market leading position across various product categories 23 States 68 Depots I ✓ Dual brand portfolio can offer products at all price points serving multiple customer sub-segments 13,000+ ~40,000 I ✓ In-depth knowledge
Slide 14: Expanding Brand Visibility and Connect
Expanding Brand Visibility and Connect ✓ Wide range of generics and speciality products for Increased crop presence and providing crop 4.• protection solutions ✓ More than 1,400+ Relationship managers connecting to 1 million+ farmers throughout crop cycle ✓ Over 100 brands covering maximum of crops
Slide 15: Digital Marketing Initiatives
Digital Marketing Initiatives Develop “Digital Marketing” as a parallel support to Traditional marketing system leading to improved sales. 4.• ✓ Our Digital Assets : 21 websites, currently driving about 8,648 visitors everyday. O YouTube - Advantage F71716111 INDIA U oAn7n ci 47Nilulhe ME= IMEMI was
Slide 16: Strategically Located Manufacturing Facilities
Strategically Located Manufacturing Facilities 40° Connectivity to Major Cities and Proximity to Main Highways, Ports Reduces Logistic Time and Costs Plant Location Area (acres) Segment Served Product Manufactured Manufacturing of Technical Grade Pesticides Technical Grade Products: Bhavnagar ~58 an
Slide 17: Strong Focus on R&D and Process Innovation
Strong Focus on R&D and Process Innovation End-to-End Product Development Capabilities 4.• ✓ 3 fully equipped, DSIR approved R&D labs located at Mumbai, Bhavnagar and Gajod capable of synthesis, technical product and formulation development ✓ R&D Team comprises of 75+ qualified and dedicated enginee
Slide 18: Thrust on Safety, Health and Environment (SHE)
Thrust on Safety, Health and Environment (SHE) 4 0° Quality Certifications Ensure Consistent product quality and healthy working environment at manufacturing sites Abiding by SCC Japan’s EHS Policies ISO:9001:2015, ISO-14001:2015 and OHSAS18001:2007 for the manufacturing sites at Bhavnagar, Gajod, T
Slide 19: Autonomous Board with Vast Industry Experience
Autonomous Board with Vast Industry Experience 4.• Dr. Mukul Govindji Asher Preeti Gautam Mehta Chairman and Independent Director Independent Non-executive Director ▪ Professorial Fellow at Lee Kuan Yew School of Public Policy at ▪ 30 years of experience in corporate laws, foreign investment the Nat
Slide 20: Autonomous Board with Vast Industry Experience
Autonomous Board with Vast Industry Experience 4.• Hiroyoshi Mukai Tadashi Katayama Masanori Uzawa Non-executive Director Non-executive Director Non-executive Director ▪ MBA from University of Virginia, USA and ▪ MBA from Vanderbilt University, U.S.A. a Bachelor’s degree from the University ▪ Associ
Slide 21: Growth Strategies
Growth Strategies Aki i W.A. Continued Investment in R&D and Pipeline ci in ci m Capacity Expansion 4.• Achieving Market Leadership in • Aim to invest in seamless integration of R&D between SCIL and SCC • units which would help improve our production processes, Driving operational efficiencies maint
Slide 22: Financial Performance Key Takeaways
Q1 FY21 Performance Highlights Financial Performance & Historical Performance Key Takeaways Highlights Key Takeaways
Slide 23: Performance Highlights – Quarter
Performance Highlights – Quarter Revenue (Rs Crs) Gross Profit (Rs. Crs) & Gross Profit Margin (%) EBITDA (Rs. Crs) & EBITDA Margin (%) PAT (Rs Crs) 4.• +40% +4% +11% +49% 119 625 648 225 40120 20 79 203 100 85 18.3% 32.5% 34.7% 30 15 80 53 13.6% 20 60 10 40 10 5 20 0 0 0 Q1FY20 Q1FY21 Q1FY20 Q1FY21
Slide 24: Consolidated Profit & Loss Account Statement - Quarter
Consolidated Profit & Loss Account Statement - Quarter Particulars (Rs. Crs) Revenue from Operations Q1 FY21 647.7 Q1 FY20 625.3 YoY 4% Q4 FY20 445.8 QoQ 45% 4.• COGS 422.6 422.2 289.8 Gross Profit 225.0 203.2 11% 155.9 44% Gross Profit % 34.7% 32.5% 225 bps 35.0% -24 bps Employee Expenses 48.3 43.8
Slide 25: Revenue Breakup – Quarter
Revenue Breakup – Quarter 40° Product Breakup Geographic Breakup 7% 5% 2% 2% 3% 8% 8% 5% 2% 2% 3% 4% 4% 2% 6% 8% 46% 7% 48% 8% Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY21 26% 23% 86% 85% Insecticides PGR Fungicides Domestic Japan Europe North America Herbicides Metal Phosphides AND & EHD* Africa Asia (Ex. India
Slide 26: Consolidated Working Capital Movement
Consolidated Working Capital Movement Particulars (Rs. Cr) Jun-20* Mar-20* Change (Jun-20 to Mar-20) Jun-19* Change (Jun-20 to Jun-19) 4.• Inventory (A) 593.8 588.0 5.8 718.1 -124.3 Inventory Days (Inventories/ COGS* No. of days in period) (i) 128 134 155 Trade Receivables (B) 730.2 849.8 -119.6 725
Slide 27: Key Developments
Key Developments 40• Impact of Draft order banning 27 Insecticides by Government of India ✓ Recently the Government of India released a draft notification for public comments regarding proposed ban of some agro-chemical products ✓ The matter is being discussed at various forums such as various indus
Slide 28: Historical Performance Highlights
Historical Performance Highlights 40° Revenue (Rs Crs) EBITDA (Rs. Crs) & EBITDA Margin (%) PAT (Rs Crs) ✓ Good monsoon and availability CID' +13% 2,425 +24% 333 +19% 205 of water boosted farmer sentiment and resulted in good 2,228 291 1,913 166 growth in rabi season 2019 as 217 145 well as upcoming
Slide 29: Consolidated Profit & Loss Account Statement
Consolidated Profit & Loss Account Statement Particulars (Rs. Crs) FY20 FY19 FY18 4.• Net Revenue from Operations 2,424.8 2,228.4 1,912.9* COGS 1,607.6 1,458.9 1,238.7 Gross Profit 817.2 769.6 674.2 Gross Profit % 33.7% 34.5% 35.2% Employee Expenses 179.3 158.4 147.5 Other Operating Expenses 304.7 3
Slide 30: Consolidated Balance Sheet
Consolidated Balance Sheet Assets (Rs. Crs) Non-Current Assets (A) Property, Plant and Equipment Mar-20 360.6 282.9 Mar-19 318.3 277.2 Mar-18 312.7 264.8 Equity & Liabilities (Rs. Crs) EQUITY (A) Mar-20 1,221.8 Mar-19 1,048.4 Mar-18 954.0 4.• Equity Share Capital 499.1 274.6 274.6 Capital work-in-pr
Slide 31: Consolidated Working Capital Movement
Consolidated Working Capital Movement 0° 4 Particulars (Rs. Cr) Mar-20 Mar-19 Change Inventory (A) 588.0 680.6 -92.6 Inventory Days (Inventories/ COGS*365) (i) 133 170 Trade Receivables (B) 849.8 671.0 178.8 Trade Receivables Days (Trade Receivables / Revenue*365) (ii) 128 110 Trade Payables (C) 490
Slide 32: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement Cash Flow Statement (Rs. Cr) Mar-20 Mar-19 Mar-18 4.• Net Profit Before Tax 266.5 259.8 221.0 Adjustments for: Non-Cash Items / Other Investment or Financial Items 45.7 18.6 9.6 Operating profit before working capital changes 312.2 278.5 230.6 Changes in working capi
Slide 33: Key Takeaways
Key Takeaways 40• Formidable Player in the Indian Experienced Management Team Well-diversified Product Portfolio Strong Brand and Well-Entrenched Agro-chem Space and Board of Directors Across Agro-Chem Value Chain Distribution Network ▪ Strong / leadership position across ▪ Strong management and ▪ M
Slide 34: Annexures
Awards & Accolades Annexures Details on Merger with Excel Crop Care Ltd. Sector Tailwinds
Slide 35: Awards & Accolades
Awards & Accolades 40• Jamnalal Bajaj Award for “Fair Business and Practices” Shramveer award for improvement of product efficiency received from national level Delhi First ever president’s gold shield for import substitution Vishwakarma Rashtriya Puraskar received for process development First awar
Slide 36: Merger of Excel Crop Care to Unlock Value
Merger of Excel Crop Care to Unlock Value Successfully and smoothly completed the merger 4.• Pre-Merger Structure Post-Merger Structure SCC and its affiliates (Japan) 44.98% 1 Public Shareholders SCC and its affiliates (Japan) Public & Others 100.00% 19.98% Excel Crop Care (ECC) J 35.03% 80.3% Sumit
Slide 37: Well-diversified Platform of Scale (1/2)
Well-diversified Platform of Scale (1/2) 0° 4 Parameter [ 1 [ ECCL 1 ( 0 ) [ SCIL (Pre-Merger) SCIL (Post-Merger) Manufacturing Facilities Plants in Gujarat (2) and Plant in Maharashtra (1) and Dadar & Nagar Haveli (1) Gujarat (1) 5 plants in West India Predominantly a formulation Manufacturing Capa
Slide 38: Well-diversified Platform of Scale (2/2)
Well-diversified Platform of Scale (2/2) 0° 4 Parameter [ 1 [ ECCL 1 ( 0 ) [ SCIL (Pre-Merger) SCIL (Post-Merger) Product Capability Major focus on Generics; nascent Major focus on Speciality Presence across complete presence in Biopesticides Products range of products Business Segments Presence onl
Slide 39: Well Placed to Benefit from Sector Tailwinds
Well Placed to Benefit from Sector Tailwinds 4.• o Pesticides: Market Share by Segment Highly Underpenetrated Market Significant growth opportunity for Indian Players 5% Pesticide Consumption (Kg/ha) Agrochemical Market Size (US$ bn) 1% 22% 13 12 +8% 8.1 FY18 47% 7 4.1 5 5 25% c <1 •• Insecticides•
Slide 40: For further information, please contact
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