Coromandel International Limited · NSE:COROMANDEL
Coromandel International — Investor Presentation (June 2018)
44 slides from Coromandel International's investor presentation, June 2018
Slide 1: Coromandel: Future Positive
Coromandel: Future Positive Jun 2018
Slide 2: Agri Landscape
Agri Landscape Birds Paradise: Bio-Diversity at Coromandel’s Kakinada Plant
Slide 3: Indian Agriculture: The Global Giant
Indian Agriculture: The Global Giant Crop India Ranking % Share Pulses 1st 23% Oilseeds 1st 11% 3rd largest Agriculture Cotton 1st 29% producer globally F&V 2nd 11% Largest cropland globally Sugarcane 2nd 20% Largest irrigated area Cereals 3rd 11% Source: U.S. Geological Survey Source: FAOSTAT 50 Ag
Slide 4: ….But Productivity Gaps exist
….But Productivity Gaps exist Falling per capita land holding Imbalanced Nutrient Usage Yield comparison (Tonnes/ ha) 10.0 3.0 Avg Landholding Size (ha) N:P:K consumption ratio 2.5 8.0 2.3 2.0 6.0 1.4 Soyabean 1.5 4.0 1.0 Ideal Ratio 2.0 2.7 0.5 4:2:1 0.0 0.0 0.9 FY09 FY10 FY11 FY12 FY13 FY14 FY15 F
Slide 5: Efforts being made to Double Farmer Income by 2022
Efforts being made to Double Farmer Income by 2022 Policy Measures in Union Budget 18-19 ▪ MSP at 1.5x Cost of Production ▪ Institutional credit at USD 17 billion ▪ Increased allocation under Crop Insurance ▪ Upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) Source: Niti A
Slide 6: Agri Growth Levers
Agri Growth Levers Food Security Improved support price Crop MSP (Rs/Qtl) 5450 FY11 FY18 4450 4020 FY50 3000 2500 2300 333 mil MT 1550 1735 1425 1000 1120 880 1.6 B PADDY WHEAT MAIZE ARHAR COTTON GROUNDNUT FY18 CAGR 6% 6% 7% 9% 7% 10% Higher Source: CACP 280 mil MT Disposable 1.3 B ….Coupled with Ru
Slide 7: Agri Growth Levers
Agri Growth Levers Dietary Shifts Digital India Indian Consumption Basket Unified National Agriculture Market USD 350 Bil USD 85 bil USD 160 Bil Others Oil F&V USD 34 bil USD 95 bil Milk & Meat USD 44 bil Cereals 2010 2030 Cereals & Pulses Milk & Meat F&V Oil Others Source: CII Mckinsey Source: SFAC
Slide 8: …along with Agriculture reforms
…along with Agriculture reforms Doubling Farmer Income by 2022 Improving Integrated Productivity Improvement Water & Inputs Market Farming Realization Minimizing Increasing Bio Micro crop losses: Balancing Allied E Irrigation technology Irrigation Crop nutrition Activities Procurement Coverage Prote
Slide 9: & Positive Policy Measures
& Positive Policy Measures Nutrient Based Subsidy Make in India …..Towards deregulating the Fertiliser industry …..Thrust towards Domestic Manufacturing Fixed Fixed subsidy & variable farm gate prices MRP 35% 35% 34% 27% 30% 37% 60% 52% 63% 65% 65% 66% 73% 70% 63% 40% 48% 37% Investment Innovation S
Slide 10: & Positive Policy Measures
& Positive Policy Measures Direct Benefit Transfer …..Towards balancing Soil Health Subsidy Disbursement on Farmer Purchase Dept of Fert ▪ Informed farmer purchases based on Soil Health Status Purchase info triggered ▪ Subsidy to manufacturer to be paid on weekly basis ▪ Lead to digitization & impro
Slide 11: Our Industry
Our Industry Birds Paradise at Coromandel’s Kakinada Plant: Home to ~100 species of migratory birds
Slide 12: Indian Fertiliser Industry: Overview
Indian Fertiliser Industry: Overview Indian Nutrient Demand Fertiliser: Supply Demand Balance 17-18 Production & Consumption (N+P2O5) (mil tons) (in mil tons) in mil tons 30.3 Demand Domestic Capacity 59.0 2.51 24.0 48.7 6.71 17.5 16.74 15.7 25.5 21.4 20.5 16.5 3.2 Urea NPKs Potash Production Consum
Slide 13: Opportunities in Inputs space: Ag Nutrients
Opportunities in Inputs space: Ag Nutrients Nutrient Deficient India Soils Source: IISS Bhopal ▪ More than 50% of the districts deficient in essential plant nutrients- Opportunity for Balanced Nutrition ▪ Relatively untapped Secondary & Micro Nutrients segment ▪ Organic products to balance plant gro
Slide 14: Opportunities in Inputs space: Micro Irrigation & Water Soluble Fertiliser
Opportunities in Inputs space: Micro Irrigation & Water Soluble Fertiliser Area under Micro irrigation (mil ha) Potential: 69 mil Ha 7.7 Current coverage: 8 mil Ha 6.1 4.9 3.1 2005 2010 2012 2015 Benefits: Increase in Water Use Efficiency: 50 – 90% Productivity Increase: 40-50% ▪ Current Micro Irrig
Slide 15: Opportunities in Crop Protection space
Opportunities in Crop Protection space Indian Crop Protection Market (USD Bil) 3.2 2.1 3.1 2.3 ▪ Exports segment to grow by 9% p.a. Exports ▪ Domestic segment to grow by 7% p.a. Domestic FY15 FY20 Increasing Pest Incidence Herbicide Opportunities Opportunities in Generic Space Molecules going off pa
Slide 16: Industry Updates: 2017-18
Industry Updates: 2017-18
Slide 17: Stable Agriculture Environment in 17-18
Stable Agriculture Environment in 17-18 1 All India South West Monsoon: 95% LPA 2 Marginal drop in acreage: -0.5% 3 Record Food grain output: +2% Area in Mil Hectare Qty in Mil tons 45 40 LY CY LY CY 35 30 Food Grains 275.1 279.5 25 20 Oilseeds 31.3 30.6 15 10 Sugarcane 306.1 355.0 Excess 5 Normal C
Slide 18: …Aided by Benign Business Scenario
…Aided by Benign Business Scenario Phos Acid CFR India USD- INR Rate (Rs/USD) 730 67.00 750 678 700 66.00 650 590 580 567 567 600 550 65.00 550 500 64.00 63.00 62.00 Ammonia CFR India 400 371 61.00 350 290 300 60.00 250 200 Urea Prilled Bulk FOB ME 300 253 ▪ Rupee operated in a narrow price band. De
Slide 19: …Resulted in improved Fertiliser Industry Dynamics
…Resulted in improved Fertiliser Industry Dynamics Indian Phosphatic Industry: Supply-Demand Scenario (in mil tons) 21.7 18.6 17.1 17.5 16.5 15.8 10.6 14.0 6.2 4.7 6.1 4.1 4.9 ▪ Improved consumption resulting in lower channel stocks 3.7 ▪ Comfortable acid availability: Improved DAP production 11.8 1
Slide 20: However, Headwinds in Global Crop Protection space in 2017
However, Headwinds in Global Crop Protection space in 2017 2017 Sales ($B) I Real Growth ▪ Lower crop prices & adequate Stock-to-Use ratio World 53.7 Sales ($B): (-3.0%) ▪ Lower pest incidence Europe NAFTA 11.6 Sales ($B): (-4.2%) ▪ Higher product inventories in key markets 10.8 Sales ($B): (+0.9%)
Slide 21: Coromandel: Who We Are
Coromandel: Who We Are - About Coromandel - Business Segments - Financials Birds Paradise at Coromandel’s Kakinada Plant: More than 50% Plant area covered under Green Belt
Slide 22: About Coromandel
About Coromandel Coromandel’s Manufacturing Presence India’s largest private sector Jammu Pioneers & market leaders in Phosphatic Fertiliser company Specialty Nutrients Rae Baereli Kota Udaipur 5th largest Ag Chem Indian Vadodara Nimrani No. 1 Organic Manure player in company Dahej Ankleshwar India
Slide 23: About Coromandel
About Coromandel Key Facts : ▪ Turnover: USD 1.7 bil (FY17-18) ▪ Market Cap: USD 2.3 bil (Mar 2018) ▪ Strong credit rating: ‘AA +’ (Stable outlook)’ with CRISIL India ▪ ~4500 employees & ~7500 contract staff ▪ International Linkages: FOSKOR, GCT, CANPOTEX, SQM, GETAX , QAFCO, ICL, OCP, YANMAR etc ▪
Slide 24: Global Strategic Alliances
Global Strategic Alliances Strategic Investment TIFERT – Phos acid venture in Tunisia ▪ Highly diversified sourcing Pact with QAFCO for supply MOP of Urea and Ammonia Canpotex - Canada ▪ Significant market presence in Ammonia and Sulphur Mitsui, Japan International markets Rock Phosphate Morocco, Is
Slide 25: Business Structure
Business Structure Subsidy / Non Subsidy DAP Sales EBITDA Phosphatic Fertilisers Complex Fertilisers 78% 68% SSP/MOP Nutrient Specialty G-Sulphur and Other Allied Business Nutrients & Water Soluble Organic fert Non subsidy EBITDA share has steadily improved Organic Manure 86% from 23% in FY08-09 to
Slide 26: Towards New Growth Segments
Growth Journey 2018 Bio Acquisition 2014 Farm Mechanization- Towards New Growth Segments Yanmar JV 2013 SSP- Liberty acquisition 2011 Crop Protection- Sabero acquisition Technology tie up- New capacity New Expansion Strategic 2012 Technology Shell addition: ~3 Businesses: into Retail Partnership Tie
Slide 27: Business Segments
Business Segments Birds Paradise at Coromandel’s Kakinada Plant: Largest breeding site in the East Godavari district for a variety of bird species
Slide 28: Coromandel Phosphatic Fertilisers
Coromandel Phosphatic Fertilisers ▪ C Train Expansion ▪ LIBERTY SSP acquisition 5.0 mil ton ▪ Largest Complex marketer in India 3.2 mil ton ▪ 22% of the domestic Phosphatics capacity 0.8 mil ton ▪ Ability to manufacture 12 different grades ▪ Differentiated offering thru Unique grades 0.3 mil ton ▪ D
Slide 29: Fertiliser Marketing
Fertiliser Marketing Sales (mil tons) Market Share Unique Grades (mil tons) 1.1 38% 39% 2.8 15.8% 2.7 37% 16.3% 1.0 2.6 15.9% 33% 35% 2.5 0.9 33% 31% 33% 0.8 1.0 31% 2.2 14.6% 14.4% 0.7 28% 0.9 0.8 29% 0.8 0.6 27% 0.6 0.5 25% FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Unique Grades Unique gra
Slide 30: Fertiliser Manufacturing
Fertiliser Manufacturing Kakinada: Capacity: 1.9 mil tons High Nutrient Efficiency Phosphatic Production (in mil tons) Flexibility to manufacture multiple grades 3.1 83% 90% 70% 70% 70% 80% 65% 2.9 Vizag: 2.7 2.9 70% 2.5 2.4 2.4 2.4 60% 2.3 50% Capacity: 1.2 mil tons 2.3 40% 2.1 30% Integrated Phos
Slide 31: Coromandel Crop Protection
Coromandel Crop Protection 1990’s 2006 2009 2010 2011 2015 2018 Acquired Acquisition of Acquired Pasura Established: FICOM and Expansion to Bio Tech – Sabero Bio Pesticide pesticides unit of - China Office setting up Latin America Jammu Unit II Acquisition Acquisition BPM Jammu Unit I - R&D Centre 5
Slide 32: Crop Protection Operations
Crop Protection Operations Diversified Sales Global presence through Subsidiaries Bio Business: Synergistic Fit 14% Bio Turnover (Rs Mio) 12% Netherlands 1234 56% 8% 1074 China Office 953 7% Mexico Philippines Nigeria 2% Brazil 1% APAC Africa S. America C. America Argentina Australia FY15 FY16 FY17
Slide 33: Crop Protection Operations
Crop Protection Operations Significant Manufacturing presence Ably supported by R&D Team Resulting in Significant growth Turnover (Rs '00 Mil) 9% CAGR 151 141 128 Ankleshwar Plant R&D Centre, Hyderabad FY16 FY17 FY18 ▪ Manufacturing Capacity 60,000+ MT/ ▪ 4 new Product launches in FY18 ▪ Growth acro
Slide 34: Retail
Retail Farming Solutions Customer Reach 2.8 million farmers annually Products Services Telangana Ag Nutrients Farm Mechanization Convergence of Crop Chem Agri Insurance Products & Services: Seeds Credit One Stop Shop Vet Feed Soil/ Petiole Testing for Agriculture needs Andhra Pradesh Karnataka Farm
Slide 35: Specialty Nutrients
Specialty Nutrients Manufacturing Capability Crop based Product Solutions Increasing share of Focus products 100% 20% 80% 39% 2012 CSQM 15000 MT WSF Plant, Kakinada Crop Solutions Infrastructure 60% 2008 WSF Plant, Vizag 40% Horticult 20% Cereals Pulses Cotton ure 2006 Bentonite Sulphur Plant, Vizag
Slide 36: SSP
SSP Maintaining Market Leadership With Quality Focus & Focus Product Approach 0.70 16% 13% Share of Granulated & Value added 0.60 14% products (%) 12% 0.50 60% 51% 10% 0.40 50% 8% 0.30 0.63 40% 0.55 0.52 6% 0.48 30% 0.20 4% 20% 0.10 2% 0.11 10% - 0% FY14 FY15 FY16 FY17 FY18 0% FY14 FY15 FY16 FY17 FY
Slide 37: Organic Manure
Organic Manure Product Portfolio Growth Drivers N – Nrich (oil cake) ▪ Regulatory push from government- Market Development Assistance ▪ Push towards waste treatment & management Bio/Microbial & P – Phosgold Organic Fertiliser (Compost + Rock P) ▪ Soil Health Focus- Sustainable Agriculture ▪ Consumpt
Slide 38: Farm Mechanization: Eyeing the Future
Farm Mechanization: Eyeing the Future Mechanization across Ag Value Chain Coromandel’s Presence Soil & seed bed preparation 40% ▪ Market leadership in TN, AP, Kerala for Rice transplanters ▪ Introduced Combine harvester in FY18 Seeding & Planting 29% Paddy Transplanters ▪ Service centers in AP, Tela
Slide 39: Doing it Responsibly
Doing it Responsibly ▪ Benefitting ~1 million lives through its CSR initiatives ▪ Coverage under Green Belt: ~10000 new planting every year Bird’s Paradise, Kakinada ▪ Conversion of Phospho gypsum heaps into Green belt ▪ Constructed 1000+ toilets as part of Swatch Bharat initiative Girl Child Educat
Slide 40: Coromandel Key Financials
Coromandel Key Financials Turnover (INR Mil) EBIDTA (INR Mil) & EBIDTA % 14, 000 11.2% 12. 0% 9.6% 1,13,630 1,17,003 12, 000 1,10,485 10. 0% 8.4% 1,01,140 1,02,499 10, 000 7.8% 7.5% 91,038 6.7% 8.0 % 8,0 00 6.0 % 6,0 00 12,263 9,820 4.0 % 4,0 00 7,679 7,926 8,495 7,896 2.0 % 2,0 00 0 0.0 % FY 2013 F
Slide 41: Coromandel Financials- P&L
Coromandel Financials- P&L In Rs Mio FY 2013 FY 2014 FY 2015 FY 2016* FY 2017* FY 2018* Revenue 91,038 1,01,140 1,13,630 1,17,003 1,02,499 1,10,485 YoY (Growth) (%) -9% 11% 12% 3% -12% 8% EBITDA before PY Subsidy 6,591 7,578 8,495 7,896 9,820 12,263 PY Subsidy 1,088 349 - - - - EBITDA Reported 7,679
Slide 42: Coromandel Financials- Balance Sheet
Coromandel Financials- Balance Sheet In Rs Mio FY 2013 FY 2014 FY 2015 FY 2016* FY 2017* FY 2018* Equity 23,029 23,066 22,020 26,340 28,908 31,259 Debt & Other LT liabilities 29,761 18,730 23,178 26,890 22,398 27,395 Deferred Tax Liability 1,877 1,890 1,875 1,679 1,495 1,290 Sources of Funds 54,666
Slide 43: 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 44: Thank You
Thank You Thank You
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