Meghmani Organics Limited · NSE:MOL
Meghmani Organics — Q1 FY2006 Earnings Presentation
35 slides from Meghmani Organics's earnings presentation, Aug 26, 2005
Slide 1: Meghmani Organics Limited 1Q FY2006 Results Briefing
Meghmani Organics Limited 1Q FY2006 Results Briefing 26 August 2005
Slide 2: Corporate Overview
Corporate Overview Established in 1986, Meghmani Organics is amongst the leading pigments and agrochemicals manufacturers in India Core competency = Organic chemistry Capitalising on the global outsourcing trend Page 2
Slide 3: Corporate profile
Corporate profile PIGMENTS & AGROCHEMICALS Business Specializes in the manufacture of green & blue pigment products and a broad spectrum of Focus commonly used generic pesticides PIGMENTS: Multiple applications in printing inks, plastics, paints, textiles, leather, paper & rubber Industry AGROCHEMIC
Slide 4: Manufacturing Facilities
Manufacturing Facilities 4 multi location plants in Gujarat, Western Part of India Total floor area of 180,000 sq m ISO 9001-2000 certified Ankleshwar Panoli Plant Pigments Plant Agrochemicals Vatva Plant Chharodi Plant Page 4
Slide 5: Global Markets
Global Markets Extensive network of 20 overseas distributors North America Europe Asia (excluding India) South America Africa Australia Over 1,000 stockists, agents, distributors & dealers covering India market Warehouses in Belgium & Uruguay 73% of total revenue from export sale
Slide 6: Key Developments Since Listing
Key Developments Since Listing Established presence 13 new product registrations in Europe & USA: in 8 countries: • Meghmani Europe •China •Paraguay BVBA (Belgium) •Bangladesh •Thailand • Listed 10 Aug 2004 •Indonesia •Meghmani Organics •Turkey • Issue price S$0.28 USA Inc. •Nigeria •Vietnam. • Rais
Slide 7: Our Business Model
Our Business Model
Slide 8: Business Overview
Business Overview Products Multiple Brands Applications CPC Blue (Copper Printing inks, plastics, Meghafast Phthalocynine Blue) paints, textiles, leather, PIGMENTS paper & rubber Pigment Green 7 Pigment Blue 15, Wider than dyes 15:1, 15:3, 15:4 Synthetic Pyrethroid, Crop protection
Slide 9: Pigment Manufacturing
Pigment Manufacturing PHTHALOCYANINE GREEN AND BLUE PIGMENTS Upstream product CPC BLUE Sold to other pigment manufacturers End products PIGMENT GREEN PIGMENT BLUE Sold to Industrial application users like ink, paint, plastic etc. manufacturers 9 Design capacity of Pigment Blue plants at Panoli is 14
Slide 10: Pesticides Manufacturing
Pesticides Manufacturing Encompasses the entire value chain Sold to technical grade pesticides Pesticide Intermediates manufacturers Technical Grade Pesticides Sold to pesticides formulators Bulk Sold to institutional Packing customers Pesticide Formulations Sold to retailers, Small dealers or direc
Slide 11: Financial Performance 1Q FY2006
Financial Performance 1Q FY2006
Slide 12: Revenue
Revenue Rs’m 1,200 42% 864.8 800 607.4 Export 644.9 Domestic 400 430.3 177.1 219.9 0 1QFY05 1QFY06 Growth in revenue from both export and domestic divisions Page 12
Slide 13: Revenue Breakdown (1Q2006)
Revenue Breakdown (1Q2006) By Geographical Markets Domestic: 25% Export sales up 49.9% to comprise Export: 75% 75% of revenue (1QFY05: 71%) Domestic sales up 24.2% to comprise 25% of revenue (1QFY05: 29%) By Business Divisions Others 2% Pigments sales up 30.2% Agrochemicals sales up 55% Pigm
Slide 14: Revenue Breakdown (1Q2006)
Revenue Breakdown (1Q2006) By Continents Africa: 5% South America: 6% Asia (excluding India): 12% North America: 26% Australia: 2% Europe: 24% India: 25% Page 14
Slide 15: Profits
Profits Gross Profit Net Profit Rs’m Rs’m 195.5 200 +35.2% 200 150 144.6 150 100 100 +56.1% 77.0 49.3 50 50 0 0 1QFY05 1QFY06 1QFY05 1QFY06 Margins (%) 23.8 22.7 8.1 8.9 Increase in cost of raw materials from rise in crude oil price as well as copper and aluminum prices. Distribution expenses ro
Slide 16: Balance Sheet Highlights
Balance Sheet Highlights (Rs’m) 30 Jun 05 30 Jun 04 31 Mar 05 (1QFY06) (1QFY05) (FY05) Trade receivables 1,324.9 1001.9 1,308.2 Inventories 724.5 528.1 552.0 Cash & bank 106.7 78.6 54.9 balances Shareholders’ equity 2,248.9 1503.2 2,170.5 NTA per share (Rs) 11.21 9.06 10.81 Debtors turnover 139 days
Slide 17: Segmental Financial Review: Pigments Division
Segmental Financial Review Pigments Division
Slide 18: Revenue: Pigments
Revenue: Pigments Rs’m 600 500 +30.2% 400 300 200 359.1 275.9 100 0 1QFY05 1QFY06 Export and Domestic sales comprise 76.1% & 23.9% of 1Q pigment revenue Export sales rose 18.5% due to higher sales of Pigment Green 7, Copper Phthalocynine Crude, Alpha Blue and Beta Blue Domestic sales grew stro
Slide 19: Gross Profit: Pigments
Gross Profit: Pigments Rs’m 200 150 +22.6% 100 87.2 71.1 50 0 1QFY05 1QFY06 Margins 25.8% 24.3% Page 19
Slide 20: Capacity Utilisation: Pigments
Capacity Utilisation: Pigments Installed Capacity 1QFY06 (MT per annum) PG 7 1200 83% CPC Blue 7200 127%* Alpha Blue 600 96% Beta Blue# 3600 82% Hysol-P 3000 0% Pigment Additives and 600 16% Pigment Blue 60 *Usage of hysol-P capacity to manufacture the additional CPC blue orders # Additional capacit
Slide 21: Segmental Financial Review: Agrochemicals Division
Segmental Financial Review Agrochemicals Division
Slide 22: Revenue: Agrochemicals
Revenue: Agrochemicals 600 +55% 500 400 300 486.6 200 314.0 100 0 1QFY05 1QFY06 Export and Domestic sales comprise 72.4% & 27.6% of 1Q agrochemical revenue 93.5% increase in export sales due to higher sales of Acephate Technical, Cypermethrin Technical, Chlorpyriphos Technical, Permethrin and Al
Slide 23: Gross Profit: Agrochemicals
Gross Profit: Agrochemicals Rs’m 200 150 +47% 106.5 100 72.3 50 0 1QFY05 1QFY06 Margins 23% 21.9% Page 23
Slide 24: Capacity Utilisation: Agrochemicals
Capacity Utilisation: Agrochemicals Installed Capacity 1QFY06 Additional Capacity Date of (MT per annum) (MT per annum) commercial production Agro I unit : Chharodi MPB / MPBA* 750 96% CMAC/CMA* 750 87% Acephate 1200 166% Cypermethrin 900 112% Permethrin 1000 39%^ Alpha Cypermethrin 60 240% Agro II
Slide 25: Outlook & Business Strategies
Outlook & Business Strategies Meghmani Organics Limited
Slide 26: Industry Prospects: Pigments
Industry Prospects: Pigments Global demand likely to increase 6.4% per year to US$5.5 billion by 2006 Continual expansion of key user markets – printing ink and coatings which account for about 80% of total demand Trend in printing ink and coatings markets towards products that feature higher pi
Slide 27: Industry Prospects: Agrochemicals
Industry Prospects: Agrochemicals Robust agrochemicals growth with sales up by 12.6% to US$32.2 billion in 2004 Growing demand for Organophosphorous, Synthetic pyrethroid & neonicotinoid insecticides compounds Positive long term outlook for Indian market with continued expansion of economy Inc
Slide 28: Outlook for FY2006
Outlook for FY2006 Raw materials prices: Crude Oil and Metal Sharp oil price increases > impact on derivatives such as Phathlic, Ortho Nitro Toluene and solvents Rise in prices of copper & aluminium Stabilisation of Chlorine gas and Caustic Market prices Recovering sales price of certain
Slide 29: Outlook for FY2006
Outlook for FY2006 Measures to protect profit margins Continuous price negotiation efforts to pass on increase in raw material costs to customers : ª a market-dependent process ª difficult to predict price adjustment period Improve management of raw materials Manage currency exposure to reta
Slide 30: Growth Strategies: Pigments
Growth Strategies: Pigments Continue to expand production capacity Shifting from blue crude supplier to a high margin and technology oriented pigments like alpha blue or beta blue Raised production capacity of Beta Blue by 600MT per annum to 3600MT per annum in 1Q Additional capacity operati
Slide 31: Growth Strategies: Agrochemicals
Growth Strategies: Agrochemicals Continue to expand production capacity Ankleshwar plant: ª Increased production capacity of Chlorpyriphos ª Increase total production of CMAC by 1,000 MT per annum (Commercial production expected to commence in January 2006) Registration of agrochemical product
Slide 32: Conclusion: Meghmani achieved a record set of results
Conclusion Meghmani achieved a record set of results in 1QFY2006 Impressive top and bottomline growth Revenue up 42.4% to Rs 864.8 m Net profit up 56.1% to Rs 77.0 m Healthy profit margins despite continued cost pressures Gross margin 22.7% and net margin 8.9% Strong sales in July Page 3
Slide 33: Thank You
Thank You Question and Answer Session
Slide 34: Pigments Division – Raw Material Prices
Pigments Division – Raw Material Prices Price trend of primary raw materials used at Panoli Plant Apr- 04 Oct- 04 Nov- 04 Dec- 04 Mar- 05 Apr- 05 Jun- 05 Particulars Price/Kg Price/Kg Price/Kg Price/Kg Price/Kg Price/Kg Price/Kg Copper Scrap 120.86 129.48 129.13 138.24 142.00 156.00 162.00 Phthalic
Slide 35: Agrochemicals Division – Raw Material Prices
Agrochemicals Division – Raw Material Prices Petroluem Base Inorganic Dimethyl Paw Di-ethyl Phosphoro Iso Carbon Acetic Thionyl Material / Thiophosphoryl C-9 Amido Thioic Butylene Tetrachloride Anhydride Cloride Month-Yr Chloride Acid ($/MT) ($/MT) ($/MT) ($/MT) (RS/KG) (RS/KG) ($/MT) Apr- 04 1,985.