Coromandel International Limited · NSE:COROMANDEL
Coromandel International — Investor Presentation (November 2016)
52 slides from Coromandel International's investor presentation, November 2016
Slide 1: Investor Presentation Nov 2016
Investor Presentation Nov, 2016
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: Global Scenario
{A Coromandel «<= GLOBAL SCENARIO ae murugappa 4
Slide 5: World N,P,K Fertilizer Market
World N,P,K Fertilizer Market Global N- Use by Product Global K- Use by Product Others 23% Others 28% UAN Urea 6% 56% MOP AN SOP 70% 7% 2% DAP/MAP 8% “N” Market is 110 Million MT “K” Market is 32 Million MT Global P- Use by Product Global Fertiliser Industry: Others 6% India and China account for
Slide 6: Global Nutrient Consumption Outlook
Global Nutrient Consumption Outlook 183 187 179 109 110 112 2013-2017 CAGR N 0.8% 41 41 42 29 32 33 P2O5 0.1% K2O 3.1% 2012/13 2015/16 f 2016/17f N P2O5 K2O Total Source: IFA
Slide 7: Indian Scenario
INDIAN SCENARIO 7
Slide 8: 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 8
Slide 9: 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 9
Slide 10: 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 10
Slide 11: 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 12: Long-term demand drivers remain strong in India
Long-term demand drivers remain strong in India Crop MSP (Rs/Qtl) 5050 4220 3860 Rural wage growth 3000 2500 – MSP increase 2300 1470 1525 1365 – Higher allocation under MGNREGS 1000 1120 880 – National Agriculture Market- Price Discovery PADDY WHEAT* MAIZE ARHAR COTTON GROUNDNUT FY11 FY17 *Wheat: F
Slide 13: Fertiliser Subsidy Policy
Fertiliser Subsidy Policy Nutrient Based Subsidy (NBS) policy effective from April 1,2010. The Salient features 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 MRP. “P” based on DAP , “N” based on
Slide 14: Resulted in lower subsidy component
Resulted in lower subsidy component… 37% 40% 48% 63% 65% 65% 66% 73% 63% 60% 52% 37% 35% 35% 34% 27% Pre NBS 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Subsidy as % of total realization Farmgate price as % of total realization Share of farm gate price of Complex Fertilizers in total rea
Slide 15: FY16-17 H1 Update: Agri Environment
FY16-17 H1 UPDATE Agri Environment 15
Slide 16: Favorable Agri Environment
Favorable Agri Environment Rainfall Map (June-Sep’16) Reservoir Storage Status (As on Oct 28) 15-16 16-17 90% 85% 86% 79% 70% 70% 73% 66% 58% 56% 49% 33% North East West Central South All India Source: Ministry of Water Resources Source: IMD Higher reservoir levels: 130% of Last Year Near Normal Mon
Slide 17: Led to higher sowings & record Kharif output
…Led to higher sowings & record Kharif output Crop Sowing -30th Sep (in L Ha) Production Estimates- Kharif (in Mil MT) 352 FY16 FY17 % Chg 305 Rice 379.0 388.9 3% 2015-16 2016-17 Coarse Cereal 184.6 190.1 3% Pulses 113.2 146.2 29% Oilseeds 184.7 189.7 3% -8% 91 94 S Cane 49.6 45.8 Cotton 116.4 102.8
Slide 18: & resulted in improved consumption
& resulted in improved consumption In L MT Phosphatics Industry Trend 217 186 165 158 106 140 62 41 83 61 37 41 118 113 122 98 105 63 FY12 FY13 FY14 FY15 FY16 FY17 Prod Imports Sales
Slide 19: Stable Exchange Rate & soft commodity prices
Stable Exchange Rate & soft commodity prices… 69 INR- USD Movement (Rs/USD) 68 68 67 67 66 66 65 04-04-2016 04-05-2016 04-06-2016 04-07-2016 04-08-2016 04-09-2016 DAP (USD/MT) Ammonia (USD/MT) China FOB India FOB 600 Middle East CFR India CFR 600 500 500 400 400 334 300 300 232 320 200 200 202 100 1
Slide 20: Resulted in moderation in farm gate prices
…Resulted in moderation in farm gate prices Farm Gate Price (Rs/MT) 30000 24000 23800 24200 24500 25000 22500 22700 22000 20000 18200 15000 10750 10000 9350 9350 5000 0 Prior to June '08- Mar-11 Mar-12 Oct-12 Apr-13 Apr-14 Oct-14 May-15 Oct-15 Jul-16 June '08 Mar '10 20
Slide 21: & higher production & lower imports
…& higher production & lower imports DAP+Complex: Production & Imports ( L MT) 106 62 61 41 37 56 41 118 113 122 98 105 60 63 2011-12 2012-13 2013-14 2014-15 2015-16 2015-16 H1 2016-17 H1 Production Import Production up by 6% Imports down by 26% 21
Slide 22: Urea demand has remained stable post NBS implementation
Urea demand has remained stable post NBS implementation UREA SUPPLY & DEMAND Lac MT 295 302 304 309 320 85 78 80 71 87 155 Slight moderation in demand in H1 due to: 144 Neem coated Urea consumption 39 36 220 226 227 226 245 Weak monsoons in North 120 119 2011-12 2012-13 2013-14 2014-15 2015-16 2
Slide 23: Company Profile
{A Coromandel «<= COMPANY PROFILE oe murugappa
Slide 24: Coromandel - Snapshot
Coromandel - Snapshot 14,000 Rs. Cr. 12,000 10,000 8,000 6,000 11,306 11,634 9,421 9,901 10,053 9,034 4,000 7,637 6,453 5,635 2,000 3,791 2,068 - 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17H1 Revenue Key Facts : Turnover: Rs.11,634 Cr (FY15-16) Market Cap: Rs. 8400 Cr ( end
Slide 25: Business Structure
Business Structure Subsidy / Non IndAS Reporting Subsidy Break up DAP Sales EBITDA Phosphatic Fertilisers Complex Fertilisers /SSP/MOP 84% 64% Nutrient Specialty G-Sulphur and Other Nutrients & Water Soluble Fertilisers Allied Organic fert Organic Manure Business Agri Inputs 16% 36% Retail Agri Serv
Slide 26: 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 27: 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 28: Coromandel's Fertilisers Business
Coromandel’s Fertilisers Business 28
Slide 29: Growth Story
Coromandel Fertiliser Business Growth Story C Train Expansion LIBERTY SSP acquisition 50 Lac Mt 29
Slide 30: 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 31: State of The Art Manufacturing Facilities
State of The Art Manufacturing Facilities • High capacity utilisation levels & continuous modernisation of facilities • Plants are strategically located in highly irrigated • Backward integration into manufacturing the southern Indian states and in heart of fertilizer intermediate - phosphoric acid
Slide 32: Visak Plant, Kakinada Plant: Cost Leadership
Cost Leadership Visak Plant Visak Production (Lac MT) Captive Phos Acid • Value gap - imported Vs own acid 10.5 9.8 • Use of various sources /grades of rocks 9.1 9.2 9.5 8.6 • New belt filter technology- to use low grade rocks 7.4 7.0 7.0 Sulphuric Acid • Consistent production performance – operatin
Slide 33: Marketing Network
Marketing Network Higher complex fertilizer Target Markets consumption in core markets Kg /ha Tertiary Market Industry Size: 3.4 Million 375 MT 250 250 100 150 200 250 110 100 100 Bihar MP AP TN KN DAP Complex Secondary Market Industry Size: 3.5 Marketing Channels million MT Dealer Trade Primary M
Slide 34: 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 35: Single Super Phosphate (SSP)
Single Super Phosphate (SSP) Market leader in SSP with 13.5% market share Presence across major SSP consuming crops- Kota Alternate to DAP in Pulses & Oilseeds Rae Baereli Improving quality perception and positioning of Udaipur Vadodara Nimrani the product: Pali Quick Test Kits Hospet Qual
Slide 36: Specialty Nutrient Business
Specialty Nutrient Business 36
Slide 37: 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 37
Slide 38: 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 39: SND & Organic Fertiliser Business
SND & Organic Fertiliser Business Sulfur Products Value based Market Share Micronised sulphur variant launched Sulphur products WSF Market leader. 12% 32% WSF 68% Expanded umbrella branding approach for SND products 88% Crop based product launches- Speedfol Cereal & Cotton Coromandel Rest Co
Slide 40: Crop Protection Business
Crop Protection Business Coremandai
Slide 41: 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 42: Crop Protection Strategy
Crop Protection Strategy Capacity augmentation of key molecule Mancozeb expansion at Dahej and Sarigam Increase R&D focus Off Patent molecule synthesis and process improvements in existing range Improving souring efficiency Generate market information through China office Focus on Expo
Slide 43: Initiatives
Initiatives Operational Initiatives Jammu • Umbrella branding focus through “Gromor Suraksha” • Reducing conversion & treatment cost • Focus territory approach • Expand dealer network and customer engagement Strategic Initiatives Ranipet • Co-Marketing with MNCs – Access to new molecules – Tie up wi
Slide 44: Mana Gromor Centers (MGCs) - Retail
Mana Gromor Centers (MGCs) - Retail
Slide 45: 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: Gromor Webinar & “Gromor Scientist” Leverage farm
Slide 46: Retail Business Overview
Retail Business Overview • 600 centers in Andhra Pradesh / Telengana and 200 centers in Karnataka- servicing more than 2 million farmers • Awards & Recognition • Retail Excellence Award by CMO Asia in Singapore • Flame Asia Award (ROI& Gromor Webinar) Products & Service Offerings Veterinary Other Fe
Slide 47: Yanmar Coromandel AgriSolutions
Yanmar Coromandel AgriSolutions Expanded FMS coverage; Market leadership in TN, AP, Kerala for Rice transplanters Opened service centers in AP/Telengana , Tamil Nadu Synergistic approach through MGC operations Indigenization of spares Expanding portfolio to include other Yanmar models (Com
Slide 48: Financial Performance
WZ Financial Performance Coromandel C=
Slide 49: Consolidated Financial Performance
Consolidated Financial Performance EBIDTA (Rs. Cr) & EBIDTA % Turnover ( Rs. Cr) EBITDA before PY Subsidy PY Subsidy EBITDA Margin % 1,200 10.2% 12.0% 11,306 11,634 9,901 10,053 1,000 7.4% 10.0% 46 7.7% 7.5% 8.4% 9,034 6.6% - 800 35 8.0% - 5,635 109 600 6.0% 1,008 400 853 4.0% 770 767 659 200 473 2.
Slide 50: Income Statement - Consolidated
Income Statement - Consolidated As per IndAs Amount in Rs. Cr FY2012 FY2013 FY 2014 FY 2015 FY 2016 H1 FY 2017* Revenue - excl PY subsidy 9,855 8,925 10,018 11,306 11,634 5,635 YoY (Growth) 33.00% -9.44% 12.25% 12.86% 2.90% EBITDA before PY Subsidy 1,008 659 770 853 767 473 EBITDA % 10.23% 7.38% 7.6
Slide 51: Balance Sheet - Consolidated
Balance Sheet- Consolidated As per IndAs Amount in Rs. Cr FY2012 FY2013 FY 2014 FY 2015 FY 2016 H1 FY 2017 Equity 2,416 2,303 2,307 2,202 2,634 2,712 Debt & Other LT liabilities 2,977 2,976 1,873 2,318 2,656 2,646 Deferred Tax Liability 67 188 189 188 168 165 Sources of Funds 5,461 5,466 4,369 4,707
Slide 52: Thank You
{A Coromandel «<= THANK YOU oe murugappa 52
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