S Chand And Company Limited · NSE:SCHAND
S Chand And — Q2 FY2018-19 Earnings Presentation
30 slides from S Chand And's earnings presentation, Nov 5, 2018
Slide 1: Cover letter to stock exchanges
. S Chand And Company Limited =——= / —~— Corporate Office: A-27, 2nd Floor, Mohan Co-Operative Industrial Estate, New Delhi - 110044, India. Ss. CHAND Registered Office: Ravindra Mansion, Ram Nagar, New Delhi - 110055, India. GROUP P:+91 11 4973 1800 | F:+91 11 4973 1801 | E:info@schandgroup.com | w
Slide 2: Q2 FY2018-19 Results Presentation
S. Chand and Company Limited Q2 – FY2018-19 Results Presentation November 05, 2018
Slide 3: Summary
SUMMARY • KEY HIGHLIGHTS: Q2FY19 • SEASONAL NATURE OF OUR BUSINESS • CONSOLIDATED FINANCIALS: Q2FY19 • WORKING CAPITAL CYCLE • SHAREHOLDING STRUCTURE • LOOKING AHEAD • ANNEXURE: • China vs India – A Case Study in Education Sector • Indian Education Sector - Overview • S Chand – Group Profile • S Cha
Slide 4: Key Highlights: Q2FY19
KEY HIGHLIGHTS: Q2FY19 • Strong focus on improving balance sheet metrics • Due to the seasonal nature of our business, Q2 historically contributes only a minor portion of our annual revenues. Therefore, our focus during the quarter remains on improvement in debtor days, net working capital etc. • Ou
Slide 5: Key Highlights: Q2FY19
KEY HIGHLIGHTS: Q2FY19 • Update on Chhaya Prakashani acquisition of the remaining 26% stake • S Chand had acquired 74% stake in Chhaya Prakashani in December, 2016. • We are in the process of acquiring additional 26% and taking our stake to 100% in the company during the year. • Update on restructur
Slide 6: Seasonal Nature of Our Business
SEASONAL NATURE OF OUR BUSINESS Less than 10% of annual Less than 5% of annual Less than 10% of annual 75% to 80% of annual revenues; revenues; revenues; revenues; Negative WC Negative WC Peak Inventory Peak Receivables Q1 April - June Q2 July - September Q3 October - December Q4 January - March o C
Slide 7: Seasonal Nature of Our Business - A Picture Is Worth a Thousand Words
SEASONAL NATURE OF OUR BUSINESS - A PICTURE IS WORTH A THOUSAND WORDS S Chand (Standalone) - Historical Quarterly Performance (Rs m) 2,621 2,700 2,082 2,100 Q1, Q2 & Q3 contributes only ~20% Q4 makes for majority 1,500 of annual revenues revenues & profitability 1,193 970 900 746 577 517 453 303 340
Slide 8: Consolidated Financial Performance: Q2FY19
CONSOLIDATED FINANCIAL PERFORMANCE: Q2FY19 S Chand and Company Limited (Figures in INR Million) Consolidated Q2FY19 Q2FY18 FY18 Revenue from Operations 106 113 7,944 Other Income 17 15 127 Revenues 123 127 8,072 Cost of goods (net of inventory change) 7 58 2562 Publication expenses 64 55 683 Selling
Slide 9: Consolidated Financial Performance: Q2FY19
CONSOLIDATED FINANCIAL PERFORMANCE: Q2FY19 30 Sep 2018 31 Mar 2018 (₹ in millions) 30 Sep 2018 31 Mar 2018 (₹ in millions) Unaudited Audited Unaudited Audited Equity and liabilities Assets Equity Non-current assets Equity share capital 175 175 Property, plant and equipment 1,060 1,074 Other equity I
Slide 10: Working Capital Cycle – Elevated in Q4, Reduction Continues Till Q3
WORKING CAPITAL CYCLE – ELEVATED IN Q4, REDUCTION CONTINUES TILL Q3 Working Capital : Debtors reduced from Rs6,312m as of Q4FY18 to Rs3,866m as of Q2FY19 (vs Rs5,016 in Q1FY19) • ~ 22% debtor realization during the quarter • Overall working capital down from peak of 253 days to 202 days Receivable D
Slide 11: Shareholding Structure
SHAREHOLDING STRUCTURE Market Data As of 2nd Nov, 2018 Key Institutional Investors - September 2018 % Holding Market Capitalization (Rs Mn) 6,930 Price (Rs) 198 Everstone Capital Partners II LLC 9.5% No. of shares outstanding (Mn) 34.95 International Finance Corporation 8.0% Face Value (Rs.) 5.0 HDF
Slide 12: Looking Ahead
LOOKING AHEAD • Q3FY19 • Working with sales teams to focus on the peak season from Dec/Jan onwards. • Continued focus on reducing receivables while inventory levels would start to increase in order to capitalise on the peak season for the industry. • Historically, Q3 accounts for less than 10% of th
Slide 13: Annexure
Annexure: - China vs India – A Case Study in Education Sector - Indian Education Sector - Overview - S Chand – Group Profile - S Chand - Historical Financial Performance
Slide 14: China - A Case Study in Growth - India Expected to Follow Suit
CHINA - A CASE STUDY IN GROWTH - INDIA EXPECTED TO FOLLOW SUIT CHINA 2006 INDIA 2017 • GDP per capita US$ 2,100. • GDP per capita US$ 1,940 • Private education market < US$ 50 Billion*. • K-12 market growing at ~ 20%. • Private education market ~ US$ 30 Billion*. • Education market expected to doubl
Slide 15: Indian Education Sector - Large & Growing Addressable Opportunity
INDIAN EDUCATION SECTOR - LARGE & GROWING ADDRESSABLE OPPORTUNITY US$90 BN Market Size for the Indian Education Sector 6 US$6 BN Ancillary Education Segment Early education 2 Informal Education Segment S. Chand operates in this segment (K-12/ Higher Education content). Test prep 5 5 o US$20 BN ➢ Sup
Slide 16: Indian Education Sector: Inflection Point, Strong Potential
INDIAN EDUCATION SECTOR: INFLECTION POINT, STRONG POTENTIAL Age-wise population distribution in India : S. Chand target market Literacy rate improving with higher participation from students (Source: IBEF Report) (Source: Technopak’s Outlook on India Schooling Segment) 500 40% 450 Potential Market o
Slide 17: Preference Towards Private, Central Curriculum Schools
PREFERENCE TOWARDS PRIVATE, CENTRAL CURRICULUM SCHOOLS Private schools market share increasing every year Indian K-12 education infrastructure (Source: IBEF Report) 120% (Source: Technopak’s Outlook on India’s Schooling Segment) Number of Schools: 1.5 MN 100% 20.0% 21.2% 21.5% 22.1% 23.0% Government
Slide 18: Preference Towards Private, Central Curriculum Schools
PREFERENCE TOWARDS PRIVATE, CENTRAL CURRICULUM SCHOOLS Target Market is 3,00,000 schools – growing at 8-10 % annually and student strength growing at 7-8% • Currently covering 38,000 schools in the target market • Target market growing at 8-10% annually in the no. of Intl 25-300 Schools schools Scho
Slide 19: S Chand Group - Leader in Indian Education Content
S CHAND GROUP - LEADER IN INDIAN EDUCATION CONTENT Delivering content, services and solutions… ➢ Long operating history of over seven decades. ➢ Offerings spanning entire the ➢ High brand equity across multiple brands. education spectrum …across the ➢ Strong author relationships. education o Early l
Slide 20: S Chand Group - Business Segments
S CHAND GROUP - BUSINESS SEGMENTS K-12 Higher Education Early Learning Revenue 80% of FY2018 revenues 18% of FY2018 revenues 2% of FY2018 revenues contribution 40% revenue CAGR (2012-2018) 9% revenue CAGR (2012-2018) Test prep (>18 years) Target Segment School students (4 -18 years) College students
Slide 21: S Chand Group - Growth Anchored by Leadership in K-12 Segment
S CHAND GROUP - GROWTH ANCHORED BY LEADERSHIP IN K-12 SEGMENT Growth Strategy ❖ Consolidated leadership in CBSE/ ICSE schools as preferred content provider. 5,378 ✓ More offerings in K-12 through multiple brands. ✓ Curriculum management. 6,355 5,427 ❖ Geographical diversification in large 3,898 regi
Slide 22: S Chand Group - Powerful Brand Connect
S CHAND GROUP - POWERFUL BRAND CONNECT Connecting with Learners • Art of Book making tour of the Printing Facilities • Mystudygear App • Social Media Connecting with Teachers with • Teacher Conclaves and Awards • Over 2000 Workshops • The Progressive Teacher magazine Connecting with School Leadershi
Slide 23: S Chand Group - Our Three Pronged Strategy
S CHAND GROUP - OUR THREE PRONGED STRATEGY 2 Leverage Reach & Expand ACCELERATE • Expand into regional markets through strategic ACQUISITONS & DIGITAL alliances/ acquisitions. INITIATIVES • ”Phygital” to broaden reach and improve outcome. • Expand digital & service offerings to new geographies and s
Slide 24: Leverage Reach & Expand – Strategic Alliances / Acquisitions
S CHAND GROUP - LEVERAGE REACH & EXPAND – STRATEGIC ALLIANCES / ACQUISITIONS STRATEGIC ALLIANCES / ACQUISITIONS • Strengthen penetration in the CBSE, ICSE Schools and expand into regional markets. • Made multiple successful acquisitions in the past, integrating companies with S. Chand Group philosop
Slide 25: Digital – Complementing Core Business Through Phygital
S CHAND GROUP - DIGITAL – COMPLEMENTING CORE BUSINESS THROUGH “PHYGITAL" Short Multi-media / videos to better illustrate difficult topic to students. • Test preparation and simulated papers for learners to test their understanding. • Students can gauge their performance and better prepare for exams.
Slide 26: Digital Initiatives – Synergies to the Core Business
S CHAND GROUP - DIGITAL INITIATIVES – SYNERGIES TO THE CORE BUSINESS In-House (Revenue Stream) Digital Investments (Inorganic) • Focused on investing in early stage digital companies. • Offerings include digital classroom learning solutions, • Total investments in digital investee companies is ~Rs.3
Slide 27: Historical Financial Performance
S CHAND – HISTORICAL FINANCIAL PERFORMANCE + 18% yoy + 21% yoy + 73% yoy INR 31.1 Revenue growth Ebidta growth PAT growth Earning Per Share FY 2017-18 FY 2017-18 FY 2017-18 FY 2017-18 Summary : Consolidated FY 2018 FY 2017 YOY% FY 2017 Figures in INR Mn Audited Proforma* Audited Total Revenues 8,072
Slide 28: S Chand – Historical Financial Performance
S CHAND – HISTORICAL FINANCIAL PERFORMANCE Increasing Contribution of K-12 to Group Revenues. Revenue Growth = Organic Growth + Acquisitions. Early learning K12 Higher Education Other Revenue 6 - Year CAGR : 29% 1,403 1,224 1,282 1,237 6,355 7,945 1,345 5,427 6,833 3,898 4,785 5,407 3,378 3,710 2,17
Slide 29: Improving Margin Profile
S CHAND – IMPROVING MARGIN PROFILE Improving Margin Profile • Economies of scale • Production Efficiency • Rationalization of Royalty • Improved realization from DEBs • Operating Leverage
Slide 30: Disclaimer
Disclaimer This presentation and the following discussion may contain “forward looking statements” by S. Chand & Company Limited (“S. Chand” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, fin
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