Ester Industries Limited · NSE:ESTER
Ester Industries — Q1 FY22 Earnings Presentation
40 slides from Ester Industries's earnings presentation, August 2021
Slide 1: Results Presentation August 2021
or Presentation NDUSTRIES LTD. August,2021
Slide 2: Forward-looking statements disclaimer
Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause actual results to diff
Slide 3: About Us, Ester 2.0, Investment Thesis, Business Overview, Q1 FY22 Performance
About Us Ester 2.0 Investment Thesis Business Overview Q1 FY22 Performance 3
Slide 4: Diversified business portfolio and sales mix
Sales Mix (FY21) Diversified business portfolio Comprehensive product suite Polyester Films 73% State-of-the-art manufacturing facilities Global footprint Specialty Polymers 6% Experienced management team Engineering Plastics 21% Strong Financial profile 4
Slide 5: Company key facts
1985 GURGAON, INDIA #3 Year of Incorporation Corporate Headquarters Business Segments* 43 COUNTRIES 556 CRISIL A- Global Footprint People Credit Rating (Long Term) * PF - Polyester Film; SP - Specialty Polymers; EP - Engineering Plastics 5
Slide 6: Corporate headquarters and manufacturing facilities
Haryana Uttarakhand Gurgaon Khatima Corporate Headquarter Telangana* Manufacturing facility *New BOPET Film plant under implementation 6
Slide 7: We serve more than 40 countries
We serve more than 40 Countries 7
Slide 8: Ester 2.0 "Specialty" Company
ESTER INDUSTRIES LTD. Ester 2.0 “Specialty” Company
Slide 9: Ester 2.0: Knowledge, Innovation, Customization, Technology
Knowledge Innovation ESTER Customization 2.0 Technology 9
Slide 10: Ester 1.0 vs Ester 2.0 achievements
Achievements Ester 2.0 Ester 1.0 Specialty Polymer SBU o Largely patent protected Revenues – high entry barriers (FY12-FY16) (FY17-FY21) o High sustainable Commoditized product 2.4% CAGR 8.8% CAGR margins portfolio High growth potential EBITDA o Limited bargaining Film SBU power (FY12-FY16)
Slide 11: Revenues, EBITDA, EBITDA margins and PAT
Revenues (Rs.cr) EBITDA (Rs.cr) 236 886 928 896 1,028 1,039 992 189 700 771 707 807 108 74 71 70 66 35 41 43 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 EBITDA Margins (%) PAT (Rs.cr) 142 23.8% 100 18.2% 31 8 4 7 5 8.0% 7.9% 9.1% 6.1% 8.1% 10.5
Slide 12: Debt, ROCE and dividend payout
Debt (Rs.cr) ROCE (%) 335 363 348 304 300 290 31% 28% 237 242 142 157 14% 8% 7% 7% 7% 3% 3% 3% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Dividend Payout (%) 37.2% 20.9%19.9% 13.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% FY12 FY13 FY14 FY15 FY16 FY17 FY
Slide 13: WACC and FY21 ROCE
31% 9% WACC FY21 ROCE *Source: Bloomberg 13
Slide 14: Shareholding pattern
34.23% 40.86% 40.86% Mar 19 Mar 20 Mar 21 59.14% 59.14% 64.04% 1.73% 14
Slide 15: Investment thesis
Specialty Polymers - Polyester Films - High Largely IP protected share of value added product portfolio products Rewarding shareholders with Scaling up capacities dividend Strong balance sheet 15
Slide 16: Green Initiatives
Green Initiatives oo wist Wrap / Shrink Film) BIO-BASED Raw Material 3 7 BIO-BASED Fuel Consumption oe Fe VC FREE ncaa C FREE PAC ‘ansparent High Barrier fi PACKAGING =e Reduction/ Recycling t ‘a n a lized High Barrier film)
Slide 17: Ester Industries Ltd.
ESTER INDUSTRIES LTD.
Slide 18: Largely IP protected business
High High entry switching Largely IP High barriers – cost Marquee Export protected margin patent ensuring clientele oriented business business protected customer retention
Slide 19: Business Opportunity: stain resistant carpets
Problem Solution Business Opportunity USA, largest High cost towards carpet stain Flexible low cost solution producer of Carpets removal Ester has developed a PET based & Rugs boasts of Stain marks on (nylon) carpets given master batch, which imparts permanent spillover / spillage of liquid shor
Slide 20: Innovative PBT polymers supplied to a global chemical leader
Regularly manufacturing & supplying Innovative Signed ‘Manufacture and Supply Agreement’ with a Polybutylene Terephthalate (PBT) polymers to a global global chemical leader in April 2019 effective 1st April chemical leader 2019 for 2 years for 400 MT per annum Ester Industries is among the only comp
Slide 21: Strong product pipeline
MB07 o MB07 is added to make polyester dye-able with deeper and darker color o Achieved customer approval after 3 years of relentless hard work o Started commercial sales with good volumes o Steady state business going forward Strong o As committed in earlier calls, commercial sales started that a
Slide 22: Applications
Consumer electronics Polyethylene Terephthalate (PET) Textile – Flame Retardant, Deep dyeable master batches, Cationic dyeable master batch Applications Polybutylene Terephthalate (PBT) Products Carpets – Stain Resistant Master Batches Carpets – Deep Dyeable Master Batch Polyethylene Naphthalate (PE
Slide 23: Specialty Polymers Q1 FY22 performance
Figs. in cr Particulars Q1FY22 Q1FY21 % Q4 FY21 % Volumes (MT) Sales (Vol's MT) 861 411 109.5 821 4.9 Q1FY21 Q1FY22 Revenue 35 10 237.8 24 48.2 EBIT 13 2 566.8 8 52.7 MB16 26 Margins (%) 36.4 18.4 1800 bps 35.3 110 bps LMC07 50 Sharp pick up in the business; revenue growth of 238% on a Y-o-Y basis
Slide 24: Packaging Film Business
ESTER INDUSTRIES LTD. Packaging Film Business 24
Slide 25: Global and domestic scenario
Global Scenario: Domestic Scenario: Demand growth of 5% - 6% Strong double digit growth rate of 10%-12% pa BOPET film used in flexible packaging applications over past 5 years will continue to be the key end use sector, Low per capita consumption of BOPET; new accounting for nearly 60% of gl
Slide 26: Film manufacturing capacity and key facts
60,000 13,200 #30+ MTPA MTPA Years of experience Polyester Film Mfg. capacity Metallized Polyester Film Mfg. capacity 67,000 48,000 43 17% MTPA MTPA Export market Share of value-added Polyethylene Terephthalate BOPET Film Capacity (# of countries) products (FY21) (Polyester) chips Mfg. expansion und
Slide 27: Value added share, EBIT margins and domestic/export mix
Value Added (%) EBIT Margins (%) – as per Domestic Exports segmental results 20 30 23 23 17 17 15 30 29 70 77 71 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 Product mix – despite reduction Pass through business model – in recent past, aiming towards provides protection against Balanced mix of domes
Slide 28: Applications
White Opaque High Clear Flexible Packaging Applications High Barrier Embossable Barrier Packaging Products Heat Saleable Twist Wrap Embossing Shrink film Anti - Static Lidding Metalized High Matte Label & Graphics Barrier 28
Slide 29: Packaging Film Q1 FY22 performance
Figs. in cr Particulars Q1FY22 Q1FY21 % Q4 FY21 % Sales (Vol’s MT) 15,283 12,629 21 14,408 6 Revenue* 225 161 39.8 195 15.2 EBIT+ 36 55 (34.9) 43 (15.9) Margins (%) 15.9 34.1 (1,820 bps) 21.9 (600 bps) *including Chips sale worth Rs. 26 crore (Q1FY22); ~Rs.2 crore (Q1FY21) & ~Rs. 3 crore (Q4FY21) +a
Slide 30: Capex of Rs.587cr
Capex of Rs.587cr to result in.. 20 21 EBITDA Margin (%) 110 EBITDA 176 92 Revenue Internal Accruals Debt 540 410 450 Capex FY24 FY25 Setting up state of the art 48,000 MTPA BOPET Film plant and 8,333 MTPA Metallized BOPET Film plant in Telangana through Wholly Owned Subsidiary Achieved financia
Slide 31: Engineering Plastics
Engineering Plastics
Slide 32: Engineering Plastics at a glance
# 350 13,500 “Gold 25+ #3 grades MTPA Winner ” Years of Diverse State-of-the- “Fastest Manufacturing experience product art growing capacity portfolio compounding Enterprise – lines Processing Engineering Polymers” 2015 32
Slide 33: Diverse product portfolio and backward integration
Diverse product portfolio Backward integrated player Increasing share of high “Unit relocation” to result in margin products margin expansion Strong sector tailwinds 33
Slide 34: Applications
Switchgear Industry Polybutylene Terephthalate (PBT) MCB, MCCB, RCCB, etc. Case, Cover & other Parts Polyethylene Terephthalate (PET) Lighting Industry Switches, Sockets, LED/CFL Holders, etc. Polyamide 6 (Nylon 6) Appliances Industry Applications Knobs, Rotary Switches, Couplers, Body Parts, etc. P
Slide 35: Engineering Plastics Q1 FY22 performance
Figs. in cr Particulars Q1FY22 Q1FY21 % Q4 FY21 % Sales (Vol’s MT) 2,400 1,262 90.2 4,175 (42.5) Revenue 59 16 252.5 78 (24.5) EBIT 22 (1) NA 22 - Margins (%) 37.2 - NA 27.9 930 bps Second wave of the pandemic impacted the recent business momentum; resulting in lower volumes (sequentially). On a Y
Slide 36: 36
36
Slide 37: Consolidated Q1 FY22 results
Particulars Q1 FY22 Q1 FY21 % Q4 FY21 % (Rs.cr) Revenues 319 189 69.1 297 7.4 EBITDA* 64 52 23.2 60 6.8 Margins (%) 20.2 27.8 (760 bps) 20.3 (10 bps) PAT 38 29 28.1 34 11.0 Margins (%) 11.8 16.0 (420 bps) 11.4 40 bps *including other non operating income Strong performance of Films and SP SBUs dro
Slide 38: Chairman's comments on the results
Commenting on the results, Mr. Arvind Singhania, Chairman, Ester Industries said “We have started the year on a positive note with a healthy growth in topline and profitability. The performance could have been even better but for the second wave of the pandemic which disrupted operations in the earl
Slide 39: About Us and contact details
About Us: (CIN :- L24111UR1985PLC015063) Incorporated in 1985, Ester Industries Limited (EIL) is an ISO 9001:2008,ISO 22000:2005,TS16949:2002 certified Company engaged in the manufacture of polyester films, specialty polymers, engineering plastics and polyester chips with manufacturing facilities lo
Slide 40: Thank You
Wy eget SS NSN gs “yy Bs Ses wares. “eS Kee 4n8 TALS ate, Spee ee ey se | - THE tees “Seacigt.t =. = 4, & g_ Ke ena siran tS FRX O77 of ttag ae” Sige a. WSS Saleeiyayil ipote AW EEE 7 / A : a ESTER Thank You INDUSTRIES LTD.