S Chand And Company Limited · NSE:SCHAND
S Chand And — Q4 FY2021 Earnings Presentation
53 slides from S Chand And's earnings presentation, Jun 22, 2021
Slide 1: Covering letter to stock exchanges on investor presentation
� -!- T S Chand And Company Limited Reqistered Office: A-27, 2nd Floor, Mohan Co-Operative Industrial Estate, New Delhi - 110044, India. S.CHAND P:+91 11 4973 1800 I F:+91 11 4973 1801 I E: info@schandgroup.com I www.schandgroup.com GROUP Date: June 22, 2021 To To Listing Department Listing Departme
Slide 2: Q4 – FY2020-21 Investor Update
S. Chand and Company Limited Q4 – FY2020-21 Investor Update 22nd June 2021
Slide 3: Summary
SUMMARY Turnaround complete, Poised for 1. growth 2. FY21 – The Year That Was 3. Digital Business 4. Looking Ahead S. Chand Ed-Tech Initiatives - 5. Annexure 2
Slide 4: Turnaround complete, Poised for growth
Turnaround complete, Poised 1. for growth 3
Slide 5: Turnaround Completed – Poised for Growth
TURNAROUND COMPLETED – POISED FOR GROWTH Rs1,076m Rs748m Rs707m Operating Cash flows Returns to positive Net Debt reduced to (OCF) more than EBITDA after FY18 Rs1,284m (vs. doubled on a YoY Rs1,991m Q3FY21). basis (FY20: Rs484m) Lowest level since Sept, 2018. Digital – Taking Rs321m 28%/46% Strong S
Slide 6: Turnaround Completed – Poised for Growth
TURNAROUND COMPLETED – POISED FOR GROWTH Cash flow from Operations (Rs M) Operating Expenses (Rs M) EBITDA (Rs M) 3,276 Expenses 748 1,076 CFO more than reduced by 46% Return to EBITDA Doubles over FY20 over FY19 profitability after 2,484 FY18 484 386 1,776 FY19 FY20 FY21 -126 FY19 FY20 FY21 -195 FY
Slide 7: Strong Improvement in Cash Flow Metrics – OCF & FCF
STRONG IMPROVEMENT IN CASH FLOW METRICS – OCF & FCF • More than Doubling of Operating Cash Flows (OCF) on a YoY basis. Our strategy of focusing on the cash flows has yielded results with Net cash generated from operations of Rs1,076m in FY21 (vs. Rs484m in FY20 and Rs386m in FY19). This is in spite
Slide 8: S Chand 3.0 Implementation Shows Visible Benefit in Operating Costs
S CHAND 3.0 IMPLEMENTATION SHOWS VISIBLE BENEFIT IN OPERATING COSTS • Strong cost control leads to lowered expenses – Operating expenses lower by 28% in comparison to FY20 and 46% lower in comparison to FY19. • Majority of the cost benefits are permanent in nature. • Expect culture of strong cost co
Slide 9: Strong Improvement in Balance Sheet Metrics
STRONG IMPROVEMENT IN BALANCE SHEET METRICS • Lowest Inventory levels in 5 years: We ended FY21 with inventory of Rs1,377m (vs Q4FY20: Rs2,014m), Down 32% on a YoY basis. This improvement in inventory is driven by various steps that we took in controlling print runs, optimizing book titles, selectiv
Slide 10: Improved Working Capital Management During Covid Times
IMPROVED WORKING CAPITAL MANAGEMENT DURING COVID TIMES • Working Capital Metrics. • Receivables: Rs3,221m (vs. FY20: Rs3,349m) • Receivable days: 276 days (vs. FY20: 285 days). This is the lowest Q4 receivable days since FY18. • Inventory: We ended FY21 with inventory of Rs1,377m (vs Q4FY20: Rs2,014
Slide 11: Print Business Turns Profitable
PRINT BUSINESS TURNS PROFITABLE • Print Business returns to profitability in FY21. We wanted to highlight that our print businesses have turned the corner in FY21. A deeper dive of our Print and Digital businesses would throw the following breakup of revenues and profitability. Increase of Rs764m on
Slide 12: FY21 – The Year That Was
— —— S.CHAND GROUP FY21 — The Year That Was www.schandgroup.com
Slide 13: The Year That Was – FY21
THE YEAR THAT WAS – FY21 • India wide lockdown in force during April and May. • Process of reopening starts from June onwards. Q1 FY21 • Schools and Colleges remain firmly closed • Examinations Delayed. • Process of reopening gathers steam across the country. • Covid cases are on an upwards trajecto
Slide 14: Déjà Vu - Wave 2 Impacts FY21 Sales Season
DÉJÀ VU - WAVE 2 IMPACTS FY21 SALES SEASON • Most schools across India had started physically opening in January for K9-K12 and in February for K6-K8. • Our sales season got impacted during March when rising covid cases from Wave 2 started leading to institute closures across the country. Do keep in
Slide 15: Wave 2 Firmly Behind Us Now
WAVE 2 FIRMLY BEHIND US NOW • Current Status: • Schools and colleges remain physically shut across the country during April – June, 21. • Online classes have resumed in certain cases in June. We expect school openings to gather steam during Q2 as covid cases keep on receding. • However, the risk rem
Slide 16: Consolidated Financial Performance
CONSOLIDATED FINANCIAL PERFORMANCE Revenues from Operations (Rs M) 5,220 4,294 4,252 FY19 FY20 FY21 PAT (Rs M) EBITDA (Rs M) Revenues (Rs m) 748 -65 Structural revival in EBITDA Strong -669 reduction in FY21 -1,115 PAT losses -126 -195 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 PAT (Rs M) SUBSTANT
Slide 17: Consolidated Financial Performance
CONSOLIDATED FINANCIAL PERFORMANCE FY21 Operating expenses: Down 28% YoY Returns to positive EBITDA after FY18 PAT Loss: Down by 94% 16
Slide 18: Consolidated Financial Performance
CONSOLIDATED FINANCIAL PERFORMANCE Particulars (Rs m) FY20 FY21 Particulars (Rs m) FY20 FY21 Audited Audited Audited Audited Non-current assets Equity and liabilities Property, plant and equipment 959 869 Equity Capital work-in-progress 1 3 Equity share capital 175 175 Goodwill 3,383 3,381 Other equ
Slide 19: Consolidated Financial Performance
CONSOLIDATED FINANCIAL PERFORMANCE • More than Doubling of Operating Cash Flows on a YoY basis. Our strategy of focusing on the cash flows has yielded results with doubling of Net cash generated from operations to Rs1,076m in FY21 (vs. Rs484m in FY20 and Rs386m in FY19). This is despite collections
Slide 20: Consolidated Financial Performance
CONSOLIDATED FINANCIAL PERFORMANCE • Inventory days - Down 101 days (YoY). • Receivable days - Down 9 days (YoY). • Net Working capital days – Down 28 days (YoY). 19
Slide 21: Consolidated Financial Performance
CONSOLIDATED FINANCIAL PERFORMANCE • Working Capital Metrics • Trade Receivables reduced to Rs3,221m during Q4FY21 vs. Rs3,349m as of Q4FY20. In terms of receivable days, it stood at 276 days (vs. 285 days in Q4FY20), a reduction of 9 days during FY21. • Inventory reduced to Rs1,377m (vs Q4FY20: Rs2
Slide 22: Shareholding Structure
SHAREHOLDING STRUCTURE Market Data As of 21st June, 2021 Key Institutional Investors - As Other Institutional Investors holding less % Holding of March 2021 than 1% - As of March 2021 Market Capitalization (Rs Mn) 3,990 International Finance 8.0% Aadi Financial Advisors Corporation Price (Rs) 114 Tr
Slide 23: Result Conference Call Details
RESULT CONFERENCE CALL DETAILS 22
Slide 24: Digital Business
Summary 3. Digital Business 23
Slide 25: Digital Business Update – Learnflix & Mylestone
DIGITAL BUSINESS UPDATE – LEARNFLIX & MYLESTONE • Learnflix App (Affordable Personalised Student App) targeted to • Mylestone: Digitally enabled School Curriculum Solution for the K-8 the Next Half Billion (NHB) audience has got strong response in segment is now ready to grow exponentially. past 12
Slide 26: Digital Business Update – Student Teacher Connect Feature Launched
DIGITAL BUSINESS UPDATE – LEARNFLIX & MYLESTONE STUDENT TEACHER CONNECT FEATURE LAUNCHED Leanflix Feature Video - https://www.youtube.com/watch?v=a0X4PRekKt8 25
Slide 27: Digital Business Update – Educate
DIGITAL BUSINESS UPDATE – EDUCATE 360 • Madhubun Educate360 is the newly conceived K-12 Blended learning solution for enabling schools to conduct online classes, student assessments, e-book support etc. as a response to the Covid-19 crisis. This product is NEP 2020 compliant supporting the recommend
Slide 28: Investee Companies – Hidden Value in Our Balance Sheet
INVESTEE COMPANIES – HIDDEN VALUE IN OUR BALANCE SHEET Our major investee companies raised capital and did well during these times as well • Testbook was founded in 2014 with focus on online test preparation for government competitive exams like Civil services, Banks, Govt departments like railways,
Slide 29: Digital Business Update – Other Assets
DIGITAL BUSINESS UPDATE – OTHER ASSETS • Convergia to house Learnflix and Mylestone. Various formalities with regards to Convergia and business transfer should complete by July, 21. The company is meeting various investors to raise US$8-10 Mn for the next leg of growth. • Convergia to be a subsidiar
Slide 30: Looking Ahead
Summary — —— S.CHAND GROUP Looking Ahead www.schandgroup.com
Slide 31: Looking Ahead
LOOKING AHEAD = —~— S.CHAND ePpoup Twin Growth Drivers in place -: (1) NEP based new curriculum for print business, (2) Increased adoption of our Ed-Tech solutions ina post Covid world FY22 Medium Term Looking Implement a Developmen forward toa rice hike Expect RE eW Debt free in Increasing, aera St
Slide 32: New Education Policy – Big Positive Going Ahead
NEW EDUCATION POLICY – BIG POSITIVE GOING AHEAD IN SHORT TO MEDIUM TERM • Announcement of Draft New Education May, 2019 Policy (NEP) • The New Education Policy (NEP) was formally adopted by the Union Government in July, 2020. • Adoption of the New Education Policy • Expected release of the New Natio
Slide 33: S. Chand Group Journey So Far
S. CHAND GROUP JOURNEY SO FAR… S. Chand Other Ed-Tech Publishing – Apps and Products – SmartK, S. Chand, Vikas, myStudyGear etc Madhuban, New Saraswati, Chaaya Destination Success - Test Coach – App for Learnflix – Mobile Digital Competition exams Learning App Classroom S. Chand Publishing Destinati
Slide 34: S. Chand Group Product Strategy for the Future
S. CHAND GROUP PRODUCT STRATEGY FOR THE FUTURE Digital Content • Textbooks • Multimedia Analytics and Insights • Practice Tests • Student 01 • Teacher 05 • School Live Classes • Parent • Video conferencing platform • Calendar scheduling Teacher Connect • Recorded classes • Teacher published content
Slide 35: Major Ed-Tech Initiatives - Annexure
Summary Major Ed-Tech Initiatives - Annexure 2.1 Learnflix 5. 2.2 Mylestone 2.3 Educate 360° 34
Slide 36: Learnflix – India's Most Affordable Learning App
LEARNFLIX – S. CHAND'S B2C & B2B2C OFFERING - INDIA'S MOST AFFORDABLE LEARNING APP Offering Digital content Adaptive test Self paced learning Analytics and reports Grades 6 to 10 Channel Sales & Marketing Support Revenue model B2B2C: Distributing through schools ➢ A strong sales team that connects w
Slide 37: Learnflix – Overview
LEARNFLIX – OVERVIEW Takes learning one step Concept ahead by providing Revision advanced individualized learning Try Out Concept Practice ➢ Currently available for grades 6th to 10th for maths and science subjects Chapter Video test ➢ The Spiral Learning Pedagogy ensures all concepts are well learn
Slide 38: Learnflix – Students Can Personalize Their Learning Paths
LEARNFLIX – STUDENTS CAN PERSONALIZE THEIR LEARNING PATHS… Flexibility to choose the time, Extremely focused and guided analytics to place and pace of learning help students, teachers and parents to monitor performance Reinforcement of previous Test level analytics 360° ➢ Score, Accuracy, Questions,
Slide 39: Mylestone – S. Chand's B2B Curriculum Offering
MYLESTONE – S. CHAND’S B2B CURRICULUM OFFERING Till grade 8 Teachers hand Student Digital content Progress report Training & support Resource kits Teacher/ Student book with Books with analytics app lesson plans Offering Grades 9 to 12 Digital content Adaptive test Self paced learning Analytics and
Slide 40: Mylestone – S. Chand's B2B Curriculum Offering
MYLESTONE – S. CHAND’S B2B CURRICULUM OFFERING 39
Slide 41: Mylestone – Features
MYLESTONE – FEATURES • Teacher Handbook • Quiz – MCQ based • Online – MCQ based Live Classes – Course Book • Assignment – • Pen and Paper – Integrated with Zoom, • Practice Book Objective + Objective and MS teams, Google • Mylestone Digital Subjective question Subjective question Meet, Other Resourc
Slide 42: Mylestone – Strong Process in Place to Assist the School
MYLESTONE – STRONG PROCESS IN PLACE TO ASSIST THE SCHOOL WITH IMPLEMENTATION Pre-implementation Post-implementation School diagnostic Training on School leaders Teachers Lesson Training on time Through survey classroom induction induction observation I management and display on-site visit Create and
Slide 43: Mylestone – The Business Case
MYLESTONE – THE BUSINESS CASE India is amongst the world’s largest K12 markets with strong preference for private schools K-12 enrolment in India Growth in K12 enrolment (in millions) 300 ➢ With over 245Mn K- 280 12 enrollments India Millions 260 250 250 250 245 240 240 is one of the largest 220 k-1
Slide 44: Mylestone – Why the Need Exists?
MYLESTONE – WHY THE NEED EXISTS? • Affordable private schools can be defined as schools charging annual fee in the range of 12k to 60k. Schools charging below 12k fees can be termed as low fee schools • According to DICE report, around 79% of private schools charge less than 5000Rs per month. That i
Slide 45: Mylestone – Why the Need Exists?
MYLESTONE – WHY THE NEED EXISTS? Affordable private schools face multiple challenges that negatively impacts learning outcome Lack of proper assessment and reports Poor quality of teachers and high attrition Assessments are based on rote learning and no analytical tool is used to Scarcity of trained
Slide 46: Educate 360° – An Overview
EDUCATE 360° – AN OVERVIEW P R O D U C T PA C K A G E E-Book Teacher’s Manual Printed Book Teacher Training Digital Supplements Assessment Integrated Platform Internet Links Concept Videos Ease of Access 45
Slide 47: Educate 360° – An Overview
EDUCATE 360 ° – AN OVERVIEW In Sync with the National Focusses on developing Education Policy (NEP)2020 2 1 st C e n t u r y S k i l l s •Art Education •Digital Creativity Digital Learning Learning Self- Confidenc Communicatio Periodic Collaborative e/ Self- n Assessment Learning Integrated Learning
Slide 48: Educate 360° – Product View
EDUCATE 360° – PRODUCT VIEW 47
Slide 49: Educate 360° – Teachers View
EDUCATE 360° – TEACHERS VIEW 48
Slide 50: Educate 360° – Students View
EDUCATE 360 ° – STUDENTS VIEW 49
Slide 51: Educate 360° – Teachers View
EDUCATE 360° – TEACHERS VIEW 50
Slide 52: Educate 360° – Students View
EDUCATE 360° – STUDENTS VIEW 51
Slide 53: 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
S Chand And Company — Q4 FY2021 Earnings Presentation on 6ix