S Chand And Company Limited · NSE:SCHAND
S Chand And — H1 FY18 Earnings Presentation
33 slides from S Chand And's earnings presentation, Nov 20, 2017
Slide 1: S Chand and Company Limited Q2 & H1 Results Update
S CHAND AND COMPANY LIMITED Q2 & H1 Results Update November 2017
Slide 2: Q2 & H1 FY18 Results Update agenda
Q2 & H1 FY18 RESULTS UPDATE INDUSTRY OVERVIEW COMPANY OVERVIEW APPENDIX 1
Slide 3: Q2 & H1 FY18 Results Update
Q2 & H1 FY18 RESULTS UPDATE
Slide 4: Q2 & H1 FY18 Results Update: Key Highlights
Q2 & H1 FY18 Results Update: Key Highlights * * Standalone Financials In Rs Mn Revenues # EBITDA 3,029 576 17 % 18 % 923 484 572 181 340 -122 -68 -246 -205 -365 Q1 FY17 H1 FY17 9M FY17 FY17 Q1 FY18 H1 FY18 Q1 FY17 H1 FY17 9M FY17 FY17 Q1 FY18 H1 FY18 # S Chand standalone revenues constitute around 4
Slide 5: Profit & Loss Statement
Q2 & H1 FY18 Results Update: Profit & Loss Statement * * Standalone Financials S Chand and Company Ltd Standalone Particulars (Rs Mn) H1 FY18 H1 FY17 Q2 FY18 Q2 FY17 Revenue from operations 467 439 174 281 Other income 105 45 59 22 Total Income 572 484 233 303 Material consumed, net of change in inv
Slide 6: Balance Sheet
Q2 & H1 FY18 Results Update: Balance Sheet * * Standalone Financials S Chand and Company Ltd September March Debt Profile September March Particulars (Rs Mn) 2017 2017 (Rs Mn) 2017 2017 Assets IPO proceeds used to Gross Debt 545 2,129 deleverage. Non Current Assets 6,416 5,216 Net Debt -140 1,985 Ne
Slide 7: Key Highlights: Segment-wise Revenue
Q2 & H1 FY18 Results Update: Key Highlights * * Standalone Financials In Rs Mn Revenue Breakup – Segment wise H1 FY18 H1 FY17 @ K-12 segment: K-12 @ 84 62 ▪ K-12 sales cycle peaks in Q4 and tapers off in Q1 Higher Education 383 377 when new academic session begins in central Test Preparation 130 136
Slide 8: Key Highlights
Q2 & H1 FY18 Results Update: Key Highlights I. Half year revenues at Rs 572 Mn, higher by 18% YOY. ➢ H1 is a low revenue period for S Chand, contributed ~ 16% of annual revenues in FY17. ➢ Q2 is lowest revenue quarter due to impact of sales returns. ➢ S Chand standalone revenues constitute around 45
Slide 9: Business Updates
Q2 & H1 FY18 Results Update: Business Updates Strategic Alliance with PDM Inc. (Affiliate of Sigong Media, South Korea) ✓ Foray into comprehensive curriculum market for Early Learning segment (pre-schools) in India. ✓ Sigong Media is a leading digital education company of South Korea and provides le
Slide 10: Business Updates – Proposed Restructuring
Q2 & H1 FY18 Results Update: Business Updates – Proposed Restructuring Content S. Chand And Company Limited Digital Content / Services Merger Into S Chand Wholly Owned Subsidiary Wholly Owned Subsidiary Demerger Wholly Owned Subsidiary Vikas Publishing House Nirja Publishers & Printers Destination D
Slide 11: Utilization of IPO Proceeds
Utilization of IPO Proceeds Particulars Amount Utilized till September 2017 Remarks Rs Mn Rs Mn Gross proceeds from IPO : Fresh Issue 3,250 Objects Repayment of loan availed by S Chand utilized towards funding acquisition of Chhaya 1,000 1,000 Repayment of loan availed by Eurasia Publishing House Pr
Slide 12: Industry Overview
S.CHAND GROUP empowering YBUNG MINDS © INDUSTRY OVERVIEW
Slide 13: 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 Marke
Slide 14: Increasing Household Expenditure On Education
Increasing Household Expenditure On Education Investment in India’s Education Sector. Higher share of education in discretionary spend. 6.00% (Source: IBEF Report) (Source: Technopak Research Report) 100% 10.0% 5.50% As a percentage of GDP 90% 5.0% 5.00% 80% 4.0% 4.4% 4.7% 4.7% 5.0% 5.0% 5.6% 0.0% 4
Slide 15: Large Addressable Opportunity
Large Addressable Opportunity US$90 Bn Market Size for the Indian Education Sector US$6 BN Ancillary Education Segment 6 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 ➢ Supports formal and informal education s
Slide 16: Preference Shifting Towards Private & Central Curriculum Schools
Preference Shifting 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%
Slide 17: Company Overview
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Slide 18: Leading Indian Education Content Company
Leading Indian Education Content Company Delivering content, services and solutions… ➢ Long operating history of over seven decades. ➢ High brand equity across multiple brands. ➢ Offerings spanning entire the …across the education spectrum ➢ Strong author relationships. education o Early learning co
Slide 19: Comprehensive Lifecycle Focused Education Content Player
Comprehensive Lifecycle Focused Education Content Player Early learning K -12 Higher education Lifecycle stages addressed by S. Chand products College and university S Chand is focused on the Consumer – both the ‘Learners’ and the ‘Educators’ – through content, innovations, empaneling leading author
Slide 20: Business Segments
Business Segments K-12 Higher Education Early Learning Revenue 80% of FY2017 revenues(1) 18% of FY2017 revenues(2) 2% of FY2017 revenues(3) contribution 45% revenue CAGR(4) 8% revenue CAGR (4) Target Test prep (>18 years) School students (4 -18 years) Children (2-5 Years) Segment College students /
Slide 21: Strong Position In K-12 Segment
Strong Position In K-12 Segment S. Chand’s growth anchored by leadership in K-12 Segment. Growth Strategy ❖ Consolidated leadership in CBSE/ ICSE schools as preferred content provider. ✓ More offerings in K-12 through multiple brands. 5,378 ✓ Curriculum management. 5,467 ❖ Geographical diversificati
Slide 22: Digital & Services Platform: At Forefront of Innovative Education Delivery
Digital & Services Platform : At Forefront of Innovative Education Delivery In-house Digital/ Service Platforms Digital Investments (Inorganic) Hybrid offerings Device based Intellitab learning and (CD, e-books) content provider End to end Activity based S. Chand's Device based S. Chand's Online tes
Slide 23: Digital Enablement Has Become Our Key Differentiator
Digital Enablement Has Become Our Key Differentiator Learning material combined with digital support helps S.Chand differentiate its offerings vis-à-vis smaller unorganized publishers and increases customer stickiness and loyalty. Short Multi-media / videos to better illustrate difficult topic to st
Slide 24: Wide Geographical Reach Across the Country
Wide Geographical Reach Across the Country Pan-India presence of sales and distribution network Distribution channel / sales 6,557 distributors 9-12 Sales & marketing team > 900 Distributors / Retailers K-12 Students K-8 Distributors Schools Students Higher Education Distributors / Retailers Student
Slide 25: Robust Infrastructure To Cater Growing Demand
Robust Infrastructure To Cater Growing Demand ✓ Extensive network of 6,557 distributors with pan India presence. Distributor ✓ S Chand brand ensures strong pricing power Channel among various stakeholders. Printing Infrastructure ✓ In-house logistic and warehousing to ✓ Two printing facilities at Sa
Slide 26: Business Growth Strategy
Business Growth Strategy Consolidate leadership position in Central Board 1 schools as a preferred content provider. Introduce new titles, wider range of subjects, hybrid offerings and services. Institutional Partnerships. 1 Customised content/ hybrid solutions. Increase presence in large regional 2
Slide 27: Shareholding Pattern
Shareholding Pattern Market Data On 17.11.2017 Key Institutional Investors - September 2017 % Holding Market Capitalization (Rs Mn) 16,470 Everstone Capital Partners II LLC 9.5% No. of shares outstanding (Mn) 34.84 International Finance Corporation 8.1% Face Value (Rs.) 5.0 HDFC Prudence fund 3.3% 5
Slide 28: Appendix
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Slide 29: Quarterly Business Cycle
Quarterly Business Cycle 7% - 8% Revenues 4% - 5% Revenues 8% - 9% Revenues 77% - 80% Revenues Negative WC Negative WC Peak Inventory Peak Receivables Q1 April - June Q2 July - September Q3 October - December Q4 January - March ▪ Last leg of K-12 sales for new ▪ Content revision/ ▪ Sample distributi
Slide 30: Historical Performance Trend
Historical Performance Trend Contribution of K-12 to Group Revenues Increasing … Revenue Growth = Mix of Organic + Acquisitions Early learning K12 Higher Education Other Revenue 5 Year CAGR : 31% 1,220 1,282 1,237 6,855 1,345 5,467 4,785 5,407 3,378 3,898 3,710 2,173 2,816 1,746 FY2014 FY2015 FY2016
Slide 31: Fiscal 2017 Revenue Analysis
Fiscal 2017 Revenue Analysis Group Revenues : Geography K-12 Revenue : Primary vs Secondary Group Revenues : Segmental 14% 2% 1% 14% 18% 36% 37% 9-12 4% 14% K-12 26% K-8 64% 20% 34% 16% North East South West Exports Chhaya S Chand Madhubun Saraswati Digital HE EL K-12 : Revenue from Core Subjects 67
Slide 32: Fiscal 2017 Margin Analysis
Fiscal 2017 Margin Analysis Positive Impact On Ebidta Margins With Increasing Contribution of K-12 Revenues Royalty, 6% EBIDTA, 25% Raw material, 31% Gross Profit Margin ~ 61% Other expenses, 9% Selling and Publishing expenses, distribution 2% expenses, 9% Employee costs, 17% ▪ Paper is the key raw
Slide 33: For Further Queries
For Further Queries - This presentation and the following discussion may contain “forward looking statements” by Samir Khurana S Chand & Company Limited (“S Chand” or the Company) that are not historical in nature. Group Head (Strategy & Investments) Contact No : + 91 11 4973 1800 These forward look