Neogen Chemicals Ltd. · NSE:NEOGEN
Neogen Chemicals — Q3 FY24 Earnings Presentation
37 slides from Neogen Chemicals's earnings presentation, Feb 10, 2024
Slide 1: Exchange filing cover letter for earnings presentation
February 10, 2024 BSE Limited National Stock Exchange of India Limited Department of Corporate Services Listing Department, Floor 25, Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Kala Ghoda, Fort Bandra Kurla Complex, Bandra (East), Mumbai - 400 001 Mumbai – 400 051 Scrip Code No: 542665
Slide 2: Exploring New Horizons - Q3 & 9M FY24 Earnings Presentation
Expanding Capabilities Exploring New Horizons Q3 & 9M FY24 Earnings Presentation February 2024
Slide 3: Safe Harbour
Safe Harbour Certain statements in this document may be forward- looking statements. Such forward looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ
Slide 4: Table of Contents
Table of Contents Update on Expansion Introduction to Initiatives & Key Q3 & 9M FY24 Industry Overview – Neogen Chemicals Developments Financial Performance Lithium-Ion Batteries 4 14 18 28 Way Forward CSR Initiatives Contact Us 30 32 34 3
Slide 5: Introduction to Neogen Chemicals
Introduction to Neogen Chemicals 4
Slide 6: Neogen Chemicals – At a Glance
Neogen Chemicals – At a Glance ISO 9001:2015, ISO 4 Manufacturing Sites + 2 246 R&D Facilities 9% 14001:2015 & ISO 482.5 33% 35% 45001:2018 Products Infrastructure Of workforce in Manufacturing units certified on Net worth - 5-year Revenue 5-year PAT developed by R&D team Quality & SHE management sy
Slide 7: Evolution of Neogen Chemicals
Evolution of Neogen Chemicals 1970’s to 1991 Pre-Neogen 1991 to 2016 – Site I 2016 to 2019 – Site I & II 2020 to 2023 – Multiple Sites ▪ Mr. HT Kanani graduated as a Chemical ▪ ‘Neogen Chemicals’ commenced business ▪ Acquired ~8,094 sq. meters of land in ▪ Doubled Inorganic Chemicals capacity Engine
Slide 8: Key Milestones
Key Milestones Leading manufacturer of Bromine and Lithium- based specialty chemicals since 1989 Raised ~Rs. 253 crore in Nov 2023 through preferential allotment Signed agreement with MUIS, Japan to acquire manufacturing technology license for electrolytes in India Acquired 100% stake in BuLi Chem t
Slide 9: Business Overview and End User Industries
Business Overview Select Clientele Bromine Compounds Organic compounds containing chlorine, fluorine, iodine-based Pharmaceuticals combinations thereof and others including grignard reagents Agrochemicals End User Industries Organic Advanced Intermediates Chemicals Combining bromination with other c
Slide 10: Compelling value-proposition
Compelling value-proposition Innovative Product Portfolio Excellent R&D Enduring Customer Capabilities Relationships State-of-the-art Established Manufacturing Facilities Relationship with Suppliers Experienced Specialised Business Board of Directors Model with High Entry Barriers 9
Slide 11: Experienced Leadership Team
Experienced Leadership Team Mr. Anurag Surana, Non-Executive Director ▪ Holds a bachelor’s degree in commerce with Honours from the University of Delhi Mr. Haridas Kanani, ▪ Experience of more than 20 years in Contract Manufacturing business Dr. Harin Kanani, B.TECH (CHEM) M.I.I.Ch.E. ▪ A well known
Slide 12: Large Manufacturing Infrastructure
Large Manufacturing Infrastructure Strong Manufacturing Infrastructure Land Factory Land Area Capacity Certifications of Manufacturing Facilities Utilisation Inorganic Organic Chemicals Chemicals (Reactor capacity) (Tonnage) Mahape (Since 1991) ~4,045 m2 100% 69 m3 9 m3 ISO 9001:2015 from Bureau Ver
Slide 13: Developed strong R&D capabilities
Developed strong R&D capabilities 62-member dedicated R&D team, including 7 Ph. D. from reputed Established two in-house institutions CMD and MD are actively R&D units, one each in involved and spend Mahape and Vadodara, significant time with an endeavor to overseeing the develop new processes and f
Slide 14: Key Export Geographies
Key Export Geographies Europe Japan China USA Korea Exporting to 31 countries, with key export geographies in United States, Europe, Japan and Middle East Export sales of 48% in FY23 13
Slide 15: Update on Expansion Initiatives & Key Developments
Update on Expansion Initiatives & Key Developments 14
Slide 16: Update on Neogen Ionics
Update on Neogen Ionics Proposed Manufacturing Setup Manufacturing locations Land Area Year Capacities Lithium Electrolyte Salts Electrolyte & Additives Dahej SEZ (transferred from FY24 2,000 MT 400 MT ~6,455 m2 Neogen Chemicals) FY25 - To be increased to 2,500 MT Pakhajan, Dahej PCPIR (New site) 26
Slide 17: Update on various expansion initiatives
Update on various expansion initiatives Details of expansion projects Current project updates: announced: Expansion plans in FY25 and FY26 Expansion of specialty organic 29 m3 will be commissioned by FY chemicals capacity by 60,000 25; 31 m3 already commissioned Existing Business litres (60 m3) in Q
Slide 18: Key Developments
Key Developments • Neogen Ionics Ltd. (100% subsidiary of Neogen Chemicals) completed land acquisition in Gujarat to establish a world-class state-of-the-art Battery Materials facility at a Greenfield site o Land acquisition totaling approximately 264,285 Sq. Meters in Pakhajan, Dahej PCPIR, Gujarat
Slide 19: Q3 & 9M FY24 Financial Performance
Q3 & 9M FY24 Financial Performance 18
Slide 20: Key Performance Highlights – Q3 & 9M FY24 (Consolidated)
Key Performance Highlights – Q3 & 9M FY24 (Consolidated) Q3 FY24 9M FY24 Q3 FY24 Revenue break-up Revenues Rs. 164.4 crore Rs. 491.0 crore *Exports, 22% -12% 2% EBITDA Rs. 20.4 crore Rs. 74.4 crore Domestic, -32% -6% *Including deemed exports 78% Profit Before Tax Rs. 5.7 crore Rs. 30.3 cror
Slide 21: Key Performance Highlights – Q3 & 9M FY24 (Standalone)
Key Performance Highlights – Q3 & 9M FY24 (Standalone) Q3 FY24 9M FY24 Revenues Rs. 167.4 crore Rs. 505.7 crore -10% 5% EBITDA Rs. 25.8 crore Rs. 81.5 crore -14% 3% Profit Before Tax Rs. 12.2 crore Rs. 40.4 crore -41% -20% Profit After Tax Rs. 5.8 crore Rs. 26.4 crore -61% -26% Note:
Slide 22: Financial Summary – 9M FY24
Financial Summary – 9M FY24 Rs. crore • Revenue performance was maintained despite significant decline in raw material prices, REVENUE both Organic and Inorganic Chemicals, leading to moderated realizations • Base volumes remained steady, underscoring the resilience of the business model, even 2% 9M
Slide 23: Revenue break-up – Q3 & 9M FY24
Revenue break-up – Q3 & 9M FY24 Organic Chemicals Q3 FY23 Rs. 136 crore Lower revenue was primarily due Q3 FY24 Rs. 129 crore -5% to a significant drop in Bromine & other RM prices year-on-year. Adjusting for this, the Organic 9M FY23 Rs. 326 crore revenue would have been higher by Rs. 12 crore in
Slide 24: Financial Table – Profit & Loss Statement (Consolidated)
Financial Table – Profit & Loss Statement (Consolidated) Particulars (Rs. In crore) Q3 FY24 Q3 FY23 Growth (%) 9M FY24 9M FY23 Growth (%) Revenue 164.4 186.3 -12% 491.0 482.3 2% Expenditure 144.2 156.1 -8% 416.8 403.2 3% EBITDA 20.4 30.1 -32% 74.4 79.1 -6% EBITDA Margins 12.3% 16.2% -384 bps 15.1% 1
Slide 25: Financial Table – Profit & Loss Statement (Standalone)
Financial Table – Profit & Loss Statement (Standalone) Particulars (Rs. In crore) Q3 FY24 Q3 FY23 Growth (%) 9M FY24 9M FY23 Growth (%) Revenue 167.4 186.3 -10% 505.7 482.3 5% Expenditure 141.6 156.1 -9% 424.3 403.2 5% EBITDA 25.8 30.1 -14% 81.5 79.0 3% EBITDA Margins 15.4% 16.2% -80 bps 16.1% 16.4%
Slide 26: Seasonal Variance Factors
Seasonal Variance Factors ▪ Neogen’s business has some seasonal drivers, due to which the company tends to deliver stronger financial performance in the second half of the financial year (October to March). Seasonal variance is driven by strong demand from Europe as orders tend to scale up in Octobe
Slide 27: Management Commentary
Management Commentary Commenting on the Q3 & 9M FY24 performance, Mr. Haridas Kanani, Chairman & Managing Director, at Neogen Chemicals said: “Our 9M FY24 performance tracks weak demand trend globally characterised by continued inventory destocking, sharp decline in key raw material prices & resulta
Slide 28: Historical Financial Trends
Historical Financial Trends Net Revenue from Operations** EBITDA (INR crore) Margin (%) (INR crore) 19.2% 19.0% 686 18.2% 17.8% 17.7% 487 336 16.3% 306 239 164 29 44 58 65 87 112 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 ** Revenue is Net of Excise PAT (INR crore) Margin (%) Networ
Slide 29: Industry Overview: Lithium-Ion Batteries
Industry Overview: Lithium-Ion Batteries 28
Slide 30: Strong Opportunities in Lithium Battery sector
Strong Opportunities in Lithium Battery sector Lithium-ion battery (3.7v) Government Focus on “ATMANIRBHAR” Approximate Cost Component Break up* • PLI scheme is expected to accelerate EV adoption • PLI Battery Scheme – Target Incentive Outlay – Rs.18,100 Crores • 60% of Battery Material to be Indige
Slide 31: Way Forward
Way Forward 30
Slide 32: Way Forward
Way Forward Increasing Custom Synthesis & Foray into sunrise sector of Lithium-Ion Contract Manufacturing portfolio Batteries Expanding production capacities Focus on operational efficiency and Focus on advanced speciality functional excellence intermediates 31
Slide 33: CSR Initiatives
CSR Initiatives 32
Slide 34: CSR Initiatives
CSR Initiatives Focus areas in CSR Rural development Education Healthcare, sanitation and Environment nutrition sustainability Conservation and management of natural resources 33
Slide 35: Contact Us
Contact Us 34
Slide 36: Contact Us / About Neogen Chemicals Limited
Contact Us About Neogen Chemicals Limited Incorporated in 1989, Neogen Chemicals Ltd. (NSE Code: NEOGEN; BSE Code: 542665) is India’s one of the leading manufacturers of Bromine-based and Lithium-based specialty chemicals. Its specialty chemicals product offerings comprises of Organic as well as Ino
Slide 37: Thank You
Thank You