Everest Kanto Cylinder Limited · NSE:EKC
Everest Kanto Cylinder — Q3 FY21 Earnings Presentation
43 slides from Everest Kanto Cylinder's earnings presentation, Feb 18, 2021
Slide 1: Regulation 30 disclosure letter to stock exchanges
February 18, 2021 To, BSE LIMITED National Stock Exchange of India P.J. Towers, Ltd. EVEREST Dalal Street, Exchange Plaza, Mumbai - 400 001 Bandra Kurla Complex, KANTO Bandra (East), Mumbai - 400051 BSE Scrip Code: 532684 CYLINDER NSE Symbol: EKC LIMITED NSE Series: EQ Manufacturers of High Pressure
Slide 2: Q3 & 9M Financial Results February 2021
Everest Kanto Cylinder Limited Q3 & 9M Financial Results February 2021
Slide 3: Safe Harbor
Safe Harbor Certain statements in this communication may be ‘forward looking statements’ within the meaning of applicable laws and regulations. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those
Slide 4: The 'EKC' Edge
The ‘EKC’ Edge #1 Market Leadership • India’s largest player in high pressure gas cylinders with market share of ~50% 42 Years Experienced Management • 42 years of focused domain experience in the field of high pressure seamless cylinder manufacturing • More than 200 SKU’s including Industrial, CNG
Slide 5: Table of Contents
Table of Contents Q3 & 9M FY21 Financial Performance 5 Company Overview 11 Industry Overview 22 Key Attributes 27 Historical Financials/Corporate Summary 32 4
Slide 6: Q3 & 9M FY21 Financial Performance
Q3 & 9M FY21 Financial Performance
Slide 7: Management Commentary
Management Commentary With the supportive macro framework driven by the government’s continued focus on a larger gas-fuelled Comments on Q3 & 9M economy, we are now extremely well-positioned to participate in the secular, long-term opportunity ahead of us. Currently, our India plants have been opera
Slide 8: Key Developments
Key Developments Transfer of holding in subsidiary, EKC Industries (Tianjin) Co. Ltd., China • The Company’s entire holding in its subsidiary, EKC Industries (Tianjin) Co. Ltd., China has been transferred to the buyer as on 31 December, 2020 and the total transaction value of RMB 93.50 Million (appr
Slide 9: Key Performance Highlights – Q3 FY21
Key Performance Highlights – Q3 FY21 Consolidated Standalone • Growth momentum continued in Indian operations driven by wide-ranging demand from gas infrastructure companies, auto Rs. 247.0 Cr Rs. 200.3 Cr OEM’s, healthcare and industrial sectors Revenues 29.2% 65.2% • Demand growth expected to sust
Slide 10: Key Performance Highlights – 9M FY21
Key Performance Highlights – 9M FY21 Consolidated Standalone Rs. 664.8 Cr Rs. 518.4 Cr Revenues 18.3% 50.9% Rs. 123.5 Cr Rs. 121.4 Cr EBITDA 71.3% 116.7% Rs. 79.6 Cr Rs. 94.8 Cr PBT* 301.9% 322.8% Rs. 87.1 Cr** Rs. 77.7 Cr PAT 777.4% 463.5% *Profit Before Tax is before exceptional items, provision f
Slide 11: Geographical Revenue Breakup – Q3 FY21
Geographical Revenue Breakup – Q3 FY21 Revenues (Rs. Cr) 246 247 191 0.4% 29% Q2 FY21 Q3 FY21 Q3 FY20 India UAE USA & Hungary Others 192.0 200.3 123.9 30 29 35 30 26 19 4 4 4 Q2 FY21 Q3 FY21 Q3 FY20 Q2 FY21 Q3 FY21 Q3 FY20 Q2 FY21 Q3 FY21 Q3 FY20 Q2 FY21 Q3 FY21 Q3 FY20 4% 62% -5% -17% -28% -37% -5%
Slide 12: Company Overview
Company Overview
Slide 13: Key Milestones
Key Milestones - Transferred holding in China Set up marketing/product subsidiary for a value of Commissioned development subsidiary in RMB 93.50 million second plant at Doubled capacity at Germany - Announced 200,000-cylinder Tarapur Dubai Plant Closed Aurangabad plant greenfield expansion Initiate
Slide 14: Board of Directors
Board of Directors Executive Chairman Managing Director Independent Director • Joined EKC business in 1994 • Joined EKC business in 1996 • Finance, Banking and Law professional • Commerce graduate from Mumbai University • MBA (International Business) from EU Business • Specializes in audit, taxation
Slide 15: Global Footprint
Global Footprint Germany Hungary Delhi Kandla SEZ, USA Gujarat Dubai Mexico Thailand India Tarapur, Mumbai Pittsburgh, PA Colombia Maharashtra Peru Bangalore Jabel Ali Free Jabel Ali Free Zone (North) Zone (South) Manufacturing Locations Sales & Marketing Offices 14
Slide 16: Corporate Structure
Corporate Structure Everest Kanto Cylinder Limited (EKC) Calcutta EKC International EKC Industries Next Gen Cylinder Compressions & FZE EKC Industries, Pvt. Ltd. Liquefaction (Thailand) Dubai Branch Engineering Ltd. (Dubai, UAE) Company Ltd. (India) wholly-owned by (India) wholly-owned by EKC wholly
Slide 17: Manufacturing Facilities – India
Manufacturing Facilities – India Tarapur, Maharashtra, India Kandla SEZ, Gujarat, India • Manufactures a wide range of high pressure seamless • Manufactures small cylinders (1 litre to 21 litres), gas steel cylinders with storage capacity of up to 280 litres cylinders (up to 3000 litres), jumbo skid
Slide 18: Manufacturing Facilities – Overseas
Manufacturing Facilities – Overseas Plant I – Dubai Plant II – Dubai • Located at the renowned Jabel Ali Free Zone (North) in Dubai • Located at the renowned Jabel Ali Free Zone (South) in Dubai • Area: 21,000 sq. m • Area: 25,000 sq. m • Annual capacity: 120,000 cylinders • Annual capacity: 120,000
Slide 19: Extensive Range of Products
Extensive Range of Products CNG Steel Cylinders Medical Oxygen Industrial Cylinders Cylinders For Hydrogen Gases • Wide range of CNG cylinders • Safe, contamination-free • Wide range of industrial • Cylinders, quads and cascades designed and manufactured to cylinders storing gases such as cylinders
Slide 20: Extensive Range of Products
Extensive Range of Products Fire Extinguisher Body Jumbo Cylinders Breathing Air Cylinders Type 4 Composite Cylinders • Cylinders for storage of carbon • Large Capacity Jumbo Large • Compressed breathing air • Type 4 composite cylinders dioxide – used in fire capacity cylinders conforming cylinders
Slide 21: Manufacturing Process
Manufacturing Process Seamless Heat Hardness Painting Tubes Treatment Checking Neck Final Product Tube Cutting Neck Drilling Stamping Threading Inside Bottom Ultrasonic Int. & Ext. Neck Forming Milling Testing Shot Blasting Bottom Bottom Hydro stretch Air leakage forming Forming testing testing 20
Slide 22: Global Quality Certifications
Global Quality Certifications India USA UAE ISO 9001:2015 Certificate from American Society for Canadian Standards US Department of Manufacturing License of Bureau Veritas for High Pressure Transport Canada Mechanicals Engineers Association Transportation Special Equipment (China) seamless steel gas
Slide 23: Industry Overview
Industry Overview
Slide 24: India's Expanding Gas Ecosystem
India’s Expanding Gas Ecosystem India targets 15% contribution from natural gas in the primary energy mix by 2030 (PIB 2017) Substantial committed investments towards “One Nation One Gas Grid” chart India’s energy roadmap India Gas Demand Outlook Launch of India Gas Exchange intended to open the gas
Slide 25: CNG Demand Outlook
CNG Demand Outlook CNG Stations CNG Vehicles (Mn) 3.6 2,000 3.1 1,500 Currently India’s CNG ecosystem is confined to just three states India Maharashtra, Gujarat India Maharashtra, Gujarat and Delhi and Delhi CNG Stations CNG Demand (mmscmd) 11,000 57 City Gas Distribution set to expand significantl
Slide 26: CNG Demand Outlook
CNG Demand Outlook Auto manufacturers planning to stop production BS-VI transition of diesel vehicles based on rising costs Policy announced, expected to drive Vehicle Scrappage Policy new vehicle sales and CNG adoption Government urging state transportation CNG conversion of diesel buses corporatio
Slide 27: Industrial Demand Outlook
Industrial Demand Outlook Demand is driven by expansion in industrial production – Gross Fixed Capital Formation (GFCF) is now expected to rebound after the recent weakness Gross Fixed Capital Formation GVA from Industrial Sector (Current Prices) CAGR: 6% CAGR: 12% CAGR: 10% CAGR: 9% 36.1 36.6 54.9
Slide 28: Industrial Demand Outlook
Industrial Demand Outlook Fire Equipment and Fire Suppression Systems Supply to Medical Establishments • The global fire safety equipment market is estimated at $ 58 • Medical gas supply systems in hospitals and other healthcare billion in 2018 – and expected to expand at CAGR of 8.8% from facilitie
Slide 29: Industrial Demand Outlook
Industrial Demand Outlook Aerospace and Defense Specialty Gases • The Global Aerospace and Defence Industry has been growing on the • Growing number of gas applications in non-traditional areas such as back of rising commercial aircraft production and strong defence space research, food preservation
Slide 30: Key Attributes
Key Attributes
Slide 31: Strengths
Strengths Sustained Established Large Capacity Wide Range of Leadership in Experienced Global High Quality Production and Wide Established the Indian Management Presence Products Infrastructure Product Range Relationships Market Large, multi- Compliance with Global scale Unique ability and Eminent c
Slide 32: Growth Drivers
Growth Drivers Diversified Customer Mix Environmental Favorable Concerns Operating High Barriers to Environment Customer base Entry Government consists of domestic Policy Support CNG has a higher- and international Robust octane rating over automobile OEMs, Demand Continued regulatory gasoline, CNG
Slide 33: International Operations
International Operations • Deals in CNG cylinders, industrial cylinders, cascades, multiple element gas containers, specialized fire suppression systems and fire detection/alarm systems • Targets markets include the Middle East, South America, Eastern and Western Europe Need pic Dubai • Received app
Slide 34: Historical Financials/ Corporate Summary
Historical Financials/ Corporate Summary
Slide 35: Key Performance Highlights – FY20
Key Performance Highlights – FY20 Revenues 8.3% Rs. 760.5 Cr Revenue Break-up (Rs. Cr) Others , 23.6 USA & Hungary , 127.3 EBITDA 4.6% Rs. 96.0 Cr PBT* (24.6%) Rs. 23.5 Cr UAE, 136.0 India , 501.6 PAT** (90.8%) Rs. 6.7 Cr *PBT before exceptional items and tax from continuing operations ** PAT during
Slide 36: Financial Summary – FY20
Financial Summary – FY20 Revenue (Rs. Cr) EBITDA (Rs. Cr) Margin (%) PBT (Rs. Cr) Margins (%) 760.5 702.1 13.0% 4.4% 12.6% 3.1% 96.0 31.2 91.8 23.5 FY19 FY20 FY19 FY20 FY19 FY20 Revenue expansion achieved Profit margin has remained in PBT decline attributed to in the backdrop of slow the range despi
Slide 37: Revenue Growth
Revenue Growth Revenue* (Rs. Cr) 760.5 702.1 588.7 542.5 472.3 505.8 FY15 FY16 FY17 FY18 FY19 FY20 India UAE USA & Hungary 187.7 180.5 462.0 501.6 167.7 149.1 136 131.4 132.0 117.9 127.3 333.4 113.1 273.1 94.1 180.0 169.2 60.2 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY16 FY1
Slide 38: Profit Margin
Profit Margin Gross Profit (Cons) (Rs. Cr) Gross Margin EBITDA (Rs. Cr) EBITDA Margin PAT (Rs. Cr) PAT Margin 53.9% 13.4% 48.3% 48.2% 10.4% 44.8% 43.6% 44.7% 14.4% 5.0% 13.1% 12.6% 0.9% 11.4% 78.7 27.2 73.0 6.7 -97.7 -124.1 0.6% 2.3% 211.5 220.3 284.2 292.7 338.1 340.2 2.6 11.8 64.6 77.8 91.7 96.0 -
Slide 39: Abridge Balance Sheet (Consolidated)
Abridge Balance Sheet (Consolidated) 30th 30th Assets (Rs. Cr)* 2017 2018 2019 2020 Liabilities (Rs. Cr)* 2017 2018 2019 2020 Sep 20 Sep 20 Fixed Assets 437.3 48.9 347.6 364.9 354.9 Shareholder Funds 421.9 444.2 517.8 537.7 571.0 Other Non-Current Assets 9.8 17.5 8.5 22.5 26.7 Long - Term Debt 324.0
Slide 40: Ratios
Ratios Net Debt/Equity Net Debt/EBITDA Interest Coverage 7.5 1.7 1.5 1.5 1.3 4.5 0.8 3.3 0.8 0.6 2.1 0.4 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 Assets Turnover Working Capital Days 284 1.7 1.6 1.2 193 178 1.1 138 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 39
Slide 41: Corporate Summary
Corporate Summary • Auto manufacturers expanding CNG production based on superior buyer economics • PNGRB auctions mandate time-bound nationwide expansion of CNG ecosystem Strong Macro • Medical oxygen demand expected to drive secular growth as India invests in Framework healthcare • Industrial dema
Slide 42: About Us
About Us Everest Kanto Cylinder Limited (EKC) (BSE: 532684, NSE: EKC), established in 1978, is a clean energy solutions company and a leading global manufacturer of seamless steel gas cylinders with over 20 million industrial gas and CNG cylinders currently in service. Contact Us: EKC operates two m
Slide 43: Thank You
Clean Energy Solution Company a E = 5 ee & a 2 2 = tod E = A 2 ee & = i Thank You
Everest Kanto Cylinder — Q3 FY21 Earnings Presentation on 6ix