Aarti Industries Ltd · NSE:AARTIIND
Aarti Industries — Investor Presentation (February 2019)
35 slides from Aarti Industries's investor presentation, Feb 25, 2019
Slide 1: Intimation of meetings with institutional investors
AARTI INDUSTRIES LIMITED Ref. No.: AIL/B-38/2019 / 133 February 23, 2019 To, To, National Stock Exchange of BSE Limited, India Limited, Department of Corporate Services, Exchange Plaza, P.J. Towers, Plot No. C/ 1, G Block, Dalal Street, Bandra Kurla Complex, Mumbai - 400 001 Bandra East, Mumbai 400
Slide 2: Annexure A
@ffii*,=, Annexure A Sr. Name of the Institutional Investor No. 1. Tata AIA Life Insurance Company Limiled 2. ffitManagemen J^. ffi 4. Reliance Industries Limited 5. 6. IIFL AMC www.aarti-industriea.com I Cl N : L241 1 0CJ1 9UPLC00730! Admin. Office : 71, Udyog Kshetra, Znd Floor, Mulund Goregaon Li
Slide 3: Investor Presentation Aarti Industries Ltd. Feb 2019
Investor Presentation Aarti Industries Ltd. Feb 2019
Slide 4: Disclaimer
Disclaimer This presentation does not constitute a prospectus, offering memorandum or an offer, or a solicitation of any offer, to purchase or sell any securities. This presentation should not be considered as a recommendation that any investor should subscribe for or purchase any securities of Aart
Slide 5: Our Values
Our Values We care for our people, our We strive to maintain the highest We continuously raise the bar for customers, our suppliers, and our ethical and moral standards. We our performance standards in safety, community. Care for our people is honour our commitments towards productivity and employee
Slide 6: Agenda
Agenda Company Overview 5 Investment Highlights 13 Growth Strategy 25 Key Financials 27 Appendix 30
Slide 7: Company Overview
Company Overview Overview Key Metrics2 ▪ One of the leading Speciality chemical company in Benzene based derivatives with integrated operations which helps in cost optimization ▪ Strong R&D capabilities – 3 R&D facilities; dedicated pool of over 1702 engineers & scientists; IPRs for developing custo
Slide 8: Key Milestones with Adaptive Growth Strategies
Key Milestones with Adaptive Growth Strategies 1984 - 1991 1992 - 2011 2012 - present Growth 1 Consolidation, Scale, cost competitiveness, SSI, Licensing, import substitution Productivity with Sustainability Strategies exports • Commissioned sulfonation unit in • Commenced Calcium chloride • Signed
Slide 9: Strategically Located Plants
Strategically Located Plants Bhachau, Kutch Pithampur Dahej Jhagadia Vapi Location within India Sarigam Silvassa Chemical Plants Tarapur Mumbai Dombivali Head Office Pharma Plants H&PC Plants R&D Center • Over 100 acres of land available in Jhagadia for future development 7
Slide 10: Key Management Team
Key Management Team Richly experienced Mr. Rajendra Gogri – Chairman & M.D. Chemical Engineer-UDCT, Masters – Chemical. Mr. Rashesh Gogri – Vice Chairman & M.D. Engineer (IOWA State USA) Production Engineer Portfolio – Strategic Planning, New Business Portfolio – Head Commercial- Speciality Chemical
Slide 11: Financials - Consolidated
Financials - Consolidated Robust Revenue Growth Strong EBITDA Growth Strong PAT Growth INR (Cr) INR (Cr) INR (Cr) 3,806 699 654 333 316 572 3,163 257 3,007 2,908 466 402 206 2,632 162 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Strong Operating Cash Flows Strong Return
Slide 12: Financials - Standalone
Financials - Standalone Robust Revenue Growth Strong EBITDA Growth Strong PAT Growth INR (Cr) INR (Cr) INR (Cr) 677 345 3,699 3,646 659 316 611 307 540 252 3,050 458 2,871 2,934 406 2,633 188 149 FY14 FY15 FY16 FY17 FY18 9MFY19 FY14 FY15 FY16 FY17 FY18 9MFY19 FY14 FY15 FY16 FY17 FY18 9MFY19 Strong O
Slide 13: Stock Performance and Shareholding
Stock Performance and Shareholding Aarti has outperformed broader market Sensex Aarti 35,8981 18,864 1,3821 79 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Shareholding Pattern (as of 31 December 2018) Key Institutional Investors (As of 31 Dec 2018) Others Institutional 3% Fund House % Holding in the c
Slide 14: Agenda
Agenda Company Overview 5 Investment Highlights 13 Growth Strategy 25 Key Financials 27 Appendix 30
Slide 15: Investment Highlights
Investment Highlights 1 • Global Player in Benzene based Derivatives with Integrated Operations o Strong/Leadership position in key products and processes o Integrated operations across product chain of Benzene and Toluene o Ability to effectively use co-products and generate value-added products 2
Slide 16: Global Player in Benzene based derivatives with Integrated Operations (1/2)
1 Global Player in Benzene based derivatives with Integrated Operations (1/2) Benzene product chain A B C D E F PNCB PNA PCA 35 DCA PFNB • Integrated operations NCB MCB across product chain Chain ONCB ONA OCA 24 DNCB OFNB of Benzene and ODCB 34 DCNB OCPNA 34 DCA 33 DCBH OFA Toluene DCB PDCB 23 DCNB
Slide 17: Global Player in Benzene based derivatives with Integrated Operations (2/2)
1 Global Player in Benzene based derivatives with Integrated Operations (2/2) Toluene product chain Sulphuric acid product chain Sulphuric Acid Nitration Hydrogenation Others OLEUM 23% & 65% NOET Leen SO2 SULPHUR 1000 OC SO2 Gas SO3 99% ONT OT Steam MEA Di Methyl Sulphate Co Gen Power Plant Di Ethyl
Slide 18: Well Diversified Across Multiple Dimensions
2 Well Diversified Across Multiple Dimensions High level of geographic diversification… …with a well diversified product portfolio, and low dependence on individual products FY18 consolidated ROW FY18 consolidated Top 5 product contribution 11% Japan Top 10 product contribution 4% China 4% 57% 44% 4
Slide 19: Pharmaceuticals – Exposure to multiple segments & products
3 Pharmaceuticals – Exposure to multiple segments & products, with strong infrastructure in place End User Industry • Global generic pharma companies Pharmaceuticals • Innovator and large pharma MNCs • Branded generic Indian pharma companies Xanthine derivatives 64%1 Pharma Intermediates & Ingredien
Slide 20: Pharmaceuticals – Significant growth with diversification
3 Pharmaceuticals – Significant growth with diversification across products and geographies Pharma1 - significant top line and margin growth… …with diversification across products and geographies Revenue CAGR FY14-18 22% FY18 Revenue Split1 EBIT CAGR FY14-18 27% Xanthine, 16.5% 36% API, 64% 14.2% Re
Slide 21: Strong Return Profile despite Significant Capex over Last 5 Years
4 Strong Return Profile despite Significant Capex over Last 5 Years Strong return profile despite significant capex spend Capex (Rs Cr) ROCE ROCE (exc CWIP) ROE 24% • Expanded capacity to scale base businesses (NCB & DCB) and 23% 21% 22% downstream value added products 20% 23% 22% 20% 20% 19% • Dive
Slide 22: Strong Focus on R&D & Process Innovation
5 Strong Focus on R&D & Process Innovation Process Innovation World Class Technology • Scrub NOx in Sulphuric Acid from • Adopted Swiss technology for MDCB plant to manufacture o Continuous Loop reactor for commercial grade Nitrosyl eco-friendly hydrogenation Sulphuric Acid World Class process • Dir
Slide 23: Strong Focus on Sustainability
6 Strong Focus on Sustainability Health & Safety ▪ Focused on Zero tolerance and Zero harm Process safety audits and ▪ Process of 'Learning from Incident' is established inspections from external ▪ Toxicologist on board for Occupational Health and emergency response experts ▪ Complete Fire protectio
Slide 24: Well placed to benefit from sector tailwinds – Global
7 Well placed to benefit from sector tailwinds – Global Speciality chemicals market has been shifting eastwards with China …India to benefit from China’s downturn benefitting significantly over the last 2 decades • Gradual erosion in China’s cost advantage, due to: o Appreciation of Chinese currency
Slide 25: Well placed to benefit from sector tailwinds - Indian
7 Well placed to benefit from sector tailwinds - Indian Growth drivers for speciality chemicals demand in India… …Driven by rising end-use demand Consumption • Per capita consumption in India is ~USD 23 (in value Major sub-segments FY17 Domestic market (US$bn) Intensity terms) vis-à-vis global avera
Slide 26: Agenda
Agenda Company Overview 5 Investment Highlights 13 Growth Strategy 25 Key Financials 27 Appendix 30
Slide 27: Growth Strategy
Growth Strategy • Scale up of capacities in existing products • New markets and applications for existing products • New value-added products in existing value chains • Improving market position across isomers • Scale up of capacities in existing 1 products and related applications • Increase presen
Slide 28: Agenda
Agenda Company Overview 5 Investment Highlights 13 Growth Strategy 25 Key Financials 27 Appendix 30
Slide 29: Consolidated Financial Statements
Consolidated Financial Statements In Rs Cr FY14 FY15 FY16 FY17 FY18 Balance Sheet Property, Plant and Equipment 826 967 1,246 1,695 1,996 Capital Work-in-Progress 117 1,923 313 270 436 Intangible Assets 0.08 0.04 0 2 2 Investments 117 173 41 47 47 Other Non-Current Assets 384 103 132 168 225 Total N
Slide 30: Consolidated Financial Statements
Consolidated Financial Statements In Rs Cr FY14 FY15 FY16 FY17 FY18 Profit and Loss Revenue 2,632 2,908 3,007 3,163 3,806 EBITDA 402 466 572 654 699 Depreciation 89 82 99 123 146 Profit Before Tax 206 251 363 416 429 Tax 54 61 95 88 83 PAT 162 206 257 316 333 % EBITDA 15% 16% 19% 21% 18% % ROCE 19%
Slide 31: Agenda
Agenda Company Overview 5 Investment Highlights 13 Growth Strategy 25 Key Financials 27 Appendix 30
Slide 32: HPC Demerger Update
HPC Demerger Update Key Financials (Standalone) FY18 data (Rs Cr) Total Assets EBIT HPC business 229 3 Total 4,118 555 167 207 132 168 264 231 HPC as a % of Total 5.6% 0.5% FY14 FY15 FY16 FY17 FY18 9MFY19 Revenue (Rs Cr) • The home and personal care chemicals business, which constitutes of the Home
Slide 33: Dicamba: Significant growth potential globally driven by rising demand for food security
Dicamba: Significant growth potential globally driven by rising demand for food security Global Dicamba market to grow at 7-8% CAGR Global Dicamba market by region (2015) Others Expected CAGR 15% Region (%) Asia North America 10-11% Pacific North 7% America Europe 3-4% 39% Asia Pacific 3-4% Europe O
Slide 34: Awards and Industry Accreditation
Awards and Industry Accreditation CHEMTECH Foundation accorded Aarti Industries Indian Institute of Chemical Engineers bestowed with the “Outstanding Achievement – Innovation” the prestigious Lala Shriram National Award for Industry Accreditation for award for the company’s commendable efforts in “L
Slide 35: Thank You
(<3) AARTI INDUSTRIES LIMITED i | — = —3 —_ —— —! —— Sn oe I ESS PRODUCTIVITY. WITH SAFETY IS OUR MOTTO | SAM HAT Ta SAN AAA S
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