Neogen Chemicals Ltd. · NSE:NEOGEN
Neogen Chemicals — Q1 FY24 Earnings Presentation
34 slides from Neogen Chemicals's earnings presentation, Aug 6, 2023
Slide 1: Cover letter to stock exchanges
August 6, 2023 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 Comp
Slide 2: Exploring New Horizons – Q1 FY24 Earnings Presentation
Expanding Capabilities Exploring New Horizons Q1 FY24 Earnings Presentation August 2023
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 m
Slide 4: Table of Contents
Table of Contents Expansion Industry Overview Introduction to Initiatives & Key Financial – Lithium-Ion Neogen Chemicals Updates in Q1 FY24 Performance Batteries 4 15 18 26 About Neogen Way Forward CSR Initiatives Chemicals 28 30 32 3
Slide 5: Introduction to Neogen Chemicals
Introduction to Neogen Chemicals 4
Slide 6: Neogen Chemicals – At a Glance
Neogen Chemicals – At a Glance 4 Manufacturing ISO 9001:2015, ISO 248 Sites + 2 R&D 10% 29 14001:2015 & ISO 482.5 33% 35% Facilities 45001:2018 Products Infrastructure Of workforce in Exporting Manufacturing units certified on Net worth - 5-year Revenue 5-year PAT developed by R&D team countries Qua
Slide 7: Evolution of Neogen Chemicals
Evolution of Neogen Chemicals 1970’s to 1991 Pre-Neogen 1991 to 2016 Pre-expansion 2016 to 2023 Present ▪ Mr. HT Kanani graduated as a Chemical ▪ ‘Neogen Chemicals’ commenced business ▪ Acquired 12 acres of land in Dahej for Greenfield expansion in 2015 Engineer and started his association with oper
Slide 8: Key Milestones
Key Milestones Leading manufacturer of Bromine and Lithium- based specialty chemicals since 1989 Signed agreement with MU Ionic Solutions Corporation, Japan in April 2023 to acquire manufacturing technology license for electrolytes in India Acquired 100% stake in BuLi Chem from Livent in May 2023 to
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 Relationship with Facilities Suppliers Specialised Experienced Business Board of Directors Model with High 9 Entry Barriers
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 Mr. Harin Kanani, B.TECH (CHEM) M.I.I.Ch.E. ▪ A well known
Slide 12: Robust Manufacturing Expertise
Robust Manufacturing Expertise Strong Manufacturing Infrastructure Land Factory Land Area Capacity Certifications of Manufacturing Facilities Utilisation Inorganic Organic Chemicals Chemicals (Reactor capacity) (Tonnage) Mahape (Since 1991) 1 acre 100% 69 m3 9 m3 ISO 9001:2015 from Bureau Veritas Ce
Slide 13: Developed strong R&D capabilities
Developed strong R&D capabilities Developed 68-member dedicated R&D team, including 7 senior personnel with doctorates in chemistry (Ph. D.) from Established two in-house reputed institutions and CMD and MD are actively R&D units, one each in with 15+ years of involved and spend Mahape and Vadodara,
Slide 14: Key Export Geographies
Key Export Geographies Europe Japan China USA Korea Middle East Exporting to 29 countries, with key export geographies in United States, Europe, Japan and Middle East Export sales of 48% in FY23 13
Slide 15: Competitive Advantages
Competitive Advantages Large and diverse array of products Experienced promoters Strong Manufacturing with domain knowledge Capabilities Established and stable Diversified and Stable relationship with suppliers Customer Base Specialised Business Model with Continuous Investment high entry barriers i
Slide 16: Expansion Initiatives & Key Updates in Q1 FY24
Expansion Initiatives & Key Updates in Q1 FY24 15
Slide 17: Update on various expansion initiatives
Update on various expansion initiatives Details of expansion projects Current project updates: announced: Recent CAPEX announcements Expansion of specialty organic 29 m3 will be commissioned by chemicals capacity by 60,000 March 2024; 31 m3 commissioned Existing Business litres (60 m3) upto Q4 FY23
Slide 18: Key updates in Q1 FY24
Key updates in Q1 FY24 ▪ Commercial terms including discussion around MOU for Electrolyte started with 3-4 Indian cell manufacturers ▪ Dialogue for Lithium Electrolyte Salt supplies is ongoing with more than 10 international potential customers ▪ Based on demand projection/ visibility shared by cust
Slide 19: Financial Performance
18 xX sa r INT Vay x NEOGEN CHEMICALS LTD Financial Performance
Slide 20: Key Performance Highlights – Q1 FY24
Key Performance Highlights – Q1 FY24 • BuLi Chem started commercial production under Neogen Chemicals mgt. in Q1 FY24 and already commenced sales. Significantly contributions are expected from BuLi Chem in Q2 FY24 and thereafter expected to meaningfully increase in the second half • Neogen Ionics Li
Slide 21: Financial Summary – Q1 FY24
Financial Summary – Q1 FY24 Rs. crore REVENUE • Strong topline performance was achieved despite global headwinds that impacted the industry like inventory destocking, rapid re-opening of China and slowdown in EU and other 11% Q1 FY24 164.9 markets • Revenue increase was in-line with new capacities a
Slide 22: Revenue Break-up – Q1 FY24
Revenue Break-up – Q1 FY24 Q1 FY23 Rs. 90 crore Organic Chemicals Q1 FY24 Rs. 121 crore 35% Q1 FY23 Rs. 58 crore Inorganic Chemicals Q1 FY24 Rs. 44 crore -25% Captures the impact of lower prices of Lithium raw material as compared to Q1 FY23 Consolidated data 21
Slide 23: 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 24: Financial Table – Profit & Loss Statement (Consolidated)
Financial Table – Profit & Loss Statement (Consolidated) (Rs. crore) Particulars Q1 FY24 Q1 FY23 Growth (%) FY23 Revenue 164.9 147.9 11% 686.2 Expenditure 136.8 123.3 11% 574.6 EBITDA 28.1 24.7 14% 111.6 Margins 17.0% 16.7% 35 bps 16.3% Depreciation 5.5 3.9 41% 16.2 EBIT (inc. Other Income) 24.4 21.
Slide 25: Management Commentary
Management Commentary Commenting on the Q1 FY24 performance, Mr. Haridas Kanani, Chairman & Managing Director, at Neogen Chemicals said: “We have commenced the year on an optimistic note and delivered strong financial performance led by 11% increase in Revenues and 14% improvement in EBITDA. This ca
Slide 26: 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 27: Industry Overview: Lithium Ion Batteries
Industry Overview: Lithium Ion Batteries 26
Slide 28: Strong Opportunities in Lithium Battery sector
Strong Opportunities in Lithium Battery sector Lithium-ion battery (3.7v) Approximate Cost Component Break up* Government Focus on “ATMANIRBHAR” • 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 29: Way Forward
Way Forward 28
Slide 30: 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 29
Slide 31: CSR Initiatives
CSR Initiatives 30
Slide 32: CSR Initiatives
CSR Initiatives Focus areas in CSR Rural development Education Healthcare, sanitation and Environment nutrition sustainability Conservation and management of natural resources 31
Slide 33: 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 34: Thank You
Thank You