Neogen Chemicals Ltd. · NSE:NEOGEN
Neogen Chemicals — Q4 FY23 Earnings Presentation
42 slides from Neogen Chemicals's earnings presentation, May 14, 2023
Slide 1: Exchange filing cover letter
May 14, 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 Compan
Slide 2: Exploring New Horizons – Q4 & FY23 Earnings Presentation
Expanding Capabilities Exploring New Horizons Q4 & FY23 Earnings Presentation May 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 Introduction to Expansion Key Developments Financial Neogen Chemicals Initiatives in Q4 FY23 Performance 4 15 19 25 Industry Overview – Lithium-Ion About Neogen Batteries Way Forward CSR Initiatives Chemicals 34 36 38 40 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 244 Sites + 2 R&D 10% 29 14001:2015 & ISO 482.6 33% 37% 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 58-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
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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 Sept 2023; 31 m3 commissioned Existing Business litres (60 m3) upto Q4 FY23 B
Slide 18: Capacity & potential revenue target based on expansion
Capacity & potential revenue target based on expansion Battery Chemicals Existing Business Incremental capacities that will be operational Business ** ▪ 31 m3 in Organic Chemicals Organic Chemicals Inorganic Chemicals (Reactor capacity) (Reactor Capacity) Electrolyte: 10,000 MT FY23 ▪ 15 m3 in Inorg
Slide 19: Wholly Owned Subsidiary for Battery Chemicals business
Wholly Owned Subsidiary (WOS) for Battery Chemicals business Battery Chemicals business will commence in a separate entity namely Neogen Ionics Limited, which will be a wholly owned subsidiary of Neogen Chemicals Limited. Distinct demand supply dynamics and High volume business: Battery Chemicals CA
Slide 20: Key Developments till May 2023
Key Developments till May 2023 1. Acquisition of 100% stake in BuLi Chem 2. Licensing agreement with MU Ionic Solutions Corporation, Japan 19
Slide 21: Acquisition of 100% stake in BuLi Chem
Acquisition of 100% stake in BuLi Chem About BuLi Chem Acquisition Completed on 3rd Cost of acquisition • Prior to the acquisition, BuLi Chem was a May, 2023 • Cost of Acquisition of the 100% subsidiary of Livent USA Corporation • Pursuant to completion of the Equity Shares of BuLi Chem on a fully (
Slide 22: Contours of the acquisition
Contours of the acquisition Acquisition will allow Neogen to offer Lithiation chemistry to Pharma and Agrochemical Industries Expertise in Acquiring established & manufacturing Manufacturing Unlocks deep synergies proven technology for by complementing the organolithium capacity of 25m3 handling lit
Slide 23: Deal benefits/ Synergies for Neogen Chemicals
Deal benefits/ Synergies for Neogen Chemicals Scale up and • To boost Neogen’s portfolio by offering Lithiation Reaction to existing and new pharma and agrochemical industries business • This will further strengthen and help scale up its advanced intermediates & CSM manufacturing business with both
Slide 24: MUIS-Neogen Electrolyte Manufacturing License Agreement
MUIS-Neogen Electrolyte Manufacturing License Agreement FIRST Ever License Issued by MUIS Anywhere in the Globe License to manufacture electrolyte materials using globally acclaimed technology & Plant Design Capacity – up to 30,000 MTPA Commercial Production Start Date expected in 2025 Rationale and
Slide 25: Advantage Neogen Chemicals
Advantage Neogen Chemicals Full Backward Integration – Manufacturing Offering High Degree of Indigenization to Battery Electrolyte and Major Raw Material of Electrolytes Manufacturers – will help Battery Manufacturers (Lithium Salts) in Achieving PLI Target Having 30 years of experience in manufactu
Slide 26: Financial Performance
25 xX sa r INT Vay x NEOGEN CHEMICALS LTD Financial Performance
Slide 27: Key Performance Highlights – Q4 & FY23
Key Performance Highlights – Q4 & FY23 Q4 FY23 FY23 The Board of Directors has recommended a final dividend of Rs. 3 per share, Revenues Rs. 203.9 crore Rs. 686.2 crore i.e., 30% of the FV, for FY23, subject to shareholders approval 30% 41% Q4 FY23 Revenue break-up EBITDA Rs. 32.6 crore Rs. 111.
Slide 28: Financial Summary – FY23
Financial Summary – FY23 Rs. crore REVENUE • Reported Highest-Ever revenues in FY23 fueled by incremental contribution from expanded FY23 686.2 capacities, sustained demand trajectory as well as favorable mix change in the business 41% • During the year, the Company witnessed noticeable shift in the
Slide 29: Revenue break-up – Q4 & FY23
Revenue break-up – Q4 & FY23 Q4 FY22 Rs. 99 crore Q4 FY23 Rs. 138 crore 39% Organic Chemicals FY22 Rs. 363 crore FY23 Rs. 463 crore 28% Q4 FY22 Rs. 58 crore Q4 FY23 Rs. 66 crore 14% Inorganic Chemicals FY22 Rs. 124 crore FY23 Rs. 223 crore 80% 28
Slide 30: 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 31: Financial Table – Profit & Loss Statement (Standalone)
Financial Table – Profit & Loss Statement (Standalone) (Rs. crore) Particulars Q4 FY23 Q4 FY22 Growth (%) FY23 FY22 Growth (%) Revenue 203.9 156.8 30% 686.2 487.3 41% Expenditure 171.3 130.2 32% 574.6 400.7 43% EBITDA 32.6 26.6 22% 111.6 86.6 29% Margins 16.0% 17.0% -100 bps 16.3% 17.8% -150 bps Dep
Slide 32: Balance Sheet Snapshot (Standalone)
Balance Sheet Snapshot (Standalone) (Rs. crore) Particulars As on March 31, 2023 As on March 31, 2022 Assets Non-Current Assets 397.7 306.5 Current Assets 656.2 493.1 • Total Debt (after including current Total Assets 1,053.9 799.5 maturities of long-term debt) stood at Rs. 362 crore in FY23 Liabili
Slide 33: Management Commentary
Management Commentary Commenting on the Q4 & FY23 performance, Mr. Haridas Kanani, Chairman & Managing Director, at Neogen Chemicals said: “I am happy to share that we have concluded the year on a strong note despite challenging operating scenario aggravated by continued volatility in input costs, d
Slide 34: Historical Financial Trends
Historical Financial Trends Net Revenue from Operations** EBITDA (INR crore) Margin (%) (INR crore) 19.0% 19.1% 686 18.2% 17.8% 17.8% 487 336 16.3% 306 239 163 29 43 58 64 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 35: Industry Overview: Lithium Ion Batteries
Industry Overview: Lithium Ion Batteries 34
Slide 36: 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 37: Way Forward
Way Forward 36
Slide 38: 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 37
Slide 39: CSR Initiatives
CSR Initiatives 38
Slide 40: CSR Initiatives
CSR Initiatives Focus areas in CSR Rural development Education Healthcare, sanitation and Environment nutrition sustainability Conservation and management of natural resources 39
Slide 41: Contact Us
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 42: Thank You
Thank You