Sumitomo Chemical India Ltd. · NSE:SUMICHEM
Sumitomo Chemical India — Q4 FY20 Earnings Presentation
40 slides from Sumitomo Chemical India's earnings presentation, Jun 8, 2020
Slide 1: Cover letter to stock exchanges
Corporate Office: 13/14, Aradhana IDC, 40, SUMITOMO CHEMICAL INDIA LTD. NearVirAoarti Indusl6a1 lEastt, Corporate Identity Number (CIN) - U24110Mh2000PLC124224 Murnbai - 400 063. Tel_ +91-22-4252 22001 Fax +91-22-4252 2380 UAL http-fiwwwsurpichern-nciia.co.in SCIL/SEC/2020-21/06 8th June, 2020 To, B
Slide 2: Sumitomo Chemical India Limited Investor Presentation June 2020
40P SUMITOMO CHEMICAL Sumitomo Chemical Sumitomo Chemical India Limited Limited Investor Presentation !nvestor June 2020
Slide 3: Safe Harbour
Safe Harbour 40• This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sumitomo Chemical India Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe
Slide 4: Q4 & FY20 Results Presentation
Q4 & FY20 Q4 86 FY20 Results Presentation Results Presentation
Slide 5: Performance Highlights – Q4 & FY20
Performance Highlights – Q4 & FY20 40° Revenue (Rs Crs) EBITDA (Rs. Crs) & EBITDA Margin (%) Adj PBT * (Rs Crs) C)+6% 50 +49% 42 20 +58% ✓ Q4 FY20 revenue growth of 422 446 33 6% YoY driven by broad- 40 15 based volume growth across 30 28 21 products, geographies and 9.4% 10 business segments 20 6.7
Slide 6: Consolidated Profit & Loss Account Statement
Consolidated Profit & Loss Account Statement Particulars (Rs. Crs) Revenue from Operations Q4 FY20 445.8 Q4 FY19 421.7 YoY 6% FY20 2,424.8 FY19 2,228.4 YoY 9% 4.• COGS 289.8 285.4 1,607.7 1,458.9 Gross Profit 155.9 136.3 14% 817.1 769.6 6% Gross Profit % 35.0% 32.3% 266 bps 33.7% 34.5% -84 bps Emplo
Slide 7: Revenue Breakup – FY20 Vs FY19
Revenue Breakup – FY20 Vs FY19 40• Product Breakup Geographic Breakup 6% 7% 9% 11% 8% 7% 49% 47% 78% 80% FY19 FY20 11% 10% 22% 20% 17% 18% FY19 FY20 Insecticides PGR Fungicides Domestic Export Herbicides Metal Phosphides AND & EHD* Segment Breakup Bulk & Branded Domestic Exports 20% 19% 73% 71% 62%
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet • Assets (Rs. Crs) Mar-20 Mar-19 Equity & Liabilities (Rs. Crs) Mar-20 Mar-19 4.• Non-Current Assets (A) 360.6 318.3 EQUITY (A) 1,221.8 1,048.4 Property, Plant and Equipment 282.9 277.2 Equity Share Capital 499.1 274.6 Capital work-in-progress 6.5 3.2 Right to use an Asset
Slide 9: Consolidated Working Capital Movement
Consolidated Working Capital Movement 0° 4 Particulars (Rs. Cr) Mar-20 Mar-19 Change Inventory (A) 588.0 680.6 -92.6 Inventory Days (Inventories/ COGS*365) (i) 133 170 Trade Receivables (B) 849.8 671.0 178.8 Trade Receivables Days (Trade Receivables / Revenue*365) (ii) 128 110 Trade Payables (C) 490
Slide 10: Key Developments – COVID-19
Key Developments + Update on COVID-19 Safety measures undertaken by the Company ✓ Global pandemic Covid-19 caused severe impact globally and in India. India announced country-wide strict lockdown since last week of March 2020 and such measures continue to be in force till date in gradually relaxed f
Slide 11: Key Developments – Draft Insecticide Ban Order
Key Developments 40• Impact of Draft order banning 27 Insecticides by Government of India ✓ Recently the Government of India released a draft notification for public comments regarding proposed ban of some agro-chemical products ✓ The matter is being discussed at various forums such as various indus
Slide 12: Company Overview
Company Overview Formidable Player in the Journey to 10x Growth Merger of Excel Crop Care Indian Agrochemicals Space in India Unlocking Value Autonomous Board with Vast To Benefit from Strong Industry Experience Parentage of SCC Japan
Slide 13: Leading Agrochemicals Player in India
Leading Agrochemicals Player in India 4o• Overview Diversified Product Portfolio & Segment Mix (FY20) 7% Incorporated in 2000 as a wholly owned subsidiary of SCC, Japan to drive • ASD expansion of its Health & Crop Sciences business in India • AND & EHD Primarily engaged in manufacture and sale of s
Slide 14: Formidable Player in the Indian Agrochemicals Space
Formidable Player in the Indian Agrochemicals Space Grown 12X* over FY11-20 Rs. Bn 5 190+ 10X Manufacturing Brands 24 Facilities 10+ 25+ / 200+ Technical Actives Y Patents / Registrations • 74 2 13,000+ 1,500+ FY11 FY20 Distributors Employees r yd *On an organic basis, grown 6X 13
Slide 15: Journey to 10x Growth in India
Journey to 10x Growth in India 40° Exploration Phase: 2000 – 2009 Manufacturing JV with New Acquired product - 2000 Chemi 2002 Started EHD (Public Health) 2005 ‘Sulfosulfuron’ Leader 2010 business rights from Monsanto Started Animal Nutrition SCIL incorporated in India as 2001 Started ASD business 2
Slide 16: Merger of Excel Crop Care to Unlock Value
Merger of Excel Crop Care to Unlock Value Successfully and smoothly completed the merger 4.• Pre-Merger Structure Post-Merger Structure SCC and its affiliates (Japan) 44.98% 1 Public Shareholders SCC and its affiliates (Japan) Public & Others 100.00% 19.98% Excel Crop Care (ECC) J 35.03% 80.3% Sumit
Slide 17: Well-diversified Platform of Scale (1/2)
Well-diversified Platform of Scale (1/2) 0° 4 Parameter [ 1 [ ECCL 1 ( 0 ) [ SCIL (Pre-Merger) SCIL (Post-Merger) Manufacturing Facilities Plants in Gujarat (2) and Plant in Maharashtra (1) and Dadar & Nagar Haveli (1) Gujarat (1) 5 plants in West India Predominantly a formulation Manufacturing Capa
Slide 18: Well-diversified Platform of Scale (2/2)
Well-diversified Platform of Scale (2/2) 0° 4 Parameter [ 1 [ ECCL 1 ( 0 ) [ SCIL (Pre-Merger) SCIL (Post-Merger) Product Capability Major focus on Generics; nascent Major focus on Speciality Presence across complete presence in Biopesticides Products range of products Business Segments Presence onl
Slide 19: Autonomous Board with Vast Industry Experience
Autonomous Board with Vast Industry Experience 4.• Dr. Mukul Govindji Asher Chetan Shantilal Shah Chairman and Independent Director Managing Director ▪ Professorial Fellow at Lee Kuan Yew School of Public Policy at ▪ Commerce graduate from the University of Mumbai and the National University of Sing
Slide 20: Autonomous Board with Vast Industry Experience
Autonomous Board with Vast Industry Experience Bhupendranath Bhargava Preeti Gautam Mehta 4.• Independent Non-executive Director Independent Non-executive Director ▪ Experience of over 50 years in areas including banking, ▪ 30 years of experience in corporate laws, foreign investment project financi
Slide 21: To Benefit from Strong Parentage of SCC Japan
To Benefit from Strong Parentage of SCC Japan About SCC, Japan 4.• ✓ SCC is a leading Japanese research driven diversified chemical company listed on the Tokyo Stock Exchange with consolidated sales revenue for FY20 of US$ 20.3 bn and Health & Crop Sciences Sector of US$ 3.1 bn ✓ Offers diverse rang
Slide 22: Sustainable Drivers for Growth
7.T. ."-.-1Lrar• 1 :—a •...1%.1 ' ' f ; r :. .. .. , 1 Sustainable Drivers for Growth Diversified & De-risked Strategically Located Strong Focus on R&D and Portfolio Across the Agro- Manufacturing Facilities Process Innovation Chem Value Chain Strong Brand and Well- Expanding Brand Visibility Well p
Slide 23: Diversified & De-risked Portfolio Across the Agro-Chem Value Chain
Diversified & De-risked Portfolio Across the Agro-Chem Value Chain 4.• Balanced Presence Across Key Sub-Segments of the Agro-Chem Value Chain Geographic Diversification with Exports to over 60 countries ■ ■ ■ Insecticides 7% 4% North America Herbicides 11% Domestic 13% South America PGR 80% 19% Euro
Slide 24: Strategically Located Manufacturing Facilities
Strategically Located Manufacturing Facilities 4 0° Connectivity to Major Cities and Proximity to Main Highways, Ports Reduces Logistic Time and Costs Plant Location Area (acres) Segment Served Product Manufactured Manufacturing of Technical Grade Pesticides Bhavnagar ~58 and Formulation Development
Slide 25: Strong Focus on R&D and Process Innovation
Strong Focus on R&D and Process Innovation End-to-End Product Development Capabilities 4.• ✓ 3 fully equipped, DSIR approved R&D labs located at Mumbai, Bhavnagar and Gajod capable of synthesis, technical product and formulation development ✓ R&D Team comprises of 75+ qualified and dedicated enginee
Slide 26: Strong Brand and Well-Entrenched Distribution Network
Strong Brand and Well-Entrenched Distribution Network 4.• I ✓ Strong brand with market leading position across various product categories 23 States 68 Depots I ✓ Dual brand portfolio can offer products at all price points serving multiple customer sub-segments 13,000+ ~40,000 I ✓ In-depth knowledge
Slide 27: Expanding Brand Visibility and Connect
Expanding Brand Visibility and Connect ✓ Wide range of generics and speciality products for Increased crop presence and providing crop 4.• protection solutions ✓ More than 1,400+ Relationship managers connecting to 1 million+ farmers throughout crop cycle ✓ Over 100 brands covering maximum of crops
Slide 28: Digital Marketing Initiatives
Digital Marketing Initiatives Develop “Digital Marketing” as a parallel support to Traditional marketing system leading to improved sales. 4.• ✓ Our Digital Assets : 21 websites, currently driving about 8,648 visitors everyday. YouTube - Advantage oAn7n om~onhe • 13111Dulube ' Earlyon‘clor pink bol.
Slide 29: Well Placed to Benefit from Sector Tailwinds
Well Placed to Benefit from Sector Tailwinds 4.• o Pesticides: Market Share by Segment Highly Underpenetrated Market Significant growth opportunity for Indian Players 5% Pesticide Consumption (Kg/ha) Agrochemical Market Size (US$ bn) 1% 22% 13 12 +8% 8.1 FY18 47% 7 4.1 5 5 25% c <1 •• Insecticides•
Slide 30: Thrust on Safety, Health and Environment (SHE)
Thrust on Safety, Health and Environment (SHE) 4 0° Quality Certifications Ensure Consistent product quality and healthy working environment at manufacturing sites Abiding by SCC Japan’s EHS Policies ISO:9001:2015, ISO-14001:2015 and OHSAS18001:2007 for the manufacturing sites at Bhavnagar, Gajod, T
Slide 31: Growth Strategies & Financial Performance
Growth Strategies Performance Highlights Growth Strategies & Financial Performance Profit & Loss Account Balance Sheet Cash Flow
Slide 32: Vision & Mission
Vision & Mission 4.• Vision Vision & Values & Values Mission Mission Vision: Marketing and Sales: • To be a trusted market leader in Indian crop- Further penetration into Indian market & take protection sector leadership; expand exports • To develop a vibrant corporate culture • Strengthen Sales For
Slide 33: Growth Strategies
Growth Strategies Continued Investment in R&D and Pipeline Capacity Expansion 4.• Achieving Market Leadership in • Aim to invest in seamless integration of R&D between SCIL and SCC • units which would help improve our production processes, Driving operational efficiencies maintaining highest safety
Slide 34: Performance Highlights
Performance Highlights 40° Revenue (Rs Crs) EBITDA (Rs. Crs) & EBITDA Margin (%) PAT (Rs Crs) CID' +13% 2,425 +24% 333 +19% 205 2,228 291 1,913 166 217 145 11.3% 13.0% 13.7% ✓ Combined entity ~2x in size FY18* FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 ✓ Net debt free balance sheet ✓ Strong margin prof
Slide 35: Consolidated Profit & Loss Account Statement
Consolidated Profit & Loss Account Statement Particulars (Rs. Crs) FY20 FY19 FY18 4.• Net Revenue from Operations 2,424.8 2,228.4 1,912.9* COGS 1,607.7 1,458.9 1,238.7 Gross Profit 817.1 769.6 674.2 Gross Profit % 33.7% 34.5% 35.2% Employee Expenses 179.3 158.4 147.5 Other Operating Expenses 304.7 3
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet 40° Assets (Rs. Crs) Mar-20 Mar-19 Mar-18 Equity & Liabilities (Rs. Crs) Mar-20 Mar-19 Mar-18 Non-Current Assets 360.6 318.3 312.7 EQUITY 1,221.8 1,048.4 954.0 Property, Plant and Equipment 282.9 277.2 264.8 Equity Share Capital 499.1 274.6 274.6 Capital work-in-progress 6
Slide 37: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement 0° 4 Cash Flow Statement (Rs. Cr) Mar-20 Mar-19 Mar-18 Net Profit Before Tax 266.5 259.8 221.0 Adjustments for: Non-Cash Items / Other Investment or Financial Items 45.7 18.6 9.6 Operating profit before working capital changes 312.2 278.5 230.6 Changes in working cap
Slide 38: Awards & Accolades
Awards & Accolades 4.• Jamnalal Bajaj Award for “Fair Business and Practices” Shramveer award for improvement of product efficiency received from national level Delhi First ever president’s gold shield for import substitution Vishwakarma Rashtriya Puraskar received for process development First awar
Slide 39: Key Takeaways
Key Takeaways 40• Formidable Player in the Indian Experienced Management Team Well-diversified Product Portfolio Strong Brand and Well-Entrenched Agro-chem Space and Board of Directors Across Agro-Chem Value Chain Distribution Network ▪ Strong / leadership position across ▪ Strong management and ▪ M
Slide 40: For further information, please contact
For further information, please contact: Company : Investor Relations Advisors : Sumitomo Chemical India Limited Strategic Growth Advisors Pvt. Ltd. CIN: U24110MH2000PLC124224 CIN: U74140MH2010PTC204285 Mr. Jigar Kavaiya / Mr. Pratik Shah 99206 02034 / 97692 60769 investor.relations@sumichem.co.in j
Sumitomo Chemical India — Q4 FY20 Earnings Presentation on 6ix