Coromandel International Limited · NSE:COROMANDEL
Coromandel International — Investor Presentation (June 2015)
50 slides from Coromandel International's investor presentation, June 2015
Slide 1: Investor Presentation June 2015
Investor Presentation June, 2015 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements which may be identified by their use of words contains “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections
Slide 3: Agri Input Industry Overview, Company Update
Agri Input Industry Overview Company Update 3
Slide 4: Agri Input Industry Overview
AGRI INPUT INDUSTRY OVERVIEW 4
Slide 5: Global Scenario
IZ Coromandel «< GLOBAL SCENARIO a murugappa 5
Slide 6: Global Mega Trends
Global Mega Trends Rising Food Demand • Global Food demand to increase 1.5x by 2030 • Changing dietary patterns, especially in developing countries Limited Resources • Limited land and labor availability • Degradation of soil quality High volatility in food prices with an upward trend • Global stapl
Slide 7: World N,P,K Fertilizer Market
World N,P,K Fertilizer Market "K" World Market "N" World Market Ammonia 1% 13% 4% 29% Urea MOP/SOP 6% UAN NPK 11% AN/CAN Others NPK 70% 52% DAP/MAP 9% Others 5% “K” Market is 31 Million “N” Market is 114 Million MT MT "P" World Market Global Fertiliser Industry: India and China account for 40% of
Slide 8: Global Nutrient Consumption Outlook
Global Nutrient Consumption Outlook Million tons Nutrient 120 112 114 2013-2018 CAGR N 1.1% 42 43 46 P2O5 1.7% 34 30 31 K2O 2.1% 2013 e 2014 f 2018 f N P2O5 K2O Source: IFA
Slide 9: DAP – Global Production & Trade
DAP – Global Production & Trade 10 year CAGR Production 2.8% MM tons Exports 1.3% 35 34 33 33 31 26 16 15 14 14 14 10 2008 2009 2010 2011 2012 2013 Production Trade Global production & trade of DAP have increased China, Saudi Arabia & Morocco account for all production increases 9
Slide 10: Indian Scenario
i Coromandel < INDIAN SCENARIO
Slide 11: India's crop productivity is low by global standards
India‟s crop productivity is low by global standards - needs to increase to meet demand MT per hectare 6.8 5.9 5.0 4.9 4.5 3.7 3.2 3.3 3.1 2.6 2.2 1.9 1.9 1.6 1.6 1.1 0.9 0.9 Wheat Rice Corn Soyabean Rapeseed Peanut World China India 11
Slide 12: Irrigated Area in India has been steadily increasing
Positive factor: Irrigated Area in India has been steadily increasing Mio hectares Net cropped area Net irrigated area Net irrigated area as % of net sown area 160 50% 140 45% 45% 141 143 141 139 142 45% 40% 120 39% 35% 119 100 30% 34% 80 25% 22% 60 20% 18% 62 64 55 15% 40 48 10% 20 31 5% 21 0 0% 19
Slide 13: Cropping Intensity has also steadily increased
Positive factor: Cropping Intensity has also steadily increased Mio hectares Gross cropped area Net cropped area Cropping Intensity 250 160% 136% 140% 140% 200 130% 131% 118% 199 120% 111% 186 185 189 150 166 100% 141 143 141 139 142 80% 132 100 119 60% 40% 50 20% 0 0% 1950-51 1970-71 1990-91 2000-0
Slide 14: India's nutrient application rates will have to increase
India‟s nutrient application rates will have to increase to improve productivity Nutrient Consumption among the Asian Countries kg/ha 439 231 151 164 137 India China Srilanka Pakistan Bangladesh India‟s Nutrient consumption (Kg/Ha) is lower than countries like China (439), Bangladesh (231) and Pakis
Slide 15: Long-term demand drivers and fundamentals are strong in India
Long-term demand drivers and fundamentals are strong in India • Population growth, urbanization and resulting food demand will be primary growth drivers – Population growth – Urbanization and higher income levels – Changing dietary mix – Impact of Food Security Bill • Nutrient application rates will
Slide 16: Fertiliser Subsidy Policy
Fertiliser Subsidy Policy Phosphatics decontrolled Nutrient Based Subsidy (NBS) policy effective from April1,2010. The Salient features of NBS policy are: o Policy applicable for P&K fertilisers only and not for Urea o Subsidy is fixed based on the import prices of various nutrients adjusted for the
Slide 17: Lower subsidy component…
Lower subsidy component… 37% 40% 48% 63% 65% 65% 63% 60% 52% 37% 35% 35% Pre NBS 2010-11 2011-12 2012-13 2013-14 2014-15 Subsidy as % of total realization Farmgate price as a % of total realization 2011- YoY Rs. Cr 2012-13 2013-14 2014-15 2015-16 P 12 Growth % Imported Urea 13,716 15,133 11,538 12,1
Slide 18: Stable exchange rate….
Stable exchange rate…. 65.00 64.00 63.00 62.00 61.00 60.00 59.00 58.00
Slide 19: … resulted in Stable MRP..
… resulted in Stable MRP.. Rs per MT 24000 23800 24200 22500 22700 18200 10750 9350 9350 Prior to June June '08- Mar Mar-11 Mar-12 Oct-12 Apr-13 Apr-14 Oct-14 May-15 '08 '10 19
Slide 20: Lower imports resulted in depleting inventory and consumption revival
…which aided by lower imports resulted in depleting inventory and consumption revival… DAP + COMPLEX: PRODUCTION + IMPORT Lac MT Production -4% 224 Imports -61% Stable exchange rate and raw 159 145 material prices, combined with 142 106 good monsoon and a sharp 61 41 decline in imports led to 37 red
Slide 21: Urea Demand has remained stable due to high levels of subsidy
….Urea Demand has remained stable due to high levels of subsidy… UREA SUPPLY & DEMAND Lac MT 298 306 298 313 302 304 309 295 78 80 71 87 220 226 227 226 2011-12 2012-13 2013-14 2014-15 2011-12 2012-13 2013-14 2014-15 Production Import Sale Lac MT MOP SUPPLY & DEMAND 75% 33% 40 42 30 28 32 22 21 24 2
Slide 22: Negatively impacted N-P-K application ratios
…and negatively impacted N-P-K application ratios in recent years 0 2 4 6 8 10 12 14 2013 7.7 3 1 2012 6.9 3.1 1 2011 4.3 2 1 2000 6.9 2.96 1 1994 8.9 2.7 1 1990 6.3 2.6 1 1980 5.8 1.9 1 N P K 22
Slide 23: Company Profile
IZ Coromandel «< COMPANY PROFILE a murugappa 59
Slide 24: Coromandel - Snapshot
Coromandel - Snapshot Rs. Cr. 12,000 1,200 1,056 1,054 Revenue EBITDA Reported 10,000 768 1,000 853 805 8,000 769 800 6,000 600 11,306 10,053 9,034 7,637 4,000 400 6,453 9,901 2,000 200 - - 09-10 10-11 11-12 12-13 13-14 14-15 Key Facts : Turnover: Rs.11,306 Cr Market Cap: Rs. 7000 Cr Strong cr
Slide 25: Business Structure
Business Structure DAP Sales EBITDA Phosphatic Fertilisers Complex Fertilisers 82% /SSP/MOP 64% Specialty G-Sulphur Nutrients & Water Soluble Organic Fertilisers fert Organic Manure Coromandel Technicals 18% 36% Crop Formulations Protection Agri Inputs Retail Agri Services Non subsidy EBITDA share h
Slide 26: Growth through acquisitions and JVs
Growth through acquisitions and JVs 2003 2004 2006 & 2008 2009 & 2011 2013 2014 2007 2010 Complex Demerge GFCL Fertilizers d fert. Acq Biz from 1.5 EID MM Parry tons SSP Liberty Group 1MM ton SSP Capacity Crop FICOM Acq of Sabero Protection Acq Jammu Acq unit Others / JVs BAA TIFERT JV with APGPCL J
Slide 27: Key Strengths
Key Strengths Farm Inputs Business Fertilisers Non Subsidy Businesses Sourcing Cost Marketing Leadership Strength • Specialty Nutrients/ Water Strategic Alliances in • Low cost • Wider reach and Soluble Sourcing – manufacturer of penetration Fertilisers/Micro • Long Term tie-up with Phos acid - Visa
Slide 28: Coromandel's Fertilisers Business
Coromandel‟s Fertilisers Business 28
Slide 29: Coromandel Fertiliser Business Growth Story
Coromandel Fertiliser Business Growth Story C Train Expansion LIBERTY SSP acquisition 50 Lac Mt 29
Slide 30: Global Strategic Alliances
Global Strategic Alliances Alliances for Key raw materials Coromandel holds 15% stake in TIFERT – JV for Phos acid venture in Tunisia with GCT Pact with QAFCO for MOP supply of Urea and Ammonia Potash- Canada Ammonia and Sulphur Mitsui, Japan Rock Phosphate Israel , Togo FMS JV with Yanmar & co. Alg
Slide 31: State of The Art Manufacturing Facilities
State of The Art Manufacturing Facilities • Plants are strategically located in highly • High capacity utilisation levels & irrigated southern Indian states and in continuous modernisation of facilities heart of fertilizer consumption market – • Backward integration into low freight cost manufacturi
Slide 32: Cost Leadership
Cost Leadership Visak Production (Lac Mt) Visak Plant Captive Phos Acid 10.5 • Continuous de-bottle necking to increase production levels 9.8 9.1 9.2 • Value gap - imported Vs own acid 8.6 • Increased Gypsum generation 7.0 7.4 7.0 • Use of various sources /grades of rocks • New belt filter technolog
Slide 33: Marketing Network
Marketing Network Higher complex fertilizer Target Markets consumption in core markets Tertiary Market Industry Size: 3.4 Million MT Coromandel’s Target: 0.25 Million MT 375 Percentage Share: 7% 250 Kg /ha 250 100 150 200 250 110 100 100 Bihar MP AP TN KN Secondary DAP Complex Market Industry Size:
Slide 34: Specialty Nutrient Business
Specialty Nutrient Business 34
Slide 35: Speciality Nutrients Division (SND)
SPECIALITY NUTRIENTS DIVISION (SND) G-SULPHUR Micronutrients WSF GROMOR SULPHUR GROMOR SPRAY Boron Sulphozinc Zinc GROMOR POWER Mixtures 35
Slide 36: Sulphur and WSF Business
Sulphur and WSF Business 2003-05 2006-13 2013 -> Crop and Soil Specific Approach Business Launch Portfolio Expansion with a dedicated filed team WSF Cotton G Sulphur Folibor Citrus Zinc SQM JV Banana 36
Slide 37: SND Strategy
SND Strategy Continuous innovation to introduce customized products suitable to soil, region and crop requirements - Improve nutrient use efficiency Leverage SQM to bring global best practices in crop nutrition management Independent & specialized marketing teams to bring crop focus- Developin
Slide 38: SND & Organic Fertiliser Business
SND & Organic Fertiliser Business Sulfur Products Market Share Micronised sulphur variant launched Sulphur products WSF Continues to be the market leader despite adverse market conditions 16% 33% WSF Expanded umbrella branding approach for SND products 77% 84% New crop specific grades introd
Slide 39: Crop Protection Business
Crop Protection Business Coromandel “A
Slide 40: Crop Protection business - Coromandel
Crop Protection business - Coromandel • Wider range of Technicals 2015 • Increased Global presence and 2011 Sabero registration Merger 2010 completed Sabero • Strong distribution with own retail Acquisition Acquired Pasura outlets Bio Tech – 2009 Jammu Unit II 2006 Expansion to Latin America Acquisi
Slide 41: Crop Protection Strategy
Crop Protection Strategy Increase R&D focus – Starting R&D center for crop protection business in Hyderabad Improving souring efficiency and generate market information through China office Expand business in LATAM, Africa and APAC by leveraging strong registration portfolio Focus on Export
Slide 42: Initiatives
Initiatives Operational Initiatives Jammu • Expansion of technical plant capacity at Ankleshwar • Branding focus through “Gromor Suraksha” • Focusing on high margin super specialities • Leveraging on retail network in AP & Accelerated growth plan in all states Strategic Initiatives • Co-Marketing wi
Slide 43: Mana Gromor Centers (MGCs) - Retail
Mana Gromor Centers (MGCs) - Retail 43
Slide 44: Retail Strategy
Retail Strategy Positioning Retail as a complete “Farming Solutions” platform Constantly deliver significantly improved customer value proposition than competition in terms of products & services Leverage farm implements knowledge of Yanmar to expand operations Increasing business efficienci
Slide 45: Retail Business Overview
Retail Business Overview • 600 centers in Andhra Pradesh and 200 centers in Karnataka- servicing more than 2 million farmers Products & Service Offerings Veterinary Other Crop Fertilisers Seeds SND FMS Agri Protection Feed Services Providing “One Stop Solution” to the Indian Farmers 45
Slide 46: Financial Performance
Financial Performance Coromandel
Slide 47: Consolidated Financial Performance
Consolidated Financial Performance Turnover ( Rs. Cr) EBIDTA (Rs. Cr) & EBIDTA % EBITDA before PY Subsidy PY subsidy EBITDA % - operating 11,306 1,200 12.0% 9,901 10,053 11.2% 109 9,034 1,000 46 10.2% 7.5% 10.0% 7.4% 7.7% 7,637 8.2% 800 35 8.0% 6,453 600 227 6.0% 1,008 400 829 853 4.0% 770 659 507 2
Slide 48: Income Statement - Consolidated
Income Statement - Consolidated Amount in Rs. Cr FY2010 FY2011 FY2012 FY2013 FY 2014 FY 2015 Revenue before PY subsidy 6,191 7,410 9,855 8,925 10,018 11,306 12.86% YoY (Growth) -34.29% 19.69% 33.00% -9.44% 12.25% EBITDA before PY Subsidy 507 829 1,008 659 770 853 EBITDA % 8.19% 11.18% 10.23% 7.38% 7
Slide 49: Balance Sheet- Consolidated
Balance Sheet- Consolidated Amount in Rs. Cr FY2010 FY2011 FY2012 FY2013 FY 2014 FY 2015 Equity 1,502 1,957 2,416 2,303 2,307 2,202 Debt and Other LT liabilities 2,047 1,664 2,977 2,976 1,873 2,318 Deferred Tax Liability 86 82 67 188 189 188 Sources of Funds 3,634 3,702 5,461 5,466 4,369 4,707 Non C
Slide 50: Thank You
THANK YOU 2% murugappa IZ Coromandel «< 50
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