Coromandel International Limited · NSE:COROMANDEL
Coromandel International — Investor Presentation (June 2014)
52 slides from Coromandel International's investor presentation, June 2014
Slide 1: Investor Presentation June 2014
Investor Presentation June , 2014 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
i, Coromandel = GLOBAL SCENARIO ae
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 29 Million “N” Market is 108 Million MT MT "P" World Market Global Fertiliser Industry: India and China account for 40% of gl
Slide 8: Global Nutrient Consumption Outlook
Global Nutrient Consumption Outlook Million tons Nutrient 116 108 109 2012-2017 CAGR N 1.2% 45 P2O5 1.6% 41 41 33 29 29 K2O 2.2% 2012 2013e 2017f N P2O5 K2O Source: IFA
Slide 9: DAP – Global Production & Trade
DAP – Global Production & Trade 10 year CAGR Production 2.9% MM tons Exports 1.6% 35 33 33 31 26 16 15 14 14 10 2008 2009 2010 2011 2012 Production Trade Global production & trade of DAP have increased China, Saudi Arabia & Morocco account for all production increases 9
Slide 10: Indian Scenario
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 6.6 MT per hectare 5.5 5.1 4.7 4.3 3.3 3.3 3.1 2.8 2.3 2.2 1.9 1.9 1.6 1.6 1.1 0.9 0.9 Wheat Rice Corn Soybean 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 000’ 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 21 5% 0 0% 1
Slide 13: Cropping Intensity has also steadily increased
Positive factor: Cropping Intensity has also steadily increased 000’ 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-
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 / Hectare 450 396 400 350 300 250 204 200 184 166 138 150 100 50 0 India Srilanka Bangladesh Pakistan China India’s Nutrient consumption (Kg/Ha) is lower than countries
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… Subsidy as percentage of Total Realization Farmgate as percentage of Total Realization 37% 35% 52% 63% 60% 63% 65% 48% 37% 40% Pre NBS 2010-11 2011-12 2012-13 2013-14 YoY Rs. Cr 11-12 12-13 13-14 14-15 Growth % Imported (Urea) fertilisers 13,883 13,398 15,544 12,300 (20.87)%
Slide 18: …and stable rupee…
…and stable rupee… USDINR INR has been in a stable range of 59- 62 over last 6 months and has been on an appreciation trend since March 63 62 61 60 59 58 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 18
Slide 19: …resulted in Stable MRP
… resulted in Stable MRP.. Rs per MT 24,000 22,500 22,700 18,200 10,750 9,350 9,350 Prior to June June 2008-Mar 10 Mar-11 Mar-12 Oct-12 Apr-13 Apr-14 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 -11% Imports -65% 224 Stable exchange rate and raw 159 material prices, combined with 142 106 good monsoon and a sharp 61 37 decline in imports led to reduction
Slide 21: Urea Demand has remained stable due to high subsidy
….Urea Demand has remained stable due to high levels of subsidy … UREA SUPPLY & DEMAND Lac MT 298 306 298 78 80 71 295 302 304 220 226 227 2011-12 2012-13 2013-14 2011-12 2012-13 2013-14 Production Import Sale MOP SUPPLY & DEMAND Lac MT -20% -28% 170 40 32 24 30 21 22 2011-12 2012-13 2013-14 2011-12
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: Current market Update
Current market Update 2013-14 Indian food grain output estimated at 263 million tons MSPs for all key crops continue to remain high • Reservoir storage levels are good - 57 out of 85 reservoirs with storage more than last 10 years average • IMD forecast for SW monsoon – expected to be 95% of LPA due
Slide 24: Company Profile
COMPANY PROFILE ae i, Coromandel = 24
Slide 25: Coromandel - Snapshot
Coromandel - Snapshot Rs. Cr. 12,000 1,200 1,054 Revenue EBITDA Reported 10,000 1,000 769 1,056 8,000 800 768 805 6,000 600 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 Key Facts : Turnover: Rs.10,053 Cr Market Cap: Rs. 6350 Cr Strong credit rating: ‘AA +’ (St
Slide 26: Business Structure
Business Structure DAP Sales EBITDA Phosphatic Fertilisers Complex Fertilisers /SSP/MOP 80% 64% Specialty G-Sulphur Nutrients & Water Soluble Organic Fertilisers fert Organic Manure Coromandel Technicals 20% 36% Crop Formulations Protection Agri Inputs Retail Agri Services Non subsidy EBITDA share h
Slide 27: 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 28: 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 29: Coromandel's Fertilisers Business
Coromandel’s Fertilisers Business 29
Slide 30: Coromandel Fertiliser Business Growth Story
Coromandel Fertiliser Business Growth Story C Train Expansion LIBERTY SSP acquisition 50 Lac Mt 30
Slide 31: Global Strategic Alliances
Global Strategic Alliances Pact with QAFCO for supply of Urea and Ammonia JV with Yanmar& co.Mitsui & Co Japan 31
Slide 32: 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 33: Cost Leadership
Cost Leadership Visak Production (Lac Mt) Visak Plant 12.0 Captive Phos Acid 10.5 10.0 9.8 10.0 9.4 9.1 • Continuous de-bottle necking to increase production levels 8.6 • Value gap - imported Vs own acid 8.0 7.0 7.4 7.0 • Increased Gypsum generation 6.0 • Use of various sources /grades of rocks • Ne
Slide 34: 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 35: Specialty Nutrient Business
Specialty Nutrient Business 35
Slide 36: Speciality Nutrients Division (SND)
SPECIALITY NUTRIENTS DIVISION (SND) G-SULPHUR Micronutrients WSF GROMOR SULPHUR GROMOR SPRAY Boron Sulphozinc Zinc GROMOR POWER Mixtures 36
Slide 37: 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 37
Slide 38: SND Strategy
SND Strategy • Provide value-added services and relevant crop technologies • Customer lock-in with the superior benefit-cost ratio • Continuous innovation to introduce customized products suitable to soil, region and crop requirements - promotion around Complete Nutrition Package • Leverage SQM to b
Slide 39: SND & Organic Fertiliser Business
SND & Organic Fertiliser Business Sulfur Products Market Share Strong growth in Sulfur products in FY14 Sulphur products WSF Continues to be the market leader despite adverse market conditions 16% 33% WSF Both WSF and Sulfur markets continue to show accelerated 77% 84% growth and their markets are e
Slide 40: Crop Protection Business
IZ Coromandel = ; | Business tection Crop Pro
Slide 41: Crop Protection business - Coromandel
Crop Protection business - Coromandel • Wider range of Technicals 2011 • Increased Global presence and registration 2010 Sabero Acquisition • Strong distribution with own retail Acquired Pasura Bio outlets 2009 Tech – Jammu Unit II 2006 Expansion to Latin America Acquisition of FICOM and setting 199
Slide 42: Crop Protection Strategy
Crop Protection Strategy Increased R&D focus – plan to start a R&D center for crop protection business in Hyderabad Gromor Suraksha – Umbrella brand for CPC launched and well accepted by farmers Expand business in LATAM, Africa and APAC by leveraging strong registration portfolio - 45% growth in com
Slide 43: Update on Sabero
Update on Sabero (Rs. Cr) 10-11 11-12 12-13 13-14 Turnover 413 358 515 724 EBITDA (before E/O Items) 41 (6) 53 77 E/O Items (2) (28) (2) - EBITDA Reported 39 34 51 77 PBT 17 (77) 8 34 PAT 11 (64) 8 32 % of TO 10-11 11-12 12-13 13-14 Domestic 45% 48% 41% 38% Exports 55% 52% 59% 62% • Increased produc
Slide 44: Initiatives
Initiatives Operational Initiatives Jammu • Expansion of technical plant capacity at Ankleshwar • Export to more countries & increase the reach • Focusing on high margin super specialities • Leveraging on retail network in AP & Accelerated growth plan in all states Strategic Initiatives • Acquired S
Slide 45: Mana Gromor Centers (MGCs) - Retail
Mana Gromor Centers (MGCs) - Retail 45
Slide 46: 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 Expand connect with farmers and provide technical advise based on proven scientific practices Ring-fence
Slide 47: 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 47
Slide 48: Financial Performance
Financial Performance Coromanniei
Slide 49: Consolidated Financial Performance
Consolidated Financial Performance Turnover ( Rs. Cr) EBIDTA (Rs. Cr) & EBIDTA % PY subsidy EBITDA before PY Subsidy EBITDA % - operating 9,901 10,053 1,200 12.0% 9,034 46 1,000 10.0% 7,637 227 11.2% 7.7% 6,453 8.2% 109 35 800 8.0% 10.2% 600 262 6.0% 1,008 7.4% 400 829 770 4.0% 659 507 200 2.0% - 0.
Slide 50: Income Statement - Consolidated
Income Statement - Consolidated Amount in Rs. Cr FY2010 FY2011 FY2012 FY2013 FY 2014 Revenue before PY subsidy 6,191 7,410 9,855 8,925 10,018 YoY (Growth) -34.29% 19.69% 33.00% -9.44% 12.25% EBITDA before PY Subsidy 507 829 1,008 659 770 EBITDA % 8.19% 11.18% 10.23% 7.38% 7.69% PY Subsidy 262 227 46
Slide 51: Balance sheet - Consolidated
Balance sheet - Consolidated Amount in Rs. Cr FY2010 FY2011 FY2012 FY2013 FY 2014 Equity 1,502 1,957 2,416 2,303 2,307 Debt & Other LT liabilities 2,047 1,664 2,977 2,976 1,873 Deferred Tax Liability 86 82 67 188 189 Sources of Funds 3,634 3,702 5,461 5,466 4,369 NFA 958 1,143 1,823 2,276 1,808 Inve
Slide 52: Thank You
THANK YOU ae i, Coromandel = 52
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