Slide 1: Investor Meet April 2008
Investor Meet April 2008 “Indian company …..Global Footprint” Footprint”
Slide 2: Safe Harbor
Safe Harbor Certain statements in this presentation concerning our future growth prospects are forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and un
Slide 3: Essel Propack today
Essel Propack today….. • USD 295 million company-doubled over last 4 years • Global leader in laminate tubes – estimated 32% market share, • Presence in all continents-trade blocs • Top global MNCs among key customers • Acknowledged Technical capability in the field • Diversified Business-Tubes, Spe
Slide 4: The Weaving Fabric
The Weaving Fabric • Knowledge of Polymers and Polymer Processing, Lamination Technology, Barrier Properties • OEM model • Quality Processes and Innovation • Capability to Scale up Business • Leveraging Relationships • Global Customer Base Combining the synergies and moving up the value chain
Slide 5: Global Footprint
Global Footprint Russia England Poland Danville China Germany Mexico Philippines Egypt Colombia India Singapore Indonesia 13 countries 25 Factories $ 295 Mn in Sales Medical Devices Laminate Tubes 2700 employees Plastic tubes Specialty. Packaging Presence across the Globe
Slide 6: Our Core Values
Our Core Values • The building blocks of our organisation culture: Customer Care Commitment to Excellence Integrity Team work and Involvement Mutual Trust and Respect Safety Close to Our Heart
Slide 7: EP … Three Revenue Streams
EP … Three Revenue Streams Tubes Specialty Packaging Medical Devices
Slide 8: Tubes
a é , = ae | vr \ ESSEL PROPACK
Slide 9: Products & Regional Presence
Products & Regional Presence Laminated & Seamless tubes Geographic Presence AMESA • Foil based and Foil-less barriers Europe 38% 18% • Diameter range – 16mm to 50mm • Orifice range 1.5mm – 8.5mm • Caps range – Flower Pot, Stand- America EAP up, Flip Top & custom designed 17% s • Printing capabilitie
Slide 10: Our Customers – Who's Who
Our Customers — Who’s Who GROUP U) Novartis iN LOREAL Suafee ASDA & — Procter&Gamble “— >¢smith&nephew €p COLGATE-PALMOLIVE COMPANY Bs TESCO eer SPENCER Unewer . REVLON — oriflame ei uP ESSEL PROPACK
Slide 11: Growth Drivers
Growth Drivers • Economic growth and retail boom in India and China • Continued need/trend for Brands to differentiate through innovative packaging – Tube is seen as a very consumer friendly package by most brand owners • Intense market activity in FMCG sectors everywhere – Introduction of new diffe
Slide 12: Tubes for varied applications with different look-n-feel
Essel Propack Mfg Model Tubes for varied applications with different look-n-feel and different Tubes Laminate Different Types of Polymers (Laminated) Manufacturing Manufacturing types of caps Caps Manufacturing Tubes (Plastic) Manufacturing
Slide 13: Strategic Direction
Strategic Direction Characteristic Oral Care Non-Oral Care Production Run Size High Low Annual Volume per SKU High Low Decorations and aesthetics Medium High, V. High Buyer Industry Consolidation Level (impact on High Low margin) Business margin for Essel Propack Medium High Market consolidation in
Slide 14: SWOT Analysis
SWOT Analysis Opportunities • Underlying economic growth in key markets (including India) and target segments (cosmetics) • Market demand for sustainable packaging Strengths • Global presence and relationships Weakness with large MNC customers • Dependence on oral care business • Market leadership i
Slide 15: Achievements in 2007
Achievements in 2007 • Sustained long-term business relationship with all major customers – Significant new business wins – #1 with 32% market share in laminated tubes • Growing portfolio of smaller local customers in various markets • New product developments – Large diameter tubes with high decora
Slide 16: Key Targets in 2008
Key Targets in 2008 • Exploit newly established capabilities/investments – Cosmetics segment in US and Europe – Pharma in China – Differentiated product offering in India • Grow presence in non-oral care segments – Leverage existing relationships with large customers – New customers in new market se
Slide 17: Challenges in the US & Poland
Challenges in the US & Poland • US Update – Stabilization of Unit #2 in the US continues – We have won a prestigious and key customer already – Learning new product qualification criteria • Poland Update – Moved production assets from UK to Poland. Added significant more capacity for Europe market –
Slide 18: Etain – Join The Cycle
Etain – Join The Cycle • Manufactured using minimum 40% Post Consumer Recycled plastic • Offered currently in Plastic tubes starting from USA • Qualified for use in personal care products • PCR is used in outer and middle layers with virgin inner layer.
Slide 19: Going Forward…
Going Forward… • Essel Propack has had an eventful 25 years journey. – It is a global leader in laminated tubes – It has a high quality and enviable customer base – It has built strong brand equity among its customer base and chosen markets • Essel Propack is expanding its target market to cosmetics
Slide 20: Medical Devices
Medical Devices aP ESSEL PROPACK
Slide 21: Medical Device Market- Snap shot
Medical Device Market- Snap shot • Largest and fastest growing segments of the medical device industry- cardiology and minimally invasive surgery – World market size – USD 25.1 billion * – OEM size of the market - USD 2.4 billion * – Growth rate 11.6% annually * • Growth Drivers – Ageing population
Slide 22: Medical Device- Strategy Roadmap
Medical Device- Strategy Roadmap Tacpro Target Design Engg., Rapid Catheter component prototyping, Custom manufacturing New manufacturing- Product Peripheral catheter Avalon Manufacturing transfer Tacpro Design Engg., Rapid CDT prototyping, Custom Design Engg. Existing manufacturing- Custom Product
Slide 23: Company Overview
Company Overview • Tacpro Inc. Located in heart of Silicon Valley is the first full- service provider of catheters and delivery systems • CDT-located in Minneapolis, focuses on cardiac and peripherals segments • Trained Staff with expertise to convert ideas into medical device solutions. • U.S. oper
Slide 24: Product Portfolio
Product Portfolio From components to finished product…
Slide 25: Services & Capabilities
Services & Capabilities Concept Feasibility Design Design Process Manufacturing Development Stage Stage Verification Development Transfer • Specialize in all areas of catheter-based devices and components • One-Stop-Shop from concept to high volume manufacturing • Custom design and develop product a
Slide 26: Key Business Drivers
KEY BUSINESS DRIVERS • Strong Customer Relationship- Supplier embedded in FDA approval process • Grow Sales Organically- New Product Introduction, speed to market • Diversification of Customer and Product base-with increased geographical reach • Leverage on existing Technical and Labor base • Ramp u
Slide 27: Major Achievements-2007
Major Achievements-2007 • Continued with effective reduction of dependence on Top 5 customers : (2006 - 74%; 2007 - 65%) • Got Tacpro facility as ISO-13485 certified for design control in catheters • Completion of Singapore facility in 2007. • Shifting of Product line from USA to Singapore • Long te
Slide 28: Challenges - 2008
CHALLENGES - 2008 • Turn current development projects into manufacturing contracts in 2008-there are several customers with whom the Tacpro is in advanced stage of the development cycle • Continue efforts to diversify customer and product base • Singapore facility provides a flag-ship site for curre
Slide 29: Specialty Packaging
= i Specialty Packaging GP ESSEL PROPACK
Slide 30: Indian Flexible Laminate Market
Indian Flexible Laminate Market • Total Flexible Packaging Market ~ 2,300,000 MT • Comprising 3 broad packaging types Woven Sacks • 200 flexible packaging converters in India 35% Specialty Laminate • Flexible laminate organized Sector India market ( 26% 600,000 Tons ) Films - Co- – Organized Nationa
Slide 31: Indian Flexible Laminate Market- Statistics
Indian Flexible Laminate Market- Statistic 874,503 813288 900,000 HOME & STAPLES 603,407 PERSONAL CARE 6% 29% CONFEC 8% 600,000 500,000 BISCUITS 465000 MT 345,000 FOOD 8% SNACKS 42% 8% 300,000 TEA 3% 2008 Ch Tobacco OTHR FD 0 11% 27% Lam. 2006 Films Woven Breakup of Indian Flexible Key Segment in La
Slide 32: Company Overview
Company Overview • Fourth largest player in specialty packaging business • Diversified blue chip customer base – Food & FMCG • State-of-the-art technology, unmatched product development expertise • Process • Blown Film • Printing • Lamination • Slitting / Rewinding • Pouching Presence in Key Domesti
Slide 33: Specialty Packaging-Strategy Roadmap
Specialty Packaging-Strategy Roadmap • Leverage global footprint • Build on Plastics Processing competency • Retail boom in the Foods industry to generate demand for convenience packaging • Indian Pharma going up the value chain – bulk to generic to formulations • Capitalize on opportunity for India
Slide 34: Major Achievements-2007
Major Achievements-2007 • Retained major supplier status with key customers • Got entry in Hygiene & Personal care business of leading MNC • Capacity added with greater geographic reach - Uttarakhand Plant commercialized Sept 07 • Backward integration started with in-house Cylinder plant Project kic
Slide 35: Challenges - 2008
CHALLENGES - 2008 • Introduce products in the higher value segment • Tap into the organized retail sector • Retain Key Customers • Start focusing on the Export Market • Leverage on EPL’s relationship for acquiring new customers • Improve Operating Margins • Stabilize Uttrakhand plant and achieve pre
Slide 36: Financial
Financial Year 2007 in retrospect
Slide 37: Key Financials
Key Financials Rs. in Million Act 07 Act 06 Inc / (Dec) Sales 11938 10092 18.3% EBITDA 2113 2401 -12.0% PAT (after exceptionals) 608 985 -38.0% EPS (Rs) bef exceptionals 4.27 6.29 % Sales EBITDA 17.7% 23.8% PAT 5.1% 9.8%
Slide 38: Sales Growth Analysis
Sales Growth Analysis Rs. in Million Regions Act 07 Growth AMESA 4547 33.6% EAP 1980 -3.6% AMERICAS 3249 19.2% EUROPE 2162 13.3% TOTAL 11938 18.3% • Strong double digit growth sustained in three regions • EAP made up the lapse of a long term contract and grew on underlying basis
Slide 39: Sales Growth Analysis
Sales Growth Analysis Act 2007 Tubes 15.0 % Specialty laminates ** 10.4 % Medical devices ** 5.7% • The flagship Tube business continues to grow strongly • The newly acquired Specialty laminates and the Medical devices performed to expectation in line with EP’s long term strategy • ** annualised gro
Slide 40: EBITDA Variance
EBITDA Variance Act 07 Act 06 Inc / (Dec) EBITDA % Sales 17.7% 23.8% -6.1% Gross margin % 55.4% 59.9% -4.5% sales Operating costs % 37.7% 36.1% -1.6% sales
Slide 41: Gross Margin
Gross Margin • Impacted by – One-off product development costs/ process stabilisation costs in US and Poland – Frequent change overs to meet the demands of CRS introduced by customers in the US – Lag in passing through of raw material price escalations
Slide 42: Operating Costs
Operating Costs • Impacted by – Interim measures to step up OTIF in the US, involving higher spend in plant fine-tuning, job work, increased personnel cost – Double establishment for part of the year to transition plastic tube manufacture from UK to Poland – Increases in power costs – Capacity costs
Slide 43: Interest Cost
Interest Cost Rupees in Mn Act 07 Act 06 Gross interest 674 357 Borrowings (y/e) 7077 5223 Capital expenditure 2503 977 • Interest cost increase Rs 317 mn over last year on account of • Increased borrowing Rs 1854 Mn as part of financing capex, mainly Poland, Uttarkhand and creating tubing/printing
Slide 44: To Sum Up
To Sum Up • Performance during 2007 was impacted by – Ramping up issues with plastic tubes in the new facilities in US/ Poland – New capability development in laminate tubes in US – Cost of Interim response to sustaining OTIF in the US – One-off restructuring cost in Europe – Rs 71 mn – High capital
Slide 45: Results: March Quarter 2008
Results: March Quarter 2008 ‘oP ESSEL PROPACK
Slide 46: Results: March Quarter (2008)
Results: March Quarter(2008) Rupees in Mn MQ 2008 MQ 2007 Net sales 2829 2825 Other income 36 Total income 2829 2861 Raw material cost 1271 1265 Employee cost 569 500 Depreciation 233 234 Other expenses 520 515 Interest 129 88 Exceptional items PBT 107 259 PAT 45 195 Gross margin % 55.1% 55.2% EBITD
Slide 47: Results Analysis
Results Analysis • Sales: – Sales growth appears flat on account of Rupee appreciation during this period – Plastic tube capacity ramping up in US and Poland did not happen to the extent planned • EBITDA – Lower by 2.4 pp vs last year due to higher personnel cost – Shows an improving trend over DQ 0
Slide 48: Next Few Months…
Next Few Months….. • Get Poland up and running • Reduce time lag in raw material costs pass-thru • Sweat the assets – leverage on the investment made during 2007 in USA, Europe & India • New product offerings – continued innovation • Pursue the inorganic growth strategy for customer and product acqu
Slide 49: Thank you Your Questions are Welcome
Thank you Your Questions are Welcome