Coromandel International Limited · NSE:COROMANDEL
Coromandel International — Investor Presentation (November 2014)
51 slides from Coromandel International's investor presentation, November 2014
Slide 1: Investor Presentation November 2014
Investor Presentation November, 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
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 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 21 5% 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 / 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: Stable exchange rate
Stable exchange rate…. 63.00 62.50 62.00 61.50 61.00 60.50 60.00 59.50 59.00 58.50 58.00 2-Apr-14 2-May-14 2-Jun-14 2-Jul-14 2-Aug-14 2-Sep-14 2-Oct-14 2-Nov-14
Slide 19: Resulted in Stable MRP
… resulted in Stable MRP.. Rs per MT 24000 23800 22500 22700 18200 10750 9350 9350 Prior to June '08 June '08- Mar '10 Mar-11 Mar-12 Oct-12 Apr-13 Apr-14 Oct-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% 224 Imports -65% Stable exchange rate and raw 159 material prices, combined with 142 106 good monsoon and a sharp 61 73 decline in imports led to 37 reduct
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 298 306 298 Lac MT 78 80 71 295 302 304 145 30 220 226 227 140 115 2011-12 2012-13 2013-14 2014-15 H1 2011-12 2012-13 2013-14 2014-15 H1 Production Import Sale MOP SUPPLY & DEMAND Lac MT -20% -28% 40 30 32 22 21 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
COMPANY PROFILE ae i, Coromandel = 23
Slide 24: Coromandel - Snapshot
Coromandel - Snapshot Rs. Cr. 1,056 1,054 768 769 805 469 < 9,901 10,053 9,034 7,637 6,453 5347 09-10 10-11 11-12 12-13 13-14 14-15 H1 Revenue EBITDA Key Facts : Turnover: Rs.10,053 Cr Market Cap: Rs. 9,250 Cr Strong credit rating: ‘AA +’ (Stable outlook)’ with CRISIL India Employees: 2712 Internati
Slide 25: 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 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 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 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- Developing mark
Slide 38: 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 39: Crop Protection Business
IZ Coromandel = ; | Business tection Crop Pro
Slide 40: 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 41: Crop Protection Strategy
Crop Protection Strategy Increased R&D focus – Starting 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 combined e
Slide 42: Update on Sabero
Update on Sabero H1 (Rs. Cr) 10-11 11-12 12-13 13-14 14-15 Turnover 413 358 515 724 490 EBITDA (before E/O Items) 41 (6) 53 77 53 E/O Items (2) (28) (2) - - EBITDA Reported 39 34 51 77 53 PBT 17 (77) 8 34 34 PAT 11 (64) 8 32 21 H1 % of TO 10-11 11-12 12-13 13-14 14-15 Domestic 45% 48% 41% 38% 42% Ex
Slide 43: 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 44: Mana Gromor Centers (MGCs) - Retail
Mana Gromor Centers (MGCs) - Retail 44
Slide 45: 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 46: 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 46
Slide 47: Financial Performance
Financial Performance Coromanniei
Slide 48: Consolidated Financial Performance
Consolidated Financial Performance Turnover ( Rs. Cr) EBIDTA (Rs. Cr) & EBIDTA % EBITDA before PY Subsidy PY Subsidy EBITDA % - operating 9,901 10,053 11.2% 9,034 10.2% 7,637 46 8.8% 6,453 227 7.7% 7.4% 5347 109 35 1,008 - 829 770 659 469 09-10 10-11 11-12 12-13 13-14 14-15 H1 10-11 11-12 12-13 13-1
Slide 49: Income Statement - Consolidated
Income Statement - Consolidated Amount in Rs. Cr FY2010 FY2011 FY2012 FY2013 FY 2014 FY 2015 H1 Revenue before PY subsidy 6,191 7,410 9,855 8,925 10,018 5347 YoY (Growth) -34.29% 19.69% 33.00% -9.44% 12.25% EBITDA before PY Subsidy 507 829 1,008 659 770 469 EBITDA % 8.19% 11.18% 10.23% 7.38% 7.69% 8
Slide 50: H1 Results update
H1 Results update Consolidated results – Rs. Cr H1 2014-15 H1 2013-14 Turnover 5347 5113 EBITDA 469 407 PBT 326 251 PAT 212 182 Stand alone Volumes – H1 ( Lac MT) H1 2014-15 H1 2013-14 Production – Phosphatics 10.95 11.32 Sales – (Manf + Imported complex + MOP) 13.07 12.25 50
Slide 51: Thank You
THANK YOU ae i, Coromandel = 51
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