Parag Milk Foods Ltd. · NSE:PARAGMILK
Parag Milk Foods — Q4 FY2019 Earnings Presentation
49 slides from Parag Milk Foods's earnings presentation, May 11, 2019
Slide 1: Parag Milk Foods Limited Investor Presentation
PARAG MILK FOODS LIMITED Investor Presentation May 2019
Slide 2: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Parag Milk Foods Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any secu
Slide 3: Contents
Contents 1 Q4 & FY19 Financials & Key 5 Industry Dynamics Developments 2 Our Journey so far… 6 Vision 2020 3 Integrated Business Model 7 Financial Highlights 4 Our Growth Strategy 8 Annexures 3
Slide 4: Q4 & FY19 Financials & Key Developments
Q4 & FY19 Financials & Key Developments 4
Slide 5: Consolidated Financial Analysis – FY19
Consolidated Financial Analysis – FY19 Revenue (Rs. Mn) EBITDA (Rs. Mn) Product wise Revenue Break-up (Rs. Mn) +22.6% +15.6% 23,957 2,235 19,545 23,957 19,545 1,933 2,519 3,416 (12.9%) (14.3%) 36% 3,892 4,241 (19.9%) (17.7%) 9% FY18 FY19 FY18 FY19 PAT (Rs. Mn) Margins (%) 12,818 24% 15,846 (65.6%) (
Slide 6: Key Highlights
Key Highlights Revenue • Consolidated Revenue from Operations for FY19 reported a growth of 22.6% YoY to Rs. 23,957 million as compared to Rs. 19,545 million in FY18. • Growth was driven by an increase in revenue from Milk Products by 23.6% YoY to Rs. 15,846 million. Gross Profit • Gross Profit for
Slide 7: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars Q4 FY19 Q4 FY18 YoY Q3 FY19 QoQ FY19 FY18 YoY Revenue from Operations 6,721.5 5,178.4 29.8% 6,006.0 11.9% 23,957 19,545 22.6% Raw Material Costs 4,731.2 3,522.8 4,048.8 16,573.6 13,678.9 GROSS PROFIT 1,990 1,656 20.2% 1,957.3 1.7% 7,383.0 5,866.2 25.9
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars Mar-19 Mar-18 Particulars Mar-19 Mar-18 ASSETS EQUITY AND LIABILITIES Non-current assets Equity Property, plant and equipment 4,023.4 3,922.7 Equity Share capital 839.4 838.9 Capital work-in-progress 290.3 204.0 Other equity 7,432.0 6,282.8 Other intangible ass
Slide 9: New Product Launch - Avvatar Absolute Isorich
New Product Launch - Avvatar Absolute Isorich Sport Nutrition Market Size – Rs. 1,400 – 1,600 Crs Growing at more than 25% CAGR Strengthens our Health and Nutrition Portfolio Product Features – 100% Whey Protein Isolate that gets Delivering 29g protein per scoop – rapidly absorbed in your digestive
Slide 10: New Product Launch – Gowardhan SWARNA Ghee
New Product Launch – Gowardhan SWARNA Ghee South region is the largest market of Ghee Consumption in India followed by North India Will help to penetrate further in the Southern Market i.e. Karnataka, AP, Tamil Nadu, Kerala & Telangana Strengthens our Value Added Product Portfolio Product Features –
Slide 11: Other Key Updates of the Quarter
Other Key Updates of the Quarter Launched New Products - Gulab Jamun & Rasgulla Pride Of Cows introduced in Delhi / NCR Market Features : Features : ✓ Ready-to-Eat Indian desserts ✓ Milk will be transported via Air from the Pune Farm to Delhi ✓ Made from pure cow ghee and cow milk ✓ Currently Availa
Slide 12: Marketing Campaigns & Consumer Engagement Initiatives
Marketing Campaigns & Consumer Engagement Initiatives Gowardhan Milk Pride of Cows North East Region Gowardhan Pure Outdoor Milk Radio Campaign Campaigns for Conducted in Delhi Gowardhan Ghee on Red FM, Radio & Go UHT Milk City, Big FM, Radio conducted in Mirchi and Fever 104 North East Region Pride
Slide 13: Our Journey so far…
Our Journey so far… Sustainability Innovation 13
Slide 14: Did You Know???
Did You Know??? One of India’s State-of-the-Art 2nd Largest Player in Cheese in Infrastructure with a milk the India with 35% Market processing capacity of 2.9 Mn Litres Share Per Day Leaders & Pioneers of Cow Ghee Pioneers of Fresh Paneer with a 75 category Day Shelf Life The Leading private player
Slide 15: Parag at a Glance
Parag at a Glance Strong State-of-the-art Strong 170+ SKU’s 7 Brands Ranked #1 Relationships Facilities Distribution Aggregate milk Gowardhan processing capacity Pan-India Go Established Strong of 2.9 mn litres per Diversified product Parag Milk Foods Distribution Network Pride Of Cows Relationships
Slide 16: Evolution
Evolution 1992 1998 2005 2008 2010 2011 Parag Milk Foods Ltd founded Commissioned Manchar Birth of Bhagyalaxmi Commissioned “Go Cheese Palamaner plant was Birth of ‘Pride of Cows’, a in 1992 with one purpose: plant and began manufacturing Dairy Farm - India’s most World” - India’s largest cheese est
Slide 17: Board of Directors
Board of Directors Mr. Devendra Shah Mr. Pritam Shah Chairman Managing Director Mr. B. M. Vyas Mr. Sunil Goyal Director Independent Director Mr. Narendra Ambwani Mr. Nitin Dhavalikar Independent Director Independent Director Mrs. Radhika Pereira Mr. Ramesh Chandak Independent Director Director The B
Slide 18: Management Team
Management Team Ms. Akshali Shah Mr. Vimal Agarwal Mr. Amarendra Vishnu Sathe VP – Strategy (Sales & Marketing) Chief Financial Officer Chief Commercial Officer (CCO) An MBA in Family Managed Business from S.P. Jain He is a Chartered Accountant and an MBA by He has 24+ years of experience in new pro
Slide 19: Creating Value through an Integrated Business Model
Creating Value through an Integrated Business Model 19
Slide 20: Fully Integrated Business Model…
Fully Integrated Business Model… STRONG PRESENCE ACROSS THE VALUE CHAIN Processing Milk Dairy Farming Owns 2,500 Holstein Freisan Cows Distribution Procurement Relationship with over 2 Lakhs Farmers Milk Dairy Farming Branding Procurement – Our Partners in Progress COMPETITIVE EDGE OVER OTHER PLAYER
Slide 21: Farmer Relationship is an integral part of our business…
Farmer Relationship is an integral part of our business… 3-tier Milk Procurement Process Procurement Network Farmer Services Village collection centres Never Say No for Milk procure milk Correct Quantity & Tier 1 Quality from over 2 lakh farmers in 29 districts Haryana Supplying Cattle feed at subsi
Slide 22: We are present in all key Cow milk procuring States
We are present in all key Cow milk procuring States In Million MT Milk % Share of CAGR Cow Milk CAGR Sr. % Share of States Production Total Milk for last Production for last No Cow Milk (2016-17) Produced 2 years (2016-17) 2 years 1 Tamil Nadu 7.6 4.6% 2.9% 7.1 93% 3.1% 2 Karnataka 6.6 4.0% 3.5% 4.6
Slide 23: State-of-the-Art Manufacturing Facilities
State-of-the-Art Manufacturing Facilities Manufacturing Location Key Features : Parag’s Manufacturing Footprint Processing Location • One of the Largest Cheese Plants in India Newly Acquired Facility from Danone • India’s 1st state-of-the-art fully integrated Whey Protein Plant Sonipat Plant, Haryan
Slide 24: Diverse Portfolio catering to all Segment of Customers
Diverse Portfolio catering to all Segment of Customers Brands Target Customer Group Positioning ▪ Household consumers seeking premium quality cow’s milk ▪ Health enthusiasts Premium ▪ Children and the youth primarily for direct consumption ▪ On-the-go consumption as source of instant nourishment Mod
Slide 25: Working closely with Institutional Clients
Working closely with Institutional Clients Interact with Customers at Customization of the Maintaining the Strong/ Long term the Inception Phase of product according to the Exclusivity of the Relations with the Product and even help Need Product Customers them to curate a menu Supplies To: Prominent
Slide 26: Last mile availability from ‘Farm to Fork’
Last mile availability from ‘Farm to Fork’ Pan-India Reach Distribution Network Route-to-market Strategy Depot Super Stockist Jammu 19 Depots Jalandhar Parwanoo Karnal Fresh Milk Delhi Siliguri Guwahati 140+ Exports Jodhpur Udaipur Jaipur Kanpur Patna Super Stockists Products General Trade Ranchi Mo
Slide 27: Our Growth Strategy
Our Growth Strategy 27
Slide 28: Industry has tremendous Growth Potential
Industry has tremendous Growth Potential Liquid Milk Ghee Paneer Curd +15.0% +14.8% Traditional Products Growth 9,761 7,358 90,567 20,403 +14.8% +14.8% CAGR of 22,403 39,119 5,149 9,224 2,448 4,373 1,851 3,239 15% 2010 2014 2020E 2010 2014 2020E 2010 2014 2020E 2010 2014 2020E UHT Milk Flavoured Mil
Slide 29: Indian Dairy Market Structure
Indian Dairy Market Structure Indian Dairy Market (US$ 107 Bn) Organised Dairy Market Unorganised Dairy (US$ 15 Bn) Market (US$ 92 Bn) Traditional Milkmen / Self Consumption at Home Cooperatives (US$ 7 Bn) Private Dairies (US$ 8 Bn) Vendors (US$ 34 Bn) (US$ 58 Bn) Milk production volume break-up Mar
Slide 30: Our strategy for Value Creation
Our strategy for Value Creation Increase Operational Efficiencies Focus on Health & Nutrition Leverage in-house technological, R&D capabilities Introduce healthy & nutritious product variants like to: ▪ Whey protein powder for mass consumption and in ▪ Maintain strict operational controls different
Slide 31: Industry Dynamics
Industry Dynamics 31
Slide 32: India Contributes > 20% of Global Milk Production
India Contributes > 20% of Global Milk Production Top Milk Producing Countries (Million MT) Global - Animal Wise Milk Production - 2017 Countries 2017 2018E 2019E 2020E 2027E CAGR 11.5% 3.5% India 169 174 181 188 244 3.7% Cow EU – 28 164 167 167 169 177 0.8% Buffalo USA 98 98 99 100 105 0.7% Goat &
Slide 33: Indian Dairy Sector is self-sufficient
Indian Dairy Sector is self-sufficient Top Exporting Countries (Million MT) - 2017 Country Wise Per Capita Milk Consumption (litres / Year) 19 19 285 281 11 4 220 3 EU New US Belarus Australia 156 Zealand Top Importing Countries (Million MT) - 2017 97 13 24 4 4 USA EU Russian Brazil India China 3 3
Slide 34: Milk Production in India
Milk Production in India Liberalization of the sector in 1991 led to entry of private players Dr. Verghese Kurien initiated 244 operation Flood to increase Milk Production 188 +4.3% 169 116 78 +2.8% 51 30 17 20 21 1950 1960 1970 1980 1990 2000 2010 2017 2020E 2027E Milk Production (Million MT) Sourc
Slide 35: India’s Favourable Dynamics offer Huge Opportunities
India’s Favourable Dynamics offer Huge Opportunities Rising Middle Class • Middle class households to grow from 255 million in 2015 to 586 million in 2025 at a CAGR of 8.7% Population & Income • Rising income & disposable income to drive consumption of milk Levels & dairy products India – GDP Growth
Slide 36: Vision 2020
Vision 2020 36
Slide 37: Vision 2020
Vision 2020 FY 2018 FY 2020 Revenue Rs. 1,955 Crs Rs. 2,700 – 3,000 Crs EBITDA Margin* 10.5% 11- 12% ROCE 15.8% 18-20% * Includes Other Income 37
Slide 38: Financial Highlights
Financial Highlights 38
Slide 39: Consolidated Revenue Highlights
Consolidated Revenue Highlights Revenue (Rs. Mn) Category wise Share 100.0% 100.0% 100.0% 100.0% 23,957 12.9% 12.9% 14.3% +17% 23.0% 19,545 21.4% 19.9% 17.7% 17,307 21.0% 10,835 64.1% 65.6% 66.1% 56.0% 0.0% 1.6% 1.6% 1.9% FY14 FY17 FY18 FY19 FY14 FY17 FY18 FY19 Skimmed Milk Powder Milk Products Liqu
Slide 40: Consolidated Profitability & Returns
Consolidated Profitability & Returns EBITDA (Rs. Mn)* EBITDA Margin (%)* ROCE (%) +250 bps 17.6% +24% 2,338 10.5% 9.8% 2,053 15.8% 7.3% 5.8% 1,006 789 FY14 FY17 FY18 FY19 FY14 FY17 FY18 FY19 9.1% PAT (Rs. Mn) PAT Margin (%) 5.6% +430 bps +75% 1,207 5.0% 4.5% 871 74 0.7% 0.3% 47 FY14 FY17 FY18 FY19 F
Slide 41: Annexures
Annexures 41
Slide 42: Ghee Market (Butter Oil/Cooking Oil/Clarified Butter)
Ghee Market (Butter Oil/Cooking Oil/Clarified Butter) India’s Ghee Market Size (in US$ Million) Key Highlights 20,403 17,985 13,836 15,791 • Ghee is traditionally used as cooking oil in Indian +16.0% 10,582 households 8,030 6,030 3,075 4,463 • It is the 2nd largest category in the Indian dairy indus
Slide 43: Cheese Market
Cheese Market India’s Cheese Market Size (in US$ Million) Key Highlights 513 • Cheese is one of the fastest growing segments 410 among dairy products in India 328 +25.3% 263 • Rise in food service outlets and changing food 204 134 164 habits are major drivers 85 106 54 69 • Earlier, the cheese marke
Slide 44: Paneer (Cottage cheese)
Paneer (Cottage cheese) India’s Paneer Market Size (in US$ Million) Key Highlights 9,761 • Paneer is to India what cheese is to the Western 8,582 world and is an integral part of many Indian 7,522 +16.8% 6,597 recipes 5,030 3,806 2,896 • Paneer is the third largest segment in the milk 1,940 1,358 pr
Slide 45: Curd (Dahi)
Curd (Dahi) India’s Curd Market Size (in US$ Million) Key Highlights 7,358 6,478 5,687 • Curd industry has transformed from being a +15.4% 4,940 3,746 product that was traditionally made at home to a 2,836 branded & packaged product 2,134 1,597 1,179 • The organized curd market is growing rapidly at
Slide 46: UHT & Beverages
UHT & Beverages India’s UHT Market Size (in US$ Million) India’s Flavoured Milk Beverages Market Size (US$ Million) 1,552 716 1,239 582 985 463 +28.4% 791 +25.5% 373 493 239 313 149 194 60 90 104 2009 2011 2013 2015 2017 2018 2019E 2020E 2009 2011 2013 2015 2017 2018 2019E 2020E Key Highlights Key H
Slide 47: Whey Protein
Whey Protein Key Highlights Sports Health & Category Nutrition Nutrition Segment Segment • Whey Protein market is estimated at 35,000 MT, translating US$ 225-300 US$ 225-300 into business potential of US$ 450 Million, growing upwards Market Size Million Million of 25% • Parag has the most integrated
Slide 48: Liquid Milk Market
Liquid Milk Market India’s Liquid Milk Market Size (in US$ Million ) Key Highlights 90,567 • A majority (77%) of the milk sold in India is 79,015 unorganized and in the form of loose milk sold by 68,731 +16.4% 59,791 milkmen 45,090 33,896 25,463 • The organized sector in liquid milk is highly 18,060
Slide 49: Contact Us
Contact Us Company : Investor Relations Advisors: Parag Milk Foods Limited Strategic Growth Advisors Pvt. Ltd. CIN: L15204PN1992PLC070209 CIN: U74140MH2010PTC204285 Name: Natasha Kedia Mr. Rohan Adhiya / Mr. Deven Dhruva Email: natasha.kedia@paragmilkfoods.com rohan.adhiya@sgapl.net / deven.dhruva@s