Kansai Nerolac Paints Limited · NSE:KANSAINER
Kansai Nerolac Paints — Investor Presentation (March 2020)
63 slides from Kansai Nerolac Paints's investor presentation, Mar 17, 2020
Slide 1: Intimation to stock exchanges on analyst/investor presentation
Page 1 of 63 ~ KANSAI Nl;:ROLAC March 13, 2020 PAINTS LIMITtD 1. Corporate Relationshi p Department 2. Manager - Listing BSE Limited, National Stock Exchange of India Ltd. Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1 , Block G, Dalal Street, Sandra Kurla Complex, S andra (E), Mumbai - 400 00 1. Mu
Slide 2: Corporate Presentation March 2020
Page 2 of 63 ~ N~ROLAC =>~ KANSAI NEROLAC PAINTS LIM ITl;:D Corporate Presentation March 2020 - ~ - - -March - 2020 - - - - -
Slide 3: Corporate Overview
Page 3 of 63 ~ Nl;:ROLAC CORPORATE OVERVIEW March 2019 - -~ - - - - March - -------- 2020
Slide 4: Kansai Nerolac Paints Ltd.
Page 4 of 63 1;:RO AC Kansai Nerolac Paints Ltd. Parameter Ownership Subsidiary of Kansai Paint, Japan Founded 1920 Market Position One of India’s largest Paint company Leader in Industrial Paints Turnover (FY 18-19 standalone) Rs. 51736 Mn. PBT (FY 18-19 standalone) Rs. 7134 Mn. Market Cap (31st Ma
Slide 5: Company Vision
Page 5 of 63 ~ N~ROLAC Company Vision “We design solutions that Protect, Inspire and Touch Lives every day” March 2019 - ~ - - -March - 2020 - - - - -
Slide 6: Company Mission
Page 6 of 63 ~ Nl;:ROLAC Company Mission We leverage superior technology to contribute to our Customers and Society, in a sustainable manner, with innovative Products and Services, through a competent workforce, built on a culture of Customer Focus, Integrity and Respect to our Stakeholders. March 2
Slide 7: Core Values
Page 7 of 63 1;:RO AC Core V; e C C 0 oc cco Ii C - ~ - - - - - - - - - March 2019 March 2020
Slide 8: icare! Logo
Page 8 of 63 ~ N~ROLAC icare! Logo Representation of an Different colours enthusiastic group of acknowledge and people, together encourage our around a single diversity as a purpose group “i”stands for “!”represents the role that each organisation member plays ar the irreverenc e in Innovation Initi
Slide 9: Strong Legacy 99 Years History
Page 9 of 63 1;:RO AC Strong Legacy 99 Years History Year Key Milestone 1920 Started as Gahagan Paints and Varnish Co. Ltd 1957 Changed name to Goodlass Nerolac Paints Ltd. 1976 Became Part of TATA group 1986 Acquisition of stake by Kansai Paint, Japan 2000 Became subsidiary of Kansai Paint, Japan 2
Slide 10: Kansai Paint, Japan
Page 10 of 63 1;:RO AC Kansai Paint, Japan • Japan’s largest paint company • 8th largest Paint company globally • Among top 5 global automotive paint companies • Presence in 80 countries via 152 companies • Gross sales over 3.9B USD Net Sa les (c-onso lid.at-ed ) 427425 li'o s of ye 01 977 34-9 3.33
Slide 11: Shareholding Pattern (31st March, 19)
Page 11 of 63 1;:RO AC Shareholding Pattern (31st March, 19) ■ KPJ ■ Institutional ■ Others 9.65% 15.36% 74.99% KPJ-Kansai Paint Japan March 2019 - ~ - - -March - 2020 - - - - -
Slide 12: Industry Overview
Page 12 of 63 ~ Nl;:ROLAC INDUSTRY OVERVIEW March 2019 - -~ - - - - March - -------- 2020
Slide 13: Indian Economy
Page 13 of 63 1;:ROLAC Indian Economy - Revenue -Expenditure Asa % ofGDP ■ Overall balance (Right-hand scale) 32 0 27.9 I 1: I I I I ~ - 24 21.3 ~ I - • - 21.3 -2 Political Stability 16 I i' J -4 Fiscal Prudence I 8 J -5 A -6 ~ -6.6 0 - - ~ - - ~ - - - ~ - - ~ - - - ~ - - - ~ - - ~ - -8 2016 2017 20
Slide 14: Indian Paint Industry Facts
Page 14 of 63 1;:RO AC Indian Paint Industry Facts Parameter Facts Size Over $7 Billion Growth Rates Double digit since 1991 Organized : Un-organized Market 70:30 Per Capita consumption ~4 kg (Global average @12-15 kg) • Favorable demographics • Rapid urbanization • Make in India Future Growth Drive
Slide 15: Kansai Nerolac Paints Ltd
Page 15 of 63 ~ Nl;:ROLAC KANSAI NEROLAC PAINTS LTD March 2019 - -~ - - - - March - -------- 2020
Slide 16: Traditional Business
Page 16 of 63 1;:RO AC Powder Coatings High performance General Industrial Coatings Coatings Traditional Business Markets 2W Automotive Coatings Decorative Coatings Auto Refinish (ARF) Coatings - ~ - - - - March - 2019 March 2020 - - - - -
Slide 17: Decorative Coatings
Page 17 of 63 1;:RO AC Decorative Coatings Exterior Economy Popular Premium Super Premium Interior Economy Popular Premium Super Premium Decorative Range: Enamels, Distemper, Emulsions, Primers, Putty, Wood finishes March 2019 - ~ - - -March - 2020 - - - - -
Slide 18: Automotive Coatings
Page 18 of 63 1;:RO AC Automotive Coatings Automotive : Leadership with Full system (Primer+ Top Coat + Clear Coat, including plastic paints) March 2019 - ~ - - -March - 2020 - - - - -
Slide 19: General Industrial Coatings
Page 19 of 63 1;:RO AC General Industrial Coatings Sewing Machine Drums & Barrel Gas Cylinder Helmet Coating Security Equipment ZIp Electrical Equipments Agricultural Equipment Generator Sets Pre Engineering Building General Industrial : Market leader with wide range to cater to a variety of Industr
Slide 20: High Performance Coatings
Page 20 of 63 1;:RO AC High Performance Coatings Petroleum / Petrochemical Metal Industries Fertilizer Industries Infra Cement Industry Railways High Protective Coatings: Wide range to tackle corrosion protection March 2019 - ~ - - -March - 2020 - - - - -
Slide 21: Powder Coatings
Page 21 of 63 1;:RO AC Powder Coatings 0 OJ ~ i Light Fixtures Electrical Equipments Fans Auto Ancillary Refigerators Washing Machine Air Conditioner Microwaves Powder Coatings: Leadership through a variety of products March 2019 - -~ - - - - March - -------- 2020
Slide 22: Selective List of Customers
Page 22 of 63 1;:RO AC Selective List of Customers MARUTI SUZUKI Co1.Jnt on ve ~ TOYOTA D HONDA TVS * BAJAJ ~ HONDA .r. TATA ~ mahindra ASHOK LEYLAND TATA MOTORS SUZUKI ~~ TAFE EICHER ,~ Hero OYAMAHA Automotive Coatings And many more... March 2019 = = = = ~----------------------------------- March 2
Slide 23: Selective List of Customers
Page 23 of 63 1;:RO AC Selective List of Customers ZAMILSTEEL BCW!lff Lcu»rie S1UDDS ORIENT FANS " HAVELLS General Industrial Coating Panasonic e t llfe ADANI Ambuja Cement f1.llldllll NTPC Bharat Petroleum ,r THERMAX High Performance Coating Panasonic Powder Coating And many more... March 2019 - -
Slide 24: New/Emerging Business
Page 24 of 63 1;:RO AC Floor Coatings ---1 Rebar Coatings Construction Chemicals Railway Coatings New/Emerging Business Markets 2W Adhesives Coil Coatings March 2019 - ~ - - -March - 2020 - - - - -
Slide 25: Subsidiaries
Page 25 of 63 1;:RO AC Subsidiaries Nepal .... ... • Operations Started in 2012 • Fastest growing company • 3rd biggest player in Nepal Amt NPR Mn On Acquisition March 2018 March 2019 Turnover 250.0 1027.8 1348.5 PBT (10.0) 145 224.2 r " Sri Lanka \.. ~ • Operations Started in 2017 • Tie-up with one
Slide 26: Subsidiaries
Page 26 of 63 1;:RO AC Subsidiaries Bangladesh ,, • Acquired in 2018-19 • Diverse range of products in Decorative and Protective coating Amt BDT Mn March 2019 Turnover 1100 PBT (104) Marpol • Acquired in 2018-19 Amt Rs Mn March 2019 Turnover 620.3 PBT 19.3 - ~ - March 2019 March 2020
Slide 27: Known for Innovation - Branding
Page 27 of 63 Nl;:ROLAC Known for Innovation - Branding ~ Nl;'.ROLAC HIGH DEFINITION COLOURS Products Pioneering concepts (Lead free, Low VOC, Healthy Home Paints) ~ ~ Dealer Portal Celebrity Endorsement Use of Social, Digital & Mobile Use of Sports for Endorsement Modern Retail March 2019 - ~ - - -
Slide 28: Known for Innovation - Technology
Page 28 of 63 1;:RO AC Known for Innovation - Technology Technology f 1r om In - House R&D Kansai Paints Japan R&D Spend: Rs 25 Cr {0.5% of Technical Colll abo1 r ation w ith Sale) Oshi m1a Kogyo Co .. Ltd,. Japan Cashew Co .. Ltd, Japan Number of R&D personnel: Pr otech Chem1ica ls Ltd,. Canada 176
Slide 29: Known for Innovation - IT
Page 29 of 63 1;:RO AC Known for Innovation - IT D ERP Supply Chain CRM Dealer Portal Ariba Vendor Portal DD EHS HR Analytics Engine IoT, Predictive analytics, ML(SAP Leonardo), RPA Completely IT Enabled Business running on SAP HANA (Early Adopters of New Technology) ·o•c:-- •D....,..._"'"' i --- --
Slide 30: Distribution
Page 30 of 63 ~ Nl;:ROLAC Distribution British Safety Award ZERO liquid Discharge OHSAS 18001 ISO 14001 . II '" . . . ~ 9 si:ilk a I • '!('Gt.1 .cm:n l • . • . ~ 9 Lote . "'~ t,11Qtu1ra!.htrPJ ~ • lll ■ 2 Upc,o ming pTants fl! AM;d na • !Si strab!gica,lty locnted plants rrieid~.;h. • 100+ Depots. I
Slide 31: Capacity
Page 31 of 63 1;:RO AC Capacity Year Annual Capacity in KL/MT Existing 2017-18 4,10,000 2018-19 4,50,000 Current 2019-20 5,10,000 Planned 2020-21 5,25,000 1 Green field Project in Pipeline March 2019 - ~ - - -March - 2020 - - - - -
Slide 32: Environmental Initiatives
Page 32 of 63 ~ N~ROLAC Environmental Initiatives Publishing Report since 2005. Sustainability report as per GRI Implemented SAP EHS in 2011 guidelines since 2012 Water and Carbon Foot print Zero Liquid discharge at all tracking manufacturing facilities Products meeting VOC regulation Reduction in C
Slide 33: People Initiatives
Page 33 of 63 ~ N~ROLAC People Initiatives Young Vibrant organization with Professionally run & managed average age of organization 35 Core Values & Competency Transparent Performance Framework defined Management System March 2019 - ~ - - -March - 2020 - - - - -
Slide 34: Our CSR Activities
Page 34 of 63 1;:RO AC Our CSR Activities March 2019 - ~ - - -March - 2020 - - - - -
Slide 35: Where Do They Stand? Strength of the Nerolac brand
Page 35 of 63 1;:RO AC Strength of the Nerolac brand BRANDEQlJ11Y Where Do The Stand? Airlines ~ Consumer Durables Paints Edible Oils (Reffned) 1Airlndia - 1 Samsung 1 Saffola 2 JetAirways _ _ ..., 2 Sony n,,saroqon,,g ~,........ I![¼1fl@s 2 Fortune --- nm:m:IIDDI!~ 3 Indigo Airlines !m..:.':liV° 3
Slide 36: Some Important Awards
Page 36 of 63 1;:RO AC Some Important Awards Institute of Company Secretaries : Best Supplier Award – HMSI - 2016 Corporate Governance - 2007 Best Supplier Award Toyota -2017 Golden Peacock : Corporate Governance – Best Vendor Award – Suzuki - 2017 2005 Best Vendor Award for Cost – Toyota -2016 Best
Slide 37: Some Important Awards
Page 37 of 63 1;:RO AC Some Important Awards Asian Manufacturing Excellence Award-Frost National Energy Conservation (Jainpur)- & Sullivan-2010 Ministry of Power GOI-2006 Certificate of merit-Lote(Zero Accident Environmental Excellence Gold Award-Lote Frequency)-National safety council Greentech Env
Slide 38: Some Important Awards
Page 38 of 63 1;:RO AC Some Important Awards ACE Awards,SAP-2012,2014,2016 Among the top 50 CEO’s-Entrepreneur SAP Awards Indus-2014 Magazine-2014 Best APO Implementation-PC Quest 2008 Best CEO in chemicals category-Business Today- Hall of fame-CTO forum 2008 2017 Gold CIO of the year-Data quest of
Slide 39: 18-19 Key Achievements
Page 39 of 63 1;:RO AC 18-19 Key Achievements r " Sustainable growth \... ~ • Double digit growth in Decorative, with Market Share gain in All Industrial segments • Inorganic growth via M&A in international and niche markets r Branding • Mr. Ranveer Singh signed up as new face of Nerolac brand • Con
Slide 40: 18-19 Key Achievements
Page 40 of 63 1;:RO AC 18-19 Key Achievements r ., Technology I. ... • MonoCoat and Common Painting system launched resulting in 50% reduction in energy for consumers • Product launched which captures indoor air Pollutants and free Formaldehyde, making the air cleaner r ,., Recognition I. ~ • Vendor
Slide 41: Financials
Page 41 of 63 ~ Nl;:ROLAC FINANCIALS - -~ - - - - March - -------- March 2019 2020
Slide 42: Financials - Sales
Page 42 of 63 1;:ROLAC Financials Sales in Mn 6000 5174 5000 4531 4737 4245 3990 4000 3000 2000 1000 0 2015 2016 2017 2018 2019 March 2019 - ~ - - -March - 2020 - - - - -
Slide 43: Financials - PBDIT %
Page 43 of 63 1;:ROLAC Financials PBDIT % 20.0 18.3 17.2 15.5 14.3 15.0 12.8 10.0 5.0 0.0 2015 2016 2017 2018 2019 March 2019 - ~ - - -March - 2020 - - - - -
Slide 44: Financials - Market Cap, Dividend, Shareholders Fund
Page 44 of 63 1;:ROLAC Financials Market Capitalisation (In Mn) Dividend % 300000 271720 350 305 246420 300 250000 300 260 260 203680 200000 250 151710 200 150000 116510 140 150 100000 100 50000 50 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Shareholders fund (In Rs Mn) 4000 3424 3125 3000
Slide 45: Financial Ratios
Page 45 of 63 1;:ROLAC Financial Ratios Return on capital employed % Earning Per Share 30.0 26.9 26.8 12.0 24.2 25.0 9.6 25.0 10.0 9.4 20.8 8.7 20.0 8.0 6.7 15.0 6.0 5.0 10.0 4.0 5.0 2.0 0.0 0.0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Return on Net Worth % 20.0 18.5 18.0 17.0 16.5 15.0 13.
Slide 46: Standalone Snap Shot
Page 46 of 63 1;:ROLAC Standalone Snap Shot FY 2001 FY 2019 CAGR from 2001 Sales Rs. mn. 6830 51736 12 PBDIT Rs. mn. 480 7420 16.4 PBT Rs. mn. 330 7134 19 EPS Rs 0.44 8.7 19 times Market Capitalization 1380 247094 179 times Rs Mn March 2019 - ~ - - -March - 2020 - - - - -
Slide 47: Consolidated Snapshot
Page 47 of 63 1;:ROLAC Consolidated Snapshot FY 2001 FY 2019 CAGR from 2001 Sales Rs. mn. 6830 54243 12 PBDIT Rs. mn. 480 8129 17 PBT Rs. mn. 330 6967 18 March 2019 - ~ - - -March - 2020 - - - - -
Slide 48: Thank You
Page 48 of 63 ~ Nl;:ROLAC Thank You March 2019 - -~ - - - - March - -------- 2020
Slide 49: Update (FY19-20)
Page 49 of 63 ~ Nl;;'.ROLAC :J~ KANSAI NEROLAC PA.IN S LIM T~D Investor Presentation Update (FY19-20) - ~ - - -March - 2020 -----
Slide 50: Disclaimer
Page 50 of 63 ~ Nl;;'.ROLAC Disclaimer This presentation may contain statements which reflect management’s current views and estimates and could be construed as forward making statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from th
Slide 51: Agenda
Page 51 of 63 ~ Nl;;'.ROLAC Agenda Business Environment FY 19-20* Financial Performance FY 19-20* Business Review FY 19-20* Risks and future outlook ------~ *The details in the presentation are for the period April – Dec 2019 - --------- ---------------- March 2020
Slide 52: Business Environment 19-20
Page 52 of 63 ~ Nl;;'.ROLAC Business Environment 19-20 Demand slow down witnessed across sectors Several Initiatives taken by Government to spark revival have seen limited impact Corporate Tax Rate reduction announced Currency volatility experienced throughout the year Geo-political concer
Slide 53: Agenda
Page 53 of 63 ~ Nl;;'.ROLAC Agenda Business Environment FY 19-20* Financial Performance FY 19-20* Business Review FY 19-20* Risks and future outlook ------~ *The details in the presentation are for the period April – Dec 2019 - --------- ---------------- March 2020
Slide 54: Financials - Standalone Q3 and FY19-20 (9 Months)
Page 54 of 63 ~ Nl;;'.ROLAC Financials - Standalone Q3 and FY19-20 (9 Months) Rs. Crore Q3 Q3 9M 9M Gr% Gr% 2018-19 2019-20 2018-19 2019-20 Revenue from Operations (Net) 1350.7 1248.1 -7.6 4020.5 3955.1 -1.6 PBDIT (without other income) 177.0 191.9 8.4 592.4 653.8 10.4 PBDIT as % of sale 13.1 15.4 1
Slide 55: Financial Analysis 19-20
Page 55 of 63 ~ Nl;;'.ROLAC Financial Analysis 19-20 Positive Factors Increased saliency of Decorative Relative stability in Raw Materials prices with a declining trend Strong control on overheads through systemic efforts Contribution improvement in Decorative and Industrial products Imp
Slide 56: Agenda
Page 56 of 63 ~ Nl;;'.ROLAC Agenda Business Environment FY 19-20* Financial Performance FY 19-20* Business Review FY 19-20* Risks and future outlook ------~ *The details in the presentation are for the period April – Dec 2019 - --------- ---------------- March 2020
Slide 57: Decorative
Decorative Page 57 of 63 ~ Nl;;'.ROLAC Consistent Robust delivery Nerolac Colour trails went Pragati Express painter training across the country extended to 7 more states Market Situation in Kashmir, where KNP* is a leader, impacted performance Demand in Q2 was affected due to a prolonged mons
Slide 58: Automotive Performance Coating
Page 58 of 63 ~ Nl;;'.ROLAC Automotive Performance Coating In line with Auto Sector Broad based growth across categories Market Market Unprecedented and prolonged slowdown in Growth continues to be single digit Auto Automotive production dropped by 13.2 % for Highlights the first 9 month
Slide 59: Subsidiary Performance
Page 59 of 63 ~ Nl;;'.ROLAC Subsidiary Performance India Subcontinent Marpol Nepal EBITDA improvement over same period Continued higher than Market growth Last Year Expansion in Dealer network Revamp of Plant started Capacity expansion undertaken SAP Implemented Synergy benefit on
Slide 60: Operations Support
Page 60 of 63 ~ Nl;;'.ROLAC Operations Support Goindwal Plant Commissioned during Q2 CAPACITY INCREASE Commissioning of State -of -the -Art Goindwal, Punjab Plant with Phase I capacity of more than 52.8 Million litre annually for Water based Products ED Plant at Saykha Commissioned for OEMs in w
Slide 61: Agenda
Page 61 of 63 ~ Nl;;'.ROLAC Agenda Business Environment FY 19-20* Financial Performance FY 19-20* Business Review FY 19-20* Risks and future outlook ------~ *The details in the presentation are for the period April – Dec 2019 - --------- ---------------- March 2020
Slide 62: Risks and Outlook
Page 62 of 63 ~ Nl;;'.ROLAC Risks and Outlook Risks: Covid-19 can be a deterrent to growth revival Currency Voltality Outlook: Low end products shall continue to drive volume growth The Outlook for Automotive Segment continues to be negative - - -~ ----------------------- March 2020
Slide 63: Thank You
Page 63 of 63 ~ Nl;;'.ROLAC Thank You - ~ - - -March - 2020 -----
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