Prataap Snacks Ltd. · NSE:DIAMONDYD
Prataap Snacks — Q2 FY23 Earnings Presentation
33 slides from Prataap Snacks's earnings presentation, Nov 5, 2022
Slide 1: Prataap Snacks Limited Q2 FY23
PRATAAP SNACKS LIMITED Q2 FY23 5th November 2022
Slide 2: Disclaimer
DISCLAIMER Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ ma
Slide 3: The Main Ingredients: Company Overview
THE MAIN INGREDIENTS: Company Overview
Slide 4: Company at a Glance
COMPANY AT A GLANCE Large, compounding market Market leadership Significant revenue scale INR 398 Bn market Market Leader in Rings; FY22 Revenue of INR ~ 14 Bn Growing at 11.2% CAGR(1) Top 5 Leader in Savoury Snacks 8-year revenue CAGR: 15%(2) Diverse product portfolio Nationwide manufacturing & Exp
Slide 5: Key Milestones
KEY MILESTONES 2018 Forayed into Sweet Snacks 2003 2012 Entered into 3P Contract 2020 Company Converted 3P founded 2006 Doubled the 2016 Manufacturing 2022 Installed capacity of Potato at Kolkata -2 and facility to owned Guwahati new in Bengaluru, Completed Chulbule plant at Chips plant at Indore Be
Slide 6: Company Evolution
COMPANY EVOLUTION 2003 2022 Single Product Potato Chips Product Diverse Product Portfolio Single Market Mumbai Presence Pan-India Presence Single Facility 14 Facilities Indore Facility 9 Owned and 5 3P Facilities Snapshot of Recent Growth Rs. 446 Cr Revenue Rs. 1,397 Cr 2014 40+ SKUs 125+ 2022 3 Fac
Slide 7: Diverse Product Portfolio
DIVERSE PRODUCT PORTFOLIO Appealing to consumers and trade partners % of FY22 CATEGORIES Revenue PRODUCTS 58% Chulbule Rings Wheels Pellets Scoops Puff Stix Extruded Snacks 23% Market Leader in Potato Chips Rings, Top 5 Leader in Savoury 16% Snacks Namkeen 3% Cookie Center Filled Choco Tiffin Sandwi
Slide 8: Branding & Marketing
BRANDING & MARKETING Brand seen to be energetic and vibrant Brand Philosophy Brand Ambassadors / Associations (1) Consumer oriented focus Providing value in multiple ways – great taste, high quality ingredients, vibrant packaging, reasonable price Brand tagline encapsulates the philosophy of deliver
Slide 9: Operational Excellence
OPERATIONAL EXCELLENCE Powered by tech and automation Data Analytics Production Automation Sales Automation Experienced Sales Analytics department working Complete ERP Solution to manage State-of-the-art SFA being used to with advanced BI Tools production processes; Software guide sales team with as
Slide 10: Established Manufacturing Network
ESTABLISHED MANUFACTURING NETWORK Reduced distribution costs; Improved time-to-market; Disciplined investment mindset STRATEGICALLY LOCATED North India (31% of rev.) MANUFACTURING 4 plants in Hisar, Nationwide manufacturing FACILITIES TO CATER TO Karnal, Kanpur, Patna footprint THE REGIONAL DEMAND •
Slide 11: Optimised Distribution Model
OPTIMISED DISTRIBUTION MODEL Direct distribution model on a nationwide scale OLD DIRECT Shifted to a direct distribution model upon hitting DISTRIBUTION Prataap Prataap DISTRIBUTION critical scale MODEL MODEL • Decentralized manufacturing footprint allows us to supply directly to distributors Supers
Slide 12: Our ESG Approach
OUR ESG APPROACH Cornerstones of doing good business • Actively working in accordance with Uniform Framework for Extended Producers Responsibility (EPR) issued by the Ministry of Environment, Forest, and Climate Change Waste management • We engage in mass collection for processing and disposal of em
Slide 13: Strong 'Value-for-Money' Brand
STRONG ‘VALUE-FOR-MONEY’ BRAND Appealing to customers across socio-demographic profiles CATEGORIES CHILDREN YOUTH ADULTS/FAMILY Rings, Kurves, Puff, Stix Chulbule Extruded Snacks Pellets Potato Chips Potato Chips Namkeen Namkeen Sweet Snacks Sweet Snacks Targeting value for money segment 13
Slide 14: Guided by an Accomplished Board
Guided by an Accomplished Board Mr. Arvind Mehta Bharat Singh Mr. V.T. Bharadwaj Chairman & Non-executive Nominee Director (Additional) Independent Director Executive Director Mr. Amit Kumat Anisha Motwani Managing Director Vineet Kumar Kapila Independent and CEO Independent Director Director Mr. Ap
Slide 15: Essential Flavours: Growth Strategies and Financial Progress
ESSENTIAL FLAVOURS: Growth Strategies and Financial Progress
Slide 16: Strategic Initiatives
STRATEGIC INITIATIVES Executing on a clear roadmap for robust and disciplined growth TOP LINE GROWTH Expand Namkeen Drive mix of larger pack sizes Disciplined Product Footprint Increase volumes of larger Innovation and ~43% of snacks industry (but pack sizes through value and Geographical Expansion
Slide 17: Measures to Enhance Profitability and Returns
MEASURES TO ENHANCE PROFITABILITY AND RETURNS Bottom slicing Compression of distribution structure • Reasons for lesser volumes being identified, • PSL has implemented direct distribution and levers are worked on to improve them across all regions, ahead of schedule • Indirect expenses are being sav
Slide 18: Robust Revenue Growth
ROBUST REVENUE GROWTH Consistent execution track record TOTAL REVENUE (INR Mn) COVID DISRUPTION Avadh 13,938 13,966 Acquisition 1,688 11,706 11,711 10,184 8,903 8,399 7,473 6,502 5,493 12,250 4,457 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 H1 FY22 H1 FY23 18
Slide 19: EBITDA Margin Recovery
EBITDA MARGIN RECOVERY On the back of recent stabilization of volatile raw material prices EBITDA MARGIN (%) 5 year (FY16-FY20) average EBITDA margin was 6.9%. In FY21-22, margin was impacted by: 6.9% Covid period: supply chain & raw material cost inflation • Operating deleverage due to shutdown, lo
Slide 20: Approval under Performance Linked Incentive (PLI) Scheme
APPROVAL UNDER PERFORMANCE LINKED INCENTIVE (‘PLI’) SCHEME The minimum CAGR for sales for calculating the incentive is 10% with the maximum cap of The benefit is available Received approval under PLI 13% CAGR for eligible products including growth in scheme of the Government of The base year for cal
Slide 21: Our Long-Term Target Operating Model
OUR LONG-TERM TARGET OPERATING MODEL CONSISTENT PROFITABILITY CAPITAL GROWTH CENTRIC EFFICIENCY ~15% >10% 15–20% Revenue growth EBITDA margin RoCE (faster than industry) 21
Slide 22: Proof of the Pudding: Q2 FY23 Performance Update
PROOF OF THE PUDDING: Q2 FY23 Performance Update
Slide 23: Operational Overview
OPERATIONAL OVERVIEW Reported robust revenue growth of 23% • Delivered solid volumes across product categories, driven by robust demand yoy during Q2 FY23 and 29% during traction across key geographies for our diverse product offering H1 FY23 primarily driven by higher • Added 25 vehicles to our fle
Slide 24: MD & CEO's Message
MD & CEO’s Message “We are delighted to report a strong performance with revenues higher by 23% yoy in Q2 and by 29% yoy for the half year. The improvement in overall activity levels supported by resilient consumption patterns has led to higher demand. Our efforts to expand our network through addit
Slide 25: Abridged P&L Statement
ABRIDGED P&L STATEMENT Y-o-Y Y-o-Y (INR Mn) Q2 FY’23 Q2 FY’22 H1 FY’23 H1 FY’22 Change (%) Change (%) Income from Operations 4,572.8 3,705.8 23% 8,398.6 6,502.0 29% Raw Material Cost 3,289.6 2,663.4 24% 6,244.1 4,788.8 30% Gross Profit 1,283.2 1,042.4 23% 2,154.5 1,713.2 26% Gross Margins 28.1% 28.1
Slide 26: Abridged Balance Sheet
ABRIDGED BALANCE SHEET (INR Mn) Sep-22 Mar-22 Variance (INR Mn) Sep-22 Mar-22 Variance Cash and Bank Balances 261.11 321.66 -19% Payables 1,103.78 901.43 22% Other current liabilities 287.78 192.31 50% Fixed Deposit with Banks 701.17 432.35 62% Other financial & Lease 2% Inventory 1,297.06 1,446.23
Slide 27: Cash Flow Statement
CASH FLOW STATEMENT (INR Mn) H1 FY23 H1 FY22 YoY change EBITDA 201.36 352.57 -42.9% Commentary Non cash items in P&L (61.25) (26.31) 132.8% • Significant improvement in working Change in WC 414.92 165.60 151% capital management with cash (16.28) (23.70) 31% generation of INR 415 Mn. Income tax paid
Slide 28: Financials – Q2 & H1 FY'23 Performance
FINANCIALS – Q2 & H1 FY’23 PERFORMANCE Income from Operations Gross Profit (INR Mn) (INR Mn) 8,399 Gross Profit 2,155 6,502 Gross margin 1,713 4,573 1,283 3,706 1,042 28% 28% 26% 26% Q2 FY22 Q2 FY23 H1 FY22 H1 FY23 Q2 FY22 Q2 FY23 H1 FY22 H1 FY23 • Improvement in overall activity levels • Cost savin
Slide 29: Financials – Q2 & H1 FY'23 Performance
FINANCIALS – Q2 & H1 FY’23 PERFORMANCE EBITDA (INR Mn) PAT (INR Mn) PAT EBITDA 353 PAT margin EBITDA margin 147 131 242 221 201 42 4% 1% 2% -1% 7% 5% 5% 2% -72 Q2 FY22 Q2 FY23 H1 FY22 H1 FY23 Q2 FY22 Q2 FY23 H1 FY22 H1 FY23 • After withstanding unusually high RM prices • Softening of volatility in t
Slide 30: Financials – Q2 & H1 FY'23 Performance
FINANCIALS – Q2 & H1 FY’23 PERFORMANCE Cash profit Cash EPS (INR Mn) 381 (INR Mn) 16 272 12 213 220 9 9 Q2 FY22 Q2 FY23 H1 FY22 H1 FY23 Q2 FY22 Q2 FY23 H1 FY22 H1 FY23 • The Company follows a conservative Resumed • Cash profit substantially higher on Cash EPS accounting policy and is amortizing gene
Slide 31: Evolving Tastes: Industry Overview
EVOLVING TASTES: Industry Overview
Slide 32: Favourable Demographics Supporting Industry Growth
Favourable Demographics Supporting Industry Growth India Population Trend Total Organized Snacks Food Market Size ~40,000 (MIllions) Crores (Last 12 months) 1,468 Potato Chips 1,444 1,456 23% 1,405 1,418 1,431 1,392 1,368 1,379 1,339 1,326 Namkeen 44% Extruded Snacks 16% 2017 2018 2019 2020 2021 202
Slide 33: Thank You!
Sumit Sharma Prataap Snacks Ltd Email: cfo@yellowdiamond.in THANK YOU! Mayank Vaswani / Mit Shah CDR India Tel: +91 98209 40953 / +91 99201 68314 Email: mayank@cdr-india.com / mit@cdr-india.com