Greenply Industries Ltd · NSE:GREENPLY
Greenply Industries — Investor Presentation (November 2019)
50 slides from Greenply Industries's investor presentation, Nov 27, 2019
Slide 1: Submission of Investor/Analyst Meet presentation
Greenply/2019-20 November 27,2019 The Manager The Manager BSELimited National Stock Exchange of India Limited Department of Corporate Services Exchange Plaza, Bandra Kurla Complex Floor 25, P. J. Towers, Dalal Street Bandra (E) Mumbai - 400 001 Mumbai - 400 051 Security Code: 526797 Symbol- GREENPLY
Slide 2: Analyst Meet Presentation (November 2019)
ANALYST MEET PRESENTATION (November 2019)
Slide 3: Disclaimer
Disclaimer Certain statements in this communication may be ‘forward looking statements’ within the meaning of applicable laws and regulations. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those s
Slide 4: Contents
Contents Industry/Plywood Overview Company Overview Subsidiary Operations Financial Performance Our Branding / Marketing Shareholding, Directors and Top Management Annexure 3
Slide 5: Industry/Plywood Overview
Industry/Plywood Overview Enormous industry Rising residential potential with market and commercial size of Rs.19,000 crore construction activity throughout the Organized vs Unorganized (Rs. Crore) country INDUSTRY CAGR 3-4% Organized players gaining market share with reference shift for STRONG True
Slide 6: Plywood industry value chain - Price-wise
Industry/Plywood Overview Plywood industry value chain - Price-wise (taking 19mm thickness as base) FY14-19 FY14-19 FY14-19 CAGR of 10-12% CAGR of 5-6% Flat/Degrowth Luxury / Premium plywood (Rs 100-140 psf) Medium/Mass plywood (Rs 70-90 psf) Low-end plywood (Rs.40-60 psf) • Market size: Rs 38bn • M
Slide 7: Luxury/premium plywood market space
Industry/Plywood Overview Luxury/premium plywood market space: Key highlights, demand drivers and opportunities for tier-I brands • Premium brands, Greenply & Centuryply are estimated to account for more than 51% of the organised market Key highlights: • Tier II brands account for the remainder of t
Slide 8: Mid/mass market plywood space
Industry/Plywood Overview Mid/mass market plywood space – Key highlights, demand drivers and opportunities • Tier II brands account for 10% while the unorganised sector controls around 85% of the market Key highlights: • This category has grown at a 5-6% CAGR over the last five years Tier I brands •
Slide 9: Low-end plywood market - key highlights and challenges
Industry/Plywood Overview Low-end plywood market – Key highlights and challenges Unorganised sector controls the entire low-end plywood market segment Tier I and II brands have no presence in this category This category is either not growing or declining over the last five years The category
Slide 10: Contents
Contents Industry/Plywood Overview Company Overview Subsidiary Operations Financial Performance Our Branding / Marketing Shareholding, Directors and Top Management Annexure 9
Slide 11: Company Overview
Company Overview Business Segments • Wood based products - Plywood and allied products, Face Veneer 30 Years Strong Brand • Largest pan-India player with 26% share of organized plywood market • Large investments in advertisements and promotional activities over the years Strong Industry Potential •
Slide 12: Company Overview
Company Overview Capacity Utilization • Plywood 139% utilization in FY19; optimum capacity utilization expected to be around 155% through outsourcing of MATT plywood • Incremental demand for mid-segment and low-segment plywood to be catered through 100% outsourcing Raw Material Sustainability • Plan
Slide 13: Our Global Business
Company Overview Our Global Business GREENPLY Greenply India Overseas Subsidiaries / JV Plywood & Allied Products Gabon - West Africa Myanmar Plywood Face Veneer Face Veneer Block Boards Flush Doors Decorative Veneers Film Face Plywood 12
Slide 14: Well-entrenched Distribution Network
Company Overview Well-entrenched Distribution Network DISTRIBUTORS / STOCKISTS RETAILERS BRANCHES 13
Slide 15: Facilities and Business Model
Company Overview FACILITIES REGIONAL PLYWOOD MIX Capacity Location (mn sqm.) Tizit, Nagaland 4.50 Kriparampur, West Bengal 6.00 23% Bamanbore, Gujarat 14.40 Total Capacity 24.90 BUSINESS MODEL • 64% PREMIUM PRODUCTS AND 36% MID & LOW END PRODUCTS IN VOLUME TERMS • 72% PREMIUM PRODUCTS AND 28% MID &
Slide 16: Manufacturing Process
Company Overview Manufacturing Process-new (4 Press Technology) Veneer Purchase/Own Generation Testing, Finishing, Overlaying Stamping & Pre Press Despatch Overlaying Drying Assembling Overlaying Hot Press Composing Mat Ply of Veneer Own Calibration Into 8x4 By Core Composer Pre Press Hot Press Mat
Slide 17: Milestones
Company Overview Milestones 1984 PROMOTERS START OPERATIONS WITH A SAW MILL 2006 LAUNCH OF ECOTEC BRAND 1988 SETTING UP OF 1ST PLYWOOD UNIT IN TIZIT, NAGALAND 2007 ACQUISITION OF TWO PLYWOOD UNITS IN GUJARAT, NOW BAMANBORE FACTORY INCORPORATED AS COMPANY UNDER THE NAME MITTAL LAMINATES PVT IMPLEMENT
Slide 18: Contents
Contents Industry/Plywood Overview Company Overview Subsidiary Operations Financial Performance Our Branding / Marketing Shareholding, Directors and Top Management Annexure 17
Slide 19: Why Gabon?
Subsidiary Operations Why Gabon? o A favorable business environment with investor friendly policies and ease of operation through single window policy for documentation & approvals o A special economic zone in close proximity to the port area, available with integrated services and attractive tax in
Slide 20: Greenply in Gabon
Subsidiary Operations Greenply in Gabon o In July 2017, we expanded with a manufacturing facility at Gabon in West Africa. o The facility is located at the NKOK - a special economic zone near the capital city of Gabon. o We are the only company in the SEZ to be FSC COC certified o The Greenply unit
Slide 21: Face Veneer Facility - Gabon, West Africa
Subsidiary Operations Face Veneer Facility – Gabon, West Africa o Greenply through its wholly owned step-down subsidiary Greenply Gabon, SA has started commercial production of face veneer in the West Africa region in July 2017 with capacity for peeling 36,000 CBM p.a of Logs and capacity increased
Slide 22: Face Veneer Facility - Gabon, West Africa
Subsidiary Operations Face Veneer Facility – Gabon, West Africa o Okoume is now accepted as the best available species for Face Veneer world over and has found wide spread acceptability in India. o In the international market, countries like Malaysia, Indonesia which were exporters of Face Veneer ar
Slide 23: Contents
Contents Industry/Plywood Overview Company Overview Subsidiary Operations Financial Performance Our Branding / Marketing Shareholding, Directors and Top Management Annexure 22
Slide 24: Strong Performance Track Record
Financial Performance Strong Performance Track Record Consolidated Standalone Net Sales Gross Profit Net Sales Gross Profit 551 474 1,404 1,276 879 317 900 336 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 EBIDTA PAT EBIDTA PAT 147 80 126 61 71 35 68 21 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 Note: All nu
Slide 25: Key Financials
Financial Performance Key Financials Consolidated Standalone ROE ROE 23.8% 18.5% 13.1% 7.8% FY18 FY19 FY18 FY19 Pre - Tax ROCE Post - Tax ROCE Pre - Tax ROCE Post – Tax ROCE 22.2% 22.7% 16.8% 16.0% 11.8% 8.8% 8.1% 5.5% FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 Note: All numbers are adjusted for post d
Slide 26: Consolidated Financial Highlights - Q2 FY 2020
Consolidated Financial Highlights - Q2 FY 2020 Q2 FY20 Q2 FY19 Key Ratios (%) Q2 FY20 Q2 FY19 Gross Margin 42.1 37.9 Net Sales 378.9 358.2 5.8% EBITDA Margin 11.9 10.3 EBIT Margin 10.2 8.7 Net Margin 7.0 4.9 Ad and promotions / Net Sales 3.2 5.6 Gross Profit 17.6% 159.7 135.8 Staff Cost/ Net Sales 1
Slide 27: Consolidated Financial Highlights - H1 FY 2020
Consolidated Financial Highlights - H1 FY 2020 H1 FY20 H1 FY19 Key Ratios (%) H1 FY20 H1 FY19 Gross Margin 42.0 38.0 Net Sales 727.1 665.1 9.3% EBITDA Margin 11.9 8.8 EBIT Margin 10.2 7.1 Net Margin 6.5 4.4 Ad and promotions / Net Sales 3.5 5.2 Gross Profit 21.0% 305.6 252.6 Staff Cost/ Net Sales 11
Slide 28: Standalone Financial Highlights - Q2 FY 2020
Standalone Financial Highlights - Q2 FY 2020 Q2 FY20 Q2 FY19 Key Ratios (%) Q2 FY20 Q2 FY19 Gross Margin 39.7 35.9 Net Sales 344.1 336.4 2.3% EBITDA Margin 11.4 10.7 EBIT Margin 9.8 9.3 Net Margin 6.7 5.4 Ad and promotions / Net Sales 3.5 5.6 Gross Profit 12.9% 136.5 120.9 Staff Cost/ Net Sales 12.0
Slide 29: Standalone Financial Highlights - H1 FY 2020
Standalone Financial Highlights - H1 FY 2020 H1 FY20 H1 FY19 Key Ratios (%) H1 FY20 H1 FY19 Gross Margin 40.1 36.5 Net Sales 648.3 622.0 4.2% EBITDA Margin 11.2 9.5 EBIT Margin 9.6 8.0 Net Margin 6.0 4.5 Ad and promotions / Net Sales 3.9 5.4 Gross Profit 14.8% 260.2 226.7 Staff Cost/ Net Sales 11.8
Slide 30: Financial Highlights - Balance Sheet Perspective
Net worth Total Debt 376.4 364.0 282.5 335.2 331.3 249.0 250.0 287.5 298.5 170.9 156.2 143.6 Financial Highlights - Consolidated Standalone Consolidated Standalone Balance Sheet Capital Employed Cash & Cash equivalents Perspective 658.9 585.2 20.6 536.5 534.9 18.9 18.1 454.7 475.0 16.3 17.3 13.4 Con
Slide 31: Financial Highlights - Balance Sheet Perspective
Receivables Fixed Assets 359.3 305.7 305.1 330.8 290.7 283.4 262.9 269.2 277.8 200.0 172.3 174.3 Financial Highlights - Consolidated Standalone Consolidated Standalone Balance Sheet Payables Inventories Perspective 242.3 155.7 161.6 169.4 141.6 241.5 131.9 128.2 232.0 234.8 219.3 214.0 Consolidated
Slide 32: Financial Highlights - Ratios
Inventories (Days) Debtors (Days) 93 44 44 90 41 39 82 38 80 81 37 79 Financial Consolidated Standalone Consolidated Standalone Highlights - Ratios Creditors (Days) Working Capital Turnover (Days) 75 67 69 69 68 60 62 63 54 57 51 53 Consolidated Standalone Consolidated Standalone Sept’19 Sept’18 Mar
Slide 33: Financial Highlights - Ratios
ROE (%) RoCE Pre-tax (%) 25.2 23.2 23.8 22.7 21.2 22.1 22.2 22.0 20.3 18.6 18.5 19.6 Financial Consolidated Standalone Consolidated Standalone Highlights - RoCE Post-tax (%) Debt/Equity Ratios 17.6 17.6 0.87 16.8 15.3 16.0 0.75 0.75 13.9 0.52 0.47 0.43 Consolidated Standalone Consolidated Standalone
Slide 34: Consolidated Performance - Q2 FY 2020 v/s Q2 FY 2019
Sales 378.9 Gross Profit EBITDA 45.0 344.1 159.7 39.1 136.5 Q2 FY20 34.8 23.2 5.9 Consolidated Greenply Subsidiaries Consolidated Greenply Subsidiaries Consolidated Greenply Subsidiaries Consolidated Performance - Q2 FY 2020 v/s Q2 FY 2019 Sales 358.2 Gross Profit 35.9 EBITDA 36.9 336.4 135.8 120.9
Slide 35: Consolidated Performance - H1 FY 2020 v/s H1 FY 2019
Sales 727.1 Gross Profit EBITDA 305.6 86.6 648.3 260.2 72.8 H1 FY20 78.8 45.3 13.8 Consolidated Greenply Subsidiaries Consolidated Greenply Subsidiaries Consolidated Greenply Subsidiaries Consolidated Performance - H1 FY 2020 v/s H1 FY 2019 622.0 Sales 665.1 Gross Profit 59.2 EBITDA 252.6 58.3 226.7
Slide 36: Greenply Standalone Performance
Particulars H1 FY20 FY19 FY18 Net sales (Rs. crore) 648 1,276 879 EBITDA margin (%) 11.2 9.9 8.0 Greenply Standalone EBIT margin (%) 9.6 8.4 6.3 Performance Annual capacity (million sqm.) 24.90 24.90 21.90 Production (million sqm.) 18.51 34.69 23.62 Sales volume (million sqm.) 28.73 57.13 40.95 Util
Slide 37: Contents
Contents Industry/Plywood Overview Company Overview Subsidiary Operations Financial Performance Our Branding / Marketing Shareholding, Directors and Top Management Annexure 36
Slide 38: Our Brands
Our Branding / Marketing Our Brands 37
Slide 39: Marketing / Activation
Our Branding / Marketing Marketing / Activation o Influencers Program/Meet Maanyata Milan (Carpenter Recognition Program) Carpenter Meets o Product Promotion – Road Show with product display o Local Branding activity – Wall Paintings, GSB’s etc. 38
Slide 40: Product launch - Green Club Hundred
Our Branding / Marketing Product launch – Green Club 5 Hundred The last word in plywood is here now. In keeping with our tradition of continuous innovation we launched Green Club 5 Hundred on 17th August 2019. As market leaders, our confidence in the product quality allows us to offer Green Club wit
Slide 41: Brand Activation - Digital
Our Branding / Marketing Brand Activation– Digital Digital media has been the key focus for us this year launching campaigns almost every quarter. Starting from IPL, World Cup to Independence Day & Pujo the brand has constantly engaged with high participation from the audience on topical content to
Slide 42: Our Branding / Marketing
Our Branding / Marketing • To leverage strong brand presence built over 30 years o India’s leading plywood manufacturing company o To continue investing ~4% of net sales going forward towards ad expenditure with the aim of increasing brand visibility and recall Successful brand campaigns • ‘Sardar K
Slide 43: Contents
Contents Industry/Plywood Overview Company Overview Subsidiary Operations Financial Performance Our Branding / Marketing Shareholding, Directors and Top Management Annexure 42
Slide 44: Shareholding Pattern
Shareholding, Directors and Top Management Shareholding Pattern June 2019 September 2019 Public, Public, 17.11% 15.12% Promoter , Promoter , 51.03% 51.70% Institution, Institution, 31.86% 33.18% Promoter holding has increased 0.67% in Q2 FY20 – a reflection of Promoter’s confidence in the strength a
Slide 45: Board of Directors
Shareholding, Directors and Top Management Board of Directors RAJESH MITTAL SUSIL KUMAR PAL CHAIRMAN CUM Veteran in the industry with over Erstwhile GM, Allahabad bank 30 years of experience NON-EXECUTIVE – MANAGING DIRECTOR INDEPENDENT SANIDHYA MITTAL ANUPAM KUMAR MUKERJI More than 6 years of indus
Slide 46: Top Management
Shareholding, Directors and Top Management Top Management B. Com, FCA, DISA; Over 17 years SUBIR PALIT – MUKESH AGARWAL – B. Sc, MBA; Over 30 years of of experience in finance, accounts COUNTRY HEAD – SALES & experience in sales & marketing CHIEF FINANCIAL OFFICER and taxation MARKETING ARABINDA SAH
Slide 47: Contents
Contents Industry/Plywood Overview Company Overview Subsidiary Operations Financial Performance Our Branding / Marketing Shareholding, Directors and Top Management Annexure 46
Slide 48: CSR Activity
Annexure CSR Activity Mission : Employ our strength to support our communities and enhance the way people live, learn & work o Free eye check up camp and cataract operation for communities o Blood donation camp: Human blood is an essential element of human life with no substitute o Mobile Medical Va
Slide 49: Growth Outlook
Annexure ADVERTISING & PROMOTIONAL SPENDS • Continued investments in increasing brand visibility pan-India PRODUCT PROFILE • Maintain Ad spends at around 4% of Net Sales • To improve mix of plywood through increase in mix of value-added products like Green Defender, Green Gold Prima and Decorative V
Slide 50: About Greenply
About Greenply Greenply Industries Limited (GIL) enjoys leadership position in For further information, please contact: plywood with more than 26 percent share of the organized Mukesh Agarwal – Chief Financial Officer plywood market in India. Greenply Industries Limited GIL has three state-of-the-ar
Greenply Industries — Investor Presentation (November 2019) on 6ix