S Chand And Company Limited · NSE:SCHAND
S Chand And — Q3 FY2018-19 Earnings Presentation
29 slides from S Chand And's earnings presentation, Feb 14, 2019
Slide 1: Cover letter to stock exchanges
� -!- T S Chand And Company Limited Corporate Office: A-27, 2nd Floor, Mohan Co-Operative Industrial Estate, New Delhi - 110044, India. Registered Office: Ravindra Mansion, Ram Nagar, New Delhi - 110055, India. S.CHAND GROUP P:'+91 11 4973 1800 I F:+91 11 4973 1801 I E: info@schandgroup.com I www.sc
Slide 2: Q3 – FY2018-19 Result Presentation
S. Chand and Company Limited Q3 – FY2018-19 Result Presentation February 14, 2019
Slide 3: Summary
SUMMARY • KEY HIGHLIGHTS • LAUNCH OF S CHAND 3.0 – FOCUS ON CASH FLOW IMPROVEMENT • SEASONAL NATURE OF OUR BUSINESS • CONSOLIDATED FINANCIALS: Q3FY19 • WORKING CAPITAL CYCLE • SHAREHOLDING STRUCTURE • LOOKING AHEAD • ANNEXURE: • China vs India – A Case Study in Education Sector • Indian Education Se
Slide 4: Key Highlights
KEY HIGHLIGHTS • Launched “S Chand 3.0” Program focused on increasing Free cash flow generation • We have launched “S Chand 3.0” program in the company which is aimed at generating higher free cash flows from the business. As a first step, we are targeting better terms with channel partners during t
Slide 5: Key Highlights
KEY HIGHLIGHTS • Relentless focus on improving debtor days metrics • Due to the seasonal nature of our business, Q3 historically contributes only a minor portion of our annual revenues. • Our Debtor days has reduced by 23 days QoQ to 155 days (vs. 290 days in Q4FY18, 231 days in Q1FY19 & 178 days in
Slide 6: Launch of S Chand 3.0 – Focus on Cash Flow Improvement
LAUNCH OF S CHAND 3.0 – FOCUS ON CASH FLOW IMPROVEMENT Targeting better • Focusing on better terms with channel partners, improved velocity of terms with collection, sale productivity metrics etc. channel partners • Focus on higher margin products. during sales in • Tightening of discounting structu
Slide 7: Seasonal Nature of Our Business
SEASONAL NATURE OF OUR BUSINESS Less than 10% of annual Less than 5% of annual Less than 5% of annual 80% to 85% of annual revenues; revenues; revenues; revenues; Negative WC Negative WC Peak Inventory Peak Receivables Q1 April - June Q2 July - September Q3 October - December Q4 January - March o Co
Slide 8: Seasonal Nature of Our Business - A Picture is Worth a Thousand Words
SEASONAL NATURE OF OUR BUSINESS - A PICTURE IS WORTH A THOUSAND WORDS S Chand (Standalone) - Historical Quarterly Performance (Rs m) 2,621 2,700 2,082 2,100 Q1, Q2 & Q3 historically contributes approx 15%-20% of annual Q4 makes for majority 1,500 revenues & profitability revenues 1,193 970 900 746 5
Slide 9: Consolidated Financial Performance: Q3FY19
CONSOLIDATED FINANCIAL PERFORMANCE: Q3FY19 (₹ in millions) Quarter ended Nine months period ended Year ended Dec 31, Dec 31, Sep 30, Dec 31, Dec 31, March 31, Particulars 2018 2017 2018 2018 2017 2018 Unaudited Unaudited Unaudited Unaudited Unaudited Audited (Refer note 2) (Refer note 2) (Refer note
Slide 10: Working Capital Cycle – Elevated in Q4, Reduction Continues Till Q3
WORKING CAPITAL CYCLE – ELEVATED IN Q4, REDUCTION CONTINUES TILL Q3 • Debtors reduced from Rs6,312m as of Q4FY18 to Rs3,085m as of Q3FY19 (vs Rs5,016 in Q1FY19 & Rs3,866 in Q2FY19) • Overall net working capital stood at 224 days on back of increased inventory to cater to Q4 sales. This is a usual in
Slide 11: Shareholding Structure
SHAREHOLDING STRUCTURE Market Data As of 13th Feb, 2019 Key Institutional Investors - December 2018 % Holding Market Capitalization (Rs Mn) 7,370 Price (Rs) 211 Everstone Capital Partners II LLC 9.5% No. of shares outstanding (Mn) 34.95 International Finance Corporation 8.0% Face Value (Rs.) 5.0 HDF
Slide 12: Annexure
Annexure: - China vs India – A Case Study in Education Sector - Indian Education Sector - Overview - S Chand – Group Profile - S Chand - Historical Financial Performance 11
Slide 13: China - A Case Study in Growth - India Expected to Follow Suit
CHINA - A CASE STUDY IN GROWTH - INDIA EXPECTED TO FOLLOW SUIT CHINA 2006 INDIA 2017 • GDP per capita US$ 2,100. • GDP per capita US$ 1,940 • Private education market < US$ 50 Billion*. • K-12 market growing at ~ 20%. • Private education market ~ US$ 30 Billion*. • Education market expected to doubl
Slide 14: Indian Education Sector - Large & Growing Addressable Opportunity
INDIAN EDUCATION SECTOR - LARGE & GROWING ADDRESSABLE OPPORTUNITY US$90 BN Market Size for the Indian Education Sector 6 US$6 BN Ancillary Education Segment Early education 2 Informal Education Segment S. Chand operates in this segment (K-12/ Higher Education content). Test prep 5 5 o US$20 BN ➢ Sup
Slide 15: Indian Education Sector: Inflection Point, Strong Potential
INDIAN EDUCATION SECTOR: INFLECTION POINT, STRONG POTENTIAL Age-wise population distribution in India : S. Chand target market Literacy rate improving with higher participation from students (Source: IBEF Report) (Source: Technopak’s Outlook on India Schooling Segment) 500 40% 450 Potential Market o
Slide 16: Preference Towards Private, Central Curriculum Schools
PREFERENCE TOWARDS PRIVATE, CENTRAL CURRICULUM SCHOOLS Private schools market share increasing every year Indian K-12 education infrastructure (Source: IBEF Report) 120% (Source: Technopak’s Outlook on India’s Schooling Segment) Number of Schools: 1.5 MN 100% 20.0% 21.2% 21.5% 22.1% 23.0% Government
Slide 17: Preference Towards Private, Central Curriculum Schools
PREFERENCE TOWARDS PRIVATE, CENTRAL CURRICULUM SCHOOLS Target Market is 3,00,000 schools – growing at 8-10 % annually and student strength growing at 7-8% • Currently covering 38,000 schools in the target market • Target market growing at 8-10% annually in the no. of Intl 25-300 Schools schools Scho
Slide 18: S Chand Group - Leader in Indian Education Content
S CHAND GROUP - LEADER IN INDIAN EDUCATION CONTENT Delivering content, services and solutions… ➢ Long operating history of over seven decades. ➢ Offerings spanning entire the ➢ High brand equity across multiple brands. education spectrum …across the ➢ Strong author relationships. education o Early l
Slide 19: S Chand Group - Business Segments
S CHAND GROUP - BUSINESS SEGMENTS K-12 Higher Education Early Learning Revenue 80% of FY2018 revenues 18% of FY2018 revenues 2% of FY2018 revenues contribution 40% revenue CAGR (2012-2018) 9% revenue CAGR (2012-2018) Test prep (>18 years) Target Segment School students (4 -18 years) College students
Slide 20: S Chand Group - Growth Anchored by Leadership in K-12 Segment
S CHAND GROUP - GROWTH ANCHORED BY LEADERSHIP IN K-12 SEGMENT Growth Strategy ❖ Consolidated leadership in CBSE/ ICSE schools as preferred content provider. 5,378 ✓ More offerings in K-12 through multiple brands. ✓ Curriculum management. 6,355 5,427 ❖ Geographical diversification in large 3,898 regi
Slide 21: S Chand Group - Powerful Brand Connect
S CHAND GROUP - POWERFUL BRAND CONNECT Connecting with Learners • Art of Book making tour of the Printing Facilities • Mystudygear App • Social Media Connecting with Teachers with • Teacher Conclaves and Awards • Over 2000 Workshops • The Progressive Teacher magazine Connecting with School Leadershi
Slide 22: S Chand Group - Our Three Pronged Strategy
S CHAND GROUP - OUR THREE PRONGED STRATEGY 2 Leverage Reach & Expand ACCELERATE • Expand into regional markets through strategic ACQUISITONS & DIGITAL alliances/ acquisitions. INITIATIVES • ”Phygital” to broaden reach and improve outcome. • Expand digital & service offerings to new geographies and s
Slide 23: Leverage Reach & Expand – Strategic Alliances / Acquisitions
S CHAND GROUP - LEVERAGE REACH & EXPAND – STRATEGIC ALLIANCES / ACQUISITIONS STRATEGIC ALLIANCES / ACQUISITIONS • Strengthen penetration in the CBSE, ICSE Schools and expand into regional markets. • Made multiple successful acquisitions in the past, integrating companies with S. Chand Group philosop
Slide 24: Digital – Complementing Core Business Through Phygital
S CHAND GROUP - DIGITAL – COMPLEMENTING CORE BUSINESS THROUGH “PHYGITAL" Short Multi-media / videos to better illustrate difficult topic to students. • Test preparation and simulated papers for learners to test their understanding. • Students can gauge their performance and better prepare for exams.
Slide 25: Digital Initiatives – Synergies to the Core Business
S CHAND GROUP - DIGITAL INITIATIVES – SYNERGIES TO THE CORE BUSINESS In-House (Revenue Stream) Digital Investments (Inorganic) • Focused on investing in early stage digital companies. • Offerings include digital classroom learning solutions, • Total investments in digital investee companies is ~Rs.3
Slide 26: Historical Financial Performance
S CHAND – HISTORICAL FINANCIAL PERFORMANCE + 18% yoy + 21% yoy + 73% yoy INR 31.1 Revenue growth Ebidta growth PAT growth Earning Per Share FY 2017-18 FY 2017-18 FY 2017-18 FY 2017-18 Summary : Consolidated FY 2018 FY 2017 YOY% FY 2017 Figures in INR Mn Audited Proforma* Audited Total Revenues 8,072
Slide 27: Historical Financial Performance
S CHAND – HISTORICAL FINANCIAL PERFORMANCE Increasing Contribution of K-12 to Group Revenues. Revenue Growth = Organic Growth + Acquisitions. Early learning K12 Higher Education Other Revenue 6 - Year CAGR : 29% 1,403 1,224 1,282 1,237 6,355 7,945 1,345 5,427 6,833 3,898 4,785 5,407 3,378 3,710 2,17
Slide 28: Improving Margin Profile
S CHAND – IMPROVING MARGIN PROFILE Improving Margin Profile • Economies of scale • Production Efficiency • Rationalization of Royalty • Improved realization from DEBs • Operating Leverage 27
Slide 29: Disclaimer
Disclaimer This presentation and the following discussion may contain “forward looking statements” by S. Chand & Company Limited (“S. Chand” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, fin
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