Sumitomo Chemical India Ltd. · NSE:SUMICHEM
Sumitomo Chemical India — Q3 FY20 Earnings Presentation
36 slides from Sumitomo Chemical India's earnings presentation, Feb 14, 2020
Slide 1: Cover letter to stock exchanges
Corporate Office: 13/14, Aradhana IDC, 4 SUMITOMO CHEMICAL INDIA LTD. Near Virwani Industrial Estate, Goregaon (East), Corporate Identity Number (CIN) - U24110MH2000PLC124224 Mumbai - 400 063. Tel.: +91-22-4252 2200 / Fax : +91-22-4252 2380 URL http://www.sumichern-india.co.in SCIL/SEC/2019-20/08 14
Slide 2: Sumitomo Chemical India Limited Investor Presentation
SUMITOMO CHEMICAL Sumitomo Chemical Che r,' India Limited Investor Presentation !nvestor February 2020
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sumitomo Chemical India Limited (the “Company”), have 4.• been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe
Slide 4: Q3 & 9M Results Presentation
Q3 Q3 && 9M 9M Results Presentation Results Presentation
Slide 5: Performance Highlights – Q3 & 9M FY20
Performance Highlights – Q3 & 9M FY20 40° Revenue (Rs Crs) EBITDA (Rs. Crs) & EBITDA Margin (%) Adj PBT * (Rs Crs) ✓ Q3 FY20 revenue growth of +21% 21% YoY driven by broad- 50 +150% 46 20 523 36 based volume growth across 432 40 +183% products, geographies and 15 30 business segments 8.7% 10 20 18 ✓
Slide 6: Consolidated Profit & Loss Account Statement
Consolidated Profit & Loss Account Statement 4o• Particulars (Rs. Crs) Q3 FY20 Q3 FY19 YoY 9M FY20 9M FY19 YoY Revenue from Operations 523.0 432.2 21.0% 1,979.0 1,806.7 9.5% COGS 356.3 296.4 1,317.8 1,173.5 Gross Profit 166.7 135.7 22.8% 661.2 633.2 4.4% Gross Profit % 31.9% 31.4% 33.4% 35.0% Employ
Slide 7: Revenue Breakup – 9M FY20 Vs 9M FY19
Revenue Breakup – 9M FY20 Vs 9M FY19 40• Product Breakup Geographic Breakup 5% 6% 9% 11% 8% 7% 49% 48% 83% 84% 9MFY19 9MFY20 12% 11% 17% 16% 18% 18% 9MFY19 9MFY20 Insecticides PGR Fungicides Domestic Export Herbicides Metal Phosphides AND & EHD* Segment Breakup Bulk & Branded Domestic Exports 15% 15
Slide 8: Key Developments
Key Developments 4.• Listing ✓ Equity shares of SCIL were listed and admitted to dealings on the BSE (542920) and NSE (SUMICHEM) effective from January 27, 2020 ✓ The outstanding shares post listing stands at 49,91,45,736 of FV of Rs 10 ✓ The listing follows the successful completion of the merger o
Slide 9: Company Overview
• 4 n. • 1. Jerr • -Al, • r•11 • 4p. -•Jr • • ..1•1 ir • r 1:1"11.4 : I gria •fri'trn10 • 421.- Lb. j•nr.— • • • ir ';- •• -7 - • k. Lk? 1 '• • 42 -• ff...• ••:312 • •; -P . : •••• • •- % ' erh • • • • 64.14 • r E. • # • 2 1141"1- ,• • •; 1 'SS. 9 •• •.',11:41 • •,.. r okr _0•1 dm 41- 4. • kn. 4 .•
Slide 10: Leading Agrochemicals Player in India
Leading Agrochemicals Player in India 4o• Overview Diversified Product Portfolio & Segment Mix (FY19) Incorporated in 2000 as a wholly owned subsidiary of SCC, Japan to drive expansion of its Health & Crop Sciences business in India • ASD 6% AND & EHD Primarily engaged in manufacture and sale of spe
Slide 11: Formidable Player in the Indian Agrochemicals Space
Formidable Player in the Indian Agrochemicals Space 4o• Grown 10X* over FY11-19 Rs. Bn 5 190+ 10X Manufacturing Brands 22 Facilities 10+ 25+ / 200+ Technical Actives Patents / Registrations 2 13,000+ 1,500+ FY11 FY19 Distributors Employees *On an organic basis, grown 6X 10
Slide 12: Journey to 10x Growth in India
Journey to 10x Growth in India 40° Exploration Phase: 2000 – 2009 Manufacturing JV with New Acquired product - 2000 Chemi 2002 Started EHD (Public Health) 2005 ‘Sulfosulfuron’ Leader 2010 business rights from Monsanto Started Animal Nutrition SCIL incorporated in India as 2001 Started ASD business 2
Slide 13: Merger of Excel Crop Care to Unlock Value
Merger of Excel Crop Care to Unlock Value 4o• Pre-Merger Structure Post-Merger Structure SCC and its affiliates Public Shareholders I (Japan) 44.98% SCC and its affiliates Public & Others (Japan) 100.00% 19.98% Excel Crop Care (ECC) J 35.03% 80.3% Sumitomo Chemical 19.7% India Limited 4 • SCIL issue
Slide 14: Well-diversified Platform of Scale (1/2)
Well-diversified Platform of Scale (1/2) 40• Parameter ECCL [ 1 [ 1(0)[ SCIL (Pre-Merger) ] SCIL (Post-Merger) Manufacturing Facilities Plants in Gujarat (2) and Plant in Maharashtra (1) and Dadar & Nagar Haveli (1) Gujarat (1) 5 plants in West India Predominantly a formulation Manufacturing Capabil
Slide 15: Well-diversified Platform of Scale (2/2)
Well-diversified Platform of Scale (2/2) 40• Parameter ECCL [ 1 [ 1(0)[ SCIL (Pre-Merger) ] SCIL (Post-Merger) Product Capability Major focus on Generics; nascent Major focus on Speciality Presence across complete presence in Biopesticides Products range of products Business Segments Presence only i
Slide 16: Autonomous Board with Vast Industry Experience
Autonomous Board with Vast Industry Experience 4o• Dr. Mukul Govindji Asher Chetan Shantilal Shah Chairman and Independent Director Managing Director ▪ Professorial Fellow at Lee Kuan Yew School of Public Policy at ▪ Commerce graduate from the University of Mumbai and the National University of Sing
Slide 17: Autonomous Board with Vast Industry Experience
Autonomous Board with Vast Industry Experience 4o• Bhupendranath Bhargava Preeti Gautam Mehta Independent Non-executive Director Independent Non-executive Director ▪ Experience of over 50 years in areas including banking, ▪ 30 years of experience in corporate laws, foreign investment project financi
Slide 18: To Benefit from Strong Parentage of SCC Japan
To Benefit from Strong Parentage of SCC Japan 4o• About SCC, Japan ✓ SCC is a leading Japanese research driven diversified chemical company listed on the Tokyo Stock Exchange with consolidated sales revenue for FY19 of US$ 20.8 bn and Health & Crop Sciences Sector of US$ 3.4 bn ✓ Offers diverse rang
Slide 19: Sustainable Drivers for Growth
"" .' 7.7.7 Sr -1-1-.1 .1 " .r•Lr Pr I : - 11 •••..1-- .1 f .. : .1 I • . .•.; Sustainable Drivers for Growth ' -. „ . ,.. . .•a, , L'.1.40.• i •- . . . : ., . ... ,`. •••' • . 7 • • lal r'' • a 1..1 . a . L ,-...4. ` -1 • .' ' 4r•-.r . ... iri: .. 2 . .117-1. ,. - IL ' • 1111' 1 lb- % .1.• r - • ..
Slide 20: Diversified & De-risked Portfolio Across the Agro-Chem Value Chain
Diversified & De-risked Portfolio Across the Agro-Chem Value Chain 4o• Balanced Presence Across Key Sub-Segments Geographic Diversification with Exports to over 60 countries of the Agro-Chem Value Chain Insecticides 8% 6% 8% 4% ••North America •• Herbicides South America Domestic 16% PGR 8% 78% Euro
Slide 21: Strategically Located Manufacturing Facilities
Strategically Located Manufacturing Facilities 4o• Connectivity to Major Cities and Proximity to Main Highways, Ports Reduces Logistic Time and Costs Plant Location Area (acres) Segment Served Product Manufactured Manufacturing of Technical Grade Pesticides Bhavnagar ~76 and Formulation Development
Slide 22: Strong Focus on R&D and Process Innovation
Strong Focus on R&D and Process Innovation End-to-End Product Development Capabilities 4.• ✓ 3 fully equipped, DSIR approved R&D labs located at Mumbai, Bhavnagar and Gajod capable of synthesis, technical product and formulation development ✓ R&D Team comprises of 75+ qualified and dedicated enginee
Slide 23: Strong Brand and Well-Entrenched Distribution Network
Strong Brand and Well-Entrenched Distribution Network 4o• I ✓ Strong brand with market leading position across various product categories 23 States 68 Depots I ✓ Dual brand portfolio can offer products at all price points serving multiple customer sub-segments 13,000+ ~40,000 I ✓ In-depth knowledge
Slide 24: Expanding Brand Visibility and Connect
Expanding Brand Visibility and Connect 4o• ✓ Wide range of generics and speciality products for Increased crop presence and providing crop protection solutions ✓ More than 1,400+ Relationship managers connecting to 1 million+ farmers throughout crop cycle ✓ Over 100 brands covering maximum of crops
Slide 25: Digital Marketing Initiatives
Digital Marketing Initiatives Develop “Digital Marketing” as a parallel support to Traditional marketing system leading to improved sales. ✓ Our Digital Assets : 17 websites, currently driving about 6,342 visitors everyday. YouTube - Advantage oAn74 CONIIIhe C115bIllulre E.Wyonye of pink bollworm In
Slide 26: Well Placed to Benefit from Sector Tailwinds
Well Placed to Benefit from Sector Tailwinds 4o• Pesticides: Market Share by Segment Highly Underpenetrated Market Significant growth opportunity for Indian Players o 5% Pesticide Consumption (Kg/ha) Agrochemical Market Size (US$ bn) 1% 22% 13 12 +8% 8.1 FY18 47% 7 4.1 5 5 25% <1 •• Fungicides • Ins
Slide 27: Thrust on Safety, Health and Environment (SHE)
Thrust on Safety, Health and Environment (SHE) Quality Certifications Ensure Consistent product quality and healthy 4.• working environment at manufacturing sites ISO:9001:2015, ISO-14001:2015 and OHSAS18001:2007 for the manufacturing sites at Bhavnagar, Gajod, Tarapur and Silvassa; ISO:9001:2015 at
Slide 28: Growth Strategies & Financial Performance
Growth Strategies Performance Highlights Growth Strategies & Financial Performance Profit & Loss Account Balance Sheet Cash Flow
Slide 29: Growth Strategies
Growth Strategies 4o• Continued Investment in R&D and Pipeline • Aim to invest in seamless integration of R&D between SCIL and SCC units which would help improve our production processes, enhancing yields and efficiency • Introduce new products as per market demand 0 0 0 m Capacity Expansion • Drivi
Slide 30: Performance Highlights
Performance Highlights 40• Revenue (Rs Crs) EBITDA (Rs. Crs) & EBITDA Margin (%) PAT (Rs Crs) 11.3% 11.9% +16% 300 264 12 +14% 2,212 166 1,913 250 217 10 145 200 8 150 6 100 4 50 2 ✓ Combined entity ~2x in size 0 0 FY18* FY19 FY18 FY19 FY18 FY19 ✓ Net debt free balance sheet ✓ Strong margin profile
Slide 31: Consolidated Profit & Loss Account Statement
Consolidated Profit & Loss Account Statement 4o• Particulars (Rs. Crs) FY19 FY18 YoY Net Revenue from Operations 2,211.7 1,912.9** 15.6% COGS 1,458.9 1,238.7 Gross Profit 752.8 674.2 11.7% Gross Profit % 34.0% 35.2% Employee Expenses 161.5 147.5 Other Operating Expenses 327.7 309.6 Operating EBITDA
Slide 32: Consolidated Balance Sheet
Consolidated Balance Sheet 4o• Assets (Rs. Crs) Sep-19 Mar-19 Mar-18 Equity & Liabilities (Rs. Crs) Sep-19 Mar-19 Mar-18-il Non-Current Assets 359.1 318.6 312.7 EQUITY 1,214.8 1,048.4 954.0 Property, Plant and Equipment 283.7 277.2 264.8 Equity Share Capital 274.6 274.6 274.6 Capital work-in-progres
Slide 33: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement 400 Cash Flow Statement (Rs. Cr) Sep-19 Mar-19 Mar-18 Net Profit Before Tax 224.2 259.8 221.0 Adjustments for: Non-Cash Items / Other Investment or Financial Items 21.0 18.6 9.6 Operating profit before working capital changes 245.2 278.5 230.6 Changes in working capi
Slide 34: Awards & Accolades
Awards & Accolades 4o• Jamnalal Bajaj Award for “Fair Business and Practices” Shramveer award for improvement of product efficiency received from national level Delhi First ever president’s gold shield for import substitution Vishwakarma Rashtriya Puraskar received for process development First awar
Slide 35: Key Takeaways
Key Takeaways Formidable Player in the Indian Experienced Management Team Well-diversified Product Portfolio Strong Brand and Well-Entrenched 4.• Agro-chem Space and Board of Directors Across Agro-Chem Value Chain Distribution Network ▪ Strong / leadership position across ▪ Strong management and ▪ M
Slide 36: For further information, please contact
For further information, please contact: Company : Investor Relations Advisors : Sumitomo Chemical India Limited Strategic Growth Advisors Pvt. Ltd. CIN : U24110MH2000PLC124224 CIN : U74140MH2010PTC204285 Mr. Sushil Marfatia Mr. Varun Divadkar / Mr. Jigar Kavaiya Executive Director 97637 02204 / 992
Sumitomo Chemical India — Q3 FY20 Earnings Presentation on 6ix