S H Kelkar and Company Ltd · NSE:SHK
S H Kelkar and — Q4 FY2016 Earnings Presentation
36 slides from S H Kelkar and's earnings presentation, May 27, 2016
Slide 1: S H Kelkar and Company Limited Q4 & FY2016 Earnings Presentation
S H Kelkar and Company Limited Largest Indian-origin Fragrance & Flavour company Q4 & FY2016 Earnings Presentation May 27, 2016
Slide 2: Disclaimer
Disclaimer Certain statements and opinions with respect to the anticipated future performance of SHK in the presentation (“forward-looking statements”), which reflect various assumptions concerning the strategies, objectives and anticipated results may or may not prove to be correct. Such forward-lo
Slide 3: Contents
Contents 1 Q4 & FY2016 Results Overview 2 Our Business 3 Annexure 2
Slide 4: Consolidated Summarized P&L Statement
Consolidated Summarized P&L Statement Y-o-Y Y-o-Y Particulars (Rs. crore) FY16 FY15 Q4 FY16 Q4 FY15 Change (%) Change (%) Revenues from Operations 922.84 833.12 10.8 264.73 234.80 12.7 Other Operating Income 3.72 2.41 54.4 1.29 .91 41.8 Total Income 926.56 835.53 10.9 266.02 235.71 12.9 Total Expend
Slide 5: FY2016 Financial and Operational Discussions
FY2016 Financial and Operational Discussions • Total Income improves to Rs. 926.56 core, up 10.9%; growth on constant currency basis is 12% o Continue to witness healthy traction in domestic market compared to international markets – Y-o-Y growth of 14% in domestic and 5% in overseas markets o Domes
Slide 6: Key Developments
Key Developments Integration of Hi-Tech Technologies (HTT) acquisition comprising of Flavours Division progressing well Executed a Business Transfer Agreement with HTT for acquisition of its Flavours Division for a total consideration of Rs. 25.1 crore Shifted production to the Company’s facilit
Slide 7: Revenue & EBIT Performance – Q4 & FY16
Revenue & EBIT Performance – Q4 & FY16 Q4 FY16 (Revenue) FY16 (Revenue) • Fragrance division forms 1,038 303 284 973 ~94% of Total Revenues – key revenue driver for the period under review • FY16 Revenue growth at 19 65 11%; Constant currency Total Fragrance Flavour Total Fragrance Flavour growth hi
Slide 8: Fragrance Division
Fragrance Division Revenue & Operating Profit Domestic and Overseas Revenue (Rs. crore) Overseas 35% 973 872 Revenue Domestic 65% EBIT 120 83 FY16 FY15 Y-o-Y Rev. growth 11.7% EBIT growth 43.5% Growth Note: Includes Inter company • Division reported 11.7% growth in FY16 – domestic and overseas reven
Slide 9: Flavour Division
Flavour Division Revenue & Operating Profit Domestic and Overseas Revenue (Rs. crore) 65 66 Domestic Overseas 49% Revenue 51% 11 EBIT 10 FY16 FY15 Y-o-Y Rev. growth -1.4 % EBIT growth 13.8% Growth Note: Includes Inter company • Segment registers marginal decline y-o-y – domestic business grew 8.7% h
Slide 10: Consolidated Balance Sheet
Consolidated Balance Sheet As on March As on March As on March As on March EQUITY AND LIABILITIES ASSETS 31, 2016 30, 2015 31, 2016 30, 2015 1) SHAREHOLDERS FUND 1) NON CURRENT ASSETS a) Share Capital 144.62 141.47 a) Fixed Assets 206.99 206.59 b) Reserves and Surplus 618.21 368.24 b) Goodwill on co
Slide 11: Balance Sheet Snapshot
Balance Sheet Snapshot • Networth 762.83 • Fixed Assets 206.99 • Cash & Investments 116.76 • Gross Debt less Cash and Cash equivalent (31.26) (Rs. crore) 10
Slide 12: Cash Flow Snapshot
Cash Flow Snapshot Particulars (Amount in Rs crore) FY13 FY14 FY15 FY16 Cash flow from Operations 103.1 32.1 61.7 86.4 Cash flow from investing activities -33.3 -63.7 -17.3 -22.4 Net 69.8 -31.6 44.4 64.0 Capex 51 36 32 26 FY13 FY14 FY15 FY16 (Rs. crore) 11
Slide 13: Financial Snapshot
Financial Snapshot Net Revenue from Operations EBITDA 927 835 EBITDA 19.0% 17.9% 19.0% 15.8% 17.6% 761 Margin 666 164 570 145 132 120 108 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Return on Net Worth & Return on Capital PAT Employed (%) PAT 7.2% 9.2% 10.4% 7.7% 8.7% Margin 20.3% 21.1% 21.0%
Slide 14: Key Financial Ratios
Key Financial Ratios Particulars FY13 FY14 FY15 FY16 EBITDA margin (%) 17.9 19 15.8 17.6 PAT Margin (%) 9.2 10.4 7.7 8.7 Debt to Equity 0.31 0.38 0.48 0.11 Debt to EBITDA 1.1 1.3 1.8 0.53 Return on Networth (%) 16.2 18.3 13.5 13.4 Return on Capital Employed (%) 21.1 21 17.6 20.3 Notes: 1. Return on
Slide 15: Management Comment
Management Comment Commenting on the performance, Mr. Kedar Vaze, Whole Time Director & CEO at SH Kelkar and Company Ltd. said: “We are pleased to report solid financial and operational performance in both Fragrance and Flavours businesses driven by improved realizations and product mix. As our busi
Slide 16: Contents
Contents 1 Q4 & FY2016 Results Overview 2 Our Business 3 Annexure 15
Slide 17: Who We Are
Who We Are S H Kelkar and Company Limited Market Excellent Strong Legacy Leadership Infrastructure Management • Established 90 years back • One of the largest Indian • Global scale, state-of-the-art • Private Equity investment by by SH Kelkar and VG Vaze F&F companies by sales, infrastructure Blacks
Slide 18: Who We Are
Who We Are Products 9,700+ Employees Customers 758 4,100+ Current Shareholding Pattern Others Sales CAGR 21.7% (2012-16) Perfumers / Flavourists ~13% / Scientists Credit Rating 12 / 2 / 18 CRISIL A/Positive Promoters & Promoter Group 56.7% Blackstone 21.6% Turnover – FY16 Creation & Development Cent
Slide 19: Our Business
Our Business Fragrances Business Flavours Business • Used by FMCG companies in personal wash, fabric care, skin Product care and hair care products; production of fine Fragrances • Used in production by bakeries, pharmaceutical Applications and F&F Blends manufacturers, dairy industry and beverages
Slide 20: Global F&F Market & Key Characteristics
Global F&F Market & Key Characteristics Concentrated market Increasing consolidation • Consolidated Industry • Large players continue to globally, with 12 players consolidate, for scale and controlling 83% of market differentiated product share and Top 4 controlling portfolio 57% of the market in CY
Slide 21: India's Favourable Dynamics Offer Huge Opportunities
India’s Favourable Dynamics Offer Huge Opportunities Globalization Rising young population Population of 1.21 bn, Globalisation to further India – GDP Growth growing 1.41% annually enhance and influence Young population ~65% customer preferences below 30 years age To bring in new product G
Slide 22: Indian F&F Market to Outpace Global F&F Growth
Indian F&F Market to Outpace Global F&F Growth Market Size ( Rs Crs) Indian F&F market to grow at 5,000 4,562 ~10% vs ~5% of global market (2013-16) 4,167 3,805 4,000 3,429 3,097 2,839 3,000 2,647 Indian market comprises of more 2,000 than 1,000 players 1,000 0 2010 2011 2012 2013 2014 2015 20
Slide 23: F&F Industry - Strong Entry Barriers
F&F Industry - Strong Entry Barriers High customer acquisition time Stringent regulatory Established relationships compliance with customers Availability of key Ingredients Sustained R&D efforts 22
Slide 24: Perfect Mix of Products, Brands and customers
Perfect Mix of Products, Brands and customers Products Customers Comprehensive Wide breadth product library of spanning MNCs, fragrances, domestic companies ingredients flavours & trade customers & formulations Low customer Over 90 years of concentration F&F legacy Portfolio comprises of c
Slide 25: Comprehensive Product Portfolio
Comprehensive Product Portfolio Fragrance Products Flavour Products Personal Wash Hair Care Skin Care Tea Dairy Products (Toilet Soap, Shower (Shampoo, Hair Oil….) (Creams, Lotions..) Gel, Hand Wash…) Fabric Care Household Products Fine Fragrances Bakery & Pharma (Detergents,Fabric (Air Care, Floor
Slide 26: Diverse Customer Base backed with Leading Brands
Diverse Customer Base backed with Leading Brands More than 3,700 Fragrance customers Brands Category Leader Brands in the portfolio - SHK, Keva and Cobra Branded small pack products “Cobra” sold to hundreds of traders and re-sellers across India and contributed ~6% of Sales in FY15 More than 4
Slide 27: Extensive Sales and Marketing Network
Extensive Sales and Marketing Network New Delhi Ahmedabad Nagpur Kolkata Mumbai Pune Hyderabad Bengaluru Cochin Manufacturing Facilities Creative Centres Countries Served SHK has established its International presence post acquisition of PFW Aroma Sales and marketing teams in November 2010 opera
Slide 28: Strong R&D Capabilities + Creation & Development Centers
Strong R&D Capabilities + Creation & Development Centers • SHK’s R&D forms the technological basis for its products and Strong R&D Capabilities solutions to focus on creative and consumer-centric research activities • Strong and dedicated research team of 18 scientists operating in Mumbai and Barnev
Slide 29: Well Equipped Creative Centers
Well Equipped Creative Centers Cosmetic Lab Fragrance Creation Application and Evaluation Quality Control Lab Market Research Application and Evaluation 28
Slide 30: Areas of Strategic Focus
Areas of Strategic Focus 1 Continue growth in market share 5 2 Accelerate growth through strategic Strengthen innovation acquisitions and platform to enhance partnerships products portfolio 4 3 Expand presence in Supply chain the branded small pack optimisation portfolio 29
Slide 31: Future Strategy
Future Strategy 1 Continue growth in market share • Focus on retaining current domestic market leadership and enhancing market share in Fragrance industry in India and emerging markets like Asia, Africa & Middle East • Introduction of new products in both the fragrance and flavour segments • Investm
Slide 32: Future Strategy
Future Strategy 4 Supply chain optimisation • Dynamic finished product forecasting to anticipate customer orders • Strengthening sales and operations planning by implementing new processes and tools • Product portfolio rationalisation • Raw material management 5 Accelerate growth through strategic a
Slide 33: Contents
Contents 1 Q4 & FY2016 Results Overview 2 Our Business 3 Annexure 32
Slide 34: Conference Call Details
Conference Call Details S H Kelkar and Company Ltd.’s Q4 FY2016 Earnings Conference Call Time • 10:00 am IST on Tuesday, May 31, 2016 Local dial-in numbers • Primary number: +91 22 3938 1071 • Secondary number: +91 22 6746 8354 International Toll Free Number • Hong Kong: 800 964 448 • Singapore: 800
Slide 35: About Us
About Us S H Kelkar and Company Limited (SHK) is the largest Indian-origin Fragrance & Flavour Company in India. It has a long standing reputation in the fragrance industry developed in 90 years of experience. Its fragrance products and ingredients are used as a raw material in personal wash, fabric
Slide 36: Thank you
Thank you 35
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