Neogen Chemicals Ltd. · NSE:NEOGEN
Neogen Chemicals — Q1 FY25 Earnings Presentation
32 slides from Neogen Chemicals's earnings presentation, Aug 8, 2024
Slide 1: Expanding Capabilities, Exploring New Horizons
Expanding Capabilities Exploring New Horizons Q1 FY25 Earnings Presentation August 2024
Slide 2: Safe Harbour
Safe Harbour 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
Slide 3: Table of Contents
Table of Contents Introduction to Update on Expansion Q1 FY25 Financial Industry Overview – Neogen Chemicals Initiatives Performance Lithium-Ion Batteries 4 14 17 26 4 14 17 26 Way Forward CSR Initiatives Contact Us 29 30 29 30 31 3
Slide 4: Introduction to Neogen Chemicals
Introduction to Neogen Chemicals 4
Slide 5: Neogen Chemicals – At a Glance
Neogen Chemicals – At a Glance ISO 9001:2015, ISO 4 Manufacturing Sites + 2 246 R&D Facilities 9% 14001:2015 & ISO 760.3 24% 11% 45001:2018 Products Infrastructure Of workforce in Manufacturing units certified on Net worth - 5-year Revenue 5-year PAT developed by R&D team Quality & SHE management sy
Slide 6: Evolution of Neogen Chemicals
Evolution of Neogen Chemicals 1970’s to 1991 Pre- 2020 to 2024 – Multiple 1991 to 2016 – Site I 2016 to 2019 – Site I & II Neogen Sites ▪ Mr. HT Kanani graduated as a ▪ ‘Neogen Chemicals’ commenced ▪ Acquired Solaris ChemTech ▪ Doubled Inorganic Chemicals Chemical Engineer and started his business o
Slide 7: Key Milestones
Key Milestones Leading manufacturer of Bromine and Lithium-based specialty chemicals since 1989 Increased Organic Chemicals reactor Raised Rs. 132 capacity to 407,000 Started crore through litres Incorporation as a manufacturing initial public Raised Rs. 225 crore private limited Increased in specia
Slide 8: End User Industries
Business Overview Bromine Compounds Select Clientele Organic compounds containing chlorine, fluorine, iodine-based Pharmaceuticals combinations thereof and others including grignard reagents Agrochemicals Organolithium / Organometallic End User Industries N Butyl Lithium and other organolithium prod
Slide 9: Compelling value-proposition
Compelling value-proposition Innovative Product Portfolio Excellent R&D Enduring Customer Capabilities Relationships State-of-the-art Established Manufacturing Facilities Relationship with Suppliers Experienced Specialised Business Board of Directors Model with High Entry Barriers 9
Slide 10: Experienced Leadership Team
Experienced Leadership Team Mr. Anurag Surana, Non-Executive Director ▪ Holds a bachelor’s degree in commerce with Honours from the University of Delhi ▪ Experience of more than 20 years in Contract Manufacturing business Mr. Haridas Kanani, ▪ A well-known personality in the Agrochemical and special
Slide 11: Large Manufacturing Infrastructure – Neogen Chemicals
Large Manufacturing Infrastructure – Neogen Chemicals Strong Manufacturing Infrastructure Land Factory Land Area Capacity Certifications of Manufacturing Facilities Utilisation Inorganic Organic Chemicals Chemicals (Reactor capacity) (Tonnage) Mahape (Since 1991) 4,045 m2 100% 69 m3 9 m3 ISO 9001:20
Slide 12: Developed strong R&D capabilities
Developed strong R&D capabilities 68-member CMD and MD dedicated R&D team, actively involved including 7 Ph. D. and spend significant time overseeing the Established two R&D functioning of both units R&D divisions Post commissioning of dedicated R&D units in 2001, the product portfolio has grown fro
Slide 13: Key Export Geographies
Key Export Geographies Europe Japan China USA Korea Exporting to United States, Europe and Japan Export sales of 27% in FY24 13
Slide 14: Update on Expansion Initiatives
Update on Expansion Initiatives 14
Slide 15: Update on various expansion initiatives
Update on various expansion initiatives Manufacturing locations Land Area Year Planned Capacities Neogen Ionics Electrolyte Lithium Electrolyte Salts & Additives FY24 - 400 MT Proposed Dahej SEZ (transferred from Neogen Chemicals) 6,455 m2 FY25 2,000 MT To be increased to 2,500 MT Manufacturing Setu
Slide 16: Update on Battery Chemicals (Neogen Ionics)
Update on Battery Chemicals (Neogen Ionics) • Achieved financial closure for majority of CAPEX in Neogen Ionics • To be funded mainly by project finance debt; long-term tenure of 10 years, includes a moratorium component • Construction work commenced at the greenfield facility; on track to hit comme
Slide 17: Q1 FY25 Financial Performance
Q1 FY25 Financial Performance 17
Slide 18: Key Performance Highlights – Q1 FY25 (Consolidated & Standalone)
Key Performance Highlights – Q1 FY25 (Consolidated & Standalone) Q1 FY25 Q1 FY25 Q1 FY25 Revenue break-up** (Consolidated) (Standalone) *Exports, Revenues Rs. 180.0 crore Rs. 166.7 crore 27% 9% 2% EBITDA Rs. 30.8 crore Rs. 28.4 crore Domestic, 73% 10% 4% *Including deemed exports Profit Befo
Slide 19: Financial Summary – Q1 FY25
Financial Summary – Q1 FY25 • Strong revenue performance despite challenging operating scenario. Volume-led growth REVENUE driven by higher contribution from non-agchem linked products amid weak pricing. Expect global agchem recovery in the later half of this fiscal year 9% Q1 FY25 180.0 • Robust pe
Slide 20: Revenue break-up – Q1 FY25
Revenue break-up – Q1 FY25 Organic Chemicals Bromine prices declined on Y-o-Y Q1 FY24 Rs. 121 crore basis. Adjusting for this fall in RM prices, the Organic revenue would have been higher by Rs. 14 crore in Q1 Q1 FY25 Rs. 142 crore 17% FY25 Inorganic Chemicals Inorganic revenues would have been Q1
Slide 21: Financial Table – Profit & Loss Statement (Consolidated)
Financial Table – Profit & Loss Statement (Consolidated) Particulars (Rs. In crore) Q1 FY25 Q1 FY24 Growth (%) Revenue 180.0 164.9 9% Expenditure 149.2 136.8 9% EBITDA 30.8 28.1 10% EBITDA Margins 17.1% 17.0% +10 bps Depreciation 6.8 5.5 24% EBIT (inc. Other Income) 25.6 24.4 5% Interest 9.8 10.8 -9
Slide 22: Financial Table – Profit & Loss Statement (Standalone)
Financial Table – Profit & Loss Statement (Standalone) Particulars (Rs. In crore) Q1 FY25 Q1 FY24 Growth (%) Revenue 166.7 170.1 -2% Expenditure 138.4 140.7 -2% EBITDA 28.4 29.5 -4% EBITDA Margins 17.0% 17.3% -30 bps Depreciation 5.7 4.9 15% EBIT (inc. Other Income) 25.6 26.4 -3% Interest 9.0 10.6 -
Slide 23: Seasonal Variance Factors
Seasonal Variance Factors ▪ Neogen’s business has some seasonal drivers, due to which the company tends to deliver stronger financial performance in the second half of the financial year (October to March). Seasonal variance is driven by strong demand from Europe as orders tend to scale up in Octobe
Slide 24: Management Commentary
Management Commentary Commenting on the Q1 FY25 performance, Mr. Haridas Kanani, Chairman & Managing Director, at Neogen Chemicals said: “We are pleased to report 9% revenue growth and 18% PAT improvement this quarter. This was driven by gradual demand recovery with better volumes amid soft pricing.
Slide 25: Historical Financial Trends
Historical Financial Trends Net Revenue from Operations** EBITDA (INR crore) Margin (%) (INR crore) 19.0% 19.2% 17.8% 686 691 18.2% 16.3% 16.0% 487 306 336 239 44 58 65 87 112 110 FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24 ** Revenue is Net of Excise PAT (INR crore) Margin (%) Netwo
Slide 26: Industry Overview: Lithium-Ion Batteries
Industry Overview: Lithium-Ion Batteries 26
Slide 27: Strong Opportunities in India’s Lithium Battery sector
Strong Opportunities in India’s Lithium Battery sector ▪ Government’s PLI scheme for batteries is expected to catalyse the growth of India's EV ecosystem – Target Incentive Outlay of Rs. 18,100 crore – Manufacturing capacity of 50 Gwh of ACC – 60% of Battery Material to be Indigenous ▪ Commercial pr
Slide 28: Strong Opportunities in Global Lithium Battery sector
Strong Opportunities in Global Lithium Battery sector Demand Estimates for the Global Market (By 2030) Estimated Battery requirement Estimated Electrolyte demand Estimated Lithium Salt demand (GWh) (MT) (MT) China Non-China China Non-China China Non-China 140,625 1,500 1,125,000 365,625 3,000 2,925,
Slide 29: Way Forward
Way Forward Enhance focus on CSM & Advanced Intermediates through portfolio expansion Deep inroads in the Battery Materials Augment the segment capacities of Organic and Inorganic Expand Chemicals capabilities in adjacent high-end complex chemistries Leverage strong R&D expertise to introduce innova
Slide 30: CSR Initiatives
CSR Initiatives Focus areas in CSR Healthcare, Conservation and Rural Environment sanitation and management of Education development sustainability nutrition natural resources 30
Slide 31: Contact Us
Contact Us About Neogen Chemicals Limited Incorporated in 1989, Neogen Chemicals Ltd. (NSE Code: NEOGEN; BSE Code: 542665) is India’s one of the leading manufacturers of Bromine-based and Lithium-based specialty chemicals. Its specialty chemicals product offerings comprises of Organic as well as Ino
Slide 32: Thank You
Thank You