Slide 1: Prataap Snacks Limited Q2 FY24 Earnings Presentation
PRATAAP SNACKS LIMITED Q2 FY24 Earnings Presentation 2 November 2023
Slide 2: Disclaimer
DISCLAIMER 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 ma
Slide 3: The Main Ingredients: Company Overview
THE MAIN INGREDIENTS: Company Overview
Slide 4: Company at a Glance
COMPANY AT A GLANCE Large, compounding market Market leadership Significant revenue scale INR 438 Bn market Market Leader in Rings, FY23 Revenue of INR ~ 16.5 Bn Growing at 14% CAGR(1) Top 2 in Extruded Snacks, 9-year revenue CAGR: 18%(2) Top 5 in Western Savoury Snacks Diverse product portfolio Nat
Slide 5: Key Milestones
KEY MILESTONES 2018 Forayed into Sweet 2022 2003 2012 Snacks 2020 Completed Company restructuring founded 2007 Doubled the 2016 Entered into 3P Contract Converted 3P of distribution Installed capacity of Potato Manufacturing facility to owned Guwahati new pyramid Chulbule plant at Chips plant at Ind
Slide 6: Company Evolution
COMPANY EVOLUTION 2003 2023 Single Product Potato Chips Product Diverse Product Portfolio Single Market Mumbai Presence Pan-India Presence Single Facility 14 Facilities Indore Facility 7 Owned and 7 3P Facilities Snapshot of Recent Growth Rs. 446 Cr Revenue Rs. 1,653 Cr 2014 40+ SKUs 125+ 2023 3 Fac
Slide 7: Diverse Product Portfolio
DIVERSE PRODUCT PORTFOLIO Appealing to consumers and trade partners % of FY23 CATEGORIES Revenue PRODUCTS 58% Chulbule Rings Wheels Pellets Scoops Puff Stix Extruded Snacks 23% Market Leader in Rings, Potato Chips Top 2 in Extruded Snacks, Top 5 in Western 16% Savoury Snacks Namkeen 3% Cookie Center
Slide 8: Branding & Marketing
BRANDING & MARKETING Brand seen to be energetic and vibrant Brand Philosophy Current Associations / Brand Ambassadors Consumer oriented focus Providing value in multiple ways – great taste, high quality ingredients, vibrant packaging, reasonable price Past Associations / Brand Ambassadors Brand tagl
Slide 9: Operational Excellence
OPERATIONAL EXCELLENCE Powered by tech and automation Data Analytics Production Automation Sales Automation Experienced Sales Analytics department working Complete ERP Solution to manage State-of-the-art SFA being used to with advanced BI Tools production processes; Software guide sales team with as
Slide 10: Established Manufacturing Network
ESTABLISHED MANUFACTURING NETWORK Reduced distribution costs; Improved time-to-market; Disciplined investment mindset STRATEGICALLY LOCATED North India (34% of rev.) MANUFACTURING 4 plants in Hisar, Nationwide manufacturing FACILITIES TO CATER TO Karnal, Kanpur, Patna footprint THE REGIONAL DEMAND •
Slide 11: Optimised Distribution Model
OPTIMISED DISTRIBUTION MODEL Direct distribution model on a nationwide scale OLD DIRECT Shifted to a direct distribution model upon hitting DISTRIBUTION Prataap Prataap DISTRIBUTION critical scale MODEL MODEL • Decentralized manufacturing footprint allows us to supply directly to distributors Supers
Slide 12: Our ESG Approach
OUR ESG APPROACH Cornerstones of doing good business • Actively working in accordance with Uniform Framework for Extended Producers Responsibility (EPR) issued by the Ministry of Environment, Forest, and Climate Change Waste management • We engage in mass collection for processing and disposal of em
Slide 13: Strong 'Value-for-Money' Brand
STRONG ‘VALUE-FOR-MONEY’ BRAND Appealing to customers across socio-demographic profiles CATEGORIES CHILDREN YOUTH ADULTS/FAMILY Rings, Kurves, Puff, Stix Chulbule Extruded Snacks Pellets Potato Chips Potato Chips Namkeen Namkeen Sweet Snacks Sweet Snacks Targeting value for money segment 13
Slide 14: Guided by an Accomplished Board
Guided by an Accomplished Board Mr. Arvind Mehta Bharat Singh Mr. V.T. Bharadwaj Chairman & Executive Non-executive Nominee Director Independent Director Director (Additional) Mr. Amit Kumat Vineet Kumar Kapila Anisha Motwani Managing Director and CEO Independent Director Independent Director Mr. Ap
Slide 15: Essential Flavours: Growth Strategies and Financial Progress
ESSENTIAL FLAVOURS: Growth Strategies and Financial Progress
Slide 16: Strategic Initiatives
STRATEGIC INITIATIVES Executing on a clear roadmap for robust and disciplined growth TOP LINE GROWTH Expand Namkeen Range Selling & Drive mix of Disciplined Product Footprint larger packs Innovation and ~44% of snacks industry (but Increase range selling and Geographical Expansion currently contribu
Slide 17: Measures to Enhance Profitability and Returns
MEASURES TO ENHANCE PROFITABILITY AND RETURNS Bottom slicing Compression of distribution structure • Reasons for lesser volumes being identified, • PSL has implemented direct distribution and levers are worked on to improve them across all regions, ahead of schedule • Indirect expenses are being sav
Slide 18: Robust Revenue Growth
ROBUST REVENUE GROWTH Consistent execution track record TOTAL REVENUE (INR Mn) COVID DISRUPTION 16,529 Avadh 13,938 13,966 Acquisition 1,688 11,706 11,711 10,174 8,940 8,174 7,572 5,493 12,250 4,460 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1FY24 18
Slide 19: EBITDA Margin Recovery
EBITDA MARGIN RECOVERY On the back of recent stabilization of volatile raw material prices EBITDA MARGIN (%) 5 year (FY16-FY20) average EBITDA margin was 6.9%. 8.5% 8.8% In FY21-22 and FY22-23, there was impact on margin due to: Covid period: supply 7.6% • Operating deleverage due to Inflationary tr
Slide 20: Overcoming Cost Pressures
OVERCOMING COST PRESSURES UNDERTOOK MULTIPLE INITIATIVES TO OVERCOME SHARP RISE IN INPUT PRICES There was sharp inflation in RM prices during the period RM/PM Price Increase from compared to the average during FY16-FY20 EBITDA MARGIN(%) FY16-20(avg) to H1 FY24 In addition to RM prices inflation ther
Slide 21: RoCE Expansion
ROCE EXPANSION SHARP INCREASE IN RETURN RATIO WHICH IS SET TO IMPROVE FURTHER 19.1% In line with rise in profitability the Company has witnessed a sharp improvement in RoCE 12.2% Further improvement in RoCE is expected due to: 5.70% • Measures undertaken to increase revenues • Further improvement in
Slide 22: Approval under Performance Linked Incentive (PLI) Scheme
APPROVAL UNDER PERFORMANCE LINKED INCENTIVE (‘PLI’) SCHEME The minimum CAGR for sales for calculating the incentive is 10% with the maximum cap of The benefit is available Received approval under PLI 13% CAGR for eligible products including growth in scheme of the Government of The base year for cal
Slide 23: Our Long-Term Target Operating Model
OUR LONG-TERM TARGET OPERATING MODEL CONSISTENT PROFITABILITY CAPITAL GROWTH CENTRIC EFFICIENCY ~15% >10% 15–20% Revenue growth EBITDA margin RoCE (faster than industry) 23
Slide 24: Proof of the Pudding: Q2 FY24 Performance Update
PROOF OF THE PUDDING: Q2 FY24 Performance Update
Slide 25: Operational Overview
OPERATIONAL OVERVIEW • Delivered a resilient topline performance despite a challenging macro-economic environment marked by uneven rainfall, sluggish demand and heightened competitiveness Reported growth of 11.8% QoQ • Urban areas continued to perform better than rural areas, where the impact of inf
Slide 26: Improving EBITDA Trajectory
IMPROVING EBITDA TRAJECTORY Reports highest ever quarterly EBITDA in Q2 FY24 EBITDA (INR Mn) *Adjusted EBITDA represents EBITDA excluding reversal of 379 Production Linked Incentive of Rs. 113 million 328 302* 242 234 221 113 176 181 139 111 189 49 -20 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22
Slide 27: MD & CEO's Message
MD & CEO’s Message “We have reported a resilient performance in Q2FY24, including a 12% increase in sales on a QoQ basis, amidst a challenging macro-economic environment marked by uneven rainfall, sluggish demand and heightened competitive pressures. Urban areas continue to perform better than rural
Slide 28: Abridged P&L Statement
ABRIDGED P&L STATEMENT Y-o-Y Y-o-Y (INR Mn) Q2 FY’24 Q2 FY’23 H1 FY’24 H1 FY’23 Change (%) Change (%) Sales/Income from operations 4,314.7 4,501.3 -4.2% 8,173.7 8,258.6 -1.0% Other operating Income 22.3 71.5 -68.8% 41.5 140.0 -70.4% Total Income from Operations 4,337.0 4,572.8 -5.2% 8,215.2 8,398.6
Slide 29: Balance Sheet
Balance Sheet YoY YoY (INR mn) Sept 2023 March 2023 (INR mn) Sept 2023 March 2023 change change Closing cash and cash 280.8 219.0 28.2% Payables 1,026.9 1,038.1 -1.1% equivalents Fixed Deposit with Banks 694.9 385.1 80.5% Other current liabilities 305.6 288.0 6.1% Inventories 1,073.0 1,352.8 -20.7%
Slide 30: Cash Flow Statement
Cash Flow Statement (INR mn) H1 FY24 H1 FY23 YoY change Reported EBITDA 708.0 201.4 251.6% Commentary Non cash items in P&L 25.4 -61.3 -141.5% • Continued improvement in cash Change in WC 115.7 414.9 -72.1% generation in H1 FY24 supported by Income tax paid -43.5 -16.3 167.0% further efficiencies in
Slide 31: Financials – Q2 & H1 FY'24 Performance
FINANCIALS – Q2 & H1 FY’24 PERFORMANCE Sales / Income from Gross Profit Operations (INR Mn) (INR Mn) 8,399 8,174 2,769 Gross Profit Gross margin 2,155 4,573 4,315 1,283 1,310 1,459 3,859 34% 34% 34% 28% 26% Q2 FY23 Q1 FY24 Q2 FY24 H1 FY23 H1 FY24 Q2 FY23 Q1 FY24 Q2 FY24 H1 FY23 H1 FY24 • Reported 11
Slide 32: Financials – Q2 & H1 FY'24 Performance
FINANCIALS – Q2 & H1 FY’24 PERFORMANCE EBITDA (INR Mn) PAT (INR Mn) EBITDA EBITDA margin PAT PAT margin 708 307 165 142 380 329 42 3.7% 3.8% 3.7% 221 201 1.0% 8.5% 8.8% 8.6% 5.0% 2.0% -1.0% -72 Q2 FY23 Q1 FY24 Q2 FY24 H1 FY23 H1 FY24 Q2 FY23 Q1 FY24 Q2 FY24 H1 FY23 H1 FY24 • The company reported its
Slide 33: Financials – Q2 & H1 FY'24 Performance
FINANCIALS – Q2 & H1 FY’24 PERFORMANCE Cash profit Cash EPS (INR Mn) (INR) 615 26.2 320 13.4 295 12.4 213 220 9.0 9.0 Q2 FY23 Q1 FY24 Q2 FY24 H1 FY23 H1 FY24 Q2 FY23 Q1 FY24 Q2 FY24 H1 FY23 H1 FY24 • The company's cash profit performance • The Company follows a conservative Generating has improved f
Slide 34: Evolving Tastes: Industry Overview
EVOLVING TASTES: Industry Overview
Slide 35: Favourable Demographics Supporting Industry Growth
Favourable Demographics Supporting Industry Growth India Population Trend Total Organized Snacks Food Market Size ~43,800 (MIllions) Crores (FY23) Potato Chips 1,431 1,444 1,456 1,468 23% 1,339 1,326 1,368 1,379 1,392 1,405 1,418 Namkeen 44% Extruded Snacks 16% 2017 2018 2019 2020 2021 2022 2023 202
Slide 36: Thank You!
Sumit Sharma Prataap Snacks Ltd Email: cfo@yellowdiamond.in THANK YOU! Mayank Vaswani / Mit Shah CDR India Tel: +91 98209 40953 / +91 99201 68314 Email: mayank@cdr-india.com / mit@cdr-india.com