Shalimar Paints Ltd · NSE:SHALPAINTS
Shalimar Paints — Investor Presentation (March 2011)
35 slides from Shalimar Paints's investor presentation, March 2011
Slide 1: Corporate Presentation, March 2011
Corporate Presentation, March 2011
Slide 2: Paints | A Large and Growing Market
Paints | A Large and Growing Market OVERVIEW GDP GROWTH V/S PAINTS INDUSTRY GROWTH • The Indian paints market is estimated at INR 170 Bn (net sales), 15.0%16.0% 16% 15.0% having grown at a CAGR of 12% over FY07 – FY10; it is expected to 14.0%14.0% 13.5% 13.0% continue growing at ~ 15% CAGR to reach
Slide 3: Dominated by a few large players
Dominated by a few large players OVERVIEW INDUSTRY STRUCTURE • The INR 170 Bn industry is dominated by organized players who DECO V/S INDUSTRIAL ORGANIZED SEGMENT account for ~75% of the market; the unorganized sector (~25%) is highly fragmented with ~1,000 small scale players • The share of organiz
Slide 4: Decorative Paints
DECORATIVE PAINTS 4
Slide 5: Market Overview
Market Overview REVENUE BY SEGMENT KEY SUCCESS FACTORS Decorative Market Size ~ INR 11.9 Bn (FY10) As a consumer product that is being sold to a young, increasingly more affluent customer, key success factors in decorative paints are Enamel as below 15% Interior Emulsions • Brand: Paints are becomin
Slide 6: Growth drivers & key trends
Growth drivers & key trends URBAN & RURAL CONSUMPTION, INR Billion (2000) GROWTH DRIVERS Contribution to 69% Residential construction growth consumption 69,503 • Rising incomes & increased affordability, esp. in urban India growth • A young customer – average age of home buyer is only 33 years 38% 3
Slide 7: Industrial Paints
INDUSTRIAL PAINTS 7
Slide 8: Market Overview
Market Overview OVERVIEW REVENUE BY SEGMENT • The industrial paints market contributes ~30% of the total market – it Industrial Market Size – INR 5.1 Bn (FY10) is primarily solvent based with few water based applications (auto primers, high end auto refinishes etc) • The proportion of industrial pai
Slide 9: Growth Drivers
Growth Drivers Category Growth Drivers • Robust volume growth of 25% Y-o-Y, driven by domestic sales and exports Automotive • Increased infrastructure spend on roads, both intra-city and inter-city • Easy availability of auto loans • Increased thrust on infrastructure – INR 40 Trillion budgeted in t
Slide 10: Company Overview
COMPANY OVERVIEW 10
Slide 11: Shalimar Paints | An Overview
Shalimar Paints | An Overview BUSINESS OVERVIEW FINANCIALS (INR Mn) • We are the oldest & one of the most well-known paint manufacturing 4,000 7.0% 3,656 7.1% 8% companies in India with the first manufacturing facility being set up in 3,309 1902 in Howrah, Kolkata 3,200 5.5% 2,994 6.8% 2,754 5.1% 6%
Slide 12: Organizational Structure
Organizational Structure BOARD OF DIRECTORS EXECUTIVE DIRECTOR & CEO Finance IT Manufacturing Supply Chain Procurement R&D Marketing HR Head Operations VP Operations VP Operations Decorative Industrial Sikandrabad Nasik Howrah Corporate Team Operations Team 12
Slide 13: Key Management – 1/2
Key Management – 1/2 Designation Profile • Responsible for overall operations of the company Executive Director & Chief • Has more than 20 years of experience Executive Officer • Prior experience at Bajaj Tempo and the Jalan group of companies • A qualified Chartered Accountant and Company Secretary
Slide 14: Key Management – 2/2
Key Management – 2/2 Designation Profile • Responsible for the overall operations at the Sikandarabad Plant DGM • Has more than 25 years of experience, mainly in the paints industry Operations (Sikandrabad) • Prior work experience at Jenson & Nicholson • M.Sc degree holder • Responsible for the enti
Slide 15: Segment Overview
SEGMENT OVERVIEW 15
Slide 16: Decorative Paints
Decorative Paints OVERVIEW REVENUE MIX, FY 2010 • We manufacture a wide range of decorative products for both the Gross Sales – INR 2,590 Mn SHE* exterior and interior segments; our product portfolio spans all price points & caters to a wide variety of customers No.1 PAD* • The decorative segment cu
Slide 17: Decorative Product Portfolio
Decorative Product Portfolio We have a complete portfolio of decorative products across price points. We have a greater presence in the economy and mid-tier markets, and derive ~ 75% - 80% of our revenue from these segments Product Revenue % ^ Economy Mid-range Premium Enamels 36% General Purpose Di
Slide 18: Industrial Paints
Industrial Paints OVERVIEW REVENUE MIX, FY 2010 • Shalimar Paints has been a pioneer in the industrial paints segment by Gross Sales – INR 1,382 Mn virtue of its association with Pinchin Johnson Co. & International Paints as well as its own R&D strength 4% • We are the 3rd largest player in high per
Slide 19: Manufacturing Facilities
MANUFACTURING FACILITIES 19
Slide 20: Manufacturing Facilities
Manufacturing Facilities OVERVIEW PLANT LOCATIONS & CAPACITIES, FY2010 • We have 3 manufacturing plants at Howrah, Sikandrabad and Nasik with a total installed capacity of 57,000 tonnes p.a. (FY10) • Howrah plant was the first large scale paint manufacturing plant to be set up in the whole of South
Slide 21: Manf. facilities offer significant operating leverage
Manf. facilities offer significant operating leverage • The decorative vs. industrial production mix is highly flexible o It can be altered to as much as 80% in favour of either segment, thereby maximizing capacity utilization o The remaining 20% is dedicated to decorative paints only – mainly putty
Slide 22: Research & Development
Research & Development Overview: • We have 2 state of the art R&D centres at Howrah & Nasik, both of them recognized by Department of Scientific & Industrial Research (DSIR) • The Howrah facility was the first in-house R&D unit to be recognized by DSIR in 1979 • The Nasik R&D facility was started in
Slide 23: Sales & Distribution
SALES & DISTRIBUTION 23
Slide 24: Sales & Distribution | Decorative Paints
Sales & Distribution | Decorative Paints Pan India distribution set up with a wide reach across rural and up country markets across India • Shalimar has a strong pan-India presence through a hub and spoke network consisting of Regional Distribution Centres (RDCs), depots and dealers for decorative p
Slide 25: Sales & Distribution | Industrial Paints
Sales & Distribution | Industrial Paints OVERVIEW KEY CLIENTS • The industrial paints business typically operates on the basis of tenders – vendors need to meet the exact technical specifications (strong R&D capabilities required) & should also be cost competitive to be able to win the tender. Clien
Slide 26: Key Initiatives & Future Plans
KEY INITIATIVES & FUTURE PLANS 26
Slide 27: Key Initiatives | 1
Key Initiatives | 1 Shalimar has built a considerable platform in the paints industry, both across decorative and industrial paints. We continue to grow this platform through a series of initiatives on an on-going basis. Some of our key ongoing & recent initiatives have been mentioned below Marketin
Slide 28: Key Initiatives | 2
Key Initiatives | 2 Shalimar has built a considerable platform in the paints industry, both across decorative and industrial paints. We continue to grow this platform through a series of initiatives on an on-going basis. Some of our key ongoing & recent initiatives have been mentioned below Manufact
Slide 29: Strategic Growth Initiatives
Strategic Growth Initiatives Decorative Paints • Increased focus on institutional customers, offer products tailored to their needs • Launch differentiated products for the retail customers • Introduction of environment friendly lead free paints Industrial Paints • Expand product offerings to other
Slide 30: Financials & Shareholding
FINANCIALS & SHAREHOLDING 30
Slide 31: Income Statement
Income Statement Figures in INR Mn FY07A FY08A FY09A FY10A 9MFY11 Gross Sales 2,905 3,401 3,689 3,942 3,036 Net Sales 2,564 2,994 3,309 3,656 2,754 (Increase) / Decrease in Stock (71) (12) 102 (79) (131) Materials Consumed 1,599 1,832 1,971 2,208 1,761 Purchase of bought-in items 99 75 97 114 103 Em
Slide 32: Balance Sheet
Balance Sheet Figures in INR Mn FY07A FY08A FY09A FY10A Sources Of Funds (1) Share Capital 38 38 38 38 (2) Reserves and Surplus 269 332 353 419 (3) Loan Funds 598 611 604 541 (4) Deferred Tax Liability 22 22 24 28 Total Liabilities 927 1,003 1,019 1,025 Application Of Funds (1) Fixed Assets (a) Gros
Slide 33: Shareholding Pattern (31 Dec 2010)
Shareholding Pattern (31 Dec 2010) 3.3% 16.0% 31.1% Indian Promoters Foreign Promoters Bodies Corporate Individuals & NRIs 18.4% Institutions 31.2% 33
Slide 34: In Summary
In Summary Shalimar – A strong established national brand with presence across both decorative and industrial paints • Diversified revenue mix o Strong, well recognized brand with a complete range of products across all price points in decorative paints o Significant presence in high performance coa
Slide 35: Thank You
Thank You bes <> Shalimar Paints ZGVG hatke sochio Shalimar