Coromandel International Limited · NSE:COROMANDEL

Coromandel International — Investor Presentation (November 2017)

48 slides from Coromandel International's investor presentation, November 2017

  1. Slide 1: Coromandel: Opportunities Unbound

    Coromandel: Opportunities Unbound Nov 2017

  2. Slide 2: Contents

    Contents About 03 Coromandel Ag Inputs 02 Opportunities 01 Indian Agriculture 2

  3. Slide 3: Indian Agriculture

    Indian Agriculture - Scale & Scope - Growth Levers - Agricultural Reforms

  4. Slide 4: Indian Agriculture: The Global Giant

    Indian Agriculture: The Global Giant Crop India Ranking % Share Pulses 1st 23% Oilseeds 1st 11% 3rd largest Agriculture Cotton 1st 29% producer globally F&V 2nd 11% 2nd largest cropland globally Sugarcane 2nd 20% Largest irrigated area Cereals 3rd 11% Source: FAOSTAT Agri Exports (USD Bil) 50 Agricu

  5. Slide 5: ….But Productivity Gaps exist

    ….But Productivity Gaps exist Falling per capita land holding Low Nutrient Usage Yield comparison (Tonnes/ ha) 3.0 Avg Landholding Size (ha) Fertiliser Consumption (kg/ha) 2.5 281 2.3 2.0 1.4 132 146 Soyabean 1.5 121 106 1.0 2.7 0.5 0.0 0.9 1960 1970 1980 1990 2000 2010 Brazil China India USA World

  6. Slide 6: Agri Growth Levers

    Agri Growth Levers Food Security Improved support price Crop MSP (Rs/Qtl) 5050 FY11 FY17 4220 3860 FY50 3000 2500 2300 333 mil MT 1470 1625 1365 1000 1120 880 1.6 B PADDY WHEAT MAIZE ARHAR COTTON GROUNDNUT FY17 CAGR 7% 7% 8% 9% 8% 11% Higher Source: CACP 272 mil MT Disposable 1.3 B ….Coupled with Ru

  7. Slide 7: Agri Growth Levers

    Agri Growth Levers Dietary Shifts Digital India Indian Consumption Basket Unified National Agriculture Market USD 350 Bil USD 85 bil USD 160 Bil Others Oil F&V USD 34 bil USD 95 bil Milk & Meat USD 44 bil Cereals 2010 2030 Cereals & Pulses Milk & Meat F&V Oil Others Source: CII Mckinsey Source: SFAC

  8. Slide 8: …along with Agriculture reforms

    …along with Agriculture reforms Doubling Farmer Income by 2022 Improving Integrated Productivity Improvement Water & Inputs Market Farming Realization Minimizing Increasing Bio Micro crop losses: Balancing Allied E Irrigation technology Irrigation Crop nutrition Activities Procurement Coverage Prote

  9. Slide 9: & Positive Policy Measures

    & Positive Policy Measures Nutrient Based Subsidy Make in India …..Towards deregulating the Fertiliser industry …..Thrust towards Domestic Manufacturing Fertiliser Prices Fixed MRP Fixed subsidy & variable farm gate prices 37% 40% 48% 63% 65% 65% 66% 73% 63% 60% 52% 37% 35% 35% 34% 27% Investment In

  10. Slide 10: & Positive Policy Measures

    & Positive Policy Measures Direct Benefit Transfer …..Towards balancing Soil Health Subsidy Disbursement on Farmer Purchase Dept of Fert  Informed farmer purchases based on Soil Health Status Purchase info triggered  Subsidy to manufacturer to be paid on weekly basis  Lead to digitization & impro

  11. Slide 11: …coupled with Rural Empowerment to boost Growth

    …coupled with Rural Empowerment to boost Growth  ~60 million soil health cards issued upto Mar’2017 Soil Health  Budget allotment: USD 84 mil  Organic thrust: Additional 0.5 mil ha coverage Financial  Bank Account for each household: 250 million accounts Inclusion  Crop Insurance (50% coverage

  12. Slide 12: Ag Inputs Opportunities

    Ag Inputs Opportunities - Ag Nutrients - Crop Protection 12

  13. Slide 13: Opportunities in Inputs space: Ag Nutrients

    Opportunities in Inputs space: Ag Nutrients Nutrient Deficient India Soils Source: IISS Bhopal  More than 50% of the districts deficient in essential plant nutrients- Opportunity for Balanced Nutrition  Relatively untapped Secondary & Micro Nutrients segment  Organic products to balance plant gro

  14. Slide 14: Opportunities in Inputs space: Micro Irrigation & Water Soluble Fertiliser

    Opportunities in Inputs space: Micro Irrigation & Water Soluble Fertiliser Area under Micro irrigation (mil ha) Potential: 69 mil Ha 7.7 Current coverage: 8 mil Ha 6.1 4.9 3.1 2005 2010 2012 2015 Benefits: Increase in Water Use Efficiency: 50 – 90% Productivity Increase: 40-50%  Current Micro Irrig

  15. Slide 15: Opportunities in Crop Protection space

    Opportunities in Crop Protection space Indian Crop Protection Market (USD Bil) 3.2 2.1 3.1 2.3  Exports segment to grow by 9% p.a. Exports  Domestic segment to grow by 7% p.a. Domestic FY15 FY20 Increasing Pest Incidence Herbicide Opportunities Opportunities in Generic Space Molecules going off pa

  16. Slide 16: Industry Updates: 2017-18 H1

    Industry Updates: 2017-18 H1 16

  17. Slide 17: Stable Agriculture Environment in 17-18

    Stable Agriculture Environment in 17-18 1 All India South West Monsoon: 95% LPA 2 Marginal drop in acreage: -0.5% 3 Improved Rabi Prospects Area in Mil Hectare 38.2 37.9 LY CY 18.7 19.0 14.7 19.0 17.3  Reservoir levels up in South (75%) 12.3 14.2 10.3  Normal North East monsoon 5.0 4.6 0.8 0.7 For

  18. Slide 18: & Positive Policy Reforms

    & Positive Policy Reforms  Agriculture focus: Crop Insurance, National Agriculture Market, Infrastructure strengthening  ‘Make in India’ Initiative:  Making India self sufficient in Urea production by 2021  Freight Subsidy changes favouring domestic manufacturing in Phosphatics  Direct Benefit

  19. Slide 19: …Resulted in improved Fertiliser Industry Dynamics

    …Resulted in improved Fertiliser Industry Dynamics Indian Phosphatic Industry: Supply-Demand Scenario (in mil tons) 21.7 18.6 16.5 17.2 15.8 10.6 14.0  Sharp fall in Imports in H1(-24%) 6.2 4.9 4.1 6.1 3.7  Partially substituted by domestic DAP production (+19%) 8.2 8.2 4.1 3.1  Normalized sales

  20. Slide 20: Introduction: About Coromandel

    Coromandel Introduction - About Coromandel - Business Segments - Financials

  21. Slide 21: About Coromandel

    About Coromandel Coromandel’s Manufacturing Presence India’s largest private sector Jammu Pioneers & market leaders in Phosphatic Fertiliser company Specialty Nutrients Rae Baereli Kota Udaipur 5th largest Ag Chem Indian Vadodara Nimrani No. 1 Organic Manure player in company Dahej Ankleshwar India

  22. Slide 22: About Coromandel: Key Facts

    About Coromandel Key Facts :  Turnover: USD 1.6 bil (FY16-17)  Market Cap: USD 2.3 bil (Oct 2017)  Strong credit rating: ‘AA +’ (Stable outlook)’ with CRISIL India  Employees: 4300 & equal no. of contract employees  International Linkages: FOSKOR, GCT, CANPOTEX, SQM, GETAX , QAFCO, ICL, OCP, YA

  23. Slide 23: Global Strategic Alliances

    Global Strategic Alliances Strategic Investment TIFERT – Phos acid venture in Tunisia Pact with QAFCO for supply  Highly diversified sourcing MOP of Urea and Ammonia Potash - Canada  Significant presence in LatAm Ammonia and Sulphur Mitsui, Japan markets Rock Phosphate Israel , Togo FMS JV with Ya

  24. Slide 24: Business Structure

    Business Structure Subsidy / Non Subsidy DAP Sales EBITDA Phosphatic Fertilisers Complex Fertilisers 78% 62% SSP/MOP Specialty G-Sulphur Nutrient and Other Allied Nutrients & Water Soluble Organic fert Non subsidy EBITDA share has steadily improved Business Organic Manure from 23% in FY08-09 to 38%

  25. Slide 25: Towards New Growth Segments

    Growth Journey 2014 Farm Mechanization- Yanmar JV Towards New Growth Segments 2013 SSP- Liberty acquisition 2011 Crop Protection- Sabero acquisition Technology tie up- New capacity New Expansion Strategic 2012 Technology Shell addition: ~3 Businesses: into Retail Partnership Tie ups: Shell, mil tons

  26. Slide 26: Business Segments

    Business Segments

  27. Slide 27: Phosphatic Fertilisers

    Coromandel Phosphatic Fertilisers Phosphatic Fertiliser H1 mil MT Summary  C Train 2.5 Expansion Sales growth  LIBERTY SSP 10% acquisition 2.2 Growth 50 Lac Mt FY14 FY17 0.8 0.6 31% …driven by Unique growth product sales FY14 FY17 33% 28% ..resulting in improved 35% Unique Product share share (v/s

  28. Slide 28: Phosphatic Fertilisers: Key Strengths

    Coromandel Phosphatic Fertilisers: Key Strengths Sourcing Cost Leadership Marketing Strength Strategic Alliances in Sourcing – • Low cost manufacturer of Phos acid - Visak • Wider reach and penetration • Long Term tie-up with Foskor, South and Ennore • Strong brand image in the home market Africa an

  29. Slide 29: Phosphatic Fertilisers: Locational Advantage

    Coromandel Phosphatic Fertilisers: Locational Advantage Nutrient Consumption (Kg/ha) Primary markets maintains the balanced nutrient ratio  Market leader in Complex fertiliser segment  2nd largest Phosphatics player in India  Highest producer and marketer of unique fertiliser grades  Plants loca

  30. Slide 30: Direct Benefit Transfer (DBT): Changing Scenario

    Direct Benefit Transfer (DBT) : Changing Scenario Paradigm Shift post DBT Advantage Coromandel: Wholesaler Focus Retailer Focus  Direct farmer connect through ~800 Mana Gromor Centers Servicing as per Convenience Scientifically Serving the network  Integrated Nutrient Team with Agronomist support

  31. Slide 31: Phosphatics: Manufacturing efficiency

    Coromandel Phosphatics: Manufacturing efficiency  Strategically located Plants in highly irrigated southern Indian states and in heart of fertilizer consumption market – low freight cost  Plant Facilities – State of art with good infrastructure support & robust systems  Phosphate – Lowest cost ma

  32. Slide 32: Crop Protection

    Coromandel Crop Protection 1990’s 2006 2009 2010 2011 2015 Acquired Acquisition of Acquired Pasura FICOM and Expansion to Bio Tech – Sabero Sabero Merger pesticides unit of completed setting up Latin America Jammu Unit II Acquisition BPM Jammu Unit I 5th Largest Crop Protection Company in India: USD

  33. Slide 33: Crop Protection: Exports

    Coromandel Crop Protection : Exports Sales Share: 2016-17 Central America, 7% Africa, 11% Apac, 12% Nigeria India, 62% China, 2% South America, 7%  8 Subsidiaries in key global geographies- Adding Subsidiaries in Africa  Exports share: 40%  Presence across 71 countries  ~800 global registrations

  34. Slide 34: Crop Protection: Domestic Formulations

    Coromandel Crop Protection : Domestic Formulations Specialties Focus  Wide product portfolio ~60 brands 24% 23% 28% 28% 31%  Customer reach thru 9000+ retailers 76% 77% 72% 72% 69% FY12 FY13 FY14 FY15 FY16 Generic Specialities Coromandel Focus Crops and Major States Rice –Andhra, Telangana, Grapes

  35. Slide 35: Crop Protection: Strong R&D

    Coromandel Crop Protection: Strong R & D  Process Synthesis / Development  Process Improvement  Formulation Development  Effluent treatability Study  Pilot Plant (Scale up)  Centralized R&D at Hyderabad  Strong product pipeline  Focusing on molecules going off patent over next 5 years Plan t

  36. Slide 36: Crop Protection: Growth Strategy

    Coromandel Crop Protection: Growth Strategy  Focus on Export Registrations to improve market penetration  B2C presence  Expand business in LATAM, Africa & APAC by leveraging strong registration portfolio  Domestic market expansion  Product portfolio expansion  Increase R&D focus  Off Patent m

  37. Slide 37: Crop Protection: Performance Variables

    Crop Protection: Performance Variables Turnover (INR mil) PBIT (INR mil) PBIT % 14082 18.6% 18.7% 10% 2% growth 2615 (2%) drop 12816 59% 12.8% 1644 8036 1500 FY16 FY17 FY18H1 FY16 FY17 FY18H1 FY16 FY17 FY18H1 Growth Drivers: Headwinds H1:  High demand for key molecule Mancozeb  Industry slowdown g

  38. Slide 38: Retail

    Coromandel Retail Farming Solutions Customer Reach 2.8 million farmers annually Products Services Telangana Ag Nutrients Farm Mechanization Convergence of Crop Chem Agri Insurance Products & Services: Seeds Credit One Stop Shop Vet Feed Soil/ Petiole Testing for Agriculture needs Andhra Pradesh Karn

  39. Slide 39: Retail: Improving Customer Value Proposition

    Coromandel Retail: Improving Customer Value Proposition Technical Market Advise to get Operated Price economic returns Farm Assured Mechanization Availability scale up Digital Reach - Trusted Place Closer to door to Buy & Sell steps Complete Farm Credit Farming scale up Existing Solutions Planned Qu

  40. Slide 40: Specialty Nutrients

    Coromandel Specialty Nutrients Product Crop Solutions Solutions Strategic Shift Secondary Micro WSF Cereals Pulses Cotton Horticulture Nutrients Nutrients Crop based & soil based new product introduction to address farmer needs Agronomist team to bring crop focus- Developing market based on total nu

  41. Slide 41: Specialty Nutrients: Balancing Growth

    Coromandel Specialty Nutrients: Balancing Growth Manufacturing Capability Marketing Capability Knowledge Capability Unique Product Focus 2012 CSQM 15000 MT WSF 11% 15% 14% 17% Plant, Kakinada 33% 33% 34%  Dedicated Agronomist Team Infrastructure 2008 WSF Plant, Vizag  SQM Crop Knowledge 89% 85% 86

  42. Slide 42: Organic Manure: Enriching Soil Health

    Coromandel Organic Manure: Enriching Soil Health Product Portfolio Growth Drivers N – Nrich (oil cake)  Regulatory push from government- Market Development Assistance Bio/Microbial and  Push towards waste treatment & management Organic P – Phosgold (Compost + Rock P)  Soil Health Focus- Sustainab

  43. Slide 43: SSP

    Coromandel SSP SSP : Market Leader in H1 Started SSP manufacturing in 1906 from Ranipet Plant: 12% market share 1st Fertiliser Plant in India  Manufacturing capacity ~1 mil MT/ annum  Presence across major SSP consuming crops- Pulses & Oilseeds  Improving quality perception and positioning of the

  44. Slide 44: Farm Mechanization: Eyeing the Future

    Farm Mechanization: Eyeing the Future Mechanization across Ag Value Chain Coromandel’s Presence Soil & seed bed preparation  Market leadership in TN, AP, Kerala for Rice 40% transplanters 29% Paddy  Service centers in AP, Telangana & Tamil Nadu Seeding & Planting Transplanters  Synergistic approa

  45. Slide 45: Key Financials

    Coromandel Key Financials Turnover ( USD Mil) EBIDTA (USD Mil) & EBIDTA % 300 16% 1952 250 14% 14% 1825 1766 12% 12% 1680 1656 1682 1581 59 45 200 10% 10% 10% 150 9% 8% 8% 912 8 18 7% 6 7% 6% 100 186 191 136 152 4% 121 126 119 113 50 2% 0 0% FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016* FY 2017*

  46. Slide 46: Financials: P&L

    Coromandel Financials- P&L In Rs Mio H1 growth FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016* FY 2017* FY 2018* H1 YOY Revenue 77,204 99,796 91,038 1,01,140 1,13,630 1,17,003 1,02,499 59,543 +5% YoY (Growth) (%) 18% 29% -9% 11% 12% 3% -12% EBITDA before PY Subsidy 8,291 9,728 6,591 7,578 8,495 7,8

  47. Slide 47: Financials: Balance Sheet

    Coromandel Financials- Balance Sheet In Rs Mio FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016* FY 2017* FY 2018 H1* Equity 19567 24161 23029 23066 22020 26340 28908 31,149 Debt & Other LT liabilities 15923 29774 29761 18730 23178 26890 22398 16,252 Deferred Tax Liability 815 675 1877 1890 1875 1679

  48. Slide 48: Thank You

    Thank You 48

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