S Chand And Company Limited · NSE:SCHAND
S Chand And — Q1 FY2019-20 Earnings Presentation
26 slides from S Chand And's earnings presentation, Aug 10, 2019
Slide 1: Letter to stock exchanges on investor presentation
• --v-- � S Chand And Company Limited Registered Office: A-27. 2nd Floor, Mohan Co-Operative Industrial Estate, New Delhi - 110044, India. S.CHAND P: .. 9111 49731800 I F: .. 9111 49731801IE:info@schandqroup.comIwww.schandg-roup.com GROUP Date: August 10, 2019 To To Listing Department Listing Depart
Slide 2: S. Chand and Company Limited Q1 FY2019-20 Investor Update
~ =;=- S.CHAND GROUP S. Chand and Company Limited Q1 – FY2019-20 Investor Update 10th August, 2019 www.schandgroup.com
Slide 3: Summary
SUMMARY ~ • -F S.CHAND GROUP • QUARTER IN NUMBERS • KEY HIGHLIGHTS – Q1FY20 • WORKING CAPITAL CYCLE – TURNAROUND VISIBLE IN METRICS • WORKING CAPITAL CYCLE - HIGHEST IMPACT ON METRICS IN PAST 4 YEARS • NEW EDUCATION POLICY – BIG POSITIVE GOING AHEAD • COST SAVINGS MEASURES MAKING AN IMPACT IN Q1 – M
Slide 4: Quarter in Numbers
QUARTER IN NUMBERS ~ • -F S.CHAND GROUP 6% 73% 43% 24% Sales Increase in Reduction Reduction Growth Gross in EBITDA in PAT (YoY %) Margins Losses Losses (Rs m) (YoY %) (YoY %) 30% 28% 12% 5% Reduction in Collection Reduction in QoQ Sales Efficiency Net Reduction returns (vs. 20% in Working in Invent
Slide 5: Key Highlights – Q1FY20
KEY HIGHLIGHTS – Q1FY20 ~ • -F S.CHAND GROUP • Financial Highlights – On track to achieve improved profitability by reducing losses • Consolidated Revenue from Operations stood at Rs 613m for the April-June quarter, up 6% YoY • Gross Margins increased to Rs307m (vs. Rs178m in Q1FY19), up 73% YoY • C
Slide 6: Key Highlights – Q1FY20
KEY HIGHLIGHTS – Q1FY20 • ~ -F S.CHAND GROUP • The Draft New Education Policy was finally announced on 31st May, 2019. • We await the release of the National Curriculum Framework (NCF) by end of CY2020 which would form the backbone of the new curriculum which would be the basis for publishing new &
Slide 7: Working Capital Cycle – Turnaround Visible in Metrics
WORKING CAPITAL CYCLE – TURNAROUND VISIBLE IN METRICS ~ -F S.CHAND • GROUP • Debtors reduced to Rs3,202m as of Q1FY20 from Rs4,446m in Q4FY19. Receivable days reduced by 90 days to 221 days (vs. 311 in Q4FY19) which is the highest reduction during Q1 in the past 4 years. • Inventory decreased to Rs1
Slide 8: Working Capital Cycle – Highest Impact in Metrics in Past 4 Years
WORKING CAPITAL CYCLE – HIGHEST IMPACT IN METRICS IN PAST 4 YEARS • ~ -F S.CHAND GROUP • Highest reduction seen in receivables and Net Working Capital days over the past 4 years. • This improvement is on back of our renewed focus on improving our collection efficiency and focus on effective working
Slide 9: New Education Policy – Big Positive Going Ahead
NEW EDUCATION POLICY – BIG POSITIVE GOING AHEAD ~ • -F S.CHAND GROUP • The Draft New Education Policy (NEP) was announced on 31st May, 2019 by Honourable Union Human Resource Development Minister, Mr. • Announcement of Draft New Ramesh Pokhriyal 'Nishank’. May, 2019 Education Policy (NEP) • Expected
Slide 10: Cost Savings Measures Making an Impact in Q1
COST SAVINGS MEASURES MAKING AN IMPACT IN Q1 – MORE TO FOLLOW IN Q2 Employee Costs • The organization has been right sized by over 400 employees in the last 6 months. Partial benefits reflected in current quarter financials. Annualized Impact of ~ Rs.250-300 Mn Numbers of Offices & Warehouse/Rentals
Slide 11: S Chand 3.0 – Target Higher Free Cash Flows in FY20
S CHAND 3.0 – TARGET HIGHER FREE CASH FLOWS IN FY20 ~ • -F S.CHAND Lowering operating costs - - - - - - - - - - - - - GROUP • Right Sizing of our employee base by over 400 employees • Rationalization of number of offices and consolidation of warehouses at over 25 locations • Focus on manpower optimi
Slide 12: Consolidated Financial Performance
CONSOLIDATED FINANCIAL PERFORMANCE (₹ in millions) Q1FY20 Q1FY19 Y-o-Y% Q4FY19 FY19 ~ • -F S.CHAND Revenue from operations 613 577 6% 4,491 5,220 GROUP Other income 24 25 (4)% 42 116 Total income 637 601 6% 4,534 5,336 Cost of published goods/materials consumed 198 256 (23)% 921 2,094 Purchases of t
Slide 13: Digital Initiatives – Update
DIGITAL INITIATIVES – UPDATE ~ • ----F S.CHAND GROUP • Launched Learnflix on the Android platform, our all-in-one learning platform for the Gen X student. • Started Test marketing of Smart K – Our curriculum product for play schools in the NCR region during the quarter. • Our digital offerings inclu
Slide 14: Shareholding Structure
SHAREHOLDING STRUCTURE ~ • -F S.CHAND As of 9th August, GROUP Market Data 2019 Key Institutional Investors - June 2019 % Holding Market Capitalization (Rs Mn) 2,130 Price (Rs) 60 Everstone Capital Partners II LLC 9.5% No. of shares outstanding (Mn) 34.95 International Finance Corporation 8.0% Face V
Slide 15: Going Ahead
GOING AHEAD • ~ -F S.CHAND GROUP • FY20 • EBITDA to FCF generation ratio of over 50%. • 35%-40% lower Sales returns from Channel Partners vs. FY19. • Improved working capital metrics from better terms of trade with channel partners and inventory rationalization. • Medium term – 3 years • Debt free i
Slide 16: Annexure
~ • -F S.CHAND GROUP Annexure: - China vs India – A Case Study in Education Sector - Indian Education Sector - Overview - S Chand Group www.schandgroup.com 15
Slide 17: China – A Case Study in Growth – India Expected to Follow Suit
CHINA - A CASE STUDY IN GROWTH - INDIA EXPECTED TO FOLLOW SUIT • ~ --v- S.CHAND ;~-----------------------------------------------------------, CHINA 2006 INDIA 2017 GROUP I --------- • GDP per capita US$ 2,100. --------- ~ • GDP per capita US$ 1,940 I • Private education market < US$ 50 Billion*. •
Slide 18: Indian Education Sector – Large & Growing Addressable Opportunity
INDIAN EDUCATION SECTOR - LARGE & GROWING ADDRESSABLE OPPORTUNITY £ -F S.CHAND GROUP US$90 BN Market Size for the Indian Education Sector 6 US$6 BN Ancillary Education Segment Early education 2 Informal Education Segment S. Chand operates in this segment (K-12/ Higher Education content). Test prep 5
Slide 19: Indian Education Sector: Inflection Point, Strong Potential
INDIAN EDUCATION SECTOR: INFLECTION POINT, STRONG POTENTIAL ~ • -F S.CHAND GROUP Age-wise population distribution in India : S. Chand target market Literacy rate improving with higher participation from students (Source: IBEF Report) (Source: Technopak’s Outlook on India Schooling Segment) 500 40% 4
Slide 20: Preference Towards Private, Central Curriculum Schools
PREFERENCE TOWARDS PRIVATE, CENTRAL CURRICULUM SCHOOLS ~ • -F S.CHAND GROUP Private schools market share increasing every year Indian K-12 education infrastructure (Source: IBEF Report) 120% (Source: Technopak’s Outlook on India’s Schooling Segment) 100% 20.0% 21.2% 21.5% 22.1% 23.0% Number of Schoo
Slide 21: Preference Towards Private, Central Curriculum Schools
PREFERENCE TOWARDS PRIVATE, CENTRAL CURRICULUM SCHOOLS Target Market is 3,00,000 schools – growing at 8-10 % annually and student strength growing at 7-8% ~ • -F S.CHAND GROUP • Currently covering 38,000 schools in the target market • Target market growing at 8-10% annually in the no. of Intl 25-300
Slide 22: S Chand Group – Leader in Indian Education Content
S CHAND GROUP - LEADER IN INDIAN EDUCATION CONTENT ~ =;=, S.CHAND GROUP Delivering content, services and solutions… ➢ Long operating history of over seven decades. ➢ Offerings spanning entire the ➢ High brand equity across multiple brands. education spectrum …across the ➢ Strong author relationships
Slide 23: S Chand Group – Seasonal Nature of Our Business
S CHAND GROUP - SEASONAL NATURE OF OUR BUSINESS ~ • -F S.CHAND Less than 10% of annual Less than 5% of annual Less than 5% of annual 80% to 85% of annual GROUP revenues; revenues; revenues; revenues; Negative WC Negative WC Peak Inventory Peak Receivables Q1 April - June Q2 July - September Q3 Octob
Slide 24: S Chand Group – Powerful Brand Connect
S CHAND GROUP - POWERFUL BRAND CONNECT • ~ ----;---- S. CHAND GROUP Connecting with Learners • Art of Book making tour of the Printing Facilities • Mystudygear App / VRX App / Learnflix App / Test Coach App • Social Media Connecting with Teachers with • Teacher Conclaves and Awards • Over 2000 Works
Slide 25: S Chand Group – Digital Initiatives – Synergies to the Core Business
S CHAND GROUP - DIGITAL INITIATIVES – SYNERGIES TO THE CORE BUSINESS ~ • -F S.CHAND GROUP In-House (Revenue Stream) Digital Investments (Inorganic) ... my estone• Runway 10 Flll\Jre Intellitab Smartivit• • ~Irr ~ IGNITOR DIGITALLY ENABLED LEARNING DESTINATION -=i SUCCESS mYstudygear flip~loss INSPIR
Slide 26: Disclaimer
• ~ -F S.CHAND GROUP Disclaimer This presentation and the following discussion may contain “forward looking statements” S.CHAND® by S. Chand & Company Limited (“S. Chand” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to fut
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