Ester Industries Limited · NSE:ESTER
Ester Industries — Q4 FY2020 Earnings Presentation
27 slides from Ester Industries's earnings presentation, Jun 20, 2020
Slide 1: Q4 & FY20 Results Presentation
June 20, 2020 Q4 & FY20 RESULTS PRESENTATION
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 government actions, local political or economic developments, technological risks, and many other factors that could 2 cause actual re
Slide 3: Q4 & FY20 Performance Overview
Q4 & FY20 Performance Overview
Slide 4: Financial Summary
Financial Summary Strong performance of Film & Specialty polymers businesses (0.5%) 72% 359% resulted in higher profitability growth Figs in cr. in FY20 Q4 FY20 254 53 37 Increasing volume & enhanced Q4 FY19 255 31 8 margins in Film business led to significantly improved profitability 4 Stellar perf
Slide 5: Formalised Dividend Distribution Policy
Formalised Dividend Distribution Policy The Board of Directors at its meeting held on 17th June 2020, has recommended final dividend of Rs. 2.50/- per equity share for the year ended on 31 March 2020, subject to the approval of the shareholders of the Company in the forthcoming Annual General Meet
Slide 6: Debt rationalization
Debt rationalization Focused on improving Debt/EBITDA (x) by paying off debt Term Debt Repayment Interest Bearing Debt (Rs. crore) Interest Bearing Debt / Annualised EBITDA (x) 44.1 274.9 43.59 242.5 38.29 34.6 201.3 157.4 171.5 24.74 23.8 142.0 2.49 2.13 0.95 0.89 0.79 0.72 FY17 FY18 FY19 FY20 FY21
Slide 7: Chairman's Comments
Chairman’s Comments Commenting on the results, Mr. Arvind Singhania, Chairman, Ester Industries said “Despite nationwide lockdown due to Covid-19 pandemic at the end of the year, we have reported a strong financial performance during the fiscal. The profitability growth was largely driven by robust
Slide 8: Covid-19 Impact & Measures
Covid-19 Impact & Measures
Slide 9: Covid-19 Impact on business
Covid-19 Impact on business Scaling down of activities – Specialty Polymer Sales in June 2020 quarter impacted due to slowdown in US on account of outbreak of Covid – 19 Due to recovery in economic activity in the US & EU, we expect to return to normal levels of operation soon Despite lockdo
Slide 10: Ester Industries response to Covid-19
Ester Industries response to Covid -19 Undertook series of steps towards supporting the society & protecting its employees Supporting the Society Contributed protective gear to healthcare workers, Police Staff etc. Non-monetary support to the under-privileged in the society & migrant labour
Slide 11: Specialty Polymers
Specialty Polymers
Slide 12: Specialty Polymer – The Catalyst
Specialty Polymer – The Catalyst 7 19 High entry barriers - Patents Product Patent protected filed portfolio business (Product & process) 12 30,000MTPA 30%+ Production Capacity EBIT margins on achieving of adequate scale of operations
Slide 13: Specialty Polymers Business overview
Specialty Polymers • Delivered stellar performance in FY20 – 85% volume growth, Revenue EBIT Margins (%) 140% revenue growth; 28x profitability expansion 73 3.5 38.0 • Proportion of MB – 03 & innovative PBT in the total sales volume increased from 33% to 76% Figs in cr. 30 28 18 6 6 1 • Closure and
Slide 14: Expect business momentum to continue in FY21
Expect business momentum to continue in FY21 Partners with a Global Chemical Leader in Manufacturing innovative Polybutylene Terephthalate (PBT) Signed ‘Manufacture and Supply Agreement’ with a global chemical leader in April 2019 effective 1st April 2019 Agreement is renewable by mutual conse
Slide 15: Patent Status
Patent Status Product approval Product Code Product Description Status of Patent Application from customer ESTER HR-03 Hot Fill PET by normal ISBM Granted in USA and filed in Approved Packaging India, Europe ESPET MB-03 Masterbatch Sulfonated PET Granted in USA and filed in Approved Stain Resistance
Slide 16: Specialty Polymers – Products & Applications
Specialty Polymers – Products & Applications Rigid Packaging – Hot-fill / Beer Kegs Polyethylene Terephthalate (PET) Textile – Flame Retardant, Deep dyeable master batches, Cationic dyeable master batch Applications Polybutylene Terephthalate (PBT) Products Carpets – Stain Resistant Master Batches P
Slide 17: Polyester Films
Polyester Films
Slide 18: Polyester Film – De-Commoditizing
Polyester Film – “De-Commoditizing” ` De-commoditizing the Mfg. Capacity -57,000MTPA Strong sector fundamentals – business by changing Polyester Films & 13,200 MTPA Stable pricing environment; product mix Metalized polyester films 18 ` #56 ~30% ` No. of countries Share of value added Cost rationaliz
Slide 19: Polyester Films Business overview
Polyester Films Revenue EBIT Margins (%) • Business momentum continues – Increasing volume and 803 805 enhanced margins drive profitability growth • Improving product mix – Increasing share of value added 22.7 Figs in cr. 202 14.9 products in overall mix post commissioning of an Off – Line 191 183 1
Slide 20: Potential impact of Covid-19 on the Film business
Potential impact of Covid-19 on the Film business Demand growth from Consumer Staples for flexible packaging is expected to remain strong Increased focus on health & hygiene products to result in further growth in demand Raw material prices are expected to remain benign in the near term Due
Slide 21: Film Business – Expect momentum to continue
Film Business – Expect momentum to continue Industry Dynamics • Market size of Domestic BOPET films ~504000 tpa • Domestic demand growing at 10%-11% • Incremental supply of about 65000 TPA on account of commissioning of 2 new production lines in August & November 2019 already absorbed by the market
Slide 22: Polyester Films – Products & Applications
Polyester Films – Products & Applications White Opaque High Clear Flexible Packaging High Barrier Embossable Barrier Packaging Applications Products Heat Saleable Twist Wrap Embossing Shrink film Anti - Static Lidding Metalized High Barrier Matte Label & Graphics 22
Slide 23: Engineering Plastics
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Slide 24: Engineering Plastics – Structurally positive; near term challenging
Engineering Plastics – “Structurally positive; near term challenging” #250 13,500MTPA “Estoplast” Product Portfolio Mfg. capacity Products marketed under the brand 24 Improving product / customer “Fastest Growing Enterprise mix, expanding exports & Processing (Engineering Polymers)” controlling cost
Slide 25: Engineering Plastics Business highlights
Engineering Plastics • 190 bps improvement in EBIT margin during Q4FY20 Revenue EBIT Margins (%) • Covid-19 pandemic disrupts the steady recovery in Engineering Plastics business. 3.9 5.4 Figs in cr. 195 • Return to normalcy not expected before second half of the current 161 financial year 47 44 2 3
Slide 26: Engineering Plastics – Products & Applications
Engineering Plastics – Products & Applications Switchgear Industry Polybutylene Terephthalate (PBT) MCB, MCCB, RCCB, etc. Case, Cover & other Parts Polyethylene Terephthalate (PET) Lighting Industry Switches, Sockets, LED/CFL Holders, etc. Polyamide 6 (Nylon 6) Appliances Industry Knobs, Rotary Swit
Slide 27: Investor Contacts
Investor Contacts For more information contact: About Us: (CIN :- L24111UR1985PLC015063) Incorporated in 1985, Ester Industries Limited (EIL) is an ISO Pradeep Kumar Rustagi 9001:2008,ISO 22000:2005,TS16949:2002 certified Company (Chief Financial Officer) engaged in the manufacture of polyester film