Garware Hi-tech Films Limited · NSE:GRWRHITECH
Garware Hi-tech Films — Q2 FY24 Earnings Presentation
54 slides from Garware Hi-tech Films's earnings presentation, Nov 10, 2023
Slide 1: Exchange cover letter for investor presentation Q2 FY24
November 10, 2023 The Compliance Manager The Manager, Listing Department BSE Limited National Stock Exchange of India Limited Corporate Relationship Dept., Exchange Plaza, Plot No. C/1, G Block, Phiroze Jeejeebhoy Towers, Bandra-Kurla Complex, Dalal Street, Mumbai 400001. Bandra (East), Mumbai 400 0
Slide 2: Garware Hi-tech Films Ltd. Investor Presentation Q2FY24
-~~ GLOBA[ •1 Window Films .. ---.'ii.. , ---·-..~, ~ GARWARE' GLOBA[ •1 ~ HI-TECH FILMS Paint Protection Films Garware Hi-tech Films Ltd. (GHFL) Investor Presentation Q2FY24
Slide 3: Contents
Automobile Window Architecture Safety I 2 Contents 01 Company Overview 02 Product Overview Paint Protection Shrink Industrial 03 Q2FY24 Highlights 04 Annexure
Slide 4: Safeharbor
I Safeharbor 3 Our discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results
Slide 5: Company Overview
4 Company Overview
Slide 6: Our Journey: Transformation to speciality film player
I Our Journey : Transformation to speciality film player 5 GHFL established by GHFL has embarked on a transformative journey led by the next generation, the Padmabhushan Late Dr. Bhalchandra (Abasaheb) Garware daughters of Dr. S. B. Garware, ensuring robust growth and strength. and Dr. S. B. Garware
Slide 7: Business Strategy | Four Pillars
I Business Strategy | Four Pillars 6 Customer-Centric Growth r---------------------------------------------------- !-------------------------------------------------------, ,-----------------------------------------------------, !----------------------------------------------------, :' Value-Added '
Slide 8: Product Strategy | Premium Market Positioning
I Product Strategy | Premium Market Positioning 7 Our 'Global' and 'Garware' brands are aimed at the high end of the market, Tier 1 Brand Exclusive Tech differentiating them from other international competitors in the premium and economy categories. A premium global brand, One of only 2 with dyed SC
Slide 9: Geographical Strategy | Mature Market with High-end Customer Base
I Geographical Strategy | Mature Market with High-end Customer Base 8 Global Presence India, USA, UK India & 3 Sales Offices 2 Manufacturing locations Tinters across 90+ Countries Europe ltd /J,. I D 5000+ the globe Export Revenue D Revenue % 77.9% I Cu 13.1% in Q2FY24 North America !l 43.1% u • ➢ S
Slide 10: Product Overview
9 Product Overview
Slide 11: Diversified Portfolio driving GHFL's Success
I Diversified Portfolio driving GHFL's Success 10 Consumer Product Division Industrial Product Division • (CPD) • (IPD) Value Added Product Value Added Product Commodity • Automotive Solar Control Film • Shrink Film • Thermal Lamination • Paint Protection Film • Electrical/Electronics • Plain Film I
Slide 12: Solar Control Film | Competitive Advantage
I Solar Control Film | Competitive Advantage 11 Only company in the world with backward integration and extensive in- ➢ Only company in the world with backward integration (Chip- house manufacturing processes for SCF Premium to-films) Leading Brand ➢ The largest global capacity at one location & amo
Slide 13: Solar Control Film | Product Range & Applications
I Solar Control Film | Product Range & Applications 12 HIGH PERFORMANCE (HP) WINDOW FILMS Front Windshield Made with high quality metallised films and its tint can be profusely crafted to match customers • ARCTIC COOL SHIELD need. The visibility of these films can be modified according to desired sh
Slide 14: Solar Control Film | Key Growth Drivers
I Solar Control Film | Key Growth Drivers 13 Capacity-1 Capacity-2* -------, ,--------- ---------1! 1,800 LSF Untapped domestic market and product diversification r----------""'. . . . .2,400 LSF . . . . . . . . . -~ ~ : : .,._______ I: I I I ' ' ' ➢ Reintroduction of GHFL ‘safety glazing’ window fi
Slide 15: Paint Protection Film | Competitive Advantage
I Paint Protection Film | Competitive Advantage 14 ➢ GHFL is the only producer of professional-grade Premium paint protection film Sole Producer (PPF) in India. Vertically ➢ A single-source manufacturing facility with in a state-of-the-art, ISO-9001:2015 Integrated certification capable to produces
Slide 16: Paint Protection Film | Product Range & Applications
I Paint Protection Film | Product Range & Applications 15 Plus Premium PPF Kits Retail – Plus, Premium 180-micron thick film with a 3- Advanced 200-micron thick Customized Kits and Matte year warranty, offers an PPF with a 5-year warranty, Garware paint protection film Finish optically clear, high-g
Slide 17: Paint Protection Films | Key Growth Drivers
I Paint Protection Films | Key Growth Drivers 16 Under penetrated and untapped PPF market in India ➢ Indian market is in the early stages of “building awareness” - scratch resistance, hydrophobicity, self-healing, and more benefits. Installed Capacity – 300 LSF ➢ Huge market potential, however, the
Slide 18: Industrial Products Division
I Industrial products Division | Integral to GHFL’s leadership in Poly-films 17 Shrink Film Thermal Lamination Wrapping & labelling plastic bottles, Provide heat insulation, energy efficiency, containers, cans, cups, etc. of various sizes increased comfort & protection in various applications like B
Slide 19: Shrink Film | Competitive Advantage
I Shrink Film | Competitive Advantage 18 Product USP Wide variety ➢ 12 variants (under High, Medium and Low Shrink options) powered by a strong focus on R&D Robust entry ➢ Implementing products at customer’s end requires extensive Niche area of Excellent Ease of barrier & trial periods, application
Slide 20: Shrink Film | Product Range & Applications
I Shrink Film| Product Range & Applications 19 Shrink Films with UV stabilization used in Key Industries dairy industry and vitamin-based Commercialization of 2 beverages to protect them from UV rays. new eco-friendly films ‘Pearl Float’ & •~-·~ II • '4,iP ~ ', v1,, Agriculture Food & Beverage Pharm
Slide 21: Shrink Film | Key Growth Drivers
I Shrink Film | Key Growth Drivers 20 IPD Capacity Utilization India's Rising Role in Shrink Film Manufacturing r------· Q2FY23 ·-------, r----- Q2FY24 ·---,I India has a great scope to emerge as a sizable player in shrink film manufacturing as part of I I I I I I I I I I I I I ~78% Utilization I I
Slide 22: Architectural Film | Next Engine for Growth
I Architectural Film | Next Engine for Growth 21 d A Unique range Privacy Films I Sun Control Films I Safety & Security Films • • 1 Applied to the inside surface of Glass Windows • •1 Holds broken glass shards intact & minimizes chances of injuries • 2• Reduces solar heat, UV light & glare, keeps in
Slide 23: Our Global Marquee Clients
Bank of Brazil Imperial College London Our Global Marquee Clients Luton Airport, London Changi Airport, Singapore ...h ,'i\.. GI.OBA[•!! • d= GARWARE 111 \::!] HI-Tl'cCH FILMS wrrovRrns .. GI.OBA P:" I F·:~:s:I rl ·r , :>
Slide 24: R&D | Innovation at our core
TM I R&D | Innovation at our core SAFETY ~ GLAZING 23 • Recognition by Indian Dep. of Scientific & Industrial Research (DSIR) • TPM Excellence Award by JIPM VAP for stable revenue and high margin growth • BRCGS Certified (Food & Packaging Grade) Continuous Interaction & 50 dedicated R&D Team members
Slide 25: Expanding Channels and Customer Base: Marketing & Branding Initiatives
24 Expanding Channels and Customer Base : Marketing & Branding Initiatives 200+ US/Europe/Middle East manufacturers, distributors visited us at SEMA show Showcased new products and R&D pipeline to select targets
Slide 26: Improve India Revenue Mix | From PPF & SCF
I Improve India Revenue Mix | From PPF & SCF 25 Marketing Strategy for Exponential Domestic Market Growth from SCF and PPF Reintroducing Safety Glazing Film with favorable shift in Indian Regulations, leveraging local manufacturing and strong brand recall Accelerated expansion of the Garware Applica
Slide 27: Implementing Domestic Market Action Plan
I Implementing Domestic Market Action Plan 26 Focused sales-burst program supported by our channel partners Crack team driven on- Sharp digital Business development Pilot, Scale Up & ground sales effort communication with our Channel partners Accelerate Deploying agile and Executing precise and Robu
Slide 28: Domestic Safety Glazing Film (SCF)
I Domestic Safety Glazing Film (SCF) | ~6-8% of total revenue in 3 years 27 Ensures better visibility and enhanced safety aligned with Central Motor Vehicle Rule Indian domestic market is highly High Under-penetration Product Launch under penetrated Domestic market has shown higher Increasing Demand
Slide 29: Domestic PPF | OEM Dealerships, GAS & PPF Distributors
I Domestic PPF | Driven by 500 OEM Dealerships, 100 GAS & PPF Distributors 28 Garware Application Studios (GAS) : Detailing and Car care Studios for • exclusive access to Garware's premium safety glazing films and PPF 9 Vile Parle, Mumbai GARWARE P a.lnl 'Prfll., h:lk... n FUm Introducing a D2C chan
Slide 30: Building Robust Sales Network | Installation Training for Applicators
I Building Robust Sales Network | Installation Training for Applicators 29 Ensure a High-Quality Finish Cutting-Edge Training Center Deeper Penetration Applicator Network expansion Established the Garware training Starting with region wise (Tier deliberate endeavor, recognizing center with state of
Slide 31: Impactful Results | Prior Marketing and Sales Initiatives
I Impactful Results | Prior Marketing and Sales Initiatives 30 Harnessing our digital platforms to Growth in PPF sales in YTD FY24 vis-à-vis boost customer impressions. • 2x our selected measurement period of FY 23 Growth in number of new retail counters SCF 1.9x added in FY 24 compared to selected
Slide 32: Q2FY24 Highlights
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Slide 33: Message from the CMD
I Message from the CMD 32 "Our PPF business has delivered strong volume and revenue growth with committed orders from our US customers and from our deepening domestic distribution network. The PPF plant is now operating at peak capacity, and the fungible capacity of our new lamination line has curre
Slide 34: New Initiatives and Developments | Q2FY24
New Initiatives and Developments | Q2FY24 33 1. Agreement signed and delivery started with Mahindra Automotive as OE supplier for PPF. Agreement in progress with three more OEMs for PPF/Safety Glazing 2. Full repayment of term loans, resulting in a gross debt balance of zero, as of date GARWARE. HI-
Slide 35: Aggressive sales and marketing efforts to yield long-term benefits
I Aggressive sales and marketing efforts to yield long-term benefits 34 EBITDA Bridge In cr Comments 75.8 0.1 8.4 74.0 -0.2 • EBITDA impacted by an aggressive approach to sales -2.4 -7.8 and marketing expenses, including consulting fees, and the subsequent increase in resource recruitment, with spec
Slide 36: Stable performance in a challenging environment
I Stable performance in a challenging environment 35 Consolidated – Q2FY24 and H1FY24 Rs. 777 cr +1.6% Rs. 38.6 (3.3)% Rs. 397 cr +0.6% Rs. 19.8 (4.6)% Revenue YoY EPS YoY Revenue* YoY EPS YoY Rs. 146.8 cr +0.2% 18.9 % (27) bps Rs. 74 cr (2.4)% 18.6 % (57) bps EBITDA YoY H1 FY24 EBITDA Margin YoY EB
Slide 37: Quarterly Financial Performance – Q2 FY24
I Quarterly Financial Performance – Q2 FY24 36 Revenue In cr Comments Revenue Q2 FY24 Growth • Sales for quarter Q2FY24 stood at Rs 397 crores, up by 4.6% QoQ and up by 0.6% YoY. 370 395 324 349 380 397 QoQ 4.6% • Sales for H1FY24 stood at Rs 777 crores, up by 1.6% YoY. Q1 Q2 Q3 Q4 Q1 Q2 FY23 FY23 F
Slide 38: Stable Historical Performance
I Stable Historical Performance 37 Revenue from Operations EBITDA Margin PAT (INR crores) 23.6% 12.7%12.8% (INR crores) 21.3% 400 220(INR crores) 11.6% 13.0% Margin 18.8% 18.7% 19.2% 350 20.0% 18.9% 9.3% 167 166 11.0% 1,438 16.1% 277 269 300 170 8.6% 12.1% 1,303 11.5% 234 126 9.0% 15.0% 250 146.5 14
Slide 39: Annexure
Annexure
Slide 40: Leadership: Our Pillars
I Leadership : Our Pillars 39 Driving Growth, Excellence and Innovation at GHFL ▪ Graduated from Dulwich College, a prestigious institute in England and studied Senior Business Management course at the University of Edinburgh ▪ Has held prestigious posts such as President - Maharashtra Chamber of Co
Slide 41: Vertically Integrated Chips-to-Films Manufacturing
I Vertically Integrated Chips-to-Films Manufacturing 40 GHFL enjoys complete control due to its vertical integration excellence, streamlining films manufacturing GHFL’s core business in value chain _______,, , (__ Natural Resources ~ ) (__) c----- Basic Petrochemicals ) (_ _) Raw Materials _____ Chi
Slide 42: GHFL Manufacturing footprints
----... ' I GHFL Manufacturing footprints ( 41 Fungible Capacity Pioneering the Future of Specialty Polyester Films ➢ Crucial for improving sales mix & responding to stable demand ➢ Enables shift between value-added and commodity products Fully Vertically integrated 2 Manufacturing Locations Total I
Slide 43: Product Division Summary: CPD
IProduct Division Summary CPD Consumer Product Division Automotive Solar Paint Protection Safety Architectural Control Film Film Film Film ➢ GHFL manufactures ➢ Leveraging 6+ decades of expertise ➢ Polyester safety films provide high ➢ GHFL produces a range of automotive films with in polyester manu
Slide 44: Product Division Summary: IPD
IProduct Division Summary IPD Special Industrial Product Division (IPD) Shrink Film Electrical & Electronics Release Liners ➢ GHFL produces shrink films for wrapping ➢ Electrical and Electronics specialty films are ➢ Release liners are a specialty film coated and labeling plastic bottles, containers
Slide 45: Product Division Summary: Commodity IPD
IProduct Division Summary Commodity Industrial Product Division (IPD) Packaging & Lidding Thermal Lamination Plain Film Metalized Film Film ➢ They type of specialty films that are ➢ Plain films offer excellent ➢ Packaging & Lidding Films are ➢ GHFL produces custom designed to provide heat insulation
Slide 46: Vertical Integration: A Strategic Advantage
IVertical Integration: A Strategic Advantage Unparalleled Competitive Advantages due to its Vertical Integration ✓ Self Sufficient Eliminates dependency on other manufacturers ✓ Raw material Ensures required and continuous availability of or outside vendors. availability quality raw materials enabli
Slide 47: Brand & Marketing | Participations across major events & conferences
I Brand & Marketing | Participations across major academic events & conferences 46 SEMA Show – November 2023 International WF Conference & Tint-off (Ruby Sponsor) Wide Open Rallies | Sponsorship Social Media Campaigns
Slide 48: Foundation for Sustainable Well-being
47 • -- -- -- Utilizing 30% PCR materials in shrink film and other film products • -- -- -- 1st company in India to introduce recyclable PETG replacing hazardous PVC shrink label films Foundation for • -- -- -- Solar Control films reduce 3-5% fuel consumption and carbon emissions Sustainable Well-be
Slide 49: C ,n s ey
48 C Ade ic Com al j A i C So ie y lopm e e ess 10 0 CO ID -1 p S 0 ca a 0 L s ey D I Be 10 0 ,n 0 1 ions st 0 it t dens f om Pl 10 n e r al e . -·~ I GLOBA.:91 GLOBAfJ W.rdow Fm;Pamt -·~ Prolecbm Fm GARWARE' ( { f f HI-TECH FILMS
Slide 50: Transitioned into a Value-Added Product Business
I Transitioned into a Value-Added Product Business 49 GHFL has ventured into value-added products like Solar Control, Paint Protection and Shrink Film, resulting in better recovery of revenue, and improved margins. FY17 & Prior FY18 & Beyond 20% 11% ➢ Before its transformation, GHFL had a diverse 52
Slide 51: Profit and Loss Summary
I Profit and Loss Summary 50 Consolidated In Rs. Crores (except EPS Quarter Ended Year Ended Particulars 30.09.2023 30.06.2023 30.09.2022 31.03.2023 (Unaudited) (Unaudited) (Unaudited) (Audited) Revenue from Operations 397.1 379.7 394.8 1438.0 Other Income 9.2 8.9 9.0 42.16 Total Income 406.3 388.6
Slide 52: Balance Sheet Summary
I Balance Sheet Summary 51 In Rs. Crores Liabilities Sep-23 Mar-23 Assets Sep-23 Mar-23 Shareholders Fund 1,926.30 1,855.82 Non-Current Assets 1,555.86 1,563.11 Share Capital 23.23 23.23 (a) Property, Plant and Equipment 1,457.52 1466.01 Other Equity 1,903.07 1,832.59 (b) Capital work - in - progres
Slide 53: Abbreviations
I Abbreviations 52 Acronym Full Form CPD Consumer Product Division IPD Industrial Product Division VAP Value Added Product SCF Solar Control Film PPF Paint Protection Film GAS Garware Application Studio PV Passenger Vehicle D2C Direct to Customer OEM Original Equipment Manufacturer LSF Lakh Square F
Slide 54: Thank You
Thank You Garware Hi-Tech Films Limited. Ernst & Young LLP CIN: L10889MH1957PLC010889 Investor Relation Advisory Ashish Samal Vikash Verma Sumedh Desai ashish.samal@garwarehitech.com Vikash.Verma1@in.ey.com Sumedh.desai@in.ey.com cs@garwarehitech.com
Garware Hi-Tech Films — Q2 FY24 Earnings Presentation on 6ix