Sundrop Brands Limited Shs Dematerialised · NSE:SUNDROP
Sundrop Brands Limited Shs Dematerialised — Agro Tech Foods — Investor Presentation (November 2023)
31 slides from Sundrop Brands Limited Shs Dematerialised's investor presentation, Nov 30, 2023
Slide 1: Regulation 30 disclosure cover letter to stock exchanges
Agro Tech Foods Limited 30th November 2023 The Manager, The Manager BSE Limited, Listing Department Floor 25, Pheroze Jeejeebhoy Towers, National Stock Exchange of India Limited Dalal Street, Exchange Plaza, Bandra-Kurla Complex, Mumbai - 400 001. Bandra (E), Mumbai – 400 051. Ph. No. 022- 22721233
Slide 2: Agro Tech Foods Limited Analyst Meet
Agro Tech Foods Limited Analyst Meet November 30th, 2023
Slide 3: Safe Harbour Statement
Safe Harbour Statement This Communication may contain statements, including the words or phrases such as ‘expects, anticipates, intends, will, would, undertakes, aims, estimates, contemplates, seeks to, objective, goal, projects, should’ and similar expressions or variations of these expressions or
Slide 4: Company Strategic Vision
Company Strategic Vision The Best Performing Most Respected Foods Company in India 3
Slide 5: Today's Agenda
Today’s Agenda • The Last 12 Months. • Actual Trends by Category • The Next 12 Months: • Expectations by Category • Road Map for EBITDA Margin Going Forward: • P&L Structure by Line Item 4
Slide 6: The Last 12 Months & The Next 12 Months
The Last 12 Months & The Next 12 Months
Slide 7: Overall: The Last 12 Months
Overall The Last 12 Months • Strong growth in RTE Snacks, Breakfast Cereals & Chocolates helps to deliver mid single digit Foods Growth. • RTC and Spreads revenues largely flat to PY. However, Instant Popcorn now showing mid single digit Volume Growth & actions already taken in Peanut Butter. • Act
Slide 8: Overall: The Next 12 Months
Overall The Next 12 Months • Strengthen RTC & Spreads – accelerate Total Foods growth rate. • Maintain momentum on RTE Snacks and Breakfast Cereals. • Create a robust Chocolate Portfolio which spans all segments – Molded, Count Lines, Panned & Assortments. Wafers to follow. • Expand the Sweet Share
Slide 9: Ready to Cook Snacks: The Last 12 Months
Ready to Cook Snacks The Last 12 Months • Post strong Growth in FY’22, RTC Popcorn sees impact of lower WFH. Impact partly mitigated by distribution expansion. Instant Popcorn now already at mid single digit Volume Growth. • PPA work undertaken in Non-Popcorn RTC – Branding, Pricing, & Pack Sizes on
Slide 10: Ready to Cook Snacks: The Next 12 Months
Ready to Cook Snacks The Next 12 Months • At the Mass Market level continue to expand Distribution & invest in TV to get Instant Pop Corn to desired growth levels per our algorithm. • At the top end and digital space leverage the Pop-Up Box to deliver a superior consumer experience in Microwave Popc
Slide 11: Ready to Eat Snacks: The Last 12 Months
Ready to Eat Snacks The Last 12 Months • End of Work From Home drives strong growth in Out of Home. Salty Snacks growth led by RTE Popcorn – biggest beneficiary of OOH. • YTD Sweet Snacks now at 2.5 X of Prior Year driven by Caramel Bliss and Duo Cruncheez. • PPA work on creating a viable Rs. 5 port
Slide 12: Ready to Eat Snacks: The Next 12 Months
Ready to Eat Snacks The Next 12 Months • Continue to enhance scale in Salty Snacks categories led by Ready To Eat Popcorn. Apply Popcorn learnings to Extruded and Tortilla Chips. • Drive Sweet share of the RTE portfolio through both Distribution Expansion and Portfolio Enhancement. • Expand distribu
Slide 13: Spreads & Dips: The Last 12 Months
Spreads & Dips The Last 12 Months • Continued focus on twin goals for Peanut Butter - Category Expansion and Clear Leadership. Roll out underway of Rs. 10 and Rs. 99. • Smaller players weaken in Peanut Butter - reduced number of brands on shelf. Larger players yet to see meaningful results despite h
Slide 14: Spreads & Dips: The Next 12 Months
Spreads & Dips The Next 12 Months • Continue to build Nut Butters led by recipe based Peanut Butter – Distribution Expansion, Media Support and Entry Level Packs. • Initiate Capacity Expansion (c 2X) for Peanut Butter enabling Operating Leverage with increased volumes and therefore Margin Improvemen
Slide 15: Breakfast Cereals: The Last 12 Months
Breakfast Cereals The Last 12 Months • Strong Volume Growth driven by Center Filled Cereals with clear product superiority. Reformulated Shells (Extruded) product rolled out. • Category Distribution reaches the 120,000 level. • Product development completed in Muesli to have a broader presence in th
Slide 16: Breakfast Cereals: The Next 12 Months
Breakfast Cereals The Next 12 Months • Continue to drive Center Filled Cereals - Superior Product Quality & Innovation. Use Shells to address the Rs. 5 price point. • Leverage Media Support to build On Shelf Presence in the primary Breakfast Cereals Category with a complete SKU line up. • Roll out t
Slide 17: Chocolates: The Last 12 Months
Chocolates The Last 12 Months • ATFL well on the way to being established as a credible player in the Rs. 15,000 crore Chocolate Confectionery category. • Media support commenced in Q2, FY’24 - focus on the Coconut Variant. • Category Distribution crosses 100,000 stores. • Clear down the line succes
Slide 18: Chocolates: The Next 12 Months
Chocolates The Next 12 Months • Expand Distribution of both Coconut & Peanut Duo products in Count Lines supported by at least one new Variant. • Make an entry into Molded Chocolates with a differentiated offering. • Further refine Gift Pack Management capabilities to gain a reasonable share of the
Slide 19: Premium & Mass Staples
Premium & Mass Staples The Last 12 Months – The Next 12 Months • The Last 12 Months • Sundrop Heart extended into Oats & Almonds making Premium Staples more broad-based while providing procurement scale for Foods. • Share of Mass Staples maintained at c 6 % of Total Revenues to help support Distribu
Slide 20: Road Map for EBITDA Margin
Road Map for EBITDA Margin
Slide 21: Road Map for EBITDA Margin
Road Map for EBITDA Margin • What is the likely P&L construct for Foods as we build the business to a Rs. 1000 crore+ level or about 80% of Total Company Revenues. • How are individual line items expected to progress in terms of : • Where are we Today (basis first six months of FY’24) • Where do we
Slide 22: Gross Contribution
Gross Contribution Net Sales - Raw Materials -Packing Materials • Where are we today: • YTD FY’24 the Foods business had a 46% Gross Contribution. • Where do we think we can be: • An average of 48-50%, in line with best in class in the Foods business. • What are the Risks: • Input Commodity inflatio
Slide 23: Manufacturing Costs
Manufacturing Costs Excluding Depreciation • Where are we today: • YTD FY’24 Manufacturing Costs excluding Depreciation are 15% of Foods Revenues. Labor costs are the highest followed by Energy and then Others and R&M. • Where do we think we can be: • As each Category gains scale a figure of 9-10% s
Slide 24: Cesses & Levies
Cesses & Levies APMC Charges, Select Taxes & Waste Management • Where are we today: • YTD FY’24 Charge of 1.1% driven by APMC charges on input agricultural commodities. • Where do we think we can be: • With increasing share of inputs represented by non-agricultural commodities and improved efficienc
Slide 25: Advertising & Promotion
Advertising & Promotion Media and Sales Promotion Expenses • Where are we today: • A&P as a % of Foods Sales was about 7% on YTD basis in FY’24. • Where do we think we should be: • ATFL’s desired A&P levels remain in the 7-8% range. • What are the Risks: • Volatility in Edible Oils impacts Total Com
Slide 26: Transportation & Warehousing
Transportation & Warehousing Primary Freight, Secondary Freight & Warehousing • Where are we today: • YTD FY’24 T&W Costs were 7% of Sales for Foods. • Where do we think we can be: • Management assessment that a level of about 6% is achievable despite increasing share of RTE/Cereals/Chocolates. • Wh
Slide 27: SG&A
SG&A Excluding Depreciation, Transportation & Warehousing • Where are we today: • SG&A, excl. Depreciation and T&W at 12% of Net Sales (drop in Oils prices). • Where do we think we can be: • SG&A of 9% achievable for ATFL at a revenue level of c Rs. 1250 crore with continued tight control on expense
Slide 28: Cost of Obsolescence
Cost of Obsolescence Damages, Leakages & Write Offs • Where are we today: • High current obsolescence rate of 1.8% due to the learning curve in each of the new categories that ATFL has entered in the recent years. • Where do we think we can be: • While Innovation will remain important for continued
Slide 29: Royalty
Royalty Payable to ConAgra Brands • Where are we today: • YTD FY’24 Royalty payout represented 1.9% of Foods Sales. • Where do we think we can be: • With a faster growth expected in Sundrop Foods as compared to Act II, Royalty outgo is expected to reduce to about 1.7% of Foods Sales. • What are the
Slide 30: Resultant Foods P&L Structure Summary
Resultant Foods P&L Structure Summary Operating Leverage to drive Margin Improvement Best % Sales Current Ever Future Gross Contribution 46% 52% 49% Cost of Manufacturing excluding Depreciation 15% 13% 9% Cesses & Levies 1% 1% 1% Transportation & Warehousing 7% 7% 6% Obsolescence 2% 1% 1% Advertisin
Slide 31: On our Way....
On our Way…. The Best Performing Most Respected Foods Company in India 30
Agro Tech Foods — Investor Presentation (November 2023) on 6ix