S Chand And Company Limited · NSE:SCHAND
S Chand And — FY2018 Earnings Presentation
38 slides from S Chand And's earnings presentation, Jun 1, 2018
Slide 1: Cover letter to stock exchanges
Date: June 01, 2018 To To Listing Department Listing Department, BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Dalal Street, Exchange Plaza, C-1, Block G, Bandra Kurla Mumbai, Maharashtra 400001 Complex, Bandra (E), Mumbai, Maharashtra 400051 Dear Sir, Re: Investors
Slide 2: Results Announcement: Q4 & Full Year, FY 2017-18
S Chand And Company Limited Results Announcement : Q4 & Full Year, FY 2017-18 May 31, 2018 Empowering Young Minds …
Slide 3: Contents
Contents 01 Performance Highlights 02 Growth Strategy 03 Group Overview 04 Industry Overview 1
Slide 4: Performance Highlights
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Slide 5: Consolidated Performance
Consolidated Performance + 18% yoy + 21% yoy + 73% yoy INR 31.1 Revenue growth Ebidta growth PAT growth Earning Per Share FY 2017-18 FY 2017-18 FY 2017-18 FY 2017-18 Summary : Consolidated FY 2018 FY 2017 YOY% FY 2017 Figures in INR Mn Audited Proforma* Audited Total Revenues 8,072 6,868 18% 6,622 E
Slide 6: Key Highlights
Key Highlights Consolidated Revenues at INR 8,072 Mn up 18%* from the previous year. o K-12 content revenues increased 17% YOY (organic) to INR 6,355 Mn. o Higher education content revenues higher by 15% YOY (organic) to INR 1,403 Mn. o Consolidated profit after taxation at INR 1,071 Mn. Mylestone (
Slide 7: Financial Performance: FY 2017-18 (12 months)
Financial Performance : FY 2017-18 (12 months) S Chand And Company Limited Standalone Consolidated Figure in INR Millions YE 31.3.18 YE 31.3.17 % YOY YE 31.3.18 YE 31.3.17 % YOY Revenues 3,710 3,020 23% 8,072 6,622 22% Cost of goods (net of inventory change) 1,334 1,089 2,562 1,982 Publication expen
Slide 8: Balance Sheet (as on 31.03.2018)
Balance Sheet (as on 31.03.2018) S Chand And Company Limited Standalone Consolidated Figure in INR Millions YE 31.3.18 YE 31.3.17 YE 31.317 YE 31.3.16 Shareholder Funds 8,600 5,020 9,997 6,412 Non controlling interests - - 42 132 Borrowings 512 807 1,713 1,994 Non Current Liabilities 15 13 88 71 Tra
Slide 9: Revenue Growth
Revenue Growth Revenue from operations increased by 18%* YOY to INR 8,072 Mn. 15% o K-12 revenues higher by 17% (volume growth of 10%). 1% 2% o HE revenues higher by 15% (volume growth of 13%). 18% o Other income at INR 128 Mn, including interest income of INR 38 Mn. Figures in INR Mn. 4% K-12 96 17
Slide 10: Margins
Margins Gross Margins at 59.2% , reduced by ~ 170 bps YOY. o Impacted by higher paper prices and GST. o Royalty cost at 6.39% as against 6.25% in the previous year, partly impacted by reverse charge under GST. o Realigned HE product portfolio with negligible price increase (< 2% on average) to impro
Slide 11: Performance Indicators
Performance Indicators S Chand And Company Limited Consolidated Remarks Figure in INR Millions On 31.03.18 On 31.03.17 Net Debt (net of cash and bank 701* 3,416 *Excludes INR 657 Mn recognized as loan (under IND AS) - being balance & current investments) estimated consideration for acquiring residua
Slide 12: Business Segments
Business Segments . Revenues up 17% YOY to INR 6,355 Mn. K-12 o Volume growth ~ 10%. o Chhaya revenue growth at 16.6%. o K-12 business contributes to 80% of group revenues. Higher education revenues increased by 15% YOY to INR 1,403 MN. Higher Education o Test preparation business registered 10% gro
Slide 13: Business Updates
Business Updates Successfully launched Virtual Reality (VRX) content for K-12 segment. o Linked to curriculum, sold as “bundled with books”. o 32 modules released for Class IX and X. o Target to release additional 50 modules in the current year and cover Class VI to VIII. Proposed merger of S Chand
Slide 14: Proposed Restructuring (under implementation)
Proposed Restructuring (under implementation) Content S. Chand And Company Limited Digital Content / Services Merger Into S Chand Wholly Owned Subsidiary Wholly Owned Subsidiary Demerger Wholly Owned Subsidiary Vikas Publishing House Nirja Publishers & Printers Destination DS Digital Private Limited
Slide 15: Utilisation of IPO Proceeds
Utilisation of IPO Proceeds Particulars Amount Utilized till March 31,2018 Remarks Figures in INR Mn Gross proceeds from IPO : Fresh Issue 3,250 Pre-payment of term loans availed by the 2,550 2,550 company and its subsidiaries General Corporate Purposes 493 373 INR 120 Mn unutilized temporarily park
Slide 16: Financial Performance: Q4 FY2017-18
Financial Performance: Q4.FY2017-18 S Chand And Company Limited Standalone Figure in INR Millions QE 31.3.18 QE 31.12.17 QE 31.3.17 Revenues 2,621 517 2,082 Cost of goods (net of inventory change) 856 269 652 Publication expenses 255 50 197 Selling & distribution expenses 80 61 73 Employee benefit 1
Slide 17: Growth Strategy
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Slide 18: 3-Pronged Growth Strategy
3-Pronged Growth Strategy 3 Be Future Ready INNOVATE o Pre school curriculum (activity & NEW LEARNING TOOLS curriculum based learning) o Education streaming for learners. o Smart book for the mobile generation. 1 Maintain Leadership o Dominant share of K-12 content Leverage Reach & Expand 2 market (
Slide 19: Outlook for FY 2018-19
Outlook for FY 2018-19 CORE BIZ DIGITAL BIZ Organic Growth of 13% - 14% Revenue growth > 30% Mix of Price & Volume Mylestone adoption in 300+ schools. CAPEX OTHERS ~ INR 400 MN Explore Opportunities to Expand Presence in Regional Markets (Inorganic) Shifting of print facility + Digital capex + Maint
Slide 20: Group Overview
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Slide 21: Leading Indian Education Content Company
Leading Indian Education Content Company Delivering content, services and solutions… Ø Long operating history of over seven decades. Ø High brand equity across multiple brands. Ø Offerings spanning entire the …across the education spectrum Ø Strong author relationships. education o Early learning co
Slide 22: Comprehensive Lifecycle Focused Approach
Comprehensive Lifecycle Focused Approach Early learning K -12 Higher education Lifecycle stages addressed by S. Chand products College and university S Chand is focused on the Consumer – both the ‘Learners’ and the ‘Educators’ – through content, innovations, empaneling leading authors, best practice
Slide 23: Business Segments
Business Segments K-12 Higher Education Early Learning Revenue 80% of FY2018 revenues. 18% of FY2018 revenues. 2% of FY2018 revenues. contribution 40% revenue CAGR (2012-2018) 9% revenue CAGR (2012-2018) Target Test prep (>18 years) School students (4 -18 years) Children (2-5 Years) Segment College
Slide 24: Strong Position in K-12
Strong Position in K-12 S. Chand’s growth anchored by leadership in K-12 Segment. Growth Strategy v Consolidated leadership in CBSE/ ICSE schools as preferred content provider. ü More offerings in K-12 through multiple brands. 5,378 ü Curriculum management. 6,355 v Geographical diversification 5,427
Slide 25: Digital & Services: Innovative Education Delivery
Digital & Services : Innovative Education Delivery In-house Digital/ Service Platforms Digital Investments (Inorganic) Device based Hybrid offerings learning and Intellitab (CD, e-books) content provider End to end Activity based S. Chand's Device based S. Chand's Online test prep curriculum learnin
Slide 26: Digitally Enabled Material, A Key Differentiator
Digitally Enabled Material , A Key Differentiator Learning material combined with digital support helps S.Chand differentiate its offerings vis-à-vis smaller unorganized publishers and increases customer stickiness and loyalty. Short Multi-media / videos to better illustrate difficult topic to stude
Slide 27: Wide Geographical Reach Across The Country
Wide Geographical Reach Across The Country Pan-India presence of sales and distribution network Distribution channel / sales ~6,600 distributors 9-12 Sales & marketing team > 950 Distributors / Retailers K-12 Students K-8 Distributors Schools Students Higher Education Distributors / Retailers Studen
Slide 28: Robust Infrastructure to Cater Growing Demand
Robust Infrastructure to Cater Growing Demand § Extensive network of 6,600 channel partners with pan India presence. Distributor § S Chand brand ensures strong pricing power Channel among various stakeholders. Printing Infrastructure § In-house logistic and warehousing to § Two printing facilities a
Slide 29: Shareholding Pattern
Shareholding Pattern Market Data On 31.05.2018 Key Institutional Investors: March 2018 % Holding Market Capitalization (Rs Mn) 13,383 Everstone Capital Partners II LLC 9.5% No. of shares outstanding (Mn) 34.97 International Finance Corporation 8.0% Face Value (Rs.) 5.0 HDFC Prudence fund 7.3% 52 wee
Slide 30: Industry Overview
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Slide 31: Indian Education Sector: Inflection Point, Strong Potential
Indian Education Sector : Inflection Point, Strong Potential 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) 40% Potential Market of 492
Slide 32: Increasing Household Expenditure on Education
Increasing Household Expenditure on Education Investment in India’s Education Sector. Higher share of education in discretionary spend. 6.00% (Source: IBEF Report) (Source: Technopak Research Report) 100% 10.0% 5.50% As a percentage of GDP 90% 5.0% 5.0% 5.0% 5.6% 5.00% 4.4% 4.7% 4.7% 0.0% 4.0% 80% 4
Slide 33: Large Addressable Opportunity
Large Addressable Opportunity 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 5 o US$20 BN Ø Supports formal and informal education s
Slide 34: Preference towards Private, Central Curriculum Schools
Preference towards Private, Central Curriculum Schools 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) Number of Schools: 1.5 MN 100% 20.0% 21.2% 21.5% 22.1% Government: 1.1
Slide 35: Supplemental Slides
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Slide 36: Historical Performance Trend
Historical Performance Trend Increasing Contribution of K-12 to Group Revenues. Revenue Growth = Organic Growth + Acquisitions. Early learning K12 Higher Education Other Revenue 6 - Year CAGR : 29% 1,403 1,224 1,282 1,237 6,355 7,945 1,345 5,427 6,833 3,898 4,785 5,407 3,378 3,710 2,173 2,816 1,746
Slide 37: Quarterly Business Cycle
Quarterly Business Cycle 7% to 8% Revenues 4% to 5% Revenues 8% to 9% Revenues 77% to 80% Revenues Negative WC Negative WC Peak Inventory Peak Receivables Q1 April - June Q2 July - September Q3 October - December Q4 January - March o Last leg of K-12 sales for new o Content revision/ development o S
Slide 38: For Further Queries
For Further Queries: This presentation and the following discussion may contain “forward looking statements” Samir Khurana by S Chand & Company Limited (“S Chand” or the Company) that are not historical in Group Head (Strategy & Investments) Contact No : + 91 11 4973 1800 nature. These forward looki