E.i.d.-parry (india) Limited · NSE:EIDPARRY
E.i.d.-parry (india) — Investor Presentation (December 2019)
50 slides from E.i.d.-parry (india)'s investor presentation, Dec 4, 2019
Slide 1: Cover letter to stock exchanges
E.I.D. - Parry (India) Limited Regd.Office : Dare House, 234,N.S.C. Bose Road, Parrys Corner, Chennai 600 001, India. Tel: 91.44.25306789 Fax: 91.44.25341609/25340858 CIN : L24211 TN 1975PLC006989 Website: www.eidparry.com Date: December 4, 2019 To BSE Limited National Stock Exchange of India Corpor
Slide 2: Unlocking Value, Delivering Performance
UNLOCKING VALUE DELIVERING PERFORMANCE E.I.D.- Parry (India) Limited • murugappa Investor Presentation I December 2019
Slide 3: Disclaimer
DISCLAIMER Certain statements included in this presentation may be forward looking statements made based on management's current expectations and beliefs concerning future developments and their potential effects upon E.I.D.-Parry (India) Limited and its subsidiaries. There can be no assurance that
Slide 4: Flow of Presentation
Flow of Presentation Overview of E.I.D.- Parry (India) Limited Global Sugar Scenario Indian Sugar Scenario EID Sugar Business Sugar Refinery Nutraceuticals Division Historical Financials
Slide 5: Overview: As pure as it gets
OVERVIEW As pure as it gets EID, South India's largest sugar producers, adheres to the highest standards of quality and specifications, bringing customers the finest quality of sugar
Slide 6: Vision & Mission
Vision & Mission uP,nriching and P,nerfJizing 6y creating 'va{ue atftfetf products fi m agricu[ture" :Ma~ tlie 6rand @ tlie most preferred clioice to acliieve Sustaina6{e and rprofita6{e growtli 5 ~ murugappa
Slide 7: Business overview - EID Parry India
Business overview - EID Parry India Sugar, Co-gen & Distillery Nutritional Health Supplements .:. Leading Sugar producer .:. Market leader in micro-algae; South India Leading producer of Organic .:. 8 sugar factories Spirulina standalone distillery .:. Developer & provider of high quality across Sou
Slide 8: A company with more than 230 years of legacy
A company with more than 230 years of legacy 1788 Thomas Parry arrived in 1956 1981 2010 Madras to EID becomes part Acquired 4 establish the East India of Murugappa 2003 Sugar factories House of Parry Distilleries & Hived off farm 1839 Sugar factories group inputs to inKN&AP The firm 2006 Ltd . boug
Slide 9: Global Sugar Scenario: Opportunities with riders
Global Sugar Scenario Opportunities with riders Growth coupled with shifting regulatory scenarios
Slide 10: Global sugar consumption expected to moderate
Global sugar consumption expected to moderate CAGR (0/0) .:. Global Sugar Market is 183 172 expected to grow at a 152 CAGR of 1.8% until 2026 141 .:. Africa, China, India, Asia - Contribution to grow from 560/0 to 61% 2006 2010 2016 2020 2026 Annual world sugar consumption (Million Metric Tons) Sour
Slide 11: Large global deficit estimated for SY 2019-20
Large global deficit estimated for SY 2019-20 Go - ucion rpl 51 efi - t ra s . arp ce (OctlS pba ) 15 30 -- c 0 CJ 'i: CI) 10 25 0 E CD c 0.23 0.52 :::::I 0 0 fit -E 20 "... CD II.. CI) ..I ." 0 Q. C CI) :::::I ->ca :::::I -10 Q. ca & -16 -20 P au 1 ,\" 'l\'2J ') ~l'\ '\ "\~ \ '3l 6 "\ ,\1,1 0 01' .
Slide 12: Indian Sugar Scenario: Steadying the giant
Indian Sugar Scenario Steadying the giant Managing business cyclicality in a highly-regulated eco-system
Slide 13: India - World's largest sugar producer & consumer
India - World's largest sugar producer & consumer Industry Size Operating Mills Private( 50%} ~ 105,000 Cr 525 Co-op(44%) (US$ 15 Bn) Others (6%) Farmers Production UP 50 Million 80 % Maharashtra 5 million workers Karnataka Planted area Consumption 5 Million Hectares 26MMT 415 MMT Per Capita 19k9 of
Slide 14: Increasing sugarcane & sugar production in India
Increasing sugarcane & sugar production in India Cane Area & Yield I Hectare Sugar production (MMT) SY10 SY11 SY12 SY13 SY14 SY15 SY16 SY17 SY18 SY19 _Cane Area (Million hectare) - "Vield (Metric Ton/hectare) , , ------ - ----- - ------- - ---- - -- - ---- --- -- - - --~- --- - - - --- - - -- - - --
Slide 15: Sugarcane price significantly higher than competitive crops
Sugarcane price significantly higher than competitive crops - I- :i - ih;; CD (,) "i: Q. 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 • Paddy - Wheat - Sugarcane Estimated profitability per acre by crop (average land holding by farmer is - 1 acre) 25,464 Rice Jowar
Slide 16: Varietal adoption has resulted in increase in recovery
-< -j ~. :;-- f:T""'.'~ ~ --.~ ;-~ .. ~!. ~".;,:,r:~-- .. ~':'--'.-~- ... ~.~~-:::-:':..:.-( '~·;~·l-t ,---. ," ~ • . I~"_~·. _J, ~'->h~ ••.- - •• , h._._ .... , •. < .-~. . . . . . . . L ..... I ~~;;~ -.j1 - .. Tl :1-' ~ \~ Varietal adoption has resulted in increase in recovery 0/0 i Sugar Year 200
Slide 17: Production outstrips consumption
Production outstrips consumption 33.7 ,, , tn c {:. 24.4 26.3 25.1 25.5 26.0 - 26.0 ... il6.0 u 24.2 .i: 22.6 22.8 Drought S ,- .... .:. Huge stock levels cap ':E c 18.9 , t 14.3 ' , the domestic sugar .2 - :E 9.3 , prices 7.5 '8.3 5.8 6.0 " SY10 SY11 SY12 SY13 SY14 SY15 SY16 SY17 SY18 SY19 SY20E ..
Slide 18: India Sugar Balance (Million Metric Tons)
India Sugar Balance (Million Metric Tons) Sugar Year 2019-20E I Opening stock 10.4 14.3 33.7 26.0 26.0 26.0 3.8 6.0 I .:. Huge stock levels - 4 Closing stock (including 14.3 8.3 months sales - cap the buffer stock) domestic sugar prices murugappa
Slide 19: Cane cost as a % of sugar realization has increased
Cane cost as a % of sugar realization has increased Key Takeaways 3,620 .:. Selling price of sugar regulated by the Government based on -- market factors .:. Payment for sugarcane ;200- - 1;300 2,300 2,613 2,613 based Remunerative on Fair Price & @ 9.5% I 10% recovery (not linked to selling price of
Slide 20: Business Cyclicality & Industry Challenges
Business Cyclicality & Industry Challenges Induced Cyclicality Industry Challenges Higher sugar .S--)t Decline in sugar prices; / Higher sugarcane production ~ , Lower Profitability High sugarcane .:. Narrowing Spreads (Sugar price - Cane price) .:. Cane, Sugar, Power and Ethanol prices production '
Slide 21: Government Reforms in Sugar Sector
Government Reforms in Sugar Sector :21) ~I mulVgoppo
Slide 22: EID Sugar Business: Newer fields, better yields
EID Sugar Business Newer fields, better yields Maximizing value by better capacity utilization, de- commoditization & profitable use of by-products
Slide 23: Sugar Operations - Farm to Farm
Sugar Operations - "Farm" to "Farm" An integrated sugar factory produces sugar, power for export, ethanol and organic manure Cane Juice ~-l""" · Sugar ill -------R~~------· Sugar I • • • • "'-":"''1:1 Waste to wealth Power Plant ~.~-_ Power Grid Ash Sugar Organic Manure II-='~l_ Bio~eompost Cane Pla
Slide 24: Sugar - Manufacturing capacities
Sugar - Manufacturing capacities Crushing (TCD) Co-Gen (MW) Distillery (KLPD) AP - Sankili 5,000 16.0 KN - Haliyal 7,500 31.0 KN - 8agalkot 6,000 15.5 KN - Ramdurg 5,000 13.0 TN - Nellikuppam 7,500 24.5 TN - Pugalur 4,800 22.0 TN - Pudukottai , 4,500 18.0 TN - Pettavaithalai 3,500 20.0 TN - Sivagang
Slide 25: Operational performance - Sugar
Operational performance - Sugar Cane Crush & Recovery Sugar Prod uct ion & Sales 10.3% 10.3% FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 _Cane Crush (LMT) ~ Recovery% • Sugar Production (LMT) • Sugar Sales (LMT) - - __ __ - .. __ .. __ _ _ ____ .. _____""" • ___________ ....... ___ !" - '"' -
Slide 26: Operational performance - Co-gen
Operational performance - Co-gen Cane Crush & Power generated Power export & Average realization per unit (f) 6,521 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 _Cane Crush (LMT) 1 -Power generated (Lakh units) _ Power export (Lakh units) 1 -Average realization per unit - ------ - -- -- - -----
Slide 27: Operational performance - Distillery
Operational performance - Distillery Cane Crush & Alcohol produced Alcohol sales & Average realization per liter (f) 705 49.1 FY15 FY16 FY17 FY18 FYF19 FY15 FY16 FY17 FY18 FY19 -Cane Crush (LMn _ Alcohol produced (Lakh Ltrs) -Alcohol Sales (Lakh Ltrs) _ Average realization per Liter .:. Performance
Slide 28: Financial Summary - Sugar
Financial Summary - Sugar Revenue (~ in Crores) EBIT (f in Crores) Capital employed (~ in Crores) 258 3 ,I -40 I I FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 I I • I • I I ------ -~--~---- - ------------ -- - ----- - - ----------------- - -- -- ----~---- - - --- -- -
Slide 29: Sugar Business - What Challenges we face?
Sugar Business - What Challenges we face? 28 ~ muruQappG
Slide 30: Our Future Plans & Strategy
Our Future Plans & Strategy Increase volume of sugar I Maximise realization from sugar New Opportunities j Reduction in fixed cost .:. Realignment of manpower 29
Slide 31: Sugar Refinery: Sweeter up the value chain
Sugar Refinery Sweeter up the value chain Adding value & volume to manage restricted spread environments, increase profitability and create premium customer segments
Slide 32: Refinery Business Model
Refinery Business Model Break Bulk Physical Flow Raw Sugar Refinin Refined Sugar --------- - -- - -- ---------- ---- ------ - - - -- - ------ --- - ---- -- ----------- ------ ----~-- - - - ---- ---- ---------------------------- - ---------------- -------------- - - _. _--------------- ------ As suga
Slide 33: Refinery - Business Profile
Refinery - Business Profile • Capacity - 8.5 LMT • Sales volume - 5.4 LMT • Sales value - ~ 1,421 Crores • Global Trade Houses C. ALVEA N ___ E·-I wilmar R • Regional Traders • Institutions pepsi • Raw Sugar Ex Brazil through Global Trade Houses • Coal ex Indonesia through Traders 32 ., murugappa
Slide 34: Refined sugar constitutes 40% of the global traded volumes
Refined sugar constitutes 40% of the global traded volumes PSRIPL operates in this 40% business space 64 60% 51 1% Consumption In production country 2016 2026 India Australia Brazil Russia • Indonesia China Mexico Thailand ROW USA UE Africa Production Consumption Source: FAD, Copersucar analysis Sou
Slide 35: White Premium Trends - EU Impact and Refinery Closures
White Premium Trends - EU Impact and Refinery Closures European Exports & The White Sugar Premium White Premium Trends and Projecti ons (US$/MD 'OOOs mt S/mt _EU Exports -White Sugar PremitnJ (wntinualioo) 8,000 250 7,000 Spread available 6,000 200 for nextS,.... 5,000 I I =~ 45 US$IIIT I ,2• 85 4,0
Slide 36: Our Journey so far
Our Journey so far L.":" ~ -.- - - - "'1".) • '~ ••.. ~_~- -. '-. -J,' '.;'"' ... _ I" ."~ ""-,,.~, • : ' •• ··:1 . .', -: .. ' .' .. " CommoditY ' Hettg~ Desk . '.' . . '. ..... .': . .j (' ~',~ ~~ ~ _. ___ . ~ _._'. ~ =----- ..... _ . _ -----" __ ~ _. . ~ '~" . __ ", . ~ I •• '. • •• _ • •:. As sp
Slide 37: Our Future Plans & Strategy
Our Future Plans & Strategy ((P,nsure year on year proJita6ifity under restricted spread en~ronment and ~pay Long Term foans out of casfi generation" Increase Sales & Move up Value chain Cost improvements (Cost pread) 36 ., murvgoppa
Slide 38: Nutraceuticals Division: Strength & Presence
Nutraceuticals Division Strength & Presence To supplement growth Expanding reach via new markets, and greater brand exposure Consolidating leadership through flagship products
Slide 39: Parry Nutraceuticals
Parry Nutraceuticals CParry Nutraceuticafs wifefocus on tfie 6usiness of naturaeproducts for fiuman we{{ness tfirougfi Jiea{tfi Suppfements and Punctiona{ Po ods 6y offering fiigfi quafity products 6ackgd 6y science, addressing tfie gfo6a{ markgt (Jjecome tfie #1 ®(pert ~commetufed, Consumercp,eferr
Slide 40: Business Overview - Nutraceuticals
Business Overview - Nutraceuticals Manufacturing Locations 39 • murugappo
Slide 41: Nutraceuticals - Today, A $230 bn Industry
Nutraceuticals -Today, A $230 bn Industry Aging population, growth of digital, self-care & health-consciousness are among the key drivers of self-care in APAC Key trends & drivers Potential implications ~+ Aging population - Ennance fOCus on etOefly-relate<l OTe prOOUCl porlfOliO - Develop innovativ
Slide 42: Industry expected to grow at a CAGR 7.8%
Industry expected to grow at a CAGR 7.8% Dietary Supplements ($ 70 Bn CAGR 6.8%) Vitamins & Minerals Herbal & TraditiOnal Medicines Probiotic Fortified Energy Drinks Probiotics Omega Fatty Acid Sports Drink Fortified Proteins Protein Bars Fortified Juices • Protein Supplements Source: Bee research o
Slide 43: Dietary Supplements
Dietary Supplements I i ~ .. ,-;-.:' . .~-:- -~ - . '~. . -: . ~~. ~ ~ "-: ~ . - VITAMINI ANO MINfRAU M. TMt MOST HlI'VLAa CATEGORY 01' DlITAIt'IIUJIt'UMINT5. Prostate Health • Saw. Palmetto .. . . f • -" _ ;. ~ L- ~ <..-.~'l- .. ~--.: __ . ..: . I . i !i Vitamins and Minerals ~ Greens i i i I! ! I
Slide 44: Our Future Plans & Strategy - Nutraceuticals
Our Future Plans & Strategy - Nutraceuticals Consolidate leadership position in Organic Spirulina and other algae; Increase market share Expand in new geographies - Latin America, United Kingdom, etc. Introduce incremental innovation through formats and combinations Improve brand equity - on the bac
Slide 45: Historical Financials: Refined & Ready
Historical Financiafs Refined & Ready Focused on delivering stakeholder value through quality products and smart strategies to thrive in challenging & changing business environment
Slide 46: Profit & Loss Summary
Profit & Loss Summary (~ Crores) Particulars FY18 FY19 Gross Revenue 4,931 EBIT 189 &7 47'1!' 164 283 210 230 194 157 174 (22) 278 7 (11) (28) (24) 6 31 (10) (1 ) 302 1 71 *FY19 includes ~ 243 Cr on account of Bio Sale proceeds 45 ~ murvgappa
Slide 47: Balance Sheet Summary
Balance Sheet Summary (~ Crores) Particulars Mar'15 Mar'16 Mar'17 Mar'19 Shareholders Funds 986 915 1,117 1,116 1,223 2,534 2,467 1,694 1,742 2,170 56 (1) (63) (71) (60) 3,176 3,38'l 2,749 2,787 3,333 2,089 2,071 1,961 1,875 1,792 137 294 301 449 339 37 25 25 25 25 Net Working Capital 1,314 991 462
Slide 48: Glossary of terms
Glossary of terms Abbreviation Description Abbreviation Description ~ / Rs. Indian Rupees ESP Ethanol Blending Program '000 Units in thousands' E1D1 EIOP E.I.O.-Pany (India) Limited AP Andhra Prad9$h ENA Extra Neutral alcohol APAC Asia Pacific EU European Union ATL Above the Une FC Fixed cost B2B Bu
Slide 49: Glossary of terms
Glossary of terms Abbreviation Description Abbreviation Description
Slide 50: Thank You
THANK YOU
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