Greenply Industries Ltd · NSE:GREENPLY
Greenply Industries — Investor Presentation (June 2014)
67 slides from Greenply Industries's investor presentation, Jun 27, 2014
Slide 1: Analyst Meet Presentation 12 M. FY2014
Analyst Meet Presentation 12 M. FY2014 27th June, 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation may contain statements which reflect Management’s current views and estimates, and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views
Slide 3: Presentation structure
Presentation structure Quick snap shot on Greenply Global environment India economy Industry overview Growth Drivers Our Business Overview Financial Highlights
Slide 4: Greenply-A Quick Snap Shot
Greenply-A Quick Snap Shot • Consolidated turnover of Rs.2215 cr. ($369.86 million) in FY 2014 • Largest and most profitable company in the interior infrastructure space • 7 State–of-the-art manufacturing facilities producing world class interior products for India and global markets • Over 5000 emp
Slide 5: Greenply-A Quick Snap Shot…
Greenply-A Quick Snap Shot… • Enjoys the largest market share across business segments – 32% of organised plywood market – 28 % of organised laminate market – 30% of MDF market • Brand presence in over 100 countries making us the largest exporter for 4 consecutive years in a row • Promoter holding 5
Slide 6: Our Capacities
Our Capacities Plywood : 32.40 million sq meters Tizit: 4.50 mn. Sqm Kriparampur: 6.00 mn. Sqm Pantnagar: 10.50 mn. Sqm Bamanbore: 11.40 mn. Sqm Laminate : 10.02 million sheets Behror: 5.34 mn sheets Nalagarh 4.68 mn sheets Natural Decorative Veneers: Behror: 4.20mn. Sqm MDF: 180000 Cubic meters Pan
Slide 7: Journey so far…
Journey so far… • Started operations in 1984 with a small saw mill • Across the 25 years of our existence, we graduated from plywood to laminates, to decorative veneers and then to MDF • From a single product unit to multi product entity • From a plywood manufacturer we evolved into an interior infr
Slide 8: Rationale for Demerger
Rationale for Demerger • Both businesses address separate segments – – The wood based products (plywood and mdf) form the backbone materials for furniture – The decorative products (laminates and decorative veneers) are surfacing materials. • The Decorative business addresses a global market while t
Slide 9: Rationale for Demerger…
Rationale for Demerger… • Dedicated focus will also enable diversification & expansion into newer product portfolios for faster growth • Strengthen the prospects of each of the businesses towards mobilising funds (equity or debt) to service their respective growth plans. • Enable each business to gr
Slide 10: Global Environment
GLOBAL ENVIROMENT
Slide 11: Global Environment
Global Environment • Global activity has broadly strengthened and expected to improve further in 2014-15. • Global growth is expected to strengthen from 3% in 2013 to 3.6% in 2014 and 3.9% in 2015 • In advances economies, in United States & Euro Zone growth is expected to increase to about 2.25% in
Slide 12: Indian Economy
INDIAN ECONOMY
Slide 13: Indian economy
Indian economy • GDP growth at 4.7% for FY 2014 vs 4.5% for FY 2013. • RBI continues with its cautious policy • Improved sentiment with arrival of a stable Central Government. • Revival expected in Core Industries and Infrastructure • Rupee improves with prospects of improvement in economy and impro
Slide 14: Industry Overview
AL LP _ Industry Overview
Slide 15: Industry at a glance
Industry at a glance Rs. in Crores Industry Size: Rs. 23700 Cr 3500 4200 5-7 % 16000 Plywood Laminate MDF & particle Board
Slide 16: Organized vs. Unorganized
Organized vs. Unorganized Rs. in Crores 14000 12000 10000 12500 8000 6000 4000 1700 0 2000 3500 3500 2500 0 Plywood Laminate MDF & Particle board Unorganised Organised There is no un-organised segment in MDF. The segment consists of Domestic manufacturers and imports with an import content of 30%. T
Slide 17: Industry Growth vs Greenply Growth
Industry Growth vs Greenply Growth • Industry has grown at 5-7% over the five years from FY 2009 to FY 2014 • Clear preference shift for branded products in the market that has led to a decline in market share of the unorganized sector • Organised players have grown at 15-20% over the same period. •
Slide 18: Growth Drivers
GROWTH DRIVERS
Slide 19: Growth Drivers
Growth Drivers • Per Capita income estimated to have risen 10.4% to Rs 74920 in 2013-2014 • Gross Fixed Capital Formation (GCFC), an indicator of Investment, was forecast at Rs 32.2 lac crore at current prices as against Rs 30.7 lac crore in 2012-13.
Slide 20: Growth Drivers
Growth Drivers Young Population India has a young population with average age of 24 years, leading to higher disposable incomes in the hands of those with aspirations for a better lifestyle and stylish interiors.
Slide 21: Growth Drivers
Growth Drivers • Rising Urbanisation : Highest urban population rate of change among BRIC nations. Estimated that 843 million people will live in Indian cities by 2050 • Rising Consumer Class : By 2030 India is likely to emerge as world’s largest middle class consumer market with an aggregate consum
Slide 22: Growth Drivers
Growth Drivers Rising Millionaire Households Expected to grow from 2.86 lacs to 6.94 lacs between 2011 and 2020, at a growth rate of 143%.
Slide 23: Real Estate Growth Drivers
Real Estate Growth Drivers Office space supply in top eight Indian cities is expected to reach Over 300 hotels are expected to India’s healthcare sector is 180 million sq ft. in 2012-16. be commissioned in India over the expected to grow from $78.6 Average mall size of around next three years. By 20
Slide 24: Growth Drivers
Growth Drivers • There is a visible shift from un-organised to organised , unbranded to branded • Stable government expected to lead to recovery in the India economy • Implementation of GST to boost the growth of organised/branded market • Internationally the HPL business is estimated to be a $7 bil
Slide 25: Our Business Overview
OUR BUSINESS OVERVIEW
Slide 26: Plywood Business
PLYWOOD BUSINESS
Slide 27: Plywood - Growth Prospects
PLYWOOD - GROWTH PROSPECTS • Focused on growing the Plywood Segment through Outsourcing Business Model. • This will free-up existing manufacturing capacities for increased production of Greenply and Greenply Club. • Outsourcing is an asset light model and will help to improve the ROC’s of the busine
Slide 28: Plywood (Plantations for Securing the future)
PLYWOOD (Plantations for Securing the future) • Setting up a subsidiary for Plantation activities around existing Plywood and MDF units. • Objective is long term raw material sustainability and controlling of raw material prices. • No investments will be made in land • Plantations will be on leaseho
Slide 29: Plywood & Allied Products
Plywood & Allied Products Rs. in Crores Particulars Q4FY14 Q4FY13 % Change FY14 FY13 % Change Net Sales 286.02 264.20 8.26 1037.30 940.17 10.33 EBIDTA Margin (%) 10.52 13.14 - 10.31 10.56 - Particulars Q4FY14 Q4FY13 % Change FY14 FY13 % Change Annual Capacity (mn.sq.m.) 32.40 32.40 32.40 32.40 Produ
Slide 30: Plywood Segment (FY 2014 Highlights)
Plywood Segment (FY 2014 Highlights) • Enhanced sales volumes by 7.15% from 41.54 mn square meters in FY 2013 to 44.51 mn square meters in FY 2014 • Grew 10.33% in value terms to Rs 1037.30 crores in FY 2014 • Share of Greenply, the flagship brand, is now close to 60% of the total sales • Sales of s
Slide 31: Capacity Utilization
Capacity Utilization Plywood 40 125% 113% 35 107% 115% 106% 105% 30 mn.sq.m. 95% 25 85% 20 75% 15 65% FY 12 FY 13 FY 14 Capacity Product ion Utilisation Rate
Slide 32: Plywood Brands
onti J shdus green RLusy Daan
Slide 33: Product & Marketing Initiatives
PRODUCT & MARKETING INITIATIVES • Launched following new products in FY 2014: –Green Ready Lines: ready to install laminated plywood panels –Green Ready Lines: ready to install laminated / veneered flush doors –Green Club Flush Doors –Green Door Stellar • Renewing focus on rural markets • Strengthen
Slide 34: Decorative Business
DECORATIVE BUSINESS
Slide 35: Laminate & Veneer business
Laminate & Veneer business • 20 years experience in laminate & surfacing business • Leader in the decorative surfacing space • Largest producer of Decorative Laminate in Asia & 3rd largest globally • Largest brand portfolio catering to various market segments & price points • First company to introd
Slide 36: Current Product offering
Current Product offering
Slide 37: New Product Offering
New Product Offering Rs. 125 cr. Fresh Investment Expected Top Line of Rs 350cr at optimum capacity utilization
Slide 38: Lifestyle Surfacing Brands
Greenlam LAMINATES Greenlam Performs Exceptionally x traordinair Cc SUPER-PREMIUM LAMINAT GREEN DECOWOOD Natural Veneers NeW ANTS 2B Decorative Laminates LTA
Slide 39: Growing Global Footprint
Growing Global Footprint $ 7 billion industry Greenlam Exports has grown at a CAGR of 24% • The laminate market has grown moderately over last 5 years by 2% per annum and is expected to • 3 overseas subsidiaries AMERICA ||EUROPE ||ASIA-PAC continue at a similar pace. • 11 Sales & Marketing offices g
Slide 40: Laminates & Allied Products
Laminates & Allied Products Rs. in Crores Particulars Q4FY14 Q4FY13 % Change FY14 FY13 % Change Net Sales Laminates & Allied Products 193.29 177.56 8.86 767.99 683.34 12.39 EBIDTA Margin (%) 12.07 7.61 446 bps 12.05 11.90 15 bps Particulars Q4FY14 Q4FY13 % Change FY14 FY13 % Change Annual Capacity i
Slide 41: Laminates Segment (FY 2014 Highlights)
Laminates Segment (FY 2014 Highlights) • Grew 12.39% in value terms and 4.35% in volume terms. • Increased production to 10.76 mn sheets in FY 2014 from 10.37 mn sheets in FY 2013; achieved capacity utilisation of 104%. • Average Realisation of Laminates increased by 9.19% to Rs 618 per sheet from R
Slide 42: Overseas Subsidiary Highlights
Overseas Subsidiary Highlights • Sales from subsidiaries has grown from $13.89mn in FY10 to $39.25mn in FY14 • Sales has grown at a CAGR of 29.65% in the last five years • Sales from subsidiaries comprises 70% of total export revenues • Opened offices in China, Myanmar & Philippines • New stock poin
Slide 43: Capacity Utilization
Capacity Utilization Laminates 12 104% 110% 11 107% 10 105% 99% 9 100% mn.sheets 8 7 95% 6 5 90% 4 85% 3 2 80% FY 12 FY 13 FY 14 Capacity Production Utilisation Rate
Slide 44: New Product launches
New Product launches • Digi juniors- exclusive licensed Kids collection of barbie & Hot wheels • Digital & Custom Laminate – Hi end digitally printed laminated where designs can be customized as per customer’s requirement • Lab Guardian- Special Grade chemical resistant compact laminate manufacturer
Slide 45: MDF Business
MDF BUSINESS
Slide 46: Medium Density Fibreboards (MDF) Growth Prospects
Medium Density Fibreboards (MDF) GROWTH PROSPECTS • Growing industry with good prospects with entry of more organised players and increased automation in the furniture industry. • Increased awareness about benefits of using MDF. • Shift expected from unbranded unorganised plywood to MDF • Green Pane
Slide 47: MDF Brands
MDF BRANDS on i yi io WOO) F LTA
Slide 48: Medium Density Fibreboards (MDF)
Medium Density Fibreboards (MDF) Rs. in Crores Particulars Q4FY14 Q4FY13 % Change FY14 FY13 % Change Net Sales 90.79 98.92 - 352.72 374.18 - EBIDTA Margin (%) 21.33 19.51 182 bps 21.65 21.61 4 bps Particulars Q4FY14 Q4FY13 % Change FY14 FY13 % Change Annual Capacity (CBM) 180000 180000 180000 180000
Slide 49: Capacity Utilisation
Capacity Utilisation Medium Density Fibreboards 180000 100% 160000 88% 76% 80% 140000 65% 120000 mn.sq.m. 60% 100000 80000 40% 60000 40000 20% 20000 0 0% FY 12 FY 13 FY 14 Capacity Production Utilisation Rate
Slide 50: Product & Marketing Initiatives
PRODUCT & MARKETING INITIATIVES •Commenced production of Laminated Flooring during Q1 FY 2015 •Launched new products to expand the Company’s presence in the economy plywood segment valued at more than Rs 12000 crores. •Expanded into production of thin MDF (2.5mm-8mm) •Pre-Laminated MDF boards approv
Slide 51: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 52: Financial Highlights Q4 FY 2014
Financial Highlights Q4 FY 2014 • Net Sales up by 5.44% at Rs. 570.11 crores – Plywood & Allied Products : Rs. 286.02 crores, up by 8.26% – Laminates & Allied Products : Rs. 193.29 crores, up by 8.86% – Medium Density Fibre-Boards : Rs. 90.79 crores, down by 8.22% • EBIDTA (excluding currency gain/l
Slide 53: Performance Snapshot 2014
Performance Snapshot 2014 Greenply's top line growth of 8.0% outperformed India's GDP Growth of 4.7% and growth of NET Sales Increased 1.7% in Construction by 8.03% EBIDTA Increased BY 5.50% NET PROFIT Maintained at 6.46%.
Slide 54: Financial Highlights FY 2014
Financial Highlights FY 2014 • Net Sales up by 8.03% at Rs. 2158.02 crores – Plywood & Allied Products : Rs. 1037.30 crores, up by 10.33% – Laminates & Allied Products : Rs. 767.99 crores, up by 12.39% – Medium Density Fibre-Boards : Rs. 352.72 crores, down by 5.74% • EBIDTA (excluding currency gain
Slide 55: Consolidated Financial Highlights FY 2014
Consolidated Financial Highlights FY 2014 • Net Sales up by 8.37% at Rs. 2215.11 crores • EBIDTA (excluding currency gain/loss) up by 3.82% at Rs 283.47 crores • EBIDTA Margin decreased by 56 basis points to 12.80% • PAT was down marginally at Rs 117.58 crores vs 119.68 crores • PAT Margin stood at
Slide 56: Financial Performance
Financial Performance Rs. in Crores Particulars FY2014 FY2013 Key Ratios ROCE (%) 15.91 18.30 RONW (%) 19.64 23.94 Net Debt / Equity (x) 1.16 1.35 Working Capital Cycle (Days) 82 83 Update on Balance Sheet Particulars FY2014 FY2013 Tangible Net Block 678.57 643.46 Net Worth 582.82 476.87 Total Debt
Slide 57: Sales Break Up
Sales Break Up FY14 Medium Density FY13 Fibreboards 16% Medium Density Plywood & Allied Fibreboards Products 19% 48% Laminate & Allied Products Laminate & Plywood & 36% Allied Products Allied Products 34% 47%
Slide 58: Growth Momentum
Growth Momentum NET SALES EBIDTA 2200 CAGR 25.45% CAGR 31.03% 1700 275 1200 200 700 125 200 50 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14
Slide 59: Other Initiatives
OTHER INITAITIVES
Slide 60: Our Sustainable Acts
Our Sustainable Acts • Formulated Green Strategy Group (GSG) –Nodal agency to create, sustain and harness the ‘Green Initiatives’ across the entire value-chain of the Organization. Key Role – Monitor environment impact on value chain – Reduce carbon footprints – Incorporating Clean technologies – Bu
Slide 61: Giving Back to The Planet
Giving Back to The Planet • Provides an additional source of income to farmers • Involved in planting close to 0.5 Million saplings in the tribal areas of Nagaland •
Slide 62: Our Green Credentials
Our Green Credentials 1st non US Company, to 1st Indian Brand to be First Indian Brand Only one in the industry to All manufacturing Facilities bag the coveted certified by to get certified with use are GREENGUARD certificate for GREEN LABEL Bio-Mass in the FSC (C-O-C) ISO 14001, 18000 Indoor Air Qu
Slide 63: Marketing Campaign - Greenlam
Marketing Campaign - Greenlam Successful brand campaign for Greenlam • 360 media approach with hi impact media Road block on the day of the launch • Each of the media vehicle has been planned to drive better realization & commercial synergy. • Engage with the customer at multiple points enabling an
Slide 64: IT & HR Initiatives
IT & HR Initiatives IT Initiatives •Implemented SAP-GRC (Governance and Risk Control) to strengthen governance in terms of user access on SAP with exceptional reporting in the first phase. •Implemented applications like Barcode Technology for its laminate plants for effective tracking of the product
Slide 65: Investment Highlights
INVESTMENT HIGHLIGHTS
Slide 66: Investment Highlights
Investment Highlights Established brands with strong presence and market share Increasing utilization and change in product-mix would substantially boost revenues and profits in the next 3 years Plywood & MDF business is expected to grow at 10-12% and Decorative Business at 18-20%. Recovery
Slide 67: Thank You
Thank You Corporate Office: Phone: +91 33 3051 – 5000 16A, Shakespeare Sarani, New B.K. Market, Fax: +91 33 3051-5010 investors@greenply.com 2nd Floor, Kolkata – 700 071, West Bengal, www.greenply.com India
Greenply Industries — Investor Presentation (June 2014) on 6ix