S Chand And Company Limited · NSE:SCHAND
S Chand And — Q1 FY2018-19 Earnings Presentation
28 slides from S Chand And's earnings presentation, Aug 10, 2018
Slide 1: Cover letter to BSE and NSE
S Chand And Company Limited -!- .=--.. .... Corporate Office: A 27 - 2nd Floor. Mohan Co-Operative Industrial Estate. New Delhi - l 10044. Iodia Re<j i.stered Office: Ravindra Man!tlon. Ram Naq-ar. New Delhi - 110055. Jnd ia, S.CHAND GROUP P:-911149731800 I F:•9111 49731801 I E:info@>thand9,oupcom I
Slide 2: Q1 FY2018-19 Results Presentation
S. Chand and Company Limited Q1 – FY2018‐19 Results Presentation August 09, 2018
Slide 3: Contents
CONTENTS • Q1 FY 2018‐19 Results Update • Proposed 51% beneficial interest in Chetana Publications (India) LLP • Annexure: Industry Overview and Group Profile
Slide 4: Consolidated Financial Performance: Q1FY2018-19
CONSOLIDATED FINANCIAL PERFORMANCE: Q1FY2018‐19 (3 MONTHS) S Chand and Company Limited (Figures in INR Million) Consolidated QE 30.6.18 QE 30.6.17 YE 31.3.2018 Revenue from Operations 577 606 7,944 Other Income 24 15 127 Revenues 601 621 8,072 Cost of goods (net of inventory change) 347 277 2562 Pub
Slide 5: Standalone Financial Performance: Q1FY2018-19
STANDALONE FINANCIAL PERFORMANCE: Q1FY2018‐19 (3 MONTHS) S Chand and Company Limited (Figures in INR Million) Standalone QE 30.6.18 QE 30.6.17 YE 31.3.2018 Revenue from Operations 189 294 3,440 Other Income 46 46 270 Revenues 235 340 3,710 Cost of goods (net of inventory change) 135 114 1,334 Public
Slide 6: Key Highlights: Q1FY2018-19
KEY HIGHLIGHTS: Q1FY2018‐19 I. Consolidated Revenues from Operation at INR 577 mn, down 4.8% YOY K12 segment sales remained at similar level of around INR 475 mn YOY Sales of Higher Education segment at INR 74 mn from INR 125 mn in Q1FY2017‐18 primarily on account of higher pre ordering in certa
Slide 7: Quarterly Working Capital Cycle (Consolidated)
QUARTERLY WORKING CAPITAL CYCLE (CONSOLIDATED) Working Capital : Debtors reduced from INR 6,312 Mn as on 31.03.2018 to INR 5,016 Mn as on 30.06.18. • ~ 30% debtor realization during the quarter • Overall working capital down from peak of 253 days to 228 days Receivable Days and Net Working Capital D
Slide 8: Investment in Chetana Publications
Investment in Chetana Publications Investment of INR 585 Mn in Chetana Publications (India) LLP for 51% beneficial interest. • Chetana is a well recognized brand in the educational publishing industry with strong presence in the Maharashtra State Board curriculum market. • Portfolio of ~ 1600 titles
Slide 9: Investment Rationale
Investment Rationale Investment is in sync with S Chand’s “Accelerate” strategy: • Diversification into regional market (Maharashtra State Board). • Increase in reach amongst schools and coaching centers by over 12,000. • Fourth acquisition in education publishing since 2012 (roll up strategy).
Slide 10: Performance – Full Year FY 17-18
PERFORMANCE – FULL YEAR FY 17‐18 + 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%
Slide 11: Performance Trend
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 FY2014 FY20
Slide 12: Improving Margin Profile
IMPROVING MARGIN PROFILE Improving Margin Profile • Economies of scale • Production Efficiency • Rationalization of Royalty • Improved realization from DEBs • Operating Leverage
Slide 13: Quarterly Business Cycle – Nature of Our Business
QUARTERLY BUSINESS CYCLE – NATURE OF OUR BUSINESS 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 Content revision/ development o Sample di
Slide 14: Annexure: Industry Overview and Group Profile
Annexure: Industry Overview and Group Profile
Slide 15: 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$20 BN Supports formal and informal education
Slide 16: Indian Education Sector: Inflection Point, Strong Potential
INDIAN EDUCATION SECTOR: INFLECTION POINT, STRONG POTENTIAL Age‐wise population distribution in India : S. Chand target market Literacy rate improving with higher participation from students (Source: IBEF Report) (Source: Technopak’s Outlook on India Schooling Segment) 500 40% 450 Potential Market o
Slide 17: Preference Towards Private, Central Curriculum Schools
PREFERENCE TOWARDS PRIVATE, CENTRAL CURRICULUM SCHOOLS Private schools market share increasing every year Indian K‐12 education infrastructure (Source: IBEF Report) 120% (Source: Technopak’s Outlook on India’s Schooling Segment) Number of Schools: 1.5 MN 100% 20.0% 21.2% 21.5% 22.1% 23.0% Government
Slide 18: Preference Towards Private, Central Curriculum Schools
PREFERENCE TOWARDS PRIVATE, CENTRAL CURRICULUM SCHOOLS Target Market is 3,00,000 schools – growing at 8‐10 % annually and student strength growing at 7‐8% • Currently covering 38,000 schools in the target market • Target market growing at 8‐10% annually in the no. of Intl 25‐300 Schools schools Scho
Slide 19: India Expected to Follow China Trend in Education
INDIA EXPECTED TO FOLLOW CHINA TREND IN EDUCATION CHINA 2006 INDIA 2017 • GDP per capita US$ 2,100. • GDP per capita US$ 1,940 • Private education market < US$ 50 Billion*. • K‐12 market growing at ~ 20%. • Private education market ~ US$ 30 Billion*. • Education market expected to double to US$ 180
Slide 20: Leader in Indian Education Content
LEADER IN INDIAN EDUCATION CONTENT Delivering content, services and solutions… Long operating history of over seven decades. Offerings spanning entire the High brand equity across multiple brands. education spectrum …across the Strong author relationships. education o Early learning continuu
Slide 21: 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) Test prep (>18 years) Target Segment School students (4 ‐18 years) College students / professionals
Slide 22: Growth Anchored by Leadership in K-12 Segment
GROWTH ANCHORED BY LEADERSHIP IN K‐12 SEGMENT Growth Strategy Consolidated leadership in CBSE/ ICSE schools as preferred content provider. 5,378 More offerings in K‐12 through multiple brands. Curriculum management. 6,355 5,427 Geographical diversification in large 3,898 regional markets/ st
Slide 23: Powerful Brand Connect
POWERFUL BRAND CONNECT Connecting with Learners • Art of Book making tour of the Printing Facilities • Mystudygear App • Social Media Connecting with Teachers with • Teacher Conclaves and Awards • Over 2000 Workshops • The Progressive Teacher magazine Connecting with School Leadership • Best Practic
Slide 24: Our 3-Pronged Strategy: Accelerate
OUR 3 – PRONGED STRATEGY 2 Leverage Reach & Expand ACCELERATE • Expand into regional markets through strategic ACQUISITONS & DIGITAL alliances/ acquisitions. INITIATIVES • ”Phygital” to broaden reach and improve outcome. • Expand digital & service offerings to new geographies and segments. 1 Maintai
Slide 25: Leverage Reach & Expand – Strategic Alliances / Acquisitions
LEVERAGE REACH & EXPAND – STRATEGIC ALLIANCES / ACQUISITIONS STRATEGIC ALLIANCES / ACQUISITIONS • Strengthen penetration in the CBSE, ICSE Schools and expand into regional markets. • Made multiple successful acquisitions in the past, integrating companies with S. Chand Group philosophy • Alliances w
Slide 26: Digital Initiatives – Complementing Core Business Through Phygital
DIGITAL INITIATIVES – COMPLEMENTING CORE BUSINESS THROUGH “PHYGITAL" Short Multi‐media / videos to better illustrate difficult topic to students. • Test preparation and simulated papers for learners to test their understanding. • Students can gauge their performance and better prepare for exams. • M
Slide 27: Digital Initiatives – Synergies to the Core Business
DIGITAL INITIATIVES – SYNERGIES TO THE CORE BUSINESS In‐House (Revenue Stream) Digital Investments (Inorganic) • Focused on investing in early stage digital companies. • Offerings include digital classroom learning solutions, • Total investments in digital investee companies is ~Rs.304 learning mana
Slide 28: Disclaimer
Disclaimer This presentation and the following discussion may contain “forward looking statements” by S. Chand & Company Limited (“S. Chand” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, fin
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