GRP Limited Investor Presentation August 2018 Safe Harbor This - PowerPoint PPT Presentation

GRP Limited Investor Presentation August 2018

Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by GRP Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment what so ever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections. 2

Performance Highlights

Performance Highlights # (in Rs. Mn) Revenue Gross Profit* EBIDTA PAT +8% +17% +271% 3.6 775.4 423.3 53.6 719.5 361.4 14.5 (17.2) Q1FY18 Q1FY19 Q1FY18 Q1FY19 Q1 FY18 Q1 FY19 Q1FY18 Q1FY19 Revenue Profitability • Due to Increase in Volumes Export Sale has turned around on back of growth in • Benefit of Raw Material Price reduction North America & China #On Standalone Basis *Gross profit: Revenue – cost of material consumed – purchase of stock-in-trade – change in inventory 4

Operational Highlights Q1FY19 Revival in Demand witnessed in international markets Price increased across major products in March and on going in subsequent months Oil price rise resulting in delayed but steady rise in Operational virgin rubber price. NR prices in India are higher Highlights than international prices Tyre sector in India is looking up and expected to grow on the back of a good monsoon - all segments growing, especially commercial vehicle tyres Benefits of automation lines starting to reflect in costs of manpower 5

Q1 FY19 Profit & Loss Statement Standalone Particulars (Rs. Mn) Q1 FY19 Q1 FY18 Y-o-Y / Bps Revenue from Operations (Net of Taxes) 775.4 719.5 7.8% Raw Material 352.1 358.1 Employee Cost 132.7 130.8 Other Expenses 237.0 216.2 EBIDTA 53.6 14.5 271.1% EBITDA Margin 6.9% 2.0% + 490 Bps Other Income 1.8 1.8 Depreciation 31.8 33.1 Finance Cost 15.2 9.6 PBT 8.4 (26.5) - Tax 4.8 (9.3) PAT 3.6 (17.2) - PAT Margin 0.5% -2.4% Cash Profit 35.4 15.9 122.1% 6

Segmental Profit & Loss Statement Reclaim Rubber Non-Reclaim Rubber Particulars (in Rs. Mn)* Q1 FY19 Q1 FY18 % Growth Q1 FY19 Q1 FY18 % Growth 748.0 703.5 6.3% 27.5 16.1 71% Revenue (Net of Taxes) Raw Material 340.3 347.8 11.9 10.3 Employee Cost 125.8 124.2 7.9 6.6 Other Expenses 228.9 213.5 8.0 2.6 EBIDTA 53.9 17.9 201.0% (0.3) (3.5) - EBIDTA Margin 7.2% 2.5% -1.1% -21.6% Other Income 1.8 1.8 0.0 0.0 29.1 31.1 2.7 2.1 Depreciation Finance Cost 15.2 9.6 0.0 0.0 PBT 11.4 (21.0) - (3.0) (5.5) - Tax 4.8 (9.3) 0.0 0.0 PAT 6.5 (11.7) - (3.0) (5.5) - PAT Margin 0.9% -1.7% -10.8% -34.4% Cash Profit 35.6 19.4 83.9% (0.3) (3.5) *On Standalone Basis 7

Revenue Break-Up across Segments Businesswise Breakup Geographical Breakup Industrial Polymer 1% Retreading 1% Domestic 32% Custom Die Forms 2% Export 68% Reclaimed Rubber 97% 8

Introduction

Tyre Graveyards are increasing across the Globe 7.6 Billion people 1.7 billion new Creating huge in the world tyres produced a year TYRE GRAVEYARDS… Over 1 billion waste 1.4 Billion tyres generated per year vehicles on the road … HUGE OPPORTUNITY 10

…presenting a HUGE OPPORTUNITY Huge tyre graveyards that can be seen GRP uses end-of-life tyres to Reclaimed rubber, Engineering plastics, from Space recycle and manufacture Die-cut products 11

It is our raison d’etre Recover, Recycle, Reuse ’ is GRP’s raison d’etre as well as mantra for creating a clean planet ▪ GRP is one of the leading producers of reclaim rubber ▪ It recycles end- of-life tyres, automotive inner tubes, automobile profiles and moulded rubber products to produce consistent quality reclaim rubber ▪ The rubber produced emits 95% Lower greenhouse gas v/s virgin polymers 12

…to Reduce, Reuse & Recycle TYRE POLYMER RETREADING COMPOSITES REDUCE • • Process to extend the life of Manufactured from 100% Commercial Vehicle tyres recycled rubber and plastics beyond single use • Product is environmental • Environmental friendly friendly, strong and durable as process ensuring saving in a substitute to wood & valuable resources concrete • Custom die forms engineered from end of life CUSTOM REUSE truck and bus bias tyres used in application DIE FORMS where low cost solutions are a necessity like door mats, impact resistance products and Agricultural equipment's RECLAIM INDUSTRIAL RUBBER POLYMERS • • Produced from end of life Recovery and Reuse of tyres, automotive inner tubes, polyamide from end-of-life RECYCLE automobile profiles and tyres, a key competitive moulded rubber products to advantage is the continuous produce consistent quality availability of in-house raw reclaim rubber materials 13

Our Business

Believing in possibility of better tomorrow… 7 Manufacturing Units with 72,000 Export presence in 60+ Countries tons/year capacity across 200+ customers 18% share in Indian Market & 50% of ~1.2 Mn End-of-Life tyres saved from India’s Export in reclaimed rubber reaching landfills Every Year Supplies to 7 out of top 10 global ISO and BS OHSAS REACH Certified for EU Zone tyre companies OUR VALUES SUSTAINABILITY TRUST COMMITMENT INTEGRITY 15

… since Four Decade & Counting 1 st Unit at Gujarat Reclaim and Got its first ever Rubber Products Ankleshwar export order Limited incorporated 1978 1984 1974 1997 2006 2011 4 th unit established 3 rd Unit established Diversified in Custom Die Forms at Solapur at Panoli 2017 2015 2014 2012 5 th Unit established Diversify into Joint Venture with Diversify into at Tamil Nadu & Industrial Marangoni S.p.a., Italy Polymer Composite Revenue USD 50 mn Polymer to form Maragoni GRP Private Limited for retreading 16

…serving the needs of Global Mobility Industry 300+ 60+ Customers Countries Distributors 200+ Panoli Indore across 20 Vendors Ankleshwar countries Mumbai Sholapur Headquarters Reclaim Rubber C-DF 7 1000+ Industrial Polymers Perundurai R&D Centre Manufacturing Employees Units >75% customers belong to Transportation Industry 17 Map not to scale. All data, information and maps are provided “as is” without warranty or any representation of accuracy, tim eliness or completeness.

…supported by self designed Manufacturing Facilities Installed Capacity in MT Build up capacity for Reclaimed Rubber over the years 66,000 66,000 2,600 2,600 66,000 7,800 58,200 10,000 48,200 20,000 28,200 800 21,000 7,200 4,800 2,400 Industrial Custom Polymer Reclaimed Polymers Die Forms Composite Rubber 1976 1985 2006 2011 2012 2015 2018 18

…with our R & D Capabilities Product Process Application ▪ Developing New ▪ Continuous ▪ Automation of Application across Development of New Processes diversified Industries Products ▪ ▪ Environment friendly Products designed ▪ Expansion in New – Zero Discharge based on Customer Product Categories application needs Customer Relationship New Products Margin Improvement 19

…with Diversified Product Applications Tyre Application Inner Liner Inner Tubes Tyre Side Walls Tyre Piles Tyre Treads & Retreads Reclaim Rubber Non - Tyre Application Conveyor Belts Adhesives Automotive Roofing Footwear Profiles Matting Moulded Goods 20