Investor Presentation
SAFE HARBOR STATEMENT • This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements • These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements • These risks and uncertainties include, but are not limited to our exposure to changes in general economic conditions, market, Foreign currency and other risks, changes in government policies/regulations, tax regimes as also technological changes • The company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of subsequent development, information or events or otherwise • The presentation was last updated on June 2020 2
COVID-19 Crisis Response Team formed A. Protect employees Protect employees and follow all local guidelines B. Manage plant and supply chain readiness to restart G. Preserve real estate Understand risk of supply chain Ensure safety of owned real estate assets Nerve Center disruptions and take actions to address anticipated shortages F. Strengthen IT infrastructure Steering the organization, C. Ensure financial health Enhance remote working infrastructure for the serving as information Define scenarios and take action to organization center, managing risks and maintain financial health responses, and aligning all stakeholders E. Ensure connectivity D. Preserve customer loyalty and Connect with customers, suppliers and Sudarshan protect margins family to strengthen relationship in these Identify and mitigate risks of declining sales and preserve uncertain times customer loyalty 3
COVID-19 Measures undertaken to build resilience Initiatives undertaken Resulted in quicker restart of operations Employees 5 th April 2020 Roha Senior Management stayed in the plant along with workforce Redeployed workforce to maintenance activities while staying on the premises Implemented safety measures beyond WHO and Government 11 th April 2020 Mahad standards Business Continuous engagement with customers and suppliers 6 th May 2020 R&D Proactively planned extra raw material and logistics capacities Cash flow war-room helped up manage our cash flows rigorously 01 st June 2020 Global Head Office Community Kept serving the community in the tough times Note: Operations were restarted phase wise from these date Distribution of food grains to communities around the plants We were able to open some of our plants early with governments permission and necessary precautions as we supply to essential Health kits and safety mask distribution industries such food and personal care 4
FINANCIAL OVERVIEW
FY20 Performance Highlights - Consolidated Financials EBITDA* ( In ₹ Cr & Margin%) Income from Operations ( In ₹ Cr) Commentary 1,833 291 291 1,708 ➢ Q4 impacted due to nationwide lockdown, however full year performance 246 246 1,593 has shown good growth 204 204 ➢ Revenue growth of 7.2% and EBITDA growth of 20.6% ➢ EBITDA Margin has seen expansion by 15.9% 160bps 14.4% 12.8% ➢ Increase in employee cost as R&D and business teams were strengthened during the year FY FY19 FY FY20 FY20e FY FY FY19 FY FY20 FY FY20e Note: FY20e is based on management estimates of potential Sales and EBITDA had COVID-19 and lockdown not disrupted the business. The company had confirmed orders and could not execute them given the nationwide lockdown. Financial results include results of the wholly owned subsidiary RIECO Industries Limited which was earlier classified under ‘discontinued operations’ . Previous quarter / year figures have been regrouped wherever necessary to meet current period’s classification. * EBITDA as percent to Total Income from operations (excluding other income) 6
Q4FY20 Performance Highlights - Consolidated Financials EBITDA* ( In ₹ Cr & Margin%) Income from Operations ( In ₹ Cr) 574 574 Commentary 99 99 ➢ Quarterly performance impacted as 449 449 430 430 certain orders could not be executed due to the nationwide lockdown 65 65 ➢ Revenue growth of 4.4% despite this 54 54 challenging environment 17.2% 15.2% 12.0% Q4FY19 Q4FY20 Q4FY20e Q4FY19 Q4FY20 Q4FY20e Note: FY20e is based on management estimates of potential Sales and EBITDA had COVID-19 and lockdown not disrupted the business. The company had confirmed orders and could not execute them given the nationwide lockdown. Financial results include results of the wholly owned subsidiary RIECO Industries Limited which was earlier classified under ‘discontinued operations’ . Previous quarter / year figures have been regrouped wherever necessary to meet current period’s classification. * EBITDA as percent to Total Income from operations (excluding other income) 7
Pigment Business Performance Highlights Income from Operations ( In ₹ Cr ) EBITDA* ( In ₹ Cr & Margin%) 1,715 1,590 234 234 279 279 1,477 210 210 ➢ FY20 exports as a % of revenue were ~48% and domestic revenue was ~52% FY20 16.3% 14.8% 14.2% ➢ Capex for the year FY20 stands at INR FY FY19 FY FY20 FY20e FY 255 cr. FY19 FY FY FY20 FY FY20e EBITDA* ( In ₹ Cr & Margin%) Income from Operations ( In ₹ Cr) ➢ For Q4FY20, Specialty and Non-Specialty 94 94 527 527 portfolio did not see any growth this 67 67 404 404 402 402 quarter owing to the fact that we were 49 49 not able to complete considerable part Q4FY20 of sales this quarter 17.8% 16.5% 12.0% Q4FY19 Q4FY20 Q4FY20e Q4FY19 Q4FY20 Q4FY20e 0e Note: FY20e is based on management estimates of potential Sales and EBITDA had COVID-19 and lockdown not disrupted the business. The company had confirmed orders and could not execute them given the nationwide lockdown. Previous quarter / year figures have been regrouped wherever necessary to meet current period’s classification. * EBITDA as percent to Total Income from operations (excluding other income). 8
Margin Performance - Consolidated Financials Gross Margin EBITDA Margin 44.1% 43.1% 43.0% 15.4% 15.6% 15.2% 41.1% 14.9% 39.8% 12.0% Quarterly Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 42.9% 40.9% 14.4% 12.8% Full Year FY19 FY FY20 FY FY FY19 FY FY20 Note: Based on Consolidated Financials 9
Key Ratios - Consolidated Financials Retu turn rn on Cap apital al Employed Curr rrent Ratio 1.4 1.2 15.9% 14.6% FY FY19 FY20 FY FY FY19 FY FY20 Debt to to Equity ty Ratio Earnings Earn s per r Shar are* 0.8 15.7 0.7 11.7 FY FY19 FY FY20 FY19 FY FY20 FY * Earnings per share calculated excluding exceptional items 10
ABOUT
Our Company at Glance We are a leading world-class color solutions provider with a focus on exceptional and sustainable results GEOGRAPHIC REACH CONSOLIDATED BUSINESS FOCUS PEOPLE INFRASTRUCTURE REVENUES 2 Manufacturing g plants $223 Mn 50+ + sales team Pigm gment Largest pigm gment producer in Mahad & Roha and a 60+ + channel partners (FY2 Y20) Focus. Don’t compete in India. dedicated R& R&D center in 2,000+ glob obal workfor orce wi with customers Exports to 85+ + countries the outskirts of Pune 12
Our Vision, Mission & Values Our growth is fueled by an immense drive to be a leading player in our field MISSION VISION VALUES World class Global To be amongst the top Seva (Service), Courage, Color Solution provider three pigment players Commitment and with an innovative and in the world Passion, Respect, vibrant culture Trust 13
Our Journey Evolution of Sudarshan from a local player to a global player is result of a well crafted strategy Establishing the Business Going Global Next leap in Technology 1952 - 1989 1989 - 2006 2006 - 2018 Scaled up infrastructure to world Efforts largely domestic with limited Building technical capabilities & class standards portfolio range infrastructure Net revenue at INR 1,000 Cr FY14 State of art technology centre at Sutarwadi Listed on NSE Manufacturing plant in Improved portfolio Mahad for Pthalos & Effect with HPPs and Effects Pigments Footprints in for Cosmetics Europe & USA Manufacturing Net revenue plant in Pune at INR 400 Cr Listed on BSE FY06 Inception of Manufacturing Sudarshan plant in Roha 14
Our Governance Structure - Board Of Directors Mr. S. N. Inamdar Mr. Ashish Vij Mr. Rajesh Rathi Mr. Pradeep Rathi (Non-Executive, (Whole Time Director) (Managing Director) (Chairman) Independent Director) Mrs. Shubhalakshmi A. Panse Mr. S. Padmanabhan Mr. Naresh T. Raisinghani Mr. D. N. Damania (Non-Executive, (Non- Executive, (Non-Executive, (Non-Executive, Independent Director) Independent Director) Independent Director) Independent Director) Dr. Deepak Parikh Mr. Sanjay K. Asher Mrs. Rati F. Forbes Mr. Anuj N. Rathi (Non-Executive, (Non-Executive, (Non-Executive, (Non-Executive, Independent Director) Independent Director) Independent Director) Non-Independent Director) 15
Our Global Presence We Exports to 85+ countries with 50+ sales members GLOBAL HEAD OFFICE Sudarshan Chemical Industries Limited NORTH AMERICA CHINA Sudarshan North Americas Inc. EUROPE Sudarshan (Shanghai) Trading Co Ltd. MEXICO Sudarshan Europe B.V. JAPAN Sudarshan Mexico S. de R.L de CV. Sudarshan Japan K.K 16
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