Reinventing the GRM Brand Cultivating the future of rice exports H1 - - PowerPoint PPT Presentation

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Earnings Presentation

Reinventing the GRM Brand

Cultivating the future of rice exports

H1 FY2019

The GRM Brand today

• A leading exporter of rice to the Gulf region, with a majority of exports

concentrated in this region

• Exporting high quality traditional basmati varieties of rice to US, UK and
• ther European countries
• Launched own brands during FY2018 which are sold at large retailers

like ASDA (Walmart UK) andT.J. Morris in the UK

• Less than 10% of Revenues come fromValue Added Products

Moving towards the next phase of growth…

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Reinventing the Business

• Diversifying from traditional basmati rice offerings to

high margin own brands, specialized and value added products

• Targeting value

added and ready to eat health products in Europe where there is significant demand for such products

• Focus on supplying specialized / rare rice varieties and

health oriented ready to eat products with signature recipes

Redefined Value Proposition Integrated Business Model Niche Product Market Increasing Market Traction Enhanced R&D Capabilities

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Table of Contents

Contents Page No.

Q2 & H1 FY2019 Performance Highlights 4 – 6 GRM Overseas: At a Glance 7 - 11 Financial Performance 12 – 14

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47 58 Q2 FY2018 Q2 FY2019

EBITDA (INR Mn.)

13 28 Q2 FY2018 Q2 FY2019

PAT (INR Mn.)

1,391 1,468 Q2 FY2018 Q2 FY2019

T

• tal Revenue (INR Mn.)

4

Q2 & H1 FY2019 Performance Highlights

Building momentum for the next phase of our growth story…

4,737 4,162 H1 FY2018 H1 FY2019

T

• tal Revenue (INR Mn.)

106 138 H1 FY2018 H1 FY2019

EBITDA (INR Mn.)

41 45 H1 FY2018 H1 FY2019

PAT (INR Mn.)

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Q2 & H1 FY2019 Profit & Loss

(INR Million) Q2 FY2019 Q2 FY2018 Y

• o-Y %

H1 FY2019 H1 FY2018 Y

• o-Y %

T

• tal Income from Operations

1,468.3 1,390.6 5.6% 4,162.3 4,737.2 (12.1)% EBITDA 57.9 46.7 23.9% 138.4 105.7 30.9% EBITDA Margin 3.9% 3.4% 3.3% 2.2% EBIT 55.2 41.8 31.9% 130.6 96.0 36.1% EBIT Margin 3.8% 3.0% 3.1% 2.0% Finance Cost 9.7 23.6 (59.1)% 48.7 36.0 35.0% PBT 45.5 18.2 149.8% 82.0 59.9 36.8% PBT Margin 3.1% 1.3% 2.0% 1.3% Tax 17.8 5.5 223.0% 36.7 18.5 98.4% PAT 27.7 12.7 118.1% 45.3 41.4 9.2% PAT Margin 1.9% 0.9% 1.1% 0.9% Basic EPS 7.52 3.45 117.7% 12.27 11.23 9.3% Comments Sales were impacted due to restriction on exports in one of the key markets in the Middle East Improvement in EBIDTA margin was attributable to effective cost control measures Effective Tax Rate was higher during the period due to consolidation of UK subsidiary’s loss The growth in PAT was largely attributable to decrease in Finance Costs by 59%YoY

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Q2 FY2019 Updates

Focused on growth in the UK Market and building brand value

TESCO is UK’s largest grocery store chain GRM Presence at 220TESCO stores Sales at TESCO expected to drive revenue growth Himalaya River available in 5 kg & 10 kg variants Instrumental in strengthening GRM’s presence in the UK Market

GRM Overseas has partnered with TESCO and is set to expand its presence in the UK

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Stringent proactive quality control procedures in place which are in accordance with International requirements Revenues of INR 9,442 mn in FY2018, an increase of 60% YoY, Net Profit of INR 119 mn, growth of 112% YoY. A variety of rice offerings catering to a mix of consumer preferences basmati, specialised products and value added products Focused on high quality value added offerings such as branded rice varieties, branded basmati, organic rice products and ready-to-eat Around 90% of our Revenues are generated from exports to the Middle East; we are also focused on exports to US & UK Over 40 years in the Rice business with a legacy of supplying products of the highest quality

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GRM Overseas: At a Glance

“GRM has always believed in delivering the best. We are constantly focused on raising the standards…” A Wealth of Experience Export Oriented Global Standards Moving up the Value Chain Diversified Basket

• f Rice Products

Robust Financial Performance

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Product Portfolio

Market Segment Product Offerings Key Customers Basmati Specialised Value Added Strategically moving towards more value add products Red Rice, Black Rice, Smoked Rice, Folk rice varieties Organic Rice, Rice based ready to eat health products and Retorts

Targeting speciality stores across Europe. Increasing customer preferences for health food products in European markets.

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Our Recipe for Success

Best in class procurement and processing facilities with a global distribution network Procurement

• Strong relationships with local farming

communities

• Access to best quality of produce
• Generally procurement undertaken

with spot payments, no long term contracts

• Partnered with Certified Grower

Group consisting of 956 farmers, with farming area of 1881 Hac., and certification of NPOP+NOP

• Major procurement season during

October to December every year

Processing

• Factory equipped with three milling

plants, each with a capacity of 20 tons per hour with shipping capacities located at Mundhra port

• Labs include moisture meters, labde-

huskers, electronic Vernier Calipers, precision electronic weighing scales, paddy separators and lab-polishers

• Strong focus on quality control
• Homegrown ERP systems in place to

enable traceability of product from the shelf to the farm, essential for stringent western markets

Distribution Channels

• Sales & distribution offices in the UK &

USA

• Network of 8 distributors and agents

in the Middle East

• Network of 668 supermarket stores

and 103 ethnic stores in UK

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Recent Launches

Strategically moving towards more value add products

• Objective: T
• bring natural foods grown locally by farmers who do not use chemicals to affect the product yield
• Target Market: The fast growing health conscious population in particularly Europe / USA / Australia

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Key Highlights

Launching value added products and expanding business to new countries to drive future growth

• Achieved a new milestone in our 40 year history in FY 2018 by starting supply of own branded products to European retailers
• Our customers currently include ASDA (Walmart UK), T.J. Morris and B&M in the UK; Albert Heign in Holland and Metro in

Poland

• GRM has recently entered into an agreement with TESCO UK to place its own brand of basmati rice ‘Himalaya River’ in

TESCO UK stores. Starting September 2018, ‘Himalaya River’ basmati rice will be available in 5kg and 10 kg pouches in around 220 TESCO stores across the UK

• Our Recent Launches include Tanush, Tanoush, 1121 Cream Sella and Gianna which are premium basmati rice offerings geared at

the fast growing health conscious population in particularly Europe / USA / Australia

• Expanded exports to more than 25 new countries.
• T

echnology tie up with a leading organic products company to develop specialized organic food products

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240 142 202 350 106 138 4.2% 4.0% 3.4% 3.7% 2.2% 3.3% 2015 2016 2017 2018 H1FY2018 H1FY2019

EBITDA (INR Mn.)

EBITDA EBITDA Margin 12

Financial Trends

5,684 3,557 5,912 9,442 4,737 4,162 2015 2016 2017 2018 H1FY2018 H1FY2019

Revenue (INR Mn.)

12.38 5.56 15.14 32.13 11.23 12.27 2015 2016 2017 2018 H1FY2018 H1FY2019

Basic EPS

46 21 56 119 41 45 0.8% 0.6% 0.9% 1.3% 0.9% 1.1% 2015 2016 2017 2018 H1FY2018 H1FY2019

PAT (INR Mn.)

PAT PAT Margin

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Key Ratios

Steady improvement in return ratios

Continuous focus on enhancing shareholder’s return... During the year, management continued its focus on penetrating new markets with value added products

13.3% 25.3% 18.9% 16.4% FY2017 FY2018 H1 FY2018 H1 FY2019

ROE %

6.0% 11.6% 20.0% 22.3% FY2017 FY2018 H1 FY2018 H1 FY2019

ROCE %

1.9x 2.2x 2.7x 2.7x FY2017 FY2018 H1 FY2018 H1 FY2019

Interest Coverage (x)

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Key Balance Sheet Items

(INR Million) H1FY2019 FY2018 FY2017 Short Term Debt 13 2,335 1,496 Long Term Debt 610 583 484 T

• tal Debt

623 2,918 1,980 Cash and Cash Equivalents 35 11 18 Net Debt 587 2,907 1,963 T

• tal Shareholder Equity

563 518 421 Net Debt to Equity (x) 1.0x 5.6x 4.7x Interest Coverage Ratio (x) 2.7x 2.2x 1.9x

299 344 365 421 518 563 2014 2015 2016 2017 2018 H1FY2019

T

• tal Shareholders' Funds (INR Mn.)

16.2% 14.2% 5.8% 14.2% 25.3% 16.4% 2014 2015 2016 2017 2018 H1FY2019

Return on Equity (ROE) %

Note – ROE % for H1FY2019 on an annualized basis

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Contact Information

This presentation contains statements that are “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to GRM Overseas’ future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number

• f risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations.

These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. GRM Overseas undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances.

For further information, please contact: Atul Garg, Director GRM Overseas +91 180 265 2476 atul@grmrice.com Ravi Gothwal / Samantha Francis Churchgate Partners +91 22 6169 5988 grm@churchgatepartners.com

www.grmrice.com Gohana Road, Panipat, Haryana, India. Phone : +91-180-2652476 / 2652524 Fax : +91-180-2653673 Web: www.grmrice.com