Galaxy Surfactants Limited Investor Presentation - February 2020 - PDF document

Galaxy Surfactants Limited Investor Presentation - February 2020

Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Galaxy Surfactants 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 whatsoever. 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. This presentation contains certain forward looking statements concerning the Company’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions regulations, interest and other fiscal costs generally prevailing in the economy. The Company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Company. 2

9M FY20 Performance Highlights 3

9MFY20: Key Developments The AMET market outperformed on the back of a strong performance registered by the Performance Surfactants segment Domestic (India) business registered healthy 4.8% (Y-O-Y) growth post two subdued quarters, showing signs of revival All three regions report volume growth despite headwinds Growth driven by all three customer segments: MNC’s, Regional & Local Emerging trends and diverse product portfolio ensured growth across product segments 4

Volume: 9MFY20 Highlights (YoY) Performance Surfactants Specialty Care Products Total Volume +7.1% +3.1% +5.6% 1,04,668 61,439 1,66,107 59,563 1,57,261 97,698 Volume Highlights 9MFY19 9MFY20 9MFY19 9MFY20 9MFY19 9MFY20 India Market grew by 0.7% Africa Middle East Turkey grew by 9.5% Rest of the World grew by 6.8% Both Performance & Specialty Care segments logged in growth which was ahead of the Industry growth rate 5

9MFY20 Highlights (YoY) Performance Surfactants Specialty Care Products Total Revenue^ -8.1% -6.6% -4.0% 1,312 770 2,082 739 1,946 1,206 Revenue Highlights 9MFY19 9MFY20 9MFY19 9MFY20 9MFY19 9MFY20 EBITDA^ PAT +25.2% +5.0% 272 168 259 134 Rs. In Crores 9MFY19 9MFY20 9MFY19 9MFY20 As per Ind AS ^Includes other Income 6

Consolidated Profit & Loss Statement Particulars (Rs. In Crores) Q3 FY20 Q3 FY19 Y-o-Y 9M FY20 9M FY19 Y-o-Y FY19 ▪ Decline in revenue is Net Revenue from Operations 625.9 679.4 -7.9% 1,939.7 2,080.8 -6.8% 2,763.0 primarily due to declining Other Income 3.4 1.0 5.9 1.2 4.7 fatty alcohol prices. The same Total Revenue 629.3 680.4 -7.5% 1,945.6 2,082.0 -6.5% 2,767.7 fell from an avg. rate of Cost of Material Consumed 421.6 477.1 1,297.5 1,481.9 1,948.1 $1,361/MT to $1,138/MT YoY basis Employee's Benefits Expense 43.2 39.7 131.6 117.7 164.6 Other Expenses 78.9 80.1 244.4 223.2 296.9 ▪ Average Forex rate in 9MFY20 EBITDA 85.5 83.5 2.4% 272.2 259.3 5.0% 358.1 was Rs. 70.36 per USD versus EBITDA Margin 13.6% 12.3% 14.0% 12.5% 12.9% Rs 69.57 per USD in 9MFY19 Depreciation 16.4 12.9 46.7 38.3 51.2 ▪ PAT includes deferred tax gain EBIT 69.1 70.6 -2.1% 225.5 221.0 2.0% 306.9 and savings on account of Finance cost 5.8 7.1 18.2 22.2 30.0 reduction in Corporate tax PBT 63.2 63.4 -0.3% 207.3 198.9 4.2% 276.9 rate in India Tax expense 15.2 21.6 39.7 65.0 85.9 PAT 48.0 41.8 14.7% 167.6 133.9 25.2% 191.0 PAT Margin 7.6% 6.2% 8.6% 6.4% 6.9% Other Comprehensive Income 2.0 -12.4 10.7 21.5 18.3 Total Comprehensive Income 49.9 29.5 178.3 155.4 209.3 EPS 13.54 11.80 47.27 37.76 53.87 As per Ind AS 7

Standalone Profit & Loss Statement Particulars (Rs. In Crores) Q3 FY20 Q3 FY19 Y-o-Y 9M FY20 9M FY19 Y-o-Y FY19 ▪ Other income for 9MFY20 Net Revenue from Operations 442.2 494.1 -10.5% 1,359.1 1,503.9 -9.6% 1,996.4 includes loss of Rs 1.03 cr as against gain of Rs 29.22 cr in Other Income -4.7 -0.8 4.0 32.1 35.9 9MFY19 in respect of Total Revenue 437.5 493.3 -11.3% 1,363.1 1,536.0 -11.3% 2,032.3 financial assets (Preference Cost of Material Consumed 300.6 352.2 917.5 1,091.2 1,432.7 Shares) mandatorily measured at fair value Employee's Benefits Expense 21.8 20.9 70.2 63.6 87.3 through profit & loss Other Expenses 50.9 55.7 161.8 152.1 208.7 EBITDA 64.4 64.5 -0.2% 213.7 229.1 -6.8% 303.5 EBITDA Margin 14.7% 13.1% 15.7% 14.9% 14.9% Depreciation 10.8 7.1 30.0 21.2 28.7 EBIT 53.6 57.4 -6.7% 183.7 207.9 -11.7% 274.8 Finance cost 4.3 4.7 13.3 14.7 20.4 PBT 49.3 52.7 -6.6% 170.4 193.2 -11.8% 254.4 Tax expense 12.7 18.9 34.0 64.9 85.9 PAT 36.5 33.9 7.8% 136.4 128.3 6.3% 168.5 PAT Margin 8.3% 6.9% 10.0% 8.4% 8.3% EPS 10.30 9.55 38.48 36.20 47.51 As per Ind AS 8

Consolidated Balance Sheet Particulars (Rs. In Crores) Sept ’19 Mar’19 Particulars (Rs. In Crores) Sept’19 Mar’19 ASSETS EQUITY AND LIABILITIES Property, Plant and Equipment 528.5 511.2 EQUITY Right-of-use assets 38.9 0.0 Equity Share Capital 35.5 35.5 Capital work-in-progress 111.8 82.6 Other Equity 956.8 841.3 Goodwill 2.6 2.5 Total Shareholders Fund 992.3 876.7 Intangible Assets 5.6 5.0 Financial Assets Non-Current Liabilities (i) Investments 0.0 0.0 Financial Liabilities (ii) Loans 7.2 6.9 (i) Borrowings 63.4 89.2 (iii) Other financial assets 0.9 1.9 (ii) Lease Liabilities 20.7 0.0 Deferred Tax Assets (Net) 4.2 4.9 (iii) Other Financial Liabilities 0.3 0.3 Income Tax Assets (Net) 17.0 8.0 Provisions 12.9 10.0 Non-current tax assets 39.8 47.6 Deferred Tax Liabilities (Net) 24.6 32.0 Total Non-Current Assets 756.5 670.6 Other non-current liabilities 0.4 0.8 Total Non-Current Liabilities 122.3 132.3 Current Assets Inventories 352.0 351.3 Current Liabilities Financial Assets Financial Liabilities (i) Trade receivables 417.4 426.8 (i) Borrowings 225.7 164.0 (ii) Cash and cash equivalents 33.4 25.0 (ii) Trade Payables 258.2 305.9 (iii) Bank Balances other than cash and cash equivalents 0.8 0.7 (iii) Lease Liabilities 3.5 0.0 (iv) Loans 0.5 3.7 (iv) Other Financial Liabilities 62.0 71.5 (v) Other Financial Assets 5.9 3.0 Other Current Liabilities 13.8 8.5 Other Current Assets 119.0 86.9 Provisions 3.3 4.1 Current Tax Liabilities (Net) 4.4 5.1 Total Current Assets 929.0 897.4 Total Current Liabilities 570.9 559.0 TOTAL ASSETS 1,685.5 1568.0 TOTAL EQUITY & LIABILITIES 1,685.5 1568.0 As per Ind AS 9

Consolidated Cash Flow Statement Half Year ended Particulars (Rs. In Crores) Sept ’19 Sept ’18 Cash Flow From Operating Activities : Profit After Tax 119.6 92.0 Operating Profit before working Capital changes 183.7 172.9 Net cash flows generated from/(used) in Operating Activities (A) 101.1 85.7 Net cash flows generated from/(used) in Investing Activities (B) -79.2 -75.6 Net cash flows generated from/(used) in Financing Activities (C) -14.1 -7.0 Net Increase/(Decrease) in cash and cash equivalents (A+B+C) 7.8 3.1 Opening cash and cash equivalents 25.0 27.1 Effects of exchange rate changes on the balance of cash and cash equivalents held 0.6 3.0 in foreign currencies Closing cash and cash equivalents 33.4 33.2 10