Heritage Foods Limited Financial Results Q4FY16 Hyderabad, 23 rd May - PowerPoint PPT Presentation

Heritage Foods Limited Financial Results – Q4FY16 Hyderabad, 23 rd May 2016 Stock Code: BSE : 519552 NSE : HERITGFOOD REUTERS : HEFI.BO / HEFI.NS BLOOMBERG : HTFL IN External Presentation

Dairy Industry in Limelight 2013 2014 2015 Nestle invests in Le Groupe Prabhat Dairy, Indocon Agro. Lactalis acquires a milk and dairy Tirumala Milk products Hatsun Agro has Products. company, gets acquired Jyothi listed on the Stock Exchanges. Dairy. PE Investment : Dairy Milk production (MT) Industry, 6% A decade back 185 PE investment 200 146 in Dairy 150 78 100 Industry was 50 2%. 94% 0 2000 2015 2020 Bring Home Health & Happiness 2

Segment-wise Turnover in FY16 Turnover(%) Renewable Bakery Energy 0.33% 0.12% Agri 3.89% Retail 23.71% Dairy 71.95% Bring Home Health & Happiness 3

Key Highlights Crossed Rs Contribution Dairy EBITDA 23,000 Mn from VAD crossed Rs 1000 Turnover mark products is 21% Mn mark in in FY16 at Rs of Dairy FY16 at Rs 1,372 23,806 Mn. Turnover. Mn. Number of EBITDA losses in Retail stores Retail down crossed 100 from Rs 138 Mn mark in FY16 at in FY14 to Rs 43 110 stores. Mn in FY16. Bring Home Health & Happiness 4 4

Key Financial Highlights - Dairy Strong ROCE of Industry Revenue of Rs. 54% in FY16 Positioning – 17,688 Mn in and 14% in FY16 and Rs. No. 1 in AP and Q4FY16. 4,598 Mn in Telangana, with Q4FY16. in top 3 brands in South India. EBITDA(Rs Mn) EBITDA Margin % PBT Margin % EBITDA of Rs. 1600 10 9 1,372 Mn in 1400 8.58% 8 7.76% 7.60% 1200 7.43% FY16 and Rs. 349 7 6.77% 1000 5.97% 6 5.65% Mn in Q4FY16. 800 5 1372 1219 1137 4 600 3.68% 879 3 400 2 200 1 0 0 FY13 FY14 FY15 FY16 Bring Home Health & Happiness 5 5

Key Financial Highlights - Retail Revenue of Rs. No. of stores at Total Carpet Area 5,829 Mn in FY16 110, up by 20%. at 3.90 lakh sq. ft and Rs. 1,659 Mn up by 15%. in Q4FY16. Total Carpet Area('000 Sqft) Average Stores Sales (Rs/Sqft/month) 450 1250 Appointed KPMG 400 1200 1195 350 to scout for 1160 1158 300 1150 Strategic 250 1113 1101 1100 390 200 Investors. 338 150 1050 256 1040 217 212 100 166 1000 50 0 950 FY11 FY12 FY13 FY14 FY15 FY16 Bring Home Health & Happiness 6 6

Milk Collection and Processing Household Serviced Vehicles: 1410 Chilling Plants: 143 Aggregators Daily: 11,25,000 Agents: 5750 Bulk Coolers: 92 Processing Plants: 14 Bring Home Health & Happiness 7

Relations with farmers Facilitating Facilitating High Arranging Cattle Loans from Quality feed. Insurance. Banks. Creating Operating Certificate in Farmers Welfare Mobile Dairy Farming. Fund. Veterinary Clinics. Bring Home Health & Happiness 8

Liquid Milk Processing Milk Collection Milk Procurement Selling price per (llpd) cost per liter (Rs) liter (Rs) FY16 FY15 FY16 FY15 FY16 FY15 11.36 9.69 30.90 31.79 36.55 37.21 Q4FY16 Q4FY15 Q4FY16 Q4FY15 Q4FY16 Q4FY15 11.87 10.76 30.95 32.72 36.28 37.91 Bring Home Health & Happiness 9

Value Add Products Turnover (Rs in Mn) JV with European 3716.00 Partner by 4000 3042.10 Dec’16. 3000 2280.00 2000 1000 0 FY14 FY15 FY16 Turnover (Rs in Mn) To offer entire range of Value 1093.00 1200 Added Products. 954.00 883.00 1000 785.00 800 600 400 200 0 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Bring Home Health & Happiness 10

Changing Lifestyle Population Growth with growing Urban Population(Crs) 121.06 130 120 102.86 110 100 90 2001 2011 Per Capita Income(Rs) 74,380 80,000 60,000 24,143 40,000 20,000 0 2005 2014 Bring Home Health & Happiness 11

Geographical Spread Ave. Milk States Milk Sales LPD Procurement LPD Andhra Pradesh 615,521 196,554 Telangana 159,601 269,657 Tamil Nadu 181,755 144,818 Karnataka 16,393 117,184 Maharashtra 88,368 57,487 Kerala - 11,351 Odisha - 10,696 Haryana/Delhi - 13,941 Rajasthan 74,105 - Total 1,135,744 821,688 Bring Home Health & Happiness 12

Geographical Spread States Ice Cream LPD Curd Kgs/day Andhra Pradesh 1,867 81,373 Telangana 2,972 37,391 Tamil Nadu 715 28,764 Karnataka 373 23,147 Maharashtra 618 185 Kerala - 762 Odisha 205 2,803 Haryana/Delhi - 2,417 Rajasthan - - Total 6,750 176,842 Bring Home Health & Happiness 13

Geographical Presence Production Plants : 1. Main Dairy Plant - Gokul 6. Pamarru 11. Vadamadurai, Kasipentla Village, Yendagandi (Via), Pamarru Morepatti Village, Chittoor Dist., AP – 517112. East Godavari Dist, AP. Dindigul Dist., Tamil Nadu – 624802. 2. Chittoor 7. Bayyavaram Sundarajapuram Village, Bayyavaram Village, 12. Bangalore E.R Palli Post, Kasimkota Mandal, Yadavanhalli Village, G.D Nellore Mandal, Vishakhapatnam Dist, AP. Bangalore(South), 1 plant Chittoor Dist., AP – 517125. Karnataka – 562107. 8. Bobbili 3. B. Kotha Kota Mettavalasa Village, 13. Sangvi Beerangai Village, Bobbili Mandal, Vijayanagar Sangvi, Sankarapuram (Post) Vizianagaram Dist., AP. Satara Dist., B. Kotha Kota Mandal, Maharashtra. Chittoor Dist., AP – 517370. 9. Narketpally 1 plant Cherugattu Village, 14. Rai 4. Bhattiprolu Narketpally, Nalgonda, AP. Sonepat, Haryana. Battiprolu Village & Mandal 10 plants Guntur Dist., AP – 522256. 10. Uppal C-10, Road No: 7, 1 plant 5. Kalluru IDA Uppal, Korlagudem (V), Kalluru Hyderabad – 500039. 1 plant (M), Khammam Dist., AP. Bring Home Health & Happiness 14

Financial Highlights(Segment-wise) Particulars (Rs. in Mn) Q4FY16 Q4FY15 YOY % Turnover (incl. other op. income) Dairy 4,597.60 4,040.30 13.79 Retail 1,658.60 1,347.20 23.11 Agri 262.20 202.20 29.67 Bakery 19.80 18.00 10.00 Renewable Energy 9.70 7.80 24.36 Total 6,547.90 5,615.50 16.60 Less: Inter SR 220.80 175.30 25.96 Net Turnover 6,327.10 5,440.20 16.30 EBITDA Dairy 348.50 283.00 23.14 Retail 39.10 32.00 22.19 Agri 4.30 1.70 152.94 Bakery (0.80) 0.70 (214.29) Renewable Energy 7.30 4.90 48.98 Total 398.40 322.40 23.57 PBT Dairy 269.50 203.30 32.56 Retail 6.50 (2.10) (409.52) Agri (2.10) (4.40) (52.27) Bakery (3.00) (1.20) 150.00 Renewable Energy 2.80 (0.50) (660.00) Total 273.70 195.20 40.22 Dairy Margins EBITDA 7.58% 7.00% 8.29 PBT 5.86% 5.03% 16.50 Bring Home Health & Happiness 15

Financial Highlights(Segment-wise) Particulars (Rs. in Mn) FY16 FY15 FY14 FY13 Turnover (incl. other op. income) Dairy 17,688.00 15,558.60 13,281.90 12,686.20 Retail 5,828.60 4,939.70 3,779.30 3,265.70 Agri 956.80 840.00 678.30 399.40 Bakery 81.20 58.90 36.60 40.60 Renewable Energy 30.40 25.70 7.70 - Total 24,585.10 21,422.90 17,783.90 1,639.90 Less: Inter SR 779.20 693.20 563.50 373.80 Net Turnover 23,805.80 20,729.70 17,220.40 16,018.10 EBITDA Dairy 1,372.00 878.70 1,136.70 1,218.60 Retail (42.90) (23.10) (138.20) (167.60) Agri 12.70 10.30 (7.40) (6.60) Bakery 2.10 (0.20) (4.90) (10.20) Renewable Energy 20.80 15.20 0.30 - Total 1,364.70 880.80 986.50 1,034.30 PBT Dairy 1,056.80 573.10 898.80 964.60 Retail (178.20) (148.20) (231.90) (272.80) Agri (13.90) (16.60) (34.70) (37.60) Bakery (6.20) (8.50) (11.20) (17.70) Renewable Energy 1.40 (8.50) (8.90) - Total 859.80 391.40 612.10 636.50 Dairy Margins EBITDA 7.76% 5.65% 8.56% 9.61% PBT 5.97% 3.68% 6.77% 7.60% Bring Home Health & Happiness 16

Dairy Financials Turnover EBIDTA Capital Employed (Rs. in Mn) (Rs. in Mn) (Rs. in Mn) FY16 FY15 FY16 FY15 FY16 FY15 17,688.0115,558.57 1,372.00 878.70 1,957.37 1,868.74 Q4FY16 Q4FY15 Q4FY16 Q4FY15 Q4FY16 Q4FY15 4,597.65 4,040.28 348.50 283.00 1,957.37 1,868.74 Bring Home Health & Happiness 17

Product Categories Category 1 : Category 2 : Category 3 : Ice-cream Cup Curd Pouch milk Cheese Ghee Pouch curd Paneer Flavored milk Pouch butter milk Cooking butter Bring Home Health & Happiness 18

New Markets Has set up a Planning to Delhi market 1,00,000 liter acquire another size is 65 lakh per day plant plant on liter per day, near Delhi. Mumbai Gujarat highway. Mumbai market size is 55 lakh Mumbai liter per day. Delhi Bring Home Health & Happiness 19

Retail Total Sqft. ('000) No. of Stores 450 400 350 390 300 338 FY16 FY15 250 256 200 212 150 100 110 92 50 0 FY13 FY14 FY15 FY16 EBITDA (Rs in Mn) No. of Stores 0 -20 FY13 FY14 FY15 FY16 -23 -40 -43 -60 Q4FY16 Q4FY15 -80 -100 -120 -140 110 92 -138 -160 -180 -173 -200 Bring Home Health & Happiness 20

Key Metrics - Retail Particulars FY16 FY15 YOY % No. of stores 110 92 19.57 Total carpet area('000 sqft) 390 338 15.29 Avg. store sales(Rs/sqft/month) 1,158 1,160 (0.19) Revenue Break-up(Rs mn): Heritage Fresh Stores 4,920 4,232 16.28 Institutional, General Trade & Others 405 324 25.13 Other Operating Income 510 396 28.93 Total Revenue from Operations (Rs mn) 5,836 4,951 17.87 Total Gross Profit(Rs mn) 1,149 979 17.36 Gross margin(%) 19.69% 19.77% (0.39) Gross margin Heritage Fresh(%) 21.29% 21.24% 0.24 EBITDA at store level(Rs mn) 400 354 13.01 EBITDA margin(%) 6.85% 7.16% (4.12) Regional & Corporate Overheads 446 377 18.45 Overheads/sft/month 105 103 1.68 EBITDA(Rs mn) (43) (23) 86.96 Bring Home Health & Happiness 21