Paper Mills Ltd. Corporate Presentation August 2017 Some of the - PowerPoint PPT Presentation

Paper Mills Ltd. Corporate Presentation August 2017

Some of the statements made in this presentation may look forward looking information that involves number of risks and uncertainties. Such statements are based on certain assumptions, estimates, projections or plans that are inherently subject to significant risks, uncertainties and contingencies that are subject to change. Actual results can differ materially from those anticipated in the Company´s forward‐looking statements as a result of a variety of factors, including those set forth from time to time in the Company´s press releases and reports and those set forth from time to time in the Company´s analyst calls and discussions. We do not assume any obligation to update the forward‐looking statements contained in this presentation. No part of this presentation shall form the basis of or may be relied upon in connection with any contract or commitment. This presentation is being presented solely for your information and is subject to change without notice. 2

Emami Group  Established in 1974  Leadership positions in major businesses FMCG & Ayurvedic Frank Ross Pharmacy Agro-Tech Paper-Mills  Pan-India presence Products Revenues of more than Revenues of nearly Revenues of nearly Revenues of more than INR 69,000 mn INR 11,600 mn INR 25,300 mn  Footprint across 60 INR 4,300mn countries  Workforce of over 20,000 employees  Market valuation of over USD 7 bn CRI (Ball pen tips) Emami Realty AMRI Hospitals Cement  Young & Dynamic Revenues of nearly Operations Management Revenues of nearly Revenues of nearly INR 3,600mn INR 1,300mn INR 3,000mn Commenced A conglomerate with group revenues in excess of INR 122bn Paper Mills Ltd. 3

Industry Overview Domestic Paper Industry

Industry Overview India’s paper consumption lower than world average India’s paper demand continues to grow at a steady pace World per capita consumption (Paper + Board) in kgs - 2014 6.3% (mn tonnes) 27 World average 18.2 6.2% Africa 8 13.4 India 11 Indonesia 29 9.9 30 Vietnam Latin America 47 Thailand 66 75 China EU 156 Singapore 159 Japan 218 N America 224 2009-10 2014-15 2019-20P India Paper : INR 554bn market in 2014-15 Stable demand ensuring high capacity utilisation levels* (mn tonnes) Capacity Production Utilisation Newsprint, 98 13.7 15.0 82% 13.3 12.8 12.0 11.5 11.0 10.8 Specialty 10.1 Market has 9.7 9.1 10.0 80% Paper, 24 grown at 11% W&P, 228 81% 80% 80% CAGR over the 79% 79% 5.0 78% last 5 years Paper board, 0.0 76% 204 2010-11 2011-12 2012-13 2013-14 2014-15 *excluding newsprint Paper Mills Ltd. Source: CRISIL Research, PPI 5

Industry Overview : Newsprint Newsprint market size growing at fairly good pace (INR bn) CAGR – 14.0% 98 95 78 69 58 2010-11 2011-12 2012-13 2013-14 2014-15 However, declining global prices affected domestic market pricing (INR per tonne) Landed cost (canada) Domestic prices  Global newsprint demand is on a decline as increasing penetration of 38,165 digital media has led to a shift in reading 35,917 34,642 34,121 33,745 habits from traditional physical 36,750 36,919 30,986 newspaper to digital newspapers. 33,500 33,096 31,375 25,823 29,521  India market continues to grow on back of rise in literacy rate which has led to 24,250 increase in newspaper dailies and readership 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 YTD Paper Mills Ltd. Source: CRISIL Research 6

Industry Overview : Paper board Paper board market has grown at a steady pace (INR bn) CAGR – 8.0% 204 182 162 160 150 2010-11 2011-12 2012-13 2013-14 2014-15 Expected to grow at a healthy pace in the long run  Kraft paper demand expected to Variety-wise Demand 2014-15 Past 5 year 2019-20P Next 5 year CAGR # (mn ton) CAGR* (mn ton) increase as industrial output improves Paperboard 6.14 5.4% 8.39 6.4%  Consumer packaging demand to be Tertiary packaging led by off-take in consumer durable, Kraft paper 3.54 4.7% 4.69 5.8% FMCG, pharmaceuticals and food Consumer packaging product industries Greyback / Whiteback 1.95 5.6% 2.65 6.3% FBB/SBB/ Others 0.66 9.9% 1.06 10.1% * 2009-10 to 2014-15 ; # 2014-15 to 2019-20 Paper Mills Ltd. Source: CRISIL Research 7

Industry Overview : Writing & Printing W&P volume growth expected to increase in next five years CAGR – 4.1% (Mn ton) CAGR – 3.6% 5.04 4.12 3.45 2010-11 2015-16 2020-21 W&P Variety-wise Demand  Demand in W&P segment grew on account Variety-wise Demand 2015-16 Last 5 year 2020-21P Next 5 year CAGR # (mn ton) CAGR* (mn ton) of increased government and corporate spending Uncoated Paper 3.45 3.6% 4.12 3.6%  Future growth is primarily attributed to an Creamwove 1.75 3.3% 1.81 0.6% increase in the literacy rate and the Maplitho $ 0.9 1.5% 1.02 2.8% government's support Branded Copier 0.8 2.4% 1.30 9.7%  Branded Copier is the fastest-growing sub- segment in the uncoated category Coated Paper/Art Board 0.67 9.1% 0.92 6.6% * 2009-10 to 2014-15 $ - including unbranded copier ; # 2014-15 to 2019-20 Paper Mills Ltd. Source: CRISIL Research 8

Company Overview Emami Paper Mills Limited

Overview – Emami Paper Mills Ltd Newsprint customers Shareholding Pattern (Jun 2017) include leading dailies – Operates through 3 One of the largest paper The Economic Times divisions manufacturers in India; The Times of India Newsprint - 127,000 TPA Hindustan Times Others 2 manufacturing facilities PaperBoard - 180,000 TPA Anandabazar Patrika 25.0% Balasore (Odhisa) Writing & Printing (W&P) The Telegraph, Kolkata (West Bengal) - 18,000 TPA The Hindu Dainik Bhaskar Promoters Invested in a state of the 75.0% Paper board end users Leading printers like TCPL, art multi-layered include HUL, Colgate, Parksons, Kumar, York packaging board unit in Key Financials Emami, Lux, Dollar, Rupa, and Borkar use Emami Balasore, Odisha; Monginis, Kellogs, etc. Paper’s Board commenced operations in Apr 2015 Rs. Mn FY14 FY15 FY16 FY17 Sales 5,466 5,210 5,388 11,384 EBITDA US FDA certification for 705 513 472 1,264 (excl. other income) Maxofold (Folding Box An ISO 9001, ISO 14001 Credit rating of A1+ for Board), Glamkot (Coated and OHSAS 18001 short term & A for long Bleached Board) and Eco EBITDA (%) 12.9% 9.8% 8.8% 11.1% certified company term from CARE Strong Virgin Top Coated Grey Back Board PAT 186 121 279 259 Paper Mills Ltd. 10 10

Emami Paper Mills – Journey so far Capacity of Board Plant increased to 180,000 TPA Paper Board Plant of One of the Largest 132,000 TPA with Manufacturer of 10.5 MW power plant Commissioning of Power Plant- Newsprint & 2017 15MW, DIP-300TPD, Paper Machine- commissioned Market Leader in III-250TPD the Country Equity listed » 2015 on NSE and Expansion of capacities to 135 TPD BSE 2010 pursuant to an IPO 2008 Merged with Gulmohar Paper Mill 2007 Received final 2005 approval for 2001 setting up 2000 of an SFB  PM-II Newsprint machine converted into 1998 writing & printing grade 1983 and commissioned in Listed on BSE July-2017  15MW Power Plant upgraded to 18MW in 5 MW Power Plant June-2017 Capacity increased to commissioned Initial Commissioning with 15 TPD 100TPD with successful capacity at Balasore facility commissioning of PM#2 India’s largest manufacturer of Newsprint and one of the largest paper and Paper Board manufacturers Note: TPD – Tonnes Per Day Paper Mills Ltd. 11 11

Board of Directors Mr. Manish Goenka Mr. P.S. Patwari Mr. MBS Nair, Mrs. Richa Agarwal Mr. A. V. Agarwal, Executive Chairman Whole Time Director Executive Director & CEO Director (Operations) Director Rich experience across Extensive Business CA with 36 years of Renowned paper technologist Extensive experience in Corp. business functions; experience of more than 18 experience; associated with with 43 years experience in Planning, Business Devp., spearheading Emami Paper years across various business Emami Paper Mills for more Paper Industry. Working with Marketing and Overall Mills Ltd. since past 18 years functions; than 33 years EPML for last 18 years Business Management Mr. J. N. Godbole Mr. S. Balasubramanian Mr. U.G. Bhat Mr. J. K. Khetawat Mr. H.M. Marda Independent Director Independent Director Independent Director Independent Director Independent Director Former Chairman of IDBI. Former Chairman of Company Well known technocrat Industrialist with extensive Industrialist with Extensive experience in and reputed project business experience in the Law Board and former extensive management Finance, Corporate Planning consultant in paper area of Corporate Planning &, member of Indian Postal experience over 3 and Strategy formulation industry Strategy Formulation Service decades Paper Mills Ltd. 12 12