Sudarshan Chemical Industries Limited Investor Presentation December, 2019 1
Safe harbour 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. 2
Financial Overview December, 2019 3
Q3FY20 and 9MFY20 Performance Highlights – Consolidated Financials Income from Operations ( In ₹ Cr ) EBITDA* ( In ₹ Cr & Margin%) Performance 63 63 58% 424 424 8% 391 391 40 40 ly Per 14.9% erly rter 10.2% uart Qua Q3FY19 Q3FY20 Q3FY19 Q3FY20 Income from Operations ( In ₹ Cr ) EBITDA* ( In ₹ Cr & Margin%) 1,259 192 192 39% 8% rmance 1,163 139 139 Perform 15.3% 9M Perf 11.9% 9M 9MFY FY19 9MFY FY20 9MFY FY19 9MFY FY20 Note: Financial results include results of the wholly ownedsubsidiaryRIECO Industries Limited which was earlier classified under ‘discontinued operations’ . Previous quarter / year figures have been regrouped wherevernecessary to meet current period’s classification * EBITDA as percent to Total Income from operations (excluding other income) 4
Q3FY20 and 9MFY20 Performance Highlights – Pigments Business Income from Operations ( In ₹ Cr ) EBITDA* ( In ₹ Cr & Margin%) Performance 58 58 63% 12% 391 391 349 349 36 36 ly Per 14.9% erly rter 10.2% uart Qua Q3FY19 Q3FY20 Q3FY19 Q3FY20 Income from Operations ( In ₹ Cr ) EBITDA* ( In ₹ Cr & Margin%) 186 186 30% 1,188 rmance 11% 1,072 143 143 Perform 15.6% 13.4% 9M Perf 9M 9MFY FY19 9MFY FY20 9MFY FY19 9MFY FY20 Note: Previous quarter / year figures have been regroupedwherever necessary to meet current period’s classification * EBITDA as percent to Total Income from operations (excluding other income). 5
Gross Margin Performance – Pigments Business 42.8% 42.6% 41.8% 40.6% 39.6% Q3FY FY19 Q4FY FY19 Q1FY FY20 Q2FY FY20 Q3FY FY20 • Q3FY20 Gross Margins bounced back to 42.8% from 40.6% for the corresponding period of the pervious year • 9MFY20 Gross Margins at 42.4%, at similar levels as compared to 42.6% for the corresponding period of the previous year 6
Robust Financial Performance – Pigments Business Income from Operations ( In ₹ Cr ) EBITDA* ( In ₹ Cr & Margin%) 70 70 404 404 65 65 400 400 63 63 396 396 391 391 58 58 349 349 17.2% 16.3% 36 36 15.7% 15.6% 10.2% Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 • Q3FY20 and 9MFY20 income from operations at ₹ 391 cr and ₹ 1,188 cr respectively, a growth of ~12% and ~11% respectively as compared to the corresponding periods of the previous year • For Q3FY FY20 20, Specia ialty lty pigments ts portf rtfoli lio volum lume gre rew 13 13% YoY and No Non-Specia ialt lty portf rtfolio io gre rew 10 10% YoY • 9MFY20 exports as a % of revenue at ~48% as compared to 47% for 9MFY19 Note: Previous quarter / year figures have been regroupedwherever necessary to meet current period’s classification. Specialty portfolio includes Azos, High Performance Pigments, Cosmetics and Pigment Dispersions. Non-Specialty portfolio includes Blue & Green Pigments, Inorganic pigments and Industrial effect pigments * EBITDA as percent to Total Income from operations (excluding other income). 7
Key Ratios – Consolidated Financials Return on Capital Employed (annualized) Net Debt - Equity Ratio 18.5% 15.7% 0.6 0.6 FY19 Dec'19 FY19 Dec'19 Current Ratio Earnings per Share (annualized)* 1.5 17.7 1.4 12.7 FY19 Dec'19 FY19 Dec'19 Note: Previous quarter / year figures have been regroupedwherever necessary to meet current period’s classification * Earnings per share calculated excluding exceptional items 8
About Sudarshan 9
Our Company at a glance… We are a leading world-class color solutions provider with a focus on exceptional and sustainable results. CON ONSOLI LIDATED MARKET GE GEOG OGRAPHIC PEOPLE LE BUSINESS BU REVE VENUES CA CAPI PITALI LIZATION 50+ sales team. REACH FOC OCUS 60+ channel partners. FY19 turnover at INR ~2,200 cr+ Largest pigment Pigment 2,000+ global $212 Mn Listed on BSE (1981) producer in India. Focus. Don’t workforce. & NSE (1995) compete with Exports to 85+ countries. customers. 10
Our Mission, Vision & Values Our growth is fueled by an immense drive to be a leading player in our field. MISSION World class Global Color Solution provider with an innovative and vibrant culture VISION To be amongst the top three pigment players in the world VALUES Seva (Service), Courage, Commitment and Passion, Respect, Trust 11
Our Journey Evolution of Sudarshan from a local player to a global player is result of a well crafted strategy. Establi blishing ing the Bus usin iness Going ing Glob obal Next xt leap p in Techno hnolog logy 1952 - 1989 1989 1989 - 2006 2006 2006 - 2018 2018 Scaled up infrastructure to world Efforts largely domestic with Building technical capabilities & class standards limited portfolio range infrastructure Footprints in Europe & USA Manufacturing Net revenue plant in Mahad at ₹ 400 Cr for Pthalos & Effect Pigments FY06 Manufacturing Improved plant in Roha portfolio with HPPs and Effects Listed on for Cosmetics NSE Manufacturing plant in Pune Net revenue Listed on at ₹ 1,000 Cr Inception of BSE FY14 Sudarshan State of art technology centre at Sutarwadi 12
Our Global Presence Exports to 85+ countries with 50+ sales members GLOB OBAL HE HEAD OF OFFICE CE Sudarshan Chemical Industries Limited NORTH AMERICA Sudarshan North Americas Inc. EUROP OPE Sudarshan Europe B.V. CHINA MEXI XICO Sudarshan (Shanghai) Trading Co Ltd. Sudarshan Mexico S. de R.L de CV. JAPAN AN Sudarshan Japan K.K 13
Our Product Portfolio PIGM GMENTS TS ORGA RGANIC INOR NORGA GANIC Azo EFFE FECT Chromes Phthalos Mica base for Cadmiums HPPs industrial and Iron Oxides Dispersions cosmetics Orga Organic nic Pigments ts Colored material made of organic compound with pigment properties. Commonly used for Coatings, plastics, Inks & Textile applications. Inorganic nic Pigments ts Made up of mineral compounds. Are mainly oxides, sulphides of one or more than one metals. Used for plastics and industrial coatings. Effect Pigments Pigments with mica base and coated with oxides to give shimmer and glow. Mainly used in plastics, automotive coatings, cosmetics applications 14
Pigments Application Sudarshan is uniquely placed to offer a comprehensive range - general purpose grades, high performance and effect pigments. COSM OSMETICS COATINGS PLASTICS INKS A pallete with a wide Effect pigments for High performance and General purpose and high spectrum of colors and cosmetics & personal care special effect for the performance pigments for performance for plastic applications. coating industry. inks. applications. Enjoy leadership position A strategically important Focus on niche in plastics segment in Our key focus area with growth area for applications in the ink multiple geographies; targeted significant Sudarshan; we continue industry with necessary attributed to our detailed growth in the automotive building capabilities in expertise in offset and know-how of the and decorative segments. end application. liquid ink segments. industry. 15
The Pigment Approval Cycle Approval cycle for pigment sales varies across products and Sudarshan Chemicals is well placed in this regard. INKS COATINGS PLASTICS COS OSMETICS Focus on niche applications Coatings remains a Market leaders in multiple Proven track record with like liquid inks to build prominent focus area with geographies offering wider significant growth for competency and strong Automotive and Decorative spectrum of colours and Sudarshan’s progress market share being the key segments pigment grades. Automotiv ive: 1 to 5 years s Plastic ics: s: 3 to 6 months Decorativ ive: 6 months s to 1 Inks: ~ ~ 1 month Cosmetic ics: s: 1 to 2 years s year 16
Our Technical Capability PEOP OPLE • 100+ Scientists & Technical resources • Global experts' panel for competency enhancement • Analytical & Application Lab experts INF NFRA RASTRU RUCT CTUR URE • Dedicated site for R&D with investments > USD 10Mn • State of art equipment for characterization and composition analysis • Ability to handle crystal modification & surface treatments • Ability to ensure reproducibility in end application PROC OCESS • Stage Gate Process • DOE approach to solutions 17
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