Q1 FY18 Beardsell Limited Earnings Presentation PDF

 September - 2017 Q1 FY18 Earnings Presentation Disclaimer Certain statements in this document may be forward-looking statements. Such forward- looking statements are subject to certain risks and uncertainties like government actions, local political or economic developme...

 September - 2017 Q1 FY18 Earnings Presentation Disclaimer Certain statements in this document may be forward-looking statements. Such forward- looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward looking statements. Beardsell Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances. 2 Content 1 Q1FY18 Performance 3 Growth Drivers 2 Business Overview 4 Financial Overview 3 Business Highlights Pre-fab continuing to gain traction Entry into new geographies Government order continues during the quarter, J&K project – IIT Jammu (Partition walls); Uttarakhand however implementation started in the 2nd quarter villas; Madhya Pradesh villas project Delay in orders by our clients due to the implementation Starting a factory in Delhi to cater to the Quikbuild of GST projects in the North Indian region Quikbuild now approved by CPWD and various state PWDs Quikbuild order pipeline in excess of Rs. 100 million MOU signed for sale of land & building Launched authorized contractor/licensee program to MOU signed for sale of land and building at MIDC, scale up Quikbuild implementation Patalganga for Rs 80 million. Steel fire-rated/clean room door manufacturing expected to commence by Q3 FY18 from Karad facility – Capex already incurred in Q1/Q2 FY18 A1+(SO) rating received from CRISIL for CP Karad facility also to supply steel parts for existing issuance appliance customers Propose to issue commercial paper for Rs. 10 cr to reduce interest costs for working capital Packaging – steady performance A1+(SO) is top rating for commercial paper – Expanding & deepening relationship with leading expected yield on issuance ~ 7% consumer durable players – Godrej & Boyce, Haier This will be used to replace existing usage of Cash Subsidiary unit in Supa, Maharashtra expected to boost Credit account profitability starting Q3 FY18, unit volumes expected to increase 50% by Q4FY18. Supa subsidiary profitability should approx. equal all other EPS units combined (post-tax) by Q1 FY19 Progressive outlook, professional approach 4 Environment Overview Prefab outlook promising GST: Prefab is a largely unorganised industry; GST expected to be a positive for an established and organised player like Beardsell; enabling greater market access o Affordable housing will be exempt from GST and will therefore be less expensive under the GST regime o ITC now available for all our pre-fab products – huge reduction in tax incidence, especially for our corporate customers To speed up construction of houses under Pradhan Mantri Awas Yojana, PM has asked Ministry for Urban Development to look at 3D construction technology in 25 major cities Large Govt and Private sector enquiries in pipeline 5 Managing Director’s Comments “We have faced some challenges in the first 5 months Commenting on of this fiscal owing to delay in order placement. While the results, Mr. we believe GST will be a significant positive for the Bharat Anumolu, economy in the longer term, lack of clarity also saw Managing some delay in placing orders Director, Beardsell Ltd said In September however we have seen a good uptick in order placement and are optimistic of this momentum continuing through the second half of the year GST also results in a move to the organised sector which is a big positive for us Progressive outlook and a thoroughly We are extremely optimistic of the prospects of both professional approach our Prefab and Packaging businesses ” 6 Financial – Q1 FY18 Performance 7 P&L Snapshot Q1 FY18 Q1 FY17 Revenue -14% (Rs mil) EBITDA -89% PAT -144% Topline impacted owing to deferment of capex by customers impacted largely by demonetisation and GST implementation 8 P&L Snapshot Reconciliation between the results reported under previous Generally Accepted Accounting Principles(IGAAP) and Ind AS are summarised below: Year Quarter Ended Ended 30-Jun-17 31-Mar-17 30-Jun-16 31-Mar-17 Particulars (Rs mn) (Unaudited) Ind AS (Audited) (Unaudited) (Audited) Revenue from operations 381 394 443 1,904 Profit before tax (12) 13 27 90 Profit after tax (7) 4 16 48 Total comprehensive income 14 - - - 9  Balance Sheet Snapshot – As on 30th June. 2017 Networth Fixed Assets Cash & Investments Net Debt (Rs mil) 10 Business Overview – Pre-fabricated buildings 11  Pre-fabricated Business Revenue Comments on performance 198 149 Marginal hit in revenues mainly due to customers postponing orders – no project cancellations though Q1 FY17 Q1 FY18 Good order flow being seen in September RO Cabins (Karnataka) repeat order received and implementation started in Q2 FY18 EBIT Quikbuild order pipeline now in excess 35 of Rs. 100 million as on Sept Quikbuild enquiries in negotiation stage for various large projects: Villas, 10 anganwadis, clinics/mortuaries, sanitation blocks – totaling Rs. 1,000 million Q1 FY17 Q1 FY18 (Rs mil) 12 Pre-fabricated buildings Growth Drivers Prefab. business operations since last 20 years Business success dependent on efficient time bound Growing awareness of the cost effectiveness of delivery - Beardsell benefits from its commitment towards pre-fabricated structures timely delivery Launched franchisee/authorized licensee model for Given the complexity of the business there are high Quikbuild to scale up implementation entry barriers resulting in fewer market players, leading Isobuild projects gaining acceptance in government to consistent margins agencies resulting in follow-on orders Leveraging expertise and know-how in the prefabricated market addressing customized needs of customers with a Emphasis from the PM to use 3D technology to good delivery model in the South India construct affordable homes for the smart cities Strong balance sheet to support strategic acquisitions Focusing on clients/projects with assured payment going forward terms and good margins. Quikbuild business gaining traction: Major focus on southern states – We expect Quikbuild to maintain its momentum – Rs 1,000mn in enquiries being negotiated 13 Pre-fabricated Product Offerings Sandwich-panel based cold storage Cold Storages Superior insulation property Application used in cold storages for Marine, Fruits, Pharma., perishable items Value-oriented design philosophy Affordable Housing Earthquake resistant Use of lightweight materials Durable and long-lasting Student Housing Modular Housing Worker housing Refugee housing Housing for military personnel etc Can be dismantled and re-used in a Site Offices different location if needed More energy efficient Can be constructed in remote areas 14 Product Information Benefits for Housing Projects The design, production, transportation and erection of the building unit reduces The Quikbuild panel brings time-lines of projects of all uniformly high quality to a sizes compared to the RCC construction project of any built structures size. Fast Uniform Implementat Structural Simple Low Cost quality ion Integrity Construction Reduced labor cost coupled with Earthquakes, hurricanes The Quikbuild system lower raw material and and high winds resistant consolidates the masonry, construction equipment cost is a insulation, plastering and primary benefit to any housing utilities addition steps thus project. Low weight of the reducing the construction product also reduces logistical complexity. costs. 15 Completed Projects - I 16 Completed Projects - II 17 Business Overview – Packaging & Molded Products Business (Consumer Durables) 18  Packaging & Molded Products Business Revenue 162 157 Comments on performance Strong relationships built over years Q1 FY17 Q1 FY18 with several leading consumer durable players Increased revenues from existing large customers – Haier & Godrej EBIT 28 Started flexible foam business – seat cushions, other custom flexible PU 7 products Q1 FY17 Q1 FY18 (Rs mil) 19 Packaging & Molded Products Business Consistently increased volumes catering to a set of Growth Drivers high value / bigger ticket size customers Introduced new product variants rather than Institutional customers are expected to expand increasing prices has kept the margins under their production capacities over the next 3 years control – Beardsell expected to pick up a major share of Given the complexity of the business there are their increased EPS requirements high entry barriers resulting in fewer market New client addition from sectors untapped earlier players, leading to consistent margins will be another key driver for growth With rising demand and quality service sales Consistently increasing volumes and introducing expected to increase over the next 2-3 years newer product variants Increase in EPS sales, mainly due to aggressive marketing and cost advantages vis-à-vis competitors 20 Packaging & Molded Products Business Beardsell has been spearheading the innovations in packaging design and development and has successfully developed cost effective and shock resistant EPS packaging over the years The anti-static packaging is a pioneering solution designed by the company offers a viable solution for protecting electronic and ordinance items apart from explosive goods. The Packaging business provides complex packaging solutions for various top consumer durable companies ensuring safe and secure transportation 21 Growth Drivers 22 Driving Organizational Growth Bid for turnkey projects both from private and government bodies Pre-fabricated Healthy growth expected on the back of rising acceptance in residential buildings and commercial space given its benefits compared to traditional civil structures Immunity from raw material price volatility - Larger customers negotiate processing contracts at flat processing charge Packaging Under utilized capacity provides room for meeting higher demand with no additional capex cost. Pharma, Electronics Rising government requirements to drive Isobuild (steel sandwich panel) & Specialty business 23 Financial Overview 24 Financials – Income Statement Particulars (Rs mn) FY14 FY15 FY16 FY17 Net Sales 1,061.2 1,418.2 1,608.4 1,904.3 EBITDA 57.1 73.4 123.2 178.1 EBITDA Margin 5.4% 5.2% 7.7% 9.4% EBIT 34.8 38.1 85.7 124.6 Interest 23.8 50.7 58.0 55.9 Tax Expense 7.3 0.5 18.5 42.1 Net Profit 12.9 (1.0) 31.4 48.1 Earnings Per Share (Rs.) 2.8 (0.2) 6.7 10.3 Figures for FY15, FY16 & FY17 are consolidated 25  Financials – Balance Sheet Performance Particulars (Rs mn) FY14 FY15 FY16 FY17 Particulars (Rs mn) FY14 FY15 FY16 FY17 EQUITY AND LIABIALITIES ASSETS SHAREHOLDERS’ FUND: NON-CURRENT ASSETS: (a) Share Capital 46.8 46.8 46.8 46.8 (a) Tangible Assets 399.5 433.1 508.6 514.6 (b) Reserves and Surplus 285.7 282.8 307.4 347.7 (b) Work In Progress 18.9 33.9 19.9 13.4 Shareholders fund 332.5 329.6 354.2 394.5 (c) Intangible Assets - - - NON-CURRENT LIABILITIES (d) Goodwill on consolidation - 22.1 24.2 24.2 (a) Long-term borrowings 125.6 154.4 190.0 169.7 (d) Non-current investments 2.6 2.6 2.6 2.6 (b) Deferred tax liability (net) 18.4 18.6 21.5 22.4 (e) Long term loans and advances 34.5 34.2 24.5 16.1 (c) Other long term liabilities 0.9 0.3 1.4 1.9 (f) Other non-current assets - - - - (d) Long-term provisions 11.6 12.8 14.0 8.3 Non current Assets 455.5 526.0 579.9 570.9 Non current Liabilities 156.5 186.1 227.0 202.3 CURRENT ASSETS: CURRENT LIABILITIES (a) Inventories 80.3 122.7 137.9 118.8 (a) Short-term borrowings 117.7 174.0 146.6 155.2 (b) Trade receivable 208.3 264.4 288.9 362.1 (b) Trade Payables 186.8 263.9 343.3 349.4 (c) Cash and cash equivalents 68.3 53.1 52.6 48.0 (c) Others current liabilities 37.1 65.5 79.1 80.4 (d) Short term loans & advances 27.5 60.1 80.8 73.7 (d) Short-term Provisions 9.4 7.5 1.7 28.0 (e) Other current assets 0.1 0.6 11.9 36.3 Current liabilities 350.9 511.1 570.7 613.0 Current Assets 384.5 501.0 572.1 638.9 TOTAL 839.9 1027.0 1152.1 1209.8 TOTAL 839.9 1,027.0 1,152.1 1209.8 Figures for FY15, FY16 & FY17 are consolidated 26 Contact Details For more information contact: Gavin Desa / Rabindra Basu CDR India Tel: +91 22 6645 1237 / 1248 Fax: +91 22 6645 1213 E-mail: [email protected] / [email protected] 27 Thank you 28