Beardsell Limited Q2&H1 FY18 Earnings Presentation PDF

 December - 2017 Q2&H1 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 development...

 December - 2017 Q2&H1 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 Q2&H1FY18 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, however J&K project – IIT Jammu (Partition walls); Uttarakhand 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 Sale of land & building executed Quikbuild orders in excess of Rs. 100 million being negotiated Sale of land and building at MIDC, Patalganga for Rs. Launched authorized contractor/licensee program to 80 million has been completed as of Nov 2017 scale up Quikbuild implementation Profit on sale of Rs 25.3 million will be booked in Q3 Steel fire-rated/clean room door manufacturing FY17 commenced operations at the Karad facility – Capex already incurred in Q1/Q2 FY18 Commercial Paper issuance Karad facility also to supply steel parts for existing Issued commercial paper to Indiabulls Liquid Fund for appliance customers Rs. 10 crore @ 8% to reduce interest costs for working capital Packaging – steady performance Expanding & deepening relationship with leading Appointment of CFO consumer durable players – Godrej & Boyce, Haier Board of Directors of the Company has appointed Mr. Subsidiary unit in Supa, Maharashtra expected to boost V.V. Sridharan as Chief Financial Officer 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 – Affordable housing will be exempt from GST and will therefore be less expensive under the GST regime – 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 last couple of Commenting on months. We are now witnessing a gradual turn around the results, Mr. and expect order booking to be healthy Bharat Anumolu, Managing Director, Beardsell Given the election bound states we are expecting a large Ltd said order win in Jan 2018 and completion by April 2018 for at least one low cost housing project, a time bound activity where we qualify on technical parameters with strong references Our packaging business has grown at a healthy pace with increasing contribution from our existing customers. We are also undertaking cost reduction steps to improve margins We remain optimistic on the prospects of both our Prefab and Packaging businesses” 6 Financial – Q2&H1 FY18 Performance 7 P&L Snapshot Q2 FY18 Q2 FY17 Revenue -27.9% (Rs mil) EBITDA -84.7% PAT -140.0% Topline impacted owing to deferment of capex by customers impacted largely by demonetisation and GST implementation 8 P&L Snapshot H1 FY18 H1 FY17 Revenue -21.5% (Rs mil) EBITDA -86.4% PAT -136.2% Topline impacted owing to deferment of capex by customers impacted largely by demonetisation and GST implementation 9 P&L Snapshot Reconciliation between the results reported under previous Generally Accepted Accounting Principles(IGAAP) and Ind AS are summarised below: Quarter Ended Year Ended 30-Jun-17 30-Sep-16 30-Sep-17 31-Mar-17 Particulars (Rs mn) (Unaudited) (Unaudited) (Unaudited) Ind AS (Audited) Ind AS Ind AS Revenue from operations 359 381 498 1,904 Profit before tax (11) (12) 39 90 Profit after tax (10) (7) 25 48 Total comprehensive income (2) 14 (1) - 10  Balance Sheet Snapshot – As on 30th September. 2017 Networth Fixed Assets Cash & Investments Net Debt (Rs mil) 11 Business Overview – Pre-fabricated buildings 12  Pre-fabricated Business Revenue Comments on performance 453.6 330.1 Marginal hit in revenues mainly due to 245.3 customers postponing orders – no 180.6 project cancellations though Export order in pipeline for West Q2 FY17 Q2 FY18 H1 FY17 H1 FY18 Africa expected in Q4FY18 Started manufacturing own machinery for Quickbuild which will lead to savings in capex cost Quikbuild enquiries in negotiation stage EBIT for various large projects: Villas, anganwadis, clinics/mortuaries, 62.6 sanitation blocks – totaling Rs. 1,000 million 31.6 24.4 14.4 Expect order finalisation by end December 2017 Q2 FY17 Q2 FY18 H1 FY17 H1 FY18 (Rs mil) 13 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 14 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 15 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. 16 Completed Projects - I 17 Completed Projects - II 18 Business Overview – Packaging & Molded Products Business (Consumer Durables) 19  Packaging & Molded Products Business Revenue Comments on performance 433.8 371.3 Strong relationships built over years 218 with several leading consumer durable 163.7 players Q2 FY17 Q2 FY18 H1 FY17 H1 FY18 Focus on cost reduction to improve margins Increasing revenues from existing large customers – Haier & Godrej EBIT Started flexible foam business – seat 59.1 cushions, other custom flexible PU 31 products 20.8 10.5 Q2 FY17 Q2 FY18 H1 FY17 H1 FY18 20 (Rs mil) 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 increasing prices has kept the margins under expand their production capacities over the control next 3 years – Beardsell expected to pick Given the complexity of the business there are up a major share of their increased EPS high entry barriers resulting in fewer market requirements players, leading to consistent margins New client addition from sectors untapped With rising demand and quality service sales earlier will be another key driver for growth expected to increase over the next 2-3 years Consistently increasing volumes and Increase in EPS sales, mainly due to aggressive introducing newer product variants marketing and cost advantages vis-à-vis competitors 21 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 22 Growth Drivers 23 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 24 Financial Overview 25 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 26  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 27 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] 28 Thank you 29