Ester Industries Limited · NSE:ESTER
Ester Industries — Q3 FY23 Earnings Presentation
35 slides from Ester Industries's earnings presentation, February 2023
Slide 1: Investor Presentation February 2023
vestor Presentation IDUSTRIES LTD. February, 2023
Slide 2: Forward-looking statements 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 diff
Slide 3: Agenda
About Us Q3 & 9M FY23 Performance Ester 2.0 Investment Thesis Business Overview 3
Slide 4: Diversified business portfolio and sales mix
Sales Mix (9M FY23) Diversified business portfolio Polyester Comprehensive product suite Films 71% State-of-the-art manufacturing facilities Specialty Global footprint Polymers 15% Experienced management team *Engineering Plastics 14% Strong Financial profile * Results for 9 months ended 31st Dec 22
Slide 5: Company key facts
1985 GURGAON, INDIA #2 Year of Incorporation Corporate Headquarters Business Segments* 500 – KHATIMA, About 50 COUNTRIES SITARGANJ, GURGAON CRISIL A (stable outlook) 149 - HYDERABAD Global Footprint People Credit Rating (Long Term) • PF - Polyester Film; SP - Specialty Polymers (EP - Engineering Pla
Slide 6: Locations of manufacturing facilities
Sitarganj Haryana Uttarakhand Gurgaon Khatima Telangana* Corporate Headquarter Manufacturing facility *Commercial production at New BOPET Film plant at Telangana commenced on 20th January 2023 6
Slide 7: We serve about 50 countries
ESTER IMETETSS LT, Ha hot ok eS *
Slide 8: 8
8
Slide 9: Q3 and 9M FY23 performance
Particulars – Continued Operations (Rs.cr) Q3 FY23 Q3 FY22 % 9M FY23 9M FY22 % ▪ Performance subdued during the quarter under review Revenues 196.66 288.45 (31.8) 825.17 807.15 2.2 ▪ External challenges impact revenue and profitability EBITDA (including Non operating income) 6.15 46.63 (86.8) 98.37
Slide 10: Chairman's commentary on results
Commenting on the results, Mr. Arvind Singhania, Chairman, Ester Industries said “Our performance during the quarter under review has been subdued. Specialty Polymer business during the quarter under review has faced some headwinds from recessionary concerns prevailing across its core end user marke
Slide 11: Ester 2.0 Specialty Company
ESTER INDUSTRIES LTD. > Ester 2.0 “Specialty” Company 11
Slide 12: Ester 2.0
Knowledge Innovation ESTER Customization 2.0 Technology 12
Slide 13: Ester 1.0 vs Ester 2.0 achievements
Achievements Ester 2.0 Ester 1.0 ▪ Specialty Polymer SBU ▪ Commoditized product Revenues portfolio o Largely patent protected (FY12-FY16) (FY17-FY22) – high entry barriers ▪ Limited bargaining 2.4% CAGR 14.7% CAGR o High sustainable margins power o High growth potential ▪ Low and unpredictable EBITD
Slide 14: Revenues, EBITDA, margins and PAT
Revenues (Rs.cr) EBITDA (Rs.cr) 1,405 236 243 928 1,028 1,039 992 189 886 896 824 700 771 707 108 74 71 70 66 35 41 42 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 EBITDA Margins (%) PAT (Rs.cr) 142 139 24.6% 100 19.1% 17.9%* 11.1% 31
Slide 15: Debt, ROCE and dividend payout
Debt (Rs.cr) ROCE (%) 335 363 348 304 300 290 31% 267 28% 26% 237 242 142 157 14% 8% 7% 7% 7% 3% 3% 3% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Dividend Payout (%) 37% 21% 20% 20% 13% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% FY12 FY13 FY14 FY
Slide 16: Shareholding pattern
34.23% 35.62% 35.57% 35.71% Mar 21 Mar 22 Jun 22 Dec 22 64.04% 64.04% 64.04% 64.04% 1.73% 0.34% 0.39% 0.25% 16
Slide 17: Investment thesis
Specialty Polymers - Polyester Films - High Largely IP protected share of value added product portfolio products Rewarding shareholders Scaling up capacities with dividend Strong balance sheet 17
Slide 18: Green initiatives, focus on sustainability
Green Initiatives Focus On Sustainability BIO-BASED Fuel Consumption 7 2 3 PVC FREE fe E . 3 2 wist Wrap / Shrink Film) BIO-BASED Raw Material b, ~~ ie SS PACKAGING MATERIA x Reduction/ Recycling J 4 ® iL REPLACEMENT a lized High Barrier film) bal
Slide 19: Specialty Polymer
oe 4 ¢ ESTER INDUSTRIES LTD. Specialty Polymer 19
Slide 20: Largely IP protected business
Customer High entry retention Largely IP barriers – ensured as High margin Marquee Export protected patent largely business clientele oriented business protected patent protected
Slide 21: Business opportunity: stain resistant carpet master batch
Problem Solution Business Opportunity USA, largest High cost towards carpet stain removal Flexible low cost solution producer of Carpets ▪ Stain marks on (nylon) carpets given ▪ Ester has developed a PET based master & Rugs boasts of spillover / spillage of liquid shortens its batch, which imparts p
Slide 22: PBT polymers supply to global chemical leader
Regularly manufacturing & supplying Innovative Signed ‘Manufacture and Supply Agreement’ with a Polybutylene Terephthalate (PBT) polymers to a global global chemical leader in April 2019 effective 1st April chemical leader 2019 for 2 years for 400 MT per annum Ester Industries is among the only comp
Slide 23: Applications
Consumer electronics Polyethylene Terephthalate (PET) Textile – Flame Retardant, Deep dyeable master batches, Cationic dyeable master batch Applications Polybutylene Terephthalate (PBT) Carpets – Stain Resistant Master Batches Products Carpets – Deep Dyeable Master Batch Polyethylene Naphthalate (PE
Slide 24: Specialty Polymers Q3 FY23 performance
Figs. in cr Q3 Q3 9M 9M Particulars % % FY23 FY22 FY23 FY22 Sales 405 953 (57.5) 2,735 2,698 1.3 (Vol's MT) Revenue 16 44 (63.6) 146 125 16.8 EBIT 4 12 (66.7) 45 42 7.1 Margins (%) 25.0 27.3 (230 bps) 30.8 33.6 (280 bps) ▪ Q3 FY23 performance was impacted due to recessionary concerns in USA, a key m
Slide 25: Packaging Film Business
ESTER INDUSTRIES LTD. Packaging Film Business 25
Slide 26: Global and domestic scenario
Global Scenario: Domestic Scenario: ▪ Demand growth of 6% - 6.5% ▪ Strong double digit growth rate of 11%-13% pa over past 5 years ▪ BOPET film used in flexible packaging applications will continue to be the key end use sector, accounting for ▪ Low per capita consumption of BOPET; new innovative nea
Slide 27: Film business capacity and key facts
108,000 23,200 #30+ MTPA MTPA Years of experience Polyester Film capacity Metallized Polyester Film capacity (including Telangana capacity) (including Telangana capacity) About 67,000 Telangana 50 22% MTPA Plant Export market Share of value-added Polyethylene Terephthalate Commercial production (# o
Slide 28: Value added mix and film business EBIT
Value Added (%) *Film business (excl. chips) Domestic Exports 20 22 17 17 (Rs.cr) FY19 FY20 FY21 FY22 30 23 29 30 EBIT 118 180 219 150 70 77 71 70 Margins (%) 16.4 24.5 31.9 17.8 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 Product mix – despite reduction in Pass through business model – recent past, aim
Slide 29: Applications and products
White Opaque High Clear Flexible Packaging Applications High Barrier Embossable Barrier Packaging Products Heat Saleable Twist Wrap Embossing Shrink film Anti - Static Lidding Metalized High Barrier Matte Label & Graphics 29
Slide 30: Film business Q3 FY23 performance
Figs. in cr Particulars Q3FY23 Q3FY22 % 9M FY23 9M FY22 % Sales (Vol’s MT) 12,734 14,248 (10.6) 42,432 44,122 (3.8) Revenue* 181 244 (25.9) 679 682 (0.4) EBIT+ (2) 40 (105.0) 65 104 (37.5) Margins (%) -1.1 16.4 (1750 bps) 9.5 15.25 (575 bps) ▪ Q3FY23 sales (in both volumetric & value terms) impacted
Slide 31: New Telangana BOPET plant commences production
▪ Ester Filmtech Limited, a wholly-owned-subsidiary of Ester Industries Limited, commences commercial production on 20th January 23 at new Polyester (BOPET) film manufacturing plant in the State of Telangana. ▪ Spread over 50 acres, the 48,000 MTPA Polyester Film and 10,000 MTPA Metallized Polyester
Slide 32: Engineering Plastics
Engineering Plastics
Slide 33: Engineering Plastics divestment
Figs. in cr EP SBU - Discontinued Operations % 9M FY23 9M FY22 % Q3FY23 Q3FY22 ▪ On 15th September 2022, EIL divested its Revenue from Operations - 77.16 - 136.01 210.39 (35.35) Engineering Plastic Business on Slump Sales basis to Radici Plastics India Private Profit before Tax - 16.46 - 17.68 56.00
Slide 34: About Us and contact information
About Us: (CIN :- L24111UR1985PLC015063) Incorporated in 1985, Ester Industries Limited (EIL) is an ISO 9001:2008,ISO 22000:2005,TS16949:2002 certified Company engaged in the manufacture of polyester films, specialty polymers and polyester chips with manufacturing facilities located in Khatima & Sit
Slide 35: Thank You
KK ERS 2. 1 nt tines een a ae (NS. ROC AH Rit) la At ei § OE LTT aL | ‘iy 7 a WSs Seep ~ = ESTER Thank You INDUSTRIES LTD.