AARTI Industries Ltd · NSE:AARTIIND
AARTI Industries — Investor Presentation (June 2017)
64 slides from AARTI Industries's investor presentation, June 2017
Slide 1: Cover letter to stock exchanges
AART( (NOUSTRIES LIMITED 71, Udyog Kshetra, 2nd Floor, Mulund - Goregaon Link Road, Mulund (West), Mumbai-400 080.INDIA @: 00-91-6797 6666, 2591 8195 e Fax : 00-91-22-2590 4806 / 2565 3185 / 3234 Regd. Office : Plot No. 801 / 23, G.1.D.C. Estate, Phase III, Vapi - 396 195, Dist. Valsad, Gujrat.INDIA
Slide 2: Investor Presentation June 2017
Investor Presentation June - 2017
Slide 3: Disclaimer
Disclaimer AARTI INDUSTRIES LIMITED may, from time to time, make additional written and oral forward looking statements, including statements contained in the company's filings with Bombay Stock Exchange and National Stock Exchange, and our reports to shareholders. The company does not undertake to
Slide 4: Vision
Vision To emerge as a ‘Global Partner of Choice’ to leading consumers across the globe of Speciality Chemicals and Intermediates for Pharmaceuticals, Agro Chemicals, Polymers, Pigments, Printing Inks, Dyes, Fuel additives, Aromatics, Surfactants and various other speciality chemicals 3
Slide 5: Profile
Profile Aarti is one of the Globally ranks at Promoters are First Generation Technocrats Highly integrated operations Present in niche most 1st – 4th position • 5 of 6 Promoter Directors are engineers. 3 of 4 • Cost-efficient processes chemistry spaces. competitive for 75% of its Founder Promoters a
Slide 6: Transformation Journey
Transformation Journey Hitting right milestones at right time • Merged Salvigor Labs, producers of DMS and Set up additional Sulphuric Acid and unit at Vapi to their downstream Set up Alchemie Merged manufacture products into Aarti. (Europe) Ltd. a Alchemie Aarti Organics Pvt NCB with • Change of na
Slide 7: Transformation Journey
Transformation Journey • Custom Synthesis division (Vapi) received • Merged • Scaled NCB capacity from 57,000 USFDA approval. manufacturing TPA to 75,000 TPA • Upgraded division of Anushakti • Expanded caffeine capacity hydrogenation unit Chemicals and • Merged promoter’s investment from batch to Dr
Slide 8: What differentiates us
What differentiates us Our product mix comprises more Most chemical companies focus than 125 research-led products on a handful of products We have focused on the manufacture Most chemical companies focus on a of integrated derivatives fragmented standalone product mix We have global capacities & ar
Slide 9: Global Partner of Choice
Global Partner of Choice Aarti Industries is a rare instance of a global speciality chemicals company that combines process chemistry competence with scale-up engineering competence Vendor servicing to Make-to-stock to Partner of Choice Transform robust Make-to-order from Our Multiproduct, Committed
Slide 10: People Connect
People Connect Though we are a B2B Company, our products touch people in various ways in their everyday lives Speciality Chemicals Polymer and additives: Our products are used in aircrafts, automobiles, cruise Liners, electro-static precipitators, bullet- proof jackets, electronic gadgets and variou
Slide 11: People Connect
People Connect Though we are a B2B Company, our products touch people in various ways in their everyday lives Pharmaceuticals Active Pharmaceutical Ingredients: Intermediates for innovators and generic companies | Our products are used in anticancer, anti-asthma and anti- hypertensive drugs as well
Slide 12: Global presence – Exports by geography
Global presence – Exports by geography 50% of revenue coming from global markets, and the number is expected to increase Europe America 25% China 28% 16% Japan 10% Rest of the World 21% Aarti’s esteemed Customer list includes Leading Multinationals and Global Giants Aarti’s has a marketing & distrib
Slide 13: Speciality Chemicals – Major Customers
Speciality Chemicals – Major Customers • Diversified customer base – 150+ export customers & 500+ domestic customers • Customers spread across the globe in 60 countries with major presence in USA, Europe, Japan & India Agro Intermediates & Fertiliser 20-25% of revenues Polymer & Additives 15-20% of
Slide 14: Speciality Chemicals – Major Customers
Speciality Chemicals – Major Customers Pigments, Paints, Printing Inks, Dyes 15-20% of revenues Pharmaceuticals & Other Speciality Chemicals 15-20% of revenues Other Speciality Chemicals include fuel additives, Oil extraction, Rubber chemicals, Optical brighteners, UV absorbers and FMCG 13
Slide 15: Industry Accreditation for Exports
Industry Accreditation for Exports CHEMEXCIL presented the Company ‘Trishul Award’ for outstanding export performance for FY14-15 and ‘Award of Excellency’ for the consistency in export performance for FY13-14 14
Slide 16: Knowledge, Process, Innovation Superiority
Knowledge, Process, Innovation Superiority • Benchmark R & D Program – Introduced pioneering technology and manufacturing processes in India – DSIR (Department of Scientific and Industrial Research) approved Facilities – Dedicated pool of over 100 engineers & scientists – GMP approved pharmaceutical
Slide 17: Pioneering innovation landscape
Knowledge, Process, Innovation Superiority • Directly utilize HCL gas, byproduct of Benzene chlorination, for Chloro Sulphonic Acid (CSA) manufacturing Pioneering • Produce 100% Export grade Calcium Chloride Granules innovation from diluted HCL landscape – • Scrub NOx in Sulphuric Acid from MDCB pla
Slide 18: Industry Accreditation for Innovation
Industry Accreditation for Innovation In recognition of outstanding achievements, the CHEMTECH Foundation accorded Aarti Industries Indian Institute of Chemical Engineers bestowed with the ‘Outstanding Achievement for Innovation’ the prestigious Lala Shriram National Award for award for the company’
Slide 19: Manufacturing Facilities
Manufacturing Facilities INDIA 16 manufacturing units Bhachau, Kutch Madhya Pradesh Gujarat Jhagadia Pithampur Dahej Sarigam Vapi Silvassa Tarapur Dombivali HEAD OFFICE - MUMBAI Mumbai Maharashtra PRODUCTION SITES 18
Slide 20: Manufacturing Facilities
Manufacturing Facilities PDA Facility, Jhagadia R&D Centre Zero Discharge Setup, Jhagadia Section of Jhagadia Unit 19
Slide 21: Pharma Units
Pharma Units USFDA Unit, Tarapur Section of USFDA Plant, Tarapur Section of USFDA Plant, Tarapur 20
Slide 22: Management Profile
Management Profile Driving a transformational enterprise - hitting the right milestones at the right juncture Nurtured into a globally leading company in core products Established track record of execution where returns have improved with growing capex Pushing innovation agenda – introducing high va
Slide 23: Management Profile
Management Profile Mr. Shantilal Shah – Vice Chairman Mrs. Hetal Gogri Gala – Director Founder Director Electronics Engineer and MDP from IIM – Ahmedabad Commerce Graduate Portfolio: Pharma, HR & Admin Portfolio: Financial Management Mr. Parimal Desai – Director Mr. Kirit Mehta – Director Founder Di
Slide 24: Key Financials
AARTI INDUSTRIES LIMITED Key Financials my
Slide 25: FY17 Highlights
FY17 Highlights Financial • FY17 Consolidated EBITDA up by 14% YoY to Rs. 653 crore with an EBITDA margin of 22% • FY17 Consolidated PAT up by 23% YoY to Rs. 316 crore • CRISIL has upgraded its ratings on our bank facilities and debt instruments to 'CRISIL AA- /Stable/CRISIL A1+' from 'CRISIL A+/Pos
Slide 26: FY17 Highlights
FY17 Highlights • In Q4FY17, operationalized captive co-generation power plant at Jhagadia, Kutch and Vapi. AIL now has a total of five power plants – two at Vapi and one each at Jhagadia, Kutch and Tarapur; which would help reduce power costs significantly • Operationalized Solar plants with aggreg
Slide 27: Q4 & FY17 P&L (Standalone)
Q4 & FY17 P&L (Standalone) Y-o-Y Y-o-Y Particulars Q4 Q4 FY17 FY16 Growth Growth (Rs. Crore) FY17 FY16 (%) (%) Gross Income from Operations 3,053 2,943 4% 835 752 11% • Depreciation has Net Income from Operations 2,827 2,698 5% 773 694 11% increased as new production facilities have Exports 1,415 1,
Slide 28: Q4 & FY17 – Speciality Chemicals (Standalone)
Q4 & FY17 – Speciality Chemicals (Standalone) Revenue 2,357 2,456 573 664 • Speciality Chemicals volume growth increased by 10% YoY in Q4 and 8% YoY in FY17 Q4 Q4 FY16 FY17 FY16 FY17 • Revenues are linked to pass through of key raw-material prices EBIT • FY17 EBIT expanded by 10% as value addition c
Slide 29: Q4 & FY17 – Other Businesses (Standalone)
Q4 & FY17 – Other Businesses (Standalone) • Debottlenecking and expansion activities have facilitated growth in pharma volumes Pharmaceuticals Pharmaceuticals Revenue EBIT • Since major fixed costs already built-in, incremental volumes 426 426 48 will result in significant increase in segmental prof
Slide 30: FY17 P&L (Consolidated)
FY17 P&L (Consolidated) Speciality Speciality EBIT Y-o-Y Particulars Revenue FY17 FY16 Growth (Rs. Crore) (%) 2,430 2,569 Gross Income from Operations 3,165 3,013 5% 504 566 Net Income from Operations 2,978 2,760 8% FY16 FY17 FY16 FY17 Exports 1,523 1,352 13% Pharmaceuticals Pharmaceuticals % of Tot
Slide 31: Balance Sheet (Consolidated)
Balance Sheet (Consolidated) Particulars As on As on (Rs. Crore) Mar 31, 2016 Mar 31, 2017 Shareholders Funds 1,189 1,426 Net Debt 1,290 1,561 Tangible Fixed Assets 1,246 1,695 • Strong execution of growth- Net Current Assets 876 964 oriented investments resulted in positive impact on returns on cap
Slide 32: Revenue Performance (Consolidated)
Revenue Performance (Consolidated) Operating revenues have Revenue Export Deep engagement with grown on the back of global customers in 4,000 CAGR: 8.7% strong volume growth in 3000 Speciality chemicals and 2,908 2,780 2,927 key business segments 3,000 2,632 pharma. In addition, part and better prod
Slide 33: EBIT Performance (Consolidated)
EBIT Performance (Consolidated) Higher growth relative to EBIT revenue highlights value CAGR: 16.6 % 615 addition delivered by AIL 542 447 333 366 FY13 FY14 FY15 FY16 FY17 Speciality Chemicals Pharmacuticals Home & Personal Care CAGR: 15.4% 566 CAGR: 52.0% 48 5 504 408 39 4 36 319 333 30 3 9 1 (0) F
Slide 34: Financial Highlights – (Consolidated)
Financial Highlights – (Consolidated) Gross Profit (Rs. Cr.) & Gross margin EBITDA & Net Profit (Rs. Cr.) 1500 41.3% 44.9% 50% 800 316 400 38.8% 36.0% 37.0% 257 40% 600 206 300 1000 30% 134 162 400 200 20% 500 200 100 1076 1244 1422 361 401 466 572 656 10% 813 947 0 0% 0 0 FY13 FY14 FY15 FY16 FY17 F
Slide 35: Financial Highlights – (Consolidated)
Financial Highlights – (Consolidated) 21.1% 20.0% 21.2% 23.8% 23.4% 25.9% 4,000 25.0% 1,500 24.1% 30.0% 21.8% 20.0% 20.0% 20.0% 25.0% 3,000 1,000 20.0% 15.0% 2,000 15.0% 10.0% 500 10.0% 1,710 2,006 2,193 2,400 2,862 1,016 1,114 1,362 1,000 756 871 5.0% 5.0% 0 0.0% 0 0.0% FY13 FY14 FY15 FY16 FY17 FY1
Slide 36: Shareholding Pattern
Shareholding Pattern Increasing Institutional Ownership …. 30.95% 27.70% 31.46% 30.07% 3.11% 3.48% 0.01% Promoters 8.17% 13.08% 12.26% 13.74% 16.15% Individuals Mutual Funds 60.88% 59.22% Foreign Institutional 54.80% 53.78% Investors Others 26.59% 54.55% Financial Institutions/ Banks Mar-14 Mar-15 M
Slide 37: CSR Initiatives
CSR Initiatives Research & Water Development for social Aarti Industries is a Conservation and uplift responsible Environment Promoters of the corporate citizen company have set Cluster and engaged in Rural aside Development community welfare Eradication of Hunger and approximately 40 through Povert
Slide 38: CSR Initiatives
CSR Initiatives Involved in various CSR initiatives with specific focus on Health, Education & Women Empowerment. 37
Slide 39: Business Model
AARTI INDUSTRIES LIMITED Business Model A
Slide 40: Segmental overview
Segmental overview Speciality Home & Personal Pharmaceuticals Chemicals Care Polymer & additives Active Pharmaceutical Agrochemicals & intermediates Non-ionic Surfactants Ingredients (APIs) Dyes, Pigments, Paints & Printing Inks Pharma Intermediates Fuel Additives, Rubber Intermediates for Innovator
Slide 41: Segmental overview
Segmental overview Speciality Home & Personal Pharmaceuticals Chemicals Care Polymer & additives Active Pharmaceutical Agrochemicals & intermediates Non-ionic Surfactants Ingredients (APIs) Dyes, Pigments, Paints & Printing Inks Pharma Intermediates Fuel Additives, Rubber Intermediates for Innovator
Slide 42: Chemical Industry Overview
Chemical Industry Overview Indian Chemicals Industry Future Indian Speciality Chemicals Outlook (USD bn) Industry Future Outlook (USD bn) 214 CAGR 15% 44 CAGR 11% 139 25 Source: FICCI, Tata Strategic FY14 FY19E FY14 FY19E Growth for Indian speciality chemicals is driven by both domestic consumption
Slide 43: Speciality Chemicals Overview
Speciality Chemicals Overview Key Parameters for Global Success Current Narrative in India • SME sector contributes 60% of output Knowledge, Processes, Innovation • Low cost, local market suppliers • Manufacturing Intermediates High Impact on User Industries • Limited Process, Quality, Customer Enga
Slide 44: Opportunities for Indian Chemical Companies
Opportunities for Indian Chemical Companies One of the major challenges in the Chemicals Business is the Compliance of Environmental These compliance requires Norms. Over a period of time, the additional investments into regulating agencies have became ETP setup, which more stringent in ensuring the
Slide 45: Speciality Chemicals – Financial Highlights
Speciality Chemicals – Financial Highlights Revenue CAGR: 7.9% 2,398 2,265 2,384 • Our performance over the last several 2,217 1,758 years has been stronger than industry average • Operating revenues have grown on the back of strong volume growth enabled by FY13 FY14 FY15 FY16 FY17 deep engagement w
Slide 46: Benzene Based Value Chain
Benzene Based Value Chain (NCB) Value Chain Chloro Benzene Value Chain PDA Value Chain Chlorination (Ranked amongst top 3 globally) Nitration (Ranked amongst top 4 globally) Ammonolysis (Ranked amongst top 2 globally) Hydrogenation(Ranked amongst top 2 globally) Others Fluro compounds - Halex chemis
Slide 47: Other Chemicals
Other Chemicals • Sulphuric Acid and Derivatives Sulphuric Acid OLEUM 23% % 65% SULPHUR 1000 OC SO2 SO3 Chloro Sulphonic Acid Di Methyl Sulphate Global leader Steam Co Gen Di Ethyl Sulphate Power Plant (6MW) • Single Super Phosphate (Fertilizer) • Export Grade Calcium Chloride Granules (for Oil Expl
Slide 48: Speciality Chemicals – Business Model
Speciality Chemicals – Business Model Strategic Supplier/Partner of Choice for major Global and Domestic Customer • Create differentiated process • Cost Competitiveness & Economies of Large • High value products Scale • Customization • Ability to cater to large global customers • Participate in Grow
Slide 49: Speciality Chemicals – Business Model
Speciality Chemicals – Business Model EBIT captures value EBIT EBIT Margin 23.7% addition delivered by 22.2% 600 25% AIL. Expansion is the 500 18.1% 17.0% result of: 1) strong 15.0% 20% contribution from 400 15% higher value products 300 10% and 2) Larger 200 economies of scale 5% 319 333 408 504 56
Slide 50: Strategy for Long Term Growth
Strategy for Long Term Growth Increase Market Share and participate in demand growth for existing products and adding products in current value chain • Capacity expansion of Chlorobenzenes and various downstreams in from FY16 to FY18 • Developing value added products for NT and Downstream Value Chai
Slide 51: Growth Projects - New
Growth Projects - New • Nitro Chloro Benzene (NCB) Value Chain – Expanded NCB Capacity of 75,000 tpa from earlier 57,000 tpa, commissioned in Nov 2015 FY13 FY14 FY15 FY16 FY17 Production (in tons) 48,072 54,230 53,400 59,500 63,700 • Chloro Benzene Value Chain – Commissioned New Calcium Chloride Uni
Slide 52: Growth Projects - New
Growth Projects - New New Toluene Value Chain • Nitration Unit at Jhagadia (Nitro Toulene & Downstreams) – New Capacity of 30,000 tpa expected to be commissioned in Q1FY18 • Ethylation Facility at Dahej – Commenced in Sept 2016 – Capacity to manufacture about 8,000 – 10,000 tpa of Ethylene derivativ
Slide 53: Introduction of New Products: Toluene Based Value Chain
Introduction of New Products: Toluene Based Value Chain 52
Slide 54: Growth Projects - New
Growth Projects - New New Projects over FY18 Details Jhagadia Chlorination & Speciality Chemical Complex, Greenfield toluene project Vapi Acid Reconcentration Plant API and Pharma Intermediate Vapi & Tarapur de-bottlenecking and expansions Total Outlay in plant & machinery FY18 including normal cape
Slide 55: Segmental overview
Segmental overview Speciality Home & Personal Pharmaceuticals Chemicals Care Polymer & additives Active Pharmaceutical Agrochemicals & intermediates Non-ionic Surfactants Ingredients (APIs) Dyes, Pigments, Paints & Printing Inks Pharma Intermediates Fuel Additives, Rubber Intermediates for Innovator
Slide 56: Pharmaceuticals
Pharmaceuticals Facilities • In all four Manufacturing units of which - two are USFDA approved facilities & other two are WHO GMP approved facilities End User Industry • Global Generic Pharmaceutical Companies, Innovator and Large Pharmaceuticals MNCs, Branded Generic Indian Pharma Companies. Salien
Slide 57: Pharmaceuticals – Financial Highlights
Pharmaceuticals – Financial Highlights Revenue • We have been consistently increasing our CAGR: 20.6% share of operations and engagement with 383 395 various customers in regulated market 303 space. 249 187 • The above along with successful closure of USFDA Inspection, has resulted into FY13 FY14 FY
Slide 58: Pharmaceuticals – Growth Drivers
Pharmaceuticals – Growth Drivers • 48 commercial APIs with 33 EDMF, 28 • CRAMs activity focused on • Doubled capacities to cater to demand USDMF and 16 CEP (1 under intermediates for Cola / Energy Drinks approval) • Dedicated 50 scientist working in manufacturers. • 12 new APIs under development. se
Slide 59: Segmental overview
Segmental overview Speciality Home & Personal Pharmaceuticals Chemicals Care Polymer & additives Active Pharmaceutical Agrochemicals & intermediates Non-ionic Surfactants Ingredients (APIs) Dyes, Pigments, Paints & Printing Inks Pharma Intermediates Fuel Additives, Rubber Intermediates for Innovator
Slide 60: Home & Personal Care Chemicals
Home & Personal Care Chemicals Facilities One unit each at Pithampur (Madhya Pradesh) & at Silvassa End User Industry FMCGs – Shampoos, Anti-Dandruff Shampoos, Disinfectants, Hand & Body wash, Dish Wash, Detergents Bars & Powders, Soaps, Tooth Powders & Paste etc. Salient Features Relatively low mar
Slide 61: Key Investment Theme
Key Investment Theme Clear Path to Value Creation Economies of Scale and Operational Efficiency: Global Partner of Leadership excellence – De-risked portfolio • Highly Backward Integrated Choice Increasing focus established – multiple and gainful usage of by- engagements with on high margin record o
Slide 62: Chairman’s Message
Chairman’s Message “Over the last decade this singular evolution – from an Indian company servicing global markets to what is fundamentally a global company selecting to manufacture out of India – has been responsible for our consistent growth. Aarti Industries is at the cusp of robust sustainable g
Slide 63: Contact Us
Contact Us For further information please log on to www.aartigroup.com or contact: Mr. Chetan Gandhi / Mrs. Mona Patel Aarti Industries Limited Tel: +91 22 6797 6666 Email: [email protected] Shiv Muttoo / Vikram Rajput CDR India Tel: +91 22 6645 1207/1223 Email: [email protected] vikramr@cd
Slide 64: Thank You
AARTI INDUSTRIES LIMITED Thank You ny