Greenply Industries Ltd · NSE:GREENPLY
Greenply Industries — Investor Presentation (2016)
44 slides from Greenply Industries's investor presentation, 2016
Slide 1: Greenply Industries Ltd Corporate Presentation – FY2016
GREENPLY INDUSTRIES LTD Corporate Presentation – FY2016
Slide 2: Disclaimer
DISCLAIMER Certain statements in this communication may be ‘forward looking statements’ within the meaning of applicable laws and regulations. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those s
Slide 3: Table of Contents
TABLE OF CONTENTS • Industry Overview • Company Overview • Plywood Segment • MDF Segment • Annexure 3
Slide 4: Industry Overview
Industry Overview 4
Slide 5: Plywood & MDF Brief: Strong Growth
PLYWOOD & MDF BRIEF Market Size (Rs. Crore) and Breakup Industry CAGR 5- Unorganized vs Organized (Rs. Crore) MDF, 6% Industry 1,600 CAGR 12- 15% Greenply 13,500 Greenply 26% 30% No market market un-organised share share segment - Plywood, 4,500 1,600 18,000 Plywood MDF Organized Unorganized • Enorm
Slide 6: Plywood
PLYWOOD Plywood industry value chain - Price-wise (taking 19mm thickness as base) • Market size: Rs35bn Luxury / FY10-15 • Market share: 20% Premium • Market leadership: Largely organised CAGR of 15% plywood • Organised to unorganised mix: 70:30 (Rs 100-140 psf) • Key brands: Luxury – Green Club • M
Slide 7: Plywood: Mid/mass market space
PLYWOOD Mid/mass market plywood space – Key highlights, demand drivers and opportunities Tier I brands Tier II brands Unorganised sector Market size: Rs4 bn Market size: Rs11 bn Market size: Rs90 bn Key highlights: Demand drivers: Current growth status: Segment opportunity for Tier I brands going fo
Slide 8: MDF: Global and India capacity
MDF Global MDF capacity has reached 100mn cbm Regional Capacity – China has 44% of world’s total MDF capacity ROW AU/NZ 97 99 102 1% 94 North 3% 85 90 China 77 America 43% 71 6% 58 60 East Asia 10% South America 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 12% EU 25% India’s MDF capacity (‘000
Slide 9: MDF: Regional demand and imports
MDF MDF Regional Demand- South India demand for MDF is highest MDF is potential substitute for Cheap quality Plywood- Total followed by North current market size for cheap quality plywood is ~40bn North 30% Others 10% Organised Cheap Category 25% 30% West Premium / 15% Mid Category Unorganised 70% 7
Slide 10: Demand Drivers for MDF in India
DEMAND DRIVERS FOR MDF IN INDIA MDF demand is expected to grow by 15% CAGR to Rs 30bn from Rs 15bn currently 2016 2021 Current MDF Expected MDF Market Size: Market Size Rs. 15bn Rs. 30bn 10
Slide 11: Plywood, MDF, and Particle Board
PLYWOOD, MDF, AND PARTICLE BOARD MDF is composed of finer wood fibers, whereas Particle board has larger and coarser wood fibers Wood based product categories – a perspective Factors Traditional Plywood MDF Particle board Produced by breaking down hardwood and softwood Particle board is a waste-wood
Slide 12: Company Overview
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Slide 13: Company Overview
COMPANY OVERVIEW BUSINESS SEGMENTS • Wood based products - Plywood and allied products, Medium Density Fibreboards (MDF) • Demerged the Decorative Business –listed as separate entity STRONG BRAND PRESENCE BUILT OVER 30 YEARS • Largest pan-India player with 26% share of organized plywood market; 30%
Slide 14: Company Overview
COMPANY OVERVIEW CAPACITY UTILIZATION • Plywood 101% utilization; optimum capacity utilization expected to be around 120% and incremental demand to be catered through outsourcing • MDF 99% utilization; optimum capacity utilization expected to be around 115%; to undertake greenfield expansion in Andh
Slide 15: Milestones
MILESTONES Setting up new unit at Pantnagar, Uttarakhand 1984 Shiv Prakash Mittal sets up a saw mill 2006 and Launch of Ecotec brand Setting up of 1st plywood factory in Tizit, Acquisition of two plywood units in Gujarat, 1988 Nagaland 2007 Now Bamanbore factory Induction of Professionalism into the
Slide 16: Our Business
OUR BUSINESS Premium segment (Market share 20%) GREENPLY Medium Segment Plywood (Market Share 58%) Low end Segment (Market Share 22%) Thin and Thick MDF, Plain MDF and Pre-Lam MDF and HDF Flooring 16
Slide 17: Well-Entrenched Distribution Network
WELL-ENTRENCHED DISTRIBUTION NETWORK Plywood MDF Distributors / Stockists Retailers Branches 17
Slide 18: Strong Performance Track Record
STRONG PERFORMANCE TRACK RECORD NET SALES GROSS PROFIT 1,656 735 1,561 651 1,314 1,390 538 560 1,059 427 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 EBIDTA PBT 173 245 201 139 180 183 110 104 118 42 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 18 Due to de-merger of Decorative Business, s
Slide 19: Key Financials
KEY FINANCIALS Greenply’s 30% revenues come from MDF segment MDF contributes 55% of total EBITDA CAGR FY10 to FY16 14% 19% Plywood MDF Plywood MDF 23% 28% 25% 26% 29% 33% 44% 42% 45% 54% 77% 72% 75% 74% 71% 67% 56% 58% 55% 46% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Capital employed mix of
Slide 20: Financial Highlights – Q4 FY16
FINANCIAL HIGHLIGHTS – Q4 FY16 Q4 FY16 Q4 FY15 6.0% 452.83 NET SALES 428.42 Key ratios (%) Q4 FY16 Q4 FY15 Gross Margin 43.8% 41.2% 12% EBITDA Margin 14.9% 12.5% EBIT Margin 13.2% 9.9% 198.12 GROSS PROFIT 176.49 Net Margin 9.1% 7.0%(*) Ad and promotions / Net Sales 2.5% 1.2% 26% Staff Cost/ Net Sale
Slide 21: Financial Highlights – FY16
FINANCIAL HIGHLIGHTS – FY16 FY16 FY15 6% 1656.1 NET SALES 1560.6 Key ratios (%) FY16 FY15 Gross Margin 44.4% 41.7% 13% EBITDA Margin 14.8% 12.9% EBIT Margin 12.1% 10.2% 735.4 GROSS PROFIT 651.5 Net Margin 7.9% 6.8%(*) Ad and promotions / Net Sales 3.2% 2.8% 22% Staff Cost/ Net Sales 10.1% 9.3% Logis
Slide 22: Financial Highlights – B/S Perspective
FINANCIAL HIGHLIGHTS – B/S PERSPECTIVE Balance Sheet Snapshot March December September March 31, March (Rs. crore) 31, 2016 31, 2015 30, 2015 2015 31, 2014 Net worth 604.49 572.61 537.21 483.17 380.29 Total debt 229.44 271.82 290.14 331.53 375.81 Long Term Debt (Including 162.32 142.17 162.05 199.
Slide 23: Our Brands
OUR BRANDS PANELMAX PLYwooD A » \ 4 GREEN [peer y > Srectrumwoop: r > [=GREEN = So SSS Le v q y y ») GREEN” GREEN | CLUB — err DOORS 23
Slide 24: Shareholding
SHAREHOLDING Non- Institutional 21% Promoter 55% Institutional 24% Sr. No. Name % of Holding No. Of Shares 1 JWALAMUKHI INVESTMENT HOLDINGS 9.85% 11,884,420 2 HDFC TRUSTEE COMPANY LTD 9.00% 10,856,855 3 WESTBRIDGE CROSSOVER FUND, LLC 3.02% 3,639,875 4 KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE 1.35% 1
Slide 25: Board of Directors
BOARD OF DIRECTORS • Shiv Prakash Mittal – Executive Chairman, o Anupam Kumar Mukerji – Non Executive – Promoter Director - Independent o Veteran in the Plywood industry with over 40 years experience o Retired as the Director General of Forests o Rajesh Mittal– Managing Director • Sonali Bhagwati Da
Slide 26: Key Management Personnel
KEY MANAGEMENT PERSONNEL • Vishwanathan Venkatramani – CFO • Raman Kumar Poddar – Rudrapur Plant Head o B Com (Hons.); CA; Over 28 years o BE; Over 23 years experience experience • Dr. Sushil Kumar Nath – President (Research) • Yogesh Arora – Country Head – Sales & Marketing (MDF) o PH. D; Over 31 y
Slide 27: Plywood Segment
Plywood Segment
Slide 28: Facilities / Production Model and Regional Breakup
FACILITIES / PRODUCTION MODEL AND REGIONAL BREAKUP Facilities Regional Plywood Mix Capacity Location 22% (mn sqm.) Tizit, Nagaland 4.50 Kriparampur, West Bengal 6.00 Pantnagar, Uttarakhand 10.50 Bamanbore, Gujarat 11.40 Total Capacity 32.40 22% 21% Production Model 70% in-house, 30% outsourced in vo
Slide 29: Manufacturing Process
MANUFACTURING PROCESS STORING OF LOGS Blocking DEBARKING •(Logs are stored in pond) •(Logs are cut in required size) •(Barks of the Blocks are removed) TENDERISER MACHINE VENEER CLIPPING PEELING •(Tenderised to make stress free) •(Veneer clipped as per required size) •(Blocks are peeled for Veneer)
Slide 30: Marketing Strategy & Initiatives
MARKETING STRATEGY & INITIATIVES • To leverage strong brand presence built over 31 years Key Initiatives o India’s leading plywood manufacturing company • 360 degree marketing initiatives targeted o To continue investing ~3% of net sales going at trade and end-consumers through forward towards ad ex
Slide 31: Growth Plans
GROWTH PLANS Moving towards an asset light model - future growth through Backward outsourcing integration route through 50% JV in Myanmar for production of face veneers • Generate higher ROCE’s • Mid-segment variants will be outsourced, freeing existing capacities for premium • JV partner familiar w
Slide 32: Financial & Operational Highlights: Plywood
FINANCIAL & OPERATIONAL HIGHLIGHTS Plywood Particulars FY12 FY13 FY14 FY15 FY16 CAGR Net sales (Rs. crore) 815.58 940.17 1037.30 1152.07 1175.64 7.6% EBITDA margin (%) 9.8% 10.6% 10.3% 9.1% 9.3% EBIT margin (%) 7.2% 8.9% 7.9% 6.8% 7.2% Annual capacity (million sqm.) 28.35 32.4 32.4 32.4 32.4 Product
Slide 33: MDF Segment
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Slide 34: Facilities / Production Model and Regional Breakup
FACILITIES / PRODUCTION MODEL AND REGIONAL BREAKUP Facilities Regional Plywood Mix Capacity Location 55% (mn sqm.) Pantnagar, Uttarakhand 1,80,000 Largest facility in India 10% 5% Production Model 100% in-house To undertake greenfield expansion in Andhra Pradesh – abundance of plantation wood 30% Ex
Slide 35: Manufacturing Process
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Slide 36: MDF – The Way Forward: Key Drivers
MDF - THE WAY FORWARD Key Drivers Shift towards Boom in Real automation in the estate / furniture industry Highly contributing to Government to Commercial / automated; increasing demand incentivize MDF Hospitality / consistency in manufacturers Health care quality and owing to Transition from finish
Slide 37: Growth Plans
GROWTH PLANS Expansion of Premium Portfolio Capacity Expansion • Expansion of pre-laminated capacity • Entry into Laminated Flooring / Veneer Flooring • Tripling capacity to cater to rising acceptance and demand • Forayed into UV Coated boards • Proposed new facility in Andhra Pradesh o Large planta
Slide 38: Financial & Operational Highlights: MDF
FINANCIAL & OPERATIONAL HIGHLIGHTS MDF Particulars FY12 FY13 FY14 FY15 FY16 CAGR Net sales 243.72 374.18 352.72 408.51 476.16 14.3% EBITDA margin (%) 15.4% 21.6% 21.6% 23.3% 28.5% EBIT margin (%) 9.0% 17.5% 17.0% 18.5% 24.6% Annual capacity (cubic metre) 180,000 180,000 180,000 180,000 180,000 Produ
Slide 39: Greenply Industries – Industry Position
GREENPLY INDUSTRIES – INDUSTRY POSITION Highly credible brand Robust & efficient manufacturing facilities Secured long-term availability of quality face • Products sold under a range of well ensuring optimal quality veneer through JV regarded sub brands Diversification of production capabilities thr
Slide 40: Growth Outlook
GROWTH OUTLOOK INDUSTRY DRIVERS PRODUCT PROFILE • Rising demand from the real estate sector • To improve mix of plywood through increase in • Increasing urbanisation, higher disposable mix of value-added products like Green Defender, incomes and a growing middle class Green Gold Prima and Natural Ve
Slide 41: Annexure
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Slide 42: Demerger of Decorative Business
DEMERGER OF DECORATIVE BUSINESS • Demerged the decorative business (comprising of laminates and allied products and accounting for 37.2% of FY14 consolidated sales) of the company with all its assets and liabilities into Greenlam Industries • Record date for the demerger was 27 November 2014; Greenp
Slide 43: Rationale for Demerger
RATIONALE FOR DEMERGER Better cash management / utilization Dedicated • Two separate management focus companies will have Separate marketing independent cash • Dedicated flows and strengthen reach management focus the prospects of Different product and resource each of the • Both businesses allocati
Slide 44: About Greenply Industries Ltd.
ABOUT GREENPLY INDUSTRIES LTD. Greenply Industries Limited (GIL) enjoys leadership position in plywood and medium density fibreboards (MDF) accounting for almost 26 percent of the organized plywood and 30 percent of the MDF market in India. GIL has four state–of-the-art manufacturing facilities for