Transcription
Q4 & FY17 RESULTS UPDATEMAY 2017
KEY HIGHLIGHTSQ4 & FY17 RESULT HIGHLIGHTSCOMPANY OVERVIEWBUSINESS MODELCOMPETITIVE ADVANTAGESSTRATEGY & OUTLOOK
KEY HIGHLIGHTSRevenuesEBITDAPATIce CreamLaunchedunder theBrand‘Volup’ Q4FY17 Revenues grew by 23.0% YoY to Rs 3,776.8 Mn FY17 Revenues grew by 20.7% YoY to Rs 14,111.3 Mn Q4FY17 EBITDA grew by 17.9% YoY to Rs 303.4 Mn, EBITDA margin of 8.0% FY17 EBITDA grew by 9.7% YoY to Rs 1,280.5 Mn, EBITDA margin of 9.1% FY17 PAT grew by 102.8% YoY to Rs 469.4 Mn Launched Ice Cream brand ‘Volup’ in areas like Nashik, Ahmednagar,Aurangabad, Jalgaon & Dhule in March 2017. Popular range of ice creams launched under the brand ‘Volup’ andPremium range of ice creams under the brand ‘Volup Sinsane’. While ‘Prabhat’ brand represents the traditional dairy products, ‘Volup’brand will offer products to meet the aspirational needs of consumers.PRABHAT DAIRY LIMITED3
Popular Range of Ice Creams under the ‘Volup’ brandButterscotch CupMango CrushKala Khatta CrushPRABHAT DAIRY LIMITEDStrawberry CupOrange CrushMango DripperVanilla CupRasbperry Dripper
Popular Range of Ice Creams under the ‘Volup’ brandVanilla CrunchieMini ChocolateCrunchieVolup PartyPack– French VanillaPRABHATDAIRYLIMITEDChocolate Vanilla CrunchieButterscotchCrunchieVolup Party Pack – ChocolateMalai & Kesar KulfiVolup Party Pack – Malai KulfiVolup Party Pack –Butter ScotchVolup Party Pack – Tutti Frutti
Premium Range of Ice Creams under the ‘Volup Sinsane’ brandReal PistachioZaffrani Badam PistaAlphonso MangoPRABHAT DAIRY LIMITEDReal LycheeBelgian Chocolate Fudge
Premium Range of Ice Creams under the ‘Volup Sinsane’ brandFrench Vanilla BarMango RushSwiss ChocolatePRABHATBelgianDAIRY LIMITEDBelgian ExoticaRingoCalifornia Coffee BarTwistieChoco Naughty Crunch
Q4 & FY17 RESULT HIGHLIGHTSIn Rs MnREVENUES & GROSS MARGIN18.9%19.3%EBITDA & EBITDA MARGIN8.4%257.423.0 %3.1%303.494.7Q4 FY1720.6%19.5%Q4 FY161.9%9.1%20.7 %Q4 FY17Q4 FY16Q4 FY173.1%5.3%2.0%3.3%743.3PRABHAT DAIRY LIMITED9.7 %FY17FY16469.4231.5103.0%FY17-17.8Q4 FY161,280.51,167.1130.5 %366.2FY16-0.5%25.3 %Q4 FY1710.0%14,111.33.1%58.417.0 %Q4 FY1611,691.68.0%PAT & PAT MARGIN118.73,776.83,070.1PBT & PBT MARGINFY16102.8 %FY17FY16FY178
Q4 FY17 RESULT HIGHLIGHTS Q4 FY17 Total Revenues increased by 23.0% YoY to Rs. 3,776.8 mn. Q4 FY17 Gross Profit increased by 19.9% YoY to Rs 712.2 mn. Gross margin decreased by 49 bps YoY from 19.3% to 18.9%. Milk procurement prices increased by 5% QoQ from Rs. 27.21 to Rs. 28.57 per litre as the raw milk availability continued toremain impacted. The share of value added products increased to 88% of total revenue in the quarter driven by speciality ingredients and cheese. Q4 FY17 EBITDA increased by 17.9% YoY to Rs. 303.4 mn. EBITDA margin decreased by 35 bps YoY from 8.4% to 8.0%. Business promotion expenses increased on account of greater focus on growing value added products and B2C sales. Co-gen Plant at Shrirampur commenced operations during the quarter.Q4 FY17 PAT decreased by 130.5% YoY from Rs. 58.4 mn. to Rs -17.8 mn. Higher deferred tax expense resulted in company reporting loss in the quarter.PRABHAT DAIRY LIMITED9
FY17 RESULT HIGHLIGHTS FY17 Total Revenues increased by 20.7% YoY to Rs. 14,111.3 mn. FY17 Gross Profit increased by 14.3% YoY to Rs. 2,753.0 mn. Gross margin decreased by 109 bps YoY from 20.6% to 19.5%. Milk procurement prices increased by 32% YoY from Rs. 19.50 to Rs. 28.57 per litre. However, better realizations on products like milk, butter, ghee, sweetened condensed milk and speciality milk powders helpedto offset the impact of higher milk procurement prices. The share of value added products increased to 86% of total revenue for the full year driven by speciality ingredients andcheese. FY17 EBITDA increased by 9.7% YoY to Rs. 1,280.5 mn. EBITDA margin decreased by 908 bps YoY from 10.0% to 9.1%. Higher manufacturing costs incurred on account of increase in milk prices. Higher marketing expenditure to increase company’s footprint in value added products and B2C sales.FY17 PAT increased by 102.8 % YoY from Rs. 231.5 mn to Rs. 469.4 mn. Improved profitability driven by an overall growth in the business and the recognition of mega project benefit.PRABHAT DAIRY LIMITED10
Q4 & FY17 RESULTSCONSOLIDATED PROFIT AND LOSS STATEMENTParticulars (In Rs Mn)Revenue from OperationsQ4 FY173,771.8Q4 FY163,067.6YoY%23.0%Q3 .7%Other Income5.02.5102.6%2.2126.8%12.614.7-13.7%Total 39,283.422.4%Gross Gross MarginEmployee Expenses18.9%96.219.3%77.8-490 bps23.7%19.1%87.2-285 bps10.3%19.5%346.920.6%282.6-109 bps22.7%Other EBITDA Margin %Depreciation8.0%109.18.4%103.4-35 bps5.5%9.3%109.5-125 bps-0.4%9.1%432.010.0%395.7-91 %743.3366.2103.0%Tax rrent Tax37.537.7-0.4%97.6-61.5%174.1121.842.9%Deferred -105.3%469.4231.5102.8%PAT Margin %-0.5%1.9%-237 bps8.3%-874 bps3.3%2.0%135 bpsFinance CostExceptional ItemPRABHAT DAIRY LIMITED11
Q4 & FY17 RESULTSCONSOLIDATED BALANCE SHEETParticulars (In Rs quities & LiabilitiesEquityEquity share capitalOther EquityNon-Current LiabilitiesFinancial LiabilitiesBorrowingsProvisionsDeferred tax liabilities (net)386.0384.514.314.3158.857.2559.0456.0Current LiabilitiesFinancial Liabilities3,192.61,193.3Trade Payables537.8521.3Other financial liabilities135.078.660.846.5BorrowingsOther current liabilitiesProvisionsCurrent tax liabilities (net)Total Equity & LiabilitiesPRABHAT DAIRY 6Particulars (In Rs Mn)AssetsNon-Current AssetsProperty, plant and equipmentCapital work in progressIntangible AssetsFinancial AssetsInvestmentsOther financial assetsIncome Tax assets (net)VAT refund receivableOther non-current assetsCurrent AssetsInventoriesFinancial AssetsTrade receivablesCash & cash equivalentsBank Bal. exc. Cash/cash equivalentsLoansOther financial assetsAdvance to suppliersOther current assetsTotal 783.612
Q4 & FY17 RESULT HIGHLIGHTSKEY BUSINESS UPDATESEXTENSIVE PROCUCT CAMPAIGNS TO INCREASE CUSTOMER ENGAGEMENT AND BRAND VISIBILITYPrint Media CampaignPRABHAT DAIRY LIMITEDCinema Advertising CampaignOutdoor Advertising Campaign13
Q4 & FY17 RESULT ANALYSISKEY BUSINESS UPDATESB2C BUSINESS Appointed Mr. Muthar Basha (ex – HUL, 25 years ofexperience) as Consumer Business Head. Ghee is present in 26 states and the penetration continues toincrease with more than 800 distributors and 100,000 retailtouch points. Products like Paneer, Dahi, Lassi, Chaas, Shrikhand etc.continue to gain prominence and acceptance amongst endconsumers. Recently launched Ice Creams under ‘Volup’ brand are gainingtraction in sales.PRABHAT DAIRY LIMITED14
Q4 & FY17 RESULT HIGHLIGHTSKEY BUSINESS UPDATESB2B BUSINESS Appointed Mr. Sridhar Vishwanath (ex – Mondelez, 16 years ofexperience) as Commercial Director. Entered into an MOU with Nutridor Ltd. Thailand for being it’sco-manufacturer for Cow Ghee, Mozzarella Cheese and SweetenedCondensed Milk. Cheese, Skimmed Milk Powder and Butter supplies to DabonInternational. Cheese supplies to Patanjali, Domino’s Sri Lanka & Britannia. Participated in the prestigious ‘Gulfood 2017’ in Dubai.PRABHAT DAIRY LIMITED15
COMPANY OVERVIEWPRABHAT DAIRY – BRIEF PROFILEBUSINESS OVERVIEW Incorporated in 1998, Prabhat Dairy Limited hasevolved from being an established specialty dairyingredients company to an emerging brand in milkand dairy products. Prabhat sells wide range of value added dairyproducts under strong & appealing brands –‘Prabhat’, ‘Prabhat Milk Magic’ and ‘Prabhat Flava’. KEY STRENGTHS Integrated business model – robust procurement,state-of-the-art manufacturing, fast-expandingdistribution network and brand presence. Consolidated Revenues, EBITDA and PAT wereRs 14,111.3 mn, Rs 1,280.5 mn and Rs 469.4 mn inFY17. Strong farmer relationships – 70% direct sourcingfrom more than 85,000 farmers. Strategically located manufacturing facilities inShrirampur (Ahmednagar) and Navi Mumbai –D/E ratio has significantly improved from 2.3x inFY12 to 0.3x in FY17 with continued efforts on deleveraging.In 2014, Prabhat was awarded as “Asia’sfastest growing marketing brands – FMCGsector” at the WCRC leaders summit.It has a strong management team led by Mr.Sarangdhar R Nirmal (18 years of experience indairy industry) & Mr. Vivek Nirmal (8 years ofexperience in dairy industry). PRABHAT DAIRY LIMITEDFINANCIAL OVERVIEW 1.5 Mn litres/day of milk processing capacity. 180 MT/day of sweet condensed milk plant islargest in Asia and 30 MT/day of cheese plant is3rd largest in India. Close proximity to milk generating regions andtarget market for end products.Strong institutional clientele – Mondelez, Abbott,Nestle, ITC, Britannia, Future Group etc.17
COMPANY OVERVIEWOUR EVOLUTION Incorporation of theCompany by NirmalFamily.19981999 Commenced sale ofliquid milkconsumer packunder ‘Prabhat’brand.PRABHAT DAIRY LIMITED Introduction ofvalue addedproducts (ghee andpowders).2005Dedicated condensedmilk plant setup forMondelez.Received HACCP andISO certificationCommencedmilkpowder productionwithcapacityof30MT/day.2008 Commenced sale ofcondensed milk toMondelez IndiaFoods PrivateLimited.2010 Private Equityinfusion by IABF (PEfirm managed byRabobank,Netherlands).Awarded beststrategic supplier byKraft and Abbott.2011 Expanded B2Bbusiness withreputed industryplayers.Launched ‘PrabhatDairy QualityMission’.2012 2013 Initiated marketing& brandingactivities toincrease consumerbusiness.2014Commenced milkprocessing capacity of0.3 mn litres/day, inNavi Mumbai.Private Equityinfusion by ProparcoNew capacity addedfor curd, icecreamand powders.2015 Listing on BSE andNSE with a successfulIPO raising- Rs 3,000 mn freshissue- Rs 565.3 mn offerfor sale2016Commencedmanufacturing ofcheese with capacityof 30MT/day (3rdlargest in India) ,paneer with capacityof 5MT/day andshrikhand withcapacity of 5MT/day 2017Launched popularrange of icecreams under thebrand ‘Volup’ andpremium range ofice creams underthe brand ‘VolupSinsane’18
COMPANY OVERVIEWSHAREHOLDING STRUCTURESHARE PRICE PERFORMANCEMARKET DATA200Market Capitalization (Rs mn.)150Price (Rs.)100No. of Shares Outstanding (mn.)500May/16Face Value (Rs.)52 Week High-Low 0.0 – 76.8Mar/17SHAREHOLDING AS ON 31st MARCH 2017KEY INSTITUTIONAL INVESTORS AT 31st MARCH 2017Rabo Equity AdvisorsPromoters48.94%Public51.06%AS ON 23.05.17 (BSE)% HOLDING14.37%PROPARCO8.68%IL&FS Trust Company Ltd.7.57%DSP Blackrock Micro Cap Fund3.01%Styrax Commodities Limited1.88%Ecap Equities Limited1.06%Wasatch Advisors1.54%Source: BSEPRABHAT DAIRY LIMITED19
BUSINESS MODELPROGRESSING FROM B2B (INSTITUTIONAL) TO B2C (RETAIL)PRABHAT’S BUSINESS MODEL HAS TRANSFORMED FROM SPECIALTY DAIRY INGREDIENTS SUPPLIERTO EMERGING CONSUMER BRAND IN MILK AND DAIRY PRODUCTS ACROSS INDIAFY12Revenues – Rs 4,830 MnFY17FY20Revenues – Rs 14,111.3 MnTARGETB2B18% CAGRB2B88.7%B2C11.3%Milk – 46.7%VAP – 53.3%B2C51% CAGRIncreasing share ofvalue added productsB2B70.0%B2C30.0%Milk – 13.7%VAP – 86.3%B2B50.0%B2C50.0%STRONG GROWTHWITNESSED INB2C BUSINESSSOLID FOUNDATIONOF ESTABLISHEDB2B BUSINESSVAP – Value added productsPRABHAT DAIRY LIMITED21
BUSINESS MODELB2C – RETAIL BUSINESSPRABHAT HAS DISPLAYED STRONG SCALABLITY IN CONSUMER BUSINESS SINCE INCEPTIONPRABHAT HAS BEEN AWARDED ASB2C: 3-POINT STRATEGY1.Focus on research driven approach to reachend-consumer with wide range of value addedproducts.2.Focus on Tier II and Tier III towns with highdisposable incomes.3.Focus on extensive consumer engagementprograms to connect with every strata ofconsumer ecosystem.“ASIA’S FASTEST GROWING MARKETING BRANDS – FMCG SECTOR”AT THE WCRC LEADERS SUMMIT IN 2014Started in FY12As on FY171 State26 States5 Distributors1,200 DistributorsPRABHAT’S EFFORTS ON GROWING ITS CONSUMERBUSINESS WILL LEAD TO –PRABHAT DAIRY LIMITED Enhanced brand visibility Increased product acceptance Higher market share Higher gross margins22
BUSINESS MODELB2C – RETAIL BUSINESSAGGRESSIVE PRODUCT LAUNCHES UNDER ‘PRABHAT’ BRAND NAME OVER PAST FEW YEARS TO REACH END-CONSUMER WITH WIDE RANGE OF PRODUCT OFFERINGSPRABHAT DAIRY LIMITED23
BUSINESS MODELB2C – RETAIL BUSINESSFOCUS ON EXPANDING DISTRIBUTION REACH AND PAN-INDIA PRESENCEOUR PAN-INDIA PRESENCE PRABHAT DAIRY LIMITEDOur products like Ghee, Paneer, Dahi, Lassi, Chaas and Shrikhand areretailed in Modern Trade shelves like Big Bazaar, Star Bazaar, Hypercity,D Mart etc. Presence in modern trade has been expanded beyond Mumbai acrossMaharashtra and Gujarat. Measures taken to expand retail presence in Northern and Southern Indianmarkets especially for the products with longer shelf life.26 States270 Sales Professionals1200 Distributors24
BUSINESS MODELB2B – INSTITUTIONAL BUSINESSProductsSweetened condensed milk, Skimmed / Whole milkpowderPremiumIngredientsB2BSkimmed / Whole milk powderNutrition supplements for baby foodFull cream milkMajor ClientsMondelez India Foods Pvt LtdGSK Consumer Healthcare,HeinzAbbot Healthcare Pvt LtdMondelez India Foods Pvt LtdInstitutionalBusinessUHT milk, lassi, yogurt, dairy whitener,clarified butter (ghee), curd (dahi), flavoured milkBritannia Industries LtdCo-ManufacturingIce-cream, candiesPRABHAT DAIRY LIMITEDMother Dairy Fruit & Vegetable Pvt Ltd25
BUSINESS MODELB2B – INSTITUTIONAL BUSINESSPRABHAT HAS DISPLAYED ITS SUPERIOR PRODUCT QUALITY AND CAPABILITIESTHROUGH ITS LONG STANDING ASSOCIATION WITH LEADING GLOBAL & DOMESTIC FMCG COMPANIESMAJORCLIENTSPRABHAT DAIRY LIMITED26
COMPETITIVE ADVANTAGEVERTICALLY INTEGRATED BUSINESS MODELINTEGRATED OPERATIONS LEADING TO EFFICIENT COST STRUCTURE & HIGH QUALITY PRODUCTSCattle Feed & Welfare Assistance to farmers. Ensure cattle nutrition &medication support to improvemilk yields.Integrated MilkandDairy ProductsCompanyRetail Marketing, DistributionEfficient Milk Procurement Retail products - Prabhat, Flava,Milk Magic brands, Volup. 270 sales professionals,1200 distributors, 150 Prabhatmini stockists. Maximise direct milk sourcingfrom farmers. Ensure transparent pricing,farmer relationships, welfareactivities.Technology & IT Infrastructure Computerized milk testing,advanced ERP systems lead tostrict quality control, lowerproduction losses & ability toprocess large orders.Low Logistics CostsMulti-product Facilities Strategically located in cow milkbelt in Maharashtra. Close proximity to principalinstitutional customers andretail consumer markets. Multi-product facilities inShrirampur & Navi Mumbai,large scale operations result insharing of manufacturing costs.PRABHAT DAIRY LIMITED28
COMPETITIVE ADVANTAGEROBUST MILK PROCUREMENT SYSTEMSTRONG DIRECT SOURCING ECOSYSTEM – ACCESS TO HIGH QUALITY MILK, INTENSIVE FARMER ENGAGEMENT, FARMER TRUST & LOYALTY More than 85,000 farmers. 70% direct sourcing from 1,200 villages twice aday.Transparent pricing – Farmers get the bestprice. Farmers receive detailed receipt mentioningquality (Fat & Non-Fat content), quantity,price. Non-cash direct transfer to farmer’s bank A/c. Ensures access to high quality milk. More than 700 procurement cycles a year. Procurement from Ahmednagar, Pune, Nashikand adjoining districts in Maharashtra (4thlargest cow milk producing state in India).Prabhat Dairy Quality Mission – “Prabhat Mitras” – Coordinate milkprocurement and help farmers on cattle health,cattle finance and insurance. “Pashu Mitras” – Company partnered veterinarydoctors / para-veterinary workers helping oncattle medication, deworming, vaccination etc.Printed Transaction ReceiptAutomated milk testingfor transparent pricingPRABHAT DAIRY LIMITED29
COMPETITIVE ADVANTAGEROBUST MILK PROCUREMENT SYSTEMRAW MILK PROCUREMENT INFRASTRUCTUREThe collected raw milk is tested through specialized automated machines post which it is transported to production facilities at Shrirampur and Navi Mumbai475 MILK COLLECTION CENTRES121 BULK MILK COOLERS20 MILK CHILLING PLANTSPRABHAT DAIRY LIMITEDSHRIRAMPUR PLANTNAVI MUMBAI PLANT30
COMPETITIVE ADVANTAGEMULTI-PRODUCT PRODUCTION FACILITIESSTATE OF THE ART MULTI-PRODUCT MANUFACTURING FACILITIES IN SHRIRAMPUR AND NAVI MUMBAIRefer Annexure for Product wise Capacity DetailsPRABHAT DAIRY LIMITED31
COMPETITIVE ADVANTAGESTRINGENT QUALITY CONTROLS MEETING CUSTOMER REQUIREMENTSSTRICT QUALITY CONTROL AND FOOD SAFETY STANDARDS HAVE ENABLED US TO CONSISTENTLY DELIVER TO OUR INSTITUTIONAL CLIENTSQUALITY CERTIFICATIONSPRABHAT DAIRY LIMITED32
STRATEGY & OUTLOOKKEY FOCUS AREASEXPAND RETAIL PRODUCTS BUSINESSLEVERAGE INSTITUTIONAL RELATIONSHIPS TO OFFER MORE PRODUCTS Leverage our ‘Prabhat’ brand and continue to innovate and expand ourproduct offerings. Focus on increasing the availability of our products in both existing marketsand new markets across India. Focus on increasing the share of value added products like cheese, paneer,shrikhand, curd, ice-cream, flavoured & UHT milk. Expand our product offerings to existing institutional customers. Leverage our relationships and demonstrated quality standards to add newcustomers in India and globally.KEY FOCUS AREASHIGHER CAPACITY UTILISATION & OPERATING EFFICIENCY LEADING TOHIGHER RETURN RATIOSEXPAND DIRECT MILK PROCUREMENT NETWORK Introduce new product lines , effectively utilize dairy by-products andoptimize product planning. Grow direct milk procurement network by increasing the number of PrabhatMitras (milk procurement partners). We are in process of setting up captive co-generation power facility thusreducing power & fuel costs. Increase engagement with farmers by providing additional veterinaryservices and quality cattle feed. Higher capacity utilisation leading to improving return ratios and profitability. This will help us consistently procure high quality milk while lowering ourmilk procurement costs.PRABHAT DAIRY LIMITED34
STRATEGY & OUTLOOKSCALING UP OUR CHEESE BUSINESSCommissioned new cheese manufacturing facility with a capacity of30 MT/day in 2015. This is the 3rd largest cheese plant in India.Strategy to grow cheese business over next 2-3 years – Initially focus on selling cheese to HORECA and B2B segments and exports to Gulfcountries. We have already procured orders from major pizza and burger chains likeDominos, Pizza Hut, Mc Donald’s and other QSRs. Currently manufactures following types of Cheese – Processed Cheese (Hard, Soft & Pizza) Mozzarella Cheese (Diced & Shredded) Cheddar Cheese Ricotta CheeseCheese sales in HORECA segment have already started in Maharashtra andGujarat and are planned in South India and North India.Cheese segment offers higher gross margin compared to other dairy products. Asthe capacity utilization of cheese plant gradually increases, it will have a positiveimpact on our overall gross margin.PRABHAT DAIRY LIMITED35
DISCLAIMERThis presentation and the following discussion may contain “forward looking statements” by Prabhat Dairy Limited (“Prabhat” or“Prabhat Dairy” or the “Company”) that are not historical in nature. These forward looking statements, which may include statementsrelating to future results of operations, financial condition, business prospects, plans and objectives are based on the current beliefs,assumptions, expectations, estimates and projections of the management of Prabhat about the business, industry and markets inwhich Prabhat operates.These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and otherfactors, some of which are beyond Prabhat’s control and difficult to predict, that could cause actual results, performance orachievements to differ materially from those in the forward looking statements.Such statements are not and should not be construed as a representation of future performance or achievements of Prabhat. Inparticular, such statements should not be regarded as a projection of future performance of Prabhat. It should be noted that the actualperformance or achievements of Prabhat may vary significantly from such statements.PRABHAT DAIRY LIMITED36
FOR FURTHER QUERIESRaviraj VahadaneRohan RegePrabhat Dairy LimitedCFODickenson Seagull IRIR ConsultantEmail ID: [email protected] ID: [email protected] No: 91 8888991111Contact No: 91 9167300142PRABHAT DAIRY LIMITED37
STRATEGY & OUTLOOK SCALING UP OUR CHEESE BUSINESS Commissioned new cheese manufacturing facility with a capacity of 30 MT/day in 2015. This is the 3rd largest cheese plant in India. Strategy to grow cheese business over next 2-3 years - Initially focus on selling cheese to HORECA and B2B segments and exports to Gulf countries.
