CORPORATE PRESENTATION Meet/200047_20100730.pdf · 9Authorised Share Capital increased from Rs. 10...
Transcript of CORPORATE PRESENTATION Meet/200047_20100730.pdf · 9Authorised Share Capital increased from Rs. 10...
CORPORATE PRESENTATION
Copyright © Globus Spirits Ltd 2009
Disclaimer
Thi P t ti h b d t id l i f ti b t th C t
Disclaimer
This Presentation has been prepared to provide general information about the Company topotential investors to whom it is addressed and who are eligible to subscribe to the equityshares of the Company. This Presentation does not purport to contain all requiredinformation for potential investors and consists of information already in the public domainor that is not price sensitive. Neither this presentation nor any other information supplied in
ti ith th it h i i t d d t b i f dit thconnection with the equity shares is intended to serve as basis of any credit or otherevaluation. The recipients of this presentation should not consider it as a recommendation topurchase the equity shares. Each investor contemplating to subscribe to any equity shares ofthis Company should refer to the Red Herring Prospectus and make an independentinvestigation of the financial condition and affairs of the Company. Potential investorsh ld lt th i fi i l l l t d th f i l d i t th i kshould consult their own financial, legal, tax and other professional advisors as to the risks
and investment considerations arising from an investment in the equity shares of theCompany. This Presentation is not intended to and does not constitute an invitation to offer
Copyright © Globus Spirits Ltd 2009
for subscription to the equity shares of the Company.
AgendaAgenda
Industry Overview
Company Overview
Promoters and Management
G th O t itiGrowth Opportunities
Financials
Project and Issue Details
Copyright © Globus Spirits Ltd 2009 3
INDUSTRY OVERVIEW
Copyright © Globus Spirits Ltd 2009 4
The Indian Alcohol IndustryThe Indian Alcohol Industry
Indian Alcohol Industry
Potable Industrial
Country Liquor IMFL Bulk Spirits Beer Esters Acetic Acid Fuel Mixing
Gl b S i it ’ O ti AGlobus Spirits’ Operating Areas
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The industry is broken up into three major segments
Industry Breakup in millions of cases IMFL Breakup in millions of casesIndustry Breakup, in millions of cases
Others , 3,
IMFL Breakup, in millions of cases
Beer , 137, 26%
Rum 38
Vodka , 4.5, 3%
Gin , 3.4, 2%
2%
IMFL , 160, 31%
Country Liquor , 225, 43%
Whisky, 86, 53%
Brandy , 28,
Rum , 38, 23%
17%
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The growth of the Indian Alcobev industryThe growth of the Indian Alcobev industry• Research has suggested that around 50% of all consumption of
liquor in India is not recorded. Segment Volume(
Growth q• The largest segment, CL, is perhaps the most affected by unrecorded
consumption. This share of unrecorded consumption is expected todecrease as the state as well as the central governments have crackeddown on illicit liquor
(mncases)
rate
Beer 137 12%down on illicit liquor.
• Already the largest market for whisky, all Indian IMFL segments areexpected to grow as well.
• Some drivers for growth in total consumption are:
Country Liquor
225 7%
IMFL 160 12%Some drivers for growth in total consumption are:Population growthAverage age of initiation into drinking coming downFavorable change in societal perception
%
Whisky 86 10%
Brandy 28 6%Favorable change in societal perceptionIncrease in purchasing power and a constantly upgradingconsumer baseAmong the lowest per capita consumption – 2.0 litres per year
Rum 38 8%
Vodka 4.5 25%
3.8 litres Thailand; 5.0 litres U.S.; 9.0 litres in RussiaFavorable Regulatory RegimeOpening up of trade channels
Gin 3.4 10%
Others 3 NA
Total 525 8%
Copyright © Globus Spirits Ltd 2009
1. Source: Credit Suisse, Company Sources, for 20072. WHO
p g p Total 525 8%
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COMPANY OVERVIEW
Copyright © Globus Spirits Ltd 2009 8
A Brief HistoryLaunched its own IMFL brands across India which has met with huge success (20-20 Hannibal Samurai Gold While Lace etc )
2007-08
A Brief History…
Crossed Rs 1000mn sales Authorised Share Capital increased from Rs. 10 crores to Rs. 25 croresName of the Company changed from Globus Agronics Limited to Globus Spirits Limited
(20-20, Hannibal, Samurai Gold, While Lace etc.)Crossed Rs 1500mn sales
2006-07
o Fa
r
Sets up Effluent Treatment and Environment friendly Bio-Composite Plant
Grain based Distillation Plant commences operation at Samalkha Unit in April, 2005
p y g g p
2004-05
2005-06
y So
During the year Behror Unit also started production
Started production of IMFL at its Behror unit
Commenced bottling of IMFL at Behror Unit in August, 1999 and Country Liquor at Samalkha Unit
1996-97
1998-99
1999-00
urne Sets up second Distillery unit at Behror, Rajasthan ; Unit commissioned
Enters into agreement with International Distilleries (India) Ltd.(1) to bottle IMFL products under the brand name of ‘IDI’
g y pCrossed Rs 500mn sales
1995-96
1996 97
Jou
Set up first Distillery; commenced production of Ethyl Alcohol in April 1994 at Samalkha Unit, Haryana. Unit was set up with an installed capacity of 144 lakh BL per annum
Acquired 18 acres of land in village Shyampur in Behror, Rajasthan
t e b a d a e o
1994-95
Copyright © Globus Spirits Ltd 2009
1. A subsidiary of International Distillers and Ventures, UK.
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World-class, fully-integrated, multi-f d t k l tfeedstock plants
The company currently operates two modern distilleries atRajasthan and HaryanaThe licensed and installed capacity at each plant is 14.4 millionbulk litres (BL) per annum and presently the utilization is 100% atbu t es ( ) pe a u a d p ese t y t e ut at o s 00% atboth units.Superior quality at low costs
We are amongst few Indian manufacturers that havecompletely streamlined multi-feedstock (coarse grain andmolases) abilities thereby reducing costsExperienced manpower and rigorous quality protocols ensureconsistent high quality produceconsistent high quality produce
Both plants are fully integrated and can produceRectified SpiritExtra Neutral Alcohol (ENA)Extra Neutral Alcohol (ENA)Country Liquor (CL)Indian Made Foreign Liquor (IMFL)
Copyright © Globus Spirits Ltd 2009 10
GSL straddles four business linesGSL straddles four business linesWe are amongst the only players in the country that straddles all four business lines of the spirits industry, thereby allowing our investors to have a true stake in the progress of the p y, y g p gindustry as a whole
Country Liquor• Market Leader in North India
Bulk Alcohol• Sale of bulk alcohol as a• Market Leader in North India
• Rajasthan | 2.5mn | 25%• Haryana | 2.0mn | 15%• New Delhi | 1.3mn | 20%• Chandigarh | 0 2mn | 15%
• Sale of bulk alcohol as a commodity
• Clients are elite Indian Alcobev Companies such as United Spirits Seagrams etc• Chandigarh | 0.2mn | 15%
(sales in cases pa| market share)
IMFL F hi IMFL O B d
United Spirits, Seagrams etc.
IMFL – Franchise• Existing tie‐up with ABD India
for the state of Rajasthan –1.0 mn cases per annum
IMFL – Own Brands• Recent foray in to this
segment in 2007‐’08• So far over 13 brands and p
• Recent association with Jagatjit Industries, for the state of Haryana – 1.2mn cases per annum
their variants launched• Company’s brands present in
7 states so far – HRY, RJ, CHD, UP, KL, KA, AP
Copyright © Globus Spirits Ltd 2009
p , , ,
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Value Chain of Each Business LineValue Chain of Each Business LineOf Bulk Alcohol ‐ $
Raw Material
MolassesGrain
Conversion into
alcoholDistiller Bottler
Of Franchise IMFL ‐ $$
Raw Material
MolassesGrain
Conversion into
alcoholDistiller
Packaging750, 375, 180ml
Bottler Distributor
Of Final Packaged Products (country liquor/imfl) ‐ $$$
Raw Material
MolassesGrain
Conversion into
alcoholDistiller
Packaging750, 375, 180ml
Bottler •Govt•Private
Distributor
•Govt•Private
Retailer Consumer
Copyright © Globus Spirits Ltd 2009 12
MANAGEMENT
Copyright © Globus Spirits Ltd 2009 13
Board of DirectorsBoard of DirectorsMr. Gautam Premnath Khandelwal – Non-Executive ChairmanMr. Khandelwal has over 23 years of experience in senior managerial positions and he is on the Board of many companiessuch as Nagpur Power & Industries Ltd., Motwane Mfg. Co. Pvt. Ltd., Krohm Solutions Pvt. Ltd., Punjab National Bank etc.such as Nagpur Power & Industries Ltd., Motwane Mfg. Co. Pvt. Ltd., Krohm Solutions Pvt. Ltd., Punjab National Bank etc.
Mr. Ajay Kumar Swarup – Promoter & Managing Director – 50 yearsProduct of The prestigious Doon School, Dehrandun; BA Economics (Hons.), St. Stephens College, Delhi University,PGDBM from IIM Kolkatta. He has over 24 years of experience in the alcohol industry. Co-promoted Associated Distilleriesin 1983 nd pr m t d GSL in 1993 H l th Pr id nt f All Indi Di till r ’ A i ti n during th r 1992 ‘95in 1983 and promoted GSL in 1993. He was also the President of All India Distillers’ Association during the years 1992 – ‘95
Mr. Manik Lal Dutta – Executive Director – 63 years36+ years in alcohol industry. He was earlier with UB Group as production head for North India & Nepal operation
M D k R Di 57Mr. Deepak Roy – Director – 57 yearsExtensive experience in marketing and general managementwith companies such as Glaxo, Ranbaxy, Warner Hindustan,UB Group, Diageo. Undertook management buyout of UDV’s domestic portfolio of brands .Currently Vice Chairman ofAllied Blenders and Distillers Pvt Ltd
Mr. Joginder Singh Damija – Independent Director – 75 years46+ years experience in various industries including liquor. Served with major spirit companies including UB Group inmultiple positions and as Director and Vice chairman of SAB India.
Mr. Santosh Kumar Bishwal – Independent Director – 62 yearsMr. Santosh Kumar Bishwal Independent Director 62 yearsExtensive experience with forms such Union Carbide, UB. Group in senior positions. Faculty at XLRI
Mr. Rajesh Kumar Malik – Whole-time director – 53 years29+ years experience in liquor industries with firms such as Tilaknagar industries, Associated Distilleries, etc.
Copyright © Globus Spirits Ltd 2009
Mr. Rameshwar Dayal Aggarwal – Whole-time director – 54 years25+ years experience in alcohol industry with firms such as Royal Distilleries, Som Distilleries, Oasis Distilleries, etc.
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Key Managerial PersonnelKey Managerial PersonnelName of Employee
Designation Age (Yrs)
Qualification Experience (Yrs)
Previous Employment /DesignationEmployee (Yrs) (Yrs) /Designation
Dr. Bhaskar Roy Executive VP & Chief Financial Officer
45 M.Com, FCA, PhD 20
Saraya Distillery (Unit of Saraya Industries Ltd.)Chief General Manager (Finance)(Finance)
Mr. Anil Arora Asst. Vice President‐Sales (North & East)
49BA, Post Graduate in Marketing & Sales Management
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AB Grain and Spirits Pvt. Limited Vice President‐Marketing & Sales‐All
B S Di l i M i l
Mr. Jeevan Das Manager (Materials) 44
B.Sc, Diploma in Materials Management From NIIRD, Chennai,Diploma in Mech. Engg from AIES, Kolkata
20Bharat Explosives Limited,Dy. Manage (Material)
Mr. Deepak Saroha
Works Manager (Behror, Rajasthan)
35B.Sc,D.I.F.A.T, from VSI, Pune
10Radico Khaitan Ltd., Senior, Chemist
Mr. Kapil General Manager ‐k 39 B A PGDIR & PM 11
pVerma
works(Samalkha, Haryana)
39 B.A., PGDIR & PM 11 ‐
Mr. Santosh Kumar Company Secretary 32
B.Com, LLB, ACS, Diploma in Computer Software from 4
Magnum Strips & Tubes Pvt. Ltd.
Copyright © Globus Spirits Ltd 2009
Pattanayak APTECH Company Secretary
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GROWTH OPPORTUNITIES
Copyright © Globus Spirits Ltd 2009 16
Pillars of growthPillars of growth
Emerge as a force to reckon in the
Branded IMFL space
Strengthen IMFL -Franchise Brands
Maintain leadership in Country Liquor
Continue dominance in the
Bulk Alcohol space via quality and cost
Copyright © Globus Spirits Ltd 2009 17
Enablers and drivers of growthEnablers and drivers of growth
IMFL Market Development•Increase distribution
Capacity Expansion•Capacity to
CL Leadership Consolidation•Continued focus on
Operational Improvement•Implementing ERP to
in existing markets•Addition of Eastern and Western Regions
•Aggressive and
manufacture bulk alcohol at both units to be doubled
•Increase bottling
quality and costs to remain competitive in the CL market
•Extending depth of
achieve lower cost and reaction times
•Reduction in energy consumptionAggressive and
innovative marketing across media
•Strong sales and marketing teams
gcapacity to cater to increasing demand of the bottled products segments
g pdistribution coverage further
•Product innovations leading to launch of
p•Launching Green House Gas abatement initiative
•Increasingmarketing teams•Acquisition of a CSD registered brand
gmore brands, variants and flavours
Increasing cogeneration capacity
Copyright © Globus Spirits Ltd 2009 18
FINANCIALS
Copyright © Globus Spirits Ltd 2009 19
Financial ReviewPrevious 4 Years
Revenues, in Rs. Mill
Financial ReviewPrevious 4 years
EBIDTA, in Rs.Million, ,
Previous 4 Years Profit Previous 4 Years Profit Before Tax, in Rs. Million After Tax, in Rs.Million
Copyright © Globus Spirits Ltd 2009 20
Financial ReviewFinancial ReviewGross Sales by Segments, in Rs. Million Profitability Margins
18352
104
868 1,167 2,353 2,814
14%
16%
14%15.20%
Profitability Margins
333
4683352
10.70%10%
14%
9681034
3176%
8% 8%7%
571850 967 1025
74224
FY 2006 FY 2007 FY 2008 FY 2009
Country Liquor IMFL Franchise Brands Industrial Alcohol IMFL In‐House BrandsSales Other
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010*
PAT Margins EBITDA Margin
* FY 2010 Margins are based on Audited Q1 2010 results
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Sales Other
21
FY 2010 Margins are based on Audited Q1 2010 results.
Peer Group AnalysisPeer Group AnalysisSource: Prowess, CMIE
Copyright © Globus Spirits Ltd 2009 22
Peer Group AnalysisPeer Group Analysis
EPS PE
21.32 Globus Spirits
EPS
1 4.69
PE
‐0.9
‐0.4
Jagatjit Industries
Khoday’s
2.6
4.4
Associated Alcohol
Radico Khaitan
7.7
20.14.4
7.1 Empee Distilleries
U i d S i i
20.4
30 229.7
36.6
United Spirits
Tilaknagar Industries
30.2
5
Copyright © Globus Spirits Ltd 2009
1 EPS annualized based on Q1 2010, PE based on higher band of IPO
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FY 2009 vs Q1 2010FY 2009 vs Q1 2010Particulars FY 2009 (Rs. Crores) Q1 2010 (Rs. Crores)
Net Sales 199.80 63.11
EBITDA 28.57 (14.3%) 9.46 (15.2%)
( ) ( )PAT 12.90(6.5%) 6.78 (10.7%)
EPS Rs. 10.5 Rs. 21.30*
PE (based on upper 9 50 4 69PE (based on upper price band)
9.50 4.69
* Annualized
Copyright © Globus Spirits Ltd 2009 24
PROJECT DETAILS
Copyright © Globus Spirits Ltd 2009 25
Project Details as appraised by SBIProject Details as appraised by SBIParticulars Amount % of total
(in Rs Lakhs)(in Rs Lakhs) Upgradation of Production Facilities 5,777 65%
Multi‐Pressure Distillation Plant to produce 35,000 litres/day of ENA at BehrorUnit
676
l ll l d l /d fMulti‐Pressure Distillation Plant, to produce 35,000 litres/day of ENA , at Samalkha Unit
2,665
Total Spirit based Starch Liquefaction section expansion by 15 KLPD capacity at Behror
333
Fermentation Modification Work in existing Grain based Distillery at BehrorUnit
66
Powerpac Travelling Grate Furnace Boilers at Behror & Samalkha 9182000 KW / 415V Bleed‐cum‐Back Pressure Turbine at Behror & Samalkha 450Green House Gases (GHG) Abatement Project at Behror & Samalkha 15IMFL Bottling Section at Samalkha Unit. 262IMFL Bottling Section at Behror Unit 352Mi ll Ci il St t 40Miscellaneous Civil Structures 40
IMFL ‐ Own Brands Development 3,151 35%Brand Development for Marketing of IMFL Brands 2,851Acquisition of Canteen Stores Department registered IMFL Brands 300
Copyright © Globus Spirits Ltd 2009
q f p gTotal 8,928 100%
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Issue DetailIssue Size 75 Lakh equity shares of the face value of Rs. 10
Issue Detail
QIBs Portion Up to 37.25 Lakh equity shares
NIBs Portion At least 11.175 Lakh equity shares
RIBs Portion At least 26.075 Lakh equity shares
Price Band Rs.90 – Rs.100 per equity share
Paid up capital Pre‐Issue – Rs 1225.77 Lakhs Post‐Issue – Rs.1975.77 Lakhs
Market Capitalization At lower band – Rs 177 Crores At upper band ‐ Rs. 197 Crores
Promoter holding Pre‐Issue – 92.74% Post‐Issue – 59.81%
Grading “CARE IPO Grade 3” from CARE
I P Issue Opens on 31/08/09 Issue Closes on 02 09 09Issue Program Issue Opens on –31/08/09 Issue Closes on – 02.09.09
Listing BSE & NSE
BRLM K t C t S i Li it d & SREI C it l M k t Li it d
Copyright © Globus Spirits Ltd 2009
BRLMs Keynote Corporate Services Limited & SREI Capital Markets Limited
27
THANK YOU
Copyright © Globus Spirits Ltd 2009 28