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Transcript of Corporate Presentation2013
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RUCHI SOYA
INDUSTRIES LIMITED
CORPORATE PRESENTATION
August 2013
-
Disclaimer
By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: This document has been prepared for information purposes only and is not an offer or invitation or recommendation to buy or sell any securities of
Ruchi Soya Industries Limited (the "Company or Ruchi Soya), nor shall part, or all, of this document form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities of the Company.
This document is strictly confidential and may not be copied, published, distributed or transmitted to any person, in whole or in part, by any medium or in any form for any purpose. The information in this document is being provided by the Company and is subject to change without notice. The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.
This document contains statements about future events and expectations that are forward-looking statements. These statements typically contain
words such as "expects" and "anticipates" and words of similar import. Any statement in this document that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the document. The Company assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.
You acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will
conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the Company. Neither the delivery of this document nor any further discussions of the Company with any of the recipients shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company since that date.
Page 1
-
INDEX
pg.
Company Overview 2
Key Highlights 7
Financial Performance 16
Appendix 20
Page 2
-
COMPANY OVERVIEW
-
1st
1st
OVERVIEW OF RUCHI SOYA Company Profile
Listed on BSE (500368) & NSE (RUCHISOYA)
Consolidated Annual turnover of over US$ 5.5 Bn(1)(2) in FY13
One of the largest integrated oilseed solvent extraction and edible oil
refining companies in India in terms of oilseed crushing and oil refining
capacity as of 31 March 2013
Crushing capacity (13,394 MT/day)
Refinery capacity (11,208 MT/day)
Strong Brand Recognition in India
Branded portfolio including Nutrela, Ruchi Gold and Mahakosh
Integrated operations:
Access to over 200,000 hectares of land in India for potential palm oil
plantations as on 31 March 2013
Recognised as the highest importer of edible oil and highest exporter of oil
meals in India(3) by certain Indian industry bodies
Segmental Revenue Spilt (2)
In INR Million SALES REVENUE
FY2012 FY2013 Change
Extractions 63,500 70662 11.27%
Vanaspati 10,559 8963 -15.11%
Oils 204,842 184001 -10.17%
Food Products 3,102 4132 33.20%
Wind Turbine 460 564 22.61%
Others 23,372 34889 47.43%
Total 305,835 303211 -0.95%
FY 2012 Revenue Mix
Page 4
Notes:
(1) Assuming INR/USD of 54.38
(2) On the basis of consolidated financials
(3) Globoil Awards 2012
(4) Ruchi Soya Industries Ltds calculation based in part on data reported by Nielsen through its Retail Index Service for the Refined Oil Consumer Pack Category for period ending Mar MAT 2013 at an All India (U+R) Market level. (Copyright 2013, The Nielsen Company)" (MAT refers to moving annual total i.e. a period of 12 months)
(5) Fortune 500 India, December 2012, Volume 3 Issue 2
Ruchi Soya: An Award Winning Story
Among the oldest and most established edible oil players in India, Ruchi Soyas strong brand recognition enable the Company to maintain its leading position
in the industry
#1 in Indian Edible Oil Sector: Based on volume sales in overall Refined Oil in Consumer Packs
(ROCP) in India (4)
#1 in Food and Agri Products in India as per Fortune 500 Indias survey of largest Indian corporations (5)
Ranked 121st in the list of Worlds Top 250 consumer product companies as per a report titled Global Powers Of The Consumer Product Industry 2013 published by Deloitte
Growing Sales (2)
26 3339
52 4876
91117 127
145
184
306 303
0
50
100
150
200
250
300
350
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
INR Bn
Oils 61%
Extractions, 23%
Vanaspati 3%
Food products
1% Others
12%
-
ORGANIZATIONAL CHART(1)
(1) Shareholding pattern as of 31 Mar 2013
Page 5
Group companies outside India
Group companies within India
Indian Oil
Ruchi Bio
Fuels LLP
(50%)
GHI Energy
Private Limited
(48.96%)
RSIL
Beneficiary
Trust
(100%)
Mrig Trading
Private Limited
(100%)
Gemini Edible
& Fats India
Private Limited
(50%)
Ruchi
Worldwide Limited
(52.48%)
Ruchi Agri PLC
(100%)
Ruchi Ethiopia
Holding Limited
(100%)
Ruchi Industries
Pte Ltd
(100%)
Ruchi Agri
Plantation
(Cambodia)
Pte. Limited
(100%)
Palmolein
Industries Pte.
Limited
(100%)
Ruchi
Agri Trading
Pte. Limited
(100%)
Ruchi Soya Industries
Limited
(Parent)
Ruchi Agri
SARL.
(100%)
-
Page 6
LEADING POSITION IN EDIBLE OIL SEGMENT The Company has an estimated market share of ~15% in the edible oil segment in India. In terms of ROCP category, the Company has
attained leadership position with market share of ~ 17% as per a recent survey(1)
1,243
1,535 1,598
2,380 2,398
3,095
2,697
0
500
1,000
1,500
2,000
2,500
3,000
3,500
FY07 FY08 FY09 FY10 FY11 FY12 FY13
Qu
anti
ty (0
00
'MT)
10.5%
11.8%11.0%
15.6%14.9%
18.3%
14.7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
FY07 FY08 FY09 FY10 FY 11 FY12 FY13M
ark
et
Sh
are
(%
)
Ruchi Soya edible oil sales(2)
Ruchi soya edible oil segment:
CAGR FY07FY13: 14%
Indian edible oil:
CAGR FY07FY13: 8%
(000MT) 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Industry edible oil consumption 11,807 12,989 14,508 15,247 16,052 16,901 18312
Ruchi Soya edible oil market share (estimated) (3)
Source: USDA FAS
Notes: (1) Ruchi Soya Industries Ltds calculation based in part on data reported by Nielsen through its Retail Index Service for the Refined Oil Consumer Pack Category for period ending March MAT 2013 at an All India (U+R)
Market level. (Copyright 2013, The Nielsen Company)" (MAT refers to moving annual total i.e. a period of 12 months) (2) Company Filings. Standalone sales of edible oil segment of Ruchi Soya Industries Ltd.; excludes the sales for captive consumption (3) Market share estimated based on edible oil sales of Ruchi Soya and Industry edible oil consumption data based on USDA FAS data, prepared by Ruchi Soya
-
BUSINESS STRATEGIES
Page 7
To capitalize on the supply and demand gap in the edible oil industry in India
To increase market share in branded edible oil products and food products in India
To continue focus on backward integration
To have a global footprint
To focus on innovation in our product range to deliver differentiated products
-
KEY HIGHLIGHTS
-
KEY HIGHLIGHTS
Page 9
Our brand portfolio includes brands such as Nutrela, Mahakosh and Ruchi Gold, which enjoy strong brand recognition in the Indian market
India is one of the leading consumers of edible oil
Significant room for growth in domestic production expected given that the increasing consumption of edible oil has been primarily met through imports as domestic production is not able to keep pace
One of the few companies in this industry operating across the value chain from origination, supply chain, manufacturing to branding, which enable us to manage costs more effectively than several of our competitors
Experienced management team with over four decades of industry experience
Key members have served or are currently serving as officers of various industry bodies, recognizing their standing in this sector
Favourable Industry Dynamics
Strong Brand Recognition in
India
Fully Integrated Operations
Extensive Distribution Network
in India
1
2
3
4
Experienced Management 5
Pan-India presence with strategically located manufacturing facilities striking the right balance between proximity to raw materials and markets
Extensive distribution network in India and a large sales force
-
46% 16% 13% 6% 7% 8% 4%
Palm Soyabean Rapeseed Peanut Cottonseed Sunflower seed Other
FAVOURABLE INDUSTRY DYNAMICS GLOBAL EDIBLE OIL INDUSTRY OVERVIEW
World Edible Oil Consumption (FY13) World Edible Oil Production (FY13)
India is the leading consumer of edible oil with high growth expectation
Palm and Soyabean oil constitute ~61% of the Global Edible Oil Demand
Page 10 Source: Global Edible Oil Demand as per USDA FAS
Source: USDA FAS
Source: USDA FAS
Indonesia
37 41 44 45 47 4954
36 38 3638 41 42
421718 20 22
23 2424
11 1012 11
11 1314
20 2121 21
23 2324
0
20
40
60
80
100
120
140
160
180
FY07 FY08 FY09 FY10 FY11 FY12 FY13
(MnT)
Palm oil Soyabean oil Rapeseed oil Sunflowerseed oil Others
FY07-FY13
CAGR
Argentina
6%
3%
5%
4%
3%
Indonesia
20%
Malaysia
13%
China 14%
Europe
10%
United States
6%
Argentina
5%
India 5%
Other 26%
Brazil, 4%
China, 20%
Argentina,
2%
Europe, 15%India, 12%
US, 8%
Others, 39%
1
-
Edible Oil63%Pulses
12%
Cashew Nuts7%
Spices3%
Fruits & Nuts6%
Sugar4%
Cotton1%
Others2%
Indian Edible oil demand being substantially met by imports as domestic
production has lagged
Oil Consumption In India growing inline with growth
in population getting turbo charged by growing per capita
income
Edible oils have a significant share in Indian agricultural imports
Source: Ministry of Agriculture (GOI) and DGCI&S) Page 11
Source: USDA FAS, IMF
Source: USDA FAS
Significant growth in per capita consumption can be
expected as Indian per capita GDP continues to grow
Source: USDA FAS, IMF
Robust growth in consumption of edible oil .... Rising deficit with domestic production not being able to keep pace
6 7 6 7 6 67 7 7
5 5 56 9
99 10
11
0
4
8
12
16
20
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Mn MT
India Production India Imports
CAGR 2005-2012 Imports: 10%
CAGR 2005-2012Production : 1%
USD
Source: USDA FAS, IMF
FAVOURABLE INDUSTRY DYNAMICS INDIA EDIBLE OIL INDUSTRY - HIGH GROWTH POTENTIAL
1
Per capita oil consumption (Ltr) Million Mn MT MT
0
5
10
15
20
25
30
35
402008-09 2009-10 2010-11 2011-12 2012-13
467
481
549
630
729
807
1009
1081
1068
1342
1389
1455
1583
0
2
4
6
8
10
12
14
16
0
200
400
600
800
1000
1200
1400
1600
1800
GDP / capita Per capita consumption
0
5
10
15
20
200
700
1200
1700
Population Total oil consumption
-
947 1,054 1,038 1,060 1,116 1,214 1,238
3,6715,075
6,230 6,4407,080 7,425
8,4251,433
1,582
1,455 1,3201,256
1,160
1,189
2,133
1,967
2,097 2,0962,318
2,433
2,425
2,500
2,330
2,300 2,7602,640
2,750
3,000
600
398
733912
9911280
1380
523
574
655659
651
639
655
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
FY07 FY08 FY09 FY10 FY11 FY12 FY13
Cottonseed Palm PeanutRapeseed Soybean SunflowerseedOther
India Edible Oil Imports
Page 12
Source: USDA FAS (Office of Global Analysis)
India Edible Oil Consumption
Palm oil consumption in India has seen significant growth, and is primarily met through imports, leaving significant room
for growth in domestic production
Source: USDA FAS (Office of Global Analysis)
11,807
8%
15%
FY07-FY13 CAGR
000 MT
12,970
14,508
15,247
16,052
16,901
15%
FAVOURABLE INDUSTRY DYNAMICS INDIA EDIBLE OIL INDUSTRY - HIGH GROWTH POTENTIAL
1
18,312
3,650
5,013
6,867 6,603 6,661
7,473
8,500 1,447
733
1,060 1,598 945
1,174
1,150
203
18
583 611
776
1114
1150
140
143
278 256
200
266
248
0
1,500
3,000
4,500
6,000
7,500
9,000
10,500
FY07 FY08 FY09 FY10 FY11 FY12 FY13
Palm Soybean Sunflowerseed Other
13% FY07-FY13 CAGR
-
Nutrela Food products/ Refined Oils (Soyabean, Groundnut, Cottonseed, Sunflower , Mustard ,
Ricebran)
Nutri Gold Vanaspati
Mahakosh Refined Oils (Soyabean, Groundnut, Cottonseed and Ricebran) & Vanaspati
Sunrich Refined Sunflower Oil
Ruchi Gold Refined Oils (Mustard and Palmolein)
Ruchi Star Refined Soyabean Oil
Ruchi No. 1 Vanaspati
STRONG BRAND RECOGNITION IN INDIA P
rem
ium
Page 13
Track record of creating successful brands in a highly commoditized industry. Company has multiple brands for several of
their products to cater to different income segments of the Indian retail market
Key Brands
Va
lue
M
as
s
2
-
FULLY INTEGRATED OPERATIONS Healthy mix of midstream and downstream, and well on its way to develop an upstream business
Origination
Palm plantations across Andhra Pradesh, Karnataka, Mizoram, Gujarat, Orissa and Tamil Nadu
Access to total agricultural land of 2,00,000 hectares for potential oil palm procurement
Processing
Daily capacity (MT)(Mar - 2013):
Crushing:13,394
Crude Oil: 2,411
Soya Meal: 10,983
Refining: 11,208
Vanaspati & bakery fats: 2,118
Textured soya protein: 467
Edible soya flour: 300
Products
Key products
Edible oil
Seed extractions,
Vanaspati
Food productions
Key brands include Nutrela, Ruchi Gold, Ruchi Star, Sunrich and Mahakosh
Merchandising and distribution
As of 31 March 2013, 106 company depots through India with storage and logistical facilities
As of 31 March 2013, pan-India non-exclusive distribution network covering 5,642 distributors reaching over 725,000 retail outlets
Origination Customer Processing Products
Merchandising
and
distribution
Finance / Risk management / Logistics coordination
Information flows / Visibility across value chain
Page 14
One Of The Few Edible Oil Companies in India with Integrated Operations
3
-
EXTENSIVE DISTRIBUTION NETWORK IN INDIA
Page 15
Processing plants across 22 locations in India, giving access to markets across India
106 company depots (with storage and other logistical facilities) which serve 5,642 distributors across the country reaching over 725,000 retail outlets
All refining plants located near ports, providing easier access to imported edible oil
Distribution through pipes at ports saves transport cost and time
Inland crushing plants located in key soya bean and mustard producing states
Crushing in
Soya bowl of
India
Proximity to
Ports
Pan India
Footprint
We have a large distribution presence in India. As of March 31, 2013, we have 22 manufacturing locations, 11 wind power generating
locations and 106 company depots across India. In terms of distribution, we have 5,642 non-exclusive distributors in India, covering
over 2,210 towns and over 725,000 retail outlets.
Strategic Manufacturing locations
Note: Manufacturing and other locations as on March 2012
Map for representation purpose only - Not to scale
Strategically located facilities striking the right balance between proximity to
raw materials (cultivating states and ports) and proximity to markets.
4
Pan India Presence
2
3
16
17
18
11
6 13
14
12
4
7
15
10
8
9
Plant location
Jammu
Haldia Gaderwada
Nagpur
Vijaywada
Kakinada
Guna
Piparia
Shujalpur
Manglia
Sriganganagar
Baran
Kota
Kandla
Patalganga
Manglore
Chennai
19
1
Washim
Daloda
5
Krishnapatnam
Durgawati 20
21 22
Cities Activity Access to
Ports Crushing Refining Vanaspati Soya food 1 Jammu 2 Ganganagar 3 Baran 4 Kota 5 Guna 6 Kandla 7 Shujalpur 8 Piparia 9 Gadarwara 10 Haldia 11 Manglia 12 Nagpur 13 Washim 14 Daloda 15 Patalganga 16 Mangalore 17 Chennai 18 Kakinada (A.P) palm mill 19 Vijaywada (A.P) palm mill 20 Durgawati (Bihar) 21 Mysore (Palm Crushing) 22 Krishnapatnam
Mysore
-
Over 26 years of experience and holds a post graduate diploma from IRMA. Oversees business of the Company
Previous experience includes Cargill and Reliance, both in India and abroad
Over 27 years of experience, including ~20 years in Ruchi Soya Responsible for Finance and Treasury operations Qualified chartered accountant, cost accountant and company secretary
Responsible for finance and accounts, audit, risk management and taxation 20 years of experience with Ruchi Soya in various capacities including as the head of
refinery and commodity trading
Mr Shahra holds Masters in Business Administration
Managing Director of Ruchi Soya Industries since 1986 Over 33 years of experience in the soya and edible oil industry Mr Shahra holds a degree of Bachelors in Chemical Engineering Entrusted with the day to day management affairs of the Company subject to the supervision
and direction of the Board
EXPERIENCED MANAGEMENT
Experienced management team with over four decades of industry experience
Credited with the growth and development of the soya and soya processing industry in India
Key members have served or are currently serving as officers of various industry bodies, recognizing their standing in sector
5
Core Management Team
Mr. Sanjeev Asthana
Director
Mr. V. Suresh Kumar
Head of Finance
Mr. Nitesh Shahra
Business Controller
Mr. Dinesh Chandra Shahra
Managing Director
Page 16
-
FINANCIAL PERFORMANCE
-
CONSOLIDATED FINANCIAL PERFORMANCE
Page 18
INR Million FYE MAR 10 FYE MAR 11 FYE MAR 12 FYE MAR 13
Total Revenue 145,333 183,729 305,835 303211
EBITDA(1) 5,316 7,173 10,080 9750
EBITDA (% of gross revenues) 3.7% 3.9% 3.3% 3.21%
Finance Cost(2) 1,537 2,550 6,625 4482
Depreciation & Amortisation 1,203 1,458 1,729 1869
Profit Before Tax 2,809 3,381 1,957 3610
Profit after Tax(3) 1,749 2,252 869 2732
Source: Company Filings.
(1) EBITDA = Total Revenue Total Expenses (2) Finance cost = Interest expense + Other Borrowing Costs + Net Loss of Foreign Currency Transactions
(3) Profit after tax excludes profit attributable to Minority Interest
-
CONSOLIDATED BALANCE SHEET
Page 19
INR Million FYE MAR 10 FYE MAR 11 FYE MAR 12 FYE MAR 13
Net Fixed Assets Incl. CWIP 20,942 24,165 27,375 28,743
Cash and Cash balances 15,997 19,547 33,151 42,962
Inventories 16,184 32,045 41,614 35,628
Total Assets 80,070 111,460 146,142 168,222
Long-term Borrowings 7,053 7,426 8,753 11,226
Short-term Borrowings 17,508 37,699 53,431 62,540
Gross Borrowings 24,561 45,125 62,184 73,766
Net Borrowings(1) 8,564 25,578 29,033 30,804
Shareholders Funds(2) 19,678 22,375 22,499 24,719
Total Capitalization(3) 28,242 47,953 51,532 55,523
Source: Company filings
(1) Net Borrowings = Gross Borrowings Cash and cash balances (2) Shareholders funds = Paid up Capital + Retained Earnings + Minority Interest (3) Total Capitalization = Consolidated Net Borrowings + Shareholders Funds
-
SUMMARY CONSOLIDATED FINANCIALS AND RATIOS
Page 20
Revenues EBITDA
Total Assets Net Leverage (1)
INR Bn INR Bn
INR Bn
Shareholders Funds
Net Borrowings / Total Capitalization (2)
INR Bn
Source:
(1) Net Leverage = Net Borrowings / EBITDA
(2) Net Borrowings = Gross Borrowings Cash and cash balances; Total Capitalization = Consolidated Net Borrowings + Shareholders Fund
CAGR 2010- 2012: 28.3% CAGR 2010- 2012: 23.8% CAGR 2010- 2012: 4.6%
CAGR 2010- 2012: 22.2%
0
50
100
150
200
250
300
350
FY10 FY11 FY12 FY13
145
184
306 303
0
2
4
6
8
10
12
FY10 FY11 FY12 FY13
5.31
7.17
10.08 9.75
0
10
20
30
FY10 FY11 FY12 FY13
19.6 22.3 22.5
24.7
0
20
40
60
80
100
120
140
160
180
FY10 FY11 FY12 FY13
80
111
146
168
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
FY10 FY11 FY12 FY13
1.61
3.57
2.88 3.16
0.0
0.1
0.2
0.3
0.4
0.5
0.6
FY10 FY11 FY12 FY13
0.30
0.53 0.56 0.55
-
APPENDIX
-
ABBREVIATIONS
Page 22
Abbreviations Used Description
FY / FYE Financial Year
9ME 9 Months Ending
Mn Million
Bn Billion
yr Year
MT Metric Tonnes
MTPA Metric Tonnes per annum
BSE BSE Limited
NSE National Stock Exchange of India Limited
INR Indian Rupee
US$ United States Dollar
USDA FAS United States Department of Agriculture Foreign Agricultural Service
IMF International Monetary Fund
-
THANK YOU!