Repositioning the GRM Identity Transitioning into a truly global brand

Transcription

1 2018 Presentation Repositioning the GRM Identity Transitioning into a truly global brand

2 The GRM Brand today A leading exporter of rice to the Gulf region, with a majority of exports concentrated in this region Exporting high quality traditional basmati varieties of rice to USA, UK and other European countries Launched our own brands during FY2018 which are sold at large retailers like ASDA (Walmart UK),T.J. Morris (UK),Albert Heign (Holland), Metro (Poland) Favourable regulatory changes and an improved operating environment in the industry have provided a boost to players with strong market positioning and balance sheet like GRM Less than 10% of Revenues come from Value Added Products currently Repositioning the GRM Brand Moving towards the next phase of growth Redefined Value Proposition Diversifying from traditional basmati rice offerings to high margin own brands, specialized and value added products Integrated Business Model Targeting value added and ready to eat health products in Europe and the US where there is significant demand for such products Focusing on supplying specialized / rare rice varieties and health oriented ready to eat products with signature recipes Niche Product Market Increasing Market Traction Enhanced R&D Capabilities 2

3 Table of Contents 1 Business Overview & Strategy Industry Overview Operational Highlights Financial Performance

4 Business Overview & Strategy

5 GRM Overseas: At a Glance A Wealth of Experience Over 40 years in the Rice business with a legacy of supplying products of the highest quality Export Oriented Around 90% of our Revenues are generated from exports to the Middle East; we are also focused on exports to US & UK Global Standards Stringent proactive quality control procedures in place in accordance with International requirements Moving up the Value Chain Focused on high quality value added offerings such as branded rice varieties, branded basmati, organic rice products and ready-to-eat Diversified Basket of Rice Products A variety of rice offerings catering to a mix of consumer preferences Basmati, Specialised Products and Value Added Products Robust Financial Performance Revenues of INR 9,442 mn in FY2018, an increase of 60% YoY, Net Profit of INR 119 mn, growth of 112% YoY GRM has always believed in delivering the best. We are constantly focused on raising the standards 5

6 Strategic Approach To become one of India s distinguished suppliers of : o High grade branded basmati rice for western markets o Our Targets Quinoa, rice based and other organic ready to eat health products To successfully launch our own brand of ready to eat health products in European markets and achieve positive synergies within next 18 months Diversification of export mix Expansion in market reach through a targeted marketing approach Improvement in realisations through branding and differentiation efforts Premiumisation of our product portfolio Focused on building our brand strength and adding value through product differentiation 6

7 Strategic Roadmap to Business Transformation Premiumisation of Product Portfolio Increase branded / own labels of rice; currently about 90% of the rice exported is private label Targeting Europe and US markets for premium products compared to the Middle East, Iran, etc. which are highly price sensitive Focus on Value Enhancement Products Increase sales of specialised rice varieties like red rice and black rice (high margin products) as well as indigenous varieties of Indian Folk Rice from Bihar,West Bengal, etc. Focus on Value Added products such as ready to eat products, organic products, Quinoa and exotic seeds, etc. which are popular in advanced health food markets like US and Europe Proactive Branding & Marketing Intensify marketing for own brands of basmati rice and the newer range of high margin value added products Gaining traction in the western markets through our Sales offices located in the UK and US Focus on R&D In house R&D team with prior experience in UK and US regions Focused on developing unique ready to eat rice recipes and health foods that appeal to the International markets Focused on reinventing our product basket in line with market trends 7

8 Product Portfolio Market Segment Product Offerings Key Customers Basmati Specialised Red Rice, Black Rice, Smoked Rice, Folk rice varieties Value Added Organic Rice, Flax and Quinoa Seeds Ready to eat health products and Retorts Targeting speciality stores across Europe. Increasing customer preferences for health food products in European markets. Strategically moving towards more value add products 8

9 Recent Launches Objective: To bring natural foods grown locally by farmers who do not use chemicals to affect the product yield Target Market: The fast growing health conscious population in particularly Europe / USA / Australia Strategically moving towards more value add products 9

10 Products & By-products Integrated Operations Basic Operations Integrated Operations Rice Head Rice Broken Rice Broken rice contributes 10% of our Revenues Husk Bran Internally used as a fuel for Boiler Bran Oil Leveraging our operational capabilities through effective utilisation of by-products Wastage 5% Enhancing value and minimising waste through integrated operations 10

11 Infrastructure and Capabilities 30 containers of 23 Tons each Production and Shipping capacity per day Integrated and efficient procurement processes due to: Strong and long standing relationships with farming communities Proximity to key rice cultivation zones Milling Plant State-of-the-art factory equipped with three milling plants, each with a capacity of 20 tons per hour with shipping capacities located at Mundhra port Labs are well-equipped with machinery of international caliber and include moisture meters, lab de-huskers, electronic Vernier Calipers, precision electronic weighing scales, paddy separator and lab-polishers Equipped with the comprehensive systems that ensure ongoing fumigation, maximum production from ground, optimal moisture & humidity and protection from all forms of infestation Huskers One stop shop: Centralized production facility for all the operational requirements 11

12 Focus on Governance, Automation and R&D Effective Governance Focus on increased objectivity in management decision making and engagements with external agencies, across the organisation Customised ERP Systems Working towards automated and better integrated reporting systems to further increase transparency Focused R&D Capabilities R&D Team in Europe to shape the value added product portfolio and ready to eat recipes for the targeted western markets Growth and expansion through dynamic business strategies Profitability and margin expansion High corporate governance standards Partner with industry leading firms across all aspects of the business Thinking bigger is the first step to exponential growth 12

13 Industry Accreditations & Recognitions GMP Certificate HAACP Certificate ISO Certificate BRC Certificate Compliant with the highest International Standards 13

14 Industry Overview

15 Industry Overview Indian Export Volumes MT 000 Indian Export Value INR billion 8,274 7,133 6,465 6,771 6,335 3,757 3,702 4,046 3,985 2, Apr - Dec Apr - Dec 2017 Basmati Rice Non-Basmati Rice Basmati Rice Non-Basmati Rice Top 5 Destinations for Export during April December 2017 Basmati Rice % Iran 23.0 Saudi Arabia 15.7 Iraq 11.3 UAE 9.4 UK 5.3 Kuwait 4.1 Non-Basmati Rice % Bangladesh 19.5 Benin 10.2 Senegal 7.0 Sri Lanka 5.9 Nepal 5.6 Guinea 4.9 Source: APEDA 15

16 Operational Highlights

17 Operational Highlights Export Volumes (Rice) (000 MT) CAGR 23.4% 1, , ,469 6,419 Realisation Per Unit (Rs./MT) 4,586 5,086 6, Export volumes have progressively increased over the last five years at a CAGR of 23.6% The increase in sales volumes is attributable to: Expansion of our client base in existing locations such as the Middle East Growth of the business in US and UK due to targeted sales efforts The increase in realisations are attributable to: Expansion of our client base across geographies Gradual increase of own brands and value added products in the product mix 17

18 Financial Performance

19 FY2018 Performance Highlights Strong growth in revenues and profitability Total Revenue (INR Mn.) 9,442 EBITDA (INR Mn.) 350 PAT (INR Mn.) 119 5, FY2017 FY2018 FY2017 FY2018 Commenting on the results and performance, Mr. Rohit Garg, MD, and Mr. Atul Garg, Joint MD said: FY2017 FY2018 During FY2018, GRM continued to grow its market share in the gulf region with high quality products and strong customer relationships. As a part of our growth strategy, we have expanded exports to 25 new countries and have made noteworthy progress in the UK market where we are now selling our own brands in large retail stores like ASDA (Walmart UK). We are very pleased with the strong financial performance achieved during the year with revenue growth of 60% and net profit growth of 112% y- o-y. The underlying growth was primarily driven by a combination of both, higher volumes and increased price realizations. Going forward, GRM will focus on diversifying from traditional basmati rice offerings to high margin own brands, specialized and value-added products, and adding value through product differentiation. Taking the momentum forward with a clear strategy in mind, GRM is poised to enter into a new era of growth and to create maximum value for all our stakeholders. Building momentum for the next phase of our growth story 19

20 FY2018 Profit & Loss (INR Million) FY2018 FY2017 Y-o-Y % Total Income from Operations 9,442 5, % EBITDA % EBITDA Margin 3.7% 3.4% 122.5% EBIT % EBIT Margin 3.5% 3.1% 135.1% PBT % PBT Margin 1.9% 1.4% 194.2% PAT % PAT Margin 1.3% 0.9% 187.9% Basic EPS % 20

21 Key Balance Sheet Items Total Shareholders' Funds (INR Mn.) (INR Million) FY2018 FY2017 Short Term Debt 2,335 1, Long Term Debt Total Debt 2,918 1,980 Cash and Cash Equivalents Net Debt 2,907 1, Return on Equity (ROE %) 25.3% Total Shareholder Equity Net Debt to Equity (x) 5.6x 4.7x Interest Coverage Ratio (x) 2.2x 1.9x 16.2% 14.2% 5.8% 14.2%

22 Annual Financial Trends Revenue (INR Mn.) 9,442 EBITDA (INR Mn.) 350 4,217 5,684 3,557 5, PAT (INR Mn.) 119 Basic EPS (INR)

23 Key Ratios Continuous focus on enhancing shareholder s return % 14.2% ROE % 13.3% 25.3% 9.0% 12.5% ROCE % 7.2% 6.0% 11.6% 2.0 Interest Coverage (x) % During the year, management continued its focus on penetrating new markets with value added products Strong improvement in return ratios 23

24 Contact Information This presentation contains statements that are forward looking statements including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to GRM Overseas future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. GRM Overseas undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances. For further information, please contact: Atul Garg, Director GRM Overseas atul@grmrice.com Ravi Gothwal / Samantha Francis Churchgate Partners grm@churchgatepartners.com 24

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