Heritage Foods Limited Investor Presentation FY17
Disclaimer The release contains forward-looking statements, identified by words like plans, expects, will, anticipates, believes, intends, projects, estimates and so on. All statements that address expectations or projections about the future, but not limited to the Company s strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances. Therefore the investors are requested to make their own independent assessments and judgments by considering all relevant factors before making any investment decision. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. Bring Home Health & Happiness 2
Vision, Mission, & Core Values Bring Home Health & Happiness 3
FY17 Highlights Change in Logo of the Company. Acquired Dairy Business of Reliance Retail Ltd. Demerged Retail Undertaking to Future Retail. Crossed Rs 1,8 crore revenue mark in Dairy vertical in FY17. Value Added Products, which enjoy 2X EBITDA margins as against Liquid Milk, notched 23.47% of Dairy revenue. Commissioned 1 st Cattle Feed Plant with a capacity of 2 tons per day. Commissioned 2 nd 2.1 MW Wind Power Plant. Bags a prominent award in Corporate Governance; won National Energy Conservation Award; CFO conferred CIMA award (1 Most Influential CFOs in India) and Dairy division CIO won The 1 most innovative CIO by The World CSR Day award. Bring Home Health & Happiness 4
Overview of Business Verticals Heritage Foods Limited ( Heritage ) is a leading corporate based out of Hyderabad and operates in the high-growth segments. 3 25 2 187.1 Dairy (Rs Mn) - FY17 2429.9 15 Two reporting divisions Dairy and Renewable Energy. 1 5 144.89 Revenue EBITDA Capital Employed One of the few private sector companies in India with a true Farm to Fork solution in dairy. 5 45 4 35 3 25 2 15 1 5 Renewable Energy (Rs Mn) - FY17 472.5 52.13 43. Revenue EBITDA Capital Employed Bring Home Health & Happiness 5
Awards The Company s Dairy division has been awarded the 1st Prize National Energy Conservation Award for the year 216 by the Ministry of Power, Government of India for the effective energy conservation methods adopted. Heritage Foods Limited has been declared as the Winner of 'Special Commendation' for Golden Peacock Award for Excellence in Corporate Governance for the year 216. The Chief Financial Officer (CFO) of Heritage Foods Ltd, Mr. A. Prabhakara Naidu has been conferred an Award by the Londonbased Chartered Institute of Management Accountants(CIMA), there by joining the elite list of CIMA's 1 Most Influential CFOs. Mr. K.Rajababu, Head-Information Technology, Dairy Division of the Company is among those conferred with the 1 Most Innovative CIO of India by The World CSR day (www.indiasgreatest.com), Mumbai. Bring Home Health & Happiness 6
Consolidated Financial Overview 3 25 2 15 1 5 16 14 12 1 8 6 4 2-2 8 6 4 2-2 Net Sales (Rs. in Mn.) & Growth % 69.79% 1722 1618 13934 34.78% 1961 94 27.12% 7925 588 21.73% 14.96% 13.62% 7.51% 26429 2386 273 2.38% 14.84% 11.2%. FY28 FY29 FY21 FY211 FY212 FY213 FY214 FY215 FY216 FY217 EBITDA (Rs. in Mn.) & EBITDA % 1365 1413 6.31% 5.52% 5.73% 5.35% 4.89% 111 3.67% 95 8814.25% 3.27% 44 512 358 -.43% -2.81% -34 FY28 FY29-165 FY21 FY211 FY212 FY213 FY214 FY215 FY216 FY217 PAT (Rs. in Mn.) 668 554 499 453 282 55 93 9 11 FY28 FY29 FY21 FY211 FY212 FY213 FY214 FY215 FY216 FY217 8. 7. 6. 5. 4. 3. 2. 1. 8. 6. 4. 2.. -2. -4. -4-357 -6 Bring Home Health & Happiness 7
Dairy Business Vertical 2 18 16 14 12 1 8 6 4 2 Net Sales (Rs. in Mn.) & Growth % 1871 17688 45. 42.76% 15559 4. 12686 13282 35. 3. 194 22.18% 866 25.3% 6883 27.12% 25. 17.14% 2. 5927 4851 15.96% 15. 16.13% 13.69% 1. 4.7% 5.73% 5.. FY28 FY29 FY21 FY211 FY212 FY213 FY214 FY215 FY216 FY217 16 14 12 1 8 6 4 2 EBITDA (Rs. in Mn.) & EBITDA % 1449 1372 6.7% 1219 5.55% 1137 8.58% 4.72% 5.65% 879 7.76% 738 9.43% 719 5.41% 563 7.43% 486 FY29 FY21 FY211 FY212 FY213 FY214 FY215 FY216 FY217 12. 1. 8. 6. 4. 2.. 3 25 2 15 1 5 Capital Employed (Rs. in Mn.) & ROCE % 9. 8.4% 7.9% 243 8. 64.54% 7. 1634 1761 1869 1957 1512 146 1523 47.2% 59.63% 6. 1227 1322 45.17% 49.25% 5. 4. 36.76% 37.24% 3. 24.4% 2. 1.. FY28 FY29 FY21 FY211 FY212 FY213 FY214 FY215 FY216 FY217 Bring Home Health & Happiness 8
Dairy : Liquid Milk In 1993-2, liters per day was milk collection. In 217 1.43 lakh liters per day is milk collection. Average procurement cost is at Rs. 32.52 per liter Average selling price is at Rs. 37.37 per liter. Bring Home Health & Happiness 9
Rs. in million Total Dairy Revenue Dairy : Branded/Value Added Products Forayed into value added products in 27. Turnover for FY15-Rs. 342. mn, FY16-Rs. 3824.7 mn, FY17-Rs. 4389.5 mn 5 4 3 2 1 Turnover (Rs. in Mn.) 3824.7 4389.5 342. FY15 FY16 FY17 Products portfolio: Curd (around 77%), rest are in the following order: Ice Cream, Paneer, Flavored Milk, Sweets. The Contribution of value added products in the total dairy revenue is 23.47% amounting to Rs 4389.5 mn in 216-17. 2 18 16 14 12 1 8 6 4 2 14311.5 4389.5 216-17 Revenue from Liquid Milk Revenue from Value added Products Bring Home Health & Happiness 1
Dairy : Winning Trust Facilitating loans for the purchase of cattle through commercial banks; Facilitating cattle insurance; Conducting health camps for animals through mobile veterinary clinics at frequent intervals; Supply of high quality cattle feed and fodder seeds; Helping to source good productive animals to farmers; Supply of milk analyzers for ensuring accurate measurement of milk quality. And ensuring punctual payment to farmers. Bring Home Health & Happiness 11
Parlours as Brand Outlets Heritage Parlor is a Modern Kirana incubated and pioneered by Heritage. Currently there are 168 parlors with an average shop area of 1 sq.ft. Vision is to nurture entrepreneurship and to enhance inclusive growth opportunities-owned and managed by franchisees. Selling only Heritage range of products and authorized products/services. Only organized chain of parlors to be selling non-dairy products also. Milk & Milk Products, Ice Cream, Bread, Baked Products, FMCG Products, Staples, Fruits & Vegetables, Eggs, Public Telephone, and Mobile recharge coupons. Bring Home Health & Happiness 12
Dairy : Moving up Value Chain Focus on own brand value added products - Curd Butter milk Frozen Dessert/Ice cream Consolidation in existing markets. Dairy Employee strength : 2,42 Bring Home Health & Happiness 13
Demerged Retail Undertaking to Future Retail... Completed demerger process of Retail undertaking (operating 136 stores with 4.81 lakh sq.ft), Agri, and Bakery divisions to Future Retail Ltd Retail operations which were started in year 26, currently serves 24 Mn customers annually. Will hold 3.65% equity stake in Future Retail Ltd through fresh issuance of shares. Bring Home Health & Happiness 14
Integrates with Reliance Dairy, post acquisition Acquired Dairy business of Reliance Retail Ltd. Reliance Dairy procurement was 1.76 Lakh Liters Per Day (LLPD) as on April, 217 from over 2,4 villages across 1 states, had 3 Milk Chilling Centers(MCCs), and 17 Bulk Milk Coolers (BMCs). Reliance Dairy transferred its 2 brands: Dairy Life and Dairy Pure. Bring Home Health & Happiness 15
Renewable Energy : Business Vertical Turnover in FY217 was Rs 52.13 mn. Capital Employed for Renewable Energy division Rs 472.5 mn. Heritage Foods Ltd has commissioned Distributed Captive Solar Power Plants at its 6 various locations/plants namely, (1) Bobbili packing Station (Andhra Pradesh), (2) Battiprolu packing Station (Andhra Pradesh), (3) Kallur packing Station (Telangana), (3) Sangavi packing Station (Maharashtra), (5) Vada Madurai packing Station (Tamil Nadu) and (6) Bangalore packing Station (Karnataka) with total capacity of 1.66KWp with key objective to optimize energy mix by use of clean & Green sources (Renewable) Energy sources to reduce carbon emissions and to secure energy at low cost. The Company increased its Renewable Energy Capacity to 8.2MW with 2.4MW Solar Power, 1.66MW Distributed Solar power and 4.2MW Wind Power in the state of Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu and Karnataka for the captive consumption of its Dairy plants. Bring Home Health & Happiness 16
Comparative Shareholding Pattern Shareholding pattern as on March, 217; March, 216 & March, 215 12. 1. 8. 47.12 5.85 53.67 6. 4. 2.. 12.98 9.25 6.31 39.9 39.9 4.3 FY17 FY16 FY15 Promoters Institutions Non-Institutions Bring Home Health & Happiness 17
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