Ruchi Soya Industries Limited Corporate Presentation Nomura International plc
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"), 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. This document speaks as of March 31, 211. 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
Overview of Ruchi Soya Industries Ltd.
Overview of Ruchi Soya Industries Company Profile One of the leading manufacturers of high quality edible oils, vanaspati, bakery fats and soya foods in India Annual turnover of over US$ 4 Bn (1) in FY11 Among the top Indian FMCG players Branded portfolio including Nutrela, Ruchi Gold, Sunrich and Mahakosh Present across the value chain with access to over 175, hectares of land in India for palm oil plantations Listed on BSE, NSE & DSE with market capitalisation of ~US$ 787 Mn (1) (as of March 31, 211) Ongoing discussions for securing land for soya / palm plantation in geographies including Ethiopia and Cambodia and other geographies (MT/Yr) 7. 6. 5. 4. 3. 2. 1.. Capacity Capacity growth Crushing: CAGR 1998-211: 16% Refining: CAGR 1998-211: 24% Vanaspati: CAGR 1998-211: 19%.1.1.1.6.3.6 1998 22 28 211.5 2.1 2.9 Crushing Refining Vanaspati.5 2.3 4. Revenues (INR Bn) 2 15 1 5 26 33 39 Growing Sales (2) Business Overview (2) 52 48 76 91 117 127 144 182 Vanaspati 6% Extractions 24% Revenue mix (FY11) Food products 2% Others 2% Vanaspati, 6% Extraction, 24% EBIT mix (FY11) Food products, 3% Others, 8% Oil, 59% FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 Oils 66% (1) Assuming INR/USD of 44.65 (2) On the basis of consolidated financials Page 3
Edible oil segment The Company has a strong position in the edible oil segment with an estimated market share of ~14%. The company has also witnessed growth over the last 3-4 years in the institutional segment, which caters to institutional customers like, Parle, Britannia Industries, Cadbury India, Nestle India, Lotte India, Bunge India, and ITC Ruchi Soya edible oil sales (1) MT % Ruchi Soya edible oil market share (2) 2,5 2, 1,5 1, Ruchi soya edible oil segment: CAGR FY7 FY11: 17% Indian edible oil: CAGR FY7 FY11: 9% 1,243 1,535 1,598 2,38 2,369 16.% 14.% 12.% 1.% 8.% 6.% 1.5% 11.8% 11.% 15.% 14.% 5 4.% 2.% FY7 FY8 FY9 FY1 FY11.% FY7 FY8 FY9 FY1 FY 11 ( MT) FY7 FY8 FY9 FY1 FY 11 Industry edible oil consumption 11,87 12,97 14,559 15,853 16,862 Source: USDA FAS 1.Standalone sales of edible oil segment of Ruchi Soya Industries Ltd.; excludes the sales for captive consumption 2. Market share estimated based on edible oil sales of Ruchi Soya (excluding captive consumption) and Industry edible oil consumption based on USDA FAS data Page 4
Evolution of Ruchi Soya Industries Consolidated revenues (INR Mn) 2 18 16 Refining Capacity Revenue (INR Mn) (MT) Consolidation of group companies, through scheme of amalgamation, leading to increase in total capacity of the Company 26: International Equity Offering (GDR) of ~US$6Mn Acquisition of companies Mac Oil & Palm-Tech, through scheme of amalgamation, leading to increase in access to 175 Ha of land in India for Palm Oil Plantations. 2.5 2 14 12 1.5 1 8 1 6 4.5 2 1999 2 21 22 23 24 25 26 27 28 29 21 211 Years Primary focus on inland crushing High proportion of revenue from trading activities Expansion of extraction and refining capacity Focus on branded products Increased port based refining Focus on developing upstream business Secure access to 175, hectares of palm plantation in India Efforts to secure international land bank access underway Page 5
Key Highlights
Key Highlights Strong Market Position in Edible Oils in India Favourable Industry Dynamics Scale & Extensive Distribution Reach in India Experienced Management Strong Brands in India Strong Risk Management Fully Integrated Operations Page 7
Global Industry Overview India is a leading consumer of edible oil with high growth expectation World Edible Oil Consumption World Edible Oil Production Others, 38% Brazil, 4% China, 19% Other 27% Indonesia Indonesia 19% Argentina, 2% India 5% Malaysia 14% US, 8% India, 11% Europe, 17% Source: USDA FAS Argentina Argentina 6% United States 7% Europe 11% China 13% Palm and Soyabean oil constitute ~61% of the Global Edible Oil Demand 5% 43% 17% 14% 9% 7% 4% Palm Soyabean Rapeseed Peanut Cottonseed Sunflowerseed Other (MnT) 16 14 12 1 8 6 4 2 22 11 2 21 21 21 23 11 1 12 11 17 18 2 22 36 38 36 38 42 37 41 44 45 49 FY7 FY8 FY9 FY1 FY11 FY7-FY11 CAGR 2% 1% 8% 4% 7% Palm oil Soyabean oil Rapeseed oil Sunflowerseed oil Others Source: USDA FAS Source: Global Edible Oil Demand as per USDA FAS Page 8
1,25 1,2 1,15 1,1 1,5 1, 95 India Edible Oil Industry: High growth potential Robust growth in consumption of edible oil.. Rising deficit with domestic production not being able to keep pace Oil Consumption growing inline with growth in population Mn Mn MT US$ 1,5 1,216 18 1,182 16 1,148 141, 1,113 1,199 12 1,165 1 5 1,131 1,43 8 1,6 1,781,96 6 4 2 21 22 23 24 Population Source: USDA FAS, IMF 25 26 27 28 29 Indian Edible oil demand being substantially met by imports as domestic production has lagged 21 Total oil consumption 211 getting turbo charged by growing per capita income 443 446 459 523 61 694 763 945 1,382 1,58 1,265 21 22 23 24 25 26 27 28 29 21E 211E GDP / capita Source: USDA FAS, IMF 15 1 (Kg / year) 5 Per capita consumption Significant growth in per capita consumption can be expected as Indian per capita GDP continues to grow Per capita consumption (kg / yr) 26 24 Indonesia 22 2 China 18 16 Pakistan 14 India 12 1 Source: USDA FAS, IMF Argentina Brazil Mexico Edible oils have a significant share in Indian agricultural imports Russia 2, 4, 6, 8, 1, 12, GDP / capita (US$) MnT 2 16 12 8 CAGR Imports: 11% CAGR Production : 2% 5 5 5 6 8 9 9 Others Cotton 7% 5% Fruits & Nuts 6% Cashew Nuts 7% Edible Oil 43% 4 6 7 6 7 7 6 7 FY5 FY6 FY7 FY8 FY9 FY1 FY11 India Imports India Production Pulses 16% Wood Products 16% Source: USDA FAS Source: USDA FAS Page 9
India Edible Oil Industry: High growth potential (Cont d) Palm oil consumption in India has seen significant growth, and is primarily met through imports, leaving significant room for growth in domestic production India Edible Oil Consumption India Edible Oil Imports 'MT 16, 12, 8, 4, 11, 87 523 6 2,5 2,133 1,433 12,97 574 398 2,33 1,967 1,582 5,65 15,853 14,559 674 667 852 731 2,67 2,3 2,252 2,95 1,385 1,455 6,475 6,75 16,862 FY7-FY11 CAGR 9% 93 2,7 2,274 1,427 21% 7,75 'MT 9, 6, 3, 5,44 14 23 1,447 3,65 5,917 151 18 733 5,15 8,74 8,68 23 23 583 55 1,6 1,5 6,867 6,4 9,17 25 72 1, 7,2 14% 19% FY7-FY11 CAGR 3,671 947 1,54 1,38 1,49 1,141 FY7 FY8 FY9 FY1 FY11 FY7 FY8 FY9 FY1 FY11 Source: USDA FAS Cottonseed Palm Peanut Rapeseed Soybean Sunflowerseed Other Source: USDA FAS Page 1
Scale & Extensive Distribution Reach in India Strategically located facilities striking the right balance between proximity to raw materials (cultivating states and ports) and proximity to markets, with an aggregate daily crushing capacity of 13,694 MT of oilseeds and aggregate refining capacity of 7,57 MT of oil Pan India Presence Manufacturing locations 1 Jammu Parwanoo Amritsar Damtal Rajpura Dehradun Ludhiana 2 Bhatinda Chandigarh Roorkee Karnal Meerut Gurgaon Delhi Barelly Sriganganagar Hapur Saharanpur Jaipur Rewari 3 Kanpur Agra Allahabad Baran Jodhpur Daloda Gorakhpur Guwahati Kota Sumerpur 4 15 Varanasi Patna Udaipur 8 Dhanbad Shujalpur Raniganj 7 Gwalior 12 Guna Siliguri Ahmedabad Manglia 5 Gaderwada Ranchi 1 11 Haldia Piparia Kandla Indore 9 Sambalpur Jeypore Kolkata 6 13 Raipur Washim Nashik 14 Cuttack Nagpur Pune Bilaspur Mumbai Bhiwandi 16 Warangal Patalganga Vijaywada Gulbarga Davangere Berhampur Hyderabad Bijapur Belgaum Vizag Kurnool Ongole Goa Tirupathi 17 Bellary 19 Kakinada Manglore Banglore18 Shimoga Hassan Chennai Hubi Vellore Mysore Villupuram Kasargod Pondicherry Calicut Salem Kumbakonam Depot Cochin Trichy Plant location Madurai Palghat Coimbatore Erode Office Note: Distribution network as of March 211 ; Cities Activity Access Crushing Refining Vanaspati Soyafood to Ports 1 Jammu 2 Ganganagar 3 Baran 4 Kota 5 Guna 6 Kandla 7 Shujalpur 8 Piparia 9 Gadarwara 1 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 Pan India Footprint Proximity to Ports Crushing in Soya bowl of India Highlights Manufacturing facilities across 19 locations in India, giving access to markets across India 92 company depots (with storage and other logistical facilities) which serve 4,23 distributors across the country reaching 51, 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 soyabean and mustard producing states Page 11
Strong Brands in India Track record of successfully creating brands in a highly commoditized industry Key Brands Branded Sales Premium Nutrela Food products/ Refined Oils (Soyabean, Groundnut, Cottonseed, Sunflower, Mustard and Ricebran) Nutri Gold Vanaspati INRBn 45 4 35 Branded Sales as % of Consolidated Total Sales 32 37 33 21% 39 3 Value Mahakosh Refined Oils (Soyabean, Groundnut, Cottonseed and Ricebran) / Vanaspati 25 2 18% 18 23 Sunrich Refined Sunflower Oil 15 Ruchi Gold Refined Oils (Mustard and Palmolein) 1 9 Mass Ruchi Star Refined Soyabean Oil 5 Ruchi No. 1 Vanaspati FY5 FY6 FY7 FY8 FY9 FY1 FY11 Page 12
Fully Integrated Operations Healthy mix of midstream and downstream, and well on its way to develop an upstream business Information flows / Visibility across value chain Origination Processing Products Merchandising and distribution Customer Finance / Risk management / Logistics coordination Origination Palm plantations across Andhra Pradesh, Karnataka, Mizoram, Gujarat, Orissa and Tamil Nadu Exclusive access to total agricultural land of 175, hectares Processing Daily capacity (MT): Crushing:13,694 Crude Oil: 2,465 Soya Meal: 11,29 Refining: 7,57 Vanaspati & bakery fats: 1,565 Textured soya protein: 57 Edible soya flour: 2 Products Key products Edible oil Seed extractions, Vanaspati Food productions Key brands include Nutrela, Ruchi Gold, Ruchi Star, Sunrich and Mahakosh Merchandising and distribution 92 company depots through India with storage and logistical facilities Pan India distribution network covering 4,23 distributors Page 13
Strong Risk Management The Company has effectively maintained revenue growth and profitability through the volatility of commodity cycles, over the last decade Consolidated Revenues (INR Bn) (US$ / MnT) 2 182 2, 144 15 117 127 1,8 91 1 76 52 1,6 26 33 39 48 5 1,4 FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 1,2 1, 8 6 4 2 Jan-2 May-2 Sep-2 Jan-3 May-3 Sep-3 Jan-4 May-4 Sep-4 Jan-5 May-5 Sep-5 Jan-6 May-6 Sep-6 Jan-7 May-7 Sep-7 Jan-8 May-8 Sep-8 Jan-9 May-9 Sep-9 Jan-1 May-1 Mar-11 Rapeseed Soya Palm Consolidated Net Income (INR Mn) 2,4 2,252 2, 1,658 1,749 1,6 1,2 851 1,36 974 8 261 361 55 32 383 4 FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 Source: IMF Rapeseed refers to - Rapeseed Oil; Crude, fob Rotterdam Soya refers to - Soybean Oil, Chicago Soybean Oil Futures (first contract forward) exchange approved grades, US$ per metric tonne Palm refers to - Palm oil, Malaysia Palm Oil Futures (first contract forward) 4-5 percent FFA, US$ per metric tonne Page 14
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 Core Management Team Mr. Dinesh Shahra Managing Director Mr. Nitesh Shahra President, Refinery Business Mr. Sanjeev Asthana Director Mr. V. Suresh Kumar Head, Corporate Finance Mr. RV Ramanujam Chief Operating Officer Source: Company. Managing Director of Ruchi Soya Industries Ltd. since 1986 Over 3 years of experience in the soya and edible oil industry Also serves as a Non Executive Director of Ruchi Infrastructure Ltd. Mr. Shahra holds a degree of Bachelors in Chemical Engineering Responsible for operations in all the port based refineries Over 17 years of experience in the relevant operations, including in Ruchi Soya since 26 Mr. Shahra holds a degree of Bachelors in Commerce and Masters in Business Administration Oversees Strategy, M&A and International Expansion Previously, served as the President and Chief Executive of Agri Business and Food Supply Chain at Reliance Retail Limited from 26 to May 21 Mr. Asthana has previously also held the position of business head, grains and oilseeds, at Cargill Over 24 years of experience, including ~16 years in Ruchi Soya Responsible for Finance and Treasury operations Qualified chartered accountant, cost accountant and company secretary Joined Ruchi Soya Industries in 29 Previous experience includes 16 years in Asian Paints (holding positions including, Regional Head- S.Pacific, China & Hongkong and CEO for Bangladesh and Dubai) and 4 years in ITC Ltd. (Agri Business) Page 15
Strong Market Position in Edible Oils in India Among the oldest and most established edible oil players in India Market Position in India (1) Among the leading importers of edible oil Among the leading exporters of meal/oil seed extracts Among the largest capacities Awards to the Company Largest Food & Agriculture Company in India Fortune India 21 One of the only two Indian Companies featured in the World's 5 fastest growing consumer firms during the June 29-June 21 period. Ranked 2th fastest growing consumer companies across the globe during June 29-1 Deloitte Exports/Imports Capacity Crushing capacity (13,694MT/day) Refinery capacity (7,57MT/day) Access to one of the largest palm oil plantations in India Branded Products One of the leading Indian Edible oil players in terms of Volumes Very strong position in Palmolein Oil Extensive portfolio of brand sales in edible oil segment Select Awards Received Edible oil / Vanaspati Management awards No.1 M.D. for 21 by Business World - Dinesh Shahra Globoil man of the year 21 Nitesh Shahra Globoil man of the decade award in the year 26 Dinesh Shahra Legend of the year 23 2 nd 2 nd Kailash Shahra National energy conservation awards Karnataka Plant (29) Chennai Plant (27) 1st Gujarat plant (28) 1 st Chennai Plant (28) Globoil gold & Other awards Ruchi soya awards Highest exporter of oil meals (21/ 9 / 7 / 6 / 4 / 3 / / 99 / 98) Highest importer of edible oil (21/ 9 / 7 / 6 / 3 / 98) Outstanding Performance for a decade in Import of edible oil (9) Outstanding Performance for a decade in Export of oil meal (9) 1 st 1 st (1) Based on company estimates Page 16
Business Strategy Backward Integration Expansion into upstream business in order to enhance margins as well as secure supply chain. Improving ability to source raw materials required from multiple sources in a timely and cost effective manner, with reduced dependence on third parties. In FY21, the Company acquired 2 entities with exclusive rights to cultivate palm plantations in two of the key palm producing states in India. The Company entered into MoU with State governments securing access to a portion of the palm fruit produce at certain plantations. Expansion of installed capacity Sustained expansion in capacity to meet the growing demand of Edible oil in India, in addition to helping the Company realize efficiencies and economies of scale. In the process of expanding CPO (crude palm oil) refining capacity by 1 Mn MTPA by calendar year 211. Greater focus on branded portfolio Increasing Global Presence Focus on maintaining leadership position in the branded edible oils segment in India. Increase of sales and marketing efforts in regions where the Company does not have a strong presence, particularly towns with population less than 5,. Increased focus on R&D activities on expanding product range. New health-focused product development to be marketed under the Nutrela brand. Focus on bakery shortening business along with leveraging the opportunities available in mustard branded sales, palm and soya products. Diversify geographic footprint, and enhance scale and reach of operations. Explore opportunities to produce and sell edible oil in other emerging markets. Ongoing discussions for securing land for soya / palm plantation in geographies including Ethiopia and Cambodia and other geographies. Page 17
Key Highlights Strong Market Position in Edible Oils in India Favourable Industry Dynamics Scale & Extensive Distribution Reach in India Experienced Management Strong Brands in India Strong Risk Management Fully Integrated Operations Page 18
Appendices
Market and Ownership Overview Top Holders (1) Shareholding Pattern (1) Sr No. Name of the shareholder Shares as % of total no. of shares 1 Vs Net Ltd 6.61% 2 Sawit Plantationa Pte. Ltd. 5.9% FII 16% FI / Bank 1% 3 Cresta Fund Limited 3.66% 4 Albula Investment Fund Limited 3.45% Promoter 52% 5 Aiwo Ltd 3.34% Non institutional 31% 6 Merrill Lynch Capital Markets Espana 1.38% 7 Merdale Investment Co. Limited 1.28% 8 Clemfield Industries Limited 1.2% Total Capital Market Data (3) 26.82% Equity Capital Face Value @ INR 2 INR 665Mn Indexed 35 3 Indexed Stock Price Performance - 5 years 158% Closing Price (3) INR15.65 25 52 Week High Low INR142.45 (H) INR79.85 (L) 2 15 1 No. of shares outstanding (Mn) (3) 332.5 Market Capitalization (3) INR 35.13 Bn (US$ 787 Mn) 1. Source: Notice to NSE post amalgamation Sunshine Oleochem Limited with Ruchi Soya Industries Limited, as of Septermber 24, 21 2. As of March 31, 211 INR/USD of 44.65 3. Source: NSE 5 8/25 6/26 4/27 1/28 11/28 9/29 7/21 Ruchi Soya Page 2
Summary Financials Consolidated INR Mn FY7 FY8 FY9 FY1 FY 11 Consolidated Profit and Loss statement: Total Revenue 9,695 117,22 127,423 143,943 182,311 EBITDA 3,34 4,385 2,95 4,443 5,946 PBT 1,61 2,639 1,572 2,89 3,63 PAT 1,36 1,658 975 1,749 2,252 Consolidated Balance Sheet Net Fixed Assets Incl. CWIP 1,78 12,17 14,137 2,942 24,181 Current Assets, Loans and Advances 32,185 51,369 49,951 57,79 87,88 Current Liabilities and Provisions 17,358 31,817 32,739 34,148 43,89 Loans 16,91 19,898 18,515 24,561 45,83 (1) Share Capital 817 1,54 1,55 825 (2) 685 (2) Reserves and Surplus 8,219 1,199 11,5 18,638 (3) 21,37 Source: Company filings 1. Including short term loans of INR 17617 Mn, which are guaranteed by banks against fixed deposits in the banks 2. Share capital takes into account redemption of preference shares capital in FY 1, conversion of share warrants and share capital suspense on amalgamation into equity shares in FY 11. 3. Includes increase on account of revaluation of fixed assets pursuant to scheme of amalgamation Page 21
Summary Financials - Consolidated Revenues EBITDA Net Income INR Bn 2 182 16 144 117 127 12 9 8 4 FY7 FY8 FY9 FY1 FY11 INR Bn 7 6 5 4 3 2 1 6. 4.4 4.4 3. 2.9 FY7 FY8 FY9 FY1 FY11 INR Bn 3 2 1 2.2 1.7 1.8 1. 1. FY7 FY8 FY9 FY1 FY11 Net Worth (1) Total Assets INR Bn 3 2 1 2 22 9 11 12 FY7 FY8 FY9 FY1 FY11 INR Bn 12 1 8 6 4 2 113 79 63 64 43 FY7 FY8 FY9 FY1 FY11 Source: Company Filings 1. Net Worth takes into account the redemption of preference shares and revaluation of fixed assets pursuant to scheme of amalgamation Page 22
Process Flow Diagram Soybean extraction plant Beans Cleaning, Cracking, Dehulling, Conditioning, Flaking Full Flat Flakes Toasting Oil Extraction Defatted Soya Flakes Crude Soyabean oil Grinding/Grading Grinding Soya Flour Soya Meal Extrusion Textured Soya Protein Refined Soya Oil Dom Bagging Hydrogenation Vanaspati Page 23
Abbreviations Abbreviations Used Description FY Financial Year Mn Million Bn Billion yr Year MT Metric Tonnes MTPA Metric Tonnes per annum BSE Bombay Stock Exchange NSE National Stock Exchange DSE Delhi Stock Exchange INR Indian Rupee US$ United States Dollar USDA FAS United States Department of Agriculture Foreign Agricultural Service IMF International Monetary Fund Page 24
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