Fineotex Investor Presentation May 2021
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Fineotex Chemical Limited (BSE: 533333; NSE: FCL) Investor Presentation May 2021 Drilling Specialties Textile Specialties Home Care and Hygiene Specialties Other Specialties Agenda Company Overview 3 – 16 Sustainability Approach 17 – 25 Financial Performance 26 – 30 2 Company Overview 3 An Introduction to Fineotex Speciality chemicals producer for 4+ decades with a market 450+ 60+ leading position in the international textiles industry Product Categories Countries Present Bluesign, ZDHC, Successful entry into home care and hygiene and drilling 43,000+ MT p.a. Star Export House Installed Capacities speciality chemicals Accreditations 100+ Rs. 270 mn Biotex Malaysia spearheads the R&D solutions, application Dealers in Indian and Deployed for brownfield research and product development International Market facility at Ambernath, Maharashtra Attractive industry dynamics with technical barriers to entry Home Care and Rs. 7,287 mn Hygiene Division Market Capitalization as and high levels of development and product customisation st Recently launched on 31 March 2021 products across housekeeping, kitchen care and disinfection 4 Fineotex Investment Case Business Dynamics Acquisition Track Record Global Customer Reach • Fineotex and Biotex associated with • Biotex (73% owned) net profit has • International acceptance by high quality and innovation across grown by a factor of 10x since profile customers industries globally acquisition in 2011 • 50% of sales come from 60+ countries • Top 10 customers: 33% of sales • De-leveraged into a debt free • Top 10 products: 18% of sales Company Shareholders Commitment 10 Year Financial CAGR Robust Cash Management • The Board has recommended a dividend of Rs. 0.30 per share • Revenues 21.7%, EBITDA 20.8% , PAT • Rs. 242 mn invested into the expansion (FY20:Rs. 0.05) 26.3% of the business in FY21 • The Company bought back 5,51,580 • Cash Flow from Operations to EBITDA shares by utilizing Rs. 18.2 mn from at 88% in FY2021 cash reserves 5 Our Evolution 1995 2004 2007 2011 2014 ❖ Incorporation of ❖ Accredited with ❖ Acquisition of FCPL ❖ Listed on BSE ❖ Bonus declared on 1:1 Fineotex ISO 9001:2008 by Fineotex Chemical ❖ Incorporated wholly owned basis Chemical ❖ Incorporation of Limited subsidiary in Malaysia ❖ Accredited with ISO Industries (FCI) Fineotex ❖ Acquired majority stake in 4001:2004 & OHSAS Chemical Private Biotex Group 8001:2007 Limited (FCPL) certifications 2015 2017 2018 2019 2020 ❖ Listed on NSE ❖ Fineotex Chemical ❖ Awarded as IPF ❖ Biotex partnered with ❖ NSE top 1,000 companies ❖ Received Star Limited fastest growing Bluesign ❖ Buyback of 11 lacs shares Export House announced first chemical ❖ Manufacturing capacity up to a maximum price of recognition buyback manufacturing increased to 43,000 Rs. 40 Company at BSE MTS annually and both ❖ Deployed Rs. 270 million for Limited on December facilities GMP certified new brownfield facility at 20, 2017 Ambernath, Maharashtra 6 Driving Future Growth Home Care Specialities Hygiene Specialities Textile Specialities Drilling Specialities Leverage core manufacturing and development expertise into new high growth areas 7 Focus on Growth and Diversification Home Care and Hygiene Chemicals Drilling Speciality Chemicals Other Speciality Chemicals • Customised solutions for: • Customised solutions for Oil and Gas • A unique ‘Mosquito Life Cycle Controller’ product ▪ Housekeeping, Kitchen Care and Disinfectants • Significant potential for offering effective products under development by Biotex ▪ Public Health and Hygiene used for drilling in oil exploratory processes • Non toxic eco-friendly solution designed with European technology in Malaysia by Biotex • The plant has been approved and certified by the • Sizable orders from a leading oil and gas company in Food & Drugs Administration (Maharashtra State) India • Approved by Ministry of Health Malaysia, Singapore department. The license has been granted for PUB, European Union, NSF and relevant authorities in production of disinfectant/antimicrobial hygiene and Vietnam and Cambodia cleaning products ensuring safety and effectiveness. • Post the outbreak of COVID-19, large addressable market for solutions used in disinfectants and sanitizers Key Products ‘Mosquito Life Cycle Controller’ Home Care and Hygiene Chemicals under development Non-textile segments will drive volume and value growth in the long term 8 Home Care and Hygiene Division Diversified Product Offering • Air freshener • Hygienic hard surface • Carpet cleaner cleaner • Carpet shampoo • Multi surface cleaner • Deodorizers • Surface cleaner cum • Floor cleaner disinfectant • Furniture maintainer • Toilet bowl cleaner • Glass cleaner • Toilet seat disinfectant Housekeeping • Hygienic bathroom cleaner • Washroom cleaner • Automatic dish wash • Kitchen multipurpose detergent cleaner • Automatic dish wash • Manual dish wash liquid neutralizer • Oven and grill cleaner Available across 15 • Drain cleaner • Stainless steel polish • East and West India Distributors added in March Care Kitchen Heavy duty floor cleaner • Hand disinfectant • Hand sanitizer • Gentle wash • Veg & non-veg disinfectant • Multi surface disinfectant cleaner 8 • Surface disinfectant – • Sanitizing tablet Marketing Technical fogging and fumigation Associates hired in March Disinfection 9 Upcoming Facility at Ambernath, Maharashtra About the Facility ➢ Located on ~4 acres of land ➢ The facility is progressing as per schedule and is expected to be commissioned in Q1 FY2022. Equipment and machinery is currently being installed ➢ Proposed deployment of Rs. 270 million out of which Rs. 200 million has been deployed Strategic Advantages ➢ Caters to customer demands in the existing Textile Specialities and fast growing Home Care and Hygiene and Drilling Specialities business ➢ State of the art automated unit which will be fully compliant with the highest standards of sustainability ➢ Located in close proximity to key port areas near Mumbai providing logistical and cost advantages Upcoming facility provides additional manufacturing capacity for existing product lines and new growth areas 10 Synergistic Business Model Fineotex - India Biotex - Malaysia • Diverse product portfolio (400+ categories) • Niche product portfolio (50+ categories) across business segments Overview • High end super speciality textile chemical • Applications primarily across the entire textile applications value chain: pre-treatment to finishing • Sustainable and effective textile solutions • Focused on textiles and rapidly entering other • Grow ‘Mosquito Life Cycle Controller’ revenue fast growing sectors Focus Areas share • High profile India customer base • High profile International customer base • Textile and auxiliary sectors • Textile, Home Care and Hygiene, Drilling and • ‘Mosquito Life Cycle Controller’, an eco friendly Business Segments Other Specialities non toxic solution for mosquito outbreaks used primarily across developing countries • Strong brand recall in Indian markets • Strong brand recall in International markets Competitive Edge • Reputation for diverse product portfolio • Solutions for finishing process in textile • Deep customer relationships • Strong R&D capabilities Fineotex and Biotex complement each others strengths and offer distinguished speciality chemical solutions globally 11 Specialty Textile Chemicals Overview Steps Weaving Pre-treatment Dyeing Printing Finishing De-sizing, Dyeing, Rotary Exhaust Sizing Scouring, Washing, Printing, Process Padding Bleach Fixing Table Printing Enzymes, Dyes, Acids, Dyes, Binder Softeners, Wetting & Alkali Thickener, Fixer Product Polymers, Silicones, Detergent, Levelling, Detergent, Categories Softeners Polymers, Sequestering Detergent Loop Resins Additives Fixer accelerator Key Customers Fineotex + Biotex together offer tailored solutions across the textile value chain with a focus on higher realisations 12 New Product Offerings from Biotex ‘The Bioguard Series’ of products from Biotex with water and oil repellent features in great demand post outbreak of COVID-19 13 Global Customer Reach • Sales in 60+ countries including Brazil, Bangladesh, Germany, Indonesia, Malaysia, Singapore, Syria, Thailand, USA, Venezuela and Vietnam • 30+ technical marketing experts • 100+ dealers in Indian and International markets FY21 Revenue Mix 57% 43% Facilities at Mahape and Ambernath (upcoming), Mumbai, India Facility at Bangi, Malaysia Sales International India Diversified revenue mix across clients, products and geographies coupled with technical expertise 14 Strategic Direction Leverage Fineotex’s industry insights and long standing customer relationships with Biotex’s high end product expertise and regional positioning to serve global customers Fineotex+ Biotex Synergies Upcoming brownfield facility at Ambernath, Maharashtra to be future ready for next phase of growth. Partnerships with International companies to establish manufacturing facilities in India Greenfield Developments Enter fast growing synergistic segments such as Home Care and Hygiene and Drilling Specialties while continuing to focus on the core Textile Chemicals business New Product Categories Strong in-house development capabilities to grow market share across existing and new customers in both Indian and International markets. Continue to develop direct customer relationships and expand distribution network Grow Market Share Fineotex has a conservative approach to funding acquisitions, capacity expansions and greenfield/brownfield developments through internal accruals. Capital