Capitaline

Analyst Meet / AGM 01-Aug-20

Conference Call

Essel Propack

New category of hand sanitizer cubes added to buoyant show from China and Europe

Essel Propack conducted conference call to discuss the financial results and performance of the company for the quarter ended June'20. Mr. Sudhanshu Vats - Managing Director, Mr. M.R. Ramasamy – COO and CEO and Mr. Parag Shah- CFO of the company addressed the call
Highlights of the Concall

The company delivered a revenue growth of 17.7% with better product mix and operating leverage, coupled with optimized costs while Ebitda grew 35% translating into 19.8% EBITDA margin in Q1FY20 which is a 260 bps improvement from Q1FY20

All 20 plants of the company are currently operational

The company has launched new product category for hand sanitizers. It has now partnered with 50 plus brands across the world, both multinational brands and local brands, and is confident of delivering the pipeline of about 150 million cubes.

Phase-2of Project Phoenix, the cost savings measure is now running very effectively across all plants across the world which involves various initiatives to reduce waste, improve utilization, and rationalize number of employees across regions

Cash was at Rs 310 crore at the end of June'20

Personal Care has been a major driver in the last few years, growing at 16% over the last ten years. It grew 21.2% YoY in Q1FY21 accounted for 49% of overall revenue compared with 45% in FY20. The company saw growth across geographies in personal care with the addition of categories, as also new customer wins. Hand sanitizer was a bew category here and bought in substantial additional business.

The company strengthened its leadership in oral care. The quarter saw wallet share gains from marquee customers in Europe and Americas and market share gains from regional players in China. However, travel tubes saw some pressure owing to the pandemic.

The company has started commercialization of the sustainable Platina tubes, fully recyclable laminate in few regions. This gives license to operate and some amount of up trading for customers. The journey has just started but more than revenue the approval status in market place with customers is more important. It should become meaningful market in 3- 5 years and Essel has good jumpstart here.

Europe revenue growth of 30% YoY was led by growth of 37% YoY in personal care and 19% YoY in oral care. This led to personal care mix from 63% to 70%. Region witnessed initiatives like strengthening sales team, flexibility in and opening new categories in these times.

America revenue grew by 10% with EBITDA margin of 17% YoY. The company saw slightly better growth inspite of travel packs in oral care getting impacted due to covid-19 but pipeline is very strong. It also won one large contract in US.

EAP witnessed revenue growth of 46% driven by a strong pickup in China while EBITDA for the region grew 92% to Rs 55.2 crore with EBITDA margin of 27.3%. The company indicated this should not be extrapolated as it was led by product mix part of which may not sustain. Non oral care revenue stood at 44.5% (vs. 33.4% in 1QFY20).

India revenue dipped 3% and EBITDA dipped 4% due to 23% dip in non oral care which stood at 46% during the quarter down from 53.3% in Q1FY20. The company expects that this segment should bounce back soon.

Even though crude oil prices have been soft, polymer prices have been largely stable or increasing, as many companies manufacturing these have scaled down operations.

The company is looking at augmenting lines in tubing and printing, in a modular fashion, rather than investing in green-field projects, going forward.

Packaging as an industry remains fragmented and the company expects consolidation in the industry going forward. It is currently evaluating certain inorganic options.

Previous News

EPL fixes record date for final dividend
( Market Beat - Reports 10-Jul-23 13:39 )

EPL consolidated net profit declines 8.88% in the September 2022 quarter
( Results - Announcements 05-Nov-22 16:10 )

EPL to hold board meeting
( Corporate News - 03-Feb-22 10:09 )

Future Retail Ltd leads losers in 'A' group
( Hot Pursuit - 11-Mar-22 15:00 )

EPL consolidated net profit declines 73.55% in the March 2024 quarter
( Results - Announcements 29-May-24 07:33 )

EPL Ltd leads gainers in 'A' group
( Hot Pursuit - 01-Jun-23 12:00 )

EPL consolidated net profit rises 12.98% in the September 2020 quarter
( Results - Announcements 13-Nov-20 08:06 )

EPL appoints company secretary and compliance officer
( Corporate News - 13-Apr-23 19:52 )

EPL announces board meeting date
( Corporate News - 05-Nov-20 15:26 )

Essel Propack consolidated net profit declines 7.20% in the March 2020 quarter
( Results - Announcements 22-May-20 18:06 )

EPL to convene board meeting
( Corporate News - 31-Jan-24 15:24 )