EPL conducted conference call on 07 February 2023 to discuss the financial results and performance of the company for the quarter ended December'22. Mr. Anand Kripalu – MD & CEO, Mr. M.R. Ramasamy – COO and Mr. Amit Jain – CFO long with other senior management of the company addressed the call

Highlights of the Concall

• The company posted double digit revenue growth of 12.1% excluding EAP (East Asia Pacific) which is 12.7% at constant currency. AMESA (Africa, Middle East & South Asia including India) grew by 9.2%, Americas at 19% and Europe at 10.3%. However, EAP revenue declined by 8%. Hence, overall, top line growth was 7% on a reported basis, and 7.8% at constant currency.

• On a YTD basis, the personal care beyond category has continued to grow faster than oral, and now accounts for 47% of business.

• EBITDA margin increased to 16.6% (sequentially from 16.3% and YoY from 15.7%) despite EAP challenges. EBITDA grew by 13.2% YoY

• Polymer and foil prices are still higher than pre-pandemic level in dollar terms and further impacted by exchange rate. Decline in polymer and foil prices seen in dollar and landed cost terms starting Q2 FY23. Ocean freight rates have started declining.

• During the quarter, performance in Europe was impacted partly by normal softening in the Christmas quarter that happens every year, and partly due to order postponement by a key customer.

• The plan for Brazil remains pretty much on track with customer trials underway and the company expects decent volumes in Q1FY24.

• The company is on track on its ambition to double Platina accounting for close to 10% of its volume.

• The company mentioned that last many quarters have been exceptional in terms of external challenges and headwinds. While many of these are receding, several do remain specifically the cost environment in Europe and inflation in the US, which requires continued efforts on pricing. Covid in China is expected to continue to have an impact over the next few months and will be compounded by the annual Chinese holidays this quarter. Thereafter, the general view is that China will bounce back very strongly.

• India business has performed strongly thus far and is expected to sustain and while there is much talk about a global recession, the company is not seeing any signs of it yet.

• The company priorities include delivering double digit revenue growth as China recovers pricing increase actions to cover inflation related cost increases, particularly in Western geographies, continued focus on margin improvement through mix cost efficiency. With supply chain easing it aims to optimize capital allocation by sharply reducing inventory.

• The company remains confident in the medium term of delivering double digit growth.

• The company expects effective tax rate of 26-27%.