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Earnings Overview • Date of Call: July 24, 2024 • Revenue Growth: 17.4% year-on-year • Total Revenue: INR 604.7 crores • Domestic Sales Growth: 11.8% • Export Sales Growth: 22-23% • Challenges: Election-related disruptions and container availability issues
Financial Performance • Gross Margins: Maintained at 52% • EBITDA Margins: Fell to 10.6% • Net Profit: INR 19.9 crores (down from INR 33 crores) • Net Working Capital Days: Improved to 65 days • Net Debt: INR 922 crores
Segment Performance • Laminate Revenue: Grew by 13.2% year-on-year, flat sequentially • Decorative Veneer Revenue: Dropped by 24.1% year-on-year and 47.5% sequentially • Engineered Wood Flooring: Revenue increased by 30.5% • Engineered Doors: Revenue increased by 40.7% • Plywood Revenue: Reported at INR 27.6 crores
Management Insights • Freight Costs: Mixed impact on margins; some costs passed to customers • Market Share: Gained in exports; slower growth in decorative veneers and flooring • Employee Expenses: Increased due to bonuses and increments, not related to new projects
Future Projections • Revenue Growth Guidance: 18-20% • EBITDA Margin Guidance: 15-16% • Particleboard Project: Expected revenue of INR 4,000 to INR 4,200 crores by FY '28 • Plywood Segment: Aiming for EBITDA positivity in the second half of the fiscal year
Challenges and Strategies • Raw Material Costs: Managed actively; external factors can impact prices • Shipping Issues: Container availability affecting exports; normalization timeline uncertain • Market Positioning: Focus on premium market for plywood; potential for brownfield expansions
Conclusion • Management remains optimistic about growth despite challenges, with ongoing initiatives to support local farmers and improve product offerings. Further questions were invited post-call.
Greenlam Industries Limited Q4 and FY 2024 Earnings Call Summary
Date and Submission • Date of Call: May 29, 2024 • Submission to BSE and NSE: June 5, 2024
Key Executives • Managing Director: Saurabh Mittal • CFO: Ashok Sharma
Performance Highlights • Q4 Performance: • Satisfactory results with strong laminates production and sales. • EBITDA positivity at the new Naidupeta plant. • Market share growth in exports despite domestic demand challenges.
• Financial Results: • Q4 FY '24: • Net revenue: INR 624 crores (up 16.9% YoY, 10.8% sequentially). • Gross margin: 53% (up 420 bps YoY). • EBITDA margin: 13.4% (decreased due to plywood losses). • Net profit: INR 40.8 crores (down from INR 46.1 crores YoY).
• Full Year FY '24: • Net revenue: INR 2,306 crores (up 13.8% YoY). • Gross margin: 52.8% (up 610 bps YoY). • EBITDA margin: 12.8%. • Net profit: INR 138 crores (up 7.8% YoY).
Segment Performance • Laminates: Revenue up 9.2% YoY, EBITDA margin at 16.6%. • Decorative Veneer: Revenue surged by 35%. • Plywood: Low revenue with 23% capacity utilization.
Financial Management • Working Capital: Improved cycle; net debt decreased to INR 834 crores. • Dividend: Final dividend declared at INR 1.65 per share. • Revenue Growth Guidance: 20% for FY '25.
Conference Call Insights • Product Metrics: Premium products contribute more to revenue. • Input Prices: Stable laminate prices; rising timber prices for plywood. • Capacity Utilization: Operating at 88% capacity; plans for brownfield expansions. • Future Capacity: Potential addition of 6-8 production lines in Andhra Pradesh and Gujarat.
Market Outlook • Volume Growth: Expected double-digit growth; competitive pricing strategies maintained. • Geopolitical Concerns: Company well-positioned to manage supply chain disruptions.
Closing Remarks • Management expressed gratitude and encouraged further inquiries from participants.
Greenlam Industries Limited Earnings Call Summary (February 5, 2024)
Overview • Earnings call held on February 5, 2024, discussing Q3 and FY24 performance. • Key executives: Managing Director Saurabh Mittal and CFO Ashok Sharma. • Positive outlook for the building materials industry, especially wood panels.
Financial Performance • Q3 FY24 Results: • Consolidated revenue: INR 563.4 crores (11.9% YoY growth, 6.7% sequential decline). • Gross margin: 54.8% (up 650 basis points). • EBITDA margin: 12.6%. • Net profit: INR 25.3 crores (down from INR 28.6 crores YoY).
• First Nine Months FY24: • Revenue: INR 1,682 crores (12.7% increase). • Net profit: INR 97.2 crores (17.8% growth).
Segment Performance • Laminate revenue: 8.8% YoY growth; domestic laminate revenue: 12.8% increase. • Decorative Veneer: 11.7% YoY growth. • Engineered wood flooring: 22.3% increase. • Engineered door business: 22% decline. • Plywood segment: Revenue of INR 16 crores with low capacity utilization (14%).
Challenges and Strategies • Increased net working capital due to export delays and inventory buildup. • Net debt: INR 847 crores as of December 31. • Management optimistic about demand recovery and market share growth despite logistical challenges.
New Initiatives • New laminate plant in Andhra Pradesh expected to ramp up production and break even soon. • Expansion plans in Uttar Pradesh pending lengthy approval processes.
Market Dynamics • Limited unorganized manufacturers in laminates market for Europe and U.S. • Compliance challenges for local unorganized producers may level the playing field. • Shift in demand towards pre-laminated particle boards noted.
Cost and Growth Outlook • Stable raw material costs despite fluctuations. • Potential adjustment in growth guidance for FY24 to around 15%. • Net debt expected to peak between INR 850-900 crores before decreasing.
Conclusion • Focus on ramping up production, improving margins, and expanding market share, particularly in export markets. • Limited routine capital expenditures planned for FY24 and FY25.
Meeting Overview • Date: November 7, 2023 • Purpose: Discuss operational and financial performance for Q2 and H1 FY24 • Key Personnel: • Mr. Sourabh Mittal (Managing Director and CEO) • Mr. Ashok Sharma (CFO) • Mr. Samarth Agarwal (VP Finance) • Format: Presentation followed by Q&A
Company Progress and Strategic Direction • Recent Developments: • Successful execution of projects from December 2021. • Increased laminate business capacity by 57% to 24.52 million sheets. • Historical Growth: • Expanded from one laminate unit in 1993 to five manufacturing facilities. • Largest laminate capacity in India and top exporter for 12 years. • Sustainability Commitment: • International certifications for quality and sustainability.
Product Offerings • Diverse range including: • Decowood veneers • Engineered wood flooring • Engineered wooden doors and frames • Plywood manufacturing facility launched in Tamil Nadu.
Market Position and Financial Performance • Market Share: • 15% share in the organized domestic laminate market. • Global laminate market projected growth from $8 billion to $10-11 billion. • Financial Highlights: • Q2 sales over INR 600 crores, 16.5% YoY increase. • EBITDA up 41% YoY; PAT up 35% YoY. • Significant capital employed increase to INR 778 crores.
Strategic Shift and Future Growth • Transitioning to an integrated player in the wood panel industry. • Addressable market expanded from INR 14,000 crores to INR 44,000 crores with plywood. • Major capital expenditure of INR 1,200 crores to enhance manufacturing capabilities.
New Initiatives • Launch of plywood brand Mikasaply in June 2023. • New particle board plant under construction in Andhra Pradesh. • Focus on urbanization and modernization driving demand.
Financial Outlook and Analyst Insights • Debt Management: • Peak debt projected at INR 800-850 crores by March. • 50% of debt has a longer repayment duration. • Growth Guidance: • Anticipated revenue growth of 20% to 25%. • Expected ROCE of 15-20% in the third to fourth year of operations.
Market Challenges and Competitive Positioning • Addressing fluctuations in timber prices and competition in the particle board market. • Emphasis on producing laminated particle boards to capture market share. • Management optimistic about growth despite geopolitical risks affecting exports.
Conclusion • Greenlam Industries is positioned for sustainable growth with strategic investments and a focus on expanding product offerings while maintaining strong financial performance.
Greenlam Industries Limited Q1 FY '24 Earnings Call Summary
Key Developments • New Production Facilities: • Laminate plant in Gujarat and plywood factory in Tamil Nadu commenced production. • Growth Metrics: • Domestic business growth: 12-13% • Export growth: 5-6% (some revenues deferred to Q2). • Market Outlook: • Anticipated top-line growth of 20-25% for FY '24. • Stable raw material costs and competitive pricing strategies.
Financial Highlights • Consolidated Net Revenue: • INR 515 crores (9.5% year-on-year growth, 3.5% sequential decline). • Gross Margin: • Improved to 52.3% (up 730 basis points year-on-year). • EBITDA Margin: • Increased to 12.5% (up 180 basis points year-on-year).
Segment Performance • Laminate Segment: • Revenue: INR 472 crores (9.7% year-on-year growth, 4% sequential decline). • Domestic laminate revenue: +13% year-on-year. • International laminate revenue: +6.4% year-on-year, -7.9% sequentially. • Decorative Veneer: • Flat year-on-year, -7.5% sequentially. • Engineered Wood Flooring: • -10.7% year-on-year, +20.7% sequentially. • Engineered Doors: • +92.6% year-on-year.
Financial Position • Net Debt: • Increased to INR 522 crores. • Net Working Capital: • Increased to 72 days due to higher inventory levels.
Management Insights • EBITDA Margin Decline: • Attributed to unbilled revenue and increased advertising/employee costs. • Export Market Trends: • Indian players gaining market share; estimated cyclone losses at 150,000 sheets. • Future Expectations: • Anticipated break-even for particle board operations in the first year.
Sales Performance • Export and Domestic Sales: • Exports increased from INR 1,246 to INR 1,290. • Domestic realization rose by ~11% due to product mix. • Improvement in Door, Flooring, and Veneer Business: • EBITDA losses decreased from INR 2.45 crores to INR 1.6 crores.
Strategic Focus • Market Expansion: • Focus on expanding product ranges and enhancing market reach, especially in plywood. • Dealer Network: • Appointed around 300 dealers in South India, optimistic about demand.
Earnings Call Overview • Date: June 5, 2023 • Key Executives: Saurabh Mittal (Managing Director), Ashok Sharma (CFO) • Focus: Operational and financial performance for Q4 FY'23
Domestic Market Performance • Reasonable demand growth in volume and value. • Shift from unorganized to organized players in laminates and plywood sectors. • Benefits for larger brands due to increased channel partnerships.
International Market Outlook • Anticipated growth in exports supported by new production capacities in Andhra Pradesh and Gujarat. • Currency challenges noted in certain markets.
Financial Highlights • FY'23 Revenue: Over Rs. 2,000 crore; Profit after tax: Rs. 100 crore. • Q4 Revenue: Rs. 534 crore (15.2% YoY increase); Gross margins: 48.8%. • Annual revenue growth: 18.9% to Rs. 2,026 crore; Net profit growth: 41% to Rs. 128 crore. • Expansion of production capacity planned for FY'24.
Segment Performance • Laminates: • Q4 Revenue: Rs. 492 crore (16% YoY growth). • Volume growth: 16.8% YoY; Domestic revenue: +11%; International revenue: +20.9%. • Full year revenue: Rs. 1,852 crore (19% increase). • Decorative Veneer: • Revenue growth: 6.8% YoY; Decline of 4.9% sequentially. • Engineered Wood Products: • Revenue declines: 20% (flooring) and 8% (doors) YoY.
Future Projections • Volume growth expected: 10-12% for FY'24. • Revenue growth projected: 20-25%. • No expected price hikes in laminates or veneer products.
Capital Expenditure and Debt • FY'24 CAPEX: Rs. 500 crore anticipated; total spending on projects: Rs. 450 crore. • Projected net debt by year-end: Rs. 750 crore.
Challenges and Strategies • Export volumes not yet back to previous highs; capacity constraints and currency challenges noted. • Focus on domestic market to improve profitability in flooring and door segments. • Strategy for plywood market entry in South India with localized advertising.
Pricing and Cost Management • Raw material costs declining; no significant price reductions expected. • Competitive landscape improving due to normalized freight costs.
Market Insights • Laminate market split: 60-65% residential, 35-40% commercial. • Organized players gaining market share due to quality advantages.
Conclusion • Management expressed cautious optimism about volume growth and market positioning. • Future revenue projections of Rs. 3,500-3,600 crore upon full plant utilization in approximately three years.
Overview • Earnings call held on February 3, 2023, discussing Q3 and FY 2023 performance. • Key executives: Managing Director Saurabh Mittal and CFO Ashok Sharma.
Financial Performance • Q3 Revenue Growth: • 12% year-on-year increase in revenue. • Domestic sales up 13.5%, exports up 10-11%. • Gross Margins: • Improved to approximately 48%. • EBITDA impacted by higher operating costs. • Working Capital: • Improved by 8-10 days year-on-year. • Net Revenue: • INR 503 crores for Q3, 12% increase year-on-year, 2.8% decrease sequentially. • For nine months, net revenue grew by 20.3% to INR 1,492 crores.
Segment Performance • Laminate Revenue: • Q3 laminate revenue up 12.5% year-on-year to INR 459 crores. • Volume growth of 7.1% year-on-year. • Veneer and Allied Segment: • Decorative veneer revenue flat; engineered doors up 37% year-on-year. • Net Debt: • Increased to INR 147 crores due to project financing.
Future Outlook • Revenue Growth: • Expected around 20% for FY '23 and FY '24. • Volume Growth: • Anticipated 12-15% growth in FY '24 due to capacity expansions.
Strategic Initiatives • Timber Procurement: • Sourcing plantation and waste wood; collaboration with local farmers considered. • Product Expansion: • No plans for acrylic sheets; potential for 1.25 mm laminate sheets.
Market Dynamics • Competitive Landscape: • High competitive intensity; supply outpacing demand in the laminate sector. • Pricing Strategy: • No laminate price increases in Q3; potential for minor corrections.
Questions and Insights • Impact of Imports: • Increased imports of particle boards could affect pricing. • Capital Expenditure: • INR 325 crores spent out of a planned INR 950 crores. • International Demand: • 9% increase in international business; 45% of laminate sales from international markets.
Conclusion • The call concluded with an invitation for further questions, emphasizing ongoing efforts to enhance customer loyalty and market positioning.