Paper Mills Ltd. - Emami

1 Paper Mills PresentationAugust ,estimates,projectionsorplansthatareinhe rentlysubjecttosignificantrisks, sforward lookingstatementsasaresultofavarietyoffa ctors,includingthosesetforthfromtimetoti meintheCompany spressreleasesandreportsandthosesetforth fromtimetotimeintheCompany Mills of more thanINR 25,300 mnFMCG & AyurvedicProductsAgro-TechPaper-MillsFra nk Ross PharmacyAMRI HospitalsCRI (Ball pen tips)CementRevenues of nearlyINR 69,000 mnRevenues of nearlyINR 11,600 mnRevenues of more thanINR 4,300mnRevenues of nearlyINR 3,600mnRevenues of nearlyINR 1,300mnOperations Commenced Established in 1974 Leadership positions in major businesses Pan-India presence Footprint across 60 countries Workforce of over 20,000 employees Market valuation of over USD 7 bn Young & Dynamic ManagementA conglomerate with group revenues in excess of INR 122bn3 Revenues of nearlyINR 3,000mnEmamiRealtyIndustry OverviewDomestic Paper IndustryPaper Mills : CRISIL Research, PPII ndustry OverviewIndia s Paper consumption lower than world (mntonnes)India Paper .

2 INR 554bn market in 2014-15W&P, 228 Paper board, 204 Specialty Paper , 24 Newsprint, 98 Market has grown at 11% CAGR over the last 5 yearsStable demand ensuring high capacity utilisationlevels*2242181591567566473029 11827N AmericaJapanSingaporeEUChinaThailandLati n AmericaVietnamIndonesiaIndiaAfricaWorld averageWorld per capita consumption ( Paper + Board) in kgs -2014 India s Paper demand continues to grow at a steady (mntonnes)*excluding newsprint5 Paper Mills : CRISIL ResearchIndustry Overview : NewsprintNewsprint market size growing at fairly good pace(INR bn)CAGR ,82330,98633,74534,64238,16535,91734,121 24,25029,52131,37533,09636,75036,91933,5 002009-102010-112011-122012-132013-14201 4-152015-16 YTDL anded cost (canada)Domestic pricesHowever, declining global prices affected domestic market pricing Global newsprint demand is on a decline as increasing penetration of digital media has led to a shift in reading habits from traditional physical newspaper to digital newspapers.

3 India market continues to grow on back of rise in literacy rate which has led to increase in newspaper dailies and readership(INR per tonne)6 Paper Mills : CRISIL ResearchIndustry Overview : Paper boardPaper board market has grown at a steady pace(INR bn)CAGR to grow at a healthy pace in the long run Kraft Paper demand expected to increase as industrial output improves Consumer packaging demand to be led by off-take in consumer durable, FMCG, pharmaceuticals and food product industriesVariety-wiseDemand2014-15(mnto n)Past 5 year CAGR*2019-20P(mnton)Next 5 year CAGR# packagingKraft packagingGreyback/ * 2009-10 to 2014-15 ; # 2014-15 to 2019-207 Paper Mills Overview : Writing & PrintingW&P volume growth expected to increase in next five years(Mnton)W&P Variety-wise Demand Demand in W&P segment grew on account of increased government and corporate spending Future growth is primarily attributed to an increase in the literacy rate and the government's support Branded Copier is the fastest-growing sub-segment in the uncoated categoryVariety-wiseDemand2015-16(mnton) Last 5 year CAGR*2020-21P(mnton)Next 5 yearCAGR#Uncoated $ * 2009-10 to 2014-15 $ -including unbranded copier ; # 2014-15 to 2019-20 CAGR : CRISIL ResearchCompany OverviewEmamiPaper Mills LimitedPaper Mills EmamiPaper Mills LtdRs.

4 MnFY14FY15FY16FY17 Sales5,4665,2105,38811,384 EBITDA(excl. other income)7055134721,264 EBITDA (%) of the largest Paper manufacturers in India; 2 manufacturing facilities Balasore(Odhisa) Kolkata (West Bengal)Operates through 3 divisions Newsprint -127,000 TPA PaperBoard-180,000 TPA Writing & Printing (W&P) -18,000 TPAN ewsprint customers include leading dailies The Economic TimesThe Times of India Hindustan TimesAnandabazarPatrikaThe Telegraph,The HinduDainikBhaskarPaper board end users include HUL, Colgate, Emami , Lux, Dollar, Rupa, Monginis, Kellogs, printers like TCPL, Parksons, Kumar, York and Borkaruse EmamiPaper s BoardInvested in a state of the art multi-layered packaging board unit in Balasore, Odisha; commenced operations in Apr 2015US FDA certification for Maxofold (Folding Box Board), Glamkot (Coated Bleached Board) and Eco Strong Virgin Top Coated Grey Back BoardAn ISO 9001, ISO 14001 and OHSAS 18001 certified companyCredit rating of A1+ for short term & A for long term from CARES hareholding Pattern (Jun 2017)Key Financials10 Paper Mills Mills Journey so farNote.

5 TPD TonnesPer Day11 Equity listed on NSE and BSE pursuant to an IPOR eceived final approval for setting up of an SFBI nitial Commissioning with 15 TPD capacity at BalasorefacilityPaper Board Plant of 132,000 TPA with MW power plant commissionedCapacity of Board Plant increased to 180,000 TPA2017 Expansion of capacities to 135 TPD 20152010 Merged with GulmoharPaper Mill20082007 PM-II Newsprint machine converted into writing & printing grade and commissioned in July-2017 15MW Power Plant upgraded to 18MW in June-2017200019981983 Capacity increased to 100 TPD with successful commissioning of PM#22005 Commissioning of Power Plant-15MW, DIP-300 TPD, Paper Machine-III-250 TPDOne of the Largest Manufacturer of Newsprint & Market Leader in the Country Listed on BSE20015 MW Power Plant commissionedIndia s largest manufacturer of Newsprint and one of the largest Paper and Paper Board manufacturersPaper Mills of Directors12 Rich experience across business functions; spearheading EmamiPaper Mills Ltd.

6 Since past 18 yearsMr. A. V. Agarwal,Executive ChairmanMr. Manish GoenkaWhole Time DirectorExtensive Business experience of more than 18 years across various business functions;Mr. PatwariExecutive Director & CEOCA with 36 years of experience; associated with EmamiPaper Mills for more than 33 yearsMr. MBS Nair, Director (Operations)Renowned Paper technologist with 43 years experience in Paper Industry. Working with EPML for last 18 yearsMrs. RichaAgarwalDirectorExtensive experience in Corp. Planning, Business Devp., Marketing and Overall Business ManagementMr. J. N. GodboleIndependent DirectorMr. S. BalasubramanianIndependent DirectorMr. BhatIndependent DirectorMr. J. K. KhetawatIndependent DirectorMr. MardaIndependent DirectorFormer Chairman of IDBI. Extensive experience in Finance, Corporate Planning and Strategy formulationFormer Chairman of Company Law Board and former member of Indian Postal Service Well known technocratand reputed projectconsultant in paperindustryIndustrialist with extensive business experience in the area of Corporate Planning &,Strategy FormulationIndustrialist with extensive management experience over 3 decadesPaper Mills Management TeamSenior ManagementRoleTotal ExperienceAssociation withEmamiProfileMr.

7 S. K. JainSr. President37 yrs13 yrsRenowned Paper technologistand Project HeadMr. S. K. KhetanPresident (Finance) & CFO29 yrs17 yrsFCA and ACS, Experienced& Qualified commercial headMr. G. SarafVice President (Finance) & Secretary40 yrs23 yrsQualified Company Secretary and commercial head of GulmoharUnitMr. B. ChoudhuryVice President (Engineering)37 yrs10 yrsWorked with Paper companies like Hindustan Paper Corporation, Rama Newsprint and Papers prior to joining Anil SinghAsst. Vice President (Board Plant)25 yrs5 yrsBoard Plant head, previously worked for JK Papers, Khanna Paper mills13 Paper Mills OverviewEmamiPaper Mills #2 Paper Board#1 NewsprintVarietyCapacityCustomersRevenue s(Rs. Mn)1,27,000 TPA1,80,000 TPAFY16 4,420FY17 4,330FY16 3,170FY17 6,250 Market Share(FY17)7%15% EconomicTimes TimesofIndia HindustanTimes Anandabazar TheHindu TheTelegraph DainikBhaskar DainikJagran HUL Colgate Emami Lux Kellogs Dollar Rupa Monginis EcoStrong Maxofold Glamkot#3 Writing and Printing18,000 TPAFY16 860FY17 780--- DeluxNewsprint StandardNewsprint CreamWove Maplitho Ledger StateBankofIndia SaraswatiPress14 Paper Mills ReachPaper BoardPrintersAssociation with 90 printers across East, West, South and North ZoneWarehousesDelhi Zone OnlyElsewheredirectly shipped from BalasoreDealers & DistributorsDistribution network across India based on tie-up with 45 dealersBalasoreKolkataTotal Land Area 300 acresNewsprint Capacity 1,10,000 TPAP aper Board Capacity 1,80,000 TPAW riting & Printing Capacity 18,000 TPAP ower Plant MWNewsprint Capacity 17,000 TPAC ombined strength of more than 3.

8 300 employees at both locationsTotal capacity (950tpdin Balasoreand 50 tpdin Kolkata)1,000 tpdNewsprint capacity127,000 TPA Board Paper capacity180,000 TPAW riting & printing capacity18,000 TPAC aptive power generation unit sufficing 100% MWDelhiHyderabadMumbaiRegional OfficesManufacturing PlantNewsprintSourcing CapabilitiesStrong waster Paper sourcing capabilitieswith large supplier network and use of rail linked facilities of container rail operators15 Paper Mills Board Business16 New Generation technology for manufacturing high quality packaging board required by the fastest growing packaging market of FMCG productsHigh level of Automation for consistent quality of the product One of the fastest break-even in the sector. More than 100% capacity utilization with high end products in the very first year of Operating team and Dynamic Sales & Marketing group offering consistent customer centric goods and services USPP aper Mills Paper Board Plant at BalasoreRaw Materials WarehouseHead BoxSheet CuttersReam & Bundling SystemRack Storage SystemPacking Line17 Paper Mills Equipment BaseNew Board Paper Facility 4 Forming Layers Shoe Press 4 CombiBlade coaters with Infra-Red dryer to produce lowest cost paperboard 4 Hydraulic Head boxes with top Former and Dilution Control System Captive Power Generation New generation effluent treatment plant Best-in-class environment-friendly technology to provide optimum output High quality coated board from waste Paper and virgin pulpCaptive Power UnitsCapacity: MWFuel: F Grade Coal & ETP SludgeBoiler Type.

9 ABFCB oiler Capacity: 35-85 TPH Steam Press: 63 Kg/cm2 Paper MachineCapacity: 155,000 TPAS peed:350 -1105 MPMD eckle Width: 2100 -3550 mmRaw Material: 100% Waste PaperLatest Installation: 200718 Paper Mills Board Deep and long term relationships with customers Long term agreements with suppliers for sourcing pulp Easy access to key raw material Coal from nearby TalcherCoalfields located 200kms from Balasorefacility Cost effective import of pulp, waste Paper , P&M and chemicals from HaldiaPort New Board Machine to be configured will produce best quality value added products FBB and CBB to capture the increased demand of virgin grade board Writing & Printing Best quality writing & printing manufacturing machines Deep rooted distribution network Continuous adaptation to latest technologies for better quality parameters and lowest costs One of the deepest networks in the country to source waste paperEfficiency Captive power plant provides self-sufficiency and keeps cost under control as power is a key cost item Fastest running Paper machine in India with 1105 MPM speed Strong employee support and absence of unions have contributed to no strikes ever Engaged with best logistics solution providers to deliver finished goods anywhere in India within 3 days Input cost parameters and quality parameters are bench-marked with

10 International normsAdvantage -EmamiPaper Mills EPML19 Paper Mills Expansion PlansPlanned capital expenditure of Rs. 11,000 mnover the next 4 years360,000 TPA132,000 TPA2016-17 Past CapacityTarget CapacityCapexRs. 6,500 Mn(Incurred)CapexRs. 500 Mn(Ongoing)180,000 TPAC apexRs. 7,500 Mn(Planned)2017-182021-2220160,000 TPA18,000 TPA2015-16 Past CapacityTarget CapacityCapexRs. 500 Mn(Ongoing)60,000 TPAC apexRs. 2,500 Mn(Planned)2017-182018-19 Paper BoardWriting & PrintingFinancialOverviewEmamiPaper Mills LimitedPaper Mills Financial Performance1,2061,3841,4641,4111,3051,32 21,3091,2751,2701,3581,3291,4312,5293,04 72,7993,0092,783Q12014Q22014Q32014Q42014 Q12015Q22015Q32015Q42015Q12016Q22016Q320 16Q42016Q12017Q22017Q32017Q42017Q12018 Revenue190183204127148114123127131105851 51368416318162292Q12014Q22014Q32014Q4201 4Q12015Q22015Q32015Q42015Q12016Q22016Q32 016Q42016Q12017Q22017Q32017Q42017Q12018 EBITDA Increasing share of relatively better margin Paper Board segment has increased overall margins Cost efficiency measures and all plants operating at 100% capacity utilisation further aids to margin uptick Commissioning of Multi-Layer Coated Board plant at Balasorein March 2016 resulted in substantial pick-up in revenues Strong ramp-up of Paper Board segment leading to quarterly revenue run-rate crossing ,500mn in Q1FY17 Paper Board Sales started(INR mn)(INR mn)