#1Premier Explosives Limited K PREMIER EXPLOSIVES LIMITED INVESTOR PRESENTATION | NOVEMBER 14, 2019#2Key Highlights - Q2FY20 Order Intake Received an order worth Rs. 150 million from Bharat Dynamics ltd. For supply of solid propellant for MRSAM; to be executed with in the period of 14 months Received an order from Vikram Sarabhai Space Centre (VSSC) for production of PSOM-XL (solid propellant) for Satellite Launch Vehicle ☐ First solid propellant order to be executed at Katepally Plant New Opportunity Landscape DRDO successfully flight tested its state-of-the-art Quick Reaction Surface-to-Air Missile (QRSAM). Solid propellant used in the missile was in-house developed, manufactured and supplied to DRDO Sole Supplier of Solid Propellant to DRDO for QRSAM Indian Air Force successfully test-fired Astra Missile from Sukhoi-30 jet; PEL developed and supplied the Propellant for the said missile Katepally Plant Updates Receipt of license from Chief Controller of Explosives, Nagpur for manufacture of Solid Propellant at Katepally Plant (a Greenfield project of the Company) Enabling Company to manufacture Large Size propellants Inauguration of Ammonium Perchlorate Building at Katepally Plant Licenses for RDX/HMX under process Premier Explosives Limited WW 2#3Results Highlight- Q2 FY20 (in Rs. mn) Operating Revenue Operating Profit 535.4 432.3 52.1 26.0 Profit After Tax 23.6 10.6 Q2FY19 Q2FY20 Q2FY19 Q2FY20 Q2FY19 Q2FY20 Revenue Breakup (in Rs. Mn) Q2FY20 Explosives Defence Services Total 267.2 111.3 53.8 432.3 Q2FY19 299.8 190.6 45.0 535.4 WW Premier Explosives Limited 3#4Results Highlight- H1 FY20 (in Rs. mn) Operating Revenue Operating Profit 1,129.8 81.6 936.1 57.6 Profit After Tax 32.2 19.4 H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 Revenue Breakup (in Rs. Mn) H1FY20 Explosives Defence Services Total 633.9 202.1 100.1 936.1 H1FY19 715.1 314.3 100.4 1,129.8 WW Premier Explosives Limited 4#5Profit & Loss Statement In Rs. Mn Q2FY20 Q2FY19 YoY (%) Q1FY20 QoQ (%) H1FY20 H1FY19 YoY(%) Revenue from Operations 432.3 535.4 -19.3% 503.8 -14.2% 936.1 1,129.8 -17.1% Expenses 406.3 483.3 472.2 878.5 1,048.2 Operating profit 26.0 52.1 -50.1% 31.6 -18.0% 57.6 81.6 -29.4% Operating Margins (%) 6.0% 9.7% 6.3% Other income 3.3 6.6 4.9 Depreciation 6.2% 7.2% 8.1 12.5 12.4 10.4 12.0 24.5 19.6 Interest 11.6 12.1 11.0 22.6 25.3 PBT 5.3 36.2 13.5 18.6 49.2 Tax (5.3) 12.6 4.7 (0.8) 17.0 PAT 10.6 23.6 -55.1% 8.8 19.1% 19.4 32.2 -40.1% PAT Margins (%) 2.5% 4.4% EPS 1.7% 2.1% 2.9% 0.98 2.22 0.82 1.80 3.03 WW! 5 Premier Explosives Limited#6Balance Sheet Highlights In Rs Mn Equity Share Capital Other Equity Long Term Borrowings Other Liabilities Total Liabilities Net Fixed Asset Block CWIP Sep'19 Mar'19 107.5 107.5 1,966.0 1,986.2 227.1 238.3 631.4 627.0 2,932.0 2,959.0 1,074.2 1,084.1 497.8 348.3 Other Non-Current Assets 200.0 203.3 Total Current Assets Total Assets 1,160.0 1,323.3 2,932.0 2,959.0 WW! Premier Explosives Limited 6#7Improving Order Book Order Book (in Rs. mn) 2,976 2,430 2,260 3,883 3,926 Order Break-up ww Premier Explosives Limited Explosives-743 (19%) Services-1,707 (43%) Defence- 1,476 (38%) Mar'16 Mar'17 Mar'18 Mar'19 Sep'19 ■Explosives Defence Services 6#8Company Overview#9Pioneer in Explosives & Defence Sector... A leading manufacturer of High Energy Materials WW Premier Explosives Limited ⚫ 1st in India to manufacture Explosives and Detonating fuels with indigenous technology 1st in the world to produce Safer and Greener NHN detonators on commercial scale 1st Private Company to manufacture Solid Propellants to India's missile programs Serving Defence & Space and Mining & Infrastructure Industries Participation in Defence and Space programs with Indigenous technology & Technology Transfer ⚫ Owns Licenses for manufacturing & development products provides High Entry barrier Highly trained manpower in handling high energy chemicals Team Strength of over 1,400 trained people across various function State-of-the-art manufacturing facilities Six Manufacturing facilities in Telangana, Madhya Pradesh, Maharashtra & Tamil Nadu#10Grew under leadership of Industry Veteran.. Dr. A. N. Gupta Chairman & Managing Director Recipient of 'Udyog Rattan Award' & 'Pickering and ISM Medal' Member of Society of Explosives Engineers, U.S.A, Ex-Chairman of Explosives Development Council and Fellow of High Energy Materials Society of India (HEMSI) Written a number of Technical papers in national & international Seminars and Journals lll + WW Premier Explosives Limited T V Chowdary Dy. Managing Director • • • A Chemical Engineer with over 35 years of experience in production of Chemicals, Explosives and Solid Propellants. Having project execution as his forte, he is excellent in HR Management and is a steadfast trouble-shooter. Development of solid propellant products for export markets Supported by skilled workforce • • Over 1,400 Dedicated and Experienced Employees Team comprises of about 100 Engineers / Scientists About 550 people trained in Propellant and Pyrotechnic products 10#11332 ERBX8 437 with impetus on Research & Development... 40 band RA 786129 QÅ Lobir Collaboration with Gulbarga University, IIT Madras and BITS Pilani for research in high energy materials Certified Lab WW Premier Explosives Limited World's 1st producer of NHN based detonators on commercial scale much safer and greener than traditional ASA. о Licensed the technology to a US company Developed Solid Propellants for various missiles including a combustion-stable Propellant for LRSAM NEW PRODUCT *** Laboratories have been certified by DSIR and accredited by NABL ...thrives to remain at the forefront of technology and product development 11#12& high focus on Safety at Manufacturing facilities Bulk Explosives Singrauli (Madhya Pradesh) Chandrapur (Maharashtra) • Godavarikhani (Telangana) Manuguru (Telangana) Neyveli (Tamil Nadu) Peddakandukur (Telangana) Defence & Space Peddakandukur (Telangana) Detonator, Detonating fuse, Packaged Explosives, Product Research & Special Products Divisions • Katepally (Telangana) (Under construction) Solid propellants HMX/RDX Ammunition Mines Warheads 4 W Premier Explosives Limited#13Greenfield expansion at Katepally • Katepally Solid Propellant Plant is ready for Commercial Operations • WW Premier Explosives Limited O Obtained License from Chief Controller of Explosives, Nagpur for production of solid propellant at the facility 。 Katepally plant would augment capacities & add new products to meet increasing demand for defence products 。 Facility will enable Company to manufacture Solid Propellant of larger size ○ Received order for production of PSOM-XL (Solid Propellant) for small satellite launch vehicles from Vikram Sarabhai Space Center (VSSC) O First order to be executed at the facility RDX & HMX Plant is in advanced stage of completion ○ Buildings are ready and the plant is in place O License is awaited 13#14Premier Serving the critical needs of Industry Commercial Explosives Explosives Limited WW Manufactures diverse range of commercial explosives for Mining & Infrastructure Industries Product range includes Bulk Explosives, Cartridge Explosives, Cast Booster, Detonators, Detonating Fuse, etc Defence & Aerospace • • Manufactures solid propellants for tactical missiles (Astra, Akash and LRSAM / MRSAM) strategic missiles (Agni) and Pinaka rocket Entered in Indian Space programme as approved supplier of PSOM-XL Motor for use in Polar Satellite Launch Vehicle (PSLV) to ISRO Only domestic manufacturer supplying countermeasures like Chaffs and Flares to Indian defence Undertaking Operation & Maintenance services for solid propellant plants of ISRO at SHAR, Sriharikota and DRDO at ASL, Jagdalpur 14#15Business Segments#16Stable business of Commercial Explosives... Manufacturing Explosives Products .... Bulk Explosives Cast Boosters Detonators Detonating Fuse WW Premier Explosives Limited ...for Clients in Mining & Infrastructure Industries कोल ल डण्डिया Coal India Neyveli Lignite Corporation Limited INLCI VISION COLLIE ONE FAMILY. ONE HE SINGA ERIES N. ONISSION COMPAN LIMITED SCCL HILICT MOIL Cement Manufacturers Export to Countries Israel, Greece, Jordan, Turkey, Nepal, Thailand, Philippines, Indonesia, etc. 16#17With greater visibility of sustainable opportunity landscape In Mining Industry . • India's thermal coal consumption to reach 1,076 MT by 2022-23. Domestic supply to grow at CAGR of 7% to 931 MT Market expansion in explosives with new Industrial licenses obtained • Focus on increasing the Exports to South East Asia and Africa for Commercial Explosives • In Infrastructure Industry WW Government's impetus on infrastructure projects to boost the need for quarry stone, iron ore and cement Government of India planned to spend Rs. 6.9 trillion on 83,677 km road construction by 2022 Cement industry capacities to reach 550 million tonne by 2025 Premier Explosives Limited 17#18Building Defence & Aerospace segment... Manufacturing Products across segments .... Propellants Pyrogen igniters Case-bonded propellants Free standing grains Fuel rich, Air Target Imitator Gas generators Strap-on motors for satellite launchers Pyros Pyro cartridges Pyro actuators Smoke/flash generators IR generators Specialized squibs Explosives CL-20 Counter-measures Chaffs HNS-IV Flares Explosive bolts BKNO3 Igniters ...for various Defence & Space PSUs GAS GENERATOR KEPLOSIVE DILTS PYROCARTIDGES 24, 100 D4) SQUIBS PYROTECHNIC IGNITER ENCE DEBE RAD ORGANISATION WW! Premier Explosives Limited 3 BANGALORE Bharat Dynamics Limited भारत इलेक्ट्रॉनिक्स BHARAT ELECTRONICS (DL) ASL ISRO सत्यमेव जयते First Private Manufacturer and Supplier of Solid Propellants in India Electronics Corporation of India Limited 18#19with focus on enhancing Technological Capabilities... Unmatched Technological know-how and Research Capabilities.... • . • . In-house development Pyrogen Igniters for Strategic missiles Non-Aluminium composition for Astra LRSAM composition without Combustion Instability Sledge Rocket Motors . IR flares • Air Target Imitator + • Production under ToT ww Premier Explosives Limited and Industrial Licences from DIPP Defence Industrial Licenses Akash booster / sustainer grains LRSAM/MRSAM / QRSAM / NGARM motors ARM motors Pyrogen igniters for ANSP Daisy II motor for Agni Pinaka rockets - Mark I and II Astra motor • In Defence, received 14 Industrial Licenses from DIPP in over last 3 years Few of the key licenses are: 1. Rocket and Missiles 2. Bombs & Mines for Defence 3. Single Base Propellant 4. License for manufacture of propellants, Ammonium Perchlorate and HTPB • Chaff • IR flares Preferred supplier to Defense: Sector with High-Entry Barriers Continuous efforts towards strengthening the Intellectual Property (IP) for manufacturing of High-Energy material 19#20Enhancing product offering... for Indian Air Force On-going Chaffs & Flares Air Target Imitators (for Air Defence & Indian Army Under Development 70 mm rockets Air-Glide bombs Re-graining of existing missiles Indigenization of power cartridges Canopy severance system for Missile Programme Expanding product portfolio Solid Propellant Rocket motor hardware Thermal insulations & Hot integration War-heads Ammonium Perchlorate HTPB & CL20 RDX/HMX Single base, Double base, Triple base propellants अनि नगर AGM-1 WW Premier Explosives Limited#21Contributing to India's Prestigious Missile Programs Missile Туре Stage Akash Tactical, Surface to Air Production Client End user Bharat Dynamics Limited (BDL) Indian Air Force and Indian Army Tactical, Production from MRSAM DRDO / BDL Indian Army Surface to Air 2019 Agni IV Ballistic W Premier Explosives Limited PEL's contribution Supplied 2000+ booster grains and 450+ sustainer grains 100% requirements of solid propellants Production Advanced Systems Laboratory Strategic Forces Command Pyrogen igniter Brahmos Cruise, Air launched Anti- ship, Land attack Production HEMRL Indian Air Force, Indian Navy and Indian Army Tactical, LRSAM Development DRDO Indian Navy Surface to Air Transfer of technology is under induction 100% requirements of solid propellants Tactical, Astra Development DRDO Indian Air Force Air to Air 100% requirements of solid propellants 21#22Increasing participation in India's Space Program Premier Explosives Limited WW Operations & Maintenance Under GOCO • Operating and Maintaining Solid Propellant plant of ISRO at SHAR under GOCO Contract for 10 years in Jan'2019 • Operating and maintaining the solid propellant plant of Advance Systems Laboratory (ASL) at Solid Fuel Complex, Jagdalpur Provides exposure to advanced processes in manufacture of solid propellants PSOM-XL for ISRO • Trial order successfully tested in January 2018 • Received an order from Vikram Sarabhai Space Centre (VSSC) for production of PSOM-XL (solid propallent) for the Satellite Launch Vechile (SLV) • Production to start at Katepalley Plant 22 22#23Defence: Opportunity landscape WW Premier Explosives Limited Government enhances focus on "Make In India" in Defence India to spend USD 250 billion by 2025 on modernization of armed forces 'Defence Procurement Policy 2016' linking to 'Make in India' Initiative to increase Self Reliance' in Defence Products Offset Opportunities 'Open General Export License' scheme to be launched by Government of India to boost export of Defence Products in Long Term In last 3 years, Exports has grown by 7 times to Rs 10,745 crores National Advanced Surface to Air Missile System II (NASAMS II)- India in the process of acquiring NASAMS II from US 'Strategic Partnership' policy would rope in large private corporates into Defence Production who in turn will create overall Defence ecology including MSMES Well positioned to enhance participation Pioneer in manufacturing and supply solid propellants to India's prestigious missile programs Possesses various Industrial license for production Member of Missile Technologies Control Group (MTCR), India provided access Advanced Technologies Tying-up with OEMs- in advance stage of negotiations • • To Meet the Defence Offset Obligations Forming Partnership to Manufacture in India Manufacturing facilities capable of handling higher volume and new product requirements Greenfield project at Katepally (near Hyderabad) in about 150 acres. Another 100 acres of land available for further expansion 23#24Space: Opportunity landscape Government to launch various Space Programme... India to double the space mission to 12 missions per year in five-year period H F 477 • In next 5 years, ISRO to launch various missions like Aditya L-1, Gaganyaan, Mars Orbiter Mission-2, Chandrayaan-3, Shukrayaan, etc. ISRO to get new commercial arm 'New Space India Limited (NSIL)' to commercialized launch vehicle and other state of art technologies in Global space market • Enhance participation of private players in the space programmes India plans to have an 'Orbiting Space Station' by 2030 ...Huge opportunity for the Private Players WW Premier Explosives Limited 24#25Building Company with Vision - 2025 ww Premier Explosives Limited AKASH AKASH 永春看 AKASH Continue the leadership in High Energy Materials for defence and space Develop low cost processes and techniques for production of industrial explosives Develop capacity for missile integration Meet the full requirements of ISRO's strap-on motors Enter export market for defence products and high energy components 25#263 328 O 00 + + 672 A 08 342.25 1241.28 640.39 428.45 14092.69 +1445.65 +1204.22 2008.6 +1804. 2059 59.14 54 27761.67 31142.45 +3542.55 312.25 +1352.14 954.36 874.48 689.45 + 2100.36 + 854.94 38992.44 30589.68 Financial Highlights#27Profit & Loss Statement In Rs. Mn FY19 FY18 Revenue from Operations 2,409 2,659 Expenses 2,175 2,459 Operating profit 234 200 Operating Margins (%) 9.7% 7.5% Other income 26 22 Depreciation Interest PBT Tax 42 36 55 52 42 163 134 46 46 47 PAT 117 87 PAT Margins (%) 4.9% 3.3% WW Premier Explosives Limited 27#28Balance Sheet Highlights In Rs Mn Equity Share Capital Other Equity Long Term Borrowings Other Liabilities Total Liabilities Net Fixed Asset Block CWIP FY19 FY18 108 106 1,986 1,876 65 78 800 1,002 2,959 3,062 1,084 999 348 158 Other Non-Current Assets 204 127 Total Current Assets Total Assets 1,323 1,778 2,959 3,062 WW! Premier Explosives Limited 28#29Awards & Appreciations WW Year Award 2019 SME - Empowering India Awards 2019 in the Defense & Aerospace (Mid - Corporate) 2016 HEMSI Honorary Fellowship to Dr. A.N.Gupta 2015 Outstanding Entrepreneur Award 2014 Appreciation for development of Propellant composition for LRSAM without combustion instability 2013 Inc. India Innovative 100 Award for plant-scale manufacture of NHN detonators 2011 Appreciation for development of Propellant Casting of Motors and Igniters for First and Second Stages of Agni-4 Awarded By Hon'ble Union Minister of Steel High Energy Materials Society of India Enterprise Asia Director, DRDO Inc. India Director, Advanced Systems Laboratory ASL 2010 Appreciation for development of Pyrogen Igniters for Agni A4 2008 Appreciation for development of Pyrogen Igniters for Agni A3 ASL 2007 Defence Technology Absorption Award-2007, received from Dr. Manmohan Singh, Prime Minister of India DRDO 2007 Best R&D Effort Award AIMO 2005 Best Technology Development Award for R&D achievements FAPCCI 2004-07 Best Greenery Development Award AP Pollution Council 29 Premier Explosives Limited#30PREMIER EXPLOSIVES LIMITED Mr. C. Subba Rao (CFO) / Ms Vijayashree (Company Secretary) [email protected] / [email protected] 'Premier House', 11 Ishaq Colony, Near AOC Center, Secunderabad 500 015 Contact Us STELLAR INVESTOR RELATIONS Ms. Pooja Sharma/ Ms. Hina Agarwal [email protected]/[email protected] Kanakia Wall Street, Andheri (East), Mumbai 400 093