Symphony Q1FY19 Concall Summary

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Key Performance Figures:

  • •Revenues declined from ₹ 190 Cr to ₹ 146 Cr. (drop of over 23%) for the Quarter ended on June’18 [Consolidated]
  • EBITDA dropped over 50% from ₹ 47 Cr. to ₹ 23 Cr. {June’18 Quarter}
  • PAT dropped from ₹ 39 Cr. to ₹ 21 Cr. a drop of about 48% in Q1FY19
  • Efficacy of Capital employed has improved from ₹ 152 Cr. to ₹ 189 Cr qoq 
  • International Business is unaffected at ₹ 80 Cr, same as the last year, for the same quarter
  • Domestic Business dropped from ₹ 110 Cr. to ₹ 65 Cr. on a Standalone alone basis 
  • Treasury, Cash & Cash Equivalents are up from ₹ 351 Cr. to ₹ 449 Cr. 
  • Treasury, Cash & Cash Equivalents are the only parameters that have shown growth in Q1FY19
  • Company would be reporting the Consolidated performance on a quarterly basis starting June’18 Quarte
  • Gross margin remained more or less same through the quarter, however the drop-in profits was due to the reduced top-line.  
  • In the Dec Quarter, the profitability was in excess of 20%

Mexico Updates

  • In Mexico, the topline in Mexican peso has increased from MXN 109 million to MXN 123 million
  • IMPCO ha made profits of INR 12 Cr. & that of the China subsidiary has made profits of INR 3 Cr.

Acquisition of Climate Technologies

  • Symphony had recently completed the acquisition of Climate Technologies w.e.f July 1st 2018.
  • Climate Technologies was acquired at valuation of 40 million AUD which is expected to grow to 44 million AUD i.e INR 210 Cr
  • For FY18, Climate Technologies topline was $ 55 million with EBITDA of $ 5.5 million, which amounts to topline of INR 275 Cr & EBITDA of INR 30 Cr. & PAT of INR 23 Cr. on translation
  • Overall the acquisition translates to EBITDA multiple of 7.33x, while the sales multiple is 1x
  • The acquisition was funded by 60% long term debt of AUD & remaining 40% which is 15 million AUD is via equity. 
  • Climate Technologies is expected to generate ROCE of approx. 20% 
  • Climate Technologies is expected to register gains of $ 65 million in 2018 
  • By 2021, Climate Technologies topline is expected to grow to $ 80 million
  • Climate Technologies market share in Australia is close to 35%

Business Updates

  • The results were not so good primarily because of the bad summer with unexpected rains
  • The Topline in India has dropped from INR 120 Cr to INR 79 Cr. 
  • However, the ad expense has remained more or less constant at 21 Cr. approx.
  • Symphony was able to maintain it’s market share despite the overall market size drop
  •  As per the estimates, the branded cooler market would have definitely grown by about 15%. Markets in India and China are fragmented
  • In the last quarter, GST has registered the profit of almost INR 3 Cr.
  •  The company has created its subsidiary in Australia
  • Under Version 3.0, there is good opportunity of savings in Symphony’s range of residential coolers through Climate Technologies

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