SI am pleased to share with you an update on your Company's performance
for FY 2019-20. The year saw a challenging business environment withlower GDP growth and slowdown in consumption. This resulted into a weakening consumersentiment and lower demand for the categories in which we operate. Against this backdropyour Company has delivered competitive profitable* and responsible growth.
The financial year 2019-20 can also be marked as the recovery year forthe value and business shrunk in the FY 2018-19 due to supply chain issues with one of thekey clients of the company. In this year your company has achieved revenue of Rs.144.70Cr. with an improvised EBIDTA margin of 14.61% [Rs.21.14 Cr.].
THE CURRENT YEAR
Fiscal 2020-21 starts with set-back due to the coronavirus andinitially it appears not very encouraging for India as a whole. Print and electronic mediahas been highlighting numerous indicators which suggest that globally the economies are atthe threshold of an economic slowdown including India. However we believe that this israther an opportunity for the Indian economy and shall give a boost to the Make in Indiainitiative that has been emphasized upon by the Govt of India. The Government cognizantof this reality has also been focusing on "Aatmanirbhar Bharat" (self-reliantIndia) and promoting "Vocal for Local". The Govt is running various campaignsstriving hard to kick start economic resurgence through favorable policies by infusingliquidity into the economy. And when the rebound happens as already signaled during thefirst quarter the FMCG sector will be the first on the uptick. From the Company'sperspective we are optimistic of our performance in the current year owing to healthyvolumes from existing and new clients.
Your company has been taking various steps in the last couple of yearsto be able to leap ahead and these efforts are beginning to show some results. While wethe entire management team are very happy about the past year we are even more excitedabout the future to deal with and overcome the challenges that marks the beginning offiscal 2020-21 due to the set back of novel coronavirus.
We are confident that we should be able to soon add some of the largerFMCG players in the country as our private label clients and break some more records inthe next couple of years. This growth comes with the addition of new clients newcapacities and new product categories.
JHS Svendgaard Laboratories Limited today is one of the largest oralcare contract manufacturers in India. Our mission of being able to provide manufacturingand other solutions for the FMCG industry is beginning to find traction with ourcustomers. We are being repeatedly trusted by our existing customers while we continue todevelop new customers and new product categories. We want our customers to concentrate onbrand building and marketing activities while we manufacture the product and in somecases even develop the product.
Some of the operational highlights in the past year included thestrategic realignment in its proprietary branded portfolio with renewed focus on the kidsoral care category with the focused approach on the e-commerce modern trade andinstitutional business while regulating the geographical expansion in the general tradeand adults oral care segment. you're Board and the management team decided that we shouldcontinue to concentrate on our strengths and deliver manufacturing solutions to ourcustomers. Your company has also once again become debt free with the repayment of theworking capital facilities that were availed by the company.
*exceptional expenditure of Rs.10.64 Cr. is one time capital natureexpense. For details refer note no. 35.
We have realised that your company has the chance of establishingitself as the preferred partner for the FMCG players when it comes to their manufacturingrequirements. The two main themes leading to this are the GST regime and the change in thedistribution landscape of the FMCG industry.
GST is becoming a game changer for the industry and leading to adecentralization of manufacturing units. This is opening up huge opportunities for thecontract manufacturing industry in general and the company in particular as your companylook at setting up manufacturing facilities closest to the market.
We also strongly believe that with e-commerce and modern retailachieving critical mass new companies with innovative products will continue to enter themarket. The need for organized contract manufacturers who can assume the manufacturingresponsibilities and enable the brands to focus on marketing initiatives will increasethereby giving them the freedom to experiment and innovate products without having toworry about hefty manufacturing setup costs.
Your company's team of nearly 338 people have not only the domainknowledge to be able to manufacture any FMCG products but also the ability to cater to anydemands that the customers may place before us. Any organization is only as good or as badas the people working there. We do not boast of the state-of-the art facilities that wehave built but are proud of our team. They are the ones who truly deserve the credit forthe company's growth. I am honoured to be given an opportunity to lead such an awesomebunch of people.
With India being one of the fastest growing FMCG markets in the worldwe believe that the industry has tremendous growth potential and the relevance of contractmanufacturers like us will only continue to rise.
I would like to take this opportunity to reiterate that your Companystands united with the nation during this challenging phase of COVID-19. I would also liketo convey my sincere appreciation to all our shareholders and express my gratitude to thegovernment and its agencies our eminent Board our customers employees bankers andsuppliers for believing in our vision and facilitating the management in taking theCompany to newer heights each year.
Warm regards Nikhil Nanda