Growth pertains to the sustained market leadership of our key brands acrossgeographies we operate coupled with an expanding product portfolio and consistent demandfor our products.
Our flagship brands Daawat and Royal further strengthened their position in India andUS during the year.
We write this Annual Report amidst a situation that has never been witnessed in ourliving memory (at least for a majority of the world's population). The COVID-19 pandemichas left national leaders battling to save the lives of fellow citizens while trying tobring economic growth back on track as phased lockdown continues.
As we adapt to a post-COVID world we are pleased to share with you our achievements inthe year gone by showcasing our efforts towards building a sustainable business whilstcreating value for all stakeholders FY19-20 was marked by satisfactory growth across ourgeographies and business verticals.
The love for food
We are proud to be in the business of food - something that unites families especiallyat an age where digital connectivity has left little time for moments of togetherness. Thesimple joys of cooking meals and reconnecting with your family over meals continues tooffer meaningful contributions across diverse emotional quotients.
At the heart of our business lies our consumers and it is what drives us to scale ourcapabilities and tap into emerging opportunities. While changing lifestyles and foodpreferences are impossible to ignore for a Company like ours we have proudlyreinvigorated our business over the last seven decades to emerge as a preferred consumerfood company for millions of people in India and across the world. Besides a wideningproduct basket gives our consumers the freedom to truly enjoy their food while nourishingtheir body and soul with healthy offerings.
Reviewing our performance
We are pleased to once again deliver on our strategies now fully ingrained in ourbusiness model. Our approach to building a value-accretive business now rests on thethree-fold strategies of growth margin expansion and strengthening our key financialmetrics & improving the ROCE (Return on Capital Employed).
Growth pertains to the sustained market leadership of our key brands acrossgeographies we operate coupled with an expanding product portfolio and consistent demandfor our products. As a result our consolidated revenue from operations grew 7% YoY toreach Rs. 4184 crore in FY 2019-20 from Rs. 3915 crore in FY 2018-19. The demand forDaawat basmati rice continues to be on the rise in India. Our flagship brand 'Daawat'strengthened its brand equity with an impressive market share of 26% in India.
THE DOUBLEDIGIT GROWTH IN INTERNATIONAL MARKETS VALIDATES OUR MARKET LEADERSHIP ACROSSGEOGRAPHIES WITH INCREASED SHARE OF PREMIUM PRODUCTS.
We delivered a 10% growth in International markets validating our market leadershipacross geographies with increased share of premium products.
Our flagship International brand 'Royal' in US further strengthened its #1 ranking inthe US during the year. Our offerings now include a range of rice variants i.e. Ready-to-heat that serve a growing consumer base.
We strengthened our market share in Europe Far East and Middle East region with ourproducts finding increasing acceptance in a competitive environment. We are alsoincreasing our engagement and reach across both the regions with presence across allchannels and price points to reach a wider consumer base.
Our organic food and ingredient division continues to deliver to a double-digit growthwith increasing population adopting organic food over conventional food. Having startedthe division almost two decades we have today 118000 hectares of organic farmland.producing varied organic food products.
We remain focused on strengthening our margins with our strategic focus on marginexpansion. Our operating model today is structured on value- creation with a culminationof the right product mix and excellent operational processes perfectly designed to createa positive impact on the bottom-line and improving Return on Capital Employed. Theintroduction of new supply chain strategies built on a strong foundation of technologywell-ahead of its time helped us to strengthen our brand presence. We registered anEBITDA growth of 21% YoY from Rs. 421 crore in FY 2018-19 to Rs. 509 crore in FY 2019-20;while our PAT increased by 45% YoY from Rs. 137 crore in FY 2018-19 to Rs. 199 crore in FY2019-20.
Our operational excellence is aptly reflected by our strengthened financial matrices.
Our EBITDA margin showed improvements by 140 bps over the previous year to reach 12.2%in FY 2019-20 while our PAT margin improved by 125 bps to stand at 4.8% as compared to3.5% in the previous year. We also reduced our debt level (bank borrowings) significantlywith an impressive interest coverage of 3.2x with a comfortable debt- equity ratio of0.90x as on March 31 2020. We also improved our ROCE from 11.3% in FY 2018-19 to 13.6%in FY 2019-20.
RIDING ON THE STRONG BRAND EQUITY WE ARE NOW PRESENT ACROSS MEDIUMS LIKEMULTICULTURAL (ETHNIC CHANNEL) DIRECT RETAIL FOOD SERVICE CHANNEL AND E-COMMERCEPLATFORMS.
Driven by Innovation and automation
At LT Foods we are driven by consumer centricity backed by our ability to continuallymap the gaps in existing consumer offerings and filling it up with our innovative approachto add new products in our portfolio. The launch of new brands like Daawat Quick BrownRice and Daawat Sehat (fortified with iron vitamins and folic acids) has not onlystrengthened our portfolio but improved our market share in key geographies. The recentlaunch of Daawat Cuppa Rice (a quick ready to eat rice based meal with no preservatives)has validated our promise on customer-centricity.
After the successful launch of Kari Kari premium rice-based snacks we now have adedicated manufacturing unit in Haryana to aid our ambitious plans of a pan-India launch.We are now excited to launch Kari Kari snacks to a larger section of the Indian populationthrough a joint venture with Kameda Seika (Japan's snack food major).
Our years of integrated infrastructure and automated technologies allow us to turn ourinnovation into quality consumer product. Further our operations products and facilitiesabide by strictest quality standards to ensure food safety consistency o our products.
Reaching out far and wide
Riding on the strong brand equity we are now present across mediums likemulticultural (ethnic channel) direct retail food service channel and e-commerceplatforms. Our aggressive brand positioning was leveraged to accelerate growth in new-agechannels of distribution. Participation in food festivals 360O marketingcampaign expansive shelf space and greater visibility across multiple e-commerceplatforms contributed to impressive growth in current fiscal.
We continue to leverage our robust network of suppliers and distributors enablingsteady supply. Right from automating our sales force team to aggressive spends on digitalmedia platforms we are moving in the right direction towards harnessing technologies. Westrategically customized synergies of our products with digital- precision marketing indifferent geographies resulting in defined business growth.
We are pleased to welcome Saudi Agriculture Livestock Investment Company (SALIC) on theBoard of Daawat Foods Limited our subsidiary company. The acquisition of 29.91% stake inour subsidiary by SALIC opens up new opportunities to grow and expand our business in theMiddle East region and validates the trust and confidence reposed by them in ourvalue-accretive business model.
Responding to COVID-19
Our already existing automated operational setup with best- in-class industrypractices technology-driven integrated supply chain and last mile distribution networkensured uninterrupted production and supply during the lockdown due to pandemic COVID-19.And even as this Annual Report goes into print the Coronavirus continues to posechallenges to business continuity and economic growth for countries worldwide. However atLT Foods our established operational culture built on the foundation of progressionglobal presence versatility and sustainability defines our growth journey as we navigatethe challenges and converting the same into opportunities.
We remain grateful to our Board members team vendors consumers bankers andinvestors for their continued trust in LT Foods. As we continue to place our consumer ateverything we do we would continue to deliver on our four strategic pillars of deliveringgrowth in our core business organic business strengthening our new growth enginesbalance sheet metrics with improved ROCE. As we look ahead our optimism drives us todream bigger enable prolonged value creation for our stakeholders and welcome newbeginnings to lay the foundations for perfecting change.
Vijay Kumar Arora
Ashwani Kumar Arora
Chief Executive Officer & Managing Director