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Prism Johnson Ltd.

BSE: 500338 Sector: Industrials
NSE: PRSMJOHNSN ISIN Code: INE010A01011
BSE 00:00 | 24 Sep 121.95 -0.65
(-0.53%)
OPEN

123.50

HIGH

124.55

LOW

121.10

NSE 00:00 | 24 Sep 121.90 -0.70
(-0.57%)
OPEN

123.50

HIGH

125.10

LOW

121.30

OPEN 123.50
PREVIOUS CLOSE 122.60
VOLUME 13066
52-Week high 149.35
52-Week low 53.70
P/E 19.45
Mkt Cap.(Rs cr) 6,138
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 123.50
CLOSE 122.60
VOLUME 13066
52-Week high 149.35
52-Week low 53.70
P/E 19.45
Mkt Cap.(Rs cr) 6,138
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Prism Johnson Ltd. (PRSMJOHNSN) - Chairman Speech

Company chairman speech

During the year we focussed on our people's health reducing costs and expandingmargins.

Dear Shareholders

2020-21 has been an important year in the history of Prism Johnson as we streamlinedthe organisation amidst an extremely challenging operating environment. With the outbreakof the Covid-19 pandemic businesses across the globe came to a standstill. Amidst thissituation Prism Johnson adapted itself with the changing environment. Even in such atough scenario there were several positives that held our momentum. The Companyconstantly focused on enhancing its efficiencies by rationalising costs and expanding itsnetwork. Moreover we witnessed good traction in the second half of 2020-21 especiallythe H & R Johnson (India) (‘HRJ') division.

Being a building materials company we have a mark on the environment and on ourcommunities. At Prism Johnson we have adopted sustainability in our DNA and fosterinclusive growth for all to stand out as responsible corporate citizens. Prism Johnson isaligned to its employees' needs and their well-being.

A year of highs & lows

The year 2020-21 has been an unprecedented year due to the rapid spread of COVID-19across the world. The Indian economy too witnessed contraction due to the curbs andlockdowns that the Government of India had to implement to control the spread of thepandemic. This had an impact on the building materials sector as demand suRs.ered. ForPrism Johnson Prism RMC has been the most-impacted division in terms of business volumesand revenue given its focus on metro and tier-1 cities. However business outlook startedto improve by the third quarter as curbs started to ease. Favourable policies by theGovernment of India also boosted infrastructure-development funding. Towards the end ofthe year the rollout of multiple vaccines further boosted people's morale and it gave arenewed thrust to infrastructure development across the country.

How we performed

Consolidated revenue came at Rs. 5587 Crores in 2020-21 as compared to Rs. 5956Crores in 2019-20. I am glad to share that we ended the financial year 2020-21 on apositive note with consolidated EBITDA growing 15.4% to Rs. 622 Crores despite the impactof the pandemic on our consolidated revenue. This was because we strengthened ourfoundation during the difficult pandemic times and adopted cost-optimisation strategiesacross segments which helped us improve margins. Consolidated EBITDA margin for the year2020-21 expanded 210 basis points to 11.1%. As a result consolidated net profit after taxand non-controlling interest increased from Rs. 10 Crores in 2019-20 to Rs. 171 Crores in2020-21. To give you a better idea this is how we walked on the concrete steps towardsthe future in terms of all our three businesses:

While cement revenues largely stayed flat year-on-year EBITDA per tonne grew by 8.2%to Rs. 962 in 2020-21. The contribution from the premium segment to total sales continuedto increase from 22.3% in 2019-20 to 27.7% in 2020-21.

HRJ revenues at 1833 Crores grew by 0.5% in 2020-21 with EBITDA margins expanding 490basis point to 8.7% in 2020-21. Tiles sales volumes grew by 8.5% in 2020-21 to 48.6 mn m2.

In the Prism RMC segment we registered a revenue of 908 Crores with an EBITDA loss ofRs. 17 Crores due to the pandemic impact.

ERs.cient working capital management and strong operational performance led to healthyoperating cash flow generation (pre-capex and investments)

At Prism Johnson we have adopted sustainability in our DNA and foster inclusive growthfor all to stand out as responsible corporate citizens. Prism Johnson is aligned to itsemployees' needs and their well-being.

of Rs. 1008 Crores and our return on capital employed (ROCE) improved from 10.9% in2019-20 to 14.4% in 2020-21 for the consolidated entity. We strengthened our balance sheetby reducing consolidated net debt from Rs. 1827 Crores in 2019-20 to Rs. 1183 Crores in2020-21. Our consolidated net debt to EBITDA ratio improved from 3.4x in 2019-20 to 1.9xin 2020-21.

Growth opportunities as we take concrete steps towards the future

Change of sentiment is playing a huge role in defining the fresh opportunities arisingin the infrastructure sector. The Government's vigour to drive the infra segment throughincreased budgetary allowances and policies to develop affordable housing will providemore scope for demand in the building material space. Ready-mixed concrete is likely togain traction due to their premix formulation and accessibility in future. Realising theimportance of staying at home many people are now concentrating on their home's basicsand aesthetics. The tiles and sanitaryware segment is witnessing a significant demand withconsumers becoming more aesthetically conscious and experimenting with new products. Indiaalso has a young-earning age population with rising disposable incomes and their attitudeto try new products is further pushing sales. During April 2021 NCLT approved theComposite Scheme of Arrangement and Amalgamation among the Company and some of itswholly-owned subsidiaries. The scheme has resulted in consolidation of operations andsimplification of the organisation structure. It will lead to efficient cost managementoptimum utilisation of resources and provide scale benefits in the future.

Concrete strategies that will shape us

At Prism Johnson we are focussed on solidifying our foundation and taking substantialsteps towards tomorrow. We have successfully implemented cost-optimisation strategies thathave helped expand margins. Going ahead we plan to increase our market share along withfurther improvement in the levels of profitability. For cement we have taken steps towiden our distribution network optimise our supply chain among other initiatives. Wehave also announced our plan to increase cement capacity at Satna Madhya Pradesh from 5.6mt currently to 6.5 mt by June 2022 for a minimal capex of Rs. 139 Crores. We further planto increase Grinding Capacity at Satna by approx. 1.0 mt by September 2023 for totalcapex of around Rs. 250 Crores thereby taking the total cement production capacity atSatna to 7.5 mt post this expansion. In the tiles segment our focus will be on innovatingvalue-added products to serve the consumers' changing needs expand our distributionnetwork pan-India and increase our brand value further. We are also focussed on digitalmedia advertisements to reach our target consumers. We plan to increase our tileproduction capacity from 60 mn m2 currently to 68 mn m2 by March2023. This includes greenfield tile capacity expansion of 2.5 mn m2 atPanhagarh West Bengal by January 2023 and tile capacity expansion of 6.0 mn m2at JV entities by March 2023. In the Prism RMC segment our target is to increase plantutilisation levels and cater the individual home builder segment. There is an increase indemand for premix formulation and our goal is to expand innovate and capture thatopportunity.

Safety and sustainability with future vision

Prism Johnson maintains quality standards in areas of environment health and safety atall the plants and offices. During 2020-21 we took concrete steps to actively replacefossil fuel with green sources. We commissioned 22.4 MW of WHRS in phases and 10.0 MW ofsolar power plant during 2020-21. This will help us get around 35% of our power and fuelrequirements for Prism Cement to be met from renewable sources in future.

In general employees in our plants and offices go through a very efficientsafety-training module to carry out the business. However our focus on people's safetywas enhanced multi-fold in times of the pandemic. We imparted education to all ouremployees on how to deal with the crisis and stay safe. We maintained all norms related tosocial-distancing encouraged wearing of masks and use of sanitizers regularlydisinfected the plants and implemented all Government orders to ensure people safety.

For all corporates sustainability is another area which we feel needs a thoroughunderstanding. It is thus

At Prism Johnson we are focussed on solidifying our foundation and taking substantialsteps towards tomorrow. We have successfully implemented cost- optimisationstrategies that have helped expand margins. Going ahead we plan to increase our marketshare along with further improvement in the levels of profitability.

imperative for us to abide by the Environment Social and Governance (ESG) bestpractices. This includes ethical environmental and corporate social responsibilityprinciples supported by strong governance structure. We contribute meaningfully toaddressing the risks that climate change poses to our business. At the same time we arealso involving our stakeholders in our overall ESG strategy and its implementation.

Outlook

With the second wave of COVID-19 in India we believe the macro-economic environmentcould remain challenging and uncertain in the foreseeable future. However we willcontinue to work on our cost-realisation measures and expand our network to achievegreater heights in the future. The pandemic has taught every industry that digitisationwill be at the centre of everything we think. The Company is thus constantly investing ininnovation to cater modern infrastructure and lifestyle needs of our customers. We areprepared to leverage technology and build capability across all levels of the organisationso that we can add value in the lives of our stakeholders. I would like to express mysincere gratitude to our stakeholders for their undeterred support during thesechallenging and uncertain times. Our success is for our employees for our customers andbusiness partners who continue to support the Company's growth and expansion. Once againI would like to take this opportunity to thank our employees for their continued hard workand commitment over the last year. It is their passion for excellent customer service thatdrives the business forward.

Yours sincerely

Vijay Aggarwal

Managing Director DIN : 00515412

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