Enzymes are helpful in unlocking energy requirements. In recent years, the energy trapped in otherwise unusable agricultural, industrial and domestic wastes, which are now being used in the generation of biofuels using enzymatic processes. Application of enzymes in detergents, food processing and other industrial processes allowed significant reduction in process energy requirements. In recent years, numerous energy intensive, less specific chemical processes have been replaced by the green, highly specific and efficient enzyme based biocatalytic processes. Enzymes technologies are green, highly specific energy efficient and helping in making big strides in reducing our environmental footprints.
Advanced Enzyme Technologies Limited (AETL) is a research driven company with global leadership in the manufacturing of enzymes and probiotics. We are the largest Indian enzyme company, engaged in the research and development, manufacturing and marketing of 400+ proprietary products developed from over 68+ indigenous enzymes and probiotics. We are commited to providing eco-safe solutions to a wide variety of industries like human health care and nutrition, animal nutrition, baking, fruit & vegetable processing, brewing & malting, grain processing, protein modification, dairy processing, speciality applications, textile processing, leather processing, paper & pulp processing, bio-fuels, bio-mass processing, bio-catalysis, etc. Our aim is to help consumers access side-effect free healthcare, help farmers enhance nutrition for animals, and also to help adopt mordern enzyme based processes.
Your Company’s domestic sales constitute 45% of revenue from operations during financial year 2017-18 as compared to 41% of revenue from operations during financial year 2016-17. International sales were 55% of revenue from operations as compared to 59% of revenue from operations during previous financial year. 76% revenues from Human Nutrition, 13% from Animal Nutrition, 11% from Industrial bio processing.
24% ROCE, 29% ROIC, 17% ROE. EBITDA Margin of 43%, PAT Margin of 24% in FY 18.
Although all the efforts towards growth had an impact on margins still your Company maintained a healthy topline and bottom-line
With the acquisition of Evoxx Technologies GmbH, our new research & development facilities in Germany, we have made a strong investment that will steadily expand our product portfolio. This acquisition further strengthens and compliments all 4 areas of R&D: 1. Enzyme engineering 2. Microbial engineering and strain development 3. Process development and scale up 4. Application development & customer solutions.
We have added 20 scientists, 13 patents and 3 enzymes to our portfolio, and also added a solid base for marketing & sales into Europe.
While we’ve made good progress in growing the size of our business, we’ve also expanded our balance sheet, and maintained a tight rein on our debt. As of 30th June 2018, the gross debt in the company stood at Rs. 655 million, while the total cash stood at Rs. 932 million. The company intends to pay off certain portion of the debt using the surplus cash available on the balance sheet. We expect to continue investing into Research & Development, as that is the lifeline of our company. Without innovation there can be no growth. The evoxx acquisition has added tremendously to our strengths, as we build a robust pipeline for the future. The R&D expenditure is expected to go a step up, from Rs. 117 million p.a. to a range of about Rs. 180 to 200 million p.a.
On the Operations front, the capacity utilization continues to be in the 55-60% range. We do not expect any significant capex on this front in the foreseeable future.
We shall continue to focus on building a stronger Advanced Enzymes, and expect to deliver robust organic growth in FY19.
Enzymes Market size is estimated to exceed US$ 9.5 Billion by 2024. Proteases will worth over US$ 2.0 Billion by 2024. Health benefits offered by Protease including, boosts immune system, prevents inflammatory bowel diseases and cures skin burns & stomach ulcers will up surge this segments’ demand. The product demand in animal feed segment will be driven by key product properties including improved fodder efficiency, upkeep of gut health and lower cost.
Indian Industrial enzymes market is forecasted to surpass US$ 361.0 Million by 2020 on account of increasing food processing facilities, growing number of tanneries and rising textile manufacturing facilities in the country. Northern region is the largest consumer of industrial enzymes and is expected tocontinue its dominance through 2020 on account of increasing presence and anticipated expansion of food processing, leather manufacturing and textile production facilities in the region. Indian industrial enzymes market is dominated by Novozymes South Asia Private Limited, E.I. DuPont India Private Limited. Limited and Advanced Enzyme Technologies Limited(AETL).
Your Company’s newly acquired wholly owned subsidiary evoxx technologies GmbH is an industrial biotech company focussing on the development and production of industrial enzymes and development of oligosaccharides and polysaccharides to be primarly used in food applications. Evoxx is a Germany based company so this acquisition would give your Company a stronger foothold in Germany and in Europe. Evoxx has a team of around 20 scientists & technicians and 2 R&D locations in Germany which will help in strengthen research & development capabilities. Evoxx enhances our product portfolio and offerings for the Pharma Biocatalysis and Food Bio-Processing industries. Evoxx also brings in certain specialized nutritional carbohydrates, which expand our offerings to the US nutraceuticals market. The annual expenditure on R&D has increased from Rs. 90.0 Million (FY17) to Rs. 119.1 Million (FY18).
Your Company’s revenue from operations on consolidated basis increased to Rs. 3,957.0 Million in FY18 from Rs. 3,430.9 Million in FY17, a growth rate of 15.33%. The total revenue comprises International sales amounting to Rs. 2,168.5 Million (previous year Rs. 2,029.9 Million) increased by 6.83% and Domestic sales amounting to Rs. 1,788.5 Million (previous year Rs. 1,401.0 Million) increased by around 27.66%. The Company’s domestic sales constitutes 45% of revenue from operations during FY18 as compared to 41% of revenue during FY17. International sales were 55% of revenue from operations as compared to 59% of revenue from operations during previous year.
Financial costs increased to around Rs. 80.9 Million in FY18 from Rs. 35.8 Million in FY17. Consolidated EBITDA (Earnings Before Interest, Tax, Depreciation And Amortization including other income) margin during FY18 was Rs. 1,653.5 Million as compared to Rs. 1,533.9 Million during FY17. Profit before exceptional item and tax stood at Rs. 1,389.7 Million during FY18 as against Rs. 1,370.5 Million in the previous year. Profit after tax (before minority interest) stood at Rs. 935.6 Million during FY18 as compared to Rs. 929.4 Million during the FY18 Other Income: FY18 is Rs. 13.9 Million as compared to Rs. 25.8 Million in FY17. Cash and Equivalents in FY18 stood at Rs. 614.2 Million against Rs. 78.7 Million in FY17.
We expect your Company to maintain the strong revenues and profitability track record in the financial year 2018-19. Stepping ahead, your Company intends to strengthen its focus on newer applications such as palm oil extraction and biodiesel. Your Company is in the process to expand its business in the Malaysian market and the European market through its newly formed and acquired subsidiaries, to drive growth in profoundly potential markets. Your Company intends to expand its presence in the huge market available globally for Animal Feed enzymes. Your Company will continue to drive revenues by expanding its distribution network and registrations in key target geographies like North America, Europe and Latin America. Your Company also continues to explore new avenues, both organically and inorganically, to establish a significant presence in the key target segments. Your Company is continuously focusing on enzymes and probiotics to become a successful market leader in the global enzyme industry. To drive this growth, your Company is fairly comfortable with its existing capacities and capital investments. Currently, your Company is operating at 55% (approximately) of the installed capacity of its fermentation assets, which is sufficient to fulfill the present customer demands.