CCL Products

CCL Products Q3 FY24 Earnings Call Notes

• There was about 14% volume growth YOY
• 800 tons of materials couldn’t be shipped due to Red Sea issue, which comes upto 40-45 crs worth of sales, which will be pushed to the next quarter
• On the breakdown of equipment in Vietnam last quarter – Impact was to the extent of 5% of bottom line, currently working with insurance company to get the claim, if claim doesn’t come through until next quarter there might be a mild revision on guidance of Profitability. No change in guidance in terms of Sales
• There are 2 kinds of contracts for shipping the products: FOB and CIF. Incase the Red Sea issue persists, 30% of the contracts are CIF, where shipping costs for a longer route to reach destination will be borne by CCL Products and remaining 70% will the borne by customer
• Branded Business this year might generate 5-6% at EBITDA level, and will plough it back into the brand. There is no burn at PAT level
• Will end the year for continental coffee at 200crs
• Coffee Machine (Vending Machine)Business – 4000 vending machines all over India, and looking to be aggressive going forward. Will scale this business in a sustainable manner. Currently the business is around 20-25crs and can become a 100crs business in 3-4 years
• Looking at the demand in the out of home consumption, Have been doing some experiments, like Kiosks, and coming up with cafes, to get some proof of concept
• Coffee Ecosystem like startup sand D2C brands, most of them are doing business with CCL Products
• Continental Coffee – in South, the present is quite good in most of the stores, now focus os on developing markets in the North and other areas
• Largest selling pack for the consumer in regard to Continental Coffee is 200 gram pack, which is lower of the segment all together
• 10% of Continental coffee revenue, is from Online sales
• Debt free in 3-4 years, but difficult to exactly give a time line
• EBITDA/Ton remains steady, apart from this quarter, where there was a little aggressiveness in Vietnam
• Vietnam new capacity running at almost optimum capacity utilisation
• There aren’t any challenges with regions, expect there were issues of meeting demand when capacities were running at optimum
• Market shares in South market is 3.5% and all India level 2.5%
• Continental Coffee Revenue from South India is 60-65%