EPL Limited (500135) Earnings Call Transcript & Summary

Hi. Good evening, everyone, and thanks for joining the call at a short notice. On behalf of Systematix, I'm very glad to welcome you all on this important call on EPL Limited. On the call, we have Mr. Amit Dixit, who is the Head of Asia for Blackstone Private Equity and a member of Board at EPL. We have Mr. Anand Kripalu, the recently appointed MD and Global CEO of EPL; and Mr. Sudhanshu Vats, who is the current MD and CEO at EPL. I would like to hand over the dias to Amit to take the discussion forward. Over to you, Amit.

Great. Well, thank you, Nikhil. And good evening, everyone, or good afternoon or good morning, depending on where you are dialing from. As Nikhil mentioned, in my current role, I head the private equity business for Blackstone across Asia in addition to heading the business in India. And this is my 20th year in private equity, 15th year at Blackstone. And I am also privileged to represent Blackstone on the Board of EPL. And I think in that context, we are here today. And I would like to sort of announce that Anand Kripalu will be taking over as the Managing Director and Global CEO of EPL from August 18 onwards. Sudhanshu Vats will stay with the company until the end of August to enable a smooth transition. Anand, in some way, shape or form, especially the public market community, does not need an introduction because still day before yesterday, he was the CEO of Diageo India, which is a $6.5 billion market cap, consumer company in the area of alcohol and beverages. And before that, Anand was with Mondelez India, which was earlier called Cadbury and he was there for 8 years. And through that time period, that was a privately held company, but the company grew 25% year-over-year. So we are super excited to have Anand join the leadership team, lead the leadership team at EPL. Anand's experience in the consumer sector should be very welcome to our customers who are all in the FMCG consumer sector, and he knows people at most of our customers. So I think customers will welcome this. Anand's reputation is of a people-friendly leader. And as you know, EPL is probably the largest India-headquartered MNC in this sector. And we have operations across 10 countries, employees across those. So I think this will really energize our employee base, our customers. And also having the experience of running a large cap public listed company, Anand has that entire experience and profile to handle all stakeholders: customers, employees, investors, Board, so on and so forth. So welcome, Anand to EPL. We are super excited to have you join the leadership team. And as EPL now scales from a mid-cap company to a large-cap company, I think your -- you being at the helm of affairs, there couldn't be anything better. So welcome to the team. And at the same time, I want to give a big thank you to Sudhanshu Vats, who has been a terrific contributor to EPL over the last year he's been with the company. And his contribution in many areas, whether it's strategy with employees or customers has been great. Both Anand and Sudhanshu are personal friends of mine. So I think this is a transition, which is I'm very confident will be very, very smooth because it's all among friends, number one. And number two, Sudhanshu and Anand used to work together at Unilever for many, many years. So they know each other very well. So the transition is going to be as smooth as it can be. And some of those conversations are already in play. So with that, let me just pause here, and I would like to invite Anand Kripalu to say a few words.

Thank you, Amit, and I am absolutely excited to be here today. I hope I know many of you who are on the call through past interaction. But just to add a bit more flavor, which I have probably not done for 32 quarters when I've been announcing results for USL here is just to give a bit of context of my experience very briefly. So I've been a kind of general manager or a head of a business for 17 years now. And there were 3 kinds of businesses that I had experience with. The first was in Unilever and that was about turning around a business that had not grown for a decade and actually lost money for a decade, and the brief of my boss at that time in 2004 was, "Anand, this is the last chance, right? Either you try and turn this around or we're going to shut it now because we don't have the stamina to take any more losses." And that was really a turnaround, and I feel really good that, that business is starting growing at double digits and it's continuing to perform for Unilever. The second was, of course, Cadbury, which is a well-run company. A strong brand, well-run, good distribution, strong management team. And there the role was really about accelerating performance. So when you had a kind of high single digits, low double-digit kind of growth, how do you double that rate of growth? And over 8 years, the CAGR on top line and bottom line was actually 25% during that Cadbury tenure. And then the last 7.5, 8-odd years with USL was really a transformation like no other. It was the company that was acquired from Dr. Mallya. And many of you would know from what's in the public domain, the nature of transformation that had to be performed both for the industry, about doing business the right way, but also about transforming the reputation of the company, the organization and structure and accelerate performance both on top line, bottom line and cash. The debt was more than INR 8,000 crores when we started that journey. And now it's INR 500 crores. So the 3 experiences I've had really are about turning around, accelerating and transforming in terms of the 3 businesses that I have kind of led. During this period, I've also been President of Asia for Cadbury and President of India and Southeast Asia when Kraft happened and when Kraft bought Cadbury. So really, that's really a nutshell, the kind of business experience that I've had. So why am I excited to be joining EPL? I think the first is that it's a rare non-IT global business from India, right? It's a rare example of a non-IT global company headquartered in India. And that's part of the excitement, right? It's different from the kind of stuff that I've done. So that makes it exciting. The second is as strange as it may seem, I have known EPL when I was a young brand manager in the early '90s in Hindustan Lever. And I've spent nights in the plants at EPL, right, which was called Essel in those days, actually [ approaching ] tubes because I worked in the oral care category for 5 years within Hindustan Lever. So actually doing proofs as a brand manager makes [ as I've said ] was right. And I'll tell you, even at that time, it was clear that this was a leading-edge company with technology before it's time, right? And of course, the third reason why I'm excited is because I'm going to take over from Sudhanshu who, as Amit said, I know so well. We worked very closely together over the years. And I absolutely know that he's going to pass on the baton to me and that baton is not going to drop, right, as part of the [ greeneries ]. So I think these are the reasons why I'm excited to be here. And I'm really looking forward to working with the team at EPL, right, which is the team that I've heard about from Sudhanshu, from Amit and others that is a really engaged, super-motivated team. And I'm really looking forward to working with them to take this business forward into the future. So that's why I'm here. And I hope over time, as we interact more and more in subsequent quarters, I hope we can build that confidence in many of you who are on this call today. Amit back to you or to Sudhanshu.

Thanks. Thank you, Anand. And Sudhanshu, can I invite you to say a few things, please.

Thanks, Amit. And thank you, Anand. I think you know -- thank you for your kind words. But I think -- and also thank you to the investor community, to all you guys who are here and to come in such large numbers at such a short notice. So it's close to about 1,900 people on the call already. Thank you. That shows your confidence in EPL and the confidence in us and in the future. And as you heard from Anand, EPL couldn't have asked for a better leader. And before I -- and Anand spoke about the 3 journeys of turnaround, acceleration and transformation. And I think therefore Anand is very well equipped to deliver on the parts which EPL has all 3 needed, through its resistant [indiscernible] of market-leading, ready to grow and capital efficient consistent earnings. At a personal level, Anand is dear friend, an outstanding leader and a brilliant professional. And I must tell you, I have deep respect for Anand because it's very rare that you find a person who is outstanding to a T but at the same time an exceptional professional. And I think in Anand, I have found that. And I think you will all see that as we go along. And lastly, to what Anand had said again, I'm confident that as we transfer this baton because of my -- because of who Anand is and because of my association, long association with Anand, I'm confident that we'll pass this baton and we'll won the relay for EPL. Thank you for your time once again. We are going to meet in 8th of April after our quarter 1 results. I know we are in the blackout period. I don't want to talk anything further. And we will be with you again and we'll be able to take more questions at that point in time. Thank you once again. Stay safe, stay healthy. Thank you.

Yes. So maybe let me just conclude. So thank you, Anand. Thank you, Sudhanshu. But just to reiterate, I think as a representative of the Board of EPL and also of the largest shareholder, Blackstone, we are super excited to welcome Anand and welcome his leadership to take this company from a mid-cap company to a large-cap company, to all the leadership qualities he brings, the experience he brings. So it's a very exciting moment for all of us. And at the same time, we want to thank Sudhanshu for his outstanding contribution and wish him all the best for the next chapter in his career. And to all our investors, thank you for supporting the company throughout the years and especially recently over the last year or so because many new investors have come into the EPL story. And I think it's a very exciting story because Blackstone took over the company about 2 years back. So we are at this -- if you were to use the T20 analogy, we have -- we are halfway through our earnings or maybe not even halfway, maybe 25%, 30% through the innings. So there is -- a new batsman is coming for the next round. And hopefully, he's going to be hitting sixes and hitting the ball out of the park. So super exciting as a shareholder for this new batsman to come on the crease and bring some energy and excitement both to our customers, employees and also bring a lot of joy to our investors. So with that, I'll hand it back to you, Nikhil.

Thanks, Amit, Sudhanshu and Anand for your comments. To all the people on the call, the company is in silent period. So we are unfortunately unable to take any questions, but the company would be available for, obviously, discussions post the results are announced in 2 weeks' time. Thank you for joining, and we can conclude the call if Amit, you permit us to conclude, and there are no more comments.

That's great. Well, thanks, everyone. Thanks, Nikhil.

Thank you, everyone, for joining. Bye.

Thank you. Thanks, everyone. Thank you.

Thank you, Nikhil. Bye-bye.