GROUP 9

TABLE OF
CONTENTS
Company Profile

Company History

Company Aspirations

Strategy Review

Firm Performance

External Analysis

Conclusion
CORPORATE STATUS &
INDUSTRY
Chemical Manufacturing
Industry
Principal business activity of
company: manufacturing and
trading of paints, varnishes and
other related items.

Subsidiary of Slotrapid Limited

(Parent company)
 COMPANY HISTORY

1950 1955
Initially incorporated The Company
in Pakistan as a established a
Private Limited manufacturing
Company facility in Karachi

1974 1991 2006

Converted into a Slotrapid Limited A second plant
public listed acquired control was set up in
company of Berger Paints Lahore in 2006

OWNERSHIP
STRUCTURE
& CONTROL

GENERAL PUBLIC OTHER FINANCIAL

INSTITUTIONS AND
FOREIGN PUBLIC
37.6%
6.5%

ASSOCIATED INSURANCE
COMPANIES AND COMPANIES
OTHER PARTIES
2.9%
53%
 COMPANY
ASPIRATIONS
VISION
Become the leading paints and associated products
manufacturing and marketing company in Pakistan
ensuring best returns to our investors & highest
customer satisfaction

INNOVATION
We will lead by innovative
We will act as a good
ideas and technological
development in the paints
and associated products in
Pakistan ensuring efficient
utilization of resources
yielding high returns.
CORPORATE SOCIAL
COMMITMENT RESPONSIBILITY
We will vigorously promote
We will ensure the highest corporate citizen ensuring
level of commitment to service towards the
achieve best quality community and shall focus
products and services. on environment, health
and safety
CARE
and safeguard the interest
of employees,
shareholders, business
associates & all other
stakeholders.

Product diversification
strategy
Operates in
diversified
product markets from
retail to non-retail and
business segments

CORPORTAE
STRATEGY
Related-constrained
diversfication
strategy

Business lines have linkages

between them and share
common resources and
competencies

BUSINESS
STRATEGY
Cost leadership strategy to
lower firm costs

Investing in production to
increase efficiency

Capitalizing on both economies

of scale and economy of scope
 STRATEGIC PARTNERSHIPS
Technical collaboration arrangements with leading international paint manufacturers

Collaboration with leading paint company of Japan to expand product portfolio in

Automotive, Vehicle Refinishes, and Industrial Paints

Strategic partnership agreement with DuPont to sell their products in Pakistani market
through extensive marketing and distribution network
ORGANIZATIONAL
STRUCTURE
Organized into departments according to
expertise
Clear division of responsibilities
Each department executes the functional
strategy which supports business strategy
FINANCIAL HIGHLIGHTS
REVENUE GROWTH
The Revenue has been fluctuating
Slumped in 2020 due to COVID-19
Revenue growth % has slowed, but it's still
growing.
Overall Revenue has increased

ROIC, ROE, ROA AND ROR

A similar trend of decline starting in 2018,
slumping in 2020 and then recovering from 2021
ROE and ROA faced a greater decline in 2022
Rising costs and falling profits in 2022 have led to
declining ROA, ROE, ROIC and ROR.
An overall improvement is observed over 5 years.
GROSS PROFIT MARGIN
A constant decline in GP margin over the 5 years
Due to rising input costs, COGS increased
Due to higher competition, sales revenue is
pressurised
GP has declined
NET PROFIT
Fluctuations in Net Profit
A sharp decline in 2020 due to COVID-19
Recovery in 2021
Fell in 2022 due to rising operating costs (e.g.
salaries etc) and finance costs
CASHFLOWS
Fluctuations in the Net Cashflows
Declining profits, high finance costs cause
negative cashflows
CAPITAL STRUCTURE
The debt-to-equity ratio is increasing
The debt component is increasing
Still maintains a healthy leverage of 41:59 debt to
equity ratio
EARNINGS PER SHARE
In accordance with profitability, EPS fell
drastically in 2020
After recovery, very sharp increment in 2021
Declining profits in 2022, EPS fell
TOBIN'S Q
Constantly, Tobin's Q is less than 1, which
means the market value is undervalued
The market outlook is unfavourable
Berger is underperforming the industry, so the
market value is lower than the intrinsic value
of the business
 INTERNAL FACTORS
Diversified revenue stream
•Retail, non-retail, allied
•Both B2B and B2C operations

Strong governance framework and experienced management

•Survival strategy
•cost reduction, cash flow generation and market share increment

Cost reduction systems are weak

INDUSTRY FACTORS •Technology
•Lean processes
Reduced Demand
•Slow Construction Activity
•Economic instability, rupee deprecation, inflation, high-interest
rates

Strong competition puts pressure on margins

•From the Unorganized sector

Rising input prices

•Crude oil, import hindrances, global inflation

Global Crises
•COVID-19, Russia-Ukraine War

Recent Floods
•Creates construction demand
 INDUSTRY COMPARISON

Berger has 10% market share in the organised sector

Berger has severely UNDER-PERFORMED as compared to the Industry
 INDUSTRY ANALYSIS

The Paint Industry is at a mature stage in Pakistan

Mainly two strategic groups: Organized Sector, and the Unorganised Sector

1. Unorganized Sector: 60 % of total demand, mainly rural and semi-urban areas

2. Organized Segment: 40 % of total demand, around 20 companies which include

Berger, Brighto, Nippon etc.

The Organised sector contributes to 0.12% of the total GDP - PKR 50 Billion in FY20
PORTER'S FIVE FORCES
Power of Suppliers - Medium

Power of Buyers - Medium

Barriers to entry - High in the Organised

sector, Low in unorganized sector

The threat of substitute: Low

Rivalry Among Competitors - High: price

wars, product differentiation

 PESTEL ANALYSIS

Political: Government Housing Schemes, Lack of political stability

Economic: Volatile exchange rate, increased raw material cost

Socio-cultural: awareness among people about better quality paints and various

varieties

Technological: Modernization of paints like waterproof paints, Teflon coating, etc.

Ecological: Extreme weather conditions require more R&D in the product

Legal: Breakthrough technologies difficult for companies to be safeguarded by IPR in

Pakistan
CONCLUSION
Redirection of efforts to

capture larger market share

Increase demand and overall

production volume to gain

economies of scale

Focus on cost management

THANK
YOU!