Welspun Living Limited · NSE:WELSPUNLIV
Welspun Living — Welspun India — Investor Day (April 2016)
40 slides from Welspun Living's investor day presentation, Apr 25, 2016
Slide 1: Annual Investor Conference
ANNUAL INVESTOR CONFERENCE 25th April, 2016 1
Slide 2: Agenda
1. Chairman’s address 2. Business Insights 3. Way Ahead AGENDA 4. Financial Highlights 5. Q&A 2
Slide 3: Chairman's Address
CHAIRMAN’S ADDRESS 3
Slide 4: Revenue: US$ 3 Billion; Asset Base: US$ 3.2 Billion
Welspun India Limited Welspun Corp Limited #1 home textiles company in the world Global leader in large diameter pipes Welspun Welspun Energy Limited Enterprises Limited India’s largest solar Winner of 1st Independent Power Hybrid Annuity Model Producer Project Revenue : US$ 3 Billion; Asset Base :
Slide 5: Welspun Group – Journey from FY14
WELSPUN GROUP – JOURNEY FROM FY14… EXIT FROM IMPROVING NON-CORE PROFITABILITY IN BUSINESSES CORE BUSINESSES SIMPLIFICATION OF DELEVERAGING CORPORATE STRUCTURE 5
Slide 6: Welspun Group – Strengthening Financial Profile
WELSPUN GROUP – STRENGTHENING FINANCIAL PROFILE Net Debt / EBITDA Net Debt/Equity 5.00 1.40 4.50 1.20 4.00 1.23 4.31 0.97 3.50 1.00 3.00 2.62 0.93 0.80 2.50 2.00 0.60 1.50 2.14 0.40 1.00 0.20 0.50 - - FY14 (A) FY15 (A) FY16 (E) FY14 (A) FY15 (A) FY16 (E) 50 45 EBITDA 43 Cash profit 30 40 26 35 25 29
Slide 7: Welspun Group Companies - Credit Rating
WELSPUN GROUP COMPANIES - CREDIT RATING Long Term Short Term Welspun India AA- A1+ Welspun Global Brands AA- A1+ Welspun Corp AA- A1+ Welspun Energy A+ A1+ Welspun Enterprises A A1 As per CARE/FITCH 7
Slide 8: Leading Tomorrow Together – Built to Last
– BUILT TO LAST…….. LEADING TOMORROW TOGETHER DIFFERENTIATION INSTITUTIONALISATION BEING RESPONSIBLE Innovation Management Empowerment Environment Friendly Technology Risk Management Practices Partnerships Financial Sustainability Caring for the Prudent Capital Community Allocation Diverse Workforce
Slide 9: Welspun India Ltd
WELSPUN INDIA LTD 9
Slide 10: Welspun India - Delivering on Commitments
WELSPUN INDIA - DELIVERING ON COMMITMENTS Guidance 3-Yr Average FY16 Revenue Growth 13-17% 18% 13% EBITDA 21-22% 24% 26% Margin ROCE 18-20% 24% 26% Net Debt/ Equity 1.7x 1.8x 1.3x Net Debt/ Op 2.8x 2.2x 1.6x EBITDA Steady FY15 & Rs. 3.8 Continuous FCF Increase FY16 +ve bn Improvement 10
Slide 11: Huge Opportunity for Indian Home Textiles
HUGE OPPORTUNITY FOR INDIAN HOME TEXTILES Cotton Competitive Availability Costs Strong Domestic Supportive Market Govt. Potential policies Socio- economic factors 11
Slide 12: Indian Players Gaining Prominence Globally
INDIAN PLAYERS GAINING PROMINENCE GLOBALLY India’s share 38% Towels (Cotton) 36% increased by 8 percentage 30% points in 6 years 26% 25% 23% 24% 22% 22% 22% 15% 15% 2009 2012 2015 Sheets (Cotton) India’s share 48% 45% increased by 21 percentage points in 6 years 27% 29% 26% 22% 23% 18% 18% 16% 15% 1
Slide 13: Vision 2020
VISION 2020 Revenue Net Debt $2 BN NIL Innovative/Branded Domestic Market Products Share of Share of Revenue Revenue 50% 20% 13
Slide 14: Business Insights
BUSINESS INSIGHTS 14
Slide 15: Welspun: Beyond Manufacturing
WELSPUN: BEYOND MANUFACTURING.. • In the past 30 years, Superior Product Welspun has evolved Personality from being a commodity Functionality manufacturer to a creator of unique Brands and product and brand Commodity Unique experiences Experiences • We create these experiences through our Problem Pe
Slide 16: Leading to a Unique Revenue Mix FY16
LEADING TO.. A UNIQUE REVENUE MIX FY16 INCREASED SHARE OF INCREASED SHARE OF INCREASED SHARE OF INNOVATIVE PRODUCTS BRANDED PRODUCTS NEW CHANNELS 34% 13% 5% 16
Slide 17: Welspun's Improved Market Share
WELSPUN’S IMPROVED MARKET SHARE CY13 CY14 CY15 14.7% in Towels 16.4% in Towels 20.1% in Towels 7.3% in Bed Linen 9.9% in Bed Linen 11.3% in Bed Linen US Market-Source OTEXA 17
Slide 18: Successful FY16
SUCCESSFUL FY16 LEADERSHIP POSITION ACCELERATED GROWTH INDUSTRY DEFINING No. 1 Home Textile Globally Launched Supplier To USA for 13% Overall Revenue Ranked No. 1 among Hygro® As An 4th Consecutive Year Growth Ingredient Brand “Home Textile Supplier to USA 2015” Highest Exports from India First Indi
Slide 19: Awards & Recognitions
AWARDS & RECOGNITIONS Dipali Goenka, Jt. MD, features at #16 in Asia's 50 Power Businesswomen 2016 by Forbes. #4 among Indian Women Dipali Goenka appointed on the Board of Directors of Social Accountability Accreditation Services (SAAS) “Supplier of the Year” in Bed & Bath category” - Walmar
Slide 20: Consumer Insights – Delivering Unique Experiences
DELIVERING UNIQUE EXPERIENCES Consumer INNOVATION FOCUS Needs BRAND AND DELIVERY FOCUS CONSUMER INSIGHTS Continuous • Welspun Innovation Lab Ingredient Idea /Technology • Product Development Generation Brands Owned Ensuring Credibility Licensed • Innovation Partners Technology • B2C/ B2B Connect Inn
Slide 21: Delivering Product Experiences
DELIVERING PRODUCT EXPERIENCES
Slide 22: Delivering Product Performances
DELIVERING PRODUCT PERFORMANCES 22
Slide 23: Focus 2016 - Inclusive Growth
FOCUS 2016 - INCLUSIVE GROWTH Virtuous Cycle of Social Development at Welspun • Sustainability Focus • Child And Adult • Health Camps Education • Mobile Medical Vans • Interventions THE 3 Es OF CORPORATE SOCIAL VALUE • Natural/ Recycled Products • 300K Trees Planted • Vocational Training • Rain Wate
Slide 24: Focus 2016 - Inclusive Growth (Contd.)
FOCUS 2016 - INCLUSIVE GROWTH (Contd.) Girls Hostel Vocational Centers for SPUN Skill Development Global Women Economic Education : Students and Empowerment Initiative Govt. Schools Covered Smart Village 24
Slide 25: Way Ahead
WELSPUN INDIA WAY AHEAD a
Slide 26: Sustainable Value Creation
SUSTAINABLE VALUE CREATION NEW CHANNELS INNOVATION NEW SEGMENTS OPERATIONAL EXCELLENCE PERSONALIZED / EXPANDED PRODUCT NEW GEOGRAPHIES CUSTOMIZED RANGE 26
Slide 27: Vision 2020 – Leading Tomorrow Together
VISION 2020 LEADING TOMORROW TOGETHER Innovation Leveraging technology Inclusive growth People Collaborations Brands development
Slide 28: Vision 2020
VISION 2020 Revenue Net Debt $2 BN NIL Innovative Products Branded Products Domestic Market Share of Revenue Share of Revenue Share of Revenue 40% 25% 20% 28
Slide 29: Financial Highlights - Q4 & FY16
FINANCIAL HIGHLIGHTS - Q4 & FY16 29
Slide 30: Financial Highlights – FY16
FINANCIAL HIGHLIGHTS – FY16 Operating EBITDA PAT crossed milestone Sales growth at 13% margin up 202 bps of Rs. 7 bn to 26% Net Debt to Equity at 1.3x Net debt to Op.EBITDA ROCE (pre-tax) at 26%; (vs. 1.8x) at 1.6x (vs. 2.0x) ROE at 41% Long term Credit Rating Positive FCF at Rs. 3.8 bn Total Divide
Slide 31: Financial Performance
FINANCIAL PERFORMANCE (Rs. Million) Particulars Q4FY16 Q4FY15 YoY Q3FY16 FY16 FY15 YoY Revenue 16,283 13,658 19.2% 14,904 59,795 53,025 12.8% Operating EBITDA 4,229 3,446 22.7% 4,006 15,575 12,742 22.2% Op. EBITDA Margin 26.0% 25.2% 74 bps 26.9% 26.0% 24.0% 202 bps EBITDA 4,497 3,735 20.4% 4,178 16,
Slide 32: Profitability Trend
PROFITABILITY TREND (Rs. Million) Particulars FY13 FY14 FY15 FY16 CAGR Revenue 36,473 43,730 53,025 59,795 17.9% Revenue growth % 24.4% 19.9% 21.3% 12.8% Operating EBITDA 5,946 9,211 12,742 15,575 37.8% Op EBITDA Margin 16.3% 21.1% 24.0% 26.0% EBITDA 6,438 10,253 13,691 16,490 36.8% EBITDA Margin 17
Slide 33: Balance Sheet Trend
BALANCE SHEET TREND (Rs. Million) Particulars 31-Mar-13 31-Mar-14 31-Mar-15 31-Mar-16 Net Worth 9,902 11,097 14,318 19,877 Short Term Loans 9,166 11,349 10,034 7,732 Long Term Loans 11,079 18,944 20,817 18,901 Gross Debt 20,244 30,293 30,851 26,632 Cash & Cash Equiv. 2,798 3,658 4,297 1,384 Net Debt
Slide 34: Financial Ratio Trend
FINANCIAL RATIO TREND FY13 FY14 FY15 FY16 Solvency Net debt/Op. EBITDA 2.93 2.89 2.08 1.62 ratios Net debt/Equity 1.76 2.40 1.85 1.27 EBIT/Interest 2.52 3.55 3.66 5.39 Current Ratio 1.00 1.07 1.10 1.17 Operational ratios Fixed Asset turnover 1.96 1.71 2.04 1.79 Total Asset turnover 0.95 0.85 0.93 0.
Slide 35: Key Financial Trends
KEY FINANCIAL TRENDS Revenues 18,000 Operating EBITDA 70,000 15,575 59,795 16,000 60,000 53,025 14,000 12,742 50,000 43,730 12,000 Rs. miilion 9,211 Rs. million 40,000 36,473 10,000 8,000 30,000 5,946 6,000 20,000 4,000 10,000 2,000 0 0 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Cash Profit PAT After M
Slide 36: Key Ratio Trends
KEY RATIO TRENDS ROCE % (Pre- Tax) 50% 36% ROE % 45% 42.5% 31% 26.4% 40.0% 26% 22.8% 40% 41.1% 21.9% 21% 35% 34.6% 16.3% 21.0% 16% 30% 25.9% 11% 25% 6% 20% 1% 15% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 2.8x Net Debt / Equity 4.0x 2.6x 2.4x Net Debt / Op. EBITDA 2.4x 3.5x 2.2x 3.0x 2.9x 2.0x 1.8x 1.
Slide 37: Focus on Free Cash Flow
FOCUS ON FREE CASH FLOW Cash flow improvement through tight working capital management and calibrated capex FCF positive in the last two years 5,000 3,762 2,456 795 714 239 0 Rs. in million FY14 FY15 FY16 -5,000 -6,217 -10,000 FCF Dividend Rs. 10 bn positive swing in FCF in two years 37
Slide 38: Demand-Driven Capacity Expansion
DEMAND-DRIVEN CAPACITY EXPANSION Expected End-FY16 Product Unit Sales volume Utilisation % Capacity Capacity FY17 Towels MT 60,000 55,400 92% 72,000 Sheets ‘000 Mtrs 72,000 66,500 92% 90,000 Rugs & Carpets ‘000 Sq. mtrs. 8,000 6,100 76% 10,000 Capacities running Investment of approx. Rs.8 bn Capacit
Slide 39: Dividend Policy
DIVIDEND POLICY Dividend distribution policy “Dividend Payout: 25% of standalone PAT” Total dividend for FY16 at Rs. 1.3 per share: 26% of standalone PAT Interim Interim Final Total Dividend Dividend Dividend: dividend: 1: Rs. 2: Rs. Rs. 0.05/sh Rs. 1.3/sh 0.65/sh 0.6/sh Note: Figures adjusted f
Slide 40: Thank You
THANK YOU For further details, please contact: Harish Venkateswaran Altaf Jiwani Sr. General Manager - Group Finance and Strategy Director (Finance) & CFO - Welspun India Limited Email: harish_venkateswaran@welspun.com Email: altaf_jiwani@welspun.com