Welspun Living Limited · NSE:WELSPUNLIV
Welspun Living — Welspun India — Investor Presentation (August 2017)
49 slides from Welspun Living's investor presentation, August 2017
Slide 1: Investor Presentation Aug 2017
INVESTOR PRESENTATION AUG 2017 Owned Brands Innovations Licenses 1
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is provided by Welspun India Limited (the “Company”) to you solely for your reference. This document is highly confidential and being given solely for your information and for your use and may not be retained by you and neither this presentat
Slide 3: Introduction to Welspun Group
INTRODUCTION TO WELSPUN GROUP Infrastructure Global Leader in Global Leader in Oil & Gas Home Textiles Large Diameter Pipes Financial Services Group Revenue Market Cap Employees US$ 2.3 Billion US$ 2.0 Billion 25,000+ 3
Slide 4: Agenda
1. Welspun India: An Introduction 2. Industry Overview AGENDA 3. Welspun India: Key Differentiators 4. Key Strategic Initiatives 5. Welspun 2.0 & Way Forward 4
Slide 5: Welspun India: An Introduction
WELSPUN INDIA: AGENDA AN INTRODUCTION 5
Slide 6: Welspun India: Overview
WELSPUN INDIA: OVERVIEW Largest Ranked #1 Home Textiles Company Globally(1) among Home Textile Suppliers With presence in to USA Bed, Bath & Flooring by Home & Textiles Today magazine for Presence in 5th Year in a Row 50+ Countries Every 5th Towel Trusted and Preferred Suppliers to Every 9th Sheet 1
Slide 7: Key Milestones
KEY MILESTONES 66 60 53 Revenues (Rs. Bn) CAGR 25% 44 (2005-17) 32 26 16 7 4.5 0.8 1.3 FY 1985 1993 1995 2005 2006 2008 2010 2012 2014 2015 2016 2017 Entry into Rugs Ranked No.1 Home Embarked upon Began the Set up Anjar, Gujarat Textile exporter to Capacity the US Expansion & Foray into: journey in
Slide 8: Shareholding and Trading Snapshot
SHAREHOLDING AND TRADING SNAPSHOT Shareholding Pattern June 30, 2017 March 31, 2017 12.7% 12.1% 0.7% Promoter 0.6% 1.6% 1.9% FIIs 11.6% 11.9% Mutual Funds Banks and Insurance Cos Public 73.5% 73.5% Market Statistics As on Aug 03, 2017 INR USD Price per share 82.05 1.3 No of Shares outstanding (Mn) 1
Slide 9: Industry Overview
WELSPUN INDIA INDUSTRY OVERVIEW
Slide 10: Asian Dominance in Home Textiles
ASIAN DOMINANCE IN HOME TEXTILES India 5% Textiles & US$ 744 bn Apparel China 38% India 6% Textiles US$ 290 bn China 37% India 11% Home Textiles US$ 45 bn China 35% Source: WTO - 2015 data, Texprocil, OTEXA 10
Slide 11: Global Market Opportunity
GLOBAL MARKET OPPORTUNITY Global Home Textile Market Market Composition (USD Bn) 203 US 33% 67 136 Wholesale Level 45 Retail Level Row 33% Europe 33% 2015 2020E US Home Textile Market (2016) US and Europe are the major end markets US Home Textile Market (USD Bn) comprising a third each of the home
Slide 12: India - Largest Player in US Market
INDIA- LARGEST PLAYER IN US MARKET Market Share in US Towel Market 11 percentage pts 40% 41% India continues 36% 38% 30% to increase its 23% 24% 26% 25% 24% 22% 22% 22% 23% 22% 20% dominance in 15% 15% 15% 15% the US Towel Market CY2009 CY2012 CY2015 CY2016 YTD June 2017 Market Share in US Sheet Mar
Slide 13: Factors Contributing India's Competitive Advantage
FACTORS CONTRIBUTING INDIA’S COMPETITIVE ADVANTAGE Largest Favourable Competitive Producer of Socio-Economic Costs Cotton Factors 4 5 6 Strong Political Global Strong Domestic Leadership Manufacturing Market with Supportive Scale Potential Policies 13
Slide 14: Welspun India: Key Differentiators
WELSPUN INDIA: AGENDAKEY DIFFERENTIATORS 14
Slide 15: Welspun India: Bellwether in Home Textiles
WELSPUN INDIA: BELLWETHER IN HOME TEXTILES 8 1 Leading Market Player Consistent Financial with a Wide Product Performance Record Range 7 2 Experienced Board and Vertically Integrated Management with Proven Presence with Significant Track Record Capabilities 6 3 Global Distribution Sustainability at
Slide 16: Leading Market Player with a Wide Product Range
1 LEADING MARKET PLAYER WITH A WIDE PRODUCT RANGE Widest product range in the Home Textiles segment Towels, Bath Sheets, TOB, Basic Carpets, Robe & Fashion Bedding Rugs A differentiated End-to-end Solutions Provider in Home Textiles Uniquely positioned for cross-selling due to Customer reach, Compet
Slide 17: Leading Market Player
1 LEADING MARKET PLAYER Welspun’s Market Share in Welspun’s Market Share in US Towels Market US Sheets Market 21.7% 20.1% 11.3% 11.1% 16.4% 9.9% 14.7% 7.3% CY 13 CY 14 CY 15 CY 16 CY 13 CY 14 CY 15 CY 16 Welspun’s Share in India’s exports to US - Towels Welspun’s Share in India’s exports to US - She
Slide 18: Vertically Integrated Presence with Significant Capabilities
2 VERTICALLY INTEGRATED PRESENCE WITH SIGNIFICANT CAPABILITIES India Supply Vertically Integrated Facilities Across Manufacturing Chain Advantage Cotton Spinning Weaving Processing Cutting & Sewing Logistics Captive Power Current integration of about 70% in Spinning and Weaving Captive power gen
Slide 19: Global Distribution Network with Marquee Clients
3 GLOBAL DISTRIBUTION NETWORK WITH MARQUEE CLIENTS Warehouses Manufacturing Facility Corp HQ/Marketing Offices Country Served Delivery and Reach in Over 50 Countries 19
Slide 20: Diversified Brand Portfolio
4 DIVERSIFIED BRAND PORTFOLIO Spectrum of Welspun Brands: Continue to Evolve Premium & Sustainability & Innovation Technology Luxury Empowerment Coveted Licenses Branded Products Contribution to Sales at 16% in FY17, up from 13% in FY16 20
Slide 21: Track Record of Innovation
5 TRACK RECORD OF INNOVATION Increasing Share of Revenue • 36% of Sales from Innovative Products Innovative Products 36% • 27 unique inventions filed globally 34% 30% FY15 FY16 FY17 • Crossed $200 Mn Sales in FY17 The two segments (innovative & branded) together account for • Good traction in hospit
Slide 22: Sustainability: Focus on the 3Es
6 SUSTAINABILITY: FOCUS ON THE 3Es Empowerment • Quality Education Project • Adult Literacy Education for women • Vocation Centers: 10 centers including SPUN - 351 women trained and 239 women employed in Welspun during the quarter Education • Walmart’s SWASTI foundation for Women Empowerment and Tra
Slide 23: Inclusive Growth: Implementing Smart Villages
6 INCLUSIVE GROWTH: IMPLEMENTING SMART VILLAGES E-Connectivity • Wi-fi enabled villages with CCTV coverage Environment • Complete E-governance • Green cover in all public land • PA system with speakers • Segregation and organized disposal of garbage • Comprehensive CMS for Panchayat Office • 100% LE
Slide 24: Sustainability in Everything That We Do
6 SUSTAINABILITY IN EVERYTHING THAT WE DO STP Installed with a Capacity to Process 30 MN Liters Per Day; currently saving 6,500 million Liters of Water annually 85% Water Recovered From STP Used at Plant 10,000 Youth Trained in FY17 via Welspun’s Skill Development Program 1,200+ Women Engaged Across
Slide 25: Experienced Board & Management with Proven Track Record
7 EXPERIENCED BOARD & MANAGEMENT WITH PROVEN TRACK RECORD Board of Directors Management Team B.K.Goenka, Chairman Rajesh Mandawewala, Managing Director • Amongst India’s most dynamic businessmen • In-charge of textile business; instrumental in growing reach over 50 countries • Ranked amongst India’s
Slide 26: Awards & Accolades
7 AWARDS & ACCOLADES – TESTIMONY TO EXCELLENCE Dipali Goenka Best Best Performing Brand Quality Supplier “Spaces” Featured at #16 in (2016) (Home Category) Asia’s Top 50 Power Businesswomen (2016) Asia’s 50 Best Quality Best Performing Power Supplier Brand Businesswoman Winner Conferred with Winner
Slide 27: Consistent Financial Performance Record
8 CONSISTENT FINANCIAL PERFORMANCE RECORD Revenues 18,000 EBITDA 16,550 16,155 70,000 66,405 CAGR 16% 59,239 16,000 CAGR 27% 60,000 14,000 13,407 53,025 50,000 12,000 43,730 9,973 Rs. miilion 36,473 10,000 40,000 Rs. million 8,000 30,000 6,178 6,000 20,000 15,394 3,333 4,000 10,000 2,000 0 0 FY13 FY
Slide 28: Consistent Financial Performance Record
8 CONSISTENT FINANCIAL PERFORMANCE RECORD 2.4x Net Debt / Equity Net Debt / EBITDA 2.7x 2.1x 2.3x 2.3x 1.6x 1.9x 1.9x 1.3x 1.2x FY14 FY15 FY16 FY17 Q1FY18 FY14 FY15 FY16 FY17 Q1FY18 ROCE % (Pre-Tax) ROE % 42.8% 40.0% 41.8% 25.4% 23.2% 23.1% 19.2% 14.4% 29.6% 20.2% FY14 FY15 FY16 FY17 Q1FY18 FY14 FY1
Slide 29: Continued Focus on Free Cash Flow
8 CONTINUED FOCUS ON FREE CASH FLOW 4,000 3,770 2,405 2,000 795 714 859 785 239 - Rs. in Millions FY14 FY15 FY16 FY17 (2,000) (4,000) (6,000) -6,217 FCF Dividend (8,000) FCF positive for three consecutive years 29
Slide 30: Key Strategic Initiatives
KEY STRATEGIC AGENDA INITIATIVES 30
Slide 31: Welspun's Proprietary Traceability Process
Welspun’s Proprietary Patented Industry-Defining Multi-Level Traceability Process Tracking Cotton from Farm - Factory - Finished Goods - Shelf using RFID, Barcodes, QR Code Scanners with ERP System integration 31
Slide 32: Smartsourcing: Asset Light Future Growth
SMARTSOURCING: ASSET LIGHT FUTURE GROWTH SYNERGISTIC BENEFITS Assured Lower Lower inventory Recycling of Supply transportation Lower Interest packaging costs cost Collaboration with • Already Established Ancillaries Suppliers for Lead Time • Spinning Reduction via Exclusive Set-up of Welspun • Trims
Slide 33: Omni-Channel Support to Top Global Retailers
Omni-Channel Support to Top Global Retailers via Product Development, Warehousing, Pick and Pack, Drop-Ship and Analytics SCM Analytics for Our Customers 33
Slide 34: Welspun 2.0 & Way Forward
WELSPUN 2.0 AGENDA & WAY FORWARD 34
Slide 35: Welspun India: Vision 2022
WELSPUN INDIA: VISION 2022 + + + + 1 2 3 4 5 Innovation & Brands New Markets New Channels New Products Patents Innovative / Branded Women Share of Domestic Revenue Net Debt Revenue Share Revenue Employees $2bn NIL 50% 20% 20% 35
Slide 36: Innovation & Patents
1 INNOVATION & PATENTS TECHNOLOGY Transcends to HOME TEXTILES with Creating interactive experiences through seamless integration of smart technology with home textiles Patented augmented reality home décor Launched in the US for Holiday 2016. Presented at CES 2017 at Las Vegas to Extensive Media
Slide 37: Brands
2 BRANDS Global Expansion of Owned Brands A 150-Year Old Reinvigorated the Christy Brand, which has dominant presence in UK Legacy.. Reinvented Introduced the brand in US, China and Middle East; witnessed healthy growth Long Standing Associations like Wimbledon, Rugby World Cup and Royal Ascot
Slide 38: New Markets
3 NEW MARKETS Composition of Sales (FY17) Presence in Japan, the Middle Future Strategy East, Australia, Russia and • Indian Urban Home Textile market South Africa is expected to grow from INR • Welspun India to focus on increasing 257bn in 2016 to INR 438bn by presence in subscale / new markets RoW
Slide 39: New Channels
4 NEW CHANNELS Hospitality and Healthcare The US hospitality and healthcare market is c. $1.5bn (i.e. for towels and sheets); Welspun currently earns c. $50mn from these categories indicating huge growth potential Focus on domestic as well as international markets Tied up with leading hotel ch
Slide 40: New Products
5 NEW PRODUCTS 1 Flooring Solutions to Drive Growth • Offerings: Existing – bath rugs, floor rugs and decorative carpets Potential – tile carpets segment, wall-to-wall carpets • Market Size: Domestic market is c. US$125mn with potential to increase to US$500mn in the next 5 years • Capex: Planned ca
Slide 41: Moving Towards Vision 2022
RAISING THE BAR Differentiation Strategy : Industry Defining Focus on New Product Innovation, Traceability New channels Domestic Market Lines Branding & Solution Sustainability MOVING TOWARDS VISION 2022 Volatile raw Rising energy costs Appreciating Rupee material costs 41
Slide 42: Thank You
THANK YOU For further details, please contact: Altaf Jiwani Director (Finance) & CFO - Welspun India Limited Email: altaf_jiwani@welspun.com Harish Venkateswaran AVP - Group Finance and Strategy Email: harish_venkateswaran@welspun.com 42
Slide 43: Appendix
WELSPUN INDIA APPENDIX
Slide 44: Key Highlights - Q1 FY18
KEY HIGHLIGHTS- Q1 FY18 Received Patent for Awarded License for Major Client addition Wel-Trak FIFA World Cup 2018 in Hospitality ‘Spaces’ brand growth ‘Christy’ brand growth Consolidated EBITDA at 43% YoY; at 24% Margin at 21.7% Domestic E-commerce grows 400% 44
Slide 45: Financial Performance - Q1 FY18
FINANCIAL PERFORMANCE – Q1 FY18 (Rs. Million) Particulars Q1FY18 Q1FY17 Change YoY Q4FY17 Revenue 15,394 15,926 -3.3% 17,572 EBITDA 3,333 4,314 -22.7% 3,946 EBITDA Margin 21.7% 27.1% -544 bps 22.5% Finance Cost (Net) 315 253 24.5% 392 Depreciation 1,183 1,121 5.5% 1,365 PBT 1,835 2,940 -37.6% 2,198
Slide 46: Financial Performance Trend
FINANCIAL PERFORMANCE TREND (Rs. Million) Particulars FY15 FY16 FY17 Q1FY18 Revenue 53,025 59,239 66,405 15,394 Revenue growth % 21.3% 11.7% 12.1% -3.3% EBITDA 13,407 16,550 16,155 3,333 EBITDA Margin 25.3% 27.9% 24.3% 21.7% Depreciation 3,329 3,718 5,054 1,183 Finance cost (Net) 2,545 2,087 1,099 3
Slide 47: Balance Sheet Trend
BALANCE SHEET TREND (Rs. Million) Particulars 31-Mar-15 31-Mar-16 31-Mar-17 30-Jun-17 Net Worth 14,732 19,700 23,971 25,176 Short Term Loans 13,936 13,533 11,721 13,435 Long Term Loans 20,864 18,945 21,393 21,553 Gross Debt 34,800 32,478 33,114 34,988 Cash & Cash Equiv. 4,321 1,388 2,725 3,924 Net D
Slide 48: Financial Ratio Trend
FINANCIAL RATIO TREND FY15 FY16 FY17 Q1 FY18 Solvency Net debt/Equity 2.07 1.58 1.27 1.23 ratios Net debt/EBITDA 2.27 1.88 1.88 2.33 EBIT/Interest 3.66 5.54 7.32 6.15 Current Ratio 1.12 1.15 1.41 1.41 Operational ratios Fixed Asset turnover 2.04 1.77 1.86 1.75 Total Asset turnover 0.90 0.90 0.91 0.8
Slide 49: Dividend Policy
DIVIDEND POLICY Clear, defined Dividend Distribution policy 25% of standalone PAT to be the total payout (incl. dividend tax) Consistent track record of dividend distribution Standalone Dividend tax Payout Period EPS DPS per share Percentage FY15 5.09 1.05 0.21 25% FY16 5.99 1.30 0.26 26% FY17