Welspun Living Limited · NSE:WELSPUNLIV
Welspun Living — Welspun India — Investor Presentation (May 2017)
49 slides from Welspun Living's investor presentation, May 2017
Slide 1: Investor Presentation May 2017
INVESTOR PRESENTATION MAY 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 Global Leader in Global Leader in Infrastructure Home Textiles Large Diameter Pipes Oil & Gas Group Revenue Market Cap Employees US$ 2.3 Billion US$ 2 Billion 25,000+ 3
Slide 4: Agenda
1. Welspun India: An Introduction 2. Industry Overview 3. Welspun India: Key Differentiators AGENDA 4. Welspun 2.0 & Way Forward 5. Key Strategic Initiatives 6. Sustainability Initiatives 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) in Home Textile Supplier Giants 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 Shee
Slide 7: Key Milestones
KEY MILESTONES 66 60 Welspun India 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 int
Slide 8: Shareholding and Trading Snapshot
SHAREHOLDING AND TRADING SNAPSHOT Shareholding Pattern March 31, 2017 March 31, 2016 12.1% 10.7% 0.6% 0.4% Promoter 1.9% 2.7% FIIs 11.9% 12.7% Mutual Funds Banks and Insurance Cos Public 73.5% 73.5% Market Statistics As on May 24, 2017 INR USD Price per share 82.10 $1.3 No of Shares outstanding (Mn)
Slide 9: Industry Overview
WELSPUN INDIA INDUSTRY OVERVIEW
Slide 10: Asian Dominance in Home Textiles
ASIAN DOMINANCE IN HOME TEXTILES India 5% Textiles & US$ 744 bn Clothing 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 +10% 38% 40% 36% India’s Export 30% 23% 24% 26% 25% Share 22% 22% 23% 22% 22% Increased by 15% 15% 15% 10% in 7 Years 2009 2012 2015 2016 Market Share in US Sheet Market +22% 48% 49% 45% Half of the US Sheet Market is 27% 29% 26% 22%
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 7 1 Leading Market Player Consistent Financial with a Wide Product Performance Record Range 6 2 Experienced Board and Vertically Integrated Management with Proven Presence with Significant Track Record Capabilities 5 3 Global Distribution Track Record of Ne
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% • 26 unique inventions filed globally 34% 30% • Crossed $200 Mn Sales FY15 FY16 FY17 • Good traction in hospitality & domestic market The two segments (innovative & branded) toget
Slide 22: Experienced Board & Management with Proven Track Record
6 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 23: Awards & Accolades
6 AWARDS & ACCOLADES – TESTIMONY TO EXCELLENCE Dipali Goenka Best Best Performing Brand Winner Quality Supplier “Spaces” in Textiles Sector Featured at #16 in (2016) (Home Category) (2016) Asia’s Top 50 Power Businesswomen (2016) Asia’s 50 Best Quality Best Performing Corporate Power Supplier Brand
Slide 24: Consistent Financial Performance Record
7 CONSISTENT FINANCIAL PERFORMANCE RECORD Revenues Op. EBITDA 18,000 66,405 15,927 15,834 70,000 CAGR 16% 16,000 CAGR 28% 59,239 60,000 14,000 53,025 12,742 50,000 43,730 12,000 Rs. miilion 36,473 10,000 9,211 40,000 Rs. million 8,000 30,000 5,946 6,000 20,000 4,000 10,000 2,000 0 0 FY13 FY14 FY15 F
Slide 25: Consistent Financial Performance Record
7 CONSISTENT FINANCIAL PERFORMANCE RECORD 2.4x Net Debt / Equity Net Debt / Op. EBITDA 2.1x 2.9x 2.4x 1.6x 2.0x 1.3x 1.9x FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 ROCE % (Pre-Tax) ROE % 42.8% 40.0% 41.8% 24.6% 21.9% 21.8% 19.3% 29.6% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 ROCE and ROE FY17 figures a
Slide 26: Continued Focus on Free Cash Flow
7 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 26
Slide 27: Welspun 2.0 & Way Forward
WELSPUN 2.0 AGENDA & WAY FORWARD 27
Slide 28: Welspun India: Vision 2020
WELSPUN INDIA: VISION 2020 + + + + 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% 28
Slide 29: Innovation & Patents: Technology Transcends to Home Textiles
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 30: 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 31: 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 32: 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 33: 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 34: Key Strategic Initiatives
KEY STRATEGIC AGENDA INITIATIVES 34
Slide 35: Welspun's Proprietary Multi-Level Traceability Process
Welspun’s Proprietary Industry-Defining Multi-Level Traceability Process Tracking Cotton from Farm - Factory - Finished Goods - Shelf using RFID, Barcodes, QR Code Scanners with ERP System integration 35
Slide 36: Smartsourcing: Asset Light Future Growth
SMARTSOURCING: ASSET LIGHT FUTURE GROWTH SYNERGISTIC BENEFITS Assured Lower Lower inventory Recycling of Off-take transportation Lower Interest packaging costs cost Collaboration with Suppliers for Lead Time Reduction via Exclusive • Commenced w.e.f Oct.16 Set-up of Welspun • Established Top 10 Vend
Slide 37: 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 37
Slide 38: Sustainability Initiatives
SUSTAINABILITY AGENDA INITIATIVES 38
Slide 39: Virtuous Cycle of Social Development
VIRTUOUS CYCLE OF SOCIAL DEVELOPMENT Empowerment • Education at Govt. Schools • Adult Literacy Education for women • Vocation Centers: 8 centers have resulted in INR 13mn earnings for women Education • Walmart’s SWASTI foundation for Women Empowerment and Training: Successfully trained 2,335 women i
Slide 40: Smart Village Model
SMART VILLAGE MODEL E-Connectivity • Wi-fi enabled villages with CCTV Environment coverage • Green cover in all public land • Complete E-governance • Segregation and organized disposal of garbage • PA system with speakers • 100% LED / solar street lighting • Comprehensive CMS for Panchayat Office •
Slide 41: Sustainability in Everything That We Do
SUSTAINABILITY IN EVERYTHING THAT WE DO STP Installed with a Capacity to Process 30 MN Liters Per Day 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 10 Vocational Centers Saved 3 mn kWh of Energy in FY17 SA
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 Sr. General Manager - Group Finance and Strategy Email: harish_venkateswaran@welspun.com 42
Slide 43: Appendix
WELSPUN INDIA APPENDIX
Slide 44: Key Financial Highlights - FY17
KEY FINANCIAL HIGHLIGHTS- FY17 Revenue growth at Christy sales growth at Domestic retail Growth 12% 12% at 21% Net debt to Op.EBITDA Net Debt to Equity at Operating EBITDA at 1.27x at 1.92x 23.8% (Vs 1.58x at FY16 –end) (Vs 1.95x at FY16-end) Net debt maintained ROCE (pre-tax) at 19.3% Healthy Inter
Slide 45: Financial Performance - Q4 FY17
FINANCIAL PERFORMANCE – Q4 FY17 (Rs. Million) Particulars Q4FY17 Q4FY16 Change YoY Q3FY17 Revenue 17,572 16,162 8.7% 15,009 Operating EBITDA 3,829 4,353 -12.0% 3,463 Op. EBITDA Margin 21.8% 26.9% -514 bps 23.1% EBITDA 3,946 4,515 -12.6% 3,505 EBITDA Margin 22.5% 27.9% -548 bps 23.4% Finance Cost (Ne
Slide 46: Financial Performance - FY17
FINANCIAL PERFORMANCE – FY17 (Rs. Million) Particulars FY17 FY16 Change % FY15 Revenue 66,405 59,239 12.1% 53,025 Operating EBITDA 15,834 15,927 -0.6% 12,742 Op. EBITDA Margin 23.8% 26.9% -304 bps 24.0% EBITDA 16,155 16,550 -2.4% 13,407 EBITDA Margin 24.3% 27.9% -361 bps 25.3% Finance Cost (Net) 1,0
Slide 47: Balance Sheet Trend
BALANCE SHEET TREND (Rs. Million) Particulars 31-Mar-15 31-Mar-16 31-Mar-17 Net Worth 14,732 19,700 23,971 Short Term Loans 13,936 13,533 11,721 Long Term Loans 20,864 18,945 21,393 Gross Debt 34,800 32,478 33,114 Cash & Cash Equiv. 4,321 1,388 2,725 Net Debt 30,479 31,090 30,389 Capital Employed# 4
Slide 48: Financial Ratio Trend
FINANCIAL RATIO TREND FY15 FY16 FY17 Solvency Net debt/Op. EBITDA 2.39 1.95 1.92 ratios Net debt/Equity 2.07 1.58 1.27 EBIT/Interest 3.66 5.54 7.32 Current Ratio 1.12 1.15 1.41 Operational ratios Fixed Asset turnover 2.04 1.77 1.86 Total Asset turnover 0.90 0.90 0.91 Inventory days 76 68 70 Debtor d
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