Welspun Living Limited · NSE:WELSPUNLIV

Welspun Living — Welspun India — FY2016 Earnings Presentation

39 slides from Welspun Living's earnings presentation, April 2016

  1. Slide 1: Investor Presentation FY16

    INVESTOR PRESENTATION FY16 April, 2016

  2. Slide 2: Welspun Group: Revenue US$ 3 Billion; Asset Base US$ 3.2 Billion

    Welspun India Limited Welspun Corp Limited #1 home textiles supplier to the US Global leader in large diameter pipes Welspun Welspun Energy Limited Enterprises Limited India’s largest solar Infrastructure Independent Power Oil & Gas Producer Revenue : US$ 3 Billion; Asset Base : US$ 3.2 Billion 1

  3. Slide 3: Agenda

    1. Company Overview 2. Industry Overview: Advantage India AGENDA 3. Welspun India: Global Leader in Home Textiles 4. FY16 Highlights 5. Way forward 2

  4. Slide 4: WIL - An Overview

    WIL - AN OVERVIEW Global Home Textiles Leader  Among the top three home textile manufacturers in the world and the largest home textile company in Asia  Leading Home Textile exporter to the US for four years in a row (2012-15)  Distribution network in more than 50 countries  Centered on excellen

  5. Slide 5: Financial Overview

    FINANCIAL OVERVIEW EBITDA in Rs. Million Revenue in Rs. Million 70,000 18,000 16,490 59,795 16,000 60,000 13,691 53,025 14,000 50,000 43,730 12,000 10,253 40,000 36,473 10,000 30,000 8,000 6,438 6,000 20,000 4,000 10,000 2,000 0 0 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Shareholding Pattern Market S

  6. Slide 6: WIL - Revenue Milestones

    WIL - REVENUE MILESTONES WIL Revenue in Rs. Billion Entry into Accent Rugs/ Carpets 60 • 1993: 53 Entry into bath Towels Christy Towels rugs 44 facility at Acquisit & Vapi ion 36 Sheets Facility 32 at Anjar 28 26 16 17 12 7 Pre-2005 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16  Textiles b

  7. Slide 7: Industry Overview: Advantage India

    INDUSTRY OVERVIEW: ADVANTAGE INDIA

  8. Slide 8: Global Home Textile Scenario

    GLOBAL HOME TEXTILE SCENARIO Market Size Key Consumers Key Producers  Home textile market at  US , Europe and Japan  India, Pakistan and China US$45 bn are the largest consumers are the largest producers;  Bath constitutes ~25%  Global demand equally Account for 85% of cotton  Bed constitutes

  9. Slide 9: Structural Change: Asian Dominance in Home Textiles

    STRUCTURAL CHANGE: ASIAN DOMINANCE IN HOME TEXTILES Textiles and Clothing • China : 37% US$797 bn • India : 5% Textiles • China : 36% US$314 bn • India : 6% Home textiles • China : 35% US$45 bn • India : 11% US Cotton Home Textiles • China : 39% US$7.5 bn • India : 31% India has emerged as significa

  10. Slide 10: Advantage India

    ADVANTAGE INDIA  Largest producer of  Major importer of  Cotton Importer cotton cotton and yarn  Energy issues  25% surplus available  Losing export  Geopolitical issues for export as Competitiveness cotton/yarn  Compliance issues  Wage inflation  Exporter of yarn  Rising power costs  Co

  11. Slide 11: Indian Players Gaining Prominence Globally

    INDIAN PLAYERS GAINING PROMINENCE GLOBALLY 38% India’s share Towels (Cotton) 36% increased by 8 30% percentage 26% points in 6 years 23% 24% 25% 22% 22% 22% 15% 15% 2009 2012 2015 Sheets (Cotton) 48% India’s share 45% increased by 21 percentage 29% points in 6 years 27% 26% 22% 23% 18% 18% 16% 15% 1

  12. Slide 12: Welspun India

    WELSPUN INDIA io 4 ° J

  13. Slide 13: Leadership: Focus and Excellence

    LEADERSHIP: FOCUS AND EXCELLENCE  A differentiated End-to-end Solutions Provider in Home Textiles  Uniquely positioned for cross-selling due to  Widest product range in the Home Textiles segment  Customer reach  Competitive manufacturing Bath Bedding Flooring  Global delivery model  Higher wa

  14. Slide 14: Leadership: Strategic Partnership with Global Retail Giants

    LEADERSHIP: STRATEGIC PARTNERSHIP WITH GLOBAL RETAIL GIANTS  Bed Bath & Beyond  Carrefour  ASDA  Shopper’s Stop  Macy’s  JYSK  Tesco  Lifestyle  J C Penney  Auchan  Sainsbury  HomeTown  Target  Kaufland  John Lewis  @Home  Kohl’s  Rusta  House of Fraser  ….. and many more  Wal M

  15. Slide 15: Leadership: Global Reach & Delivery Model

    LEADERSHIP: GLOBAL REACH & DELIVERY MODEL Delivery & Reach in over 50 countries 14

  16. Slide 16: Leadership: Scale

    LEADERSHIP: SCALE Expected End-FY16 Sales volume Product Unit Utilisation % Capacity Capacity FY16 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 Capacity growth t

  17. Slide 17: Welspun: Beyond Manufacturing

    WELSPUN: BEYOND MANUFACTURING…  Evolved from being a Superior commodity Product manufacturer to a Personality creator of unique Functionality customer experiences Brands and Commodity  Experiences created Unique through brands, product Experiences and technologies and new channels Problem Performa

  18. Slide 18: Delivering Unique Experiences

    DELIVERING UNIQUE EXPERIENCES Consumer INNOVATION FOCUS Needs BRAND AND DELIVERY FOCUS Continuous  Welspun Innovation Lab Ingredient Idea /Technology  Product Development Generation CONSUMER INSIGHTS Brands Owned Ensuring Credibility Licensed  Innovation Partners Technology Innovation  Global pa

  19. Slide 19: 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% 24

  20. Slide 20: 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 18

  21. Slide 21: Branding Our Innovation

    BRANDING OUR INNOVATION  Launched nation-wide campaign in the US in FY16 to introduce patented Hygrocotton® technology to consumers  First ever such campaign in textiles in the past 15 years 19

  22. Slide 22: 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  Vocational Training Products  Employability  300K Trees Pla

  23. Slide 23: Focus 2016 - Inclusive Growth (Contd.)

    FOCUS 2016 - INCLUSIVE GROWTH (Contd.) Girls Hostel Vocational Centers for SPUN Skill Development Global Women Economic Education: Students and Smart Village Empowerment Initiative Govt. Schools Covered 21

  24. Slide 24: FY16 Highlights

    FY16 HIGHLIGHTS ‘ © ag Ret aa 7 ad 0 Perret Q Q oi “pay WELSPUN INDIA HOME TEXTILES ca —_ é jee F ja 3 i ggsgaesepfeaseecs0 f= =. aoe rt = ~ { r i Me ee ee sien oe c = Ht eat oes

  25. Slide 25: Operational Highlights

    OPERATIONAL HIGHLIGHTS LEADERSHIP POSITION ACCELERATED GROWTH INDUSTRY DEFINING No. 1 Home Textile Globally Launched 13% Overall Revenue Supplier To USA for Hygro® As An Growth 4th Consecutive Year Ingredient Brand Highest Exports from India First Indian Company To 47% Domestic Retail for Bed Linen

  26. Slide 26: Financial Highlights

    FINANCIAL HIGHLIGHTS Operating EBITDA PAT crossed milestone Sales growth at 13% margin up 202 bps of Rs. 7 bn to 26% Net debt to Net Debt to Equity at 1.3x ROCE (pre-tax) at 26%; Op.EBITDA at 1.6x (vs. 1.8x) ROE at 41% (vs. 2.0x) Long term Credit Rating Positive FCF at Rs. 3.8 bn Total Dividend of u

  27. Slide 27: 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,

  28. Slide 28: 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

  29. Slide 29: 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

  30. Slide 30: 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.

  31. Slide 31: 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 Net Profit

  32. Slide 32: 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.

  33. Slide 33: 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 32

  34. Slide 34: Dividend Policy

    DIVIDEND POLICY  Dividend Distribution policy: 25% of standalone PAT to be the total payout (incl. dividend tax)  Interim dividend 1: Rs. 0.65/sh  Interim dividend 2: Rs. 0.60/sh  Final dividend: Rs. 0.05/sh  Total dividend at Rs. 1.30/share Note: Figures adjusted for the stock split to Re.1 pe

  35. Slide 35: Way Forward

    a 4OME TEXTILES WAY FORWARD ¢ 4}¢ i 4 ey ay

  36. Slide 36: Sustainable Value Creation

    SUSTAINABLE VALUE CREATION NEW CHANNELS INNOVATION NEW SEGMENTS OPERATIONAL EXCELLENCE PERSONALIZED / NEW GEOGRAPHIES CUSTOMIZED EXPANDED PRODUCT RANGE 35

  37. Slide 37: Vision 2020

    VISION 2020 LEADING TOMORROW TOGETHER Innovation Leveraging technology Inclusive growth Brands People development Collaboration 36

  38. Slide 38: Vision 2020 Targets

    VISION 2020 Revenue Net Debt $2 BN NIL Innovative/Branded Women Share of Share of Revenue employees Domestic Revenue 50% 20% 20% 37

  39. Slide 39: 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

Welspun India — FY2016 Earnings Presentation on 6ix