Sheela Foam Ltd. · NSE:SFL
Sheela Foam — Investor Presentation (August 2023)
42 slides from Sheela Foam's investor presentation, Aug 11, 2023
Slide 1: Cover letter to stock exchanges
11th August, 2023 To The BSE Limited The National Stock Exchange India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Bandra Kurla Complex Dalal Street, Mumbai-400001 Bandra(E), Mumbai-400051 Scrip Code: 540203 NSE Symbol: SFL Subject: Corporate Presentation for the Investor Meet to be held on 18
Slide 2: Corporate Presentation August 2023
Corporate Presentation August 2023 Strictly Private and Confidential
Slide 3: Table of Contents
Table of Contents 1. Overview of Potential Targets 3 2. Acquisition Considerations 7 3. Key Competitive Strengths 15 4. SFL - Financial Summary 30 5. Future Growth Strategy 33
Slide 4: Largest Manufacturer of Polyurethane Foam in India
Largest Manufacturer of Polyurethane (“PU”) Foam in India CORPORATE “Sleepwell” is the Presence in both Integrated platform with a wide product Experienced leading mattress B2B and B2C basket management brand in India segments OPERATIONAL 19% market share Presence across in Indian organized ~40% mar
Slide 5: Sheela Foam's Evolution Driven by Strong Organic Growth and Overseas Acquisitions
Sheela Foam’s (“SFL” or the “Company”) Evolution Driven by Strong Organic Growth, Coupled with Overseas Acquisitions Major acquisition to expand operations globally, the Many awards won including Set up a new Company acquired the the Star SME of the Year by Issued bonus subsidiary called as polyuret
Slide 6: 1. Overview of Potential Targets
1. Overview of Potential Targets
Slide 7: Kurl-on: Third Largest Organized Player in the Modern Mattress Segment
1 Kurl-on: Third Largest Organized Player in the Modern Mattress Segment Kurl-on, one of the oldest and most trusted mattress brands in India, has a notable reputation in the manufacture and innovation of rubberized coir mattresses Company Overview Distribution Network (As on FY2023) • Founded in 19
Slide 8: Furlenco: Frontrunner in the Indian Furniture and Home Lifestyle Space
2 Furlenco: Frontrunner in the Indian Furniture and Home Lifestyle Space Facilitates products and services for efficient ‘rent, subscribe, buy and sell back’ of furniture under one roof Company Overview Revenue (INR mn) and Customer Acquisitions • Incorporated in 2012, House of Kieraya (“Furlenco”)
Slide 9: Furlenco: Rental + Sale Business Model
2 Furlenco: Rental + Sale Business Model Continuum of product and service offerings for all furniture and lifestyle needs Rent Assured Buyback Subscribe Value Added Services Buy Brand New Loyalty & Rewards Buy Remanufactured 5
Slide 10: Furlenco: Key Metrics
2 Furlenco: Key Metrics Furlenco has robust performance metrics High LTV to CAC Ratio • LTV to CAC Ratio of 9x (only 1 rupee spent on marketing for every 9 rupees earned) • Upfront collection of ~7.5x monthly revenues resulting in front loaded cash flows (INR 16k per order / ARPU of INR 2k per Large
Slide 11: 2. Acquisition Considerations
2. Acquisition Considerations
Slide 12: Proposed Acquisitions to Propel Augmentation of Addressable Market (1/6)
1 Proposed Acquisitions to Propel Augmentation of Addressable Market and Integration Across Value Chain (1/6) • Post acquisitions, SFL would strengthen its competitiveness in mattress market as well as enter the furniture market • The gap with the next competitor would further widen post acquisition
Slide 13: Strong Strategic Rationale for a Combination with Kurl-on (2/6)
1 Proposed Acquisitions to Propel Augmentation of Addressable Market and Integration Across Value Chain (2/6) Strong Strategic Rationale for a Combination with Kurl-on Opportunity for capacity optimization • Strong pan-India brand positioning Consolidation of Fragmented Market • Sleepwell dominates
Slide 14: Proposed Acquisitions: Market Shares and Channel Split (3/6)
1 Proposed Acquisitions to Propel Augmentation of Addressable Market and Integration Across Value Chain (3/6) Organized Mattress Market shares by Region Strong Strategic Rationale for a Combination with Kurl-on 62% 68% 71% Others 82% Kurlon 7% Diversification of • Premium brand (SFL) + Mass brand (K
Slide 15: Kurl-on's Brand Portfolio (4/6)
1 Proposed Acquisitions to Propel Augmentation of Addressable Market and Integration Across Value Chain (4/6) Kurl-on’s Brand Portfolio Brands Brief Top selling Brands Positioning • Inspire • Rubberised Coir Mattress • KurloBond Mattress • Foam Mattress • Desire • Mass and Mass Premium • Spring Matt
Slide 16: International Brands Introduced by Kurl-on (5/6)
1 Proposed Acquisitions to Propel Augmentation of Addressable Market and Integration Across Value Chain (5/6) International Brands Intoduced by Kurl-on Offer More ‘Choices’ to Customers Brand Features ➢ Kurl-on is already positioned with wide portfolio of brands to cater Indian consumers’ taste shif
Slide 17: Furlenco Offers Complementary Product Play (6/6)
1 Proposed Acquisitions to Propel Augmentation of Addressable Market and Integration Across Value Chain (6/6) Furlenco Offers Complementary Product Play • Entry into renting and selling branded furniture (a larger segment) Increase in TAM – • Overall furniture market is ~$19bn; of which rental marke
Slide 18: Powerhouse of Brands in the Furnishing Market in India
2 Powerhouse of Brands in the Furnishing Market in India Brands enjoying leadership positions in respective foam based and rubberized coir based mattresses will be brought under one umbrella – SFL – further strengthening market leadership position SFL Kurl-on Furlenco Mattress Furniture Comfort / Te
Slide 19: Revised Group Structure
3 Revised Group Structure SFL 93.66% 100% 100% 94.66% 35% Interplasp Joyce Foam Staqo Kurl-on Furlenco (Spain) (Australia) 14
Slide 20: 3. Key Competitive Strengths
3. Key Competitive Strengths
Slide 21: Key Competitive Strengths
Key Competitive Strengths Growing Industry with Favorable Levers in Place 1 Impeccable Track Record with Consistent Focus on Breakthrough Innovation 2 Vertically Integrated Manufacturing Facilities across Globe 3 Wide Product Basket catering to Clients across Industries 4 Extensive Distribution Netw
Slide 22: Large Addressable Market with Increasing Demand for PU Foams
1 Large Addressable Market with Increasing Demand for PU Foams India flexible PU foam market has reached ~INR 110bn by the fiscal year 2023 India Flexible PU Foam Market (INR bn) India Flexible PU Foam Market (FY23) 105-112 Slabstock Moulded 85-95 65% 36-40 35% 10% 4% 5% 33-38 12% 5% 50-60 6% 35-45
Slide 23: Indian Players Well-positioned to Capture Growth in Mattress Segment
1 Indian Players Well-positioned to Capture Growth in Mattress Segment given their Deep Distribution Capabilities Indian mattress market expected to demonstrate strong growth owing to consumer driven factors such as increasing population, rising urbanization and increase in disposable income Indian
Slide 24: Strong Macro Tailwinds Accelerating Market Shifts
1 Strong Macro Tailwinds Accelerating Market Shifts Market growth fueled by rising disposable incomes, rapid shift to the organized sector and changing preferences towards greater variety of products Rising Incomes with Middle-class Expansion ~3x More Spend on Living with Higher Income Increased Sha
Slide 25: Sleepwell is Market Leader, Followed by Kurl-on
1 Sleepwell is Market Leader, Followed by Kurl-on Sleepwell leads the market in both volume and value terms; market share majorly contributed from North and West India presence % Value Market Share (Branded Modern Mattress Market)1 38-44% 19% 12-14% 11% 9-11% 5-7% Sleepwell Kurlon Competitor 1 Compe
Slide 26: Sleepwell - Impeccable Track Record of Quality and Consistent Innovation
2 Sleepwell - Impeccable Track Record of Quality and Consistent Innovation Backed by Technology Established brand presence helped Sleepwell maintain market share of ~19% in the Indian modern mattress market Track record of innovative manufacturing backed by technology Diversified product offerings…
Slide 27: SFL's Strong Business Performance Backed by Balance Sheet
2 SFL’s Strong Business Performance Backed by Balance Sheet Competitor 1 Long Term Rating AA- / -- -- / A BB+ / A Short Term Rating (CRISIL / ICRA) A1+ / -- -- / A2 A4+ / A1 FY22 Revenue (INR mn) 28,656 7,952 8,934 FY21 Revenue (INR mn) 24,372 7,588 5,666 45.3% FY20-22 9.7% (7.0%) Revenue CAGR (%) 1
Slide 28: Integrated Manufacturing Facilities in India, Coupled with Global Prowess (1/2)
3 Integrated Manufacturing Facilities in India, Coupled with Global Manufacturing Prowess (1/2) India Rajpura (Punjab) Kala Amb (HP) Sahibabad (UP) Surajpur (UP) Extensive global presence Jalpaiguri (WB) and export relations with 25 Greater Noida (UP) nations Jabalpur (upcoming Mfg. plant) Nandigram
Slide 29: Integrated Manufacturing Facilities in India, Coupled with Global Prowess (2/2)
3 Integrated Manufacturing Facilities in India, Coupled with Global Manufacturing Prowess (2/2) Company benefits from synergized business operations through manufacturing of home comfort products as well as raw materials 11 Manufacturing Units in India1 • Pioneers in VPF – World’s most environmental
Slide 30: 'A Mattress for Every Indian' Plant in Jabalpur
3 ‘A Mattress for Every Indian’ is the Motto behind the Newly Envisaged Plant in Jabalpur SFL is setting up an integrated manufacturing plant at Jabalpur to cater the traditional market (currently forming 64% of the total Indian mattress market size) • Targeting cotton / EPE foam mattress users (tra
Slide 31: Wide Portfolio Offering Technologically Advanced Products
4 Wide Portfolio Offering Technologically Advanced Products Innovation and adoption of contemporary manufacturing technologies enables production of personalised and niche home comfort products My Mattress, Spring range, Technology range, Custom Cell range, Back Mattresses Support range, Flexi PUF r
Slide 32: Well Recognised and Established Brands
4 Well Recognised and Established Brands Company has proven track record of nurturing winning brands that reflects comfort and luxury enhancing the lifestyle of modern households Flagship brand for mattresses E-commerce brand for Pure PU foam and comfort accessories mattress Indian Brands Superior q
Slide 33: Extensive Distribution Network in India; Global Sales Expansion Opportunity
5 Extensive Distribution Network in India; Global Sales Expansion Opportunity into Europe/ North America using Spain Facility Strategically located distribution network of exclusive distributors, retail dealers and multi-brand outlets backed by digital technology enable SFL to efficiently offer its
Slide 34: Best-in-class Management Team Backed by Diversified Board (1/2)
6 Best-in-class Management Team Backed by Diversified Board (1/2) Versatile leadership and family-based management team with proven experience of successfully navigating SFL through domestic and international shocks Key Management Name Biography Name Biography Nilesh Mazumdar • Joined the Company in
Slide 35: Best-in-class Management Team Backed by Diversified Board (2/2)
6 Best-in-class Management Team Backed by Diversified Board (2/2) SFL is led by ever-guiding board consisting of experienced and formidable team with well defined strategic direction Board of Directors Name Biography Name Biography Name Biography Rahul • Founder of the Company and • Associated since
Slide 36: 4. SFL - Financial Summary
@ SheelaFoam 4. SFL - Financial Summary
Slide 37: SFL – Consolidated Financial Performance
SFL – Consolidated Financial Performance Revenue (INR mn) EBITDA (INR mn) and EBITDA Margin (%) 3,642 28,656 28,733 3,149 3,004 2,973 24,372 21,736 13.8% 14.9% 11.0% • Revenue mix % from overseas operations 10.4% saw a huge increase in FY21 due to the addition of full-year Spain revenues FY20 FY21 F
Slide 38: SFL – Consolidated Income Statement
SFL – Consolidated Income Statement Particulars (INR mn) FY21 FY22 FY23 Operational Revenue 24,372 28,656 28,733 Cost of Materials consumed 13,888 18,770 17,868 • Prices of two main raw materials of PU have Other Manufacturing Expenses 496 623 677 behaved differently during last 1 year Employee cost
Slide 39: SFL - Consolidated Balance Sheet and Cash Flow
SFL - Consolidated Balance Sheet and Cash Flow Particulars (INR mn) FY21 FY22 FY23 Total Equity 11,932 14,002 16,087 Non-current Liabilities Select Balance Sheet Items Borrowings 1,326 2,282 2,838 • Lean balance sheet with significant headroom for additional debt Lease Liabilities 1,086 1,056 875 Cu
Slide 40: 5. Future Growth Strategy
@ SheelaFoam 5. Future Growth Strategy
Slide 41: Expansion Strategy
Expansion Strategy Strengthen leadership position by offering high quality comfort products globally Continue to increase TAM, Continue to focus on consumer Expand distribution network 1 leverage brand equity and 2 preferences and development 3 and export sales product premiumization of personalized
Slide 42: Disclaimer
Disclaimer No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the d