Sheela Foam Ltd. · NSE:SFL
Sheela Foam — Merger or Acquisition (July 2023)
33 slides from Sheela Foam's merger presentation, Jul 18, 2023
Slide 1: Cover letter to stock exchanges: Investor Presentation
Date 18th July 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 Symbol: SFL Ref.: Investor Presentation Dear Sir/Madam, As per Regulations 30 of Sto
Slide 2: Sheela Foam Ltd. Acquisition Presentation
Sheela Foam Ltd. Acquisition Presentation
Slide 3: Company Snapshot
Company Corporate Snapshot ‘Sleepwell’ mattresses a Largest household Brand and manufacturers of PU one of the most trusted Foam in India brands in India Backward Integrated Experienced Player with a wide Management product basket Operational 13% Market Share in 40% market share in Presence across M
Slide 4: Company Overview
Company Overview • Incorporated in 1971, Sheela Foam is the market leader and the largest manufacturer of Polyurethane Foam (PU) Revenue , EBITDA (INR Mn), EBITDA Margin (%) in India. 3 5 ,0 0 • The Company manufactures various foam-based home comfort products like mattresses, furniture cushions, as
Slide 5: Timeline
Timeline Many awards won including Set up a new Subsidiary Sheela Foam’s The Company introduced the Star SME of the Year by called as International Major acquisition to Business Standard; Silver Limited journey rubberized coir products expand operations Comfort Technologies to Received the medal in
Slide 6: Product Mix
Product Mix Mattresses segmentation Comfort Foam and Home Care My Mattress, Spring Range, Products Technology Range, Custom Cell Range, Back Support Range, Flexi PUF Foam Sheets, Foam Blocks, Comfort range Range, Showroom Range, Economy 41% 21% accessories, Foam Cores, Furniture Cushions, Range, Sle
Slide 7: Branded Portfolio
Branded Portfolio Australian subsidiary Joyce Inc Spanish subsidiary Interplasp Inc Investor Presentation | Sheela Foam Ltd. 6
Slide 8: Prominent Dealer-Distribution Network
Prominent Dealer-Distribution Network Most distributors have been associated with the company for more than 20+ years Exclusive distributors are in strategic proximity to the manufacturing facilities, hence it helps reduce carriage fees and Well-integrated with the Company’s IT minimizes product dam
Slide 9: Geographical Presence
Geographical Presence INDIA Jabalpur (upcoming Mfg. plant) Nandigram • Currently operating 11 manufacturing facilities in India. Upcoming 12th manufacturing plant in Jabalpur for Foaming and Foam Leading manufacturer of processing Mattresses and PU Foam • Dispersed manufacturing plants to cater to s
Slide 10: Manufacturing Facilities
Manufacturing Facilities 11 Manufacturing Units in India Pioneers in Vertical Variable Pressure Foaming (VPF) – World’s most environmentally responsible foam manufacturing and is equipped with state of the art HENNECKE Foaming machines Spain Unit Largest Integrated Manufacturer of PU Foam and ‘Bed i
Slide 11: Marquee Clients
Marquee Clients Mattress Industry Furniture Industry Automotive Lamination Industry Peeling Industry Acoustic Industry Investor Presentation | Sheela Foam Ltd. 10
Slide 12: Kurlon Acquisition
Kurlon Acquisition
Slide 13: Kurlon - Overview
Kurlon - Overview • Founded in 1962, Kurlon is part of the renowned Pai family business group from South India. Revenues (INR Mn), EBITDA Margin (%) • Kurlon is one of the oldest and most trusted mattress brand in India with market leadership in Rubberised Coir Mattresses. • 12,00 0 35. 00% Its flag
Slide 14: Kurlon’s Journey
Kurlon’s Journey • 2010: Uttarakhand Plant (Roorkee) • 1962: Kurlon was formed • 2011: Furniture Plant, Budhihal, Bangalore • Completed merger of Spring Air Bedding • 1965-1992: 2 plants at Bengaluru • 2013: Unit at Jhaghadia Gujarat Company (India) Ltd • 2003: Added plants at Dabaspet & Peenya • 20
Slide 15: Kurlon’s Product Portfolio
Kurlon’s Product Portfolio Mattress (64%) PU Foam (25%) Furniture (11%) Rubberized Coir • Kurlon manufactures and markets wide Kurlon is the pioneer and the market leader in coir • PU Foam is manufactured under the wholly owned subsidiary of Kurlon called Komfort range of home comfort solutions like
Slide 16: Kurlon’s Brands
Kurlon’s Brands Brands Products Sub Brands Positioning Price Range • Inspire • Kurlobond Mattress • Desire Mass and Mass premium INR 4,000 to INR 1 Lakh • KurlCoire • SpineTheraphy • SpringAir Mattress • Englander Premium and luxury INR 16,000 to INR 1.5 Lakh • Chattam & Wells • Goldline Plus Foam b
Slide 17: Kurlon’s Manufacturing & Distribution Network
Kurlon’s Manufacturing & Distribution Network Pan India Manufacturing Network Distribution Network 475+ EBOs 4,500+ MBOs 4 Centralized Hubs 1,200+ SIS 10,000 + touchpoints E-commerce websites Investor Presentation | Sheela Foam Ltd. 16
Slide 18: Distribution Synergies
Distribution Synergies • Kurlon’s strong hold in MBO dealer network to provide additional sales while Sleepwell’s extensive EBO presence can bolster reach of Kurlon’s product • While SFL is strong in North and West, Kurlon has a stronger presence in East and South. With the acquisition the combined
Slide 19: Operational Synergies
Operational Synergies Sheela Foam Limited (SFL) Kurlon Combined Entity • Enhanced product portfolio catering across • Specialty in Foam Mattress • Specialty in Rubberized Coir mass to prestige range • ~13% market share of modern • ~8% market share of modern • 20%+ market share in modern mattress mat
Slide 20: Creating an Undisputed Market Leader
Creating an Undisputed Market Leader Overall Market Spring, 64% 6% Coir, Cotton, 20% 16% 13% 8% 5% Foam, 4% 3% 2% 1% 59% Sleepwell Kurlon Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Others & (Sheela Foam) Unorganised Organized Market players Spring, 20%+ Market Share in Modern M
Slide 21: Acquisition Details
Acquisition Details • Sheela Foam is acquiring 94.66% (approx. 3,46,02,375 shares) of shares in Kurlon Enterprises Ltd (KEL) at an equity valuation of INR 21,500 Mn (cost of acquiring INR 20,350 Mn) • The acquisition would be through a cash consideration funded by a mix of internal accruals, debt an
Slide 22: Investment Summary
Investment Summary Mattresses as a category is a highly fragmented market segment with a strong need for consolidation. Overall market size is INR Consolidation of fragmented market 25,000 crore in India. Combining the top leaders of the industry i.e. Sheela Foam(13%) and Kurlon(8%) will result in t
Slide 23: Furlenco Acquisition
Furlenco Acquisition
Slide 24: Furlenco - Overview
Furlenco - Overview • Furlenco is a Bangalore based startup founded by Mr. Ajith Mohan. It was incorporated in 2011 with a Revenue Mix (FY23) vision to emerge as India’s largest furniture rental and subscription business. • Today it is India's fastest growing online furniture company with an aim to
Slide 25: Furlenco - Online Platform for Furniture Purchase & Rental
Furlenco - Online Platform for Furniture Purchase & Rental • Furlenco is an online platform that provides their customers with the ability to pick how they bring furniture into their home and replace it as their needs change in order to change the design and reinvent their environment • The marketin
Slide 26: Furlenco’s Key Performance Indicators
Furlenco’s Key Performance Indicators Improvements in last quarter Revenue (INR Crs) & Customer Additions 1 8 0 62,301 7 0 , 0 0 1 6 0 6 0 , 0 0 1 4 0 157 44,664 5 0 , 0 0 129 1 2 0 32,467 33,000 100% 1.53% 4 0 , 0 0 1 0 90 8 0 84 3 0 , 0 0 6 0 2 0 , 0 0 Growth in Brand Traffic Healthy Conversion ra
Slide 27: Acquisition Details
Acquisition Details • Sheela Foam is acquiring 35% of shares in House of Kieraya (Furlenco) which is valued at INR 8,571 Mn (cost of acquiring is INR 3,000 Mn) • It would be a cash consideration through subscription of share in House of Kieraya (Furlenco) • Furlenco’s financials will be reported as
Slide 28: Investment Rationale
Investment Rationale The India furniture industry is estimated to be at a value of around USD 80 Bn by 2025 with an expected Entry into fast growing branded CAGR of 13%, while the furniture rental industry is at a nascent stage and is estimated to grow to USD 13 furniture market Bn by 2025 with an e
Slide 29: Strategic Overview
Strategic Overview
Slide 30: Revised Group Structure
Revised Group Structure Sheela Foam 100% 100% 94.66% 35% Joyce Foam Interplasp (Australia) Kurlon Furlenco (Spain) • The Company is planning to retain its own Management Team and Board of Directors • Following the potential acquisitions of Kurlon and Furlenco, it is expected that none of the founder
Slide 31: Combined Brand Universe
Combined Brand Universe Brands Sheela Foam Kurlon Furlenco Combined Technical and PU Foam Mattress Furniture • With these acquisitions the combined entity will be providing a diversified product portfolio across the value chain, from foam manufacturing, to mattresses to furniture products. • The bra
Slide 32: 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
Slide 33: THANK YOU
THANK YOU