Redington Limited · NSE:REDINGTON
Redington — Q4 FY2019 Earnings Presentation
65 slides from Redington's earnings presentation, May 22, 2019
Slide 1: Cover letter to NSE: presentation to investor/analyst meet
_, :n “WSW Cargorate Office Redington (India) Limited ‘3 I ‘ Redington House Centre Point, e mg on SEAMLESS PARTNERSHIPS pmtosumsp, Thiru.Vi.Ka Industrial Estate, Guindy, ChennaiA 600032, INDIA Tel : +91 1.41.224 3353 Fax : +91 44 2225 3799 CIN : L52599TN1961PLC028758 www.redingtongroup.cum 22"d May
Slide 2: Q4FY19 Earnings Presentation
REDINGTON (INDIA) LIMITED Q4FY19 Earnings Presentation March 2019
Slide 3: Disclaimer
Disclaimer This presentation contains “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Redington India Limited’s future business developments and economic performance. While these forw
Slide 4: Financial Highlights
Financial Highlights • Q4FY19 – On a consolidated basis, Revenue grew by 16%, EBITDA grew by 15% and PAT grew by 18% • India – Revenue grew by 24%, EBITDA grew by 17% and PAT grew by 6% • Overseas – Revenue grew by 11%, EBITDA grew by 13% and PAT grew by 23% • Overseas w/o Arena, Turkey – Revenue gr
Slide 5: Financial Highlights: India business
Financial Highlights India business – Turnaround story sustains • During the quarter, • India business registered strong double digit growth in Revenue, driven by all three business segments, viz a viz, IT, Mobility and Services • EBITDA growth of 17% YoY, on the back of Gross Margin growth • Signif
Slide 6: Financial Highlights: Overseas business
Financial Highlights Overseas business – Momentum maintained • During the quarter, • Overseas business continued its strong momentum, registering strong double digit growth across Revenue, EBITDA and PAT • All the three major geographies have contributed to the growth story • Overseas business conti
Slide 7: Commits & Delivery
Commits & Delivery “We have taken working capital WC DAYS management in India as a very Q4FY19 Q3FY19 Q2FY19 Q1FY19 Q4FY18 clear mandate for the current year” – Q4FY18 Call WC Days 40 60 46 52 53 “So, given all of this, we believe that, in FY19 the company will Growth Rates Consolidated Consolidated
Slide 8: Q4FY19 Highlights
Q4FY18 Highlights Q4FY19 Highlights Connecting The Dots Transformation from ‘Product’ to ‘Utility of Product’ 7
Slide 9: Q4FY19 Consolidated Financials
Q4FY19- Consolidated Financials ₹ in million REVENUE EBIDTA PAT 16% 15% 18% 1,26,097 1,690 1,08,938 2,824 1,433 2,457 Q4FY18 Q4FY19 Q4FY18 Q4FY19 Q4FY18 Q4FY19 8 7
Slide 10: Q4FY19 Performance by Market
Q4FY19 Performance by Market ₹ in million REVENUE EBIDTA PAT 9 16% 15% 18% 2,824 1,690 1,26,097 1,08,938 2,457 1,433 1674 23% 11% 78,496 13% 1251 1478 70,671 1018 17% 6% 24% 47,601 979 1150 38,267 415 439 Q4FY18 Q4FY19 Q4FY18 Q4FY19 Q4FY18 Q4FY19 INDIA OVERSEAS INDIA OVERSEAS INDIA OVERSEAS 8
Slide 11: Q4FY19 Performance by Vertical
Q4FY19 Performance by Vertical INDIA OVERSEAS CONSOLIDATED 6% 6% 2% 2% 3% 3% 15% 15% 24% 24% 29% 29% 79% 79% 69% 69% 73% 73% Q4FY18 Q4FY19 Q4FY18 Q4FY19 Q4FY18 Q4FY19 IT Mobility Services IT Mobility Services IT Mobility Services Note: Upon re-grouping, only smartphones are shown under Mobility 9 10
Slide 12: Q4FY19 Working Capital Days
Q4FY19 – Working Capital Days INDIA OVERSEAS CONSOLIDATED 53 40 40 34 33 30 13 4 7 Q4FY18 Q4FY19 Q4FY18 Q4FY19 Q4FY18 Q4FY19 11 10
Slide 13: Free Cash Flow Statement
Free Cash Flow Statement ₹ in million Particulars Q4 FY19 Q4 FY18 Profit Before Taxation 2,099 1,831 Non-cash items (426) (31) Outflow of Finance Cost 492 608 Changes in Working Capital 9,832 (4,503) Direct Taxes Paid 37 (510) Net Cash Flow from Operations 12,034 (2,605) Capex (220) (214) Dividend p
Slide 14: Q4FY19 Top Vendors Consolidated
Q4FY19 – Top 5 Vendors Consolidated REVENUE 38% 40% OTHERS LENOVO 7% CISCO 6% 4% 6% DELL EMC 11% 9% HP Inc 17% 15% APPLE 23% 24% Q4FY18 Q4FY19 13 12
Slide 15: Q4FY19 Performance – ProConnect
Q4FY19 Performance – ProConnect ₹ in million REVENUE EBIDTA 16% 8% *19% • Revenue growth over Q4FY18 is 16% 1,074 157 • EBITDA growth over Q4FY18 is 8% • PAT degrowth over Q4FY18 is -2% 929 146 • *Adjusting for one-offs relating to M&A, EBITDA would have grown by 19% and Q4FY18 Q4FY19 Q4FY18 Q4FY19
Slide 16: FY19 Highlights
Q4FY18 FY18 Highlights Highlights FY19 Highlights Connecting The Dots Transformation from ‘Product’ to ‘Utility of Product’ 15
Slide 17: FY19 Consolidated Financials
FY19- Consolidated Financials ₹ in million REVENUE EBIDTA PAT 12% 12% 5% 4,65,994 9,619 5,078 4,816 4,16,417 8,555 FY18 FY19 FY18 FY19 FY18 FY19 16 15
Slide 18: FY19 Performance by Market
FY19 Performance by Market ₹ in million REVENUE EBIDTA PAT 12% 12% 5% 4,65,994 5,078 4,816 4,16,417 9,619 8,555 2,95,306 28% 19% 11% 5,587 2,894 3,433 2,65,918 4,355 13% 4,200 4% 14% 4,032 1,922 1,645 1,50,499 1,70,688 FY18 FY19 FY18 FY19 FY18 FY19 India Overseas India Overseas India Overseas 16 17
Slide 19: FY19 Performance by Vertical
FY19 Performance by Vertical INDIA OVERSEAS CONSOLIDATED 5% 6% 2% 2% 3% 3% 20% 19% 31% 33% 27% 28% 75% 75% 67% 70% 69% 65% FY18 FY19 FY18 FY19 FY18 FY19 IT Mobility Services IT Mobility Services IT Mobility Services Note: Upon re-grouping, only smartphones are shown under Mobility 18 17
Slide 20: FY19 Working Capital Days
FY19 – Working Capital Days INDIA OVERSEAS CONSOLIDATED 55 44 47 37 37 31 8 6 7 FY18 FY19 FY18 FY19 FY18 FY19 19 18
Slide 21: Free Cash Flow Statement
Free Cash Flow Statement ₹ in million Particulars FY19 FY18 Profit Before Taxation 6,233 6,306 Non-cash items 1,956 787 Outflow of Finance Cost 1,802 1,633 Changes in Working Capital 2,975 (5,014) Direct taxes paid (1,993) (1,514) Net Cash Flow from Operations 10,973 2,198 Capex (678) (315) Dividend
Slide 22: Consolidated Balance Sheet
Consolidated Balance Sheet ₹ in million Particulars 31-MAR-19 31-MAR-18 Source: Networth 39,060 35,306 Net Debt 4,302 9,165 Minority Interest 3,447 3,588 Total 46,809 48,059 Application: Fixed Assets 4,508 4,692 Goodwill 220 213 Net Assets 42,081 43,154 Total 46,809 48,059 20 21
Slide 23: FY19 Top Vendors Consolidated
FY19 – Top 5 Vendors Consolidated REVENUE 38% 39% OTHERS LENOVO 4% 5% CISCO 7% 6% DELL EMC 8% 8% HP Inc 16% 15% APPLE 27% 27% FY18 FY19 22 21
Slide 24: Shareholding Pattern
Shareholding Pattern Others Others 13.2% 12.2% Mutual Funds Mutual Funds 13.5% 14.1% Synnex Mauritius Synnex Mauritius Limited Limited 24.2% 24.2% Standard Standard Chartered Private Chartered Private Equity Equity 15.8% 15.8% Foreign Foreign Institutional Institutional Investors & FPIs Investors &
Slide 25: Investor Contacts
Investor Contacts M. Muthukumarasamy Compliance Officer Redington (India) Limited SPL Guindy House, 95 Mount Road, Guindy, Chennai 600 032 https://www.redingtongroup.com Sowmiya M Manager – Investor Relations Connecting The Dots sowmiya.manickam@redington.co.in Transformation from ‘Product’ to ‘Util
Slide 26: Corporate Presentation
Corporate Presentation March 2019
Slide 27: Who Are We? What We Do?
WHO ARE WE? WHAT WE DO? A prominent & leading We are ‘Business Enablers’, “Technology Distributor” Seamlessly partnering with evolving into a Brands and Channel partners “Services & Solutions company” in delivering value No.1 Technology Multi faceted Expanding the reach An Emerging Markets $6.7bn+ c
Slide 28: Industry Overview
SEAMLESS PARTNERSHIPS, Industry Overview
Slide 29: Distribution Food Chain
Distribution Food Chain IT CONSUMER & MOBILITY SUB DISTRIBUTOR RESELLER Earlier VENDOR DISTRIBUTOR RETAILER CUSTOMER RESELLER Present VENDOR DISTRIBUTOR RETAILER CUSTOMER ECOMMERCE PLAYER IT ENTERPRISE Earlier VENDOR DISTRIBUTOR SYSTEM INTEGRATOR CUSTOMER VALUE ADDED RESELLER SYSTEM INTEGRATOR Prese
Slide 30: Distributors: Value Creators
Distributors: Value Creators Market Knowledge & Access One stop shop Demand Generation Inventory Management Partner Recruitment & Enablement Bulk breaking BRANDS CHANNEL Sales & Marketing Expertise PARTNERS Credit financing Supply Fulfilment Logistics Pre & Post Sales Consulting Order consolidation
Slide 31: Product Lifecycle
Product Lifecycle Manufacture/ Sell Reach Maintain Develop Our presence across the product lifecycle 6
Slide 32: Company Overview
SEAMLESS PARTNERSHIPS, Company Overview
Slide 33: Mission Statement
Mission Statement “Our mission is to offer a robust technology-powered platform to enable a seamless flow of products and services” 8
Slide 34: Our Values
Our Values ADAPTABILITY COLLABORATION KNOW-HOW OBJECTIVITY SIMPLICITY TRUST TRANSPARENCY 9
Slide 35: Our Emergence
Our Emergence Present Presence across 37 markets, a leading Emerging Markets player 1993 10
Slide 36: Our Associations
Our Associations Present 1993 Enviable Partnerships with over 220+ brands 11
Slide 37: Our Expansion
Our Expansion CHANNEL SALES SERVICE BRANDS EMPLOYEES MARKETS WAREHOUSES CENTRES PARTNERS OFFICES Present 220+ 39,800+ 4,839 37 80 220+ 285+ 1993 1 25 5 1 3 1 1 From a ‘Home Grown Company’ to a ‘Leading Distributor’ 12
Slide 38: Our Board Of Directors
Our Board Of Directors Independent Directors CHAIRMAN Prof. Ramachandran V. S. Hariharan Keith WF Bradley B Ramaratnam Anita P Belani Professor, Corporate Ex. Vice President, Ex.President, Professional Sr Business & Human Policy & Strategy Hewlett-Packard, Ingram Micro, North Director Capital Leader
Slide 39: Our Experienced Executive Team
Our Experienced Executive Team Raj Shankar Managing Director P S Neogi E H Kasturi Rangan Ramesh Natarajan J K Senapati, Dr. R. Arunachalam S V Krishnan S V Rao Chief Development Whole Time Joint COO & Chief Joint COO, India CEO, ProConnect Chief Financial CEO, Ensure & Strategy Officer Director Sal
Slide 40: Business Overview
SEAMLESS PARTNERSHIPS, Business Overview
Slide 41: Distribution Business
Distribution Business BUSINESS INDIA MIDDLE EAST AFRICA TURKEY SINGAPORE SOUTH ASIA DISTRIBUTION IT CONSUMER IT ENTERPRISE MOBILITY EMERGING PCs Laptops Networking Software Health & Medical Smartphones Equipment Print Supplies 3D Printers & Scanners Servers & Storage Security Printers Solar Consumer
Slide 42: Services Business
Services Business BUSINESS INDIA MIDDLE EAST AFRICA TURKEY SINGAPORE SOUTH ASIA SERVICES Supply Chain SERVICES & SOLUTIONS Transformative initiatives for Trader Distributor Consolidator COMPANY Seamless Success Logistics services Support services Cloud services Digital print services 3D Print Servic
Slide 43: ProConnect India
ProConnect India Wholly Owned Subsidiary of Redington Revenue Contribution from Services 17% Integrated Third Party Logistics partner Warehousing 50% Transportation 33% PAN India presence Others 180+ Warehouses Revenue Contribution from Industries IT 6.8 mn Sq.ft. in operation 18% Consumer Durables
Slide 44: ProConnect India: Growth Story
ProConnect India : Growth Story 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 CUSTOMERS 33 53 74 124 166 205 WAREHOUSES 74 74 80 150 173 181 WAREHOUSING SPACE (in sq. ft.) 0.9 mn 1.2 mn 2.5 mn 4.8 mn 6.3 mn 6.8 mn Revenue EBITDA PAT Revenue Mix Redington Outside Biz 403 58 30 24% 29% 49% 65% 79% 8
Slide 45: Ensure India
Ensure India Wholly Owned Subsidiary of Redington Warranty Support Services PAN India presence with 35+ Owned Infrastructure Post Warranty Management service centres across India Services Services Preferred Service partner with 200+ service partners across India Managed Print Spare Parts Services Ma
Slide 46: Redington Cloud Solutions
Redington Cloud Solutions Our Cloud Practice Our business Digital Platform Partner Enablement Program Distribution Element Services Element Managed Our Cloud Business Practice Down-selling of Redington team Services Development Cloud products provides Managed Services, focussing on SME/Mid Market Cl
Slide 47: Printing Solutions
Printing Solutions DIGITAL PRINT SERVICES 3D PRINT SERVICES Exclusive Distributor of HP Indigo’s “Digital Set up 3D Printing Printing Press” in India Facility in Chennai REVENUE MODEL Ranked Grade “AA” by HP Indigo (Second highest Distribution of Printing Press in the world) Annuity revenues from cl
Slide 48: Fueling Growth In a Challenging Business
Fueling Growth In a Challenging Business IT CONSUMER • Enabling better product mix with higher ASP • Market share gains PC Shipments decline • Establishing presence in Cloud IT ENTERPRISE • Increased value added services • Systematic approach devised to participate in Government Gradual pickup in Co
Slide 49: Financial Performance
SEAMLESS PARTNERSHIPS, Financial Performance
Slide 50: Performance Since Listing
84,539 1,00,424 1,16,115 1,26,623 CAGR 15% 1,63,734 2,07,799 2,34,462 2,72,441 REVENUE 3,07,361 3,44,198 3,97,362 4,16,417 4,65,994 1,985 Performance Since Listing 2,590 3,296 3,657 4,717 CAGR 14% 6,334 6,842 7,196 EBITDA 7,619 8,176 8,662 8,555 *Post acquisition of Easyaccess Financial Services in
Slide 51: Performance By Market
Performance By Market ₹ in million REVENUE EBIDTA PAT 4,65,994 4,16,417 12% 12% 5% 5,078 9,619 4,816 8,555 28% 19% 11% 2,95,306 2,65,918 5,587 2,894 3,433 4,355 13% 4% 14% 1,50,499 1,70,688 4,200 4,032 1,922 1,645 FY18 FY19 FY18 FY19 FY18 FY19 India Overseas India Overseas India Overseas 26
Slide 52: Performance By Vertical
Performance By Vertical INDIA OVERSEAS CONSOLIDATED 5% 6% 2% 2% 3% 3% 20% 19% 31% 33% 27% 28% 75% 75% 67% 70% 65% 69% FY18 FY19 FY18 FY19 FY18 FY19 IT Mobility Services IT Mobility Services IT Mobility Services 27
Slide 53: Geographical Contribution
Geographical Contribution REVENUE PAT 47% 49% 51% 57% 59% 62% 61% 54% 64% 63% 60% 68% 53% 51% 49% 43% 41% 38% 39% 46% 36% 37% 40% 32% FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 14 FY 15 FY 16 FY 17 FY18 FY19 India Overseas India Overseas 28
Slide 54: Top Vendors
Top 5 Vendors 38% 39% 50% 46% 54% 52% 4% 5% 7% 6% 7% 9% 4% 8% 8% 7% 8% 3% 4% 6% 3% 5% 4% 4% 16% 15% 15% 21% 20% 17% 27% 27% 22% 11% 13% 15% FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 APPLE HP Inc DELL EMC CISCO LENOVO OTHERS Note: Effect of Dell EMC merger is shown partly in FY17 figures and fully in FY18
Slide 55: Key Operating Metrics
Key Operating Metrics Inventory Days Debtor Days Creditor Days Working Capital Days 58 55 54 43 44 37 39 41 48 44 49 Working Capital Days 43 61 59 63 53 59 54 at sustainable levels 33 36 43 33 29 32 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 Rs in mn FY14 FY15 FY16 FY17 FY18 FY19 Cumulative generation CFO
Slide 56: Consolidated Financials
Consolidated Financials Particulars FY19 FY18 FY17 FY16 FY15 FY14 Total Revenue 4,65,994 4,16,417 3,93,762 3,44,198 3,07,361 2,72,441 EBITDA 9,619 8,555 8,662 8,176 7,619 7,196 PAT 5,078 4,816 4,642 4,235 3,865 3,367 Networth 39,060 35,306 31,479 29,494 23,742 20,213 Capital Employed 55,581 53,472 5
Slide 57: Dividend Distribution
Dividend Distribution 215% Dividend Payout : 20% on profits earned 165% 120% 105% 115% 95% Buyback of shares 45% Issue size Rs.139 crs 20% % Equity 2.78% FY13 FY14 FY15 FY16 FY17 FY18 FY19 Dividend % on Face Value of shares Final dividend plus Special Interim Dividend declared 32
Slide 58: Shareholding Pattern (As on Mar 31st, 2019)
Shareholding Pattern (As on Mar 31st, 2019) HDFC Mutual Fund Fidelity Management & Research (FMR) Others, 12.2% Synnex Mauritius Ltd, 24.2% Franklin Templeton Investments Mutual Funds, 14.1% ICICIPru Life Insurance Standard Fidelity International Chartered Foreign Private Equity, Institutional 15.8%
Slide 59: Our Growth Drivers
SEAMLESS PARTNERSHIPS, Our Growth Drivers
Slide 60: Revenue Growth Vectors
Revenue Growth Vectors Tapping incremental Continuous addition BRAND MARKET revenue from of brands across SHARE ACQUISITIONS available product categories opportunities GAINS TARGET 3 year Revenue CAGR of 10% yoy Acquiring MARKET NEW BUSINESS Foraying into newer distribution rights in product categor
Slide 61: Margin Growth Vectors
Margin Growth Vectors Enabling higher Product mix of Improved Mix HIGH MARGIN Margin Focus on products Trajectory INDIA Geography as a growth Mix TARGET market ROCE of Business Foray into 16-18% by Improved Mix SERVICES WC turns FY21 Optimization Driving of OPERATING Efficiency EXPENSES Improvement
Slide 62: Capital Allocation Priorities
Capital Allocation Priorities NO FPO Dividend payout @ 1 Returns to Shareholders 20% of Profits MADE Investments of Debt ~Rs.150 crs spread until FY21 Investments into the business Investments into business 2 Equity Ratio at 0.1 Investments of 3 Strategic M&As for ProConnect ~Rs.150 crs spread until
Slide 63: Redington Foundation
Redington Foundation Foundation for CSR @ Redington (Redington Foundation), a trust formed by Redington (India) Limited to implement various CSR activities towards the betterment of the society 38
Slide 64: Contact Us
CONTACT US Compliance Officer M. Muthukumarasamy Redington (India) Limited SPL Guindy House, 95 Mount Road, Guindy, Chennai 600 032 https://www.redingtongroup.com CIN - L52599TN1961PLC028758 Investor Contact Sowmiya M Manager – Investor Relations sowmiya.manickam@redington.co.in IR Materials - https
Slide 65: Thank You
aoe ears paetiaeiee