Welspun Living Limited · NSE:WELSPUNLIV
Welspun Living — Welspun India — Q3 FY16 Earnings Presentation
41 slides from Welspun Living's earnings presentation, February 2016
Slide 1: Investor Presentation Q3 FY16
INVESTOR PRESENTATION Q3 FY16 February, 2016
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
Slide 3: Agenda
1. WIL - An Overview 2. Industry Overview: Advantage India AGENDA 3. Welspun India: Global Leader in Home Textiles 4. Q3FY16 Highlights 5. Way forward 2
Slide 4: WIL - An Overview
WIL - AN OVERVIEW Global Home Textiles Leader A part of US$ 3 billion Welspun Group, Welspun India Ltd. is 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 the third consecutive year With a dist
Slide 5: Financial Overview
FINANCIAL OVERVIEW Revenue in Rs. Million EBITDA in Rs. Million 60,000 16,000 53,025 13,691 14,000 50,000 11,993 43,730 43,511 12,000 10,253 40,000 36,473 10,000 29,329 30,000 8,000 5,960 6,438 6,000 20,000 4,000 10,000 2,000 0 0 FY12 FY13 FY14 FY15 9M FY16 FY12 FY13 FY14 FY15 9M FY16 Shareholding P
Slide 6: WIL - Revenue Milestones
WIL - REVENUE MILESTONES WIL Revenue in Rs. Billion Entry into Accent Rugs/ Carpets 53 • 1993: 44 Entry into bath Towels Towels Christy rugs 36 facility at & Acquisit 32 Vapi Sheets ion 26 28 Facility at Anjar 16 17 12 7 Pre-2005 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Textiles business
Slide 7: Industry Overview: Advantage India
INDUSTRY OVERVIEW: ADVANTAGE INDIA
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
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
Slide 10: Structural Changes in Favour of India
STRUCTURAL CHANGES IN FAVOUR OF INDIA Largest producer and Major importer of Cotton Importer 2nd largest exporter cotton and yarn Energy issues of cotton Losing export Geopolitical issues Exporter of yarn Competitiveness Compliance issues Competitive costs Wage inflation Robust
Slide 11: Structural Change: Manifests in Higher Market Share
STRUCTURAL CHANGE: MANIFESTS IN HIGHER MARKET SHARE US Imports from Various countries – Market share Towels (Cotton) India China Pakistan ROW 35% 36% 36% 37% 30% 31% 27% 25% 24% 26% 26% 26% 23% 22% 24% 23% 22% 23% 23% 20% India’s share 16% 15% 16% 15% increased by 7 percentage points in 5 years 2009
Slide 12: Welspun India Home Textiles
WELSPUN INDIA HOME TEXTILES WELSPUN INDIA a iL TEV TE UT Uh des an es
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 Customer Widest product range in the Home Textiles segment reach, Competitive manufacturing and Global delivery model empowering higher wallet share S
Slide 14: Leadership: Strategic Partnership with Global Retail Giants
LEADERSHIP: STRATEGIC PARTNERSHIP WITH GLOBAL RETAIL GIANTS Bed Bath & Beyond Shopper’s Stop Ikea ASDA Macy’s Lifestyle Carrefour Tesco J C Penney HomeTown JYSK Marks & Spencer Target @Home El Corte Ingles Debenhams Kohl’s ….. and many more Vincenzo Zucchi Hou
Slide 15: Leadership: Global Reach & Delivery Model
LEADERSHIP: GLOBAL REACH & DELIVERY MODEL Delivery & Reach in over 50 countries 14
Slide 16: Leadership: Scale
LEADERSHIP: SCALE FY15 Expected Capacity Product Unit Sales volume Utilisation % Capacity FY16 Towels MT 50,000 50,852 102% 60,000 Sheets ‘000 Mtrs 60,000 58,047 97% 72,000 Rugs & Carpets MT 15,000 8,755 58% 20,000* Investment of around Rs.7 bn Capacities running close to Capacity growth to be expec
Slide 17: Leadership: FMCG Approach - Consumer-Driven Innovation
LEADERSHIP: FMCG APPROACH – CONSUMER-DRIVEN INNOVATION Product Unmatched Promotion Interactive & experience Communication Consumer Research Robust Distribution SCM & Development Superlative End Products Consumer Strategic Integrated Partnership Quality, Manufacturing with cost control Retailers Valu
Slide 18: Today's Welspun: FAST
TODAY’S WELSPUN: “FAST” Fast Affordable Sustainability Tech-oriented Quick Best cost Caring for the Technology response structures for environment leveraged time different price and the across (Speed to levels community Products, Market) Processes and Supply Chain 17
Slide 19: FAST Translating into Leadership Position
“FAST” TRANSLATING INTO LEADERSHIP POSITION US Terry Towels Import India share US Cotton Sheets Import India share 40.0% 36.5% YTD 50.0% 46.9% YTD 35.6% 46.6% 35.0% Nov’15 is Nov’15 is 45.0% Welspun 38.3% Welspun 48.3% 7.3% 9.9% 30.0% 40.0% Welspun Welspun 14.7% 25.7% 16.4% 25.8% 35.0% 25.0% 23.2% 2
Slide 20: Value Through Brands
VALUE THROUGH BRANDS Premium brand Value brand; Largest terry Value brand in the Patent ‘Hygro with presence in presence in India towel brand in UK with a focus Cotton’ India via mass retailers; the UK with on bedding launched as a also growing via growing Targetting the brand in Footp
Slide 21: Value Through Brands (Contd...)
VALUE THROUGH BRANDS (CONTD…) Suppliers of the License holder of Licensed the Launched own Licensed the Wimbledon the Rugby World Amy Butler brand of luxury Annie Phillip towels Cup 2015 towels range of home linen in the US via brand for floor products for the e-commerce coverings in A s
Slide 22: Spaces Campaign
HOME TEXTILES SPACES CAMPAIGN BED, BATH, RUGS & CO-ORDINATES D, BATH, RUGS & CO-ORDINATES Define your style. Follow your imagination. Create your own look Scoces Home & Beyord by Welspun a8 abou te axpraison SPACES ony J @ Find your space 21
Slide 23: Branding Our Innovation
BRANDING OUR INNOVATION Launched nation-wide campaign in the US in September 2015 to introduce patented Hygrocotton® technology to consumers First ever such campaign in textiles in the past 15 years 22
Slide 24: Value Through Brands
VALUE THROUGH BRANDS Strong growth expected in the branded category, especially in India Expansion of Christy into Branded sales as % of Total geographies such as USA, China and Middle East 11.5% Increased penetration of Spaces and 11.0% Welhome through shop-in-shop and 10.5% e-commerce 10.0%
Slide 25: CSV - Through 3E's: Empowerment
CSV – THROUGH 3E’S Empowerment WOMEN EMPOWERMENT AT CSR 8 212 141 748 3,244 541,576 1,127,963 12,344,113 24
Slide 26: CSV - Launched Campaign for SPUN
CSV – THROUGH 3E’S – LAUNCHED CAMPAIGN FOR “SPUN” SPUN : Our Corporate Social Value initiative to Empower Women and Revive the crafts of our country 25
Slide 27: CSV - Through 3E's: Environment & Health
CSV – THROUGH 3E’S Environment & Health HEALTH CAMPS: SANITATION MOBILE HEALTH PLANTATIONS: 10 camps on blood group PROJECT: VANS at Anjar & 4,500 fruit and detection, general health 2,800 toilets Mumbai: vegetable check up, diabetes constructed in 10 Provide basic health plantations done at detecti
Slide 28: CSV - Through 3E's: Education
CSV – THROUGH 3E’S Education ADULT LITERACY QUALITY EDUCATION PROGRAMME: PROGRAMME WITH 45 4 classes were conducted consisting GOVT SCHOOLS IN of a total of 75 women at Versamedi, ANJAR: Ratnal, and Ajapar villages since We recruited 62 August 2014 Para – teachers 27
Slide 29: CSV - 5E's Vision for Smart Village
SUSTAINABLE : CORPORATE SOCIAL VALUE (CSV) – 5E’S VISION FOR SMART VILLAGE 5 Es for a Smart Village PCC Roads, Side Walks, Upgraded Under ground Sewage lines, Un-Interrupted power supply, Essential Infra Street Lights, Adequate water supply, Public toilets, Entrance Gate, Sports field E – Connecti
Slide 30: Q3 FY16 Highlights
WELSPUN INDIA HOME TEXTILES Q3 FY16 HIGHLIGHTS [_loterare aa e CES;
Slide 31: Key Highlights - Q3 FY16
KEY HIGHLIGHTS – Q3 FY16 Ranked No:1 Home Crossed Rs. 4 bn quarterly Textile Supplier to the Domestic Retail Sales Operating EBITDA Growth of 52% YTD US for the fourth milestone consecutive year by HTT Dipali Goenka appointed Bestowed ‘Exemplary Supply Launched ‘Hygro Cotton’ on the Board of Directo
Slide 32: Financial Performance - Q3 FY16 & 9M FY16
FINANCIAL PERFORMANCE - Q3 FY16 & 9M FY16 (Rs. Million) Particulars Q3FY16 Q3FY15 YoY Q2FY16 9M FY16 9M FY15 YoY Revenue 14,904 13,459 10.7% 14,723 43,511 39,367 10.5% Operating EBITDA 4,006 3,400 17.8% 3,743 11,346 9,296 22.1% Oper. EBITDA Margin 26.9% 25.3% 161 bps 25.4% 26.1% 23.6% 246 bps EBITDA
Slide 33: Financial Highlights: Profitability Trend
FINANCIAL HIGHLIGHTS : PROFITABILITY TREND (Rs. Million) Particulars FY13 FY14 FY15 9M FY16 Revenue 36,473 43,730 53,025 43,511 Revenue growth % 24.4% 19.9% 21.3% 10.5% Operating EBITDA 5,946 9,211 12,742 11,346 Operating EBITDA Margin 16.3% 21.1% 24.0% 26.1% EBITDA 6,438 10,253 13,691 11,993 EBITDA
Slide 34: Financial Highlights: Balance Sheet
FINANCIAL HIGHLIGHTS : BALANCE SHEET (Rs. Million) Particulars 31-Mar-13 31-Mar-14 31-Mar-15 31-Dec-15 Net Worth 9,902 11,097 14,318 18,332 Short Term Loans 9,166 11,349 10,034 14,039 Long Term Loans 11,079 18,944 20,817 17,787 Gross Debt 20,244 30,293 30,851 31,827 Cash & Cash Equiv. 2,798 3,658 4,
Slide 35: Financial Highlights: Financial Ratios
FINANCIAL HIGHLIGHTS : FINANCIAL RATIOS FY13 FY14 FY15 9M FY16* Solvency Net debt/Op. EBITDA 2.93 2.89 2.05 1.75 ratios Net debt/Equity 1.76 2.40 1.82 1.44 EBIT/Interest 2.52 3.55 3.66 5.46 Current Ratio 1.00 1.07 1.12 1.09 Operational ratios Fixed Asset turnover 1.96 1.71 2.04 1.95 Total Asset turn
Slide 36: Key Financials - Trends
KEY FINANCIALS - TRENDS 14,000 Operating EBITDA 12,742 Revenues 60,000 12,000 11,346 53,025 50,000 43,511 10,000 9,211 43,730 Rs. miilion 40,000 36,473 8,000 Rs. million 29,329 5,566 5,946 30,000 6,000 20,000 4,000 10,000 2,000 0 0 FY12 FY13 FY14 FY15 9M FY16 FY12 FY13 FY14 FY15 9M FY16 PAT After Mi
Slide 37: Key Ratio Trends
KEY RATIO TRENDS ROE % ROCE % (Pre- Tax) 46% 42.5% 36% 41% 40.0% 41.6% 31% 36% 34.6% 26% 21.9% 22.8% 31% 25.9% 24.7% 26% 21% 26.7% 16.3% 21% 21.0% 16% 16% 14.0% 9.9% 15.9% 11% 11% 6% 6% 1% 1% FY 11 FY 12 FY 13 FY 14 FY 15 9M FY16 FY 11 FY 12 FY 13 FY 14 FY15 9M FY16 3.0x 6.0x Net Debt / Equity Net D
Slide 38: Dividend Policy - A Pioneering Initiative in the Industry
DIVIDEND POLICY - A PIONEERING INITIATIVE IN THE INDUSTRY Dividend distribution policy announced along with FY15 results Dividend Payout: 25% of standalone PAT Total dividend for FY15 at Rs. 10.5 per share of face value Rs. 10 Interim dividend for FY16 at Rs. 6.5 per share of face value Rs.
Slide 39: Way Forward
OE RR Wu tre nos Pe HOME TEXTILES WAY FORWARD X y é y faa > q y ‘eg: = 2 ‘ »~ Sein — a NNR 4 J ii . I j
Slide 40: Way Forward: Sustaining Growth Momentum
WAY FORWARD : SUSTAINING GROWTH MOMENTUM New markets Leverage ‘FAST’ New products New channels 39
Slide 41: 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