Shankara Buildpro Limited · NSE:BUILDPRO
Shankara Buildpro — Shankara Building Products — Investor Presentation (May 2018)
35 slides from Shankara Buildpro's investor presentation, May 2018
Slide 1: Corporate Investor Presentation
Corporate Investor Presentatio Presentation n May May 2018 2017
Slide 2: Declaration
Declaration 2 The views expressed here may contain information derived from publicly available sources that have not been independently verified, and no representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. This presentation should no
Slide 3: One of India's largest retailers of home improvement and building materials
One of India’s largest retailers of home improvement and building materials 3 Stores 131* Products Retail store space 75+ 0.51 mn sqft SKUs 30,000+ States / UT 9/1 * As of 15th May, 2018
Slide 4: Key Milestones in the Shankara story
Key Milestones in the Shankara story 4 Incorporation of by IIM Ahmedabad alumnus, first generation entrepreneur Mr. Sukumar Srinivas in 1995 • Achieved Rs. 20 bn.+ turnover Opened an integrated • Added new products warehousing categories – cement, facility of Commenced Commenced tiles, scaffolding a
Slide 5: A leading organised retailer of home improvement & building products
A leading organised retailer of home improvement & building products 5 Comprehensive range Strong track record and Presence across the of home improvement financial stability – entire value chain creates products and building important for future efficiencies materials expansion and scale-up 1 3 5 2
Slide 6: 131* Shankara BuildPro retail stores...
131* Shankara BuildPro retail stores... 6 FY18 Revenue mix across Cities • Retail presence in 9 states & 1 union territory • 131* Shankara Buildpro stores Tier III Tier I • 0.51 mn sq.ft. of retail store space 35% 39% Tier II 26% 3 Bengaluru1 Retail stores across India (as of 31 March, 2018) (28 Ret
Slide 7: ...offering a "One-stop-shop" solution...
...offering a “One-stop-shop” solution... 7 120+ 30,000+ 75+ Brands SKUs Products Comprehensive range of products • Offers home improvement & building products and customized solutions Construction Materials Plumbing & Sanitaryware Flooring TMT, cement, m PVC pipes & fittings, Tiles, wooden • Huge d
Slide 8: ...for 'End to End' home improvement & building material solutions
...for ‘End to End’ home improvement & building material solutions 8 Over 575k sale transactions in FY18 ~1,576/day Wide product mix Wide geographic spread Unique customer requirements Varied applications of products Allied Services To gain trust & capture higher 30,000+ SKUs 9 states & 1 UT, 131* o
Slide 9: Increased focus on retail operations…
Increased focus on retail operations… 9 Number of Stores 3rd Party Brands 129 122 106 88 95 85 71 46 15 FY14 FY15 FY16 FY17 FY18 FY12 FY16 FY17 FY18 SKUs Own Brands 30,394 19,240 12,568 7,401 7,998 FY14 FY15 FY16 FY17 FY18
Slide 10: ...leading to profitable store economics
...leading to profitable store economics 10 Average store size 3,915 sq ft Same store sales Leasehold stores growth (FY18) 109 out of 129 16.1% Profitable store economics Avg monthly rental Avg ticket size per cost for leased stores retail transaction (FY18) INR 25,665 INR 16.99 / sq ft Target for c
Slide 11: Targeting a variety of customers...
Targeting a variety of customers... 11 Home • Rs. 4.7-5.0 lakh crore addressable Improvement opportunity growing at estimated 8.5-9.0% CAGR Building • Increasing customer involvement in home Material solutions makes the model highly scalable Our Target Audience Home Owners Professional Customers Sma
Slide 12: … to cater to the entire 'Home Improvement' sales model…
…to cater to the entire ‘Home Improvement’ sales model… 12 Retail – Store Channel Sales Enterprise Sales FY18 Revenue Share 47.9% FY18 Revenue Share 20.6% FY18 Revenue Share 31.6% Access to 120+ brands sold through Leveraging the large network of Ability to customize products 129 Shankara Buildpro s
Slide 13: …with in-house supply chain and processing support
…with in-house supply chain and processing support 13 Backward integrated processing facilities offering bespoke products In-house supply chain management Installed capacity (in MTPA)* Steel Pipes Warehouses with 0.69 mn sq.ft space* 230,400 & Tubes Roofing 34,000 Sheets Bright Bars 48 Fleet of owne
Slide 14: Scaling up business over the years…
Scaling up business over the years… 14 Business scale up Infrastructure scale up FY16 FY18 Inorganic Retail Outlets 95 131* VPSPL1 (FY11) CRIPL2 (FY14) JP (FY18) Vaigai (FY18) expansion Processing Product Categories Small Base 75+ capacity 323,200 tons (FY16) 332,400 tons (FY18) expansion SKUs 12,56
Slide 15: …with the guidance of a marquee Board…
…with the guidance of a marquee Board… 15 • He holds a bachelor’s degree in mechanical engineering from BITS, Pilani and a PGDBM from the IIM, V Ravichandar Ahmedabad Chairman & Independent • He has been associated with the Company since 2007 and has 36 years of experience in the consulting industry
Slide 16: …and a seasoned management team
…and a seasoned management team 16 Siddhartha Mundra • He holds a bachelor’s degree in engineering with a specialisation in computer science from the NIT, Warangal (formerly REC, Warangal) and a PGDBM from the IIM, Ahmedabad CEO • He was appointed CEO in June 2017 after having served as a nominee di
Slide 17: Strategies to enhance stakeholder value
Strategies to enhance stakeholder value 17 Retail Expanding retail presence to address the growing demand for home building Presence and improvement products Product Enhancing product offerings to create a compelling shopping experience for Offerings customers Bespoke Capitalize on our specializatio
Slide 18: Industry Overview
Industry Overview Corporate Presentatio n May 2017 3
Slide 19: Buildings Material Industry estimated to grow at 8.5-9.0% CAGR
Buildings Material Industry estimated to grow at 8.5-9.0% CAGR to Rs. 7.2-7.6 lakh crore by 2021-22 of which 34-38% is sold through Retail Network
Slide 20: Key building material required for housing unit
Key building material required for housing unit 20 Electrical 6%-8% Flooring 6%-8% Cement 18%-20% Steel 18%-20% Bricks 9%-11% Sand 6%-8% Door Frame & Plumbing Shutter 7%-9% 5%-7% Aggregate 6%-8% Others Paint 2%-4% 5%-7% Source: Report on “Assessment of Housing and Building Material Industry in India
Slide 21: Opportunity for retail of key building materials - Rs. 1.6 – 1.9 lakh crore
Opportunity for retail of 8 key building materials - Rs. 1.6 – 1.9 lakh crore 21 Building materials industry for the 8 key segments aided by Government initiatives to boost the … with different growth models & sectors… to grow significantly… housing sector Rs. trillion 7.2- 7.6 Large corporate Small
Slide 22: Strong growth potential across segments
Strong growth potential across segments 22 Typical levels of Market Size Growth Customer involvement Share of Organized Vs. Indicative share of Particulars (in Rs.bn) in Forecast for in purchase of Unorganized sales via retail channels 2016-17 next 5 Years Products (Home Owners) Cement 1,325-1,430 6
Slide 23: Backed by Government policies
Backed by Government policies 23 Swachh Bharat Abhiyan to Atal Mission for Rejuvenation provide toilet facilities to all and Urban Transformation Smart Cities to focus on with the focus of the urban upgradation of facilities of renewal projects sustainable, better and inclusive living Housing for Al
Slide 24: Benefitting from systemic growth drivers
Benefitting from systemic growth drivers 24 Retail Home Improvement Drivers Increase Nuclear Finance Product & Changing Population Urbanization Increase Changing in Income Finance Trends Population Growth Urbanization in Income Nuclear Families Availability Product & Brands Trends in in levels Famil
Slide 25: Financial Performance
Financial Performance Corporate Presentatio n May 2017 3
Slide 26: Outperformance of retail segment...
Outperformance of retail segment... 26 CAGR Particulars Units FY16 FY17 FY18* FY16-FY18 No of retail stores Nos. 95 106 129 16.5% Total Area Sq. ft 3,23,070 3,81,070 5,05,034 25.0% Revenue from retail stores (INR mn) Rs. Mn 8,078 9,807 12,197 22.9% Same store sales growth % 28.3% 19.4% 16.1% - EBITD
Slide 27: ...backed by growth in Shankara Buildpro Stores
...backed by growth in Shankara Buildpro Stores 27 Growth in number of stores Same store sales growth (%) 129 28.3% 106 95 19.4% 16.1% FY16 FY17 FY18* FY16 FY17 FY18* Growth in overall retail sales (Rs. mn.) Retail EBITDA (Rs.mn.) and EBITDA Margin (%) 12,197 9.6% 9.9% 10.7% 1,303 9,807 8,078 972 77
Slide 28: Consistently improving financials…
Consistently improving financials… 28 Segment wise Revenue & Net Revenue from Operations (Rs. mn.) EBITDA (Rs. mn.) & EBITDA Margin (%) 20,359 23,101 25,487 5.9% 6.6% 6.9% 1,758 1,522 12,197 1,203 9,807 8,078 6,555 7,595 8,050 5,727 5,699 5,240 FY16 FY17 FY18* FY16 FY17 FY18* Retail Enterprise Chann
Slide 29: ...and focus on maintaining business efficiency...
...and focus on maintaining business efficiency... 29 Debtor Days* Inventory Days* 61 60 50 49 45 44 FY16 FY17 FY18 FY16 FY17 FY18 Creditor Days* Net Working Capital Days* 66 55 42 41 53 52 FY16 FY17 FY18 FY16 FY17 FY18 *Calculated as days of sales; Net Working Capital days = Debtor days + Inventory
Slide 30: ...leading to shareholder value creation
...leading to shareholder value creation 30 Return on Capital Employed Return on Equity Net Debt : Equity 0.7x 17.3% 17.5% 23.2% 23.2% 22.0% 14.1% 0.5x 0.4x FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 Return on Equity = PAT / Net Worth; Return on Capital Employed = EBIT / (Total Debt (excluding cur
Slide 31: Consolidated Profit & Loss
Consolidated Profit & Loss 31 Particulars (Rs. Mn) FY16 FY17 FY18 CAGR (FY16-FY18) Revenue from Operations 20,359 23,101 25,487 11.9% Raw Material 17,672 19,794 21,738 Employee Expenses 413 492 592 Other Expenses 1,079 1,300 1,404 EBITDA 1,203 1,522 1,758 20.9% EBITDA % 5.9% 6.6% 6.9% Depreciation 9
Slide 32: Consolidated Balance Sheet
Consolidated Balance Sheet 32 Rs. Mn FY16 FY17 FY18 Rs. Mn FY16 FY17 FY18 Shareholder's Fund 2,889 3,898 4,558 Non-current assets 2,449 2,739 3,206 Share Capital 219 228 228 Fixed assets 2,193 2,450 2,727 Reserves & Surplus 2,670 3,669 4,329 Intangible assets - - 104 Non-controlling Interest 0 0 1 N
Slide 33: Annexure
Annexure Corporate Presentatio n May 2017 3
Slide 34: Annexure: Shareholding Pattern and Inorganic expansion
Annexure 34 Shareholding Pattern Inorganic expansion 16.6% Vaigai Sanitation, a distributor of tiles, wood flooring, CP fittings and sanitary ware in Chennai 31st March 2018 56.2% 27.2% JP Sanitation, a distributor of sanitary products, such as sanitary-ware, tiles, and bathroom accessories in Benga
Slide 35: Thank you!
Shanikara Building Products Ltd. Thank you! Builldpro
Shankara Building Products — Investor Presentation (May 2018) on 6ix