Pearl Global Industries Limited · NSE:PGIL
Pearl Global Industries — Investor Presentation (February 2024)
65 slides from Pearl Global Industries's investor presentation, Feb 26, 2024
Slide 1: Pearl Global
PEARL GLOBAL Exceeding Expectations...Always PGIL/SE/2023-24/103 Date: February 26, 2024 THE GENERAL MANAGER, THE GENERAL MANAGER, DEPARTMENT OF CORPORATE SERVICES -CRD LISTING DEPARTMENT BSE LIMITED NATIONAL STOCK EXCHANGE OF INDIA LTD. IST FLOOR, NEW TRADING RING “EXCHANGE PLAZA”, PLOT NO. C- 1, R
Slide 2: Investors & Analyst Meet Presentation
Pearl Global Industries Limited Investors & Analyst Meet Presentation February 2024 1
Slide 3: Safe Harbour
Safe Harbour This presentation has been prepared by and is the sole responsibility of Pearl Global Industries Limited (the “Company”). By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or form part of any offer or invitat
Slide 4: Pearl Global: Everything From Fibre To Fashion
Pearl Global: Everything From Fibre To Fashion Founded in 1987, Pearl Global Industries Limited (PGIL) is a leading apparel manufacturer offering end-to-end sustainable solutions to the fashion industry. We began our journey with a single unit in New Delhi and today we are proud to have over 27,000
Slide 5: Our Journey Spanning Over 36 Years
Our Journey Spanning Over 36 Years 1987 1998 2002 2004 Established presence in Hong Commencement of Indonesian Established import and distribution in the USA, UK Pearl Global started operations Kong operations and Norp 1 in Bangladesh 2017 2014-16 2007-11 2014: Demerged from House of Pearl 2007: Got
Slide 6: Architects Of Our Vision & Leaders Behind Our Mission
Architects Of Our Vision & Leaders Behind Our Mission Architects Leaders Shifalli Seth Pallab Banerjee Sanjay Gandhi Ratna Singh Thought Leader- Managing Director Group CFO Group CHRO Design & CSR Gurusankar Vikas Mehra Pankaj Bhasin Sundeep Chatrath Gurumoorthy (CEO - Bangladesh) (CEO - Woven India
Slide 7: Board of Directors
Board of Directors Deepak Kumar Seth Pulkit Seth Shifalli Seth Pallab Banerjee Chairman Vice Chairman Non-Executive Director Managing Director Anil Nayar Rajendra Aneja Chittranjan Dua Abhishek Goyal Independent Independent Independent Independent Director Director Director Director Rajiv Kumar Sanj
Slide 8: Our Manufacturing Units Are Strategically Established
OUR MANUFACTURING UNITS ARE STRATEGICALLY ESTABLISHED TO MEET EXPECTATIONS ACROSS GEOGRAPHIES 7
Slide 9: Today Our Presence Is Global
TODAY OUR PRESENCE IS GLOBAL THANK YOU UNITED KINGDOM SPAIN USA (NEW YORK) BANGLADESH HONG KONG For further information, please contact GUATEMALA Company : Investor Relations Advisors : VIETNAM INDIA (GURGAON, CHENNAI, BANGALORE) INDONESIA CIN: L74899DL1989PLC036849 CIN: U74140MH2010PTC204285 Mr. Sa
Slide 10: India – Manufacturing Capacity
INDIA – MANUFACTURING CAPACITY GURGAON BENGALURU CHENNAI Total Capacity – 24.5 million pieces p.a. Maps not to scale. All data, information and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
Slide 11: Product Portfolio
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Slide 12: Product Portfolio
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Slide 13: India – Factory Automation
India – Factory Automation 12
Slide 14: Bangladesh – Manufacturing Capacity
BANGLADESH – MANUFACTURING CAPACITY DHAKA Total Capacity – 45.0 million pieces p.a. Maps not to scale. All data, information and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
Slide 15: Knits
PEARL GLOBAL Exceeding Expectations... Always ep Knits MANGO AMERICAN EAGLE TOMMY SBHILFIGER MANGO AMERICA TOMMY Saul Cele MANGO
Slide 16: Wovens
ges Wovens PEARL GLOBAL Exceeding Expectations... Always KOHLS d . NORDSTROM ’
Slide 17: Denim
PEARL GLOBAL Exceeding Expectations...Always Walmart >'< > LASS Bershka >
Slide 18: Denim
PEARL GLOBAL Exceeding Expectations... Always
Slide 19: Sleepwear & Lounge
ges Sleepwear & Lounge PEARL GLOBAL Exceeding Expectations...Always — Walmart >/< Walmart ><
Slide 20: Active Wear & Athleisure
ges Active Wear & Athleisure PEARL GLOBAL Exceeding Expectations...Always — NORDSTROM
Slide 21: Kids Wear
ges Kids Wear PEARL GLOBAL Exceeding Expectations...Always —
Slide 22: Pearl Global - Vietnam
PEARL GLOBAL - VIETNAM CANTEEN FABRIC CUTTING HANOI PRODUCTION WAREHOUSE Total Capacity – 6.5 million pieces p.a. Maps not to scale. All data, information and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
Slide 23: Product Portfolio
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Slide 24: Product Portfolio
ges Product Portfolio PEARL GLOBAL Exceeding Expectations...Always —
Slide 25: Latest Technical Skills
Latest Technical Skills Heat quilting Seam Sealing with Seam Sealing Jacket Filling Jacket Flatlock seam jacket deco pant 24
Slide 26: Indonesia - PT Pinnacle Apparels
INDONESIA - PT Pinnacle Apparels KABUPATEN SEMARANG DEMAK Total Capacity – 4.0 million pieces p.a. Maps not to scale. All data, information and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
Slide 27: Product Portfolio
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Slide 28: Product Portfolio
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Slide 29: Guatemala
GUATEMALA Total Capacity – 2.0 million pieces p.a. Maps not to scale. All data, information and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
Slide 30: Product Portfolio
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Slide 31: Synergies From Partnership Model
Synergies From Partnership Model Working Capital Investment Responsible for optimum capacity utilization at Industrial Engineer Pearl partner facility Designing Global Ensures Compliances Monitors Production Processes Appointment of industrial Engineer Fabric Procurement 16% Capex and Labour Expense
Slide 32: Key Clientele
Cle S ind See 7 N wd Cr Getting Calvin ln. bigger & betterwith —_— Key Clientele every collaboration! ve | Cle Se Cavin Kein > TOMMY SB HILFIGER ( PEARL GLOBAL
Slide 33: Robust Clientele Portfolio
Robust Clientele Portfolio 32
Slide 34: Robust Growing Customer Relationship
Robust Growing Customer Relationship Revenue Contribution from Key Clients Revenue Contribution from customers added in last 5 years 42.0% 42% +59.2% 24.5% 58% 21.2% 10.4% 4.7% 5.3% FY19 FY20 FY21 FY22 FY23 9MFY24 5+ years <5 years 33
Slide 35: Mr. Vikas Mehra
Mr. Vikas Mehra CEO - Bangladesh
Slide 36: Mr. Gurusankar Gurumoorthy
Mr. Gurusankar Gurumoorthy CEO – Vietnam & Hong Kong
Slide 37: Productivity Improvements
PEARL GLOBAL PEAR! GLOBAL Exceeding Expectations...Always Conscious steps towards a Sustainable future Productivity Improvements
Slide 38: Digitization
DIGITIZATION END OF LINE FABRIC VETTED FABRIC CUTTING - PCS INSPECTION FINISHING RECEIVE PLY TO GARMENT QR FINISHING QUALITY ISSUE PCS CODE ISSUE INSPECTION SAP GRN FABRIC ROLLS SUPERMARKET DISPATCH PACKING CREATION FABRIC QR ROLL TO CODE INVENTORY PRODUCTION CUTING - PILES WASHING UPDATE LINE GARME
Slide 39: Cotton Traceability
Cotton Traceability KNITTING PROCESSING GARMENT GINNING SPINNING RETAILERS MANUFACTURING WEAVING Doc Set 1 Doc Set 2 Doc Set 3 Doc Set 4 Doc Set 5 1. Invoice 1. Invoice 1. Invoice 1. PO to customer 1. Invoice 2. Packing list 2. Packing list 2. Packing list 2. Packing list 2. Packing list 3. Bill of
Slide 40: Efforts Towards Sustainable Production #Mission Zero
Efforts Towards Sustainable Production MAKE THE WORLD Aqua Less Missi n A BETTER PLACE WITH LESS It’s our new technology to reduce 85%the water Dry bag softener step Aqualess Oz-One Dry Bag Novascraper Indigo Aged Powder Softner Conventional Aqua Less Missi n 85% WATER REDUCTION DESIZING – STONE WAS
Slide 41: Industry Updates & Key Drivers
Industry Updates & Key Drivers
Slide 42: Global Scenario
Global Scenario USA EU UK Japan • In December 2023, US • EU apparel imports in • UK apparel imports in • In December 2023, Japan’s apparel imports were US$ December 2023 were US$ December 2023 were US$ apparel imports were US$ 1.6 5.5 Bn. which is 15% lower 6.1 Bn. which is 20% lower 1.2 Bn. which i
Slide 43: Share Of Major Suppliers In Key Markets
Share Of Major Suppliers In Key Markets 42 Source: Wazir Advisors
Slide 44: Peer Comparison
Peer Comparison Peers China Peer 1 China Peer 2 Taiwan Peer 1 Taiwan Peer 2 South Korean Peer Vietnam, Cambodia Vietnam, China, and Indonesia Vietnam , Nicargua, Manufacturing - Cambodia, Bangladesh - Small Manufacturing - Guatemala, Indonesia, Locations and Sri-Lanka China, Philippines, Haiti and M
Slide 45: Our Unique Proposition
Our Unique Proposition Multinational Presence Robust Design Team Shift Towards Asset Light Model Strong Customer Relationship • 24 manufacturing facilities • Fashion trend analysis by • Partnership model to drive • Long term relationship with well- spread across 5 countries talented design personnel
Slide 46: Growth Drives for PGIL
Growth Drives for PGIL New Customer Acquisition Geographical Expansion Automation Of Facilities Optimum Utilization Of Existing Facilities Growth Through Partnership Facilities PLI Scheme To Act As A Growth Engine 45
Slide 47: Key Financial Highlights
PEARL GLOBAL Exceeding Expectations...Always We believe in the Triple Bottom Line Approach \ KA OOS
Slide 48: Consolidated Group Performance
Consolidated Group Performance In Rs. Crs Revenue Adj EBITDA** 8.1% 9.1% 3,158.4 COVID-19 Impact COVID-19 Impact 2,713.5 255.5 2,558.8 5.2% 232.5 4.0% 4.1% 1,685.1 1,490.9 140.6 66.9 60.9 FY20 FY21 FY22 FY23 9MFY24 FY20 FY21 FY22 FY23 9MFY24 EBITDA EBITDA Margin(%) Adj PBT* PAT 5.1% 5.4% COVID-19 Im
Slide 49: Improved Working Capital Days
Improved Working Capital Days Working Capital Days Inventory Days 66 67 73 63 68 57 59 38 33 13 FY20 FY21 FY22 FY23 H1 FY24* FY20 FY21 FY22 FY23 H1 FY24* Debtor Days Creditor Days 59 60 59 48 49 50 45 39 30 24 FY20 FY21 FY22 FY23 H1 FY24* FY20 FY21 FY22 FY23 H1 FY24* Ratios are calculated on sales 4
Slide 50: Improved Debt Position
Improved Debt Position Debt Service Coverage Interest Coverage 2.4 2.5 3.5 3.4 2.7 1.6 1.8 1.0 0.7 1.0 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23 Net Debt/EBITDA Debt In Rs. Crs 3.69 564 3.43 2.95 448 414 357 374 325 247 208 154 0.60 32 0.11 Mar-20 Mar-21 Mar-22 Mar-23 Sep
Slide 51: Improved Financial Metrics
Improved Financial Metrics Cash Flow from Operations CCE & Bank Balance In Rs. Crs 364.8 341.6 315.7 294.5 94.6 149.8 63.7 117.0 109.8 -91.5 FY20 FY21 FY22 FY23 H1 FY24* FY20 FY21 FY22 FY23 H1 FY24* Return on Capital Employed (%) Comment on CCE & Bank Balance 26.3% 24.2% The CCE & Bank Balance after
Slide 52: Risk Mitigation & Governance
Risk Mitigation & Governance
Slide 53: Risk Management
Risk Management Currency Raw Material Early projection and booking of raw materials, Maintaining a natural hedge in all along with periodic review of physical count & overseas operations, including India- utilization of stock export-forward cover Social and Ethical Compliance Product Robust internal
Slide 54: Robust Governance To Protect Value
Robust Governance To Protect Value Structure & Integrity PGIL Group Initiatives People & Team ▪ Ernst & Young appointed as Statutory auditor in Hong Kong ▪ Ernst & Young appointed as Internal auditor in India & Bangladesh ▪ KPMG appointed as Statutory auditor in Bangladesh GOVERNANCE Policies & Proc
Slide 55: Strengthening the Board
Strengthening the Board Dr. Rajiv Kumar, Non-Executive, Independent Mr. Sanjay Kapoor, Non-Executive, Independent Mr. Ashwini Agarwal, Non-Executive, Independent Director Director Director • Chairman of Pahle India Foundation, a non-profit • Founder & President, Genesis Luxury Fashion Pvt • Founder
Slide 56: Improving Credit Rating Over The Years
Improving Credit Rating Over The Years 2021 2022 2023 Long Term [ICRA] BBB (Stable) [ICRA] BBB+ (Stable) [ICRA] A- (Stable) Short Term [ICRA] A3+ [ICRA] A2 [ICRA] A2+ Reasons For Upgrade Resulting into borrowing of funds at low-cost debt Consistent Business re-routing Multinational Performance amids
Slide 57: Regular Dividend Payouts – Pre Split
Regular Dividend Payouts – Pre Split Dividend 16.9% 9.6% 15.8% 10.9% 43.2%^ Payout FY20 & FY21 The Company finalised a dividend policy Due to impact of Covid-19, the 68.7 wherein the Company will declare dividend Company has restrained from of at least 20% of the consolidated profit giving dividend
Slide 58: Way Forward
PEARL GLOBAL Exceeding Expectations...Always Way Forward
Slide 59: Strategic Pathway To Growth
Strategic Pathway To Growth Multinational 2.0 Presence Smart Factories, Diversified Product Digitization, Strong Offering Processes 2.0 Sustainable, New COPs, Licensed Products Robust Design Team 2.0 Market Intelligence, 3D Designing, Fabric R&D Strong Customer Relationships 2.0 Strategic Partnershi
Slide 60: Guidance vs Achievement
Guidance vs Achievement Doubled our revenue from Rs 1,490.9 crore in FY21 to Rs 3,158.4 crore in FY23, 1 To grow at 12-15% CAGR and cross the Rs 3,000 1 crore revenue mark thereby surpassing our growth guidance Guidance With the acquisition of Guatemala unit in 2023 the company is now present in 3 o
Slide 61: Growth Outlook
Growth Outlook No of pieces shipped in Mn Revenue (in Rs. Crore) CAGR CAGR +12%-14% +15%-20% 5,800-6,600 90-100 Management Commentary 3,158 53 51 2,714 On Revenue Growth: • We expect revenue growth on the back of FY22 FY23 FY28E FY22 FY23 FY28E customer expansion strategy, increase in wallet share,
Slide 62: Investments In Capacities
Investments In Capacities Capacity & Capacity Utilisation In-house Partnership Total Country 65% 75% Capacity (as on FY23) Capacity Capacity No. of units No. of units (in Mn. Pieces) (in Mn. Pieces) (in Mn. Pieces) 120-140 India 7 24.5 - - 24.5 80.0 Bangladesh 4 33.5 5 11.5 45.0 102.0 63.3 Vietnam 1
Slide 63: Growth Potential Post Expansion
Growth Potential Post Expansion Big 3 - High Growth Customers 250-300 Mn USD Capacity CAPACITY EXPANSION Next 10 Customer Focus 350-400 Mn USD Bangladesh 45.0 India 24.5 CUSTOMER GROWTH Vietnam 6.5 120-140 Mn Pcs + Indonesia 4.0 Other Customers 50-90 Mn USD Guatemala 2.0 62
Slide 64: Way Forward Maximising Return to Stakeholders
Way Forward GROWTH IN EBIT BORROWING LEVERAGE WORKING CAPITAL Maximising CAPITAL OPTIMIZATION Return to ALLOCATION Stakeholders FIXED ASSETS OPTIMUM GOVERNANCE UTILISATION FRAMEWORK 63
Slide 65: Thank You
THANK YOU For further information, please contact Company : Investor Relations Advisors : CIN: L74899DL1989PLC036849 CIN: U74140MH2010PTC204285 Mr. Sanjay Gandhi - Group CFO Mr. Karan Thakker / Mr. Rahul Agarwal sanjay.gandhi@pearlglobal.com karan.thakker@sgapl.net / rahul.agarwal@sgapl.net +91 8169
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