Linc Limited · NSE:LINC
Linc — Investor Presentation (May 2024)
43 slides from Linc's investor presentation, May 3, 2024
Slide 1: Cover letter: Revised Strategy Presentation
3rd May, 2024 The Listing Department, The Manager The Manager, The Calcutta Stock Exchange Ltd. Department of Corporate Listing Department, 7, Lyons Range, Services, National Stock Exchange of India Ltd. Kolkata – 700001 BSE Limited Exchange Plaza, P. J. Towers, Dalal Street, Bandra Kurla Complex, B
Slide 2: oentonic
oentonic The Pan of lnlio driven by design
Slide 3: Strategy Presentation May 2024
STRATEGY PRESENTAT ION Linc Limited (formerly Linc Pen and Plastics Limited) MAY 2024 NSE : LINC BSE : LINC Bloomberg : LINC:IN 2
Slide 4: Safe Harbour Statement
Safe Harbour Statement This presentation may contain certain “forward-looking statements” within the meaning of applicable securities laws and regulations, which may include those describing the Company’s strategies, strategic direction, objectives, future projects and/or prospects, estimates etc. I
Slide 5: Inside This Presentation
Inside This Presentation 1 2 3 4 Future of Writing Industry Why Linc Financial Instruments Outlook Snapshot
Slide 6: Future of Writing Instruments
Future of Writing Instruments Why traditional pens will persist alongside digital tools? ▪ Cultural Significance – Writing Instruments hold Cultural and traditional importance in many societies. Rituals, Ceremonies, Cultural Practices continue to drive the demand for pens and other writing tools ▪ E
Slide 7: Future of Writing Instruments
Future of Writing Instruments Why traditional pens will persist alongside digital tools? ▪ Artistic & Creative Expression – Pens, Markers and other writing tools are essential for Artists and Creative professionals ▪ Stationery Culture – The Stationery Culture, driven by a love for well designed not
Slide 8: Industry Outlook
er Industry Outlook
Slide 9: Global Stationery Industry Opportunity
Global Stationery Industry Opportunity Global Stationery Products Market 217.9 ▪ The stationery industry is divided into paper and non-paper stationery, the latter accounting for the larger share ▪ US Market estimated at US$52 Bn in 2020. US$ Billion 192.2 ▪ China Market projected to grow @ CAGR 3.6
Slide 10: Global Stationery Industry Opportunity
Global Stationery Industry Opportunity Global Writing Instruments Share of Relevant Market Writing & Marking Instruments Market Size 2 Market1 32.9 2020 2027 ▪ The USA is estimated at US$4.7 Billion in the year 22.5 2022. Ball & Gel Pen 36% 41% US$ Billion CAGR 3.9% ▪ China is forecasted to reach a
Slide 11: Opportunity in the Indian Market
Opportunity in the Indian Market Indian Writing & Creative Indian Education Industry Writing Instruments Market Growth Drivers Instruments Market 225 ▪ Rising Populations: 140 - 145 o Largest population in age bracket of 5-24 years ~580 ₹ Billion million. US$ Billion 96.8 o Indian working population
Slide 12: Indian Writing Instrument Industry Opportunity
Indian Writing Instrument Industry Opportunity Indian Writing Instruments Market Indian Pen Segment at Manufacturer’s Realization, in ₹ Billion • Demand is driven by students and working-class population 91.5 - 96 CAGR • As of FY23 Pens occupy 65% share in Writing Instruments, and 6.6% - 7.7% 6.5 -
Slide 13: Indian Writing Instrument Industry Opportunity
Indian Writing Instrument Industry Opportunity Indian Pen Segment Market Size Indian Pen Market subsegments in ₹ Billion 15-20% 87 - 90 CAGR 7.6% – 8.3% 15-20% 25 42% 60.4 Premium FY23 58% Mid-Premium MRP 17.3 42.5 Mass 70-75% 12.1 26.9 62 - 65 7.7 43.1 Pen Subsegments Price Criteria 30.4 19.2 Mass
Slide 14: Pens - Global Trade Perspective
Pens - Global Trade Perspective 4,886 Top 10 Exporters of Pens in CY 2023 (Jan – Nov) 1,782 Top 10 Importers of Pens in CY 2023 (Jan – Nov) 1,467 USD Millions USD Millions 2,790 898 1,524 572 569 530 461 444 403 751 742 339 442 306 283 283 256 China Germany Japan USA Mexico USA Germany United Kingdo
Slide 15: Our Journey
Our Journey Pentonic GRT launched @ Rs 40 (a Umergaon Pentonic was launched. retractable gel pen) Production It was a Game Changer commenced in that featured new factory Minimalistic design & 508 Linc Glycer, Price at Rs 10 490 The company’s Mitsubishi FY 24 Ocean Gel highest selling pen acquired 13
Slide 16: Our Portfolio of Products
Our Portfolio Our Portfolio of of Products. Products ▪ Among Top 3 brands in ▪ New Writing ▪ Global brand from ▪ Asia’s largest India for Writing Instrument brand Mitsubishi Pencil Co. Ltd, stationery giant. Instruments. launched in FY19 by Linc Japan. in MRP ₹10 and above segment. ▪ Presence in the
Slide 17: Upcoming Launches - H1 FY25
Upcoming Launches - H1 FY25. Recent Launches Pentonic G-RT ₹ 40 Retractable Gel Pen Q3’FY24 Q4’FY24 Pentonic Glitz Pentonic Ball Pen Pentonic B-RT Offix SE Pens ₹ 10 Glitter ₹ 10 Ball Pen ₹ 20 Ball Pen ₹ 5 Ball Pen Pen Variants Variants 16
Slide 18: Upcoming Launches
Upcoming Launches H1’FY25 Geltonic Pentonic CLR Pentonic EVO ₹ 20 Gel Pen ₹ 20 Ball Pen ₹ 30 Gel Pen Linc Geometry Box & Kolor World Play Dough Linc Illustrator Geo Box Variants Variants
Slide 19: Trend of Financial Performance
Trendofof Trend Financial Financial Performance Performance. CAGR 6.4% CAGR 12.9% CAGR 10.2% 12.6% 31.2% 31.3% 11.1% 9.6% ₹ LACS 24.7% 23.8% 6,136 22.4% 15,197 15,909 5,642 48,676 50,785 6.1% 39,699 3,826 4.0% 35,496 9,805 8,441 25,666 5,753 2,153 1,017 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 F
Slide 20: Leadership
Leadership MR. ANIL KOCHAR MR. DEEPAK JALAN Independent, Non-executive director, Managing director, ▪ Postgraduate in Commerce and LLB ▪ Commerce graduate with 38 years of experience ▪ An eminent advisor on income tax matters ▪ Responsible for the overall operations with a specialization in internat
Slide 21: Why Linc?
Why Linc? Focus on Geographic Inroads into Strong Consistently Rapidly Premiumization, Expansion; Stationery Balance Sheet endeavors to expanding consistently Focusing on Products; with negative practice good distribution augmenting increasing its widening net Corporate network Added the contributio
Slide 22: Focus on Premiumisation
Focus on Focus on Premiumisation. Premiumization Pentonic brand introduced in FY19 as a Growth in average realization of Pens minimalistic yet contemporary pen, known for 5.80 5.83 its aesthetics as well as writing smoothness 5.53 5.62 5.57 5.62 5.67 4.9 5.42 4.52 4.32 ₹ 3.96 3.65 FY 18 FY 19 FY 20
Slide 23: Focus on Premiumization
Focus on Premiumization Number of Pens Pens above and below ₹ 10 7,600 7,318 2,340 • Pentonic positioned at ₹ 10 + segment 20% 2,743 147 • Pentonic GPM ~ 41% 62% 164 • Significant increase in revenue share of In Lacs 'Pentonic' over the last 5 years 80% 5,114 • Pentonic volume grew by ~17% 4,411 38%
Slide 24: Focus on Premiumization
Focus on Premiumization Pentonic’s Contribution to Total Revenue ▪ Increase in share of Pentonic in total revenue led to higher GPM at the company level. 30% 30% 37% 38% FY24 FY23 ▪ New Launches in the upcoming quarters will 34% 30% drive premiumization 31% 28% 33% 29% 1st Quarter 2nd Quarter 3rd Qu
Slide 25: Increasing its Global Footprint As Well
Increasing it’s Global Footprint As Well Value Growth over Pen Exports from India - CY23 USD Millions CY22 Linc’s Geographic Reach –FY24. South & Central America (SA) 24 -21% Middle East (ME) 39 -6% Europe Including Russia Africa 46 9% North America 13.4% South East Asia (SEA) 24 3% 10.5% Europe 33
Slide 26: Recent Participation in Global Expos
Recent Participation in Global Expos Ambiente, Frankfurt, Germany, 2024
Slide 27: Recent Participation in Global Expos
Recent Participation in Global Expos Scofex, South Africa, 2023
Slide 28: Recent Participation in Global Expos
Recent Participation in Global Expos Escolar, Brazil, 2023
Slide 29: Recent Participation in Global Expos
Recent Participation in Global Expos Paperworld, Middle East , Dubai 2022
Slide 30: Inroads into Stationery Products
Inroads into Stationery Products ▪ Targeting ₹1 Billion of revenue from Deli by FY27 ▪ Deli offers a range of over 200 products in India ▪ Company to largely focus on Calculators, Scissors & Desk Organizers ▪ Deli should contribute ~10 % of company’s revenue by FY26 ▪ Deli’s GPM is around 20%
Slide 31: Focus on Shareholder Value Creation
Focus on Focus on Shareholder Shareholder Value Value Creation. Creation Net Cash from Operating Activities Vs Dividend Payout Net Debt and Net Debt/Operating EBITDA 2.44 4,723 52% 4,338 6,194 Net Debt 3,835 ₹ LACS 3,801 ₹ LACS 3,317 33% 4,562 Net Debt/ 20% 1.19 Operating EBITDA 12% 22% 2,044 744 0.
Slide 32: Expansion Plan
Expansion Plan Linc’s plans to increase its existing capacity at Gujarat have been deferred as the expansion of its facility near Kolkata, WB has taken precedence. FY’25 demand would be met by the existing capacity & stepping-up outsourcing, which has already been tied up New Infra adjacent to the e
Slide 33: Wider Penetration across India
Wider Penetration across India Wider Penetration across India ▪ India has over 10 Mn non-stationery outlets Break-up of Region-wise Touch Points – FY24 ▪ Broken tradition by expanding to neighbourhood grocery stores (Kirana, Medical stores, Pan stores, etc.) ▪ We have already crossed the milestone o
Slide 34: ESG
ESG E S G ▪ Consistently ▪ Strongly believes in ▪ Pentonic’s individual endeavored to practice diversity in the plastic wrapper good Corporate workforce and has packaging has been Governance ~1,600 female employees consciously substituted ▪ Believes such ▪ Employs a small specially- with paper box p
Slide 35: ESG
ESG why does a pen company want you to stop buying pens? Yes, it's a weapon. But discarded carelessly, a plastic pen becomes a weapon of mass destruction. For starters, it is difficult to recycle and emits toxic The next time you throw a plastic pen away, think chemicals. Plastic pollution also play
Slide 36: Financial Snapshot
t Financial Snapshot
Slide 37: Operational Highlights
Operational Highlights ₹ Lacs Writing Instruments Other Products Writing Instruments Other Products Revenue Own Brands Licensed Brands Own Brands Licensed Brands Pentonic Linc & Others Uni-Ball Pentonic Linc & Others Deli FY24 16,387 20,427 7,777 1,124 2,597 2,799 Sales Contribution (%) 32.1% 40.0%
Slide 38: Operational Highlights
Operational Highlights Trade Channel Wise Break-up of Operating Revenue ₹ Lacs 9,781 19% Exports Exports 10,125 21% 1,506 3% E commerce E commerce 872 2% 2,590 Modern Trade Modern Trade 5% 2,545 5% 4,854 Corporate 9% 2,449 Corporate 5% 32,382 General Trade 32,814 General Trade 63% 67% FY24 FY23 FY24
Slide 39: Profit & Loss Summary
Profit & Loss Summary ₹ Lacs Particulars FY19 FY20 FY21 FY22 FY23 FY24 Operating Income 36,694 39,699 25,666 35,496 48,676 50,785 Gross Profit 7,434 9,805 5,753 8,441 15,197 15,909 Gross Profit (%) 20.3% 24.7% 22.4% 23.8% 31.2% 31.3% Operating EBITDA 2,539 3,826 1,017 2,153 6,136 5,642 Operating EBI
Slide 40: Balance Sheet Summary
Balance Sheet Summary ₹ Lacs Particulars FY19 FY20 FY21 FY22 FY23 FY24 Net Worth 12,337 13,697 13,471 14,285 17,722 20,585 Gross Debt 6,205 4,575 812 299 - 692 Cash & Cash equivalent 11 13 14 9 760 1,456 Net Debt 6,194 4,562 797 290 (760) (765) Capital Employed1 19,388 19,199 15,025 15,178 18,730 23
Slide 41: Ratios
Ratios Particulars Ratios FY19 FY20 FY21 FY22 FY23 FY24 Solvency Ratios Net Debt/Equity 0.50 0.33 0.06 0.02 (0.04) (0.04) Net Debt/Op EBITDA 2.44 1.19 0.78 0.13 (0.12) (0.14) EBIT/Interest 2.76 5.26 -0.39 15.81 79.78 18.91 Operational Ratios Current Ratio 1.68 1.85 1.92 2.14 2.56 2.22 Fixed Asset Tu
Slide 42: Shareholding Pattern
Shareholding Pattern As on March’24 Promoters Mitshubishi Pencil Co Ltd 24.8% IEPF NRI, FII, AIF etc. Other Public 2.1% 0.2% 59.4% 13.4% 41
Slide 43: Thank You
Thank You For further details please contact Director Finance & CFO Investor Relations Advisor N.K.Dujari Sanjeev Sancheti Email: investors@linclimited.com Email: ir@uirtus.in Landline: +91 33 68262100 Website: www.uirtus.in 42