Redington Limited · NSE:REDINGTON
Redington — Investor Presentation (June 2020)
46 slides from Redington's investor presentation, June 2020
Slide 1: Corporate Presentation
Corporate Presentation June 2020
Slide 2: An 'Emerging Markets Multinational'
An ‘Emerging Markets Multinational’ with a multi-faceted approach of DISTRIBUTION SERVICES No.1 Technology Third Party Logistics distributor in MEA Services through and No.2 in India ProConnect Distribution of IT Consumer, IT Enterprise, Support Services & Mobility products through Ensure Expanding
Slide 3: Our Mission and Values
Our Mission and Values “Our mission is to offer a robust technology-powered platform to enable a seamless flow of products and services” ADAPTABILITY COLLABORATION KNOW-HOW OBJECTIVITY SIMPLICITY TRUST TRANSPARENCY 9 3
Slide 4: Our Transformation
Our Transformation From a “Broadline Distributor” to a “Value Added Distributor” to a “Services & Solutions Company” IT CONSUMER IT CONSUMER + IT ENTERPRISE IT + MOBILITY + LOGISTICS + MOBILITY 1993-2002 : The Emergence 2003-2011 : The Proliferation 2012-2020 : The Expansion 4
Slide 5: Our Presence
Our Presence TURKEY INDIA SSA 1 market 1 market 5 markets Enviable “In country” presence in 37 markets No.1 or No.2 position across all markets “High potential” markets Presence across product categories Portfolio of Marquee brands AFRICA MIDDLE EAST 22 markets 8 markets 5
Slide 6: Our Expansion
Our Expansion BRANDS CHANNEL SALES EMPLOYEES MARKETS WAREHOUSES PARTNERS OFFICES Present 210+ 37,370+ 4,047* 37 80+ 225+* 1993 1 25 5 1 3 1 12 *Figures does not contain the details of Ensure India which has been divested in Jul’20 6
Slide 7: 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, Director Capital Leader, Oper
Slide 8: Our Experienced Executive Team
Our Experienced Executive Team Raj Shankar Managing Director P S Neogi S V Krishnan Ramesh Natarajan J K Senapati, Gautam Hukku, R Venkatesh E H Kasturi Rangan Dilip Sharma Chief of Staff CFO & Whole CEO, India COO, India President, Apple President, Enterprise MD, ProConnect COO, ProConnect Time Dir
Slide 9: Our Shareholders
Our Shareholders HDFC Mutual Fund Others, Fidelity Management & Research (FMR) 11.9% Synnex Mauritius Ltd, 24.2% Fidelity International Mutual Funds, 11.5% Franklin Templeton Investments Affirma ICICIPru Life Insurance Foreign Capital, 15.8% Institutional Investors & Acacia Partners (Ruane Cunniff &
Slide 10: Business Overview
Gg Redington SEAMLESS PARTNERSHIPS Business Overview
Slide 11: Distribution Business
Distribution Business
Slide 12: Distribution Business Model
Distribution Business Model CHANNEL PARTNERS SUB DISTRIBUTORS RETAILERS* RESELLERS BRANDS DISTRIBUTOR CUSTOMERS E-COMMERCE PLAYERS SYSTEM INTEGRATORS VALUE ADDED RESELLERS Market Knowledge & Access One stop shop Demand Generation Inventory Management Partner Recruitment & Enablement Bulk breaking BR
Slide 13: Distribution Business
Distribution Business BUSINESS INDIA MIDDLE EAST AFRICA TURKEY SINGAPORE SOUTH ASIA DISTRIBUTION IT CONSUMER IT ENTERPRISE MOBILITY PCs Networking Software Cloud Laptops Printers Smartphones Print Digital Print Supplies Solutions Licensing & Servers & Storage Security Subscription Consumer Lifestyle
Slide 14: IT Consumer Business
IT Consumer Business PRODUCT CATEGORIES IT CONSUMER’S BRANDS# CONTRIBUTION TO PCs Printers Laptops REVENUES* 33% Print Digital Print Supplies Solutions INDIA 39% Consumer Lifestyle OVERSEAS products *Figures as on Q1FY21 #Illustrative List 14
Slide 15: IT Enterprise Business
IT Enterprise Business PRODUCT CATEGORIES IT ENTERPRISE’S BRANDS# Networking Software Cloud CONTRIBUTION TO REVENUES* INDIA Licensing & Servers & Storage Security Subscription 42% OVERSEAS 25% *Figures as on Q1FY21 #Illustrative List 15
Slide 16: Redington Cloud Business
Redington Cloud Business Our business Our Major Competencies Enabling channel partners to auto provision, Unified Digital consume, view consumption reports, subscription Cloud Platform management and monthly billing of Cloud services Distribution Team Strength : 84 Element Services Investments in Cl
Slide 17: Redington Cloud Managed Solutions (RCMS)
Redington Cloud Managed Solutions (RCMS) Assess Solution FEATURES OF REDINGTON CLOUD MANAGED SOLUTIONS Provision Assessment workshop Redington and Partner works with Customer IT team to do assessment workshop and validate customer readiness for cloud Migrate Architect Cloud Findings from application
Slide 18: Mobility Business
Mobility Business PRODUCTS MOBILITY CONTRIBUTION TO REVENUES* BRANDS# Smartphones 22% 35% INDIA OVERSEAS *Figures as on Q1FY21 #Illustrative List 18
Slide 19: Services Business
Services Business
Slide 20: Services Business
Services Business INDIA MIDDLE EAST AFRICA Logistics Support Divested Services in Jul’20 SERVICES CONTRIBUTION TO REVENUES* • Subsidiaries of Redington India Limited 3% 2% • Third Party Logistics player offering Warehousing; Transportation; INDIA OVERSEAS 25% Value added services *Figures as o
Slide 21: ProConnect India
ProConnect India Revenue Contribution from Services Wholly Owned Subsidiary of Redington 15% Warehousing 53% Integrated Third Party Logistics partner Transportation 32% Others FY20 figures PAN India presence Revenue Contribution from Industries Consumer Durables 25% IT 31% E-commerce 170+ Warehouses
Slide 22: Risk Management
SEAMLESS PARTNERSHIPS Risk Management
Slide 23: De-risking Strategy By Diversification
De-risking Strategy By Diversification 37 Markets Our rich product portfolio consists of diversified Brands and diversified product categories under the same brand New Turkey SSA Presence in multiple markets ensures diversification of MARKETS risk as well as ensuring Kaizen’s continuous Adjacent MEA
Slide 24: Inherent Risks & Mitigation Measures
Inherent Risks & Mitigation Measures Invoices in foreign currency; CHANNEL PARTNER 1 Currency risk VENDOR DISTRIBUTOR CHANNEL PARTNER 2 CUSTOMERS CHANNEL PARTNER 3 Purchases products; Sells products on Credit; Inventory risk Receivables risk Risk Measures Effect of Mitigated Risk Inventory Risk • St
Slide 25: Financial Performance
Gg Redington SEAMLESS PARTNERSHIPS Financial Performance
Slide 26: Performance track record
Performance track record
Slide 27: Performance Since Listing
FY 07 86,672 FY 08* 1,03,699 FY 09 1,19,186 FY 10 1,31,622 CAGR 15% FY 11* 1,63,734 FY 12 2,07,799 FY 13 2,34,462 FY14^ 2,72,441 FY 15 3,07,361 REVENUE FY 16 3,44,198 FY 17 3,97,362 FY 18 4,16,417 FY 19 4,65,994 FY 20 5,15,138 FY 07 1,985 FY 08* 2,590 FY 09 3,296 FY 10 3,657 FY 11* 4,717 Performance
Slide 28: Performance Snapshot
Performance Snapshot Revenue 5,15,138 EBITDA 10,718 PAT 5,152 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY16 FY17 FY18 FY19 FY20 WC days ROE ROCE 12.6% 18.1% 31 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY16 FY17 FY18 FY19 FY20 Provisions Cash Flow from
Slide 29: Annual performance track record
Annual performance track record Particulars Q1FY21 FY20 FY19 FY18 FY17 FY16 Total Revenue 1,07,220 5,15,138 4,65,994 4,16,417 3,97,362 3,44,198 Growth YoY -8.3% 10.5% 11.9% 5.8% 15.4% 12.0% EBITDA 2,301 1,0718 9,706 8,555 8,662 8,176 Growth YoY -6.1% 10.4% 13.5% -1.2% 5.9% 7.3% PAT 888 5,152 5,078 4
Slide 30: ROCE vs Cost of Debt Capital
ROCE vs Cost of Debt Capital Consistent Focus on Capital efficiency INDIA OVERSEAS Return on Rupee capital Return on Dollar Capital Value Creation 11.3% Value Creation 17.4% 21.4% 19.1% 19.8% 18.1% 15.5% 15.5% 15.8% 14.5% 7.4% 6.9% 7.8% 6.6% 4.9% 5.5% 5.4% 4.0% FY18 FY19 FY20 Q1FY21 FY18 FY19 FY20 Q
Slide 31: Quarterly performance track record
Quarterly performance track record Particulars Q1FY21 Q4FY20 Q3FY20 Q2FY20 Q1FY20 Total Revenue 1,07,220 1,26,773 1,47,956 1,23,543 1,16,866 Growth QoQ -15.4% -14.3% 19.8% 5.7% -7.3% EBITDA 2,301 2,545 3,094 2,627 2,451 Growth QoQ -9.5% -17.7% 17.8% 7.2% -13.2% PAT 888 1,192 1,559 1,301 1,101 Growth
Slide 32: Top Vendors
Top 5 Vendors 41% 39% 38% 43% 51% 46% 4% 6% 6% 4% 5% 6% 5% 4% 5% 7% 8% 8% 7% 8% 8% 6% 8% 4% 16% 15% 13% 15% 11% 17% 27% 27% 29% 26% 22% 15% FY 16 FY 17 FY 18 FY 19 FY 20 Q1FY21 APPLE HP Inc DELL EMC LENOVO SAMSUNG OTHERS 29 Note: Effect of Dell EMC merger is shown partly in FY17 figures and fully in
Slide 33: Value Creation for our Shareholders
Value Creation for our Shareholders EPS BOOK VALUE/SHARE DIVIDEND PAYOUT In ₹ In ₹ 13.2 12.8 Avg DPO @ ~21% 110 CAGR 12% CAGR 16% 12.0 of profits earned 11.6 100 37% 10.6 32% 88 9.7 79 8.4 8.1 25% 67 7.4 21% 58 20% 20% 20% 20% 20% 19% 19% 5.7 49 4.7 40 4.1 33 32 3.5 11% 3.1 27 26 19 16 5% 5% FY FY F
Slide 34: Current year performance
Current year performance
Slide 35: Performance By Market
Performance By Market ₹ in million REVENUE EBITDA PAT 8% 6% 19% 1,16,866 2,451 1,07,220 2,301 1,101 888 1,304 17% 75,445 4% 3% 72,705 1,519 697 677 1,147 32% 41,421 17% 34,515 782 404 48% 211 Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY20 Q1FY21 India Overseas India Overseas India Overseas 35
Slide 36: India Performance
India Performance ₹ in million REVENUE EBITDA PAT 41,421 17% 32% 48% 1,147 34,515 404 782 935 211 40,039 16% 336 25% 33,519 24% 708 251 1,382 996 65% -ve 28% 212 68 74 (40) Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY20 Q1FY21 SERVICES DISTRIBUTION SERVICES DISTRIBUTION SERVICES DISTRIBUTION Note: Services repr
Slide 37: Overseas Performance
Overseas Performance ₹ in million REVENUE EBITDA PAT 75,445 4% 72,705 17% 3% 1,519 1,304 697 677 3% 20% 0.3% 67,779 65,459 1,393 1,158 593 595 5% 13% 21% 7,666 7,246 146 126 104 82 Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY20 Q1FY21 SSA META SSA META SSA META Note: Overseas performance in c/c terms – Revenue
Slide 38: Performance By Vertical
Performance By Vertical INDIA OVERSEAS GLOBAL 3% 3% 2% 2% 2% 2% 20% 22% 38% 35% 32% 31% 77% 75% 60% 63% 66% 67% Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY20 Q1FY21 IT Mobility Services IT Mobility Services IT Mobility Services 27 Note: Services represents ProConnect & Ensure 39
Slide 39: Redington Vis-à-vis Global Peers
Redington Vis-à-vis Global Peers Net Debt to Equity 1 2 4 3 5 yr Avg ROE 1 4 2 3 5 yr Avg ROCE 1 3 4 2 5 yr Avg WC days 3 2 4 1 5 yr PAT CAGR 3 1 4 2 5 yr Gross Profit CAGR 1 4 3 2 5 yr Rev CAGR 1 4 3 2 Redington Global Comp 1 Global Comp 2 Global Comp 3 40
Slide 40: Our Opportunities
Gg Redington SEAMLESS PARTNERSHIPS Our Opportunities
Slide 41: India: Govt spending opportunities
India: Govt spending opportunities India to attain a trillion dollar of economic value of digital economy by 2025 India’s digital economy could contribute 18–23% of overall economic activity by 2025, with more than half the potential coming from scaling up new and emerging digital ecosystems Source:
Slide 42: India Opportunities
India Opportunities • Covid 19 impact - CIOs to invest more in Security, Collaboration, Mobility & Cloud • Smartphone market in India is expected to expand at a CAGR of ~14.6% between FY 2018-23 • Enterprise Networking to become a $3.6 billion market by 2024 • India's public cloud market could reach
Slide 43: META Opportunities
META Opportunities • Government ICT spending in MEA to reach $15 billion by 2023 • Consumer IT spending in META will total $43 billion in 2021, with mobile phones contributing 80% of the value • Enterprise spending on AI in Middle East and Africa is expected to grow at a CAGR of 22.0% to reach $530
Slide 44: 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 44 45
Slide 45: 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 Senior Manager – Investor Relations sowmiya.manickam@redington.co.in IR Materials
Slide 46: Thank You
THANK YOU