Redington Limited · NSE:REDINGTON
Redington — Q2 FY2020 Earnings Presentation
64 slides from Redington's earnings presentation, Nov 5, 2019
Slide 1: Cover letter to National Stock Exchange
Corporate Office edington Se . Redington (India) Limited Redington House CentrePoint, Thiru.Vi.Ka Industrial Estate, ee Guindy, Chennai- 600032, India Tel: +91 44 4224 3353 Fax : +91 44 2225 3799 CIN : L52599TN1961PLC028758 www.redingtongroup.com 5" November 2019 The National Stock Exchange of India
Slide 2: Q2FY20 Earnings Presentation
REDINGTON (INDIA) LIMITED Q2FY20 Earnings Presentation September 2019
Slide 3: Disclaimer
Disclaimer This presentation contains “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Redington India Limited’s future business developments and economic performance. While these forw
Slide 4: Financial Highlights
Financial Highlights • Q2FY20 – On a consolidated basis, Revenue grew by 11%, EBITDA grew by 24% and PAT grew by 24% • India – Revenue grew by 15%, EBITDA grew by 40% and PAT grew by 37% • Overseas – Revenue grew by 9%, EBITDA grew by 13% and PAT grew by 17% • H1FY20 – On a consolidated basis, Reven
Slide 5: Financial Highlights: India business
Financial Highlights India business • During the quarter, India business registered double digit growth in Revenue, EBITDA and PAT, driven by Mobility segment • Substantial improvement in WC days to the tune of 17 days during Q2FY20 and 21 days during H1FY20 • ROCE improved to 16.8% in Q2FY20 and 20
Slide 6: Financial Highlights: Overseas business
Financial Highlights Overseas business • During the quarter, • Overseas business delivered double digit growth in EBITDA and PAT, driven mainly by IT segment • Overseas business continues to maintain WC efficiently with WC days for Q2FY20 at 32 days (vs 39 days in Q2FY19) • Redington Gulf had an imp
Slide 7: Q2FY20 Highlights
Q4FY18 Highlights Q2FY20 Highlights Connecting The Dots Transformation from ‘Product’ to ‘Utility of Product’ 6
Slide 8: Q2FY20 Consolidated Financials
Q2FY20- Consolidated Financials ₹ in million REVENUE EBITDA PAT 11% 24% 24% 1,23,543 1,11,323 2,627 1,300 2,111 1,051 Q2FY19 Q2FY20 Q2FY19 Q2FY20 Q2FY19 Q2FY20 7 7
Slide 9: Q2FY20 Performance by Market
Q2FY20 Performance by Market ₹ in million REVENUE EBITDA PAT 8 11% 24% 24% 1,300 1,23,543 2,627 1,11,323 1,051 2,111 1,363 17% 799 9% 74,759 13% 68,833 686 1,209 40% 1,264 37% 15% 48,784 501 42,490 902 365 Q2FY19 Q2FY20 Q2FY19 Q2FY20 Q2FY19 Q2FY20 INDIA OVERSEAS INDIA OVERSEAS INDIA OVERSEAS 8
Slide 10: Q2FY20 Performance by Vertical
Q2FY20 Performance by Vertical INDIA OVERSEAS CONSOLIDATED 6% 6% 2% 2% 3% 3% 19% 24% 30% 27% 28% 31% 75% 70% 67% 68% 70% 69% Q2FY19 Q2FY20 Q2FY19 Q2FY20 Q2FY19 Q2FY20 IT Mobility Services IT Mobility Services IT Mobility Services Note: Upon re-grouping, only smartphones are shown under Mobility 99
Slide 11: Q2FY20 Working Capital Days
Q2FY20 – Working Capital Days INDIA OVERSEAS CONSOLIDATED 41 37 46 32 30 29 17 5 11 Q2FY19 Q2FY20 Q2FY19 Q2FY20 Q2FY19 Q2FY20 10 10
Slide 12: Free Cash Flow Statement
Free Cash Flow Statement ₹ in million Particulars Q2 FY20 Q2FY19 Profit Before Taxation 1,512 1,474 Non-cash items 630 459 Outflow of Finance Cost 526 437 Changes in Working Capital 15,854 810 Direct Taxes Paid (627) (432) Net Cash Flow from Operations 17,895 2,748 Capex (34) (125) Dividend paid inc
Slide 13: Q2FY20 Top Vendors Consolidated
Q2FY20 – Top 5 Vendors Consolidated REVENUE 39% 40% OTHERS MICROSOFT 3% 3% LENOVO 7% 7% DELL EMC 8% 8% HP Inc 17% 15% APPLE 26% 27% Q2FY19 Q2FY20 12 12
Slide 14: Q2FY20 Performance – ProConnect
Q2FY20 Performance – ProConnect • Revenue growth over Q2FY19 is 19% • EBITDA growth over Q2FY19 is 78% REVENUE EBITDA PAT 19% 78% 77 68% 1,189 260 146 999 25 Q2FY19 Q2FY20 Q2FY19 Q2FY20 Q2FY19 Q2FY20 ₹ in million ₹ in million ₹ in million Above figures include Mission Critical Services 13 13
Slide 15: H1FY20 Performance
Q3FY18 Highlights 9MFY18 Highlights H1FY20 Performance Connecting The Dots Transformation from ‘Product’ to ‘Utility of Product’ 14
Slide 16: H1FY20 Consolidated Financials
H1FY20- Consolidated Financials ₹ in million REVENUE EBITDA PAT 13% 29% 24% 2,40,409 2,13,611 5,076 2,401 1,938 3,922 H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 15 15
Slide 17: H1FY20 Performance by Market
H1FY20 Performance by Market ₹ in million REVENUE EBITDA PAT 16 13% 29% 24% 2,40,409 5,076 2,401 2,13,611 3,922 1,938 11% 19% 2,666 20% 1,496 1,50,221 1,34,825 2,234 1,245 43% 2,410 31% 14% 78,786 90,188 1,688 905 693 H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 INDIA OVERSEAS INDIA OVERSEAS INDIA OVER
Slide 18: H1FY20 Performance by Vertical
H1FY20 Performance by Vertical INDIA OVERSEAS CONSOLIDATED 6% 6% 2% 2% 3% 3% 19% 23% 34% 28% 30% 33% 75% 71% 69% 64% 64% 67% H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 IT Mobility Services IT Mobility Services IT Mobility Services Note: Upon re-grouping, only smartphones are shown under Mobility 17 1
Slide 19: H1FY20 Working Capital Days
H1FY20 – Working Capital Days INDIA OVERSEAS CONSOLIDATED 51 39 42 30 32 31 21 7 11 H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 18 18
Slide 20: Free Cash Flow Statement
Free Cash Flow Statement ₹ in million Particulars H1FY20 H1FY19 Profit Before Taxation 2,981 2,692 Non-cash items 976 1,131 Change in Working Capital 1,103 832 Direct Tax Paid 5,141 960 Outflow of Finance Cost (783) (1,049) Net Cash Flow from Operations 9,418 4,567 Capex (363) (337) Dividend (1,287)
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet ₹ in million Particulars 30-SEP-19 30-SEP-18 Source: Networth 40,542 38,567 Net Debt 4,045 10,087 Minority Interest 3,558 3,753 Total 48,145 52,407 Application: Fixed Assets 4,558 5,068 Goodwill 218 238 Net Assets 43,369 47,101 Total 48,145 52,407 20
Slide 22: H1FY20 Top Vendors Consolidated
H1FY20 – Top 5 Vendors Consolidated REVENUE 40% 42% OTHERS MICROSOFT 3% LENOVO 6% 3% 6% DELL EMC 8% 8% HP Inc 16% 13% APPLE 27% 28% H1FY19 H1FY20 21 21
Slide 23: Shareholding Pattern
Shareholding Pattern Others Others 9.4% 7.0% Mutual Funds Mutual Funds 13.2% 11.7% Synnex Mauritius Synnex Mauritius Limited Limited 24.2% 24.2% Standard Affirma Chartered Capital Private 15.8% Equity 15.8% Foreign Foreign Institutional Institutional Investors & FPIs Investors & FPIs 37.4% 41.3% Jun
Slide 24: Investor Contacts
Investor Contacts M. Muthukumarasamy Compliance Officer Redington (India) Limited SPL Guindy House, 95 Mount Road, Guindy, Chennai 600 032 https://www.redingtongroup.com Sowmiya M Senior Manager – Investor Relations Connecting The Dots sowmiya.manickam@redington.co.in Transformation from ‘Product’ t
Slide 25: Corporate Presentation
Corporate Presentation June 2019
Slide 26: Who Are We? What We Do?
WHO ARE WE? WHAT WE DO? A prominent & leading We are ‘Business Enablers’, “Technology Distributor” Seamlessly partnering with evolving into a Brands and Channel partners “Services & Solutions company” in delivering value No.1 Technology Multi faceted Expanding the reach An Emerging Markets $6.7bn+ c
Slide 27: Industry Overview
SEAMLESS PARTNERSHIPS Industry Overview
Slide 28: Distribution Food Chain
Distribution Food Chain IT CONSUMER & MOBILITY SUB DISTRIBUTOR RESELLER Earlier VENDOR DISTRIBUTOR RETAILER CUSTOMER RESELLER Present VENDOR DISTRIBUTOR RETAILER CUSTOMER ECOMMERCE PLAYER IT ENTERPRISE Earlier VENDOR DISTRIBUTOR SYSTEM INTEGRATOR CUSTOMER VALUE ADDED RESELLER SYSTEM INTEGRATOR Prese
Slide 29: Distributors: Value Creators
Distributors: Value Creators Market Knowledge & Access One stop shop Demand Generation Inventory Management Partner Recruitment & Enablement Bulk breaking BRANDS CHANNEL Sales & Marketing Expertise PARTNERS Credit financing Supply Fulfilment Logistics Pre & Post Sales Consulting Order consolidation
Slide 30: Product Lifecycle
Product Lifecycle Manufacture/ Distribute Logistics Support Develop Our presence across the product lifecycle 6 6
Slide 31: Company Overview
Gg Redington SEAMLESS PARTNERSHIPS Company Overview
Slide 32: Mission Statement
Mission Statement “Our mission is to offer a robust technology-powered platform to enable a seamless flow of products and services” 8 8
Slide 33: Our Values
Our Values ADAPTABILITY COLLABORATION KNOW-HOW OBJECTIVITY SIMPLICITY TRUST TRANSPARENCY 9 9
Slide 34: Our Emergence
Our Emergence Present Presence across 37 markets, a leading Emerging Markets player 1993 10 10
Slide 35: Our Associations
Our Associations Present 1993 Enviable Partnerships with over 215+ brands 11 11
Slide 36: Our Expansion
Our Expansion CHANNEL SALES SERVICE BRANDS EMPLOYEES MARKETS WAREHOUSES CENTRES PARTNERS OFFICES Present 215+ 38,200+ 4,747 37 80+ 245+ 275+ 1993 1 25 5 1 3 1 1 From a ‘Home Grown Company’ to a ‘Leading Distributor’ 12 12
Slide 37: 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 38: Our Experienced Executive Team
Our Experienced Executive Team Raj Shankar Managing Director P S Neogi S V Krishnan Ramesh Natarajan J K Senapati, E H Kasturi Rangan Dr. R. Arunachalam S V Rao Chief Development CFO & Whole Joint COO & Chief Joint COO, India MD, ProConnect CEO, ProConnect CEO, Ensure & Strategy Officer Time Directo
Slide 39: Business Overview
Gg Redington SEAMLESS PARTNERSHIPS Business Overview
Slide 40: Distribution Business
Distribution Business BUSINESS INDIA MIDDLE EAST AFRICA TURKEY SINGAPORE SOUTH ASIA DISTRIBUTION IT CONSUMER IT ENTERPRISE MOBILITY EMERGING PCs Laptops Networking Software Health & Medical Smartphones Equipment Print Supplies 3D Printers & Scanners Servers & Storage Security Printers Solar Consumer
Slide 41: Services Business
Services Business BUSINESS INDIA MIDDLE EAST AFRICA TURKEY SINGAPORE SOUTH ASIA SERVICES Trader Distributor Supply Chain SERVICES & SOLUTIONS Transformative initiatives for Consolidator COMPANY Seamless Success Logistics services Support services Cloud services Digital print services 3D Print Servic
Slide 42: ProConnect India
ProConnect India Wholly Owned Subsidiary of Redington Revenue Contribution from Services 17% Warehousing Integrated Third Party Logistics partner 50% Transportation 33% PAN India presence Others FY19 figures 180+ Warehouses Revenue Contribution from Industries IT 6.7 mn Sq.ft. in operation 18% Consu
Slide 43: ProConnect India: Growth Story
ProConnect India : Growth Story 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 CUSTOMERS 33 53 74 124 166 205 WAREHOUSES 74 74 80 150 173 181 WAREHOUSING SPACE (in sq. ft.) 0.9 mn 1.2 mn 2.5 mn 4.8 mn 6.3 mn 6.8 mn Revenue EBITDA PAT Revenue Mix Redington Outside Biz 295 4,035 581 24% 29% 49% 65% 7
Slide 44: Ensure India
Ensure India Wholly Owned Subsidiary of Redington Warranty Support Services Infrastructure PAN India presence with 45+ Owned Post Warranty Management service centres across India Services Services Preferred Service partner with 185+ service partners across India Managed Print Spare Parts Services Ma
Slide 45: Redington Cloud Solutions
Redington Cloud Solutions Our Cloud Practice Our business Digital Platform Partner Enablement Program Distribution Element Services Element Managed Our Cloud Business Practice Down-selling of Redington team Services Development Cloud products provides Managed Services, focussing on SME/Mid Market Cl
Slide 46: Printing Solutions
Printing Solutions DIGITAL PRINT SERVICES 3D PRINT SERVICES Exclusive Distributor of HP Indigo’s “Digital Set up 3D Printing Printing Press” in India Facility in Chennai REVENUE MODEL Ranked Grade “AAA” by HP Indigo (First in the Distribution of Printing Press world) Annuity revenues from clicks Par
Slide 47: Fueling Growth In a Challenging Business
Fueling Growth In a Challenging Business IT CONSUMER • Enabling better product mix with higher ASP • Market share gains PC Shipments decline • Establishing presence in Cloud IT ENTERPRISE • Increased value added services • Systematic approach devised to participate in Government Gradual pickup in Co
Slide 48: Financial Performance
Gg Redington SEAMLESS PARTNERSHIPS Financial Performance
Slide 49: 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 REVENUE FY 15 3,07,361 FY 16 3,44,198 FY 17 3,97,362 FY 18 4,16,417 FY 19 4,65,994 FY 07 1,985 FY 08* 2,590 FY 09 3,296 FY 10 3,657 FY 11* 4,717 Performance Since Listing
Slide 50: Performance By Market
Performance By Market ₹ in million REVENUE EBIDTA PAT 13% 29% 24% 2,401 2,40,409 5,076 2,13,611 1,938 3,922 20% 11% 19% 2,666 1,496 1,50,221 1,34,825 2,234 1,245 14% 31% 43% 2,410 78,786 90,188 1,688 905 693 H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 India Overseas India Overseas India Overseas 26 26
Slide 51: Performance By Vertical
Performance By Vertical INDIA OVERSEAS CONSOLIDATED 6% 6% 2% 2% 3% 3% 19% 23% 34% 34% 28% 30% 75% 71% 69% 64% 64% 67% H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 IT Mobility Services IT Mobility Services IT Mobility Services 27 27
Slide 52: Geographical Contribution
Geographical Contribution REVENUE PAT 47% 49% 51% 57% 59% 62% 61% 62% 54% 64% 63% 60% 62% 68% 43% 53% 51% 49% 41% 38% 39% 36% 37% 38% 46% 40% 32% 38% FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 H1FY20 FY 14 FY 15 FY 16 FY 17 FY18 FY19 H1FY20 India Overseas India Overseas 28 28
Slide 53: Top Vendors
Top 5 Vendors 42% 42% 42% 49% 52% 47% 53% 3% 3% 3% 3% 4% 5% 6% 4% 4% 7% 8% 8% 4% 8% 9% 8% 6% 7% 4% 5% 4% 16% 15% 13% 15% 21% 20% 17% 27% 27% 28% 22% 11% 13% 15% FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 H1FY20 APPLE HP Inc DELL EMC LENOVO MICROSOFT OTHERS 29 Note: Effect of Dell EMC merger is shown partly
Slide 54: Key Operating Metrics
Key Operating Metrics Inventory Days Debtor Days Creditor Days Working Capital Days 58 55 54 44 37 43 39 41 48 44 49 31 Working Capital Days 43 61 59 63 53 59 54 48 at sustainable levels 43 50 33 36 33 29 32 29 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 H1FY20 Rs in mn FY14 FY15 FY16 FY17 FY18 FY19 H1FY20
Slide 55: Consolidated Financials
Consolidated Financials Particulars H1FY20 FY19 FY18 FY17 FY16 FY15 FY14 Total Revenue 2,40,409 4,65,994 4,16,417 3,93,762 3,44,198 3,07,361 2,72,441 EBITDA 5,076 9,619 8,555 8,662 8,176 7,619 7,196 PAT 2,401 5,078 4,816 4,642 4,235 3,865 3,367 Networth 40,542 39,060 35,306 31,479 29,494 23,742 20,2
Slide 56: Dividend Distribution
Dividend Distribution 215% Dividend Payout : 20% on profits earned 165% 120% 115% 105% 95% Buyback of shares 45% Issue size Rs.1390 mn 20% % Equity 2.78% FY13 FY14 FY15 FY16 FY17 FY18 FY19 Dividend % on Face Value of shares 32 Final dividend plus Special Interim Dividend declared 32
Slide 57: Shareholding Pattern (Sep 2019)
Shareholding Pattern (Sep 2019) HDFC Mutual Fund Others, 7.0% Fidelity Management & Research (FMR) Synnex Mutual Mauritius Funds, 11.7% Franklin Templeton Investments Ltd, 24.2% Fidelity International ICICIPru Life Insurance Foreign Affirma Institutional Capital, 15.8% Acacia Partners (Ruane Cunniff
Slide 58: Our Growth Drivers
Gg Redington SEAMLESS PARTNERSHIPS Our Growth Drivers
Slide 59: Revenue Growth Vectors
Revenue Growth Vectors Tapping incremental Continuous addition BRAND MARKET revenue from of brands across ACQUISITIONS SHARE available product categories opportunities GAINS TARGET 3 year Revenue CAGR of 10% yoy Acquiring NEW BUSINESS Foraying into newer distribution rights MARKET OPPORTUNITIES prod
Slide 60: Margin Growth Vectors
Margin Growth Vectors Enabling higher Product mix of Improved Mix HIGH MARGIN Margin Focus on products Trajectory INDIA Geography as a growth Mix TARGET market ROCE of Business Foray into 16-18% by Improved Mix SERVICES WC turns FY21 Optimization Driving of OPERATING Efficiency EXPENSES Improvement
Slide 61: Capital Allocation Priorities
Capital Allocation Priorities NO FPO MADE Dividend payout @ 1 Returns to Shareholders 20% of Profits Debt Equity Ratio at Investments of 0.1 ~Rs.4000 mn spread until FY22 Capex and M&A Investments into business 2 AA/A1+ Credit rating 37 37
Slide 62: 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 38 38
Slide 63: 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 64: Thank You
THANK YOU