Welspun Living Limited · NSE:WELSPUNLIV
Welspun Living — Welspun India — Q3 FY17 Earnings Presentation
40 slides from Welspun Living's earnings presentation, January 2017
Slide 1: Investor Presentation Q3 - FY17
INVESTOR PRESENTATION Q3 - FY17 January, 2017 November, 2016 1
Slide 2: Welspun Group: Global Leader in Home Textiles
Welspun India Limited Global Leader in Home Textiles Welspun Welspun Enterprises Limited Corp Limited Infrastructure Global Leader in Oil & Gas Large Diameter Pipes Revenue : US$ 2.3 Billion; Asset Base : US$ 1.8 Billion; Employees: 25,000+ 2
Slide 3: Agenda
1. Company Overview 2. Industry Overview: Advantage India 3. Welspun India: Global Leader in AGENDA Home Textiles 4. Q3 - FY17 & 9M - FY17 Highlights 5. Way forward 3
Slide 4: WIL - An Overview
WIL - AN OVERVIEW Global Home Textiles Leader Among the top three home textile manufacturers in the world and the largest home textile company in Asia Leading Home Textile exporter to the US for four years in a row (2012-15) Distribution network in more than 50 countries Centered on excellen
Slide 5: Financial Overview
FINANCIAL OVERVIEW Revenue in Rs. Million EBITDA in Rs. Million 70,000 18,000 16,849 59,371 16,000 60,000 13,691 53,025 14,000 48,834 12,655 50,000 43,730 12,000 10,253 40,000 36,473 10,000 30,000 8,000 6,438 6,000 20,000 4,000 10,000 2,000 0 0 FY13 FY14 FY15 FY16 9M FY17 FY13 FY14 FY15 FY16 9M FY17
Slide 6: WIL - Revenue Milestones
WIL - REVENUE MILESTONES WIL Revenue in Rs. Billion Entry into Accent Rugs/ Carpets 60 • 1993: 53 Entry into bath Towels Christy Towels rugs 44 facility at Acquisit & Vapi ion 36 Sheets Facility 32 at Anjar 28 26 16 17 12 7 Pre-2005 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Textiles b
Slide 7: Industry Overview: Advantage India
INDUSTRY OVERVIEW: ADVANTAGE INDIA 7
Slide 8: Global Home Textile Scenario
GLOBAL HOME TEXTILE SCENARIO Market Size Key Consumers Key Producers Home textile market at US , Europe and Japan India, Pakistan and China US$45 bn are the largest consumers are the largest producers; Bath constitutes ~25% Global demand equally Account for 85% of cotton Bed constitutes
Slide 9: Structural Change: Asian Dominance in Home Textiles
STRUCTURAL CHANGE: ASIAN DOMINANCE IN HOME TEXTILES Textiles and Clothing • China : 37% US$797 bn • India : 5% Textiles • China : 36% US$314 bn • India : 6% Home textiles • China : 35% US$45 bn • India : 11% US Cotton Home Textiles • China : 39% US$7.5 bn • India : 31% India has emerged as a signifi
Slide 10: Advantage India
ADVANTAGE INDIA Largest producer of Major importer of Cotton Importer cotton cotton and yarn Energy issues 25% surplus available Losing export Geopolitical issues for export as Competitiveness cotton/yarn Compliance issues Wage inflation Exporter of yarn Rising power costs Co
Slide 11: Reflection of Country Advantage
REFLECTION OF COUNTRY ADVANTAGE India’s share 40% increased by 10 38% percentage Towels (Cotton) 36% points in 6 years 30% 26% 25% 23% 24% 23% 22% 22% 22% 22% 15% 15% 15% 2009 2012 2015 YTD Nov 2016 India’s share increased by 22 Sheets (Cotton) 48% 49% 45% percentage points in 6 years 27% 29% 26% 22
Slide 12: Welspun India
i HOME TEXTILES WELSPUN INDIA PON
Slide 13: Leadership: Focus and Excellence
LEADERSHIP: FOCUS AND EXCELLENCE A differentiated End-to-end Solutions Provider in Home Textiles Uniquely positioned for cross-selling due to Widest product range in the Home Textiles segment Customer reach Competitive manufacturing Bath Bedding Flooring Global delivery model Towels Shee
Slide 14: Leadership: Strategic Partnership with Global Retail Giants
LEADERSHIP: STRATEGIC PARTNERSHIP WITH GLOBAL RETAIL GIANTS Bed Bath & Beyond Carrefour ASDA Shopper’s Stop Macy’s JYSK Tesco Lifestyle J C Penney Auchan Sainsbury HomeTown Kohl’s Kaufland John Lewis @Home Wal Mart Rusta House of Fraser ….. and many more Cos
Slide 15: Leadership: Global Reach & Delivery Model
LEADERSHIP: GLOBAL REACH & DELIVERY MODEL Delivery & Reach in over 50 countries 15
Slide 16: Leadership: Scale
LEADERSHIP: SCALE Expected End-FY16 Sales volume Product Unit Utilisation % Capacity Capacity FY16 FY17 Towels MT 60,000 55,400 92% 72,000 Sheets ‘000 Mtrs 72,000 66,500 92% 90,000 Rugs & Carpets ‘000 Sq. mtrs. 8,000 6,100 76% 10,000 Capacities running at Investment of Rs. 8 bn New investment of hig
Slide 17: Flooring Solutions to Drive Growth
FLOORING SOLUTIONS TO DRIVE GROWTH ▪ Flooring solution to be the next growth driver for international as well as domestic market ▪ Consists of rugs, decorative carpets, tile carpets, accent rugs ▪ Capex of Rs. 6 bn earmarked for flooring facility ▪ Capacity of 7 million square meters per annum ▪ Fac
Slide 18: Welspun: Beyond Manufacturing
WELSPUN: BEYOND MANUFACTURING… Evolved from being a Superior commodity Product manufacturer to a Personality creator of unique Functionality customer experiences Brands and Commodity Experiences created Unique through brands, product Experiences and technologies and new channels Problem Performa
Slide 19: Delivering Unique Experiences
DELIVERING UNIQUE EXPERIENCES… Consumer INNOVATION FOCUS Needs BRAND AND DELIVERY FOCUS CONSUMER INSIGHTS Continuous Idea • Welspun Innovation Lab Ingredient Generation • Product Development /Technology Brands Owned Certifications Licensed • Innovation Partners Technology • B2C/ B2B Connect Innovati
Slide 20: Leading to a Unique Revenue Mix
...LEADING TO A UNIQUE REVENUE MIX INCREASED SHARE OF INCREASED SHARE OF INCREASED SHARE OF INNOVATIVE PRODUCTS BRANDED PRODUCTS NEW CHANNELS 34% 13% 5% Note: Figures of FY16 20
Slide 21: Welspun's Improved Market Share
WELSPUN’S IMPROVED MARKET SHARE CY13 CY14 CY15 Towels 14.7% 16.4% 20.1% Bed Linen 7.3% 9.9% 11.3% US Market-Source OTEXA 21
Slide 22: Branding Our Innovation
BRANDING OUR INNOVATION Launched nation-wide campaign in the US in FY16 to introduce patented Hygrocotton® technology to consumers First ever such campaign in textiles in the past 15 years 22
Slide 23: Focus on Inclusive Growth
FOCUS ON INCLUSIVE GROWTH Virtuous Cycle of Social Development at Welspun Quality Education at Sustainability Focus Govt. Schools Need based Health Adult Literacy Camps Education for women Mobile Medical Vans THE 3 Es OF CORPORATE SOCIAL VALUE Vocational Training Natural/ Recycled for
Slide 24: Focus on Inclusive Growth (Contd.)
FOCUS ON INCLUSIVE GROWTH (Contd.) Girls Hostel Vocational Centers for SPUN Skill Development Global Women Economic Education: Students and Smart Village Empowerment Initiative Govt. Schools Covered 24
Slide 25: Financial Highlights
WELSPUN INDIA HOME TEXTILES FINANCIAL HIGHLIGHTS =, a NGES REMAINING IBM»
Slide 26: Key Highlights – Q3 FY17
KEY HIGHLIGHTS – Q3 FY17 Robust Volume growth Christy sales growth at Tie-ups with Coveted in Terry Towels and 35% YoY Global Brands including Rugs Disney, Minions, FC Barcelona Operating EBITDA at Net Debt to Equity at 1.3x 23.1% (24.7% adj.) in Net debt to Op.EBITDA at 1.75x (Vs 1.3x at FY16 –end)
Slide 27: Financial Performance – Q3 FY17
FINANCIAL PERFORMANCE – Q3 FY17 (Rs. Million) Particulars Q3FY17 Q3FY16 Change YoY Q2FY17 Revenue 15,009 14,451 3.9% 17,899 Operating EBITDA 3,463 4,070 -14.9% 4,318 Op. EBITDA Margin 23.1% 28.2% -509 bps 24.1% EBITDA 3,673 4,251 -13.6% 4,569 EBITDA Margin 24.5% 29.4% -495 bps 25.5% Finance Cost 480
Slide 28: Financial Performance – 9M FY17
FINANCIAL PERFORMANCE – 9M FY17 (Rs. Million) Particulars 9MFY17 9MFY16 Change % Revenue 48,834 43,077 13.4% Operating EBITDA 12,005 11,574 3.7% Op. EBITDA Margin 24.6% 26.9% -228 bps EBITDA 12,655 12,246 3.3% EBITDA Margin 25.9% 28.4% -251 bps Finance Cost 1,153 1,700 -32.2% Depreciation 3,689 2,68
Slide 29: Profitability Trend
PROFITABILITY TREND (Rs. Million) Particulars FY15 FY16 9M FY17 Revenue 53,025 59,371 48,834 Revenue growth % 21.3% 12.0% 13.4% Operating EBITDA 12,742 15,899 12,005 Op EBITDA Margin 24.0% 26.8% 24.6% EBITDA 13,691 16,849 12,655 EBITDA Margin 25.8% 28.4% 25.9% Depreciation 3,329 3,718 3,689 Finance
Slide 30: Balance Sheet Trend
BALANCE SHEET TREND (Rs. Million) Particulars 31-Mar-15 31-Mar-16 31-Dec-15 31-Dec-16 Net Worth 14,318 19,739 18,931 21,692 Short Term Loans 10,034 7,716 14,039 11,869 Long Term Loans 20,817 18,945 17,836 22,575 Gross Debt 30,851 26,661 31,875 34,443 Cash & Cash Equiv. 4,297 1,386 4,548 6,436 Net De
Slide 31: Financial Ratio Trend
FINANCIAL RATIO TREND FY15 FY16 9M FY17* Solvency Net debt/Op. EBITDA 2.08 1.59 1.75 ratios Net debt/Equity 1.85 1.28 1.29 EBIT/Interest 3.66 5.55 7.78 Current Ratio 1.10 1.15 1.26 Operational ratios Fixed Asset turnover 2.04 1.77 1.84 Total Asset turnover 0.93 0.97 0.89 Inventory days 76 69 71 Debt
Slide 32: Key Financial Trend
KEY FINANCIAL TREND Revenues 18,000 Operating EBITDA 70,000 15,899 16,000 59,371 60,000 14,000 12,742 53,025 12,005 48,834 50,000 43,730 12,000 Rs. miilion 9,211 Rs. million 40,000 36,473 10,000 8,000 30,000 5,946 6,000 20,000 4,000 10,000 2,000 0 0 FY13 FY14 FY15 FY16 9M FY17 FY13 FY14 FY15 FY16 9M
Slide 33: Key Ratio Trend
KEY RATIO TREND ROCE % (Pre- Tax) ROE % 50% 36% 42.5% 43.5% 45% 31% 27.4% 40.0% 40% 26% 22.8% 21.9% 21% 21.5% 35% 31.8% 16% 30% 11% 25% 6% 20% 1% 15% FY14 FY15 FY16 9M FY17* FY14 FY15 FY16 9M FY17* Net Debt / Equity 4.0x 2.5x 2.4x Net Debt / Op. EBITDA 3.5x 2.0x 1.9x 3.0x 2.9x 2.5x 2.1x 1.5x 1.3x 1.
Slide 34: Focus on Free Cash Flow
FOCUS ON FREE CASH FLOW Cash flow improvement through tight working capital management and calibrated capex FCF positive in the last two years 5,000 3,762 2,456 795 714 239 0 Rs. in million FY14 FY15 FY16 -5,000 -6,217 -10,000 FCF Dividend Rs. 10 bn positive swing in FCF in two years 34
Slide 35: Dividend Policy
DIVIDEND POLICY Clear, defined Dividend Distribution policy 25% of standalone PAT to be the total payout (incl. dividend tax) Standalone Dividend tax Payout Period EPS DPS per share Percentage H1FY15 2.43 0.30 0.06 15% H2FY15 2.66 0.75 0.15 34% FY15 5.09 1.05 0.21 25% H1FY16 3.15 0.65 0.13 25% H
Slide 36: Way Forward
WAY FORWARD aX BES: ty WELSPUN INDIA HOME TEXTILES 36
Slide 37: Building a Sustainable Leadership Position
BUILDING A SUSTAINABLE LEADERSHIP POSITION New New New Innovation Brands Markets Channels Products 37
Slide 38: Vision 2020
VISION 2020 LEADING TOMORROW TOGETHER Innovation Leveraging technology Inclusive growth Brands People development Collaboration 38
Slide 39: Vision 2020 Targets
VISION 2020 Revenue Net Debt $2 BN NIL Innovative/Branded Women Share of Share of Revenue employees Domestic Revenue 50% 20% 20% 39
Slide 40: Thank You
THANK YOU For further details, please contact: Harish Venkateswaran Altaf Jiwani Sr. General Manager - Group Finance and Strategy Director (Finance) & CFO - Welspun India Limited Email: harish_venkateswaran@welspun.com Email: altaf_jiwani@welspun.com 40