Pds Limited · NSE:PDSL
Pds — PDS Multinational Fashions — Q3 FY2021 Earnings Presentation
44 slides from Pds's earnings presentation, Feb 12, 2021
Slide 1: Cover letter to stock exchanges
PDS Multinational Fashions Limited Global Colloborative Ethical PDS/SE/2020-21/53 February 12, 2021 The Secretary The Secretary BSE Limited National Stock Exchange of India Limited Pheeroze Jeejeebhoy Towers Exchange Plaza, 5th Floor Plot No- 'C Block, G Dalal Street, Fort Block Bandra-Kurla Complex
Slide 2: Investor Presentation & Q3FY21 Investor Update
Investor Presentation & Q3FY21 Investor Update D AT E : 1 2 T H F E B R U A R Y 2 0 2 1 1
Slide 3: Safe Harbour
Safe Harbour This presentation has been prepared by PDS Multinational Fashions Ltd (“PDS”, “the Company”) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or
Slide 4: Table of Contents
Table of Contents 1 Company Overview 4-12 2 Overview of Global Textile & Apparel Industry and Addressable Market for PDS 13-17 3 Deep Dive into Business Verticals of PDS 18-24 3 5-year Historical Financial Performance Overview 25-28 4 Business & Financial Performance Overview 29-35 6 Value Creation
Slide 5: Company Overview
Company Overview 4
Slide 6: PDS Multinational Fashions Ltd - At a Glance
PDS Multinational Fashions Ltd - At a Glance PDS Multinational Fashions Limited (“the Company”), one of the world’s largest design-led sourcing, manufacturing & supply chain platforms Strong Financials and catering to leading brands and retailers globally Risk Management Capabilities Key Facts Desig
Slide 7: What do we do?
What do we do? PDS Venture Sourcing Manufacturing Investments & Core Operations (43% of capital employed) (44% of capital employed) Others* (13% of capital employed) Leading Design & Exploring Strategic new Manufacturing channels of Partner business PDS Extensive Presence in A GLOBAL ORGANIZATION Un
Slide 8: Key Milestones Over The Last 2 Decades
Key Milestones Over The Last 2 Decades Brick by Brick Building a Global Footprint Entered into denims through establishment of Established operations in Turkey, Zamira Fashion in Hong Kong Germany, Sri Lanka and Spain Acquired FX Import Company in the UK Expanded Direct Marketing offices in Melbourn
Slide 9: PDS Business Model Evolution
PDS Business Model Evolution From Single Entity to a Collaborative Model 1999 2020 PDS PDS PDS PDS Single Entity Model Hub & Spoke Model Platform Model Collaborative Model PDS Establishes itself in 1999 under Created Hub & Spoke model under PDS Establishment of PDS Platform to Solution based approac
Slide 10: PDS' vertically integrated model
Platform Optimization With Clearly Defined Roles Core BU operations Design & Product Supply chain Sales and marketing Sourcing Manufacturing Development management PDS’ vertically integrated model • 150+ designers • 190+ customers • 10 countries • 1 million • 4 factories in 3 garments a day countrie
Slide 11: Building a Winning Culture- Levers of Influence
Building a Winning Culture- Levers of Influence VALUES 6 C’s • Trust, Integrity & Ethics • Customer Dependency • Transparency, Collaboration & • Credit Teamwork • Currency • Entrepreneurial Spirit • Compliance • Social Responsibility • Cost • People First • Compliant Capacity • Customer Centricity ➢
Slide 12: PDS – Risk Management Principles 6 C's
PDS – Risk Management Principles CREDIT COMPLIANCE • Secured Credit Payment terms from Customers • Adherence to PDS code of conduct (ZTV policy) and • Insurance cover – Euler Hermes, Atradius, ECIC Hkg, customer compliance requirements ECGC India • ZERO tolerance on unauthorised sub-contracting • Re
Slide 13: Sustainable Business Built Over 2 Decades
Sustainable Business Built Over 2 Decades Supplier Consolidation Retailers are increasingly looking at Strategic relationships with reliable and consistent suppliers to meet constant evolving demand Design Excellence Global Footprint 150 designers based out of customer location and Right Product, Ri
Slide 14: Overview of Global Textile & Apparel Industry and Addressable Market for PDS
Overview of Global Textile & Apparel Industry and Addressable Market for PDS 13
Slide 15: Industry Overview
Industry Overview 1. The global textiles and apparel industry market had a retail market value of $1.9 trillion in 2019 2. As per Boston Consulting Group projected by to reach $3.3 trillion in 2030, growing at a CAGR of 3.5% Overall market size 3. The growth of the global apparel market is expected
Slide 16: Global Textile & Apparel Market: Where is the World Consuming?
Global Textile & Apparel Market Where is the World Consuming? Europe (including UK) Size: UK $ 476 bn Size: $ 85 bn 4Y CAGR: 5.2% 4Y CAGR: 1.8% US Size: $ 368 bn India Size: $ 71 bn 4Y CAGR: 7.1% 4Y CAGR: 12% The global textiles and apparel industry market is projected by Boston Consulting Group to
Slide 17: Global Textile & Apparel Market: Channels
Global Textile & Apparel Market Channels through which World is Selling? US Europe China 66% 67% 63% 78% 84% 78% 34% 33% 37% 22% 16% 22% 2019 2021E 2019 2021E 2019 2021E • Across large global markets, we are witnessing increased share of online sales: o In USA the share of online sales is expected t
Slide 18: Global Textile & Apparel Market: Key Takeaways
Global Textile & Apparel Market Key Takeaways UK & Europe are the largest markets in the world and PDS is well entrenched in this geography. Focus 1 on capturing larger share of customer wallets, increasing penetration and reach out to new customers North America is one of the largest markets global
Slide 19: Deep Dive into Business Verticals of PDS
Deep Dive into Business Verticals of PDS 18
Slide 20: PDS Sourcing Business- Design Led
PDS Sourcing Business- Design Led ~43%% of Capital Employed Managing the entire supply chain execution of end-customers Design Excellence Provides in-house expertise and market know-how in managing global trade Market Intelligence In-house product development, design, sampling, and technical teams E
Slide 21: PDS Sourcing Business: A Well Diversified Base Of Marquee Customers
PDS Sourcing Business: A Well Diversified Based Of Marquee Customers Catering to both offline & online channels Top 10 Customers account for nearly 2/3rd of sales Continuous efforts underway in managing credit risk through application of 6Cs 20
Slide 22: PDS Manufacturing Business
PDS Manufacturing Business: (~44% of Capital Employed) Creating A World Class Manufacturing Base 6000 Machine Capacity with 130 production lines spread across Bangladesh, India and Sri Lanka Annual in-house production of 36 Million pieces PROGRESS APPAREL, BANGLADESH PARC DESIGN, INDIA ▪ Planned cap
Slide 23: PDS Venture Investments & Others
PDS Venture Investments & Others* 13% of Capital Employed Collaborations Overview Value Add PDS Impact Revenue ↑ Major focus on sustainable - True Portfolio companies can add revenue - More share of wallet of existing & tech-oriented fashion sources for PDS group (eg- Hush, Cotswold) customers to PD
Slide 24: PDS Venture Investments: Key Investment Criterion
PDS Venture Investments Key Investment Criterion Deployment Idea Stage Seed Stage (<$1Mn Early Stage (Between $1Mn Growth Stage (>$5Mn Stage (Pre-Revenue) Revenue) and $5 Mn in revenue) Revenue, scaling) Major Focus Area ESG Focus & Carbon Neutral Nature Giveback Waste Elimination Greener Choices Im
Slide 25: PDS Venture Investments: Few Illustrative Investments
PDS Venture Investments Few Illustrative Investments Materra (erstwhile Hydrocotton) Cerebra A Technology (AI/ML) Company to grow cotton using 80% less water & no Pesticides An AI platform to help retailers & consumer product companies in the optimizing for company revenue, profit, cost reduction or
Slide 26: 5-year Historical Financial Performance Overview
5-year Historical Financial Performance Overview 25
Slide 27: 5-year Financials Snapshot
5-year Financials Snapshot Sales (₹cr) Gross Margin (₹cr) 6,648 1,150 1,099 17.0% 6,486 1,050 948 16.0% 950 16.5% 850 15.0% 4,924 4,616 750 675 4,277 650 578 612 14.6% 14.0% Free Cash Flow (FCF) (₹cr) 550 13.7% Cumulative FCF for 5 years: ₹236cr 13.5% 13.0% 450 13.3% 202 350 12.0% FY16 FY17 FY18 FY1
Slide 28: Deep Dive into Sourcing & Manufacturing Business
Deep Dive into Sourcing & Manufacturing Business Sales (₹cr) EBITDA Margin % ROCE % 6248 6304 4766 4862 46% Sourcing 3.4% Based on Annualized 2.4% 1.8% 2.0% 9MFY21 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 ~100% 99% 96% 95% % of sales -16.3% -10.7% Manufacturing -85.2% 245 310 - • ROCE is –ve due to –
Slide 29: Enhanced Key Leverage and Return Ratios
Enhanced Key Leverage and Return Ratios Net Debt/EBITDA(x) ROCE (Net) % 3.8 16% 1.3 6% FY17 FY20 FY17 FY20 Key Takeaways: • Net Debt/EBITDA has improved over last 3-years: o Attributable to increase in EBITDA with the Net Debt being under control • ROCE has increased significantly over last 3-years:
Slide 30: Business & Financial Performance Overview
Business & Financial Performance Overview Q3 FY2021 AND 9M FY21 29
Slide 31: Key Business Highlights (1/2)
Key Business Highlights (1/2) 1. Notwithstanding adverse impact of COVID in key markets i.e. UK/EU/US, the Company has successfully managed credit risk along with topline growth (13% yoy), expansion of gross margins (1.5% yoy), opex reduction (17% in 9MFY21) and reduction in net working capital (10
Slide 32: Key Financial Highlights (2/2)
Key Financial Highlights (2/2) Reported consolidated Q3 Opex Reduction of EBITDA of Gross Margin expansion FY21 topline growth 13% 154bps 17% ₹ 76cr from ₹689cr in 9MFY20 to 4.7% in Q3 FY21 316bps in Q3 FY21 on YoY basis on YoY basis ₹570cr in 9MFY21 increase yoy Net Working Capital Reported PAT Q3
Slide 33: Consolidated Statement of Profit & Loss
Consolidated Statement of Profit & Loss ₹ in cr, unless mentioned otherwise Growth Growth Particulars Q3 FY21 Q2 FY21 Q3 FY20 9M FY21 9M FY20 FY20 (Y-o-Y) (Y-o-Y) Income from Operations 1,626 1,856 1,437 13% 4,448 4,644 -4% 6,648 Q3FY21 COGS 1,329 1,611 1,197 11% 3,745 3,881 -3% 5,549 • Income from
Slide 34: Revenue Break up (9M FY21)
Revenue Break up (9M FY21)* Essentials Australia 0.1% Others 5% PPE 5% Asia & Children 4% Brands Wear 18% Others Middle 14% 5% East 1.2% America 8% Customer wise Category wise Geography wise Men's Ladies Retailers Wear 35% UK & Wear 86% 33% Europe 86% *Broad Estimates 33
Slide 35: Segment wise Business Performance
Segment wise Business Performance Revenue break up (₹cr, % of total) Capital Employed break up (₹cr, % of total) Manufacturing, 494 , 44% Manufacturing, 68, 4% Investment & Sourcing, 1,578 , Others, 2, 0% 96% Investment & Others, 145 , 13% Sourcing, 493 , 43% Gross Capital Employed: ₹1,133cr • Sourc
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet ₹ in cr, unless mentioned otherwise As on As on Particulars Particulars 31-Dec-20 31-Mar-20 31-Dec-20 31-Mar-20 Non-Current Assets 560 571 Inventory Days 14 12 Current Assets 1,607 1,773 Debtor Days 48 46 Inventories 195 183 Payables Days 59 48 Trade Receivables 785 832 NW
Slide 37: Value Creation and Way Forward for PDS
Value Creation and Way Forward for PDS 36
Slide 38: What PDS has achieved since listing
What PDS has achieved since listing PDS Share Price Evolution since Listing PDS Price Evolution Since Listing= XIRR of 16% 700 BSE SENSEX XIRR: 11% BSE MidCap XIRR: 12% 600 500 400 300 200 100 - Apr-20 Dec-20 Oct-14 Jun-15 Oct-15 Jun-16 Oct-16 Jun-17 Oct-17 Jun-18 Oct-18 Jun-19 Oct-19 Jun-20 Oct-20
Slide 39: What PDS has achieved?
What PDS has achieved? PDS Generating Return Higher than Cost of Capital 15% • Cost of Debt: 4.4% • Cost of Equity: 15.3% 10% Value Creation Given PDS has largely LIBOR driven debt and revenues are in US$, PDS has a natural hedge WACC ROCE PDS has a Positive Economic Value-Added (EVA) generating ret
Slide 40: Way Forward
Way Forward Balance Sheet Optimization Continue to operate on an asset light model Margin Expansion Expansion in margins and turn around of manufacturing business Collaborating with retailers for will enable PDS generate higher creation of in-house brands return on capital employed Category Expansio
Slide 41: Annexure
Annexure 40
Slide 42: Standalone Statement of Profit & Loss
Standalone Statement of Profit & Loss ₹ in cr, unless mentioned otherwise Growth Growth Particulars Q3 FY21 Q2 FY21 Q3 FY20 9M FY21 9M FY20 FY20 (Y-o-Y) (Y-o-Y) Income from Operations 16.2 9.8 10.6 52% 31.4 29.7 6% 41.1 COGS 7.7 3.8 0.0 11.5 0.0 0.0 Gross Profit 8.5 6.0 10.6 -20% 19.9 29.7 -33% 41.1
Slide 43: Standalone Balance Sheet
Standalone Balance Sheet ₹ in cr, unless mentioned otherwise As on Particulars 31-Dec-20 31-Mar-20 Non-Current Assets 135 137 Current Assets 10 9 Trade Receivables 4 1 Cash and cash equivalents 3 2 Other Bank Balances 0 0 Other Current Assets 2 6 Total Assets 144 146 Total Equity 114 111 Non-Current
Slide 44: Together we're building a better, more sustainable supply chain
Together we’re building a better, more sustainable supply chain Abhishekh Kanoi PDS Multinational Fashions Limited For Further Head of Legal & Company Secretary No. 758 & 759, 2nd Floor, Information, abhishekh.k@pdsmultinational.com 19th Main, Sector-2, HSR Layout, please contact Bangalore-560102, K
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