Welspun Living Limited · NSE:WELSPUNLIV
Welspun Living — Welspun India — Q2 FY16 Earnings Presentation
39 slides from Welspun Living's earnings presentation, October 2015
Slide 1: Welspun India Limited (WIL) Investor Presentation – Q2 FY16
……………………………………………………………………….…….. Welspun India Limited (WIL) Investor Presentation – Q2 FY16 ……………………………………………………………….……..
Slide 2: Agenda
Agenda WIL – An Overview Industry Overview: Welspun India: Global Advantage India Leader in Home Textiles Q2FY16 Highlights Way forward 2
Slide 3: WIL – An overview
WIL – An overview Global Home Textiles Leader Commitment & Empowerment A part of US$ 3 billion Welspun Group, Welspun Creates opportunities for financial inclusion for India Ltd. is among the top three home textile women – through initiatives like Spun, Rags to manufacturers in the world and the
Slide 4: Financial Overview
Financial Overview EBITDA in Rs. Million Revenue in Rs. Million 16,000 60,000 13,691 53,025 14,000 50,000 43,730 12,000 10,253 40,000 36,473 10,000 29,329 7,815 28,607 8,000 30,000 6,438 5,960 6,000 20,000 4,000 10,000 2,000 0 0 FY12 FY13 FY14 FY15 H1 FY16 FY12 FY13 FY14 FY15 H1 FY16 Shareholding Pa
Slide 5: WIL – Revenue Milestones
WIL – Revenue Milestones WIL Revenue in Rs. Billion Entry into Accent Rugs/ Carpets 53 • 1993: Towels 44 Entry into bath facility at Towels Christy rugs 36 Vapi & Acquisit 32 Sheets ion 26 28 Facility at Anjar 16 17 12 7 Pre-2005 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Textiles business
Slide 6: Industry Overview: Advantage India
Industry Overview: Advantage India 6
Slide 7: Global Home Textile Scenario
Global Home Textile Scenario Market Size Key Consumers Home textile market at US$45 bn US , Europe and Japan are the largest consumers Bath constitutes ~25% Global demand equally split between US, Europe and Bed constitutes ~35% Rest of the World Key Producers India , Pakistan and China
Slide 8: Structural Change: Asian Dominance in Home Textiles
Structural Change: Asian Dominance in Home Textiles Textiles and Clothing • China : 36% US$784 bn • India : 5% Textiles • China : 35% US$306 bn • India : 6% Home textiles • China : 35% US$45 bn • India : 11% India has emerged as significant player in Home Textiles 8 Source :- WTO - 2013 data, Texpro
Slide 9: Structural Changes in favour of India
Structural Changes in favour of India Largest producer and 2nd Major importer of cotton Cotton Importer largest exporter of cotton and yarn Energy issues Exporter of yarn Yuan appreciation Geopolitical issues Competitive costs Losing export Compliance issues Robust ecosystem fo
Slide 10: Structural Change: Manifesting in Higher Market share
Structural Change: Manifesting in Higher Market share US Imports from Various countries – Market share Towels (Cotton) India’s share India China Pakistan ROW increased by 7 35% 36% 36% 37% percentage 30% 31% points in 5 years 27% 25% 24% 26% 26% 26% 23% 22% 24% 23% 22% 23% 23% 20% 16% 15% 16% 15% 20
Slide 11: Welspun India
Welspun India —£ ~ y é |
Slide 12: Leadership: Focus and Excellence
Leadership: Focus and Excellence A differentiated End-to-end Solutions Provider in Home Textiles Widest product range in the Home Textiles segment Bath Bedding Flooring Towels Sheets Carpets Bath robes TOB Rugs Basic and Fashion Bedding Uniquely positioned for cross-selling due to Customer rea
Slide 13: Leadership: Strategic Partnership with Global Retail Giants
Leadership: Strategic Partnership with Global Retail Giants • Bed Bath & Beyond • Macy’s • J C Penney • Target • Kohl’s • Wal Mart • K Mart- Sears • Spaces- Home & Beyond ….. and many more • Welhome • Ikea • ASDA • Carrefour • Tesco • JYSK • Marks & Spencer • El Corte Ingles • Debenhams • Vincenzo Z
Slide 14: Leadership: Global Reach & Delivery Model
Leadership: Global Reach & Delivery Model Delivery & Reach in over 50 countries 14
Slide 15: Leadership: Scale
Leadership: Scale FY15 Expected Capacity Product Unit Sales volume Utilisation % Capacity FY16 / FY17 Towels MT 50,000 50,852 102% 60,000 Sheets ‘000 Mtrs 60,000 58,047 97% 72,000 Rugs & Carpets MT 15,000 8,755 58% 20,000 Investment of Rs.8.5 bn expected over Capacity growth to be Capacities running
Slide 16: Leadership: FMCG Approach – Consumer-Driven Innovation
Leadership: FMCG Approach – Consumer-Driven Innovation Product Unmatched Promotion & Interactive Communicat experience ion Consumer Robust Research & Distribution SCM Developme nt Superlative End Products Consumer Strategic Integrated Partnership Manufactur Quality, with ing Valuable cost control Re
Slide 17: Today’s Welspun: “FAST”
Today’s Welspun: “FAST” Fast Affordable Sustainability Tech-oriented Quick Best cost Caring for the Technology response structures for environment leveraged time different price and the across (Speed to levels community Products, Market) Processes and Supply Chain 17
Slide 18: “FAST” translating into Leadership Position
“FAST” translating into Leadership Position US Terry Towels Import US Cotton Sheets Import 40.0% India share India share 50.0% 35.6% 36.5% YTD Aug’15 46.6% 46.9% YTD Aug’15 35.0% is 38.5% 45.0% Welspun Welspun is 47.6% 7.3% 9.9% 30.0% 40.0% Welspun Welspun 14.7% 25.7% 16.4% 25.8% 35.0% 25.0% 23.2% 2
Slide 19: Value through Brands
Value through Brands Premium brand with presence in India and Middle East Footprint of around 200 shop-in-shop outlets and distribution BRANDS Value brand; presence via mass retailers; also growing via distributor network Largest terry towel brand in the UK with growing presence in China and
Slide 20: Value through Brands (contd…)
Value through Brands (contd…) Suppliers of the Wimbledon towels A souvenir that even the star tennis players covet BRANDS License holder of the Rugby World Cup 2015 towels Licensed the Amy Butler range of home products for the US business with a special focus on e-commerce Launched own bra
Slide 21: Spaces Campaign
Spaces Campaign werspun Gifting. There's always a reason. There’s always a season. Define your style. Follow your imagination. Create your own look. Spaces Home & Beyond by Welspun is all about seif-axareasion Fund your space meee 21 End your space
Slide 22: Branding our Innovation
Branding our Innovation • Launched nation-wide campaign in the US in September 2015 to introduce patented Hygrocotton® technology to consumers 22 • First ever such campaign in textiles in the past 15 years
Slide 23: Value through Brands
Value through Brands Strong growth expected in the branded category, especially in India Branded sales as % of Total Expansion of Christy into geographies such 11.5% as USA, China and Middle East 11.0% Increased penetration of Spaces and 10.5% Welhome through shop-in-shop and e- 10.0% commerce
Slide 24: Corporate Social Value (CSV) – 3E’s Vision
SUSTAINABLE : Corporate Social Value (CSV) – 3E’s Vision 24
Slide 25: CSV – Through 3E’s
CSV – Through 3E’s Empowerment 25
Slide 26: CSV – Through 3E’s – Launched Campaign for “SPUN”
CSV – Through 3E’s – Launched Campaign for “SPUN” SPUN : Our Corporate Social Value initiative to Empower Women and Revive the crafts of our country 26
Slide 27: CSV – Through 3E’s
CSV – Through 3E’s Environment & Health HEALTH CAMPS: 10 camps SANITATION PROJECT: MOBILE HEALTH VANS at PLANTATIONS: on blood group detection, 1,800 toilets constructed Anjar & Mumbai: Provide 4,500 fruit and general health check up, basic health facilities, vegetable plantations in 16 villages of
Slide 28: Q2 FY16 Highlights
Q2 FY16 Highlights 28
Slide 29: Key highlights – Q2FY16
Key highlights – Q2FY16 Highest Exports Award for Launched Hygro Tencel, Bedsheet,Towel and Overall Home Domestic Retail Sport and Denim towels Textiles from Texprocil, India Growth of 35% YoY Operating EBITDA margin at 25.4%; Net debt reduced to Rs. 24.3 bn Capex of Rs. 4.5 bn in PAT margin at 11.7
Slide 30: Financial performance - Q2FY16 & H1FY16
Financial performance - Q2FY16 & H1FY16 (Rs. Million) Particulars Q2FY16 Q2FY15 YoY Q1FY16 H1FY16 H1FY15 YoY Revenue 14,723 14,135 4.2% 13,885 28,607 25,908 10.4% Operating EBITDA 3,743 3,169 18.1% 3,598 7,341 5,896 24.5% Operating EBITDA Margin 25.4% 22.4% 300 bps 25.9% 25.7% 22.8% 290 bps EBITDA 3
Slide 31: Financial Highlights: Trend of Profitability
Financial Highlights: Trend of Profitability (Rs. Million) Particulars FY13 FY14 FY15 H1 FY16 Revenue 36,473 43,730 53,025 28,607 Revenue growth % 24% 20% 21% - Operating EBITDA 5,946 9,211 12,742 7,341 Operating EBITDA Margin 16.3% 21.1% 24.0% 25.7% EBITDA 6,438 10,253 13,691 7,815 EBITDA Margin 17
Slide 32: Financial Highlights: Balance Sheet
Financial Highlights: Balance Sheet (Rs. Million) Particulars 31-Mar-13 31-Mar-14 31-Mar-15 30-Sep-15 Net Worth 9,902 11,097 14,318 17,227 Short Term Loans 9,166 11,349 10,034 10,517 Long Term Loans 11,079 18,944 20,817 19,304 Gross Debt 20,244 30,293 30,851 29,821 Cash & Cash Equiv. 2,798 3,658 4,7
Slide 33: Financial Highlights: Financial Ratios
Financial Highlights: Financial Ratios FY13 FY14 FY15 H1FY16* Solvency Net debt/Op. EBITDA 2.93 2.89 2.05 1.65 ratios Net debt/Equity 1.76 2.40 1.82 1.41 EBIT/Interest 2.52 3.55 3.66 5.51 Current Ratio 1.00 1.07 1.12 1.14 Operational ratios Fixed Asset turnover 1.96 1.71 2.04 1.98 Total Asset turnov
Slide 34: Key Financials - Trends
Key Financials - Trends 14,000 Operating EBITDA Revenues 12,742 60,000 12,000 53,025 50,000 10,000 9,211 43,730 36,473 Rs. miilion 40,000 8,000 7,341 Rs. million 29,329 28,607 5,566 5,946 30,000 6,000 20,000 4,000 10,000 2,000 0 0 FY12 FY13 FY14 FY15 H1 FY16 FY12 FY13 FY14 FY15 H1 FY16 Cash Profit P
Slide 35: Key Ratio Trends
Key Ratio Trends 46% ROE % ROCE % (Pre- Tax) 42.5% 36% 41% 40.0% 42.5% 31% 36% 31% 34.6% 26% 21.9% 22.8% 25.2% 25.9% 26% 21% 26.7% 16.3% 21% 21.0% 16% 16% 14.0% 15.9% 11% 9.9% 11% 6% 6% 1% 1% FY 11 FY 12 FY 13 FY 14 FY 15 H1FY16 FY 11 FY 12 FY 13 FY 14 FY15 H1FY16 6.0x 3.0x Net Debt / Op. EBITDA Net
Slide 36: Dividend Policy – A Pioneering Initiative in the Industry
Dividend Policy – A Pioneering Initiative in the Industry Dividend distribution policy announced along with FY15 results Dividend Payout: 25% of standalone PAT Total dividend for FY15 at Rs. 10.5 per share of face value Rs. 10 Interim dividend for FY16 at Rs. 6.5 per share of face value Rs. 10 36
Slide 37: Way Forward
Way Forward 37
Slide 38: Way Forward: Sustaining growth momentum
Way Forward : Sustaining growth momentum New markets Leverage ‘FAST’ New products New channels 38
Slide 39: 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 Company Website: www.welspunindia.com 39