Welspun Living Limited · NSE:WELSPUNLIV
Welspun Living — Welspun India — Q1 FY17 Earnings Presentation
39 slides from Welspun Living's earnings presentation, July 2016
Slide 1: Investor Presentation Q1 FY17
INVESTOR PRESENTATION Q1 - FY17 July, 2016
Slide 2: Welspun group overview
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+ 1
Slide 3: Agenda
1. Company Overview 2. Industry Overview: Advantage India 3. Welspun India: Global Leader in Home Textiles AGENDA 4. Q1 - FY17 Highlights • Ind-AS Impact 5. Way forward 2
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 EBITDA in Rs. Million Revenue in Rs. Million 70,000 18,000 16,849 59,371 16,000 60,000 13,691 53,025 14,000 50,000 43,730 12,000 10,253 40,000 36,473 10,000 30,000 8,000 6,438 6,000 4,414 20,000 15,926 4,000 10,000 2,000 0 0 FY13 FY14 FY15 FY16 Q1 FY17 FY13 FY14 FY15 FY16 Q1 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
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 significa
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: Indian Players Gaining Prominence Globally
INDIAN PLAYERS GAINING PROMINENCE GLOBALLY 39% India’s share 38% increased by 9 Towels (Cotton) 36% percentage 30% points in 6.5 26% 25% 26% 23% 24% years 22% 22% 22% 20% 15% 15% 15% 2009 2012 2015 YTD May 2016 India’s share Sheets (Cotton) 51% 48% increased by 24 45% percentage points in 6.5 29% ye
Slide 12: Welspun India Home Textiles
HOME TEXTILES WELSPUN INDIA \ SENN |
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 Target Kaufland John Lewis @Home Kohl’s Rusta House of Fraser ….. and many more Wal M
Slide 15: Leadership: Global Reach & Delivery Model
LEADERSHIP: GLOBAL REACH & DELIVERY MODEL Delivery & Reach in over 50 countries 14
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 Investment of approx. Rs.8 bn Capacity growth t
Slide 17: 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 18: Delivering Unique Experiences
DELIVERING UNIQUE EXPERIENCES…. Consumer INNOVATION FOCUS Needs BRAND AND DELIVERY FOCUS Continuous Welspun Innovation Lab Ingredient Idea /Technology Product Development Generation CONSUMER INSIGHTS Brands Owned Ensuring Credibility Licensed Innovation Partners Technology Innovation Global
Slide 19: 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 18
Slide 20: 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 19
Slide 21: 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 20
Slide 22: Focus 2016 - Inclusive Growth
FOCUS 2016 - 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
Slide 23: Focus 2016 - Inclusive Growth (Contd.)
FOCUS 2016 - INCLUSIVE GROWTH (Contd.) Girls Hostel Vocational Centers for SPUN Skill Development Global Women Economic Education: Students and Smart Village Empowerment Initiative Govt. Schools Covered 22
Slide 24: Q1 FY17 Highlights
WELSPUN INDIA HOME TEXTILES HALLENGES REMAINING wimbledon.com
Slide 25: Key Highlights - Q1 FY17
KEY HIGHLIGHTS - Q1 FY17 Operating EBITDA PAT crosses Rs. 2 bn Sales growth at 14.3% margin up 19 bps milestone to 26.5% Net debt to Net Debt to Equity at 1.2x ROCE (pre-tax) at 25%; Op.EBITDA at 1.5x (Vs 1.3x at FY16 –end) ROE at 39% (Vs 1.6x at FY16-end) Innovative sales Wimbledon campaign Branded
Slide 26: Financial Performance – Q1 FY17
FINANCIAL PERFORMANCE – Q1 FY17 (Rs. Million) Particulars Q1FY17 Q1FY16 YoY Q4FY16 QoQ Revenue 15,926 13,931 14.3% 16,294 -2.3% Operating EBITDA 4,225 3,669 15.1% 4,326 -2.3% Op. EBITDA Margin 26.5% 26.3% 19 bps 26.6% -2 bps EBITDA 4,414 3,955 11.6% 4,603 -4.1% EBITDA Margin 27.7% 28.4% -68 bps 28.3
Slide 27: Profitability Trend
PROFITABILITY TREND (Rs. Million) Particulars FY14 FY15 FY16 Q1 FY17 Revenue 43,730 53,025 59,371 15,926 Revenue growth % 19.9% 21.3% 12.0% 14.3% Operating EBITDA 9,211 12,742 15,899 4,225 Op EBITDA Margin 21.1% 24.0% 26.8% 26.5% EBITDA 10,253 13,691 16,849 4,414 EBITDA Margin 23.4% 25.8% 28.4% 27.7
Slide 28: Balance Sheet Trend
BALANCE SHEET TREND (Rs. Million) Particulars 31-Mar-14 31-Mar-15 31-Mar-16 30-Jun-16 Net Worth 11,097 14,318 19,739 21,638 Short Term Loans 11,349 10,034 7,716 11,393 Long Term Loans 18,944 20,817 18,945 19,518 Gross Debt 30,293 30,851 26,661 30,911 Cash & Cash Equiv. 3,658 4,297 1,386 5,180 Net De
Slide 29: Financial Ratio Trend
FINANCIAL RATIO TREND FY14 FY15 FY16 Q1 FY17* Solvency Net debt/Op. EBITDA 2.89 2.08 1.59 1.52 ratios Net debt/Equity 2.40 1.85 1.28 1.19 EBIT/Interest 3.55 3.66 5.55 9.34 Current Ratio 1.07 1.10 1.15 1.26 Operational ratios Fixed Asset turnover 1.71 2.04 1.77 1.89 Total Asset turnover 0.85 0.93 0.9
Slide 30: Key Financial Trends
KEY FINANCIAL TRENDS Revenues 18,000 Operating EBITDA 70,000 15,899 59,371 16,000 60,000 14,000 12,742 53,025 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 15,926 4,225 4,000 10,000 2,000 0 0 FY13 FY14 FY15 FY16 Q1 FY17 FY13 FY14 FY15 FY16 Q1
Slide 31: Key Ratio Trends
KEY RATIO TRENDS ROCE % (Pre- Tax) ROE % 50% 36% 43.5% 45% 42.5% 31% 27.4% 40.0% 40% 26% 22.8% 25.3% 39.0% 21.9% 35% 21% 16% 30% 11% 25% 6% 20% 1% 15% FY14 FY15 FY16 Q1FY17* FY14 FY15 FY16 Q1FY17* 2.8x 4.0x Net Debt / Equity Net Debt / Op. EBITDA 2.6x 2.4x 3.5x 2.4x 2.2x 3.0x 2.9x 2.0x 1.9x 2.5x 1.8
Slide 32: 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 32
Slide 33: 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 34: Ind-AS Transition: Key Impacts
Ind-AS Transition : Key Impacts Impact of Ind-AS on profitability mainly on two accounts Effect of change in method of recognising grants Deferred tax impact on Ind-AS adjustments (Rs. Million) Description Q4FY16 Q1FY16 FY16 Net profit as per Indian GAAP 1,968 1,650 7,153 Add/(Less): Effect of
Slide 35: Way Forward
WAY FORWARD ety == WELSPUN INDIA HOME TEXTILES
Slide 36: Sustainable Value Creation
SUSTAINABLE VALUE CREATION NEW CHANNELS INNOVATION NEW SEGMENTS OPERATIONAL EXCELLENCE PERSONALIZED / NEW GEOGRAPHIES CUSTOMIZED EXPANDED PRODUCT RANGE 35
Slide 37: Vision 2020
VISION 2020 LEADING TOMORROW TOGETHER Innovation Leveraging technology Inclusive growth Brands People development Collaboration 36
Slide 38: 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% 37
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