Linc Limited · NSE:LINC
Linc — Q2 FY23 Earnings Presentation
28 slides from Linc's earnings presentation, Nov 22, 2022
Slide 1: Cover letter to stock exchanges
22nd November 2022 The Listing Department, The Manager The Manager, The Calcutta Stock The Department of The Listing Department, Exchange Ltd. Corporate Services, National Stock Exchange of 7, Lyons Range, BSE Limited, P. J. India Limited, Exchange Kolkata – 700001 Towers, Plaza, Dalal Street, Bandr
Slide 2: Q2 FY23 Strategy Presentation
Q2 FY23 STRATEGY November 2022 PRESENTATION. NSE : LINC BSE : LINC Linc Limited Bloomberg : LINC:IN (formerly Linc Pen and Plastics Limited) 1
Slide 3: Inside this Presentation
Inside this Presentation. Executive Summary Industry Outlook LINC 2.0 Financial Snapshot 2
Slide 4: Who are we?
L NC lincpen.com LINC Who are we?.
Slide 5: A Leading Writing Instrument Company
A Leading Writing Instrument Company . • Among Top 3 brands • New Writing Instrument • Global brand from • Asia’s largest stationery in India for Writing brand launched in FY19 by Mitsubishi Pencil Co. Ltd, giant. • Linc Ltd. is the 3rd Instruments. Linc in MRP ₹10 and above Japan. largest writing s
Slide 6: With State of the Art Manufacturing Facilities
With State of the Art Manufacturing Facilities • Manufacturing Facility at Serakole in West • Manufacturing Facility at Umbergaon, Gujarat Bengal with plans in place to double the capacity • Plant at Serakole was established in 1984 • Plant at Umbergaon was established in 2017 Umbergaon Manufacturin
Slide 7: Trend of Financial Performance
Trend of Financial Performance . Operating Income Operating EBITDA * 50.9% 5000 12.00% 38.3% 9.6% 10.5%10.00% 39,699 4000 ₹ Lacs 36,694 7.8% ₹ Lacs 33,189 3,826 8.00% 35,496 3000 6.9% 4.0% 6.1% 6.00% 25,666 10.6% 22,492 2000 2,577 2,539 2,356 8.2% 2,153 4.00% -35.3% -5.3% 1000 2.00% 1,017 0 0.00% FY
Slide 8: Leadership
Leadership. MR. DEEPAK JALAN MR. ANIL KOCHAR Managing director, Independent, Non-executive director, • Commerce graduate with 35 years of experience • Postgraduate in Commerce and LLB • Responsible for the overall operations with a specialization in • An eminent advisor on income tax matters interna
Slide 9: Industry Outlook
L NC lincpen.com LINC Industry Outlook.
Slide 10: Global Writing Instrument Industry Opportunity
Global Writing Instrument Industry Opportunity. 1. The Global writing instruments Global Writing Instrument Industry Share of relevant market market is dominated by USA with a market share of 27% 2020 2027 2. Growth Drivers: 20.6 15.9 CAGR a) Demand for Luxury Billions Ball and Gel Pen 36% 41% USD 3
Slide 11: Global Stationery Industry Opportunity
Global Stationery Industry Opportunity. Global Stationery Products Market • The stationery industry is divided into paper and non-paper 217.9 stationery, the latter accounting for the larger share • Growth Drivers 192.2 • Rising inclination towards higher education Billions CAGR USD 1.81% • Demand f
Slide 12: Opportunity in Indian Market
Opportunity in Indian Market. Indian Education Market Size Indian School Market Size • Largest population in age bracket of 5-24 years ~ 580 million 225 74.3 • Over 250 million school going students • Indian education market expected to be ~ $225 CAGR CAGR billion by FY 25, growing at over 13% 91.7
Slide 13: LINC 2.0
L NC LINC 2.0. lincpen.com 12
Slide 14: Evolution to Linc 2.0
Evolution to Linc 2.0. Full Effect of Pentonic Project Full Effect of Gel Pen Project Share of Pentonic Revenue Total Revenue reached ₹ 13,684 lacs increased to 17%, GM and EBITDA was ₹ 918 lacs expanded to ~ 25% due to higher GP of 46% on Pentonic 1999- 2004- 2018- 2019- 2022 2000 2005 2019 2020 On
Slide 15: Increased Touch Points
Increased Touch Points. 2,37,620 2,18,471 1,48,898 1,39,500 1,16,963 India has over 10 Mn non-stationery outlets 65,000 56,553 Broken tradition by expanding to neighbourhood 46,000 50,000 grocery stores (Kirana, Medical stores, Pan stores, etc.) 3,000 5,000 2,000 We have already crossed the mi
Slide 16: Focus on Higher Margin Products
Focus on Higher Margin Products. • Pentonic brand introduced in FY19 as a minimalistic yet 25.5% 28.4% contemporary pen, known for its aesthetics as well as writing 20.0% 17.2% smoothness 7.0% • Positioned at ₹ 10 + segment, Pentonic’s GPM is ~ 43% 0.0% • Increase in share of Pentonic in total reven
Slide 17: Inroads into Stationery Products
Inroads into Stationery Products. • Targeting over ₹7,500 lacs topline by FY25 • Deli will contribute over 10 % of company’s total revenue in the next 3 years • Deli’s GPM is around 20% and hence it will start contributing materially to the operating EBITDA of the company from the current financial
Slide 18: Step-up the Existing Capacity
Step-up the Existing Capacity. Linc plans to increase its existing in house capacity from 10 lacs pen per day to 15 lacs pen per day Revenue Potential of the new facility at full capacity will be ~ ₹7,500 lacs Land acquisition in the final leg of completion with advance already paid and land blocked
Slide 19: ESG
ESG. Environment Social Governance • Pentonic’s individual • Strongly believes in • Consistently endeavored plastic wrapper packaging diversity in the workforce to practice good has been consciously and has ~700 female Corporate Governance substituted with paper employees at the Gujrat • Believes su
Slide 20: Financial Snapshot
L NC lincpen.com LINC Financial Snapshot. 19
Slide 21: Focus on Shareholder Value Creation
Focus on Shareholder Value Creation. FCF VS DIVIDEND PAYOUT 5000 60.0% 52% 50.0% 4,723 4000 34% • Sharp increase in Free Cash Flow in HY FY23 40.0% 3,835 3000 ₹ LACS 3,317 33% 30.0% • Consistent Dividend Pay-out track record of greater than 30% 2,649 2000 12% 20.0% 2,044 (Other than Covid years due
Slide 22: Profit & Loss Summary
Profit & Loss Summary. ₹ Lacs Particulars FY18 FY19 FY20 FY21 FY22 H1 FY23 Operating Income 33,189 36,694 39,699 25,666 35,496 22,492 Growth (%)3 -5.0% 10.6% 8.2% -35.4% 38.3% *50.9% Gross Profit 7,232 7,434 9,805 5,753 8,441 6,362 Gross Profit Margin 21.8% 20.3% 24.7% 22.4% 23.8% 28.3% Operatin
Slide 23: Balance Sheet Summary
Balance Sheet Summary. ₹ Lacs Particulars FY18 FY19 FY20 FY21 FY22 H1 FY23 Net Worth 12,077 12,337 13,697 13,471 14,285 15,412 Short Term Loans 4,848 3,813 2,352 812 299 - Long Term Loans 1,710 2,392 2,223 - - - Gross Debt 6,558 6,205 4,575 812 299 - Cash & Cash equivalent 11 11 13 14 9 822
Slide 24: Ratio Summary
Ratio Summary. ₹ Lacs Particulars Ratios FY18 FY19 FY20 FY21 FY 22 H1 FY23 Net Debt/Equity 0.54 0.50 0.33 0.06 0.02 (0.05) Solvency Ratios Net Debt/Op EBITDA 2.54 2.44 1.19 0.78 0.13 (0.17) EBIT/Interest 3.57 2.76 5.26 -0.39 15.81 93.54 Current Ratio 1.74 1.68 1.85 1.92 2.14 2.27 Fixed Asset Tu
Slide 25: Shareholding Pattern
Shareholding Pattern. 27.4% Promoters Mitshubishi Pencil Co Ltd 0.3% IEPF 58.70% 0.2% NRI, FII etc. 13.4% Other Public As on 30th Sep’22 24
Slide 26: Why Linc?
Why Linc?. Education sector Strong Balance Sheet with experiencing strong tail zero debt and free cash in winds in India; hence hand; strong top & bottom demand for company’s line growth products will continue to grow Presence over all categories Strong in-house – Roller Pen, Gel Pen & Ball manufact
Slide 27: Disclaimer
Disclaimer. The information contained in this presentation is provided by Linc Limited (the “Company”). Although care has been taken to ensure that the information in this presentation is accurate, and that the opinions expressed are fair and reasonable, the information is subject to change without
Slide 28: Thank You
Thank You. For further details please contact Director Finance & CFO Investor Relations Advisor N.K.Dujari Email: investors@linclimited.com Phone No.: +91 9830042353 Sanjeev Sancheti Landline: +91 33 68262100 Email: ss@uirtus.in Phone No.: +91 9836244222 27