Linc Limited · NSE:LINC
Linc — Investor Presentation (November 2023)
43 slides from Linc's investor presentation, Nov 26, 2023
Slide 1: Cover letter to stock exchanges
26th November 2023 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, India Limited, Kolkata – 700001 P. J. Towers, Exchange Plaza, Dalal Street, Bandr
Slide 2: Strategy Presentation November 2023
STRATEGY November 2023 PRESENTATION. NSE : LINC BSE : LINC Linc Limited Bloomberg : LINC:IN (formerly Linc Pen and Plastics Limited) 1
Slide 3: Safe Harbour Statement
Safe Harbour Statement. This presentation may contain certain “forward-looking statements” within the meaning of applicable securities laws and regulations, which may include those describing the Company’s strategies, strategic direction, objectives, future projects and/or prospects, estimates etc.
Slide 4: Inside this Presentation
Inside this Presentation. Future of Writing Instrument Industry Outlook Why Linc Financial Snapshot 3
Slide 5: Future of Writing Instruments
Future of Writing Instruments. Why traditional pens will persist alongside digital tools? • Cultural Significance: Writing Instruments hold cultural and traditional importance in many societies. Rituals, ceremonies, cultural practices continue to drive the demand for pens and other writing tools • E
Slide 6: Future of Writing Instruments
Future of Writing Instruments. Why traditional pens will persist alongside digital tools? • Artistic & Creative Expression: Pens, markers and other writing tools are essential for Artists and Creative professionals • Stationery Culture: The Stationery culture, driven by a love for well designed note
Slide 7: Industry Outlook
L NC lincpen.com Industry Outlook.
Slide 8: Global Stationery Industry Opportunity
Global Stationery Industry Opportunity. Global Stationery Products Market The stationery industry is divided into paper and non- 217.9 paper stationery, the latter accounting for the larger share US Market estimated at US$52 Bn in 2020 US$ Billion 192.2 CAGR 1.81% China Market projected to gro
Slide 9: Global Writing Instrument Industry Opportunity
Global Writing Instrument Industry Opportunity. Global Writing Instruments Market1 Share of Relevant Market Writing & Marking Instruments Market Size2 32.9 The USA is estimated at US$4.7 Billion in the 2020 2027 year 2022. 22.5 Ball & Gel Pen 36% 41% China is forecasted to reach a projected US$
Slide 10: Opportunity in Indian Market
Opportunity in Indian Market. Indian Writing & Creative Indian Education Industry Writing Instruments Market Growth Drivers Instruments Market 225 140 - 145 Rising Populations: o Largest population in age bracket of 5-24 years ~580 million. ₹ Billion US$ Billion 96.8 o Indian working population to
Slide 11: Indian Writing Instrument Industry Opportunity
Indian Writing Instrument Industry Opportunity. Indian Writing Instruments Market Indian Pen Segment at Manufacturer’s Realization, in ₹ Billion • Demand is driven by students and working-class population 91.5 - 96 • As of FY23 Pens occupy 65% share in Writing Instruments, and CAGR expected to incre
Slide 12: Indian Writing Instrument Industry Opportunity
Indian Writing Instrument Industry Opportunity. Indian Pen Market subsegments Indian Pen Segment Market Size in ₹ Billion 87 - 90 15-20% CAGR 7.6% – 8.3% 25 15-20% 60.4 42% Premium FY23E MRP 58% 17.3 Mid-Premium 42.5 Mass 70-75% 12.1 26.9 62 - 65 7.7 43.1 Pen Subsegments Price Criteria 30.4 19.2 Mas
Slide 13: Pens - Global Trade Perspective
Pens - Global Trade Perspective. 2,367 Top 10 Exporters of Pens in CY 2022 Top 10 Importers of Pens in CY 2022 USD Millions USD Millions 1,175 951 787 434 431 390 375 340 290 339 238 242 165 161 160 156 156 154 136 China Japan Germany Mexico France USA Germany France Mexico China United Kingdom Neth
Slide 14: Our Journey
Our Journey. Umergaon Production commenced in Launch planned for Pentonic GRT @ Rs 40 (a retractable gel pen) new factory Pentonic was launched. It was a Game Changer that featured FY 23 Mitsubishi Minimalistic design & Linc Glycer, acquired 13% Price at Rs 10 490 The company’s Stake in Linc Ocean G
Slide 15: Our Portfolio of Products
Our Portfolio of Products. Among Top 3 brands in New Writing Instrument Global brand from Asia’s largest India for Writing brand launched in FY19 Mitsubishi Pencil Co. Ltd, stationery giant. Instruments. by Linc in MRP ₹10 and Japan. above segment. Presence in the Presence across all P
Slide 16: Pentonic's Upcoming Launches
Pentonic’s Upcoming Launches. Pentonic G-RT ₹ 40 Retractable Gel Pen Q2’FY24 Q3’FY24 Q4’FY24 Q1’FY25 ₹ 30 Ball Pen ₹ 20 Ball Pen Pentonic Ball Pen Pentonic B-RT ₹ 10 Ball Pen ₹ 20 Ball Pen Variants Variants 15
Slide 17: Trend of Financial Performance
Trend of Financial Performance. 8000 CAGR 7.0% Growth 8.1% CAGR 15.7% Growth 16.7% 40.0% CAGR 17.1% Growth 9.2% 12.6% 31.2% 6000 ₹ LACS 30.0% 9.6% 6,136 48,676 24.7% 15,197 30.6% 10.6% 28.3% 10.5% 39,699 23.8% 4000 20.0% 4.0% 35,496 22.4% 3,826 6.1% 9,805 25,666 8,441 22,492 24,309 6,362 7,427 2000
Slide 18: Leadership
Leadership. MR. DEEPAK JALAN MR. ANIL KOCHAR Managing director, Independent, Non-executive director, Commerce graduate with 37 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 19: Why Linc?
Why Linc?. Focus on Premiumization; Geographic Expansion; Consistently augmenting Focusing on increasing its the contribution of high- exports revenue and margin products to its developing newer markets overall revenue Inroads into Stationery Products; widening Strong Balance Sheet with product port
Slide 20: Focus on Premiumisation
Focus on Premiumisation. Growth in average realization of Pens Pentonic brand introduced in FY19 as a 5.80 5.69 5.78 minimalistic yet contemporary pen, known 5.53 5.62 5.57 5.62 5.77 for its aesthetics as well as writing 5.56 4.9 5.42 smoothness 4.52 4.32 ₹ 3.96 3.65 FY 18 FY 19 FY 20 FY 21 FY 22
Slide 21: Focus on Premiumisation
Focus on Premiumisation. Positioned at ₹ 10 + segment, Pentonic’s GPM Number of Pens is ~ 41% + 24.4% 7,600 6,110 2,340 20% Pentonic’s volume grew ~ 15.9% in H1 FY24 over H1 FY23 1,526 147 52% 111 - 3.1% In Lacs 3,589 3,479 80% 1,093 1,267 5,114 68 4,473 81 48% 2,427 2,131 FY 18 H1 FY 24 FY 22 FY 23
Slide 22: Focus on Premiumisation
Focus on Premiumisation. Increase in share of Pentonic in total 31.2% 30.6% revenue led to higher GPM at the company level. 24.7% 23.8% 22.4% New Launches in the upcoming quarters 21.8% 20.3% will drive premiumization 32.7% 29.9% 25.5% 20.0% 17.2% 7.0% FY 18 FY19 FY20 FY21 FY22 FY23 H1 FY 24 Com
Slide 23: Increasing its Global Footprint As Well
Increasing it’s Global Footprint As Well. Linc’s Geographic Reach – H1 FY 24. Pen Exports from India - 2022 Value Growth USD Millions over 2021 South & Central America (SA) 30 66% Europe Including Russia North America 16.8% Middle East (ME) 41 80% 2.4% Africa 43 38% South East Asia (SEA) 23 49% Tota
Slide 24: Recent Participation in Global Expos
Recent Participation in Global Expos. Scofex, South Africa, 2023
Slide 25: Recent Participation in Global Expos
Recent Participation in Global Expos. Ambiente, Frankfurt, Germany, 2023
Slide 26: Recent Participation in Global Expos
Recent Participation in Global Expos . Escolar, Brazil, 2023
Slide 27: Recent Participation in Global Expos
Recent Participation in Global Expos. Paperworld, Middle East , Dubai 2022
Slide 28: Inroads into Stationery Products
Inroads into Stationery Products. Targeting ₹1 Billion of revenue from Deli by FY26 Deli offers a range of over 200 products in India Company to largely focus on Calculators & Scissors Deli should contribute at least 10 % of company’s revenue by FY25 Deli’s GPM is around 20% Deli has ach
Slide 29: Focus on Shareholder Value Creation
Focus on Shareholder Value Creation. Net Cash from Operating Activities Vs Dividend Payout Net Debt and Net Debt/Operating EBITDA 3.00 5,000 60.0% 52% 2.50 4,723 4,000 50.0% 2.44 Net Debt 4,338 6,194 2.00 3,835 40.0% ₹ LACS 3,000 ₹ LACS 4,562 3,317 33% Net Debt/ Operating 1.50 30.0% 1.19 20% EBITDA
Slide 30: Increased Touch Points
Increased Touch Points… Break-up of Region wise Touch Points – Sep’ 2023 241,424 248,573 218,471 148,898 141,970 144,969 116,963 50,000 65,000 56,553 South India East India 21% 24% 3,000 5,000 FY 19 FY 20 FY 21 FY 22 FY23 Sep-23 Total touch points Kiranas, Medical Stores, Pan Stores etc. India has
Slide 31: Resulting in Broader Penetration Across India
…Resulting in Broader Penetration Across India. Revenue Share FY19 Revenue Share H1 FY 24 13.0% 17.0% East India 31.0% 14.0% 42.0% North India 21.0% West India 31.0% South India 31.0% Increasing footprint in West and South India and steadily moving towards a more homogenous presence across India 30
Slide 32: 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 Gujarat Believes such
Slide 33: ESG
ESG. Yes, it's a weapon. But discarded carelessly, a plastic pen becomes a weapon of mass destruction. For starters, it is difficult to recycle and emits toxic chemicals. The next time you throw a plastic pen away, think Plastic pollution also plays havoc on soil nutrients and again. All it takes is
Slide 34: LINC Financial Snapshot
L NC lincpen.com LINC Financial Snapshot. 33
Slide 35: Half Year Highlights (Cont..)
Half Year Highlights (Cont..). ₹ Lacs Writing Instruments Other Products Writing Instruments Other Products Revenue Own Brands Licensed Brands Own Brands Licensed Brands Pentonic Linc & Others Uni-Ball Pentonic Linc & Others Deli H1 FY24 7,598 9,783 3,854 364 1.138 1,619 Sales Contribution (%)
Slide 36: Half Year Highlights (Cont..)
Half Year Highlights (Cont..). Trade Channel Wise Break-up of Operating Revenue ₹ Lacs Writing Instruments Other Products 3,808 Exports 16% 4,142 Exports 19% 793 E commerce 3% 374 E commerce 2% 1,442 Modern Trade 1,196 6% Modern Trade 6% 1,074 Corporate 740 4% Corporate 3% 17,239 General Trade 14,89
Slide 37: Profit & Loss Summary
Profit & Loss Summary. ₹ Lacs Particulars FY19 FY20 FY21 FY22 FY23 H1 FY24 Operating Income 36,694 39,699 25,666 35,496 48,676 24,309 Gross Profit 7,434 9,805 5,753 8,441 15,197 7,427 Gross Profit Margin 20.3% 24.7% 22.4% 23.8% 31.2% 30.6% Operating EBITDA 2,539 3,826 1,017 2,153 6,136 2,574 Oper
Slide 38: Balance Sheet Summary
Balance Sheet Summary. ₹ Lacs Particulars FY19 FY20 FY21 FY22 FY23 H1 FY24 Net Worth 12,337 13,697 13,471 14,285 17,722 18,470 Gross Debt 6,205 4,575 812 299 - - Cash & Cash equivalent 11 13 14 9 760 597 Net Debt 6,194 4,562 797 290 (760) (597) Capital Employed1 19,388 19,199 15,025 15,178 18,7
Slide 39: Ratios
Ratios. ₹ Lacs Particulars Ratios FY19 FY20 FY21 FY 22 FY23 H1 FY24 Net Debt/Equity 0.50 0.33 0.06 0.02 (0.04) (0.03) Solvency Ratios Net Debt/Op EBITDA 2.44 1.19 0.78 0.13 (0.12) (0.12) EBIT/Interest 2.76 5.26 -0.39 15.81 79.78 18.24 Current Ratio 1.68 1.85 1.92 2.14 2.56 2.65 Fixed Asset Turn
Slide 40: Shareholding Pattern
Shareholding Pattern. 24.8% Promoters 2.2% Mitshubishi Pencil Co Ltd 0.2% 59.3% IEPF 13.5% NRI, FII, AIF etc. Other Public As on 30th September’23 39
Slide 41: 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 40
Slide 42: Expansion Plan
Expansion Plan. Linc plans to increase its existing capacity at Gujarat from 10 lacs pen per day to 15 lacs pen per day in FY’25 & to 20 lacs pen per day subsequently FY’24 demand would be met by the existing capacity & stepping-up outsourcing, which has already been tied up Revenue potential of the
Slide 43: Typical Price Waterfall
Typical Price Waterfall. Particulars Pentonic Others Ball Pen MRP ₹ 10.00 ₹ 10.00 Retailer Margin ₹ 2.50 ₹ 3.25 Distributor Margin ₹ 0.48 ₹ 0.47 Super Stockist / Channel Partner Margin ₹ 0.28 ₹ 0.25 GST (For entire value chain) ₹ 1.14 ₹ 1.03 Company’s Realisation ₹ 5.60 ₹ 5.00 42