32 slides from S.p. Apparels's earnings presentation, November 2016
Slide 1: Q2 & H1 FY17 Results Update
Q2 & H1 FY17 RESULTS UPDATE NOVEMBER 2016
Slide 2: Disclaimer
DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by S.P. Apparels Limited (“SPAL” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial co
Slide 3: Key Highlights – Q2 FY17
KEY HIGHLIGHTS – Q2 FY17 33% YoY growth in revenues from operations 31% YoY growth in EBITDA, stable EBITDA margin 216% YoY growth in PAT, PAT margin up from 3.6% to 8.9% Total Debt declined to Rs 1,781.7 mn (Rs 2,593.6 mn at 31st March, 2016) Debt / Equity of 0.5x Cash-adjusted ROCE of
Slide 4: Q2 & H1 FY17 Results Update
Q2 & H1 FY17 RESULTS UPDATE Company Overview Business Strategy & Outlook Financial Overview & Shareholding Structure
Slide 5: Q2 & H1 FY17 Results Key Highlights
Q2 & H1 FY17 RESULTS KEY HIGHLIGHTS H1 FY17 YoY ANALYSIS In Rs Mn REVENUES EBITDA & EBITDA MARGIN * PBT & PBT MARGIN PAT & PAT MARGIN 13.6% 9.2% 15.3% 17.5% 3,293.7 6.6% 4.5% 2,472.1 449.5 313.2 575.6 379.2 33 % 52 % 163.8 174 % 113.5 176 % H1 FY16 H1 FY17 H1 FY16 H1 FY17 H1 FY16 H1 FY17 H1 FY16 H1
Slide 6: Leverage Analysis & Return Ratios
Q2 & H1 FY17 RESULTS LEVERAGE ANALYSIS & RETURN RATIOS In Rs Mn RETURN METRICS 35.4% 24.0% 17.9% 20.4% 12.7% 13.5% 9.4% 9.9% 12.1% 4.0% FY13 FY14 FY15 FY16 H1 FY17 * ROE % Cash Adjusted ROCE% ROE = PAT / Avg. Equity (Excl. preference shares), Cash Adj. ROCE = EBIT / Avg. Capital Employed excl. C&CE
Slide 7: Division Wise Analysis
Q2 & H1 FY17 RESULTS DIVISION WISE ANALYSIS In Rs Mn Q2 FY17 YoY ANALYSIS – TOTAL REVENUE BREAKUP * H1 FY17 YoY ANALYSIS – TOTAL REVENUE BREAKUP * 1,726.7 3,370.7 160.2 281.8 1,250.1 2,495.3 72.9 120 % 142.7 97 % 1,566.5 3,088.9 1,177.2 2,352.6 33 % 31 % Q2 FY16 Q2 FY17 H1 FY16 H1 FY17 Garments Reta
Slide 8: Result Analysis
Q2 & H1 FY17 RESULTS RESULT ANALYSIS FINANCIAL UPDATE: • Q2 FY17 total revenues saw robust growth of 33% YoY to Rs 1,669.6 mn. • Revenue growth of 33% in garments division and 120% in retail division. • Growth in garments division driven by increase in existing customer orders supported by increase
Slide 9: Consolidated Profit & Loss Statement
Q2 & H1 FY17 RESULTS CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs Mn) Q2 FY17 Q2 FY16 YoY % H1 FY17 H1 FY16 YoY % Revenue from Operations 1,528.7 1,160.6 31.7% 3,026.5 2,287.9 32.3% Other Operating Income 140.9 93.7 50.3% 267.3 184.3 45.0% Total Revenues 1,669.6 1,254.4 33.1% 3,293.7 2,47
Slide 10: Consolidated Balance Sheet
Q2 & H1 FY17 RESULTS CONSOLIDATED BALANCE SHEET Particulars in Rs. Mn Sep 16 Mar 16 Particulars in Rs. Mn Sep 16 Mar 16 Equities & Liabilities Assets Shareholder's Funds Non-Current Assets Equity and Share Capital 451.7 371.5 Fixed Assets Tangible assets 2,727.7 2,701.1 Reserves & Surplus 3,175.4 95
Slide 11: Company Overview
Q2 & H1 FY17 Results Update COMPANY OVERVIEW Business Strategy & Outlook Financial Overview & Shareholding Structure
Slide 12: Brief Profile
COMPANY OVERVIEW BRIEF PROFILE SPAL is one of the leading manufacturers and exporters of knitted garments for infants and children in India. Provides end-to-end garment manufacturing from greige fabric to finished products including body suits, sleep suits, tops and bottoms. BUSINESS OVERVIEW
Slide 13: Our Evolution
COMPANY OVERVIEW OUR EVOLUTION 2007-08 Amalgamation with Sri Balaji 2016 2003 Bakkiam Spinning Mills Listed on BSE / NSE Set-up first in-house embroidery facility at Thekkalur 2008-13 Repayment of Loans to Streamlining of operations to integrate the reduce leverage 1989 2004 factories, increase
Slide 14: Leading Manufacturer & Exporter of Infant & Children Wear in India
COMPANY OVERVIEW LEADING MANUFACTURER & EXPORTER OF INFANT & CHILDREN WEAR IN INDIA SPAL IS A SPECIALIZED PLAYER IN THE HIGHLY CHALLENGING INFANT & CHILDREN WEAR KNITTED GARMENT INDUSTRY INDUSTRY’S UNIQUE CHALLENGES SPAL’S CORE COMPETENCIES 1 Demonstrated manufacturing excellence for over two decade
Slide 15: Preferred Vendor to Reputed International Brands
COMPANY OVERVIEW PREFERRED VENDOR TO REPUTED INTERNATIONAL BRANDS SPAL IS THE PREFERRED VENDOR FOR KNITTED GARMENTS FOR INFANTS AND CHILDREN TO REPUTED INTERNATIONAL BRANDS AND RETAILERS WHY SPAL? • Expertise to concurrently manage multiple large orders with a diversified product range including bod
Slide 16: Strategically Located & Integrated Manufacturing Facilities
COMPANY OVERVIEW STRATEGICALLY LOCATED & INTEGRATED MANUFACTURING FACILITIES INTEGRATED BUSINESS LOCATION ADVANTAGE: MODEL • All 21 manufacturing facilities are located within a radius of ~125 km of our Registered Office near Product Development Tirupur (leading hub in India for knitted garments for
Slide 17: Strategically Located & Integrated Manufacturing Facilities
COMPANY OVERVIEW STRATEGICALLY LOCATED & INTEGRATED MANUFACTURING FACILITIES Spinning Dyeing 17
Slide 18: Strategically Located & Integrated Manufacturing Facilities
COMPANY OVERVIEW STRATEGICALLY LOCATED & INTEGRATED MANUFACTURING FACILITIES Printing Automated Embroidery Sewing Automated Sewing Assembly Line Semi-Automated Inventory Management 18
Slide 19: Strong In-House Design Expertise
COMPANY OVERVIEW STRONG IN-HOUSE DESIGN EXPERTISE STRONG DESIGN IS SPAL’S CORE COMPETENCY • SPAL’s core competency lies in understanding latest fashion and trends to suit the customers buying preferences. • Dedicated in-house design and merchandising team of designers located at our Corporate Office
Slide 20: Stringent Quality Controls & Compliance
COMPANY OVERVIEW STRINGENT QUALITY CONTROLS & COMPLIANCE • Strong adherence to the highest standards of quality, assurance and compliance. • Stringent quality control checks consisting of inspection and testing of fabric, greige and processed yarn, trims, accessories, packing materials and of each p
Slide 21: Building Retail Presence in India
COMPANY OVERVIEW BUILDING RETAIL PRESENCE IN INDIA SPAL’s PRESENCE ACROSS LARGE FORMAT STORES 21
Slide 22: Building Retail Presence in India
COMPANY OVERVIEW BUILDING RETAIL PRESENCE IN INDIA SPAL IS STRENGTHENING ITS RETAIL PRESENCE BY EXPANDING THE REACH OF CROCODILE BRAND OUR RETAIL STORE PRESENCE • SPAL undertakes manufacturing and retailing activities in India under the ‘Crocodile’ brand. • SPAL sells wide range of adult menswear pr
Slide 23: Qualified Management with Deep Understanding of Apparel Sector
COMPANY OVERVIEW QUALIFIED MANAGEMENT WITH DEEP UNDERSTANDING OF APPAREL SECTOR Mr P. Sundararajan ` Ms S. Latha Mr S. Chenduran Chairman and Managing Director Executive Director Director Operations • Three years of experience in the • Founder director of SPAL with 31 Founder director of SPA with 24
Slide 24: Board of Directors – Wide Spectrum of Experience
COMPANY OVERVIEW BOARD OF DIRECTORS – WIDE SPECTRUM OF EXPERIENCE Mr Srinivas Chidambaram Mr A.S. Anandkumar Mr P. Yesuthasen Non Whole-time Director Independent Director Independent Director • 26 years of experience • 43 years of experience in • 40 years of experience in mainly in financial service
Slide 25: Business Strategy & Outlook
Q2 & H1 FY17 Results Update Company Overview BUSINESS STRATEGY & OUTLOOK Financial Overview & Shareholding Structure
Slide 26: Capacity Expansion & Backward Integration
BUSINESS STRATEGY & OUTLOOK CAPACITY EXPANSION & BACKWARD INTEGRATION Existing Business Model SPAL proposes to utilize Rs 750.7 mn from the Net IPO Proceeds towards: 1. Enhancing spinning capacity – Capex of Rs 472.4 mn Product Development • Spinning capacity from 16,896 to 22,272 spindles • Blow ro
Slide 27: Expand Retail Presence Across India
BUSINESS STRATEGY & OUTLOOK EXPAND RETAIL PRESENCE ACROSS INDIA PROPOSED EXPANSION OF RETAIL PRESENCE OVER THREE YEARS • Growing aspiration levels of people in Tier II, III and IV cities in India along with rising brand awareness and higher disposable income makes these smaller urban areas as focal
Slide 28: Financial Overview & Shareholding Structure
Q2 & H1 FY17 Results Update Company Overview Business Strategy & Outlook FINANCIAL OVERVIEW & SHAREHOLDING STRUCTURE
Slide 29: Financial Overview
FINANCIAL OVERVIEW REVENUES EBITDA & EBITDA MARGIN PAT & PAT MARGIN CAGR: 8 % CAGR: 16 % CAGR: 145 % 6.5% 5,328 14.6% 16.0% 4,726 14.2% 4,285 4,509 12.8% 1.5% 2.1% 0.6% 853 347 639 689 550 67 100 24 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 * EBITDA EBITDA Margin PAT PAT Margin * E
Slide 30: IPO Proceeds Utilisation
IPO PROCEEDS UTILISATION Utilization of Net proceeds as on 04/11/2016 Utilization Amount Amount Pending Particulars (Rs million) Planned Utilized Utilization Expansion and modernization of manufacturing facility 701.6 47.3 654.3 Repayment or prepayment of debt 630.0 630.0 0.0 Opening of new stores f
Slide 31: Shareholding Structure
SHAREHOLDING STRUCTURE SHAREHOLDING PATTERN – 30th SEPTEMBER 2016 KEY INSTITUTIONAL INVESTORS – 30th SEPTEMBER 2016 Goldman Sachs group 5.32% Public 29% Birla Sun Life Insurance Company Limited 3.71% Promoters DSP Blackrock Micro Cap Fund 3.58% 60% NYLIM India 3.18% Ashish Kacholia 2.43% UTI- Balanc
Slide 32: For Further Queries
FOR FURTHER QUERIES: Mr. V. Balaji Mr. Nilesh Dalvi / Mr. Yashesh Parekh Chief Financial Officer IR Consultant Email: balaji.V@s-p-apparels.com Email: nilesh.dalvi@dickensonir.com Contact no: 0429630400 yashesh.parekh@dickensonir.com Contact no: +91 9819289131 / 8108321555