Service Industries Ltd · PSX:SRVI
Service Industries — FY2022 Earnings Presentation
33 slides from Service Industries's earnings presentation, May 26, 2023
Slide 1: Notice of Corporate Briefing Session to Pakistan Stock Exchange
I Service Industries Limited --0- ddr/tia Seruis House, 2-Main Gulberg Lahore-54662 (Pakistan) Phone: (42) 5751990-96 Fax: (42) 5710593 SIL/PS)UCS/129 BY PUCARS & T.C.S May 19,2023 The General Manager, Pakistan Stock Exchange Limited, Stock Exchange Building, Stock Exchange Road, Karachi. SUBJEGT: C
Slide 2: Corporate Briefing Session for the Year Ended December 31, 2022
SERVICE INDUSTRIES LIMITED CORPORATE BRIEFING SESSION FOR THE YEAR ENDED DECEMBER 31, 2022 1
Slide 3: Contents
CONTENTS Group Profile ------------------------------------------------------------------------------------- 03 Details of Subsidiaries ------------------------------------------------------------------------- 07 Company Profile -----------------------------------------------------------------
Slide 4: Group Profile
GROUP PROFILE Servis Group comprises of Service Industries Limited, the flagship company of the group with five subsidiary companies including three foreign subsidiaries, and associated companies, engaged in diversified segments. The group structure is as follow: Company Status Group Shareholding Se
Slide 5: Group Profile (Cont.)
GROUP PROFILE (CONT.) Two of the group companies, Service Industries Limited and Service Global Footwear Limited are listed on Pakistan Stock Exchange. Having local and international presence in Footwear, Tyres, Tubes and Motorcycle spare parts and Technical Rubber Products. Exporting to count
Slide 6: Group Profile: Geographical Spread of Group
GROUP PROFILE (CONT.) GEOGRAPHICAL SPREAD OF GROUP Location Product Business Orientation Gujrat, Punjab Tyre, Tube & Footwear Manufacturing Muridke, Punjab Footwear Manufacturing Muridke, Punjab Motorcycle Chain Kit Manufacturing Nooriabad, Sindh Tyre Manufacturing Sri Lanka Footwear Man
Slide 7: Group Profile (Cont.)
GROUP PROFILE (CONT.) The largest exporter of Footwear from Pakistan exporting more than PKR 13 Billion (US$ 64 M) in FY 2022. More than 40% of total leather footwear exports of Pakistan are driven by Servis Group. The leading manufacturer of Tyres and Tubes in Pakistan having combined capacity
Slide 8: Details of Subsidiaries: Service Global Footwear Limited
DETAILS OF SUBSIDARIES SERVICE GLOBAL FOOTWEAR LIMITED - SGFL SGFL was operating as an integrated unit of Service Industries Limited (“SIL”) since 1988 which was demerged in 2019 into a separate entity. Listed on Pakistan Stock Exchange in 2021. Export oriented unit. First solar powered shoe
Slide 9: Details of Subsidiaries: Service Long March Tyres
DETAILS OF SUBSIDARIES (CONT.) SERVICE LONG MARCH TYRES (PRIVATE) LIMITED - SLM First manufacturing facility in Pakistan for manufacturing and sale of All Steel Radial Truck and Bus Tyres (TBR tyres) with Chinese stake of 44% who brought in the technical expertise. Manufacturing facility located
Slide 10: Details of Subsidiaries: Dongguan Service Global Limited
DETAILS OF SUBSIDARIES (CONT.) DONGGUAN SERVICE GLOBAL LIMITED (DSGL) A wholly-owned subsidiary of Service Global Footwear Limited ,has been set up to undertake procurement, marketing and product development activities for footwear products. China, being the hub of the global footwear industry,
Slide 11: Details of Subsidiaries: SIL Gulf (FZE)
DETAILS OF SUBSIDARIES (CONT.) SIL Gulf (FZE) A wholly owned subsidiary of Service Industries Limited, set up in SAIF Zone, UAE. Opportunity to tap export markets of tyres. This trading arm is the first venture of Servis Group in the Middle East and provides a platform for promotion of exports
Slide 12: Details of Subsidiaries: Service Shoes Lanka
DETAILS OF SUBSIDARIES (CONT.) Service Shoes Lanka (Private) Limited A partially owned subsidiary of Service Industries Capital (Private) Limited, established in partnership with a local investor in 2015 and based in Katunayake BOI Zone, Sri Lanka. The Company was established to enhance export f
Slide 13: Company Profile
COMPANY PROFILE Flagship company of the Servis Group. The story of ‘Servis’ begins in late 1930s when a group of three young graduates from college, started exploring the possibility of doing business. Incorporated as a Private Limited Company in 1957. Became Public Limited Company in 1959.
Slide 14: Company Profile (Cont.)
COMPANY PROFILE (CONT.) Annual turnover in financial year 2022 of around PKR 43 Billion PKR (US$ 210M) with exports amounting to more than PKR 5 Billion (US $ 26M). Main Segments of revenue are Footwear (26%), Tyre & Tube (66%), Service Genuine Parts (7%) and Technical Rubber Products (1%). Le
Slide 15: Company Profile: Export vs Local Sales Mix
COMPANY PROFILE (CONT.) Sales mix of exports and local sales for the FY 2022 can be seen in the pie chart. Export sales – Rs. 5 Billion Local sales – Rs. 38 Billion 88% 12% Export Sales Local Sales 14
Slide 16: Free Float as at December 31, 2022
COMPANY PROFILE (CONT.) FREE FLOAT AS AT DECEMBER 31, 2022 Free float shares are 16,623,342 out of total paid up share capital of 46,987,454 which make up to 35%. 15
Slide 17: Business Segment: Tyre and Tube
BUSINESS SEGMENT TYRE AND TUBE SEGMENT Tyre & Tube Segment revenue comes from the following streams: • Exports • Local – OEMs (Original equipment Manufacturer) • Local – Replacement Market The main Products included in Tyre & Tube segment are: • Motorcycle Tyre & Tube • Cycle Tyre & Tube • Rickshaw
Slide 18: Business Segment: Tyre and Tube (Cont.)
BUSINESS SEGMENT (CONT.) TYRE AND TUBE SEGMENT Total Tyre & Tube segment revenue is around of PKR 28 billion (US$ 138 M) in the year 2022. In the motorcycle tyre & tube business, SIL is leading in market share. Almost all major OEMs are customers of SIL. SIL has almost 49% market share in Pakistan
Slide 19: Business Segment: Footwear
BUSINESS SEGMENT (CONT.) FOOTWEAR SEGMENT Footwear Segment revenue of around PKR 12 Billion (US$ 56M) comes from the following streams: • Exports • Local – institutional & Wholesale • Retail The company's export sales of footwear amounted to PKR 2 billion (US$ 9 million) in the year 2022. The compan
Slide 20: Business Segment: Footwear Retail
BUSINESS SEGMENT (CONT.) FOOTWEAR SEGMENT The Company’s retail segment achieved phenomenal results in the year 2022 as sales revenue crossed PKR 5 billion mark (US $ 24 million). The number of stores which were 91 in December 2021 touched 152 in December 2022, showing an increase of 61 retail outlet
Slide 21: Business Segment: Service Genuine Parts
BUSINESS SEGMENT (CONT.) SERVICE GENUINE PARTS SEGMENT Started in Jan-15. Own manufacturing of motorcycle chains and sprockets commenced in 2022. Third (3rd) party manufacturing was done earlier. The basic idea is to leverage existing distribution network, which already has access to around
Slide 22: Business Segment: Service Genuine Parts (Cont.)
BUSINESS SEGMENT (CONT.) SERVICE GENUINE PARTS SEGMENT Own manufacturing of motorcycle chains started from July 2022 and sprockets from November 2022. The annual capacity of the project stands at 3 million for chains and 2.4 million for sprockets. Projected to sell goods worth more than PKR 2 bi
Slide 23: Financial Performance Highlights: Overall Snapshot
FINANCIAL PERFORMANCE HIGHLIGHTS : OVERALL SNAPSHOT Description 2017 2018 2019 2020 2021 2022 Export Sales Rs. (million) 5,058 7,472 6,353 3,049 4,009 5,258 Local Sales Rs. (million) 15,840 16,608 19,803 21,394 28,716 37,341 Revenue (Separate) Rs. (million) 20,898 24,080 26,156 24,442 32,725 42,599
Slide 24: Dividend Declared, Yields and Bonus Shares
FINANCIAL PERFORMANCE HIGHLIGHTS- DIVIDEND DECLARED, YEILDS & BONUS SHARES Description 2017 2018 2019 2020 2021 2022 Dividend Rs. Per share 30.50 30.00 20.00 15.00 7.50 5.00 Paid up Share Capital No. 12,028,789 12,028,789 18,794,982 23,493,727 46,987,454 46,987,454 Bonus Issue % - 25.00 50.00 100.00
Slide 25: Profitability Ratios and Returns
FINANCIAL PERFORMANCE HIGHLIGHTS- PROFITABILITY RATIOS AND RETURNS Description 2017 2018 2019 2020 2021 2022 Gross profit Ratio % 17.05% 17.99% 18.67% 20.13% 16.09% 18.72% Net Profit Ratio % 4.29% 4.41% 3.39% 2.82% 1.09% 0.83% Earning per share Rs. 19.09 22.59 18.86 14.69 7.59 7.54 Return on equity
Slide 26: Liquidity Ratios and Financial Coverage
FINANCIAL PERFORMANCE HIGHLIGHTS- LIQUIDITY RATIOS AND FINANICAL COVERAGE Description 2017 2018 2019 2020 2021 2022 Interest Cover Times 4.05 3.06 2.54 2.84 2.18 1.73 Current Ratio Times 1.14 1.11 0.98 0.97 0.96 0.84 Gearing Ratio % 38:62 38:62 38:62 40:60 52:48 58:42 Break-up value Rs. 395 459 305
Slide 27: Shareholders' Wealth (Based on 100 Shares)
SHAREHOLDERS’ WEALTH (Based on 100 shares) Rupees Particulars No of Market Market Shares Price Value Number of Shares held by a shareholder Jan 01 2019 100 725 72,500 Bonus Shares Issued in: CY 2019 50% 50 CY 2020 25% 38 CY 2020 100% 188 275 Number of Shares held by a shareholder Dec 31 2022 375 340
Slide 28: Financial Performance Highlights: Separate Financials
FINANCIAL PERFORMANCE HIGHLIGHTS SEPARATE FINANCI ALS December 31, 2022 December 31, 2021 Variance Percentage (Rupees in thousands) Revenue 42,599,481 32,724,924 9,874,557 30.17 Cost of Sales (34,626,020) (27,458,310) (7,167,710) 26.10 Gross Profit 7,973,461 5,266,614 2,706,847 51.40 Distribution Co
Slide 29: Financial Performance Highlights: Consolidated Financials
FINANCIAL PERFORMANCE HIGHLIGHTS December 31, 2022 December 31, 2021 Variance CONSOLIDATED FINANCIALS Percentage (Rupees in thousands) Revenue 61,668,669 39,385,032 22,283,637 56.58 Cost of Sales (51,406,625) (32,911,184) (18,495,441) 56.20 Gross Profit 10,262,044 6,473,848 3,788,196 58.52 Distribut
Slide 30: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY SIL contributed over PKR 70 million for CSR activities in various sectors in FY 2022. Major focus being healthcare and education. Servis Group has a strong commitment to social responsibility, with a 42% long-standing tradition of charity and giving dating back to
Slide 31: Corporate Social Responsibility (Cont.)
CORPORATE SOCIAL RESPONSIBILITY (CONT.) INTERNAL COMPANY INITIATIVES & RESPONSIBLE OPERATIONS INSTITUTIONAL CONTRIBUTIONS THROUGH SERVIS FOUNDATION • Industrial Relations • Employment of females and persons with disability • Shalamar Institute of Health Sciences • Occupational Safety and Health • Ki
Slide 32: Future Outlook
FUTURE OUTLOOK Pakistan is going through a period of economic turmoil with rising inflation, increasing interest rates, aggressive devaluation, political instability and worsening macro-economic indicators battering the industry on all fronts. The company management’s is actively tracking the late
Slide 33: Thank You, Questions & Answers
THANK YOU QUESTIONS & ANSWERS 32