Welspun Living Limited · NSE:WELSPUNLIV
Welspun Living — Welspun India — Investor Presentation (May 2018)
52 slides from Welspun Living's investor presentation, May 2018
Slide 1: Investor Presentation May 2018
INVESTOR PRESENTATION May 2018 Owned Brands Innovations Licenses 1
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is provided by Welspun India 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
Slide 3: Introduction to Welspun Group
INTRODUCTION TO WELSPUN GROUP Global Leader in Global Leader in Infrastructure Home Textiles Large Diameter Pipes Investments in Oil & Gas Group Revenue Asset Base Employees US$ 2.3 Billion US$ 2.7 Billion 25,000+ 3
Slide 4: Agenda
1. Welspun India: An Introduction 2. Industry Overview AGENDA 3. Welspun India: Key Differentiators 4. Key Strategic Initiatives 5. Welspun 2.0 & Way Forward 4
Slide 5: Welspun India: An Introduction
WELSPUN INDIA: AGENDA AN INTRODUCTION 5
Slide 6: Welspun India: Overview
WELSPUN INDIA: OVERVIEW Largest Ranked #1 Home Textiles Company Globally(1) among Home Textile Suppliers With presence in to USA Bed, Bath & Flooring by Home & Textiles Today magazine Presence in 5 Times in Last 6 Years 50+ Countries Every 5th Towel Trusted and Preferred Suppliers to Every 10th Shee
Slide 7: Key Milestones
KEY MILESTONES 66 60 61 53 Revenues (Rs. Bn) CAGR 22% 44 (2005-18) 32 26 16 7 4.5 0 0.8 1.3 FY 1985 1993 1995 2005 2006 2008 2010 2012 2014 2015 2016 2017 2018 Entry into Rugs Ranked No.1 Home Embarked upon Began the Set up Anjar, Gujarat Textile exporter to Capacity the US Established industry jour
Slide 8: Shareholding and Trading Snapshot
SHAREHOLDING AND TRADING SNAPSHOT Shareholding Pattern March 31, 2018 March 31, 2017 15.6% 12.1% 0.6% Promoter 0.6% 1.9% FIIs 6.2% 11.9% Mutual Funds 9.2% Banks and Insurance Cos 68.5% Public 73.5% Market Statistics As on Mar 31, 2018 INR USD Price per share 57.95 0.89 No of Shares outstanding (Mn)
Slide 9: Industry Overview
WELSPUN INDIA INDUSTRY OVERVIEW
Slide 10: Asian Dominance in Home Textiles
ASIAN DOMINANCE IN HOME TEXTILES India 5% Textiles & US$ 748 bn Apparel China 35% India 6% Textiles US$ 292 bn China 37% India 11% Home Textiles US$ 45 bn China 35% Source: WTO - 2016 data, Texprocil, OTEXA 10
Slide 11: Global Market Opportunity
GLOBAL MARKET OPPORTUNITY Global Home Textile Market Market Composition (USD Bn) 203 US 33% 67 136 Wholesale Level 45 Retail Level Row 33% Europe 33% 2015 2020E US Home Textile Market (2016) US and Europe are the major end markets US Home Textile Market (USD Bn) comprising a third each of the home
Slide 12: India - Largest Player in US Market
INDIA- LARGEST PLAYER IN US MARKET Market Share in US Towel Market 9 percentage pts 38% 40% 39% 36% 30% India continues 23% 24% 26% 25% 22% 22% 23% 22% 24% to dominate the 22% 21% 15% 15% 15% 16% US Towel Market CY2009 CY2012 CY2015 CY2016 CY2017 India China Pakistan ROW 23 percentage pts Market Sha
Slide 13: Factors Contributing India's Competitive Advantage
FACTORS CONTRIBUTING INDIA’S COMPETITIVE ADVANTAGE Largest Favourable Competitive Producer of Socio-Economic Costs Cotton Factors 4 5 6 Strong Political Global Strong Domestic Leadership Manufacturing Market with Supportive Scale Potential Policies 13
Slide 14: Welspun India: Key Differentiators
WELSPUN INDIA: AGENDAKEY DIFFERENTIATORS 14
Slide 15: Welspun India: Bellwether in Home Textiles
WELSPUN INDIA: BELLWETHER IN HOME TEXTILES 8 1 Leading Market Player Consistent focus on free with a Wide Product cash flow Range 7 2 Experienced Board and Vertically Integrated Management with Proven Presence with Significant Track Record Capabilities 6 3 Global Distribution Sustainability at the C
Slide 16: Leading Market Player with a Wide Product Range
1 LEADING MARKET PLAYER WITH A WIDE PRODUCT RANGE Widest product range in the Home Textiles segment Towels, Bath Sheets, TOB, Basic Carpets, Rugs, Robe & Fashion Bedding flooring solutions A differentiated End-to-end Solutions Provider in Home Textiles Uniquely positioned for cross-selling due to Cu
Slide 17: Leading Market Player
1 LEADING MARKET PLAYER Ranked No.1 supplier to the US for 2016 by Home & Textiles Today magazine; 5 times in last 6 years Every 5th towel sold in US is made by Welspun Every 10th sheet sold in US is made by Welspun 10% 19% 15% 7% CY13 CY17 CY13 CY17 Welspun’s Market Share in US Towels Market Welspu
Slide 18: Vertically Integrated Presence with Significant Capabilities
2 VERTICALLY INTEGRATED PRESENCE WITH SIGNIFICANT CAPABILITIES India Supply Vertically Integrated Facilities Across Manufacturing Chain Advantage Cotton Spinning Weaving Processing Cutting & Sewing Logistics Captive Power Current integration of about 70% in Spinning and Weaving Captive power gen
Slide 19: Global Distribution Network with Marquee Clients
3 GLOBAL DISTRIBUTION NETWORK WITH MARQUEE CLIENTS Warehouses Manufacturing Facility Corp HQ/Marketing Offices Country Served Delivery and Reach in Over 50 Countries 19
Slide 20: Diversified Brand Portfolio
4 DIVERSIFIED BRAND PORTFOLIO Spectrum of Welspun Brands: Continue to Evolve Premium & Sustainability & Innovation Technology Luxury Empowerment Coveted Licenses Branded Products Contribution to Sales at 17% in FY18 20
Slide 21: Track Record of Innovation
5 TRACK RECORD OF INNOVATION Increasing Share of Innovative Products • 37% of Sales from Innovative Products 34% 36% 37% 30% • 30 unique inventions filed globally FY15 FY16 FY17 FY18 • Contributes more than $175 Mn of Sales The two segments (innovative & branded) together account for • Good traction
Slide 22: Sustainability: Focus on the 3Es
6 SUSTAINABILITY: FOCUS ON THE 3Es Empowerment • Quality Education Project • Adult Literacy Education for women • Vocation Centers: 10 centers including SPUN - 351 women trained and 239 women employed in Welspun during the quarter Education • Walmart’s SWASTI foundation for Women Empowerment and Tra
Slide 23: Inclusive Growth: Implementing Smart Villages
6 INCLUSIVE GROWTH: IMPLEMENTING SMART VILLAGES E-Connectivity • Wi-fi enabled villages with CCTV coverage Environment • Complete E-governance • Green cover in all public land • PA system with speakers • Segregation and organized disposal of garbage • Comprehensive CMS for Panchayat Office • 100% LE
Slide 24: Sustainability in Everything That We Do
6 SUSTAINABILITY IN EVERYTHING THAT WE DO STP Installed with a Capacity to Process 30 MN Liters Per Day; currently saving 6,500 million Liters of Water annually 85% Water Recovered From STP Used at Plant 10,000+ Youth Trained via Welspun’s Skill Development Program 1,200+ Women Engaged Across 10 Voc
Slide 25: Experienced Board & Management with Proven Track Record
7 EXPERIENCED BOARD & MANAGEMENT WITH PROVEN TRACK RECORD Board of Directors Management Team B.K.Goenka, Chairman Rajesh Mandawewala, Managing Director • Amongst India’s most dynamic businessmen • In-charge of textile business; instrumental in growing reach over 50 countries • Ranked amongst India’s
Slide 26: Awards & Accolades – Testimony to Excellence
7 AWARDS & ACCOLADES – TESTIMONY TO EXCELLENCE Dipali Goenka Best Brand Product Innovation Award “Spaces” Featured at #16 in Asia’s Top 50 Power (Home Category 2017) Businesswomen (2016) Asia’s 50 Power Innovation Branding Businesswoman Marketing Services Award Top-3 in Product-Wise Winner of “Space
Slide 27: Continued Focus on Free Cash Flow
8 CONTINUED FOCUS ON FREE CASH FLOW 4,000 3,770 2,405 2,000 795 714 859 785 907 786 239 - Rs. in Millions FY14 FY15 FY16 FY17 FY18 (2,000) (4,000) (6,000) -6,217 FCF Dividend (8,000) FCF positive for four consecutive years 27
Slide 28: Trend of Financial Performance
8 TREND OF FINANCIAL PERFORMANCE Total Income EBITDA CAGR 11% 18,000 CAGR 13% 16,831 16,639 80,000 16,000 70,000 67,211 13,691 61,318 14,000 60,143 12,046 60,000 54,924 12,000 10,253 44,772 Rs. miilion 50,000 10,000 36,965 Rs. million 40,000 8,000 6,438 30,000 6,000 20,000 4,000 10,000 2,000 0 0 FY1
Slide 29: Key Strategic Initiatives
KEY STRATEGIC AGENDA INITIATIVES 29
Slide 30: Welspun's Patented Global Cotton Integrity Process
WELSPUN’S PATENTED GLOBAL COTTON INTEGRITY PROCESS Welspun’s patented Wel-Trak™ process, supplemented by scientific traceability from Oritain™, is now the most comprehensive end-to-end fiber tracking process. - Verifies fiber from the origin and at every stage of production - Ensures rigorous proces
Slide 31: Smartsourcing: Asset Light Future Growth
SMARTSOURCING: ASSET LIGHT FUTURE GROWTH SYNERGISTIC BENEFITS Assured Lower Lower inventory Recycling of Supply transportation Lower Interest packaging costs cost Collaboration with • Already Established Ancillaries Suppliers for Lead Time • Spinning Reduction via Exclusive Set-up of Welspun • Trims
Slide 32: Omni-Channel Support to Top Global Retailers
Omni-Channel Support to Top Global Retailers via Product Development, Warehousing, Pick and Pack, Drop-Ship and Analytics SCM Analytics for Our Customers 32
Slide 33: Welspun 2.0 & Way Forward
WELSPUN 2.0 AGENDA & WAY FORWARD 33
Slide 34: Welspun India: Vision 2022
WELSPUN INDIA: VISION 2022 + + + + 1 2 3 4 5 Innovation & Brands New Markets New Channels New Products Patents Innovative / Branded Women Share of Domestic Revenue Net Debt Revenue Share Revenue Employees $2bn NIL 50% 20% 20% 34
Slide 35: Innovation & Patents: Technology Home Textiles
1 INNOVATION & PATENTS TECHNOLOGY Transcends to HOME TEXTILES with Creating interactive experiences through seamless integration of smart technology with home textiles Patented augmented reality home décor Launched in the US for Holiday 2016. Presented at CES 2017 at Las Vegas to Extensive Media
Slide 36: Brands: Christy
2 BRANDS : CHRISTY Christy Brand Reinvigorated & Launched Globally 2008 2013 2017 A 150-Year Old Reinvigorated the Christy Brand, which has dominant presence in UK Legacy.. ‘Living Introduced the brand in US, China and Middle East; witnessed healthy growth Redefined’ Coveted Associations like
Slide 37: Brands: Spaces
2 BRANDS : SPACES Focus on tapping Domestic Market potential India – one of the fastest growing economies in the world with huge potential for increasing organized market ‘Spaces’ was recently recognized as a best brand in home category by Myntra. Also, received Amazon Marketing Services Award f
Slide 38: New Markets
3 NEW MARKETS Composition of Sales (FY18) Presence in Japan, the Middle Future Strategy East, Australia, Russia and • Indian Urban Home Textile market South Africa is expected to grow from INR • Welspun India to focus on increasing 257bn in 2016 to INR 438bn by presence in subscale / new markets RoW
Slide 39: New Channels: E-Commerce
4 NEW CHANNELS : E-COMMERCE In key developed markets, E-commerce constitutes 10-15% in Home Textiles. Expected to reach ~25% by FY23 Welspun approach to tap the Ecommerce opportunity Key Ecommerce Big-Box Retailers’ Exclusive Online Platforms Own Website Websites D2C Players • Key Ecommerce players
Slide 40: New Channels: Hospitality
4 NEW CHANNELS : HOSPITALITY Opportunity Welspun only constitutes ~3% of total US hospitality market - The US hospitality market is c. $1.5bn (i.e. for towels and sheets) - Welspun currently earns c. $50mn from this category indicating huge growth potential High potential global wellness economy of
Slide 41: New Products: Flooring Solutions
5 NEW PRODUCTS : FLOORING SOLUTIONS Wide range of Flooring products Carpet Tiles Broadloom Carpets Artificial Grass & Area Rugs Welspun Flooring: Fully integrated and independent flooring vertical - Aim to become a one-stop flooring solutions provider for domestic and international markets - Facilit
Slide 42: New Products
5 NEW PRODUCTS 1 Untapped Opportunity in Bedding • Large untapped opportunity in basic bedding, comforters and quilts • Currently, China dominates the market; India is gradually making inroads • Contributed ~3% of sales in FY18 2 Technical / Advanced Textiles • Products for specialized use in health
Slide 43: Moving Towards Vision 2022
RAISING THE BAR Differentiation Strategy : Industry Defining Focus on New Product Innovation, Traceability New channels Domestic Market Lines Branding & Solution Sustainability MOVING TOWARDS VISION 2022 Volatile raw Rising energy costs Volatile Rupee material costs 43
Slide 44: Thank You
THANK YOU For further details, please contact: Altaf Jiwani Director (Finance) & CFO - Welspun India Limited Email: altaf_jiwani@welspun.com Harish Venkateswaran AVP - Group Finance and Strategy Email: harish_venkateswaran@welspun.com 44
Slide 45: Appendix
WELSPUN INDIA APPENDIX
Slide 46: Key Highlights - Q4 FY18
KEY HIGHLIGHTS- Q4 FY18 Wel-TrakTM merchandise available on shelves in US stores across multiple retailers E-commerce contributes double-digit share in Christy sales Received Amazon Marketing Services Award 2018 for “Spaces” EBITDA Margin at 19.0% Company generated positive free cash flows for the f
Slide 47: Financial Performance – Q4 FY18
FINANCIAL PERFORMANCE – Q4 FY18 (Rs. Million) Change Change Particulars Q4FY18 Q4FY17 Q3FY18 YoY QoQ Total income 15,349 17,727 -13.4% 14,143 8.5% EBITDA 2,922 3,984 -26.7% 2,687 8.8% EBITDA Margin 19.0% 22.5% -344 bps 19.0% 4 bps Finance Cost 381 430 -11.4% 345 10.3% Depreciation 1,301 1,365 -4.7%
Slide 48: Financial Performance – FY18
FINANCIAL PERFORMANCE – FY18 (Rs. Million) Change Particulars FY18 FY17 YoY Total income 61,318 67,211 -8.8% EBITDA 12,046 16,639 -27.6% EBITDA Margin 19.6% 24.8% -511 bps Finance Cost 1,408 1,583 -11.1% Depreciation 5,042 5,054 -0.2% PBT 5,597 10,003 -44.0% Exceptional (Loss) - (4,648) PAT (Before
Slide 49: Financial Performance Trend
FINANCIAL PERFORMANCE TREND (Rs. Million) Particulars FY15 FY16 FY17 FY18 Total income 54,924 60,143 67,211 61,318 Growth % 22.7% 9.5% 11.8% -8.8% EBITDA 13,691 16,831 16,639 12,046 EBITDA Margin 24.9% 28.0% 24.8% 19.6% Depreciation 3,329 3,718 5,054 5,042 Finance cost 2,829 2,368 1,583 1,408 PBT 7,
Slide 50: Balance Sheet Trend
BALANCE SHEET TREND (Rs. Million) Particulars 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 Net Worth 14,732 19,700 23,971 26,057 Short Term Loans 13,936 13,533 11,721 12,580 Long Term Loans 20,864 18,945 21,393 20,228 Gross Debt 34,800 32,478 33,114 32,807 Cash & Cash Equiv. 4,321 1,388 2,725 2,538 Net D
Slide 51: Financial Ratio Trend
FINANCIAL RATIO TREND FY15 FY16 FY17 FY18 Solvency Net debt/Equity 2.07 1.58 1.27 1.16 ratios Net debt/EBITDA 2.23 1.85 1.83 2.51 EBIT/Interest 3.66 5.54 7.32 4.98 Current Ratio 1.12 1.15 1.41 1.41 Operational ratios Fixed Asset turnover 2.04 1.77 1.86 1.80 Total Asset turnover 0.90 0.90 0.91 0.84 I
Slide 52: Dividend Policy
DIVIDEND POLICY Clear, defined Dividend Distribution policy 25% of standalone PAT to be the total payout (incl. dividend tax) Consistent track record of dividend distribution Standalone Dividend tax Payout Period DPS EPS per share Percentage FY15 5.09 1.05 0.21 25% FY16 5.99 1.30 0.26 26% FY17