Redington Limited · NSE:REDINGTON
Redington — Q1 FY22 Earnings Presentation
68 slides from Redington's earnings presentation, Aug 12, 2021
Slide 1: Cover letter to NSE: Presentation to Investor/Analyst Meet
Registered & Corporate Office . Redington (India) Limited pa : Nn O Nn Redington House, Centre Point, Plot. No.11 [SP], Thiru.Vi.Ka Industrial Estate, SEAMLESS PARTNERSHIPS Guindy, Chennai- 600032. Tamil Nadu, INDIA Tel : +91 44 4224 3353 Fax : +91 44 2225 3799 CIN : L52599TN1961PLC028758 www.reding
Slide 2: Q1FY22 Earnings Presentation
REDINGTON (INDIA) LIMITED Q1FY22 Earnings Presentation June 2021
Slide 3: Disclaimer
Disclaimer This presentation contains “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Redington India Limited’s future business developments and economic performance. While these forw
Slide 4: Financial Highlights
Financial Highlights • Q1FY22 – • Global – Revenue grew by 26%, EBITDA grew by 58%, PAT grew by 167% • India – Revenue grew by 57%, EBITDA grew by 94%, PAT grew by 359% • Overseas – Revenue grew by 11%, EBITDA grew by 40% and PAT grew by 106% • Key Metrics - Global • WC days for Q1FY22 is 18 days •
Slide 5: Financial Highlights: India Business
Financial Highlights INDIA BUSINESS During the quarter, • India Distribution – Revenue grew by 59%, EBITDA grew by 100%, PAT grew by 278% • Strong growth in IT vertical driven largely by IT Consumer followed by IT Enterprise • WC days stood at 21 days in Q1FY22 as against 12 days in Q1FY21 • Strong
Slide 6: Financial Highlights: Overseas Business
Financial Highlights OVERSEAS BUSINESS • During the quarter, • META – Revenue grew by 16%, EBITDA grew by 46%, PAT grew by 129% • Impact to revenue growth in SSA on account of shift of few biz (at vendor end) to India • WC days stood at 17 days in Q1FY22 as against 19 days in Q1FY21 • Strong ROCE pe
Slide 7: Other Highlights
Other Highlights MSCI ESG Research provides MSCI ESG Ratings on global public and a few private companies on a scale of AAA (leader) to CCC (laggard), according to exposure to industry-specific ESG risks and the ability to manage those risks relative to peers. MSCI ESG Research provides in-depth res
Slide 8: Connecting The Dots
Q4FY18 Highlights Q1FY22 Highlights Connecting The Dots Transformation from ‘Product’ to ‘Utility of Product’ 7
Slide 9: Q1FY22 Redington Global Performance
Q1FY22 Redington Global Performance ₹ in mn REVENUE EBITDA PAT 26% 58% 167% 1,34,740 3,642 1,07,220 2,367 2,301 888 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 8
Slide 10: Q1FY22 Performance by Market
Q1FY22 Performance by Market ₹ in mn REVENUE EBITDA PAT 57% 94% 359% 54,351 INDIA 34,515 1,517 971 782 211 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 OVERSEAS 11% 40% 106% 80,389 72,705 2,125 1,396 1,519 677 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 9
Slide 11: Q1FY22 Contribution by Market
Q1FY22 Contribution by Market REVENUE EBITDA PAT 60% 66% 58% 59% 68% 76% 40% 34% 42% 41% 32% 24% Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 INDIA OVERSEAS INDIA OVERSEAS INDIA OVERSEAS 10
Slide 12: Q1FY22 India Performance
Q1FY22 India Performance ₹ in mn REVENUE EBITDA PAT 59% 100% DISTRIBUTION 278% 53,255 33,519 1,416 952 708 251 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 10% 37% -ve to +ve SERVICES# 19 996 1,096 74 101 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 -40 #Services contains Ensure India figures in Q1FY21 (D
Slide 13: Q1FY22 Overseas Performance
Q1FY22 Overseas Performance ₹ in mn REVENUE EBITDA PAT 16% 46% 129% 75,869 65,438 META 2,006 1,312 1,370 573 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 38% 19% 20% SSA 7,267 4,520 149 120 104 84 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Note: Overseas performance in c/c terms – Revenue 13%; EBITDA 44
Slide 14: Q1FY22 Revenue Performance by Verticals
Q1FY22 Revenue Performance by Verticals INDIA OVERSEAS GLOBAL 3% 2% 1% 1% 1% 1% 16% 22% 27% 35% 35% 31% 75% 82% 68% 72% 64% 64% Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 IT Mobility Services IT Mobility Services IT Mobility Services Note: Upon re-grouping, only smartphones are shown under Mobility N
Slide 15: Q1FY22 Working Capital Days
Q1FY22 Working Capital Days INDIA OVERSEAS GLOBAL 9 2 1 6 7 6 21 19 18 15 17 17 12 12 10 Q1FY21 Q4FY21 Q1FY22 Q1FY21 Q4FY21 Q1FY22 Q1FY21 Q4FY21 Q1FY22 14 14
Slide 16: Q1FY22 Free Cash Flow Statement
Q1FY22 Free Cash Flow Statement ₹ in mn Particulars Q1FY21 Q4FY21 Q1FY22 Profit Before Taxation 1,305 3,848 3,014 Non-cash items 426 522 511 Outflow of Finance Cost 424 220 183 Changes in Working Capital 22,058 2,803 (5,901) Direct Tax Paid (288) (1,265) (667) Net Cash Flow from Operations 23,925 6,
Slide 17: Q1FY22 Top Vendors
Q1FY22 Top 5 Vendors REVENUE 34% OTHERS 43% SAMSUNG 6% LENOVO 5% 8% 7% DELL EMC 9% 8% HP Inc 14% 11% APPLE 26% 29% Q1FY21 Q1FY22 16 16
Slide 18: Q1FY22 ProConnect India
Q1FY22 ProConnect India • PCS registered growth across all metrics with revenue growth of 36% YoY • PCS registered EBITDA margin of 9% for the quarter REVENUE EBITDA PAT 36% 114% -ve to +ve 1,096 19 101 47 Q1FY21 Q1FY22 803 Q1FY21 Q1FY22 Q1FY21 Q1FY22 ₹ in mn -45 ₹ in mn ₹ in mn Above figures includ
Slide 19: Shareholding Pattern
Shareholding Pattern Others Others 11.7% 12.5% Mutual Funds Mutual Funds 10.8% 11.2% Synnex Mauritius Synnex Mauritius Limited Limited 24.2% 24.2% Affirma Affirma Capital Capital 15.8% 15.2% Foreign Foreign Institutional Institutional Investors & FPIs Investors & FPIs 37.5% 36.9% Mar-2021 Jun-2021 2
Slide 20: Investor Contacts
Investor Contacts M. Muthukumarasamy Compliance Officer Redington (India) Limited Redington House, Centre Point, Plot No. 11 (SP), Thiru. Vi. Ka. Industrial Estate, Guindy, Chennai 600 032 https://www.redingtongroup.com Sowmiya M Senior Manager – Investor Relations Connecting The Dots sowmiya.manick
Slide 21: Corporate Presentation
Corporate Presentation Jun 2021 1
Slide 22: An 'Emerging Markets Multinational'
An ‘Emerging Markets Multinational’ with a multi-faceted approach of DISTRIBUTION SERVICES No.1 Technology Third Party Logistics distributor in MEA Services through and No.2 in India ProConnect Distribution of IT Consumer, IT Enterprise, Support Services & Mobility products through Ensure Expanding
Slide 23: Our Mission and Values
Our Mission and Values “Our mission is to offer a robust technology-powered platform to enable a seamless flow of products and services” 3
Slide 24: Our Transformation
Our Transformation From a “Broadline Distributor” to a “Value Added Distributor” to a “Services & Solutions Company” IT CONSUMER IT CONSUMER + IT ENTERPRISE IT + MOBILITY + LOGISTICS + MOBILITY 1993-2002 : The Emergence 2003-2011 : The Proliferation 2012-2021 : The Expansion 4
Slide 25: Our Presence
Our Presence TURKEY INDIA SSA 1 market 1 market 5 markets Enviable “In country” presence in 37 markets No.1 or No.2 position across all markets “High potential” markets Presence across product categories Portfolio of Marquee brands AFRICA MIDDLE EAST 22 markets 8 markets 5
Slide 26: Our Expansion
Our Expansion BRANDS CHANNEL SALES EMPLOYEES MARKETS WAREHOUSES PARTNERS OFFICES Present 245+ 34,000+ 3,983 37 70+ 200+ 1993 1 25 5 1 3 1 6
Slide 27: Our Board Of Directors
Our Board Of Directors Independent Directors CHAIRMAN Prof. Ramachandran V. S. Hariharan Keith WF Bradley B Ramaratnam Anita P Belani Professor, Corporate Ex. Vice President, Ex.President, Professional Sr Business & Human Policy & Strategy Hewlett-Packard, Ingram Micro, Director Capital Leader IIM,
Slide 28: Our Experienced Executive Team
Our Experienced Executive Team Raj Shankar Rajiv Srivastava Vice Chairman & Managing Director Joint Managing Director P S Neogi S V Krishnan Ramesh Natarajan J K Senapati, Gautam Hukku, R Venkatesh E H Kasturi Rangan Dilip Sharma Chief of Staff Whole Time CEO, India COO, India President, Apple Presi
Slide 29: Our Shareholders
Our Shareholders HDFC Mutual Fund Others, Fidelity Management & Research (FMR) 12.5% Synnex Mauritius Ltd, 24.2% ICICIPru Life Insurance Mutual Funds, 11.2% Fidelity International Affirma Acacia Partners (Ruane Cunniff & Goldfarb) Foreign Capital, 15.2% Institutional Investors & Franklin Templeton I
Slide 30: Our ESG Journey
Our ESG Journey An Environmentally conscious A Socially compassionate An Ethically Governed Redington Redington Redington MSCI ESG Research provides MSCI ESG Ratings on global public and a few private companies on a scale of AAA (leader) to CCC (laggard), according to exposure to industry-specific E
Slide 31: Redington Foundation
Redington Foundation Foundation for CSR @ Redington (Redington Foundation), a trust formed by Redington (India) Limited to implement various CSR activities towards the betterment of the society EMPLOYABILITY VOCATIONAL EQUIPPING SMART SKILLS TRAINING SKILLS TRAINING ACTIVITIES SCHOOLS HEALTHCARE EMP
Slide 32: Business Overview
Gg Redington SEAMLESS PARTNERSHIPS Business Overview
Slide 33: Distribution Business
Distribution Business
Slide 34: Distribution Business Model
Distribution Business Model CHANNEL PARTNERS SUB DISTRIBUTORS RETAILERS* RESELLERS BRANDS DISTRIBUTOR CUSTOMERS E-COMMERCE PLAYERS SYSTEM INTEGRATORS VALUE ADDED RESELLERS Market Knowledge & Access One stop shop Demand Generation Inventory Management Partner Recruitment & Enablement Bulk breaking BR
Slide 35: Distribution Business
Distribution Business BUSINESS INDIA MIDDLE EAST AFRICA TURKEY SINGAPORE SOUTH ASIA DISTRIBUTION IT CONSUMER IT ENTERPRISE MOBILITY PCs Networking Software Cloud Laptops Printers Smartphones Print Digital Print Supplies Solutions Licensing & Servers & Storage Security Subscription Consumer Lifestyle
Slide 36: IT Consumer Business
IT Consumer Business PRODUCT CATEGORIES IT CONSUMER’S BRANDS# CONTRIBUTION TO PCs Printers Laptops REVENUES* 46% Print Digital Print Supplies Solutions INDIA 45% Consumer Lifestyle OVERSEAS products *Figures as on Q1FY22 #Illustrative List 16
Slide 37: IT Enterprise Business
IT Enterprise Business PRODUCT CATEGORIES IT ENTERPRISE’S BRANDS# Networking Software Cloud CONTRIBUTION TO REVENUES* INDIA Licensing & 36% Servers & Storage Security Subscription OVERSEAS OVERSEAS 19% *Figures as on Q1FY22 #Illustrative List 17
Slide 38: Redington Cloud Business
Redington Cloud Business Our business Our Major Competencies Enabling channel partners to auto provision, Unified Digital consume, view consumption reports, subscription Cloud Platform management and monthly billing of Cloud services Distribution Team Strength : 80 Element Services Investments in Cl
Slide 39: Redington Cloud Managed Solutions (RCMS)
Redington Cloud Managed Solutions (RCMS) Assess Solution FEATURES OF REDINGTON CLOUD MANAGED SOLUTIONS Provision Assessment workshop Redington and Partner works with Customer IT team to do assessment workshop and validate customer readiness for cloud Migrate Architect Cloud Findings from application
Slide 40: Mobility Business
Mobility Business PRODUCTS MOBILITY CONTRIBUTION TO REVENUES* BRANDS# Smartphones 16% 35% INDIA OVERSEAS *Figures as on Q1FY22 #Illustrative List 20
Slide 41: Services Business
Services Business
Slide 42: Services Business
Services Business INDIA MIDDLE EAST AFRICA Logistics Support Divested Services in Jul’20 SERVICES CONTRIBUTION TO REVENUES* • Subsidiaries of Redington India Limited 2% 1% • Third Party Logistics player offering Warehousing; Transportation; INDIA 19% OVERSEAS Value added services *Figures as o
Slide 43: ProConnect India
ProConnect India Revenue Contribution from Services* Wholly Owned Subsidiary of Redington 5% Warehousing 28% Integrated Third Party Logistics partner Transportation 67% Others FY21 figures PAN India presence Revenue Contribution from Industries FMCD 26% 25% IT E-commerce 150+ Warehouses 9% Apparels
Slide 44: Risk Management
SEAMLESS PARTNERSHIPS Risk Management
Slide 45: De-risking Strategy By Diversification
De-risking Strategy By Diversification 37 Markets Our rich product portfolio consists of diversified Brands and diversified product categories under the same brand New Turkey SSA Presence in multiple markets ensures diversification of MARKETS risk as well as ensuring Kaizen’s continuous Adjacent MEA
Slide 46: Inherent Risks & Mitigation Measures
Inherent Risks & Mitigation Measures Invoices in foreign currency; CHANNEL PARTNER 1 Currency risk VENDOR DISTRIBUTOR CHANNEL PARTNER 2 CUSTOMERS CHANNEL PARTNER 3 Purchases products; Sells products on Credit; Inventory risk Receivables risk Risk Measures Effect of Mitigated Risk Inventory Risk • St
Slide 47: Financial Performance
Gg Redington SEAMLESS PARTNERSHIPS Financial Performance
Slide 48: Performance track record
Performance track record 28
Slide 49: Performance Since Listing
FY 07 86,672 FY 08* 1,03,699 FY 09 1,19,186 FY 10 1,31,622 FY 11* 1,63,734 CAGR 14% FY 12 2,07,799 FY 13 2,34,462 FY14^ 2,72,441 FY 15 3,07,361 FY 16 3,44,198 REVENUE FY 17 3,97,362 FY 18 4,16,417 FY 19 4,65,994 FY 20 5,15,138 FY21 5,70,416 ₹ in mn FY 07 1,985 FY 08* 2,590 FY 09 3,296 FY 10 3,657 FY
Slide 50: Performance Snapshot
Performance Snapshot Revenue 5,70,416 7,564 EBITDA 14,390 PAT ₹ in mn ₹ in mn ₹ in mn FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 WC days ROE 16.4% ROCE 36.5% 14 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 Pr
Slide 51: Annual performance track record
Annual performance track record All figures are ₹ in mn Particulars Q1FY22 FY21 FY20 FY19 FY18 FY17 Total Revenue 1,34,740 5,70,416 5,15,138 4,65,994 4,16,417 3,97,362 Growth YoY 25.7% 10.7% 10.5% 11.9% 5.8% 15.4% EBITDA 3,642 14,390 1,0714 9619 8,555 8,662 Growth YoY 58.3% 34.3% 10.4% 12.4% -1.2% 5
Slide 52: ROCE vs Cost of Debt Capital
ROCE vs Cost of Debt Capital Consistent Focus on Capital efficiency INDIA OVERSEAS Return on Rupee capital Return on Dollar Capital Value Creation 38.1% Value Creation 57.2% 63.2% 41.9% 39.2% 33.0% 19.8% 15.8% 18.1% 15.5% 15.5% 14.5% 6.6% 7.4% 6.9% 5.5% 3.8% 5.5% 5.4% 6.0% 6.0% 4.9% FY18 FY19 FY20 F
Slide 53: Quarterly performance track record
Quarterly performance track record All figures are ₹ in mn Particulars Q1FY22 Q4FY21 Q3FY21 Q2FY21 Q1FY21 Total Revenue 1,34,740 1,55,303 1,70,032 1,37,861 1,07,220 Growth QoQ -13.2% -8.7% 23.3% 28.6% -15.4% EBITDA 3,642 4,515 4,465 3,110 2,301 Growth QoQ -19.3% 1.1% 39.4% 35.1% -9.5% PAT 2,367 3,02
Slide 54: Top Vendors
Top 5 Vendors 39% 38% 37% 34% 41% 46% 5% 6% 4% 6% 6% 6% 6% 8% 4% 4% 5% 7% 8% 8% 8% 8% 9% 6% 11% 16% 15% 13% 14% 15% 29% 33% 29% 22% 27% 27% FY 17 FY 18 FY 19 FY 20 FY 21 Q1FY22 APPLE HP Inc DELL EMC LENOVO SAMSUNG OTHERS Note: Effect of Dell EMC merger is shown partly in FY17 figures and fully in FY
Slide 55: Value Creation for our Shareholders
Value Creation for our Shareholders EPS BOOK VALUE/SHARE PAYOUT TO SHAREHOLDERS* In ₹ In ₹ Avg Payout @ ~39% CAGR 13% CAGR 13% 126 of profits earned 19.4 110 60% 100 *53% 88 13.2 12.8 79 12.0 11.6 37% 67 10.6 32% 20% 20% FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 16 F
Slide 56: Current year performance
Current year performance
Slide 57: Q1FY22 Performance Snapshot
Q1FY22 Performance Snapshot REVENUE EBITDA PAT 26% 58% 167% Q1FY22: Rs.1,34,740 mn Q1FY22: Rs.3,642 mn Q1FY22: Rs.2,367 mn Q1FY21: Rs.1,07,220 mn Q1FY21: Rs.2,301 mn Q1FY21: Rs.888 mn WC DAYS ROE ROCE# 18 days 18.8% 52.2% Q1FY21: 17 days Q1FY21: 8.2% Q1FY21: 20.6% INVENTORY CHARGE AR PROVISION FREE
Slide 58: Performance By Market
Performance By Market REVENUE EBITDA PAT ₹ in mn ₹ in mn ₹ in mn 1,34,740 26% 58% 167% 3,642 1,07,220 2,367 80,389 2,301 1,396 11% 40% 2,125 72,705 106% 888 1,519 57% 54,351 94% 1,517 677 359% 971 34,515 782 211 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 India Overseas India Overseas India Overseas 2
Slide 59: India Performance
India Performance REVENUE EBITDA PAT ₹ in mn ₹ in mn ₹ in mn 54,351 57% 94% 359% 971 34,515 1,517 952 53,255 211 59% 782 100% 278% 33,519 1,416 251 19 708 996 10% 1,096 101 Q1FY21 -ve to +ve Q1FY22 74 37% (40) Q1FY21 Q1FY22 Q1FY21 Q1FY22 Services Distribution Services Distribution Services Distribut
Slide 60: Overseas Performance
Overseas Performance REVENUE EBITDA PAT ₹ in mn ₹ in mn ₹ in mn 11% 40% 106% 80,389 72,705 2,126 1,396 1,519 75,869 46% 129% 65,438 16% 2,006 677 1,312 1,370 573 7,267 4,520 20% 38% 19% 149 120 104 84 Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 SSA META SSA META SSA META Note: Overseas performance in
Slide 61: Performance By Vertical
Performance By Vertical INDIA OVERSEAS GLOBAL 3% 2% 1% 1% 1% 1% 22% 16% 35% 35% 31% 27% 75% 82% 64% 64% 68% 72% Q1FY21 Q1FY22 Q1FY21 Q1FY22 Q1FY21 Q1FY22 IT Mobility Services IT Mobility Services IT Mobility Services 27 Note: Services represents ProConnect only 41
Slide 62: Redington Vis-à-vis Global Peers
Redington Vis-à-vis Global Peers Net Debt to Equity 1 2 4 3 3 yr Avg ROE 2 3 1 4 3 yr Avg ROCE 2 3 1 4 3 yr Avg WC days 2 3 4 1 3 yr PAT CAGR 3 1 4 2 3 yr Gross Profit CAGR 2 3 4 1 3 yr Rev CAGR 2 3 4 1 Redington Global Peer 1 Global Peer 2 Global Peer 3 42
Slide 63: Our Opportunities
Gg Redington SEAMLESS PARTNERSHIPS Our Opportunities
Slide 64: India: Govt spending opportunities
India: Govt spending opportunities India to attain a trillion dollar of economic value of digital economy by 2025 India’s digital economy could contribute 18–23% of overall economic activity by 2025, with more than half the potential coming from scaling up new and emerging digital ecosystems Source:
Slide 65: India Opportunities
India Opportunities • Covid 19 impact - CIOs to invest more in Security, Collaboration, Mobility & Cloud • 5G to comprise 18% mobile subscriptions in India by 2025 • Enterprise networking market is expected to post a CAGR of 5% between 2019 and 2024 • India public cloud market to reach Rs 63,000 crs
Slide 66: META Opportunities
META Opportunities • Government ICT spending in MEA to reach $15 billion by 2023 • Total smartphone connections in MENA will exceed 500 million by 2025 • AI-based spending in META region will increase at a CAGR of 19% by 2023 • IoT revenue to more than double in Middle East and Africa by 2023 • Cybe
Slide 67: Contact Us
CONTACT US Compliance Officer M. Muthukumarasamy Redington (India) Limited Redington House, Centre Point, Plot No. 11 (SP), Thiru. Vi. Ka. Industrial Estate, Guindy, Chennai 600 032 https://www.redingtongroup.com CIN - L52599TN1961PLC028758 Investor Contact Sowmiya M Senior Manager – Investor Relati
Slide 68: Thank You
THANK YOU