Management Presentation August 2009 - aceanalyser.com Meet/114304_20090831.pdf · Company’s...

SKNLManagement Presentation

August 2009

Clothiers to the Nation Today…the World Tomorrow

1

DisclaimerThe information in this presentation has been prepared by S. Kumars Nationwide Limited (the “Company”)

By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations:

The information communicated in this document contains certain statements that are or may be forward looking. These statements typically contain words such as "will", "expects" and "anticipates" and words of similar import including those relating to general business plans and strategy of the Company. By their nature forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There may be additional material risks that are currently not considered to be material or of which the Company and its advisors or representatives are unaware. The Company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or developments in the Company’s business, its competitive environment, its ability to implement its strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in India. This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, or a solicitation of any offer, to purchase or sell, any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of Company’s shares.

No representation or warranty, express or implied, is made as to, and does not accept any liability or responsibility and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. Neither the Company nor any of the Company's advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially.

This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this document, which neither the Company nor itsadvisors are under an obligation to update, revise or affirm.

THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OR SOLICITATION OF ANY OFFER TO PURCHASE OR SELL ANY SECURITIES OF THE COMPANY.

The securities of the Company have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered, sold or delivered within the United States or to US persons absent from registration under or an applicable exemption from the registration requirements of the United States securities laws. Neither these slides nor any copy of them may be taken or transmitted into or distributed in Canada, Australia, Japan or any other jurisdiction which prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of the United States or other national securities laws.


2

Name Experience

Nitin Kasliwal

Vice Chairman and MD

♦ 32 years of experience in the textile industry

♦ Member of managing committee of Indian Cotton Mills Federation, Indian Woolen Mills Federation, World Trade Centre, India

♦ MBA in International Management from Switzerland

Anil Channa

Dy. Managing Director & COO

♦ Over 35 years of senior level textile industry management experience

♦ Over 20 years as business head of large textile operations

♦ MBA from Delhi University, FMS and Engineer from IIT Delhi

Anees Fazalbhoy

Business Strategy, M&A and Investor Relations

♦ Managed own business with activities in India, Canada & Middle East for over 25 years

♦ MBA in International Management from Switzerland

Jagadeesh Shetty

CFO

♦ Over 20 years of senior level experience in finance and accounting primarily in the textile industry

♦ Associate member of the Institute of Cost and Works Accountants of India

Management Team


3

4 Pillars– Brands, Professional Management, Distribution, Manufacturing2

Appendix6

Future Growth – Building Scale Organically and Inorganically3

Proven Financials4

India – A Large Growing Market Opportunity5

SKNL Overview1


4


Appendix6


Proven Financials4


SKNL Overview1


SKNL Group Structure

Promoters

Reid & Taylor (India) Limited

BrandhouseRetail Limited

SKNL

Consumer Textiles

EBOLuxury Textiles

JV ValueHVFC

Premium Ready-to-

wear garments

Home Textiles

Ready-to-wear

garments

Future SBUs

5

SKNL / RTIL Brands

Foreign Brands

76.97%

49.83% 55.73%

SKNL International Operations

Dom

esti

cIn

tern

atio

nal

Leggiuno Hartmarx


SKNL Shareholding Pattern

6

Source: National Stock Exchange of India as of 30 June 2009

Promoter and Promoter Group

49.83%

Foreign Institutional

Investors26.18%

Indian Institutions,

Banks, Mutual Funds and Retail

23.99%


7

Company Overview – Strength through Diversity

Sales US$464m (Rs 22,604mm)PBIDT US$97m (Rs 4,730mm)

Luxury Textiles Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS)

Sales: $109m (Rs 5,297m)PBIDT: $41m (Rs 1,978m)PBIDT Margin: 37.3%ContributionSales: 23.4%

Sales: $223m (Rs 10,846m)PBIDT: $37m (Rs 1,776m)PBIDT Margin: 16.4%ContributionSales: 48.0%

Partly commissioned

Sales: $70m (Rs 3,392m)PBIDT: $12m (Rs 580m)PBIDT Margin: 17.1%ContributionSales: 15.0%

Sales: $51m (Rs 2,494m)PBIDT: $8m (Rs 406m)PBIDT Margin: 16.3%ContributionSales: 11.0%

2008–2009 ($=Rs 48.69)

♦ Reid & TaylorLuxury Suitings

♦ Reid & TaylorPremium NaturalFibre Suitings

♦ S.KumarsWork Wear

♦ BelmonteDaily Wear

♦ UniformityUniform fabrics

♦ 100% Natural FibreShirtings

♦ BenettonSuper Premium

♦ Carmichael HousePremium

♦ New Brand*Mid-Premium

*To be launched

♦ Stephens BrothersSuper Premium

♦ Reid & TaylorPremium

♦ Balmoral*Casual Premium

♦ BelmonteMid-Premium

*Being launched in 2009

♦ Operate across all three segments of the textile industry in India– Fabrics - Apparels - Home Textiles

♦ Branded presence in all socio-economic segments♦ Operates in all fibre segments

Overseas Businesses

2Sales: $12m (Rs 581m)PBIDT: $-0.4m (Rs -18m)PBIDT Margin: -3.0%ContributionSales: 2.6%

♦ Leggiuno♦ Hartmarx

Note: 1 Sales and PBIDT do not include other income; PBDIT = Revenue from operations – material cost – manufacturing expenses – personnel cost – administrative cost – selling expenses2 Sales for only one quarter (ending 31 December 2008) of Leggiuno is included in the above consolidated financial statements3 Sales of Hartmarx are not included in FY09 financials


8

Presence in different Socio-Economic Segments1

MID-PRICECarmichael House

ECONOMYNew Brand (to be launched)

LUXURYBenetton

SUPER PREMIUMStephens Brothers

CASUAL PREMIUMBalmoral(to be launched)

LUXURY(To be launched)

PREMIUMReid & Taylor

MID-PRICE Belmonte

MID-PRICEBelmonte

ECONOMYS.Kumars


READY TO WEAR

FABRIC

Present across diverse categories and in different socio-economic segments

HOME TEXTILES

Not Catered to by SKNLNot Catered to by SKNL Un-brandedUn-branded

Un-brandedNot Catered to by SKNL

Note: 1 Excluding Unbranded segment


9

SKNL is One of the Dominant Players in the Indian Textile Market…

SKNL Product SegmentsDescription

Market PositionPresent in All Fibre and Product categories

♦ One of the leading player in uniforms

♦ One of the leading player in Worsted Suitings

♦ One of the largest institutional supplier of textiles

PREMIUM

MID PREMIUM

ECONOMY

SUITING , APPAREL & HOME TEXTILES

SUITINGS, APPAREL & HOME TEXTILES

SUITINGS, APPAREL & HOME TEXTILES

♦ SKNL has a wide reaching and established distribution network of over 400 wholesale dealers and 30,000 retail outlets

♦ Operates in Luxury Textiles, Consumer Textiles, HVFC, Home Textiles, Ready to Wear (TWS)

SUPER PREMIUM LUXURY APPAREL & SUITINGS

… & has become a Clothier to the Nation

Un-branded

Natural

Fibers

Blended

Fibers

Man Made

Fibers

Wool Poly-Wool Polyester

Cotton Poly-Viscose Viscose

Linen Wool-Linen Nylon

Source: Company estimates

SKNL Sales split (FY09)

Luxury Textiles23%

Ready-to-Wear11%

Overseas Businesses3%

Consumer Textiles48%

Home Textiles15%


10

… On the way to becoming clothier to the World

♦ One of the leading shirt fabric manufacturers in the world

♦ Produces dyed yarn, piece dyed and digitally printed linen fabrics for high end shirt brands

♦ Producer of shirting fabric addressing the high value market

Acquisition of Leggiuno, Italy

♦ One of the largest US premier tailored clothing manufacturers

♦ Portfolio of 32 brands (21 owned and 11 licensed)

♦ Manufactures and wholesales some of the most highly recognized brands in the men’s tailored clothing market including Hickey Freeman and Hart Schaffner Marx

♦ Over 100 years of legacy with high brand loyalty and recall

Acquisition of Hartmarx Assets, USA


11


Appendix6


Proven Financials4


SKNL Overview1


12

Well Established Brands

Brand Products Achievements

- Worsted fabrics- Ready-to-wear

One of the leading players in Luxury Suitings

- Blended fabrics- Workwear- Ready-to-wear- School Uniform

One of the leading player in uniforms

- Bed Linen & Bath Linen- Table & Kitchen Linen

Development of home textiles as strategic business unit

- Ready-to-wear for men and women

A brand with British heritage for India

♦ Diversified portfolio of well recognized brands♦ Strength through celebrity endorsements♦ Advertising campaign across India using different media in several languages


13

Brand VisibilityContemporary in design and customer friendly stores


14

Professional Management

Anil Channa

Dy. Managing Director & COO

STRATEGIC BUSINESS UNITS (SBUs)

Board of Directors

Nitin Kasliwal

Vice Chairman & Managing Director

Home Textiles

Dinesh SharmaCEO

Consumer Textiles

Col. S. K. RajeGroup Admin & HRD

Ready-to-Wear (TWS)

Janak DaveCOO

HIGH VALUE FINE COTTONS

Anupam DikshitCOO

Luxury Suitings

Arvind GuptaCOO

Vijay BakshiPresident

ExportsBusiness

D.D. AvariCorp. Affairs

J. S.ShettyPresident- Finance & CFO

Anees FazalbhoyBusiness Strategy

CORPORATE

FUNCTIONS

Nimesh ShahCompany Secretary

Rajan K. Garg COO

Each SBU is headed by an experienced personnel

Predeep MukimCOO - Belmonte

Johnny JohnCOO – Mass brand

Paolo IngegnoliCEO

Leggiuno


15

Distribution Strategy

Multi Brand Outlets

Large Format Stores

Institutional Sales

Export Sales

Exclusive Brand Outlets

Franchisee Model

Company Operated

Retail activities for SKNL / RTIL Brands

India Franchisee for International Brands

Company owned stores for SKNL / RTIL Brands

BRANDHOUSE RETAILS LTD.

Luxury Textiles Consumer Textiles HVFC Home Textiles Ready to Wear (TWS)

♦ Reid & TaylorLuxury Suitings

♦ Reid & TaylorPremium NaturalFibre Suitings

♦ S.KumarsWork Wear

♦ BelmonteDaily Wear

♦ UniformityUniform fabrics

♦ 100% Natural FibreShirtings

♦ BenettonSuper Premium

♦ Carmichael HousePremium

♦ New Brand (To be launched)Mid-Premium

♦ Stephens BrothersSuper Premium

♦ Reid & TaylorPremium

♦ Balmoral (to be launched)Casual Premium

♦ BelmonteMid-Premium

601

Agents

4001

Wholesale Dealers

30,0001

Retailers

Note: approximate numbers


16

State of the Art Manufacturing FacilitiesState-of-the-art plants manufacturing products to the highest quality standards

Plant Location Products Manufactured

Reid & Taylor Worsted Suiting Unit Mysore, India Worsted Suiting, Premium P/V blended suitingS.Kumars suiting Unit Dewas, India Uniforms, Work Wear Fabrics Polyester & Polyester Viscose Blended suitingsHome Textile Chamunda Standard Mills Dewas, India Polyester Blended Yarn, Grey Fabrics, (PV, PC, 100% Cotton), MVCF

Total Wardrobe Solutions Bengaluru, India Shirts, Trousers, Blazers, Suits & Other Accessories

Home Textiles (under implementation) Jhagadia, India Home TextilesHVFC (to commence production in Q3FY10) Jhagadia, India High Value Fine CottonLeggiuno Milano, Italy High Value Fine Cotton

Hartmarx Des Plaines, Illinois Tailored ClothingHartmarx New York Tailored Clothing


17


Appendix6


Proven Financials4


SKNL Overview1


Strategic Guidelines

18

♦ Improve group growth & profitability profile

♦ Emphasis on organic growth, development of international operations & free cash flow generation

♦ Capture significant market share in the Luxury Textiles & Consumer segments and seize opportunities

♦ Develop brands and businesses driven by distinctive distribution models

♦ Expand opportunistically in India & abroad

♦ Build outsourcing strategy

♦ Increase production capacity to cater to growing demand

♦ Form licensing agreements with leading luxury textile brands


19

Growth Initiatives – Organic

Segment Initiative Status

Luxury Textiles ♦ Weaving and spinning capacity expansion to cater to the domestic and international

markets ♦ Completed

Hartmarx assets acquisition

♦ US premier tailored clothing manufacturer ♦ Acquired in August

2009 High Value Fine Cotton (HVFC)

♦ Setting up capacity to cater to the international as well as domestic markets -

♦ Partly commissioned

Home Textiles ♦ Capacity expansion under (TUF) technology upgradation to cater to high demand in

the post quota regime – ♦ Under installation

Consumer Textiles

♦ Creating value addition in existing business by introducing premium blended suiting and adding capacity for spinning, weaving and processing of blended fabrics

♦ Under implementation

Ready-to-Wear (TWS)

♦ Introducing new brands to increase market share in the segment – “Casual premium brand” – Mass brand – Luxury brand

♦ Setting up a suits factory at Bangalore ♦ Setting up a stitching unit at Jhagadia

♦ Under implementation

HVFC – spinning unit

♦ Setting up cotton spinning capacity ♦ Under

implementation

Growth Initiatives Across Different Segments

Note: Assuming exchange rate of INR 48.69 per US$


1,089

1,5921,977

38.7% 39.6% 37.3%

0

500

1000

1500

2000

2500

FY07 FY08 FY09

INR

mm

20%

30%

40%

PBDIT PBDIT Margin

2,811

4,022

5,297

-

1,000

2,000

3,000

4,000

5,000

FY07 FY08 FY09

INR

mm

20

Luxury Textiles

Sales

Investment PlanPBDIT Margin

Growth Strategy

♦ Domestic: – Expanding market reach by offering a lower price range

and introducing a range of fabrics– Increase retail reach by opening exclusive stores and shop-

in-shop programs and multi-brand outlets– Plans to increase exclusive brand outlets and multi-brand

outlets ♦ International

– Increase exports to North America, Japan, West Asia, Europe and the Middle East

– Leverage global strength of R&T to access leading brandsand latest technologies

♦ Contemplating expansion in the capacity

♦ Funded for growth through investment from GIC

CAGR: 37.3%

US$mm 58 83 109

US$mm 22 33 41

Note: Assuming exchange rate of INR 48.69 per US$Excluding Other Income


190

347 406

16.3%

20.7%16.0%

0

100

200

300

400

500

FY07 FY08 FY09

INR

mm

0%

7%

14%

21%

PBDIT PBDIT Margin

1,1911,677

2,494

-

600

1,200

1,800

2,400

3,000

FY07 FY08 FY09

INR

mm

21

Ready to Wear (Total Wardrobe solutions)

Sales Growth Strategy

♦ Expanding Reid & Taylor garments to multi-brand outlets

♦ Expand distribution of Stephen Brothers

♦ Introducing International brands in Luxury & Super Premium segments– Introducing Reid & Taylor products for Women

♦ Plans to enter in new manufacturing contracts with international brands

♦ Adding capacity in the suits and stitching unit

♦ Introducing Casual Premium Brand (Balmoral – to be launched)

PBDIT Margin

Adding manufacturing facilities to complement distribution as well as adding new brands

CASUAL PREMIUMBalmoral (to be launched)


SUPER PREMIUMStephens Brothers

LUXURY(To be launched)

CAGR: 44.7%

MID-PRICEBelmonte

US$mm 24 34 51

Note: Assuming exchange rate of INR 48.69 per US$Financials exclude other income

US$mm 3.9 7.1 8.3


6,305

8,892

10,846

-

4,000

8,000

12,000

FY07 FY08 FY09

INR

mm

22

Consumer Textiles

Sales Growth

Adding following capacities

♦ Weaving unit capacity expansion

♦ A processing house

♦ A PV spinning unit

PBDIT Margin

Creating value addition in existing business by adding capacity for weaving and processing of high value fabrics

Growth Strategy

CAGR: 31.2%

872

1,4401,77613.8%

16.2%

16.4%

0

500

1000

1500

2000

FY07 FY08 FY09

INR

mm

0%

6%

12%

18%

PBDIT PBDIT Margin

US$mm 129 183 223

US$mm 18 30 36Note: Assuming exchange rate of INR 48.69 per US$Financials exclude other income


1,987

2,895

3,392

-

800

1,600

2,400

3,200

4,000

FY07 FY08 FY09

INR

mm

23

Home Textiles

Sales Growth

PBDIT Margin

Growth Initiatives

♦ State-of-the-art manufacturing facility at Jhagadia - under installation

♦ Planning to export home textiles output to EU and US

♦ Expanding market reach in India by launching products in the economy segment

♦ Benetton was launched recently

Modernization and technology upgradation to cater to high demand in the post quota regime

CAGR: 30.6%

554

250

580

12.6%

19.1%

17.1%

0

150

300

450

600

FY07 FY08 FY09

INR

mm

0%

5%

10%

15%

20%

25%

PBDIT PBDIT Margin

US$mm 41 59 70

US$mm 5 11 12Note: Assuming exchange rate of INR 48.69 per US$Financials exclude other income


24

High Value Fine Cotton

Investment Plan

Growth Strategy

♦ State-of-the-art manufacturing facility at Jhagadia – partly commissioned♦ Set up weaving & processing facilities♦ Front-end – back-end synergy with Leggiuno♦ Domestic target market

– Manufacturers making shirts for international brands– Indian brands offering premium shirts to Indian customers

♦ International target market– Global market for HVFC shirting– Primarily European manufacturers– SKNL to offer quality & cost benefits using European know-how & expertise and advantage of manufacturing facility in India– Access customers outside India through

– Leggiuno, Reid & Taylor (Scotland) and International labels coming to India through SKNL

Set to enter High Value Fine Cotton in the International as well as domestic markets

Backward integration by adding cotton spinning capacity


♦ SKNL acquired 100% shareholding of Leggiuno SpA in October 2008

25

Acquired Leggiuno in October 2008

Transaction Overview Business Overview

Strengths

♦ One of the leading shirt fabric manufacturers in the world

♦ Produces dyed yarn, piece dyed and digitally printed linen fabrics for high end shirt brands

♦ Producer of shirting fabric addressing the high value market

♦ Operations headed by Mr. Paolo Ingegnoli

♦ High Design Value - Enjoys reputation for its fabric designs for its relevance to the fashion trends

♦ Quality finished products - Fabric quality and finished products are comparable with the best of the shirting fabrics out of Italy

♦ Enjoys High Brand Equity - With its long history of supplying quality fabrics, Leggiuno has a good brand equity in the market today

♦ High End Worldwide Customer Base - Leggiuno has an premium customer base across the world

Synergy

♦ SKNL gets access to leading international brands, addressing the high end market

♦ Half of Leggiuno’s fabric are processed at other plants in Italy. The new HVFC Plant at Jhaghadia, Gujarat is expected to cater to some of the requirements of Leggiuno

♦ Move up the value chain providing access to international brands leading to comparatively better sales price resulting in higher margins


26

Acquired Hartmarx Assets in August 2009

Business Overview

Key brands of Hartmarx

♦ One of the leading US premier tailored clothing manufacturer♦ Portfolio of 32 brands (21 owned and 11 licensed)♦ Manufactures and wholesales some of the most highly recognized brands in the men’s tailored clothing market including Hickey Freeman and Hart

Schaffner Marx♦ Supplier to the department and specialty stores in the U.S. including Dillards, Kohls, Macy’s, Barneys♦ Over 100 years of legacy with high brand loyalty and recall♦ Higher price point men’s clothing is produced at six company facilities in North America

Category / Brands Product Categories Primary Customer Channel

Luxury

Hickey Freeman and Hart Schaffner Marx Men’s tailored clothing, furnishings and Sportswear Upscale department and specialty stores

Bobby Jones Sportswear and golfwear Upscale department, specialty stores and greengrass golf shops

Womenswear

Christopher Blue Denim and sportswear Upscale department, specialty stores and boutiques

JAG Jeans Denim and sportswear Upscale department and specialty stores

Austin Reed Career apparel and sportswear Department stores

Exclusively Misook Knitwear Upscale department and specialty stores

Tailored

Claiborne Men’s mainstream tailored clothing Moderate retailers

Austin Reed Tailored clothing, sport coats and slacks Department stores

Sportswear

Monarchy Men’s denim and sportswear Upscale department stores, specialty stores and boutiques

Ted Baker Men’s sportswear Department stores and specialty stores

Golden Bear Men’s sportswear and golfwear Popular retailers

International

Coppley Men’s tailored clothing and furnishings Upscale department and specialty stores


27

Hartmarx – Future Strategy

Fabric Outsourcing and Gross Margin Improvement

♦ Back end-front end strategy allowing SKNL to supply fabric and garments from India generating “telescopic” margins across the owned supply chain from India to the US

♦ Hartmarx is currently sourcing fabrics predominantly from Europe at high cost basis

♦ Potential to source Hartmarx branded products from Leggiunio/HVFC

♦ Will enable SKNL to develop relationships with major US wholesales and retailers

Operating Expense Reduction

♦ “Right Sizing” business to meet current requirements

♦ Headcount reductions in selling, distribution and administration

♦ Synergies derived from supply chain and logistics improvements

♦ Shut down of unprofitable brands and licenses

♦ Renegotiations and terminations of leases

♦ Overall cost curtailment measures across Hartmarx

Wholesale & Retail Development in EU, China & India

♦ Develop a wholesale and retail channel in Europe

– Already identified over 100 points of sale in the EU

– Retail development and product introduction in India, China

♦ Opportunity to leverage legacy brands and licenses and product extensions

Multiple Brands ♦ Hartmarx has multiple owned and licensed brands in its portfolio at various price points and market segments

♦ Right brand management, development and promotion of relevant product champions for each brand

♦ Retail-led product merchandising and category expansion


28


Appendix6


Proven Financials4


SKNL Overview1


12,295

17,487

22,604

-

6,000

12,000

18,000

24,000

FY07A FY08A FY09A

INRm

m

CAGR: 35.6%

29

Proven FinancialsRevenues1 PBDIT1

Net Income after minority interest Gross COGS / Revenue1

69.1% 67.5% 68.1%

0%

20%

40%

60%

80%

100%

FY07A FY08A FY09A

2,399

3,938

4,730

-

1,100

2,200

3,300

4,400

5,500

FY07A FY08A FY09A

INRm

m

CAGR: 40.4%

US$mm 253 359 464 US$mm 49 81 97

US$mm 25 42 36

1,235

2,0561,766

-

700

1,400

2,100

2,800

3,500

FY07A FY08A FY09A

INRm

m

CAGR: 19.6%

Note: Assuming exchange rate of INR 48.69 per US$1 Excluding other income and extraordinary Income


30


Appendix6


Proven Financials4


SKNL Overview1


702 742598

447 314

45167 454

550514

19

243 457-

13129

448

11

-

11

1329

0

200

400

600

800

1,000

1,200

1,400

1,600

1985 1995 2005 2015E 2025E

mm

<US$1,969 US$1,969-US$4,376 US$4,376-US$10,941 US$10,941-US$21,882 >US$21,882

31

India—A Growing MarketSignificant Growth in Purchasing Power (Number of

People)

Source: Euromonitor

Favorable Demographic

Source: Eeromonitor

Indian Consumption Pattern

Source: McKinsey Global Institute

Growing Middle Class

Source: McKinsey, NCAERNote: Figures are rounded to the nearest integer and may not add up exactly to column totals

Working Age Population as % of Total Population (Age 15–64)

A Growing middle class whose size exceeds the population of the USA or the European Union

0.1%93.1106.091.31,969-4,376

Income class(US$)

2005households

2015households

2025households CAGR

>21,882 1.2 3.3 9.5 10.9%

10,941-21,882 2.4 5.5 33.1 14.0%

4,376-10,941 10.9 55.1 94.9 11.4%

<1,969 101.1 74.1 49.9 -3.5%

Middle class

343 370433 449

-

100

200

300

400

500

2005 2006 2007 2008

mm

CAGR: 9.4%

644 687761

833

62.0%64.0%

65.6%

61.0%

-

200

400

600

800

1,000

2002 2005 2010 2015

mm

pop

ulat

ion

56%58%60%62%64%66%68%

Working age population % of total population


32

Indian Textile Market

Domestic and Export Share in Indian Textile Industry

Source: E&Y, Mckinsey

Industry Growth Drivers

♦ One of India’s most important sectors accounting for 4% of the country’s GDP

♦ Total exports of textiles and apparels has increased from US$17.8 bn in 2005-06 to US$22.4bn in 2007-08

− EU the largest exports market for India (31.6% share in 2007-08)

♦ Growth drivers of India’s Textile Industry

− Availability of raw materials: Domestic cotton production has grown at a 9% CAGR over the past four financial years and has reached 31.5 mm bales in 2007–08

− Growing young population: 2/3rd of India’s population is under 35 years of age, the median age being 24 years

− Rising household incomes: number of households with annual income more than US$4,376 will grow with a 2005-2025E CAGR of 11.9%

− Boom in organized retail: Organized retail in India is on a high growth trajectory and is expected to grow at around 27% per annum over the next five years

Source: : Confederation of Indian Textile Industry

Market Segmentation

♦ The overall market can be divided into 3 segments– Fabric is retailed over the counter as for

– Customized tailoring– Garment industry

– Garments: Growth due to :

– Growth in organized retailing (spreading beyond metro cities)

– Enhanced propensity towards fashion (international exposure)

– Home Textiles –Growth due to– Rapid growth in disposable incomes –indulgence at home– Increased exposure –enhanced home décor etiquette

– Few players in the organized segment –opportunity for growth

Domestic, 65.0%

Exports, 35.0%


33

International Market

International Market Overview International Market Growth Opportunities

♦ The global apparel and textiles industry generated total revenues of $1,972.2bn in 2008, representing a compound annual growth rate (CAGR) of 2.9% for the period spanning 2004-2008

♦ Developed markets looking at India as the alternative to China for textiles & apparel imports

♦ India’s share in the US’s apparel imports have increased 4-fold from 4% pre-quota to 15% post-quota

Total Revenues 2008: US$1,972bn

Europe33%

Asia Pacific32%

Americas25%

ROW10%

♦ Quota restrictions & tariff barriers phased out

♦ Significant production capacity shift to India due to– High quality manpower, raw material and lower costs– Inherent strengths in textile production

♦ India, second largest producer of apparel and textiles after China

– Only country with ability to compete with China in the textile and apparel industry (USITC report)

♦ Major initiatives by Government of India (recognized as a high-growth area)– De-reservation of substantial portion of the industry

– Fiscal reforms in the synthetic textiles business underway

– Increase in investment ceilings– FDI freely allowed in the sector

Source: E&Y, Datamonitor


34


Appendix6


Proven Financials4


SKNL Overview1


35

GIC investment in Reid & Taylor (India) Limited

Structure Key Transaction Details

Pre Transaction

♦ 100% subsidiary

♦ Transfer of assets at book value as a going concern with effect from January 1, 2008

♦ Working capital facilities of INR1,000mm apportioned to RTIL

♦ Debts amounting to INR.2,500mm relative to transferred assets moved to RTIL for settlement

Post Transaction

♦ INR 4,400mm loaned to SKNL for repayment of debt

♦ Post transaction, SKNL owns 76.97% in RTIL

SKNL

R&T

Reid & Taylor fabric & garments

business spun-off as 100% subsidiary

Transfer of Assets/ Liabilities

GIC

Funds to repay lenders

INR 7,900 mm 23.03%

♦ GIC invested INR 7,900mm in the form of shares and warrants for 23.03% stake

♦ Company emerges stronger financially and has greater operating flexibility


36

Reid & Taylor (India) Limited - OverviewFa

cilit

ies

Mar

ket

Posi

tion

Prod

ucts

Dis

trib

utio

n

Manufactured at the state-of-art facility at Mysore, Karnataka

Fabrics Ready-to-Wear garment

One of the leading players in worsted fabrics in India

Ready to Wear — FormalsSuits (Pure wool, wool blended) blazers, tweed jackets, shirts in pure cotton and CVC, trousers in Wool, Wool blended and cotton

Ready to Wear — CasualsT-Shirts, smart casual shirts, polos, chinos and denims

AccessoriesTies, belts, trousers, cufflinks and other accessories

Pure wool, poly wool, poly viscose, pure linen, pure silk, and superfine polyesterWide collection of designs

Retailed through distribution channels including wholesale dealers, retailers and Reid & Taylor exclusive stores

Retailed through multi-brand outlets, Reid & Taylor exclusive stores, several large format stores and retail chains


Reid & Taylor (India) Limited - Organization Chart

CEO & MD

RTIL

COO

Textiles

COO

Ready To Wear

PRESIDENT

Mktg. & Sales

PRESIDENT

Operations

PRESIDENT

Intl. Business

Sr. VP

Finance

& Accounts

VP

Sales

Head

Supply Chain

& Logistics

Head

Finance

GM

ProductionArtistic

Director

37


Reid & Taylor (India) Limited- Product Profile

38

♦ Have high wearability, ease of maintenance, and superior shape retention

♦ Pure wool, pure linen and pure silk, the blended fabrics made from fine merino fleece in high counts such as 90s, 100s and 130s and superfine polyester

♦ Plains and designs such as stripes, checks, bird’s eye, drills, herringbones, dobbies, jacquards

♦ Premium image – at affordable prices

♦ Wide collection of designs and shades


Reid & Taylor (India) Limited - Product Profile

39

♦ Ready to Wear – Formals

− Suits (pure wool, wool blended) blazers, tweed jackets, shirts in pure cotton and CVC, trousers in wool, wool blended and cotton

♦ Ready to Wear - Casuals

− T-Shirts, smart casual shirts, polos, chinos and denims

♦ Accessories

− Ties, belts, trousers, cufflinks and other accessories


Thank you..

Management Presentation August 2009 - aceanalyser.com Meet/114304_20090831.pdf · Company’s...

Documents

Transcript of Management Presentation August 2009 - aceanalyser.com Meet/114304_20090831.pdf · Company’s...