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Transcript of Raymond Cp 11
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Corporate Presentation
July 2011
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DISCLAIMER
1. Numbers mentioned in this note in respect of consolidated revenues and results and additional
information including but not limited to retail sales, branded sales etc. but other than Raymond Ltd.
Standalone financial results have been compiled by the management and are being provided only by
way of additional information. These are not to be construed as being provided under any legal or
regulatory requirements. The accuracy of this information and provisional quarterly consolidated
numbers have neither been vetted nor approved by the Audit Committee and the Board of Directors
of Raymond Ltd., nor have they been vetted or reviewed by the Auditors, and therefore may differ
significantly from the actual. The Company assumes no responsibility for the use of informationmentioned herein.
2. Statements in this “Presentation” describing the Company’s objectives, projections, estimates,
expectations or predictions may be “forward looking statements” within the meaning of applicable
securities laws and regulations. Actual results could differ materially from those expressed or implied.
Important factors that could make a difference to the Company’s operations include global and Indian
demand supply conditions, finished goods prices, input material availability and prices, cyclical
demand and pricing in the Company’s principal markets, changes in Government regulations, taxregimes, economic developments within India and the countries within which the company conducts
business and other factors such as litigation and labor negotiations. The Company assumes no
responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any
subsequent development, information or events, or otherwise.
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ABOUT RAYMOND GROUP
3
One of India's largest branded fabric and fashion retailer, with some of thebest brands in its portfolio
Eight decades old group, in operation since 1925
Integrated across the value chain
One of the largest exclusive retail networks in the textile and fashion spacein India
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EVOLUTION OF GROUP(SINCE 1925)
1925 1950 1958 1968 1986 1996 2002 2003 2005 2006 2009 2011
1950
Setup of JK Files
and Tools
(engineering files)
1925
Set up of
Raymond
Woollen mill in
Thane
1958
First Exclusive
Raymond retail
outlet
1968
Set up of readymade
garments plant atThane
1996
Launch of
Raymond Denim
2003
Setup of Silver
Spark ApparelLtd
(manufacturing
suits, trousers)
2006
Setup of 3rd
worsted unit atVapi
Setup of
Raymond
Zambaiti, a
greenfield high
value cotton
shirting unit at
Kolhapur
1986
Launch of Park
Avenue
2002
Acquisition
of
ColorPlus
2011
Thane
settlementduring FY 11
Regional launch
of ‘Makers’
brand in the
value for money
fabric segment
600th TRS outlet
opened
2005
Set up of jeanswear
garmenting
facility Everblue
Apparel Ltd
Set up of
Celebrations
Apparel Ltd (shirt
manufacture)
2009
Vapi Phase II
commenced
commercial
production
Super 240s
fabric launched
– a world record
1999
1999
Launch of
Parx
4
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FabricManufacturing
GarmentManufacturing
• Suiting
• Shirting
• Denim
• Shirts
• Trousers
• Suits
• Jeans
InternationalMarket
• Exports
Brands
• Raymond
• Park Avenue
• Parx
• Colorplus
Domestic Market
B2C constitutes 84% of revenues
B2B constitutes
16% of Revenues
BUSINESS OVERVIEW
5
Retail• Wholesalers
• MBO’s
• Exclusive Stores
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33172609
1392
3336
4789
16.3%
10.9%
5.4%
13.2%
15.7%
2006-07 2007-08 2008-09 2009-10 2010-11
EBITDA EBITDA Margin
SUCCESSFUL TURNAROUND IN COMPANY’S PERFORMANCE
• ERP roll out
issues
• Denim business
• Refocus on
long term
strategic
thrust areas
• GAS joint venture
• Denim business
• Forex losses
• Duplicate plant costs (Thane &
Vapi)
• Implementation of
turnaround strategy
including trouble
shooting
Note: All figures in Rs million.
20407 23962 25901 25281 30562SALES
Successful resolution of all historical issues has enabled the company to turnaround and
demonstrate strong improvement in profitability from FY 09 to FY11
6
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STRATEGIC THRUST AREAS
Focus on power brands to help maintain pricing and profitability through
premium positioning
Continue with rapid penetration into smaller
towns and cities spearheaded by the exclusive retail network and widen distribution reach
Cement Raymond’s position to maintain
leadership status in a vibrant domestic market
7
Brand Focused Approach
Market AccessLeadership position
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MARKET SIZE AND OPPORTUNITY
8
6082
140
248
0
50
100
150
200
250
300
1995 2005E 2015E 2025F
Household income
Household income
Rs. in '000
•Household income levels are expected to
increase leading to higher disposable incomes
Source: Mckinsey Global Institute
• Large domestic market opportunity
• Men’s wear accounts for a major portion of the market
Market Size (Rupees billions)
Source: KSA Technopak
383446 481
539
842
158 181 192 225
331
2128 30 35 65
0
100
200
300
400
500
600
700
800900
2006 2007 2008 2009 2014
Mens Wear Womens wear Kidswear
CAGR 13%
CAGR 9%
CAGR 8%
The share of discretionary
expenditure will continue toexpand in the consumer's wallet
Source: India Consumer Trends,
Technopak analysis
27%
30%
32%
24%
26%
28%30%
32%
34%
Discretionary Expenditure
2003 2008 2013
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India will have 68 cities with a population of more than 1 million by 2030, up
from 42 today. Urban India will drive a nearly fourfold increase in average
national income. Cities will account for nearly 30% of India’s GDP by 2030.
Urbanization
A shift togreater
discretionaryspending
The share of Food and Grocery in the consumer’s wallet will drop from 40%
to 32%, releasing money for discretionary expenditure
INDIA CONSUMPTION STORY
9
GrowingAffluence
across India
Poverty will reduce sharply in urban and rural India; a key trend of
significance will be the rapid growth in the Middle class across both urban
and rural India
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BRAND STRENGTH
Source: TNS Global Market research
10
0
10
20
30
40
50
60
Raymond Vimal Gwalior Siyaram Reid &
Taylor
Mayur Dinesh
May-June’09 Jul- Sept’09 Oct – Dec’09 Jan – Mar’10
Brand salience - Top of mind recall
0
20
40
60
80
100120
Raymond Vimal Gwalior Siyaram Reid &
Taylor
Mayur Dinesh
May-June’09 Jul-Sept’09 Oct – Dec’09 Jan – Mar’10
Brand salience - Spontaneous recall
Source: TNS Global Market research
‘Raymond’ has maintained its leadership position in brand track studies as compared to its
competitors
‘Park Avenue’ won the award for ‘Most Admired Menswear Brand 2009’ at Images Fashion
Have recently launched the new ‘Park Avenue’ mnemonic and logo which has a young,
contemporary, global appeal.
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BRAND POSITIONING AND SIZE
Formal wear
Source: ColorPlusinternal data; TechnoPak Advisors, June 2007; CRISIL research
Popular/ mass segment
Formal
Super
Premium
Casual wear
Rs 1254 mn
FY11
revenue
Fabric
Rs 11825 mn
[domestic only]
Casual
Premium
Branded Clothing Business
11
Rs 2319 mn
Rs 518 mn
Rs 1720 mn
(Mid premium)
(Mid premium)
Recently launched
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AGGRESSIVE RETAIL THRUST• One of the largest exclusive retail networks in the
textile and apparel space in India
• 1.54 million square feet of exclusive retail space
(as of Mar’11)
• Like to like stores growth have picked up from 6%,
5% and 10% over the last 3 years
• Thrust on smaller towns & cities (Tier 3/4/5)
• Unique asset light franchisee model
12
Town Class Total TRS Presence Balance
CLASS 1 7 7 0
CLASS 2 28 28 0
CLASS 3 36 26 10
CLASS 4 318 166 152CLASS 5 394 39 355
Grand Total 783 276 517
9981197
13281506 1524
0
500
1000
1500
2000
2006-07 2007-08 2008-09 2009-10 2010-11
Retail Space ('000 sq. ft.)
The above table shows the untapped opportunity
that lies in class 4 & 5 towns
437
547 584676
739
0
200
400
600
800
2006-07 2007-08 2008-09 2009-10 2010-11
No.of Exclusive Stores (In India and overseas)
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SUMMARY OF STRENGTHS
13
• Raymond is one of India’s leading conglomerates operating inthe Branded Lifestyle space.
DomesticConsumption play
• Raymond has a strong portfolio of brands, both in fabric andapparel segments that make it best positioned to cater to thebrand conscious customers in both these segments
Powerful Brands
• The company has one of the largest exclusive retail networksspread across the country
• In addition, the company’s products are retailed through18000+ touch points
Retail network
• One of the few companies that is integrated across the valuechain
Integrated BusinessModel
• The company has state of the art manufacturing capabilities inall its businessesProduct Quality
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2164
2622
3675
0
500
1000
1500
2000
2500
3000
3500
4000
FY09 FY10 FY11
EBITDA (Rs million)
1137912229
14854
0
2000
4000
6000
8000
10000
12000
14000
16000
FY09 FY10 FY11
Sales (Rs million)
SUITINGS BUSINESS
14
Textiles business
•Market leader in its segment, ‘Raymond’ brand has maintained its
leadership position in brand track studies as compared to itscompetitors
•One of the largest integrated textile units
•The brand is sold through more than 18000 touch points throughout
the country.
14
14% CAGR 30% CAGR
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56935562
6408
5000
5200
5400
5600
5800
6000
6200
6400
6600
FY09 FY10 FY11
Sales (Rs million)
BRANDED APPAREL BUSINESS
15
Branded Apparel Business
•Houses brands like Park Avenue, Parx, ColorPlus
•All brands are well positioned to target different segments
15
472
406
664
0
100
200
300
400
500
600
700
FY09 FY10 FY11
EBITDA (Rs million)
6% CAGR
19% CAGR
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SHIRTING, DENIM AND GARMENTING BUSINESS
16
16
12951632
2118
317
372
319
0
500
1000
1500
2000
2500
280
300
320
340
360
380
FY09 FY10 FY11
Sales (Rs million) EBITDA (Rs million)
1011
10091260
91
158143
0
50
100
150
200
0
200
400
600
800
10001200
1400
FY09 FY10 FY11
Sales (Rs million) EBITDA (Rs million)
High value cotton shirting business3 year CAGR – Sales 28%
Garmenting business3 year CAGR - Sales 12%, EBITDA 26%
Denim business3 year CAGR - Sales -4%
7035
51356427
-488
402
594
-600
-400
-200
0
200
400
600
800
0
2000
4000
6000
8000
FY09 FY10 FY11
Sales (Rs million) EBITDA (Rs million)
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ENGINEERING BUSINESS
21602120 2552
194280
326
0
50
100
150
200
250
300
350
0
500
1000
1500
2000
2500
3000
FY09 FY10 FY11
Sales (Rs million) EBITDA (Rs million)
Tools and Hardware Business3 year CAGR- Sales 9%,EBITDA 30%
•Engaged in manufacturing and marketing
of Steel Files
•Largest producer of Steel Files in the
world.
790 760
1070
90
123
190
0
50
100
150
200
0
200
400
600
800
1000
1200
FY09 FY10 FY11
Sales (Rs million) EBITDA (Rs million)
Auto Component Business3 year CAGR- Sales 16%,EBITDA 45%
•Manufactures Starter Gears and Integral
Shaft Bearings
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MANUFACTURING FACILITIES – FABRICS
Fabrics Processes Capacity Location
Worsted Fabric • Combing• Spinning
• Weaving
• Finishing
• 31 mmpa • Thane – Nil (closedsince Dec 09)
• Chindwara – 14 mmpa
• Vapi – 14 mmpa
• Jalgaon – 3 mmpa (+ 7
mmpa to be added by
Q4FY11)High Value Cotton
Shirting Fabric
• Weaving
• Finishing
• 21.6 mmpa (10.1 mmpa
has commissioned in
Q1FY12)
Kolhapur
Woolen Fabric • Spinning
• Weaving
• Finishing
• 1.7 mmpa Jalgaon
Denim Fabric • Spinning
• Dyeing
• Weaving
• Finishing
• 47 mmpa •Yavatmal, India – 40
mmpa
•Romania – 7 mmpa
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MANUFACTURING FACILITIES - GARMENTING
Garment Capacity Location
Celebrations
Apparel – Shirts
• 1.8 m p.a. • Bangalore • Garmenting for
group companies
Silverspark Apparel
- Jackets
- Trousers
- Premium Jackets
• 0.56 m p.a.
• 1.14 m p.a.
• 60,000 piecesp.a
• Bangalore • Has domestic
and international
clients
Denim garmenting • 1.5 m p.a. • Bangalore • Hived off into
the denim JV
Suit Plant
- Jackets
- Trousers
• 0.69 m p.a
• 0.87 m p.a
• Bangalore • Hand made suits(increasing Jackets
to 0.84 mpa inQ3FY12)
All the facilities cater to domestic and international clients and is a part of
the One-Stop Shop strategy of the company.
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SOME RECENT INITIATIVESBelow are some of the opened The Raymond Shops (TRS ) by the company.
21
Zaheerabad ,Andhra Pradesh
Ujjain
(Madhya Pradesh)
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SOME RECENT INITIATIVESBelow are some of the innovative concepts like Neckties and More and Raymond Made-to-Measure initiated
by the company.
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BOARD OF DIRECTORS
• Mr Gautam Hari Singhania, Chairman & Managing Director
– Was appointed the Wholetime Director on the Board of Raymond Ltd. in 1990 and was elevated to the position of Managing Director in mid-1999
– Has steered Raymond Limited with a single-minded focus of being the best brand in India
• Dr Vijaypat Singhania, Chairman Emeritus
– Has nearly four decades of experience in the management of several industrial units as the Chief Executive, evenbefore his current position
– Has been instrumental for the successful growth and diversification plans of the Company
• Mr. H. Sunder, Whole-time Director
– Has over 26 years of experience in finance, taxation, accounts, legal, secretarial areas, international business andgeneral corporate management
– He is the President – Finance and Group Chief Financial Officer of the Company since 2006. He has been with theCompany for over 14 years.
• Mr I D Agarwal, Independent Director
– Has 37 years of experience in Banking, Finance and Currency, Former Executive Director, Reserve Bank of India, wasan Advisor to the United Nations and has been the Director of Small Industries Development Bank of India
• Mr Pradeep Guha, Independent Director – Has recently finished a very successful stint as the CEO of India's largest satellite broadcasting network, Zee
Entertainment Enterprises Ltd
– Associated with the print medium for 29 years and was President of The Times of India group
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BOARD OF DIRECTORS• Mr P K Bhandari, Non Executive Director
– Has over 25 years of experience in the field of project finance, industry, business and corporate management
– Joined the Company in 1989, played a key role in strategizing and implementing the Company's restructuring program
• Mr Nabankur Gupta, Independent Director
– Joined the Company as Group President on August 1, 2000 and was co-opted on the Board of Directors of the
Company as Wholetime Director and Group President effective January 15, 2001.
– Was the first Indian to receive recognition by the Advertising Age International, New York, in 1995 with the title of
‘Marketing Superstar‘
• Mr Sailesh Haribhakti, Independent Director
– A renowned Chartered Accountant, Director on the Board of 20 highly acclaimed public and private companies
holding the position of Chairman or Member of Audit Committee in ten of them
– Was a member of the ICAI's Group on Implementation of Convergence with IFRS, has been awarded "The Best Non
Executive Independent Director Award 07" by Asian Centre for Corporate Governance
• Mr Akshay Chudasama, Independent Director (wef 21.04.2011)
– Partner in JSA, a reputed Law Firm.
– He specializes in Mergers & Acquisitions, Joint Ventures, Cross Border Investments, Private Equity, Real Estate,
Hospitality, Franchising and Media & Entertainment law
• Mr Boman R Irani, Independent Director (wef 21.04.2011)
– He is the chairman of Rustomjee Group.
– Leading Real estate developer and leader in construction industry. He is a first generation developer and an
entrepreneur.
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