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Transcript of S. Kumars Nationwide Ltd. · S. Kumars Nationwide Ltd. Investor Presentation Sep. 2005 C l o t h i...
Clothiers to the Nation Today…the World Tomorrow
SKNL
S. Kumars Nationwide Ltd.
Investor PresentationSep. 2005
Clothiers to the Nation Today …the World Tomorrow
SKNL
Clothiers to the Nation Today…the World Tomorrow
SKNL
An Overview
Key Strengths
Section 1
Section 2
Section 3
Industry OverviewSection 4
Business Profile
Initiatives & DriversSection 5
Financial ReviewSection 6
Index
Clothiers to the Nation Today…the World Tomorrow
SKNL
An OverviewSection 1
Section 2
Section 3
Section 4
Section 5
Section 6
Company snapshot
Financial snapshot
The Journey
Business Profile
Key Strengths
Industry Overview
Initiatives & Drivers
Financial Review
Turnaround -CDR Package
Clothiers to the Nation Today…the World Tomorrow
SKNL
Product Mix (FY’06)
Company snapshot
Strong Brands
Economy segment: S. Kumars
Mid-price segment: Tamarind
Premium segment: Reid & Taylor
Wide DistributionS. Kumars : 300 wholesale dealers
30,000 retailers
R&T : 8,000 retail outlets 16 exclusive stores
Financials ( FY’05)
Total Revenue – Rs 6,887.2mn
Operating Income – Rs 591.9mn
Net Income – Rs 182.4mn
S.Kumars 65%
Reid & Taylor
26%Home
Textiles 6%
Total Wardrobe Solutions
3%
Only textile major to operate in all fiber categories
4 state-of-the-art manufacturing units
2nd largest in the premium worsted fabrics segment
Market leader in the uniform segment with 30% share
Implemented a well planned Turnaround and Growth strategy (TAG)
Joint Venture with Reid & Taylor in 1995
Clothiers to the Nation Today…the World Tomorrow
SKNLFinancial snapshot
1.18(1.24)(8.75)(6.94)Earnings per share
2.1(1.4)(1.6)1.3ROCE (%)
2.6(3.4)(21.9)(13.8)Net Profit Margin (%)
183(205)(1,345)(1,091)Net Profit (Rs. Mn)
8.66.16.38.3Operating Profit Margin (%)
592368387655Operating Profit (Rs. Mn)
6,8876,0806,1317,929Net Income (Rs. Mn)
Mar-05*Sep-04Sep-03Sep-02Particulars
1.080.97--Earning Per Share
8.5%7.6%-3.9%Net Profit Margin (%)
174.5 149.7 (58.2)Net Profit (Rs. Mn)
11.1%9.7%5.9%Operating Profit Margin (%)
229 190 87 Operating Profit (Rs. Mn)
2,0591,9621,483Net Income (Rs. Mn)
Jun 2005 Mar 2005 Dec 2004 Particulars
Annual
Quarterly
Stable Operating Margins even during downturn
Revenues up by 38% to Rs 2,059.1mn in Jun’05 with improved value realizations
* 6 months annualized
Clothiers to the Nation Today…the World Tomorrow
SKNL
Consolidation of all Textile businesses1990
1997Collaborated with Reid & Taylor, Scotland
1996 - 99Landmark Investments in
Home Textile Worsted Units
2001Pioneered Total Wardrobe Solutionconcept through launch of “Tamariind”
2005CDR package implementationModernization and capacity expansion
1948 - 80Established in 1948 as a textile trader Ventured into manufacturing in 1975
The Journey
Countermeasures
Corporate debt restructuring (CDR)Substantial reduction in costsThrust on Sales & Marketing
• Expanding R&T penetration• Economically priced range• Institutional focus for Uniforms
Generic Problem of the 90s
Growth funded by high cost debtSkewed D:E ratioMarket slowdown in late 90sHuge debt burden hampers growth
Clothiers to the Nation Today…the World Tomorrow
SKNLTurnaround – The CDR Package
Interest cost reduced from 15.6% to 7%1134.9
609.6
0
400
800
1200
FY'03 FY'06
Rs m
n
Interest Cost The Package
The repayment of term loans, NCDs, Funded Interest, Unsecured Loans and Preference Shares rescheduled
To match with the cash flows of the company
Benefits
Interest cost now is about Rs. 600mn for the year 2005-06 As compared to a peak level of Rs. 1320mn in the year 2001-02
Written off value of fixed assets capitalized during the earlier years, to the extent of Rs 2,055.6mn
Funded interest, which is at zero % coupon to be repaid during 2014-2020, the impact of which is a virtual write off
Implementation of the CDR package will assist SKNL in coming back on a proper footing in terms of profitable performance
Clothiers to the Nation Today…the World Tomorrow
SKNL
An Overview
Key Strengths
Section 1
Section 2
Section 3
Industry OverviewSection 4
Business Profile
Initiatives & DriversSection 5
Financial ReviewSection 6
SBU Overview
Consumer Textile
Worsted Suitings
Home Textiles
Ready To Wear
Clothiers to the Nation Today…the World Tomorrow
SKNLSBU Overview
Worsted Suitings Reid & Taylor Wool & Wool – blend Suitings
S. Kumars• Work-wear• Uniforms
Consumer Textiles
Tamariind (Mid-Price)Reid & Taylor (Premium)
Ready-to-wear
Home TextilesBed LinenBath AccessoriesFurnishings
SKNL
SBUs operate as totally independent profit centers
Cater to all socio-economic segments of the market
72.4%
24.2%0.1% 3.3%
77.9%
21.6%0.1% 0.3%
64.6%
26.4%
2.9%6.1%
0%
20%
40%
60%
80%
100%
FY'04 FY'05* FY'06
Blended and Uniform Fabrics Worsted FabricsTotal Wardrobe Solutions Home Textiles
Revenue Break up
* 6 months annualized
Clothiers to the Nation Today…the World Tomorrow
SKNLConsumer Textile
4,628.8 4,535.55,438.0
0
1500
3000
4500
6000
FY'03 FY'04 FY'05*
Rs
mn
Net Sales
* 6 months annualized
EBIDTA Margins
* 6 months annualized
Leader in Uniform segment with 30% share of organized domestic market
• Uniform fabrics• Workday wear fabrics351 LoomsS Kumars Suiting Unit,
Dewas
Product MixCapacityPlant
2.3% 1.8%
4.4%
0%
2%
4%
6%
FY'03 FY'04 FY'05*
Offers complete garment and outfit solutions with accessories
Exports to Europe, Middle East, East Africa, Syria and Latin America
4,000+ varieties of uniform fabrics
In house production - 20%Outsourced - 80%
Low margin - high volume segment
Strong quality control systems to ensure quality standards at every stage of manufacture and outsourcing
Clothiers to the Nation Today…the World Tomorrow
SKNLWorsted Suitings
1,403.7 1,515.9 1,508.2
0
400
800
1200
1600
FY'03 FY'04 FY'05*
Rs
mn
* 6 months annualized
* 6 months annualized
EBIDTA Margins
Net Sales
30.5%26.4%
32.2%
20%
30%
40%
FY'03 FY'04 FY'05*
• Wool Suitings• Wool-blended
Suitings
12,960 Spindles 56 Looms Modern
Processing and Finishing House
Reid & Taylor Worsted suiting Unit
Mysore
Product MixCapacityPlantR&T 2nd largest brand in the domestic organized worsted fabric industry with
15% market share
High value and high margin business
Brand launched under James Bond Platform
Joint Venture with R&T, Scotland
Commissioned Worsted Suiting Plant at Mysore
Strong brand equity with recall rate of 84%
1997
1998
1999
Journey so far
2002 Initiated exclusive store chain for R&T
95% capacity utilization
16% of production is exported
2003 Amitabh Bachchan signed as brand ambassador
Perpetual right to use the brand R&T for 2% royalty
Clothiers to the Nation Today…the World Tomorrow
SKNLHome Textiles
Net Sales
188.8162.2
20.4
0
50
100
150
200
FY'03 FY'04 FY'05*
Rs
mn
* 6 months annualized
24 Dornier Jacquard Looms
Home Textile Unit Dewas
• Bed Linen & Bath Accessories
• Furnishings & Table linen
38,564 Spindles 64 Looms
Home Textile (Chamunda
Standard Mills) Dewas
Product MixCapacityPlant
Caters to Global Markets
Develop special fabrics for International markets
Only manufacturer of fine counts Damasks in India
Quality product well accepted in export markets
Drop in turnover due to :
• Labour issues• Decline in export realizations
Labour issues settled in the current quarter
Spinning strength gives depth to the division’s advantage
Strengths
Clothiers to the Nation Today…the World Tomorrow
SKNLTotal Wardrobe Solutions
Net Sales
* 6 months annualized
37.4
7.1
10.0
0
10
20
30
40
FY'03 FY'04 FY'05*
Rs m
n
Pioneered the concept of TWS
Brands catering to segments ranging from mid-priced to premium
Diverse Product base
Providing value added offerings
100% outsourced material
Strong brand image
High margin in the premium end
Excellent marketing and intensive distribution network including exclusive shops, shop-in-shops, multi-brand outlets and factory outlets
Strong quality control mechanism
Style consciousnessRelatively recent entrant in this segment thus• Low market penetration• Low brand awareness
Reason for lower volumes
Strengths
Clothiers to the Nation Today…the World Tomorrow
SKNL
An Overview
Key Strengths
Section 1
Section 2
Section 3
Industry OverviewSection 4
Business Profile
Initiatives & DriversSection 5
Financial ReviewSection 6
Strong Brands
Human Capital
Manufacturing
Distribution & Market Reach
Clothiers to the Nation Today…the World Tomorrow
SKNLStrong Brands
#2 in Worsted Fabrics (15% share)• Worsted fabrics• Ready-to-wear
Pioneered Total Wardrobe Solutions in India• Ready-to-wear
Market leader in uniforms (30% share)• Blended fabrics• Workwear• School Uniforms
AchievementsProductsBrand
Clothiers to the Nation Today…the World Tomorrow
SKNLHuman Capital
Board of Directors
Managing Director
P.B.Vaid Advisor Business Strategy
SERVICE FUNCTIONS
D.D. AvariHRD & Corp. Affairs
J. S.ShettyPresident - FinanceTarun JoshiCorporate Communication
L. N. SomaniCompany Secretary
WORSTED SUITINGS
CONSUMER TEXTILES
READY TO WEAR
Sudhir Kumar COO
S.C.Dalal CEO
Rawi Puri CEO
Subhash Kataria COO
Bharat Ram Head Retails
Govind Mirchandani CEO
Ashiwini Mishra COO
HOME TEXTILES
Divided into product-wise Strategic Business Units (SBU)
Fusion of entrepreneurship & professional expertise Board includes eminent persons from different spheres
Experts from respective industry manage each SBU
Clothiers to the Nation Today…the World Tomorrow
SKNLManufacturing
Damask Fabric
Polyester Blended Yarn, Grey Fabrics (PV, PC, 100% Cotton)
Fabrics ( Polyester & Polyester Viscose)
Worsted Suiting
Products Manufactured2nd Largest share with 15% market share in worsted suiting
12,960 Spindles 56 Looms, Modern
Processing and Finishing house
Reid & Taylor Worsted Suiting Unit Mysore
The only manufacturer of fine count Damasks in India
38,564 Spindles 64 Looms
Home Textile (Chamunda Standard Mill) Dewas
Leader in Uniform segment with 30% market share 351 LoomsS. Kumars Suiting Unit
Dewas
24 Dornier Jacquard Looms
Home Textiles Unit Dewas
Highlights CapacityPlant
4 state-of-the-art manufacturing units produce over 2,00,000 meters / day
One of the most modern worsted manufacturing unit in the world in Mysore with 7 MW captive power plant
Clothiers to the Nation Today…the World Tomorrow
SKNLDistribution & Market Reach
Penetrative distribution network in Domestic & International Markets
• Over 300 dealers & 30,000 retail outlets across 300 cities in India– Network of Agents servicing the mills
• Largest institutional supplier (organized sector)
• Reid & Taylor, Scotland – Channel to Global Markets
– Access to top brands worldwide (Prada, Brioni, Hackett, Dunhill, Kiton etc.)
• Exclusive stores for Reid & Taylor– 16 in operation & 10 under fit outs
Clothiers to the Nation Today…the World Tomorrow
SKNL
An Overview
Key Strengths
Section 1
Section 2
Section 3
Industry OverviewSection 4
Business Profile
Initiatives & DriversSection 5
Financial ReviewSection 6
Overview
Emerging opportunities
Clothiers to the Nation Today…the World Tomorrow
SKNLIndustry Overview
McKinsey, CII Report
Industry Estimates
Others, 17%
Sarees, 31%
Dress, 8%
Apparel, 22%
Shirting, 12% Suiting,
10%
Indian Textile & Apparel Industry
The Indian Suitings Industry
Unbranded, 51%
Branded Worsted, 18%
Branded PV , 31%
CII, Industry Estimates
Total Apparel Industry Rs. 191,400 mn
Unbranded (75%) Branded (25%) Rs. 48,500 mn
Men(70%) Rs 34,000mn
Women (8%)
Children (22%)Formal Wear Rs. 18,000 mn
Casual Wear Rs. 16,000 mn
• One of India’s most important economic sectors– 2nd in overall impact, after Agriculture– Accounts for 4% of the country’s GDP– about 14% of the national industrial production – about 35% of the total national export earnings
• A major forex earner– Earns $ 13.5bn annually for the country– Accounts for 25% of India’s exports
• A large employer– Provides 35mn jobs– Grass root employment growth potential
Clothiers to the Nation Today…the World Tomorrow
SKNL
Major initiatives by Government of India (recognized as a high-growth area)
De-reservation of substantial portion of the industryFiscal reforms in the synthetic textiles business underwayIncrease in investment ceilingsFDI freely allowed in the sectorTechnology Upgradation Fund
Significant production capacity shift to India
High quality manpower, raw material and lower costsInherent strengths in textile productionOnly country with ability to compete with China in the textile and apparel industry (USITC, Jan. 2004 report)
“Opening Up” of
the International Market
Emerging Opportunities . . . .
Quota restrictions & tariff barriers being phased out from Jan.’05Would free $ 370 - $ 380 billion of global textile business
Clothiers to the Nation Today…the World Tomorrow
SKNL
Exports to US market before & after quota elimination
Emerging Opportunities . . . .
China16%
India4%
Others24%
Hong Kong9%
Rest of America16%
Mexico10%
EU5%
Phillipines4%
Indonesia4% Bangladesh
4%Taipei
4%
China50%
India15%
Others10%
Hong Kong6%
Rest of America
5%
Mexico3%
Thailand3%
Phillipines2%
Indonesia2%
Bangladesh2%
Srilanka2%
BEFORE AFTER (Estimated)
India growth – 375%WTO estimates (Far Eastern Economic Review)
Clothiers to the Nation Today…the World Tomorrow
SKNL
An OverviewSection 1
Section 2
Section 3
Industry OverviewSection 4
Business Profile
Initiatives & DriversSection 5
Financial ReviewSection 6
Growth in Existing SBU’s
Key Strengths
Investment Plan
Foray into HVFC
Export Thrust
Growth Drivers (Summary)
Retail Expansion
Strengthening coverage
Clothiers to the Nation Today…the World Tomorrow
SKNL
FY’10Rs 17,836mn
FY’05Rs 6,887mn
Growth Drivers
Aggressive Turnaround and Growth (TAG) strategy to drive future growth and profitability
Fresh investments of Rs 3460mn to meet increasing demand
Strategic initiatives for modernization & capacity expansion of its existing SBU’s
Moving up the value chain to improve margins
Foray into (HVFC) Shirting
Well prepared to tap the export opportunity
Focus on domestic high growth retail sector
Leveraging strong brand equity
Revenue Growth (21% CAGR)
Clothiers to the Nation Today…the World Tomorrow
SKNLInvestment Plan
3,4603009801,250930Total Investment
50020015010050Working Capital Margin
900250650HVFC Fabric (Being launched)
800100100100500Home Textiles
500300200Ready-to-Wear (TWS)
760480100180Worsted Suitings (R&T)
Total FY'09FY'08FY'07FY'06Figures in Rs Mn
Sources of finance include promoter contribution/ fresh equity (Rs 2,100mn) and internal accruals (Rs 1,360mn)
With the investment of Rs 3,460mn
Top-line expected to grow by 21% CAGR Operating margins to grow from 14.7% to 22%
10,46413,628
16,536 17,837
8,284
0
4500
9000
13500
18000
FY'06 FY'07 FY'08 FY'09 FY'10
Rs
mn
22.0%
14.7%17.8%
20.2% 21.6%
14.3%13.2%10.8%6.5%6.8%
0%
10%
20%
30%
FY'06 FY'07 FY'08 FY'09 FY'10Operating Margins Net margins
Clothiers to the Nation Today…the World Tomorrow
SKNL
Presence in all socio economic segments & across all categories
MID PRICECarmichael House (to be launched)
ECONOMYNew Brand (On the anvil))
LUXURYInternational brand (On the anvil)
SUPER PREMIUMInternational Brands(Being finalized)
ECONOMYS.Kumars & World Player(To be launched)
LUXURYBalmoral(To be launched)
PREMIUMReid & Taylor
MID PRICE Tamariind
MID PRICEWorld Player
ECONOMYS.Kumars
PREMIUMReid & Taylor
READY TO WEAR
HOME TEXTILES
FABRIC
Strategy – Strengthening coverage
Clothiers to the Nation Today…the World Tomorrow
SKNL
14% 8% 5% 4% 4%
54%
32%21% 16% 14%
11%
19%
12%9% 8%
21%41%
39%37% 37%
34% 36%23%
0%
25%
50%
75%
100%
FY'06 FY'07 FY'08 FY'09 FY'10S Kumars Reid & TaylorReady to wear Home TextileHigh Value Fine Cotton Shirting's
Projected SBUwise% in Total Exports
Strong thrust on exports across all SBUs
Well prepared to tap the export opportunity in the post (MFA) era
Drivers
Shift in Revenue Mix
90%
83%
75%
69%
68%
10%
17%
25%
31%
32%
0%
25%
50%
75%
100%
FY'06 FY'07 FY'08 FY'09 FY'10
Domestic Sales Export Sales
Exports to increase to 32% of turnover
SKNL’s capabilities to leverage this opportunityHigh Brand Equity
Distribution strengths – Global & domesticManufacturing capabilities
External environment – Booming marketsPost quota regime opens up global markets
Increasing consumerism driving domestic markets
Strategy - Export Thrust
Clothiers to the Nation Today…the World Tomorrow
SKNL
Plans to extend marketing
& distribution
network
Over the next 5 years
50
100
150
200
300
0
50
100
150
200
250
300
FY'06 FY'07 FY'08 FY'09 FY'10
No.
of S
tore
s
Expansion of Retail Stores
Plans to establish 300 exclusive R&T retail outlets and shop-in-shops
Plans to increase the number of S. Kumars Value shops from 4 at present to 20
Open 200 multi-brand outlets
Focus on high growth retail sector
Strategy - Retail Expansion
Clothiers to the Nation Today…the World Tomorrow
SKNLConsumer Textile
Projected Sales
5,350 5,495 5,920 6,345
0
1750
3500
5250
7000
FY'06 FY'07 FY'08 FY'09
Rs
mn
Projected EBIDTA Margins
2,0501,8001,5501,300Amana Suitings
20015010050Retail (Value Shops)
35302520Medallion
110907050Uniserve
700600500400Institution
FY'09FY'08FY'07FY'06Channel wise Sales (in mn)
6.6%
8.3% 8.7% 9.1%
4%
6%
8%
10%
FY'06 FY'07 FY'08 FY'09
Increasing operating margins due to
• Thrust on exports• Orientation towards Institutional, Medallion,
Uniserve and Retail market segments• Considerable shift in the industry towardsbranded fabrics
Creating value addition in existing business by introducing premium blended suitings
Clothiers to the Nation Today…the World Tomorrow
SKNLWorsted Suitings
Projected Sales
2,1872,806
3,457 3,625
0
1250
2500
3750
FY'06 FY'07 FY'08 FY'09
Rs
mn
Projected EBIDTA Margins
760480100180Total
8080Finishing
28080100100Weaving
400400Spinning
TotalFY'08FY'07FY'06Investment (Rs mn)
35.1%
38.1%
40.3% 40.7%
34%
36%
38%
40%
42%
FY'06 FY'07 FY'08 FY'09
Investment Plan
Export target - 21% of sales by FY’06
Capacity expansion (current utilization 95%) from 4.8mn meters to 8.4mn meters in 3 phases to cater to expanding Domestic and International markets
• Expanding Market reach– Lower priced range
• Introduction of PV fabrics• Retail Thrust
– Exclusive stores being set up• 150 stores by 2007
– Shop-in-shop programs
• Increasing Export thrust– USA, Canada, Japan, West Asia,
Europe, Far & Middle East• Leveraging Global Strengths of R& T,
Scotland– Access to leading brands
worldwide– Access to the latest technology
Growth Strategy
InternationalDomestic
Clothiers to the Nation Today…the World Tomorrow
SKNLTotal Wardrobe Solutions
Projected Net Sales
1,1491,666
2,3393,016
2430
800
1600
2400
3200
FY'06 FY'07 FY'08 FY'09 FY'10
Rs m
n
Projected EBIDTA Margins
500300200
TotalFY'07FY'06Investment (Rs mn)
18.4%15.8%13.4%12.6%14.2%
10%15%20%
FY'06 FY'07 FY'08 FY'09 FY'10
Business vision
Investment Plan
(To be launched)(Being Finalized)
(To be launched)
Adding manufacturing facility to complement distribution, brand building capabilities and exports
Expanding Reid & Taylor garments to multi brand outletsRejuvenating Tamariind through effective supply chain & distributionIntroducing International Labels in Luxury & Super Premium segmentsGrowth
Strategy International
Domestic
Catering to growing demand from Reid & Taylor Scotland customersExport own brands to Middle East & South East AsiaNew manufacturing contracts with international brands
Clothiers to the Nation Today…the World Tomorrow
SKNLHome Textiles
Projected Sales
Projected EBIDTA Margins
800100100100500Total
250250Processing
400100100100100Weaving
100100Modernization Spinning
5050Modernization Weaving
Total FY'09FY'08FY'07FY'06Investment (Rs mn)
5041,014
1,5642,047
0
700
1400
2100
FY'06 FY'07 FY'08 FY'09
Rs
mn
19.0%19.9%18.7%
12.6%
10%
15%
20%
FY'06 FY'07 FY'08 FY'09
Investment Plan
Capacity Expansion , Modernization and Technology Upgradation to cater to high demand in the post quota regime
Expanding capacities from 4.65mn meters in FY’06 to 8.25mn meters in FY’10
Increasing sales due to :
• Exploring new markets (Domestic & Exports)• Launch of new brands catering to
• Higher disposable incomes • Growing consumerism
• Introducing special fabrics• Heat / oil resistant & Water repellant
Clothiers to the Nation Today…the World Tomorrow
SKNLForay into HVFC
900250650Total
100100Building
300300Spinning
500250250Weaving
Total FY'08FY'07Investment (Rs mn)
Set to enter HVFC fabrics to cater to large, high margin, low competitioncategory in the International markets
Setting up weaving & processing facilities of 14.5mn meters
Investment Plan
(being launched)
Projected Sales
1,0202,180 2,600
0
650
1300
1950
2600
FY'08 FY'09 FY'10
Rs m
n
Projected EBIDTA Margins
35.4%34.5%30.6%
20%
30%
40%
FY'08 FY'09 FY'10
– Fabricators making shirts for international brands
– Indian brands offering premium shirts to Indian customers
• Global market for HVFC shirting approx 550 – 600mn meters
– Primarily European manufacturers• SKNL to offer quality & cost benefits
– European Know-how & expertise– Indian manufacturing advantage
• Access to global customers through– Reid & Taylor, Scotland &– International labels coming to India
through SKNL
Growth Strategy
InternationalDomestic
Clothiers to the Nation Today…the World Tomorrow
SKNL
An Overview
Key Strengths
Section 1
Section 2
Section 3
Industry OverviewSection 4
Business Profile
Initiatives & DriversSection 5
Financial ReviewSection 6
Annual Performance Trend
Quarterly Performance Trend
Clothiers to the Nation Today…the World Tomorrow
SKNLAnnual Performance
Net Sales
* 6 months annualized
6,131.1 6,080.4 6,890.6
0
1750
3500
5250
7000
FY'03 FY'04 FY'05*
Rs
mn
EBIDTA Margins
* 6 months annualized
6.3% 6.1%
8.6%
0%
5%
10%
FY'03 FY'04 FY'05*
Turnover increased by 13% from Rs 6,080mn in FY’04 to Rs 6,890mn (annualized) in FY’05
Driven by increased realizations
Turnaround in bottom-line from losses to profits post restructuring
Operating profits increased by 60% from Rs 368mn in FY’04 to Rs 592mn (annualized) in FY’05
Due to better operating efficiencies
Operating margins increased from 6% in FY’04 to 8.6% in FY’05
Clothiers to the Nation Today…the World Tomorrow
SKNLQuarterly Performance
Net Sales
EBIDTA Margins
5.9%
9.7%11.1%
0%
5%
10%
15%
OND'04 JFM'05 AMJ'05
1,483.31,962.0 2,059.1
0
700
1400
2100
OND'04 JFM'05 AMJ'05
Rs m
n
Net sales increased from Rs 1,483mn in OND’04 to Rs 2,059.1mn in AMJ’05
With improved value realizations
Post restructuring, SKNL has consolidated its operations
Operating profits increased from Rs 87mn in OND’04 to Rs 229mn in AMJ’05
Driven by increase in net salesSubstantial reduction in administrative costs
Clothiers to the Nation Today…the World Tomorrow
SKNL
1.2(1.2)(8.8)(6.9)EPS
182.5(205.1)(1,345.0)(1,091.4)PAT
---(64.3)Less deferred tax
----Less Provision for current Tax
182.5(205.1)(1,345.0)(1,155.8)PBT
85.969.250.262.1+Non Operating Income
96.6(274.3)(1,395.2)(1,217.8)OPBT
455.2623.5647.4557.3Less Depreciation
40.118.71,135.01,315.3Less Finance Charges
591.9367.9387.2654.8OPBDITA
296.2369.4381.6407.2Selling and distribution expenses
173.5157.5171.7208.9Administration Expenses
164.6207.6186.3180.8Salaries & Wages
224.3173.8210.7275.1Other Mfg. Expenses
133.4150.0142.4130.6Power, Fuel and Water
45.642.039.649.0Stores consumed
5,257.84,612.34,611.56,023.0Raw Material Consumed
6,295.45,712.55,744.07,274.5Less Operating Expenses
6,887.36,080.46,131.17,929.3Net Revenues
31-Mar-05*30-Sep-0430-Sep-0330-Sep-02Year Ending . . .
P&L Statement
Figures in Rs million * 6 months annualized
Clothiers to the Nation Today…the World Tomorrow
SKNL
12,612.5 14,139.5 13,025.5 12,525.3 TOTAL (1+2+3)
11,596.0 11,158.9 11,204.4 9,350.4 (b) Others
1,512.5 1,512.5 361.6 361.6 (a) Preference Shares
13,108.5 12,671.4 11,566.0 9,712.0 3. Loans
0.0 (582.4)(582.4)(582.4)2. Deferred Tax
(2,242.8)303.8 495.2 1,849.0 (b) Reserves and Surplus
1,746.7 1,746.7 1,546.7 1,546.7 (a) Share Capital (Including Share Application Money)
(496.1)2,050.5 2,041.9 3,395.7 1. Shareholders' Funds
SOURCES OF FUNDS
31-Mar-05*30-Sep-0430-Sep-0330-Sep-02BALANCE SHEET AS AT
BALANCE SHEET ….
Figures in Rs million * 6 months annualized
12,612.5 14,139.5 13,025.5 12,525.3 TOTAL (1+2+3+4)
1,338.9 952.9 99.3 164.3 4. Miscellaneous Expenditure
57.8 49.2 71.0 107.4 (b) Others
1,003.2 984.0 1,385.2 1,485.8 (a) Sundry creditors
1,061.1 1,033.2 1,456.2 1,593.2 B. Current Liabilities
855.8 998.7 890.2 807.0 (c) Other Current Assets
4,068.8 3,754.0 3,774.3 2,969.3 (b) Receivables
3,406.9 3,205.1 2,934.8 2,840.3 (a) Inventories
8,331.5 7,957.8 7,599.3 6,616.7 A. Current Assets
7,270.5 6,924.6 6,143.2 5,023.5 3. Net Current Assets (A-B)
68.8 68.8 68.9 68.8 2. Investments
694.6 693.3 686.1 685.6 Capital Work in Progress
3,239.7 5,499.8 6,028.1 6,583.1 Net Block
(2,680.5)(2,962.0)(2,352.1)(1,737.6)Less: Accumulated Depreciation
5,920.2 8,461.8 8,380.3 8,320.7 Gross Block
3,934.3 6,193.1 6,714.2 7,268.7 1. Net Fixed Assets
APPLICATION OF FUNDS
Clothiers to the Nation Today…the World Tomorrow
SKNLKEY FINANCIAL PROJECTIONS ….
14.3%13.2%10.8%6.5%6.8%PAT/Sales
2,556.82,175.91,470.7681.3563.7PAT
217.5185.1125.158.048.0Tax / MAT
2,774.42,361.01,595.8739.3611.6PBT
86.486.486.491.9123.9Amortization / Misc. Exp. W/O
680.0680.0580.0480.0430.0Depreciation
388.5437.8493.8547.3609.6Interest
0.00.00.00.0557.5Miscellaneous Income
22.0%21.6%20.2%17.8%14.7%PBDIT MARGIN
3,929.23,565.22,755.91,858.41,217.6PBDIT
13,907.712,970.710,871.68,605.97,066.5Total Cost
1,654.71,534.01,263.1943.3674.0Selling Expenses
377.6342.2273.3213.6180.0Administrative Expenses
399.6374.9299.8235.6219.9Personnel Cost
2,086.01,873.51,492.31,070.5678.2Manufacturing Expenses
9,389.88,846.17,543.26,142.95,314.4Material Cost
17,836.916,535.913,627.610,464.38,284.1Total Sales
5,779.15,088.03,472.71,803.3858.6Export Sales
12,057.811,447.910,154.98,661.07,425.5Domestic Sales
2009-102008-092007-082006-072005-06Year Ending 31-March …
Figures in Rs million
Clothiers to the Nation Today…the World Tomorrow
SKNL
Comparative Growth for SKNL (Projections ’05-’06 to ’09-’10)
SKNL – ROCE Projections
573%
223%
115%
0%
200%
400%
600%
Sales PBDIT Exports
17.97%17.78%
14.61%
9.69%
5.93%
5%
10%
15%
20%
'05-'06 '06-'07 '07-'08 '08-'09 '09-10
KEY FINANCIAL PROJECTIONS ….