VIP Industries Limited has informed the Exchange about Investor Presentation
BSE Limited Phiroze Jeejeebhoy Towers, Dalal St, Kala Ghoda, Fort, Mumbai - 400001
8th November, 2022
National Stock Exchange of India Ltd. Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051.
BSE Code No. 507880
NSE Code – VIPIND
Subject: Presentations to be made to analysts / institutional investors
Dear Sir / Madam,
Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith presentation to be made on the Q2 financial performance of the Company on 10th and 11th November, 2022 to the analysts/ institutional investors.
Kindly take the same on record.
Thanking you,
Yours faithfully,
For V.I.P. Industries Limited
Anand Daga Company Secretary & Head – Legal
Encl.: As above
INVESTOR PRESENTATION NOVEMBER’22
Disclaimer
Some of the statements in this communication may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially from those expressed or implied. Important developments that could affect the Company’s operations include changes in the industry structure, significant changes in political and economic environment in India and overseas, tax laws, import duties, litigation and labour relations.
The information contained herein has been prepared to assist prospective investors in making their own evaluation of the Company and does not purport to be all-inclusive or to contain all of the information a prospective or existing investor may desire. In all cases, interested parties should conduct their own research/investigation and analysis of the Company and the data set forth in this information. The Company makes no representation or warranty as to the accuracy or completeness of this information and shall not have any liability for any representations (expressed or implied) regarding information contained in, or for any omissions from, this information or any other written or oral communications transmitted to the recipient in the course of its evaluation of the Company.
While we have made every attempt to ensure that the information contained in this presentation has been obtained from reliable source, the Company is not responsible for any errors or omissions, or for the results from the use of this information. All information in this presentation is provided on "as is" basis with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information and without warranty of any kind, express or implies including but not limited to warranties of performance for a particular purpose. In no event will the Company its Directors, legal representatives, agents or employees thereof be liable to anyone for any decision made or action taken by relying on data/information in this Presentation.
Index
Industry Overview
Company Overview
Q2 Financial Performance
Brands, Channels & Categories
Market Share
Q3 Sneak Preview
Industry Overview
Industry Set To Grow At 15% For Next 5 Years
5 year CAGR : 10%
Industry Size (Rs. Cr)
5 year CAGR : 15%
Pre-pandemic
Pandemic Y1
17089
10467
11619
8305
10399
12663
Post-pandemic
15062
17149
19109
21042
CY14
CY15
CY19
CY20
CY21
CY22
CY23
CY24
CY25
CY26
Source: Euromonitor, Includes backpacks, luggage, duffel bags and other small bags (Excludes Ladies Handbags)
Growing Middle India And Its Increasing Propensity To Indulge Will Accelerate The Industry Growth
Ballooning middle class consisting of ‘connected aspirants’ will form majority of India’s demography going forward
Frequency jump in travel turning luggage into lifestyle products
Category Core : Durability with additional features for convenience ▪ 2-3 Travel Occasions ▪ Business Travel emerges a new
cohort
▪ Two Bags in the Family ▪ One for Official Travel & One for
Family
▪ Mode of transports:
▪ Train/Bus/Limited Air Travel
▪ Replacement : 5-7 yrs
2
2000
Flaunt / Expression will be key Category core
▪ Multiple travel occasions with
increasing trend of international travel, weekend getaways, solo trips etc.
▪ Repertoire of Bags per person ▪ Mode of travel
▪ Domestic & International Air
/Car Trips / Train / Bus
▪ Replacement : 2-3 years
2010
3
4
Category Core moves to Convenience ▪ One Bag for each individual ▪ Mode of transport
▪ Domestic Air /Car Trips /
Train / Bus ▪ Replacement : 3-5 years
2015-2022
1990
1
Category Core : Durability ▪ One Travel a year
▪ Meet Relatives, Location Transfer, Marriage etc.
▪ One Bag for the Family ▪ Mode of transport
▪ Train/Bus Travel
▪ Replacement : 8-10 years
Source : Research commissioned by VIP Industries, Conducted by The Third Eye consulting & research firm
Consumer Cohorts Extending Beyond Travel
• Expenditure on weddings had been on the rise in India and as per industry estimates it has gotten bigger post pandemic2 • Luggage is an integral part of Wedding Shopping
I
S G N D D E W
• Departures from India for International Education has grown at a CAGR of 19% for 5 years ended 20211 • A Similar trend is expected to continue
T N E D U T S L A N O I T A N R E T N
I
L E V A R T
• Luggage as a preferred personal gifting item is emerging as a significant trend • Major retail chains now operating regular promotional gifting of luggage category
S N O I T O M O R P & G N I T F I G
Source : 1. Redseer Strategy Consultant Published report 2. Media reports
Macro Pressures & Consumer Preference Shift Fueling Growth For Organized Players
r e m u s n o C
e c n e r e f e r P
s d r a w o t
t f i h S
d o o G d e d n a r B
y t i l
a u q
s t c u d o r p
i
n a h c y l p p u S
i
s t n a r t s n o C
c i m e d n a p t s o P
f o h t w o r G
d e z i n a g r O
r o t c e S
r o t c e S
n o i t a z i l
a m r o F
t s o P
o i t a t n e m e p m
l
I
T S G
f o n
Market Split
Branded
Others
55%
61%
53%
44%
43%
42%
40%
39%
45%
39%
47%
56%
57%
58%
60%
61%
CY19
CY20
CY21
CY22
CY23
CY24
CY25
CY26
Source: Euromonitor & internal estimates
Company Overview
Undisputed leader in an Oligopolistic Indian Luggage Industry
Established in 1968
#1 In the organized luggage space
Present in multiple luggage categories across price points
9 Own Manufacturing Facilities in India & Bangladesh
Servicing customers through 10,500 Point of Sales across 800 towns
Over 8000 employees
Milestones
Leveraging our rich heritage & strong legacy
Revenue Journey (Rs. In Cr.)
Aristocrat Acquisition
Caprese Launch
Skybags Launch
1,785
1,714
Aristocrat Restage
Bangladesh Operations
1,416
1,283
1,234
Carlton Acq China Ofc
1,064
988
868
854
745
614
567
521
439
287
305
296
321
331
Aristo Plast Pvt Ltd 297
8 6 9 1
Strategic Shift from China Sourcing To Own Mfg
1,290
619
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
11-12
12-13
13-14
14-15
15-16
16-17
17-18
18-19
19-20
20-21
21-22
Our Board & Management
is
graduate
a Commerce
He and an experienced industrialist who has pioneered the luggage industry in India. He has an experience of more than 50 years in the luggage industry
She a graduate from Oxford University and has done an MBA from the Harvard Business School. She has over 10 years of experience in managing and strategizing the business of luggage, bags and other travel accessories.
holds
a MBA in Marketing
He and International Business and has 25 years of leadership experience in the FMCG industry across business verticals and categories. He is responsible to build the organization growth strategy and lead execution across all business verticals & regions globally
She has completed B.Sc. from The Wharton School and an MBA from Harvard Business School. She is the Executive Chairperson of Godrej Consumer Products and Director of Godrej Agrovet and Teach For India.
Mr. Dilip Piramal Chairman
Ms Radhika Piramal Executive Vice Chairperson
Mr. Anindya Dutta Managing Director
Ms Nisaba Godrej Independent Director
Mr. Amit Jatia Independent Director
Mr. Tushar Jani Independent Director
Mr. Ramesh Damani Independent Director
Ms Neetu Kashiramka Chief Financial Officer
He has a degree in Business Administration from the Marshall School of Business, Los Angeles. He has attended several sessions of the YPO / Harvard President’s Program at HBS. He has over 26 years of experience in the QSR industry.
He is a Science graduate. He is a founder of Blue Dart Courier Services, Blue Dart Express Limited, Blue Dart Aviation Limited and Express Industry Council of India. He has over 40 years of experience in the Shipping and Transport Industry. He has pioneered inland logistics of sea freight containers.
He is a Commerce graduate and a post-graduate in Business from California State University, Northridge. He has over 20 years of experience in security market.
Administration, Marketing
along with
She is a qualified Chartered Accountant and has 25 years of experience across varied industries. At VIP industries, Financial Controller & business partner, she is responsible for Relationship, Legal, Information Commercial functions.
Technology
Secretarial,
Investor
being
and
the
Senior Management
Abhinav Kapoor Vice President Sales Over 20 years of experience in FMCG industry
Anjan Mohanty Chief Executive Officer – Bangladesh 23 years of experience in apparel industry
Anup Sur Head - Supply Chain & Logistics 24 years of experience across varied industries
Ashish Saha Sr. Vice President – India Manufacturing & New Projects 42 years of experience in luggage industry
MVH Sastry Head Procurement 20 years of experience in FMCG industry
Praful Gupta Head Marketing 22 years of experience in FMCG & luggage industry
Suhas Kshirsagar Head - Corporate Quality & After Sales Service 27 years of experience in luggage, automotive & FMCG industry
Sunil Kolhe Sr. Vice President – Design, Sourcing & Product Development 34 years of experience in luggage industry
Vikas Anand Vice President - Human Resources 17 years of experience across varied industries
VIP Power Brands : High Equity, targeted at distinctive opportunity spaces
Proposition
Innovative & Caring partner that makes every trip comfortable, safe and enjoyable
Trendy , colorful luggage brand that helps you get noticed
Partner every young middle Indian in this journey with products that are built to outperform and outlast
Hello Holidays
Move in Style
Unpack Your Dreams
Brand Print
BRANDS FROM THE HOUSE OF VIP INDUSTRIES
VIP Power Brands : High Equity, targeted at distinctive opportunity spaces
Proposition
Luggage Partner For Young Visionaries & Leaders
Avant-garde range of handbags & accessories for every woman who wishes to announce her arrival in life
The New Face Of Business
All That A Girl Can Be
Brand Print
BRANDS FROM THE HOUSE OF VIP INDUSTRIES
Diversified Product Portfolio
HARD LUGGAGE
DUFFLE BAGS
SOFT LUGGAGE
LADIES HANDBAGS
BACKPACKS
Healthy geographical presence
RETAIL TRADE
MODERN TRADE
GENERAL TRADE
ECOM
CSD CPC
INSTITUTIONAL
Branch locations
4 Regions 20 Branches
Pop Strata
50K - 1 Lakh
1 - 5 Lakhs
Town Universe
VIP Penetration
FY20
H1 FY23
583
395
51%
85%
67%
95%
5 -20 Lakhs
81
100%
100%
20 - 50 Lakhs
50 Lakhs+
8
5
100%
100%
100%
100%
Total
1072
68%
80%
Towns universe as per census 2011 data
Strategic Advantage Of Own Manufacturing
Upstream transformation Revenue volumes split by source
Post-pandemic
YTD FY23
3p Sourcing, 4%
China, 9%
Controlled Mfg - India, 19%
Own Manufacturing, 68%
Pre-pandemic
FY20
3p Sourcing, 13%
China, 34%
Own Manufacturing, 42%
Controlled Mfg - India, 12%
Planned Capex for FY23 is Rs. 100 crores - capacity enhancement by 20%
Financial Overview
Performance Highlights (Consolidated)
Operational Highlights
• Q2 revenue growth at 56% over Q2 FY22 • Q2 FY23 is at 87% of Q1 revenue – highest ever
compared to any pre-covid year
• Q2 GP after netting of other income is 48% as
compared to 47% in Q2 FY22 mainly on account of better realization.
• Q2 Overall Expense is at Rs. 176 cr as compared to Q2 FY22 at Rs. 114 cr. Increase is mainly on account of increase in advertisement spend, employee cost, freight cost and exchange rate fluctuation.
EBITDA % - Q2 FY 22 Increase in Gross Margin Decrease in Employee Cost Increase in Other Expenditure EBITDA % - Q2 FY 23
14.4% 0.5% 2.1% -2.1% 14.8%
Q2 FY22
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Revenue (Rs. cr)
Growth (over base FY20)
330
-20%
397
-8%
356
14%
591
5%
515
25%
Q2-FY23 Consolidated Financial Performance
INR 515 Cr. Revenues
48.1%. GP %
14.8% EBITDA %
INR 52 Cr. PBT
+56%
+1%
+0.4%
+112%
Over Q2 FY22
H1-FY23 Consolidated Financial Performance
INR 1105 Cr. Revenues
49.1%. GP %
16.7% EBITDA %
INR 152 Cr. PBT
+106%
+0.5%
+3.1%
+476%
Over H1 FY22
21
Q2 & H1 Financial Performance - Consolidated
Particulars Revenue from Operations Other Income Total Revenue COGS Gross Contribution GC Margin (without Other Income) Employee Benefits expenses Other Expenses Total Expenses EBIDTA EBIDTA Margin Depreciation EBIT Finance Cost Profit before Exceptional items Exceptional items Expense / (Income) Profit before Tax Tax Profit After Tax
Quarter ended
Year ended
Year ended
Sep-22 515 5 520 267 253 48.1% 58 118 176 77 14.8% 18 59 7 52 0 52 9 43
Jun-22 591 7 598 296 302 49.9% 60 132 192 110 18.3% 18 92 7 85 -15 100 31 69
Sep-21 330 7 337 175 162 47.1% 44 69 114 49 14.4% 17 31 7 25 0 25 6 19
Sep-22 1105 12 1118 563 555 49.1% 118 250 368 187 16.7% 36 151 13 137 -15 152 40 112
Sep-21 536 21 557 276 282 48.6% 83 123 206 76 13.6% 36 40 14 26 0 26 5 21
Mar-22 1290 36 1326 645 681 50.0% 189 311 500 181 13.6% 70 111 25 86 0 86 19 67
Key Financial Metrics – P&L
520
Sep-22
Revenue
598
Jun-22
EBITDA
18.3%
14.8%
14.4%
Gross Margin
48.1%
49.9%
47.1%
337
Sep-21
Sep-22
Jun-22
Sep-21
PBT Before Exceptional Items
85
52
25
Sep-22
Jun-22
Sep-21
Sep-22
Jun-22
Sep-21
Key Financial Metrics – Balance sheet
77
Net Debt
61
Sep-22
Mar-22
Investments & Cash & Bank
-
Sep-21
106
61
61
92
Sep-22
18.7%
Net Current Assets (No of Days)
112
117
Mar-22
ROCE
15.5%
Sep-21
5.7%
Sep-22
Mar-22
Sep-21
H1 Sep-22
FY Mar-22
H1 Sep-21
Brands, Channels & Categories
Revenue Performance : Channels
Channel-wise revenue Salience
Q2 FY20
Q2 FY22
Q2 FY23
YoY % Growth
General trade
Retail trade
Modern trade
Ecom
CSD CPC
Institutional
International
18%
14%
28%
14%
15%
9%
2%
15%
9%
27%
23%
17%
7%
2%
18%
11%
27%
22%
12%
6%
5%
87%
102%
49%
45%
6%
26%
287%
• Distribution Expansion, Share gain in large & weak accounts, Value Segment Competitiveness & Productivity improvement driving growth across traditional physical channels of Retail, General and Modern trade
• Added 46 new EBO’s during H1 FY23 with 44 additional stores signed
•
and under fit-out as on date Low population strata penetration along with presence in premium malls is a focus for retail expansion strategy
• General Trade Distribution Has Surpassed Pre-Covid Levels Increasing
VIP Penetration to 80%
• VIP’s GT distribution is currently present in 862 towns
• Modern Trade compensated for entire Future Group loss during the
quarter through other MT chains & catchment marketing
•
•
•
International Business Revenue reported 178% growth over base year FY20 Renewed GTM strategy in key market UAE and base expansion (7 new countries) is adding to the growth in this business
ECOM, on the back stronger fundamentals of Strengthened Portfolio, improved content, higher spends and supply efficiency has leveraged the ‘Big day & festive buying’ of Q2
Revenue Performance : Categories & Brands
Brand-wise revenue Salience
CARLTON
VIP
SKYBAGS
Premium & Mass Premium
ARISTROCRAT+ ALFA
CAPRESE
Q2 FY20
5%
27%
38%
70%
22%
8%
Q2 FY22
5%
21%
36%
63%
33%
4%
Q2 FY23
YoY % Growth
Category-wise revenue Salience
Q2 FY20
Q2 FY22
Q2 FY23
YoY % Growth
6%
21%
32%
58%
37%
4%
63%
48%
36%
43%
74%
59%
UPRIGHTS
HL - UPRIGHT
SL - UPRIGHT
DUFFEL BAGS
BACKPACKS
LADIES HAND BANGS
64%
47%
53%
10%
17%
8%
76%
62%
38%
10%
11%
4%
75%
67%
33%
8%
12%
4%
51%
62%
32%
21%
79%
59%
Value Play Going Strong Shift from unbranded segment expanding organised market – Higher growth in value segment a must for overall share gain Relevant launches, set offers, aggressive promotions during the Ecom shopping festivals has contributed to our Value portfolio performance
Premium Portfolio Revenue Growth Healthy All brands - Carlton, VIP and Skybags - reported traction with pick up in international travel, student travel season and corporate travel Our premiumisation themed new launches have also reported encouraging response
HL Strategy Success HL continues to outperform in the uprights category
Backpack Revival Backpacks performance – a concern last quarter - has picked up momentum on the back of new launches & non-seasonal sub-categories
Caprese build-up continues and has maintained revenue share with jump in overall company sales
Value Segment continues to Outshine
Set story drives Luggage business in both Hard & Soft
Aggressive promo ‘s executed with ecom partners for festival sales
Sets salience in Value portfolio revenue
29%
17%
1%
18-19
2%
19-20
21-22
22-23
Distribution thrust in tier II & tier III towns
New Launches in Opening Price Points and in new product types like PU /Antitheft /Drawstring to gain share
Targeting Train Travelers (2 W SL, Duffle wheels, Built - in cable lock for train travel)
Premiumization Themed Innovations
Skybags - 3 new ranges launched in hard luggage
First Hard case with Bometric Lock
India’s First Ever Personalised Luggage launched - Xpressionz
First Ever Metallic finish in printed PC films
Ecom Exclusive - Special focus on women travelers
Biker Collection , Slim laptop , New Marvel Collection , PU
First Hard case in Businesss Overnighters
Mettalics in Solid Colours
Premiumization Through specific targeted communications
Owning # Airport look with sustained Influencer Led Content on social Media
Targeting International Student Traveller through print / Social Media
Building Affity with GenZ through Backpack Campaigns - # Back to Cool
Inspiring the Solo woman traveller
Driving Premiumization through Consumer Promotions
EOSS – END OF SEASON SALE ON PREMIUM RANGES
BUY MORE SAVE MORE VIP + CARLTON: Driving frequency through EOSS through offline & online channels during lean period
Partnership with HDFC offering extra 10% discount in Q2
STUDENTS SPECIALS SKYBAGS: Capturing the growing demand for International Student Travel
Market Share
Market share movement for last 12 quarters
*Relative Market share based on reported results of 3 Companies
Q3 Sneak Preview
Exciting Mega Launches in Q3 FY23
Limited Edition FIFA Luggage Range Our Hero Launch Of The Year Is Out Now!
Exciting Mega Launches in Q3 FY23
VIP Highlander The SUV Of Luggages !
Exciting Mega Launches in Q3 FY23
COUTURE LINE OF CAPRESE X MANISH MALHOTRA RANGE FOR PARTY WEAR IN KEEPING WITH CAPRESE SENSIBILITIES AND MANISH MALHOTRA LOOKS
Exciting Mega Launches in Q3 FY23
For Further Information Contact:
VIP Industries Limited
Miss Neetu Kashiramka – Chief Financial Officer Email: neetu.kashiramka@vipbags.com
Adfactors PR Pvt. Ltd.
Snighter Albuquerque/ Rushabh Shah Email: snighter.a@adfactorspr.com/ rushabh.shah@adfactorspr.com Mobile: 9819123804 / 8082180182
5th Floor, DGP House, 88-C, Old Prabhadevi Road, Mumbai – 400025