SFLNSE8 November 2022

Sheela Foam Limited has informed the Exchange about Investor Presentation

Sheela Foam Limited

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Earnings Presentation Q2/H1-FY23

Company Snapshot

Experienced Management

‘Sleepwell’ mattresses a household Brand and one of the most trusted brands in India

Backward Integrated Player with a wide product basket

Largest manufacturers of PU Foam in India

20-25% Market Share in the Mattresses segment

40% market share in Australia

Presence across multiple geographies

Low Gearing ratio

Consistent Positive cash flow generation

Strategic move to focus on high margin products

Earnings Presentation Q2-FY23

Marquee Investors

Proven track record in Acquisitions and Integration

•

35, 000

30, 000

25, 000

20, 000

15, 000

10, 000

5, 000

Company Overview

Incorporated in 1971, Sheela Foam is the market leader and the largest manufacturer of Polyurethane Foam (PU) in India.

India Operations

The Company manufactures various foam-based home comfort products like mattresses, Furniture cushions, as well as technical grades of polyurethane foams for end-use in a range of industries like automobile, acoustics, etc.

The flagship household brands include: ‘Sleepwell’ for mattresses and home comfort, ‘Feather Foam’ a pure PU Foam and ‘Lamiflex’ a polyester foam for lamination.

Manufacturing Plants

The company has a global manufacturing footprint with 11 nationwide manufacturing plants in India, 5 in Australia, and 1 in Spain.

It has a strong presence and market share in Australia through its wholly-owned subsidiary, Joyce Foam Pty Ltd. and also in Spain through its subsidiary, Interplasp S.L.,

The company has an integrated manufacturing facility 123,000 MTPA with a robust distribution network of 100+ exclusive distributors, 5,400+ exclusive brand outlets, and 7,850+ multi-brand outlets.

Revenue , EBITDA and EBITDA Margins (INR Mn)

Q2-FY23 Revenue Breakup

123,000

MTPA of Total Capacity

20 – 25%

Market share in India

29,818

Geographical Distribution

Business Segment Distribution

Global Operations

21,414

21,736

24,372

14.94%

13.82%

14,512

10.56%

10.00%

3,004

3,642

3,149

1,442

9.85%

2,109

12%

15%

19%

73%

81%

FY19

FY20

FY21

FY22

H1-FY23

Revenues

EBITDA

EBITDA Margins

India Europe

Australia

Home Comfort

Technical Foam

Earnings Presentation Q2-FY23

Manufacturing plants in Australia with a capacity of 11,000 MTPA

40%

Market share in Australia

Manufacturing plant in Spain with a capacity of 22,000 MTPA to cater to European and US markets

Q2/H1-FY23 Performance Highlights

Earnings Presentation Q2-FY23

Q2/H1-FY23 Financial and Operational Highlights

Q2-FY23 Consolidated Financial Performance

Q2/H1-FY23 Operational Highlights

INR 783 Mn

EBITDA

INR 536 Mn

Net Profit

INR 7,222 Mn Revenue from Operations

10.84%

EBITDA Margin

7.42%

PAT Margin

INR 10.98 Basic/ Diluted EPS

H1-FY23 Consolidated Financial Performance

EBITDA INR 1,442 Mn

EBITDA

Net Profit INR 961 Mn

Net Profit

INR 14,513 Mn Revenue from Operations

9.94%

EBITDA Margin

6.62%

PAT Margin

INR 44.83 Basic/ INR 19.70 Diluted EPS Basic/ Diluted EPS

•

Gross Margins improved due to improved raw material scenario, with Polyol prices continued their consistent downward correction, while TDI prices also cooled off in this quarter after 4-5 consistent quarters of rising price scenario.

Global economies too continue to face headwinds due to uncertain geopolitical situations and high inflationary pressure are weighing in on economic activities and consumption patterns.

Softer demand environment in India and Europe business, while Australia continued to perform well.

Decline in consolidated EBITDA margins primarily due to the increase in sales and marketing expenses by 37% year on year and 24% quarter on quarter.

Earnings Presentation Q2-FY23

Quarterly and YTD Geographical Revenues

SFL India (INR Mn)

Australia - Joyce (INR Mn)

Spain - Interplasp (INR Mn)

Consolidated (INR Mn)

7, 000

6, 000

5, 000

4, 000

3, 000

2, 000

1, 000

12, 000

10, 000

8, 000

6, 000

4, 000

2, 000

5,857

15.36%

5,334

11.80%

714

520

Q2-FY22

Q2-FY23

20. 00%

18. 00%

16. 00%

14. 00%

12. 00%

10. 00%

8. 00%

6. 00%

4. 00%

2. 00%

0. 00%

1, 200

1, 000

800

600

400

200

- 200

950

1,050

8.42%

9.60%

-5

Q2-FY22

Q2-FY23

900

700

500

300

100

- 100

13. 00%

11. 00%

9. 00%

7. 00%

5. 00%

3. 00%

1. 00%

- 1.00%

1, 300

15. 00%

1, 100

1,058

881

15.10%

11.32%

10, 000

9, 000

8, 000

7, 000

20. 00%

18. 00%

6, 000

16. 00%

14. 00%

12. 00%

5, 000

4, 000

10. 00%

3, 000

8. 00%

6. 00%

4. 00%

2. 00%

0. 00%

2, 000

1, 000

14.00%

7,856

7,221

10.80%

769

536

15. 00%

13. 00%

11. 00%

9. 00%

7. 00%

5. 00%

3. 00%

1. 00%

- 1.00%

Q2-FY22

Q2-FY23

Q2-FY22

Q2-FY23

Revenues

PAT

EBITDA Margins

Revenues

PAT

EBITDA Margins

Revenues

PAT

EBITDA Margins

Revenues

PAT

EBITDA Margins

9,114

11.90%

10,478

10.30%

906

903

15. 00%

2, 500

13. 00%

11. 00%

9. 00%

7. 00%

5. 00%

3. 00%

1. 00%

2, 000

1, 500

1, 000

500

- 1.00%

1,984

10.20%

2,153

9.10%

H1-FY22

H1-FY23

H1-FY22

H1-FY23

15. 00%

2, 800

13. 00%

11. 00%

2, 300

9. 00%

7. 00%

5. 00%

1, 800

1, 300

3. 00%

800

1. 00%

- 1.00%

300

- 200

2,283

1,927

11.80%

8.20%

117

142

17, 000

15, 000

13, 000

15. 00%

13. 00%

11, 000

11. 00%

9. 00%

7. 00%

5. 00%

3. 00%

1. 00%

- 1.00%

9, 000

7, 000

5, 000

3, 000

1, 000

- 1, 000

13,369

11.10%

14,512

9.90%

1,020

961

H1-FY22

H1-FY23

H1-FY22

H1-FY23

Revenues

PAT

EBITDA Margins

Revenues

PAT

EBITDA Margins

Revenues

PAT

EBITDA Margins

Revenues

PAT

EBITDA Margins

Earnings Presentation Q2-FY23

Mattresses (INR Mn)

Furniture Foam (INR Mn)

Technical Foam (INR Mn) Technical Foam

Comfort Foam and HC Line (INR Mn)

Quarterly Business Segment Revenues

2,470

2,075

780

640

1,170

1,452

1,437

1,156

Q2-FY22

Q2-FY23

Q2-FY22

Q2-FY23

Q2-FY22

Q2-FY23

Q2-FY22

Q2-FY23

Mattresses (Volumes in 000’s)

Furniture Foam (Volumes in MT)

Technical Foam (Volumes in MT)

Comfort Foam (Volumes in MT)

582

475

1,697

1,350

2,200

1,700

1,200

700

200

6,446

4,013

5,075

3,491

Q2-FY22

Q2-FY23

Earnings Presentation Q2-FY23

Q2-FY22

Q2-FY23

Q2-FY22

Q2-FY23

Q2-FY22

Q2-FY23

Mattresses (INR Mn)

Furniture Foam (INR Mn)

Technical Foam (INR Mn) Technical Foam

Comfort Foam and HC Line (INR Mn)

YTD Business Segment Revenues

3,867

4,270

1,165

1267

1,920

2,688

2,161

2,233

H1-FY22

H1-FY23

H1-FY22

H1-FY23

H1-FY22

H1-FY23

Mattresses (Volumes in 000’s)

Furniture Foam (Volumes in MT)

Technical Foam (Volumes in MT) Technical Foam

H1-FY22

H1-FY23

Comfort Foam (Volumes in MT)

7,326

9,675

10,017

2,539

2,652

5,683

932

976

2,700

2,200

1,700

1,200

700

200

H1-FY22

H1-FY23

Earnings Presentation Q2-FY23

H1-FY22

H1-FY23

H1-FY22

H1-FY23

H1-FY22

H1-FY23

Raw Material Prices and Gross Margins

TDI & Polyol Price Trend

267

227

212

203

200

173

178

174

248

131

SFL Consolidated Gross Margins (%)

39.9%

39.1%

37.4%

39.8%

44.6%

Q2-FY22

Q3-FY22

Q4-FY22

Q1-FY23

Q2-FY23

TDI

POLYOL

Q2-FY22

Q3-FY22

Q4-FY22

Q1-FY23

Q2-FY23

SFL India

Gross Margins (%)

Australia - Joyce

41.1%

39.7%

40.3%

37.0%

44.3%

50.6%

50.1%

52.1%

51.3%

48.1%

Spain - Interplasp

23.5%

24.0%

20.1%

31.0%

26.0%

Q2-FY22 Q3-FY22 Q4-FY22 Q1-FY23 Q2-FY23

Earnings Presentation Q2-FY23

Particulars (INR Mn)

Revenue from Operations

Operating Expenses

EBITDA

EBITDA Margin (%)

Other Income

Depreciation

Finance Cost

PBT

Tax

PAT

PAT Margin (%)

Other Comprehensive Income

Total Comprehensive Income

Basic/Diluted EPS (INR)

Earnings Presentation Q2-FY23

Quarterly Standalone Financial Performance

Q2-FY23

Q2-FY22

5,334

4,705

629

5,857

4,961

896

11.79%

15.30%

164

966

252

714

199

725

205

520

9.75%

528

10.66

Y-O-Y

(8.9)%

(5.2)%

(29.8)%

(351) Bps

21.3%

1.3%

47.1%

(24.9)%

(18.7)%

(27.2)%

Q1-FY23

5,144

4,695

449

8.73%

163

516

133

383

Q-O-Q

3.7%

0.2%

40.1%

306 Bps

22.1%

6.8%

8.7%

40.5%

54.1%

35.8%

12.19%

(244) Bps

7.45%

230 Bps

722

14.64

(26.9)%

(27.2)%

(35)

348

7.85

51.7%

35.8%

PARTICULARS (INR Mn)

Operational Revenue

Operating Expenses

EBITDA

EBITDA Margins (%)

Other Income

Depreciation

Finance Cost

PBT

Tax

PAT

PAT Margins (%)

Other Comprehensive Income

Total Comprehensive Income

Diluted EPS (INR)

Earnings Presentation Q2-FY23

YTD Standalone Income Statement

H1-FY23

10,478

9,399

1,079

10.30%

360

151

1,241

338

903

8.62%

(26)

877

18.51

H1-FY22

9,113

8,032

1,081

11.86%

311

150

1,200

294

906

9.94%

938

18.57

Y-o-Y

15.0%

17.0%

(0.2)%

(156) Bps

15.8%

0.7%

11.9%

3.4%

15.0%

(0.3)%

(132) Bps

(6.5)%

(0.3)%

Particulars (INR Mn)

Revenue from Operations

Operating Expenses

EBITDA

EBITDA Margin (%)

Other Income

Depreciation

Finance Cost

PBT

Tax

PAT

PAT Margin (%)

Other Comprehensive Income

Total Comprehensive Income

Basic/Diluted EPS (INR)

Earnings Presentation Q2-FY23

Quarterly Consolidated Financial Performance

Q2-FY23

Q2-FY22

7,222

6,439

783

7,856

6,758

1,098

10.84%

13.98%

225

205

753

217

536

7.42%

632

10.98

179

186

1049

280

769

9.79%

776

15.77

Y-O-Y

(8.1)%

(4.7)%

(28.8)%

(314) Bps

25.7%

10.2%

19%

(28.2)%

(22.5)%

(30.3)%

Q1-FY23

7,291

6,633

658

9.02%

184

206

584

159

425

Q-O-Q

(1.0)%

(2.9)%

19.0%

182 Bps

22.3%

(0.5)%

(3.8)%

28.9%

36.5%

26.1%

(237) Bps

5.83%

159 Bps

(18.6)%

(30.4)%

(66)

359

8.72

76%

25.9%

PARTICULARS (INR Mn)

Operational Revenue

Operating Expenses

EBITDA

EBITDA Margins (%)

Other Income

Depreciation

Finance Cost

PBT

Tax

PAT

PAT Margins (%)

Other Comprehensive Income

Total Comprehensive Income

Diluted EPS (INR)

Earnings Presentation Q2-FY23

YTD Consolidated Income Statement

H1-FY23

14,513

13,071

1,442

9.94%

409

411

103

1,337

376

961

6.62%

991

19.70

H1-FY22

13,369

11,888

1,481

11.08%

357

371

1,376

355

1,021

7.64%

1052

20.92

Y-o-Y

8.6%

10.0%

(2.6)%

(114) Bps

14.6%

10.8%

13.2%

(2.8)%

5.9%

(5.9)%

(102) Bps

(3.2)%

(5.8)%

Historical Financial Overview

Earnings Presentation Q2-FY23

PARTICULARS (INR Mn)

Operational Revenue

Operating Expenses

EBITDA

EBITDA Margins (%)

Other Income

Depreciation

Finance Cost

PBT

Exceptional Items

Tax

PAT

PAT Margins (%)

Other Comprehensive Income

Total Comprehensive Income

Diluted EPS (INR)

Earnings Presentation Q2-FY23

Historical Standalone Income Statement

FY19

18,138

16,302

1,835

10.12%

305

311

1,756

519

1,237

6.82%

(9)

1,228

25.35

FY20

17,548

15,278

2,270

12.94%

413

331

2,271

120

496

1,655

9.43%

(43)

1,612

33.93

FY21

16,939

14,566

2,373

14.01%

474

325

2,435

623

1,812

10.70%

1,833

37.13

FY22

21,244

18,906

2,338

11.01%

702

324

2,645

672

1,973

9.29%

(12)

1,961

40.45

H1-FY23

10,478

9,399

1,079

10.30%

360

151

1,241

338

903

8.62%

(26)

877

18.51

PARTICULARS (INR Mn)

FY21

FY22

H1-FY23

PARTICULARS (INR Mn)

FY21

FY22

H1-FY23

Historical Standalone Balance Sheet

ASSETS

Non-current Assets Property, Plant & Equipment Capital Work In Progress Right of Use Assets Investment Property Investment In Subsidiaries Financial Assets (a) Investments (b) Loans (c) Other Financial Assets (d) Investment in Preference Shares Non-current Assets (Net) Other Non Current Assets Current Assets Inventories Financial Assets (a) Investments (b) Trade Receivable (c) Cash And Cash Equivalent (d) Other Bank Balances (e) Loans (f) Other Current Fin Assets Other Current Assets GRAND TOTAL – ASSETS

8,497 2,536 12 201 38 2,137

3,036 486 21 - 3 26 5,713 2,283

1,060 1,630 350 5 56 87 241 14,210

11,159 2,350 6 184 36 1,967

5,288 778 180 299 45 26 5,079 2,035

840 1,516 143 3 56 293 194 16,238

10,020 2,354 15 178 35 1,967

3,955 949 184 299 45 40 6,659 2,185

2,141 1,551 204 3 54 221 300 16,679

EQUITY & LIABILITIES

Equity

(A) Share Capital

(B) Other Equity

Non-current Liabilities

Financial Liabilities

(A) Borrowings

(B) Lease Liabilities

Provisions

Deferred Tax Liabilities (Net)

Other Non Current Liabilities

Current Liabilities

Financial Liabilities

(A) Borrowings

(B) Lease Liabilities

(D) Other Current Fin Liabilities

Provisions

Other Current Liabilities

10,134

12,095

12,972

244

9,890

653

502

244

11,851

12,728

877

183

503

141

805

176

417

139

3,423

3,266

2,902

2,333

2,095

381

664

413

722

1,905

436

520

GRAND TOTAL - EQUITIES & LIABILITES

14,210

16,238

16,679

Earnings Presentation Q2-FY23

PARTICULARS (INR Mn)

Operational Revenue

Operating Expenses

EBITDA

EBITDA Margins (%)

Other Income

Depreciation

Finance Cost

PBT

Exceptional Items

Tax

PAT

PAT Margins (%)

Other Comprehensive Income

Total Comprehensive Income

Diluted EPS (INR)

Earnings Presentation Q2-FY23

Historical Consolidated Income Statement

FY19

21,414

19,305

2,109

9.85%

276

395

1,894

557

1,337

6.24%

(9)

1,328

27.41

FY20

21,736

18,732

3,004

13.82%

400

590

130

2,684

120

621

1,943

8.94%

(31)

1,912

39.83

FY21

24,372

20,730

3,642

14.94%

502

729

177

3,238

836

2,402

9.86%

188

2,590

49.23

FY22

29,818

26,669

3,149

10.56%

792

808

169

2,964

777

2,187

7.33%

(18)

2,169

44.84

H1-FY23

14,513

13,071

1,442

9.94%

409

411

103

1,337

376

961

6.62%

991

19.70

Historical Consolidated Balance Sheet

PARTICULARS (INR Mn)

FY21

FY22

H1-FY23

ASSETS

Non-current Assets Property, Plant & Equipment

Capital Work In Progress Right of Use Assets Investment Property Intangible Assets Financial Assets (a) Investments (b) Loans

Non-current Assets (Net) Other Non Current Assets Current Assets Inventories

Financial Assets (a) Investments

(b) Trade Receivable (c) Cash And Cash Equivalent

(d) Other Bank Balances (e) Loans (f) Other Current Fin Assets Other Current Assets GRAND TOTAL – ASSETS

Earnings Presentation Q2-FY23

12,381 4,300

326 1,418 590 2,631

3,036 2

52 -

- 26 8,313 3,153

1,070

3,021 574

7 56 69 363 20,694

15,589 4,355

1,199 1,394 562 2,520

5,288 1

45 78

67 80 8,214 3,145

894

2,850 408

3 56 264 594 23,803

14,794 5,568

599 1,249 548 2,516

3,955 8

37 114

98 102 9,690 3,322

2,197

2,686 509

3 54 203 716 24,484

PARTICULARS (INR Mn)

EQUITY & LIABILITIES

Equity

(A) Share Capital

(B) Other Equity Non Controlling Interest Non-current Liabilities

Financial Liabilities

(A) Borrowings

(B) Lease Liabilities

Provisions

Other Non current Liabilities

Deferred Tax Liabilities (Net)

Current Liabilities

Financial Liabilities

(A) Borrowings

(B) Lease Liabilities

(D) Other Current Fin Liabilities

Provisions

Current Tax Liabilities (Net)

FY21

FY22

H1-FY23

11,932

14,002

14,995

244

11,599 89 3,068

244

13,682 76 4,215

1,326

1,086

502

2,282

1,057

503

274

244

14,672 78 4,235

2,612

901

417

172

131

5,694

5,586

5,255

730

201

3,301

531

147

1,096

230

3,013

454

1,206

201

2,373

736

128

Other Current Liabilities GRAND TOTAL - EQUITIES & LIABILITES

739 20,694

768 23,803

599 24,484

Consolidated Financial Performance

Revenues (INR Mn)

EBITDA (INR Mn) and EBITDA Margins (%)

PAT (INR Mn) and PAT Margins (%)

29,818

21,414

21,736

24,372

14,513

FY19

FY20

FY21

FY22

H1-FY23

4, 000

3, 500

3, 000

2, 500

2, 000

1, 500

1, 000

500

2,109

9.85%

FY19

3,642

3,004

3,149

13.82%

14.94%

1,442

10.56%

9.94%

FY20 EBITDA

FY21

FY22

H1-FY23

EBITDA Margins

30. 00%

25. 00%

20. 00%

15. 00%

10. 00%

5. 00%

0. 00%

Net Debt to Equity Ratio (x)

Networth (INR Mn)

0.21

0.22

14,995

14,002

11,932

0.16

0.12

9,264

7,301

0.01

FY19

FY20

FY21

FY22

H1-FY23

FY19

FY20

FY21

FY22

H1-FY23

Earnings Presentation Q2-FY23

3, 000

2, 500

2, 000

1, 500

1, 000

500

30. 00%

25. 00%

20. 00%

15. 00%

10. 00%

5. 00%

0. 00%

2,402

2,187

1,943

1,337

6.24%

8.94%

9.86%

961

7.33%

6.62%

FY19

FY20

FY21

FY22

H1-FY23

PAT

PAT Margins

ROE and ROCE (%)

20.9%

21.0%

20.1%

18.3%

19.2%

19.4%

15.6%

12.9%

FY19

FY20

FY21

FY22

ROE

ROCE

Capital Market Information

1- year Stock Performance (Up to 30th September 2022)

70%

60%

50%

40%

30%

20%

10%

-10%

-20%

Oct-21

Nov-21

Dec-21

Jan-22

Feb-22

Mar-22

Apr-22

May-22

Jun-22

Jul-22

Aug-22

Sep-22

Sheela Foam

Midcap Index

Sensex

Shareholding Pattern as on 30th September 2022

Price Data as on 30th September, 2022

Face Value

CMP

52 Week H/L

Market Cap (INR Mn)

No. of Share outstanding (Mn)

1 Year Avg. Trading Volume (000)

INR

5.00

2,872.4

4,054 / 2,314

140,118

48.8

30.8

Promoters 72.95%

Public 1.15%

Foreign Portfolio Investors 3.16%

AIF 0.21%

Mutual Funds 22.51%

Earnings Presentation Q2-FY23

Disclaimer

No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently held beliefs and assumptions of the management Sheela Foam Limited (“Company” or “Sheela Foam Ltd.”), which are expressed in good faith and in their opinion reasonable, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive and regulatory environment.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.

This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities in any jurisdiction, including the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of our securities may be offered or sold in the United States, without registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from registration there from.

This presentation is confidential and may not be copied or disseminated, in whole or in part, and in any manner.

Valorem Advisors Disclaimer: Valorem Advisors is an Independent Investor Relations Management Service company. This Presentation has been prepared by Valorem Advisors based on information and data which the Company considers reliable, but Valorem Advisors and the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded. Valorem Advisors also hereby certifies that the directors or employees of Valorem Advisors do not own any stock in personal or company capacity of the Company under review.

For further information please contact our Investor Relations Representatives: Mr. Anuj Sonpal Valorem Advisors Tel: +91-22-4903-9500 Email: sheela@valoremadvisors.com

Earnings Presentation Q2-FY23

THANK YOU

Earnings Presentation Q2-FY23

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