Shankara Building Products Limited has informed the Exchange regarding Investor Presentation
Shanlkara®
Building Products Ltd.
Date: 10th May, 2019
To The Department of Corporate services Bombay Stock Exchange Limited P.J Towers, Dalal Street Mumbai-400001
To National Stock Exchange of India Limited 5th Floor, Exchange Plaza Sandra (El Mumbai-400051
Scrip Code: - 540425
Scrip Symbol- SHAN KARA
Dear Sir /Madam,
Sub: - Investor's presentation
Please find enclosed Investor's Presentation pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements), Regulation 2015.
You are requested to take note of the same.
Thanking You
Yours faithfully For Shankara Building Products Li
(\ J � �� pi \l"1..IA,f
� 0 "' c; Ereena Vikram � BANGALORE '.::; Company Secretary & Complianc Officer ., "'
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G2 - Farah Winsford, No. 133, Infantry Road, Bangalore - 560001. Karnataka. Ph : 080 4011 7777, Fax - 080 4111 9317 CIN No. L26922KA1995PLC018990
www.shankarabuildpro.com
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Shan koro
Building Products Ltd.
Buildpro
Q4 & FY19 Corporate Result Presentatio Presentation n
May May 2019 2017
Safe Harbor
Shan ara
Building Products Ltd.
2
This presentation and the accompanying slides (the “Presentation”), which has been prepared by Shankara Building Products Limited (the “Company”), has been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but 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.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the tire industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward- looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
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Delivery on our Current Focus Areas
Sh_a�odu��9. Building
INCREASE in share of Retail Business
REDUCTION in Debtors
51%
53%
55%
57%
418
Rs. in Crs
365
343
334
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Conscious DEFOCUS on Channel Business
Rationalizing Debt : Equity Ratio
129
102
Rs. in Crs
0.70
0.72
0.70
86
84
0.38
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY19
Q2FY19
Q3FY19
Q4FY19
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3
Strong Operating Cash Flow
FY19 Operating Cash flow of
Rs. 171 crs
Further Business Strengthening Measures
Shan ara
Building Products Ltd.
Deal Structure
Proposed sale pertains to a significant asset, part of its wholly owned subsidiary Taurus Value Steel & Pipes Pvt. Ltd., located in Chegunta near Hyderabad (Telangana)*
Sale value is ~INR 70 Crores
Implied Release of Working Capital for the company leading to stronger consolidated balance sheet
Disinvestment Strategy
4
Market Landscape
Volatility in the steel price which has an impact on the processing margins is being mitigated
The loss of revenue by way sale of these assets will be recouped by undertaking trading activities in standardized products available in the market.
Processing Margins Highlights
Processing Business
Q1FY19
Q2FY19 Q3FY19 Q4FY19
FY19
To focus on its core business of Retailing Building Products which is a superior margin business with a higher return on equity
Effect on Margins
Focus area of continuing on the path of Financial prudence and expanding our Retail presence through Shankara Buildpro stores.
Processing Margins (%)
4.9%
4.1%
2.3%
2.5%
3.6%
Overcome the challenges in terms of achieving scale benefits which led to sub optimal margins thus dragging down our overall profitability and return ratios
Proceeds will be utilized for reduction in overall debt of the company
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*Subject to shareholders approval at the EGM
Retail Segment Margins (in %) (Impact of lower processing margins on retail business)
10.3%
9.7%
7.9%
7.3%
8.8%
Our Long Term Focus
Shan ara
Building Products Ltd.
5
One stop shop
Offering end to end Home Improvement & Building Material products being a One Stop Shop Solution for building products for our customers
Product Offerings
Increasing Product Offerings and Creating Depth in the existing product categories to create an engaging shopping experience for customers
Shan�ara
Building Products Ltd.
e
Retail Presence
Expanding Retail Presence through organic and inorganic routes to address the growing demand for home building and improvement products
Brand Equity
Enhancing the Brand Equity of our Shankara Buildpro stores to ensure high level of trust, authenticity and selection of various products and brands
Financial Prudence
With expansion in our retail presence, customer base and geography, our core focus will be to continue on a Financially Prudent Path
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Customer Outreach Activities Strengthened
6
Shanlkara
Building Products Ltd.
Customer meets
Orientation sessions
Customer outreach
Organizing customer meets across to showcase the wide
locations range of product offerings
Over 150+ influencer meets held
over in the last
Most
of
the meets
held
in
collaboration with partner brands
Localized marketing – pamphlet inserts, direct outreach to
newspaper distribution, construction sites etc.
efforts
Product
training
sessions
in collaboration with various brands for and insights on the products we offer and their usage
understanding
better
suildpro
Click Here for our blog for various Customer Meets, Fares & Event, Training Session and Recognition received from Suppliers and Customers
Revenue Break up FY19
Shan �ara
Building Products ltd.
7
Rs. in Mn
Retail Revenue
Enterprise Revenue
Channel Revenue
Total Revenue
+17%
+2%
-23%
+4%
12,197
14,311
8,050
8,220
5,240
25,487
26,541
4,010
FY18
FY19
FY18
FY19
FY18
FY19
FY18
FY19
Overall company revenues grew by 4% for FY19
Retail segment is a strong focus area for the Company and grew by 17% in FY19
Channel business is being consciously shrunk and has declined by 23%
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Revenue Break up FY19
Shan ara
Building Products Ltd.
8
FY18 Revenue mix across States
11.1%
11.0%
11.8%
47.5%
12.1%
6.5%
Karnataka
Telengana
Andhra Pradesh
Kerala
FY19 Revenue mix across States
12.2%
11.9%
9.9%
46.2%
13.9%
5.9%
Karnataka
Telengana
Andhra Pradesh
Kerala
Tamil Nadu
Other States
Tamil Nadu
Other States
Telengana and Tamil Nadu have recorded strong growth
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Key Highlights – Retail Business
Shan ara
Building Products Ltd.
9
Particulars
No of retail stores
Total Area
Average store size
Average ticket size
Revenue from retail stores
EBITDA
Margin (%)
EBITDA per store
Units
Nos.
Sq. Ft
Sq. Ft
Rs.
Rs. Mn
Rs. Mn
%
Rs. Mn
Average rental cost per Sq. Ft. per month
Rs.
FY19
134
FY18
129
5,67,202
5,05,034
4,233
28,003
14311
1,265
8.8%
94.43
19.10
3,915
25,665
12,197
1,303
10.7%
101.01
16.99
Y-o-Y
4%
12%
8%
9%
17%
-3%
-190 bps
-7%
12%
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Comparable sales growth stood at 5% for FY 19
Q4 & FY19 Income Statement*
Shan ara
Building Products Ltd.
Particulars (Rs. Mn)
Q4 FY19
Q4 FY18
Total Income
Raw Material
Employee Expenses
Other Expenses
EBITDA
EBITDA %
Other Income
Depreciation
Finance Cost
Profit before Tax
Tax
Profit after Tax
Cash Profit
EPS
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6,197
5,627
151
253
164
2.7%
22
46
124
16
0
16
63
7,608
6,585
147
335
541
7.1%
1
43
137
362
146
216
259
FY19
26,541
23,594
642
1,109
1,197
4.5%
42
186
567
485
158
327
514
FY18
25,487
21,986
559
1,189
1,752
6.9%
6
136
463
1,159
421
738
874
0.71
1.11
14.33
32.30
*Financial Data as per IND AS
10
Low Revenue growth was on account of consolidation of our business and degrowth in our channel business while concentrating on our core strength of retail business.
Low margins for the year were due to increase in Raw Material cost over the last year. However, we have been focusing on consolidating our stores and reducing the other expenses which is evident by decrease of other expenses in Q4FY19 by 24% YoY to Rs. 253 Mn.
Increase in other income was on account of receipt of insurance claim up to the tune of Rs. 18.3 Mn in Q4FY19 and disposal of property in Q3FY19.
Increase in depreciation was on account of amortization from our acquisitions of Vaigai & JP Sanitation and capitalisation of assets for upgrading the existing stores.
goodwill
of
Finance cost has reduced to Rs. 124 Mn a decrease of ~23% QoQ; further reduction is targeted in coming quarters.
FY19 Consolidated Balance Sheet*
Shan ara
Building Products Ltd.
Particulars (Rs. Mn) Total Equity
Equity Share Capital Other Equity Non-Controlling Interest
Non-current liabilities Financial Libilities (i) Borrowings (ii) Other Financial Liabilities
Provisions Deferred Tax Liabilities (Net)
Mar-19 Mar-18 4,558 4,791 228 228 4,329 4,562 1 1
235
24 - 3 206
181
9 - 3 169
Current liabilities
6,094
7,389
Financial Liabilities (i) Borrowings (ii) Trade Payables (iii) Other Financial Liabilities
Provisions Current Tax Liabilities (Net) Other Current Liabilities
Total Liabilities
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1,927 3,814 167 20 23 143 11,120
2,420 4,605 189 10 81 85 12,128
*Financial Data as per IND AS
Particulars (Rs. Mn) Non-current assets
Property, Plant and Equipment Investment Property Capital Work in Progress Intangible Assets Goodwill on Consolidation Financial Assets
(i) Trade Receivables (ii) Loans
Other non-current assets
Current assets Inventories Financial Assets
(i) Trade receivables (ii) Cash and cash equivalents (iii) Bank balances other than above (iv) Others financial assets
Other Current Assets Current Assets Net Non Current Assets held for sale
Total Assets
11
Mar-19 Mar-18 3,208 2,773 2,726 2,252 1 71 - 43 104 66 140 140
40 148 14
31 180 26
8,346 3,829
8,919 4,157
3,336 92 83 13 296 7 691 11,120
4,241 12 48 12 450 - - 12,128
FY19 Consolidated Cash Flow*
Shan ara
Building Products Ltd.
12
Particulars (Rs. Mn) Operating profit before working capital changes
(Increase) / Decrease in inventories (Increase) / Decrease in trade receivable Decrease / (Increase) in Other Assets (Decrease) / Increase in trade payables (Decrease) / Increase in other liabilities (Decrease) / Increase in provisions
Cash Flow from Operations
Income Tax Paid
Net Cash generate from Operating Activities (A)
Cash flow from Investing Activities
Increase in property, plant & equipment Bank deposit bot considered as cash Interest Received
Net Cash from Investing Activities (B)
Cash flow from Financing Activities
Repayment of non-current borrowings Proceeds from current borrowings Interest paid Dividend paid
Net Cash from Financing Activities (C)
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Net increase in cash and cash equivalents(A+B+C)
*Financial Data as per IND AS
FY19 1,195 328 920 182 (790) 56 4 1,893 (179) 1,715
(453) (35) 6 (482)
(12) (493) (559) (89) (1,153)
79
Our constant focus on better Inventory and Debtor management by encouraging cash sales has substantially increased our operating cash flows to
Rs. 1,715 Mn for FY19
which has been utilized for debt servicing and repayment
Improving Business Efficiency
Shan �ara
Building Products ltd.
Working Capital Days are calculated on the basis of revenue *FY18 and FY19 days are not comparable to earlier periods due to GST impact on revenue
13
Receivable Days
61*
47
48
50
49
46*
Inventory Days
60*
53*
42
43
46
44
FY14
FY15
FY16
FY17
FY18
FY19
FY14
FY15
FY16
FY17
FY18
FY19
Creditor Days
42
41
66*
52*
23
25
Working Capital Days
66
65
54
52
54*
46*
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FY14
FY15
FY16
FY17
FY18
FY19
FY14
FY15
FY16
FY17
FY18
FY19
Key Ratios
Shan ara
Building Products Ltd.
14
Average Return on Capital Employed
Average Return on Equity
Net Debt : Equity
25%
25%
17%
17%
1.4
21%
15%
1.2
17%
15%
16%
13%
9%
7%
0.8
0.6
0.5
0.4
FY14
FY15
FY16
FY17
FY18
FY19
FY14
FY15
FY16
FY17
FY18
FY19
FY14
FY15
FY16
FY17
FY18
FY19
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Shan sore
Building Products Ltd.
15
For further information, please contact:
Company :
Investor Relations Advisors :
Shan ara
Building Products Ltd.
S GA Strategic Growth Advisors
CIN - U26922KA1995PLC018990
CIN - U74140MH2010PTC204285
Mr. Alex Varghese – CFO
Mr. Sagar Shroff /Mr. Shogun Jain sagar.shroff@sgapl.net / shogun.jain@sgapl.net +91 98205 19303 / +91 77383 77756
www.shankarabuildpro.com
www.sgapl.net
Buildpro