Sutlej Textiles and Industries Limited has informed the Exchange regarding Investor Presentation
sumo
texti les and industries limited
07th August, 2019
SUTLEJ TEXTILES AND INDUSTRIES LIMITED Lotus Corporate Park, 'E' Wing, 5th/6th Floor, 185/A, Graham Firth Compound, Near Jay Coach, Goregaon (East), Mumbai - 400 063, INDIA. Phone : (022) 4219 8800/6122 8989 Fax : (022) 4219 8830 E-mail : info@sutlejtextiles.com Website : www.sutlejtextiles.com CIN No. : L17124RJ2005PLCO20927
BSE Limited Phiroze Jeejeebhoy Towers, Dalai Street, Fort, Mumbai 400 001. Scrip Code: 532782
National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1, G-Block, Bandra - Kuria Complex, Bandra (E), Mumbai 400 051. Scrip Code : SUTLEJTEX
Re:- Results Presentation
Dear Sirs,
Please find enclosed herewith a copy of the presentation with respect to the Un-audited
Financial Results (Standalone and Consolidated) of the Company for the quarter ended
30th June, 2019.
Thanking you
Yours faithfully For Sutlej Textiles and Industries Limited
Man j Contractor Company Secretary and Compliance Officer
Encl: a/a
Regd. Office : Pachpahar Road, Bhawanimandi - 326 502 (Rajasthan)• Mills : Bhawanimandi (Raj.), Kathua (J&K), Baddi (H.P.), Bhilad (Guj.)
(Govt. Recognised Three Star Export House)
Sutlej Textiles and Industries Limited
Investor Presentation | Q1 FY20 August 2019
COUNTERING THE VUCA WORLD
1
Safe Harbor
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sutlej Textiles and Industries Limited (the “Company”), 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. Unless otherwise stated in this document, the information contained herein is based on management
information and estimates. The information contained is subject to change without notice and past performance is not indicative of future results. 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 industry in India and worldwide, 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. You acknowledge that you will be solely responsible for your own assessment of the
market and the market position of the Company and that you will conduct your own analysis and be solely and completely responsible for forming your own view of the
potential future growth and performance of the Company. The Company will not be in any way responsible for any action taken based on such statements and undertakes
no obligation to publicly update, amend, modify or revise these forward looking statements to reflect subsequent events or developments. 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 statement/s and projection/s made by third parties included in this
Presentation are not adopted by the Company and the Company is not responsible for such third party statement/s and projection/s. The contents of this presentation have
not been reviewed by any regulatory authority in any jurisdiction where such presentation has been made or distributed.
22
Q1FY20 Results Highlights Consolidation continues…
33
Results Highlights (Consolidated) – Q1 FY20
Total Income (Rs Cr)
667
636
EBITDA (Rs Cr)
55
50
PBT (Rs Cr)
12
11
Q1FY19
Q1FY20
Q1FY19
Q1FY20
Q1FY19
Q1FY20
Finance Cost (Rs Cr) & Avg Borr Cost %*
Total Debt (Rs Cr)*
16
6.04%
13
6.12%
(Total Debt has reduced by Rs. 191 crore)
1,028 446
582
837
307
530
Q1FY19
Q1FY20
Q1FY19
Q1FY20
Finance Cost Avg Borrowing cost
Long Term Short Term
*On Standalone basis
44
Profitability Highlights
Growth in sales led by 10% increase in domestic market
Export realisation up by 7%
EBITDA margins impacted due to increase in raw material prices and subdued demand
Finance cost reduced due to efficient working capital management and reduction in debt
55
Rs. in Cr Q1FY20Q1FY19 YoY Chg %Q1FY20Q1FY19 YoY Chg %Total Income6566216%6676365%Raw Material Cost38935410%3973649%Employee Cost 85798%87817%Other Expenses 131133-2%132135-2%EBITDA 5155-8%5055-9%EBITDA Margin (%) 7.75%8.91%-116bps7.50%8.61%-111bpsDepreciation2527-8%2527-7%Finance Cost1316-20%1316-20%Profit Before Tax 13128%12114%Tax 5331%4426%Net Profit After Tax8.568.63-1%78-6%Net Profit Margin (%) 1.31%1.39%-8bps1.11%1.24%-13 bpsStandaloneConsolidated Key Performance Highlights – Q1 FY20
Revenue growth for the quarter was 5%, Yarn continues to contribute over 94% of the revenues
Yarn Sales (in MT) Up by 3% in Q1FY20 Average Yarn Realization (Rs/kg) Up by 2% in Q1FY20 Yarn Export Revenue down by 3% in Q1FY20
26,531
27,424
221
217
Q1FY19
Q1FY20
Q1FY19
Q1FY20
197
419
191
458
Q1FY19
Q1FY20
Domestic
Export
66
Executive Chairman’s comments
Commenting on the results, Mr. C.S. Nopany, Executive Chairman, Sutlej Textiles and Industries Limited said:
“The expected resurgence of demand once the upheaval of demonetisation is yet to materialize. Weakness in domestic as well as in and GST settled, international demand due to slowing Indian and global economy has resulted in muted performance with operating margins under pressure due to lack of pricing power. Sutlej had been focusing on improving efficiencies and controlling costs to mitigate the current turmoil and are fully geared on back of our varied and robust product portfolio to capitalize on any opportunity which unfolds once the situation normalizes”
Executive Chairman - Mr. C. S. Nopany
77
Sutlej
Creation of a Strong Foundation over the years
88
Sutlej Textiles - Overview
Largest
India’s largest spun dyed Yarn Manufacturer
One of the leading manufacturer of Melange Yarn
Patronage of Renowned K.K.Birla group
Part of a reputed group with excellent corporate governance
Niche Presence
Zero grey yarn manufacturing, presence in all value added yarns
Presence in curtains and upholstery in Home Textile segment
Exports to + 65 countries
Exports across Europe, North America, South-East Asia, USA, etc
Substantial Capacities
4,20,840 spindles capacity of Yarn
9.6 Million Meters Per Annum capacity of Home Textiles
Reputed Cliental
Marquee clients like Page Inds (Jockey), Westside, Marks &
Spencer, Arvind, Raymond, Donear NXG, Siyaram’s, Arrow,
Grasim, Digjam, JC Penney, Monte Carlo Pantaloons etc
99
Key Milestones
Entered into Home Textiles
Expansion of Kathua and Bhawanimandi units by 35,400 spindles and 2,112 spindles to manufacture PV Dyed Yarn completed
Bhawanimandi Expansion
Completed Expansion of 7,488 spindles for PV Dyed Yarn
12,672 Spindles added for manufacturing Cotton Yarn
2006-07
2008-09
Commenced commercial production of 31,104 Spindles at Chenab Textile Mills, J&K to manufacture Cotton Mélange and Cotton Blended Dyed Yarn
Installed 12 MW Thermal Power Plant at Bhanwanimandi unit
2009-10
Acquisition of Birla Textile Mills
35,280 spindles – commenced commercial production for Cotton blended dyed and Mélange Yarn at Rajasthan
9.6 MMPA - commenced production of Home Textile facilities at Gujarat
2015-17
31,104 spindles added at Chenab Textile Mills - J&K for value added cotton mélange and cotton blended dyed yarn
2014
Acquired Design, Sales, and Distribution (DS&D) business along with brand of American Silk Mills LLC (ASM)
Invested USD 4.5 Million in Owned Wholly Subsidiary in USA
2017-19
Backward integration into fiber
green
Modernization of Home Textile Facility
2019-20
10
Business Verticals
Value Added Yarns
Dyed Yarns
Melange Yarns
Curtains
Home Textiles
Upholstery
Made Ups
11
Sutlej – Charged to grow higher
Focussed on Value Added Dyed yarns
Leading spun dyed & Melange
Yarn Manufacturer in India
Niche Home Textile
Curtains, Upholstery and Made ups
Improving Operating Efficiencies
One of the best Capacity Utilization in Industry
Better RM & Power through Green Fibre and Solar Energy
Growth Drivers
Home Textile
New Adjacent Segments
Inorganic Growth
12
Experienced Team
Board of Directors
Mr. C.S. Nopany
Mr. U.K. Khaitan
Mr. Amit Dalal
Mr. Rajan Dalal
Ms. Sonu Bhasin
Executive Chairman
Independent
Independent
Independent
Independent
Non Exec Director
Non Exec Director
Non Exec Director
Non Exec Director
Mr. Rajiv K. Podar
Independent
Non Exec Director
Mr. Rohit Dhoot
Mr. Ashok Mittal
Non Exec Director
Non Exec Director
Key Executives
Mr. S.K. Khandelia
Mr. Updeep Singh
Mr. Bipeen Valame
Mr. Manoj Contractor
President & CEO
Deputy CEO
WTD and CFO
CS & Compliance Officer
13
Focused on Value Added Specialty Yarns Always opted for expansion into high value specialty yarns
1414
Yarn Capacities
Bhawanimandi, Rajasthan • 35,280 Spindles (Cotton Mélange ) • 91,584 Spindles (Man –made Fibre) • Roof top solar plant of 2.7 MW
Baddi, Himachal Pradesh (Under Implementation) • Green Fibre Plant • 120 MT per day manufacturing
Raw White & Black Recycle Fibre
• Exp. Commercial production
Q1FY20-21
• Ability to handle variety of RM with
different counts
• Work very closely with customer to
fulfil requirements
• Manufacture to Sale and not to
Stock
Kathua, J&K • 1,09,154 Spindles (Cotton Mélange) • 1,01,446 Spindles (Man-made Fibre)
Baddi, Himachal Pradesh • 83,376 Spindles (Man-made Fibre)
15
Yarn Business
Acquisition
Captive consumption (Under Implementation)
Speciality Dyed Yarns – Backbone of our business
Leading Yarn manufacturer in India
4,20,840 Dyed Yarn Spindles
35% dedicated to Melange Yarn
65% dedicated to various blends
Well Diversified Product Portfolio
Continuous Increase in Spindle Capacities
4,20,840
Marquee clients like Page Inds (Jockey), Westside, Marks & Spencer,
Arvind, JC Penney, Monte Carlo Pantaloons etc,
B2B business model with over 60% revenue from organized sector
2,61,736
Robust Business Model with low concentration and diversified
geographical spread
Strong Brand Recall in Yarn Segment
1,55,456
Strong Global Footprint
Around 35% Revenue from Export to over 65 countries
Export to all major countries in the world
Three Star Export House Status holder
FY05
FY14
FY19
16
Niche Home Textile Presence One of the few listed Curtains & Upholstery players
1717
Home Textile - Emerging Business
Focus on Curtains, Upholstery & Made ups
Leading producer & exporter of Home Decor
Acquisition of American Silk Mills (ASM), leading Design & Distribution in USA
Continuous Increase in Loom Capacities
Latest Technology in design & manufacturing
State of Art manufacturing facility at Gujarat
Capacity 9.6 Mn. metres/pa
126 dobby & jacquard looms including 36 looms with double width
Strengthening Product Portfolio
Leveraging ASM design expertise and US presence
Focus on higher end markets in developed counties
Building world class design capabilities
Improving product mix and broadening product portfolio
9.6
5.0
2.0
2.5
FY07
FY14
FY15
FY19
Capacity (MMT)
18
Strengthening Capabilities in Home Textiles
Enhance Manufacturing Capabilities
Expanding Product Portfolio
• Modernisation of Home textile facility is underway to
• Better Designs
help widening product offering & meet market trends.
• Made-ups
• Adding wider width machines & Printing capabilities.
• Prints
• Upgrading sampling infrastructure.
• Wider width fabrics
Establish Geographic Presence
Improving Designing Strength
•
Increasing focus on US & UK markets, new collections
being well received
• Acquired new customers in domestic & export market
• Entry into new sales channels
• Hired International Designers
• New designs with latest trend
• Latest design S/W
Leverage ASM Brand
Branding
• Over 100 years of industry experience with rich design
• Contemplating to create own brand in home textiles
archives
• Build Synergy to leverage designs
segment which will help to have brand recall, loyalty
and better margins.
19
www.americansilk.com
Building Organisation
20
American Silk Mills (ASM)
Acquired Design, Sales, and Distribution (DS&D) business along with brand of American Silk Mills LLC (ASM) After the acquisition of ASM, the company has taken various steps to improve the performance
New Management team
The company had appointed Mr. David Corbin as the CEO in Feb 2019. Prior to joining ASM, David has held key
positions in companies like Steve Silver, Real Home furniture and other renowned companies
The company has also appointed key positions in the Marketing and Designing team
Product & Design
Introduced new product line-Endurosilk – this fabric combines the look and feel of silk & endurance of performance
Have done Product innovation in ASMs iconic Velvet Brussels collection by making it more safer and durable
Working on provide year-round product offerings focused on key accounts to increase opportunity and continual
contact with all customers
Continuous custom product development for customers across all markets
Marketing & Sales
Launched new website and Corporate Video
Reorganized sales force & added key positions like National Accounts Design Specialist to help facilitate Key A/cs.
Launching India specific collection sourced from India & marketed in USA
Plans to start sale on Ecommerce platform
21
American Silk Mills (ASM)
Acquired Design, Sales, and Distribution (DS&D) business along with brand of American Building Customers Confidence/Identifying new customers Silk Mills LLC (ASM) Re-gaining customer confidence of key customers like Lee Industries, Tapis etc
Identified new customers to be targeted
Operations
Continuously identifying synergy opportunities for sourcing yarn/fabrics from Sutlej
Introduced 5 S into warehouse operations
Warehouse is made compliant with OSHA guidelines
Improved percent of on-time deliveries
Some of ASMs collections
22
Improving Operating Efficiencies Our disciplined approach towards growth have always helped us to achieve new heights
2323
Backward Integration into Green Fiber
Captive Utilisation
PSF – A Key Raw Material for Sutlej
Bottle
Flake
Fibre
Yarn
Fabric
Description
Capacity to produce Raw white and black recycled fibre
CAPEX
Details
120 MT / Day
Rs. 189 crore
Location (adjacent to our existing yarn manufacturing unit)
Baddi, Himachal Pradesh
Expected Commercial Production
Spent upto date
Q1FY20-21
~Rs 18 crores
Current Status : Project on schedule. Civil Work is ongoing and orders for most of key plant and machinery have been placed
Fulfil 75% of Captive Requirement of Key Raw Material PSF
24
Focus on Reducing Energy Cost
Installed Roof Top Solar plant of 2.7 MW at new unit in Bhawanimandi, Rajasthan,
Resulting in over 70% saving in per unit power cost compared to State Tariff
Solar Plant at Bhawanimandi, Rajashthan
25
Sutlej 2.0 – Growth Strategy Charged to grow higher backed by a strong Foundation
26
Always Focused on Disciplined Growth
Total Income
Total Debt
Networth
Total Debt
Total Debt to Equity
2,642
1,705
809
738
652
923
942
923
4.73
738
652
349
1.87
156
0.98
1,000
800
600
400
200
0
FY08
FY13
FY19
FY08
FY13
FY19
Continuous reduction in Total Debt to Equity ratio over the years,FY19 was 0.98 vs 1.15 in FY18
5.00
4.00
3.00
2.00
1.00
0.00
27
Well Placed for next Growth Phase
• Effective control on key
Raw material cost
Backward Integration
• Improving performance of ASM & integration with Sutlej
• Product Portfolio
expansion to strengthen Home Textiles Business
Growth in Home Textile with better Margins
• Opportunities into
Forward Integration
• Opportunities in new
Speciality Yarns
•Strong Balance Sheet
•Generate better Return
Ratio’s
Exploring New Segments
Inorganic Growth opportunity
28
Annexure - Financials
2929
5 year Performance Highlights
Revenue
EBITDA
FY15
FY16
FY17
FY18
FY19
1,918
2,108
2,285
FY15
FY16
FY17
2,510
FY18
272
302
317
281
2,642
FY19
240
PAT
FY15
FY16
FY17
FY18
FY19
115
143
158
113
58
The Company acquired American Silk Mills, LLC on 6th Nov 17 and hence FY 2017-18 is first year of
consolidation and FY2018-19 is first full year of Operation.
30
Balance sheet Ratios
Comfortable Total Debt/Equity Ratio
Robust Interest Coverage
Average Interest Rate of Term Loans (After TUF)
FY15
FY16
FY17
FY18
FY19
1.1
1.2
1.3
1.15
0.98
FY15
FY16
FY17
FY18
FY19
3.8
4.9
7.5%
7.3%
5.2
4.8
4.2
6.8%
6.2% 6.2%
FY15 FY16 FY17 FY18 FY19
31
Appreciation and Awards
Silver Trophy for Second highest exports of Cotton yarn (Processed Yarns) in category II by TEXPROCIL
Bestowed ‘Silver Trophy’ for the ‘Second Best Export Performance of Spun Yarns’ for 2017-18 by SRTEPC
32
“WITHSTANDING FIRMLY DURING A STORM HELP’S TO CHERISH THE SUNSHINE LATER”
THANK YOU!
Let’s Connect
Mr. Bipeen Valame
bipeenvalame@sutlejtextiles.com
Lotus Corporate Park, Goregaon (East), Mumbai 400063
Mr. Vikash Verma / Mr. Abhishek Bhatt
vikash.verma@stellar-ir.com abhishek@stellar-ir.com
Kanakia Wall Street, Andheri (East), Mumbai 400 093 33
For more information visit: www.sutlejtextiles.com