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S.Kumars Nationwide Limited
Management Presentation
September 2008
Clothiers to the Nation Today …the World Tomorrow
2
Name Experience
Nitin Kasliwal
Vice Chairman and MD
Over 30 years of experience in textile industry
Chairman of Madhya Pradesh Textile Mills Association
Member of managing committee of Indian Cotton Mills Federation, Indian Woolen Mills Federation, World Trade Centre, India
MBA in International Management from Switzerland
Anil Channa
Dy. Managing Director & COO
Over 35 years of very senior level textile industry management experience
Over 20 years as business head of large textile operations
MBA from Delhi University, FMS and Engineer from IIT Delhi
Anees Fazalbhoy
Business Strategy, M&A and Investor Relations
Managed own business with activities in India, Canada & Middle East for over 25 years
MBA in International Management from Switzerland
J agadeesh Shetty
CFO
Over 20 years of senior level experience in finance and accounts primarily in textile industry
Member of the Institute of Chartered Accountants of India
Team Introduction
Clothiers to the Nation Today …the World Tomorrow
3
SKNL Group Highlights
Clothiers to the Nation Today …the World Tomorrow
4
SKNL Group Highlights
4 Pillars– Brands, Professional Management, Distribution, Manufacturing2
Transaction Update3
Brandhouse Retail – SKNL Group’s Initiative7
Future Growth – Building Scale Organically and Inorganically4
Strong Financials5
India – A Large Growing Market Opportunity6
Reid & Taylor – SKNL Group Initiative8
SKNL Overview1
Clothiers to the Nation Today …the World Tomorrow
SKNL Group Structure
5Clothiers to the Nation Today…the World Tomorrow
SKNL Group Structure
SKNL Group
Reid & Taylor (India) Limited
Brandhouse Retail Limited
SKNL
Consumer Textiles
EBULuxury Textiles
J V ValueHVFC GarmentsHome
Textiles
Total Wardrobe Solutions
Future SBUs
Clothiers to the Nation Today …the World Tomorrow
6
Company Overview – Strength through Diversity
Market Cap: Sales US$413.9mmPBIDT US$95.0mm
Luxury Textiles Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS)
Sales: US$95.3mmPBIDT: US$38.2mmPBIDT Margin: 40.0%ContributionSales: 23%
Sales: US$210.6mmPBIDT: US$35.3mmPBIDT Margin: 16.8%ContributionSales: 51%
Under implementation
Sales: US$68.5mmPBIDT: US$13.4mmPBIDT Margin: 19.5%ContributionSales: 17%
Sales: US$39.5mmPBIDT: US$8.2mmPBIDT Margin: 20.7%ContributionSales: 10%
2007–2008
Reid & TaylorLuxury Suitings
Reid & TaylorPremium NaturalFiber Suitings
S.KumarsWork Wear
BelmonteDaily Wear
MichaelangeloPremium Wear
Uniformity Uniform fabrics
100% Natural Fiber Shirtings
Benetton*Super Premium
Carmichael HousePremium
New Brand**Mid-Premium
*Being launched shortly**To be launched
Stephens BrothersSuper Premium
Balmoral* Premium Reid & Taylor
Ready to wear Premium
BelmonteMid-Premium
*Being launched by end of 2008
The only company in India to operate across all 3 segments of the industry– Fabrics - Apparels - Home Textiles
Branded presence in all socio-economic segments Operates in all fibre segments
Clothiers to the Nation Today …the World Tomorrow
7
Presence in all Socio-Economic Segments
MID PRICECarmichael House
LUXURYInternational brand (On the anvil)
PREMIUM PLUSStephens Brothers
ECONOMY(To be launched)
LUXURY(To be launched)
PREMIUMReid & Taylor
MID PRICE Belmonte
MID PRICEWorld PlayerBelmonte
ECONOMYS.Kumars
PREMIUMReid & Taylor
READY TO WEAR
FABRIC
Present across all categories and in all socio-economic segments
HOME TEXTILES
Not Catered to by SKNLNot Catered to by SKNL Un-brandedUn-branded
Un-brandedNot Catered to by SKNL
ECONOMY(To be launched)
Clothiers to the Nation Today …the World Tomorrow
8
… & has become a Clothier to the Nation
Clothiers to the Nation Today …the World Tomorrow
9
SKNL Group Highlights
4 Pillars– Brands, Professional Management, Distribution, Manufacturing2
Transaction Update3
Brandhouse Retail – SKNL Group’s Initiative7
Future Growth – Building Scale Organically and Inorganically4
Strong Financials5
India – A Large Growing Market Opportunity6
Reid & Taylor – SKNL Group Initiative8
SKNL Overview1
Clothiers to the Nation Today …the World Tomorrow
10
Well Established Brands
Brand Products Achievements
- Worsted fabrics- Ready-to-wear
#2 in Luxury Suitings(18% share)
- Blended fabrics- Workwear- Ready-to-wear- School Uniform
Market leader in uniforms (30% share)
- Bed Linen & Bath Linen- Table & Kitchen Linen
Pioneering Total Home Expressions in India
- Ready-to-wear for men and womens
Reinventing a brand with British heritage for India
Diversified portfolio of well recognised brands Strength through Celebrity endorsements Pan India advertising campaign using different media in different languages
Clothiers to the Nation Today …the World Tomorrow
11
Strong Brand Visibility
• Contemporary in Design and customer friendly Stores
Clothiers to the Nation Today …the World Tomorrow
12
Professional Management
Anil ChannaDy. Managing Director & COO
STRATEGIC BUSINESS UNITS (SBUs)
Board of Directors
Nitin Kasliwal Managing Director & CEO
TOTAL HOME
EXPRESSIONS
Dinesh Sharma
CEO
CONSUMER TEXTILES
Col. S. K. Raje
Group Admin & HRD
READY-TO-WEAR (TWS)
Janak Dave
COO
HIGH VALUE FINE COTTONS
Martin Haemmerle
CEO
Anupam Dikshit
COO
LUXURY SUITINGS
Arvind Gupta
COO
Vijay Bakshi
President
INTERNATIONAL
BUSINESS
D.D. AvariCorp. Affairs
J. S.ShettyCFO
Anees FazalbhoyBusiness Strategy
CORPORATE FUNCTIONS
Nimesh ShahCompany Secretary
Shrikant HazareHead - Marcom
Rajan K. Garg
COO
Each SBU headed by a segment specialist
Clothiers to the Nation Today …the World Tomorrow
13
Distribution Strategy
Multi Brand Outlets
66%
Large Format Stores
6%
Institutional Sales
15%
Export Sales
3%
Exclusive Brand
Outlets
Franchisee Model
Company Operated
Master Franchisee for SKNL Brands
India Franchisee for International Brands
Company owned stores for SKNL Brands
BRANDHOUSE RETAILS LTD.
60Agents
400 Wholesale
dealers
30,000
Retailers
10%
Luxury Textiles Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS) Reid & Taylor
Luxury Suitings Reid & Taylor
Premium NaturalFiber Suitings
S.KumarsWork Wear
BelmonteDaily Wear
MichaelangeloPremium Wear
Uniformity Uniform fabrics
100% Natural Fiber Shirtings
Benetton*Super Premium
Carmichael HousePremium
New Brand**Mid-Premium
Stephens BrothersSuper Premium
Balmoral Premium Reid & Taylor
Ready to wear Premium
BelmonteMid-Premium
Clothiers to the Nation Today …the World Tomorrow
14
State of the Art Manufacturing Facilities5 state-of-the-art plants manufacturing products to the highest quality standards
Plant Products Manufactured
Reid & Taylor Worsted Suiting Unit, Mysore
Worsted Suiting
S.Kumars & Belmonte Fabric Unit, Dewas
Fabrics (Polyester & Polyester Viscose)
Home Textile and Medium Value Cotton Mills (Chamunda Standard)
Dewas
Polyester Blended Yarn, Grey Fabrics (PV, PC, 100% Cotton),
Medium Value Cotton
Home Textiles Unit, Dewas Damask Fabric
Garments Unit, Bangalore Shirts, Trousers, Blazers & Suits
New Facilities under Construction in Gujarat
Home Textiles and High Value Cotton Shirting
Clothiers to the Nation Today …the World Tomorrow
15
SKNL Group Highlights
4 Pillars– Brands, Professional Management, Distribution, Manufacturing2
Transaction Update3
Brandhouse Retail – SKNL Group’s Initiative7
Future Growth – Building Scale Organically and Inorganically4
Strong Financials5
India – A Large Growing Market Opportunity6
Reid & Taylor – SKNL Group Initiative8
SKNL Overview1
Clothiers to the Nation Today …the World Tomorrow
GIC investment in R&T
16
GIC values R&T at US$840mm post money
GIC invests US$211mm in the form of shares and warrants for 25.4% stake
Post transaction, SKNL owns 74.6% in R&T
Pure Equity transaction with no conditions attached
Clothiers to the Nation Today …the World Tomorrow
17
GIC investment in Reid & Taylor
Structure Key Transaction Details
Pre Transaction 100% subsidiary
Transfer of assets at book value as a going concern with effect from January 1, 2008
Working capital facilities of US$25mm apportioned to R&T
Debts amounting to US$62.5mm relative to transferred assets moved to R&T for settlement
Post Transaction GIC values R&T at US$840mm post money
GIC invests US$211mm in the form of shares and warrants for 25.4% stake
Post transaction, SKNL owns 74.6% in R&T
SKNL
R&T
Reid & Taylor fabric & garments
business spun-off as 100% subsidiary
Transfer of Assets/ Liabilities
GIC
Funds to repay lenders
US$ 210 mm 25.4%
Post transaction, SKNL & Reid & Taylor retire over $ 170 Mn debt
Company emerges stronger financially and has greater operating flexibility
GIC US$211mmLoan to SKNL to repay debtUS$110mmCapacity Expansion US$37.5mmPayment of debt in R&T US$62.5mm
Total US$211mm Total US$211mm
Source of Funds Use of Funds
Clothiers to the Nation Today …the World Tomorrow
18
SKNL Group Highlights
4 Pillars– Brands, Professional Management, Distribution, Manufacturing2
Transaction Update3
Brandhouse Retail – SKNL Group’s Initiative7
Future Growth – Building Scale Organically and Inorganically4
Strong Financials5
India – A Large Growing Market Opportunity6
Reid & Taylor – SKNL Group Initiative8
SKNL Overview1
Clothiers to the Nation Today …the World Tomorrow
19
Growth Initiatives - Organic
Segment Initiative
Luxury Textiles
Capacity expansion from 8.4mm meters to 13.2mm meters by FY10 to cater to expanding domestic and international markets
Consumer Textiles
Creating value addition in existing business by introducing premium blended suiting and adding capacities for weaving and processing of high value fabrics
Ready-to-Wear (TWS)
Adding manufacturing facilities to complement distribution as well as adding new brands
Home Textiles (THE)
Capacity expansion , modernization and technology upgradation to cater to high demand in the post quota regime
High Value Fine Cottons (HVFC)
Setting up capacity to cater to the high margin, high growth segment in the international as well as domestic markets
Segment US$mm
Luxury Textiles 37.7
Consumer Textiles 37.7
Total Wardrobe solutions 16.6
Home Textiles 52.5
HVFC Project 58.8
Total 203.1
Total Investment in Growth Initiatives
Growth Initiatives Across Different Segments
Two new SBU’s are being added – Technical Textiles and Uniserve
Clothiers to the Nation Today …the World Tomorrow
20
Luxury Textiles
Sales
Investment PlanEBITDA Margins
Growth Strategy
Domestic: – Expanding market reach by using lower price range
and introducing V Fabrics– Increase retail reach by opening exclusive stores
and shop-in-shop programs International
– Increasing export thrust in North America, Japan, West Asia, Europe and Middle East
– Leverage global strength of R&T to access leading brand and latest technology
Capacity expansion from 8.4mm meters and to 13.2mm meters by FY10 to cater to expanding domestic and international markets
Expansion from 8.4mm to 13.2mm meters by FY10
Total investment is projected to be US$37.7mm40.6%40.0%39.0%
33.2%
30%
35%
40%
FY06A FY07A FY08A FY09E
5666
95
128
-20406080
100120140
FY06A FY07A FY08A FY09E
US$
mm
Clothiers to the Nation Today …the World Tomorrow
21
Total Wardrobe Solutions
Sales Growth Strategy
Domestic– Expanding Reid & Taylor garments to multi brand
outlets– Rejuvenating Tamarind through effective supply
chain & distribution– Introducing International Labels in Luxury & Super
Premium segments– Introducing Balmoral– Introducing Premium Casual Brand– Introducing Reid & Taylor Range for Women
Exports– Catering to growing demand from Reid & Taylor
Scotland customers– Export own brands to Middle East & South East Asia– New manufacturing contracts with international
brands
EBITDA margins
Adding manufacturing facilities to complement distribution as well as adding new brands
Investment Plan
Investment – US$mmTotal
16.6
7.5%
18.6%20.7%
16.2%
0%5%
10%15%20%25%
FY06A FY07A FY08A FY09E
5
2839
85
-
20
40
60
80
FY06A FY07A FY08A FY09E
US$
mm
ECONOMY S.Kumars and World Player
MID PREMIUMBelmont
PREMIUMReid & Taylor; Balmoral (To be launched)
SUPER PREMIUMStephens Brothers
LUXURY(To be launched)
Clothiers to the Nation Today …the World Tomorrow
22
Consumer Textiles
Sales Growth
Increasing operating margins due to
Orientation towards Institutional, Medallion, Uniserve and Retail market segments
Considerable shift in the industry towards branded fabrics
Shift in product mix in favour of high margin P/V designer suitings and launch of Belmont brand
Improving Customer Serviceability by enhancing in-house finishing capacity
Upgradation of weaving capacity to cater for more innovative product.
EBITDA margins
Creating value addition in existing business by introducing premium blended suiting and adding capacities for weaving and processing of high value fabrics
Growth Strategy
Investment Plan
Total Investment US$mmTotal
37.7
11.8%
17.7%16.8%
14.8%
10%
12%
13%
15%
16%
18%
FY06A FY07A FY08A FY09E
139 150
211
304
100
150
200
250
300
FY06A FY07A FY08A FY09E
US$
mm
Clothiers to the Nation Today …the World Tomorrow
23
Home Textiles
Sales Growth Investment Plan
EBITDA Margins Growth Initiatives
Expanding capacities to 28mm meters
Increasing sales due to :– Exploring new markets (Domestic & Exports)– Launch of new brands catering to
– Higher disposable incomes – Growing consumerism
– Introducing special finish fabrics– Diversifying product mix to “Top of Bed” decorative
items
Capacity expansion, modernization and technology upgradation to cater to high demand in the post quota regime
Total Investment US$mmTotal
52.5
5.3%
13.1%
21.6%19.5%
3%
8%
13%
18%
23%
FY06A FY07A FY08A FY09E
11
47
68
90
-
20
40
60
80
100
FY06A FY07A FY08A FY09E
US$
mm
Clothiers to the Nation Today …the World Tomorrow
24
High Value Cotton Fabric
Sales Growth Investment Plan
Growth Strategy
Setting up weaving & processing facilities of 12.75mm meters
Domestic– Fabricators making shirts for international brands– Indian brands offering premium shirts to Indian
customers International
– Global market for HVFC shirting approx 550 – 600mm 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
Set to enter High Value Cotton Fabrics to cater to large, high margin, high growth segment in the International as well as domestic markets
Total Investment – US$ mm Total
58.8
EBITDA Margin
36
58
-
15
30
45
60
75
FY08A FY09E FY10E
US$
mm
36.7%37.7%
35%
37%
38%
40%
FY09E FY10E
Clothiers to the Nation Today …the World Tomorrow
25
Growth Summary
Sales Growth Drivers
Projected CAGR FY07-FY09E
Reid & Taylor Scotland helps SKNL to access its clients - leading international brands
Strategic initiatives, modernization and capacity expansion to help capitalize on favorable international environment
Building Infrastructure to tap export opportunities in international markets
Leveraging strong brand equity
Focus on domestic high growth retail sector
Launching new Garment brands to increase market share
Introducing new product lines
Diversifying into Technical Textiles
Moving up the value chain to improve margins– Launching (HVFC) Shirting
139 150 211304
128
85
956656
3928
5
68
90
4711
36
-
100
200
300
400
500
600
700
FY06A FY07A FY08A FY09E
US$
mm
Consumer Textiles Luxury Textiles TWS
Home Textiles HVFC
211292
414
642
48%
62%
49%
0%
15%
30%
45%
60%
75%
Sales PBIDT EPS
Clothiers to the Nation Today …the World Tomorrow
26
Growth Initiatives - Inorganic
Target Business
Segment
Target Overview
Synergy benefits
Target 1
HVFC
To Identify and acquire a leading shirt fabric manufacturer in the premium segment supplying to leading shirt brands
SKNL gets access to leading international Brands,
addressing the premium market
Through supplying HVFC requirement for the target
Move up the value chain therefore access to better brands leading to better realisations resulting in higher margins
Potential Overseas Acquisitions
Though we got Shareholders approval to invest up to USD 500 Million for overseas acquisition, But we plan to invest USD 75 Million, as of now. This money will be
raised through internal accruals
Clothiers to the Nation Today …the World Tomorrow
27
Sales: US$127.8mm
PBIDT: US$51.8mm
PBIDT margin: 40.6%
Sales: US$303.7mm
PBIDT: US$53.8mm
PBIDT margin: 17.7%
Sales: US$89.7mm
PBIDT: US$19.4mm
PBIDT margin: 21.6%
Sales: US$84.7mm
PBIDT: US$ 15.8mm
PBIDT margin: 18.6%
Sales: US$36.1mm
PBIDT: US$13.3mm
PBIDT margin: 36.7%
SKNL in FY09
Consumer Textiles Home Textiles
S.Kumars
Belmonte
Michelangelo
Uniformity
Luxury Textiles
Reid & Taylor Worsted Suitings
Reid & Taylor Premium Natural Fiber Suitings
Sales US$641.9mmPBIDT US$154.1mm
Ready-to-wear
Shirting Benetton
Carmichael House
Mid-Premium Brand
Contribution to Sales
19.9%
HVFC
Stephens Brothers
Reid & Taylor
Balmoral
Belmonte
S.Kumars
World Player
Contribution to Sales
47.3%
Contribution to Sales 5.6%
Contribution to Sales
14.0%
Contribution to Sales
13.2%
Clothiers to the Nation Today …the World Tomorrow
28
SKNL Group Highlights
4 Pillars– Brands, Professional Management, Distribution, Manufacturing2
Transaction Update3
Brandhouse Retail – SKNL Group’s Initiative7
Future Growth – Building Scale Organically and Inorganically4
Strong Financials5
India – A Large Growing Market Opportunity6
Reid & Taylor – SKNL Group Initiative8
SKNL Overview1
Clothiers to the Nation Today …the World Tomorrow
29
On a High Growth path
Revenues EBITDA
Net Income* Gross COGS/Revenue
211292
414
642
-
100
200
300
400
500
600
700
FY06A FY07A FY08A FY09E
US$
mm
CAGR: 44.9%
35.9
58.9
95.0
154.1
-
25
50
75
100
125
150
175
FY06A FY07A FY08A FY09E
US$
mm
CAGR: 62.6%
74.4%68.5% 67.1% 63.9%
0%
20%
40%
60%
80%
100%
FY06A FY07A FY08A FY09E
20.725.3
48.4
74.7
-
15
30
45
60
75
FY06A FY07A FY08A FY09E
US$
mm
CAGR: 53.3%
* Tax is not deferred tax
Clothiers to the Nation Today …the World Tomorrow
30
Increasing Profitability
Profitability ROCE
EPS (Before Extraordinary Items) Debt - Equity Ratio
0.07
0.13
0.20
0.29
0.00
0.05
0.10
0.15
0.20
0.25
0.30
FY06A FY07A FY08A FY09E
US$
/Sha
re
18.8%16.8%12.3%
9.0%
0%
5%
10%
15%
20%
25%
FY06A FY07A FY08A FY09E
497
122
180 210160 225
0.2
1.891.73
0.69
0.91.1
-
100
200
300
400
500
FY07A FY08A FY09E
-
0.5
1.0
1.5
2.0
Long term Debt Shareholder's Fund
DER TOL/ TONW
24.0%23.0%20.2%
17.0%
9.8% 8.7%11.7%
12.8%
5%
10%
15%
20%
25%
30%
FY06A FY07A FY08A FY09EPBIDT Margins Net Margins
Clothiers to the Nation Today …the World Tomorrow
31
Shareholding Pattern
Promoters & Group
Companies, 48.00%
Foreign Institutional Investors, 40.00%
Indian Institutions,
Banks, Mutual Funds & Retail,
12.00%
Promoters acquired additional 10 mn shares through creeping acquisition (average price Rs 115 per share) – March 08
Clothiers to the Nation Today …the World Tomorrow
32
SKNL Group Highlights
4 Pillars– Brands, Professional Management, Distribution, Manufacturing2
Transaction Update3
Brandhouse Retail – SKNL Group’s Initiative7
Future Growth – Building Scale Organically and Inorganically4
Strong Financials5
India – A Large Growing Market Opportunity6
Reid & Taylor – SKNL Group Initiative8
SKNL Overview1
Clothiers to the Nation Today …the World Tomorrow
33
India—A Growing Market
Purchasing Power Explosion
Source: KPMG
Favorable Demographic
Source: Equity Research
Indian Consumption Pattern
Source: McKinsey Global Institute
Growing Middle Class
Source: McKinsey, NCAER
Note: Figures are rounded to the nearest integer and may not add up exactly to column totals
Working Age Population as % of Total Population (Age 15–60)
A Growing middle class whose size exceeds the population of the USA or the European Union
Income class(US$' 000)
1996HHs (Pop)
2002HHs (Pop)
2009(E)HHs (Pop) CAGR
>11.8 1.2 (7) 2.6 (15) 7.0 (40) 15%
7.1-11.8 32.5 (185) 46.4 (265) 91 (425) 10%
2.4-7.1 54.1 (312.2) 74.4 (429) 85 (490) 2%
<2.4 77 (444.3) 57.2 (332) 36 (177) -8%
Globals (>23.5)
Aggregate Consumption Across Income BracketsUS$ bn , 2000
Household Income BracketsUS$ ‘000, 2000
Strivers (11.8–23.5)
Seekers (4.7–11.8)
Aspirers (2.1–4.7)Deprived (<2.1)
MiddleClass
505560657075
2000 2005 2010 2015 2020 2025 2030
(%)
India Brazil China Russia G6
118 118 94 7171 212 282 282
47
28261271
376
94
329
47-24 -24
2424
1985 1995 2005E 2015F 2025F
141 212
400
800
1,647
Individuals in Urban India with an MHI of US$235+
6
15
19
1113
0
5
10
15
20
1997 2000 2001 2002 2003
CAGR: 21.2%
Clothiers to the Nation Today …the World Tomorrow
34
Domestic Growth Potential
Fabric78%
Apparel22%
Indian Clothing Market
Segmentation
The overall market can be divided into 3 segments– Fabric (the largest seller): is retailed over the counter as:
– Custom tailoring is very inexpensive– Garment industry is yet to reach maturity levels
– Garments: Growth due to :– Growth in organized retailing (spreading beyond
Metros)– Enhanced propensity towards fashion (international
exposure)– Home Textiles –the next big growth area in India
– Rapid growth in disposable incomes –indulgence at home
– Increased exposure –enhanced home décor etiquette– Few players in the organized segment –opportunity for
growth
Source: KPMG
Industry Characteristics
One of India’s most important sectors accounting for 4% of the country’s GDP
15-20% revenue growth overall for the textile industry
Branded apparel is the fastest growing segment domestically at 20% p.a., due to the growth in the modern retailing format
Worsted fabrics is currently a US$550mm market growing at 20-25%
Ready to wear market of US$2bn growing at 20% p.a.
Retail market for clothing, textile and fashion accessories has total size US$28.5bn of which the organized sector accounts for US$5.5bn (19%)
Market Size: US$23.5bn
1821
9
46
2.84
Global
Average: 6.8
0
5
10
15
20
25
Developed
countries
USA J apan Developing
countries
China Pakistan India
Clothiers to the Nation Today …the World Tomorrow
35
International Market
International Market Overview International Market Growth Opportunities
Quota restrictions & tariff barriers phased out
Significant production capacity shift to India due to
– High quality manpower, raw material and lower costs
– Inherent strengths in textile production
India, second largest producer of apparel and textiles after China
– Only country with ability to compete with China in the textile and apparel industry (USITC report)
Major initiatives by Government of India (recognized as a high-growth area)
– De-reservation of substantial portion of the industry
– Fiscal reforms in the synthetic textiles business underway
– Increase in investment ceilings
– FDI freely allowed in the sector
– Technology Upgradation Fund
India has a low contribution to a huge international market in the post-quota regime
Developed markets looking at India as the alternative to China for textiles & apparel imports
ROW75%
China22%
India3%
Clothiers to the Nation Today …the World Tomorrow
36
SKNL Group Highlights
4 Pillars– Brands, Professional Management, Distribution, Manufacturing2
Transaction Update3
Brandhouse Retail – SKNL Group’s Initiative7
Future Growth – Building Scale Organically and Inorganically4
Strong Financials5
India – A Large Growing Market Opportunity6
Reid & Taylor – SKNL Group Initiative8
SKNL Overview1
Clothiers to the Nation Today …the World Tomorrow
37
Brandhouse Retail Limited - Overview
History
Launched as subsidiary of SKNL in 2006
Demerged in to a separate company in 2008
To be listed by Aug 2008
Vision and
Mission
Provide a distinct competitive edge to the brands by creating an International Retail Experience for addressing the booming Indian consumerism
Company Activities
Involved in setting up and managing Mono Brand outlets for multiple brands across India with a special focus on fashion and lifestyle
Current Brand
Portfolio
International luxury brands (Dunhill, Escada)
International super-premium brand (Stephens Brothers)
Indian Brands (Reid & Taylor, Carmichael House, Belmonte)
Clothiers to the Nation Today …the World Tomorrow
38
Brandhouse Retail – Organizational Chart
Tarun Joshi Managing Director & CEO
CFOCOO
OperationsCOO
Business Development
VP Scouting (Real Estate)
VP Projects (Store
Implementation)
VP Operations
VP Luxury
GM HR
GM Accounts
Company Secretary
& Legal
GM IT
GM Commercial
VP Merch.
Managers, Executives & Support Staff
Regional managers and executives in 4 regions of India
Clothiers to the Nation Today …the World Tomorrow
39
Brandhouse Retail – Experiencing Rapid Growth
No of Stores Revenues
EBITDA Margin
74
165
254
-
50
100
150
200
250
FY08A FY09E FY10E
US$
mm
CAGR: 85.5%
9.7%
12.1%12.8%
5%
8%
10%
13%
15%
FY08A FY09E FY10E
158
300
103
265
114
254
34
19
3
3
3
1
-
100
200
300
400
500
600
700
800
900
FY08A FY09E
No
of S
tore
s
Reid & Taylor Belmonte Carmichael House
Stephens Brothers Escada Dunhill
398
859
Clothiers to the Nation Today …the World Tomorrow
Brandhouse Retails – At a glance
2007-08Audited
2008-09Projected
2009-10Projected
Nos of Stores 398 859 1207
Revenues (USD Mn.) 73.4 163.2 251.6
EBIDTA (USD Mn.) 7.1 19.9 32.5
EBIDTA % 9.7% 12.2% 12.9%
PBT (USD Mn.) 5.3 11.9 19.1
PBT % 7.2% 7.3% 7.6%
PAT (USD Mn.) 3.1 7.8 12.6
PAT % 4.2% 4.8% 5.0%
EPS * (USD) 0.06 0.15 0.24* Earning Per Share : EPS is computed based on existing nos of shares.
Clothiers to the Nation Today …the World Tomorrow
41
SKNL Group Highlights
4 Pillars– Brands, Professional Management, Distribution, Manufacturing2
Transaction Update3
Brandhouse Retail – SKNL Group’s Initiative7
Future Growth – Building Scale Organically and Inorganically4
Strong Financials5
India – A Large Growing Market Opportunity6
Reid & Taylor – SKNL Group Initiative8
SKNL Overview1
Clothiers to the Nation Today …the World Tomorrow
42
Reid & Taylor (India) Company Overview
Facilit
ies
Com
peti
tor
sM
ark
et
Posit
ion
Pro
du
cts
Dis
trib
uti
on
Manufactured at the state-of-art mill at Mysore, Karnataka Finished fabrics production capacity of 8.4mm mtrs p.a
7-8 players include Raymond, Reliance, Digjam, OCM, Dinesh, BSL
Key players in the market include Madura Garments, Raymond, Arvind brands, Zodiac
Fabrics Ready-to-Wear garment
FY08 Sales $95.5mm FY08 EBITDA Margin 39.9%
No.2 player with 18% market share
FY08 Sales $19.3mmFY08 EBITDA Margin 25.9%
Ready to Wear — Formals Suits (Pure wool, wool blended) Blazers, Tweed jackets,
Shirts in pure cotton and CVC, Trousers in Wool, Wool blended and Cotton
Ready to Wear — Casuals T-Shirts, Smart casual shirts, Polos, chinos and denimsAccessories Ties, belts, trousers, cufflinks and other accessories
Pure wool, Poly wool, Poly viscose, pure linen, pure silk, and superfine polyester
Wide collection of designs-500 designs with some varieties having 40 shades
Retailed through distribution channels with 110 wholesale dealers and 11,000 retailers and 158 Reid & Taylor exclusive stores
Retailed through 300 multi-brand outlets, 158 Reid & Taylor exclusive stores, several large format stores and retail chains
Clothiers to the Nation Today …the World Tomorrow
43
SKNL Group Highlights
Clothiers to the Nation Today …the World Tomorrow
44
STRICTLY PRIVATE AND CONFIDENTIAL
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