Symphony Limited · NSE:SYMPHONY
Symphony — Investor Presentation (February 2014)
48 slides from Symphony's investor presentation, February 2014
Slide 1: Symphony Limited
Symphony Limited USA INDIA MEXICO 1
Slide 2: World leader in Air Cooling
World leader in Air Cooling Residential Range 2
Slide 3: Industrial & Commercial Range
Industrial & Commercial Range 3
Slide 4: Index
Index • Principle of Air Cooling • Background • Business Model • Financials • Opportunities – Domestic Residential – Domestic Modern Retail – Domestic Industrial – International 4
Slide 5: Index
Index • IMPCO – Mexican WOS • SWOT Analysis • Quality Standards and Certifications 5
Slide 6: Principle of Air Cooling
Principle of Air Cooling Hot Air Cool Air Pour Water Switch On 6
Slide 7: Principle of Air Cooling
Principle of Air Cooling Water Distributor COOL FILTERED AIR HOT DRY Fan AIR Evaporative Media Water Reservoir 7
Slide 8: Air Cooler V/s. Air Conditioner
Air Cooler V/s. Air Conditioner PARAMETERS AIR COOLER AC CAPITAL COST LOW HIGH RECURRING COST 90% LOWER THAN AC VERY HIGH 100% FRESH FILTERED STALE DRY AIR INDOOR AIR QUALITY COOL AIR RECIRCULATED POLLUTING REFRIGERANTS WATER REFRIGERANTS SIMPLE AND COST COMPLEX AND MAINTENANCE EFFECTIVE EXPENSIVE P
Slide 9: The Symphony Advantage
The Symphony Advantage Operating Cost of 1 or 2 bulbs only Also works on Inverter and portable gensets Delivers fresh, filtered cool air For Indoor and Outdoor usage 9
Slide 10: Background
Background • Established in 1988 • Went Public in 1994 • Pre-2000, positioning was : „Many products – One market‟ • Ventured into AC‟s, Washing machines and other durables • Suffered financial stress and restructured • Revived with focus on core-competence (Air Coolers) • Post 2005, positioning is –
Slide 11: Business Model: Key Highlights
Business Model: Key Highlights • Design driven – Design leader, Advantage over competition • Brand focused – World‟s and India‟s leading Air-cooler brand • Global Distribution network – 60+ countries, India – 16,400+ retail dealers • Asset light • Defining market terms – Sales only on cash – Sales t
Slide 12: Business Model: Undisputed Leadership
Business Model: Undisputed Leadership • World‟s largest selling Air-Cooler Brand • Leader in India by Miles – Market share almost 50% amongst organised market players, despite new entrants • Competitors – many leading Indian brands • No major Global player • GST - Potential game changer – will accel
Slide 13: Business Model: Key Entry Barriers/Moat
Business Model: Key Entry Barriers/Moat • USP : – Innovation, Design, Quality, Features and Performance • Brand and category leadership • Distribution leadership • Customer centric • Management: – Experience (what to do and what not to do) – Ahead of curve attitude (new products, new designs) • Focu
Slide 14: Business Model: Management Beliefs
Business Model: Management Beliefs • Focus: Stick to Core-Competence. No distractions • Value acquisitions • Business Model: – Asset light and Capital Light – Variable cost business model – Negligible sales on credit – Profitable Growth • Create value for all stakeholders • ROI – most important dete
Slide 15: Financials: P&L
Financials: P&L Gross Revenue growth Volume growth 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 PBT % on Gross Revenue PAT growth 31.2 28.4 24.0 23.1 22.9 18.9 5.3 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 CAGR from 2007. 2011 onwards, consolidate
Slide 16: Financials: Balance Sheet and EPS
EPS Book(Excluding Value (In Extra Rs.) Ordinary Items) (In Rs.) Financials: Balance Sheet and EPS Equity (Rs. Crs) Debt (Rs.Crs.) <------------------No Equity Dilution --------------------------> 9.0 8.0 7.8 8.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 8.0 7.0 6.0 6.0 4.0 5.0 4.0 2.0 3.0 2.0 0.0 1.0 0.0 0.0 0.0
Slide 17: Financials: Capex and Dividend
Dividend Payout Ratio (In %) Financials: Capex and Dividend Capex (Rs. Crs.) Dividend Payout Ratio & Dividend % 350.0 325 30.0 24.4 300.0 Dividend payout ratio 275 25.0 250.0 Dividend % 20.0 200.0 15.0 150.0 100 10.0 7.8 100.0 4.7 5.6 42.1 44.3 5.0 50.0 10 25 0 0 5.5 15.9 1.3 1.1 1.5 0.0 1.9 0.0 0.0
Slide 18: Domestic Opportunity: Key Growth Drivers
Domestic Opportunity: Key Growth Drivers • Rising per capita income • Improved life-style and aspirations • Global Warming • Acceptance as a utility product rather than a luxury • Electrification • Availability of Easy Finance Options • Organized retail is growing exponentially. We‟ve also registere
Slide 19: Domestic Opportunities: Strong Brand
Domestic Opportunities: Strong Brand • Symphony Brand is synonymous with air cooler • Highest Ad-spend in the air cooler category • Advertising since 1990 through: – TV – Print – Radio – Below the Line – Internet (since 2010) 19
Slide 20: Opportunities: Modern Retail in India
Opportunities: Modern Retail in India 20
Slide 21: Modern Retail Customers in India
Modern Retail Customers in India 21
Slide 22: Sales Growth: Modern Retail
Sales Growth: Modern Retail Growth % 314% 175% 2010-11 2011-12 2012-13 22
Slide 23: Modern Retail Display
De! Modern Retail Display natural cooling \*\iiiik i 23
Slide 24: Opportunities: Industrial Cooler
Opportunities: Industrial Cooler “90% of American firms named cool air as the single biggest boost to their productivity” “Cooling raised productivity by a quarter. On factory floors it cut absenteeism and stoppages.” (Source: The Economist, Page 41 Jan 2013 issue) 24
Slide 25: Opportunities: Industrial Cooler
Opportunities: Industrial Cooler Effective 24 27 29 32 35 38 41 Temp (C ) Loss of work 3% 8% 18% 29% 45% 62% 79% output Loss of 0% 5% 40% 300% 700% > 700% accuracy (Source: Study for NASA. “Comfort Conditioning the Plant with Evaporative Cooling” Plant Engineering July 8, 1976 Pg 76 Joseph Marg 25
Slide 26: Opportunities: Industrial Cooler
Opportunities: Industrial Cooler • Central AC Market in India - Rs 40,000 Mn • Central Air Cooling Market size is undefined • Potential market size > Rs 40,000 Mn • Symphony is the only branded player • Most industrial, commercial and religious establishments are potential customers 26
Slide 27: Industrial Cooler: Potential Sites
Industrial Cooler: Potential Sites Offices Universities Residences Lecture halls Shops Service stations Showrooms Poultry farms Places of worship Dairy Farms Club Houses Departmental stores Warehouses DG room Lounges Laundry Canteens Kitchen Malls Panel rooms Guest Houses Factory Banquet Halls Indus
Slide 28: Successful Installations
Successful Installations 28
Slide 29: World's Largest Air Cooling Project
World‟s Largest Air Cooling Project Executed by IMPCO, Mexico Air-cooled entire Mecca Complex in Saudi 100 Million CFM of air cooling done. 29
Slide 30: India's Largest Air Cooling Project
India‟s Largest Air Cooling Project Executed by Symphony, India Baba Ramdev’s Yoga Hall, Haridwar Ductless cooling of 2,00,000 sq. ft hall with just 22 units. 30
Slide 31: Industrial & Commercial Coolers: Installations
Industrial & Commercial Coolers: Installations DHL warehouse, Delhi KJR Polyfilms, Hyderabad ISB, New Delhi 31
Slide 32: Industrial & Commercial Coolers: Installations
Industrial & Commercial Coolers: Installations Marico Industries - Jalgaon Railway Waiting Room - Kota Marriage Hall - Latur Sweet Shop - Indore 32
Slide 33: Industrial Coolers: Global Installations
Industrial Coolers: Global Installations 33
Slide 34: Industrial Coolers: Global Installations
Industrial Coolers: Global Installations 34
Slide 35: Industrial Coolers: Global Installations
Industrial Coolers: Global Installations 35
Slide 36: Opportunities: International Markets
Opportunities: International Markets • Air cooler seen as a Green Product – gaining popularity • Global warming accelerating demand • Current market size for ACs : 75 mn units • AC global market size expected to be 150 mn by 2017 (industry report) • Air Cooler market potential should logically be gr
Slide 37: International Markets: Presence
International Markets: Presence Office/Country Manager 37
Slide 38: Symphony across geographies
Symphony across geographies South Africa Middle East America South East Asia 38
Slide 39: Symphony across geographies
Symphony across geographies Africa Asia CIS Countries Europe 39
Slide 40: IMPCO
Wmpheny
Slide 41: IMPCO
IMPCO 1930 1939 Adam Goettl International Metal invents and patents Products Co. (IMPCO) first Evaporative founded in Phoenix, USA Cooler 2006 1960 All products are First cooler 1955 made in Mexico made in Mexico IMPCO Mexico 2009-11 Symphony Acquires Impco.
Slide 42: IMPCO
IMPCO MONTERREY US office in Phoenix. IMPCO plant in Monterrey, MX (150 miles from US border)
Slide 43: IMPCO
IMPCO • Symphony started leveraging Impco‟s relationships With large format stores like • Acquisition has opened substantial opportunities to offer end-to-end economical and environment-friendly air-cooling solutions • Commercial and Industrial Coolers available to distribute in India and through it
Slide 44: SWOT Analysis
SWOT Analysis Strengths Opportunity • Focused on one category • Vast Untapped market potential for • Innovation led residential coolers • Strong brand • Global Warming • Asset-light business model • Huge potential for Industrial coolers • No debt • • Low competition, globally products • Inorganic gr
Slide 45: Quality Standards and Certifications
Quality Standards and Certifications First Indian company to receive certification for Germany North America Europe Brazil Mexico Saudi Arabica Russia-CIS Malaysia Global Kuwait 45
Slide 46: Quality Standards and Certifications
Quality Standards and Certifications Star Export House Govt. of India approved R&D centre 46
Slide 47: ICAI Award for Excellence in Financial Reporting
ICAI AWARD IN 2nd CONSECUTIVE YEAR FOR „EXCELLENCE IN FINANCIAL REPORTING‟ The Award was handed over by Mr. V. N. Kaul, the former Comptroller and Auditor General of India, (who was also the chief of the jury) to Mr. Nrupesh Shah, Executive Director and to Mr. Bhadresh Mehta, VP-Finance ICAI has
Slide 48: www.symphonylimited.com
www.symphonylimited.com Symphony USA Inc. 48