Pds Limited · NSE:PDSL
Pds — PDS Multinational Fashions — Investor Presentation (September 2018)
46 slides from Pds's investor presentation, Sep 28, 2018
Slide 1: Cover letter to stock exchanges
PDS Multinational Fashions Limited PDS/SE/2018-19/20 28th September, 2018 The General Manager, The General Manager, Corporate Service Department Listing Department BSE Limited National Stock Exchange of India Limited P. J Tower, Dalal Street, Fort, Exchange Plaza, Bandra Kurla Complex, Mumbai-400001
Slide 2: Investor Presentation FY2018
INVESTOR PRESENTATION FY2018
Slide 3: Table of Contents
TABLE OF CONTENTS Facts about Business Financial PDS Group Competencies Highlights 2
Slide 4: Safe Harbor
SAFE HARBOR Certain statements in this document may be forward-looking statements. Such forward- looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ m
Slide 5: Facts about PDS Group
MULTINATIONAL >: FACTS ABOUT PDS GROUP
Slide 6: PDS – Purpose, Mission and Values
PDS – PURPOSE, MISSION AND VALUES PURPOSE Be the world's best Innovative Enterprise, providing Fashion Solutions in a highly ethical and trusted manner MISSION To provide PDS clients outstanding service and innovative designs sourced in the most ethical manner Provide all PDS associates and pa
Slide 7: Company Statistics
COMPANY STATISTICS » Global Leading Retailers And Brands As Customers » Associates and factory workers worldwide One of the » Offices Across Countries leading global organizations - » Revenue Stood at Rs. Crore in FY18 strategic sourcing partner » Income stood at Rs. Crore in FY18 and manufacturer t
Slide 8: Global Fashion Manufacturing and Sourcing Business
GLOBAL FASHION MANUFACTURING AND SOURCING BUSINESS Design & Development Sourcing Social & Ethical Compliance PDS A TRUSTED GLOBAL $ ORGANIZATION Value-added Services Manufacturing ` Financial Strength Company works with ~200 partner factories to Stringent ethical standards – PDS Group handles deli
Slide 9: Close-to-Demand Global Market Presence
CLOSE-TO-DEMAND GLOBAL MARKET PRESENCE Over the last few years, PDS Multinational Fashions has widened its presence all across the globe Sourcing / Manufacturing Operations Sales & Design Operations Corporate Office 8
Slide 10: Milestones
MILESTONES Established operations in Entered into denims through establishment of Turkey, Germany, Sri Lanka and Zamira Fashion in Hong Kong Spain Promoter family Acquired FX Import Company in the UK Expanded Direct Marketing established first offices in Melbourne, Australia flagship Began Direct Ma
Slide 11: Transformation Underway..
TRANSFORMATION UNDERWAY.. Figures in Rs. crore Particulars FY2014 FY2018 Growth Trend (FY14 – FY18) Income 584 675 PAT 24 21 4% (CAGR) Growth in Income Net Worth 373 465 Long-term Debt Equity Ratio 0.13 0.13 ~30% Cash & Bank Balances 212 225 Cash & Bank Balances / Market Cap (March 31, 2018) Market
Slide 12: Our Customers
OUR CUSTOMERS Business from Long-term of Total Products repeat customers relationships with sold designed by brands/ retailers Company itself 11
Slide 13: Sales Distribution as on March 2018
SALES DISTRIBUTION AS ON MARCH 2018* Strong Focus on augmenting UK & Europe Market share in 88.4% the upcoming Asia & Middle years East 3.1% America 7.2% Australia~ 1.3% • *Customers with sales value more than USD 100K • ~Australia & Others 12
Slide 14: Building a Winning Culture
BUILDING A WINNING CULTURE LEVERS OF INFLUENCE VALUES 6 C’s • Trust, Integrity & Ethics • Customer Dependency • Transparency, Collaboration & Teamwork • Credit • Entrepreneurial Spirit • Currency 6 C’s • Social Responsibility • Compliance Code of Conduct • People First • Cost Navex • Customer
Slide 15: The PDS Edge
THE PDS EDGE Design & Product Development 150 designers working on consumer requirements Design Studio’s set up in Key Markets Develops over 1,000 new styles/ month Design Centers in key sourcing locations People Logistics & Supply Chain 1,700 Associates and 2,700 factory workers worldwide
Slide 16: PDS Multinational Business Competencies
PDS MULTINATIONAL BUSINESS COMPETENCIE w
Slide 17: Business Competencies
BUSINESS COMPETENCIES Brand Saliency Social & Ethical Compliance Upscaling Design & Development business model through core competencies Financial Strength Sourcing Operations Own Manufacturing Segment 16
Slide 18: Business Competencies – Brand Saliency
BUSINESS COMPETENCIES Brand Saliency Leading & trusted global strategic sourcing and manufacturing partner to major brands and retailers Strong management experience of over 40 years in the business Brand synonymous with innovation, quality of goods, utmost transparency of service and reliabil
Slide 19: Business Competencies – Social & Ethical Compliance
BUSINESS COMPETENCIES Social & Ethical Compliance Great emphasis on core PDS values - Transparency, Ethics and Social Compliance Invested in Navex Global, a leading solution provider of GRC management processes, to ensure highest level of compliance and ethics in the garments industry PDS’ Cod
Slide 20: Business Competencies – Design & Development
BUSINESS COMPETENCIES Design & Development Over 150 highly qualified in-house designers Develops over 1,000 new styles every month Produces over 10,000 samples every month In-house product development, design, sampling, and technical teams Designers based in London, Hong Kong, New York, Ba
Slide 21: Business Competencies – Financial Strength
BUSINESS COMPETENCIES Financial Strength Financially strong business - Healthy Balance Sheet USD 300mn Credit and Working Capital Limits Asset-light business model Large credit and working capital limits with several banks across geographies Bridges the gap between quality small vendors an
Slide 22: Business Competencies – Sourcing
BUSINESS COMPETENCIES Sourcing Strong relationships with manufacturers across key sourcing geographies – Bangladesh, Cambodia, China, India, Myanmar, Pakistan, Sri Lanka, Turkey Flexible and cost effective sourcing solutions. Extensive network of over 1, 000 suppliers technically and ethically
Slide 23: Business Competencies – Sourcing (Agency Model)
BUSINESS COMPETENCIES Sourcing (Agency Model) A-la-carte approach towards managing the entire supply chain execution of end-customers o Sourcing o Design o Quality Check Minimized risks of cancellation/delays from customers Low overheads & operational costs Provides in-house expertise and ma
Slide 24: Business Competencies – Manufacturing
BUSINESS COMPETENCIES Manufacturing PDS forayed into its own manufacturing division by establishing two factories in Bangladesh o Two state-of-the-art manufacturing facilities in Bangladesh under Progress Group and Green Smart Shirts (GSS) Group In FY18, PDS entered into a JV to set-up a manufac
Slide 25: Manufacturing Business – Investing for the Future
MANUFACTURING BUSINESS – INVESTING FOR THE FUTURE Primed for Growth Investment for Next Level of Growth Laying the Foundation (FY20 onward) (FY17-19) • Aiming to be one of the • Set-up dedicated facilities in Bangladesh leading players in the global market (FY16) • Entered into a JV to set-up factor
Slide 26: Progress Apparels
PROGRESS APPARELS 1 2 3 Go live date: Number of people Production Lines: to be employed: October ~5,000 50 2017 4 5 6 Total machines: Production Expansion of 2,500 Capacity Monthly: capacity through lean manufacturing 1.2 million methods units 25
Slide 27: Green Smarts Shirts Ltd
GREEN SMARTS SHIRTS LTD 1 2 3 Go live date: Number of people Production Lines: to be employed: Jan ~3,000 2018 4 5 Total machines: Production 1,500 Capacity Monthly: units 26
Slide 28: Well-Balanced Business Model
WELL-BALANCED BUSINESS MODEL Ability to Fund Invests in key Increased Sales vendors to with Customers upgrade their after Having facilities and Secured Credit production Payment Terms capacities Leveraging Solid Attractive Relationships Destination Across for New Geographies Business and Newer Leade
Slide 29: 6 C's of Risk Management
6 C’S OF RISK MANAGEMENT Credit • Customer credit - Not to on board any customer without having secured payment terms either in the form of L/c or Credit insurance checked by PDS risk mgmt. team • Supplier Credit - Any advance given to supplier should not be more than 30% of the order value • All ad
Slide 30: Mitigating Inventory Risk
MITIGATING INVENTORY RISK Commencement of Production Only After Having Secured Credit Payment Terms Strict Policy of Partnering with AAA+ Rated Customers All Orders Pre-sold Minimal Inventory Risk 29
Slide 31: Financial Highlights
FINANCIAL HIGHLIGHiIS
Slide 32: PDS – Growth & Established Businesses
PDS – GROWTH & ESTABLISHED BUSINESSES Established Business Demonstrated strong operational & financial performance ESTABLISHED Established customer relationships BUSINESSES Growth business Focus on expanding customer base High-potential & Scalable Deriving business from repeat Businesses c
Slide 33: Sourcing Operations – Established Business
PDS - SOURCING OPERATIONS – ESTABLISHED BUSINESS Income from Established PAT from Established Business (Rs. crore) Business (Rs. crore) Established Business 83 78 79 577 596 608 67 496 Future business plans drawn realistically keeping in mind softer retail environment FY15 FY16 FY17 FY18 FY15 FY16
Slide 34: Sourcing Operations – Growth Business
PDS - SOURCING OPERATIONS – GROWTH BUSINESS Income from Growth Business (Rs. crore) Growth Business 52 52 33 31 Initial investment in OPEX to support growth plans of businesses resulted in negative profitability FY15 FY16 FY17 FY18 Revenues 421 348 407 671 Thrust on periodic monitoring of perfor
Slide 35: Manufacturing Business – Investing for the Future
MANUFACTURING BUSINESS – INVESTING FOR THE FUTURE Income from Manufacturing (Rs. crore) PAT from Manufacturing (Rs. crore) 15 FY15 FY16 FY17 FY18 -9 -17 -19 0 0 1 -51 FY15 FY16 FY17 FY18 Revenues - - 4 86 Higher investment spends to continue, towards Capital Employed (Rs. crore) transforming PDS i
Slide 36: Improving Performance Across Verticals
IMPROVING PERFORMANCE ACROSS VERTICALS Income Income Growth PAT PAT Growth Business Maturity (FY18) – Rs. cr (3-yr CAGR) (FY18) – Rs. cr (3-yr CAGR) Established Over 4 years 608 7% 79 6% 1/3rd reduction in Growth 0-4 years 52 1% (8) losses in 3 years Manufacturing* 0-5 years 15 NA (51) NA Note: *Man
Slide 37: Financial Track-Record
FINANCIAL TRACK-RECORD CONSOLIDATED Brands, 15% Home Income (Rs. crore) Products, Apparel, 1% 99% Customers Products 675 584 610 612 549 Retailers, 85% Others, Essentials 1% , 4% FY14 FY15 FY16 FY17 FY18 Australia, Kids, 15% 1% Women, Revenues 3,748 3,886 4,308 4,630 4,948 UK & 45% Europe, Asia & 88
Slide 38: Financial Track-Record
FINANCIAL TRACK-RECORD CONSOLIDATED EBITDA (Rs. crore) 73 EBITDA stood at Rs. 61 crore, translating into margin of 9%; PAT 68 70 62 61 at Rs. 20 crore, with margins at 3% (Manufacturing business EBITDA Losses stood at Rs.46 crore) FY14 FY15 FY16 FY17 FY18 Strategic investments towards the Compan
Slide 39: Key Financials
KEY FINANCIALS CONSOLIDATED Most Borrowings for PDS Multinational Fashions are Dollar-Denominated…. Break-up of Borrowings in FY18 FY18 FY18 Borrowings (USD / INR in 000’s) (Rs. in 000’s) USD Borrowings 81,625 USD to INR 5,308,878 INR Borrowings 212,364 212,364 Total Borrowings 5,521,243 Lower int
Slide 40: Key Financials
KEY FINANCIALS CONSOLIDATED 552 492 Receivables 465 475 470 484 484 416 420 446 Rs. crore 775 728 783 715 583 49 55 38 60 13 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Long-term Debt Short-term Debt Total Debt Receivables consistently higher than short-term/ Working Capital Debt 1,277 1,162 1
Slide 41: Key Ratios
KEY RATIOS CONSOLIDATED ROCE (%) ROE (%) 9% 9% 8% 8% 7% 7% 7% 6% 6% 5% FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Return ratios have been impacted due to investment and losses in initial setup period in manufacturing operations Note: 1. Calculation for Capital Employed: Networth + short-ter
Slide 42: Key Financials
KEY FINANCIALS CONSOLIDATED Net Worth (Rs. crore) Long-term Debt Equity Ratio 0.13 0.13 481 463 465 0.12 447 373 0.08 0.03 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Growth in long-term debt on account of investments in manufacturing plants Note: 1. Calculation for Capital Employed: Networt
Slide 43: Key Market Statistics
KEY MARKET STATISTICS As on Key Market Statistics June 30, 2018 Shareholding as on June 30, 2018 BSE/NSE Ticker 538730 / PDSMFL Industry Textiles FII / FPI, 3.9 IFI & Banks, MP (Rs.) 255.3 0.9 Promoters, Other, 33.3 Retail & 66.7% Market Cap (Rs. Crore) 664.8 Others, 22.2 CB, 6.3 Number of outstandi
Slide 44: Promoter Profiles
PROMOTER PROFILES Mr. Deepak Seth Mr. Pallak Seth Mrs. Payel Seth Group Chairman Vice Chairman Managing Director 40 years experience in the industry Heads PDS Multinational Group’s strategy and Associate with the group as a Promoter Established the Group in 1987 development initiatives Director sinc
Slide 45: For further information, please contact
PDS Multinational Fashions Limited PDS Multinational Fashions Limited is a global organization that is a strategic manufacturing partner to major brands and retailers. In addition to the broad range and diversity of consumer products available through its extensive international sourcing network, PD
Slide 46: Thank You
MULTINATIONAL THANK YOU
PDS Multinational Fashions — Investor Presentation (September 2018) on 6ix