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Arvind Strategy Update - Final
Arvind Strategy Update - Final
TEXTILES
• Denim • Shirting • Revenue growth of over 10% over last five years
• Knits • Industry leading margins and returns
• Garment manufacturing
• Arrow & FM • Strategic acquisitions • Strategic acquisitions • Growth momentum
ARVIND
launched (TH, USPA, Gant) (CK, GAP, Sephora) • Margin expansion
FASHIONS
• India’s first EBOs
• 5 yr CAGR of 25%; robust
ANUP • Business • Crossed 100 cr mark margins
ENGINEERING • Key customer acquired • Debt free, cash
acquired
• Operational excellence generating company
• 3 year CAGR of 30%+ on
ARVIND
• Business started • Achieved critical mass both topline and EBITDA
SMARTSPACES • Independent listing • ~ 4x growth in market cap
in 2 years
Textiles
Real Estate
Branded
Apparel
Process Engg.
Equipment
Advanced
Materials
Env. Solutions
Telecom
Internet
3
Since demerging from Arvind Limited, Arvind Smart Space has grown at
30%+ and multiplied its market capitalization by 4x
87 25
67 20
137
Crs
Market Cap
at Listing
FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Aug 2015 Nov 2017
4
Arvind Fashions and Anup Engineering are ready for independent paths
FY2017 Revenue
6,158 Crs (13%) 2,898 Crs (~25%*) 179 Crs (25%)
(CAGR)
FY2017 EBITDA
819 Crs (5%) 145 Crs (~34%*) 54 Crs (47%)
(CAGR)
Debt/ Cash as on 30
2,792 Crs 696 Crs Net 36 Crs Cash
Sep 2017
Shareholders Equity
~2,600 Crs 1,108 Crs 179 Crs
as on 30 Sep 2017
* Adjusted for change in accounting standards from FY16 7
Textiles
8
Textiles
Over last 5 years, the textiles business has grown steadily and delivered
solid earnings
Steady top-line growth With steady growth in EBITDA
EBITDA
+5% +4%
5,453 980
4,958 5,069 910 928
880
4,684
2,999
408
FY14 FY15 FY16 FY17 H1 FY18 FY14 FY15 FY16 FY17 H1FY18
EBITDA 18.8%
18.4% 18.3% 18.0% 13.6%
Margin
9
Textiles
10
Textiles
11
Textiles
13
Branded Apparel
14
Branded Apparel
45 2015
India
123 2025E 2011 2015 2021E
Top 15 brands have grown at 24%
CAGR in last 5 years (industry @ 6.5%)
16
Branded Apparel
+26% +31%
+16%
+23% +39%
2,898 +33% 178
2,740
+37%
2,361 2,302 +32% 145
38% 136
1,915 1,818
102 104 106%
1,402 77 79
FY13* FY14* FY15* FY16* FY16 FY17 H1 FY13* FY14* FY15* FY16* FY16 FY17 H1
FY18 FY18
EBIDTA
5.5% 5.3% 5.8% 6.5% 4.5% 5.0% 4.3%
Margin
Note: F
• Financials for FY16 and FY17 are as per Ind AS. FY13* to FY16* are as per Indian GAAP
• Growth number for FY16 and compounded growth rate is adjusted for change in accounting standard 17
Branded Apparel
Even over the recent difficult quarters, Arvind Fashions has led the
market in terms of topline growth
40.0%
10.0%
0.0%
-10.0%
Source:
• Company Data
18
Branded Apparel
22-24% 35-40%
FY17 FY18 FY19 FY20 FY21 FY22 FY17 FY18 FY19 FY20 FY21 FY22 FY17 FY18 FY19 FY20 FY21 FY22
• With Debt/Equity of only ~0.6x as on 30th September 2017 business is financially well placed
19
Engineering
20
Engineering
21
Engineering
Over the last few years, Anup has acquired and augmented critical
capabilities and credentials
Longstanding
Relationships going
back to 10+ years
Process Licensors
EPC / LSTK / PMC
Repeat Buys
End Users
Consistently for last
4 years
Order Size
Large customers
giving 30-50 cr
orders
23
Engineering
27.7% 30.0%
Rev, Rs Crs
30.0% 22.9%
179* 20.5%
180
+25% 20.0%
160
145*
140 136 10.0% 15.7% EBITDA Margin
120 0.0%
105
100 FY13 FY14 FY15 FY16 FY17
80 73 60.0%
40.5% 43.3%
60 40.0% 34.5%
40 18.5%
20.0%
20 25.2% RoCE
0 0.0%
FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17
Anup Engineering is a highly cash flow generating business. Company has zero net debt and a net
cash balance of Rs 36 crores as on 30th September 2017
* FY16 and FY17 financial data is as per Ind AS. FY 13-15 financial data is as per Indian GAAP.
24
Engineering
Products
• Average ticket-size has steadily grown
Specialty
Customers (doubled from ~50 lakhs/ pc to ~1 cr/ pc)
Water/ Solar
Fertilizers
HE/ PV • Clear momentum towards further
Hydrocarbons
increase in average equipment value
India Africa / ME US/ EU Geos (basis growing capabilities in complex
Direct
design, large tonnage and more exotic
Fabrication EPCs metallurgies)
Design JVs
Channels
Solutions
Value chain
Plan to become INR 1,000 crore top-line business over next 5-6 years
25
Transaction
Structure
26
Existing Conglomerate structure allowed creation of large and valuable
businesses
Branded
Textiles Engineering
• Branded Apparel: Branded apparel and
Apparel accessories, Customized Clothing
Arvind Anup
Various JVs
Fashion Engineering
• Engineering: Manufacturing of critical
process equipment
Division Subsidiary
27
Proposal to demerge Branded Apparel and Engineering businesses into
independently listed companies
Proposed structure Process and timelines
28
Structure Mechanics – Branded Apparel Undertaking
Branded Apparel Business Process details
Thank You!