Management Presentation March 2009 - SKNL

March 2009 

SKNL 

Management Presentation

Team Introduction 

Name 

Nitin Kasliwal 

Vice Chairman and MD 

Anil Channa 

Dy. Managing Director & COO 

Anees Fazalbhoy 

Business Strategy, M&A and Investor 

Relations 

Jagadeesh Shetty 

CFO 

Experience 

♦ Over 33 years of experience in textile industry 

♦ Member of managing committee of Indian Cotton Mills Federation, Indian 

Woolen Mills Federation, World Trade Centre, India 

♦ MBA i in IInternational t ti l MManagement g t f from SSwitzerland it l d 

♦ Over 35 years of very senior level textile industry management experience 

♦ Over 20 years as business head of large textile operations 

♦ MBA from f DDelhi lhi UUniversity, i it FMS and d EEngineer i f from IIT DDelhi lhi 

♦ Managed own business with activities in India, Canada & Middle East for over 

25 years 

♦ MBA in International Management from Switzerland 

♦ Over 20 years of senior level experience in finance and accounts primarily in 

textile industry 

♦ Member of the Institute of Chartered Accountants of India 

Clothiers to the Nation Today 

…the World Tomorrow 

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SKNL Overview 

4 Pillars– Brands, Professional Management, Distribution, Manufacturing 

Transaction Update 

Future Growth – Building Scale Organically and Inorganically 

Strong Financials 

India – A Large Growing Market Opportunity 

Brandhouse Retail – SKNL Group’s Initiative 

Reid & Taylor – SKNL Group Initiative 



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Strategic Guidelines 

• Improve group growth & profitability profile 

• Emphasis on organic growth, development of international operations & free 

cash flow generation 

• Capture significant market share in Luxury Textiles & Consumer segments and 

seize opportunities 

• Strong brands and businesses driven by distinctive distribution models 



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Company Overview – Strength through Diversity 

♦ The only company in India to operate across all 3 segments of the industry 

– Fabrics - Apparels - Home Textiles 

♦ Branded presence p in all socio-economic segments g 

♦ Operates in all fibre segments 

2007–2008 ($=Rs 48) 

Market Cap: 

Sales US$362m (Rs 1735 Cr) 

PBIDT US$84m (Rs 404 Cr) 

Luxury Textiles Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS) 

♦ Reid & Taylor 

Luxury Suitings 


Premium Natural 

♦ S.Kumars 

Work Wear 

♦ Belmonte 

Daily Wear 

Fiber Suitings ♦ Michaelangelo 

Premium Wear 

♦ Uniformity 

Uniform fabrics 

Sales: $79m (Rs 381cr) 

PBIDT: $34m (Rs 162cr) 

PBIDT Margin: 40.0% 

Contribution 

Sales: 23% 




Contribution 

Sales: 51% 

♦ 100% Natural Fiber 

Shirtings 

Under 

implementation 

♦ Benetton* 

Super Premium 

♦ Carmichael House 

Premium 

♦ New Brand** 

Mid-Premium 

*Being launched shortly 

**To be launched 




Contribution 

Sales: 17% 

♦ Stephens Brothers 

Super Premium 

♦ Balmoral* 

Premium 

♦ RReid id & TTaylor l 

Ready to wear 

Premium 

♦ Belmonte 

Mid-Premium 

*Being launched by end of 

2008 


PBIDT: $7m (Rs 35 cr) 


Contribution 

Sales: 10% 



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Sales & EBIDTA Breakdown 



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Continued Strong Performance 

9 m FY 2009 

Net income from operations up 38.9% to 

Rs. 16,987.2 million from Rs. 12,230.2 

million 

EBIDTA improves 40.3% to Rs. 3,754.8 

million from Rs Rs. 22,675.8 675 8 million 

Net profits increase by 5.4% to Rs. 1,508.2 

million from Rs. 1,430.7 million 

EPS (diluted) improves to Rs. 6.18 from 

Rs. 5.94 (9 months) 

Q 3 (Oct – Dec) FY 2009 

Net Income from operations increase by 

33.4% to Rs. 6,043.1 million from Rs. 

4,530.7 million 

EBIDTA stands at Rs. 1,160.2 million 

versus Rs. Rs 1,039.2 1 039 2 million, million indicating 

11.6% growth 



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Presence in all Socio-Economic Segments 

Present across all categories and in all socio-economic segments 

Not Catered to by SKNL 

FABRIC 

PREMIUM 

Reid & Taylor 

MID PRICE 

World Player 

Belmonte 

ECONOMY 

S.Kumars 

Un-branded 


HOME TEXTILES 


LUXURY 

International brand (On the anvil) 

MID PRICE 

Carmichael House 

READY TO WEAR 

ECONOMY 

New Brand (On the anvil)) 

Un-branded 

LUXURY 

(To be launched) 



SUPER PREMIUM 

Stephens Brothers 

PREMIUM 

Reid & Taylor 

MID PRICE 

Belmonte 

ECONOMY 


Un-branded 

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SKNL is a Dominant Player in the Indian Market… 

Description 

♦ SKNL SKNL h has a wide id established bli h d di distribution ib i network k of f over 

400 wholesale dealers and 30,000 retail outlets 

♦ Operates in Luxury Textiles, Consumer Textiles, HVFC, 

Total Home Expression, Ready to Wear (TWS) 

Only Textile Major in All Fiber and Product categories 

Home 

Textiles 

17% 

Worsted 

Suiting 

23% 

Apparel 

10% 

Consumer 

Textiles 

51% 

Natural 

Fibers 

Blended 

Fibers 

Man Made 

Fibers 

Wool Poly-Wool Polyester 

Cotton Poly-Viscose Poly Viscose Viscose 

Linen Wool-Linen Nylon 

Un-branded 

SUPER PREMIUM 

SKNL Product Segments 

LUXURY APPAREL & SUITINGS 

PREMIUM SUITING , APPAREL & HOME 

TEXTILES 

MID PREMIUM 

ECONOMY 

SUITINGS, APPAREL & 

HOME TEXTILES 

Market Position 

SUITINGS, APPAREL 

& HOME TEXTILES 

♦ Market Leader in Uniforms with 30% market share 

♦ # 2 in Worsted Suitings 

… & has become a Clothier to the Nation 

♦ LLargest t IInstitutional tit ti l SSupplier li of f TTextiles til 



25mm people 

75mm people 

160mm 

people 

250mm 

people 

450mm 

people 

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… On way to becoming clothier to the World 

Acquisition of Leggiuno 

• One of the top three Shirt Fabric manufacturers in the world world. 

• Produces dyed yarn, piece dyed and digitally printed linen fabrics for high end shirt brands. 

• In FY07, Company sold 5.4 Mn square meters of fabrics 

• Luxury Brands like Prada, Hugo Boss, Fassonnable, Hermes, Kenzo etc are some of the 

prestigious customers 

Synergy 

• SKNL gets access to leading international Brands Brands, addressing the high end market. market 

• Half of Company’s fabric are processed at other Italian Plants. The new HVFC Plant will be in a 

position to cater to a large portion of this requirement. 



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Well Established Brands 

♦ Diversified portfolio of well recognised brands 

♦ Strength through Celebrity endorsements 

♦ Pan India advertising campaign using different media in different languages 

Brand Products Achievements 

- Worsted fabrics 

-Ready-to-wear 

#2 in Luxury 

Suitings(18% share) 

- Blended fabrics 

Market leader in 

-Workwear 

uniforms (30% share) 

-Ready-to-wear 

- School Uniform 

- Bed Linen & Bath Linen 

- Table & Kitchen Linen 

- Ready-to-wear for men 

and womens 

Pioneering Total Home 

Expressions in India 

Reinventing a brand 

with British heritage 

for India 



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Strong Brand Visibility 

• Contemporary in Design and customer friendly Stores 



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Professional Management 

CORPORATE 

FUNCTIONS 

D.D. Avari 

Corp Corp. Affairs 

Anees Fazalbhoy 

Business Strategy 

Col. S. K. Raje 

Group Admin & HRD 

J. S.Shetty 

CFO 

Nimesh Shah 

Company Secretary 

LUXURY 

SUITINGS 

Arvind Gupta 

COO 

CONSUMER 

TEXTILES 

Rajan K. Garg 

COO 

Board of Directors 

Nitin Kasliwal 

Managing Director & CEO 

Anil Channa 

Dy. Managing Director & COO 

STRATEGIC BUSINESS UNITS (SBUs) 

HIGH VALUE 

FINE COTTONS 

Martin Haemmerle 

CEO 

Anupam Dikshit 

COO 

TOTAL HOME 

EXPRESSIONS 

Dinesh Sharma 

CEO 

Each SBU headed by a segment specialist 

READY-TO- 

WEAR (TWS) 

Janak Dave 

COO 

INTERNATIONAL 

BUSINESS 

Vijay Bakshi 

President 



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Distribution Strategy 

Luxury Textiles Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS) 


Luxury Suitings 


Premium Natural 

Fiber Suitings 

Multi Brand 

Outlets 

♦ S.Kumars 

Work Wear 

♦ Belmonte 

Daily Wear 

♦ Michaelangelo 

Premium Wear 

♦ Uniformity 

Uniform fabrics 

Large Format 

Stores 

♦ 100% Natural Fiber 

Shirtings 

Institutional 

Sales 

♦ Benetton* 

Super Premium 

♦ Carmichael House 

Premium 

♦ New Brand** 

Mid-Premium 

Export 

Sales 

66% 6% 15% 3% 10% 

60 

Agents 

400 

Wholesale 

dealers 

30,000 

Retailers 

Company owned stores 

for SKNL Brands 

Master Franchisee for 

SKNL Brands 

India Franchisee for 

International Brands 

Company 

Operated p 

♦ Stephens Brothers 

Super Premium 

♦ Balmoral 

Premium 


Ready to wear Premium 

♦ Belmonte 

Mid-Premium 

Exclusive Brand 

Outlets 

BRANDHOUSE 

RETAILS LTD. 



Franchisee 

Model 

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State of the Art Manufacturing Facilities 

5 state-of-the-art plants manufacturing products to the highest quality standards 

Plant Products Manufactured 

Reid & Taylor Worsted Suiting Unit, 

Mysore 

S.Kumars & Belmonte Fabric Unit, 

Dewas 

Home Textile and Medium Value 

Cotton Mills (Chamunda Standard) 

Dewas 

Worsted Suiting 

Fabrics (Polyester & Polyester Viscose) 

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 



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GIC investment in R&T 

♦ 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 



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Reid & Taylor (India) Limited : Investment 

Thesis 

Opportunity pp y to play p y in 

one of the largest and 

fastest growing 

consumer markets 

Well established 

premium brand 

Pan India distribution 

network 

High margins, High 

growth & scalable 

business model 

♦ Indian consumer market addresses a growing middle class whose size exceeds the population of USA or 

EU 

♦ Per capita consumption of textiles is among the lowest in the world 

♦ Worsted fabric and branded apparel currently growing at over 20% annually 

♦ Organized retail accounts for only 15% in the ready to wear market 

♦ Launched in 1998 1998, Reid & Taylor (India) Ltd (RTIL) has consistently gained market share and is 

currently the second largest player with 19% in the worsted sector. RTIL has also a 8% market share in 

ready to wear market 

♦ Single brand straddling fabrics and apparel with greater synergy 

♦ Clear product and pricing segmentation achieving greater penetration and growth 

– Only one major brand in the market as competitor 

♦ Over 110 dealers, 11,000 retail outlets (MBOs) and 160 exclusive outlets. The distribution will expand 

aggressively to 400 exclusive stores and 20,625 MBOs by FY11. 

♦ End-to-end solution with a state of the art manufacturing g facility y to exclusive distribution outlets 

through Brandhouse retail (BHRL) 

♦ RTIL has grown at over 38% in the last 2 years and is projected to grow at 35% for the next 3 years 

♦ High EBITDA margins of 37.5% for the business 

♦ Expanding current capacity from 88.1 1 to 13 13.2 2 mm meters in worsted manufacturing to meet the growing 

demand 



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Rationale for Spin-off 

To Facilitate increased investor interest and enhance shareholder value 



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GIC investment in Reid & Taylor 

Transfer 

of f AAssets/ t / 

Liabilities 

♦ Post transaction, SKNL & Reid & Taylor retire over $ 170 Mn debt 

♦ Company emerges stronger financially and has greater operating flexibility 

SStructure K Key TTransaction i DDetails il 


Reid & Taylor 

fabric & garments 

business spun-off as 

100% subsidiary 

R&T 

US$ 210 mm 25.4% 

GIC 

Funds to 

repay 

lenders 

Pre Transaction 

♦ 100% subsidiary y 

♦ 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 

Source of Funds Use of Funds 

GIC US$211mm Loan to SKNL to repay debt US$110mm 

Capacity Expansion US$37.5mm 

Payment of debt in R&T US$62.5mm 

Total US$211mm Total US$211mm 



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Growth Initiatives - Organic 

Luxury Textiles 

Consumer Textiles 

Ready-to-Wear (TWS) 

Home Textiles (THE) 

Growth Initiatives Across Different Segments 

Segment Initiative 

High Value Fine Cottons (HVFC) 

Capacity p y expansion p from 8.4mm meters to 13.2mm meters by y FY10 to cater to expanding p g 

domestic and international markets 

Creating value addition in existing business by introducing premium blended suiting and adding 

capacities for weaving and processing of high value fabrics 

Adding manufacturing facilities to complement distribution as well as adding new brands 

Capacity expansion , modernization and technology upgradation to cater to high demand in the 

post quota regime 

Setting up capacity to cater to the high margin, high growth segment in the international as well 

as domestic markets 

Total Investment in Growth Initiatives 

Segment US$mm 

Luxury Textiles 37.7 

Consumer Textiles 37 37.7 7 

Total Wardrobe solutions 16.6 

Home Textiles 52.5 

HVFC Project 58.8 

Total 203 203.1 1 

Two new SBU’s are being added – Technical Textiles and Uniserve 



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Luxury Textiles 

Capacity expansion from 8.4mm meters and to 13.2mm meters by FY10 to cater to expanding 

domestic and international markets 

40% 

35% 

30% 

mm 

US$ 

140 

120 

100 

80 

60 

40 

20 

- 

33.2% 

56 

Sales Growth Strategy 

66 

EBITDA Margins 

95 

128 

FY06A FY07A FY08A FY09E 

39.0% 

40.0% 

40.6% 


♦ Domestic: 

– Expanding market reach by using lower price range and 

introducing V Fabrics 

– Increase retail reach by opening exclusive stores and shop- 

in-shop ppprograms g 

♦ 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 

Investment Plan 

♦ Expansion from 8.4mm to 13.2mm meters by FY10 

♦ Total investment is projected to be US$37.7mm 



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Total Wardrobe Solutions 

Adding manufacturing facilities to complement distribution as well as adding new brands 

US$ U mm 

25% 

20% 

15% 

10% 

5% 

0% 

- 

80 

60 

40 

20 

7.5% 

5 

Sales Growth Strategy 

28 

EBITDA margins gi 

39 

85 


16 16.2% 2% 

20.7% 

18 18.6% 6% 


Investment Plan 

Investment – US$mm 

Total 

16.6 

♦ DDomestic ti 

– 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 

LUXURY 


SUPER PREMIUM 

Stephens Brothers 

PREMIUM 

Reid & Taylor; Balmoral (To be launched) 

MID PREMIUM 

Belmont 

ECONOMY 

S.Kumars and World Player 



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Consumer Textiles 

Creating value addition in existing business by introducing premium blended suiting and adding 

capacities for weaving and processing of high value fabrics 

US$ mm 

18% 

16% 

15% 

13% 

12% 

10% 

300 

250 

200 

150 

100 

11.8% 

139 

Sales Growth Investment Plan 

150 

211 

304 


Total l Investment US$mm S$ 

EBITDA margins Growth Strategy 

14.8% 

16.8% 

17.7% 


Increasing operating margins due to 

Total 

37.7 

♦ 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. 



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Home Textiles 

Capacity expansion, modernization and technology upgradation to cater to high demand in the post 

quota regime 

US$mmm 

23% 

18% 

13% 

8% 

3% 

100 

- 

80 

60 

40 

20 

5.3% 

11 


47 

68 

90 


Total Investment US$mm 

EBITDA Margins Growth Initiatives 

13.1% 

19.5% 

21.6% 


♦ Expanding capacities to 28mm meters 

Total 

52 52.5 5 

♦ 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 



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High Value Cotton Fabric 

Set to enter High Value Cotton Fabrics to cater to large, high margin, high growth segment in the 

International as well as domestic markets 

US$ $mm 

- 

75 

60 

45 

30 

15 


36 

58 

FY08A FY09E FY10E 

EBITDA Margin 

Total Investment – US$ mm 

Growth Strategy 

♦ Setting up weaving & processing facilities of 12.75mm meters 

40% 

♦ Domestic 

37.7% – Fabricators making shirts for international brands 

38% 36.7% 

– Indian brands offering premium shirts to Indian customers 

♦ International 

37% 

– Global market for HVFC shirting approx 550 – 600mm 

meters 

35% 

– Primarily European manufacturers 

FY09E FY10E 

– 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 

Total 

58 58.8 8 



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Growth Summary 

US$ mm 

700 

600 

500 

400 

300 

200 

100 

- 

292 

211 

47 

11 

28 

66 

56 

139 150 

5 

Sales Growth Drivers 

414 

68 

39 

95 

211 

642 

36 

90 

85 

128 

304 


Consumer Textiles Luxury y Textiles TWS 

75% 

60% 

45% 

30% 

15% 

Home Textiles HVFC 

0% 

Projected CAGR FY07-FY09E 

48% 

62% 

49% 

Sales PBIDT EPS 

♦ RReid id & Taylor T l Scotland S tl d helps h l SKNL to t access its it clients li t - lleading di 

international brands 

♦ Strategic initiatives, modernization and capacity expansion to 

help capitalize on favorable international environment 

♦ Building g Infrastructure to tap p export p opportunities pp 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 g( (HVFC) ) Shirting g 



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On a High Growth path 

US$ U mm 

US$ U mm 

Revenues EBITDA 

700 642 

175 

154.1 

600 

500 

400 

CAGR: 44.9% 

292 

414 

150 

125 

100 

CAGR: 62.6% 

95.0 

300 211 

75 

58.9 

200 

50 35.9 

100 

- 

- 

75 

60 

45 

30 

15 

Net Income* Gross COGS/Revenue 

US$ U mm 

FY06A FY07A FY08A FY09E FY06A FY07A FY08A FY09E 

20.7 

CAGR: 53.3% 

25 25.3 3 

48.4 

74.7 


* Tax is not deferred tax 

- 

100% 

80% 

60% 

40% 

20% 

0% 

25 

74.4% 

68.5% 67.1% 63.9% 




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Increasing Profitability 

30% 

25% 

20% 

15% 

10% 

5% 

US$ $/Share 

17.0% 

9.8% 

Profitability ROCE 

20.2% 

87% 8.7% 

23.0% 

11.7% 

24.0% 

12.8% 


PBIDT Margins Net Margins 

25% 

20% 

15% 

10% 

5% 

0% 

9.0% 

12.3% 

16.8% 

18.8% 


EPS (Before Extraordinary Items) Debt - Equity Ratio 

0.30 

0.25 

0.29 

500 

400 

1.89 

1.73 

497 

0.20 

1.1 

0.20 

300 

0.9 

0.15 

0.10 

0.05 0.07 

013 0.13 

200 

100 

- 

180 

160 

210 

225 

122 

0.69 

0.2 

0.00 

FY07A FY08A FY09E 

FY06A FY07A FY08A FY09E Long term Debt Shareholder's Shareholders Fund 

DER TOL/TONW 



2.0 

1.5 

1.0 

0.5 

- 

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Shareholding Pattern 

Promoters acquired q additional 10 mn shares through g creeping p g acquisition q (average ( g price p Rs 115 

per share) – March 08 



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India—A Growing Market 

20 

15 

10 

5 

0 

Purchasing Power Explosion Favorable Demographic 

Individuals in Urban India with an MHI of US$235+ 

19 

6 

CAGR: 21.2% 

11 

13 

1997 2000 2001 2002 2003 

Source: KPMG Source: Equity Research 

15 

(%) 

Working Age Population as % of Total Population (Age 15–60) 

75 

70 

65 

60 

55 

50 

2000 2005 2010 2015 2020 2025 2030 

India Brazil China Russia G6 

Indian Consumption Pattern Growing Middle Class 

Aggregate Consumption Across Income Brackets 

US$ bn , 2000 

1,647 

329 

376 

141 

24 

118 

- 

212 

2471- 

118 

400 

24 

4724 

212 

94 

800 

94 

71 

282 

282 

71 

612 

282 

47 

1985 1995 2005E 2015F 2025F 

Household Income Brackets 

US$ ‘000, 2000 

Globals (>23.5) 

Strivers (11.8–23.5) 

Seekers (4.7–11.8) 

Aspirers (2.1–4.7) 

Deprived (

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 

25 

20 

15 

10 

5 

0 

18 

Developed 

countries 

Source: KPMG 

– Few players in the organized segment –opportunity for 

growth 

21 

Domestic Growth Potential 

9 

USA Japan Developing 

countries 

4 

6 

4 

Global 

Average: 6.8 

2.8 

China Pakistan India 

Industry Characteristics 

Apparel 

22% 

Market Size: US$23.5bn 

Fabric 

78% 

♦ 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%) 



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International Market 

International Market Overview International Market Growth Opportunities 

China 

22% 

India 

3% 

ROW 

75% 

♦ 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 

♦ Quota Q restrictions & tariff barriers phased p out 

♦ Significant production capacity shift to India due to 

– High quality manpower, raw material and lower costs 

– Inherent strengths in textile production 

♦ India 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 j initiatives by y Government of India (recognized ( g as a 

high-growth area) 

– De-reservation of substantial portion of the industry 

– Fiscal reforms in the synthetic textiles business 

underway 

– I Increase i in iinvestment t t ceilings ili 

– FDI freely allowed in the sector 

– Technology Upgradation Fund 



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Brandhouse Retail Limited - Overview 

History 

Vision 

and 

Mission 

Company 

Activities 

Current 

Brand 

PPortfolio f li 

♦ Launched as subsidiary of SKNL in 2006 

♦ Demerged in to a separate company in 2008 

♦ To be listed by Aug 2008 

♦ Provide a distinct competitive edge to the brands by creating an International Retail Experience for 

addressing the booming Indian consumerism 

♦ Involved in setting up and managing Mono Brand outlets for multiple brands across India with a special 

focus on fashion and lifestyle 

♦ International luxury brands (Dunhill, Escada) 

♦ International super-premium p p brand ( (Stephens p Brothers) ) 

♦ Indian Brands (Reid & Taylor, Carmichael House, Belmonte) 



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Brandhouse Retail – Organizational Chart 

COO 

Business Development 

VP Scouting 

VP Projects 

(Real ( Estate) ) (Store 

Implementation) 

Tarun Joshi 

Managing Director & CEO 

CFO 

COO 

Operations 

GM Accounts GM Company GM 

VP VP GM VP 

IT Secretary & 

Legal 

Commercial Operations Merch Merch. HR Luxury 

Managers, Executives & Support Staff 

Regional managers and executives in 4 regions of India 



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Brandhouse Retail – Experiencing Rapid Growth 

No of Stoores 

900 

800 

700 

600 

500 

400 

300 

200 

100 

- 

No of Stores Revenues 

398 

19 

3 

1 

114 

103 

158 

859 

3 

34 33 

254 

265 

300 

FY08A FY09E 

Reid & Taylor Belmonte Carmichael House 

Stephens Brothers Escada Dunhill 

US$ mm 

15% 

13% 

10% 

8% 

5% 

250 

200 

150 

100 

- 

50 

9.7% 

74 

CAGR: 85.5% 

165 

254 


EBITDA Margin 

12.1% 



12.8% 


40

Brandhouse Retails – At a glance g 

(Figures in INR Million) 

Performance & Projections (without Oviesse) 

2007-08 

Audited 

2008-09 

Estimated 

2009-10 

Projected 

No. of Stores 398 696 909 

Sales 3137.9 5520.0 8127.9 

EBIDTA 304.1 378.1 788.4 

EBIDTA % 97% 9.7% 68% 6.8% 97% 9.7% 

PBT 226.3 242.3 334.0 

PBT % 72% 7.2% 44% 4.4% 41% 4.1% 

PAT 131.1 159.1 221.6 

PAT % 42% 4.2% 29% 2.9% 27% 2.7% 

* Earning Per Share : EPS is computed based on existing nos of shares. 



41

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2 

3 

4 

5 

6 

7 

8 











42

Reid & Taylor - Organization Chart 

COO 

Textiles 

PRESIDENT PRESIDENT PRESIDENT 

Mktg. & Sales Operations Intl. Business 

Sr. VP 

Finance i 

& Accounts 

CEO 

MD 

RTIL 

VP 

Sales 

Head 

Supply l Chain h i 

& Logistics 

COO 

Ready To Wear 

Artistic 

Director 

Head GM 



Finance Production 

43

Reid & Taylor (India) Company Overview 

Products 

Facilities 

Compettitors 

Distributiion 

Market M 

Position 

Fabrics Ready-to-Wear y garment g 

FY08 Sales $95.5mm 

FY08 EBITDA Margin 39.9% 

u Pure wool, Poly wool, Poly viscose, pure linen, pure silk, and 

superfine polyester 

u Wide collection of designs-500 designs 500 designs with some varieties 

having 40 shades 

u Manufactured at the state-of-art mill at Mysore, Karnataka 

u Finished fabrics production capacity of 8.4mm mtrs p.a 

FY08 Sales $19.3mm 

FY08 EBITDA Margin 25.9% 

Ready to Wear — Formals 

u Suits (Pure wool, wool blended) Blazers, Tweed jackets, Shirts 

in pure cotton and CVC, CVC Trousers in Wool Wool, Wool blended and 

Cotton 

Ready to Wear — Casuals 

u T-Shirts, Smart casual shirts, Polos, chinos and denims 

Accessories 

u Ties, belts, trousers, cufflinks and other accessories 

u Retailed through distribution channels with 110 wholesale u Retailed through 300 multi-brand outlets, 158 Reid & Taylor 

dealers and 11,000 retailers and 158 Reid & Taylor exclusive 

stores 

exclusive stores, several large format stores and retail chains 

u 7-8 players include Raymond, Reliance, Digjam, OCM, Dinesh, u Key players in the market include Madura Garments, Raymond, 

BSL Arvind brands, Zodiac 

u No.2 player with 18% market share 



44

Reid & Taylor - Product Profile 

Reid & Taylor Fabrics 

Have high wearability, ease of 

maintenance, and superior shape 

retention 

– In pure wool, pure linen and pure silk, the 

blended fabrics made from fine merino fleece in 

high counts like 90s, 100s and 130s and superfine 

polyester 

– In plains and designs like stripes, checks, 

bird’s eye, eye drills, drills herringbones, herringbones dobbies dobbies, 

jacquards 

Premium image – at affordable prices 

Wide collection of designs-500 designs 

with some varieties having 40 shades 



45

Reid & Taylor - Product Profile 

Ready to Wear - Formals 

– Suits (Pure wool, wool wool blended) Blazers, 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 denims 

Accessories 

– Ties Ties, belts belts, trousers trousers, cufflinks and other 

accessories 



46

Reid & Taylor– y At a glance g 

2007 2007-08 08 2008 2008-09 09 2009 2009-10 10 

Audited 

Projected 

Projected 

Revenues (USD Mn.) 114.64 177.06 262.98 

EBIDTA (USD Mn.) 43.17 62.67 95.38 

EBIDTA % 37 37.7% 7% 35 35.4% 4% 36 36.3% 3% 

PBT (USD Mn.) 34.93 60.98 97.45 

PBT % 30 30.5% 5% 34 34.4% 4% 37 37.1% 1% 

PAT (USD Mn.) 31.17 40.26 64.33 

PAT % 27 27.2% 2% 22 22.7% 7% 24 24.5% 5% 



47

1 

2 

3 

4 

5 

6 

7 

8 











48

SKNL Group Structure 

Future 

SBUs 

Total 

Wardrobe 

Solutions 


International BV 


Home 

Textiles 

SKNL Group 

48% 58% 

Leggiuno 

(through SKNL Europe) 

75% 

Consumer Luxury 

HVFC Garments 

Textiles Textiles 

Reid & Taylor 

Brandhouse 

( (India) di ) Limited i i d 

Retail l Limitedd 


Brands 

EBO 

Foreign 

Brands 



JV Value 

49

STRICTLY PRIVATE AND CONFIDENTIAL 

Important Notice 

By attending the meeting where this presentation is made, made or by reading the presentation slides, slides you agree to be bound by the following limitations: 

The information in this document has been prepared by S.Kumars Nationwide Limited (“SKNL") solely for use at a presentation. This document and its 

contents are confidential and may not be distributed, published, reproduced (in whole or in part) by any medium or in any form, or disclosed or made 

available by recipients, to any other person. 

Nothing in this presentation constitutes investment advice and any recommendations that may be contained herein have not been based upon a 

consideration of the investment objectives, financial situation or particular needs of any specific recipient. 

N No representation t ti or warranty, t express or iimplied, li d i is made d as t to, and d no reliance li should h ld b be placed l d on, th the ffairness, i accuracy, completeness l t or 

correctness of the information, or opinions contained herein. Neither SKNL, its investment manager, nor any of SKNL's advisors or representatives shall 

have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or 

otherwise arising in connection with this document. The information set out herein may be subject to updating, completion, revision, verification and 

amendment and such information may change materially. 

This document does not constitute or form part of, and should not be construed as, an offer, invitation or inducement to purchase or subscribe for any 

securities nor shall it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. Any decision to 

purchase securities should not made on the basis of the information contained in this document. This document does not constitute a recommendation 

regarding the securities of SKNL. 

The information communicated in this document contains certain statements that are or may be forward looking. These statements typically contain 

words such as "expects" and "anticipates" and words of similar import. By their nature forward looking statements involve risk and uncertainty because 

they relate to events and depend on circumstances that will occur in the future. 



50

Management Presentation March 2009 - SKNL

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