Ready To Wear For Men And Womens

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Ready To Wear For Men And Womens

  1. 1. S.Kumars Nationwide Limited Management Presentation September 2008
  2. 2. Team Introduction
  3. 3. SKNL Group Highlights
  4. 4. SKNL Group Highlights 4 Pillars– Brands, Professional Management, Distribution, Manufacturing 2 Transaction Update 3 Brandhouse Retail – SKNL Group’s Initiative 7 Future Growth – Building Scale Organically and Inorganically 4 Strong Financials 5 India – A Large Growing Market Opportunity 6 Reid & Taylor – SKNL Group Initiative 8 SKNL Overview 1
  5. 5. SKNL Group Structure
  6. 6. Company Overview – Strength through Diversity Market Cap: Sales US$413.9mm PBIDT US$95.0mm Luxury Textiles Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS) Sales: US$ 95.3 mm PBIDT: US$38.2mm PBIDT Margin: 40.0 % Contribution Sales: 23% Sales: US$ 210.6 mm PBIDT: US$35.3mm PBIDT Margin: 16.8% Contribution Sales: 51% Under implementation Sales: US$ 68.5 mm PBIDT: US$13.4mm PBIDT Margin: 19.5% Contribution Sales: 17% Sales: US$ 39.5 mm PBIDT : US$8.2mm PBIDT Margin: 20.7 % Contribution Sales: 10 % 2007–2008 <ul><ul><ul><li>Reid & Taylor Luxury Suitings </li></ul></ul></ul><ul><ul><ul><li>Reid & Taylor Premium Natural Fiber Suitings </li></ul></ul></ul><ul><ul><ul><li>S.Kumars Work Wear </li></ul></ul></ul><ul><ul><ul><li>Belmonte Daily Wear </li></ul></ul></ul><ul><ul><ul><li>Michaelangelo Premium Wear </li></ul></ul></ul><ul><ul><ul><li>Uniformity </li></ul></ul></ul><ul><ul><ul><li>Uniform fabrics </li></ul></ul></ul><ul><ul><ul><li>100% Natural Fiber Shirtings </li></ul></ul></ul><ul><ul><ul><li>Benetton* Super Premium </li></ul></ul></ul><ul><ul><ul><li>Carmichael House Premium </li></ul></ul></ul><ul><ul><ul><li>New Brand ** Mid-Premium </li></ul></ul></ul><ul><ul><ul><li>* B eing launched shortly </li></ul></ul></ul><ul><ul><ul><li>**To be launched </li></ul></ul></ul><ul><ul><ul><li>Stephens Brothers Super Premium </li></ul></ul></ul><ul><ul><ul><li>Balmoral* </li></ul></ul></ul><ul><ul><ul><li>Premium </li></ul></ul></ul><ul><ul><ul><li>Reid & Taylor Ready to wear Premium </li></ul></ul></ul><ul><ul><ul><li>Belmonte Mid-Premium </li></ul></ul></ul><ul><ul><ul><li>* B eing launched by end of 2008 </li></ul></ul></ul><ul><ul><ul><li>The only company in India to operate across all 3 segments of the industry </li></ul></ul></ul><ul><ul><ul><ul><li>Fabrics - Apparels - Home Textiles </li></ul></ul></ul></ul><ul><ul><ul><li>Branded presence in all socio-economic segments </li></ul></ul></ul><ul><ul><ul><li>Operates in all fibre segments </li></ul></ul></ul>
  7. 7. Presence in all Socio-Economic Segments MID PRICE Carmichael House LUXURY International brand (On the anvil) PREMIUM PLUS Stephens Brothers ECONOMY (To be launched) LUXURY (To be launched) PREMIUM Reid & Taylor MID PRICE Belmonte MID PRICE World Player Belmonte ECONOMY S.Kumars PREMIUM Reid & Taylor READY TO WEAR FABRIC Present across all categories and in all socio-economic segments HOME TEXTILES Not Catered to by SKNL Not Catered to by SKNL Un-branded Un-branded Un-branded Not Catered to by SKNL ECONOMY (To be launched)
  8. 8. … & has become a Clothier to the Nation
  9. 9. SKNL Group Highlights 4 Pillars– Brands, Professional Management, Distribution, Manufacturing 2 Transaction Update 3 Brandhouse Retail – SKNL Group’s Initiative 7 Future Growth – Building Scale Organically and Inorganically 4 Strong Financials 5 India – A Large Growing Market Opportunity 6 Reid & Taylor – SKNL Group Initiative 8 SKNL Overview 1
  10. 10. Well Established Brands <ul><ul><ul><li>Diversified portfolio of well recognised brands </li></ul></ul></ul><ul><ul><ul><li>Strength through Celebrity endorsements </li></ul></ul></ul><ul><ul><ul><li>Pan India advertising campaign using different media in different languages </li></ul></ul></ul>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
  11. 11. Strong Brand Visibility <ul><li>Contemporary in Design and customer friendly Stores </li></ul>
  12. 12. Professional Management Anil Channa Dy. Managing Director & COO STRATEGIC BUSINESS UNITS (SBUs) Board of Directors Nitin Kasliwal Managing Director & CEO CONSUMER TEXTILES Col. S. K. Raje Group Admin & HRD D.D. Avari Corp. Affairs J. S.Shetty CFO Anees Fazalbhoy Business Strategy CORPORATE FUNCTIONS Nimesh Shah Company Secretary Shrikant Hazare Head - Marcom Rajan K. Garg COO Each SBU headed by a segment specialist TOTAL HOME EXPRESSIONS Dinesh Sharma CEO 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
  13. 13. Distribution Strategy Multi Brand Outlets 66% Large Format Stores 6% Institutional Sales 15% Export Sales 3% Exclusive Brand Outlets Master Franchisee for SKNL Brands India Franchisee for International Brands Company owned stores for SKNL Brands BRANDHOUSE RETAILS LTD. 60 Agents 400 Wholesale dealers 30,000 Retailers 10% Luxury Textiles Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS) <ul><ul><ul><li>Reid & Taylor Luxury Suitings </li></ul></ul></ul><ul><ul><ul><li>Reid & Taylor Premium Natural Fiber Suitings </li></ul></ul></ul><ul><ul><ul><li>S.Kumars Work Wear </li></ul></ul></ul><ul><ul><ul><li>Belmonte Daily Wear </li></ul></ul></ul><ul><ul><ul><li>Michaelangelo Premium Wear </li></ul></ul></ul><ul><ul><ul><li>Uniformity </li></ul></ul></ul><ul><ul><ul><li>Uniform fabrics </li></ul></ul></ul><ul><ul><ul><li>100% Natural Fiber Shirtings </li></ul></ul></ul><ul><ul><ul><li>Benetton* Super Premium </li></ul></ul></ul><ul><ul><ul><li>Carmichael House Premium </li></ul></ul></ul><ul><ul><ul><li>New Brand ** Mid-Premium </li></ul></ul></ul><ul><ul><ul><li>Stephens Brothers Super Premium </li></ul></ul></ul><ul><ul><ul><li>Balmoral </li></ul></ul></ul><ul><ul><ul><li>Premium </li></ul></ul></ul><ul><ul><ul><li>Reid & Taylor Ready to wear Premium </li></ul></ul></ul><ul><ul><ul><li>Belmonte Mid-Premium </li></ul></ul></ul>Franchisee Model Company Operated
  14. 14. State of the Art Manufacturing Facilities 5 state-of-the-art plants manufacturing products to the highest quality standards Plant <ul><ul><ul><li>Reid & Taylor Worsted Suiting Unit, Mysore </li></ul></ul></ul>Products Manufactured <ul><ul><ul><li>adfadf </li></ul></ul></ul>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
  15. 15. SKNL Group Highlights 4 Pillars– Brands, Professional Management, Distribution, Manufacturing 2 Transaction Update 3 Brandhouse Retail – SKNL Group’s Initiative 7 Future Growth – Building Scale Organically and Inorganically 4 Strong Financials 5 India – A Large Growing Market Opportunity 6 Reid & Taylor – SKNL Group Initiative 8 SKNL Overview 1
  16. 16. GIC investment in R&T <ul><ul><ul><li>GIC values R&T at US$840mm post money </li></ul></ul></ul><ul><ul><ul><li>GIC invests US$211mm in the form of shares and warrants for 25.4% stake </li></ul></ul></ul><ul><ul><ul><li>Post transaction, SKNL owns 74.6% in R&T </li></ul></ul></ul><ul><ul><ul><li>Pure Equity transaction with no conditions attached </li></ul></ul></ul>
  17. 17. GIC investment in Reid & Taylor Structure Key Transaction Details <ul><ul><ul><li>Pre Transaction </li></ul></ul></ul><ul><ul><ul><li>100% subsidiary </li></ul></ul></ul><ul><ul><ul><li>Transfer of assets at book value as a going concern with effect from January 1 , 2008 </li></ul></ul></ul><ul><ul><ul><li>Working capital facilities of US$25mm apportioned to R&T </li></ul></ul></ul><ul><ul><ul><li>Debts amounting to US$62.5mm relative to transferred assets moved to R&T for settlement </li></ul></ul></ul><ul><ul><ul><li>Post Transaction </li></ul></ul></ul><ul><ul><ul><li>GIC values R&T at US$840mm post money </li></ul></ul></ul><ul><ul><ul><li>GIC invests US$211mm in the form of shares and warrants for 25.4% stake </li></ul></ul></ul><ul><ul><ul><li>Post transaction, SKNL owns 74.6% in R&T </li></ul></ul></ul>SKNL R&T Reid & Taylor fabric & garments business spun-off as 100% subsidiary Transfer of Assets/ Liabilities GIC Funds to repay lenders US$ 210 mm 25.4% <ul><ul><ul><li>Post transaction, SKNL & Reid & Taylor retire over $ 170 Mn debt </li></ul></ul></ul><ul><ul><ul><li>Company emerges stronger financially and has greater operating flexibility </li></ul></ul></ul>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$211mm Source of Funds Use of Funds
  18. 18. SKNL Group Highlights 4 Pillars– Brands, Professional Management, Distribution, Manufacturing 2 Transaction Update 3 Brandhouse Retail – SKNL Group’s Initiative 7 Future Growth – Building Scale Organically and Inorganically 4 Strong Financials 5 India – A Large Growing Market Opportunity 6 Reid & Taylor – SKNL Group Initiative 8 SKNL Overview 1
  19. 19. Growth Initiatives - Organic Total Investment in Growth Initiatives Growth Initiatives Across Different Segments Two new SBU’s are being added – Technical Textiles and Uniserve Segment US$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
  20. 20. Luxury Textiles Sales Investment Plan EBITDA Margins Growth Strategy <ul><ul><ul><li>Domestic: </li></ul></ul></ul><ul><ul><ul><ul><li>Expanding market reach by using lower price range and introducing V Fabrics </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Increase retail reach by opening exclusive stores and shop-in-shop programs </li></ul></ul></ul></ul><ul><ul><ul><li>International </li></ul></ul></ul><ul><ul><ul><ul><li>Increasing export thrust in North America, Japan, West Asia, Europe and Middle East </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Leverage global strength of R&T to access leading brand and latest technology </li></ul></ul></ul></ul>Capacity expansion from 8.4mm meters and to 13.2mm meters by FY10 to cater to expanding d omestic and i nternational markets <ul><ul><ul><li>Expansion from 8.4mm to 13.2mm meters by FY10 </li></ul></ul></ul><ul><ul><ul><li>Total investment is projected to be US$37.7mm </li></ul></ul></ul>
  21. 21. Total Wardrobe Solutions Sales Growth Strategy <ul><ul><ul><li>Domestic </li></ul></ul></ul><ul><ul><ul><ul><li>Expanding Reid & Taylor garments to multi brand outlets </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Rejuvenating Tamarind through effective supply chain & distribution </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Introducing International Labels in Luxury & Super Premium segments </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Introducing Balmoral </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Introducing Premium Casual Brand </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Introducing Reid & Taylor Range for Women </li></ul></ul></ul></ul></ul><ul><ul><ul><li>Exports </li></ul></ul></ul><ul><ul><ul><ul><li>Catering to growing demand from Reid & Taylor Scotland customers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Export own brands to Middle East & South East Asia </li></ul></ul></ul></ul><ul><ul><ul><ul><li>New manufacturing contracts with international brands </li></ul></ul></ul></ul>EBITDA margins Adding manufacturing facilities to complement distribution as well as adding new brands Investment Plan Investment – US$mm Total 16.6 ECONOMY S.Kumars and World Player MID PREMIUM Belmont PREMIUM Reid & Taylor; Balmoral (To be launched) SUPER PREMIUM Stephens Brothers LUXURY (To be launched)
  22. 22. Consumer Textiles Sales Growth <ul><li>Increasing operating margins due to </li></ul><ul><ul><ul><li>Orientation towards Institutional, Medallion, Uniserve and Retail market segments </li></ul></ul></ul><ul><ul><ul><li>Considerable shift in the industry towards b randed fabrics </li></ul></ul></ul><ul><ul><ul><li>Shift in product mix in favour of high margin P/V d esigner s uitings and launch of Belmont b rand </li></ul></ul></ul><ul><ul><ul><li>Improving Customer Serviceability by enhancing in-house finishing capacity </li></ul></ul></ul><ul><ul><ul><li>Upgradation of weaving capacity to cater for more innovative product. </li></ul></ul></ul>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$mm Total 37.7
  23. 23. Home Textiles Sales Growth Investment Plan EBITDA Margins Growth Initiatives <ul><ul><ul><li>Expanding capacities to 28mm meters </li></ul></ul></ul><ul><ul><ul><li>Increasing sales due to : </li></ul></ul></ul><ul><ul><ul><ul><li>Exploring new markets (Domestic & Exports) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Launch of new brands catering to </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Higher disposable incomes </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Growing consumerism </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Introducing special finish fabrics </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Diversifying product mix to “Top of Bed” decorative items </li></ul></ul></ul></ul>Capacity e xpansion, m odernization and t echnology u pgradation to cater to high demand in the post quota regime Total Investment US$mm Total 52.5
  24. 24. High Value Cotton Fabric Sales Growth Investment Plan Growth Strategy <ul><ul><ul><li>Setting up weaving & processing facilities of 12.75mm meters </li></ul></ul></ul><ul><ul><ul><li>Domestic </li></ul></ul></ul><ul><ul><ul><ul><li>Fabricators making shirts for international brands </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Indian brands offering premium shirts to Indian customers </li></ul></ul></ul></ul><ul><ul><ul><li>International </li></ul></ul></ul><ul><ul><ul><ul><li>Global market for HVFC shirting approx 550 – 600mm meters </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Primarily European manufacturers </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>SKNL to offer quality & cost benefits </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>European Know-how & expertise </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Indian manufacturing advantage </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Access to global customers through </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Reid & Taylor, Scotland & International labels coming to India through SKNL </li></ul></ul></ul></ul></ul>Set to enter High Value Cotton Fabrics to cater to large, high margin, high growth segment in the International as well as domestic markets EBITDA Margin Total Investment – US$ mm Total 58.8
  25. 25. Growth Summary Sales Growth Drivers Projected CAGR FY07-FY09E <ul><ul><ul><li>Reid & Taylor Scotland helps SKNL to access its clients - leading international brands </li></ul></ul></ul><ul><ul><ul><li>Strategic initiatives , m odernization and capacity expansion to help capitalize on favorable international environment </li></ul></ul></ul><ul><ul><ul><li>Building Infrastructure to tap export opportunities in i nternational m arkets </li></ul></ul></ul><ul><ul><ul><li>Leveraging strong brand equity </li></ul></ul></ul><ul><ul><ul><li>Focus on domestic high growth retail sector </li></ul></ul></ul><ul><ul><ul><li>Launching new Garment brands to increase market share </li></ul></ul></ul><ul><ul><ul><li>Introducing new product lines </li></ul></ul></ul><ul><ul><ul><li>Diversifying into Technical Textiles </li></ul></ul></ul><ul><ul><ul><li>Moving up the value chain to improve margins </li></ul></ul></ul><ul><ul><ul><ul><li>Launching (HVFC) Shirting </li></ul></ul></ul></ul>
  26. 26. Growth Initiatives - Inorganic 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
  27. 27. SKNL in FY09 Sales : US $127.8mm PBIDT: US$51.8mm PBIDT margin: 40.6 % Sales: US $ 303.7 mm PBIDT: US$53.8mm PBIDT margin: 17.7% Sales: US $ 89.7 mm PBIDT: US$19.4mm PBIDT margin: 21.6% Sales: US $84.7mm PBIDT: US$ 15.8mm PBIDT margin: 18.6% Sales: US $ 36.1 mm PBIDT: US$13.3mm PBIDT margin: 36.7% Consumer Textiles Home Textiles <ul><li>S.Kumars </li></ul><ul><li>Belmonte </li></ul><ul><li>Michelangelo </li></ul><ul><li>Uniformity </li></ul>Luxury Textiles <ul><li>Reid & Taylor Worsted Suitings </li></ul><ul><li>Reid & Taylor Premium Natural Fiber Suitings </li></ul>Sales US $ 641.9 mm PBIDT US $ 154.1 mm Ready-to-wear <ul><li>Shirting </li></ul><ul><li>Benetton </li></ul><ul><li>Carmichael House </li></ul><ul><li>Mid-Premium Brand </li></ul>Contribution to Sales 19.9% HVFC <ul><li>Stephens Brothers </li></ul><ul><li>Reid & Taylor </li></ul><ul><li>Balmoral </li></ul><ul><li>Belmonte </li></ul><ul><li>S.Kumars </li></ul><ul><li>World Player </li></ul>Contribution to Sales 47.3% Contribution to Sales 5.6% Contribution to Sales 14.0% Contribution to Sales 13.2%
  28. 28. SKNL Group Highlights 4 Pillars– Brands, Professional Management, Distribution, Manufacturing 2 Transaction Update 3 Brandhouse Retail – SKNL Group’s Initiative 7 Future Growth – Building Scale Organically and Inorganically 4 Strong Financials 5 India – A Large Growing Market Opportunity 6 Reid & Taylor – SKNL Group Initiative 8 SKNL Overview 1
  29. 29. On a High Growth path Revenues EBITDA Net Income* Gross COGS/Revenue * Tax is not deferred tax
  30. 30. Increasing Profitability Profitability ROCE EPS (Before Extraordinary Items) Debt - Equity Ratio
  31. 31. Shareholding Pattern Promoters acquired additional 10 mn shares through creeping acquisition (average price Rs 115 per share) – March 08
  32. 32. SKNL Group Highlights 4 Pillars– Brands, Professional Management, Distribution, Manufacturing 2 Transaction Update 3 Brandhouse Retail – SKNL Group’s Initiative 7 Future Growth – Building Scale Organically and Inorganically 4 Strong Financials 5 India – A Large Growing Market Opportunity 6 Reid & Taylor – SKNL Group Initiative 8 SKNL Overview 1
  33. 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 Globals (>23.5) Aggregate Consumption Across Income Brackets US$ bn , 2000 Household Income Brackets US$ ‘000, 2000 Strivers (11.8–23.5) Seekers (4.7–11.8) Aspirers (2.1–4.7) Deprived (<2.1) Middle Class Income class (US$' 000) 1996 HHs (Pop) 2002 HHs (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%
  34. 34. Indian Clothing Market Domestic Growth Potential Segmentation <ul><ul><ul><li>The overall market can be divided into 3 segments </li></ul></ul></ul><ul><ul><ul><ul><li>Fabric (the largest seller): is retailed over the counter as: </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>C ustom tailoring is very inexpensive </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Garment industry is yet to reach maturity levels </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Garments: Growth due to : </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Growth in organized retailing (spreading beyond Metros) </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Enhanced propensity towards fashion (international exposure) </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Home Textiles –the next big growth area in India </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Rapid growth in disposable incomes –indulgence at home </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Increased exposure –enhanced home décor etiquette </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Few players in the organized segment –opportunity for growth </li></ul></ul></ul></ul></ul>Source: KPMG Industry Characteristics <ul><ul><ul><li>One of India’s most important sectors accounting for 4% of the country’s GDP </li></ul></ul></ul><ul><ul><ul><li>15-20% revenue growth overall for the textile industry </li></ul></ul></ul><ul><ul><ul><li>Branded apparel is the fastest growing segment domestically at 20% p.a., due to the growth in the modern retailing format </li></ul></ul></ul><ul><ul><ul><li>Worsted fabrics is currently a US$550mm market growing at 20-25% </li></ul></ul></ul><ul><ul><ul><li>Ready to wear market of US$2bn growing at 20% p.a. </li></ul></ul></ul><ul><ul><ul><li>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%) </li></ul></ul></ul>Market Size: US$23.5bn
  35. 35. International Market International Market Overview International Market Growth Opportunities <ul><ul><ul><li>Quota restrictions & tariff barriers phased out </li></ul></ul></ul><ul><ul><ul><li>Significant production capacity shift to India due to </li></ul></ul></ul><ul><ul><ul><ul><li>High quality manpower, raw material and lower costs </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Inherent strengths in textile production </li></ul></ul></ul></ul><ul><ul><ul><li>India, second largest producer of apparel and textiles after China </li></ul></ul></ul><ul><ul><ul><ul><li>Only country with ability to compete with China in the textile and apparel industry (USITC report) </li></ul></ul></ul></ul><ul><ul><ul><li>Major initiatives by Government of India (recognized as a high-growth area) </li></ul></ul></ul><ul><ul><ul><ul><li>De-reservation of substantial portion of the industry </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Fiscal reforms in the synthetic textiles business underway </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Increase in investment ceilings </li></ul></ul></ul></ul><ul><ul><ul><ul><li>FDI freely allowed in the sector </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Technology Upgradation Fund </li></ul></ul></ul></ul><ul><ul><ul><li>India has a low contribution to a huge international market in the post-quota regime </li></ul></ul></ul><ul><ul><ul><li>Developed markets looking at India as the alternative to China for textiles & apparel imports </li></ul></ul></ul>
  36. 36. SKNL Group Highlights 4 Pillars– Brands, Professional Management, Distribution, Manufacturing 2 Transaction Update 3 Brandhouse Retail – SKNL Group’s Initiative 7 Future Growth – Building Scale Organically and Inorganically 4 Strong Financials 5 India – A Large Growing Market Opportunity 6 Reid & Taylor – SKNL Group Initiative 8 SKNL Overview 1
  37. 37. Brandhouse Retail Limited - Overview
  38. 38. Brandhouse Retail – Organizational Chart Tarun Joshi Managing Director & CEO CFO COO Operations COO 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
  39. 39. Brandhouse Retail – Experiencing Rapid Growth No of Stores Revenues EBITDA Margin
  40. 40. Brandhouse Retails – At a glance * Earning Per Share : EPS is computed based on existing nos of shares. 2007-08 Audited 2008-09 Projected 2009-10 Projected 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
  41. 41. SKNL Group Highlights 4 Pillars– Brands, Professional Management, Distribution, Manufacturing 2 Transaction Update 3 Brandhouse Retail – SKNL Group’s Initiative 7 Future Growth – Building Scale Organically and Inorganically 4 Strong Financials 5 India – A Large Growing Market Opportunity 6 Reid & Taylor – SKNL Group Initiative 8 SKNL Overview 1
  42. 42. Reid & Taylor (India) Company Overview <ul><ul><li>Facilities </li></ul></ul><ul><ul><li>Competitors </li></ul></ul><ul><ul><li>Market Position </li></ul></ul><ul><ul><li>Products </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><li>Manufactured at the state-of-art mill at Mysore, Karnataka </li></ul><ul><li>Finished fabrics production capacity of 8.4mm mtrs p.a </li></ul><ul><li>7-8 players include Raymond, Reliance, Digjam, OCM, Dinesh, BSL </li></ul><ul><li>Key players in the market include Madura Garments, Raymond, Arvind brands, Zodiac </li></ul>Fabrics Ready-to-Wear garment FY08 Sales $95.5mm FY08 EBITDA Margin 39.9% <ul><li>No.2 player with 18% market share </li></ul>FY08 Sales $19.3mm FY08 EBITDA Margin 25.9% <ul><li>Ready to Wear — Formals </li></ul><ul><li>Suits (Pure wool, wool blended) Blazers, Tweed jackets, Shirts in pure cotton and CVC, Trousers in Wool, Wool blended and Cotton </li></ul><ul><li>Ready to Wear — Casuals </li></ul><ul><li>T-Shirts, Smart casual shirts, Polos, chinos and denims </li></ul><ul><li>Accessories </li></ul><ul><li>Ties, belts, trousers, cufflinks and other accessories </li></ul><ul><li>Pure wool, Poly wool, Poly viscose, pure linen, pure silk, and superfine polyester </li></ul><ul><li>Wide collection of designs-500 designs with some varieties having 40 shades </li></ul><ul><li>Retailed through distribution channels with 110 wholesale dealers and 11,000 retailers and 158 Reid & Taylor exclusive stores </li></ul><ul><li>Retailed through 300 multi-brand outlets, 158 Reid & Taylor exclusive stores, several large format stores and retail chains </li></ul>
  43. 43. SKNL Group Highlights
  44. 44. <ul><li>STRICTLY PRIVATE AND CONFIDENTIAL </li></ul><ul><li>Important Notice </li></ul><ul><li>By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: </li></ul><ul><li>The information in this document has been prepared by S.Kumars Nationwide Limited (“ SKNL &quot;) 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. </li></ul><ul><li>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. </li></ul><ul><li>No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness 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. </li></ul><ul><li>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 . </li></ul><ul><li>The information communicated in this document contains certain statements that are or may be forward looking. These statements typically contain words such as &quot;expects&quot; and &quot;anticipates&quot; 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. </li></ul>

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