corporate presentation 2016 - symphony limited model positioning focused on offering cutting-edge...

Corporatepresentation2016

Air cooling simplified

2

Symphony Limited Corporate presentation 2016

WATERDISTRIBUTOR

HOT DRY AIR

EVAPORATIVE MEDIA

WATER RESERVOIR

FAN

COOLFILTERED AIR

Widest product range

3


Cloud – World’s First Wall Mounted Air Cooler

Window Air Cooler Range

Portable Air Cooler Range

Widest product range

4


Central Air Cooling Solution

Range of Packaged Air Coolers

5


i-Pure Range

Multi-stage Air Purification

6

Air cooling edge


Runs at the operating cost of a fan

Works on inverter power

Use it outside, use it inside.

Delivers fresh, filtered cool air.

Symphony

- milestones

7


Established in 1988 with a portfolio comprising one air cooler model

Pre-2000s, positioning: ‘Many products – One market’

Ventured into the manufacture of ACs, washing machines and other durables

Suffered financial stress and restructured

Post-2005 positioning is: ‘One product – Many markets’

Scaled up international presence in 2009

Acquired IMPCO (North America) in 2009-11

Started offering central air cooling solutions in India in 2011

Established foothold in all formats of modern retail in 2013

Unveiled the world’s first packaged air cooler in 2015

Acquired MuntersKeruilai (China) in 2015

Launched world’s 1st

wall mounted air cooler in 2016

Business model

Positioning

Focused on offering cutting-edge cooling technology

Progressively product-agnostic approach

8


Design-driven

Best-in-class design, a significant advantage over competitors

Brand-focused

World and India’s leading air-cooler brand

15 robust sub-brands

An industry pioneer

Cash-and-carry

Sales-to-subsidiary and modern retail format on credit

Asset and capital-light

Rs. 466 crore in revenues (9MFY2016)

Rs. 77 crore in net fixed assets (March 31, 2016)

De-risked

Well-diversified market presence and customer base

Widespread supplier base

Innovations

9


1988Marketed the first branded plastic air cooler in India that resembled an air-conditioner

1994Introduced an air cooler with remote control

2000Unveiled e-flow technology for enhanced cooling

2004Equipped air coolers with four-side cooling for better performance

2005Introduced humidity control

2007Launched air coolers with Power Saver Technology (PST)

2009Marketed Diet coolers with ergonomic design

2012Unveiled the world’s largest portable tower cooler – Storm

2012Received recognition from the Government of India for the R&D centre

2014Marketed India’s first branded window coolers with all-weather composite plastic body

2015Introduced the world’s first packaged air cooler range

2016Introduced the world’s 1st wall mounted cooler – ‘Cloud’ and introduced air cooler range with air purification – ‘i-Pure’.

Sectoral entry barriers

10


Leader in terms of innovation

• Technology, design, quality, features and performance

Leader in management

• Entrenched experience (what to do and what not to do)

• Ahead of the curve (new products, new designs)

Leader in customer-centric

• Expanding portfolio

• New models

• Innovative features

Leader in brand and category status

• Focused approach

Revenue break-up 2015-16 (9M) (Consolidated)

11


Revenue break up Aircooler revenue break up

Air Cooler Sales

Rs.444 cr

Residential Air Cooler 93%

Rs.413 cr

Industrial & Ducted 7 %

Rs.31 cr

Air cooler: 95%

Rs.368 cr

Gross Revenue

Rs.466 cr

India: 84%

Rs.389 cr

Rest of World: 16%

Rs. 77 cr

Others: 5%

Rs.21 cr

9.1

22.3

14.1

126.2

139.5

138.5

0 50 100 150

FY1

4FY

15

9M

FY1

6

EBIT (Rs. in Cr)

Air Coolers Corporate Funds

194.7

246.1

180.4

81.0

60.2

138.3

0.0 100.0 200.0 300.0

FY1

4FY

15

9M

FY1

6

Capital Employed (Rs. in Cr)


6.4

11.4

5.4

106.02

138.8

152.9

0 50 100 150 200FY

14

FY1

59

MFY

16

ROCE (%)


Particulars ((Rs. Cr.)Consolidated Standalone

FY14 FY15 9MFY15* 9MFY16 9MFY15* 9MFY16

Net Sales 487.5 525.5 375.0 444.4 351.8 413.7

% growth 40.6 7.8 18.5 14.1 17.6

Other Income 15.9 34.1 22.9 22.0 20.6 20.6

Total Income 503.4 559.6 397.9 466.4 372.4 434.3

EBITDA 139.2 166.0 126.0 156.9 134.8 171.8

% growth 45.8 19.2 24.6 27.4

Depreciation 3.9 4.1 3.0 4.3 1.4 2.2

PBT 135.3 161.3 122.4 164.9 132.8 169.5

Tax 29.6 45.4 38.7 46.5 38.7 46.5

PAT 105.7 115.9 83.7 118.4 94.2 123.0

% growth 75.8 9.6 41.4 30.6

PAT Margin (%) 21.0 20.7 21.0 24.7 25.3 28.3

Segmental Consolidated Standalone

Revenue (Rs. Cr.) FY14 FY15 9MFY15* 9MFY16 9MFY15* 9MFY16

India 349.7 411.2 310.0 368.4 307.7 367.9

Rest of the world 137.8 114.3 64.9 76.0 44.2 45.8

Net Sales from

Operation487.5 525.5 374.9 444.4 351.8 413.7

EBIT (%)

India 32.8 34.9 38.1 41.0 38.3 40.9

Rest of the world 15.0 15.8 7.6 2.1 35.5 41.5

Total 27.8 30.8 32.8 34.3 37.9 41.0

Y-0-Y Analysis

Revenue Growth (%)

India 44.4 17.6 18.8 31.5 19.6

Rest of the world 31.7 (17.1) 17.0 19.2 3.7

Total 40.6 7.8 18.5 29.9 17.6

Break-up of sales

(%)

Domestic 71.7 78.2 82.7 82.9 87.5 88.9

Export 28.3 21.8 17.3 17.1 12.5 11.1

Profit and Loss Statement Segmental

Accelerates performance


12

Segmental Standalone

Revenue (Rs. Cr.) FY14 FY15 9MFY15* 9MFY16

India 439.5 408.6 307.7 367.9

Rest of the world 56.6 53.7 44.1 45.8

Net Sales from

Operation496.1 462.3 351.8 413.7

*Unaudited Financials


13


Return on capital employed

108.5

14.5

138.5

14.1


EBIT (Rs. Cr)

9MFY2015 9MFY2016

132.1

188.5

138.3

180.4


Capital Employed (Rs. Cr)

9MFY2015 9MFY2016

108.9

7.7

152.9

5.4


ROCE (%)

9MFY2015 9MFY2016


14


Financial Performance for 9M FY2015 V/s 9M FY2016

397.9

126.0

83.7

320.6

91.6

466.4

156.9

118.4

318.6

91.1

GrossRevenue

EBIDTA PAT ShareholdersFund

Book Value

(Rs. Cr)

9MFY2015 9MFY2016

31.7

21.0

33.6

24.7

EBIDTA % PAT%

Margins (%)

9MFY2015 9MFY2016

58.9

105.3*

FY2015 9MFY2016

Dividend Payout(Rs. Cr)

50.8

88.9#

FY2015 9MFY2016

Dividend Payout(%)

*Includes special dividend payout of Rs. 42.1 crore. #Includes special dividend payout percent of 35.6


15


Financials - Statement of Profit & Loss

175

276296

364

503

560

466

Gross Revenue# (Rs. crore)

2010 2011 2012 2013 2014 2015 9M2016

37

51 53

60

106

116 118

Profit after tax(Rs. crore)

2010 2011 2012 2013 2014 2015 9M2016

31.4

27.5

24.7 25.1

26.9

28.8

32.7

PBT %(of gross revenue)

2010 2011 2012 2013 2014 2015 9M2016

*To calculate CAGR, 9M2016 figure is annualised

#Gross revenue figures are net off VAT and CST amount. In past annual reports till FY2015, gross revenue figures includes VAT and CST amount

23.47% CAGR* 25.01% CAGR*

9 m

on

ths

9 m

on

ths

9 m

on

ths


16


Financials - Balance Sheet

86.4

152.5

189.1

222.2

275.8

306.2318.6

Shareholders Fund(Rs. crore)

2010 2011 2012 2013 2014 2015 9M2016

86.4

141.0

112.7

83.1 81.0

60.2

138.3

Capital employedAir coolers (Rs. crore)

2010 2011 2012 2013 2014 2015 9M2016

0.0 0.0 0.0 0.0 0.0 0.0 0.0

Debt (Rs. crore)

2010 2011 2012 2013 2014 2015 9M2016

53.5

11.7

83.9

139.1

194.7

246.1

180.4

Capital employedCorporate funds (Rs. crore)

2010 2011 2012 2013 2014 2015 9M2016

9 m

on

ths

9 m

on

ths

9 m

on

ths

17



Financials - Shareholder value creation

32.4

27.926.6 26.2

27.7

29.7

33.6

EBIDTA margin %

2010 2011 2012 2013 2014 2015 9M2016

1.8

8.1

22.426.6

53.2

58.9

105.3*

Dividend payout(Rs. crore)

2010 2011 2012 2013 2014 2015 9M2016

4.7

15.9

42.144.3

50.3 50.8

88.9#

Dividend payout %

2010 2011 2012 2013 2014 2015 9M2016

24.8

43.6

54.1

63.5

78.8

87.591.1

Book value (Rs.)

2010 2011 2012 2013 2014 2015 9M2016

*Includes special dividend payout of Rs. 42.1 crore. #Includes special dividend payout percent of 35.6

9 m

on

ths

9 m

on

ths

9 m

on

ths

9 m

on

ths

Comparison betweenair-cooling appliancesParameters Fans Air coolers Air-conditioners

Capital cost Low Low High

Recurring cost Low 90% lower than ACs Very high

Indoor air quality Circulates same air 100%-fresh filtered cool air Recirculates stale dry air

Refrigerants No WaterOzone layer-depleting CFCs

Maintenance Simple and cost-effective Simple and cost-effective Complex and expensive

Portability No Yes No

Usage Indoors Outdoors and indoors Indoors

Emission No Eco-friendlyEnvironmentally harmful CFCs

Effectiveness in humid climates

Not applicable Less effective Effective

18


Residential air coolers

Using all forms of advertisement modes

19


Symphony - the hallmark of trust

Electronic Print Radio

Below-the-line marketing

activities

Internet(since 2010)

The result: Symphony has cemented its identity as a generic name for air coolers

Portable cooler campaign

Central Air Cooler campaign

TV campaign in Mexico

i-Pure range

campaign

Advert - pankhe what is this 2015.mp4

Advert - CACS English 2015.mp4

Advert - TVC Mexico.mov

Advert - ipure tvc.mp4

Advert - ipure tvc.mp4

Centralised air coolingsolutions – fact and figures“90% of American firms named cool air as the single biggest factor determining their productivity.”

“Cooling raised productivity by a quarter. On factory floors it cut absenteeism and stoppages.”(Source: The Economist, Page 41, January 2013 issue)

20


Effective Temp (C )

24 27 29 32 35 38 41

Loss of work output

3% 8% 18% 29% 45% 62% 79%

Loss of accuracy 0% 5% 40% 300% 700% > 700%

(Source: Study for NASA. “Comfort Conditioning the Plant with Evaporative Cooling” Plant Engineering July 8, 1976 Pg 76 Joseph Marg

Centralised air cooling solutions and Symphony

• Acquired IMPCO (2009-11) and entered the centralised air cooling solutions business

• IMPCO possessed in-depth expertise in manufacturing large metallic air coolers and providing customised centralised air cooling solutions

• Potent combination of IMPCO’s sectoral knowledge and Symphony’s entrepreneurial approach

21


Impco, S.de R.L. de C.V., Mexico

The Symphony-IMPCO synergy

• Symphony leverages IMPCO’s relationships with large format stores to market residential coolers

• Commercial and industrial coolers available for Symphony to distribute in India and internationally (through dedicated distributors)

22


Centralised air cooling solutions – long runway

Opportunity and size

Offices Universities

The centralised air-conditioning market in India is estimated to be worth Rs. 40,000 million

The value of the centralised air cooling market size is undefined (potentially >Rs. 40,000 million)

Symphony is the only branded player in this segment

Residences Lecture halls

Shops and showrooms Service stations

Religious institutions Factories

Club houses Poultry and dairy farms

Warehouses Departmental stores

Lounges Diesel generator rooms

Canteens Laundry

Guest houses Kitchens

Banquet halls Malls

23


Centralised air cooling solutions - domestic presence

• IMPCO’s multi-decadal knowledge allowed Symphony to execute multiple prestigious centralised air cooling solution projects in India

• These projects were undertaken across diverse spaces including factories, religious institutions, warehouses and railway stations, among others

24


Centralised air cooling solutions – enterprise customersWorking with esteemed brands

25


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International markets – long runway

26


Air cooler seen as a Green Product – gaining popularity

Global warming accelerating demand

Air cooler market potential should logically be greater

AC global market size expected to be 150 million by 2017 (industry

report)

Global installations – Central Air Cooling

27


World’s Largest Air Cooling Project

28


Air-cooled entire Mecca Complex in Saudi

100 Million CFM of air cooling done.

Air Cooling Solutions- our international presence

29


Direct Presence

Symphony - foraying into a third geography

30


Inorganic presence in China

•Acquisition of 100% equity in Guangdong Symphony Keruilai Air Coolers Co. Ltd., China (GSK), erstwhile known as Munters Keruilai Air Treatment Equipment (Guangdong) Co. Ltd (MKE)

•Keruilai is a market leading brand in China in the evaporative air cooler segment

Symphony’s opportunities

•Cutting-edge R&D expertise

•Only internationally-recognized Chinese air cooler brand

•Market access to China

•Inherent synergy

•Sourcing advantage

•China’s FTA with ASEAN countries

Guangdong Symphony KeruilaiAir Coolers Co. Ltd (GSK)

Rise in temperature

31


Temperature is rising globally and making global headlines

Looking forwardto attractive growth ratesMultiple revenue streams

•Symphony earlier serviced only one customer group – the residential buyer; the Company now services commercial and industrial customers as well

•Symphony was earlier simply an air-cooler company; the Company has since evolved into a technologically proficient corporate with a progressively product-agnostic approach

•Symphony was earlier solely a one-product company; the company is progressively evolving into a product-cum-solutions organisation

32


Other factors

•Symphony possesses a complement of mature and newly-launched models

•Sustained advertising will continue to reinforce Symphony’s ‘Share of Voice’ that could translate into higher revenues

•Decision to move to an asset-light model at IMPCO will enhance liquidity

33


This presentation contains forward-looking statements which may be identified by their use of words like“plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similarmeaning. All statements that address expectations or projections about the future, including, but not limited to,statements about the strategy for growth, product development, market position, expenditures, and financialresults, are forward-looking statements. Forward-looking statements are based on certain assumptions andexpectations of future events. The companies referred to in this presentation cannot guarantee that theseassumptions and expectations are accurate or will be realized. The actual results, performance or achievements,could thus differ materially from those projected in any such forward-looking statements. These companiesassume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of anysubsequent developments, information or events, or otherwise.

DISCLAIMER

www.symphonylimited.com

USASymphony USA, Inc.

MEXICOImpco, S.de R.L. de C.V.

Avenida Miguel Aleman #6061,Col. America, Guadalupe N.L.

Mexico, C.P. 67130

6520 N. 7th Street Suite #235Phoenix, AZ 85014

CHINAGuangdong Symphony Keruilai

Air Coolers Co. Ltd

Taiying Industrial Area,Hongmei Town,

523160 Dongguan,Guangdong China

INDIASymphony Limited

Symphony House, FP12-TP50 Bodakdev, Off SG Highway,

Ahmedabad 380054.


Aug 2

016

corporate presentation 2016 - symphony limited model positioning focused on offering cutting-edge...

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