INTEGR ATE D TE XTILE SO LU TION S Corporate Presentation July 2010
Alok Overview Vertically Integrated Textile Company both in cotton and polyester Sales of Rs. 4,314.67 crores (Provn.) and PAT of Rs. 242.45 crores (Provn.) in FY 2010 Export of Rs. 1,560.48 crores in FY 2010 (Provn.) 2 State of the art manufacturing facilities with Integrated Management System Certification Two decades of providing wide range of quality textile products
Textile Industry Synopsis 3
Global Textile Trade Vision 2015 2007 Global trade in textiles and clothing increased to US$ 583 bn from US$ 342 bn. in 2001 - CAGR of 9% 2015 Global trade expected to grow to US$ 805 bn from US$ 583 bn in 2007 - CAGR of 4.12% 1000 800 600 400 200 0 Expected Growth World Trade 805 650 530 583 505 311 345 390 219 238 260 300 2006 2007 2010 2015 Textile Apparel USD bn. Top Exporters Amount US$ BN. % Europe 183.99 31.56% China 176.17 30.22% Turkey 22.73 3.90% India 19.10 3.28% United States 16.68 2.86% Others 164.33 28.18% Total 583.00 100.00% 4 Source: - WTO
Indian Textile Industry Snapshot Second largest producer of cotton in the world Second largest employer in India (after agriculture) Direct Employment to 35 mn. people Constitutes 13% of India s exports Contributes 11.50% to Industrial production Contributes 2% to GDP Size - 2009 USD bn. Particulars Domestic Export Total Apparel 33.00 10.00 43.00 Home Textiles 12.00 12.00 24.00 Total 45.00 22.00 6.40 Source: Ministry of Textiles India/Technopack 5
Indian Textiles - Vision 2014 Exports Domestic Market 115 CAGR-10% 42.5 36 13.5 11 25 29 57 19 38 67 22 45 50 65 CAGR- 13% CAGR- 8% 2002 2004 2007 2009 2014 Projections Per Capita consumption 2005 20 mtrs 2010 30 mtrs Growth 9% Direct Employment 2005 35 mn 2010 40 mn Growth 3 % Considering the fact that asset turnover of ratio of the industry is about 1.25, industry is likely to invest about Rs.1,40,000 crores (USD 32.0 billion) by 2012 and need to double the production across sector Almost 2/3 rd of the total Indian apparel and textile industry is from domestic consumption, which keeps it isolated from the ups and downs of the global trade and the economic uncertainties of the developed market. 6 Source: - Technopak
Alok Industries Ltd TM Integrated Textile Solutions 7
Segment Wise Revenue Segment COTTON YARN APPAREL FABRICS (Woven & Knits) Target Customer Captive Consumption Export to traders, manufacturing units, weavers Garment exporters in India / converter countries Domestic garment manufacturers, retailers and traders Share of Business 2010 (Provisional) 354.50 (8.22%) 1,918.45 (44.46%) Rs. in Crores Share of Business 2009 (Audited) 111.10 (3.73%) 1,609.56 (54.06%) HOME TEXTILES (Sheet sets, comforters, etc) Export to Overseas retailers and brands Domestic Sales through H&A Retail Stores 698.70 (16.19%) 498.54 (16.75%) GARMENTS (Woven & Knits) Export to Overseas retailers and brands Domestic Sales through H&A Retail Stores 132.86 (3.08%) 138.58 (4.66%) POLYESTER YARN (POY & Texturised Yarn) Domestic power loom weavers Direct exports 1,210.17 (28.05%) 619.15 (20.80%) Total 4,314.67 (100%) 2,976.93 (100%) 8
Alok s Advantage Timely expansions resulting in first mover advantage Exports increased from Rs. 100 crores (US$ 21.41 mn.) in 2004 to about 1,560 crores (US$ 334 mn.) in 2010 at a CAGR of about 60% Preferred Vendor status from leading retailers Critical supplier for the Buyer due to Quality, Cost & Delivery (QCD) Economies of scale coupled with low interest cost giving competitive advantage Sustained margins due to forward and backward Integration Wide range of products offered across different market segments Product development and designing strength State of the art infrastructure with modern machines Order Book position is healthy with indication of order for the entire year 9 1US$ - Rs. 46.70
Global Sized Capacities Divisions Units Current Capacities Capacity under Implementation Capacities Post Expansion Market Position SPINNING Tons (Spindles) 58,500 (300,096) 17,960 (111,744) 73,650 (411,840) Largest at Single Location in India HOME TEXTILES Processing mn. Mtrs 82.50 17.50 100.00 Largest Player Weaving mn. Mtrs 68.00 24.00 92.00 Largest Player Terry Towels Tons 6,700 13,300 20,000 Top 5 Player APPAREL FABRICS Processing Woven mn. Mtrs 105.0 21.0 126.0 Largest Player Weaving mn. Mtrs 93.00 17.00 120.0 Largest Player Knits Tons 18,200 6,800 25,000 Largest Player GARMENTS mn. Pcs. 22.0-22.0 Top 15 Player POLYESTER DTY/FDY Tons (Machines) 125,000 (92) 125000 (48) FDY 12 250000 (140) FDY 12 Top 3 Player 10 POY Tons 200,000 200,000 400,000 Top 5 Player
Diversified Customer Base Export Domestic Creative Garments 11 Other leading garments exporters and retailers
Product Development Speciality Fabrics Special Finishes Stain Guard Anti Static Soil Release 3X Dry Brushed Fabric Flame Retardant Water Repellent Infra Red Finish Insect Repellent High Visibility Anti Finish Bacterial Aroma Finish User Industry Defense Aviation Hospitality Construction Infrastructure Health Care & Fire Brigades Oil Refineries Petrol Pumps Welding Industry Coal Mines 12 Industrial Research
Organic Cotton Initiatives Global retailers and brands increasingly prefer fair trade and organic cotton, since it: Promotes eco-friendly textile products Addresses global warming concerns Tie up with an NGO called Zameen organic Entered into agreement for complete supply chain and product development solution Brands 13
Certifications ISO Certifications The company is now accredited with Integrated Management System (IMS). There are 4 certificates under this system: 1. ISO 9001: 2000 Quality Management System 2. ISO 14001:2004 Environmental Management System 3. OHSAS 18001: 2007 Occupational Health & Safety Assessment System 4. SA 8000: 2008 Social Accountability Alok is the only India textile company to have obtained IMS with all the four certifications ECO-Certification Alok is the first Indian Textile company to have been awarded all three certifications for its eco-friendly products as under: EU Flower the eco-certificate from European Union KRAV certification for organic products SWAN certification a Nordic eco-labelling certification 14
Way Forward Having built sizeable capacities across all business segments, the company to focus on maximising returns in next few years with main focus on effective utilisation of capacities and cost control Company will be incurring normal capex of about Rs.400 crores per annum ensure optimisation of all its installed capacities to Thrust on increasing presence in value added yarn dyed (standard) fabrics, Technical textiles and Institutional segments Improving the debt: equity ratio of the company Increasing asset turnover ratio of the company Focusing on improving in the ROCE Generation of Free Cash flow Bring back investments from Realty and Retail No more dilutions 15
Financial Analysis 16
Credit Rating Basel II Norms Long Term Credit Rating of CARE A+ assigned to the long term facilities by Credit Analysis & Research Ltd (CARE) Instruments with this rating are considered to offer adequate safety for timely servicing of Debt Obligation Short Term CP/NCD CARE has upgraded and assigned PR1+ rating from PR1 to the company s short term commercial paper / MIBOR linked short term NCD aggregating to Rs. 1,000 crores for a maturity not exceeding One year 17
General Information Alok Industries Ltd. Present Equity Listed at Rs. 787.798 crores (US$ 164.12 mn.) (787.79 million shares) BSE and NSE Market Price Rs. 20.10 as on June 30, 2010 Market Capitalization Rs. 1,583 crores 52 weeks High / Low High: Rs.27.90 Low: Rs. 15.80 Plant Locations Directors Vapi, Silvassa, Navi Mumbai and Bhiwandi 12 directors (3 promoter directors) Employees 19,000 + Share Holding Pattern as on June 2010 Particulars No. of Shares % Holding Promoters & Promoter Group 223,376,351 28.35% Mutual Funds/Insurance Companies/Venture Capital Funds/Banks 266,103,635 33.78% Foreign Institutional Investor 88,464,830 11.23% OCB s & Indian Public 209,853,462 26.64% Total 787,798,278 100.00% 18 1US$ - Rs. 48.00
Historical Financials Particulars 2010 (Provisional) 2009 (Audited) Rs. In Crores 2008 Rs. in 2007 Crores (Audited) (Audited) Profitability Sales 4,314.67 2,976.93 2,170.41 1,824.68 Operating EBITDA 1,261.33 803.75 547.75 410.96 Operating PAT 242.45 217.04 167.73 135.18 Cash Profit 598.62 542.65 329.69 258.22 Basic EPS (Rs.) 3.38 8.81 11.40 9.70 Balance Sheet 2010 (Provisional) 2009 (Audited) 2008 (Audited) 2007 (Audited) Tangible Networth 2,734.24 1,755.06 1,431.34 1,024.44 Net Debt 7,126.04 6,251.41 4,093.57 2,551.46 Net Fixed Assets 7,164.61 5,983.87 3,891.30 2,583.80 Current Assets 4,737.92 2,685.93 3,377.53 1,992.66 Net Debt / Equity 2.30 3.03 2.86 2.49 Current Ratio 1.84 1.36 1.49 1.42 19
Rupees In Crores Rupees In Crores Rupees In Crores Rupees In Crores Historical Financials Sales EBIDTA 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00-2,170.41 2,976.96 4,314.67 1,500.00 1,000.00 500.00-547.75 803.75 1,261.33 2007-08 2008-09 2009-10 2007-08 2008-09 2009-10 Years Years PAT Networth 300.00 200.00 167.73 217.04 242.45 3,000.00 2,000.00 1,431.34 1,755.06 2,734.24 100.00 1,000.00-2007-08 2008-09 2009-10 - 2007-08 2008-09 2009-10 20 Years Years
Holding Structure and Subsidiaries 21
Alok Structure Textile Manufacturing Cotton Spinning Polyester Yarn Apparel Fabrics Home Textiles Garment International Business Alok Industries International (BVI) Domestic Cash & Carry Alok H&A Ltd (100% Subsidiary) Infrastructure & Realty Alok Infrastructure Ltd (100% Subsidiary) Domestic Garment Manufacturing Alok Apparels Pvt Ltd (100% Subsidiary) Mileta International (79.8% Holding) H&A Stores (220 Stores Operational) Alok Realtors Pvt Ltd (100% Subsidiary) (Peninsula Business Park) Grabal Alok (UK) Ltd (42% Holding) Ashford Royale (50:50 Joint Venture) (Nahur Residential Project) 22
Alok H&A Limited 23
Present Status The Company s retail operations are now carried out in cash and carry company called Alok H&A Ltd., a 100% subsidiary of the company Stores offer quality products in home textiles, mens wear, womens wear, kids wear and accessories like ties, handkerchiefs, cuff lings etc. 220 Stores as on date on franchisee basis compared to 167 stores as last reported, an increase of 53 stores in three months Presence in more than 20 states and 60 cities Future Strategy Roll out 500 stores Pan India in two years All New stores are on Franchisee basis, thereby reducing set-up costs and accelerating store roll out Introduce new accessories like foot wear, sun glasses, perfumes etc. Roll out large format stores upto 2,500 sq. ft. To become a established affordable lifestyle store brand by 2011 24
Overseas Retail - Grabal Alok (UK) Ltd 25
Alok Group presently has a stake of 90.4% in Grabal Alok (UK) Ltd. (Alok Industries International Ltd. 41.7% and 48.7% by Grabal Alok International Ltd.) Currently, the chain comprises of 215 stores and employ about 2,500 people The stores offer a value proposition for quality apparel for women, men, and children. They also sell accessories (artificial jewellery, shoes, leather bags, toys etc. ), which complement the apparel range Turnover of about GBP 117 million as on March 2010 The company has been able to reduce its total cost from GBP 62 mn. in 2007-08 to GBP 53 mn. in 2009-10 Gross Sales grew by 7.57% to GBP 117.06 mn. during April March 2010 compared to GBP 108.82 mn. in corresponding period of previous year 26
Mileta International Alok holds 79.62% stake in Mileta, a Czech based manufacturing company through its wholly own subsidiary Alok Industries International limited Derived benefits from Mileta s technology skills in yarn-dyed fabrics and hemming: results in higher per-unit realizations and new product lines Extensive marketing network in Europe, Russia and Africa: a gateway for Alok products Brands like Mileta, Erba, Cottonova, Wall Street and Lord Nelson: available for introduction in the domestic market The revenues of the company for the quarter ended March 2010 was Euro 4.03 mn. (Rs. 24.37 crores) Revenue of Euro 18 mn. (Rs. 108.96 crores) in FY 2010 The Cash Profits of the company was Euro 0.30mn. (Rs. 1.83 crores) during FY 2009-10 as against cash loss of Euro 4.17 mn. (Rs. 25.26 crores) during the previous year 27
28 Alok Realtors Pvt. Ltd. Peninsula Business Park, Lower Parel 641,589 sq ft of ultra modern office premises with 600 car parks Project developed by Peninsula Lands Ltd, Civil work carried on by Shapoorji Pallonjee First level starts at a height of 80 feet from the ground, thereby offering a fabulous view of the Arabian sea and Mahalaxmi Race Course. One of the floor admeasuring about 32,000 sq. ft. has been sold Total project cost Rs. 1,279.50 crores; Funded by Equity of Rs. 529.50 crores and Debt of Rs. 750 crores The total debt component has been tied up by the company Development in full swing with 19 floors already constructed Possession December 2010 Ashford Royale Premium Residential Complex, Nahur Ashford Investment & Trading Company Pvt. Ltd and Alok Infrastructure Ltd. jointly propose (50:50) to develop an residential complex on a 7 acre plot (CEAT factory) at Nahur Architects Talati & Panthaky Proposed saleable area of 1.1 mn Sq. ft. Being converted in to modern residential complex with large landscaped gardens and water bodies. Club house, gymnasium, Total project cost is estimated to be about Rs. 450 crores; Funded by Equity of Rs. 150 crores, Advance from Customers Rs. 100 crores and Debt of Rs. 200 crores Construction funding being tied-up Received good response during the pre-launch booking Possession December 2013 Ashford Centre, Lower Parel 60,000 square feet of prime office space in Lower Parel Project developed by Ashford Group with Architects Billimoria 8 storey with floor plate of 7,500 sq. ft; 40 car parks. Proximity to Lower Parel and Currey Road stations; 5 star hotels ITC and Four Seasons; other major complexes like Indiabulls, DLF; HDFC Bank House; Ambit RSM Total project cost Rs. 124.50 crores Construction completed and Occupancy Certificate received The company is looking out for a potential buyer for the premises
Corporate Social Responsibility (CSR) CSR is an integral part of Alok - some of the CSR initiatives includes: Employment to tribal women on weaving looms and garment/made up stitching machines after intensive training and orientation Private Public Partnership with Silvassa Administration for converting the Government owned Industrial Training Institute into a centre of excellence Proposal to set up a 50 bed hospital at Silvassa with a portion set aside for charitable purpose Proposal to set up a School at Silvassa Best in class ETP system for primary, secondary and tertiary treatment of effluents. Reverse Osmosis plant to optimize water conservation Green Zones around all facilities and planting of saplings to conserve ecological balance Plants certified for ISO 9001, ISO 14001, SA 8000 and OHSAS 18001 29
Alok Vision To be the world s best integrated textile solutions enterprise with leadership position across products and markets, exceeding customer & stakeholder expectations Alok Mission WE WILL: Be a knowledge leader & an innovator in our businesses Maximise people development initiatives Optimise use of all resources Become a process driven organization Exceed compliance and global quality standards Actively explore potential market & products Offer innovative, customized and value added services to our customers Be an ethical, transparent and responsible global organization 30
Product and Plant Gallery 31
Vapi Plant Continuous processing plant wider width Vapi 32
Silvassa Plant 33 Airjet Weaving plant- Silvassa
Spinning Unit 34 Rieter Spinning unit- Silvassa
Weaving Unit Airjet Weaving Machinery- Silvassa 35
Terry Towel 36 Terry Towel Jacquard Looms - Vapi
Made Ups Unit 37 Made Ups Unit - Vapi
Texturising 38 Texturising unit- Silvassa
Quilting Unit Made up unit- Silvassa 39
Knitting Unit 40
Knit Processing Unit 41
Apparel Processing Unit 42
POY Unit 43 POY Lines - Silvassa
Embroidery unit -Lasser 44 Lasser Embroidery Unit - Silvassa
Embroidery Unit 45 Multihead Embroidery Machines - Silvassa
Fire Fighting 46 Mecedes Fire Fighting Trucks - Silvassa
Staff Housing Colony 47
Products - Home Textiles Sheet Sets, Quilts, Comforters, Blankets, Bed in a bag 48
Products - Home Textiles Towels 49
Products Apparel Fabrics 50
Products Knitted Fabrics 51
Products Dyed & Polyester Yarn 52
Products Garments 53
Thank you Alok Industries Limited 54 Peninsula Towers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013. Tel. +91 (22) 2499 6200 / 500, Fax: +91 (22) 2493 6078 E-mail: info@alokind.com Website: www.alokind.com