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Orient Bell Limited Investor Presentation 2021
61797_rns_2021-05-13_e35f299a-b1d4-470a-b4c4-0961462b9c48.pdf
Investor Presentation
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OBL:HO:SEC:00:
BSE Limited Corporate Relation Department 1st Floor, New Trading Ring Rotunga BuildingPhiroze Jeejeebhoy Towers Dalal Street, Mumbai - 400 001
New Delhi : 13.05.2021
National Stock Exchange of India Ltd. Exchange Plaza, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (E) Mumbai-400 051
Stock Code - 530365
Stock Code: ORIENTBELL
SUB: INVESTOR PRESENTATION FOR THE QUARTER AND FINANCIAL YEAR ENDED 31.03.2021.
Dear Sir/ Madam,
Please find enclosed herewith Investor Presentation of Orient Bell Ltd. highlighting the performance of the Company during the quarter and financial year ended on 31st March, 2021.
Kindly take the same on record.
Yours faithfully,
for Orient Bell Limited
~)
Yogesh Mendiratta Company Secretary & Head - Legal
Encl: as above
Shape Up Scale Up
Investor Presentation Q4 & 12MFY21
Dorientbell
Disclaimer
This presentation may contain certain forward-looking statements relating to Orient Bell Ltd. and its future business, development and economic performance. These statements include descriptions regarding the intent, belief or current expectations of the Company, its subsidiaries and associates and their respective directors and officers with respect to the results of operations and financial condition of the Company, subsidiary or associate, as the case may be.
Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macroeconomic and political trends; (4) fluctuations in currency exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigation; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this presentation.
Company assumes no obligation to update or alter forward-looking statements whether as a result of new information, future events or otherwise. Any forward-looking statements and projections made by third parties included in this presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
This presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this presentation. This presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this presentation is expressly excluded. This presentation and its contents are confidential and should not be distributed, published or reproduced, in whole or in part, or disclosed by recipients directly or indirectly to any other person. _ yorientbdell
Contents
- 01 Overview and Q4 & 12MFY21 highlights
- 02 The journey of shaping-up
- 03 Next phase: scaling-up
- 04 Historical financial performance
Overview and Q4 & 12MFY21 Highlights
OrientBell Limited - a leading manufacturer of tiles
| severe | pedigreeseem | hE | ttre | |
|---|---|---|---|---|
| 1977-05 | 2006-10 | 2010-16 | 2017-19 | 2020 |
| 1977 -Incorporatedpublicasa_limited company.1993 —Mr. M.K. Daga, veteran tiletechnologist takes over themanagement.2000 —1st bonus for shareholdersin the ratio of 1:1.2004 —withAccreditedISOOHSAS9001:2000and18000:1999.2005 —FranchiseeOrient1stBellTile Boutiques (OBTB). | 2007 —= Achieves turnover of 200crores.Bonus2ndfor=shareholders issued in theratio of 5:4.2008 —1st Indian manufacturer toEuropeanChiefhireasaProduct & Solution Designer.2009 —Enters the luxury home=decor segment.Records the highest profit=growth in the industry.2010 —= Acquires Bell Ceramics.CompanyownedOBTB="launched in Delhi. | 2011 —= AwardedPowerBrandStatus.CompanyownedOBTB=Launch in Kolkata.2012 -Merger completed with BellrenamedCeramics;toOrient Bell Ltd.2013 —OBLpatent4thfiles(Pending Registration).2015 —markReceivedatISISikandrabad unit.2016 —CompanyownedOBTB="launched in Chennai.1st JV set up in Morbi.= | 2017 —New brand identity.=100th OBTB launched.=engageddevelopEYto="performanceenhancement blueprint.2018 —New CEO & CXO team.="New line at Sikandrabad="manufacture(MF-4)toGVT.2019 —Revamped _ organization,="new products, rationalizedcosts, improved customerconnect,starteddigitization,branding,optimizeddisplays&working capital.KPMG engaged for plant="Operations Review. | Appointed SRBC for GSTAudit.Digitization helps navigateCovid.Stakeholder engagement.No loan moratorium.ManufacturingstartsinJune.dormantRestartedmanufacturing line in Q3(MF-2).69 new OBTBs in FY21.~500+ SKUs — 12 differentsizes.Sales branches up by 20%Head/ZHandStateby50%.Net Debt free & strongcash flow. |
Business Environment — Full Year FY21
- "Q1 impacted due to lockdown, economic activities resumed in a phased manner post Unlock.
- "Demand :
- = Domestic demand better than anticipation smaller towns and projects picked up faster
- =" CP's preferred branded products over Morbi for continuity of supplies and services.
- "Exports too added to the joy Morbi diverted supplies to cater to the demand from existing/new markets. _ yorientbdell
- "No major capacity additions during FY21 but announcements aplenty
- = After a low base during 1HFY21, costs continued to escalate m-o-m current gas costs almost at par vs. Mar-20 levels.
- ="Price increases / discount reductions implemented to offset the impact on margins — largely absorbed
- ="Covid resurgence, limited lockdowns / curfews and labour migration impacting construction and thus demand for now.
Operational highlights of FY21... 1 of2
Business resumed with strict enforcement of safety protocols + strong focus on fixed cash costs (saved +30% over normalized baseline of Q4FY20) and cash flows (overall debt at end June-20 lower than Mar-20).
= Sales force increased by 10%. Teeth to tail ratio improves to 2.3 : 1. = 3 virtual Townhalls, 2 R&R & 3 Digital Events. = Close to 12000 People Hours spent in L&D , e-learning platform (i Learn) launched. = Zero major accidents. = Identifying and filling up profitable portfolio gaps — 8 new product categories launched over the last 2 years to facilitate "One Unit Many Product" approach — 17% of FY21 total sales. =» ~500 + SKUs launched in FY21 found increasing acceptance with CPs, and improved product availability. = Front-line sales force incentives, Display efforts, Marketing Efforts ensured wide distribution. = New online series "Icons of Creativity" - 6 episodes and 2 million views (YTD). =» +1 Lakh customers visit OBL's website. = 79 Videos launched in 2020 — 5.5 Crore Views, 1 Crore Likes & Shares. Awards for Best Brand from ET Now & Realty+. _ yorientbdell
Operational highlights of FY21... 2 of2
| Operational | highlights of FY21of22 |
|---|---|
| Building focus on Architect & Influencer segments with 69 new OBTB's additions, highestin a single#year (OBTB count as on 31-Mar-21Displays in existing OBTB refreshed as well.230);:Ashwamedha Project 2.0— 414 CP's added10% of FY21 total sales=-Growth: 24 branches grew over LY & 15 Branches grown by +10%.= | |
| Rebalancing & debottlenecking of lines continues.=Quality and Breakage Complaints reduced.="Customer Delight initiatives on Quality & service levels launched.=Tight focus on costs.= | |
| While retaining focus on Simplification / Automation ++ COST CONTROL ++ WORKING CAPITAL=(reduced CCC by 40 days vs. LY).Adoption of Digital tools by employees and Channel partners speeding up.=New versions of Channel partner App and Sales executive app launched.=Transport Management System Implemented= |
Q4FY21 and 12MFY21 Consolidated financial highlights
| 12MFY21Q4FY21and | Consolidated | highlightsfinancial | |
|---|---|---|---|
| Q4FY21 | Q4FY21 | Q4FY21 | Q4FY21 |
| Volumes | Revenue | EBITDA | ANE |
| +37% | +43% | +178% | +63% |
| Y-o-Y | Y-o-Y | Y-o-Y | Y-o-Y |
12MFY21 consolidated financial highlights
Consolidated Abridged Income statement
| Quarter Ended | 12 Month Ended | |||||
|---|---|---|---|---|---|---|
| (Rs. Crore) | Q4 FY20 | Q4 FY21 | Y-o-Y | 12M FY20 | 12M FY21 | $Y$ -o-Y |
| Revenue from Operations | 126.8 | 181.5 | 43.2% | 492.3 | 502.5 | 2.1% |
| Other Income | 2.3 | 0.6 | $-74.5%$ | 5.2 | 1.9 | $-64.5%$ |
| Operating Expenses | 122.0 | 162.6 | 33.2% | 466.2 | 467.3 | 0.2% |
| EBITDA | 7.0 | 19.5 | 177.6% | 31.3 | 37.0 | 18.2% |
| EBITDA Margin% | 5.6% | 10.8% | 5.2% | 6.4% | 7.4% | 1.0% |
| Depreciation and Amortisation | 5.2 | 5.3 | 2.0% | 20.6 | 20.6 | $-0.1%$ |
| EBIT | 1.8 | 14.2 | 692.6% | 10.7 | 16.4 | 53.4% |
| Interest and Financial Charges | 1.5 | 1.1 | $-24.9%$ | 8.1 | 5.7 | $-30.2%$ |
| Share of profit/(loss) of Associates | (0.3) | 0.3 | 171.5% | 0.3 | 0.7 | 123.9% |
| Profit Before Tax(PBT) | (0.1) | 13.3 | 15956.2% | 2.9 | 11.4 | 291.9% |
| PBT Margin % | $-0.1%$ | 7.3% | 7.4% | 0.6% | 2.3% | 1.7% |
| Tax Expenses | (5.1) | 5.0 | 197% | (4.2) | 3.8 | 189.5% |
| Profit After Tax(PAT) | 5.1 | 8.3 | 63.4% | 7.1 | 7.7 | 8.0% |
| PAT Margin % | 4.0% | 4.6% | 0.6% | 1.4% | 1.5% | 0.1% |
Topline Growth in Q4FY21 is 43% y-o-y on back of successful implementation of strategic initiatives - Aggressive Business Expansion Strategy pursued to gain Market Share.
EBITDA Margin maintained at 10.8% during Q4FY21 despite significant increase in gas costs sequentially.
Full Year Topline and Profitability still higher on a y-o-y basis despite a washout in Q1FY21
*Q4FY20 & Q1FY21 impacted due to lockdown post COVID.
Consolidated Abridged Balance Sheet
| Consolidated Abridged | ||
|---|---|---|
| Balance Sheet | ||
| Rs. Crores | ||
| Liabilities | ||
| Share Cauity | ||
| OtherEqu | ||
| Net Worth | ||
| Borrowin | ||
| Tradebles | ||
| Other Liabilities | ||
| for Lease AssetsLiability | ||
| Total Liabilities | ||
| Assets | ||
| Plant andEquipment | ||
| Lease Assets | ||
| Investments | ||
| Inventories | ||
| Trade Receivables | ||
| Cash & CashEquivalents | ||
| Others Assets |
| Borrowin | |
|---|---|
| Tradebles | |
| Other Liabilities | |
| for Lease AssetsLiability | |
| Total Liabilities | |
| Assets | |
| Plant andEquipment | |
| Lease Assets | |
| Investments | |
| Inventories | |
| Trade Receivables | |
| Cash & CashEquivalents | |
| Others Assets |
1. Other Liabilities : Deferred Tax Liabilities, Employee Cost Provisions, Unpaid Dividends, Statutory dues & provisions
Journey of shaping-up
Consolidated Financial comparison for last 4 quarters
Key Strategies driving "Shaping Up"
oa Revamped leadership team with diverse experience
Reorganization of top-level management poised to lead the company into new phase of sustainable growth Leaders with a mix of strategic focus, deep customer understanding and ability to execute.
| Ajay Srivastava | Chief Human Resources Officer26+ years of experience in human resource management | Previously worked with PepsiCo, ITC Limited, Dainik Jagran, | Joinedin June2019 | _toinedin August2018 | Pinaki NandyChief Sales Officer25+ years of experience in leading sales rolesPreviously worked with Vodafone and Cadbury and, as |
|---|---|---|---|---|---|
| Himanshu JindalChief Financial Officer: | 18+ years of experience in leading finance rolesPreviously worked with Heidelberg cement, Cipla, Cargill,Pfizer and most recently, as the CFO at Den Networks. | poinedin Decemberj201018 | joinedIn July201018 | eee ooChief M 'ain mark tin voles23+of experi nceyears OF experience in veaaingrsmarkenng rolesPreviously worked with Unilever, GSK Consumer Healthcare,SaraLee and Ebay Indiay, | |
| Chief Executive OfficerReliance Communications & TATA Group. | 30 years of multi- functional experience in industry leadingcompanies, Previously worked with UB Spirits, Bharti Airtel, | polriedin March2018 | Jeined)InApril2004 | Anil AgarwalChief Operations Officer34+ years of experience in the ceramics industryHas been a part of the OBL team for 16+ years, previouslyworked with Somany Ceramics & Vrundavan Ceramics. |
2 Product Portfolio- A Structured Approach
- VY 8 New Product Ranges— 17%+ of sales.
- Vv Market research to select designs.
- Y Solution based strategy Germfree tiles 5% of sales.
- Y Focus on High Value.
_yorientbell
tes:
- v Innovative Tiles (patent pending).
- = Germ-free tiles: specially formulated glaze with antimicrobial treatment.
- = Anti-viral Tiles: These tiles restrict the spread of viruses on the surface and kill more than 99% of the viruses in 2 hours.
- = Anti-Static Conductive Tiles: Specifically designed for data centres and other places with sensitive electronic equipment, these tiles conduct static electricity preventing potentially dangerous electric sparks.
- =" Forever tiles: High abrasion, scratch and stain resistant.
- = Cool tiles: Lowers building temperature.
Revamping manufacturing to improve competitive advantage
3 own manufacturing plants + 2 JV plants with a capacity of 30 million sq meters p.a spread across India.
Modernization of wall line at Sikandrabad (MP1) announced by Board in Jan-21 - total capex <Rs. 10 Crores increasing from 2.1 MSM to 2.8 MSM from mid-FY22 – progressing as per scheduled target
orientbell
19
+' Enhancing Distribution Reach & Effectiveness
3,000+ 2,000+
SKUs Channel Partners 230
Orient Bell Tile Boutiques
Improved Distribution & Channel engagement
- CXO led meetings with channel partners to establish connect, resolve issues and identify growth opportunities.
- Project to add new Channel Partners (Ashwamedha 2.0) 10.0% of total sales in FY21.
- Empowered channel partners with digital tools to track Order status, SKU wise stock & Invoice details for ease of business.
- Working on connect with architects & Interior designers with a unique solution-based approach.
Focus on displays
- Launched 3 partnership models to strengthen chain of signature showrooms (OBTB).
- 69 Orientbell Tile Boutiques (OBTB) added in FY21 totaling to 230 OBTB's- more to come.
- Refreshed existing OBTB displays with New category & HVP focus.
- OBTB focused digital tools to enhance customer experience.
- Increased depth in the market, including tier 2 & 3 cities.
- Digital lead generation model to increase OBTB footfalls.
Sales Breakup- Region Wise FY21
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Next phase: scaling-up
Scaling-up strategy for accretive value creation
| Scaling-up strategy for accretive value | creation | |
|---|---|---|
| Focus on 4 | pillars to build customer preference for OBL | |
OBL- Recipe for success
Drivers to support growth
| supportDrivers to | growth |
|---|---|
| deen) | © Positive impact of falling home loan rates and reductionin trust deficit.© Covid-19 has increased demand for home improvements & preference for bigger |
| Tinydomestic demand | homes. |
| © Trend of governments providing relief to realty sector. | |
| Morbimanufacturers | ® Global customers are looking at countries besides China.© GCC exports continue unabated despite ADD impositionin Jun'20 largely attributed toMorbi's growing competitiveness, particularly in the ceramic wall and lower format GVT |
| focused on exports | segment.® US imposition of ADD on China (~200%+); US has now become the second largest exportdestination for Morbi after GCC. Exports to UK and Europe also gaining strong traction. |
| © Channel partners prefer large branded players due to assured and faster supplies. | |
| aeTEESESIPe | © Reduced discounting.© Better compliance on GST improving competitiveness of branded players. |
| domestic market | © OBL dependence on Morbiis the lowest amongst branded players. |
Ensure sustainable and responsible growth
Protecting environment
Reduced water consumption by rainwater harvesting. 6
Zero Waste and water discharge manufacturing facilities
Solar PPA executed for Hoskote
Planted 1500+ trees YTD FY21
Won the "Certificate of Merit" in National Energy Conservation Award' 2016 organized by Ministry of Power for saving Power and Fuel Consumption, ey . 2f GON. Member of Indian Green (BY; Building Council, GRIHA *Q lJ:
ISO 14001:2015 Certified, global Recognition for enviornment friendly industrial company
Contributing to society Responsible governance
head dedicated departments
Organization wide Code of Conduct that reflects the company's principles
Continuous stakeholder engagement promoting transparency — Shareholder communications/ Employee = townhalls, transparent Vendor
Historical Financial performance
Historical consolidated profit & loss statement
| consolidatedHistoricalprofit & | statementloss | ||
|---|---|---|---|
| 648.0 | 571.1 | 492.3 | |
| 2.4 | 1.9 | 5.3 | |
| 287.7 | 256.7 | 236.3 | |
| 76.1 | 75.7 | 73.6 | |
| 237.1 | 201.8 | 156.4 | |
| 600.8 | 534.1 | 466.2 | |
| EBITDA | 49.67.6% | 39.06.8% | 31.36.4% |
| 7.3 | 8.7 | 8.1 | |
| 15.0 | 16.5 | 20.6 | |
| -0.2 | 0.4 | 0.3 | |
| 20.3 | - | - | |
| 47.3 | 14.1 | 2.9 | |
| Revenue from operationOther IncomeCost of Goods SoldEmployee Benefit ExpenseOther ExpensesTotal Operating ExpensesEBITDA marginInterestDepreciationShare of profit/(loss) of AssociatesExceptional ItemPBTTax Expenses (Credits)PAT | 7.340.0 | 4.89.3 | -4.27.1 |
Consolidated balance sheet
| Share Capital | 14.3 | 14.3 | ||||
|---|---|---|---|---|---|---|
| Fixed Assets incl. CWIP | 218.1 | 225.5 | ||||
| Right-of-use assets | 7.0 | 7.9 | ||||
| Non-Current Investments | ||||||
| 7.0 | 7.0 | |||||
| Other Non Current Assets | 4.5 | 4.0 | ||||
| Long Term Provisions | ||||||
| mmfTrade Payables | 82.7 | 8 | Trade Receivables | 67.8 | 86.9 | |
| cnnLease Liabilitieswa eeecceececeeceeeaassaeeescceeeeessenaaeeseseeeeeeee | 2.0 | 2.2ceeceaescnseeeeccececessenaseeceeeecceseceafescaueeesceeeeeasseeasecceeeeeesseeeaassenseeeseeeeeoes | Cash and Bank | 32.5 | 3.0 | |
| Other Current Liabilities | 16.1 | 19.4 | ||||
| Short Term Provisions | 0.5 | 0.4 | Other Current Assets | 3.6 | 5.3 | |
| Short Term Borrowings | - | 6.0 | ||||
| Fixed Assets incl. CWIP | 218.1 | 225.5 | |
|---|---|---|---|
| Right-of-use assets | 7.0 | 7.9 | |
| Non-Current Investments | 7.0 | 7.0 | |
| Other Non Current Assets | 4.5 | 4.0 | |
Thank You
Orient Bell Limited
Mr. Himanshu Jindal — CFO
Mr. Ashish Kapur — AGM Treasury, Investor Relations & Corporate Finance
+91-11-4711-9100 (B)
Pareto Capital (Investor Relations)
Ms. Pooja Dokania [email protected]
Mr. Rishav Das [email protected] DA R FE TS
