Description
US$ 1.2 billion Electrical Company, globally
• Founded in 1971 with the acquisition of ‘HAVELLS’
brand
• Started in India, expanded globally through acquisition,
acquired Sylvania* brand in 2007
• Expanded from a Switchgear company to Consumer
Electricals - backyard to living room
• Strong Brand, wide distribution channel and broad
product portfolio provide competitive strength
• Expanding in new geographies and new products in
existing markets
Havells India Limited
June 2012
• US$ 1.2 billion Electrical Company, globally
• Founded in 1971 with the acquisition of ‘HAVELLS’
brand
• Started in India, expanded globally through acquisition,
acquired Sylvania* brand in 2007
• Expanded from a Switchgear company to Consumer
Electricals - backyard to living room
• Strong Brand, wide distribution channel and broad
product portfolio provide competitive strength
• Expanding in new geographies and new products in
existing markets
Introduction
2
US$ 1.2 billion company
EUROPE
INDIA
LATIN AMERICA
CHINA
SOUTH EAST ASIA
*Globally except for North America, Australia, NZ
3
• Focus on branded products through
Distribution channel.
• Broaden product range as consistent
with Distribution channel which further
gears up cross selling.
• Create sustainable relationship with
channel through consistent policies,
transparency and growth initiatives.
• Brand reinforcement through
continuous engagement with end users.
Core Strategy
Products
Distribution
Brand
4
Europe
? Major Presence through Sylvania
? 27% of Consolidated Revenue (62% of Sylvania)
? 4 Manufacturing Units & distribution across Europe
India
? Major Presence through Havells India
? 56% of Consolidated Revenue
? 15 Manufacturing Units
? Strong Distribution Channel
New Targeted Markets: China, ASEAN region
Americas
? Presence through Sylvania mainly in South America
and Mexico
? 17% of Consolidated Revenue (38% of Sylvania)
? 2 Manufacturing Units
Global Footprint
5
Shareholders
• Promoters hold 61.6%, single business focus.
• Key institutional investors includes:
?Warburg Pincus
?Sequoia capital
?Nalanda Capital
0
100
200
300
400
500
600
Mar-05 Oct-05 May-06 Dec-06 Jul-07 Feb-08 Sep-08 Apr-09 Nov-09 Jun-10 Jan-11 Aug-11 Mar-12
Havells Closing Price vs NSE Closing Price
(Adjusted for bonuses & issue)
Havells Closing Price
• Introduction
• India: Havells well positioned
• Sylvania: Global Footprint
Agenda
7
• Competent distribution network of 5,600 dealers/ wholesalers and
100,000 retailers across India.
• High regard and strong relationship with dealers/distributors,
nurturing over 4 decades.
• Leading brand in the electrical consumer products industry.
• Aggressive brand building via media, premium positioned
• Broad product portfolio, no. 1- 4 in each category
• World-class manufacturing units.
• Havells Galaxies - One stop shop, initiative to reach consumer
directly, increasing from 140 to 200 in next one year.
Havells – India
Conceived as E-FMCG
8
Consistent outperformer
* Growth on y-o-y basis (except Q3FY09 due to one time loss due to sharp fall in metal price)
in Rs crore
** based on average excluding investment
• Consistent Growth – 10 years CAGR
?Revenue - 34%
?EBIDTA - 36%
?Profit after Tax - 43%
? 34 quarters of consecutive growth*
? As on March 2012 - Net debt Rs. (76) mn
• High Returns on capital **
? Return on capital employed – 52%
? Return on equity – 42%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
0
500
1000
1500
2000
2500
3000
3500
4000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Net Sales EBIDTA(%)
0%
10%
20%
30%
40%
50%
60%
02 03 04 05 06 07 08 09 10 11 12
RoACE RoAE
9
Domestic switchgear – MCB
Market Size ~ INR 16,000 million
Market share ~ 28% (15% in 2006)
# 1
Peers position
- Legrand (MDS &
Indo Asian)
- Schneider
Modular Switches
Market Size ~ INR 14,000 million
Market share ~ 15% (5% in 2006)
# 2
Peers position
- Matsushita/ Anchor
Roma
- Legrand
# 5
Peers position
- L&T
- Schneider
- Siemens
- ABB
LV Industrial switchgear
Market Size ~ INR 30,000 million
Market share ~ 6% (7% in 2006)
*Contribution margins are derived after deducting direct cost and direct selling variables from net sales
Market size data and peers position as per best estimates of management
Broad Product Portfolio
# 2
Peers position
Cable Wire
- Polycab - Finolex
- KEI - Polycab
Cable & Wire
Market Size ~ INR 170,000 million
Market share ~ 9% (6% in 2006)
Lighting - CFL
Market Size ~ INR 20,000 million
Market share ~ 11% (10% in 2006)
# 2
Peers position
- Philips
- Osram
Lighting - Luminaires
Market Size ~ INR 25,000 million
Market share ~ 12% (3% in 2006)
# 4
Peers position
- Philips
- Bajaj
- Crompton
- Wipro
# 3
Peers position
- Crompton
- Usha
- Orient
Electrical Consumer Durable - Fans
Market Size ~ INR 38,000 million
Market share ~ 15% (6% in 2006)
10
*Contribution margins are derived after deducting direct cost and direct selling variables from net sales
Market size data and peers position as per best estimates of management
Broad Product Portfolio
11
Peers position
- Bajaj
- Philips
- Recold
New
Strengthening product portfolio
Small Domestic Appliances
Market Size ~ INR 50,000 million
• Launched Domestic Appliances in August 2011, to extend electrical consumer durable segment
• Leveraging existing distribution network
Garment Care Brewing Home Comfort Cooking Food Preparation Water Heaters Air Coolers
12
• Improving margins through higher sales realization
and better cost management.
• Low Debt, high assets turnover ratio.
• Low working capital due to channel financing made
available to dealers i.e. direct funding by bankers
having limited recourse on the company
Operational highlights
Balance Sheet highlights
In millions of Rupees
Financial Highlights
FY10 FY11 FY12
Net Revenue 23,714 28,817 36,156
EBIDTA 3,055 3,373 4,591
EBIDTA % 12.9% 11.7% 12.7%
Net Profit 2,282 2,421 3,054
Net Profit % 9.6% 8.4% 8.4%
CAPEX
2,140
1,420
1,373
FY10 FY11 FY12
Net Worth 11,352 13,408 16,083
Net debt 476 844 (76)
Net Fixed Assets 6,012 7,303 8,339
Investment
(Sylvania) 5,317 7,155 7,751
Net working
capital 1,041 1,534 2,661
Agenda
• Introduction
• India: Havells well positioned
• Sylvania: Global Footprint
Europe
Latin
America
14
• Sylvania is one of the leading lighting product
companies in the world.
• Full-spectrum provider of professional and
architectural lighting solutions, built on over a
century of expertise.
• Presence across five continents, 56 countries,
10,000 dealers & distributors network.
• Acquired in 2007 at an enterprise value of Euro 227
million to capitalize on brand and distribution
network.
15
Fixtures Lamps
Complete range of products
Architectural /
accent
Industrial /
commercial
Fluorescent Energy
Savings
(CFL & LED)
Incandescent Halogen High
Intensity
Discharge
(“HID”)
Others
Net
Revenue
CY2011
€ 70 mn € 78 mn € 82 mn € 74 mn € 25 mn € 28 mn € 33 mn € 52 mn
Major peers
•Zumtobel
•Philips
•Zumtobel
•Philips
•Philips
• Osram
(Siemens)
•GE
•Philips
• Osram
(Siemens)
•GE
•Philips
• Osram
(Siemens)
•GE
•Philips
• Osram
(Siemens)
•GE
•Philips
• Osram
(Siemens)
•GE
16
in millions of Euro
• Strengthen pricing discipline
• Fixed cost variabilization – increasing outsourcing from LCC
• Optimized fixed cost - Restructuring
Net Revenue & EBIDTA Margins %
Global Europe Americas
€ 128
€ 105
€ 135
€ 143
5.2%
8.2%
9.6%
9.3%
2008 2009 2010 2011
€ 495
€ 406
€ 438
€ 441
3.2%
0.0%
5.5%
8.4%
2008 2009 2010 2011
€ 340
€ 283
€ 279
€ 274
1.9%
-2.9%
3.8%
7.0%
2008 2009 2010 2011
Sylvania - Complete Turnaround
17
CY09 CY10 CY11
Net Revenue € 406 € 438 € 441
Gross Profit % 21% 26% 31%
EBIDTA € 0.5 € 24 € 37
EBIDTA % -- 5.5% 8.4%
Exceptional
cost € 54 € 4 --
Net Profit € (73) € (7) € 8
CY09 CY10 CY11
Net debt € 117 € 138 €126
Net Fixed
Assets* € 49 € 42 € 37
Goodwill € 53 € 53 € 53
Net working
capital € 109 € 153 €145
Operational highlights Balance Sheet highlights
* before fair value adjustments
in millions of Euro
Sylvania - Financial Highlights
• Refinancing due in 2012 & 2013 has
been completed
• New debt to be paid by May 2016
18
FY10 FY11 FY12
Net Revenue 51,626 56,126 65,182
EBIDTA 3,114 5,489 6,780
As % to NR 6.0% 9.8% 10.4%
Net Profit after
exceptional
items (2,241) 3,034 3,704
FY10 FY11 FY12
Net Worth 4,004 6,537 9,556
Net Debt 9,183 9,395 7,934
Net fixed
assets 9,210 10,204 10,946
Net Working
Capital 8,734 10,402 11,883
in millions of Rupees
Operational highlights
Balance Sheet highlights
Consolidated performance
19
• Strong Brand & Channel: Emerged as a trade focused and trade friendly consumer
brand.
• Margins Focused: Driving margins through product innovation and product mix.
• Sylvania Turn Around: Generating profits, improving margins.
• Exploring New Markets: Geographical expansion in Africa, China & ASEAN region.
• Cross Selling: Introduced Havells brand in UK leveraging upon established Sylvania
channel.
Summary
20
The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall
be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating
to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the
information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly
or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The
information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would
becontrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation /
advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for
any questions or clarifications at our end.
This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our
general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and
our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words ‘may,
will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue’ and similar expressions identify
forward looking statements. Actual results, performances or events may differ materially from these forward-looking statements
including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of
factors, including without limitation future changes or developments in our business, our competitive environment, technology and
application, and political, economic, legal and social conditions. It is cautioned that the foregoing list is not exhaustive This presentation
is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any
investment decision.
Disclaimer
doc_822652871.pdf
US$ 1.2 billion Electrical Company, globally
• Founded in 1971 with the acquisition of ‘HAVELLS’
brand
• Started in India, expanded globally through acquisition,
acquired Sylvania* brand in 2007
• Expanded from a Switchgear company to Consumer
Electricals - backyard to living room
• Strong Brand, wide distribution channel and broad
product portfolio provide competitive strength
• Expanding in new geographies and new products in
existing markets
Havells India Limited
June 2012
• US$ 1.2 billion Electrical Company, globally
• Founded in 1971 with the acquisition of ‘HAVELLS’
brand
• Started in India, expanded globally through acquisition,
acquired Sylvania* brand in 2007
• Expanded from a Switchgear company to Consumer
Electricals - backyard to living room
• Strong Brand, wide distribution channel and broad
product portfolio provide competitive strength
• Expanding in new geographies and new products in
existing markets
Introduction
2
US$ 1.2 billion company
EUROPE
INDIA
LATIN AMERICA
CHINA
SOUTH EAST ASIA
*Globally except for North America, Australia, NZ
3
• Focus on branded products through
Distribution channel.
• Broaden product range as consistent
with Distribution channel which further
gears up cross selling.
• Create sustainable relationship with
channel through consistent policies,
transparency and growth initiatives.
• Brand reinforcement through
continuous engagement with end users.
Core Strategy
Products
Distribution
Brand
4
Europe
? Major Presence through Sylvania
? 27% of Consolidated Revenue (62% of Sylvania)
? 4 Manufacturing Units & distribution across Europe
India
? Major Presence through Havells India
? 56% of Consolidated Revenue
? 15 Manufacturing Units
? Strong Distribution Channel
New Targeted Markets: China, ASEAN region
Americas
? Presence through Sylvania mainly in South America
and Mexico
? 17% of Consolidated Revenue (38% of Sylvania)
? 2 Manufacturing Units
Global Footprint
5
Shareholders
• Promoters hold 61.6%, single business focus.
• Key institutional investors includes:
?Warburg Pincus
?Sequoia capital
?Nalanda Capital
0
100
200
300
400
500
600
Mar-05 Oct-05 May-06 Dec-06 Jul-07 Feb-08 Sep-08 Apr-09 Nov-09 Jun-10 Jan-11 Aug-11 Mar-12
Havells Closing Price vs NSE Closing Price
(Adjusted for bonuses & issue)
Havells Closing Price
• Introduction
• India: Havells well positioned
• Sylvania: Global Footprint
Agenda
7
• Competent distribution network of 5,600 dealers/ wholesalers and
100,000 retailers across India.
• High regard and strong relationship with dealers/distributors,
nurturing over 4 decades.
• Leading brand in the electrical consumer products industry.
• Aggressive brand building via media, premium positioned
• Broad product portfolio, no. 1- 4 in each category
• World-class manufacturing units.
• Havells Galaxies - One stop shop, initiative to reach consumer
directly, increasing from 140 to 200 in next one year.
Havells – India
Conceived as E-FMCG
8
Consistent outperformer
* Growth on y-o-y basis (except Q3FY09 due to one time loss due to sharp fall in metal price)
in Rs crore
** based on average excluding investment
• Consistent Growth – 10 years CAGR
?Revenue - 34%
?EBIDTA - 36%
?Profit after Tax - 43%
? 34 quarters of consecutive growth*
? As on March 2012 - Net debt Rs. (76) mn
• High Returns on capital **
? Return on capital employed – 52%
? Return on equity – 42%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
0
500
1000
1500
2000
2500
3000
3500
4000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Net Sales EBIDTA(%)
0%
10%
20%
30%
40%
50%
60%
02 03 04 05 06 07 08 09 10 11 12
RoACE RoAE
9
Domestic switchgear – MCB
Market Size ~ INR 16,000 million
Market share ~ 28% (15% in 2006)
# 1
Peers position
- Legrand (MDS &
Indo Asian)
- Schneider
Modular Switches
Market Size ~ INR 14,000 million
Market share ~ 15% (5% in 2006)
# 2
Peers position
- Matsushita/ Anchor
Roma
- Legrand
# 5
Peers position
- L&T
- Schneider
- Siemens
- ABB
LV Industrial switchgear
Market Size ~ INR 30,000 million
Market share ~ 6% (7% in 2006)
*Contribution margins are derived after deducting direct cost and direct selling variables from net sales
Market size data and peers position as per best estimates of management
Broad Product Portfolio
# 2
Peers position
Cable Wire
- Polycab - Finolex
- KEI - Polycab
Cable & Wire
Market Size ~ INR 170,000 million
Market share ~ 9% (6% in 2006)
Lighting - CFL
Market Size ~ INR 20,000 million
Market share ~ 11% (10% in 2006)
# 2
Peers position
- Philips
- Osram
Lighting - Luminaires
Market Size ~ INR 25,000 million
Market share ~ 12% (3% in 2006)
# 4
Peers position
- Philips
- Bajaj
- Crompton
- Wipro
# 3
Peers position
- Crompton
- Usha
- Orient
Electrical Consumer Durable - Fans
Market Size ~ INR 38,000 million
Market share ~ 15% (6% in 2006)
10
*Contribution margins are derived after deducting direct cost and direct selling variables from net sales
Market size data and peers position as per best estimates of management
Broad Product Portfolio
11
Peers position
- Bajaj
- Philips
- Recold
New
Strengthening product portfolio
Small Domestic Appliances
Market Size ~ INR 50,000 million
• Launched Domestic Appliances in August 2011, to extend electrical consumer durable segment
• Leveraging existing distribution network
Garment Care Brewing Home Comfort Cooking Food Preparation Water Heaters Air Coolers
12
• Improving margins through higher sales realization
and better cost management.
• Low Debt, high assets turnover ratio.
• Low working capital due to channel financing made
available to dealers i.e. direct funding by bankers
having limited recourse on the company
Operational highlights
Balance Sheet highlights
In millions of Rupees
Financial Highlights
FY10 FY11 FY12
Net Revenue 23,714 28,817 36,156
EBIDTA 3,055 3,373 4,591
EBIDTA % 12.9% 11.7% 12.7%
Net Profit 2,282 2,421 3,054
Net Profit % 9.6% 8.4% 8.4%
CAPEX
2,140
1,420
1,373
FY10 FY11 FY12
Net Worth 11,352 13,408 16,083
Net debt 476 844 (76)
Net Fixed Assets 6,012 7,303 8,339
Investment
(Sylvania) 5,317 7,155 7,751
Net working
capital 1,041 1,534 2,661
Agenda
• Introduction
• India: Havells well positioned
• Sylvania: Global Footprint
Europe
Latin
America
14
• Sylvania is one of the leading lighting product
companies in the world.
• Full-spectrum provider of professional and
architectural lighting solutions, built on over a
century of expertise.
• Presence across five continents, 56 countries,
10,000 dealers & distributors network.
• Acquired in 2007 at an enterprise value of Euro 227
million to capitalize on brand and distribution
network.
15
Fixtures Lamps
Complete range of products
Architectural /
accent
Industrial /
commercial
Fluorescent Energy
Savings
(CFL & LED)
Incandescent Halogen High
Intensity
Discharge
(“HID”)
Others
Net
Revenue
CY2011
€ 70 mn € 78 mn € 82 mn € 74 mn € 25 mn € 28 mn € 33 mn € 52 mn
Major peers
•Zumtobel
•Philips
•Zumtobel
•Philips
•Philips
• Osram
(Siemens)
•GE
•Philips
• Osram
(Siemens)
•GE
•Philips
• Osram
(Siemens)
•GE
•Philips
• Osram
(Siemens)
•GE
•Philips
• Osram
(Siemens)
•GE
16
in millions of Euro
• Strengthen pricing discipline
• Fixed cost variabilization – increasing outsourcing from LCC
• Optimized fixed cost - Restructuring
Net Revenue & EBIDTA Margins %
Global Europe Americas
€ 128
€ 105
€ 135
€ 143
5.2%
8.2%
9.6%
9.3%
2008 2009 2010 2011
€ 495
€ 406
€ 438
€ 441
3.2%
0.0%
5.5%
8.4%
2008 2009 2010 2011
€ 340
€ 283
€ 279
€ 274
1.9%
-2.9%
3.8%
7.0%
2008 2009 2010 2011
Sylvania - Complete Turnaround
17
CY09 CY10 CY11
Net Revenue € 406 € 438 € 441
Gross Profit % 21% 26% 31%
EBIDTA € 0.5 € 24 € 37
EBIDTA % -- 5.5% 8.4%
Exceptional
cost € 54 € 4 --
Net Profit € (73) € (7) € 8
CY09 CY10 CY11
Net debt € 117 € 138 €126
Net Fixed
Assets* € 49 € 42 € 37
Goodwill € 53 € 53 € 53
Net working
capital € 109 € 153 €145
Operational highlights Balance Sheet highlights
* before fair value adjustments
in millions of Euro
Sylvania - Financial Highlights
• Refinancing due in 2012 & 2013 has
been completed
• New debt to be paid by May 2016
18
FY10 FY11 FY12
Net Revenue 51,626 56,126 65,182
EBIDTA 3,114 5,489 6,780
As % to NR 6.0% 9.8% 10.4%
Net Profit after
exceptional
items (2,241) 3,034 3,704
FY10 FY11 FY12
Net Worth 4,004 6,537 9,556
Net Debt 9,183 9,395 7,934
Net fixed
assets 9,210 10,204 10,946
Net Working
Capital 8,734 10,402 11,883
in millions of Rupees
Operational highlights
Balance Sheet highlights
Consolidated performance
19
• Strong Brand & Channel: Emerged as a trade focused and trade friendly consumer
brand.
• Margins Focused: Driving margins through product innovation and product mix.
• Sylvania Turn Around: Generating profits, improving margins.
• Exploring New Markets: Geographical expansion in Africa, China & ASEAN region.
• Cross Selling: Introduced Havells brand in UK leveraging upon established Sylvania
channel.
Summary
20
The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall
be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating
to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the
information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly
or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The
information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would
becontrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation /
advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for
any questions or clarifications at our end.
This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our
general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and
our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words ‘may,
will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue’ and similar expressions identify
forward looking statements. Actual results, performances or events may differ materially from these forward-looking statements
including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of
factors, including without limitation future changes or developments in our business, our competitive environment, technology and
application, and political, economic, legal and social conditions. It is cautioned that the foregoing list is not exhaustive This presentation
is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any
investment decision.
Disclaimer
doc_822652871.pdf