#1LMC MONTE CARLO MONTE CARLO mc Its the way you make me feel MONTE CARLOR MONTE CARLOUR MONTE CARLO MONTE CARLO MONTE CARLOS Q1 FY17 INVESTOR PRESENTATION AUGUST 2016#2DISCUSSION SUMMARY MONTE CARLO/mmc Its the way you make mil t . Q1 FY17 RESULTS HIGHLIGHTS • OPERATIONAL HIGHLIGHTS FINANCIALS • COMPANY OVERVIEW - ABOUT US • UNDERSTANDING OUR BUSINESS MODEL • SUSTAINABLE COMPETITIVE ADVANTAGES • FUTURE GROWTH STRATEGY • ANNEXURE MONTE CARLO careful boy! feel denim MONTE CARLO AlPha MONTE CARLO#3Q1 FY17 - RESULTS HIGHLIGHTS Adjusted Revenues* 688.8 542.8 16.5%* Q1 FY17 YoY ANALYSIS MONTE CARLO/mmc Its the way you make mc feel OPERATING EBIDTA & EBIDTA % PAT & PAT Margin % 756.4 632.6 13.9% 12.5% 2.2% 96.1 1.4% 94.8 2.7% 20.4 14.8 37.8% Q1 FY16 Q1 FY17 Q1 FY16 Q1 FY16 Q1 FY17 Q1 FY17 Revenues I Adjusted Revenues* EBIDTA EBIDTA Margin % PAT Adjusted PAT Margin % Note - EBIDTA W/O Other Income Adjusted Revenues* - Revenues have been adjusted excluding the sale of raw material (Fabric & Yarn), Fabric & Yarn sales: Q1 FY17 - Rs. 121.4 mn, Q1 FY16 - Rs. 144.2 mn 3#4Q1 FY17 - FINANCIAL HIGHLIGHTS MONTE CARLO/mmc Its the way you make mil t feel FINANCIAL UPDATE - ■ Q1 FY17 Revenues from Operations increased by 9.8 % to Rs. 756.4 mn. However, excluding the sale of raw material (Fabric & Yarn), Fabric & Yarn sales: Q1 FY17 - Rs. 121.4 mn, Q1 FY16 - Rs. 144.2 mn, Adjusted Revenues increased by 16.5% to Rs. 632.6 mn. Gross Margins remained stable at 71.2%. ■ Overall Growth Outlook is stable and positive due to good visibility on the Order book. ■ Q1 FY17 EBIDTA w/o Other income remained flat at Rs. 94.8 mn. EBIDTA Margin was 12.5%. ■ Advertisement and Marketing expenses increased by 24.8% to Rs. 100.1 mn as compared to Rs. 80.2 mn YoY. ■ The current strategy is to establish our Brand visibility on a Pan India basis along with increased focus on Southern & western India, therefore the increase in advertising and marketing expense should be seen as an investment which would lead to long term benefits of enhancing our Overall brand recall. The management feels that the sale from the southern and western India will increase to 10% of the overall revenues in the FY17 from 8% in FY16 which shows the acceptance and good growth potential of selling our products in the said region. ■ No Major capex planned for next 2 years. Therefore, Positive Operating leverage expected as the production gains scale during the course of the year. ■ Q1 FY17 PAT increased by 37.8% at Rs. 20.4 mn vs Q1 FY16 PAT of Rs. 14.8 mn due to Lower depreciation and moderating Interest expenses. ☐ 7 New EBO stores opened during the quarter with a focus on Central and Southern regions. Stores opened in Karnataka, Bihar, Chhattisgarh, Madhya Pradesh, Himachal Pradesh, Punjab and NCR. ☐ Foray into the accessories business in leather products. ■ Update on Marketing & Branding - Links for the new Summer Ad campaign launched during the quarter – • Monte Carlo - Summer Collection (Full version Ad) -You Tube Link Monte Carlo - Alpha Summer Collection - You Tube Link Monte Carlo - Tweens Collection (Kids Segment) - You Tube Link 4#5OPERATIONAL HIGHLIGHTS REVENUE ANALYSIS - SEGMENT WISE - Segment wise Revenues – Product Category wise (In Rs mn) MONTE CARLO THE Its the way you make mil t feel Total Revenues ** Q1 FY17 Q1 FY16 FY16 FY15 FY14 FY13 FY12 632.6 542.8 5,664.8 5,271.8 4,566.7 3,686.0 3,346.9 % Revenue Share - Segment wise Woollen Segment -13.3% -2.1% 34.2% 34.5% 36.5% 42.7% 41.6% Cotton Segment 87.6% 73.4% 51.3% 52.6% 50.8% 47.5% 57.3% Home Furnishings 19.0% 25.4% 9.7% 8.4% 8.0% 6.5% 0.1% Kids 6.7% 3.3% 4.9% 4.6% 4.7% 3.3% 1.0% Segment wise Revenues – Channel wise (In Rs mn) Total Revenues** Q1 FY17 632.6 Q1 FY16 FY16 FY15 FY14 FY13 FY12 542.8 5,664.8 5,271.8 4,566.7 3,686.0 3,346.9 % Revenue Share -Channel wise MBO including NCS / Institutional 63.9% 66.3% 63.1% 63.5% 65.0% 59.6% 60.2% Retail Outlets - EBO - COCO 4.1% 4.7% 5.0% 5.5% 5.0% 1.8% 7.7% Retail Outlets -EBO - FOFO 32.0% 29.0% 31.9% 30.9% 30.0% 38.5% 32.1% MBO Multi Brand Outlet EBO Exclusive Brand Outlet Note ** - Revenues from Core products COCO Company own Company operated FOFO Franchise own Franchise operated 5#6OPERATIONAL HIGHLIGHTS REVENUE ANALYSIS - REGION WISE MONTE CARLO/mmc Its the way you make Til t feel Segment wise Revenues-Region wise % Revenue Share - Region wise North East Central South | | West Overseas Q1 FY17 Q1 FY16 FY16 FY15 FY14 FY13 42.7% 49.0% 52.7% 51.3% 58.8% 57.1% 32.3% 32.1% 25.9% 27.1% 25.1% 22.0% 13.4% 11.7% 13.1% 13.8% 9.0% 12.7% 5.2% 5.3% 3.6% 3.1% 2.7% 3.7% 6.2% 2.0% 4.4% 4.6% 4.3% 4.0% 0.2% 0.0% 0.2% 0.1% 0.2% 0.5% STRATEGIC FOCUS TO REDUCE DEPENDENCE ON NORTH REGION AND IMPROVE MARKET PRESENCE AND MARKET SHARE ACROSS PAN INDIA. 6#7OPERATIONAL HIGHLIGHTS STORE NETWORK ANALYSIS MONTE CARLO THE Its the way you make mi t feel Total Network details • Total Number of EBOS - 228, spread across Pan India. Major Presence in North, Central & East. As on Jun-16 • Increasing Footprint in South. • Have strong Distribution presence across more than 2,200+ Multi- Brand Outlets pan India. No of Own EBO No of Franchise EBO 21 207 • Have presence in 164 National chain store Outlets No of MBO 2,200+ . Presence through 5 National Retail chains such as - Reliance Retail, Shoppers stop, Pantaloons, Metro, Central. No of NCS Presence 164 - Retail store Exclusive Brand Outlets Network details (EBO) Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Mar-15 Mar-14 Mar-13 Mar-12 Existing - No of Stores New Opened 223 222 218 220 214 214 166 152 144 7 3 11 4 6 6 28 20 12 Closed 2 2 7 6 0 6 1 6 4 Total Number of Retail outlets 228 223 222 218 220 214 193 166 152 7#8FINANCIALS P&L STATEMENT Particulars (in million) Net Sales* Other Operating Income Total Income from Operations Cost of Goods Sold Gross Profit Gross Margin Personnel Expenses Advertisment Expenses Other Expenses EBITDA MONTE CARLO THE Its the way you make mil t feel Q1 FY 17 Q1 FY 16 % Change FY 16 754.0 687.0 9.75% 6,199.9 2.4 1.7 37.6% 15.4 756.4 688.8 9.82% 6,215.3 217.9 189.0 15.3% 3,118.0 538.5 499.7 7.75% 3,097.3 71.2% 72.6% (137bps) 49.8% 121.2 117.5 3.20% 463.8 100.1 80.2 24.8% 348.5 222.3 206.0 7.9% 1051.9 94.8 96.1 -1.3% 1233.2 EBITDA Margin 12.5% 14.0% (141bps) 19.9% Other Income 29.4 37.5 -21.6% 139.1 EBITDA Margin (incl. Other Income) 16.4% 19.4% (298bps) 22.1% Depreciation 59.4 70.2 -15.4% 292.7 Interest Expense 33.5 35.6 -6.0% 162.4 PBT 31.3 27.7 12.8% 901.0 Taxes 10.8 12.9 -16.0% 311.6 PAT 20.4 14.8 37.9% 589.4 PAT Margin 2.7% 2.2% 50bps 9.5% EPS 0.94 0.68 38.2% 27.12 *Includes sale of Fabrics & Raw Material - Fabric & Yarn sales: Q1 FY17 - Rs. 121.4 mn, Q1 FY16 - Rs. 144.2 mn, Adjusted Revenues increased by 16.5% to Rs. 632.6 mn from Rs. 548.8 mn. 8#9COMPANY OVERVIEW - ABOUT US BRIEF OVERVIEW OUR PEDIGREE • OUR BRAND & PRODUCT PORTFOLIO MONTE CARLO Its the way you makc mil t feel Launched in 1984 as an exclusive woollen brand by Oswal Woollen Mills Limited ("OWML"), "Monte Carlo" has emerged as one of the leading Indian apparel brands. Experienced management team led by Mr. Jawahar Lal Oswal who has over 50 years experience in the textile and woollen industry and with Mr. Sandeep Jain Executive Director. 'Monte Carlo' has been recognized as a 'Superbrand' for woollen knitted apparel in each edition of Consumer Superbrands India since its first edition in September 2004. Launched as an exclusive woollen brand, Company has successfully diversified with a comprehensive line of woollen, cotton & cotton blended, knitted and woven apparel and home furnishing under the 'Monte Carlo' brand • Branded apparel business was demerged into Monte Carlo Fashions Limited (MCFL) in 2011. Ownership of the brand 'Monte Carlo' is with the Company 'Monte Carlo' is the flagship brand with a portfolio of woollen apparel and cotton and cotton blended apparel Have Launched different ranges under the Umbrella Brand "Monte Carlo" - 'Platine' is our premium range for men, 'Denim' is our exclusive range for denim apparel, 'Alpha' is our exclusive range for women and 'Tweens' is our exclusive range for kids. OUR REACH & PRESENCE Brands distributed through a network of Monte Carlo EBOS and MBOS including national chain store. Strong distribution network and wide presence across the country. In south & west the company has adopted distribution system through distributors. MBOS - Products are supplied through 21 exclusive commission agents to over 2,200+ MBOs on outright basis. EBOS COCO - 21 stores are leased, managed by company personnel. Inventory is owned by MCFL EBOS - FOFO - 207 EBOS are on Franchise basis. Products are supplied on Pre-order Outright basis. Also supplying through National Chain Stores for 5 Retail chains. E-commerce presence through own portal montecarlo.in and tie-ups with Digital platforms such as Flipkart, Snapdeal etc Consolidated Revenues, EBITDA and PAT were Rs. 6,215.3 mn, Rs. 1,233.2 mn and Rs.589.4 mn in 2016 Virtually debt-free balance sheet with Total Debt to Equity at 0.2 x as of Mar-16. Strong Cash Balance at Rs. 1,007.8 mn as on Mar-16. (Excluding Non Current investments of Rs. 450.1 mn) OUR FINANCIALS • Healthy Return Ratios: 2016 ROCE of 17.3%, Cash Adjusted ROCE of 22.2% and ROE of 13.7%. • Virtually the business model has no Inventory risk and credit risk, thus protected from normal hazards of Branded Apparel Business 9#10COMPANY OVERVIEW - ABOUT US SHAREHOLDING STRUCTURE Market Data Market Capitalization (Rs Mn) No. of shares outstanding (Mn) Face Value (Rs.) 52 week High-Low (Rs.) Source BSE MONTE CARLO THE Its the way you make mil t feel Key Institutional Investors As on 09.08.2016 (BSE) Kanchi Investments Ltd (Samara Capital) % Holding 10.94 9,922.0 Goldman Sachs India 2.34 ICICI Prudential Life Insurance 2.28 21.73 Aditya Birla Pvt Eqity Trust 1.57 10.00 Birla Sun Life Trustee Co. 1.34 572.0-337.0 DB International (Asia) Ltd Source Company / BSE 1.30 June-16 Shareholding 35.75% Promoter 64.25% Public 10#11COMPANY OVERVIEW - ABOUT US FINANCIAL HIGHLIGHTS MONTE CARLO THE Its the way you make mil t feel REVENUES CAGR: 13.7% EBITDA & EBITDA Margin PAT & PAT Margin 13.3% 22.0% 6,215 21.2% 12.1% 5,826 19.9% 10.8% 17.5% 18.4% 10.3% 9.5% 5,031 1,230 1,233 4,044 3,722 598 589 927 818 710 || 544 495 489 FY 12 FY13 FY14 FY15 FY16 FY12 FY13 EBITDA (mn) FY14 FY15 EBITDA Margin % FY16 FY12 FY13 PAT (mn) FY14 FY15 PAT Margin % FY16 0.43 36.8% LEVERAGE & RETURN RATIOS X 37.0% 32.8% 29.9% 24.2% 0.27 EBO-STORE GROWTH REVENUE-SEGMENT WISE % 267 3:9 4.6 4.9 8.4 9.6 223 214 193 31.5% 166 61.7 30.0% 54.7 X 0.31 X 0.31 152 56.2 52.6 51.6 20.5% 20.3% 20.9% 22.2% 15.7% 17.3% 0.22 15.1% 194 202 13.7% 175 135 149 38.3 36.6 33.1 34.5 33.9 18 20 21 FY 12 FY 13 FY 14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 ROCE Cash Adj ROCE ROE -X-D/E No of Own EBO No of Franchise EBO Wollen Cotton I Home Furnishing Kids Source - RGP Note - ROE: PAT/Avg. Equity, ROCE: EBIT/Avg. Capital Employed [(Capital Employed = Equity + Total Debt), (Cash Adj. Capital Employed = Equity + Total Debt - C&CE)] 11#12COMPANY OVERVIEW - ABOUT US OUR PRODUCT PORTFOLIO Woollens MONTE CARLO Cottons MONTE CARLO Sweaters Jackets, Shawls AlPha MENITE CARLO T-shirt, Shirts, Trousers denim MONTE CARLO Kids MIC TWEENS MONTE CARLO Sweaters Jackets, T-shirt, Sweat Shirts Economy range C&D CLOAK & DECKER REJUVENATE YOUR STYLE STATEMENT T-Shirts, Sweatshirts, Thermal-wear Home Furnishing Range MONTE CARLO Mink Blankets, Bed Sheets, Quilts MONTE CARLO/mmc Its the way you make Til t feel#13COMPANY OVERVIEW - ABOUT US OUR RETAIL PRESENCE & RETAIL NETWORK Monte Carlo exclusive brand outlets (EBO)* -Total 228 EBOS with presence across India. Mainly into North, East & Central J&K 4 HP Punjab 8 38 Haryana Uttrakhand 6 21 Delhi: 16 Rajasthan 19 UP 27 Bihar 32 Assam: 1 Nagaland: 1 5 MP 9 Jharkha nd Manipur: 1 Chhattisgarh WB 7 Tripura 1 Maharashtra 4 Orissa 2 Gujarat Karnataka 5 Tamil Nadu 2 Over 20 stores 10 to 20 stores Less than 10 stores • MONTE CARLO Its the way you make mil t feel Brands distributed through a network of Monte Carlo EBOS and MBOs including national chain stores MBOS - Products were supplied by 21 exclusive commission agents to 2,200+ MBOS on outright basis EBOS - Company-Owned-Company-Operated With a focus to develop brand equity by opening stores at High streets at Premium Retail Locations and showcasing an extensive range of products. 21 stores are leased and managed by company personnel. Inventory is owned by MCFL EBOS - Franchisee-Owned-Franchisee-Operated Fit-outs layout and fixtures defined by MCFL. But franchisees lease premises for stores and bear staff and operational costs With no major capex from the company side, the format is highly scalable NCS - Products are also supplied to 164 National chain stores (NCS) on Consignment / Outright basis. Supply to 5 Retail chains such as Reliance retail, Shopper stop, Central, Pantaloons, Metro. Entered into distribution agreements with online sales through digital commerce platforms MBO Multi Brand Outlet EBO Exclusive Brand Outlet COCO Company own Company operated FOFO Franchise own Franchise operated 13#14COMPANY OVERVIEW - ABOUT US OUR RETAIL PRESENCE THROUGH E-COMMERCE MONTE CARLO/mmc Its the way you make mc feel RETAIL PRESENCE THROUGH E-COMMERCE - . • Recently started online e-commerce sale through our own portal www.montecarlo.in as well as tie-ups with several online portals. The e-Retail portal and online business completely belongs to the company. Have Entered into distribution agreements with some of the leading Indian digital commerce platforms for sale of our products online. SHOP BY PRICE Rs. 675 COLOR Rs. 675 to Rs. 1999 CATEGORIES OWN PORTAL - WWW.MONTECARLO.IN Rs. 1999 OFFER: ADDITIONAL 10% OFF ON PREPAID ORDERS. SELECT PAYU MONEY AT PAYMENT PAGE Call Or +91-81969-22333, +91 161-504-8700 [9AM TO 7PM] MONTE CARLO SEARCH Q MEN'S WEAR WOMEN'S WEAR KIDS WEAR CLOAK & DECKER Home / Men's Weer / Shirts-Mens SHIRTS-MENS [29] Shirts Basic Shirts MONTE CARLO MEN'S K MONTE CARLO MEN'S CA MONTE CARLO MEN'S CA. Designer Rs. 1,999 Rs. 1,499 Rs. 1,599 Shirts CREATE ACCOUNT LOGIN SHOP BY PRODUCTS Sort By: Position v MONTE CARLO MEN'S CA.. Rs. 1,599 TIE-UPS WITH ONLINE PLATFORMS flipkart.com The Online Megastore JABONG.COM snapdeal yebhi.com indiatimes Shopping 14#15COMPANY OVERVIEW - ABOUT US IN-HOUSE DESIGN & PRODUCTION CAPABILITIES IN-HOUSE DESIGN & PRODUCT DEVELOPMENT • • . In-House dedicated design team of over 30 professionals which travels and follows the emerging global fashion trends for creation of the designs for our new collections. Focus on developing new products, improving existing ones and forecasting fashion trends. In addition, our Exclusive Commissioned Agents have direct access to the dealers, distributors and retailers in India and they conduct regular market surveys to understand consumer demand and feedback. MANUFACTURING CAPABILITIES - • Three manufacturing facilities in Ludhiana, Punjab :- • One for woollen apparel products . • Two for cotton apparel products. • The manufacturing facilities include facilities for product development, a design studio and sampling infrastructure. Almost all woollen knitted products are manufactured in-house. Recently also commenced in-house manufacturing of some of our cotton t-shirts and thermals in April 2014. For the remaining cotton and cotton-blended products, we follow an asset-light model by outsourcing the production to a network of job work entities with which we enjoy a long-term relationship. MONTE CARLO Its the way you make Til t feel SSA 112 SSA 112 15#16COMPANY OVERVIEW UNDERSTANDING OUR BUSINESS MODEL DESIGN & PRODUCT DEVELOPMENT RAW MATERIAL PROCUREMENT APPAREL PRODUCTION MONTE CARLO THE Its the way you make BRANDING & DISTRIBUTION Til t feel • COMPLETELY IN-HOUSE DESIGN TEAM & DESIGN STUDIO PRODUCT DEVELOPMENT SAMPLING INFRASTRUCTURE In-House 30 Member dedicated design team Develop new products, improve existing ones and forecast fashion trends. Commissioned agents have direct access to the dealers, distributors and retailers in India and they conduct regular market surveys to understand consumer demand and feedback OWML Oswal Woollen Mills Ltd. NSML Nahar spinning Mills Ltd IWS (an international body for regulating the spinning and hosiery industry COMPLETELY OUTSOURCED LEVERAGING THE NAHAR ECO- SYSTEM - OWML - The Company is one of the biggest producers of worsted Woollen yarns in the country. OWML yarn products have been exhibited as the best products by the International Wool Secretariat (IWS) Ensures Access to high quality raw material % of Raw material procured from OWML 50.3 % % of Raw material procured from NSML - 18.1% INDEPENDENT AUDITOR CONSULTANT FOR RELATED PARTY TRANSACTIONS TRANSFER PRICING MONITORING - GRANT THORNTAN The transfer pricing and related party transactions are being monitored by Grant Thortan in addition to the statutory audit • • • . IN-HOUSE + OUTSOURCED THREE MANUFACTURING FACILITIES IN PUNJAB - One for woollen apparel products & two for cotton apparel products 595 knitting machines in our woollen manufacturing facility. Almost all our woollen knitted products are manufactured in-house Also recently commenced in-house manufacturing of some of cotton t- shirts and thermals in April 2014. ASSET LIGHT OUTSOURCING MODEL - For the remaining cotton and cotton-blended products, we follow an asset-light model Outsourcing the production to a network of job work entities with which we enjoy a long-term relationship. BRAND MANAGEMENT COMPLETLY IN-HOUSE Ownership of the 'Monte Carlo' brand is with the Company. 'Monte Carlo' is the flagship brand of our Company which is a market leader. 'Monte Carlo' is the umbrella brand under which the company has successfully diversified with different ranges such as Platine, Alpha, Tweens and Cloak & Decker. Control over Brand Positioning, Brand Communication strategy and Distribution channel strategy. DISTRIBUTION - EBO + MBO + NCS + E-COMMERCE Brands distributed through a network of Monte Carlo EBOS and MBOS including national chain stores Distribution Model MBO No of Outlets 2,200+ EBO-COCO 21 EBO - FOFO 207 NCS 164 16#17• COMPANY OVERVIEW UNDERSTANDING OUR BUSINESS MODEL JANUARY UNDERSTANDING WINTER SEASON SEGMENT FEBRUARY - MARCH APRIL MAY TILL JULY MONTE CARLO fmc Its the way you make Til t feel AUGUST ONWARDS Production for these specific designs for which orders are placed, commences from the month of May. • Start dispatching our winter wear products to the 'Monte Carlo Exclusive Brand Outlets' and MBOS from August onwards. Peak Inventory in September, Product Development & Sampling Process Design process is finalised. Sample sets sent to our Commissioned Agents. (CA) Commissioned Agents take these sample sets to various cities for display and invite the dealers and distributors Company Organizes fashion shows to showcase proposed products to the MBOs. CA procure orders from the MBOS and act as an interface between us and the MBOS. These CA are Exclusive to the Company. • The dealers and distributors of the MBOS place orders for our products with the CA • Pre Booking of Orders from MBOS and Franchise EBOS • UNDERSTANDING SUMMER SEASON SEGMENT AUGUST • Separate Dedicated Design team for non- winter products Design process is finalised. Sample sets sent to our Commissioned Agents. (CA) SEPTEMBER- OCTOBER Commissioned Agents take these sample sets to various cities for display and invite the dealers and distributors Company Organizes fashion shows to showcase proposed products to the MBOS. • OCTOBER The dealers and distributors of the MBOS place orders for our products with the CA NOVEMBER TILL JANUARY • Production for these specific designs for which orders are placed, commences from the month of November. • • • CA procure orders from the MBOS and act Pre Booking of Orders as an interface between us and the MBOs. These CA are Exclusive to the Company. from MBOS and Franchise EBOS Designing is an ongoing process throughout the year for both cotton and woollen garments. Production of plain and basic designs continue through out the year for both Woollen and cotton segments FEBRUARY ONWARDS Start dispatching our non- winter wear products to the 'Monte Carlo Exclusive Brand Outlets' and MBOs from August onwards. 17#18COMPANY OVERVIEW UNDERSTANDING SEASONALITY MONTE CARLO Its the way you make Til t feel Total Revenues (Rs. % of Revenues in Avg. Ticket price (Rs.) Mn) Third Quarter FY 2012 3,722 53.6 % Winter wear - Sweater, Jackets & Cardigans ~2000 FY 2013 4,044 59.9% Shirts ~1000 FY 2014 5,037 53.4 % Denim ~900 FY 2015 5,826 54.4% Trouser ~900 FY 2016 6,215 55.3% T-shirt ~600 • Winter clothing usually comprises of high-ticket products, with approximately 4 months of winter revenues comparable to 8 months of summer business Significant amount of revenue generated primarily during the third quarter of each fiscal year. • The seasonality is primarily because the sales of our winter products which includes sweaters, jackets, cardigans and sale of certain cotton and cotton-blended products such as cotton jackets, suits, sweat shirts, full sleeve t- shirts and shirts in the winter mainly occurs between October and January. • Winter products are typically higher in value in terms of production cost as well as sales revenue, and accordingly generate higher revenue, in comparison with the non-winter products. 18#19SUSTAINABLE COMPETITIVE ADVANTAGE STRONG BRAND & BRAND RECALL MONTE CARLO mc Its the way you make mil t feel • The strength of our brand 'MONTE CARLO' has significantly contributed to the success of our business. The Ownership of the 'Monte Carlo' brand as well as all the sub-brand ranges are the registered trademarks and belong to the Company. Monte Carlo enjoys significant premium and brand recall on a pan-India basis MONTE CARLO/mc Its the way you make me • Leading Indian Apparel brand by revenue. 2014 - as per Technopak report AMC feel • As per the Technopak Report, 2014, we are the leading woollen knitted apparel brand in India in the premium and mid-premium segment. • • • . In 2014, Monte Carlo was honoured as one of ASIA'S BEST MARKETING BRANDS by World Consulting & Research Corporation (WCRC) MONTE CARLO' has been recognized as a 'Superbrand' for woollen hosiery garments since September 2004 by International Society for Superbrands. Introduced successfully a number of ranges under the umbrella brand and seek to build its brand-equity based on new products Showcases our ability to anticipate, identify and respond to changing fashion trends in a timely manner. Scale of our business provides us the ability to increasingly focus on branding and promotion to further increase our visibility and market share across India MONTE CARLO RANGES LAUNCHED UNDER THE BRAND - "MONTE CARLO" denim MONTE CARLO AlPha C&D CLOAK & DECKER REJUVENATE YOUR STYLE STATEMENT MC TWEENS MONTE CARLO 19#20SUSTAINABLE COMPETITIVE ADVANTAGE WELL DIVERSIFIED PRODUCT MIX • Launched as an exclusive woollen brand, the Company now offers a comprehensive line of woollen, cotton & cotton blended, knitted and woven apparel and home furnishing under the 'Monte Carlo' brand. The woollen and woollen blended product category contributed 34% of revenues in FY16. Over last 3 years, New ranges have been successfully launched under the Umbrella Brand "Monte Carlo": - An exclusive women's wear range 'Alpha' • Kids wear range 'Tweens' - for age group 7-13' • Premium men's range of woollen sweaters under 'Platine' and • Economy range for men under 'Cloak and Decker' Also Introduced its range of home furnishing products like mink blankets, quilts and sheets MONTE CARLO Its the way you make Til t feel Range, positioning and products offered Range Monte Carlo - Premium and mid-premium segments for men Platine - Woollens & Woollen-blended Sweaters, jackets, thermals, woollen accessories (caps, mufflers, Shawls, stoles) Cottons & Cotton-blended Shirts, trousers, t-shirts, track-suits Home Furnishing Kids Mink blankets, bed sheets and quilts Premium range for Men Cashmere and cash-wool sweaters, blazers, coats Cotton shirts, trousers and t- shirts Segment wise Revenues Total Revenues (Rs. Mn) % Revenues - Woollen Segment FY16 FY15 FY14 FY13 FY12 5,664.8 5,271.8 4,566.7 3,686.0 3,346.9 34.2% 34.5% 36.5% 42.7% 41.6% Denim mid- premium Range Alpha - Exclusive range cardigans for Women Tweens - Exclusive Kids wear Collection Sweaters, % Revenues - Cotton Segment % Revenues - Home Furnishing Segment 51.3% 52.6% 50.8% 47.5% 57.3% 9.7% 8.4% 8.0% 6.5% 0.1% Cloak & Decker - Economy range % Revenues - Kids Segment 4.9% 4.6% 4.7% 3.3% 1.0% for men Denim trousers (jeans) and shirts Shirts, t-shirts, tops and trousers Cotton and cotton-blended t-shirts Sweaters, Cardigans, Shirts, t-shirts and Bottoms 20 20#21SUSTAINABLE COMPETITIVE ADVANTAGE ROBUST DISTRIBUTION MODEL Total Number of Outlets % of Revenue MBO 2,200+ NCS EBO-COCO 164 21 MONTE CARLO, THE Its the way you make EBO-FOFO 207 mil t feel 63.1% 36.9% Contribution - FY16 (NCS Contribute less than 10%) Distribution Sale Model Outright Sale Pre-Booking of Orders SOR Sale or Return / Outright Sale Inventory owned by MCFL Pre-Booking of Orders Outright sale Inventory Risk No Yes Yes Minimal-5-15 % of Products Return Allowed Discount Sharing No No Payment Collection - Credit Risk Exclusive Commission Agents are Liable to Reputed Retail Chains pay Yes Yes, Range from 5% to 17.5% Bank Guarantee's and PDC taken from Franchise ROBUST DISTRIBUTION MODEL ASSURES MINIMAL INVENTORY RISK AND CREDIT RISK. TILL DATE, THERE HAS BEEN NO BAD DEBTS OR RECEIVABLES WRITE OFF FOR THE COMPANY MBO Multi Brand Outlet EBO - Exclusive Brand Outlet NCS - National Chain Stores COCO Company Own Company Operated FOFO - Franchise Own Franchise Operated 21#22FUTURE GROWTH STRATEGY FOCUS ON BRAND & PRODUCT PORTFOLIO EXPANSION FOCUS ON RETAIL NETWORK EXPANSION FOCUS ON RETURN RATIOS EXPANSION MONTE CARLO/mmc Its the way you make mil t feel • Focus on branding and promotion to further increase our visibility and market share across India Focus on a comprehensive range of cotton and cotton-blended products which cater to all seasons in-order to expand our all-season product range and strengthen our pan- India operations. • Plan to diversify our pan-India presence by penetrating into the southern and western regions of India. Focus on Online sales through own portal as well as Tie-ups with e-commerce portals such as Flipkart, Jabong, Snapdeal and India Shopping. • No major capex requirement for over next 2 years. Have already built the Manufacturing building facility, need to install additional machinery to expand production facility. Ability to sustain Robust growth for next 2-3 years without any major capex. Therefore Return ratios set to improve. 22#23DISCLAIMER MONTE CARLO/mmc Its the way you make mc feel This presentation and the following discussion may contain "forward looking statements" by Monte Carlo Fashions Ltd ("MCFL" or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the management of MCFL about the business, industry and markets in which MCFL operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond MCFL's control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of MCFL. In particular, such statements should not be regarded as a projection of future performance of MCFL. It should be noted that the actual performance or achievements of MCFL may vary significantly from such statements. 23#24THANK YOU MONTE CARLO/mmc Its the way you make mc feel MONTE CARLO Its the way you make me feel Mr. Dinesh Gogna Director Email: [email protected] DICKENSON SEAGULL R Kapil Jagasia Dickenson Seagull IR Contact No: +91 9819033209 Email: [email protected] 24 24#25MONTE CARLO FASHIONS STORE IMAGES 8 MONTE CARLO MONTE CARLO. MONTE CARLO Actoren/er 14-150 Ca LARRIVAL vin Stores MONTE CARLO mc THE Its the way you make mil t feel 25#26MONTE CARLO FASHIONS OUR CAMPAIGNS & COLLECTIONS AlPha MONTE CARLOS MONTE CARLO AA careful boy! ww denim MONTE CARLO MONTE CARLO/mmc Its the way you make mil t feel 26