#1MONTE CARLO It's the way you make me feel MONTE CARLO FASHIONS LIMITED Q2 & H1 FY21 INVESTOR PRESENTATION MONTE CARLO It's the way you make me feel#266 It's the way you make me feel MONTE CARLO. It's the way you make me feel DISCUSSION SUMMARY # Page No 01 Company Overview 03 70 02 Q2 & H1FY21 Highlights 08 93 03 Monte Carlo Advantage 14 04 Annexure 24#301 COMPANY OVERVIEW MONTE CARLO It's the way you make me feel#4MONTE CARLO: INDIA'S FIRST ORGANISED LIFESTYLE APPAREL BRAND MONTE CARLO It's the way you make me feel • • STRONG PEDIGREE Leading Winter wear Brand, launched in 1984 and part of Oswal Woollen Mills Ltd Recognised as "Superbrand" for woollen knitted apparel in each edition of Consumer Superbrands India • WIDE REACH Presence across India through a judicious mix of EBOS, MBOS and Shop in shop, distributors and national chain stores and online Located in 20 states & 3 union territory IN HOUSE DESIGNING TEAM Strong design team of over 30 professionals closely tracking the trending global fashion • DIVERSIFIED PRODUCT PORTFOLIO Successfully diversified brand across segments like Woollen, Cotton, Kids, Home Furnishing, & Healthcare. 4#5DIVERSIFIED PRODUCT PORTFOLIO Range Monte Carlo Mid Premium / Premium Luxuria - Mid Premium / Premium Denim- Mid Premium / Woollen Sweaters, Pullovers thermals, woollen accessories (caps, mufflers, shawls, stoles) Cash wool sweaters, blazers,coats Cotton Shirts, trousers, t-shirts, track-suits and jackets Cotton Shirts, trousers and t-shirts Denim Trouser (jeans) and Shirts Premium Alpha - Women wear Sweaters, cardigans Shirts, Tshirts, Trousers, jackets and sweat-shirts Tweens - Kids wear (7-13 years) Cloak & Decker- Men's wear Sweaters, cardigans Cotton and cotton blended Tshirts Rock It - Sports wear Tank, Polo T-Shirt, Shorts, Track Pants MC Healthcare MONTE CARLO It's the way you make me feel Home Furnishing Kids Healthcare Mink blankets, bed sheets and quilts Sweat Shirts Sweaters, Cardigans, Shirt, T-Shirts and Bottoms TRENDY AND PREMIUM QUALITY APPROACH TO CLOTHING Alpha TMC TWEENS MONTE CARLO CD CLOAK & DECKER rock.it Face Masks (3 PLY, KN95 and N95) and Personal Protective Equipment (PPE) Kit 5#6WHAT IS OUR BUSINESS MODEL • . • January Feb -March April BUSINESS CYCLE FOR WINTER SEASON SALES Product development & Sampling process Design process is finalised Sample sets sent to our commissioned agents (CA) • Commissioned agents display the samples to dealers and distributors Company organizes fashion shows to showcase proposed products to the MBOS and EBOS CAs procure orders from MBOS and act as an interface between the Company and MBOS August September • • The dealers and distributors of the MBOS place orders with the CAS Pre-booking of orders from MBOS and franchise EBOS BUSINESS CYCLE FOR SUMMER SALES October • MONTE CARLO It's the way you make me feel May Till July Aug Onwards Production of pre- ordered designs commences Dispatching of winter wear products to EBOS and MBOS Peak Inventory in September, at the beginning of the winter season November Till January February Onwards DESIGNING IS AN ONGOING PROCESS THROUGHOUT THE YEAR FOR BOTH COTTON AND WOOLLEN GARMENTS / PRODUCTION OF PLAIN AND BASIC DESIGNS CONTINUE THROUGHOUT THE YEAR FOR BOTH WOOLLEN AND COTTON GARMENTS 6#7DISTRIBUTION MODEL MINIMUM GOODS RETURNED MONTE CARLO M It's the way you make me feel MBO and Distributors NCS Shop In Shop EBO-COCO EBO-FOFO Distribution Sale Model Pre-Booking of orders Outright SOR Sale or Pre-Booking of Sales Return/ Outright Sales orders Outright Inventory owned by Company Pre-Booking of orders Outright Sales Goods Return Risk No Yes No N.A LOW CREDIT RISK Discount Sharing No Yes Yes Yes 夕 COMMANDS PRICING POWER ☐ ☐ ☐ ORDER TO PRODUCE MODEL Payment Collection Credit Risk Exclusive commissioned Reputed retail agents are liable to pay chains Exclusive commissioned agents are liable to pay 40 sale Minimal 5%-10% of Products Return Allowed Yes Range of 5% - 17.5% Bank guarantee's and PDC taken from franchise 7#802 Q2 & H1 FY21 HIGHLIGHTS MONTE CARLO M It's the way you make me feel#9Q2 FY21: REVENUE DETAILS REVENUE BREAKUP-REGION WISE (Including Online Sales) Q2 FY20: Rs 1,511 Mn 5% 4% 2% 11% MONTE CARLO It's the way you make me feel REVENUE BREAKUP - CHANNEL WISE Q2 FY21: Rs 973 Mn Q2 FY20: Rs 1,511 Mn Q2 FY21: Rs 973 Mn 1% 2% 7% 8% 10% 10% 53% 25% 34% 46% 25% 4% 25% 63% 60% 5% IMBO+NCS EBO-COCO EBO-FOFO Others including online North East Central South West Others Including Online Online Sales Rs (Mn) 67 70 10 Q2FY20 Q2FY21 6#10H1 FY21: REVENUE DETAILS REVENUE BREAKUP-REGION WISE (Including Online Sales) H1 FY20: Rs 2,080 Mn 3% 4% 3% 12% MONTE CARLO It's the way you make me feel REVENUE BREAKUP - CHANNEL WISE H1 FY21: Rs 1,057 Mn H1 FY20: Rs 2,080 Mn H1 FY21: Rs 1,057 Mn 1% 2% 7% 7% 10% 10% 51% 34% 27% 28% 46% 5% 27% 60% 6% 66 ■MBO+NCS EBO-COCO EBO-FOFO Others including online North East Central South West Others Including Online Online Sales Rs (Mn) 58 78 57% H1 FY20 H1 FY21 10#11Q2 & H1 FY21: REVENUE ANALYSIS REVENUE BREAKUP - SEGMENT WISE In Rs Mn FY19 FY20 Total Revenues* 6,715 7,235 Q2 FY20 1,511 MONTE CARLO It's the way you make me feel Q2 FY21 H1 FY20 H1 FY21 973 2,080 1,057 Woollen Segment 25.5% 22.3% 22.12% 16.11% 12.81% 11.90% Cotton Segment 60.1% 59.1% 54.32% 41.75% 62.38% 45.21% Home Textiles 9.1% 11.7% 19.28% 35.22% 20.10% 36.70% Kids 5.3% 6.9% 4.28% 4.78% 4.71% 4.14% MC Healthcare 2.13% 2.05% FOCUS ON PRODUCT DIVERSIFICATION Positioning as all fashion brand to reduce seasonality impact, woollen segment contribution has moved marginally lower in FY20 to 22.3% • Revenue from core products (Excluding Yarn, Fabrics & Miscellaneous sales) FY19 Sales of scrap and accessories was Rs.29.6 Mn, Other Operating revenue was 13.5Mn & INDAS adj. was Rs.-194.4 Mn * FY20 Sales of scrap and accessories was Rs.80.3Mn, Other Operating revenue was 11.5 Mn & INDAS adj. was Rs. -70.7Mn * H1 FY21 Sales of scrap and accessories was Rs.8.02Mn, Other Operating revenue was 1.93Mn & INDAS adj. was Rs.27.50 Mn * H1 FY20 Sales of scrap and accessories was Rs.43.67 Mn, Other Operating revenue was 4.20Mn & INDAS adj. was Rs.-0.66Mn 11#12Q2 &H1 FY21: PROFIT AND LOSS STATEMENT MONTE CARLO It's the way you make me feel Particulars (In Rs Mn) Revenue From Operations Material Cost Gross Margin Q2 FY21 Q2 FY20 H1 FY21 H1 FY20 982 1,528 1,094 2,127 388 720 396 915 594 808 698 1,212 Gross Margin % 60.4% 52.9% 63.8% 57.0% Personnel Expenses 150 169 235 322 Advertisement Expenses 13 84 17 138 Other Expenses 281 353 440 574 Operating EBITDA 150 202 6 178 EBITDA Margin % 15.2% 13.2% 0.6% 8.4% Other Income Depreciation 45 44 101 70 88 82 166 154 Finance cost 35 47 65 82 PBT 72 117 -124 12 Tax Expense 28 49 -33 6 PAT 44 67 -91 6 PAT Margin % 4.5% 4.4% 0.3% EPS (Rs.) 2.13 3.27 0.31 12#13BALANCE SHEET HIGHLIGHT MONTE CARLO M It's the way you make me feel Particulars (Rs In Mn) Sept-20 Mar-20 Particulars (Rs In Mn) Sept-20 Mar-20 Equities & Liabilities Non-Current Assets Property, Plant and equipment 1,531 1,518 Equity Share Capital 207 207 Right-of-use assets 759 759 Other Equity 5151 5,244 Capital work in progress 35 25 Total Equity 5,358 5,451 Other Intangible Assets 5 6 Non-Current Liabilities Financial Assets Long-term Borrowings 140 163 Investments 373 357 Loans 55 40 Other financial Liabilities 176 169 Other financial assets 101 81 Lease Liability 715 704 Income Tax Assets 21 89 Other Long-term Liabilities 11 12 Deferred tax assets 131 79 Provisions 22 19 Other non-current assets 6 17 Total of Non-current liabilities 1,064 1,067 Total non-current assets 3,018 2,971 Current Assets Current Liabilities Inventories 3,125 2,162 Short-term Borrowings 680 154 Financial Assets Trade Payables 1481 1,674 Investments 447 979 Lease Liability 109 100 Trade Receivables 1,916 2,522 Other financial Liabilities 466 544 Cash & Bank Balance 321 128 Loans 3 6 Other Current Liabilities 215 92 Other financial assets 29 14 Short-term Provisions 37 23 Other Current Assets 551 324 Total Current Liabilities 2,988 2,586 Total Current Assets 6,392 6,133 Total Equity & Liabilities 9,410 9,104 Total Assets 9,410 9,104 13#1403 MONTE CARLO ADVANTAGE MONTE CARLO It's the way you make me feel#15STRONG BRAND EQUITY ... MONTE CARLO It's the way you make me feel * "Monte Carlo", has Strong Brand Equity Being a Premium Brand, Monte Carlo enjoys Pricing Power & Customer Loyalty Regular Investment in Brand Building & Marketing Initiatives ASPIRE TO SERVICE END TO END WARDROBE REQUIREMENTS OF INDIAN CONSUMERS BY FURTHER INTRODUCING EXCITING RANGE OF NEW PRODUCTS 15#16HAVING PAN INDIA PRESENCE ... J&K 2 Ladakh MONTE CARLO It's the way you make me feel DISTRIBUTION NETWORK STORE NETWORK Type of Store FY19 FY20 Q1 FY21 Q2 FY21 HP 10 EBO - COCO 27 37 37 41 Punjab 43 Chandigarh 4 Uttarakhand 9 EBO - FOFO 229 241 242 244 Haryana 24 Delhi 20 MBO and Distributors 2500+ 2500+ 2500+ 2500+ UP 38 Nepal 2 Rajasthan 30 Assam 1 NCS 306 566 144 279 Bihar 37 Jharkhand 8 Manipur 1 Nagaland1 SIS 85 126 124 146 Tripura1 Amazon, Flipkart, Myntra, MP 12 E-Commerce 2WB 15 Jabong and Kapsons Gujarat 8 Chhattisgarh 2 Odisha 2 EBO - NET ADDITIONS FY20 Q1 FY21 Q2 FY21 Maharashtra 7 Existing 256 278 279 New Opened Closed 31 1 8 9 0 2 Karnataka 8 Over 20 stores 10 to 20 stores Total EBOS 278 279 285 Less than 10 stores T Nadu 1 NEW STORE LAUNCHES In addition to 285 EBO'S, company has 2 EBO in Nepal FOFO: CENTRAL (1) NORTH (2) WEST (1) COCO: NORTH(3) EAST(1) 16#17& REGULAR TECHNOLOGY UPGRADATION Whole Garment Machine 3D KNIT Cotton SSR 112 MONTE CARLO It's the way you make me feel Woollen FASHION ORIENT . • 30 professionals closely tracking the trending global fashion To meet the standards of technology upgradation and modernisation, Company has installed the automatic whole-garment state-of-art manufacturing facility, at the existing Ludhiana's unit. This technology, in knit is one entire piece which provides a seam-free fit and comfort, unmatched by any other knitwear. This helps in elimination of multiple manufacturing processes, thereby, reducing the wastage and increasing the efficiency. 17#18DIVERSIFIED PORTFOLIO SEGMENT COMPOSITION 2.1% 9.0% 5.0% 7.6% 9.1% 11.7% 5.1% 5.3% 6.9% 36.7% 58.0% 4.1% 61.0% 60.1% 59.1% 45.2% 28.0% 26.3% 25.5% 22.3% MONTE CARLO It's the way you make me feel COTTON SEGMENT BIFURCATION- H1 FY21 15% 19% 1% 6% 17% 42% 11.9% FY 2017 FY 2018 FY 2019 FY 2020 H1 FY21 Woollen Cotton KIDS Home Textiles ■MC Healthcare ■Tshirt & Shirt Other Garments ■Denim & Trousers ■Cloak & Decker Jackets, coats & Suits ■ Accessories • Woollen share gradually reducing due to diversification, focusing more on cotton products During the quarter Shirts, Tshirts, Cloak & Decker (New economy range) together contributes 61% to the total Cotton contribution Company has diversified itself into Fitness Regime through Brand "Rock.It" Launched new products in healthcare segment i.e. Face Masks (3 PLY Mask, KN95 Mask and N95 Mask) and Personal Protective Equipment (PPE) Kit 18#19LED BY EXPERIENCED MANAGEMENT... MONTE CARLO It's the way you make me feel Sh. Jawaharlal Oswal (Chairman & MD) Sh. Jawahar Lal has More than 50 years of experience in the textile and woollen industry Awarded the 'Udyog Ratna Award' by the PHD Chamber of Commerce and Industry, the 'LMA-Sat Paul Mittal Life Time Achievement Award' by the Ludhiana Management Association and the 'Achievers of the North' by the Economic Times • • Sh. Sandeep Jain (Executive Director) Sh. Sandeep Jain is has more than 21 years of experience in the field of administration He is Bachelor's degree in Pharmacy, Diploma in Export Management Prior to joining Monte Carlo in 2008, he has worked with Oswal Woollen Mills Limited Sh. Rishabh Oswal (Executive Director) Rishabh Oswal is part of third generation of Oswal family Rishabh Oswal completed his BA Hons in Management Studies from University of Nottingham, UK in 2013 and then went on to pursue an Executive MBA from the prestigious Indian School of Business, Hyderabad • Sh. Dinesh Gogna (Director) Sh. Dinesh Gogna has more than 35 years of experience in the field of Corporate Finance and Taxation He has Bachelor's Degree in Law, completed the United States Money and Capital Market Seminar conducted by New York Institute of Finance 19 19#20RESULTING IN STRONG FINANCIALS MONTE CARLO M It's the way you make me feel HEALTHY RETURN RATIOS Ability to sustain Robust growth without any major capex; Return Ratios set to improve STABLE WORKING CAPITAL CYCLE ✰ Stable core working capital whilst achieving 11% growth in revenues for FY20 STRONG BALANCE Cash balance of Rs 1,242Mn (includes cash and bank balance along with current and non- current investments) SHEET POSITION LOWER DEBT Low overall debt; Long term borrowing at Rs 140 Mn as of Sept 2020 20 20#21CONSISTENT REWARD TO SHAREHOLDERS Dividend% Buy Back 100 100 100 FY2015 FY2016 FY2017 120 Buyback FY2018 FY2019 MONTE CARLO It's the way you make me feel 50 FY2020 Company has done buy back of Rs. 550 Mn in FY19 to reward shareholders. Promoters have not participated in the buy back Strong Track Record and Proven Expertise to Generate Healthy, Predictable and Sustainable Returns 21#22FINANCIAL PERFORMANCE CONSISTENT REVENUES MONTE CARLO It's the way you make me feel EBITDA & EBITDA MARGIN 6,564 7,256 21.7% 5,680 5,760 19.7% 17.1% 5,231 14.8% 15.0% 1,233 1,132 1,244 983 776 FY16 FY17 FY18 FY16 FY17 FY18 FY19 FY20 EBITDA (mn) FY19 EBITDA Margin % FY20 PAT & PAT MARGIN LEVERAGE & RETURN RATIOS 11.8% 10.4% 0.22 8.4% 9.1% 8.6% 0.13 0.11 0.10 0.1 679 589 596 627 442 25% 20% 23% 14% 13% 20% 22% 23% 19% 19% FY16 FY17 PAT (mn) FY18 FY19 FY20 PAT Margin % Note Previous year figures have been recast as per Ind AS to make them comparable with current year figures EBITDA does not include other income FY16 FY17 FY18 FY19 FY20 ROCE Cash Adj ROCE -D/E Inventory Data related to FY18 onwards is according to the cost method of valuation and the data related prior to FY18 is according to retail method of valuation Revenues exclude Raw Material Sales (Yarns, Fabrics & Trims) 22 22#23GROWTH STRATEGY PRODUCT MIX MOVING TOWARD COTTON FOCUS ON RETAIL NETWORK EXPANSION MONTE CARLO It's the way you make me feel ■ Cotton share maintained over 59.11% of total FY20 revenue reflecting shift towards Cotton from Woollen segment ■ Textile and Kids segment delivered robust growth, contributing higher revenue to the overall business Sales through SIS Model · Focus on Online Sales through own portal • Own Portal sales in Q2 FY21 was Rs 113 Mn from 120 Mn in Q2 FY20 FOCUS ON RETURN RATIOS EXPANSION Capex of Rs ~Rs100-150mn for FY20-21 majorly for de-bottlenecking and modernization of existing facilities Ability to sustain Robust growth without any major capex; Return Ratios set to improve 23#2404 ANNEXURE A C 0 す 0 0 O Q 0 0 6 0 D G D 0 D G C De MONTE CARLO It's the way you make me feel#25BRANDING INITIATIVES MONTE CARLO M It's the way you make me feel Proven track record in building brands in India Clothing partner for the blockbuster Bollywood films Saaho, Barfi, Mary Kom, Bhaag Milkha Bhaag, and Student of the Year Clothing Partner for reality Shows like Big boss, Khatron ke Khiladi MAU DURUN ARENA LAKE KE KHILADI fodre & TRIGGER rock.it #SweatsSexy TIE-UPS WITH ONLINE PLATFORMS amazon flipkart.com The Online Megastore snapdeal MYATRA.com Paytm JABONG firstcry TATA S SHOPPERS STOP START SOMETHING NEW COM Airline Tie-ups Air Asia - Overhead Bins Go Air Overhead Bins STRATEGIC TIE-UPS Air India - Seat Back Devices + Inflight Magazine Theatres PVR - Cinepolis - Inox - Carnival - SRS TRENDS YOUR STYLE. YOUR STORE, C CENTRAL Indigo - Inflight Magazine - 800+ screens across India 25 25 CLIQ pantalons AJIO lifestyle Vistara Inflight Magazine#26CSR ACTIVITIES OSWAL FOUNDATION review Education Environment Sports Health SPORTS WE BELIEVE IN “FULFILLING ASPIRATIONS AND TRANSFORMING LIVES EDUCATION MONTE CARLO It's the way you make me feel The organization has worked towards the betterment of various schools & institution at Dhandari Kalan Government Primary school, Govt School (Magra Lulu), Brailee Bhawan Ludhiana by providing them operational & Financial support ENVIRONMENT Oswal Foundation renovated fountain chowk in Ludhiana also planted numerous trees to promote greenery and to enhance the flora and fauna NEL REGD Contributed in this field by organizing on open women Taekwood Championship at LETC, Katani Kalan, Ludhiana HEALTH In this sector Oswal Foundation has done its bit by organizing eye camp & by providing medical support to those in need, through various means 26#27THANK YOU MONTE CARLO It's the way you make me feel DICKENSON Mr. Dinesh Gogna Director Email: [email protected] Ms. Manasi Bodas Consultant Mr. Vikash Verma Director Email: [email protected] Disclaimer: 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.