NO LIMITS! GOKALDAS EXPORTS LIMITED - HOW A CULTURE OF AGILITY TRANSLATED INTO OUR Q1 FY21 OUTPERFORMANCE
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NO LIMITS! GOKALDAS EXPORTS LIMITED HOW A CULTURE OF AGILITY TRANSLATED INTO OUR Q1 FY21 OUTPERFORMANCE
Products Global footprint
Background Engaged in the Exports to more than
In business since manufacture of 50 countries like US,
1985; leading outerwear, sportswear, Europe, Canada,
apparel exporter of casual wear and formal Japan, Russia, Middle
India wear for women, men East, South Africa and
and children South America
Manufacturing Integrated
Functions comprise People
strength Locations Employing over
Capacity to produce 30 design, development,
embroidery, Multiple locations 20,000 women;
million apparel pieces across South India average age
per annum quilting, printing,
washing, lazer ~35 years
with 13,000+ machines
finishing and polyfill
2
Our prominent
customers
GAP: Largest specialty H&M: One of the global Adidas: Global leader Columbia: Industry
retailer in the United leaders in fashion with in athletic apparel leader in outdoor apparel
States whose products a presence in about 60 and the second- products like jackets,
are available in over 90 countries, along with an largest sportswear fleece, pants, shoes and
countries online presence in over manufacturer in the boots
35 countries world
Carhartt: Delivering Puma: German Vero Moda: One Marks & Spencer:
best-in-class apparel, multinational that designs of the first brands Iconic British
respected for rugged and manufactures to launch within multinational retailer that
construction, innovative athletic and casual the family-owned specialises in selling
design and exceptional footwear, apparel and Bestseller company. clothing, home products
standards of quality, accessories. Third Emerged as the brand and food products
durability and comfort for largest sportswear of choice for the
125 years manufacturer in the fashion-conscious,
world independent young
woman who wants to
dress well and pay
less
3
Our prominent customers
A&F: American lifestyle ZARA: Biggest fashion
retailer that focuses on retailer globally that
casual wear. Operates launches over 12,000
two offshoot brands designs every year
Abercrombie Kids and
Hollister Co., with 1,049
stores across all three
brands
Walmart: US Carrefour: French
multinational retail multinational retail
corporation engaged corporation with a
in the operations of a global network of
chain of hypermarkets, over 12,000
discount department stores. Offers
stores and grocery consumer goods,
stores. The Company food and non-
operates over 11,500 food products,
stores under 56 household
banners in 27 countries supplies, textiles,
electronics, home
appliances and
local products
4
The challenges against whichthis
performance was delivered
The outbreak General Key markets Weaker Disrupted
of theCovid-19 economic of USA and EU consumer supply chain
pandemic slowdown under lockdown sentiment Need to
Affected the Global and (partial or Consumer access new
supply chain, Indian GDP de- complete) preferencefor and reliable
costs and grew. Indian Retail store lower value suppliers
sales pipeline; apparel closures, decline products
particularly in exports in apparel
Q1 declined 62% offtake
A relatively creditable quarter for our company
Nimbly brought Reduced
Sectoral Lower revenues; in new business operating cost
outperformance superior EBIDTA line in in line with
margin healthcare to revenue
augment
revenue reduction
5
2. Logistics
movement was
affected impacting 15%
RM and FG capacity
movements utilization,April
1. Closure of 3. No regular 2020
all our manufacturing
factories operations in
from 24 March April 2020,
2020
Covid-19
except
healthcare
50%
capacity
garments
impact on our utilization, May
2020
6. Overall lost operations
50% of
production
4. Resumed
capacity in
the quarter manufacturing with 75%
social distancing on capacity
4 May 2020 utilization,
5. Restricted
June 2020
labour availability
and social
distancing
reduced capacity
6
The big picture of our Q1 FY21 performance
REVENUES EBIDTA EBIDTA MARGIN
Lost production capacity mainly
237.3 18.5 7.8 impacted revenue generation
Rs cr, Rs cr, %,
Revenues, Q1 EBIDTA, Q1 Q1 FY2021 New business in healthcare apparel
FY2021 FY2021 supported the business in the
quarter
Managed operating expenses and
341.3 18.7 5.5 controlled it to align with revenue
Rs cr, Rs cr, %, reduction
Revenues, Q1 EBIDTA, Q1 Q1 FY2020
FY2020 FY2020
Revenue and EBITDA of Q1 FY20
excludes MEIS income of Rs. 10.63
Cr which was reversed during the
quarter ended December 31, 2019
30 ~Par 2.3 consequent to the notification issued
% change in % increase by the Government of India, on 14th
decline in EBIDTA in EBIDTA Jan 2020
revenues margin
7
The big messages of our Q1 performance
EXTENSIVELY OPPORTUNIST
OUTPERFORMED IC ENTRY INTO
THE SECTOR NEW BUSINESS
30 25
% decline % revenue
in revenues vs. from new
62% decline in healthcare
Indian RMG product
exports segment
(Source: DGCI&S, 2020)
SUPERIOR ENHANCED
OPERATIONS EBIDTA MARGIN
MANAGEMENT
33 7.8
% reduction % EBIDTA
in operating margin, Q1,
expenses FY21, vs. 5.5% in
Q1, FY20
8
How we protected
our business
Optimised Customer Manufacturing
Diversification costs relationships efficiency
Safety Supply
Capex freeze
chain
9How we protected our business #1 - Diversification
Entered the
Among few Generated
Diversified base healthcare
companies incremental
helped offset segment;
selected by revenues (25%
product, customer commenced
Government of of revenues)
or geographic production of
India to produce and cash flows
revenue volatility personal protective
equipment (PPE) PPEs
How we protected our business #2 - Capex freeze
Complete Realigned Strong
,
freeze on supplier focus
non-critical payment in tune on cash
capex with business conservation
reality
10How we protected our business #3 -
Opex management
All Headcount
expenses realignment and
critically compensation
evaluated structuring
Re-aligned Re-negotiated
value-added input costs
services costs with suppliers
to business where
needs possible
11How we protected our
business #4 -Safety
Use of
Robust protocols temperature Social
for workplace sensing, masks, distancing
safety face shields and practices
hand washing
Strengthened
All facilities Engaged with employee
regularly the various engagement
sanitized teams to improve
productivity
12How we protected Continued
focus on
our business #5 - Realigned
long-term
partnerships Focus on
Customer product mix to
suit current
timely order
completion and
relationships market
conditions
delivery
Offered support
to customers Working closely
requiring to adapt to
replanning of customer supply
deliveries in line chain needs
with market need
Constant
Retained engagement
positioning as a with customers
preferred global and aligning
vendor their needs to
Managed
redistribution of ground reality
orders across
units
13How we protected our business #6 - Supply chain
Provided Diversified our Sought non-
Strengthened
business while supplier base China suppliers
engagementes with
receiving where to broadbase
long-standing
benefit of required vendors
partners
better terms
How we protected our business #7 -
Manufacturing efficiency
Thrust on
Relentless recovering as
,
focus on much of April /
optimized May
manufacturing production loss
in June
14The outcomes of our
multi-pronged approach
Financial Operational Strategic
• Managed cash • Balanced orders • Strong customer
flows efficiently with capacity engagement and
• Leveraged • Stopped non- handholding
additional Covid value-adding ensured business
line of credit as a operations continuity
backup • Managed supply
chain well to
ensure
operational
continuity
15Gokaldas Exports adequately
positioned to deliver
Retail industry Demand shift Brands to seek
shakeout; shutting towards lower- lower cost and
down of priced products volume-based
unprofitable stores in the short run suppliers
Volatile
Greater traction seasonal
for casual Increased planning
dressing and online environment
athleisure offtake could impact
products lead times for
delivery
Brands Orders
Demand
seeking favouring
traction
Adv. companies companies
towards
with with record
GEX large apparel
of timely
exporters complex
capabilities delivery 16We remain integral
to global business flow
Consistent outperformance HSE compliances in place;
of the global industry service zero liquid discharge status
delivery average of the captive laundry
Beyond commodity; a
complex value-added
garments manufacturer
No long-term debt on the
Balance Sheet
Demonstrated capability
to address a range of
garments (hence de-risked)
17This concludes our presentation
Forward-looking statement
In this presentation, we have disclosed forward-looking information to enable investors to comprehend our
prospects and take informed investment decisions. This report and other statements - written and oral - that
we periodically make contain forward-looking statements that set out anticipated results based on the
management’s plans and assumptions. We have tried wherever possible to identify such statements by using
words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar
substance in connection with any discussion of future performance.
We cannot guarantee that these forward looking statements will be realized, although we believe we have been
prudent in assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate
assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions
prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers
should bear this in mind.
We undertake no obligation to publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise
Should you have more questions, please contact
info@gokaldasexports.com
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