Q4 FY24 Sheila Form Limited Results Conference Call

Participants:

• Mr. Rahul Goam: Executive Chairman
• Mr. Tashar Goam: Managing Director
• Mr. NES Mundar: CEO, India Business
• Mr. Amit Kumar Gupta: Group Chief Financial Officer
• Danta Bansel from MK Global Financial Services

Welcome and Introductions

• Hosted by MK Global Financial Services.
• Key participants introduced.
• Conference recorded.
• Agenda includes management presentations followed by a Q&A session.

Opening Remarks by Amit Kumar Gupta

Overview & Key Highlights

• Acquisitions & Investments:
  • Acquired Kon & investment in furniture rental company Forlano.
  • Kon achieved 7%+ EBITDA margin in Q4 FY24, doubling margin from Q3.
  • Target: ₹1,000 Cr top line and ₹100 Cr EBITDA.
  • Integration in process; ERP system implemented from April 1, 2024.
  • Brand refresh set for June 9, India-Pakistan T20 World Cup match.
• Forlano:
  • PBT profitable for last three months.
  • Debt repayment reducing interest burden.
  • Subscriber base increased by 50% post-investment.

Internal Initiatives

• Jabalpur Plant: Commissioned, aiming to boost small-town India initiatives.
• IT Initiatives: In-house IT company TIO, serving group companies, generating 20-25% margin.
• Brand Transition: Shift to Sleepwell brand in online segment, recovering and becoming profitable.

Financial Highlights

• Consolidated (Q4 FY24):
  • Revenues: ₹845 Cr (16% YoY increase).
  • EBITDA: ₹81 Cr (3% YoY increase), margin 9.53%.
  • Net profit: ₹65 Cr (49% YoY increase).
• Consolidated (FY24):
  • Revenues: ₹2,982 Cr (3.8% YoY increase).
  • EBITDA: ₹300 Cr, margin 10%.
  • Net profit: ₹184 Cr (8.4% YoY decrease).
• Standalone (Q4 FY24):
  • Revenues: ₹487 Cr (6% YoY decrease).
  • EBITDA: ₹50 Cr (14% YoY decrease), margin 10.31%.
  • Net profit: ₹56 Cr (35% YoY increase).
• Standalone (FY24):
  • Revenues: ₹1,880 Cr (7.8% YoY decrease).
  • EBITDA: ₹210 Cr, margin 11.2%.
  • Net profit: ₹168 Cr (1.7% YoY decrease), margin 8.95%.
• Operational Highlights: Volume growth in Sleepwell (31%) and Kon brands (17%) in Q4 FY24.

Q&A Session Highlights

Volume and Market Data

• Combined volumes of Sleepwell and Kon shared; focus on increasing presence in Flagship brands.
• Sleepwell brand initiatives showed 31% growth; Klon 177% growth.
• Prioritizing brand investments and growth in Flagship brands.

Financial Income & Debt

• ₹117 Cr other income from investments; sustainable with current investments ranging ₹500-₹550 Cr.
• Debt breakdown: ₹725 Cr at 8.45%, foreign debt at ~5%, and other debt at ~5-6%.

Strategy and Market Insights

• Long-term focus on b2c space; strengthening Sleepwell and Kon brands across price segments.
• Initiatives being implemented to realize synergies from acquisitions.
• Growth projections: 15% CAGR with focus on volume and market penetration.

Regional Business Performance

• Spain: Capacity expansion in progress to boost growth.
• Australia: Market expansion initiatives; addressing competitive pressures.
• Emphasis on maintaining and improving margins despite raw material fluctuations.

Investment and Profitability Guidance

• Forlano: Strong revenue growth trajectory post-acquisition.
• Online channel recognized as a key growth area with continued investment.

Closing Comments

• Amit Kumar Gupta thanks participants and invites further questions via IR managers.

Summary

Overall, the conference detailed robust growth in strategic acquisitions, internal initiatives, financial performance, and proactive measures for future expansion. The management emphasized a strategic shift towards reinforcing their core brands while improving operational efficiency and market reach.