SKNL Corporate Presentation April

S.Kumars Nationwide LimitedS.Kumars Nationwide Limited

Corporate PresentationApril 2010

4 Pillars– Brands, Professional Management, Distribution & Manufacturing2

Future Growth – Building Scale & Creating Synergy Organically and Inorganically3

SKNL Overview1

Key Financials 4

Clothiers to the Nation Today…the World Tomorrow


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SKNL is a multinational textile major with Estimated Revenues in excess of US $1 billion for FY 2010

Export Markets

Legend



2

SKNL Indian OperationsSKNL European OperationsSKNL North American Operations*

Hartmarx, USA Coppley,Canada SKNL UK Leggiuno, Italy SKNL & RTIL

Revenues: Rs.1169 Crs – 28 % Revenues: Rs. 175 Crs – 4% Revenues: Rs. 3151 Crs – 75 %

Export Markets

* Only for a part of the year ** Not included in the revenues, Business Plan being worked out

SKNL North American Operations*

Revenues: Rs.852 Crs – 20 %

SKNL Group Structure

Promoters

Consumer Textiles

HVFCReady-to-

wear garments

Future SBUs

74.4% subsidiary

49.83%

SKNL International

Operations

Unlisted Entities

100 % subsidiary

Home Textiles

SKNL

Listed on Indian Stock Exchanges

Reid & Taylor (India)

Limited

GIC invested Rs.900 crs to own



3

Brandhouse

Retails Limited

Listed on Indian Stock

Exchanges

EBO

SKNL/RTIL/

Foreign Brands

Luxury Textiles

JV with Oviesse

Premium Ready-to-

wear garments55.73%

Leggiuno

Italy

Menswear

Business of

DKNY Brand

HMX

USA

25.6%

• The only company in India to operate across all 3 segments of the industry

- Fabrics - Apparels - Home Textiles

• Branded presence in all socio-economic segments

• Operates in all fibre segments

Company Overview – Strength through Diversity

Reid & Taylor Consumer Textiles HVFC Home Textiles (THE) Ready to Wear (TWS)

2008–09

• Reid & Taylor • Belmonte • 100% Natural • Benetton • Stephens Brothers

International Business

• Leggiuno

ConsolidatedSales Rs 2,276 cr (US$467m)

PBIDT Rs 488 cr (US$100m ) PBIDT Margin 21.4 %PAT2 Rs 176 cr (US$ 36.30m )ROCE : 20% D/E Ratio 1:1



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(1) Only includes revenue of one quarter ending 31/12/08 of Leggiuno. Does not include Hartmarx or SKNL UK revenues.

(2) After Minority Interest

US$ = INR 48.69

Sales: Rs. 540 Crs

EBITDA: Rs. 209 Crs

EBITDA Margin: 38.6%

Contribution

Sales: 23%

Sales: Rs. 1,087 Crs

EBITDA : Rs. 179 Crs


Contribution

Sales: 48%

Partly

Commissioned

Sales: Rs. 340 Crs

EBITDA: Rs. 59 Crs


Contribution

Sales: 15%

Sales: Rs. 250 Crs

EBITDA: Rs. 41 Crs


Contribution

Sales: 11%

• Reid & Taylor

Luxury Suitings

• Reid & Taylor

Premium NaturalFiber Suitings

• Belmonte

Daily Wear

• Uniformity

Uniform fabrics

• S.Kumars

Work Wear

• 100% NaturalFiber Shirtings

• Benetton

• Super Premium

• Carmichael House

Premium

• New Brand

Mid-Premium

• Stephens Brothers

Super Premium• Balmoral / KRUGER

Premium / Casual Premium

• Reid & Taylor

Ready to wear Premium• Belmonte

Mid-Premium• World Player

Economy

Sales(1): Rs.59 Crs

EBITDA: Rs. -0.7 Crs

EBITDA Margin:(1.1%)

Contribution

Sales: 3%

• Leggiuno• Hartmarx• SKNL UK

Presence in all branded Socio-Economic Segments

SUPER PREMIUMStephens Brothers

CASUAL PREMIUMKRUGER

LUXURY(To be launched)

PREMIUMReid & Taylor

MID-PRICE Belmonte

MID-PRICEBelmonte

ECONOMYS.Kumars

PREMIUMReid & Taylor

Present across diverse categories and in different socio-economic segments

Not Catered to by SKNLNot Catered to by SKNL

Un-brandedUn-branded

Economy World Player



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PremiumCarmichael House

ECONOMYNew Brand (to be launched)

LUXURYBenetton

READY TO WEARFABRIC

HOME TEXTILES

Not Catered to by SKNLNot Catered to by SKNL Un-branded

Un-branded

Un-brandedNot Catered to by SKNL

Presence in all Product and Fibre Categories

SKNL Product Segments

PREMIUM

MID PREMIUM

ECONOMY

SUITING , APPAREL & HOME TEXTILES

SUITINGS, APPAREL & HOME TEXTILES

SUITINGS, APPAREL & HOME TEXTILES

SUPER PREMIUM LUXURY APPAREL & SUITINGS

75mn people

160mn people

250mn people

25mn people



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Only Textile Major in All Fiber and Product categories

♦ Market Leader in Uniforms with 30% market share

♦ # 2 in Worsted Suitings

♦ Largest Institutional Supplier of Textiles

Natural

Fibers

Blended

Fibers

Man Made

Fibers

Wool Poly-Wool Polyester

Cotton Poly-Viscose Viscose

Linen Wool-Linen Nylon

Un-branded 450mn people

Apparel10%

Home

Textiles

16%

Consumer

Textiles

51%

Worsted

Suiting

23%

Market Position

Structure of Indian Menswear Market

Luxury(5000+)

Super Premium(3000-5000)

Premium(1200-3000)

6800 Cr. (YOY 24%)

Louis Vuitton, Chanel, Gucci, Zegna, Dunhill

Nautica, Lacoste, Manzoni, Gant, Espirit, Tommy, Stephens Brothers

Louis Philippe, Wills Lifestyle, Van Heusen, Raymond , Zodiac, Reid & Taylor, Kruger

1,500 Cr. (YOY 36%)



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Mid Price(600-1200)

Economy(250-600)

Lower Mass Market (Upto 500)

8800 Cr.. (YOY 25 %)

8100 Cr.. (YOY 11 %)

18100 Cr. (YOY 7 %)Unbranded

Regional Brands

Note: Prices in INR. Price range refers to Shirts

Peter England, Koutons, Excalibre, John Player, Belmonte

4 Pillars – Brands, Professional Management, Distribution & Manufacturing2

SKNL Overview1


Key Financials 4



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SKNL – Key Strengths

Manufacturing

Brands

Distribution

Management

• Extraordinary portfolio of domestic and foreign brands

• Brands at all price points capturing all segments of the organized market in India

• Foreign brands have deep legacy and brand recall capturing mid to upper end of the market

• Ability to leverage our several brands to across several geographies

• Professionally managed by industry leading management team

Nitin S. Kasliwal MD & Vice Chairman

Anil Channa Deputy MD

Anees Fazalbhoy Director, Business Strategy

Dara Avari Director, Corporate Affairs

Micheal Morris President – SKNL UK

Doug Williams President, HMX

Ashley Potter Director, SKNL International

Jagadeesh Shetty President - Finance & CFO



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State of the art manufacturing plants producing to the

highest quality standards in the industry

1. Mysore, Karnataka, India

2. Dewas, Madhya Pradesh, India

3. Bangalore, Karnataka, India

4. Jhagadia, Gujarat, India

5. Leggiuno, Italy

6. Des Plaines, Illinois, USA

7. Rochester, New York, USA

8. Hamilton, Ontario, Canada

• Deep distribution model penetrating all addressable markets for SKNL products

• Multi brand Outlets

� 60 Agents

� 400 Pan-India Wholesalers

� 30,000+ Pan-India Retailers

• Large Format Stores

• Institutional Sales

• Export Sales

• Exclusive Brand Outlets through Brandhouse Retails

� Company owned retail stores

� Franchised retail stores

� Indian Franchise Operations for International Brands

• Pan-USA wholesale distribution to all leading US department stores and men’s speciality stores throughHartmarx

Well Entrenched Domestic Brands…

Brand Products Achievements

- Worsted fabrics- Ready-to-wear

One of the leading players in Luxury Suitings

- Blended fabrics- Workwear- Ready-to-wear- School Uniform

One of the leading player in uniforms

- Bed Linen & Bath Linen- Table & Kitchen Linen

Development of home textiles as strategic business unit

♦ The only company in the world to operate 45 globally well established textile brands

♦ Diversified portfolio of well recognized brands

♦ Strength through celebrity endorsements Advertising campaign across India using different media in several languages



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business unit

- Ready-to-wear for men and women

A brand with British heritage for India

- Bed Linen Targeting the premium range customers with great success

… And Globally Well Established BrandsMen’s tailored clothing, furnishings and

sportswear

Men’s tailored clothing, furnishings and

sportswear

Knitwear

Career apparel and sportswear

Denim and sportswear

Sportswear and golfwear

Men’s tailored clothing and furnishings

Men’s denim and sportswear



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Denim and sportswear

Men’s tailored clothing sold exclusively at

Kohl’s

Strong Brand Visibility- within IndiaContemporary in design and customer friendly stores



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Strong Brand Visibility - Internationally



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Professional Management

Anil Channa

Dy. Managing Director & COO

STRATEGIC BUSINESS UNITS (SBUs)

Board of Directors

Nitin Kasliwal

Vice Chairman & Managing Director

D.D. AvariCorp. Affairs

CORPORATE

FUNCTIONS

Men’s Wear International



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Home

Textiles

Dinesh Sharma

CEO

Consumer

Textiles

Col. S. K. Raje

Group Admin & HRD

Ready-to-

Wear (TWS)

Janak Dave

COO – Reid & Taylor

High Value

Fine Cotton

Anupam Dikshit

COO

Luxury

Suitings

Arvind Gupta

COO

Vijay Bakshi

President

Exports

Business

Corp. Affairs

J. S. Shetty

President- Finance & CFO

Anees FazalbhoyBusiness Strategy

Nimesh ShahCompany Secretary

Rajan K. Garg

COO

Each SBU is headed by a Segment Specialist

Predeep Mukim

COO - Belmonte

Johnny John

COO – Mass brand

Paolo Ingegnoli

CEO

Leggiuno

Doug Williams

CEO

Hartmarx

Michael Morris

President

Men’s WearBusiness of a Global Brand

InternationalBusiness

Integration

Ashesh Amin

Director

Multi-format pan-India Distribution Network

Multi Brand

Outlets

Large Format

Stores

Institutional

SalesExport Sales

Luxury Textiles Consumer Textiles HVFC Home Textiles Ready to Wear (TWS)

♦ Reid & TaylorLuxury Suitings

♦ Reid & TaylorPremium NaturalFibre Suitings

♦ S.KumarsWork Wear

♦ BelmonteDaily Wear

♦ UniformityUniform fabrics

♦ 100% Natural Fibre Shirtings

♦ BenettonSuper Premium

♦ Carmichael HousePremium

♦ New Brand (To be launched)Mid-Premium

♦ Stephens BrothersSuper Premium

♦ Reid & TaylorPremium

♦ Kruger (to be launched)Casual Premium

♦ BelmonteMid-Premium

Multi Brand

Outlets

56%

Large Format

Stores

6%

Institutional

Sales

15%

Export Sales

3%

Exclusive Brand Outlets(726 outlets)

20%FY 2010 Sales



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375 stores

348 stores

16

Franchisee

Model

Company

Operated

Master Franchisee for SKNL/ RTIL Brands

India Franchisee for International Brands

Company operated stores for SKNL / RTIL Brands

BRANDHOUSE

RETAILS LTD.

60+

Agents

400+

Wholesale Dealers

30,000+

Retailers

56% 6% 15% 3% 20%FY 2010 Sales Estimates

3 stores

State-of-the-art Manufacturing FacilitiesSno Major Plants Location Products Manufactured

1. Reid & Taylor Worsted Suiting Unit Mysore, Karnataka Worsted Suiting, Premium P/V Blended Suiting

2. S.Kumars Suiting Unit Dewas,Madhya Pradesh Uniforms, Work Wear Fabrics, Polyester and Polyester-Viscose Blended Suitings

3. Home Textile Chamunda Standard Mills Dewas, Madhya Pradesh Polyester Blended Yarn, Grey Fabrics (PV, PC, 100% Cotton), Medium Value Cotton

4. Total Wardrobe Solutions Bengaluru, Karnataka Shirts, Trousers, Blazers, Suits and Other Accessories

5. Home Textiles (Under -Implementation) Jhagadia,Gujarat Home Textiles

6. HVFC Jhagadia,Gujarat High Value Fine Cotton

7. Leggiuno Milano, Italy High value Fine Cotton Shirting

8. Hartmarx Illinois, USA Tailored Products



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8. Hartmarx Illinois, USA Tailored Products

9. Hartmarx New York, USA Tailored Products

10. Hartmarx Ontario, Canada Tailored Products



SKNL Overview1

Key Financials 4



18

Growth Initiatives – Building Scale & Creating Synergy Organically and Inorganically

Segment Initiative Status

Luxury Textiles ♦ Weaving capacity expansion to cater to the domestic and international markets ♦ Completed

Leggiuno Italy

♦ One of the top three Shirt Fabric manufacturers in the world.

♦ Produces dyed yarn, piece dyed and digitally printed linen fabrics for high end shirt brands

♦ Completed

Hartmarx USA ♦ US Premier tailored clothing manufacturer ♦ Completed

High Value Fine Cotton

(HVFC) ♦ Setting up capacity to cater to the international as well as domestic markets

♦ Commissioned

Home Textiles ♦ Capacity expansion to cater to high demand in the post quota regime ♦ Under installation

Growth Initiatives Across Different Segments



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Luxury Textiles ♦ Weaving & Spinning capacity expansion along with balancing equipment to cater to the

domestic and international markets

♦ Under implementation

Consumer Textiles ♦ Increased value addition by scaling up premium blended suitings and adding capacity for

spinning, weaving and processing of premium blended fabrics


Ready-to-Wear (TWS)

♦ Introducing new brands to increase market share in the segment

– Casual premium brand

– Mass brand

– Luxury brand

♦ Setting up a suits factory at Bangalore

♦ Setting up a stitching unit at Jhagadia


HVFC – spinning unit ♦ Setting up cotton spinning capacity – backward integration to HVFC ♦ Under implementation

Acquired Leggiuno in October 2008

♦ One of the leading shirt fabric manufacturers in the world

♦ Produces dyed yarn SKNL gets access to leading, piece dyed and digitally printed linen fabrics for high end shirt brands

Synergy

♦ International brands like - Prada, Hugo Boss, Faconnable, Hermes, Kenzo etc are some of the prestigious customers addressing the high end market

♦ Half of Leggiuno’s fabric are processed at other plants in Italy. The new HVFC Plant at Jhagadia, Gujarat would cater to substantial requirements of Leggiuno

Business Overview



2020

Strengths

♦ High Design Value - Enjoys reputation for its fabric designs for its relevance to the fashion trends

♦ Quality finished products - Fabric quality and finished products are comparable with the best of the shirting fabrics out of Italy

♦ High End Worldwide Customer Base - Leggiuno has an premium customer base across the world

would cater to substantial requirements of Leggiuno

♦ Move up the value chain providing access to international brands leading to comparatively better sales price resulting in higher margins

High Value Fine Cotton

Growth Strategy

♦ State-of-the-art manufacturing facility at Jhagadia – partly commissioned

♦ Setting up a cotton spinning capacity – backward integration with HVFC

♦ Front-end – back-end synergy with Leggiuno

♦ Domestic target market

– Manufacturers making shirts for international brands

– Indian brands offering premium shirts to Indian customers

♦ International target market

– Global market for HVFC shirting

Set to enter High Value Fine Cotton in the International as well as domestic markets



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Investment Plan

– Global market for HVFC shirting

– Primarily European manufacturers– Access customers outside India through Leggiuno, Reid & Taylor (Scotland) and International labels coming to India through SKNL

Backward integration by adding cotton spinning capacity

Product Profile

High Value Fine Cotton Shirting Fabric

Acquired Hartmarx Assets in August 2009

Business Overview

Key brands of Hartmarx

♦ One of the leading US premium tailored clothing manufacturer

♦ Portfolio of 34 brands (23 owned and 11 licensed)

♦ Manufactures and wholesales some of the most highly recognized brands in the men’s tailored clothing market including Hickey Freeman and Hart Schaffner Marx

♦ Supplier to the department and specialty stores in the U.S. including Dillards, Kohls, Macy’s, Barneys

♦ Over 100 years of legacy with high brand loyalty and recall

♦ Higher price point men’s clothing is produced at 3 company facilities in North America



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Hartmarx – Future Strategy

Growth Strategy

Fabric Outsourcing and Gross Margin Improvement♦ Back end-front end synergy allowing SKNL/RTIL to supply fabric and garments from India

generating “telescopic” margins across the supply chain from India to the US

♦ Hartmarx is currently sourcing fabrics predominantly from Europe at high cost basis

♦ Potential to source Hartmarx branded products from Leggiuno/HVFC

♦ Will enable SKNL to develop relationships with major US wholesalers and retailers

Operating Expense Reduction



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Operating Expense Reduction

♦ “Right Sizing” business to meet current requirements

♦ Headcount reductions in selling, distribution and administration

♦ Synergies derived from supply chain and logistics improvements

♦ Shut down of unprofitable brands and licenses

♦ Renegotiations and terminations of leases

♦ Overall cost curtailment measures across Hartmarx

Wholesale & Retail Development in EU, China & India

♦ Develop a wholesale and retail channel in Europe,Asia

♦ Opportunity to leverage legacy brands and licenses and product extensions

Global Menswear License of DKNY Brand

� SKNL has signed an agreement with LVMH group for the award of the Global Menswear License for the DKNY brand

� License acquired at “0” value

� The business potential is US$200 mn globally - SKNL’s target would be to exceed this

� The Worldwide exclusive License entails Design, Manufacture and

Business Overview



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� The Worldwide exclusive License entails Design, Manufacture and Distribution

� The License is “exclusive” except Japan

� The License also allows SKNL to open its own boutiques for retailing the brand

� The License will be vested in a UK based co.

� SKNL (UK) Ltd. for this purpose has already been established



SKNL Overview1

Key Financials4



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Key Financials for 9 Months of Year Ended 30.12.2009SKNL - Consolidated Rs in Crore

Nine

months

Ended

Nine

months

Ended

Change

For the

year

ended

31.12.2009 31.12.2008 YOY 31.03.2009

Net Sales 2,860.50 1,698.72 68.4% 2,260.36

Other Income 15.32 12.57 15.85

Total Income 2,875.82 1,711.29 68.0% 2,276.21

Total Expenditure 2,313.17 1,335.80 73.2% 1,788.13

Consumption of Raw Materials 1,726.97 1,083.37 59.4% 1,461.02

Other Expenditure 586.20 252.43 132.2% 327.11

PBIDTA 562.65 375.49 49.8% 488.08

PBIDTA Margin 19.6% 21.9% -10.8% 21.4%

Depreciation 48.84 40.22 21.4% 44.21

Misc. Exp. Written Off 20.56 6.96 195.4% 13.71

Particulars



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Misc. Exp. Written Off 20.56 6.96 195.4% 13.71

PBIT 493.25 328.31 50.2% 430.16

Interest 178.39 89.41 99.5% 138.81

PBT 314.86 238.90 31.8% 291.35

Tax 103.08 78.88 30.7% 91.90

PAT (before extraordinary items) 211.78 160.02 32.3% 199.45 PAT Margin (Before Extraordinary Items) 7.4% 9.4% -21.2% 8.8%

Extra-ordinary items - - 57.20

Tax on Extra-ordinary items - - 61.51

Net Extra-ordinary items - - (4.31)

PAT 211.78 160.02 32.3% 195.14

PAT Margin 7.4% 9.4% 47.5% 8.6%

Less: - Minority Interest 34.66 9.21 18.55

PAT After Minority Interest 177.12 150.81 17.4% 176.59

Paid-up Equity Share Capital 236.51 223.39 223.39

EPS (in Rs.) (not annualised)

Basic 7.49 6.93 8.06

Diluted 7.23 6.18 7.23



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Thank you..

SKNL Corporate Presentation April

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