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Conference Call Overview • Date: August 5, 2024 • Participants: Key management including Rahul Gautam (Executive Chairman), Tushaar Gautam (Managing Director), Nilesh Mazumdar (CEO), Amit Kumar Gupta (Group CFO), and moderator Amit Purohit (Elara Securities). • Officially signed by Md. Iquebal Ahmad (Company Secretary & Compliance Officer).
Financial Results for Q1 FY 2025 • Standalone Performance: • Revenues: INR 504 crores (10% YoY increase) • EBITDA: INR 48 crores (22% decline) • Net Profit: INR 32 crores (25% decline) • Consolidated Performance: • Revenues: INR 810 crores (26% increase) • EBITDA: INR 60 crores (23% decline) • Net Profit: INR 47 crores (8% increase) • Integration of Kurlon Enterprise Limited causing temporary disruptions.
Integration of Kurlon • Integration process approximately 85-90% complete. • Expected annual savings of INR 250 crores. • Kurlon's revenue contribution for the quarter: INR 170-175 crores.
Management Insights • Rahul Gautam addressed revenue targets and assured achievement of INR 1,000 crores soon. • Amit Kumar Gupta explained EBITDA decline due to fixed costs and integration disruptions. • Anticipated growth rate of 15% YoY in upcoming quarters.
Operational Challenges • Rapid ERP integration completed in one week. • Concerns raised about sluggish performance in the consumer durables sector.
Future Outlook • Confidence in stronger fundamentals post-integration. • Plans to expand distribution networks, particularly in small towns. • Target of 10% increase in active channels for the current financial year.
Market Strategy • Focus on creating consumer demand rather than competing on price. • Introduction of affordable products targeting low-income groups.
Dividend Policy and Market Share • Discussion on the company's longstanding policy of not paying dividends. • Assurance that the company is not losing market share, with growth in both volume and value expected.
Conclusion • Current challenges viewed as temporary; business fundamentals remain strong.
Sheela Foam Limited Investor Conference Call Summary
Date and Context • Date of Call: May 22, 2024 • Financial Results: Quarter and year ending March 31, 2024
Key Executives Present • Rahul Gautam: Executive Chairman • Tushaar Gautam: Managing Director • Amit Kumar Gupta: Group CFO
Significant Developments • Acquisitions: • Kurlon • Investment in Furlenco • Performance: • Kurlon: 7% EBITDA margin in Q4 • Furlenco: Profitable for three consecutive months • Operational Updates: • Completion of Jabalpur plant • Integration of ERP system with Kurlon
Financial Highlights • Q4 Revenues: INR 845 crores (up 16% YoY) • Q4 Net Profit: INR 65 crores (up 49% YoY) • Full Year Revenues: INR 2,982 crores (up 3.8% YoY) • Full Year Net Profit: INR 184 crores (down 8.4% YoY)
Volume Growth Insights • Current Quarter Volume: 675,000 pieces (up from 665,000 YoY) • Brand Growth Rates: • Sleepwell: 31% • Kurlon: 17% • Revenue Guidance for FY '25: Projected 15% CAGR growth
Market Share and Growth Expectations • Estimated Market Share: 29% to 30% • Growth Drivers: Primarily volume increases rather than pricing
EBITDA Margins and Cost Structure • Current EBITDA Margins: Lower than expected despite reduced raw material costs • Future Margin Improvement: Potential 3% increase over the next few years through cost efficiencies
Brand Performance and Strategy • Focus on Category Growth: Emphasis on overall growth rather than individual brand performance • Kurlon Growth Factors: Expanded distribution, price rationalization, and new marketing initiatives
E-commerce and Market Trends • E-commerce Contribution: Expected to stabilize at 10% to 15% in the next 2-3 years • Raw Material Pricing Trends: Fluctuations anticipated due to market factors
International Market Performance • Australia and Spain: • Declining revenues noted • Capacity increases in Spain despite market shrinkage • Focus on market share expansion in Australia
Conclusion • Call Closure: Management thanked participants and invited further inquiries.
Sheela Foam Limited Q3 FY '24 Earnings Conference Call Summary
Key Management Participants • Executive Chairman: Rahul Gautam • CEO: Nilesh Mazumdar • CFO: Amit Kumar Gupta
Financial Highlights • Consolidated Revenue: INR 879 crores (15.5% YoY increase) • Net Profit: INR 31 crores (49% YoY decrease) • Sleepwell Mattress Segment: 26% YoY growth
Acquisitions • Furlenco: Updates on profitability expected in February. • Kurlon: Achieved annualized revenue of INR 890 crores post-acquisition.
New Brand Launches • Tarang: Targeting lower-cost mattress consumers, priced around INR 2,000. • Nexa: Premium mattress starting from INR 24,000. • FitRest: Affordable option for specific market segments.
Strategic Focus • Phase 1: Focus on profitability. • Phase 2: Selling furniture through stores and online, funded by generated capital.
Operational Updates • Goodwill and Purchase Price Allocation: Ongoing process for Kurlon acquisition. • Return on Equity (ROE): Confidence in achieving 18-20% ROE post-QIP. • Marketing Expenses: Significant spending on mattresses, especially during high-impact events.
Revenue and EBITDA Goals • Targeting INR 1,000 crores in revenue and a 10% EBITDA margin. • Operational synergies from procurement expected to materialize soon.
Export Challenges • U.S. Exports: Difficulties due to 27-30% antidumping duty. • Production Centralization: New facility near Mumbai fully utilized.
International Market Insights • Europe: Maintaining volume share despite recession. • Australia: Stable market with slight decline; capacity expansions completed.
Conclusion • Invitation for further inquiries and appreciation for participant engagement.
Sheela Foam Limited Investors' Conference Call Summary (November 3, 2023)
Financial Performance • Q2FY24 Results: • Revenue declined 10% year-on-year to ₹613 crore. • Consolidated revenues for H1 FY24 also down 10% to ₹1,258 crore. • Profit After Tax (PAT) reported at ₹88 crore.
• Factors for Decline: • Increased online pricing for Sleepwell brand. • Falling raw material prices affecting revenue. • Delayed festive season impacting sales.
Segment Developments • Technical Foam Segment: • Positive growth driven by OEM.
• Furniture Cushioning Sales: • Lower due to festive season delays.
Acquisitions and Operations • Recent Acquisitions: • 35% stake in Furlenco and 95% stake in Kurlon.
• New Plant Operations: • Jabalpur mattress production plant to commence in December.
• Capital Expenditures: • Investments in Australia and Spain on track.
Financial Outlook • Furlenco's Financials: • Total debt around ₹350 crore; significant reduction in interest costs. • Targeting operational EBITDA positivity by month-end.
• Revenue Projections: • Kurlon expected to generate ₹1,000 crore with 10% EBITDA margin. • Furlenco projected at ₹300 crore, aiming for profitability. • Total revenue for Sheela Foam projected at ₹3,200-3,300 crore.
Distribution and Brand Strategy • Tarang Distribution Model: • Focus on smaller towns using FMCG-like distribution.
• Brand Positioning: • Sleepwell as modern/technology-driven; Kurlon as natural/organic.
Market Challenges • Cannibalization Concerns: • Management addressing potential overlap between Kurlon and Sleepwell brands.
• Top-line Growth Decline: • Influenced by raw material price drops and lower volumes.
Margin Improvements • Gross Margin Enhancements: • Improvements due to conversion from SleepX to Sleepwell mattresses.
• Segment Performance: • Varied performance in technical foam and furniture foam segments.
Overseas Operations • Margin Dynamics: • Australia and Spain facing different margin pressures; expectations for improvement.
Seasonal Impact • Festive and Wedding Seasons: • Delayed festive season effects felt in October; wedding season shorter but balancing out.
• Inventory Management: • Generally low inventory levels; slight increase to meet festive demand.
Conclusion • Management expressed gratitude for inquiries and encouraged further questions.
Sheela Foam Limited Q1 FY '24 Earnings Conference Call Summary
Key Highlights • Date of Call: August 3, 2023 • Submission: Transcript submitted to BSE and NSE on August 8, 2023 • Management Present: Chairman and Managing Director Rahul Gautam
Financial Performance • Quarter Ending: June 30, 2023 • EBITDA: • 13.3% for India business • 12% consolidated • Revenue Trends: • Decline in topline revenue due to rationalization of loss-making SleepX products • Significant reduction in raw material prices positively impacting profitability
Strategic Acquisitions • Acquisitions: Kurlon and Furlenco • Expected to enhance market position in mattress and furniture sectors • Kurlon to operate as a subsidiary initially, with potential merger plans
Brand Focus • Sleepwell Brand: • Emphasis on promoting Sleepwell in e-commerce • Marginal growth in Sleepwell volumes and revenues • SleepX Brand: • Strategic downsizing of online presence due to unprofitability • Expected phase-out of online sales
Operational Insights • Gross Margin Improvements: • Attributed to reduction in SleepX and lower raw material costs • Volume Data: • Temporarily omitted due to ongoing acquisitions; will be provided in future reports
Future Projections • Furlenco: • Expected to become EBITDA positive by October and PBT positive by December • Debt Status: • Kurlon operates on a debt-free cash-free basis
Marketing and Growth Strategies • Product Mix: • Combination of Sleepwell and Kurlon offerings • Geographical Presence: • Enhanced growth potential beyond sum-of-parts • Marketing Investment: • Need for increased investment to capture market share from unorganized sector
Challenges and Risks • Export Issues: • Challenges due to anti-dumping duties and supply chain issues, particularly in the US market • Fire Incident: • An INR 11 crore exceptional item due to a fire at a vendor's unit; no business disruptions reported
Management Outlook • Rationalization of SleepX: • Largely complete; revenue decline attributed to raw material price fluctuations • Future Growth: • Optimistic outlook for operations and growth prospects, with no specific sales targets provided for FY '24.
Date and Context • Date of Call: May 18, 2023 • Financial Results: Quarter and year ending March 31, 2023 • Key Participants: Chairman and Managing Director Rahul Gautam, Nilesh Mazumdar, Rakesh Chahar, Nihal Jham, Ritesh Shah
Business Environment • Challenges: • Low consumer footfall in the mattress segment • Varying performance across industries • Optimism: • Stabilizing raw material prices • Upcoming capacity expansions in India, Australia, and Spain • Launch of a new mattress for low-income consumers
Strategic Focus • Growth Opportunities: • Commitment to reinvest profits • Pursuing organic and inorganic growth • Management Changes: • Nilesh Mazumdar appointed to lead Indian business • Focus on organized market shift and upgrading consumer products
Financial Clarifications • Revenue and Expenses: • Recent reclassifications suggested by auditors had no impact on profitability • Mergers and Acquisitions: • Exploring opportunities with a focus on affordability
Market Performance • Exports: Slow recovery noted • Indian Railways: • Revenue over INR 60 crores achieved • Target to increase revenue significantly despite competition • Footfalls and Conversion Rates: • Healthy conversion rate of 30-50% • Need for increased footfalls through channel expansion and advertising
Advertising and Sales Strategy • Advertising Expenditure: • Targeting 5-6% of net sales, with increased spending during peak seasons • Channel Expansion: • 20% expansion in active channels for Sleepwell brand planned • Online Sales: • Currently 8-9% of mattress sales, expected to reach 10%
Future Projections • Growth Rate: Projected blended growth of 12-14% • Market Share: No loss in market share despite mattress segment challenges • Gross Margins: Expected improvement due to stable raw material prices
Conclusion • Focus: Emphasis on core products amid market challenges • Gratitude: Participants thanked for their attendance as the call concluded.
Sheela Foam Limited Q3 FY 2022-23 Conference Call Summary
Financial Performance • Date of Call: February 3, 2023 • Key Management: Managing Director Rahul Gautam • Revenue Growth: Slight increase, but EBITDA below 10% due to one-off expenses. • Challenges: Inflation and fluctuating raw material costs impacting performance.
Market Insights • Market Shift: Transition from unorganized to organized markets; increased market share for Sleepwell brand. • Subsidiary Performance: Positive developments in Australia and Spain. • Sustainability Initiatives: Ongoing efforts highlighted.
Inventory and Margins • Gross Margins: Improved but affected by old inventory in TDI and polyol. • Current Pricing: Gross margins reflect current raw material costs.
Expansion and Growth Strategies • Volume Recovery: Focus on increasing foot traffic in Exclusive Brand Outlets (EBOs) and Multi-Brand Outlets (MBOs). • New Outlets: Plans for 400-500 new outlets annually. • International Expansion: New plant in Australia and modest recovery in Spain.
Sales Projections • Exports: Expected to reach INR 40 crores this year, with potential growth to INR 100 crores next year. • Online Sales: Projected to exceed INR 100 crores this year, with a 50-60% increase anticipated next year.
Product Initiatives • Sofa Market: Ongoing refurbishment pilot program. • Technical Foam Growth: Significant growth driven by the auto sector, holding a 70-75% market share.
Competitive Landscape • Furniture Retail Competition: Establishing "Furniture-First" stores to compete with retailers like IKEA. • Consumer Preferences: Noted trend towards one-stop shopping.
Strategic Initiatives • Affordable Mattresses: "Mattress for Every Indian" initiative targeting underserved populations. • European Market: Gaining market share despite a 25% slump in demand.
Marketing and Future Spending • Marketing Expenses: Recent one-time expenses necessary for post-COVID recovery; future spending expected to normalize.
Plant Installations and Revenue Expectations • Jabalpur Plant: Estimated revenues of INR 350-400 crores in 2-3 years. • Export Plant Utilization: Currently around 10-15%, leading to losses.
Inorganic Growth Focus • Acquisition Strategy: Interest in consumer-facing businesses in India and foam manufacturing abroad.
Industry Trends • Online Sales: Stabilizing, with expectations to account for 15-20% of the market. • Consolidation: Anticipated in the organized mattress market over the next two years.