Dear fellow shareholders
I would like to begin by expressing my gratitude for your unwavering faith andconfidence in our Company. The financial year 2018-19 saw most large global economiesperform relatively better than the last few years while developments in technologycontinued to pick up pace. At Creative we have been embracing these developments not justto keep the brands relevant but also to transform them into holistic customerexperiences.
Creative has continued to maintain its leadership as market specialists for globalniche brands in India and is scaling up its operations over a wide spectrum to facilitatethese brands. At Creative we have a pan-India network for over 20 reputed brands; most ofwhich are exclusive to us. Our Company has been successful in delivering tangible resultsfor our clients in markets that are early adopters of new technologies. The journeythough has only just started and we are continually calibrating and aligning ourselvesto make our brand collaborations successful and be at the forefront of what our industrycan offer.
During the year we have entered into an agreement with Thermal take for thedistribution of computer cooling and gaming accessories in the West North & Southregions of India. We entered into an exclusive agreement with InVue Security Products Corpto distribute its products across India.
During this time our association with Honeywell for Trademark License Usage andContract Manufacturing has started showing results. We now have more than 100 SKUs. Eachconsumers' life today is governed by three screens- TV screens laptop screens and mobilescreens and as a company we would like to enhance the customer experience for the usage ofthese screens. I am glad to share that the brand has extended its contract with us todistribute some of their products across the SAARC and Middle East regions. This is inline with our global expansion plans and would benefit us as we achieve economies of scalein these mature markets.
Our Company also signed an agreement with ASRock Inc. (a Taiwan based electronicsmanufacturer) to distribute motherboards in India. With great pride we would like toshare that imaging giant GoPro has renewed its exclusive contract with us for distributingits products across India. These agreements are a strong reflection of the confidence andfaith that our clients have in us.
Digitization is increasingly being embraced by enterprises consumers and IT servicesfirms. While the pace of adoption is unprecedented it is on expected lines with thefocus gradually shifting from a product/price sensitive market to 'customer experience'becoming a central theme. Both enterprise mindsets and business models are undergoing aparadigm shift where the key scarce resource is no longer financial capital butintellectual capital. Our own ability to adapt to the new and agile way of conductingbusiness has become the key differentiator.
In line with evolving trends in the industry I am happy to share that we have emergedas a one-stop-shop having an omni-channel network encompassing Online Retail and GeneralTrade. We have engaged with our partner brands in order to develop product life cycleguide them in knowing customers' challenges and improve price-to-benefit ratio. Toincrease brand awareness among the masses we conduct specialized training modules eventsand promotional activities at the ground level with our channel partners in the Indianmarket. This is possible due to the dedication and experience of our corporate and salesteams which constantly track latest market developments to build a closer market connect.
Over and above our portfolio of products covering IT Lifestyle Imaging and RetailSecurity products we are increasingly focusing on creating a unique customer experiencefor our brands one that would differentiate them from their peers/competitors. Our widespectrum of products offered from multiple vendors helps us to achieve economies of scaleand provide customers a single sourcing point.
We have created a strong market network over the span of two decades. Over the lastcouple of years we improved our operating model making it more efficient and intend tocontinue doing so. Our comprehensive reach combined with optimal logistics capabilitieshelp us provide end-to-end services including warranty and post-warranty high-levelrepair services and response centers among others. Such expertise and superior qualityof service has led to increased confidence of our brands in us. They have continued toengage with us increasing their product offerings and are encouraging new brands to notjust look at India as a growth opportunity but enter this market choosing Creative astheir exclusive partner. This is evident from several global brands approaching us fortheir India-entry strategy.
All these initiatives that we have undertaken reflect in our financial performance aswell.
In FY2019 our Company recorded a sales growth of 47.7% to Rs. 370.7 crore in FY2019from Rs. 250.9 crore in FY2018. This coupled with newer brand additions facilitated a75.7% growth in EBITDA to Rs. 13.2 crore in FY2019 from Rs. 7.5 crore in FY2018. TheEBITDA margin expanded by 57 bps to 3.56% from 2.99% on the back of sales of higher marginvalue added products. Our Company registered a 98.97% growth in net profit to Rs. 5.75crore in FY2019 from Rs. 2.89 crore in FY2018.
Moreover it gives me immense pleasure to announce that on 5th August 2019our Company successfully migrated to the NSE Main Board from the NSE-SME platform afterfulfilling all the required criteria. This opportunity would create better visibility forthe Company to reach out to a wider investor community. The migration bears a testimony toour performance and client confidence.
Our Company has grown significantly since listing on the SME platform and we believewe are ready for this larger platform the move enabling us to achieve new and higherbenchmarks. This move to the Main Board also comes at an appropriate time as our Companyexpands across international markets and takes up larger projects.
All our milestones and successes that we have achieved are entirely attributed to ourmost important asset - our Team! They are incredibly talented passionate and have imbibedour core values of Collaboration Expertise and Dedication. They have not only set highstandards for themselves but also hold us accountable to deliver them. I would also liketo express my gratitude and appreciation to our brands who present to us the opportunityof dealing with the exciting challenges of today's business our partners who enable us toexecute and meet our commitments and all our stakeholders for their unflinching supportfor us to pursue our goals in a steadfast manner.
We plan to continue on this journey increasing our engagement with global brandsadding to our network expanding & scaling our operations with the single mind focusof enhancing the consumers' experience in a more holistic way.
Chairman and Managing Director
Date: 14th August 2019