It's been another eventful year for us at Himatsingka. We had set out to accomplishseveral objectives for FY19 and we are indeed pleased with the progress that we have madeduring this time.
While the global and domestic economic environments continue to be challenging andvolatile we have been steadfast in executing various initiatives across the board. Ourinitiatives are focused on achieving holistic growth. It is not our operating performancealone that drives value for our stakeholders but a string of initiatives that aid inaugmenting our global leadership quotient and our ability to build a more sustainable andresponsible enterprise.
Our Manufacturing Platforms
Over the last three years we undertook a calibrated capital expenditure programme thatinvolved the setting up of one brownfield and two greenfield projects.
We undertook a brownfield expansion programme to augment the capacity of our beddingdivision from 23 MMPA (Million Metres Per Annum) to 61 MMPA making us amongst the largestintegrated manufacturers of bedding products globally.
We also undertook a backward integration greenfield project to set up a cotton spinningplant with an installed capacity of 211584 spindles. This spinning plant the world'slargest under one roof gives us significant strengths in furthering our seamlesslyintegrated model spanning the entire value chain from fibre to shelf.
In addition to expand our soft home solutions portfolio we implemented a greenfieldproject to set up amongst the larges- terry towel production facilities globally. With aninstalled capacity of 25000 TPA (Tonnes Per Annum) this facility will be synergistic andcomplimentary to the products offered by our bedding division.
While the expansion of the bedding division commenced commercial production duringFY17 our spinning plant was commissioned during FY18.
We are pleased to share that our towel facility commenced trial production during FY19and should be ready to begin commercial production by the end of H1-FY20.
Situated at our manufacturing campus in Hassan Karnataka all these plants areequipped with best-in-class technology and infrastructure. These investments havesignificantly strengthened our capabilities and capacities and will be pivotal to ouroperating performance going forward.
Our Global Brand Portfolio
Himatsingka has developed a strong know-how to build and operate brands in the hometextile space.
Nurturing and growing our brand portfolio is integral to the Himatsingka model that isseamlessly linked from fibre to shelf. During FY19 we successfully integrated therecently acquired portfolio of brands that includes the iconic Tommy Hilfiger home brandamong others. In addition during the year we also acquired exclusive license rights tothe Royal Velvet brand
Our cotton brands Pimacott HomeGrown Cotton! Organicott and Gizacott continueto cement their global leadership in the cotton Track & Trace space.
Our global brand portfolio is now powered by over 12 brands that continue to aid ourefforts in enhancing our market share across regions. Our portfolio also helps inleveraging our manufacturing expertise and scale to deliver integrated solutions for ourglobal clientele.
We remain focused on enhancing revenues from our global brand portfolio and believethey will add significant strength to our operating model. Our revenue streams from brandsremained strong during FY19 and stood at '2255 crores versus '1610 crores during FY18.
Our global brand portfolio is now powered by over 12 brands that continue to aid ourefforts in enhancing our market share across regions.
Our Operating Scorecard
FY19 saw us stabilise the operating performance of our new Spinning plant augmentcapacity utilisation levels at our Bedding plant and integrate our acquired brandportfolio. These initiatives culminated in Consolidated Total Revenues growing by 17.1% to'2654 crores during FY19 versus '2267 crores during FY18. Our five-year growth CAGR onthe Consolidated Revenue front therefore stood at 5.48%.
Our Consolidated EBITDA for FY19 grew 24.4% and stood at '580 crores versus '466 croresduring FY18. Our focus on sweating assets helped us expand our consolidated EBITDA marginsthat stood at 21.8% during FY19 versus 20.6% during FY18.
The consolidated PAT for FY19 remained range-bound and stood at '196.84 crores versus'201.64 crores during FY18. Consolidated Total Assets for FY19 stood at '5205 croresversus '4219 crores during FY18. Growth in Total Assets was primarily due to theinvestments made in new projects and higher working capital requirements.
While we remain focused on improving our capital efficiency parameters both ROE andROCE for FY19 remained range- bound given the increase in total capital employed onaccount of new projects. We endeavour to improve our capital efficiency parameters withthe commissioning and scaling up of our new assets.
Priorities for FY20
FY20 will be a year of consolidation. As far as our manufacturing platforms areconcerned we will be focused on sweating our assets across Bedding Bath and Yarnverticals.
On the Bedding and Bath front our priority will be to increase capacity utilisationbroaden product offerings and drive efficiencies. We believe digital capabilities andsuperior efficiencies are positively correlated and our investments in creating nextgeneration digital shop floors will be integral to achieving the same.
Our integrated model comprises of high tech scale oriented manufacturing platforms onthe one hand and strong consumer facing brand platforms on the other. Therefore we willcontinue to strengthen and grow our portfolio of brands in order to provide relevant andfuture ready solutions to global audiences.
As a total solutions provider in the home textile space it is imperative thatHimatsingka epitomizes flexibility and agility in responding to the requirements of ourglobal clientele. Given our wider product portfolio with the addition of bath products wewill intensify our efforts to achieve best-in-class response times in addressingincreasingly dynamic client needs across markets.
As a thought leader in our industry we strive to decode global market movements tooffer solutions that lead the way and drive value for our clients. This is not possiblewithout building teams rich in intellectual capital across functions. We will thereforecontinue to invest in strengthening our intellectual capital pool keeping medium and longterm goals in view.
Our New Identity
We thought it's time to refresh our brand identity re-energise our vision and purposearticulate our core values and define our approach to work. We believe our new vision of'Redefining possibility and delivering distinction through the relentless pursuit ofexcellence' will guide us in exploring new frontiers of growth while our values keep usanchored to become a more sustainable and responsible enterprise.
We believe our new vision of 'Redefining possibility and delivering distinction throughthe relentless pursuit of excellence' will guide us in exploring new frontiers of growth.
Being More Sustainable
Sustainability is central to our thinking at Himatsingka. We endeavour to make everystep of the value chain we operate in more sustainable. Our efforts to be greenermanifests in everything; from packaging to power consumption from water to waste.
Himatsingka operates best-in-class zero liquid discharge (ZLD) water managementfacilities and has been focused in increasing its energy consumption from renewablesources.
We are pleased to share that our energy consumption from renewable sources hasincreased to 23% of total energy consumed in FY19 versus approximately 8% during FY18.
On the product front we have worked with clients across regions to develop and launchproducts with green packaging and accessories. We have also led various initiatives to useraw materials like cotton that have been grown organically or cultivated using optimalagri-practices that significantly reduce and/or remove the use of chemical basedagri-inputs and restrict usage of other natural resources like water.
We will remain committed to driving sustainability measures across the value chain andendeavour to create new benchmarks in developing sustainable practices.
The Road Ahead
Over the last three years we have committed approximately '2500 crores inimplementing our new projects undertaking organic capital expenditure requirementsacquisitions and meeting working capital needs across our businesses.
We have a lot to do in order to harness the full potential of the various assets thathave come to be part of our global asset portfolio. While we are committed to maximisingreturns from these investments we also endeavour to embrace new growth opportunities thathelp us consolidate and adapt to the increasingly unpredictable and disruptive globalenvironment.
Our efforts are incomplete without the valuable support and trust of our shareholdersemployees bankers clients suppliers the Board and other stakeholders. We would like totake this opportunity to express our sincere gratitude for your belief in Himatsingka.
|Sincerely || |
|Shrikant Himatsingka ||Dinesh Himatsingka |
|Managing Director & CEO ||Executive Chairman |