NO LIMITS! GOKALDAS EXPORTS LIMITED HOWA CULTURE OF AGILITY TRANSLATED INTO OUR Q1 FY21 OUTPERFORMANCE
Products Global footprint Engaged in the Background Exports to more than manufacture of In business since 50 countries like US, outerwear, sportswear, 1985; leading Europe, Canada, casual wear and formal Japan, Russia, Middle apparel exporter of wear for women, men East, South Africaand India and children South America Integrated Manufacturing People Functions comprise strength Locations Employing over design, development, Capacity to produce 30 Multiple locations 20,000 women; embroidery, million apparel pieces across South India average age quilting, printing, per annum ~35 years washing, lazer with 13,000+ machines finishing and polyfill 2
Our prominent customers GAP: Largest specialty H&M: One of the global Adidas: Global leader Columbia: Industry retailer in the United leaders in fashion with in athletic apparel leader in outdoor apparel States whose products a presence in about 60 and the second- products like jackets, are available in over 90 countries, along with an largest sportswear fleece, pants, shoes and countries online presence in over manufacturer in the boots 35 countries world Carhartt: Delivering Puma: German Vero Moda: One Marks & Spencer: best-in-class apparel, multinational that designs of the first brands Iconic British respected for rugged and manufactures to launch within multinational retailer that construction, innovative athletic and casual the family-owned specialises in selling design and exceptional footwear, apparel and Bestseller company. clothing, home products standards of quality, accessories. Third Emerged as the brand and food products durability and comfort for largest sportswear of choice for the 125 years manufacturer in the fashion-conscious, world independent young woman who wants to dress well and pay less 3
Our prominent customers A&F: American lifestyle ZARA: Biggest fashion retailer that focuses on retailer globally that casual wear. Operates launches over 12,000 two offshoot brands designs every year Abercrombie Kids and Hollister Co., with 1,049 stores across all three brands Walmart: US Carrefour: French multinational retail multinational retail corporation engaged corporation with a in the operations of a global network of chain of hypermarkets, over 12,000 discount department stores. Offers stores and grocery consumer goods, stores. The Company food and non- operates over 11,500 food products, stores under 56 household banners in 27 countries supplies, textiles, electronics, home appliances and local products 4
The challenges against whichthis performance wasdelivered The outbreak General Weaker Disrupted Key markets economic of theCovid-19 of USAand EU consumer supply chain slowdown pandemic underlockdown sentiment Need to Global and Affected the (partial or Consumer access new supply chain, Indian GDP de- complete) and reliable preferencefor grew . Indian costs and Retail store lower value suppliers apparel sales pipeline; closures, decline products exports particularly in in apparel declined 62% Q1 offtake A relatively creditable quarter for our company Nimbly brought Reduced Lowerrevenues; in new business Sectoral operating cost line in superior EBIDTA outperformance in line with healthcare to margin revenue augment reduction revenue 5
2. Logistics movement was 15 % affected impacting RM and FG capacity movements utilization,April 1. Closure of 2020 3. No regular all our manufacturing factories operations in from 24 March April 2020, 2020 50 % except Covid-19 healthcare capacity garments impact on our utilization, May 2020 operations 6. Overall lost 50% of production 4. Resumed 75 % capacity in manufacturing with the quarter capacity social distancing on utilization, 4 May 2020 5. Restricted June 2020 labour availability and social distancing reduced capacity 6
The big picture of our Q1 FY21 performance REVENUES EBIDTA EBIDTA MARGIN Lost production capacity mainly 237.3 18.5 7.8 impacted revenue generation %, Rs cr, Rs cr, Q1 FY2021 Revenues, Q1 EBIDTA, Q1 New business in healthcare apparel FY2021 FY2021 supported the business in the quarter Managed operating expenses and 341.3 18.7 5.5 controlled it to align with revenue %, Rs cr, Rs cr, reduction Q1 FY2020 Revenues, Q1 EBIDTA, Q1 FY2020 FY2020 Revenue and EBITDA of Q1 FY20 excludes MEIS income of Rs. 10.63 Cr which was reversed during the 30 ~Par 2.3 quarter ended December 31, 2019 consequent to the notification issued % change in % increase by the Government of India, on 14th EBIDTA in EBIDTA decline in Jan 2020 margin revenues 7
The big messages of our Q1 performance EXTENSIVELY OPPORTUNIST OUTPERFORMED IC ENTRY INTO NEW BUSINESS THE SECTOR 25 30 % revenue % decline from new in revenues vs. healthcare 62% decline in product Indian RMG segment exports (Source: DGCI&S, 2020) SUPERIOR ENHANCED OPERATIONS EBIDTAMARGIN MANAGEMENT 33 7.8 % reduction % EBIDTA in operating margin, Q1, expenses FY21, vs. 5.5% in Q1, FY20 8
How weprotected our business Optimised Customer Manufacturing Diversification costs relationships efficiency Supply Safety Capex freeze chain 9
How we protected our business #1 - Diversification Entered the Generated Among few healthcare Diversified base incremental companies segment; helped offset revenues (25% selected by commenced product, customer of revenues) Government of production of or geographic and cash flows India to produce personal protective revenue volatility PPEs equipment (PPE) How we protected our business #2 - Capex freeze Realigned Complete Strong , supplier freeze on focus payment in tune non-critical on cash with business capex conservation reality 10
How we protected our business #3 - Opex management All Headcount expenses realignment and critically compensation evaluated structuring Re-aligned Re-negotiated value-added input costs services costs with suppliers to business where needs possible 11
How we protectedour business #4 -Safety Use of temperature Robust protocols Social sensing, masks, for workplace distancing face shields and safety practices hand washing Strengthened All facilities employee Engaged with regularly engagement the various sanitized to improve teams productivity 12
How weprotected Continued focus on our business #5 - long-term Realigned partnerships Focus on Customer product mix to timely order suit current completion and relationships market delivery conditions Offered support to customers Working closely requiring to adapt to replanning of customer supply deliveries in line chain needs with market need Constant Retained engagement positioning as a with customers preferred global and aligning vendor their needs to Managed ground reality redistribution of orders across units 13
How we protected our business #6 - Supply chain Provided Diversified our Sought non- Strengthened business while supplier base China suppliers engagement e s with receiving where to broadbase long-standing benefit of required vendors partners better terms How we protected our business #7 - Manufacturing efficiency Thrust on Relentless recovering as , focus on much of April / optimized May manufacturing production loss in June 14
The outcomes of our multi-pronged approach Financial Operational Strategic • Managed cash • Strong customer • Balanced orders flows efficiently engagement and with capacity • Leveraged handholding • Stopped non- ensured business additional Covid value-adding continuity line of credit as a operations backup • Managed supply chain well to ensure operational continuity 15
Gokaldas Exports adequately positioned to deliver Brands to seek Retail industry Demand shift lower cost and shakeout; shutting towards lower- volume-based down of priced products suppliers unprofitable stores in the short run Volatile seasonal Greater traction Increased planning for casual online environment dressing and offtake could impact athleisure lead times for products delivery Orders Brands Demand favouring seeking traction companies Adv. companies towards with record with GEX large apparel of timely complex exporters delivery 16 capabilities
We remain integral to global business flow HSE compliances in place; Consistent outperformance zero liquid discharge status of the global industry service of the captive laundry delivery average Beyond commodity; a complex value-added garments manufacturer No long-term debt on the Balance Sheet Demonstrated capability to address a range of garments (hence de-risked) 17
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