Symphony LimitedUSA INDIA MEXICO

1

World leader in Air Cooling

Residential Range

2

Industrial & Commercial Range

3

Index

• Principle of Air Cooling

• Background

• Business Model

• Financials

• Opportunities

– Domestic Residential

– Domestic Modern Retail

– Domestic Industrial

– International

4

Index

• IMPCO – Mexican WOS

• SWOT Analysis

• Quality Standards and Certifications

5

Pour WaterSwitch On

Hot

Air

Cool

Air

Principle of Air Cooling

6

Principle of Air Cooling

Water

Distributor

HOT DRY

AIR Evaporative

Media

Water Reservoir

Fan

COOL

FILTERED

AIR

7

PARAMETERS AIR COOLER AC

CAPITAL COST LOW HIGH

RECURRING COST 90% LOWER THAN AC VERY HIGH

INDOOR AIR QUALITY100% FRESH FILTERED

COOL AIR

STALE DRY AIR

RECIRCULATED

REFRIGERANTS WATERPOLLUTING

REFRIGERANTS

MAINTENANCESIMPLE AND COST

EFFECTIVE

COMPLEX AND

EXPENSIVE

PORTABILITY YES NO

USAGE OUTDOOR & INDOOR INDOOR ONLY

EMISSION ECO-FRIENDLYENVIRONMENTALLY

HARMFUL CFC

HUMID CLIMATE LESS EFECTIVE EFFECTIVE

Air Cooler V/s. Air Conditioner

8

The Symphony Advantage

9

Operating Cost of 1 or 2 bulbs only

Also works on Inverter and portable gensets

Delivers fresh, filtered cool air

For Indoor and Outdoor usage

Background

• Established in 1988

• Went Public in 1994

• Pre-2000, positioning was : „Many products – One

market‟

• Ventured into AC‟s, Washing machines and other

durables

• Suffered financial stress and restructured

• Revived with focus on core-competence (Air Coolers)

• Post 2005, positioning is – „ One Product – Many

Markets‟ with complete range of Residential and

Industrial Air Cooling Solutions

10

Business Model: Key Highlights

• Design driven– Design leader, Advantage over competition

• Brand focused– World‟s and India‟s leading Air-cooler brand

• Global Distribution network– 60+ countries, India – 16,400+ retail dealers

• Asset light• Defining market terms

– Sales only on cash

– Sales to Subsidiary and Modern Retail on credit

• Capital Light– Negative Net-working Capital

• High ROI business model– Asset and capital – light model leading to high ROI

11

Business Model: Undisputed Leadership

• World‟s largest selling Air-Cooler Brand

• Leader in India by Miles

– Market share almost 50% amongst organised market

players, despite new entrants

• Competitors – many leading Indian brands

• No major Global player

• GST - Potential game changer

– will accelerate conversion of unorganised market to

organised players

12

Business Model: Key Entry Barriers/Moat

• USP :

– Innovation, Design, Quality, Features and Performance

• Brand and category leadership

• Distribution leadership

• Customer centric

• Management:

– Experience (what to do and what not to do)

– Ahead of curve attitude (new products, new designs)

• Focused approach

13

Business Model: Management Beliefs

• Focus: Stick to Core-Competence. No distractions

• Value acquisitions

• Business Model:

– Asset light and Capital Light

– Variable cost business model

– Negligible sales on credit

– Profitable Growth

• Create value for all stakeholders

• ROI – most important determining factor

14

2007 2008 2009 2010 2011 2012 2013

Volume growth

2007 2008 2009 2010 2011 2012 2013

Gross Revenue growth

5.3

18.9

31.2

28.4

24.022.9 23.1

2007 2008 2009 2010 2011 2012 2013

PBT % on Gross Revenue

15

Financials: P&L

CAGR from 2007. 2011 onwards, consolidated with IMPCO

2007 2008 2009 2010 2011 2012 2013

PAT growth

8.0 7.8

0.0 0.0 0.0 0.0 0.00.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

2007 2008 2009 2010 2011 2012 2013

Debt (Rs.Crs.)

Financials: Balance Sheet and EPS

16

EPS (Excluding Extra Ordinary Items) (In Rs.)Book Value (In Rs.)EPS (Excluding Extra Ordinary Items) (In Rs.)Book Value (In Rs.)

7.0 7.0 7.0 7.0 7.0 7.0 7.0

0.0

2.0

4.0

6.0

8.0

2007 2008 2009 2010 2011 2012 2013

Equity (Rs. Crs)<------------------No Equity Dilution -------------------------->

0.6

4.2

8.2

10.6

14.6 15.2

17.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2007 2008 2009 2010 2011 2012 2013

EPS (Face value of one share Rs. 2) (In Rs.)

(1.0)2.4

14.8

24.8

43.6

54.1

63.5

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2007 2008 2009 2010 2011 2012 2013

Book Value (In Rs.)

2011 onwards, consolidated with IMPCO

Financials: Capex and Dividend

17

Dividend Payout Ratio (In %)Dividend Payout Ratio (In %)

1.3 1.1 1.5

7.8

24.4

4.7 5.6

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2007 2008 2009 2010 2011 2012 2013

Capex (Rs. Crs.)

0.0 0.0 1.9 5.5 15.9

42.1 44.3

0 010 25

100

275

325

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

2007 2008 2009 2010 2011 2012 2013

Dividend Payout Ratio & Dividend %

Dividend payout ratio

Dividend %

2011 onwards, consolidated with IMPCO

Domestic Opportunity: Key Growth Drivers

• Rising per capita income

• Improved life-style and aspirations

• Global Warming

• Acceptance as a utility product rather than a luxury

• Electrification

• Availability of Easy Finance Options

• Organized retail is growing exponentially. We‟ve also registered

300%+ growth in last 2 years

• Strong and trusted 25 year old brand

18

Domestic Opportunities: Strong Brand

• Symphony Brand is synonymous with air cooler

• Highest Ad-spend in the air cooler category

• Advertising since 1990 through:

– TV

– Print

– Radio

– Below the Line

– Internet (since 2010)

19

Opportunities: Modern Retail in India

20

Modern Retail Customers in India

21

Sales Growth: Modern Retail

22

175%

314%

2010-11 2011-12 2012-13

Growth %

Modern Retail Display

23

Opportunities: Industrial Cooler

“90% of American firms named cool air as the

single biggest boost to their productivity”

“Cooling raised productivity by a quarter. On

factory floors it cut absenteeism and stoppages.”

(Source: The Economist, Page 41 Jan 2013 issue)

24

Opportunities: Industrial Cooler

25

EffectiveTemp (C )

24 27 29 32 35 38 41

Loss of work output

3% 8% 18% 29% 45% 62% 79%

Loss of accuracy

0% 5% 40% 300% 700% > 700%

(Source: Study for NASA. “Comfort Conditioning the Plant with Evaporative

Cooling” Plant Engineering July 8, 1976 Pg 76 Joseph Marg

Opportunities: Industrial Cooler

• Central AC Market in India - Rs 40,000 Mn

• Central Air Cooling Market size is undefined

• Potential market size > Rs 40,000 Mn

• Symphony is the only branded player

• Most industrial, commercial and religious

establishments are potential customers

26

Industrial Cooler: Potential Sites

27

Offices UniversitiesResidences Lecture hallsShops Service stationsShowrooms Poultry farmsPlaces of worship Dairy FarmsClub Houses Departmental storesWarehouses DG roomLounges LaundryCanteens KitchenMalls Panel roomsGuest Houses FactoryBanquet Halls Industry

Successful Installations

28

29

World‟s Largest Air Cooling ProjectExecuted by IMPCO, Mexico

Air-cooled entire Mecca Complex in Saudi

100 Million CFM of air cooling done.

30

India‟s Largest Air Cooling ProjectExecuted by Symphony, India

Baba Ramdev’s Yoga Hall, Haridwar

Ductless cooling of 2,00,000 sq. ft hall with just 22 units.

31

Industrial & Commercial Coolers: Installations

DHL warehouse, Delhi

KJR Polyfilms, Hyderabad ISB, New Delhi

32

Industrial & Commercial Coolers: Installations

Marico Industries - Jalgaon Railway Waiting Room - Kota

Sweet Shop - Indore Marriage Hall - Latur

33

Industrial Coolers: Global Installations

34

Industrial Coolers: Global Installations

35

Industrial Coolers: Global Installations

Opportunities: International Markets

36

• Air cooler seen as a Green Product – gaining popularity

• Global warming accelerating demand

• Current market size for ACs : 75 mn units

• AC global market size expected to be 150 mn by 2017

(industry report)

• Air Cooler market potential should logically be greater

International Markets: Presence

37

Office/Country Manager

Symphony across geographies

38

South Africa Middle East

America South East Asia

Symphony across geographies

39

Asia

CIS Countries Europe

Africa

IMPCO

IMPCO

1930Adam Goettl

invents and patents first Evaporative

Cooler

1939International Metal

Products Co. (IMPCO) founded in Phoenix, USA

1960First cooler

made in Mexico

2009-11Symphony

Acquires Impco.

1955IMPCO Mexico

2006All products are made in Mexico

IMPCO

IMPCO plant in Monterrey, MX (150 miles from US border)US office in Phoenix.

MONTERREY

IMPCO

• Symphony started leveraging Impco‟s relationships

With large format stores like

• Acquisition has opened substantial opportunities to offer end-to-end

economical and environment-friendly air-cooling solutions

• Commercial and Industrial Coolers available to distribute in India and

through its international distribution.

• Initiated Brand Building through TV ad campaign for

43

SWOT Analysis

44

Strengths

• Focused on one category

• Innovation led

• Strong brand

• Asset-light business model

• No debt

• Low competition, globally

Weakness

• Relatively small size of the current market

• Seasonality in IMPCO

Opportunity

• Vast Untapped market potential for residential coolers

• Global Warming

• Huge potential for Industrial coolers

•

products

• Inorganic growth

Threat

• Competition from China

Quality Standards and Certifications

45

First Indian company to receive

certification for Germany

Mexico

GlobalRussia-CISSaudi Arabica

North America Europe Brazil

Malaysia Kuwait

Quality Standards and Certifications

46

Star Export House

Govt. of India approved R&D centre

ICAI AWARD IN 2nd CONSECUTIVE YEAR FOR

„EXCELLENCE IN FINANCIAL REPORTING‟

47

The Award was handed over

by Mr. V. N. Kaul, the former

Comptroller and Auditor

General of India, (who was also

the chief of the jury) to Mr.

Nrupesh Shah, Executive

Director and to Mr. Bhadresh

Mehta, VP-Finance

ICAI has nominated

Symphony Annual Report for

„Best Presented Accounts Award‟

for 2012 organized by South

Asian Federation of Accountants

(SAFA)

48

www.symphonylimited.com

Symphony USA Inc.