Swiss Military Consumer Goods Ltd

"WE ENVISION A MASSIVE SURGE IN THE DEMAND FOR QUALITY

LUGGAGE. LUGGAGE

THAT REPRESENTS THE TRAVELLERS' PERSONALITY AND ENHANCES TRAVEL CONVENIENCE. BEING IN THE LUGGAGE SEGMENT, WE SEE A SIGNIFICANT OPPORTUNITY TO GROW OUR WALLET, SHELF SHARE AND BUSINESS SHARE."

Dear shareholders,

It gives me immense pleasure and satisfaction to inform you that we have closed FY24 on a splendid note and robust numbers. We reafirm and assure all our valued stakeholders that we are fully committed to serving your interests and scaling up business through progressive growth on all parameters. We reiterate with pride and humility that at Swiss Military, we delivered on all our stated commitments, goals and objectives while progressing on our strategic focus areas. Our performance reflects our ability to adapt, innovate, and thrive in a dynamic, cutthroat and price-sensitive market environment.

FY24 marks an important milestone in our journey as we have embarked on setting up our first manufacturing facility dedicated to manufacturing travel gear. While this marks a break in our otherwise asset-light operations, it was the need of the hour.

The altering landscape

Today, we stand at the edge of massive change, with the world around us rapidly evolving to embrace the next normal.

The next normal is the rapid shift in consumer preferences from ‘Materialistic Possessions' to ‘Memorable Experiences'. The average Indian is arguably investing much more in building moments as against material stu_.

As a result, travel has surged. The air travel numbers are mind-boggling. In the first three months of 2024 alone, 97 million passengers travelled through Indian airports.

Air travel in India's rural areas saw a significant surge last fiscal year, driven by government initiatives and expanded airline services to underserved regions. Regional airports reported substantial increases in passenger tra_c, ranging from 30% to a remarkable 702% in FY24 compared to the previous year.

Moreover, Indians spent 3.5 times more on foreign travel in FY24 than they did five years ago. And tailwinds to this trend will only strengthen as we move forward for three important reasons.

1) The travelling mindset has changed.

The travel landscape in India has evolved. Gone are the days of only having family vacations and business trips. Indians are now opting for leisure trips, staycations, teenage and group travel, and solo trips. The concept of 1 family trip a year has now broadened to various short road trips, weekend staycations, friends' trips, bachelorette trips and more.

2) Earning potential will only increase.

In the last three decades, India has not only grown faster but has also compressed the GDP growth of the earlier decades into fewer years. India is expected to transition from a US$ 3.75 Trillion economy to a US$ 7 Trillion economy in maybe by the end of this decade. What was achieved in 78 years will be replicated in about seven years.

As the nation surges ahead, some secular trends will continue to reshape the consumer landscape in India - rising disposable incomes and the democratisation of the internet mean that awareness levels are very high. Media reports suggest that India's per capita income will likely grow around 70% by 2030 and is expected to reach US$4,000 from current levels of US$2,450. Even as this transpires, an appreciable proportion of this would come to travel.

3) Connectivity will surge

The government is pivotal in supporting this travel boom by investing heavily in infrastructure.

• Our airports have surged from 74 in 2014 to 149 in 2024. Moreover, plans are underway to construct 71 new airports, totalling 220 in the near future. The new airports are focused on building connectivity with tier 2 and 3 towns, making travelling more accessible.

• There is a plan to redevelop railway stations in India, the largest of its kind in the world, of which work has been initiated for about 500. Moreover, the Government is adding the new Vande Bharat trains on every travel route to make travel an enthralling experience.

Wind beneath our wings

We envision a massive surge in the demand for quality luggage. Luggage that represents the travellers' personality and enhances travel convenience. Being in the luggage segment, we see a significant opportunity to grow our wallet, shelf share and business share.

We are responding to this opportunity proactively. We are setting up a luggage manufacturing facility, our first asset-based operations. The new venture is aligned with our future vision of expansion in India and abroad while being part of the government's 'Make in India' call.

We trust that this new facility will be a cornerstone in our journey towards sustained growth and leadership in the industry.

Additionally, we will continue to assess new segments and categories based on their potential. We will curate strategies to acquire capabilities we do not possess or need to develop quickly as long as they meet our strategic and financial _lters and align with our long-term objectives.

In conclusion

I am optimistic about the future of Swiss Military. We are well-positioned to capitalise on the growing trends in travel and lifestyle products, supported by our strong financial performance and strategic initiatives. I thank our shareholders, employees, and customers for their unwavering support and trust.

TOGETHER, WE ARE DESTINED FOR GROWTH.