Service Global Footwear Limited (‘SGFL’ or ‘the Company’) was incorporated as a public limited entity on July 19th, 2019 under the Companies Act, 2017 and got PSX listing on April 28th, 2021. It has a free float of ~25.00pc as of Dec'25. The Company's registered office is located at Servis House, 2-Main Gulberg, Lahore.

SGFL is a subsidiary entity of Service Industries Limited (SIL). The BoD of SIL decided to demerge and transfer one of its manufacturing units, SIL - Muridke unit, along with its facility and all relevant assets, operations, andliabilities etc. to a subsidiary, Service Global Footwear Limited, through a court sanctioned scheme. Subsequent to this decision SGFL was incorporated in 2019. During 2021, as per the devised strategy, proceeds from the SGFL's IPO were mainly utilized for making an investment in another associated company named Service Long MarchTyres (Pvt.) Limited – SLM Tyres. Currently, SGFL owns ~18.30% stake in SLM Tyres. SGFL has also incorporated a wholly owned subsidiary by the name of Dongguan Service Global Limited (DSGL) to undertake procurement, marketing and product development activities.

Service Global Footwear Limited (SGFL) is engaged in the manufacturing, sale, marketing, import, and export of footwear, leather, and allied products, operating primarily as an export-oriented entity. The Company’s manufacturing facility is located at 10-KM Muridke–Sheikhupura Road, Lahore, and is equipped with state-of-the-art machinery. SGFL operates an integrated production setup encompassing cutting, stitching, lasting, and finishing processes, enabling consistent product quality and timely order fulfillment. The Company caters to both private-label and branded international customers, with a strong focus on European markets, supported by established relationships with global buyers. The facility has an installed production capacity of approximately 4.6 million pairs per annum, with capacity utilization of around 85% during 9MCY25, reflecting healthy demand and operational efficiency. SGFL’s operations are further supported by standardized production processes, robust quality assurance systems, and compliance with international social and environmental standards, strengthening its export-oriented business model.

Service Global Footwear Limited (SGFL) is majority owned by Service Industries Limited, which holds approximately 75.0% of the Company’s shareholding. Members of the sponsoring family directly hold around 1.2% of the shares, while the remaining ~23.8% stake is held by the general public.

Service Global Footwear Limited’s ownership structure is considered stable, with no significant changes in the shareholding pattern expected in the near term. The majority stake remains with the group’s holding company, Service Industries Limited (SIL), which provides continuity in ownership, strategic direction, and oversight.

The Service Group, sponsor of Service Global Footwear Limited (SGFL), is considered to have strong business acumen, supported by over six decades of operating history in Pakistan and a diversified presence across sectors including footwear, tyres, technical rubber, power, and investments. The Group is led by experienced professionals with strong academic and industry backgrounds. SGFL benefits from more than 50 years of experience in footwear manufacturing and is a leading exporter of leather footwear, supplying internationally renowned brands. The Group’s strong financial profile and emphasis on innovation and sustainability, including adoption of solar energy and international certifications, provide strategic and operational support to SGFL.

Service Global Footwear Limited (SGFL), as part of the Service Group, benefits from a sound financial profile with substantial access to both domestic and international markets. The sponsors’ capacity to provide financial support, if required, is considered good. The holding company, Service Industries Limited (SIL), maintains a strong consolidated financial position, with an asset base of ~PKR 119 billion and equity of around PKR 38.7 billion. As of 9MCY25, SIL reported a consolidated topline of PKR 109 billion and net profit of PKR 12 billion, underscoring the sponsors’ strong earnings capacity and financial resilience.

The board comprises nine members, out of which three are executive, three are non-executive, & three are independent directors. Mr. Arif Saeed who has more than 3 decades of diverse industry exposure, chairs the Company's board. Mr. Hassan Javed, the CEO, also serves the board as an executive member. SGFL's board is following good corporate governance structure.

The Board comprises experienced professionals with diversified expertise, including four members representing the Service Group. The Chairman, Mr. Arif Saeed, is an Oxford University graduate and Chief Executive Officer of Service Industries Limited, with directorships at Service Long March Tyres (Private) Limited and Servis Foundation. He has previously served as Chairman of APTMA and the Lahore Stock Exchange, founded multiple public-sector power companies, and currently serves on the Boards of Aitchison College, Divisional Public School Lahore, Pakistan Revenue Automation (Private) Limited, and as an Independent Director of Sui Northern Gas Pipelines Limited. Mr. Hassan Javed, a leather technologist from Nene College UK and shoe technologist from ISMS School Czech Republic, serves as a Director at Service Industries Limited, Service Long March Tyres (Private) Limited, and Servis Foundation, and has held senior leadership roles including Resident Director Gujrat and Chairman of GEPCO and the Pakistan Footwear Manufacturers Association. Other key members include Mr. Ahmed Javed, Chairman of Service Industries Limited, and Mr. Omar Saeed, a Brown University graduate with an MBA from Harvard Business School, currently CEO of Service Long March Tyres (Private) Limited and Servis Foundation, and a Director at Nestlé Pakistan Limited, Systems Limited, Service Industries Limited, The Hunar Foundation, and Shalamar Hospital. The independent directors, Mr. Azmat Ali Ranjha, Mr. Abdul Rashid Lone, and Ms. Maleeha Humayun Bangash, contribute extensive experience in public service, energy, finance, and corporate governance, strengthening the Board’s oversight framework.

The Board of Service Global Footwear Limited has demonstrated strong effectiveness through structured governance and oversight. It has established two key sub-committees: the Audit Committee and the Human Resource & Remuneration Committee, which focus on financial integrity, risk management, and executive performance. Board meetings are held quarterly in compliance with corporate governance principles, with all discussions, decisions, and actions meticulously documented in formal minutes. The Board actively monitors company performance, strategic initiatives, and regulatory compliance, ensuring alignment with shareholder interests. Independent directors provide unbiased oversight, strengthening transparency and accountability. Overall, the Board’s proactive engagement, combined with its diverse expertise and structured committees, ensures sound decision-making, risk mitigation, and sustainable value creation for stakeholders.

M/S. Riaz Ahmad and Co., SBP category ‘A’ auditor, is the external auditor of the Company. The auditors have expressed an unqualified audit opinion on the financial statements of SGFL for the year ended December 31st, 2024.

Service Global Footwear Limited (SGFL) operates a hierarchical organizational structure led by the CEO, with department heads reporting directly or indirectly to the Chief Executive Officer. The multilayered departmental structure ensures clear lines of authority, enabling effective coordination, accountability, and operational efficiency across the organization.

The management team of Service Global Footwear Limited (SGFL) is led by Mr. Hassan Javed, CEO, a leather and shoe technologist with extensive industry experience and board memberships at Service Industries Limited, Service Long March Tyres (Pvt.) Limited, and Servis Foundation. Key senior management includes Hassan Ehsan Cheema, COO; Qadeer Ahmed Vaseer, Executive Director; Muhammad Ashfaq, Senior VP Solutions – Sales & Product Development; Amer Ahmed Javed, GM Engineering & Special Projects; Usman Liaqat, Financial Controller; Anwar Ul Haq, GM Export Sales; Syed Kashif Abbas, GM Sales & Marketing; Luqman Afzal, GM HR & Admin; and Muhammad Zahid Mumtaz, GM Operations. Collectively, the team combines decades of experience, long tenure with the Group, and specialized expertise, ensuring effective operational management, strategic execution, and sustainable business growth.

With the support of an experienced team of professionals, SGFL is building up the business strengths and increasing its foot print across different countries abroad, and also tends to grow its exposure domestically.Functions of the management are clear and well-defined to effectively achieve its underlying goals and objectives.

The Company is presently using Oracle EBS Version 12.2.7 as the main software for Enterprise Resource Planning (ERP).

For operational efficiency and appraisal of internal controls, the Company has in-house team of qualified professionals at all levels to implement and monitor the policies and procedures. SGFL has an effective mechanism for identification, assessment and reporting of all types of risks arising out of the business operations.

The Footwear sector constitutes an important segment of Pakistan’s consumer goods industry, holding considerable economic significance as it is reflected by the large number of people employed (over ~1Mn) in the Footwear industry. Pakistan’s production base is diverse, including leather shoes, sports Footwear, sandals and safety boots, which cater to both domestic demand and export markets. The Footwear industry in Pakistan is heavily concentrated in Punjab, with Lahore, Gujranwala and Sheikhupura forming the core production cluster. These, alongside Karachi and Sialkot, serve as important manufacturing hubs and account for nearly ~86% of Pakistan’s overall Footwear production capacity. In FY25, Footwear exports amounted to USD ~176Mn, whereas the total Footwear produced in the country for the period was ~37.7Mn pairs. Pakistan is the 7th largest consumer of footwear globally, underscoring its significance as a sizeable domestic market while also highlighting strong potential on the export front.Pakistan’s Footwear exports increased ~8.9% YoY to USD~176.5Mn in FY25 (FY24: USD~162.1Mn), forming ~0.6% of country’s total exports (FY24: ~0.5%). In volumetric terms, however, exports were down ~11.5% YoY to record at ~19.0Mn pairs (FY24:~21.5Mn pairs). This was mainly on the back of higher value products being exported for the period. Leather Footwear made up ~77.9% of Pakistan’s Footwear exports in FY25 in value terms. The export value increased by ~10.1% YoY to record at USD ~137.6Mn. In volumetric terms, leather Footwear exports were recorded at ~8.9Mn pairs (SPLY: ~9.5Mn pairs), marking a ~6.2% YoY decline. Canvas accounted for ~1.4% of the total Footwear exports in FY25. It declined ~15.6% YoY to USD ~2.4Mn (SPLY: USD ~2.9Mn). Similar decrease was reported in volumetric terms, with a ~22.4% decrease YoY. Other Footwear (including rubber/plastic, synthetic, and athletic) made up ~20.7% of total Footwear exports. Export value increased ~6.4% YoY to USD ~36.5Mn. In FY25, Pakistan’s average Footwear export price rose ~23.4% YoY to USD ~9.3 per pair (FY24: USD ~7.5 per pair). This points to a shift toward higher-priced products due to a stronger international demand for premium and durable footwear in the period. The average export price for leather Footwear showed an increase of ~16.7% YoY for FY25, whereas, average export price for ‘Other’ Footwear registered an increase of ~24.5% to record at USD ~3.6/pair in FY25. The export price for canvas Footwear reached USD ~20.2/pair, a ~8.6% YoY increase. Germany remains the top destination for Footwear exports followed by Italy, Netherlands, USA and Spain. Although Pakistan is one of the countries subjected to US tariffs (~19%), it still holds a competitive edge over its regional competitors (China, Vietnam & India), which face steeper duties, creating room for Pakistan’s Footwear exports to expand in the US market. Country’s major exporters include Service Global Footwear Ltd., Bata Pakistan, Elegant Shoes Pvt. Ltd., Fircos Shoes and Firhaj Footwear, among others.

Service Global Footwear Limited (SGFL) is Pakistan’s largest footwear exporter and holds a dominant position in the export market, accounting for ~37.5% of the country’s total footwear export value. The Company exports over 99% of its production to more than twenty countries across five continents. SGFL’s scale, export concentration, and long-standing relationships with international brands distinguish it from local peers.

During 9MCY25, SGFL’s topline reached PKR 15.2 billion (CY24: PKR 17.4 billion; CY23: PKR 15.1 billion), reflecting ~16.4% YoY growth over the corresponding period last year. Export sales continued to dominate, contributing around 99% of total revenues. The Company’s revenue mix remains concentrated, with the top ten customers accounting for approximately 90% of total sales, reflecting elevated client concentration risk.

Gross margin improved slightly to 17.1% in 9MCY25 (CY24: 16.6%; CY23: 21.9%), supported by operational efficiency and better cost control, though still below historic levels due to elevated raw material and energy costs. The net profit margin strengthened to 10.8% (CY24: 6.4%; CY23: 7.8%), reflecting improved profitability on account of enhanced operational performance and reduced finance costs.

SGFL continues to focus on maintaining its global presence through technology-led efficiency improvements and capacity expansion. The Company leverages its position as Asia’s first solar-powered footwear manufacturer, operating with a 2MW solar energy system, contributing to cost efficiency and sustainability credentials. An addition of  ~1.8MW capacity to the solar energy system is in process. In addition, SGFL's strategic investment in Service Long March (SLM) continue to yield sustantial returns. SGFL is proactively engaing new U.S customers to diversify its portfolio and to reduce concentration risks.

The gross working capital cycle improved to 135 days as of 9MCY25 (CY24: 134 days; CY23: 139 days), driven by better inventory management, while net working capital days increased marginally to 107 days (CY24: 101 days; CY23: 99 days). This reflects relatively stable receivable turnover and moderate reliance on short-term financing.

Free cash flows from operations (FCFO) stood at PKR 759 million during 9MCY25 (CY24: PKR 685 million; CY23: PKR 1,452 million). The EBITDA-to-finance cost improved to 3.5x (CY24: 2.2x; CY23: 1.9x), while FCFO-to-finance cost rose to 2.5x (CY24: 1.2x; CY23: 1.6x), indicating a strengthened coverage profile despite elevated working capital needs.

As of 9MCY25, SGFL maintained a moderately leveraged capital structure, with a debt-to-total capital ratio of 53.5% (CY24: 56.4%; CY23: 57.1%). Total borrowings stood at PKR 9.3 billion, of which ~ 88% were short-term. Despite leverage pressures, the capitalization profile remains adequate, supported by healthy profitability and retained earnings growth.