Afg International Company · TADAWUL:4240
Afg International — Cenomi Retail — Q3 FY2023 Earnings Presentation
33 slides from Afg International's earnings presentation, Dec 31, 2022
Slide 1: Earnings Presentation Q3-FY23
Earnings Presentation Q3-FY23 As at 31 December 2022
Slide 2: Disclaimer
Disclaimer This presentation has been prepared solely for use as an investor presentation for Cenomi Retail. (the “Company”). By attending or by reading this presentation, you agree to be bound by the following limitations. The information contained in this presentation is for background purposes on
Slide 3: Management and Market Overview
Management and Market Overview 3
Slide 4: We are now Cenomi Retail
We are now Cenomi Retail* “Find yourself here” Represents: Stands up Accessible, common, Ceno = Greek for new brand promise: approachable, Our story is really a story about you. You’re the main character Mi = English “me”, Arabic “my” Finding yourself ownable How you live, how you play what you shar
Slide 5: Unique KSA momentum
Unique KSA momentum: Cenomi Retail operates in the G20’s fastest growing economy and one of the globe’s most exciting growth stories. 1 KSA is the fastest-growing economy in the G20 2 A Booming consumer outlook 500 - 900 KSA population: -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 +4 million (+12%) Sau
Slide 6: Unparalleled Opportunity: The birth of the New Saudi Consumer
Unparalleled Opportunity: The birth of The New Saudi Consumer presents unique growth prospects Birth of the New Saudi Consumer KSA Retail Spend Overview (2022-2027, in SAR Mn) Shift to lifestyle categories: More demand for F&B, Leisure and Entertainment Market Size Market Size CAGR Category 2022 202
Slide 7: Market Context
Market Context Historical vs. Future Projected Retail Spend (CAGR) 16,8% The Saudi Retail sector 14,2% has faced key headwinds 9,2% over the past five years, 8,2% 7,1% 7,3% 6,8% 6,5% 6,4% 6,3% 4,9% 5,1% 4,6% 5,1% 5,4% but is on track to strong 3,9% 4,6% 2,8% 1,7% growth as these start to -2,3% CAGR
Slide 8: Consumer Trends
Consumer Trends: Moving forward, Cenomi Retail will need to cater to New normal consumer behaviors Implications for the future of retail new consumer trends with significant implications on the future of the industry. Increasing digital / Scale digital channels e-commerce adoption & reinvent role of
Slide 9: Synergistic omni-channel ecosystem
Synergistic omni-channel ecosystem: The Cenomi omni-channel ecosystem blends engaging physical experiences and curated brands with convenience of online channels to deliver E-commerce competitive advantage. • Extension of physical channels, with unlimited tenants • Enabling leading retailers instead
Slide 10: Cenomi Retail's strategic pillars
Cenomi Retail’s strategic pillars: Unlocking long-term Re-affirm KSA • Consolidate KSA leadership and expand in CIS growth opportunities 1 Geography leadership and win in CIS • Become the top 3 regional player by winning in CIS Evolve from apparel • Defend & maintain Fashion & Accessories market lea
Slide 11: Operational Excellence
Operational Area Project Excellence Sales acceleration: Grow revenue via sales and marketing initiatives Revenue Complement growth 1 acceleration Comp, benefits, incentives: Review C&B philosophy and sales incentives aspirations with relentless pursuit of operational excellence. Inventory management
Slide 12: On its existing brand portfolio
On its existing brand portfolio: BC / Tier 1 T2-T3 Maintain T3 Growth Brands Re-assess - Deprioritize Exit Brands Cenomi Retail should Okaidi • Monsoon • Gerry Weber • Ninewest • Ikks, achieve the full potential Zara • Stradivarius • Pull & GAP, Charles & Keith • Machka • Twist • ADL • The Children’
Slide 13: Financial Overview
Financial Overview cenomi 13
Slide 14: Q3 and 9M-FY23 Financial Performance Overview
Q3-FY23 9M-FY23 Q3 and 9M-FY23 Financial SAR 1,460 mn SAR 4,538 mn Performance Overview: Revenue Revenue -0.5% vs Q3-FY22 0.2% vs 9M-FY22 ▪ Revenue largely stable in Q3, driven by lower F&B sales (-25% YoY) as a result of brand rationalization. SAR (60) mn SAR 411 mn Meanwhile, international portfol
Slide 15: Key brand & store openings
Key brand & store openings: Retail F&B ▪ 21 stores opened ▪ 11 stores opened Q3-FY23 Retail ▪ 45 stores closed Q3-FY23 F&B ▪ 86 stores closed ▪ 24 net closures ▪ 75 net closures ▪ 62 stores opened ▪ 35 stores opened 9M-FY23 Retail ▪ 102 stores closed 9M-FY23 F&B ▪ 103 stores closed ▪ 40 net closures
Slide 16: Stable revenue performance
Stable revenue performance: Revenue, SAR million LFL consolidated sales growth, % Rationalized store count and lower F&B sales moderated LFL revenue declined 4.6% YoY, on a 6.8% and a 2.8% YoY revenue performance in Q3-FY23, at SAR 1,460 million (-0.5% contraction, respectively from domestic retail,
Slide 17: Decline in trading margins, exacerbated by F&B
Decline in trading margins, exacerbated by F&B: Gross Profit, SAR million – GPM, % EBITDA, SAR million – EBITDA Margin, % ▪ Trading Margin (Revenue less COGS less royalties less ▪ EBITDA Margin declines in Q3-FY23, largely impacted by normalized inventory provisions) stood at 23% in Q3-FY23 lower F&
Slide 18: Strategic focus on inventory optimization
Strategic focus on inventory optimization: Inventory balance (SAR million) Inventory efficiency ratios ▪ Cenomi Retail continues to focus on inventory ▪ Sustained improvement in managing inventory levels, with management to enhance liquidity and advanced techniques for better predictability and visi
Slide 19: Online sales gaining traction
Online sales gaining traction: Online revenues, SAR million E-commerce, % of total retail sales 5.6% 5.4% 93 84 6.8% 5.3% 63 4.1% 55 4.0% 48 48 3.8% 3.9% Q3-FY21 Q3-FY22 Q4-FY22 Q1-FY23 Q2-FY23 Q3-FY23 Q3-FY22 Q4-FY22 Q1-FY23 Q2-FY23 Q3-FY23 FY21 FY22 9M-FY23 19
Slide 20: Store rationalization gained momentum
Store rationalization gained momentum Store network evolution Gross Floor Area, SQM vs Sales Density, SAR Net 99 store closures in Q3-FY23 9M-FY23 revenue per sqm of SAR 11,972 shows a decline of 5.6% 12,331 12,687 11,972 1,684 1,668 1,676 1,659 1,560 8,135 322 318 314 325 250 315 308 310 304 308 1,
Slide 21: Optimization of brand portfolio to transform domestic retail
Optimization of brand portfolio to transform domestic retail: Saudi retail store network evolution Gross Floor Area, SQM vs Sales Density, SAR 13,211 13,656 1,002 8,907 12,050 1,047 1,042 1,030 1,052 29 25 33 41 14 22 20 24 11 13 345 320 321 320 Q3-FY22 Q4-FY22 Q1-FY23 Q2-FY23 Q3-FY23 FY20 FY21 FY22
Slide 22: Divestment of non-strategic brands to establish solid foundation for future growth
Divestment of non-strategic brands to establish solid foundation for future growth Lower F&B sales resulting from strategic brand rationalization F&B store network evolution Total number of transactions (millions) 3.5 322 318 314 325 250 3.3 3.3 3.0 19 -2% 8 11 13 11 15% -8% 2.4 -9 -2 2% -12 -15 -31
Slide 23: THANK YOU
cenomi THANK YOU 23
Slide 24: Appendix
Appendix Cenomi Retail cenomi 24
Slide 25: Financial Statements
Financial Statements Cenomi Retail 25 25
Slide 26: Income Statement Q3 and 9M-FY23
Income Statement Q3 and 9M-FY23 SAR Million Q3-FY23 Q3-FY22 % Change 9M-FY23 9M-FY22 % Change Revenue 1,460 1,466 -0.5% 4,538 4,528 0.2% Cost of Revenue (1,229) (1,222) 0.6% (3,837) (3,719) 3.17% Inventory Charge (290) (290) Gross Profit (Loss) (60) 245 -124.5% 411 809 -49.2% Gross Profit Margin -4.
Slide 27: Balance Sheet
Balance Sheet SAR Million 31 Dec 2022 31 Mar 2022 % Change Assets Property, Plant and Equipment 1,328 1,358 -2% Right-of-Use Assets 3,027 3,276 -8% Goodwill and Intangible Assets 1,121 1,083 3% Investment Property 1 2 -8% Equity-accounted investees 63 62 2% Other investments 285 300 -5% Derivative a
Slide 28: Supplementary Information
Supplementary Information Cenomi Retail 28 28
Slide 29: Revenue breakdown
Revenue breakdown Revenue by division Revenue by channel Revenue by geography 7% 6% 1%4% 9% 4% 4% 4% 18% 22% 13% 20% 71% 71% 80% 96% 78% 94% Q3-FY23 - Outer circle Q3-FY 23 - Outer circle Q3-FY23 - Outer circle Q3-FY22 - Inner circle Q3-FY 22 - Inner circle Q3-FY22 - Inner circle KSA Retail Int'l Re
Slide 30: Footfall impacted by boost in online sales
Footfall impacted by boost in online sales: LFL Saudi retail sales growth, % LFL international retail sales growth, % Saudi LFL revenues down nearly 7% in Q3-FY23, on pick International LFL revenues maintained positive trajectory, albeit up in online revenues supported by post-pandemic at slower pac
Slide 31: Debt management in focus
Debt management in focus: In line with comprehensive balance sheet restructuring, effective management of leverage is at the forefront for Cenomi Retail SAR million Dec’22 Mar’22 % Change Total Interest-Bearing Debt 2,932 2,878 2% Cash Position 193 198 -2% Net Debt 2,739 2,680 -2% 31
Slide 32: Cenomi Retail Footprint
Cenomi Retail Footprint: Kazakhstan * International footprint also includes USA, which is not represented here Georgia Balkans Armenia Azerbaijan Lebanon Iraq Morocco Jordan Kuwait Libya Egypt Bahrain Qatar KSA UAE Oman Core market International footprint Market access via Vogacloset 32
Slide 33: THANK YOU
THANK YOU Contacts Investor Relations Department Email: IR.retail@cenomi.com For more information, visit Tel: +966 (11) 825 2080 https://ir.cenomiretail.com/ 33