Afg International Company · TADAWUL:4240
Afg International — Alhokair Fashion Retail — 1H-FY2020 Earnings Presentation
25 slides from Afg International's earnings presentation, 2019
Slide 1: Al Hokair Results Presentation 1H-FY2020
AL HOKAIR Results Presentation 1 H - F Y 2 0 2 0 AlHokair Fashion Retail 1 Investor Presentation
Slide 2: 1H-FY2020 Results Snapshot
1H-FY2020 Results Snapshot SAR 250 mn SAR 2,967 mn SAR 1,002 mn SAR 901 mn Revenues Gross Profit EBITDA ( SAR 198 mn after IFRS 16 impact) ▲ LFL +1.7% in 2Q ▲29.6% y-o-y / 33.8% margin ▲70% y-o-y / 30.4% margin Net Profit ▼ 2.0% y-o-y / 8.4% margin 1.77 1,615 479K sqm 85 Units / Transaction Total St
Slide 3: Focused Strategy Leading to Strengthening Performance
Focused Strategy Leading to Strengthening Performance The Group’s forward-looking strategy is built on four primary pillars to accelerate its growth trajectory Active Portfolio Management In-Store Retail Excellence An empirically-driven approach to portfolio optimization Invest in winning concepts a
Slide 4: Focused Strategy Leading to Strengthening Performance
Focused Strategy Leading to Strengthening Performance The Group’s forward-looking strategy is built on four primary pillars to accelerate its growth trajectory Building a Lifestyle Company Growing E-Commerce Activities A key driver for future growth is transforming from a fashion The Group is active
Slide 5: Financial & Operational Review 1H-FY2020
FINANCIAL & OPERATIONAL REVIEW 1H-FY2020 AlHokair Fashion Retail 5 Investor Presentation
Slide 6: Strategy of Extracting More from Less is Delivering Results
The Group’s Strategy of Extracting More from Less is Delivering Results Slower y-o-y decline in 1H-FY20 as store closures reach completion Breakdown of SAR 122 mn revenue decline Y-O-Y Revenue (SAR mn) Y-o-Y Change 1H-FY20 Revenue Change -11% -12% 6,706 Revenue declined by 5% y- 42 o-y as the Group
Slide 7: Cost-Cutting and Operational Efficiencies Leading to Expanding Margins
Cost-Cutting and Operational Efficiencies Leading to Expanding Margins Cost of Revenue as a Percentage of Sales SG&A as a Percentage of Sales Cost of Goods Rent Gross Profit Margin is stable Selling & Distribution Consistent effort into Salaries at 24% before IFRS 16 driving efficiency and 34% 25% O
Slide 8: Network Evolution
Network Evolution KSA International Total # of Stores Space sqm # of Stores Space sqm # of Stores Space sqm Stores as at 30 September 2018 1,418 406,100 371 132,729 1,789 538,829 New Stores 82 28,471 9 1,451 91 29,922 Closed Stores (224) (78,193) (42) (11,484) (266) (89,677) Net Change (142) (49,722
Slide 9: An EBITDA Positive Strategy
An EBITDA Positive Strategy Portfolio optimization + cost efficiency = an EBITDA Positive Strategy Even after normalizing for IFRS 16 effect EBITDA (SAR mn) EBITDA Margin Norm. EBITDA (SAR mn) Norm. EBITDA Margin 35% 30% 30% 40. 00% 35. 00% Normalizing for the effect 25% 901 of IFRS 16, EBITDA is IF
Slide 10: Focus on International Performance
Focus on International Performance International Segment Key Performance Indicators International Revenue Breakup by Country SAR mn 1H-FY19 1H-FY20 Change Net Revenue 488.5 486.5 -0.4% Azerbaijan Georgia Egypt 20% Gross Profit 94.8 142.2 50% 19% Operating Income (19.4) 29.7 253% 1% EBITDA 16.9 112.8
Slide 11: Debt Management in Focus
DEBT MANAGEMENT IN FOCUS Deleveraging effort underway to strengthen capital structure and support implementation of strategy initiatives Summary Credit Metrics SAR mn March’19 September’19 Total Interest-Bearing Debt * 2,862.20 2,569.20 Sustained cash Cash Position 516.30 408.75 position while drivi
Slide 12: Income Statement 1Q-FY2020
INCOME STATEMENT 1Q-FY2020 SAR Million 1H-FY19 1H-FY20 Before IFRS 16 Change without IFRS 16 1H-FY20 After IFRS 16 Change Revenue 3,119.7 2,967.0 (4.9%) 2,967.0 (4.9%) Cost of Revenue (2,346.5) (2,259.3) (3.7%) (1,965.0) (16.3%) Gross Profit 773.3 707.7 (8.5%) 1,002.0 29.6% Gross Profit Margin 24.8%
Slide 13: Balance Sheet
BALANCE SHEET AS AT JUNE 2019 SAR Million Mar ‘19 Sept ’19 Change Assets Property, Plant and Equipment 1,752.4 1,633.6 -7% Right-of-Use Assets - 4,447.5 - Goodwill and Intangible Assets 873.8 867.9 -1% Investment Property 62.8 60.3 -4% Investment in Associates & Others 389.3 81.3 -79% Receivables fr
Slide 14: Appendix
APPENDIX AlHokair Fashion Retail 14 Investor Presentation
Slide 15: Group History
Group History Established in 1990 with two operational stores, the Group has since built a track record of introducing global Brands to KSA and entering new markets KSA Armenia, Georgia and Morocco Inditex Egypt, Acquisition Company Relationship Jordan and of Nesk Kazakhstan formation 1990 1997 1999
Slide 16: Our Footprint
Our Footprint Our Group maintains a presence Country Stores across 13 global markets with over 84% of Saudi Arabia 1,277 Sales: SAR 1,615 stores and 480,000 sqm 2,492 mn Egypt 75 of retail space Growth Markets Georgia 46 10% of Armenia 33 Sales: SAR 297 mn Azerbaijan 29 1,460 Jordan 56 Kazakhstan 38
Slide 17: Our Primary Market
Our Primary Market Looking beyond macro headwinds in the KSA – recovering consumer environment conducive to growth in the retail sector KSA Consumer Spending Cycle Beyond macro drivers, industry fundamentals such as increased transition to organized retail and women enablement (employment, mobility,
Slide 18: Our Brand Portfolio
OUR BRAND PORTFOLIO AlHokair Fashion Retail holds a portfolio of over 75 brand representations and ownership covering all market segments Department Stores Kids Fashion Fashion Boutique Shoes & Accessories AlHokair Fashion Retail 18 Investor Presentation
Slide 19: Our Brand Portfolio
OUR BRAND PORTFOLIO Women’s & Men’s Fashion Lingerie Cosmetics Youth Fashion Home COMPANYS Entertainment and Food & Beverage Morocco & Spain USA AlHokair Fashion Retail 19 Investor Presentation
Slide 20: Active Portfolio Management
ACTIVE PORTFOLIO MANAGEMENT Empirically-driven approach to brand portfolio optimization AlHokair Brand Footprint vs. EBITDA per SQM Migrating Brands to Create a Majority of Stars & Cash Cows AlHokair aims to Y-axis – Total Brand Footprint (SQM) increasingly migrate its c.35% of brand portfolio towar
Slide 21: In-Store Retail Excellence
IN-STORE RETAIL EXCELLENCE Leverage an integrated operating model to achieve retail excellence PEOPLE PROCESS TECHNOLOGY Implementation of Oracle ERP Culture evolution Disciplined decision-making system to streamline reporting and process on strategy, investment, information flow and financing Talen
Slide 22: Merchandising
MERCHANDISING The merchandising function is the core of our commercial operations, with the Group deploying four different buying models in merchandising operations Planning Push Exposure is maximized 40% Incentives received for push marketing efforts when the Groups owns the stock Buying Pull 30% B
Slide 23: Expansion to New Categories
EXPANSION TO NEW CATEGORIES A consumer-centric strategy to offer a complete lifestyle experience Lifestyle Company Fashion & Category New Retail Entertainment & Accessories Expansion Categories Experiential Depth of Offering Beauty Products New Categories Athleisure, accessories Consumer Electronics
Slide 24: Develop E-Commerce Capabilities
DEVELOP E-COMMERCE CAPABILITIES AlHokair is implementing a dual-pronged strategy to Selected Best Performing effectively capitalize on varying traffic levels across its brand Implementation Status Brands portfolio TIER 1 Secured exclusive legal Standalone e-commerce Selected Mono-Brand Best Performi
Slide 25: Thank you
ALHOKAIR fff J-145 JI Fashion Retail d5j aU cloiji Thank you
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