Afg International Company · TADAWUL:4240
Afg International — Al Hokair Fashion Retail — Q1 2020 Earnings Presentation
24 slides from Afg International's earnings presentation, 2020
Slide 1: AL HOKAIR Results Presentation 1Q-FY2020
AL HOKAIR Results Presentation 1 Q - F Y 2 0 2 0 AlHokair Fashion Retail 1 Investor Presentation
Slide 2: 1Q-FY2020 Results Snapshot
1Q-FY2020 Results Snapshot SAR 249 mn SAR 1,732 mn SAR 656 mn SAR 562 mn Revenues Gross Profit EBITDA ( SAR 225 mn after IFRS 16 impact) ▲ LFL +1% ▲25.4% y-o-y / 37.8% margin ▲43% y-o-y / 32.4% margin Net Profit ▲ 2.0% y-o-y / 14.4% margin 1.8 1,658 500K sqm 86 Units / Transaction Total Stores Total
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 1Q-FY2020
FINANCIAL & OPERATIONAL REVIEW 1Q-FY2020 AlHokair Fashion Retail 5 Investor Presentation
Slide 6: The Group's 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 1Q-FY20 as store closures reach completion Breakdown of SAR 113 mn revenue decline Y-O-Y Revenue (SAR mn) Y-o-Y Change 1Q-FY20 Revenue Change 0 -11% -11% -12% 6,706 Revenue declined by 6% y- 20 -20 o-y as
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 28% before IFRS 16 driving efficiency and 28% Other
Slide 8: 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% 32% 40. 00% 30% 35. 00% Normalizing for the effect 25% 21% of IFRS 16, EBITDA is IF
Slide 9: Focus on International Performance
Focus on International Performance International Segment Key Performance Indicators International Revenue Breakup by Country SAR mn 1Q-FY19 1Q-FY20 Change Net Revenue 237 224.3 -6% Gross Profit 42 73.0 74% Azerbaijan Georgia Egypt 19.7% 17.5% Operating Income -4 18.5 -563% 1.6% EBITDA 16 57.4 259% J
Slide 10: Debt Management in Focus
DEBT MANAGEMENT IN FOCUS Deleveraging effort underway to strengthen capital structure and support implementation of strategy initiatives Summary Credit Metrics Sustained cash SAR mn March’19 June’19 position while Total Interest-Bearing Debt 2,862.2 2,653.6 driving both: Aim for Net Debt reduction b
Slide 11: Income Statement 1Q-FY2020
INCOME STATEMENT 1Q-FY2020 SAR Million 1Q-FY19 1Q-FY20 Before IFRS 16 Change without IFRS 16 1Q-FY20 After IFRS 16 Change Revenue 1,845.7 1,732.4 (6%) 1,732.4 (6%) Cost of Revenue (1,322.4) (1,248.3) (6%) (1,076.5) (19%) Gross Profit 523.3 484.1 (7%) 655.9 25% Gross Profit Margin 28% 28% Stable 38%
Slide 12: Balance Sheet as at June 2019
BALANCE SHEET AS AT JUNE 2019 SAR Million Mar ‘19 June ’19 Change Assets Property, Plant and Equipment 1,752.4 1,717.4 -2% Right-of-Use Assets - 4,653.4 - Goodwill and Intangible Assets 873.8 870.8 -0.3% Investment Property 62.8 61.5 -2% Investment in Associates & Others 389.3 389.3 - Receivables fr
Slide 13: Appendix
APPENDIX AlHokair Fashion Retail 13 Investor Presentation
Slide 14: 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 15: Our Footprint
Our Footprint Our Group maintains a presence Country Stores across 13 global markets with over 87% of Saudi Arabia 1,314 Sales: SAR 1,658 stores and 500,000 sqm 1,508 mn Egypt 75 of retail space Growth Markets Georgia 46 8% of Armenia 33 Sales: SAR 145 mn Azerbaijan 30 1,498 Jordan 57 Kazakhstan 43
Slide 16: 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 17: 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 17 Investor Presentation
Slide 18: 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 18 Investor Presentation
Slide 19: 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 20: 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 21: 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 22: 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 23: 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 24: Thank you
ALHOKAIR fff J-145 JI Fashion Retail d5j aU cloiji Thank you
Al Hokair Fashion Retail — Q1 2020 Earnings Presentation on 6ix