Khadim India Limited · NSE:KHADIM
Khadim India — Q4 FY2019 Earnings Presentation
35 slides from Khadim India's earnings presentation, May 2019
Slide 1: Cover letter to stock exchanges on investor meet
Khadirn's® May 21,2019 The Manager The Manager The Department of Corporate Services The Listing Department BSE Limited National Stock Exchange of India Limited P. J. Towers, Exchange Plaza, Bandra Kurla Complex, Dalal Street, Mumbai - 400001 Bandra (East), Mumbai - 400 051 Scrip Coda- 540775 Symbol·
Slide 2: Q4 & FY19 Results Presentation
KHADIM INDIA LIMITED Q4 & FY19 RESULTS PRESENTATION MAY 2019
Slide 3: Discussion Summary
DISCUSSION SUMMARY DISCUSSION SUMMARY ▪ BUSINESS OVERVIEW ▪ Q4 FY19 RESULTS ▪ BUSINESS STRATEGY & OUTLOOK ▪ FINANCIAL & OPERATIONAL SUMMARY ▪ ANNEXURE 2
Slide 4: Business Overview
BRITISH WALKERS BUSINESS OVERVIEW
Slide 5: Quick Snapshot
QUICK SNAPSHOT 1 Leading Footwear Brand in India 2 Huge Market Growth Potential * • 2nd largest footwear retailer in India * • Domestic footwear market expected to grow • Largest presence in East India at 15% (FY16-20) • One of the top 3 players in South India • Branded footwear market expected grow
Slide 6: Two-Pronged Market Strategy of Retail & Distribution Models
TWO-PRONGED MARKET STRATEGY OF RETAIL & DISTRIBUTION MODELS Retail Business – Distribution Business – Reach 799 ‘Khadim’s’ exclusive branded outlets 544 distributors supplying to MBOs across India Middle & upper middle income consumers in metros Lower & middle income consumers in Tier I – III cities
Slide 7: Extensive Geographical Reach & Penetration
EXTENSIVE GEOGRAPHICAL REACH & PENETRATION Presence in 23 States & 1 Union Territory 1 2 9 3 1 8 17 49 46 Brand Network Mar ‘19 Retail Stores – Tier wise 47 37 1 2 86 38 4 Retail Stores 799 Metros 21% 11 2 - COCO 204 26 11 23 21 16 Tier I 18 14 276 236 3 49% 1 - Franchises 595 Tier II 14% 9 6 42 22
Slide 8: Extensive Geographical Reach & Penetration
EXTENSIVE GEOGRAPHICAL REACH & PENETRATION Retail COCO Franchises • Revenue Rs 5059 m • GM – 46% • Rev Share – 58.6% • Rev Share – 41.4% • EM – 8% Distribution Store Presence Store Store Gross EBITDA# Type Count Size Margin Margin FY19 Revenues • Revenue Rs 2052 m Sq. ft. Rs 7992 Mn • GM – 29% • EM
Slide 9: Q4 & FY19 Results Update
Q4 & FY19 RESULTS UPDATE
Slide 10: Q4 and FY19 Results: Key Highlights
Q4 and FY19 RESULTS: KEY HIGHLIGHTS Q4 FY19 YoY Analysis In Rs Mn Revenues & Gross Margin EBITDA & EBITDA Margin PAT & PAT Margin 33.7% 33.0% 9.1% 4.5% 5.2% 0.6% 1,964 2,067 178 102 93 12 Q4 FY18 Q4 FY19 Q4 FY18 Q4 FY19 Q4 FY18 Q4 FY19 FY19 YoY Analysis Revenues & Gross Margin EBITDA & EBITDA Margin
Slide 11: Q4 & FY19 Results: Segment Analysis
Q4 & FY19 RESULTS: SEGMENT ANALYSIS In Rs Mn FY19 YoY ANALYSIS – REVENUE BREAKUP Q4 FY19 YoY ANALYSIS – REVENUE BREAKUP 1,764 2,052 461 556 16% 21% 4,989 5,059 1,229 1,182 1% -4% FY18 FY19 Q4 FY18 Q4 FY19 Retail Distribution Retail Distribution Segment Share % * FY18 FY19 Segment Share % * Q4 FY18 Q
Slide 12: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs Mn) Q4 FY19 Q4 FY18 YoY % FY19 FY18 YoY % Revenue 2,066.7 1,963.7 5.2% 7,991.8 7,487.1 6.7% COGS 1,385.1 1,302.8 6.3% 4,964.6 4,653.1 6.7% Gross Profit 681.6 660.8 3.1% 3027.2 2834.0 6.8% Gross Margin % 33.0% 33.7% -67 bps 37.9% 37.9% 3 bps Emp
Slide 13: Balance Sheet
BALANCE SHEET EQUITY AND LIABILITIES March 2019 March 2018 ASSETS March 2019 March 2018 Equity Non-current assets Equity share capital 179.7 179.7 Property, plant and equipment 1,308.3 1,246.2 Other equity 2,697.0 2,505.2 Capital work-in-progress 17.4 14.6 2,876.7 2,684.8 Intangible assets 8.2 12.3
Slide 14: Business Strategy & Outlook
BUSINESS STRATEGY & OUTLOOK
Slide 15: Business Growth Strategy
BUSINESS GROWTH STRATEGY Retail Business Distribution Business • Focus on expanding retail footprint in markets across South India, West India and • Focus on penetration in existing markets in Expand Footprint in in Uttar Pradesh in North India Eastern and Southern India and capitalise Western & Nor
Slide 16: Business Growth Strategy
BUSINESS GROWTH STRATEGY Retail Business Distribution Business • Given the aspirational nature of customer base, increase focus on sub-brands to drive premiumization • Introduce premiumized versions of product • Khadim’s brand helps to capture the target offerings in Hawai, PVC and PU Strengthen the
Slide 17: Positive Industry Outlook
POSITIVE INDUSTRY OUTLOOK Domestic footwear retail to grow at a faster pace compared to the overall retail industry Favourable macro and Overall retail market in US $ Bn Domestic footwear market at retail price in US $ Bn demographic tailwinds Population Growth 960 12.6 • Young demographics - 78% of
Slide 18: Financial & Operational Summary
FINANCIAL & OPERATIONAL SUMMARY
Slide 19: Financial Summary
FINANCIAL SUMMARY* In Rs Mn Revenues & Gross Margin EBITDA & EBITDA Margin PAT & PAT Margin CAGR: 14.8% CAGR: 42.8% 9.8% 10.6% 10.1% 4.7% 5.0% 5.1% 37.1% 39.2% 37.9% 37.9% 7.1% 2.6% 32.1% 7,992 3.0% 757 306 379 6,106 7,489 645 252 212 5,345 524 570 -4.1% 4,602 137 -187 FY15 FY16 FY17 FY18 FY19 FY15
Slide 20: Financial Summary
FINANCIAL SUMMARY In Rs Mn (I-GAAP) Revenues – Segment wise Retail Revenues – COCO vs Franchises Retail Revenues – Khadim’s vs Sub-brands 15% 19% 22% 24% 26% 42% 47% 47% 46% 42% 48% 50% 52% 52% 57% 72% 75% 73% 66% 63% 58% 53% 53% 54% 58% 52% 50% 48% 48% 43% 13% 6% 5% 10% 11% FY15 FY16 FY17 FY18 FY19
Slide 21: Operational Summary
OPERATIONAL SUMMARY Number of Retail Stores Retail Stores – Region-wise Breakup 753 799 4% 6% 6% 6% 7% 673 9% 612 9% 10% 10% 10% 545 15% 17% 18% 19% 485 19% 570 595 464 511 369 403 72% 69% 67% 66% 64% 116 142 148 162 183 204 FY14 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 COCO Franchises Tota
Slide 22: Annexure
ANNEXURE
Slide 23: Wide Product Range Across Various Categories & Price Points
WIDE PRODUCT RANGE ACROSS VARIOUS CATEGORIES & PRICE POINTS ‘Affordable Fashion’ brand catering to the entire family for all occasions - Men / Women / Kids - Menswear - Menswear - Menswear - Men & Women wear - Fashionable & casual - Formal shoes & sandals - Semi-formal & casual shoes / - Outdoor boo
Slide 24: Distinct Brand Positioning for Various Market Segments
DISTINCT BRAND POSITIONING FOR VARIOUS MARKET SEGMENTS Khadim’s brand presence and product range makes it capable to address ~85% of the total Indian footwear market potential Footwear Market Segmentation (MRP at retail stores in Rs) Distinct brand positioning to target customers % Share, Value Acro
Slide 25: Asset Light Model & Strong Design Capabilities
ASSETS LIGHT MODEL & STRONG DESIGN CAPABILITIES TO CREATE AND GROW BUSINESS Asset Light Model makes the business highly scalable, less capital-intensive and leads to higher operating leverage and increasing profitability Retail Business – Maximise Outsourcing Distribution – Maximise Capacity Utilisa
Slide 26: Marketing Initiatives to Strengthen Brand Recall and Customer Connect
MARKETING INITIATIVES TO STRENGTHEN BRAND RECALL AND CUSTOMER CONNECT Key Marketing Triggers Extensive Marketing Campaigns – Sponsor for KKR and CSK in ongoing IPL tournament Brand promotions Season based new arrivals Scheme promotions, discount sales, consumer offers New store openings • Regional m
Slide 27: Grow Our Online Presence
GROW OUR ONLINE PRESENCE Grow online presence through product innovations and Khadim’s products are now also available on various e- advertisements commerce portals – Company website – www.khadims.com 26
Slide 28: Robust Backend Infrastructure
ROBUST BACKEND INFRASTRUCTURE Procurement & Warehousing & Supply Chain Manufacturing Quality Control Logistics Management • 90% of products for the retail • Operates 2 manufacturing • Four distribution centres across • In the retail business, each SKU business is procured from facilities in West Ben
Slide 29: Experienced Promoter & Management Team
EXPERIENCED PROMOTER & MANAGEMENT TEAM Siddhartha Roy Burman, Chairman & Managing Director • Associated with the Company since its incorporation. He has 34 years of experience in the footwear industry • Responsible for the overall strategic decision making and provides leadership to all operations I
Slide 30: Board of Directors
BOARD OF DIRECTORS Siddhartha Roy Burman, Chairman & Managing Director Ritoban Roy Burman, Non-Executive Director Prof. (Dr.) Surabhi Banerjee, Non-Executive, Independent Director • He is a graduate in Mass Communication from St. Xavier’s College, Kolkata. • 37 years of experience as an academician
Slide 31: Shareholding Structure
SHAREHOLDING STRUCTURE % Shareholding – Mar-19 Key Institutional Investors – Mar-19 % Holding Individuals, IDFC MUTUAL FUND 5.7% 5.6 MIRAE ASSET MUTUAL FUND 4.6% UTI-MASTER EQUITY PLAN 4.6% Promoter & Institutions, Promoter SUNDARAM MUTUAL FUND 4.3% 33.4 Group, 59.7 FRANKLIN INDIA FUND 3.2% ICICI PR
Slide 32: Key Milestones
KEY MILESTONES 1981 1993 1999 2002 2005 • Acquired and took over the • Commenced retail • Commenced retail • Commenced • Accredited with business of M/s S.N. business through operations in South manufacturing ISO 9001:2000 Industries as a going concern COOs for footwear India through with operations
Slide 33: Awards, Accreditations and Accolades
AWARDS, ACCREDITATIONS AND ACCOLADES Khadim’s was ranked 7th amongst the Top 100 Franchises in India in 2017 Most Preferred Footwear Brand, 2015 Most Admired Retailer Of The Year (East), 2014 Most Attractive Footwear Retail Brand, 2013 Mirchi Business Excellence Bengal’s Best Footwear, Most Purchase
Slide 34: Disclaimer
DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by Khadim India Limited (“Khadim” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial c
Slide 35: Thank You
Ishani Ray Nachiket Kale CEO IR Consultant Contact No: +91 33 40090501 Contact No : + 91 99209 40808 Email: ishani.ray@khadims.com Email – nachiket.kale@dickensonir.com Indrajit Chowdhury CFO Contact No : + 91 33 40090505 Email – indrajit.chowdhury@khadims.com THANK YOU 34