Afg International Company · TADAWUL:4240
Afg International — AlHokair Fashion Retail — FY2020 Earnings Presentation
30 slides from Afg International's earnings presentation, 2020
Slide 1: AlHokair Investor Presentation FY2020
AL HOKAIR Investor Presentation F Y 2 0 2 0 AlHokair Fashion Retail 1 Investor Presentation
Slide 2: The Region’s Leading Franchise Retailer
The Region’s Leading Franchise Retailer AlHokair Fashion Retail is the leading franchise retailer in KSA, MENA, Central Asia and Caucasus regions 29+ yrs 81 Operational History Portfolio Brands 13 1,580 Country Footprint Store Locations 472,100 sqm 10,000+ Retail Space Employees SAR 5.3 bn SAR 545.5
Slide 3: FY2020 Results
FY2020 Results Q4-FY20 Highlights SAR 1,085 mn SAR 541 mn SAR 805 mn SAR 898 mn Revenues Gross Loss Operating Loss Net Loss ▲ 1.1% y-o-y / LFL -1.2% -49.9% margin -74.1% margin -82.7% margin FY2020 Highlights SAR 5,342 mn SAR 408 mn SAR 14.8 mn SAR 681 mn Revenues Gross Profit EBITDA Loss Net Loss ▼
Slide 4: FY2020 Results
FY2020 Results FY2020 Highlights SAR 5,342 mn SAR 408 mn SAR 14.8 mn SAR 681 mn Revenues Gross Profit EBITDA Loss Net Loss ▼ 1.6% y-o-y / LFL -1.2% in Q4-FY20 ▼ 62.4% y-o-y / 7.6% margin -0.3% margin -12.8% margin Strong Like-for-Like Growth Pre-COVID-19 Operational KPIs 3.5% 472K sqm 1% 1.7% Total
Slide 5: COVID-19 Developments
COVID-19 Developments External Measures Impacting Alhokair Fashion Retail Curfews & Restrictions External Support • March 16: Temporarily closed most retail units in KSA • Salaries: The Government of KSA introduced the SANED program which covers 60% of • April 26: Retail units outside of Makkah Regi
Slide 6: Strategy Overview
STRATEGY OVERVIEW FY2020 AlHokair Fashion Retail 6 Investor Presentation
Slide 7: Turnaround Strategy
Turnaround Strategy Since 2019, Alhokair Fashion Retail has been implementing a turnaround strategy to improve operational efficiency and build a foundation for long-term growth I I I I Portfolio Transition into a Operational Growing E-commerce Optimization Lifestyle Company Excellence Activities Ge
Slide 8: Portfolio Optimization
Portfolio Optimization An empirically-driven approach to strengthen portfolio performance and extract higher value FY2020: Realignment & Focus FY2021: Strengthening & Transformation Closure of Nonperforming Stores Normalization of Store Closures / Expansion Closure of 308 nonperforming stores since
Slide 9: Transitioning into a Lifestyle Company
Transitioning into a Lifestyle Company A key driver for future growth is transforming from a fashion retailer into a lifestyle company by venturing into new categories FY2020: Realignment & Focus FY2021: Strengthening & Transformation Expansion into New Categories Deepening F&B Presence with Launch
Slide 10: Focus on Food and Beverage
Focus on Food and Beverage Alhokair is rapidly deepening its exposure to Saudi Arabia’s lucrative and fast-growing F&B sector Landmark F&B Portfolio Acquisition 10 New F&B franchises acquired in FY2020 Expanding F&B portfolio has already proved value-accretive… F&B Segment: Income Statement 200+ Loc
Slide 11: Achieving Operational Excellence
Achieving Operational Excellence Streamlining operations and building a leaner organization FY2020: Realignment & Focus FY2021: Strengthening & Transformation Shedding Non-Core Assets Shared Services Center Sale of Dubai Warehouse, Kingdom Center, Tahliya Building, and Launch of shared services cent
Slide 12: Growing E-Commerce Activities
Growing E-Commerce Activities AlHokair has developed a calibrated plan to broaden and deepen the Company’s e-commerce footprint across multiple channels FY2020: Realignment & Focus FY2021: Strengthening & Transformation Acquired Online Rights Launch Multi-Brand Flagship Platform Alhokair has acquire
Slide 13: Financial & Operational Review
FINANCIAL & OPERATIONAL REVIEW FY2020 AlHokair Fashion Retail 13 Investor Presentation
Slide 14: 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 FY2020 as store closures reach completion Top-line decline recorded SAR 138 mn at year-end FY2020 FY20 Rev Change 6,706 Despite COVID-related - 6,117 closures, revenue declined (2 0.0) 5,426 5,341 by just
Slide 15: Commitment to Sound Inventory Management and Accurate Value Appraisal
Commitment to Sound Inventory Management and Accurate Value Appraisal In the final quarter of FY2020, management took the strategic decision to reassess legacy assets in line with Alhokair’s optimization and restructuring strategy. Despite the resulting bottom-line impact, management is confident th
Slide 16: 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 Gross Profit Margin 8% Rent recorded 7.6%, a decrease Selling & Distribution 2% Salaries Selling, general and 20% Other driven by the 12% Genera
Slide 17: Network Evolution
Network Evolution KSA International Total # of Stores Space (SQM) # of Stores Space (SQM) # of Stores Space (SQM) Stores as at 31 March 2019 1,346 384,637 343 123,631 1,689 508,268 New Stores 91 28,227 34 13,798 125 42,025 Closed Stores (200) (69,697) (34) (8,546) (234) (78,225) Net Change (109) (41
Slide 18: Targeting Sustainable Long-Term Value
Targeting Sustainable Long-Term Value EBITDA impacted by one-off expenses in final quarter Adjusted EBITDA reflects cost efficiency + portfolio optimization EBITDA (SAR mn) EBITDA Margin EBITDA decreased following Norm. EBITDA (SAR mn) Norm. EBITDA Margin 14% the adoption of IFRS 16 40. 0% 10% 11% d
Slide 19: Focus on International Performance
Focus on International Performance International Segment Key Performance Indicators SAR mn FY2019 FY2020 Change International Revenue Breakup by Country Net Revenue 951.7 962.1 1.1% Gross Profit 151.9 236.2 55.5% Azerbaijan Georgia Egypt 20% Operating Income (25.1) 63.3 352.3% 21% 1% Jordan Armenia
Slide 20: Income Statement
INCOME STATEMENT FY2020 FY2020 Post SAR Million FY2019 Change Change Pre-IFRS 16 IFRS 16 Net Revenue 5,425.8 5,341.8 -1.5% 5,341.8 -1.6% Cost of Revenue (4,341.3) (5,004.5) 15.3% (4,933.9) 13.7% Gross Profit 1,084.5 337.3 -68.9% 407.8 -62.4% Gross Profit Margin 20.0% 7.2% -13.7 pts 7.6% -12.4 pts SG
Slide 21: Balance Sheet
BALANCE SHEET Change vs Change vs SAR Million Mar ‘19 Dec ’19 Mar ’20 March Dec Assets Prope rty, Pl a nt a nd Equi pme nt 1,752 1,468 1,541 -12% 5% Ri ght-of-Us e As s e ts - 4,136 4,058 -2% Goodwi l l a nd I nta ngi bl e As s e ts 874 868 1,080 24% I nve s tme nt Prope rty 63 4 4 -94% 0% I nve s t
Slide 22: Debt Management in Focus
DEBT MANAGEMENT IN FOCUS Re-financing furthers capital structure optimization with an eye to boosting liquidity position and flexibility to invest in the business. Summary Credit Metrics SAR mn Mar’19 Dec’19 Mar’20 Improved terms and Total Interest-Bearing Debt pricing yielding 2,862.20 2,533.00 3,1
Slide 23: Appendix
APPENDIX AlHokair Fashion Retail 23 Investor Presentation
Slide 24: 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 25: Presence Countries
Our Current Footprint Our Group maintains a presence Country Stores across 13 global markets with 1,580 82% of Saudi Arabia 1,237 Sales: SAR stores and over 472,000 sqm 4,379 mn Egypt 81 of retail space Growth Markets Georgia 57 12% of Armenia 33 Sales: SAR 656.9 mn Azerbaijan 29 1,437 Jordan 55 Kaz
Slide 26: 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 27: 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 27 Investor Presentation
Slide 28: 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 28 Investor Presentation
Slide 29: Share Performance
Share Performance Jan 2019 - June 2020 Share Performance 160 7,000,000 Alhokair Volume (Shares) Alhokair Rebased 100 TASI Rebased 100 140 6,000,000 120 5,000,000 100 4,000,000 80 3,000,000 60 2,000,000 40 20 1,000,000 0 0 Jul-19 Jul-19 Jul-19 Apr-19 Apr-19 May-19 May-19 Jun-19 Jun-19 Nov-19 Nov-19 A
Slide 30: Thank you
ALHOKAIR fff J-145 JI Fashion Retail d5j aU cloiji Thank you
AlHokair Fashion Retail — FY2020 Earnings Presentation on 6ix