Afg International Company · TADAWUL:4240
Afg International — Fawaz Abdulaziz Alhokair — FY2021 Earnings Presentation
37 slides from Afg International's earnings presentation, Mar 31, 2021
Slide 1: Earnings Presentation FY 2021
Earnings Presentation FY 2021 As at 31 March 2021 Fawaz Abdulaziz Alhokair Co. | Tadawul: 4240
Slide 2: Management review FY21
Management review FY21
Slide 3: The leading retail franchiser
The leading retail franchiser The leading franchise retailer in Saudi Arabia, and the first choice for brand partners seeking exposure to strategic markets 1,700+ stores c.450k sqm Kazakhstan Balkans 12 countries Georgia Armenia Azerbaijan Leaders in KSA Lebanon Morocco Iraq 1,120 Saudi stores Jorda
Slide 4: Differentiated brand portfolio; diverse revenues
Differentiated brand portfolio; diverse revenues Our Brand Portfolio Is Our Competitive Advantage & Transformation Driver to a Lifestyle Destination Targeting most consumer Successful relationship Evolving brand mix 89 brands* segments through economy and fast fashion brands with partners and alignm
Slide 5: Our operational upgrade strategy
Our operational upgrade strategy Portfolio optimization 01 Optimize store network Exit weak/non-performing brands 02 Operational excellence Expand portfolio – unique brand experience Restructure inventory Increase revenue per SQM Revamp inventory & supply chain management Build shared service center
Slide 6: Key brand acquisitions
Key brand acquisitions FY21 key brand acquisitions FY22 Retail c. 60 new stores to open c. 40 stores to close CAPEX ~ SAR 85mn Store network expansion FY22 F&B c. 50 new stores to open (lion’s share Cinnabon & Mamma Bunz) c. 6 stores to close FY22 key CAPEX ~ SAR 50mn brand acquisitions Fawaz Abdula
Slide 7: Financial review FY21
Financial review FY21
Slide 8: FY21 at-a-glance
FY21 at-a-glance Reported SAR 4,233 mn SAR 89 mn SAR 390 mn SAR 1,110 mn Revenue Gross Loss EBITDA Loss Net Loss 20.8% FY2020: SAR 408 mn FY2020: SAR 163 mn 63 % Adjusted* SAR 4,233 mn SAR 393 mn SAR 110 mn SAR 608 mn Revenue Gross Profit EBITDA Net Loss FY2020: SAR 873 mn FY2020: SAR 873 mn FY2020:
Slide 9: Q4 FY21 at-a-glance
Q4 FY21 at-a-glance Reported SAR 1,132 mn SAR 55 mn SAR 184 mn SAR 348 mn Revenue Gross Loss EBITDA Loss Net Loss 4.4% Q4FY20: SAR 541 mn Q4FY20: SAR 1,107 mn Q4FY20: SAR 915 mn Adjusted* SAR 4,233 mn SAR 33 mn SAR 96 mn SAR 276 mn Revenue Gross Profit EBITDA Loss Net Loss Q4 FY20: SAR 3 mn FY2020:
Slide 10: Top line shows gradual normalization
Top line shows gradual normalization Revenues (SAR million) LFL growth (consolidated) Y-o-Y growth on F&B consolidation, online sales & gradual Improving LFL growth performance but still pressured by weak recovery in KSA. Q-o-Q drop results from seasonality in retail. International LFL growth & rest
Slide 11: Balance sheet optimization
Balance sheet optimization Aggressive inventory management and working capital optimization to improve liquidity and increase efficiency Inventory balance (SAR million) Receivables from related parties* (SAR million) 2,029 472 -38% -27% 1,656 348 344 1,257 1,108 Q3-FY20 Q4-FY20 Q3-FY21 Q4-FY21 FY19
Slide 12: Balance Sheet Actions
Balance Sheet Actions Important decisive actions to restructure the company’s capital 1. 2. 3. 4. SAR 205 mn of Executive Capital reduction Authorized to statutory reserves management and capital appoint advisors, utilised to offset mandated by the increase further details to be accumulated losses.
Slide 13: Segmental review FY21
Segmental review FY21
Slide 14: Revenue breakdown
Revenue breakdown Revenue by division Revenue by channel Revenue by geography 8% 5.2% 13% 18% 1% 0.8% 87.0% 10.3% 82.0% 6.4% 2.7% 5.1%3.2% 81% 3.3% 99.2% 79% 94.8% FY 21- Outer circle FY 21- Outer circle FY 21- Outer circle FY 20 - Inner circle FY 20 - Inner circle FY 20 - Inner circle Stores Online
Slide 15: LFL Revenue Growth
LFL Revenue Growth Saudi retail International retail LFL improving sequentially yet remain pressured by LFL remains subdued as CIS markets only returned to restricted religious tourism. Exc. Makkah and Madinah, pre-pandemic operating hours starting April LFL would be 4% Q3-FY20 Q4-FY20 Q1-FY21 Q2-FY
Slide 16: Ongoing store fleet rationalization
Ongoing store fleet rationalization Store network evolution Gross Floor Area (SQM) vs Revenue Per SQM Net store contraction of 141 stores in FY21. Plans to close a 46 stores in FY22 whilst focusing on expansion in chosen segments. Estimated EBITDA savings of SAR 18 mn in FY21-22. 1,880 2,505 1,848 1
Slide 17: Saudi Arabia remains core market, key focus
Saudi Arabia remains core market, key focus Saudi retail store network evolution Store yields improving, upward trend 3,171 2,760 22 1,243 13 12 13 8 2,427 2,691 1,212 1,202 -22 1,171 -41 -44 -44 345 344 340 336 -59 1,386 320 1,120 Q4-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q4-FY20 Q1-FY21 Q2-FY21 Q3-F
Slide 18: Rapid growth in online sales
Rapid growth in online sales Online revenues (SAR million) E-commerce, % of total retail sales 218 15.1% 6.0 % 82 5.1% 63 3.7% 1.0 43 3.2% 34 38 % 0.9% Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 FY20 FY21 Q3-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 FY20 FY21 • LFL, online growth was a remarkable 408% y-o-y, reflec
Slide 19: F&B segment poised for recovery and growth
F&B segment poised for recovery and growth Total number of transactions (‘000) F&B store network evolution 3,500 3,262 300.0% 3,113 3,000 250.0% 2,694 200.0% 314 2,500 2,326 8 15 150.0% 8 2,000 4 100.0% -3 -4 304 -5 1,500 301 50.0% 300 887 -17 1,000 0.0% 500 -50.0% - -100.0% Q1-FY21 Q2-FY21 Q3-FY21
Slide 20: Outlook FY22
Outlook FY22
Slide 21: Key messages for FY22
Key messages for FY22 We have confidence in the resilience, flexibility and strength of our team and our organisation Well-established player with an exceptional Continual improvements to governance and portfolio of brands establishing a genuine lifestyle processes addressing historical issues retai
Slide 22: Our vision
Our vision Our vision is to be the leading lifestyle retailer of choice in Saudi Arabia and our selected strategic markets 01 02 03 04 Expand scale and reach to become franchisor of choice .Expand portfolio, modernize network and improve Improve omnichannel capabilities by Develop effective and effi
Slide 23: Thank you
Thank you Investor Relations investors.relations@fahretail.com
Slide 24: Supplementary information
Supplementary information
Slide 25: Income Statement FY21
Income Statement FY21 SAR Million Q4-FY20 Q4-FY21 Change y-o-y FY20 FY21 Change Revenue 1,085 1,132 4.4% 5,342 4,233 -20.8% Cost of Revenue (2,083) (1,187) -43.0% (4,934) (4,321) -12.4% Gross Profit (998) (55) -94.5% 408 (89) -121.7% Gross Profit Margin -92.0% -4.9% 87.1 7.6% -2.1% (9.7) Selling and
Slide 26: Balance Sheet FY21
Balance Sheet FY21 SAR Million 31 March 2020 31 March 2021 Change Assets Property, Plant and Equipment 1,514 1,327 -12% Right-of-Use Assets 4,058 3,402 -16% Goodwill and Intangible Assets 1,080 1,111 3% Investment Property 4 2 -54% Investment in Associates & Others 232 303 31% Receivables from Dispo
Slide 27: Bottom line analysis
Bottom line analysis Gross Profit (SAR million) EBITDA (SAR million) 407.8 163.0 72.1 55.7 157.4 51.9 (184.0) (334.4) (390.0) (51.9) (88.5) (242.7) (541.2) (1,107) Q4-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 FY20 FY21 Q4-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 FY20 FY21 Fawaz Abdulaziz Alhokair Co. FY21 Re
Slide 28: Bottom line analysis
Bottom line analysis Net Profit (SAR million) (98.2) (128.1) (348.3) (535.6) (681.2) (915.4) (1,110.3) Q4-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 FY20 FY21 Fawaz Abdulaziz Alhokair Co. FY21 Results Presentation 28
Slide 29: Adjusted Bottom Line
Adjusted Bottom Line Adjusted Gross Profit (SARmn) Fawaz Abdulaziz Alhokair Co. FY21 Results Presentation 29
Slide 30: Adjusted Bottom Line
Adjusted Bottom Line Adjusted Net Profit (SARmn) Fawaz Abdulaziz Alhokair Co. FY21 Results Presentation 30
Slide 31: Intensive balance sheet restructuring
Intensive balance sheet restructuring Alhokair continues to rationalize inventory balances. Progress towards optimal inventory levels is nearing completion. Phase Target Income statement impact Q4-FY2020 Asset impairments SAR 239.4 million Q1-FY2021 Q4-FY2020 Q1-FY2021 Mark to market - Legacy ageing
Slide 32: Debt management in focus
Debt management in focus Actively addressing our capital structure to boost liquidity position and operational / strategic flexibility Summarized credit metrics SAR million Mar’20 Mar’21 % change Total Interest-Bearing Debt 3,183 3124 -2% Cash Position 686 468 -32% Net Debt 2,497 2656 6% Improved te
Slide 33: Our market
Our market The Saudi retail and F&B sectors enjoy strong fundamentals underpinned by favourable demographics, evolving lifestyles and low e-commerce penetration Supportive Growing F&B sector Retail growth driven by Supportive demographics e-commerce infrastructure 62% of Saudis between 6% p.a. growt
Slide 34: Vogacloset: value accretive for Alhokair
Vogacloset: value accretive for Alhokair Strengthening our omnichannel experience to extend our leadership position Transition to lifestyle retailer E-commerce arm Positive financial impact Omnichannel offering Proven leadership Profitable player Mitigate risk, gain market share Additional
Slide 35: Vogacloset: an enriched, integrated ecosystem
Vogacloset: an enriched, integrated ecosystem BACK-END FRONT-END POST SALES MERCHANDISING SYSTEM UNMATCHED CUSTOMER SERVICE Data driven sorting and recommendation engine Vogacloset AlHokair Brands Tenant Bilingual CRM Brands Brands Free returns BACK-BONE OPERATING picked up by SYSTEM A unique omnich
Slide 36: Strengthening our corporate governance
Strengthening our corporate governance An ongoing governance and leadership journey Board of Directors Executive management • Refreshed board with a healthy balance of skills & experience • Strong executive team delivering on a clear strategy • Four independent NEDs appointed in August 2020 • Recent
Slide 37: Thank you
Thank you Investor Relations investors.relations@fahretail.com
Fawaz Abdulaziz Alhokair — FY2021 Earnings Presentation on 6ix