Arvind Fashions Ltd. · NSE:ARVINDFASN
Arvind Fashions — Q2 FY23 Earnings Presentation
26 slides from Arvind Fashions's earnings presentation, Nov 14, 2022
Slide 1: Board meeting outcome cover letter to stock exchanges
ARVIND FASHIONS LIMITED A MEMBER OF THE LALBHAI GROUP Corporate Office : Du Pare Trinty, 8"' Floor, 17, M .G. Road, Bengaluru - 560 001 Tel : 91-80-4155 0601, Fax: 91-80-41550651 Website: http www.arvindfashions.com November 14, 2022 BSE Limited National Stock Exchange of India Ltd. Listing Dept. /
Slide 2: Q2 FY23 Results Presentation
Q2 FY23 RESULTS PRESENTATION AfVInD tASH IOn s November | 2022 Q2 FY23 RESULTS
Slide 3: Disclaimer
DISCLAIMER This document by Arvind Fashions Limited (‘the Company’) contains forward-looking statements that represent our beliefs, projections and predictions about future events or our future performance. These forward-looking statements are necessarily subjective and involve known and unknown ris
Slide 4: Agenda
AGENDA 01 02 03 Q2 FY23 Performance Q2 FY23 Results Way Forward Highlights Q2 FY23 RESULTS 3
Slide 5: Q2 FY23 Performance Highlights
Q2 FY23 PERFORMANCE HIGHLIGHTS Q2 FY23 RESULTS 4
Slide 6: Market & Economy Update
MARKET & ECONOMY UPDATE Retail channel continues to stay strong (compared to pre-Covid levels) leading to sharper recovery across the industry Changing consumer preferences towards pre-Covid with offices opening, marriage & occasion-led demand Premiumization continues to be a key trend across multip
Slide 7: FY23 Targets & Objectives – What We Have Set For Ourselves
FY23 TARGETS & OBJECTIVES – WHAT WE HAVE SET FOR OURSELVES Sales & Profitability Inventory Omni-channel business model • Amongst industry leading growth rates (over • Further improvement in inventory turns • Build scalable omni-channel model with FY22) to >4x higher contribution of direct-to-consume
Slide 8: Q2 FY23 Business Highlights
Q2 FY23 BUSINESS HIGHLIGHTS QUARTERLY POWER CHANNEL-WISE GROWTH DRIVERS GROSS EBITDA & SALES BRANDS PERFORMANCE (CATEGORY / FORMAT) MARGINS ROCE 46% sales Double digit EBITDA 70% growth in retail 50%+ growth each in Record full price ~90% growth in growth Y-o-Y; margin channel Y-o-Y and footwear and
Slide 9: AFL Posted Highest Ever Quarterly Sales
AFL POSTED HIGHEST EVER QUARTERLY SALES • Recorded highest sales quarter led by continued Sales ( ₹ in crores) buoyancy in demand and sharp execution in retail channel resulting in ~25% LTL growth and strong EOSS 1182 • Strong performance in the MBO channel 895 • Investment in brand advertisement, n
Slide 10: Resulting in Record Bottom Line Performance
RESULTING IN RECORD BOTTOM LINE PERFORMANCE EBITDA ( ₹ in crores) PBT and PAT (after minority interest) ( ₹ in crores) 45 136 18 72 -22 -98 Q2 FY22 Q2 FY23 Q2 FY22 Q2 FY23 ■ PBT ■ PAT (After minority interest) Y-o-Y improvement in gross margin leading to 260 bps increase in EBITDA margin despite hig
Slide 11: Brand Highlights
Q2 FY23 PERFORMANCE HIGHLIGHTS BRAND HIGHLIGHTS
Slide 12: Brand Highlights: U.S. Polo Assn.
Brand Highlights U.S. POLO ASSN. SINCE 1890 • Q2 FY23 witnessed highest • First time ad campaign with quarterly revenue ever Indian celebrity, Bollywood actor Arjun Rampal. Great • Very strong retail sales backed response to campaign focused by industry-leading LTL, with on twinning sharp reduction
Slide 13: Brand Highlights: Arrow
Brand Highlights ARROW • Key focus area for us and • Brand refresh involving new delivering strong results with retail identity, premium and brand doubling its NSV in H1 ceremonial designs in formal FY23 line and bigger assortment of smart casual ‘Arrow Sports’ • EBITDA positive trajectory line post
Slide 14: Brand Highlights: Tommy Hilfiger
Brand Highlights • Leading super-premium brand • Leadership in premium in India, with double digit watches, eyewear, belts and EBITDA (pre-IndAS) wallets segments in India • Much loved for its consistently • Fast growing and very high standards of retailing profitable online business across more tha
Slide 15: Brand Highlights: Calvin Klein
Brand Highlights C Calvin Klein • The fastest growing bridge to • Market leadership of bridge to luxury fashion brand in India luxury segment in jeans, Tees having doubled its revenue in and innerwear segments H1 FY23 • Much talked about association • Industry leading full price sell- with celebrity
Slide 16: Brand Highlights: Flying Machine
~~ FLYING ~MACHINE Brand Highlights • Strategic partnership with • Fueling of growth through Flipkart group gives brand a adjacent categories across unique advantage to reach footwear, innerwear and online first mindset young kidswear in the medium term consumers across India • Investing in omni cap
Slide 17: Brand Highlights: Sephora
SEPHORA Brand Highlights • Leading player in the prestige • Strengthening of categories segment with presence in 26 like fragrances, haircare and EBOs across key malls in the skin care through launch of country multiple brands during the quarter like Hanz De Fuko, • Unique engagement with MAC and To
Slide 18: Q2 FY23 - Groupwise Performance
Q2 FY23 - GROUPWISE PERFORMANCE (₹ in crores) Sales EBITDA EBITDA % Q2 FY23 Q2 FY22 % Growth Q2 FY23 Q2 FY22 Q2 FY23 Q2 FY22 Power Brands 998 674 48% 131 67 13.1% 9.9% Emerging Brands 184 138 34% 6 5 3.0% 3.7% Total 1182 812 46% 136 72 11.5% 8.9% Strong scale of ~1000 Crs in power brands in a single
Slide 19: H1 FY23 - Groupwise Performance
H1 FY23 - GROUPWISE PERFORMANCE (₹ in crores) Sales EBITDA EBITDA % H1 FY23 H1 FY22 % Growth H1 FY23 H1 FY22 H1 FY23 H1 FY22 Power Brands 1746 936 87% 214 55 12.3% 5.9% Emerging Brands 356 195 82% 16 (8) 4.5% (4.1)% Total 2102 1131 86% 230 47 11.0% 4.2% Note: Power Brands – US Polo Assn., Tommy Hilf
Slide 20: Continued Focus on Inventory & Working Capital Management
CONTINUED FOCUS ON INVENTORY & WORKING CAPITAL MANAGEMENT ( ₹ in crores) Sep’22 Sep’21 June’22 Inventory 1221 948 1013 Inventory days 86 94 98 Receivables 686 622 549 Debtor days 52 69 54 Payables 1342 1093 996 Creditor days 102 121 97 NWC 566 477 566 NWC days 36 42 54 Inventory control continues to
Slide 21: Q2 FY23 Results
Q2 FY23 RESULTS Q2 FY23 RESULTS 20
Slide 22: Q2 FY23 - Performance Snapshot
Q2 FY23 - PERFORMANCE SNAPSHOT ( ₹ in crores) Q2 FY23 Q2 FY22 Revenue from Operations 1182 812 Other Income 20 16 Total Income 1202 828 EBITDA 136 72 PBT 45 (22) Discontinued operations - (69) Minority Interest 10 3 PAT 18 (98) Strong financial performance with huge improvement in operational profit
Slide 23: Balance Sheet as on 30-Sep-2022
BALANCE SHEET AS ON 30-SEP-2022 ( ₹ in crores) Particulars 30-Sep-22 30-Sep-21 Net Worth* 1041 886 Borrowings 573 843 Capital Employed 1614 1729 Inventory 1221 948 Receivables 686 622 Creditors 1342 1093 Net Working Capital 566 477 Net Fixed Asset 262 297 Other Assets 781 913# Discontinued Business
Slide 24: Way Forward
WAY FORWARD Q2 FY23 RESULTS 23
Slide 25: Way Forward
WAY FORWARD AFL Growth momentum to stay strong led by festive Expanding the retail network into smaller towns demand, build-up of adjacent categories across through the franchisee model brands, LTL growth and multi-channel play Focus on improving profitability further through Strong balance sheet th
Slide 26: Thank You
ALVIND £ASHIONS THANK YOU