Afg International Company · TADAWUL:4240
Afg International — Al Hokair Fashion Retail — 1Q-FY21 Earnings Presentation
28 slides from Afg International's earnings presentation, 2020
Slide 1: Al Hokair Investor Presentation 1Q-FY21
AL HOKAIR Investor Presentation 1 Q - F Y 2 1 AlHokair Fashion Retail 1 Investor Presentation
Slide 2: Key Developments 1Q-FY21
Key Developments 1Q-FY21 AlHokair Fashion Retail 2 Investor Presentation
Slide 3: 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 4: Operational Developments
Operational Developments Store Closures Between 16 March and 26 April 2020, Alhokair temporarily closed most of its retail units in the Kingdom of Due to COVID- Saudi Arabia, with units gradually reopened starting 26 April through 21 June 2020. COVID-related closures -53.8% during the period account
Slide 5: Financial & Operational Review
FINANCIAL & OPERATIONAL REVIEW 1Q-FY21 AlHokair Fashion Retail 5 Investor Presentation
Slide 6: Results Impacted by COVID-19 and Store Closures
Results Impacted by COVID-19 and Store Closures Revenue impacted by COVID-19 and store closures 6,117 5,426 5,341 Revenues declined 67.4% y-o-y on account of COVID-19 and the shuttering of the company’s stores for prolonged periods during the quarter. 1,732 565 FY18 FY19 FY20 1Q-FY20 1Q-FY21 Smaller
Slide 7: Completion of Inventory and Asset Cleanup with no Further One-Time Costs
Completion of Inventory and Asset Cleanup with no Further One-Time Costs In 4Q-FY20 and 1Q-FY21, 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 that th
Slide 8: Lost Revenue During Closures Leading to SAR 525 mn Impact on Gross Profit
Lost Revenue During Closures Leading to SAR 525 mn Impact on Gross Profit Gross profitability impacted by lower revenue and operating leverage Adjusted gross profitability accounts for IFRS-16 and one-time write-offs Gross profitability reflects Adjusted Gross Profit (SAR mn) lower revenue and Adjus
Slide 9: Network Evolution
Network Evolution KSA International Total # of Stores # of Stores # of Stores Stores as at 30 June 2020 1,508 344 1852 New Stores 13 2 15 Closed Stores -25 -7 -32 Net Change -12 -5 -17 Stores as at 31 Aug 2020 1,496 339 1,835 Forecasted Openings 54 16 70 Forecasted Closings -41 -22 -63 Net Changes 1
Slide 10: Focus on International Performance
Focus on International Performance International Segment Key Performance Indicators SAR mn 1Q-FY20 1Q-FY21 Change International Revenue Breakup by Country Net Revenue 224.3 69.4 -69.0% Gross Profit 50.2 (46.2) -192.0% Azerbaijan Georgia Egypt 20% 18% Operating Income 18.5 (82.8) 547.2% 2% Jordan Arm
Slide 11: 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 Jun ‘19 Mar’20 Jun ’20 Improved terms and Total Interest-Bearing Debt 2,654 3,183 3,134 pricing yielding C
Slide 12: Strategy Overview
STRATEGY OVERVIEW AlHokair Fashion Retail 12 Investor Presentation
Slide 13: 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 14: 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 15: 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 16: 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 17: 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 18: 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 Launched Multi-Brand Flagship Platform Alhokair has acqui
Slide 19: Appendix
APPENDIX AlHokair Fashion Retail 19 Investor Presentation
Slide 20: Income Statement
INCOME STATEMENT SAR Million 1Q-FY20 1Q-FY21 Change Net Revenue 1,732.4 564.9 -67.4% Cost of Revenue (1,076.5) (807.7) -25.0% Gross Profit 655.9 (242.7) -137.0% Gross Profit Margin 37.9% -43.0% - Selling & Distribution Expenses (39.0) (35.9) -7.9% General & Administrative Expenses (53.7) (55.6) 3.4%
Slide 21: Balance Sheet
BALANCE SHEET SAR Million Jun ‘19 Mar ’20 Jun ’20 Change vs Jun Change vs Mar Assets Property, Plant and Equipment 1,717 1,541 1,439 -16% -7% Right-of-Use Assets 4,653 4,058 3,830 -6% Goodwill and Intangible Assets 871 1,080 1,077 24% Investment Property 62 4 4 -94% 0% Investment in Associates & Oth
Slide 22: 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 23: Our Current Footprint
Our Current Footprint Our Group maintains a presence Country Stores across 13 global markets with 1,561 88% of Saudi Arabia 1,218 Sales: SAR stores and over 468,460 sqm 495.5 mn Egypt 81 of retail space Growth Markets Georgia 57 8% of Armenia 33 Sales: SAR 46.8 mn Azerbaijan 29 1,418 Jordan 55 Kazak
Slide 24: 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 25: 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 25 Investor Presentation
Slide 26: 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 26 Investor Presentation
Slide 27: 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 Apr-20 Apr-20 M
Slide 28: Thank you
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