Arvind Fashions Ltd. · NSE:ARVINDFASN
Arvind Fashions — Q1 FY21 Earnings Presentation
26 slides from Arvind Fashions's earnings presentation, September 2020
Slide 1: Arvind Fashions Limited Q1 FY21 Performance Highlights
Arvind Fashions Limited Q1 FY21 Performance Highlights Sep 2020 0
Slide 2: Agenda
Q1 Performance Highlights Q1 Results Agenda Way Forward Strategy 1
Slide 3: Making AFL Stronger - Fit for Growth Strategy
Making AFL Stronger - Fit for Growth Strategy Portfolio Rationalization Completed On Track – Accelerated during Cost Optimization Covid On Track - Multiple Actions to Working Capital Optimization Reduce Inventory & Debtors Debt Reduction - Equity infusion of Rs 660 Crs completed In Rs Crs. M
Slide 4: Making AFL Stronger & Fit for Growth - Q1 Highlights
Making AFL Stronger & Fit for Growth - Q1 Highlights 1 Restarted operations quickly post lockdown as allowed 70% / 77% Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 2 enabled sales 3.5X 3 Cost structure brought down significantly
Slide 5: Rs 660 Crs of Equity Infusion
Rs 660 Crs of Equity Infusion 1 Flipkart investment in Flying Machine Rs 260 Crs. 2 Successful Rights Issue – Oversubscribed 1.4 times Rs 400 Crs. 4
Slide 6: Making AFL Stronger & Fit for Growth - Q1 Highlights
Making AFL Stronger & Fit for Growth - Q1 Highlights 1 Restarted operations quickly post lockdown as allowed 70% / 77% Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 2 enabled sales 3.5X 3 Cost structure brought down significantly
Slide 7: Opening Up With Safety as #1 Priority
Opening Up With Safety as #1 Priority • Masks & sanitizers provided to employees Safety Measures & Guidelines • Periodic sanitization at offices and stores at Office and Stores • Well laid out SOP & Guidelines • Sanitizer disposal stands provided to partners Supporting our partners • Supporting part
Slide 8: Post Lockdown Store Opening
Post Lockdown Store Opening Store Universe # Stores Open 1250 963 963 963 865 871 895 904 887 816 855 841 730 409 347 273 96 131 Wk6 WK7 Wk8 Wk9 Wk10 Wk11 Wk12 Wk13 Wk14 Wk15 Wk16 Wk17 Wk18 Wk19 Wk20 Wk21 Wk22 (4th – 10th May) 24th - 30th Aug) MAY JUNE JULY AUG 7
Slide 9: Post Lockdown Sales Trend - Overall
Post Lockdown Sales Trend - Overall This year sales as % of last year same month sales Overall 46% 39% 26% 5% 0% Apr May Jun Jul Aug 8
Slide 10: Post Lockdown Sales Trend
Post Lockdown Sales Trend This year sales as % of last year same month sales Stores Dept. Stores 34% 50% 37% 19% 15% 20% 6% 3% 0% 0% Apr May Jun Jul Aug Apr May Jun Jul Aug Started slow, now picking up 9
Slide 11: Post Lockdown Revenue Trend – Online Channel
Post Lockdown Revenue Trend – Online Channel Growth over last year same Key Drivers month NNNOW.com Revenue • Search engine optimization led to improved organic traffic growth of 3X leading to 3.5X sales post unlock June’20 0.9X • 15-20% stores sales delivered through sales initiated through NNNOW
Slide 12: Channel Focus
Channel Focus Online Focus channel for the year – Target double digit growth Malls currently underperforming Exclusive Focus on high street Improve sales through stores Omni & Hyperlocal Brand Stores Small town expansion fulfilment Parallely work on additional cost efficiency Department
Slide 13: Making AFL Stronger & Fit for Growth - Q1 Highlights
Making AFL Stronger & Fit for Growth - Q1 Highlights 1 Restarted operations quickly post lockdown as allowed 70% / 77% Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 2 enabled sales 3.5X 3 Cost structure brought down significantly
Slide 14: Substantial Reduction in Costs
Substantial Reduction in Costs Total (Rs Crs.) 392 338 -63% -57% 147 147 Q1’20 Q1’21 Q4’20 Q1’21 Employee Emoluments (Rs Crs.) Other Expenses (Rs Crs.) Rent Savings (Rs Crs.) 101 77 291 261 Total: 70 -51% 49 -36% -63% 49 -66% 98 Q1 Q2 Q3 Q4 98 41.3 18.0 8.5 2.5 Q1’20 Q1’21 Q4’20 Q1’21 Q1’20 Q1’21 Q4
Slide 15: Making AFL Stronger & Fit for Growth - Q1 Highlights
Making AFL Stronger & Fit for Growth - Q1 Highlights 1 Restarted operations quickly post lockdown as allowed 70% / 77% Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 2 enabled sales 3.5X 3 Cost structure brought down significantly
Slide 16: Working Capital Reduction of Rs 130 Crs.
Working Capital Reduction of Rs 130 Crs. Inventory(Rs Crs.) Debtors (Rs Crs.) 1,367 781 - 45 -85 1,322 696 Mar-20 Jun-20 Mar-20 Jun-20 15
Slide 17: Making AFL Stronger & Fit for Growth - Q1 Highlights
Making AFL Stronger & Fit for Growth - Q1 Highlights 1 Restarted operations quickly post lockdown as allowed 70% / 77% Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 2 enabled sales 3.5X 3 Cost structure brought down significantly
Slide 18: Strong Presence in Categories Recovering Faster
Strong Presence in Categories Recovering Faster Accelerated Casualization & Work from Home Innerwear/ T-Shirts Casual Footwear Kidswear DIY Beauty Comfortwear • USPA, GAP, TH – • Supported with • Product categories of • Strong demand for • Strong omni-push Preferred brands for comfort wear launch ca
Slide 19: Agenda
Q1 Performance Highlights Q1 Results Agenda Way Forward Strategy 18
Slide 20: Q1 FY21 - Performance Snapshot
Q1 FY21 - Performance Snapshot IndAS 116 Q1 FY20 Q1 FY21 Growth Revenue from Operations 901 104 (88%) Other Income (Rent concessions) - 65 - Total Income 901 169 (81%) EBITDA 20 (54) - PBT (144) (201) - PAT (97) (197) - 19 All figures in Rs Crs.
Slide 21: Q1 FY21 – Performance Snapshot
Q1 FY21 – Performance Snapshot All Figures in Rs Cr. Q1 FY20 Q1 FY21 Q4 FY20 Revenue from Operations 901 104 710 Other Income (Rent concessions) - 65 Total income 901 169 710 Cost of Goods Sold 489 77 383 Employees' Emoluments 101 49 77 Other Expenses 291 98 261 EBIDTA 20 (54) (10) 20
Slide 22: Groupwise Performance Snapshot
Groupwise Performance Snapshot Sales (Rs Crs.) EBITDA (Rs Crs.) Q1 FY20 Q1 FY21 Growth Q1 FY20 Q1 FY21 Power 61 (35) 518 53 (90%) Brands Specialty 274 39 (86%) 19 0 Retail Emerging 120 12 (90%) 8 (20) Brands Total 912 104 (89%) 88 (54) Total including 901 104 (88%) 20 (54) Discontinued Brands 21
Slide 23: Agenda
Situation Update Q1 Performance Agenda Way Forward Strategy 22
Slide 24: FY21 Outlook – Q2/Q3/Q4
FY21 Outlook – Q2/Q3/Q4 Increasing trend in retail sales • Estimate 8-10% improvement in recovery every month Sustain FY cost reduction @ 40% Online on growth path. Estimated to accelerate growth on the back of Release Rs 250 Crs. in Gross • Increased stores integration with online platforms
Slide 25: Exit FY21 - Well Positioned for Value Creation in Medium and Long Term
Exit FY21 - Well Positioned for Value Creation in Medium and Long Term 1. 7 strong brands 2. Leader in casualwear 3. De-risked Unlimited/Emerging brands business model 4. Good momentum in high potential categories – Kidswear, Innerwear, Footwear and Beauty 5. Head start in online – strengthened with
Slide 26: Thank You
Thank You