Afg International Company · TADAWUL:4240
Afg International — Cenomi Retail — Investor Presentation (September 2024)
48 slides from Afg International's investor presentation, September 2024
Slide 1: Cenomi Retail Investor Presentation
Cenomi Retail Investor Presentation As of 30 September 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared solely for use as an Investor presentation for Cenomi Retail (the “Company”). By attending or by reading this presentation, you agree to be bound by the following limitations. The information contained in this presentation is for background purposes onl
Slide 3: Table of Contents
Table of Contents 04 At a Glance 06 Why Cenomi Retail? 10 Retail Sector Overview 13 Macro Overview 16 Strategic and Operational Review 25 Financial Overview 33 Concluding Remarks 35 Appendix
Slide 4: At a Glance
a cenomi ed Ata Glance
Slide 5: Cenomi Retail at a glance
Cenomi Retail at a glance The leading franchise retailer in Saudi Arabia, and the only listed business of its type in the Middle East Over 850 357 Saudi stores stores Kazakhstan Georgia + 360K sqm 252 F&B outlets Armenia Azerbaijan Uzbekistan Jordan Egypt 9 countries 250 international KSA stores Cor
Slide 6: Why Cenomi Retail?
a cenomi ed Why Cenomi Retail?
Slide 7: A leading fashion and F&B franchise retailer in KSA
A leading fashion and F&B franchise retailer in KSA, representing top global brands KSA Q3’24: +3.6% YoY Saudi Arabia’s leading franchise retailer Representing Brand Champions across a well diversified portfolio No. 1 357 53 Fashion Franchise Stores Malls Apparel Retailer in KSA 23 20 224,129 Sports
Slide 8: Strong international presence in key emerging markets
Strong international presence in key emerging markets with a solid growth potential 8 250 40 34 115,440 Countries Stores Malls Brands GLA in SqM Diversified International footprint (percentage of Intl Tier-1 Champion Brands Revenues) Tier 1 Champion Kazakhstan Brands Georgia 1% 34% (Core Brands) Arm
Slide 9: E-commerce continues to be an area of focus
E-commerce continues to be an area of focus for the company E-commerce presence …across monobrand websites Top brands with monobrand websites: 9% 7% Zara online sales Fashion brands as % of as % of total Zara revenue total fashion revenues 39% 20 Online F&B sales as % Monobrand of total F&B revenues
Slide 10: Retail Sector Overview
a cenomi ed Retail Sector Overview
Slide 11: KSA retail market is growing 30%+ by 2028
KSA retail market is growing 30%+ by 2028 including strong growth in fashion, accessories, and F&B Saudi Arabia retail market, market size in SAR Bn Forecast CAGR growth in selected retail categories Market size in SAR Bn 2023A-’28E CAGR (%) 837 +5.3% 792 (1) 310 F&B +3.5% 751 368 715 +29.2% 682 648
Slide 12: Well positioned to seize opportunities in fashion and F&B
Cenomi Retail is well positioned to seize the exceptional opportunities within the fashion and F&B market The New KSA Consumer presents attractive prospects for Cenomi Retail, with the Fashion & Accessories segment being one of the fastest-growing at a CAGR of 4.6% for 2023-2028, and F&B being the l
Slide 13: Macro Overview
a cenomi ed Macro Overview
Slide 14: The economy of Saudi Arabia is on a solid growth trajectory
The economy of the Kingdom of Saudi Arabia is on a solid growth trajectory Since the announcement of Vision 2030, KSA has firmly established itself as one of the most attractive growth stories around the globe KSA is the one of the fastest-growing economies … …with a booming consumer outlook… Relati
Slide 15: Riyadh is a fast growing and underpenetrated market
Riyadh is a fast growing and underpenetrated market Riyadh’s population steadily increasing Riyadh retail market is underpenetrated City Population (mn) Conservative scenario vs Organized retail penetration, GLA m2 per capita Government ambition to double the size of Riyadh 2.13 CAGR: 1.37% 7.75 7.8
Slide 16: Strategic and Operational Review
Strategic and Operational Review 16
Slide 17: Continuing our path to enhanced potential and profitability
Continuing our path to enhanced potential and profitability Continuing our path to enhanced potential and profitability Phase 1: Fix The House Phase 3: Achieving Optimal Potential ▪ Rationalize brand and ▪ Scale existing brands to maximum potential store portfolio ensuring comprehensive coverage of
Slide 18: Effective execution of our strategy
Effective execution of our strategy Continuing our path to enhanced potential and profitability Key initiatives to drive growth in the domestic market Renovating high footfall stores and Targeting opening new openings in prime stores in prime Leveraging the malls locations use of data Seamless check
Slide 19: Renovation program delivered ~70% sales increase
Renovation program by Cenomi Retail has delivered an average ~70% sales increase in renovated stores Continuing our path to enhanced potential and profitability • Location: Kingdom Center • Location: Mall of Arabia • Location: Red Sea Mall • Location: Kingdom Center • City: Riyadh • City: Jeddah • C
Slide 20: Next-generation flagship malls opening in KSA
Multiple next-generation flagship malls opening in KSA, supporting new top-producing flagship stores across the brand portfolio Unprecedented opportunity for new flagship stores Cenomi Centers Flagship Malls under construction • Many new flagship malls are opening in KSA over the next few years, pro
Slide 21: International portfolio
International portfolio ▪ Strong sales momentum, with CIS region driving the Country # of Stores # of Brands # of Malls growth ▪ Strategically expanding operations in select global Armenia 27 15 4 markets such as Azerbaijan, Georgia, Armenia and Uzbekistan Azerbaijan 41 17 7 ▪ Exclusively customized
Slide 22: F&B Excellence: QSR strategy
F&B Excellence: Our QSR strategy is to operate the champions of each F&B category We operate leading F&B brands and category champions… • Working on increasing the store sales • Exiting non-core brands • Increasing home delivery sales • Investing more in marketing initiatives • Presenting new additi
Slide 23: Our turnaround strategy is steadily advancing
Our turnaround strategy is steadily advancing across all fronts Brand Store Operational Market Rationalization Rationalization Enhancement Rationalization ▪ 24 brands with SAR 212 ▪ 113 closed stores in Q3’24 ▪ Revenue per store increase ▪ Exited Morrocco million capital gain , YTD and opened 13 Mar
Slide 24: Moving Forward Key Highlights – Q1 2025
Moving Forward Key Highlights – Q1 2025 The Kingdom of Saudi Arabia Fashion F&B Online Sales International Markets •4 Zara & Inditex stores to be renovated • Expansion of Zara at Nakheel Mall from •12 Subway stores opened in October •New ecommerce channels will be opened • 7 Zara and Inditex stores
Slide 25: Financial Overview
a cenomi ed Financial Overview
Slide 26: Financial performance highlights
Financial performance highlights 3Q’24 9M’24 Highlights ▪ Retail revenues in the Kingdom of Saudi Arabia were up 3.6% Revenues YoY in Q3-24, supported by Zara & Inditex brands, and SAR 1.2 BN 9.0% SAR 3.7 BN 1.5% adoption of strategic sales measures ▪ International portfolio witnessing strong moment
Slide 27: Domestic retail and international portfolio drive revenue growth
Domestic retail and international portfolio drive revenue growth Revenue, SAR MN LFL consolidated sales growth, % ▪ Retail revenues in the Kingdom of Saudi Arabia increased 3.6% while ▪ LFL growth driven by enhancement of customer experiences through international retail achieved 30.9% growth in Q3-
Slide 28: Strategic sales measures drive revenue growth and profitability
Strategic sales measures drive revenue growth and profitability LFL Saudi retail sales growth % LFL International retail growth % ▪ Domestic LFL sales witnessed a growth of 3.6%, supported by proactive ▪ International LFL sales continued to improve, as a result of the sales strategies as well as eff
Slide 29: Online sales maintaining strong contribution
Online sales maintaining strong contribution to consolidated revenues Online revenues, SAR MN E-commerce, % of total revenues ▪ Online sales decreased 5.0% YoY in Q3-24 and were temporarily ▪ Accessibility, convenience and technology adoption expected to further impacted by the brands divestment pro
Slide 30: Retail price positioning and cost optimization help sustain margins
Strategic retail price positioning and cost optimization help sustain margins Gross Profit, SAR MN – GPM, % EBITDA, SAR MN – EBITDA Margin, % ▪ Gross margin increased to 10.6% in Q3-24, due to a reduction in ▪ EBITDA margin increased to 12.0% in Q3-24, driven by the employee costs, rent expenses and
Slide 31: EBITDA performance across segments
EBITDA performance across segments EBITDA KSA Retail, SAR MN – EBITDA Intl, SAR MN – EBITDA EBITDA F&B, SAR MN – EBITDA EBITDA Margin, % Margin, % Margin, % 200 40.0% 70 20.0% 15 15.0% 18.3% 9.3% 146 18.0% 7.6% 6.3% 10.0% 10 100 60 5.0% 84 20.0% 61 9 16.0% 5.0% 15.5% 13.2% 5 6 5 0 -59 17.7% 11.8% 4
Slide 32: Inventory optimization leading to enhanced efficiency
Inventory optimization leading to enhanced efficiency Inventory balance (SAR MN) Inventory efficiency ratios ▪ Inventory continues to be within an acceptable range, reaching SAR ▪ Effective management of inventory , including streamlined procurement 722 MN, as focus increases on inventory optimizati
Slide 33: Concluding Remarks
a cenomi ed Concluding Remarks
Slide 34: Key takeaways
Key takeaways Topline Profitability Financial position Brand Rationalization International operations leading Turnaround in profit to SAR 19 Balance sheet remains key area Continued progress, with capital revenue growth, primarily driven in Q3-24, with a continued focus of focus, with net debt gains
Slide 35: Appendix
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Slide 36: Stock performance, shareholder composition and peer benchmarking
Stock performance, shareholder composition and peer benchmarking 150 • ISIN Code: SA000A0LB2R6 Revenue – 5 Market Cap P/E Ratio P/B Ratio 2024 Gross Margin EBITDA ROE (%) Year CAGR • Average 3-year daily volume (USD mn)* (x) (x) EBITDA est. (%) Margin (%) 100 TASI Index (%) traded: 1.04M Retail Inde
Slide 37: KSA is home to an increasing population, attracting more tourists
KSA is home to an increasing population, whilst attracting more tourists KSA has a high share of urban population Tourism industry is thriving in the Kingdom Share of population in urban agglomerations of more than 1 million, % 120 300 256 5 cities with 206 66 1+ million 100 250 population 80 117 20
Slide 38: KSA has the largest and fastest growing F&B market in MENA
KSA has the largest and fastest growing F&B market in MENA F&B Market Size per country (2022, USD bn, 2022-2026, CAGR %) GCC North Africa Levant* 45 18 9 22 CAGR (2022-2026) 11% MENA Total 72 Currency devaluation not fully taken into account in 9% the growth rate 7% 6% 11 6% 6% 12 5% 5% 5% 5% 5% 5%
Slide 39: ~2 million sqm of prime retail space opening in KSA
~2 million sqm of prime retail space opening in KSA, supporting a robust store opening pipeline The Avenues New Murabba Al-Othaim Diriyah Gate (Riyadh and DAK) (Riyadh) (Riyadh and DAK) (Riyadh) Distinctive & upscale mixed-use A visionary project to build a new, Large mixed-use destination A World-c
Slide 40: Cenomi Retail's Current store network
Cenomi Retail’s Current store network Store network evolution ▪ 5 stores opened Q3’24 ▪ 102 stores closed 1,340 1,345 ▪ 97 net closures 251 254 Retail 1,062 ▪ 31 stores opened 959 9M’24 ▪ 516 stores closed 266 267 251 859 ▪ 485 net closures 255 252 249 255 250 ▪ 8 stores opened 823 824 Q3’24 ▪ 11 st
Slide 41: Revenue diversification
Revenue diversification Revenue by division Revenue by channel Revenue by geography 6% 4% 5% 5% 5% 21% 27% 29% 27% 16% 32% 6% 7% 7% 21% 25% 21% 8% 27% 7% 10% 9% 7% 9% 73% 7% 67% 64% 62% 61% 79% 73% 71% 73% 94% 93% 68% 93% 92% 90% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'2
Slide 42: Portfolio optimization enabling solid revenue per store
Portfolio optimization enabling solid revenue per store Revenue Per Store (Group) Revenue Per Store (KSA) 1600 1,800 900 2,800 1,294 1,362 1,986 1,229 1,841 1400 1,600 800 1,689 2,300 1,400 700 1200 801 Number of 1,200 600 1,800 1000 752 Number of 832 1,000 500 800 800 Stores 400 763 1,300 Stores Re
Slide 43: Income Statement
Income Statement SAR MN Q3-23 Q3-24 Change 9M-23 9M-24 Change Revenue 1,074 1,170 9.0% 3,772 3,716 -1.5% Cost of revenue -993 -1,046 5.3% -3,246 -3,270 0.7% Gross profit/(loss) 80 124 54.6% 525 446 -15.2% margin 7.5% 10.6% 3.1pp 13.9% 12.0% (1.9pp) Selling and distribution expenses -38 -28 -26.8% -1
Slide 44: Balance Sheet
Balance Sheet SAR MN 31 Dec 23 30 Sept 24 Change SAR MN 31 Dec 23 30 Sept 24 Change Assets Equity & Liabilities Share Capital 1,148 1,148 0% Property, Plant and Equipment 1,150 1,134 -1% Reserves (Statutory, Foreign Currency and Fair Value) -565 -604 7% Right-of-Use Assets 2,045 1,583 -23% Fair valu
Slide 45: Consumer trends
Consumer trends Increasing digital / Moving forward, Cenomi Retail will need to cater to new consumer Scale digital e-commerce channels & reinvent adoption trends with significant implications for the future of the industry. role of stores Shift towards Re-mix portfolio experiences & new to experien
Slide 46: Brand portfolio
Brand portfolio # KSA # CIS GLA BRAND COUNTRY DESCRIPTION STORES STORES (sqm k) Zara is one of the largest international fashion brands and places the customer at the heart of their unique business model. It is engaged in the 31 12 91 production, distribution, and sale of a wide range of jeans wear,
Slide 47: Brand portfolio – cont'd.
Brand portfolio – cont’d. BRAND COUNTRY DESCRIPTION (1) Aldo specializes in the creation of high-quality fashion footwear, leather goods and accessories Known for its trendy designs and affordable prices, Charles & Keith specializes in women’s footwear, handbags, and accessories Cosmetics brand that
Slide 48: Thank You
cenomi THANK YOU
Cenomi Retail — Investor Presentation (September 2024) on 6ix