Khadim India Limited · NSE:KHADIM
Khadim India — Q4 FY18 Earnings Presentation
37 slides from Khadim India's earnings presentation, May 15, 2018
Slide 1: Exchange intimation letter on investor meet
May 15, 2018 To To The Manager The Manager The Department of Corporate Services The Listing Department BSE Limited National Stock Exchange of India Limited P. J. Towers, . Exchange Plaza, Bandra Kurla Complex, Dalal Street, Mumbai - 400 001 Bandra (East), Mumbai - 400 051 Scrip Code- 540775 Symbol·
Slide 2: Q4 & 12M FY18 Results Presentation
KHADIM INDIA LIMITED Q4 & 12M FY18 RESULTS PRESENTATION May 2018
Slide 3: Disclaimer
DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by Khadim India Limited (“Khadim” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial c
Slide 4: Discussion Summary
DISCUSSION SUMMARY DISCUSSION SUMMARY ▪ BUSINESS OVERVIEW ▪ BUSINESS STRATEGY & OUTLOOK ▪ Q4 & FY18 RESULTS ▪ FINANCIAL & OPERATIONAL SUMMARY ▪ MANAGEMENT TEAM & SHAREHOLDING PATTERN 3
Slide 5: Business Overview
BRITISH WALKERS BUSINESS OVERVIEW
Slide 6: Quick Snapshot
QUICK SNAPSHOT 1 Leading Footwear Brand in India 2 Huge Market Growth Potential * • 2nd largest footwear retailer in India * • Domestic footwear market expected to grow • Largest presence in East India at 15% (FY16-20) • One of the top 3 players in South India • Branded footwear market expected grow
Slide 7: Two-Pronged Market Strategy of Retail & Distribution Models
TWO-PRONGED MARKET STRATEGY OF RETAIL & DISTRIBUTION MODELS Retail Business – 66.3% Distribution Business – 24.1% Reach 753 ‘Khadim’s’ exclusive branded outlets 455 distributors supplying to MBOs across India Middle & upper middle income consumers in metros Lower & middle income consumers in Tier I
Slide 8: Extensive Geographical Reach & Penetration
EXTENSIVE GEOGRAPHICAL REACH & PENETRATION Presence in 23 States & 1 Union Territory 1 1 4 3 1 3 14 48 39 Brand Network Mar ‘18 Retail Stores – Tier wise 41 31 1 2 80 38 3 Retail Stores 753 Metros 19% 8 2 22 10 23 16 13 - COCO 183 Tier I 19 9 277 208 1 2 51% - Franchises 570 14% 9 4 Tier II 40 15 Di
Slide 9: Extensive Geographical Reach & Penetration
EXTENSIVE GEOGRAPHICAL REACH & PENETRATION Retail COCO Franchises • Rev Share – 66.3% • GM – 46.4% • Rev Share – 53.7% • Rev Share – 46.3% • EM – 10.8% Distribution Store Presence Store Store Gross EBITDA Type Count Size Margin Margin FY18 Revenues • Rev Share – 24.1% Sq. ft. Rs 7699 Mn • GM – 38.9%
Slide 10: Asset Light Model to Drive Positive Operating Leverage
ASSET LIGHT MODEL TO DRIVE POSITIVE OPERATING LEVERAGE 332 Incremental retail Incremental Revenue & Capex from new retail Stores added over FY14-18 stores added over FY14 to FY18 (Rs Mn) Performance by COCO EBO BO FRM Channel (FY18) 4,509 258 Revenue (Rs Mn) 2,742 1950 280 134 Expansion Frontend 74
Slide 11: Wide Product Range Across Various Categories & Price Points
WIDE PRODUCT RANGE ACROSS VARIOUS CATEGORIES & PRICE POINTS ‘Affordable Fashion’ brand catering to the entire family for all occasions - Men / Women / Kids - Menswear - Menswear - Menswear - Men & Women wear - Fashionable & casual - Formal shoes & sandals - Semi-formal & casual shoes / - Outdoor boo
Slide 12: Distinct Brand Positioning for Various Market Segments
DISTINCT BRAND POSITIONING FOR VARIOUS MARKET SEGMENTS Khadim’s brand presence and product range makes it capable to address ~85% of the total Indian footwear market potential Footwear Market Segmentation (MRP at retail stores in Rs) Distinct brand positioning to target customers % Share, Value Acro
Slide 13: Strong Design Capabilities to Create and Grow Sub-Brands
STRONG DESIGN CAPABILITIES TO CREATE AND GROW SUB-BRANDS LEADING TO PREMIUMISATION Khadim’s brand and its sub-brands continue to drive premiumisation leading to higher ASPs and gross margins 44 46.4 38.9% 43% Distribution 52% 2 % 401 43.7% 33.5% Retail 57% 48% FY14 FY18 FY14 FY18 FY14 FY18 FY14 FY18
Slide 14: Marketing Initiatives to Strengthen Brand Recall and Customer Connect
MARKETING INITIATIVES TO STRENGTHEN BRAND RECALL AND CUSTOMER CONNECT Key Marketing Triggers Extensive Marketing Campaigns – Sponsor for KKR and CSK in ongoing IPL tournament Brand promotions Season based new arrivals Scheme promotions, discount sales, consumer offers New store openings • Regional m
Slide 15: Grow Our Online Presence
GROW OUR ONLINE PRESENCE Grow online presence through product innovations and Khadim’s products are now also available on various e- advertisements commerce portals – Company website – www.khadims.com 14
Slide 16: Robust Backend Infrastructure
ROBUST BACKEND INFRASTRUCTURE Procurement & Warehousing & Supply Chain Manufacturing Quality Control Logistics Management • 88.9% of products for the retail • Operates 2 manufacturing • Four distribution centres across • In the retail business, each SKU business is procured from facilities in West B
Slide 17: Business Strategy & Outlook
BUSINESS STRATEGY & OUTLOOK
Slide 18: Business Growth Strategy
BUSINESS GROWTH STRATEGY Retail Business Distribution Business • Focus on expanding retail footprint in markets across South India, West India and • Focus on penetration in existing markets in Expand Footprint in in Uttar Pradesh in North India Eastern and Southern India and capitalise Western & Nor
Slide 19: Business Growth Strategy
BUSINESS GROWTH STRATEGY Retail Business Distribution Business • Given the aspirational nature of customer base, increase focus on sub-brands to drive premiumization • Introduce premiumized versions of product • Khadim’s brand helps to capture the target offerings in Hawai, PVC and PU Strengthen the
Slide 20: Positive Industry Outlook
POSITIVE INDUSTRY OUTLOOK Domestic footwear retail to grow at a faster pace compared to the overall retail industry Favourable macro and Overall retail market in US $ Bn Domestic footwear market at retail price in US $ Bn demographic tailwinds Population Growth 960 12.6 • Young demographics - 78% of
Slide 21: Q4 & FY18 Results Update
Q4 & FY18 RESULTS UPDATE
Slide 22: Q4 & FY18 Results: Key Highlights
Q4 & FY18 RESULTS: KEY HIGHLIGHTS Q4 FY18 YoY Analysis In Rs Mn Revenues & Gross Margin EBITDA & EBITDA Margin PAT & PAT Margin 6.9% 9.9% 9.1% 5.2% 35.9% 33.7% 1,964 103 102 1,498 178 31% 148 20 % -1.5% Q4 FY17 Q4 FY18 Q4 FY17 Q4 FY18 Q4 FY17 Q4 FY18 FY18 YoY Analysis Revenues & Gross Margin EBITDA
Slide 23: Q4 & FY18 Results: Key Highlights
Q4 & FY18 RESULTS: KEY HIGHLIGHTS Q4 FY18 vs. Q4 FY17 Analysis: • Q4FY18 net revenues increased by 31.1% from Rs.1498 mn to Rs.1964 mn • Retail business grew by 19% and distribution business grew by 44%, in addition there was Govt institutional sales of Rs.219 mn in Q4FY18 as compared to Rs.75 mn in
Slide 24: Q4 & FY18 Results: Segment Analysis
Q4 & FY18 RESULTS: SEGMENT ANALYSIS Note: Based on I GAAP standard In Rs Mn Q4 FY18 YoY ANALYSIS – REVENUE BREAKUP FY18 YoY ANALYSIS – REVENUE BREAKUP 508 1,856 354 44 % 1,347 38 % 1,062 1,269 4,565 5,107 19 % 12 % Q4 FY17 Q4 FY18 FY17 FY18 Retail Distribution Retail Distribution Segment Share % * Q
Slide 25: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs Mn) - IND-AS Q4 FY18 Q4 FY17 YoY % Q3 FY18 QoQ % FY18 FY17 YoY % Revenue from Operations 1,963.6 1,498.0 31.1% 2,046.4 -4.0% 7,487.1 6,106.0 22.6% COGS 1,302.8 960.0 35.7% 1,272.9 2.4% 4,653.1 3,714.5 25.3% Gross Profit 660.8 538.0 22.8% 773.5
Slide 26: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Particulars (In Rs Mn) – IND-AS Mar-18 Mar-17 Particulars (In Rs Mn) – I GAAP Mar-18 Mar-17 Shareholder's Funds 2684.8 1839.6 Non-Current Assets Fixed Assets – Tangible & Intangible 1258.5 1208.4 Non-Current Liabilities CWIP & Intangibles under development 14.6 31.5 Long T
Slide 27: Financial & Operational Summary
FINANCIAL & OPERATIONAL SUMMARY
Slide 28: Financial Summary
FINANCIAL SUMMARY* In Rs Mn Revenues & Gross Margin EBITDA & EBITDA Margin PAT & PAT Margin CAGR: 12.6% CAGR: 11.2% CAGR: 33% 10.4% 9.8% 10.6% 10.1% 4.7% 5.0% 5.1% 37.1% 39.2% 37.9% 34.3% 2.5% 32.1% 7,489 3.0% 757 306 379 6,106 645 252 4,781 4,602 5,345 496 524 122 -4.1% 137 -187 FY14 FY15 FY16 FY17
Slide 29: Financial Summary
FINANCIAL SUMMARY In Rs Mn (I-GAAP) Revenues – Segment wise Retail Revenues – COCO vs Franchises Retail Revenues – Khadim’s vs Sub-brands 11% 15% 19% 22% 24% 52% 42% 47% 47% 46% 43% 48% 50% 52% 52% 75% 72% 75% 73% 66% 48% 58% 53% 53% 54% 57% 52% 50% 48% 48% 14% 13% 6% 5% 10% FY14 FY15 FY16 FY17 FY18
Slide 30: Operational Summary
OPERATIONAL SUMMARY Number of Retail Stores Retail Stores – Region-wise Breakup 753 4% 4% 6% 6% 6% 673 7% 9% 612 9% 10% 10% 545 15% 15% 17% 485 18% 19% 570 464 511 369 403 75% 72% 69% 67% 66% 116 142 148 162 183 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 COCO Franchises East South West North
Slide 31: Management Team & Shareholding Pattern
MANAGEMENT TEAM & SHAREHOLDING PATTERN
Slide 32: Experienced Promoter & Management Team
EXPERIENCED PROMOTER & MANAGEMENT TEAM Siddhartha Roy Burman, Chairman & Managing Director • Associated with the Company since its incorporation. He has 34 years of experience in the footwear industry • Responsible for the overall strategic decision making and provides leadership to all operations I
Slide 33: Board of Directors
BOARD OF DIRECTORS Siddhartha Roy Burman, Chairman & Managing Director Ritoban Roy Burman, Non-Executive Director Prof. (Dr.) Surabhi Banerjee, Non-Executive, Independent Director • He is a graduate in Mass Communication from St. Xavier’s College, Kolkata. • 37 years of experience as an academician
Slide 34: Shareholding Structure
SHAREHOLDING STRUCTURE % Shareholding – Mar-18 Key Institutional Investors – Mar-18 % Holding Sundaram MF 6.81% Public, 12.01 HSBC Global 4.95% Promoter & IDFC MF 4.01% Promoter Group, Franklin India Smaller Companies Fund 3.23% Institutions, 59.70 28.29 UTI – Master Equity 2.20% IL & FS Alternate I
Slide 35: Key Milestones
KEY MILESTONES 1981 1993 1999 2002 2005 • Acquired and took over the • Commenced retail • Commenced retail • Commenced • Accredited with business of M/s S.N. business through operations in South manufacturing ISO 9001:2000 Industries as a going concern COOs for footwear India through with operations
Slide 36: Awards, Accreditations and Accolades
AWARDS, ACCREDITATIONS AND ACCOLADES Khadim’s was ranked 7th amongst the Top 100 Franchises in India in 2017 Most Preferred Footwear Brand, 2015 Most Admired Retailer Of The Year (East), 2014 Most Attractive Footwear Retail Brand, 2013 Mirchi Business Excellence Bengal’s Best Footwear, Most Purchase
Slide 37: Thank You
Ishani Ray Nachiket Kale CEO IR Consultant Contact No: +91 33 40090501 Contact No : + 91 99209 40808 Email: ishani.ray@khadims.com Email – nachiket.kale@dickensonir.com Indrajit Chowdhury Ravindra Bhandari CFO IR Consultant Contact No : + 91 33 40090505 Contact No: +91 92836 14197 Email – indrajit.c