Afg International Company · TADAWUL:4240
Afg International — Fawaz Abdulaziz Alhokair — Investor Presentation (September 2021)
43 slides from Afg International's investor presentation, September 2021
Slide 1: Investor Presentation
Investor Presentation September 2021 Fawaz Abdulaziz Alhokair Co. (Tadawul: 4240)
Slide 2: Disclaimer
Disclaimer This presentation has been prepared solely for use as an investor presentation for Fawaz Abdulaziz Alhokair Co. (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 backgrou
Slide 3: About Alhokair
About Alhokair
Slide 4: The leading retail franchiser
The leading retail franchiser The leading franchise retailer in Saudi Arabia, and the first choice for brand partners seeking exposure to strategic markets 1,709 stores* c.470k sqm Kazakhstan Balkans 11 countries** Georgia Armenia Azerbaijan Leaders in KSA Lebanon Morocco Iraq 1,089 Saudi stores Jor
Slide 5: Differentiated brand portfolio; diverse revenues
Differentiated brand portfolio; diverse revenues Our Brand Portfolio Is Our Competitive Advantage & Transformation Driver Targeting most consumer Diversifying Successful relationship Evolving brand mix 90 brands* segments through economy and fast fashion F&B offering with partners and alignment on s
Slide 6: Revenue breakdown – FY21
Revenue breakdown – FY21 Revenue by division Revenue by channel Revenue by geography 8% 5% 13% 18% 1% 1% 87% 10% 82% 6% 3% 5% 3% 81% 3% 79% 99% 95% FY 22 - Outer circle FY 22 - Outer circle FY 22 - Outer circle FY 21 - Inner circle FY 21 - Inner circle FY 21 - Inner circle KSA CIS Egypt Others KSA R
Slide 7: Our vision
Our vision Our vision is to be the leading lifestyle retailer of choice in Saudi Arabia and our selected strategic markets 01 02 03 04 Expand scale and reach to become franchisor of choice .Expand portfolio, modernize network and improve Improve omnichannel capabilities by Develop effective and effi
Slide 8: Operational Upgrade Strategy
Operational Upgrade Strategy
Slide 9: Our operational upgrade strategy
Our operational upgrade strategy Portfolio optimization 01 02 Operational excellence Optimize store network Ongoing FY21-22 Restructure inventory Exit weak/non-performing brands FY21 FY21-22 Revamp inventory & supply chain management Expand portfolio – unique brand experience FY21-22 H1-FY22 Build s
Slide 10: Lifestyle footprint transition
Lifestyle footprint transition Cabana F&B – casual dining concept Public Desire footwear – first-ever physical store Other FY22 openings to date Monobrand platforms Georgia, Saudi Arabia Fawaz Abdulaziz Alhokair Co. Investor Presentation – September 2021 10
Slide 11: Key brand acquisitions for FY22
Key brand acquisitions for FY22 Already Signed Coming Soon in F&B Desserts Concept Arabic Food Concept In F&B, c. 50 new stores to open in FY22 with a CAPEX ~ SAR 50mn In Retail c. 65 new stores to open in FY22 with a CAPEX ~ SAR 100mn Signed 5 new Cinnabon sub-franchises ~ +30 new stores in t
Slide 12: Omnichannel transition
Omnichannel transition Ongoing integration of our brands on Vogacloset & new Monobrand platforms rollout in KSA and abroad Vogacloset Monobrand Platforms Q1- FY22 Uterque - KSA Massimo Dutti - Georgia Multiple phase go live 29 Alhokair fashion brands Q2- FY22 Massimo Dutti Armenia - July are
Slide 13: Financial review Q1-FY22
Financial review Q1-FY22
Slide 14: Q1-FY22 at-a-glance
Q1-FY22 at-a-glance Reported SAR 1,701 mn SAR 333 mn SAR 193 mn SAR 46 mn Revenue Gross Profit EBITDA Net Profit 201% vs Q1-FY21 Q1-FY21 SAR -242.7 mn Q1-FY21 SAR -334.4 mn Q1-FY21 SAR -535.6 mn 1.3% vs Q1-FY20 Q1-FY20 SAR 507.5 mn Q1-FY20 SAR 413.4 mn Q1-FY20 SAR 224.9 mn Return to profitability po
Slide 15: Top line returns to pre-pandemic levels
Top line returns to pre-pandemic levels Revenues (SAR million) LFL growth (consolidated) Y-o-Y growth as sales return to pre-pandemic levels. Improving LFL growth performance. Based on pre-pandemic Performance strong compared to pre-pandemic Q1-FY20. levels revenue down 13% due to ongoing limitation
Slide 16: Gross profitability and EBITDA recovery
Gross profitability and EBITDA recovery Gross Profit (SAR million) – GPM (%) EBITDA (SAR million) – EBITDA Margin (%) 23.9% 29.3% 11.4% 19.6% 6.1% 4.1% 11.7% 4.4% -4.9% -16.2% 413 72 56 193 508 52 157 333 (334) (184) (243) (55) -43.0% -59.2% Q1-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q1-FY20 Q1
Slide 17: Balance sheet optimization
Balance sheet optimization Aggressive inventory management and working capital optimization to improve liquidity and increase efficiency Inventory balance (SAR million) Receivables from related parties* (SAR million) 472 1,377 -25.8% -12% 414 1,257 348 344 1,108 1,021 Q1-FY21 Q3-FY21 Q4-FY21 Q1-FY22
Slide 18: Balance Sheet Actions
Balance Sheet Actions Important decisive actions to restructure the company’s capital 1. 2. 3. 4. SAR 205 mn of statutory Executive management Capital reduction and Financial and legal advisors reserves utilised to offset mandated by the board capital increase to be appointed, further accumulated lo
Slide 19: Segmental review Q1-FY22
Segmental review Q1-FY22
Slide 20: Revenue breakdown
Revenue breakdown Revenue by division Revenue by channel Revenue by geography 6% 3.6% 13% 3% 12% 14.6% 87% 88% 6% 7% 3% 3% 3% 84% 85.0% 3% 81% 96.0% Q1 FY 22- Outer circle Q1 FY 22- Outer circle Q1 FY 22- Outer circle Q1 FY 21 - Inner circle Q1 FY 21 - Inner circle Q1 FY 21 - Inner circle Stores Onl
Slide 21: LFL Revenue Growth
LFL Revenue Growth Saudi retail International retail LFL improving significantly. Saudi LFL revenues down 15% vs. LFL improvement due to removal of Covid-19 restrictions. LFL revenues pre pandemic levels. Target low single digit LFL growth. down 11% compared to pre-pandemic levels. Q1-FY20 Q2-FY20 Q
Slide 22: Ongoing store fleet rationalization
Ongoing store fleet rationalization Store network evolution Gross Floor Area (SQM) vs Revenue Per SQM Net store contraction of 30 stores in Q1-FY22. Plans to close c.50-60 stores Revenue per sqm on an upward trajectory as we continue to in FY22 whilst focusing on expansion in chosen segments. genera
Slide 23: Saudi Arabia remains core market, key focus
Saudi Arabia remains core market, key focus Saudi retail store network evolution Store yields improving, upward trend 4,213 3,907 1,212 1,202 1,171 2,983 13 12 13 8 17 2,641 -22 2,590 -44 -44 -48 384 -59 1,120 344 340 336 320 312 1,089 1,147 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q1-FY20 Q1-FY21 Q2
Slide 24: Rapid growth in online sales
Rapid growth in online sales Online revenues (SAR million) E-commerce, % of total retail sales 82 6.0 15.1% % 63 62 34 38 5.1% 1.0 3.2% 3.7% 3.9% % 7 Q1-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 FY20 FY21 Online sales down 25.3% due to in-store traffic in
Slide 25: F&B segment poised for recovery and growth
F&B segment poised for recovery and growth Total number of transactions (million) F&B store network evolution 3.1 3.3 2.7 2.8 314 8 15 8 7 4 -3 -4 304 -5 -5 303 0.9 301 300 -17 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Total # of Transaction QoQ Growth Opened Ou
Slide 26: Outlook FY22
Outlook FY22
Slide 27: Key messages for FY22
Key messages for FY22 Name of the Game: Topline and Margins Well-established player with an exceptional Continual improvements to governance and portfolio of brands establishing a genuine lifestyle processes addressing historical issues retail proposition and brand Aggressive operational upgrade pla
Slide 28: Financials Q1-FY22
ALHOKAIR fff 153! Fashion Retail G5j ai! cl_yji Financials Q1-FY22
Slide 29: Income Statement Q1-FY22
Income Statement Q1-FY22 SAR Million Q1-FY21 Q1-FY22 Change y-o-y Revenue 564.9 1,700.7 201.0% Cost of Revenue (808) (1,368) 69.4% Gross Profit (242.7) 332.6 - Gross Profit Margin -43.0% 19.6% - Selling and Distribution Expenses (36) (44) 23.3% General and Administrative Expenses (56) (99) 77.3% Imp
Slide 30: Balance Sheet Q1-FY22
Balance Sheet Q1-FY22 SAR Million 30 June 2021 31 March 2021 Change Assets Property, Plant and Equipment 1,304 1,327 -2% Right-of-Use Assets 3,459 3,402 2% Goodwill and Intangible Assets 1,118 1,111 1% Investment Property 2 2 0% Investment in Associates & Others 304 303 0% Receivables from Disposal
Slide 31: Appendix
Appendix
Slide 32: Operational developments
Operational developments
Slide 33: Our operational upgrade strategy
Our operational upgrade strategy 01 Portfolio optimization 02 Operational excellence Optimize store network Increase revenue per SQM Restructure inventory Build shared service center Revamp inventory and Exit weak/non-performing Expand portfolio – Dispose of non-core supply chain management brands u
Slide 34: Our operational upgrade strategy
Our operational upgrade strategy 03 Building a lifestyle brand 04 Commitment to digital Add new brands and deliver Enter Sports and Roll-out of digital store Lifestyle segments Launch mono-brand and new retail concepts multi-brand platforms interfaces Grow F&B network Launch loyalty & CRM Launch cli
Slide 35: Supplementary Information
Supplementary Information
Slide 36: Intensive balance sheet restructuring
Intensive balance sheet restructuring Alhokair continues to rationalize inventory balances. Shrinkage and ageing provisions to be in line with guidance of c.2% of sales. Phase Target Income statement impact Q4-FY2020 Asset impairments SAR 239.4 million Q1-FY2021 Q4-FY2020 Q1-FY2021 Mark to market -
Slide 37: Debt management in focus
Debt management in focus Actively addressing our capital structure to boost liquidity position and operational / strategic flexibility Summarized credit metrics SAR million Mar’21 Jun’21 % change Total Interest-Bearing Debt 3,124 2,999 -4% Cash Position 468 374 -20% Net Debt 2,656 2,625 -1% Improved
Slide 38: Strengthening our corporate governance
Strengthening our corporate governance An ongoing governance and leadership journey Board of Directors Executive management Refreshed board with a healthy balance of skills & experience Strong executive team delivering on a clear strategy Four independent NEDs appointed in August 2020 Recent
Slide 39: Our market
Our market The Saudi retail and F&B sectors enjoy strong fundamentals underpinned by favourable demographics, evolving lifestyles and low e-commerce penetration Supportive Growing F&B sector Retail growth driven by Supportive demographics e-commerce infrastructure 62% of Saudis between 6% p.a. growt
Slide 40: Vogacloset: value accretive for Alhokair
Vogacloset: value accretive for Alhokair Strengthening our omnichannel experience to extend our leadership position Transition to lifestyle retailer E-commerce arm Positive financial impact Omnichannel offering Proven leadership Profitable player Mitigate risk, gain market share Additional
Slide 41: Vogacloset: an enriched, integrated ecosystem
Vogacloset: an enriched, integrated ecosystem BACK-END FRONT-END POST SALES MERCHANDISING SYSTEM UNMATCHED CUSTOMER SERVICE Data driven sorting and recommendation engine Vogacloset AlHokair Brands Tenant Bilingual CRM Brands Brands Free returns BACK-BONE OPERATING picked up by SYSTEM A unique omnich
Slide 42: Inventory optimization action plan
Inventory optimization action plan | ongoing Systems Policies & Procedures Logistics Digitalization/Technology Streamlined three different ERPs into Developed and drafted with PwC Consolidated three different Post ERP stabilization, the Company will one comprehensive ERP (Oracle V16) for updated
Slide 43: Thank you
Thank you Investor Relations investors.relations@fahretail.com ir.fahretail.com
Fawaz Abdulaziz Alhokair — Investor Presentation (September 2021) on 6ix