Afg International Company · TADAWUL:4240
Afg International — Fawaz Abdulaziz Alhokair — H1-FY22 Earnings Presentation
35 slides from Afg International's earnings presentation, Sep 30, 2021
Slide 1: Earnings Presentation | H1-FY22
Earnings Presentation | H1-FY22 As at 30 September 2021 Fawaz Abdulaziz Alhokair Co. | Tadawul: 4240
Slide 2: Management review H1-FY22
Management review H1-FY22
Slide 3: 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 1,682 stores* Kazakhstan c.468k sqm Balkans Georgia 11 countries** Armenia Azerbaijan Lebanon Iraq Leaders in KSA with 9.4% Morocco Jordan Kuwai
Slide 4: Our operational upgrade strategy
Our operational upgrade strategy Portfolio optimization 01 02 Operational excellence Optimize store network Ongoing FY22 IT, finance and other optimization initiatives Exit weak/non-performing markets FY22 FY22 Revamp inventory & supply chain management Expand portfolio – unique brand experience FY2
Slide 5: Differentiated brand portfolio; diverse revenues
Differentiated brand portfolio; diverse revenues Our Brand Portfolio Is Our Competitive Advantage & Transformation Driver to a Lifestyle Destination Targeting most consumer Diversifying Successful relationship Evolving brand mix 87 brands* segments through economy and fast fashion F&B offering with
Slide 6: Key brand & store openings
Key brand & store openings H1-FY22 new ▪ Total gross capex of SAR 53.5mn ▪ 18 stores opened Q2-FY22 brand store ▪ On 11 STAR existing brands ▪ 54 stores closed Retail openings Aleph, Lefties, Zara, Pull & Bear, ▪ Net 36 closures LC Waikiki and new brands like Decathlon H1-FY22 ▪ 41 stores opened Ret
Slide 7: F&B: At the core of our upgrade strategy
F&B: At the core of our upgrade strategy The F&B segment turnaround is gaining momentum with major expansions in FY22 and FY23 based on 3 strategic revenue growth pillars 01 Expand store ▪ Q2-FY22: Opened 13 stores, closed 4 for a net of 9 new stores network of existing ▪ H1-FY22: Opened 20, closed
Slide 8: Omnichannel transition
Omnichannel transition Ongoing integration of our brands on Vogacloset & new Monobrand platforms rollout in KSA and abroad Vogacloset Monobrand Platforms KSA International ▪ 36 Alhokair fashion brands 14 5 are now live ▪ Total stock on hand of ▪ Uterque - KSA 66.7K units H1- FY22 ▪ Massimo Dutti - G
Slide 9: Financial review Q2/H1-FY22
Financial review Q2/H1-FY22
Slide 10: Q2-FY22 at-a-glance
Q2-FY22 at-a-glance Reported SAR 1,361 mn SAR 232 mn SAR 155 mn SAR 21 mn Revenue Gross Profit EBITDA Net Profit 14.8% vs Q2-FY21 348.0% vs Q2-FY21 114.5% vs Q2-FY21 Q2-FY21 SAR -98 mn Return to sustainable profitability post Covid-19 and Inventory significantly reduced vs. pre-Covid, with operation
Slide 11: H1-FY22 at-a-glance
H1-FY22 at-a-glance Reported SAR 3,062 mn SAR 565 mn SAR 348 mn SAR 67 mn Revenue Gross Profit EBITDA Net Profit 74.9% vs H1-FY21 H1-FY21 SAR -191 mn H1-FY21 SAR -262 mn H1-FY21 SAR -634 mn Sequential profitability providing the platform to Profitability still lower than pre-pandemic but deliver a s
Slide 12: Top line surpass pre-pandemic levels
Top line surpass pre-pandemic levels Revenues, SAR million LFL consolidated sales growth, % Sales exceed pre-pandemic levels despite ongoing capacity Improving LFL growth performance. Based on pre-pandemic limitations in malls and F&B outlets during Q2. levels revenue down -12% due to ongoing limita
Slide 13: Strategic delivery drives sustainable profitability
Strategic delivery drives sustainable profitability Gross Profit (SAR million) – GPM (%) EBITDA (SAR million) – EBITDA Margin (%) 14.3% 11.4% 11.4% 19.6% 17.1% 6.1% 14.8% 4.1% 11.7% 4.4% -4.9% -16.2% 176 72 56 193 155 183 52 157 333 232 (334) (184) (243) (55) -43.0% -59.2% Q2-FY22 Q1-FY21 Q2-FY21 Q3
Slide 14: 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 -13% 412 2,039 -46% 348 344 1,656 1,263 1,257 1,099 Q2-FY20 Q4-FY20 Q2-FY21 Q4-
Slide 15: Balance Sheet Actions
Balance Sheet Actions Capital alternation to restructure capital and further strengthen financial position 1. 2. 3. 4. Share Capital of SAR 2.1 Board recommends capital Capital reduction by Capital increase by way billion with accumulated decrease followed by a 46% to offset accumulated of a SAR 1.0
Slide 16: Debt management in focus
Debt management in focus Actively addressing our capital structure to boost liquidity position and operational / strategic flexibility Summarized credit metrics YTD % SAR million Mar’21 Sep’21 change SAR 188 million of debt H1-FY22 financial paid down YTD Total Interest-Bearing Debt 3,124 2,936 -6%
Slide 17: Outlook FY22
Outlook FY22
Slide 18: 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 .Expand portfolio, modernize network and improve Improve omnichannel capabilities by Develop effective and efficient o
Slide 19: Thank you
Thank you Investor Relations investors.relations@fahretail.com
Slide 20: Supplementary information
Supplementary information
Slide 21: Income Statement Q2-FY22 and H1-FY22
Income Statement Q2-FY22 and H1-FY22 SAR Million Q2-FY21 Q2-FY22 Change y-o-y H1-FY21 H1-FY22 Change y-o-y Revenue 1,186 1,361 14.8% 1,751 3,062 74.9% Cost of Revenue (1,134) (1,129) -0.4% (1,941) (2,497) 28.6% Gross Profit 52 232 348.0% (191) 565 - Gross Profit Margin 4.4% 17.1% 12.7 -10.9% 18.5% 2
Slide 22: Balance Sheet Q1-FY22
Balance Sheet Q1-FY22 SAR Million 30 September 2021 31 March 2021 Change Assets Property, Plant and Equipment 1,300 1,327 -2% Right-of-Use Assets 3,139 3,402 -8% Goodwill and Intangible Assets 1,131 1,111 2% Investment Property 2 2 0% Equity-accounted investees 3 3 0% Other investments 301 300 0% Re
Slide 23: 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.1-2% 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 24: Revenue breakdown
Revenue breakdown Revenue by division Revenue by channel Revenue by geography 10% 4.0% 9% 2.9% 19% 14% 81% 10% 86% 7% 4% 4% 77% 4% 5% 71% 97.1% 96.0% Q2-FY22 - Outer circle Q2-FY22 - Outer circle Q2-FY22 - Outer circle Q2-FY21 - Inner circle Q2-FY21 - Inner circle Q2-FY21 - Inner circle KSA CIS Egyp
Slide 25: LFL Revenue Growth
LFL Revenue Growth Saudi retail International retail LFL gradually improving. Saudi LFL revenues down 9.8% vs. pre LFL improvement due to gradual removal of Covid-19 restrictions. LFL pandemic levels due to Covid-19 restrictions during the quarter. revenues down 8.5% compared to pre-pandemic levels.
Slide 26: Store base rationalization slowing down
Store base rationalization slowing down Store network evolution Gross Floor Area, SQM vs Sales Density, SAR Net store contraction of 27 stores in Q2-FY22 stemming from ongoing Annualized H1-FY22 revenue per sqm (+61% yoy) on an upward network rationalization in KSA. F&B back to net store opening. tr
Slide 27: Saudi Arabia remains core market, key focus
Saudi Arabia remains core market, key focus Saudi retail store network evolution Gross Floor Area, SQM vs Sales Density, SAR Annualized H1-FY22 KSA revenue per sqm up +60% yoy and +8% compared to H1-FY20 14,281 13,211 1,212 1,202 13 12 13 17 15 8 8,907 1,171 -22 1,120 -44 -44 358 -481,089 (50) -59 3
Slide 28: Rapid growth in online sales
Rapid growth in online sales Online revenues, SAR million E-commerce, % of total retail sales 82 5.1% 5.6% 4.4% 63 62 3.7% 3.9% 4.1% 55 3.2% 38 34 1.0% 6 Q2-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q2-FY22 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q2-FY22 FY20 FY21 H1-FY22 Ecommerce continues to gain mome
Slide 29: 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 3.3 3.3 3.1 251.1% 2.8 2.7 314 312 15 13 8 7 4 -4 304 -5 -5 303 -4 301 0.9 16.6% -17 4.8% 4.6% -17.4% Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q2-FY22 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q2-FY22
Slide 30: 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 31: 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 Retail growth driven Supportive demographics sector by e-commerce infrastructure 62% of Saudis between 6% p.a. growt
Slide 32: 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 33: 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 34: 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 35: Thank you
Thank you Investor Relations investors.relations@fahretail.com
Fawaz Abdulaziz Alhokair — H1-FY22 Earnings Presentation on 6ix