Fsn E-commerce Ventures Ltd. · NSE:NYKAA
Fsn E-commerce Ventures — Q4 FY23 Earnings Presentation
60 slides from Fsn E-commerce Ventures's earnings presentation, May 24, 2023
Slide 1: Investor Presentation cover letter to stock exchanges
FSN E-Commerce Ventures Limited (formerly ‘FSN E-Commerce Ventures Private Limited’) May 24, 2023 National Stock Exchange of India Limited BSE Limited Exchange Plaza, 5th Floor, Corporate Relationship Department, Plot No. C/1, G Block, 2nd Floor, New Trading Wing, Bandra – Kurla Complex, Rotunda Bui
Slide 2: Investor Presentation Quarter and full year ended March 31, 2023
Investor Presentation Quarter and full year ended March 31, 2023 FSN E-Commerce Ventures Limited
Slide 3: Table of Contents
Table of Contents Agenda 1. Performance Highlights 2. Our Businesses 3. Investment for future growth 4. Business Highlights 4a. BPC 4b. Fashion 4c. eB2B 5. Financial Performance 2
Slide 4: Performance Highlights
Performance Highlights 3
Slide 5: Q4 FY23: GMV momentum followed by improved EBITDA Margin
Q4 FY23: GMV momentum followed by improved EBITDA Margin GMV Revenue Gross Profit Rs. 24,454 MM Rs. 13,017 MM % Rs. 5,758 MM ₹ +36% YoY Growth +34% YoY Growth +35% YoY Growth Gross Margin 44.2%(1) (54 bps YoY) EBITDA PBT PAT(2) Rs. 707 MM Rs. 86 MM Rs. 23 MM +84% YoY Growth 48% YoY Growth -70% YoY
Slide 6: FY23: Robust growth in GMV
FY23: Robust growth in GMV GMV Revenue Gross Profit Rs. 97,433 MM Rs. 51,438 MM % Rs. 22,781 MM ₹ +41% YoY Growth +36% YoY Growth +39% YoY Growth Gross Margin 44.3%(1) (73 bps YoY) EBITDA PBT PAT(2) Rs. 2,560 MM Rs. 384 MM Rs. 210 MM +57% YoY Growth -19% YoY Growth -49% YoY Growth EBITDA Margin 5.0
Slide 7: Our Businesses
Our Businesses 6
Slide 8: Maintaining our GMV growth momentum
Maintaining our GMV growth momentum All Values in Rs million % YoY Growth 36% 41% 29% 33% Consolidated GMV 97,433 BPC GMV 66,491 69,332 50,089 24,454 17,979 16,289 12,587 Q4FY22 Q4FY23 FY22 FY23 Q4FY22 Q4FY23 FY22 FY23 38% 47% 170% 204% Others(1) GMV Fashion GMV 25,696 17,516 5,245 6,641 4,827 1,524
Slide 9: Investment for future growth
Investment for future growth 8
Slide 10: Acceleration in customer acquisition
Acceleration in customer acquisition GMV (Rs Mn) Annual Unique Transacting Customers (Mn) FY22 FY23 FY22 FY23 2.5% 5.2% 0.4 0.5 25.3% 1.8 2.5 26.4% 0.3 Rs 69,332 Mn Rs 97,433 Mn 10.3 Mn 0.6 13.0 Mn 72.2% 68.4% 9.4 7.7 YoY Growth % 33% 47% 204% YoY Growth % 22% 73% 39% 30% Cumulative Customer base of
Slide 11: Employee Count: Core employee count reached an optimal level
Employee Count: Core employee count reached an optimal level FY2022 FY2023 25.4% Retail and Sales Employee 32.3% 2,764(1) Core Employees 3,177(1) 67.7% 74.6% 63% 58% 54% 42% YoY Growth % 27% 25% 17% 4% Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Stores + Sales Employee Count Core Employe
Slide 12: Building a strong technology platform, technology employee cost grew 73% YoY
Building a strong technology platform, technology employee cost grew 73% YoY Technology employee count and cost FY2022 FY2023 computed as a % of core employees(1) 389 482 18.9% 22.4% 24% 2,063(1) 2,152(1) Technology Employee Headcount (#) Tech Headcount YoY Growth % Rs 831 Mn Rs 1,441 Mn 29.7% 33.2%
Slide 13: Technology – Improvement in platform capabilities
Technology – Improvement in platform capabilities Personalization Seller Panel Ad-Tech Attribution Engine Improved customer journey - Martech Product Inward to Nykaa Nykaa Fashion Order placed Consolidation Fashion Custom handles last B2B2C on Nykaa of orders by Warehouse, Clearance by mile logistic
Slide 14: Investment in infrastructure and retail
Investment in infrastructure and retail % YoY Growth (%) Physical Stores Warehouse Office Space Physical Stores Area (Lacs Sq. ft.) Warehouse Capacity (Lacs Sq. ft.) Capacity (Lacs Sq. ft.) 18% 59% 43% 5% 41% 79% -19% 54% 68% 1.4 14.6 1.9 1.0 8.2 1.1 0.6 0.9 0.5 5.5 5.8 0.7 FY20 FY21 FY22 FY23 FY20
Slide 15: Business Highlights
Business Highlights 14
Slide 16: Beauty & Personal Care
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Slide 17: Key drivers of the BPC market
Key drivers of the BPC market CAGR % 10% USD 31 Bn(1,2) Increase in Per Capita Beauty consumption USD 10 Bn, 32% Basket: Personal Care to Beauty USD 19 Bn(1,2) USD 3Bn, 15% USD 9 Bn, 30% USD 5 Bn, 26% Growth KIOSK Drivers Shift between Offline to Online USD 11 Bn, USD 12 Bn, 59% 38% Moving form unor
Slide 18: Growth Strategies
Growth Strategies Core Value Proposition driving our growth 1 2 3 4 5 Acquiring new and Deep relationships Penetrating across the Creating, acquiring, Developing new ways retaining with value chain and and scaling a of selling and a holistic our repeat a diverse set channels to address the portfolio
Slide 19: Sustained growth in traffic along with strong growth in unique visitors
Sustained growth in traffic along with strong growth in unique visitors % YoY Growth (%) Visits (Mn) MAUV(1) (Mn) 14% 11% 22% 21% 937 841 22.5 22.7 231 18.5 18.8 204 Q4FY22 Q4FY23 FY22 FY23 Q4FY22 Q4FY23 FY22 FY23 1 AOV@MRP (Rs) Orders (Mn) Acquiring new and retaining 22% 31% our repeat 1,857 1,857
Slide 20: Large & highly engaged customer base with best in class visit & order conversion
Large & highly engaged customer base with best in class visit & order conversion % YoY Growth (%) Annual Unique Transacting Customers (Mn) GMV (Rs Mn) 24% Existing Customers(2) New Customers 10.0 29% 33% 8.0 66,491 22% 50,089 FY22 FY23 1 27% Order Conversion(1) (%) Acquiring new and retaining 3.8% 3
Slide 21: Strong brand relationships offering the widest assortment
Strong brand relationships offering the widest assortment Brand Partners New Brand Launch Most loved Luxury launch - Lancome 3,400+ International & Domestic Brands(1) Of top 100 brands Creating a shop-in-shop experience with Lancome; 2 offering tools such as ‘Skin analyser’ to Retail customers Owned
Slide 22: Successful Pink Love Sale reiterates Nykaa as the beauty destination of choice
Successful Pink Love Sale reiterates Nykaa as the beauty destination of choice Strong performance across Pink Love Sale’23 Pre-Buzz Engagement activities ➢ Gamezone ➢ Slash and Save ➢ Offer and Price Reveal 131% YoY GMV vs Feb’22 Big Love Sale 2 ~2,000 brands participating Deep relationships Engagem
Slide 23: Investing across value chain & channels to create better consumer experience
Investing across value chain & channels to create better consumer experience Physical Stores Distribution – House of Owned Brands GMV YoY Growth % 55% 67% Store YoY Growth % 41% 2,749 Stores 104 145 104 145 5,511 1,945 GT & MT Stores (#) 3,293 FY22 FY23 1,443 931 Fulfilment Centres(3) GMV (Rs millio
Slide 24: Growing distribution of our House of Brands
Growing distribution of our House of Brands % YoY GMV Growth # Owned Brand Count Annual GMV(2) GMV of Owned Brands (Rs million) Rs 2,500 Mn+ 13% 41% ~Rs 1,300 Mn+ each 10 12 10 12 7,889(1) 1,600+ SKUs(3) 5,578 4 Creating, acquiring, Distributed across 2,580(3) selective and scaling a (1) doors and 1
Slide 25: House of Brands: New launches across categories
House of Brands: New launches across categories 4m Creating, acquiring, and scaling a portfolio of independent and new age consumer-first brands 24
Slide 26: House of Brands: New launches across categories
House of Brands: New launches across categories 4m Creating, acquiring, and scaling a portfolio of independent and new age consumer-first brands 25
Slide 27: Nykaa Beauty Bar: Bringing together beauty enthusiasts across the country
Nykaa Beauty Bar: Bringing together beauty enthusiasts across the country Interactive event – 1st edition of Nykaa Beauty Bar in Lucknow After over 2 years, partly due to COVID, Nykaa has brought back a successful series of Beauty Bars – allowing beauty enthusiasts to interact with leading makeup ar
Slide 28: Leading technology: Our backbone across the value chain
Leading technology: Our backbone across the value chain Nudges for incomplete Personalized Paperless Picking shopping mission replenishment nudges 5 X Unlocking targeted Developing new ways coupons for cohorts of selling and a holistic consumer connect Increase order fulfillment capacity by improvin
Slide 29: Fashion
Fashion 28
Slide 30: Key drivers of the Fashion market
Key drivers of the Fashion market CAGR % Increasing digital penetration Increasing adoption of online platforms across tiers and customer segments due to higher internet 14% USD 147 Bn(1,2) penetration, aided by ease of shopping and discovery Landscape for D2C disruption USD 49 Bn, D2 Emergence of n
Slide 31: Growth strategies
Growth strategies Core Value Proposition driving our growth 1 2 3 4 5 Acquiring and retaining Strengthen external Accelerate Owned Explore new operating Technology led customers brand assortment Brands Strategy models and channels innovations across the platform 30
Slide 32: Targeted Approach to Customer Acquisition
Targeted Approach to Customer Acquisition % YoY Growth (%) Visits(1) (Mn) MAUV(1) (2) (Mn) 12% 14% 8% 13% 504 441 16.0 17.3 17.3 15.3 113 127 Q4FY22 Q4FY23 FY22 FY23 Q4FY22 Q4FY23 FY22 FY23 1 Acquiring and retaining AOV(1) (Rs) Order Conversion %(1) (3) Orders(1) (Mn) customers 4,653 4,507 25% 42% 4
Slide 33: Investing in customer growth with women as the key demographic
Investing in customer growth with women as the key demographic % YoY Growth for NykaaFashion.com (%) % YoY Growth for Other Platforms (%) Annual Unique Transacting Customers(1) (Mn) GMV (Rs Mn) NykaaFashion.com Others(3) 39% Fashion YoY 38% 47% Growth % 2.5 46% 17% 1.8 36% 54% 25,696 1 FY22 FY23 GMV
Slide 34: Consistently partnering with brands to bring the best, curated assortment
Consistently partnering with brands to bring the best, curated assortment Growth of key brands popular with the Indian audience Global Store – bringing unique international brands to India (1) ~650+ (1) ~700 Brands / Retailers like Alo, Brands Revolve, Cider, including Little Mistress Puma, Biba, Ma
Slide 35: House of Brands: Strengthening our presence across varied categories
House of Brands: Strengthening our presence across varied categories Over time, we have created the ecosystem to build owned brands in-house and scale them consistently Brand Types FY20 FY21 FY22 FY23 Acquired Built Internally Masaba (NYKD), Nikhil Collaborations Thampi (RSVP), AlayaF (XXD) 3 Our ca
Slide 36: House of Brands: Strengthening our presence across varied categories
House of Brands: Strengthening our presence across varied categories Women’s Western Wear Women’s Indian Wear Women’s Lingerie and Athleisure ~8,500 Styles(1) ~2,000 Styles (1) ~1,800 Styles (1) 3 Accelerate Owned Brands Strategy Jewellery & Accessories Men’s Innerwear & Athleisure Home & Décor ~8,5
Slide 37: House of Brands: Consistent growth across channels
House of Brands: Consistent growth across channels % YoY GMV Growth # Owned Brand Count Annual GMV(1) GMV of Owned Brands (Rs million) Rs 1,500 Mn+ Rs 850 Mn+ 99% 141% 7 13 7 13 Offline Expansion • Twenty Dresses & RSVP: 112 MBOs as on March 31, 2023 3,313 • Gajra Gang & Likha: 6 MBOs as on March 31
Slide 38: House of Brands: Focusing on the GenZ customer with the launch of MIXT
House of Brands: Focusing on the GenZ customer with the launch of MIXT 3 Accelerate Owned Brands Strategy 37
Slide 39: House of Brands: Expanding our offline footprint to drive customer growth
House of Brands: Expanding our offline footprint to drive customer growth Nykd – 4 EBOs and 900+ General Trade Outlets Nykaa Fashion – 4 MBOs Average MBO store size of 2,938 sq. ft. 4 20 Dresses, RSVP, Likha, Gajra Gang – 118 MBOs Explore new operating models and channels Average MBO store size of 1
Slide 40: Omnichannel Experience: Exploring the multi-brand retail store format
Omnichannel Experience: Exploring the multi-brand retail store format 4 Explore new operating models and channels Launched 3 new MBOs for Nykaa Fashion in FY23 Introduced customers to Partnered with 15+ brands international brands like Cider, across different categories NA-KD in an offline setting 3
Slide 41: Investing in technology and infrastructure to improve operations
Investing in technology and infrastructure to improve operations Enabling new marketplace capabilities to increase inventory depth and width for customers from global brands, offline retailers and other marketplace partners while improving operational efficiency 4 Explore new operating models and ch
Slide 42: Enhancing the buying journey across touchpoints
Enhancing the buying journey across touchpoints Personalization Refund to Wallet Recommendation Engine Launching hyper personalised Enabling customers to get instant Revamping recommendation widgets across recommendations to customize the refunds to their Nykaa wallets – different landing pages to h
Slide 43: Engaging customers on and off the platform
Engaging customers on and off the platform Watch & Buy Editor’s Picks Events and Launches Simplifying styling tips, education on latest trends and launches ~3 Mn by constantly revamping content to commerce properties like Customizing events for Social Watch & Buy and Editor’s Picks global brand part
Slide 44: eB2B: SuperStore by Nykaa
eB2B: SuperStore by Nykaa 43
Slide 45: eB2B: Deepening the BPC moat
eB2B: Deepening the BPC moat CAGR % 10% USD 31 Bn(1,2) USD 10 Bn, 32% USD 19 Bn(1,2) USD 3Bn, 15% USD 9 Bn, Value Proposition 30% USD 5 Bn, 26% KIOSK Your All-in-One Store Super Service USD 11 Bn, USD 12 Bn, 59% 38% Super Flexibility Super Earnings 2022 2027P Unorganized Offline Organized Offline On
Slide 46: eB2B: Strategic scale up to serve the unorganized market
eB2B: Strategic scale up to serve the unorganized market % Activation rate (As % of registered retailers) Transacting Retailers (#) Brands Listed (#) 46% 71% 190 1,09,360 134 18,806 FY22 FY23 FY22 FY23 Cities (#) Orders (‘000) 700 728.9 302 48.6 FY22 FY23 FY22 FY23 45
Slide 47: eB2B: Scaling up technology infrastructure
eB2B: Scaling up technology infrastructure Personalized recommendations for Lat/long based check-in for sales & One click access to get best price retailer delivery 46
Slide 48: Financials
Financials 47
Slide 49: Strong revenue growth
Strong revenue growth All Values in Rs million % YoY Growth % Margin % to Revenue 34% 36% 43.7% 44.2% 43.6% 44.3% 51,438 35% 39% Gross Profit Revenue 37,739 22,781 16,439 13,017 9,733 4,253 5,758 Q4FY22 Q4FY23 FY22 FY23 Q4FY22 Q4FY23 FY22 FY23 4.0% 5.4% 4.3% 5.0% 0.6% 0.7% 1.3% 0.7% 84% 57% 48% -19%
Slide 50: Scale efficiencies show through
Scale efficiencies show through bps YoY Change Total Operating Cost(1,2) Fulfilment Expense(1) -93 bps 8 bps -180 bps -164 bps 39.7% 38.8% 39.2% 39.3% 10.5% 9.7% 8.8% 7.9% Q4FY22 Q4FY23 FY22 FY23 Q4FY22 Q4FY23 FY22 FY23 Employee Expense(1) Marketing Expense(1) -130bps -129 bps 40 bps 91 bps 12.3% 12
Slide 51: FY23: Strong delivery of EBITDA margin
FY23: Strong delivery of EBITDA margin ➢ Gross margin improvement due to 129 bps -88 bps change in brand mix -91 bps 164 bps -122 bps 73 bps 5.0% ➢ Fulfilment expense improvement driven 4.3% by regionalization strategy which helped reduction in split shipment and air shipment ➢ Marketing efficiency
Slide 52: FY23: Continued strengthening of our infrastructure
FY23: Continued strengthening of our infrastructure 5.0% -129 bps -266 bps ➢ Depreciation increased YoY on account -77 bps 49 bps 0.7% of incremental capex in retail stores, warehouses and offices FY23 EBITDA Margin Depreciation and Least Cost Interest-Financing Other Income FY23 PBT Margin Amortisa
Slide 53: Vertical Performance: Business Wise (Q4)
Vertical Performance: Business Wise (All amounts in ₹ million, unless otherwise stated) Q4 FY23 Q4 FY22 Particulars BPC Fashion Others Total BPC Fashion Others Total GMV 16,289 6,641 1,524 24,454 12,587 4,827 565 17,979 Growth 29% 38% 170% 36% 31% 84% 288% 45% NSV 10,238 1,859 807 12,904 7,918 1,506
Slide 54: Vertical Performance: Business Wise (FY)
Vertical Performance: Business Wise (All amounts in ₹ million, unless otherwise stated) FY23 FY22 Particulars BPC Fashion Others Total BPC Fashion Others Total GMV 66,491 25,696 5,245 97,433 50,089 17,516 1,727 69,332 Growth 33% 47% 204% 41% 49% 168% 344% 71% NSV 40,765 7,444 2,416 50,625 30,823 5,7
Slide 55: Profit & Loss Statement
Profit & Loss Statement (All amounts in ₹ million, unless otherwise stated) Quarter Ended Year Ended Particulars YoY YoY Mar-23 Mar-22 Mar-23 Mar-22 Growth Growth Revenue from Operations 13,017 9,733 34% 51,438 37,739 36% Cost of goods Sold 7,259 5,481 32% 28,657 21,300 35% Gross Profit 5,758 4,253
Slide 56: Balance Sheet
Balance Sheet (All amounts in ₹ million, unless otherwise stated) (All amounts in ₹ million, unless otherwise stated) As at As at As at As at Particulars 31 March 31 March Particulars 31 March 31 March 2023 2022 2023 2022 Equity and liabilities Assets Equity Non-Current Assets Equity share capital 2
Slide 57: Cash Flow
Cash Flow (All amounts in ₹ million, unless otherwise stated) (All amounts in ₹ million, unless otherwise stated) For the year ended For the year ended Particulars Particulars Mar-23 Mar-22 Mar-23 Mar-22 I] Operating activities II] Investing activities Profit/(loss) before tax as per Statement of pr
Slide 58: Glossary
Glossary Term Description Unique customers identified by their email-id or mobile number who have placed at least one Order on our websites, mobile applications or physical stores during the last 12 months ended as on Annual Unique Transacting Customers measurement date. Annual Transacting Customers
Slide 59: Thank you
Thank you 58
Slide 60: Key Operational Metrics
Key Operational Metrics Quarter Quarter Ended Year Ended Ended Mar-23 Metric Unit Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 FY22 FY23 YoY Growth YoY growth Number of Visits Beauty and Personal Care Million 205 211 221 204 222 234 250 231 14% 841 937 11% Fashion Million 98 115 115 113 1
FSN E-Commerce Ventures — Q4 FY23 Earnings Presentation on 6ix