Arvind Limited · NSE:ARVIND
Arvind — Investor Presentation (March 2015)
34 slides from Arvind's investor presentation, March 2015
Slide 1: Arvind Limited At An Inflection
Arvind Limited At An Inflection March 2015
Slide 2: Agenda
Agenda • Snapshot and Overall Growth Vision • Division-wise Roadmap • Summary and Conclusion: Overall Value Creation Path 2
Slide 3: Agenda
Agenda • Snapshot and Overall Growth Vision • Division-wise Roadmap • Summary and Conclusion: Overall Value Creation Path 3
Slide 4: Arvind Limited – At a Glance
Arvind Limited – At a Glance 20% topline growth over Coupled with rising ...and higher returns with the last 5 years weighted margins... lower leverage +20% Margins % D/E RoCE % Revenue in $ M 1,144 13 13 12 13 14 1.7 13 14 882 15 12 15 821 11 681 1.0 547 10 11 11 10 11 1.3 5 8 7 1.1 1.2 5 0 0 0 FY’
Slide 5: Arvind future story built on two parallel growth drivers
Arvind future story built on two parallel growth drivers, with a strong value creation logic Opportunity Arvind growth model Value creation logic Brands & Retail: Build a breakthrough • Portfolio of high growth portfolio of Power Brands & growth and moderate • Pivoting Specialty Retail growth busine
Slide 6: Arvind – The Future Vision
Arvind – The Future Vision Strong topline & bottomline growth ...and shift towards more B2C portfolio Revenue, Mn USD Business Mix With asset-light With B2C margin models 3,000 expansion 100% 4% 9% 10% Other 2,250 80% 28% 18% 33% Brands 40% & Retail 1,583 60% 1,144 40% 68% 58% 50% Textiles 20% 0 0%
Slide 7: Agenda
Agenda • Snapshot and Overall Growth Vision • Division-wise Roadmap • Summary and Conclusion: Overall Value Creation Path 7
Slide 8: Three pillars of Arvind strategic growth vision
Three pillars of Arvind strategic growth vision Asset-efficient play across high-growth and medium-growth businesses 1 Brands & Retail 2 Textiles 3 Select other bets • Brands • Garmenting • Online platforms • Retail • Wovens fabric • Technical textiles • Denim fabric 8
Slide 9: Brands & Retail Business: Key part of Arvind, to drive value creation
Brands & Retail Busienss: Key part of Arvind, to drive value creation going forward Brands & Retail to become Brands & Retail to account for Substantial improvement in 40% of Arvind revenue by FY18 30% of Arvind profits ROCE expected % of Arvind revenues % of Arvind EBIDTA ROCE (%) 24% 100% 4% 4% 10
Slide 10: Arvind has an unmatched portfolio of owned and licensed brands and retail formats
Arvind has an unmatched portfolio of owned and licensed brands and retail formats Brands Retail Formates 10
Slide 11: Our strategy is a hybrid of brands and retail businesses
Our strategy is a hybrid of brands and retail businesses, a proven model in emerging markets like ME Successful emerging market players have combined Two successful strategies seen in developed markets brands and retail models 1 Brands Sp. Retail Financials Multiple • 25+ brands • Turnover1 : $11 Bn
Slide 12: In chosen categories, we have a strong portfolio across price points
In chosen categories, we have a strong portfolio that straddles consumer segments across price points Price Point Menswear (Rs.96k Cr mkt) Kidswear (Rs.48k Cr mkt) Innerwear (Rs.18k Cr mkt) Formal Casual Denim Brands Retail Men Women "Premium / Bridge" "Mainstream" "Entry Price" (Retail) Our aspirat
Slide 13: How to Win: Five key capabilities
How to Win: Five key capabilities which will help us win over the long term 1 • Excellent distribution footprint with strong momentum • Strong distribution footprint, across retail, department stores, MBOs and other channels • Strong Go-to-market capabilities: Real estate, customer relationships, se
Slide 14: Our robust strategy will create multiple large brands by FY18
Our robust strategy will create multiple large brands by FY18 $ 400 M brand $ 200 M brands $ 100 M brands 14
Slide 15: Our strategy will deliver EBIDTA and ROCE improvement
Our strategy will deliver EBIDTA and ROCE improvement EBITDA improvement driven by Growth Inventory Improvement and Better brands and Megamart Profitability to drive Increase in ROI EBIDTA (%) 3.40 20 7% 5% 4% 2.16 0 Capital FY14 turns -20 -14% Brands M Other Overall M Retail FY FY 18 % of 67% 29% 4
Slide 16: Strategy to create many 'Power Brands'
Strategy to create many ‘Power Brands’, with strong topline growth and healthy bottomline Revenues Mn USD Power brands +40% 198 200 • Among the top Indian 153 126 apparel brands 100 79 • Very strong growth over 36 50 a sustained period 0 • Operating at double digit store contributions EBITDA Mn USD
Slide 17: Arvind well-positioned to be a formidable brands and retail player
Arvind well-positioned to be a formidable brands and retail player over the next 3-4 years Topline Mn USD • Strong topline growth through organic and inorganic 1,500 routes • Building several Power brands, while leveraging the portfolio strengths $ 1 Billion • Introducing newer retail formats, in pa
Slide 18: Three pillars of Arvind strategic growth vision
Three pillars of Arvind strategic growth vision Asset-efficient play across high-growth and medium-growth businesses 1 Brands & Retail 2 Textiles 3 Future bets • Brands • Garmenting • Online platforms • Retail • Wovens fabric • Technical textiles • Denim fabric 18
Slide 19: A large opportunity expected for India in global Textile trade
In the longer run, a large opportunity is expected to emerge for India in global Textile trade Strong growth in global Textile trade India poised to be a strong contender • Key drivers: • Strong pointers that China will have to cede 1. Increasing global consumption some opportunity to other SE Asian
Slide 20: De-risked and capital efficient textiles business model
Arvind is looking to develop a de-risked and capital efficient textiles business model through a vertically integrated offering More robust business model Capital efficient growth model • More customer stickiness • Lower capital intensity • Better pricing power • Better end-to-end RoCE profile • Bet
Slide 21: Garmenting strategic to build vertical business model
Garmenting strategic to build vertical business model with capital efficiency and de-risking Topline and bottomline performance Future strategy Rev, Mn USD • Stable and strong management team, achieved profitable operations 150 +8% 112 • Strong customer relationships with global 100 88 84 77 76 77 m
Slide 22: Wovens provide balance of high growth and strong cash flows
Wovens provide a great balance of high growth opportunity and strong cash flows Topline and bottomline performance Future strategy Rev, Mn USD • High growth opportunity through further +24% 300 expansion of global GTM 300 239 • More differentiated product, less cyclical 200 164 183 137 • Less depend
Slide 23: Denim business stable, with robust cash flows
Denim business stable, with robust cash flows and moderate growth plans Topline and bottomline performance Future strategy Rev, Mn USD • Operate in differentiated segments, with +17% 20-30% price premium 400 315 • High utilization levels while industry 300 267 257 226 175 operates at much lower util
Slide 24: Three pillars of Arvind strategic growth vision
Three pillars of Arvind strategic growth vision Asset-efficient play across high-growth and medium-growth businesses 1 Brands & Retail 2 Textiles 3 Future bets • Brands • Garmenting • Online platforms • Retail • Wovens fabric • Technical textiles • Denim fabric 24
Slide 25: E-Commerce: Online apparel retail likely to be ~US$ 5 bn by 2017
3a – Online Platforms E-Commerce: Online apparel retail likely to be ~US$ 5 bn by 2017 Revenue Projections Total E-Tail Apparel E-Tail (USD Billion) Key Growth Drivers Best-Case Scenario • Increasing penetration of 28.0 technology • Desire for a fashion conscious ~25% 3.2 behavior beyond the metros
Slide 26: Arvind preparing for the massive discontinuity in the online space
3a – Online Platforms Arvind preparing for the massive discontinuity in the online space Unique Capabilities of Arvind Ability to differentiate from competition • Experience of building fashion brands • Own brands, ability to offer exclusive • Hands-on experience of fashion retailing and/or deep ran
Slide 27: Arvind will play in the online space with Multiple .com models
3a – Online Platforms Arvind will play in the online space with Multiple .com models “To gain a leadership position as a seamless “brick-n-click”, experience oriented online multi-brand retailer and reach ~10% MBO E- share of brands sales in next 3 years” Commerce1 • Platform for Arvind’s omni-chann
Slide 28: Technical textiles poised to evolve as an attractive space in India
3b – Technical Textiles Technical textiles poised to evolve as an attractive space in India Combination of strong opportunity and attractive industry structure Domestic Attractive Global opportunity industry Opportunity pivoting structure opening up • Domestic mkt size US$12 Bn / • Strong IP-based i
Slide 29: Arvind well placed to leverage this immense opportunity
3b – Technical Textiles Arvind well placed to leverage this immense opportunity Arvind Value proposition • Best-in-class assets, cutting-edge machining Textiles / Technical • Ability to efficiently manage complex supply chain Capabilities • Impeccable quality credentials Marketing capabilities – • L
Slide 30: Arvind has a bold Vision in this space
3b – Technical Textiles Arvind has a bold Vision in this space Global technical textiles company with expertise in Protective Wear, Woven Fabrics, Non-Wovens and Composites 1 2 Protective Specialized Fabrics / Industrial Clothing Weaving 3 4 Composites Non-Wovens 30
Slide 31: Agenda
Agenda • Snapshot and Overall Growth Vision • Division-wise Roadmap • Summary and Conclusion: Overall Value Creation Path 31
Slide 32: Arvind – The Future Vision
Arvind – The Future Vision Strong topline & bottomline growth ...and shift towards more B2C portfolio Revenue, Mn USD Business Mix With asset-light With B2C margin models 3,000 expansion 100% 4% 9% 10% Other 2,250 80% 28% 18% 33% Brands 40% & Retail 1,583 60% 1,144 40% 68% 58% 50% Textiles 20% 0 0%
Slide 33: Summary: Arvind Limited is at an inflection point
Summary: Arvind Limited is at an inflection point B&R TEX OTH Strong growth Margin expansion Asset light models • Breakout growth in • Significant margin • Brands and retail brands & retail expansion in brands inherently more and retail capital efficient • Moderate growth in textiles led by vertical
Slide 34: Thank You!
Thank You!