Afg International Company · TADAWUL:4240
Afg International — Cenomi Retail — Q1 2023 Earnings Presentation
31 slides from Afg International's earnings presentation, Mar 31, 2023
Slide 1: Cenomi Retail Earnings Presentation
Cenomi Retail Earnings Presentation For the first quarter ended on 31 March 2023 (“Q1 23”)
Slide 2: Disclaimer
Disclaimer This presentation has been prepared solely for use as an investor presentation for Cenomi Retail. (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 background purposes on
Slide 3: Table of Contents
Table of Contents Topic Page Number Cenomi Retail Overview 5 Market Overview 9 Operational Overview 14 Financial Overview 18 Appendix 27 Q1 23 Earnings Presentation 3
Slide 4: Cenomi Retail at glance
Cenomi Retail at glance Overall top line International Online sales grows 2.4% YoY portfolio continues witnessed to SAR 1.42 bn on upward exceptional growth trajectory with of 84.7% YoY 10.4% growth Return to growth in EBITDA Net number of Saudi Market contribution of stores declined by +4.6% YOY SA
Slide 5: Cenomi Retail Overview
01 | Cenomi Retail Overview
Slide 6: Cenomi Ecosystem
Cenomi Ecosystem The Cenomi omnichannel ecosystem blends engaging physical experiences and curated brands with convenience of online channels to deliver competitive advantage. Under one all- encompassing brand: Lifestyle centers Retail & Entertainment E-commerce ▪ #1 lifestyle centers player ▪ Leadi
Slide 7: Cenomi Retail's strategic pillars
Cenomi Retail’s strategic pillars: Unlocking long-term growth opportunities Geography Re-affirm KSA ▪ Consolidate KSA leadership and expand in CIS leadership & win in CIS ▪ Become the top 3 regional player by winning in CIS Evolve from apparel ▪ Defend & maintain Fashion & Accessories market leaders
Slide 8: Operational Excellence
Operational Excellence Complement growth aspirations with relentless pursuit of operational excellence Area Project Sales acceleration: Grow revenue via sales and marketing initiatives Revenue acceleration Comp, benefits, incentives: Review C&B philosophy and sales incentives Inventory management: S
Slide 9: Market Overview
02 | Market Overview
Slide 10: Unique KSA momentum
Unique KSA momentum: Cenomi Retail operates in the G20’s fastest growing economy and one of the globe’s most exciting growth stories. KSA continues to showcase promising growth well 01 ahead of G20 average 02 A Booming consumer outlook World 2.9 500 - 900 G20¹ 2.6 2.9 KSA population: Australia 1.5 1
Slide 11: Market Context
Market Context Historical vs. Future Projected Retail Spend (CAGR) 16,8% The Saudi Retail sector has faced 14,2% 16.8 14.2 key headwinds over the past five 6,5% 6,4% 7,3% 8,2% 9,2% 6,8% 7,1% 6,3% 4,9% 5,1% 4,6% 5,1% 5,4% 4,6% 9.2 years, but is on track to strong 7.1 1,7% 6.5 2,8% 3,9% 6.4 7.3 8.2 6.
Slide 12: Unparalleled Opportunity
Unparalleled Opportunity: Unparalleled Opportunity: Birth of the New Saudi Consumer The birth of The New Saudi Consumer presents unique growth prospects KSA Retail Spend Overview (2022-2027, in SAR MN) Shift to lifestyle categories: Market Size Market Size CAGR More demand for F&B, Category 2022 202
Slide 13: Consumer Trends
Consumer Trends: Moving forward, Cenomi Retail will need to cater to new consumer trends with significant implications for the future of the industry. Scale digital Increasing digital / channels & e-commerce reinvent role of adoption stores Shift towards Re-mix portfolio to experiences & new experie
Slide 14: Operational Overview
03 | Operational Overview
Slide 15: Cenomi Retail Footprint
Cenomi Retail Footprint: Q1 highlights include: Kazakhstan ▪ Expansion across international Balkans locations with significant Georgia growth across the CIS region, which was up 45.8% compared to the same period in 2022. Armenia Azerbaijan Morocco Lebanon Iraq Jordan Kuwait Libya Egypt Bahrain Qatar
Slide 16: Key Brand & Store Opening
Key Brand & Store Opening Retail Rationalization of brand portfolio to transform domestic retail ▪ 8 stores opened Q1’23 Retail ▪ 107 stores closed Divestment of non-strategic brands to establish solid foundation ▪ 99 net closures for future growth ▪ 23 stores opened Q4’22 Retail ▪ 35 stores closed
Slide 17: Store Rationalization Progress
Store Rationalization Progress Store network Saudi retail store F&B store evolution network evolution network evolution 322 325 1,684 1,668 1,676 1,659 318 314 1,047 1,052 1,560 1,042 1,465 1,030 250 254 1,002 322 318 314 325 250 254 908 29 14 25 9 33 41 2 15 86 12 6 98 1,047 1,042 1,052 1,030 1,002
Slide 18: Financial Overview
04 | Financial Overview
Slide 19: Q1'23 Financial Performance Overview
Q1’23 Financial Performance Overview: Revenue witnessed a 2.4% YoY increase with increases in the Q1 2023 Financial highlights international and KSA portfolio revenue of 10.4% and 4.6%, respectively. F&B business however witnessed a 28.2% decline due to divestment of certain brands in Q4 22 Exceptio
Slide 20: Stable revenue performance
Stable revenue performance: Revenue, SAR million LFL consolidated sales growth, % ▪ Retail sales continues to dominate the revenue pool contributing almost ▪ LFL returned to positive territory after three quarters of declines, led by 94% of the total sales mix the Saudi market. ▪ Online sales broke
Slide 21: Footfall impacted by boost in online sales
Footfall impacted by boost in online sales: LFL Saudi retail sales growth % LFL International Retail growth % ▪ Saudi LFL revenue maintained stability in comparison to previous ▪ International LFL revenues maintained positive trajectory, and quarter accelerated during the quarter, with CIS countries
Slide 22: Online sales gaining traction
Online sales gaining traction: Online revenues, SAR MN E-commerce, % of total retail sales 93 88 84 6.3% 6.2% 4.9% 55 55 48 48 4.0% 3.7% 3.4% 3.5% Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Q1 23 Earnings Presentation 22
Slide 23: Gaining Momentum: Impact of Store Rationalization
Gaining Momentum: Impact of Store Rationalization Sales per SQM Sales per SQM (exc. F&B & Online) (exc. Online) 12,605 12,318 12,175 11,790 11,899 11,732 11,658 11,722 11,749 11,468 446 451 442 439 423 479 484 485 465 448 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Gross Floor Area -
Slide 24: Revenue breakdown
Revenue breakdown Revenue by division Revenue by channel Revenue by geography 0% 7% 6% 4% 13% 9% 3% 3%4% 17% 9% 16% 75% 84% 76% 97% 83% 94% KSA Retail Int'l Retail F&B Stores Online KSA CIS Egypt Others Q1-23 - Outer circle Q1-22 - Inner circle Q1 23 Earnings Presentation 24
Slide 25: Decline in trading margins, exacerbated by F&B
Decline in trading margins, exacerbated by F&B: Gross Profit, SAR million – GPM, % EBITDA, SAR million – EBITDA Margin, % ▪ Gross Profit Margin stood at 11.7% in Q1 2023 compared to 13.1% in ▪ EBITDA Margin dropped by 3.8pp in Q1 2023 compared to the same Q1 2022 mainly influenced by a 4% y-o-y rise
Slide 26: Strategic focus on inventory optimization
Strategic focus on inventory optimization: Inventory balance (SAR MN) Inventory efficiency ratios ▪ Cenomi Retail continues to focus on inventory management to enhance ▪ The increase in inventory levels in the quarter is attributable to the liquidity and efficiency seasonality associated with the pr
Slide 27: Appendix
05 Appendix
Slide 28: Income Statement
Income Statement SAR Million 31 March 2023 31 March 2022 % Change Revenue 1,420.6 1,386.7 2.4% Cost of Revenue -1,253.7 -1,205.4 -4.0% Gross Profit (Loss) 166.9 181.3 -8.0% Gross Profit Margin 11.7% 13.1% -1.3pp Selling & Distribution Expenses -52.5 -27.3 -92.5% General & Administrative Expenses -88
Slide 29: Balance Sheet
Balance Sheet SAR Million 31 Mar 2023 31 Dec 2022 % Change SAR Million 31 Mar 2023 31 Dec 2022 % Change Assets Equity & Liabilities Property, Plant and Equipment 1,344.4 1,324.3 1.5% Share Capital 1,147.7 1,147.7 0.0% Right-of-Use Assets 2,883.6 3,110.8 -7.3% Reserves ( Statutory, Foreign Currency a
Slide 30: Cenomi Retail Brand Portfolio – 67 Brands
Cenomi Retail Brand Portfolio – 67 Brands Sports F&B Fashion Multimedia Lifestyle Inditex & Zara Beauty Q1 23 Earnings Presentation 30
Slide 31: THANK YOU
Cenomi Retail THANK YOU Contacts Investor Relations Department Email: IR.retail@cenomi.com For more information, visit Tel: +966 (11) 825 2080 https://ir.cenomiretail.com/