Arvind Fashions Ltd. · NSE:ARVINDFASN
Arvind Fashions — Q3 FY2024 Earnings Presentation
26 slides from Arvind Fashions's earnings presentation, February 2024
Slide 1: Q3 FY24 Results Presentation
Q3 FY24 RESULTS PRESENTATION Feb | 2024 Q3 FY24 RESULTS
Slide 2: Disclaimer
DISCLAIMER This document by Arvind Fashions Limited (‘the Company’) contains forward-looking statements that represent our beliefs, projections and predictions about future events or our future performance. These forward-looking statements are necessarily subjective and involve known and unknown ris
Slide 3: Agenda
AGENDA 01 02 03 Q3 Performance Highlights Q3 & YTD FY24 Results Way Forward Q3 FY24 RESULTS 3
Slide 4: Q3 FY24 Performance Highlights
Q3 FY24 PERFORMANCE HIGHLIGHTS Q3 FY24 RESULTS 4
Slide 5: Market & Economy Update
MARKET & ECONOMY UPDATE Weak consumer sentiment continued despite festive season Cricket fever over important weekends during Diwali impacted the retail sales Early start of end of season sale (EOSS) and aggressive discounting across the industry Premium product categories & casualization trend cont
Slide 6: FY24 Objectives – What We Have Set For Ourselves
FY24 OBJECTIVES – WHAT WE HAVE SET FOR OURSELVES Objectives • Focus on profitable revenue growth and aspiration to grow ahead of industry Sales & Profitability • Continue sharper focus on further expanding EBITDA & PAT margins • Drive higher market share through increased investments in advertising
Slide 7: Discontinued Businesses
DISCONTINUED BUSINESSES Brands P&L Remarks • Post the consummation of sale of Sephora business during Q3 and receipt of consideration, we have classified all the other dormant brands (Ed Hardy & Aeropostale) along with Sephora as part of discontinued businesses in Q3 FY24 • After realizing gain from
Slide 8: Q3 FY24 Business Highlights
Q3 FY24 BUSINESS HIGHLIGHTS QUARTERLY GROWTH DRIVERS CHANNEL-WISE GROSS EBITDA WORKING CAPITAL SALES PERFORMANCE MARGINS & PAT 5% sales 15%+ growth in kidswear 15%+ growth in MBO Lower discounting EBITDA at ₹ 150 crores; GWC improved by 5 growth Y-o-Y; 2-yr Y-o-Y; womenswear channel Y-o-Y along with
Slide 9: AFL Posted Good Growth Despite Muted Environment
AFL POSTED GOOD GROWTH DESPITE MUTED ENVIRONMENT Sales ( ₹ in crores) 1125 • Overall revenue growth of 5%, despite weak consumer sentiment and muted festive season 1073 • Transformation in retail channel & sharper execution continued, resulting in revenue mix higher by 2% • Retail LTL of 2% • Gross
Slide 10: Gross Margins & Cost Optimization Leading to Strong Profitability Improvement
GROSS MARGINS & COST OPTIMIZATION LEADING TO STRONG PROFITABILITY IMPROVEMENT EBITDA ( ₹ in crores) PBT and PAT (after minority interest) ( ₹ in crores) 150 50 38 127 22 12 Q3 FY23 Q3 FY24 Q3 FY23 Q3 FY24 PBT PAT (After minority interest)* * For continuing business and excluding exceptional item Imp
Slide 11: Channel Mix
CHANNEL MIX Q3 FY23 Q3 FY24 27% 30% 42% 44% 29% 28% Wholesale (MBO + Dept. Stores) Retail Online & Others Q3 FY24 RESULTS 11
Slide 12: Brand Highlights
Q3 FY24 PERFORMANCE HIGHLIGHTS BRAND HIGHLIGHTS
Slide 13: Brand Highlights
Brand Highlights • Continue to command leadership position in casual lifestyle category across channels driving it towards 2,000+ Crs NSV brand • Premiumization continue to be key differentiator and winterwear products having strong sell-thru’s • Significant results with marketing investments throug
Slide 14: Brand Highlights
Brand Highlights • Steady revenue growth Y-o-Y across channels • Premiumization through ‘1851’ line continue to have robust sell-thru’s • Significant investment in marketing through new campaign featuring Hrithik Roshan • Launched new retail identity with sharper focus on retail experience and expan
Slide 15: Brand Highlights
Brand Highlights • Transformational journey started with fresh brand identity including new logo, design and brand positioning • Launched capsule collection in association with ‘Muhammad Ali’ • Positive response from trade channel partners resulting in rapid expansion of distribution • Adjacent cate
Slide 16: Brand Highlights
Brand Highlights • Affinity towards premium products despite market slowdown, continue to help brand deliver superior sales growth and profitability • Continued focus on differentiated customer experience along with high quality product designs & winterwear products across 100+ EBOs • Signed up Neer
Slide 17: Brand Highlights
Brand Highlights • Premiumization trend helping brand deliver strong financial performance with industry leading sell-thru’s and LTL growth • Market leadership in bridge to luxury segment in Jeans, Tees and Innerwear categories Q3 FY24 RESULTS 17
Slide 18: Q3 FY24 - Groupwise Performance
Q3 FY24 - GROUPWISE PERFORMANCE (₹ in crores) Sales EBITDA EBITDA % Q3 FY24 Q3 FY23 % Growth Q3 FY24 Q3 FY23 Q3 FY24 Q3 FY23 Power Brands 1125 1073 5% 150 127 13.3% 11.9% Total 1125 1073 5% 150 127 13.3% 11.9% EBITDA margin expansion of ~150 bps despite higher investments (of 130 bps Y-o-Y) across b
Slide 19: YTD FY24 - Groupwise Performance
YTD FY24 - GROUPWISE PERFORMANCE (₹ in crores) Sales EBITDA EBITDA % YTD FY24 YTD FY23 % Growth YTD FY24 H1 FY23 YTD FY24 YTD FY23 Power Brands 3165 3014 5% 396 347 12.5% 11.5% Total 3165 3015 5% 396 347 12.5% 11.5% Sharper focus on retail execution & cost control leading to EBITDA margins increase
Slide 20: Q3 & YTD FY24 Results
Q3 & YTD FY24 RESULTS Q3 FY24 RESULTS 20
Slide 21: Q3 FY24 - Performance Snapshot
Q3 FY24 - PERFORMANCE SNAPSHOT ( ₹ in crores) Q3 FY24 Q3 FY23 Revenue from Operations 1125 1073 Other Income 7 16 Total Income 1132 1088 EBITDA 150 127 PBT 50 38 Exceptional item (6) - Taxes 14 12 Minority Interest 14 14 PAT 16 12 Profit/(loss) from discontinued operations 35 (4) Reported PAT 51 8 Q
Slide 22: YTD FY24 - Performance Snapshot
YTD FY24 - PERFORMANCE SNAPSHOT ( ₹ in crores) YTD FY24 YTD FY23 Revenue from Operations 3165 3014 Other Income 21 37 Total Income 3186 3051 EBITDA 396 347 PBT 116 111 Exceptional item (6) - Taxes 44 34 Minority Interest 41 33 PAT 25 45 Profit/(loss) from discontinued operations 31 (19) Reported PAT
Slide 23: Efficient Working Capital Management
EFFICIENT WORKING CAPITAL MANAGEMENT ( ₹ in crores) Dec’23 Dec’22 Sep’23 Inventory 1068 1041 1283 Inventory days 95 92 93 Receivables 547 572 644 Debtor days 45 52 45 GWC 1615 1613 1927 GWC days 139 144 138 Payables 968 1038 1153 Creditor days 82 96 83 NWC 647 575 774 NWC days 57 48 55 Note for days
Slide 24: Way Forward
WAY FORWARD Q3 FY24 RESULTS 24
Slide 25: Way Forward
WAY FORWARD AFL Demand trends continue to Continued focus on profitability Retail network expansion across remain soft; improvement improvement from full price brands through the franchisee expected by Q1 FY25 sell-thru’s, operating leverage model and cost optimization etc. Continue decisive focus o
Slide 26: Thank You
ALVIND £ASHIONS THANK YOU