Afg International Company · TADAWUL:4240
Afg International — Cenomi Retail — Q2 2024 Earnings Presentation
28 slides from Afg International's earnings presentation, Jun 30, 2024
Slide 1: Cenomi Retail Earnings Presentation
Cenomi Retail Earnings Presentation For the quarter ended 30 June 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared solely for use as an Earnings 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 6 10 13 24 Q2-24 Earnings Presentation 3
Slide 4: Cenomi Retail at a glance
Cenomi Retail at a glance SAR 1.3 BN SAR 212 MN SAR 84 MN Revenues EBITDA Net profit 12% YOY 28% YOY -50% YOY SAR 330 MN SAR 84 MN 13 Weeks International Online Sales Inventory Turnover Revenue 15% YOY 8% YOY 32% YOY Q2-24 Earnings Presentation Q2-24 Earnings Presentation Q2-24 Earnings Presentation
Slide 5: KSA consumer spending continues to rise
KSA consumer spending continues to rise POS Transactions* - KSA Market POS Transactions* - Select Sectors (SAR Million) (SAR Million) +8% vs FY23 +7% +6% -9% -3% -9% +2% 660,618 +10% Q2'23 613,957 559,135 Q2'24 +8% 65,448 66,889 473,258 +32% 357,298 22,398 23,958 23,230 24,648 12,972 11,835 3,694 3,
Slide 6: Strategic Review
01 Cenomi Retail Strategic Review Q2-24 Earnings Presentation Q1 23 Earnings Presentation 66
Slide 7: Transforming portfolio, expanding brand champions and enhancing operational efficiency
Transforming portfolio, expanding brand champions and enhancing operational efficiency ▪ Exited Morocco and the US is in process, and rationalized Egypt operations Geography ‘Saudi First’ Strategy ▪ Double down on Saudi market and wider MENA region Evolve from apparel ▪ Defend & maintain Fashion & A
Slide 8: Continuing our path to enhanced potential and profitability
Continuing our path to enhanced potential and profitability Focus Phase 1: Phase 2: Phase 3: Fix The House (2023-2024) Embark on Growth (2024-2026) Achieving Optimal Potential (2026+) Turnaround Growth Invest to scale existing brands across Scale existing brands to maximum potential Rationalize bran
Slide 9: Our turnaround strategy is steadily advancing across all fronts
Our turnaround strategy is steadily advancing across all fronts Market Brand Store Operational Governance Rationalization Rationalization Rationalization Enhancement • Successfully exited • Finalized the sale of 19 • Closure of 122 stores in • Average revenue per • 40+ Operational Morocco . brands w
Slide 10: Operational Overview
02 Operational Overview Q2-24 Earnings Presentation Q2-24 Earnings Presentation 10
Slide 11: Continued focus on optimizing market, brand & store footprint
Continued focus on optimizing market, brand & store footprint Retail Market Rationalization ▪ 15 stores opened Q2’24 Retail ▪ 122 stores closed 122 underperforming stores were closed in Q2’24 and 422 in ▪ 107 net closures H1’24 across KSA (retail and F&B), Egypt, Azerbaijan, Kazakhstan, and others ▪
Slide 12: "Fix the House" phase progressing well, with ongoing store rationalization
“Fix the House” phase progressing well, with ongoing store rationalization Store network Saudi retail store F&B store International store evolution network evolution network evolution network evolution 835 823 824 257 1,389 297 1,340 1,345 255 1,062 562 14 254 959 76 257 251 254 449 266 267 255 251
Slide 13: Financial Overview
03 Financial Overview Q2-24 Earnings Presentation Q2-24 Earnings Presentation 13
Slide 14: Financial performance overview
Financial performance overview Total revenues of SAR 1.3 BN in Q2’24 (-12% YoY) Financial highlights • Saudi retail revenues down 19%, due to shift in Ramadan and Eid, and portfolio optimization program • International retail operations sustained strong momentum, with 15% rise in Q2’24 • F&B segment
Slide 15: International portfolio supports top line, with portfolio optimization shaping up
International portfolio supports top line, with portfolio optimization shaping up Revenue, SAR MN LFL consolidated sales growth, % ▪ International retail recorded 15% growth in revenues in Q2-24, ▪ LFL growth impacted by shift in Ramadan and Eid sales periods, but mitigating the impact of 19% declin
Slide 16: Network optimization in progress, to help enhance revenues and profitability
Network optimization in progress, to help enhance revenues and profitability LFL Saudi retail sales growth % LFL International retail growth % ▪ LFL sales witnessed a dip of 18.2%, driven by a shift in the Holy month ▪ International LFL sales supported primarily by strong performance of of Ramadan,
Slide 17: Some brands experienced weakness during the period
Some brands experienced weakness during the period Fashion & F&B Revenues (SAR Million) -16% LFL -13% LFL -13% LFL Q2'23 Q2'24 481 404 406 352 87 76 Zara Inditex F&B Q2-24 Earnings Presentation 17
Slide 18: Online sales maintaining strong contribution to consolidated revenues
Online sales maintaining strong contribution to consolidated revenues Online revenues, SAR MN E-commerce, % of total retail sales ▪ E-commerce sales largely unchanged from last quarter, but focus ▪ Accessibility, convenience and technology adoption expected to further remains on enhancing digital of
Slide 19: Revenue per store continues to improve
Revenue per store continues to improve, driven by progress on portfolio optimization Revenue Per Store (Group) Revenue Per Store (KSA) 1,252 1,315 1,500 1,734 1,886 2,000 Thousands 1000 1,027 1,000 Thousands 886 1,250 960 752 1,000 763 1,000 500 500 500 1,389 1,340 1,345 1,062 959 835 823 824 562 44
Slide 20: Revenue diversification
Revenue diversification Revenue by division Revenue by channel Revenue by geography 5% 6% 4% 5% 5% 20% 20% 15% 15% 25% 29% 26% 19% 25% 21% 5% 7% 7% 6% 6% 7% 8% 7% 8% 73% 9% 73% 67% 67% 62% 80% 80% 75% 71% 74% 95% 94% 94% 93% 92% Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q2'23 Q3'23
Slide 21: Brands divestment program supporting margins
Brands divestment program supporting margins Gross Profit, SAR MN – GPM, % EBITDA, SAR MN – EBITDA Margin, % ▪ Gross profit declined 31% YoY in Q2-24, due to the muted top line ▪ EBITDA declined 28% YoY in Q2-24 in line with the drop in revenues, performance, as the typically busy sales period durin
Slide 22: EBITDA Performance across segments
EBITDA Performance across segments EBITDA Intl, SAR MN – EBITDA Margin, % EBITDA F&B, SAR MN – EBITDA Margin, % EBITDA KSA Retail, SAR MN – EBITDA Margin, % 300 40.0% 70 25.0% 15 15.0% 9.3% 8.6% 200 21.7% 20.7% 10 10.0% 17.3% 60 5.0% 20.0% 6.3% 20.0% 5.0% 226 18.3% 5 100 8 9 146 50 4 5 -2.2% 0.0% 0
Slide 23: Inventory optimization leading to enhanced efficiency
Inventory optimization leading to enhanced efficiency Inventory balance (SAR MN) Inventory efficiency ratios ▪ Inventory continues to trend downwards, reaching SAR 692 million, as ▪ Inventory on hand improving compared to last year, due to measures focus increases on inventory optimization. undertak
Slide 24: Appendix
04 Appendix Q2-24 Earnings Presentation Q2-24 Earnings Presentation 24
Slide 25: Income statement
Income statement SAR million Q2-23 Q2-24 Change Revenue 1,427 1,261 -12% Cost of revenue -1,128 -1,054 -7% Gross profit/(loss) 299 207 -31% margin 21.0% 16.4% (4.6pp) Selling and distribution expenses -42 -30 -28% General and administrative expenses -78 -79 1% Other operating income 113 138 22% Othe
Slide 26: Balance sheet
Balance sheet SAR million 31 Dec 23 30 June 24 Change SAR million 31 Dec 23 30 June 24 Change Assets Equity & Liabilities Share Capital 1,148 1,148 0% Property, Plant and Equipment 1,150 1,125 -2% Reserves ( Statutory, Foreign Currency and Fair Value) (565) (609) 8% Right-of-Use Assets 2,045 1,698 -
Slide 27: 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. Increasing digital / Scale digital e-commerce channels & adoption reinvent role of stores Shift towards Re-mix portfolio to experiences & new experien
Slide 28: THANK YOU
Cenomi Retail THANK YOU Contacts Sarah Moussa Director of Earnings Relations For more information, visit Email: IR.retail@cenomi.com https://ir.cenomiretail.com/