Afg International Company · TADAWUL:4240
Afg International — Fawaz Abdulaziz Alhokair — Q1 FY2022 Earnings Presentation
35 slides from Afg International's earnings presentation, Jun 30, 2021
Slide 1: Earnings Presentation Q1-FY22
Earnings Presentation Q1-FY22 As at 30 June 2021 Fawaz Abdulaziz Alhokair Co. | Tadawul: 4240
Slide 2: Management review
Management review Q1-FY22
Slide 3: The leading retail franchiser
The leading retail franchiser The leading franchise retailer in Saudi Arabia, and the first choice for brand partners seeking exposure to strategic markets 1,709 stores* c.470k sqm Kazakhstan Balkans 11 countries** Georgia Armenia Azerbaijan Leaders in KSA Lebanon Morocco Iraq 1,089 Saudi stores Jor
Slide 4: Differentiated brand portfolio; diverse revenues
Differentiated brand portfolio; diverse revenues Our Brand Portfolio Is Our Competitive Advantage & Transformation Driver to a Lifestyle Destination Targeting most consumer Diversifying Successful relationship Evolving brand mix 90 brands* segments through economy and fast fashion F&B offering with
Slide 5: Our operational upgrade strategy
Our operational upgrade strategy Portfolio optimization 01 Optimize store network Exit weak/non-performing brands 02 Operational excellence Expand portfolio – unique brand experience Restructure inventory Increase revenue per SQM Revamp inventory & supply chain management Build shared service center
Slide 6: Key brand acquisitions
Key brand acquisitions Q1-FY22 new Q1- FY22 30 stores opened brand store Retail 60 stores closed openings CAPEX ~ SAR 85mn 7 outlets opened Q1-FY22 F&B 5 outlets closed Signed 5 new Cinnabon sub-franchises ~ +30 new outlets in the next 2 years FY22 key In advanced discussions to secure
Slide 7: Omnichannel transition
Omnichannel transition Ongoing integration of our brands on Vogacloset & new Monobrand platforms rollout in KSA and abroad Monobrand Platforms Operational readiness First AFR brands go Multiple phase go live Expand brand offering Q1- FY22 Uterque - KSA - Drive increased and integrations live aware
Slide 8: Financial review
Financial review Q1-FY22
Slide 9: Q1-FY22 at-a-glance
Q1-FY22 at-a-glance Reported SAR 1,701 mn SAR 333 mn SAR 193 mn SAR 46 mn Revenue Gross Profit EBITDA Net Profit 201% vs Q1-FY21 Q1-FY21 SAR -242.7 mn Q1-FY21 SAR -334.4 mn Q1-FY21 SAR -535.6 mn 1.3% vs Q1-FY20 Q1-FY20 SAR 507.5 mn Q1-FY20 SAR 413.4 mn Q1-FY20 SAR 224.9 mn Return to profitability po
Slide 10: Top line returns to pre-pandemic levels
Top line returns to pre-pandemic levels Revenues (SAR million) LFL growth (consolidated) Y-o-Y growth as sales return to pre-pandemic levels. Improving LFL growth performance. Based on pre-pandemic Performance strong compared to pre-pandemic Q1-FY20. levels revenue down 13% due to ongoing limitation
Slide 11: Gross profitability and EBITDA recovery
Gross profitability and EBITDA recovery Gross Profit (SAR million) – GPM (%) EBITDA (SAR million) – EBITDA Margin (%) 23.9% 29.3% 11.4% 19.6% 6.1% 4.1% 11.7% 4.4% -4.9% -16.2% 413 72 56 193 508 52 157 333 (334) (184) (243) (55) -43.0% -59.2% Q1-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q1-FY20 Q1
Slide 12: Balance sheet optimization
Balance sheet optimization Aggressive inventory management and working capital optimization to improve liquidity and increase efficiency Inventory balance (SAR million) Receivables from related parties* (SAR million) 472 1,377 -25.8% -12% 414 1,257 348 344 1,108 1,021 Q1-FY21 Q3-FY21 Q4-FY21 Q1-FY22
Slide 13: Balance Sheet Actions
Balance Sheet Actions Important decisive actions to restructure the company’s capital 1. 2. 3. 4. SAR 205 mn of statutory Executive management Capital reduction and Financial and legal advisors reserves utilised to offset mandated by the board capital increase to be appointed, further accumulated lo
Slide 14: Segmental review
Segmental review Q1-FY22
Slide 15: Revenue breakdown
Revenue breakdown Revenue by division Revenue by channel Revenue by geography 6% 3.6% 13% 3% 12% 14.6% 87% 88% 6% 7% 3% 3% 3% 84% 85.0% 3% 81% 96.0% Q1 FY 22- Outer circle Q1 FY 22- Outer circle Q1 FY 22- Outer circle Q1 FY 21 - Inner circle Q1 FY 21 - Inner circle Q1 FY 21 - Inner circle Stores Onl
Slide 16: LFL Revenue Growth
LFL Revenue Growth Saudi retail International retail LFL improving significantly. Saudi LFL revenues down 15% vs. LFL improvement due to removal of Covid-19 restrictions. LFL revenues pre pandemic levels. Target low single digit LFL growth. down 11% compared to pre-pandemic levels. Q1-FY20 Q2-FY20 Q
Slide 17: Ongoing store fleet rationalization
Ongoing store fleet rationalization Store network evolution Gross Floor Area (SQM) vs Revenue Per SQM Net store contraction of 30 stores in Q1-FY22. Plans to close c.50-60 stores Revenue per sqm on an upward trajectory as we continue to in FY22 whilst focusing on expansion in chosen segments. genera
Slide 18: Saudi Arabia remains core market, key focus
Saudi Arabia remains core market, key focus Saudi retail store network evolution Store yields improving, upward trend 4,213 3,907 1,212 1,202 2,983 13 12 13 1,171 17 2,641 8 2,590 -22 -44 -44 384 -48 344 340 336 320 -59 1,120 312 1,089 1,147 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q1-FY20 Q1-FY21 Q2
Slide 19: Rapid growth in online sales
Rapid growth in online sales Online revenues (SAR million) E-commerce, % of total retail sales 82 6.0 15.1% % 63 62 34 38 5.1% 1.0 3.2% 3.7% 3.9% % 7 Q1-FY20 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 FY20 FY21 • Online sales down 25.3% due to in-store traffic in
Slide 20: F&B segment poised for recovery and growth
F&B segment poised for recovery and growth Total number of transactions (million) F&B store network evolution 3.1 3.3 2.7 2.8 314 8 15 8 7 4 -3 -4 304 -5 -5 303 0.9 301 300 -17 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Q1-FY21 Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 Total # of Transaction QoQ Growth Opened Ou
Slide 21: Outlook FY22
Outlook FY22
Slide 22: Key messages for FY22
Key messages for FY22 Name of the Game: Topline and Margins Well-established player with an exceptional Continual improvements to governance and portfolio of brands establishing a genuine lifestyle processes addressing historical issues retail proposition and brand Aggressive operational upgrade pla
Slide 23: Our vision
Our vision Our vision is to be the leading lifestyle retailer of choice in Saudi Arabia and our selected strategic markets 01 02 03 04 Expand scale and reach to become franchisor of .Expand portfolio, modernize network and improve Improve omnichannel capabilities by Develop effective and efficient o
Slide 24: Thank you
Thank you Investor Relations investors.relations@fahretail.com
Slide 25: Supplementary information
Supplementary information
Slide 26: Income Statement Q1-FY22
Income Statement Q1-FY22 SAR Million Q1-FY21 Q1-FY22 Change y-o-y Revenue 564.9 1,700.7 201.0% Cost of Revenue (808) (1,368) 69.4% Gross Profit (242.7) 332.6 - Gross Profit Margin -43.0% 19.6% - Selling and Distribution Expenses (36) (44) 23.3% General and Administrative Expenses (56) (99) 77.3% Imp
Slide 27: Balance Sheet Q1-FY22
Balance Sheet Q1-FY22 SAR Million 30 June 2021 31 March 2021 Change Assets Property, Plant and Equipment 1,304 1,327 -2% Right-of-Use Assets 3,459 3,402 2% Goodwill and Intangible Assets 1,118 1,111 1% Investment Property 2 2 0% Investment in Associates & Others 304 303 0% Receivables from Disposal
Slide 28: Intensive balance sheet restructuring
Intensive balance sheet restructuring Alhokair continues to rationalize inventory balances. Shrinkage and ageing provisions to be in line with guidance of c.2% of sales. Phase Target Income statement impact Q4-FY2020 Asset impairments SAR 239.4 million Q1-FY2021 Q4-FY2020 Q1-FY2021 Mark to market -
Slide 29: Debt management in focus
Debt management in focus Actively addressing our capital structure to boost liquidity position and operational / strategic flexibility Summarized credit metrics SAR million Mar’21 Jun’21 % change Total Interest-Bearing Debt 3,124 2,999 -4% Cash Position 468 374 -20% Net Debt 2,656 2,625 -1% Improved
Slide 30: Strengthening our corporate governance
Strengthening our corporate governance An ongoing governance and leadership journey Board of Directors Executive management Refreshed board with a healthy balance of skills & experience Strong executive team delivering on a clear strategy Four independent NEDs appointed in August 2020 Recent
Slide 31: Our market
Our market The Saudi retail and F&B sectors enjoy strong fundamentals underpinned by favourable demographics, evolving lifestyles and low e-commerce penetration Supportive Growing F&B sector Retail growth driven by Supportive demographics e-commerce infrastructure 62% of Saudis between 6% p.a. growt
Slide 32: Vogacloset: value accretive for Alhokair
Vogacloset: value accretive for Alhokair Strengthening our omnichannel experience to extend our leadership position Transition to lifestyle retailer E-commerce arm Positive financial impact Omnichannel offering Proven leadership Profitable player Mitigate risk, gain market share Additional
Slide 33: Vogacloset: an enriched, integrated ecosystem
Vogacloset: an enriched, integrated ecosystem BACK-END FRONT-END POST SALES MERCHANDISING SYSTEM UNMATCHED CUSTOMER SERVICE Data driven sorting and recommendation engine Vogacloset AlHokair Brands Tenant Bilingual CRM Brands Brands Free returns BACK-BONE OPERATING picked up by SYSTEM A unique omnich
Slide 34: Disclaimer
Disclaimer This presentation has been prepared solely for use as an investor presentation for Fawaz Abdulaziz Alhokair Co. (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 backgrou
Slide 35: Thank you
Thank you Investor Relations investors.relations@fahretail.com
Fawaz Abdulaziz Alhokair — Q1 FY2022 Earnings Presentation on 6ix