Afg International Company · TADAWUL:4240
Afg International — Cenomi Retail — Q3 2024 Earnings Presentation
33 slides from Afg International's earnings presentation, Sep 30, 2024
Slide 1: Cenomi Retail Earnings Presentation
Cenomi Retail Earnings Presentation For the quarter ended 30 September 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: Presenters
Presenters Salim Fakhouri Ahmed Belbesy Chief Executive Officer Chief Financial Officer
Slide 4: Table of Contents
Table of Contents 6 At a Glance 10 Strategic and Operational Review 16 Financial Overview 25 Concluding Remarks 28 Appendix
Slide 5: At a Glance
7 cenomil ed Ata Glance
Slide 6: Cenomi Retail at a glance
Cenomi Retail at a glance The leading franchise retailer in Saudi Arabia, and the only listed business of its type in the Middle East Over 850 357 Saudi stores stores Kazakhstan Georgia c. 360K sqm 252 F&B outlets Armenia Azerbaijan Uzbekistan Jordan Egypt 9 countries 250 international KSA stores Co
Slide 7: Financial highlights
Financial highlights SAR 1.2 BN SAR 709 MN Revenues Kingdom of Saudi Arabia Retail Revenues 9.0% YOY 3.6% YOY SAR 140 MN SAR 380 MN EBITDA International Retail Revenues vs loss of SAR 17 MN 30.9% YOY SAR 19 MN SAR 84 MN Net profit Online Sales vs loss of SAR 203 MN 5.0% YOY 7
Slide 8: KSA consumer spending on rising trend
KSA consumer spending on rising trend POS Transactions* - KSA Market (SAR Million) POS Transactions* - KSA Market (SAR Million) +8% vs FY23 +8% +4% +9% -3% -10% +5% 660,618 613,957 Q3'23 Q3'24 559,135 65,485 62,308 473,258 357,298 22,528 24,371 23,786 24,697 9,144 9,978 3,734 3,633 3,116 2,806 Resta
Slide 9: Strategic and Operational Review
Strategic and Operational Review 9
Slide 10: Transforming portfolio, expanding brand champions and enhancing operational efficiency
Transforming portfolio, expanding brand champions and enhancing operational efficiency Lead with winning brands Evolve to Drive Growth of Tier 1 Rise to meet the online ‘Saudi First’ Strategy Champion brands opportunity Geography Brands Category Channel ▪ Double down on Saudi market and ▪ BOD approv
Slide 11: Continuing our path to enhanced potential and profitability
Continuing our path to enhanced potential and profitability Continuing our path to enhanced potential and profitability Phase 1: Fix The House Phase 3: Achieving Optimal Potential ▪ Rationalize brand and store portfolio ▪ Scale existing brands to maximum potential ▪ Exit/stabilize non-strategic mark
Slide 12: Our turnaround strategy is steadily advancing across all fronts
Our turnaround strategy is steadily advancing across all fronts Operational Market Brand Rationalization Store Governance Enhancement Rationalization Rationalization ▪ 24 brands with SAR 212 ▪ 113 closed stores in Q3’24 ▪ Revenue per store increase ▪ Exited Morrocco ▪ 40+Operational Policies & milli
Slide 13: Continued focus on optimizing market, brand & store footprint
Continued focus on optimizing market, brand & store footprint Store network evolution ▪ 5 stores opened Q3’24 ▪ 102 stores closed 1,340 1,345 ▪ 97 net closures 251 254 Retail 1,062 ▪ 31 stores opened 959 9M’24 ▪ 516 stores closed 266 267 251 859 ▪ 485 net closures 255 252 249 255 250 ▪ 8 stores open
Slide 14: Financial Overview
7 cenomil ed Financial Overview
Slide 15: Financial performance overview
Financial performance overview 3Q’24 9M’24 Highlights ▪ Retail revenues in the Kingdom of Saudi Arabia were up 3.6% Revenues YoY in Q3-24, supported by Zara & Inditex brands, and SAR 1.2 BN 9.0% SAR 3.7 BN 1.5% adoption of strategic sales measures ▪ International portfolio witnessing strong momentum
Slide 16: Domestic retail and international portfolio drive revenue growth
Domestic retail and international portfolio drive revenue growth Revenue, SAR MN LFL consolidated sales growth, % ▪ Retail revenues in the Kingdom of Saudi Arabia increased 3.6% while ▪ LFL growth driven by enhancement of customer experiences through international retail achieved 30.9% growth in Q3-
Slide 17: Strategic sales measures drive revenue growth and profitability
Strategic sales measures drive revenue growth and profitability LFL Saudi retail sales growth % LFL International retail growth % ▪ Domestic LFL sales witnessed a growth of 3.6%, supported by proactive ▪ International LFL sales continued to improve, as a result of the sales strategies as well as eff
Slide 18: Zara & Inditex witnessing growth during the period
Zara & Inditex witnessing growth during the period Fashion & F&B Revenues (SAR Million) +8.0% LFL +6.2% LFL -11.9% LFL 336 311 322 303 84 74 Zara Inditex F&B Q3'23 Q3'24 18
Slide 19: Online sales maintaining strong contribution to consolidated revenues
Online sales maintaining strong contribution to consolidated revenues Online revenues, SAR MN E-commerce, % of total revenues ▪ Online sales decreased 5.0% YoY in Q3-24 and were temporarily ▪ Accessibility, convenience and technology adoption expected to further impacted by the brands divestment pro
Slide 20: Portfolio optimization enabling solid revenue per store
Portfolio optimization enabling solid revenue per store Revenue Per Store (Group) Revenue Per Store (KSA) 1600 1,800 900 2,800 1,294 1,362 1,986 1,229 1,841 1400 1,600 800 1,689 2,300 1,400 700 1200 801 Number of 1,200 600 1,800 1000 752 Number of 832 1,000 500 800 800 Stores 400 763 1,300 Stores Re
Slide 21: Revenue diversification
Revenue diversification Revenue by division Revenue by channel Revenue by geography 6% 4% 5% 5% 5% 21% 27% 29% 27% 16% 32% 6% 7% 7% 21% 25% 21% 8% 27% 7% 10% 9% 7% 9% 73% 7% 67% 64% 62% 61% 79% 73% 71% 73% 94% 93% 68% 93% 92% 90% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'2
Slide 22: Strategic retail price positioning and cost optimization help sustain margins
Strategic retail price positioning and cost optimization help sustain margins Gross Profit, SAR MN – GPM, % EBITDA, SAR MN – EBITDA Margin, % ▪ Gross margin increased to 10.6% in Q3-24, due to a reduction in ▪ EBITDA margin increased to 12.0% in Q3-24, driven by the employee costs, rent expenses and
Slide 23: EBITDA performance across segments
EBITDA performance across segments EBITDA KSA Retail, SAR MN – EBITDA Intl, SAR MN – EBITDA EBITDA F&B, SAR MN – EBITDA EBITDA Margin, % Margin, % Margin, % 200 40.0% 70 20.0% 15 15.0% 18.3% 9.3% 146 18.0% 7.6% 6.3% 10.0% 10 100 60 5.0% 84 20.0% 61 9 16.0% 5.0% 15.5% 13.2% 5 6 5 0 -59 17.7% 11.8% 4
Slide 24: Inventory optimization leading to enhanced efficiency
Inventory optimization leading to enhanced efficiency Inventory balance (SAR MN) Inventory efficiency ratios ▪ Inventory continues to be within an acceptable range, reaching SAR ▪ Effective management of inventory , including streamlined procurement 722 MN, as focus increases on inventory optimizati
Slide 25: Concluding Remarks
7 cenomil ed Concluding Remarks
Slide 26: Q3'2024 Key takeaways
Q3’ 2024 Key takeaways Topline Profitability Financial position Brand Rationalization International operations leading Turnaround in profit to SAR 19 Balance sheet remains key area Continued progress, with capital revenue growth, primarily driven in Q3-24, with a continued focus of focus, with net d
Slide 27: Moving Forward Key Highlights
Moving Forward Key Highlights The Kingdom of Saudi Arabia Fashion F&B Online Sales International Markets •4 Zara & Inditex stores to be renovated • Expansion of Zara at Nakheel Mall from •12 Subway stores opened in October •New ecommerce channels will be opened • 7 Zara and Inditex stores currently
Slide 28: Appendix
7 cenomil ed App endix
Slide 29: Income Statement
Income Statement SAR MN Q3-23 Q3-24 Change 9M-23 9M-24 Change Revenue 1,074 1,170 9.0% 3,772 3,716 -1.5% Cost of revenue -993 -1,046 5.3% -3,246 -3,270 0.7% Gross profit/(loss) 80 124 54.6% 525 446 -15.2% margin 7.5% 10.6% 3.1pp 13.9% 12.0% (1.9pp) Selling and distribution expenses -38 -28 -26.8% -1
Slide 30: Balance Sheet
Balance Sheet SAR MN 31 Dec 23 30 Sept 24 Change SAR MN 31 Dec 23 30 Sept 24 Change Assets Equity & Liabilities Share Capital 1,148 1,148 0% Property, Plant and Equipment 1,150 1,134 -1% Reserves (Statutory, Foreign Currency and Fair Value) -565 -604 7% Right-of-Use Assets 2,045 1,583 -23% Fair valu
Slide 31: Consumer trends
Consumer trends Increasing digital / Moving forward, Cenomi Retail will need to cater to new consumer Scale digital e-commerce channels & reinvent adoption trends with significant implications for the future of the industry. role of stores Shift towards Re-mix portfolio experiences & new to experien
Slide 32: Presenters Sarah Moussa
Presenters Sarah Moussa Director of Investor Relations IR.retail@cenomi.com
Slide 33: Thank you
cenomi THANK YOU