Arvind Fashions Ltd. · NSE:ARVINDFASN
Arvind Fashions — Q4 FY24 Earnings Presentation
36 slides from Arvind Fashions's earnings presentation, May 21, 2024
Slide 1: Exchange filing cover letter
ARVIND FASHIONS LIMITED A MEMBER OF THE LALBHAI GROUP Corporate Office: Du Parc Trinity, 8th Floor, 17, M.G Road, Bangalore – 560 001 Tel: +91-80-4155 0601, Fax: 91-80-4155 0651 Website: www.arvindfashions.com May 21, 2024 To, To, BSE Limited National Stock Exchange of India Ltd. Listing Dept. / Dep
Slide 2: Q4 FY24 Results Presentation
Q4 FY24 RESULTS PRESENTATION May | 2024 Q4 FY24 RESULTS
Slide 3: 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 4: Agenda
AGENDA 01 02 03 Q4 & FY24 Performance Q4 & FY24 Results Way Forward Highlights Q4 FY24 RESULTS 3
Slide 5: Q4 FY24 Performance Highlights
Q4 FY24 PERFORMANCE HIGHLIGHTS Q4 FY24 RESULTS 4
Slide 6: Market & Economy Update
MARKET & ECONOMY UPDATE Overall market environment continued to stay subdued Delayed weather impacting seasonality & consumer buying pattern Premiumization continues to get differentiated traction amongst consumers Q4 FY24 RESULTS 5
Slide 7: FY24 Scorecard – What We Had Set for Ourselves at the Start of Year
FY24 SCORECARD – WHAT WE HAD SET FOR OURSELVES AT THE START OF YEAR Objectives Achievement • Focus on profitable revenue growth and • Grew sales profitably by ~5%, despite tough aspiration to grow ahead of industry market conditions; 2-yr CAGR at healthy 24% Sales & Profitability • Continue sharper
Slide 8: Q4 FY24 Business Highlights
Q4 FY24 BUSINESS HIGHLIGHTS QUARTERLY GROWTH DRIVERS CHANNEL-WISE GROSS EBITDA WORKING CAPITAL SALES PERFORMANCE MARGINS & PAT ~4% sales 20%+ growth in 10%+ growth in retail EBITDA at ₹ 148 GWC remained growth Y-o-Y; 2-yr kidswear Y-o-Y; channel Y-o-Y crores; ~17% growth stable; debtor days CAGR sto
Slide 9: Sales: 4% LTL Driving Sales Growth
4% LTL DRIVING SALES GROWTH Sales ( ₹ in crores) • Overall revenue growth of 4%, despite muted 1094 consumer environment • Focus on retail excellence continued, resulting in 1055 revenue mix higher by 3% and channel growth of >10% • Gross addition of 24 EBOs during Q4, FY additions at 146 • Growth i
Slide 10: Leading to Strong Profitability Improvement
LEADING TO STRONG PROFITABILITY IMPROVEMENT EBITDA ( ₹ in crores) PBT and PAT (after minority interest) ( ₹ in crores) 54 148 38 127 25 14 Q4 FY23 Q4 FY24 Q4 FY23 Q4 FY24 PBT PAT (After minority interest)* * For continuing business Improvement in EBITDA margins by 150 bps despite higher advertising
Slide 11: Channel Mix – Focus on Building High Quality Retail Business
CHANNEL MIX – FOCUS ON BUILDING HIGH QUALITY RETAIL BUSINESS Q4 FY23 Q4 FY24 18% 25% 38% 41% 44% 35% Wholesale (MBO + Dept. Stores) Retail Online & Others Q4 FY24 RESULTS 10
Slide 12: FY24 Performance Highlights
FY24 PERFORMANCE HIGHLIGHTS Q4 FY24 RESULTS 11
Slide 13: 3-Year Scorecard – Transformation of Business Towards Healthy Profit
3-YEAR SCORECARD – TRANSFORMATION OF BUSINESS TOWARDS HEALTHY PROFIT 24% CAGR 4259 Sales 4069 Gross Margin % 52.2% 49.2% ( ₹ in crores) 2784 45.2% FY22 FY23 FY24 FY22 FY23 FY24 47% CAGR 600 544 14. 0% 473 PAT (after minority 500 13. 0% 59 56* interest) ( ₹ in crores) ( ₹ in crores) 12.8% 400 12. 0%
Slide 14: 3-Year Scorecard – Transformation of Balance Sheet with Robust KPIs
3-YEAR SCORECARD – TRANSFORMATION OF BALANCE SHEET WITH ROBUST KPIs Inventory Debtor Gross Debt Net Debt 113 ( ₹ in crores) 91 94 598 (In Days) 502 466 420 68 397 49 298 47 FY22 FY23 FY24 FY22 FY23 FY24 0.5 5 16%+ 12%+ 0.5 0 0.4 5 0.47 0.4 0 0.36 0.3 5 0.3 0 0.2 5 0.25 0.2 0 FY22 FY23 FY24 FY22 FY23
Slide 15: Revenue Scales to ~4300 Crores in FY24
REVENUE SCALES TO ~4300 CRORES IN FY24 Sales ( ₹ in crores) • Growth of ~5% led by multi-channel performance with focus on retail transformation 4259 • Retail channel mix higher by 300+ bps Y-o-Y to 42% delivering 4% LTL and higher sell-thru’s • Significant de-growth in online B2B channel • Higher i
Slide 16: Innovative Retail Formats Ready for Expansion
INNOVATIVE RETAIL FORMATS READY FOR EXPANSION Indiranagar, 100 Ft, Bengaluru Elante, Chandigarh Q4 FY24 RESULTS 15
Slide 17: Innovative Retail Formats Ready for Expansion
INNOVATIVE RETAIL FORMATS READY FOR EXPANSION Pavilion Mall, Ludhiana Megamart, Bengaluru Q4 FY24 RESULTS 16
Slide 18: Rollout of Large Size Flagship Stores of U.S. Polo
ROLLOUT OF LARGE SIZE FLAGSHIP STORES OF U.S. POLO Indiranagar, 100 Ft, Bengaluru • Opening these large flagship stores (across Bengaluru, Goa, Express Avenue (Chennai), showcasing all categories of brand for stronger consumer engagement Jayanagar, Bengaluru Q4 FY24 RESULTS 17
Slide 19: Strong Profitability Metrics
STRONG PROFITABILITY METRICS EBITDA ( ₹ in crores) PBT and PAT (after minority interest) ( ₹ in crores) 170 544 149 473 59 56 FY23 FY24 FY23 FY24 PBT PAT (After minority interest)* * For continuing business and excluding exceptional item; higher tax outgo in Q1FY24 due to tax on dividend received ~1
Slide 20: Channel Mix – Focus on Building High Quality Retail Business
CHANNEL MIX – FOCUS ON BUILDING HIGH QUALITY RETAIL BUSINESS FY23 FY24 27% 28% 39% 42% 31% 33% Wholesale (MBO + Dept. Stores) Retail Online & Others Q4 FY24 RESULTS 19
Slide 21: Brand Highlights
Q4 FY24 PERFORMANCE HIGHLIGHTS BRAND HIGHLIGHTS
Slide 22: Brand Highlights
Brand Highlights • Continue to command leadership position in casual lifestyle category across channels driving business towards 2,000+ Crs NSV brand • Premiumization continue to be key differentiator aiding strong sell-thru’s, despite market conditions • Significant results with marketing investmen
Slide 23: Brand Highlights
Brand Highlights • Steady revenue growth Y-o-Y across channels in FY24 • Premiumization through ‘1851’ line continue to drive differentiation • Strong connect with younger consumers through NewYork line • Continued significant investment in marketing • Expanding new retail identity with Mall of Asia
Slide 24: Brand Highlights
Brand Highlights • Transformational journey started with fresh brand identity including new logo, design and brand positioning • Positive response from various channel partners resulting in rapid expansion of distribution • Adjacent category extension through footwear to aid revenue growth Q4 FY24 R
Slide 25: Brand Highlights
Brand Highlights • Affinity towards premium products 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 • Record performance in FY24 despite mute
Slide 26: Brand Highlights
Brand Highlights • Premiumization trend helping brand deliver industry leading sell-thru’s and LTL growth • Market leadership in bridge to luxury segment in Jeans, Tees and Innerwear categories • Record performance in FY24 despite muted market conditions Q4 FY24 RESULTS 25
Slide 27: Q4 FY24 - Groupwise Performance
Q4 FY24 - GROUPWISE PERFORMANCE (₹ in crores) Sales EBITDA EBITDA % Q4 FY24 Q4 FY23 % Growth Q4 FY24 Q4 FY23 Q4 FY24 Q4 FY23 Power Brands 1094 1055 4% 148 127 13.5% 12.0% Total 1094 1055 4% 148 127 13.5% 12.0% EBITDA margin expansion of 150 bps with stronger pricing power & operational rigor; despit
Slide 28: FY24 - Groupwise Performance
FY24 - GROUPWISE PERFORMANCE (₹ in crores) Sales EBITDA EBITDA % FY24 FY23 % Growth FY24 FY23 FY24 FY23 Power Brands 4259 4069 5% 544 473 12.8% 11.6% Total 4259 4069 5% 544 473 12.8% 11.6% Sharper focus on retail execution resulting in healthy LTL of 4% along with cost control aiding EBITDA margins
Slide 29: Q4 & FY24 Results
Q4 & FY24 RESULTS Q4 FY24 RESULTS 28
Slide 30: Q4 FY24 - Performance Snapshot
Q4 FY24 - PERFORMANCE SNAPSHOT ( ₹ in crores) Q4 FY24 Q4 FY23 Revenue from Operations 1094 1055 Other Income 13 14 Total Income 1107 1069 EBITDA 148 127 PBT 54 38 Taxes 13 6 Minority Interest 15 18 PAT 25 14 Profit/(loss) from discontinued operations (1) (4) Reported PAT 24 11 Q4 FY24 RESULTS 29
Slide 31: FY24 - Performance Snapshot
FY24 - PERFORMANCE SNAPSHOT ( ₹ in crores) FY24 FY23 Revenue from Operations 4259 4069 Other Income 34 50 Total Income 4293 4120 EBITDA 544 473 PBT 170 149 Exceptional item (6) - Taxes 57 40 Minority Interest 56 50 PAT 50 59 Profit/(loss) from discontinued operations 31 (22) Reported PAT 81 37 Q4 FY
Slide 32: Balance Sheet as on 31-Mar-2024
BALANCE SHEET AS ON 31-MAR-2024 ( ₹ in crores) Particulars 31-Mar-24 31-Mar-23 Net Worth 1192 1092 Borrowings 466 598 Capital Employed 1658 1690 Inventory 1068 1131 Receivables 647 560 Creditors 936 1020 Net Working Capital 779 671 Net Fixed Asset 275 259 Other Assets 635 760 Discontinued Business (
Slide 33: Efficient Working Capital Management
EFFICIENT WORKING CAPITAL MANAGEMENT ( ₹ in crores) Mar’24 Dec’23 Mar’23 Inventory 1068 1068 1131 Inventory days 94 95 91 Receivables 647 547 560 Debtor days 47 44 49 GWC 1715 1615 1691 GWC days 140 139 140 Payables 936 968 1020 Creditor days 81 82 91 NWC 779 647 671 NWC days 59 57 49 Note for days
Slide 34: Way Forward
WAY FORWARD Q4 FY24 RESULTS 33
Slide 35: Way Forward
WAY FORWARD AFL Demand trends continue to Continue execution on Focused retail network improve; growth to witness profitability improvement expansion across brands through strong uptick compared to Q4 through operating leverage & FOFO model cost optimization etc. Decisive focus on scaling existing W
Slide 36: Thank You
ALVIND £ASHIONS THANK YOU