Metro Brands Ltd. · NSE:METROBRAND
Metro Brands — H1 FY24 Earnings Presentation
51 slides from Metro Brands's earnings presentation, Oct 20, 2023
Slide 1: Cover letter to stock exchanges
October 20, 2023 To, To, The Manager The Manager Listing Department Listing Department BSE Limited, National Stock Exchange of India Phiroze JeeJeeBhoy Towers, Ltd, Dalal Street, Mumbai – 400001 (E) Exchange Plaza, 5th Floor, Plot No. Maharashtra, India C/1, G Block, Bandra Kurla Complex, Scrip code
Slide 2: H1 FY24 Earnings Presentation
METRO BRANDS LIMITED H1 FY24 EARNINGS PRESENTATION 19th October 2023
Slide 3: Safe Harbor statement
Safe Harbor statement • The information contained in this Presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may occur after the date of the Presentation. The information set o
Slide 4: Agenda
Brief Overview Q2 & H1 FY24 Business Highlights Metro’s Strengths Levers of growth Sustainability Initiatives & Others Appendix: Industry Overview
Slide 5: Our Journey
Our Journey FEET ON THE GROUND. • Hits 750 stores • Acquired Cravatex • Crossed 1mn sq ft EYES ON THE FUTURE. Brands Ltd Retail area • Hits Marketcap of • Exclusive license $4B • Exclusive tie up for Fila with Fitflop • Owns sportswear • Hits 600 stores brand Proline 2023 • Listed on BSE, NSE Tie-up
Slide 6: Our story in numbers
Our story in numbers Company Facts Performance in H1 FY24 5 Rs 1,138 crores Revenue from operations store formats^ 15.6 % YOY growth 795 Rs 343 crores Stores ^ EBITDA 30.1 % EBITDA margin 31 70% States & Union territories ^ Revenue contribution of in-house brands at MBOs ^ 189 53% Cities^ YOY Growth
Slide 7: 65+ years of market presence
65+ years of market presence KEY ENABLERS STRONG BRAND WIDE REACH CAPITAL-LIGHT COMPETENT OPERATIONAL PORTFOLIO BUSINESS MANAGEMENT EFFICIENCY ❖ One-stop-shop family ❖ Pan-India presence through ❖ Long-standing ❖ Chairman Mr Rafique A. ❖ Among the few footwear retailer catering to the 795 Stores loc
Slide 8: One Stop Shop for all Footwear Needs
One Stop Shop for all Footwear Needs Sep’23 / H1FY24 (MBO) (MBO) (EBO) (MBO) (EBO) Target Customer Family Youth Premium Value Format Premium 299 223 197 69 7 No. of. Stores (38%) (28%) (25%) (9%) (1%) Cities 159 108 92 50 6 Price Range (INR)1 1,000 – 10,000 1,000 – 10,000 1,500 – 6,000 350 – 3,500 3
Slide 9: One Stop Shop for all Footwear Needs
One Stop Shop for all Footwear Needs Network of Retail Outlets (as of Sep’23) PAN India Presence with 795 Stores I 189 Cities I 31 States and UTs (As of Sep’23) Zone wise1 Tier wise1 Location Wise1 OUR PRESENCE West Tier III Metro ___________________________ South 30% 15% cities 32% 30% High Street
Slide 10: Agenda
Brief Overview Q2 & H1 FY24 Business Highlights Metro’s Strengths Levers of growth Sustainability Initiatives & Others Appendix: Industry Overview
Slide 11: Q2 FY24 Business Highlights
Q2 FY24 Business Highlights Standalone Consolidated In INR Crore Q2 FY24 Q2 FY23 YoY Growth% Q2 FY24 Q2 FY23 YoY Growth% Revenue 532 463 14.8% Revenue 556 476 16.7% EBITDA 161 143 12.3% EBITDA 156 148 5.6% EBITDA% 30.2% 30.9% EBITDA% 28.1% 31.0% PAT 79 74 7.7% PAT 68 78 -13.2% PAT% 14.9% 15.9% PAT%
Slide 12: H1 FY24 Business Highlights
H1 FY24 Business Highlights Standalone Consolidated In INR Crore H1 FY24 H1 FY23 YoY Growth% H1 FY24 H1 FY23 YoY Growth% Revenue 1,088 961 13.2% Revenue 1,138 984 15.6% EBITDA 355 324 9.6% EBITDA 343 331 3.6% EBITDA% 32.6% 33.7% EBITDA% 30.1% 33.6% PAT 186 177 4.9% PAT 161 184 -12.3% PAT% 17.1% 18.4
Slide 13: Q2 & H1 Business Highlights (Standalone)
Q2 & H1 Business Highlights (Standalone) Revenue from Operations and Revenue per sq.ft Gross Profit and Gross Margins 5,700 4,900 5,750 5,050 5,000 4,450 60.0% 57.5% 59.7% 57.2% 60.0% 57.1% 410 577 556 360 344 333 497 514 532 463 298 294 304 310 267 260 210 160 H1 FY23: 961; 10300 H1 FY24: 1088 ; 92
Slide 14: Q2 & H1 Business Highlights (Consolidated)
Q2 & H1 Business Highlights (Consolidated) Revenue from Operations Gross Profit and Gross Margins 59.7% 57.4% 59.2% 55.9% 59.1% 56.8% 410 599 583 355 344 544 556 360 508 303 304 316 476 310 273 260 210 160 H1 FY23: 984 H1 FY24: 1138 110 H1 FY23: 577, 58.6% H1 FY24: 660 ; 58.0% 60 Q1 FY23 Q2 FY23 Q3
Slide 15: Update on implementation of Bureau of Indian Standards for footwear
Update on implementation of Bureau of Indian Standards for footwear ❑ The Department for Promotion of Industry and Internal Trade (DPIIT) issued BIS Quality Control Order (QCO) for footwear which was mandatory from 1st July 2023. ❑ The implementation date is now deferred to 1st January 2024 for most
Slide 16: Key business updates – Cravatex Brands Limited
Key business updates – Cravatex Brands Limited Results of Cravatex Brands Ltd incorporated with MBL financials w e.f 1st December 2022 Q2 FY24 In INR Crore H1 FY24 In INR Crore MBL MBL MBL MBL Consolid Cravatex excluding Consolid Cravatex excluding ated Cravatex ated Cravatex Revenue from operations
Slide 17: Year wise Store additions - Standalone
Year wise Store additions - Standalone Stores 504 +9% 551 +6% 586 +6% 624 +18% 739 +4% 766 +4% 795 H1 : 56 Opened^ 95 57 59 87 144 31 33 Closed^ 10 10 24 49 29 4 4 Relocation^ 3 - 3 12 13 1 1 FY19 FY20 FY21 FY22 FY23 Jun23 Sep23 Metro 209 218 219 231 278 289 299 Mochi 136 145 145 162 199 211 223 Wal
Slide 18: Profit & Loss Statement (Standalone)
Profit & Loss Statement (Standalone) In INR Crore Particulars Q2 FY24 Q1 FY24 Q2 FY23 H1 FY24 H1 FY23 FY23 Revenue from Operations 532 556 463 1,088 961 2,052 Other Income 18 16 12 34 21 55 Total Income 550 572 475 1,122 981 2,107 EXPENSES Purchases of stock-in-trade 200 324 286 524 544 1,017 Change
Slide 19: Profit & Loss Statement (Consolidated)
Profit & Loss Statement (Consolidated) In INR Crore Particulars Q2 FY24 Q1 FY24 Q2 FY23 H1 FY24 H1 FY23 FY23 Revenue from Operations 556 583 476 1,138 984 2,127 Other Income 16 14 12 31 21 54 Total Income 572 597 488 1,169 1,005 2,182 EXPENSES Purchases of stock-in-trade 209 328 295 538 558 1,066 Ch
Slide 20: Balance Sheet (Consolidated)
Balance Sheet (Consolidated) Balance Sheet In INR Crore As at As at As at As at Particulars September 30, March 31, Particulars September 30, March 31, 2023 2023 2023 2023 Non-current assets Equity Property, plant and equipment 338 298 Equity share capital 136 136 Goodwill 41 41 Other equity 1,538 1
Slide 21: Cash Flow statement (Consolidated)
Cash Flow statement (Consolidated) In INR Crore For the six month For the six month Particulars period ended period ended September 30, 2023 September 30, 2022 Cash flow from Operating Activities 223 242 Profit before tax for the year 130 92 Add: Non-cash items/re-classification 353 335 Operating pr
Slide 22: Agenda
Brief Overview Q2 & H1 FY24 Business Highlights Metro’s Strengths Levers of growth Sustainability Initiatives & Others Appendix: Industry Overview
Slide 23: Our Key Strengths
Our Key Strengths 1 One of India's largest pan India footwear retailers1 with a brand appeal among aspirational consumer segments 2 Pivoting from primarily "Offline" to an "Omni-channel" enabled footwear & accessories retailer Wide range of brands and products catering to all occasions across age gr
Slide 24: One of India's largest pan India footwear retailers
1 One of India's largest pan India footwear retailers1 with a brand appeal among aspirational consumer segments 551 586 624 739 795 13% 14% 13% 16% 13% 15% 14% 15% 13% 14% 23% 21% 24% 22% 25% 23% 25% 22% 25% 21% …with diversified presence across regions2 31% 31% 31% 32% 32% 32% 31% 33% 32% 35% 33% 3
Slide 25: Pivoting from Offline to Omni-channel footwear retailer
2 Pivoting from primarily "Offline" to an "Omni-channel" enabled footwear and accessories retailer E-commerce – Online & Omnichannel “Highest number of Instagram Followers among key footwear ❑ Majority of online business comes through leading e-commerce retailers in India” (CRISIL) 2.7% 2.5% 11.6% 7
Slide 26: Wide range of brands and products (1/3)
3 Wide range of brands and products catering to all occasions across age groups and market segments resulting in strong customer loyalty (1/3) Product presence across multiple categories through Own and Third party brands Own Brands Casual Formal Sports Accessories Third Party Brands Skechers Adidas
Slide 27: Wide range of brands and products (2/3)
3 Wide range of brands and products catering to all occasions across age groups and market segments resulting in strong customer loyalty (2/3) Own Brands contribute ~ 70-75% of total store product sales at MBOs Targeting Mid and Premium Segment through 5 different Brand Outlets Average Realization P
Slide 28: Wide range of brands and products (3/3)
3 Wide range of brands and products catering to all occasions across age groups and market segments resulting in strong customer loyalty (3/3) Repeat Sales to Members of Loyalty programs Club Metro (2007*) – Loyalty Program Members (Mn) % Total Product Sales 6.5 7.0 56% 54% 55% 55% 4.9 5.6 4.5 50% F
Slide 29: Asset light business with an efficient operating model
4 Asset light business with an efficient operating model leading to sustained profitable growth 1 2 3 4 Outsourced Leveraging scale Identification of Variable Cost Manufacturing of operations store location Structure ✓ One of the few footwear ✓ One of the highest gross ✓ Robust store selection ✓ Lea
Slide 30: Efficient operating model through vendor engagements and TOC supply chain
5 Efficient operating model through deep vendor engagements and TOC based supply chain Long Standing Relationships with Vendors • 250+ vendors dealt with over last 3 fiscal years • 20+ years of relationship with certain vendors Demand Driven Inventory Norms New Designs and Styles • Optimum capital e
Slide 31: Platform of choice for third party brands looking to expand in India
6 Platform of choice for third party brands looking to expand in India Why brands prefer Metro platform Successful brand partnership Market Store ❑ Metro entered into an agreement with Crocs in Apr 2015, position economics Number of Crocs EBOs as amended by way of an addendum agreement entered in Ju
Slide 32: Board of Directors
7 Board of Directors1 ARUNA BHAGWAN ADVANI, ARVIND KUMAR SINGHAL, MANOJ KUMAR MAHESHWARI, IQBAL HASANALLY DOSSANI, Independent Director Independent Director Independent Director Whole Time Director ❖ Holds bachelor’s degree in science ❖ Holds Bachelor of Engineering degree ❖ Holds bachelor’s degree
Slide 33: Promoters and Key Managerial Personnel
7 Strong promoter background and an experienced and entrepreneurial management team with a proven track record RAFIQUE A. MALIK, FARAH MALIK BHANJI, ALISHA RAFIQUE MALIK, Chairman Managing Director President - Sports Division, E-Commerce and CRM ❖ Over 50 years of experience in the ❖ Over 20 years o
Slide 34: Strong track record of growth, profitability and financial discipline
8 Strong track record of growth, profitability and financial discipline Revenue from Operations Gross Profit and Gross Margins EBITDA and EBITDA Margins 17,500 16,800 10,150 15,450 19,800 54.9% 55.6% 54.9% 57.9% 58.1% 27.7% 27.5% 21.5% 30.6% 32.0% 2,127 1,235 681 1,217 1,285 1,343 410 714 777 337 35
Slide 35: Agenda
Brief Overview Q2 & H1 FY24 Business Highlights Metro’s Strengths Levers of growth Sustainability Initiatives & Others Appendix: Industry Overview
Slide 36: Key Strategies
Key Strategies 1 3 5 2 4 Store Inorganic E-Commerce Expansion Plans Opportunities Expansion Leverage multi-channel Evaluation basis Target to open 200 Leverage existing Expand Portfolio of platform targeted returns, stores over next 2 capabilities to increase Accessories and financial years operatio
Slide 37: To Summarize….
To Summarize…. SOURCING & VENDOR WIDE RANGE OF RELATIONS PRODUCTS PREFERRED PARTNER ASSET LIGHT BUSINESS FOR THIRD PARTY MODEL BRANDS ALLIED PRODUCTS (Accessories, Foot care, PAN INDIA PRESENCE Shoe care, etc.) MULTI-CHANNEL BRAND VINTAGE RETAIL PLATFORM 36
Slide 38: Agenda
Brief Overview Q2 & H1 FY24 Business Highlights Metro’s Strengths Levers of growth Sustainability Initiatives & Others Appendix: Industry Overview
Slide 39: CSR & Sustainability Initiatives (1/8)
CSR & Sustainability Initiatives (1/8) Environment Processing of Old & Discarded Footwear (ODF) in an eco-friendly manner ❑ Under this project, ODF is collected & then sorted, cut, and again sorted material wise as below: • Rubber and Plastic materials are sent for recycling. • Other totally worn of
Slide 40: CSR & Sustainability Initiatives (2/8)
CSR & Sustainability Initiatives (2/8) Environment ❑ Launched vegan friendly footwear range : ❑ Nature Pro Collection: 11 PET bottles recycled ❑ Our packaging boxes use filler paper made of Tie-Dye Collection, made with modern, to get 1 pair of shoes. recycled & bio-degradable paper pulp comfortable
Slide 41: CSR & Sustainability Initiatives (3/8)
CSR & Sustainability Initiatives (3/8) Health & Well-being Launched project “Ek Kadam Aage” to empower 150 Mumbai Railway Station based Shoe Shiners covering the aspects of their livelihood, healthcare and financial literacy trainings Through another project, we are working to create awareness, educ
Slide 42: CSR & Sustainability Initiatives (4/8)
CSR & Sustainability Initiatives (4/8) Health & Well-being Contributed towards Capex for building a Head and Neck Cancer Hospital in Mumbai. 41
Slide 43: CSR & Sustainability Initiatives (5/8)
CSR & Sustainability Initiatives (5/8) Health & Well-being We are creating awareness and early detection of hypertension, diabetes & oral cancer through screening in cobbler as well as other vulnerable communities. We donated Footwear pairs to more than 1200 children residing in 41 childcare institu
Slide 44: CSR & Sustainability Initiatives (6/8)
CSR & Sustainability Initiatives (6/8) Education We are supporting more than 80 children of under privileged families with their school fees and uniform expenses. We are supporting a college to construct a new classroom to decongest the existing ones, so that school children can study comfortably. 4
Slide 45: CSR & Sustainability Initiatives (7/8)
CSR & Sustainability Initiatives (7/8) Education We contributed towards Sponsored 230 underserved providing access to quality adolescents to develop leadership education to 500 skills in them through football, with a underprivileged girls from focus on breaking gender stereotypes, Bharuch, Gujarat a
Slide 46: CSR & Sustainability Initiatives (8/8)
CSR & Sustainability Initiatives (8/8) Education We supported more than 150 trainees by providing them practical exposure through on-the-job training at Metro Brands Ltd retail outlets, thus enhancing their skills. 45
Slide 47: Awards & Recognition
Awards & Recognition Forbes India Leadership Awards 2022 MAPIC India Retail Awards PETA India – Vegan Fashion Awards Farah Malik Bhanji and Alisha Malik won the Most Admired Retailer of the year Best Vegan Shoe Line,2022 GenNext Entrepreneur award for a Footwear Category, 2023 successful expansion a
Slide 48: Agenda
Brief Overview Q2 & H1 FY24 Business Highlights Metro’s Strengths Levers of growth Sustainability Initiatives & Others Appendix: Industry Overview
Slide 49: Industry Overview (1/2)
Industry Overview (1/2) Low per capita footwear consumption in India as compared to other countries Per Capita footwear consumption India Per Capita Consumption of Footwear (2019) Per capita consumption of footwear (pairs) 8.1 6.4 2.0 – 2.1 6.2 6.2 1.9 5.8 1.6 4.3 4.0 1.2 3.3 3.2 2.5 1.9 USA Japan U
Slide 50: Industry Overview (2/2)
Industry Overview (2/2) Organized Retail Penetration - Footwear Segment wise market composition Category wise market composition In Percentage (%) 10% 10% 10% 6% 7% 8% 38% 9% 11% 13% 35% 30% 32% 34% 31% 33% 23% 27% 28% 23% 62% 60% 58% 56% 56% 51% FY15 FY20 FY21 FY22P FY25P FY15 FY20 FY25P FY15 FY20
Slide 51: Thank You
Crocs 4% Se a metro BRANDS