Khadim India Limited · NSE:KHADIM
Khadim India — Q2 FY19 Earnings Presentation
36 slides from Khadim India's earnings presentation, Nov 5, 2018
Slide 1: Cover letter to BSE and NSE: Investor Meet
November 05, 2018 To To The Manager The Manager The Department of Corporate Services The Listing Department BSE Limited National Stock Exchange of India Limited P. J. Towers, Exchange Plaza, Bandra Kurla Complex, Dalal Street, Mumbai - 400 001 Bandra (East), Mumbai - 400051 Scrip Code· 540775 Symbol
Slide 2: Q2 & H1 FY19 Results Presentation
KHADIM INDIA LIMITED Q2 & H1 FY19 RESULTS PRESENTATION NOVEMBER 2018
Slide 3: Discussion Summary
DISCUSSION SUMMARY DISCUSSION SUMMARY ▪ BUSINESS OVERVIEW ▪ Q2 FY19 RESULTS ▪ BUSINESS STRATEGY & OUTLOOK ▪ FINANCIAL & OPERATIONAL SUMMARY ▪ ANNEXURE 2
Slide 4: Business Overview
BRITISH WALKERS BUSINESS OVERVIEW
Slide 5: Quick Snapshot
QUICK SNAPSHOT 1 Leading Footwear Brand in India 2 Huge Market Growth Potential * • 2nd largest footwear retailer in India * • Domestic footwear market expected to grow • Largest presence in East India at 15% (FY16-20) • One of the top 3 players in South India • Branded footwear market expected grow
Slide 6: Two-Pronged Market Strategy of Retail & Distribution Models
TWO-PRONGED MARKET STRATEGY OF RETAIL & DISTRIBUTION MODELS Retail Business – Distribution Business – Reach 766 ‘Khadim’s’ exclusive branded outlets 485 distributors supplying to MBOs across India Middle & upper middle income consumers in metros Lower & middle income consumers in Tier I – III cities
Slide 7: Extensive Geographical Reach & Penetration
EXTENSIVE GEOGRAPHICAL REACH & PENETRATION Presence in 23 States & 1 Union Territory 1 2 7 3 1 6 15 48 44 Brand Network Sep ‘18 Retail Stores – Tier wise 45 36 1 2 85 38 4 Retail Stores 785 Metros 20% 11 2 - COCO 192 25 10 22 20 13 Tier I 18 12 279 225 1 2 50% - Franchises 593 13% 9 5 Tier II 41 18
Slide 8: Extensive Geographical Reach & Penetration
EXTENSIVE GEOGRAPHICAL REACH & PENETRATION Retail COCO Franchises • Revenue Rs 1442m • GM – 47.3% • Rev Share – 51.6% • Rev Share – 50.5% • EM – 9.98% Distribution Store Presence Store Store Gross EBITDA Type Count Size Margin Margin H1 FY19 Revenues • Revenue Rs 509m Sq. ft. Rs 4,161 Mn • GM – 33.8
Slide 9: Q2 FY19 Results Update
Q1 FY19 RESULTS UPDATE
Slide 10: Q2 and H1 FY19 Results: Key Highlights
Q2 and H1 FY19 RESULTS: KEY HIGHLIGHTS Q2 FY19 YoY Analysis In Rs Mn Revenues & Gross Margin EBITDA & EBITDA Margin PAT & PAT Margin 41.9% 12.2% 6.6% 38.0% 8.3% 3.8% 2,264 114 211 1,732 188 86 Q2 FY18 Q2 FY19 Q2 FY18 Q2 FY19 Q2 FY18 Q2 FY19 H1 FY19 YoY Analysis Revenues & Gross Margin EBITDA & EBITD
Slide 11: Q2 FY19 Results: Key Highlights
Q2 FY19 RESULTS: KEY HIGHLIGHTS Q2 FY19 vs. Q2 FY18 Analysis: • Q2 FY19 net revenues increased by 30.7% from Rs 1,732m to Rs 2,264m • Retail business revenue was up 7% during the quarter while distribution business grew by 32% • Retail contributed 62% of the overall revenue while distribution contri
Slide 12: Q2 & H1 FY19 Results: Segment Analysis
Q2 & H1 FY19 RESULTS: SEGMENT ANALYSIS In Rs Mn H1 FY19 YoY ANALYSIS – REVENUE BREAKUP Q2 FY19 YoY ANALYSIS – REVENUE BREAKUP 871 1,109 27% 32% 509 387 2,597 2,694 1,442 4% 1,347 7% H1 FY18 H1 FY19 Q2 FY18 Q2 FY19 Retail Distribution Retail Distribution Segment Share % * H1 FY18 H1 FY19 Segment Shar
Slide 13: Consolidated Profit & Loss Statement
CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (In Rs Mn) - IND-AS Q2 FY19 Q2 FY18 YoY % Q1 FY19 QoQ % H1 FY19 H1 FY18 YoY % Revenue from Operations 2264.1 1731.8 30.7% 1896.3 19.4% 4160.5 3477.0 19.7% COGS 1403.8 1005.9 39.6% 1141.1 23.0% 2544.9 2077.3 22.5% Gross Profit 860.3 725.9 18.5% 755.2 1
Slide 14: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Particulars (In Rs Mn) – IND-AS Sep-18 Mar-18 Particulars (In Rs Mn) – IND-AS Sep-18 Mar-18 Shareholder's Funds 2825.7 2684.8 Non-Current Assets Non-Current Liabilities Fixed Assets – Tangible & Intangible 1316.2 1258.5 Long Term Borrowings - - CWIP & Intangibles under dev
Slide 15: Business Strategy & Outlook
BUSINESS STRATEGY & OUTLOOK
Slide 16: Business Growth Strategy
BUSINESS GROWTH STRATEGY Retail Business Distribution Business • Focus on expanding retail footprint in markets across South India, West India and • Focus on penetration in existing markets in Expand Footprint in in Uttar Pradesh in North India Eastern and Southern India and capitalise Western & Nor
Slide 17: Business Growth Strategy
BUSINESS GROWTH STRATEGY Retail Business Distribution Business • Given the aspirational nature of customer base, increase focus on sub-brands to drive premiumization • Introduce premiumized versions of product • Khadim’s brand helps to capture the target offerings in Hawai, PVC and PU Strengthen the
Slide 18: Positive Industry Outlook
POSITIVE INDUSTRY OUTLOOK Domestic footwear retail to grow at a faster pace compared to the overall retail industry Favourable macro and Overall retail market in US $ Bn Domestic footwear market at retail price in US $ Bn demographic tailwinds Population Growth 960 12.6 • Young demographics - 78% of
Slide 19: Financial & Operational Summary
FINANCIAL & OPERATIONAL SUMMARY
Slide 20: Financial Summary
FINANCIAL SUMMARY* In Rs Mn Revenues & Gross Margin EBITDA & EBITDA Margin PAT & PAT Margin CAGR: 12.6% CAGR: 11.2% CAGR: 33% 10.4% 9.8% 10.6% 10.1% 4.7% 5.0% 5.1% 37.1% 39.2% 37.9% 34.3% 2.5% 32.1% 7,489 3.0% 757 306 379 6,106 645 252 4,781 4,602 5,345 496 524 122 -4.1% 137 -187 FY14 FY15 FY16 FY17
Slide 21: Financial Summary
FINANCIAL SUMMARY In Rs Mn (I-GAAP) Revenues – Segment wise Retail Revenues – COCO vs Franchises Retail Revenues – Khadim’s vs Sub-brands 11% 15% 19% 22% 24% 52% 42% 47% 47% 46% 43% 48% 50% 52% 52% 75% 72% 75% 73% 66% 48% 58% 53% 53% 54% 57% 52% 50% 48% 48% 14% 13% 6% 5% 10% FY14 FY15 FY16 FY17 FY18
Slide 22: Operational Summary
OPERATIONAL SUMMARY Number of Retail Stores Retail Stores – Region-wise Breakup 753 4% 4% 6% 6% 6% 673 7% 9% 612 9% 10% 10% 545 15% 15% 17% 485 18% 19% 570 464 511 369 403 75% 72% 69% 67% 66% 116 142 148 162 183 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 COCO Franchises East South West North
Slide 23: Annexure
ANNEXURE
Slide 24: Wide Product Range Across Various Categories & Price Points
WIDE PRODUCT RANGE ACROSS VARIOUS CATEGORIES & PRICE POINTS ‘Affordable Fashion’ brand catering to the entire family for all occasions - Men / Women / Kids - Menswear - Menswear - Menswear - Men & Women wear - Fashionable & casual - Formal shoes & sandals - Semi-formal & casual shoes / - Outdoor boo
Slide 25: Distinct Brand Positioning for Various Market Segments
DISTINCT BRAND POSITIONING FOR VARIOUS MARKET SEGMENTS Khadim’s brand presence and product range makes it capable to address ~85% of the total Indian footwear market potential Footwear Market Segmentation (MRP at retail stores in Rs) Distinct brand positioning to target customers % Share, Value Acro
Slide 26: Assets Light Model & Strong Design Capabilities
ASSETS LIGHT MODEL & STRONG DESIGN CAPABILITIES TO CREATE AND GROW BUSINESS Asset Light Model makes the business highly scalable, less capital-intensive and leads to higher operating leverage and increasing profitability Retail Business – Maximise Outsourcing Distribution – Maximise Capacity Utilisa
Slide 27: Marketing Initiatives to Strengthen Brand Recall and Customer Connect
MARKETING INITIATIVES TO STRENGTHEN BRAND RECALL AND CUSTOMER CONNECT Key Marketing Triggers Extensive Marketing Campaigns – Sponsor for KKR and CSK in ongoing IPL tournament Brand promotions Season based new arrivals Scheme promotions, discount sales, consumer offers New store openings • Regional m
Slide 28: Grow Our Online Presence
GROW OUR ONLINE PRESENCE Grow online presence through product innovations and Khadim’s products are now also available on various e- advertisements commerce portals – Company website – www.khadims.com 27
Slide 29: Robust Backend Infrastructure
ROBUST BACKEND INFRASTRUCTURE Procurement & Warehousing & Supply Chain Manufacturing Quality Control Logistics Management • 89.8% of products for the retail • Operates 2 manufacturing • Four distribution centres across • In the retail business, each SKU business is procured from facilities in West B
Slide 30: Experienced Promoter & Management Team
EXPERIENCED PROMOTER & MANAGEMENT TEAM Siddhartha Roy Burman, Chairman & Managing Director • Associated with the Company since its incorporation. He has 34 years of experience in the footwear industry • Responsible for the overall strategic decision making and provides leadership to all operations I
Slide 31: Board of Directors
BOARD OF DIRECTORS Siddhartha Roy Burman, Chairman & Managing Director Ritoban Roy Burman, Non-Executive Director Prof. (Dr.) Surabhi Banerjee, Non-Executive, Independent Director • He is a graduate in Mass Communication from St. Xavier’s College, Kolkata. • 37 years of experience as an academician
Slide 32: Shareholding Structure
SHAREHOLDING STRUCTURE % Shareholding – Sep-18 Key Institutional Investors – Jun-18 % Holding Sundaram MF 7.2% Public, 10.29 HSBC Global 4.9% Promoter & IDFC MF 4.9% Promoter Group, Franklin India Smaller Companies Fund 3.2% Institutions, 59.70 30.01 Mirae Asset Management 2.5% UTI – Master Equity 2
Slide 33: Key Milestones
KEY MILESTONES 1981 1993 1999 2002 2005 • Acquired and took over the • Commenced retail • Commenced retail • Commenced • Accredited with business of M/s S.N. business through operations in South manufacturing ISO 9001:2000 Industries as a going concern COOs for footwear India through with operations
Slide 34: Awards, Accreditations and Accolades
AWARDS, ACCREDITATIONS AND ACCOLADES Khadim’s was ranked 7th amongst the Top 100 Franchises in India in 2017 Most Preferred Footwear Brand, 2015 Most Admired Retailer Of The Year (East), 2014 Most Attractive Footwear Retail Brand, 2013 Mirchi Business Excellence Bengal’s Best Footwear, Most Purchase
Slide 35: Disclaimer
DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by Khadim India Limited (“Khadim” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial c
Slide 36: Thank You
Ishani Ray Nachiket Kale CEO IR Consultant Contact No: +91 33 40090501 Contact No : + 91 99209 40808 Email: ishani.ray@khadims.com Email – nachiket.kale@dickensonir.com Indrajit Chowdhury Ravindra Bhandari CFO IR Consultant Contact No : + 91 33 40090505 Contact No: +91 92836 14197 Email – indrajit.c