Arvind Fashions Ltd. · NSE:ARVINDFASN
Arvind Fashions — Q2 FY24 Earnings Presentation
29 slides from Arvind Fashions's earnings presentation, Nov 7, 2023
Slide 1: Cover letter to stock exchanges
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 November 7, 2023 To, To, BSE Limited National Stock Exchange of India Ltd. Listing Dept. /
Slide 2: Q2 FY24 Results Presentation
Q2 FY24 RESULTS PRESENTATION Nov | 2023 Q2 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 Q2 Performance Highlights Q2 & H1 FY24 Results Way Forward Q2 FY24 RESULTS 3
Slide 5: Q2 FY24 Performance Highlights
Q2 FY24 PERFORMANCE HIGHLIGHTS Q2 FY24 RESULTS 4
Slide 6: Market & Economy Update
MARKET & ECONOMY UPDATE Continued sluggishness in consumer demand Premiumization theme continues to be key lever for growth & differentiation Affinity towards stronger brands by customers Shift of demand across quarters due to movement in festive calendar Q2 FY24 RESULTS 5
Slide 7: FY24 Objectives – What We Have Set for Ourselves
FY24 OBJECTIVES – WHAT WE HAVE SET FOR OURSELVES Objectives • Focus on profitable revenue growth and aspiration to grow ahead of industry Sales & Profitability • Continue sharper focus on further expanding EBITDA & PAT margins • Drive higher market share through increased investments in advertising
Slide 8: Sephora Transaction
SEPHORA TRANSACTION Key points Description • Signed definitive agreement with Reliance Beauty & Personal Care Limited (RBPCL) to sell our Transaction Structure wholly owned subsidiary Arvind Beauty Brand Retail Limited (ABBRL) which ran Sephora India business, in an all cash transaction • Transactio
Slide 9: Q2 FY24 Business Highlights
Q2 FY24 BUSINESS HIGHLIGHTS QUARTERLY POWER CHANNEL-WISE GROWTH DRIVERS GROSS EBITDA & ROCE SALES BRANDS PERFORMANCE MARGINS 7% sales Steady improvement 15%+ growth across ~20% growth in Strong sell-thru’s Highest ever EBITDA growth Y-o-Y, leading to in EBITDA margins retail and MBO footwear Y-o-Y;
Slide 10: AFL Posted the Highest Ever Quarterly Sales
AFL POSTED THE HIGHEST EVER QUARTERLY SALES Sales ( ₹ in crores) 1267 • 7% growth in revenues, despite soft consumer demand 1182 • Sharp execution in retail channel leading to 9% LTL growth • Strong performance in MBO channel, growth of 15%+ • Gross addition of 46 EBOs during Q2 Q2 FY23 Q2 FY24 Q2 F
Slide 11: Leading to the Highest Ever Quarterly EBITDA & PAT
LEADING TO THE HIGHEST EVER QUARTERLY EBITDA & PAT EBITDA ( ₹ in crores) PBT and PAT (after minority interest) ( ₹ in crores) 152 48 45 136 22 18 Q2 FY23 Q2 FY24 Q2 FY23 Q2 FY24 PBT PAT (After minority interest) Improvement in EBITDA margins by ~50 bps despite higher marketing & advertising expense
Slide 12: Brand Highlights
Q2 FY24 PERFORMANCE HIGHLIGHTS BRAND HIGHLIGHTS
Slide 13: Launch of website and #LegendsTogether campaign
Launch of website and #LegendsTogether campaign Q2 FY24 RESULTS 12
Slide 14: Brand Highlights
Brand Highlights • Continued domination in casual lifestyle category in its journey towards 2,000+ Crs NSV • Driving product innovation to premiumize the brand – introduction of Liquid cotton Polo • Significant investments in marketing with launch of brand website, www.uspoloassn.in & #LegendsTogeth
Slide 15: Marketing campaign with Hrithik Roshan having #MyArrowMoment
Marketing campaign with Hrithik Roshan having #MyArrowMoment Q2 FY24 RESULTS 14
Slide 16: Brand Highlights
Brand Highlights • Continue to make good progress on financial performance • Further rollout of ‘1851’ line to drive premiumization • Continued focus on superior retail experience and expansion of retail footprint Q2 FY24 RESULTS 15
Slide 17: New brand appeal and design architecture
New brand appeal and design architecture Q2 FY24 RESULTS 16
Slide 18: Brand Highlights
Brand Highlights • Launched new brand identity through new logo, design and brand positioning • Strong improvement in sell-thru’s despite muted market environment • Encouraging response by the trade partners and channel expansion strategy • Footwear category extension showing good traction Q2 FY24 R
Slide 19: Brand Highlights
Brand Highlights • Superior sales growth and profitability, despite market slowdown • Focus on excellent customer retail experience along with high quality product designs across 100+ stores in India • Encouraging response to ‘Tommy tailored’ line and handbags Q2 FY24 RESULTS 18
Slide 20: Brand Highlights
Brand Highlights • Premiumization aiding brand’s strong financial performance with industry leading sell-thru’s • Market leadership in bridge to luxury segment in Jeans, Tees and Innerwear segments • Continued strong partnership with brand ambassador - Disha Patani with launch of new watch campaign
Slide 21: Q2 FY24 - Groupwise Performance
Q2 FY24 - GROUPWISE PERFORMANCE (₹ in crores) Sales EBITDA EBITDA % Q2 FY24 Q2 FY23 % Growth Q2 FY24 Q2 FY23 Q2 FY24 Q2 FY23 Power Brands 1047 998 5% 138 131 13.2% 13.1% Emerging Brands 220 184 19% 14 6 6.3% 3.0% Total 1267 1182 7% 152 136 12.0% 11.5% EBITDA margin expansion of ~50 bps despite signi
Slide 22: H1 FY24 - Groupwise Performance
H1 FY24 - GROUPWISE PERFORMANCE (₹ in crores) Sales EBITDA EBITDA % H1 FY24 H1 FY23 % Growth H1 FY24 H1 FY23 H1 FY24 H1 FY23 Power Brands 1808 1746 3% 232 214 12.8% 12.3% Emerging Brands 416 356 17% 36 16 8.5% 4.5% Total 2224 2102 6% 268 230 12.0% 11.0% Continued sharper focus on profitability & cos
Slide 23: Q2 & H1 FY24 Results
Q2 & H1 FY24 RESULTS Q2 FY24 RESULTS 22
Slide 24: Q2 FY24 - Performance Snapshot
Q2 FY24 - PERFORMANCE SNAPSHOT ( ₹ in crores) Q2 FY24 Q2 FY23 Revenue from Operations 1267 1182 Other Income 5 20 Total Income 1272 1202 EBITDA 152 136 PBT 48 45 Taxes 11 17 Minority Interest 15 10 PAT 22 18 Sharp focus on improving profitability Q2 FY24 RESULTS 23
Slide 25: H1 FY24 - Performance Snapshot
H1 FY24 - PERFORMANCE SNAPSHOT ( ₹ in crores) H1 FY24 H1 FY23 Revenue from Operations 2224 2102 Other Income 15 22 Total Income 2240 2124 EBITDA 268 230 PBT 63 58 Taxes 30 22 Minority Interest 27 19 PAT 5 18 Q2 FY24 RESULTS 24
Slide 26: Efficient Working Capital Management
EFFICIENT WORKING CAPITAL MANAGEMENT ( ₹ in crores) Sep’23 Sep’22 Jun’23 Inventory 1283 1221 1174 Inventory days 93 95 93 Receivables 644 686 451 Debtor days 45 53 46 GWC 1927 1908 1625 GWC days 138 148 139 Payables 1153 1342 916 Creditor days 83 101 88 NWC 774 566 709 NWC days 55 46 52 Note for day
Slide 27: Way Forward
WAY FORWARD Q2 FY24 RESULTS 26
Slide 28: Way Forward
WAY FORWARD AFL Demand trends continue to Improve profitability further by Retail network expansion across remain volatile; gradual better full price sell-thru’s, brands through the franchisee recovery expected operating leverage through cost model optimization etc. Continue decisive focus on Increa
Slide 29: Thank You
ALVIND £ASHIONS THANK YOU