Arvind Fashions Ltd. · NSE:ARVINDFASN
Arvind Fashions — Q4 FY19 Earnings Presentation
21 slides from Arvind Fashions's earnings presentation, May 2019
Slide 1: Arvind Fashions Limited Q4 FY19 Performance Highlights
Arvind Fashions Limited Q4 FY19 Performance Highlights May 2019 0
Slide 2: Agenda
Q4 & FY19 Performance Highlights Agenda FY20 Priorities & Outlook 1
Slide 3: Market Context and Q4 Focus
Market Context Q4 Focus 1. Cash generation Drop In Consumption Expenditure 2. Working capital reduction Slowing GDP Growth Rate 3. Cost efficiency 2
Slide 4: Q4 FY19 Business Highlights
Q4 FY19 Business Highlights Hits Misses Financial Strong cash generation leading to Record profitability in Power Brands reduction in Debt of Higher than planned loss in Unlimited 14.1% / +60 bps Rs 167 Crs. Despite flat sales, driven by discount control & cost efficiency Portfolio USPA, emerging as
Slide 5: Q4 FY19 Performance Snapshot
Q4 FY19 Performance Snapshot Sales EBITDA Rs Crs. Growth% Rs Crs. % Sales Growth% 1,169 2% 85 7.3% 13% +80 BPS Revenue growth impact of ~8% on …Helping account of • Deliver strong FOCF & Impact Of Key 1. Exit of long credit cycle customers in reduction in debt Actions Power Brands • Control of disco
Slide 6: Q4 FY19 Brand Groupwise Performance
Q4 FY19 Brand Groupwise Performance Power Brands Specialty Retail Emerging Brands Sales (Rs Crs.) EBITDA (Rs Crs.) Sales (Rs Crs.) EBITDA (Rs Crs.) Sales (Rs Crs.) EBITDA (Rs Crs.) 746 105 / 14.1% 231 (19) 192 (1) +64 BPS 5
Slide 7: FY19 Performance Snapshot
FY19 Performance Snapshot Sales EBITDA ROCE Rs Crs. Growth% Rs Crs. % Sales Growth% 4,644 10%* 288 6.2% 26% 6.7% +80 BPS +170 BPS *Underlying growth 15% Strong underlying growth of 15% overall & 16% in Power Brands delivered with 80 BPS improvement in EBITDA despite • Additional marketing investment
Slide 8: FY19 Brand Groupwise Performance
FY19 Brand Groupwise Performance Power Brands Specialty Retail Emerging Brands Sales (Rs Crs.) EBITDA (Rs Crs.) Sales (Rs Crs.) EBITDA (Rs Crs.) Sales (Rs Crs.) EBITDA (Rs Crs.) 2,797 344 / 12.3% 1,110 (43) 737 (13) 9% / 16% +130 BPS Underlying 7
Slide 9: Store Distribution Footprint
Store Distribution Footprint FY18 Exit Store Changes FY19 Exit Closure Store Sq Ft Store Count Sq Ft (Lacs) Additions Count (Lacs) Power Brands 940 8.1 148 70 1018 8.9 Unlimited 101 9.7 20 14 107 10.8 Speciality Retail 29 1.3 6 0 35 1.5 Total* 1297 21.5 218 125 1390 23.7 * Including Emerging Brands
Slide 10: Robust Performance Of All Focus Categories
Robust Performance Of All Focus Categories Premium Casuals/Denim Leadership Arvind’s Portfolio Growth Sales 1.2x x One out of every five casual wear bought in branded premium men’s casual/denim market is from FY18 FY19 Arvind’s portfolio 9
Slide 11: Robust Performance Of All Focus Categories
Robust Performance Of All Focus Categories Premium Kidswear Innerwear Accelerated Prestige Beauty Leadership Growth Leadership Sales Sales Sales 1.25x 1.6x 1.4x x x x FY18 FY19 FY18 FY19 FY18 FY19 US Polo innerwear sales doubled 10
Slide 12: Robust Performance Of Focus Channels
Robust Performance Of Focus Channels Small Town Distribution Expansion Online Power brands 3rd Party Online Own Online Incl. Omni FY19 Cities 1.6x 3.3x Sales Gr% x Univ. Cities Contr. x (Stores) FY18 FY19 FY18 FY19 Tier 363 156 25.3% 23% II/III 11
Slide 13: Brand Performance Milestones: USPA
Brand Performance Milestones USPA Emerging As India’s Leading Lifestyle Brand – Fastest to Cross Rs 1,000+ Crs. With Strong Multi-Category & Multi-Channel Play Multi-Category Play Multi-Channel Play FY19 FY19 Innerwear Denim Trade Online Kids Casuals Dept. Stores Retail 12
Slide 14: Brand Performance Milestones: Flying Machine
Brand Performance Milestones Flying Machine Among India’s Top 3 Denim Brands With Strong Youth Connect Leveraging Social Media Product Innovation Fast Growing Channels Sales Dept. Stores Including Value Fashion 1.5x x FY18 FY19 Sales 2x Online x FY18 FY19 13
Slide 15: Brand Performance Milestones: GAP
Brand Performance Milestones GAP Scaling Rapidly And Turning Profitable Sales growth (FY19): 50%+ 0.5x EBITDA (FY19) -3.0x -3.0x -4.0x Q1 Q2 Q3 Q4 FY18 FY19 Channel Mix Wholesale Online Retail 14
Slide 16: Audited Financials – P&L
All Figures in Rs Crs. Q4 FY19 Q4 FY18 Change FY19 FY18 Change Revenue from 1,169 1,151 2% 4,644 4,219 10% Operations Cost of Goods Sold 547 566 2,289 1,979 Employees' Emoluments 96 90 408 367 Others 441 420 1,659 1,644 EBIDTA 85 75 13% 288 229 26% EBITDA% 7.3% 6.5% 6.2% 5.4% Audited Other Income 0
Slide 17: Audited Financials – Balance Sheet
Particulars (in Rs Crs.) 31.03.19 31.03.18 Net Worth 1,221 1,147 Borrowings 791 671 Capital Employed 2,011 1,818 Net Working Capital 866 810 Audited Financials – Net Fixed Assets 549 533 Balance Sheet Deferred Tax Asset 269 238 As On Other Current/non-current Assets/ 338 238 Liabilities 31.03.2019 C
Slide 18: Key Indicators – FY19 vs FY18
Key Indicators – FY19 vs FY18 EPS Debt/Equity Ratio 2.6 2.9 0.7 0.7 ROCE FY18 FY19 FY18 FY19 6.7% Debt/EBITDA 5.0% ROE FY18 FY19 3.2 2.9 1.1% 0.9% FY18 FY19 FY18 FY19 17
Slide 19: Agenda
Q4 & FY19 Performance Highlights Agenda FY20 Priorities & Outlook 18
Slide 20: FY20 Priorities & Outlook
Will Continue to Deliver Double Digit Growth With Improved Profitability & ROCE 1. Revenue growth & EBITDA growth will be muted in Q1 due to shifting of trade channel sales to July to reduce credit cycle – will get corrected in Q2 Q1 FY20 2. Complete the exit of emerging brands with limited long ter
Slide 21: Thank You!
Thank You!