Arvind Limited · NSE:ARVIND
Arvind — Investor Presentation (September 2014)
34 slides from Arvind's investor presentation, September 2014
Slide 1: Arvind Limited – At An Inflection
Arvind Limited – At An Inflection September 2014
Slide 2: Agenda
Agenda • Snapshot and Overall Growth Vision • Division-wise Roadmap • Summary and Conclusion: Overall Value Creation Path 2
Slide 3: Agenda
Agenda • Snapshot and Overall Growth Vision • Division-wise Roadmap • Summary and Conclusion: Overall Value Creation Path 3
Slide 4: Arvind Limited – At a Glance
Arvind Limited – At a Glance 20% topline growth over Coupled with rising ...and higher returns with the last 5 years margins... lower leverage Op. Rev, Rs Cr Margins % RoCE % D/E % 10,000 +20% 15 13 13 12 13 14 1.7 13 12 14 15 6,862 11 5,293 10 1.0 5,000 4,085 4,925 11 11 11 3,280 10 1.3 5 8 7 1.1 1
Slide 5: Arvind future story built on two growth drivers
Arvind future story built on two growth drivers, with a strong value creation logic Opportunity Arvind growth model Value creation logic Brands & Retail: Build a breakthrough • Portfolio of high growth portfolio of Power Brands & growth and moderate • Pivoting Specialty Retail growth businesses dome
Slide 6: Arvind – The Future Vision
Arvind – The Future Vision Strong topline & bottomline growth ...and shift towards more B2C portfolio Op. Rev, Rs Cr Business Mix With asset-light With margin models 15,000 14,500 expansion 100% 21% 4% 9% 10% Other 12,000 80% 28% 10,600 33% Brands 40% & Retail 9,000 60% 6,862 6,000 40% 68% 58% 50% T
Slide 7: Agenda
Agenda • Snapshot and Overall Growth Vision • Division-wise Roadmap • Summary and Conclusion: Overall Value Creation Path 7
Slide 8: Three pillars of Arvind strategic growth vision
Three pillars of Arvind strategic growth vision Asset-efficient play across high-growth and medium-growth businesses 1 Brands & Retail 2 Textiles 3 Select other bets • Brands • Garmenting • Online platforms • Retail • Wovens fabric • Technical textiles • Denim fabric 8
Slide 9: Unmatched portfolio of owned and licensed brands and retail formats
Arvind has an unmatched portfolio of owned and licensed brands and retail formats Product Brands (Licensed) Retail Brands JV Brands Product Brands (Owned) 9
Slide 10: Strategy to create many 'Power Brands'
Strategy to create many ‘Power Brands’, with strong topline growth and healthy bottomline Revenues Rs Cr Power brands 1,500 +40% • Among the top Indian 1,185 919 apparel brands 1,000 759 477 • Very strong growth over 500 218 297 a sustained period 0 • Operating at double digit store contributions EB
Slide 11: Clear logic for a diverse brand portfolio
Clear logic for a diverse brand portfolio, built for a unique and advantaged ‘plug-and-play’ model 1• Mastered the learning curve of growing strong new brands – 5 out of top 10 international brands in India built by Arvind 2• Ability to address diverse segments through a differentiated portfolio – P
Slide 12: Addressing diverse segments through differentiated brands and retail
Arvind able to address diverse segments through a differentiated brands and retail play Market Size Estimates for 2015 Menswear Womenswear Kidswear Innerwear Rs 95,000 Cr/ $17 Bn Rs 72,000 Cr/$12 Bn Rs 44,000 Cr/$8 Bn Rs 18,000 Cr/$3 Bn Bridge to Luxury Brands Premium Value Bridge to Luxury Retail P
Slide 13: Arvind has exceptional leverage in malls
Arvind has exceptional leverage in malls Arvind space Mall requirement Type (sq.ft. ) A+ ~80,000 Malls A Malls ~60,000 B Malls ~30,000 Arvind is the only player which can take anchor space, ground floor, first floor & upper floor stores in all grades of malls 13
Slide 14: Excellent distribution strength to expand its growth brands
Excellent distribution strength to expand its growth brands 2012-13 Q3 2013-14 Q4 2013-14 Q1 2014-15** Particulars # Stores Sq ft # Stores Sq ft # Stores Sq ft # Stores Sq ft Brands 570 630248 684 709,543 698 717,236 741 7,54,529 MM 197 710133 189 762,081 166 744,785 158 7,96,467 Total 767 1340381 8
Slide 15: Leveraging India's evolving Retail play
Arvind looking to fully leverage India’s evolving Retail play Retail Segment Major Players (Domestic & international) Now Future Bridge to Luxury Dept. Store Premium Dept. Store Kids Fast Fashion Specialty Retail Youth Family Value format Target to be among the Top 3 players in the appar
Slide 16: Update: GAP and TCP
Update: GAP and TCP Investment Revenues Revenues # Stores Size, Sqft License Tenure Rs Cr 3 Yrs 5 Yrs 21 8000-10000 200 300 750 20 Years Auto renewable every 7 years on 25 2000-3000 90 200 500 achievement of business plan • E commerce – Ecommerce Rights with Arvind 16
Slide 17: Well-positioned as a formidable brands and retail player
Arvind well-positioned to be a formidable brands and retail player over the next 3-4 years Topline Rs Cr • Strong topline growth through organic and inorganic 7,500 routes • Building several Power brands, while leveraging the 5500-6000 Cr 6,000 portfolio strengths 4,500 • Introducing newer retail fo
Slide 18: Three pillars of Arvind strategic growth vision
Three pillars of Arvind strategic growth vision Asset-efficient play across high-growth and medium-growth businesses 1 Brands & Retail 2 Textiles 3 Future bets • Brands • Garmenting • Online platforms • Retail • Wovens fabric • Technical textiles • Denim fabric 18
Slide 19: India second largest exporter of T&C globally
In 2013, India became the second largest exporter of T&C with global share of 4.8%, while China is the largest with 36% share Country Mix of Global T&C trade over 2003-13 (USD Bn) USD Bn 424 475 506 555 617 646 556 642 756 738 766 Others 36.9% 35.3% 34.9% 33.7% 34.2% 42.5% 39.9% 39.0% 38.2% Korea 44
Slide 20: Large opportunity for India in global T&C trade
In the longer run, a large opportunity is expected to emerge for India in global T&C trade Strong growth in global T&C trade India poised to be a strong contender • Key drivers: • Strong pointers that China will have to cede 1. Increasing global consumption some opportunity to other SE Asian countri
Slide 21: De-risked, capital efficient textiles business model
Arvind is looking to develop a de-risked and capital efficient textiles business model through a vertically integrated offering More robust business model Capital efficient growth model • More customer stickiness • Lower capital intensity • Better pricing power • Better end-to-end RoCE profile • Bet
Slide 22: Garmenting strategic to build vertical business model
Garmenting strategic to build vertical business model with capital efficiency and de-risking Topline and bottomline performance Future strategy Rev, Rs Cr • Stable and strong management team, +8% achieved profitable operations 800 672 526 • Strong customer relationships with global 600 462 458 460 5
Slide 23: Wovens: high growth opportunity and strong cash flows
Wovens provide a great balance of high growth opportunity and strong cash flows Topline and bottomline performance Future strategy Rev, Rs Cr • High growth opportunity through further expansion of global GTM 2,000 +24% 1,797 1,431 • More differentiated product, less cyclical 1,500 987 1,099 1,000 81
Slide 24: Denim business stable with robust cash flows
Denim business stable, with robust cash flows and moderate growth plans Topline and bottomline performance Future strategy Rev, Rs Cr • Operate in differentiated segments, with +17% 1,890 20-30% price premium 2,000 1,602 1,543 1,359 • High utilization levels while industry 1,500 848 1,051 operates a
Slide 25: Three pillars of Arvind strategic growth vision
Three pillars of Arvind strategic growth vision Asset-efficient play across high-growth and medium-growth businesses 1 Brands & Retail 2 Textiles 3 Future bets • Brands • Garmenting • Online platforms • Retail • Wovens fabric • Technical textiles • Denim fabric 25
Slide 26: E-Commerce: Online apparel retail likely ~US$5 bn by 2017
3a – Online Platforms E-Commerce: Online apparel retail likely to be ~US$ 5 bn by 2017 Revenue Projections Total E-Tail Apparel E-Tail (USD Billion) Key Growth Drivers Best-Case Scenario • Increasing penetration of 28.0 technology • Desire for a fashion conscious ~25% 3.2 behavior beyond the metros
Slide 27: E-Commerce: Arvind preparing for the massive discontinuity
3a – Online Platforms E-Commerce: Arvind preparing for the massive discontinuity Unique Capabilities of Arvind Ability to differentiate from competition • Experience of building fashion brands • Own brands, ability to offer exclusive • Hands-on experience of fashion retailing and/or deep ranges ̶ ~1
Slide 28: E-Commerce: Launch of online platform for custom-clothing
3a – Online Platforms E-Commerce: Launch of online platform for custom-clothing: 28
Slide 29: Technical textiles poised to evolve as attractive space in India
3b – Technical Textiles Technical textiles poised to evolve as an attractive space in India Combination of strong opportunity and attractive industry structure Domestic Attractive Global opportunity industry Opportunity pivoting structure opening up • Domestic mkt size US$12 Bn / • Strong IP-based i
Slide 30: Arvind well placed to leverage this opportunity
3b – Technical Textiles Arvind well placed to leverage this immense opportunity Arvind Value proposition • Best-in-class assets, cutting-edge machining Textiles / Technical • Ability to efficiently manage complex supply chain Capabilities • Impeccable quality credentials Marketing capabilities – • L
Slide 31: Arvind has a bold Vision in this space
3b – Technical Textiles Arvind has a bold Vision in this space Global technical textiles company with expertise in Protective Wear, Woven Fabrics, Non-Wovens and Composites 1 2 Protective Specialized Fabrics / Industrial Clothing Weaving 3 4 Composites Non-Wovens 31
Slide 32: Agenda
Agenda • Snapshot and Overall Growth Vision • Division-wise Roadmap • Summary and Conclusion: Overall Value Creation Path 32
Slide 33: Summary: Arvind Limited is at an inflection point
Summary: Arvind Limited is at an inflection point B&R TEX OTH Strong growth Margin expansion Asset light models • Breakout growth in • Significant margin • Brands and retail brands & retail expansion in brands inherently more and retail capital efficient • Strong growth in textiles led by vertical •
Slide 34: Thank You!
Thank You!