Arvind Limited · NSE:ARVIND
Arvind — Investor Presentation (October 2016)
21 slides from Arvind's investor presentation, Oct 25, 2016
Slide 1: Investor and Analysts Presentation
Arvind Limited Investor and Analysts Presentation 25th October 2016 | Mumbai
Slide 2: Safe harbour statement
Safe harbour statement Certain statements contained in this document may be statements of future expectations and other forward looking statements that are based on management‘s current view and assumptions and involve known and unknown risks and uncertainties that could cause actual results, perfor
Slide 3: Arvind Brands business – well placed in a growing fashion market
Arvind Brands business– well placed in a growing fashion market • Apparel market at inflection point ; Market in 2015 estimated at INR ~320k Cr expected to grow to INR 750k Cr by CY2020 at a CAGR of 13% – Branded apparels to grow at 1.5x overall market (18%); BTL segment to grow at 17% (1.3x histori
Slide 4: Indian Apparel market is estimated at INR ~320K Cr in 2015
Indian Apparel market is estimated at INR ~320K Cr in 2015 Overall market split Split of the branded market ~320 6 (2%) BTL & Above > INR35005 Others Innerwear Casuals Formals 105 130 Branded Men 20% 7% 19% 54% 130 (33%) (41%) 76 Mainstream 1000 – 3500 INR Others Western Innerwear Ethnic (24%) 8% 13
Slide 5: Indian apparel demand is at the cusp of significant growth
Indian apparel demand is at the cusp of significant growth as the economy crosses $2000 GDP per capita China apparel consumption took-off Indian apparel consumption Branded segment to grow at $2k GDP per capita stands to grow significantly at 1.5x the overall market USD per capita Billion USD ‘000 U
Slide 6: Online apparel fashion segment to account for ~12-16% of total sales by 2022
Online apparel fashion segment to account for ~12-16% of total sales by 2022 China witnessed similar 3 growth drivers... ...to increase share of online growth between '10 & '15 E-retail buyers increased from 80 mn Internet penetration to (2015) to 400 mn (2015) while AAS increase from 260 mn in incr
Slide 7: Adjacent market segments also growing rapidly
Adjacent market segments also growing rapidly Cosmetics to grow at Footwear to grow at Clothing accessories to 16-18% 17 -18% grow at 12% Rs '000Cr Rs '000 Cr Rs '000 Cr 74-78 12 100 50 6% Kids +12% 16 – 18% 40 8-9 8 50% Mens 19% Eye 15% Face 50 25 23 4 34 4 37% Lip 8% 19% 13% 53% 44% Women 43% 30%
Slide 8: Arvind has built a strong portfolio for segments across income pyramid
Arvind has built a strong portfolio for segments across income pyramid Arvind Fashions portfolio Indian market by Income segment # of HH (Mn) HH income1 pa 3 >$45,000 Premium 6 / bridge 7 $20,000-$45,000 26 15 $12,000-$20,000 42 Main- stream 48 $6,700-$12,000 75 110 Value $2,500-$6,500 86 36 $1,000-
Slide 9: Arvind growth trajectory to be fueled by 5 powerful platforms
Arvind growth trajectory to be fueled by 5 powerful platforms Sustained growth 5 Powerful Platforms Long lasting 4 Next generation 1 international brand Omni-channel relationships capabilities 1 2 3 4 3 2 Strong distribution Strong Sourcing footprint Capabilities 5 Best Talent Base 10
Slide 10: Relationships with iconic global brands built over two decades
Relationships with iconic global brands built over two decades Proven track record in successfully Experience of successfully launching launching & building brands in India brands across all formats 2015 2015 Bridge to Luxury 2015 2014 Premium 2013 2013 Youth 2012 2012 Value 2009 2007 2006 Departmen
Slide 11: Industry leading distribution network that powers the coverage
Industry leading distribution network that powers the coverage • MBOs, Departmental Stores, Retailers • Real estate developers 1 • E-commerce players Relationship • Successful mall locations 2 • Optimal commercial terms Real Estate 3 • Exclusive Network: 1000+ stores across 190 towns • Distribution
Slide 12: Strong footprint across all leading malls
Strong footprint across all leading malls Typical Mall Presence Kidswear / Innerwear floor: 3,000 sq ft International brands: 13,000 sq ft (GF / FF) Specialty Retail: 25,000 - 30000 sq ft 45,000 sq ft across various brands 13
Slide 13: Product innovation and strategic sourcing enables top of class product line
Product innovation and strategic sourcing enables top of class product line Deep expertise Best in class apparel in product innovation sourcing capabilities Strong product team Strategic Vendor Management • 250+ designers & merchants 1st way owned 3rd way 2nd way manufacturing Arvind transactional s
Slide 14: Industry leading talent and HR practices
Industry leading talent and HR practices Arvind ranked No. 1 in the Industry in 'India's Best Companies To Work For' survey of Top 535 companies Strong employee brand & work culture Best in class HR practices Continuous training and Arvind development through virtual University university Career pro
Slide 15: Recent performance reflects the robustness of growth agenda
Recent performance reflects the robustness of growth agenda 25% + CAGR Sales Strong bottom-line results Improving capital efficiency Sales1 (Rs. Cr) EBIDTA (Rs Cr) ROCE (%) +25% 2,740 178 5.5% 2,361 +38% 4.2% 1,915 122 3.9% 1,405 97 2.7% 68 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16
Slide 16: Brands business agenda will be driven by 3 clear sets of priorities
Brands business agenda will be driven by 3 clear sets of priorities 1 • Build on the power brands through category and channel expansion Consolidate existing • Specialty retail to quickly gain strength due to strengths of brands business • Growth brands moving towards double digit EBITDA • Enhance r
Slide 17: Well balanced mix of mature and growth businesses
Well balanced mix of mature and growth businesses Power Brands Emerging Brands Specialty Retail Portfolio Good financials Breaking even Investment mode FY16 Revenue: 1460 cr Revenue: 310 cr Revenue: 611 cr Actuals Gross Margin: 54% Gross Margin: 54% Gross Margin: 43% EBITDA: 12.4% EBITDA: -2% EBITDA
Slide 18: Existing head-room and adjacency expansions to power growth
Existing head-room and adjacency expansions to power growth Men: Be #1 player in branded apparel and extend Women: Extend strength in menswear to create strong platforms & brands to create play in adjacencies portfolio in Women's-wear and adjacent categories Apparel Apparel Formal Cosmetics wear Bag
Slide 19: Arvind Brands aspires for INR 9000 cr topline by 2022
Arvind Brands aspires for INR 9000 cr topline by 2022 Sales growing at ~22-24%+ Sharp rise in EBITDA Improving capital efficiency Sales (Rs. Cr) EBIDTA (Rs. Cr) ~1200- ROCE (%) ~9000 1300 40+% 22% - 24% 35% - 40% 2425 134 5% FY 16 FY 17 FY 18 FY 20 FY21 FY22 FY 16 FY 17 FY 18 FY 20 FY21 FY22 FY 16 F
Slide 20: 10% dilution for Rs 740 cr. | EV: 8,000 cr. | Investor: Multiples
10% dilution for Rs 740 cr.| EV: 8,000 cr. | Investor: Multiples … will boost Arvind’s financial strength and strategic agenda Arvind Brands Business Arvind Limited Investors • Market validation of • Stronger financial muscle • Arvind investors: – Attractiveness of the to address opportunities – Unl
Slide 21: Thank You!
Thank You!