Arvind Limited Performance Review Q th August 2015, Ahmedabad

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Buck Peters
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1 Arvind Limited Performance Review Q th August 215, Ahmedabad

2 Agenda Performance Review Q1 FY Financial Performance : Consolidated Financial Performance : Standalone Business Analysis 2

3 Agenda Performance Review Q1 FY Financial Performance : Consolidated Financial Performance : Standalone Business Analysis 3

4 Q : Consolidated revenue growth of 6% and EBITDA growth of 2%; reducton in PAT by 33% Moderate growth in revenues......as well as EBITDA margins Rev, Rs Cr 2, 1,773 6% 1,877 EBITDA, Rs Cr % 227 1,5 Q Q , PAT*, Rs Cr % 61 5 Q Q Q Q *PAT before exceptional items 4

5 Summary Business Highlights : Overall performance in line with plan All figures in INR crs Q1 FY16 Q1 FY15 Change Revenue from Operations 1,877 1,773 6% RawMaterials Project Expenses 6 15 Employees' Emoluments Others Stock (Increase)/Decrease Forex Loss/(Gain) 1-4 EBIDTA % Margin 12.1% 12.6% Other Income Interest & Finance Cost Cash Accruals % Depreciation Profit Before Taxes % Tax Profit After Tax % Less : Exceptional Item 3 Net Profit % Key highlights Revenue growth of 6% Strong growth (14%) in Brands & Retail business Steady (3%) growth in TexTles Increase in overall EBITDA by 2% Margin expansion in textles ReducTon in margin of B&R due to non recurring expenses/losses of Rs. 7.5 cr. Improvement in margins in power brands PAT lower on account of higher tax provision; excepgonal items: Rs. 3 crs for retrenchment of workers 5

6 Strong revenue growth in B&R; textles growth steady along expected lines Revenues in Rs. cr TexGles Brands & Retail 1,4 1,21 3% 1, % Q Q Q Q TexTles grew by 3% despite healthy growth of 34% in garments due to sluggish market Denim volume saw 2% revenue de- growth Wovens volume, though higher compared to Q1 of FY15, lower than planned Robust growth of Power brands (17%) and other brands (37%) led to 14% overall growth of brands & retail business despite Flat revenue of MegaMart as planned 6

7 Margin expansion in textles business; fall in B&R largely from non- recurring costs EBITDA (%) EBITDA % TexGles Brands & Retail % 17.3% MM 1.9%, Other 4.1% 3.5% 4.% Non- recurring 1.4% items % 2.6% MM - 2.9%, Other 4.2% 1 Q Q Margin expansion of.4% due to Lower coron prices Improved realizagon of denim fabrics despite several negatve factors Withdrawal of certain export incengves (restored in Q2) Lower capacity utlizaton of wovens fabrics Low/negaTve EBIDTA margins in newly started garments factories Q Q Margin lower by.9% primarily due to non- recurring costs Losses on discongnued businesses LiquidaGon of inventory in MegaMart Pre- operatve losses on new brands..margin improvement from 3.5% to 4% on like- to- like comparison due to OperaGng leverage in power brands Strong performance of new acquired brands 7

8 Agenda Performance Review Q1 FY Financial Performance : Consolidated Financial Performance : Standalone Business Analysis 8

9 Financial Performance Q Q1 Rs in Crs Change Revenue from Operations 1,311 1,278 3% RawMaterials Project Expenses 1 4 Employees' Emoluments Others (Increase) / Decrease in Stock Foreign Exchange Loss /(Gain) - 5 EBIDTA % Margin 16.% 15.7% Other Income Interest & Finance Cost Cash Accruals % Depreciation 36 3 Profit Before Taxes % Tax Profit After Tax % Less : Exceptional Item 3 Net Profit % 9

10 Agenda Performance Review Q1 FY Financial Performance : Consolidated Financial Performance : Standalone Business Analysis 1

11 TexTles Business: Revenues stable in denim and wovens, 34% growth in garments Rev, Rs Cr 3% 1,4 1,241 1, , , Knits Voiles Garments Wovens Rev. Growth % 18% - 4% 34% 1% TexGle revenue grew by 3% Led by 34% growth in Garments 1% growth in Wovens 18% growth in Knits Fabrics 2% de- growth in denim Denim - 2% Internal sale - 2 Q Q

12 Volume growth: Wovens volume growth at 2% : Lower Volumes in Denim by 4% Denim Wovens (ShirGng & Khaki) Q1 comparison Vs LY Volume, Mn Mtrs % 26.4 Volume, Mn Mtrs % 27.4 Q Q Q Q

13 Key Parameters: Q TexTles Denim Woven Q Q Q Q Exports(Mn Mtrs) Domestic (Mn Mtrs) Avg Prices Major Components Cotton Gas Cost in Rs / Kg

14 Brands & Retail Business grew topline by 14% in Q Strong revenue growth Key highlights Rev, Rs Cr % 53 Revenue growth of 14% achieved due to 2% revenue growth in Brands /other formats Flat revenue in MegaMart Retail Like to Like growth Brands with 6.6% LTL growth MegaMart with - 9 % LTL growth 2 Q Q *Without Arvind Internet Business 14

15 Strong performance of power brands both in Revenue growth and EBITDA expansion Power brands Revenues Rs Cr 3 +17% 28 EBITDA Rs Cr 4 EBITDA % % 1.1% Q Q Q Q EBITDA % EBITDA Rs Cr Revenue Rs Cr Revenue Growth 17% and EBIDTA Margin grew from 9.5% to 1.1% 1. Note: Tommy Hilfiger numbers reflect 5% Arvind share of the JV company 15

16 Brands & Retail Business DistribuTon Q Q Q Particulars Stores Sq Ft Stores Sq Ft Stores Sq Ft Brands 8 789, , ,33 MM , , ,268 GAP 1 9,78 Total 945 1,631, ,589, ,515,598 No of KA Exclusive Counters Sales Increase in Key Account Counters: Growth of 29% in Q

17 Successful launch of GAP Store In Delhi The Gap Store launch has been very successful. The store is performing far better than our initial estimate as well as similar competing formats Encouraged by its success, store opening plan has been expedited: 6-7 more stores opening by end of FY 17

18 Outlook Revenue Growth likely to be between % primarily driven by volume growth in brands & retail business and Garments manufacturing : Revenue Growth in TexTles 4-5% Revenue Growth in Brands & Retail at about 22-24% Weighted Margins likely to up marginally on account of margin improvement of 15+ basis points in Brands & Retail Business Power Brands to contnue growth momentum Improvement in margins of brands and retail formats introduced over last couple of years Closure of a few loss making formats PAT growth to be slower due to higher tax 18

19 Thank You!

Arvind Limited Q2 Review Note 5 th November 2015, Ahmedabad

Arvind Limited Q2 Review Note 5 th November 215, Ahmedabad Contents Performance Review Q2 FY 215-16 Financial Performance : Consolidated Financial Performance : Standalone Business Analysis Outlook 2 Contents