Arvind Limited Q4 Performance Review 12th May 2016, Ahmedabad

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Rudolf Bradford
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1 Arvind Limited Q4 Performance Review 12th May 216, Ahmedabad 1

2 Contents Performance Review Q4 and FY Financial Performance: Consolidated Business Analysis 2

3 Key Highlights In the back drop of difficult macro economic environment Strong Brand & Retail revenue growth Q4 Growth : 3% Growth : 16% EBIDTA margin of Brand & Retail Segment improved significantly Q4: up 37 bps : up 13 bps Arvind Lifestyle Brand Limited became PBT positive as per the forecast Very Successful launch of 4 speciality retail formats- GAP, TCP, Sephora & Aeropostale Speciality Retail to contribute significantly to future revenue growth MegaMart restructuring complete Loss making stores closed Launched Value Retail format under the name Unlimited Gross Margin improvement of 5% Textile Margins & ROCE nearly maintained 3

4 Financial Performance: Q Consolidated revenue growth of 14% and PAT growth of 14% Strong growth in revenues......as well as margins Rev, Rs Cr 2,5 14% 2,41 2, 2,32 EBITDA, Rs Cr 14% FY FY ,5 PAT*, Rs Cr 1, % FY FY FY FY *PAT before exceptional Item 4

5 Business Highlights: Q Strong top-line growth and Profit Growth All Figures in INR Crs Q4 FY16 Q4 FY15 Change Revenue from Operations 2,32 2,41 14% Raw Materials 1,4 847 Project Expenses 7 18 Employees' Emoluments Others Stock (Increase) / Decrease Forex (Gain) / Loss 4-5 EBIDTA % Margin 12.8% 12.7% Other Income 2 23 Interest & Finance Cost Cash Accruals % Depreciation Profit Before Taxes % Tax Profit After Tax % Less : Exceptional Item 48 Net Profit % Key highlights Revenue growth of 14% achieved due to 3% top-line growth in Brands & Retail 27% top-line growth in Garments PBT growth of 2%, PAT growth 14% 5

6 Financial Performance: FY Revenue growth of 8% and PAT de-growth of 6% Moderate revenue growth as well as margins Rev, Rs Cr EBITDA, Rs Cr 9, 7,5 7,851 8% 8,45 1,5 1, 5 1,13 5% 1,65 6, FY FY ,5 3, 1,5 PAT*, Rs Cr % 371 FY FY FY FY *PAT is before exceptional Item 6

7 Business Highlights: FY Moderate top-line & bottom-line growth All Figures in INR Crs Change Revenue from Operations 8,45 7,851 8% Raw Materials 3,75 3,696 Project Expenses Employees' Emoluments Others 2,744 2,48 Stock (Increase) / Decrease Forex (Gain) / Loss 7-8 EBIDTA 1,65 1,13 5% Margin 12.6% 12.9% Other Income Interest & Finance Cost Cash Accruals % Depreciation Profit Before Taxes % Tax Profit After Tax % Less : Exceptional Item 8 54 Net Profit % Key highlights Revenue growth of 8% achieved due to 16% top-line growth of Brands & Retail 3% top-line growth of Textiles EBIDTA margin % slightly lower Higher weightage of Brand & Retail Business PBT growth of 5% : PAT growth of -6% due to higher taxation 7

8 Strong Margin growth in B&R Business: Textile Margin lower as share of Garments revenue increased Textiles Brands & Retail EBITDA % EBITDA % FY comparison Vs LY % 17.1% FY FY % FY % FY Q4 comparison Vs LY EBITDA % % 15 1 Q % Q EBITDA % % Q % Q

9 Consolidated Balance Sheet, as at Mar 31 st 216 As at Rs Cr 31st Mar'16 31st Mar'15 Shareholders' Fund Share Capital Reserves and Surplus Non Current Liabilities Shortterm Borrowings Current Liabilities Minority Interest Total Assets Fixed Assets Non -Current Investment Long Term Loans and Advances Other Non Current Assets 2 8 Current Assets Total

10 Key Financial Ratios Particulars Q EPS (Annualised) Debt / Equity Debt / EBIDTA ROCE 14.1% 15.5% 13.9% ROE 14.1% 15.2% 12.7% Revenue Growth 14.4% 13.5% 7.6% 1

11 Agenda Performance Review Q4 and FY Financial Performance: Consolidated Business Analysis 11

Textiles Business: Revenue Mix in FY215-16 Rev, Rs Cr 3% 5,122 5,5 4,977 32 5, 275 345 36 4,5 712 883 4, 3,5 3, 1,944 2,15 2,5 2, 1,5 1, 1,927 1,879 5-241 -32-5 FY 214-15 FY 215-16 Knits Voiles

12 Textiles Business: Revenue Mix in FY Rev, Rs Cr 3% 5,122 5,5 4, , , , 3,5 3, 1,944 2,15 2,5 2, 1,5 1, 1,927 1, FY FY Knits Voiles Garments Wovens Denim Internal sale Rev. Growth % 1% -4% 24% 4% -3% Textile revenue grew by 3% Led by 4% growth Woven fabrics 24% growth in garments 3% degrowth in Denim 1% growth on a smaller base for the Knits business 12

Volume growth: Wovens volume growth at 5% : Lower Volumes at denim by 6 % Denim Wovens (Shirting & Khaki) Q4 comparison Vs LY Volume, Mn Mtrs 3 26. 2 1-4% 25.1 Volume, Mn Mtrs 3% 3 28.2 2 1 29.

13 Volume growth: Wovens volume growth at 5% : Lower Volumes at denim by 6 % Denim Wovens (Shirting & Khaki) Q4 comparison Vs LY Volume, Mn Mtrs % 25.1 Volume, Mn Mtrs 3% Q Q Q Q Volume, Mn Mtrs Volume, Mn Mtrs FY comparison Vs LY % % FY FY FY FY Product mix change in Denim resulted in bottlenecks in capacity leading to lower volume: Investments to debottleneck the plant made operational in March 16 13

14 Key Parameters: FY Textiles Denim Woven Q Q Q Q Exports(Mn Mtrs) Domestic (Mn Mtrs) Avg Prices Major Components Cotton Cost in Rs / Kg Denim Woven Exports(Mn Mtrs) Domestic (Mn Mtrs) Avg Prices Major Components Cotton Cost in Rs / Kg

15 Brands & Retail Business grew topline by 3% in Q Strong revenue growth Key highlights Rev, Rs Cr Revenue growth of 3% achieved due to 44% revenue growth in Brands /Retail formats 8 3% 766 (-)4% growth revenue in MegaMart Retail Like to Like growth 2.7% LTL growth in Brands Q Q *Without Arvind Internet Business 15

16 Brands & Retail Business grew topline by 16% in FY Strong revenue growth Key highlights Rev, Rs Cr Revenue growth of 16% achieved due to 26% revenue growth in Brands/Other formats 3, 2,5 2,361 16% 2,74-11% revenue growth in MegaMart Retail, as business went through a repositioning and model change to consolidate operations and restore margins 2, Like to Like growth 1,5 2.3% LTL growth in Brands Overall LTL growth of -13% in Megamart Retail 1, 5 FY FY *Without Arvind Internet Business 16

Performance of Power Brands Revenues Rs Cr 6 +31% +2% 2, Power brands 463 1,64 354 1,5 1,334 4 2 Q4 214-15

7% 41 Q4 214-15 EBITDA % 14.4% 15 1 67 5 Q4 215-16 EBITDA Rs Cr 3 2 1 11.4% 152 FY 214-15 13.

17 Performance of Power Brands Revenues Rs Cr 6 +31% +2% 2, Power brands 463 1, ,5 1, Q Q4 FY Q Revenues Rs Cr 1, 5 FY FY EBITDA Rs Cr % 41 Q EBITDA % 14.4% Q EBITDA Rs Cr % 152 FY % 213 FY EBITDA % EBITDA % EBITDA Rs Cr Revenue Rs Cr 1. Note: Tommy Hilfiger numbers reflect 5% Arvind share of the JV company 17

18 Brands & Retail Business Distribution Q Q Particulars Stores Sq Ft Stores Sq Ft Unlimited & Megamart 95 7,29, ,19,526 Others 93 8,66, ,61,35 Total ,95, ,8,561 No of KA Exclusive Counters Sales Increase in Key Account Counters: Growth of 19.7% in FY

19 Outlook Revenue Growth likely to be between 15-16% primarily driven by volume growth in brands & retail business and Garments manufacturing : Revenue Growth in Textiles 8-9% Revenue Growth in Brands & Retail at about 24% Weighted Margins likely to be marginally lower due to mix change in favour of Brand & Retail business Textile Margins likely to be maintained B & R Margin likely to increase by.75-1% 19

20 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