Aditya Birla Fashion and Retail Limited
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Key numbers — 40 extracted
rs,
INR 13,996
INR 1,703
INR 1000
8%
1%
3%
20%
45%
33%
30%
22%
Guidance — 5 items
Registered Office
opening
“SOURCED 67% of energy from renewable sources across ABFRL’s owned facilities Science Based Targets initiative (SBTi) validated ABFRL target ambition and it is in line with 1.5ᵒC trajectory Note : CSA -Corporate Sustainability Assessment CSR Strategy CSR Mission To make a meaningful impact on the lives of individuals in communities around us by developing model villages through our focus on Education, Health & Sanitation, Sustainable Livelihood, Water & Watershed, and Digitalisation.”
Backed by industry tailwinds
opening
“* Retail includes Value/outlet sales Pillars of Expansion Existing Markets New Markets Project Stretch (Make existing stores Bigger) Target to open ~250 stores every year FY251 FY30P 62% 62% 70% 70% Retail* Wholesale E-commerce Exports and Institutional Our Strengths and Way Forward Key Areas What has got us here?”
Widest range of sizes
opening
“Recorded sales CAGR of ~43% during the phase Best in Class Profitability and Strong Double Digit EBITDA Margin”
Internal Challenges
opening
“lehenga, saree, FY24E INR ‘000 Cr.) xx% Estimated CAGR (FY24-FY27) Non festive Festive+ Formal + Casual Social Heavy festive Celebratory BTL + Luxury Prestige + Premium Value Mass Note: 1.”
Internal Challenges
opening
“Scaling of EBO business Project Ninja: Extending Project Ninja to drive SSSG across EBO network Project Rise: One stop destination for all ethnic use cases Expansion: Doubling store network in next 5 years 1.”
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Speaking time
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Opening remarks
Registered Office
Piramal Agastya Corporate Park, Building ‘A’, 4th and 5th Floor, Unit No. 401, 403, 501, 502, L.B.S. Road, Kurla, Mumbai - 400 070 CIN: L18101MH2007PLC233901 Tel.: +91 86529 05000 Fax: +91 86529 05400 Website: www.abfrl.com E-mail: secretarial@abfrl.adityabirla.com Disclaimer Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements” including, but not limited to, those relating to general business plans strategy of Aditya Birla Fashion and Retail Limited (“ its future outlook growth prospects, future developments in its businesses, its competitive regulatory environment and management's current views assumptions which may not remain constant due to risks and uncertainties Actual results may differ materially from these forward looking statements due to a number of factors, including future changes or developments in ABFRL's business, its competitive environment, its ability to implement its strategies and in
Backed by industry tailwinds
o Unbranded to Branded shift o Premiumization o Gen-Z fueled growth in E-Com Adequate growth capital through fund raise to fuel growth till self-sustenance *Awaiting writtenorder from honorable NCLT, post which scheme will be made effective Benefits Lead to the right operating architecture for both companies with sharper focus on their individual business strategies Unlock value for the overall business portfolio through price discovery of the individual entities for existing shareholders Separately listed companies to attract specific investors basis their business profile Encourage stronger capital market outcomes Demerger leading into Two independent growth engines with clear capital allocation and value creation trajectories Proposed Aditya Birla Lifestyle Brands Limited Demerged Aditya Birla Fashion & Retail Limited Lifestyle Brands Youth Western Wear Sportswear Activewear, Athleisure & Innerwear Unlocks its cash flow to fuel accelerated growth Leverage its brand strength, distrib
Key levers of the premiumization strategy
• Re-defined Brand position from Value to Masstige • Launch of new labels and merchandise, with new design aesthetics to appeal to the younger consumers Significant improvement in financial performance 2013 95 2020 342 Stores Retail Space 1.7 Mn sq.ft. 4.3 Mn sq.ft. • Re-energized brand with strong marketing investments and more contemporary branding Revenue in INR Bn EBITDA%1, 2 • • • Strengthened distribution footprint with strong expansion and online presence Enhanced customer experience with revamped store design and with a complete reset in freshness and availability of merchandise Strong investments in organizational capabilities & talent Notes:1Post-Ind EBITDA Margins, 2FY10-19 represents iGAAPnumbers as Ind-AS 116 was introduced from FY20 16% 35 7% 32 6% 28 4% 5% 5% 2% 25 21 19 17 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Pantaloons – 2020-24 Significant shift in competitive landscape post Covid; Leveraged this as an opportunity to reset the business for the future • Business deeply i
Widest range of sizes
7 different sizes Network of diverse vendors with long-standing relationship enables to ace the complex ethnic space Resilient sourcing strategy and vendor management… …To address inherent complexities of ethnic supply chain… …Resulting in efficient management Of complex, large-scale operations 50+ Network of fabric vendors 99%+ sourced from India Diverse Raw Material Vendors Garmenting Vendors 25+ Network of vendors ~10 Production geographies spread across 5 states ~3,000 Fabrics ~1000 Trims From small village artisans to large units 100 – 25,000 meters: range of fabric orders 1,000+ Apparel styles launched every season 20% brand new range Industry leading innovation 100% prints in-house unique to TCNS FY14-19 : High Growth Trajectory … …Hit by the Covid roadblock in 2020 Achieved NSV Milestone of INR 1000 Cr. Recorded sales CAGR of ~43% during the phase Best in Class Profitability and Strong Double Digit EBITDA Margin
External Factors
• Overall women’s wear segment saw degrowth, ethnic-wear took a further hit • Within ethnic, Typical straight functional Mix & Match kurta lost relevance • work-wear consumption going down • Occasion-wear consumption saw tremendous traction • SKDs & Sets tipped Kurta in complete reversal of trend
Internal Challenges
• Existing portfolio was not in sync with change in trend • Products were mainly kurtas catering for Work/Casual wear • Had Insignificant presence in occasion wear • Elevated use of Polyesters & glitter prints was not well received in Strong Cash Flow the market • Slower than expected recovery coupled with rising input cost significantly impacted profitability Putting pressure on Retail Store Profitability, Inventory Accumulation and Increased Cost Base TCNS is on a Transformation journey KEY FOCUS AREAS 3. Rejuvenated Brand Presence 2. Revamped Product Strategy 1. Subtracting bad network, inventory & cost TCNS 4. Building Retail Muscle 5. Responsive Supply Chain 1 Subtracting bad network, inventory & cost Network Rationalization • Consolidation and focus on profitable EBO model led to closure of 100+ stores in last 12 months • Right sizing of LFS and MBO network basis counter level profitability and inventory efficiency • Resetting of online channel for profitable growth Inventory Opt
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