Spencer's Retail Limited has informed the Exchange about Investor Presentation
SRL:SEC:SE:2021-22/50
November 20, 2021
The Manager Listing Department, National Stock Exchange of India Limited Exchange Plaza, 5th Floor Plot No. C/1, G-Block Bandra-Kurla Complex Bandra (East), Mumbai – 400 051 (Symbol: SPENCERS)
Dear Sir / Madam,
Sub: Intimation of Investor Presentation
The General Manager Department of Corporate Service, BSE Limited Phiroze Jeejeebhoy Tower Dalal Street Mumbai – 400 001 (Scrip Code: 542337)
Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed a copy of the corporate presentation to be used in the "RPSG Virtual Investor Conference" 2021, which is scheduled to be held on November 22, 2021 and November 23, 2021 respectively.
The said presentation www.spencersretail.com.
is also uploaded on the website of the Company at
We request you to take the afore-mentioned information in record and oblige.
Thanking you, For Spencer’s Retail Limited
Rama Kant Company Secretary & Compliance Officer (FCS 4818)
Encl: As above
Spencer's Retail Limited Regd. Office: Duncan House, 31, Netaji Subhas Road, Kolkata-700 001 Corp. Office: RPSG House, 2/4 Judges Court Road, Kolkata-700 027 Tel: +91 33 2487 1091 Web: www.spencersretail.com CIN: L74999WB2017PLC219355
Investors Presentation
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Disclaimer
This presentation has been prepared by Spencer's Retail Limited (the "Company") for general information purposes only, about the company activities without regard to specific objectives, suitability, financial situations and needs of any particular person. This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment therefor. No person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation and if given or made, such information or representation must not be relied upon as having been authorized by any person.
This presentation may include statements which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position, expenditures, and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. This presentation should not be relied upon as a recommendation or forecast by the Company. Please note that the past performance of the Company and its subsidiary is not, and should not be considered as, indicative of future results. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. The Company does not undertake to revise any forward-looking statement that may be made from time to time by or on behalf of the Company. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward looking statements.
This presentation may not be copied or disseminated, in whole or in part, and in any manner or for any purpose. No person is authorized to give any information or to make any representation not contained in or inconsistent with this presentation and if given or made, such information or representation must not be relied upon as having been authorized by any person. Failure to comply with this restriction may constitute a violation of applicable laws.
The presentation is confidential and cannot be published with prior permission. None of the Company, its subsidiary, its Directors, Promoters or affiliates or associates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this document or its contents or otherwise in connection with this document, and makes no representation or warranty, express or implied, for the contents of this document including its accuracy, fairness, completeness or verification or for any other statement made or purported to be made by any of them, or on behalf of them, and nothing in this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. The information and opinions contained in this presentation are current, and if not stated otherwise, as of the date of this presentation. The Company undertakes no obligation to update or revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise. Any opinions or information expressed in this presentation are subject to change without notice. This presentation may not contain material information to potential information, unless explicitly claimed.
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Contents
Industry Overview
Key highlights
Growth Strategy
Annexures
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Industry Overview
Key highlights
Growth Strategy
Annexures
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RP- Sanjiv Goenka Group Diversified Business House
FY21 Operating Revenue in INR (Cr)
1325
2660
6921
2428
451
434
284
Power utility company engaged in coal mining, generation and distribution of electricity
Largest Indian & 7th largest global carbon black manufacturer
India's premier organised multi-format retailer
Amongst top 3 BPO players in India
Largest natural rubber producer in India & 2nd largest tea producer in south India
India's largest music company with an archive of over 300,000 tracks
Latest venture in FMCG industry
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Organized Retail share growing at CAGR ~17%
•
India will continue to see exponential growth in the Modern retail business because of the increasing consumerism and increased market access driven by technology & infrastructure
• The market will continue to grow overcoming the recent blip of COVID ~19% in FY21
• The market will expand for both Value and Experience format
CAGR ~11%
CAGR ~17%
Source: CRISIL Research All numbers are in INR Trillion indicates market share and year pertains to Calendar Year
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42.9 48.6 52.7 58.8 62.0 57.0 66.0 91.0 3.8 4.3 5.2 6.4 7.4 6.0 7.1 11.4 FY16FY17FY18FY19FY20PFY21PFY22PFY25POrganised Retail growing faster than Overall Retail GrowthOverall Retail Market SizeOrganised Retail Market Size The future of retail is “OMNI Channel”
Combination of Physical & Online Platform
• E-commerce will be the fastest
growing channel for retail because of the Ecosystem
• Growing consumerism of the
middle class
• Young population • Access to technology platform
• Non Food categories will see higher
migration & adoption. Food & Grocery business will see multiple hyper local model to drive this channel
• The last few years have seen a strong
growth of 24% CAGR for Online
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CAGR ~8%
CAGR ~24%
CAGR ~25%
Source: CRISIL Research All numbers are in INR Trillion indicates market share and year pertains to Calendar Year
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3.1 3.5 4.1 4.8 5.5 4.0 4.8 0.6 0.8 1.1 1.4 1.7 1.9 2.4 0.1 0.1 0.1 0.1 0.2 0.2 0.2 FY16FY17FY18FY19FY20PFY21PFY22PMoving Towards OMNI ChannelPhysicalOnlineOthers Spencer’s presence across segments in Organized Retail
Spencer’s Retail Limited is present across ~73% segment share of organised Retail
Others ~24.5%
Books & Music ~1%
Pharmacy ~1.5%
Segment
Food & Grocery
Share of Modern Trade ~20%
Market Penetration
~4.6%
Apparel
~23%
~26.6%
~73%
Consumer Durables, Mobile & IT
~24%
~57.3%
Organised Retail Market Share
Furniture & Household Items
Footwear
Spencer’s Presence
~7.6%
~18.4%
~2%
~4%
~73%
• Massive headroom for growth since Penetration of Modern Trade in Grocery is less than ~5% and Indian modern
retail to double its size in over the next couple of years.
• There will be positive result due to Consolidation in the retail space and everyone will have their share of growth.
• Huge potential for growth with lowest market penetration amongst other segments
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Source: CRISIL Research
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Indian E-Commerce & Online Grocery Market
CAGR of 27% over 2019- 24, with grocery and fashion/apparel likely to be the key drivers for incremental growth
E-commerce sales in
India only increased by 7-8% in 2020, compared to 20% in China and the US.
There are lot of
opportunities for E- retailers in India to capitalize upon with the gradually growing internet penetration in India.
With a CAGR of 57% over
2019-24, there is ample scope of growth for “Food & Grocery” retailers.
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INR to USD conversion rate In FY24F is 74.94 (of FY21), for FY20F 74.18 and FY18 68.36 Source: Reserve Bank of India, Average for the Year Source: Media sources, Global Internet : e-commerce’s steepening curve published by Goldman Sachs, Forrester Research, News Articles
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95.30%89.30%4.70%10.70%20192024FOffline & Online Retail % Offline RetailOnline Retail1.5 2.2 7.4 Indian E-commerce Market INR Trillion20182020F2024F0.13 1.36 Indian Online Grocery MarketINR Trillion20192024F Industry Overview
Key highlights
Growth Strategy
Annexures
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Business Journey So Far
2012-2019 Acquisition of Online platform MERAGROCER
Trading Area touches 1mn sqft
2019 Acquisition of Natures Basket
2021 Scaling of OMNI Channel by 6.5X & Cost Reset for Profitable growth
2000-2005 Launch of 1st Large format store in Hyderabad
1989-2000 Introduced Modern Retail to India
2005-2012 Multi Format cluster consolidation
2019 Crossed Revenues of 2000cr
Listed in Stock exchanges
Company achieves breakeven on EBITDA level*
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2020 Natures Basket limited reported full year Positive EBITDA within 1 year of acquisition
Certified as “Great Place to Work” for two years in a row
* Since 2019 the Company has been EBITDA positive
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Business Portfolio
India's premier organised multi- format retailer, Offering customers great choice, great price and great experience
Makes Fine Living Affordable
155 stores in 38 cities
Differentiated Business Model of International foods offering products ranging from Fresh food, Artisanal breads, FMCG and Staples
One-stop-destination for multi-cuisine, organic and international food products
35 stores in 6 cities
Omnipresent Retail India Pvt. Ltd (Out-of-Store Business)
Online marketplace delivery platform for selling FMCG, Fresh, Staples, General Merchandise, Apparel & electrical products
True OMNI Channel retailer (Online + On Call)
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Serves in 30 cities
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Pioneer in Modern Retail
Spencer’s Retail offers experiential and affordable shopping
Spencer’s Retail operates a chain of experiential retail stores across 41 cities with 190 stores having a trading area of 14.7 lacs sq.ft.
Operating leverage
Cluster based expansion, Operates multi format stores in 4 clusters (East, South, North and West)
Daily essential and International cuisine as part of food offering
Products offerings across categories of Food, General Merchandise, Fresh, Apparel, Electricals, Wine & Liquor and International food
Strong participation of Private Brands in Food & Non Food across chains
Strong loyalty with 70%+ repeat customers
The Company operates on Affordable value with seamless OMNI Channel experience
Low cost culture and leveraging skill & scale across platform. Natures Basket & ORIPL turnaround using skill & scale
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Industry Overview
Key highlights
Growth Strategy
Annexures
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Building blocks for growth
Format Size
OMNI Channel
Non Food
Customer Experience
Continue to expand in the existing city cluster for next 3-4 years
Lead store growth
with Spencer’s Large format 5k to 18k sqft and Natures Basket small format gourmet store
Out-of-Store Channel to be key driver for growth for Spencers and Natures Basket
www.spencers.in • Grocery locally delivered • Non Food Nationally
delivered
www.naturesbasket.co.in • Gourmet & International cuisine to be serviced in existing geogrpahies
www.thegiftstudio.com • One stop destination for gifting solution across Food & Non Food categories India
Non Food share to touch 25%+ in next 4 years
2Bme to be a value, stylish and experiential OMNI Channel brand. Under MRP 999 price point
General Merchandise and Electricals to built higher share through large format expansion and OMNI Channel
10km radius
neighbourhood delivery model
Investment in “Price for the month” Policy to strengthen Spencer’s value proposition
Natures Basket to
continue leadership in Gourmet format with enhanced Experienced format through partnership with speciality food players
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Cluster base profitable growth
NORTH 45 Stores Spencers + Natures Basket
SOUTH 65 Stores Spencers + Natures Basket
EAST 57 Stores Spencers + Natures Basket
WEST
23 Stores Natures Basket
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OMNI Channel Business Growth >6.5X
• ORIPL is an E-commerce company 100% owned Subsidiary of Spencer’s Retail Limited
• Online store for Food, Grocery, Fresh, Apparel, General Merchandise and Liquor
In India, Online penetration to reach 10.7% in FY24 vs 4.7% in FY19
Continuous investments are being made in the online platform (deliveries through E- comm/ Telephone/whatsapp/Chatbot) for enhancing consumer experience
We have witnessed more than 6.5x growth from FY19 and 4.5x growth from FY20.
Operational presence in the top 10 online
grocery market in India
Share of OMNI Channel grew from low single digit of 2% to double digit as a sustainable base
GMV (₹ in Cr)
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28 40 183 FY19FY20FY21 Well curated Private Brand
Private Brand Share %
Spencer’s: Food Business 12.5%
Non Food Business 19.1%
Natures Basket Food Business 12.8%
e v i t i n g o C
l a t n e m e r c x E
e n i t u o R
l e r a p p A
& s e l p a t S
G C M F
M G
E & E
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Private Brands products have 8-10% higher gross margins than the branded products
Strategy way forward
Spencer’s growth to be driven through large format
Natures Basket store expansion in existing cluster with new
addition of NCR and Kolkata
OMNI Channel business growth via PAN India Non Food and
time bound grocery deliveries in neighbourhood
Reorient Spencer’s Large format for higher non food mix
Cost reset driven through technology adoption and low cost
~15% new space YoY
2.5 to 3 lac sqft in pipeline for next 2 years
OMNI Channel Sales Mix of 10%+
Non Food Sales Mix of 25%+
GM% expansion with Non Food Mix
culture
Continue Market leadership in Gourmet food
Natures Basket strategic partnership with Speciality food player
Cementing Spencer’s value proposition (Price of the Month)
Drive Non Food participation through 2Bme under 999 MRP proposition
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Consolidated Financials
Natures Basket Limited was acquired in July’19, hence FY19 and FY20 numbers are not comparable
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Working Capital = Closing Inventory + Trade Debtors – Trade Creditors
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156 193 197 No. of StoresFY19FY20FY2113.7 14.6 14.7 Trading Area Lac sqftFY19FY20FY212,187 2,640 2,428 Revenue from Operations ₹ CrFY19FY20FY2121.2%21.4%20.4%Gross Margin %FY19FY20FY211.7%3.4%2.5%EBITDA %FY19FY20FY2145 34 40 Inventory Days of Holding on TurnoverFY19FY20FY21455509 488 Total expenses ₹ CrFY19FY20FY21 Consolidated Financials H1
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Working Capital = Closing Inventory + Trade Debtors – Trade Creditors
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185 190 No. of StoresH1FY21H1FY2214.0 14.7 Trading Area Lac sqftH1FY21H1FY22251216Total expenses ₹ CrH1FY21H1FY220.2%4.9%EBITDA %H1FY21H1FY2239 44 Inventory Days of Holding on TurnoverH1FY21H1FY221,164 1,134 Revenue from Operations ₹ CrH1FY21H1FY2220.4%20.8%Gross Margin %H1FY21H1FY22 Industry Overview
Key highlights
Growth Strategy
Annexures
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Our response to COVID
Business Continuity
1. Ensured safe and hygiene environment for employees and customers 2. No Mask No Entry, Social distancing, Thermal screening & frequent sanitization
Our COVID Response
OMNI Channel Ecommerce
1. Leveraged E commerce channel for ease ordering & wider reach 2. Store as a platform; Scaled multi channel out of store business
Value partnership & operations
1. Strategic partnership with Uber, Swiggy, Dunzo & etc. 2. Modified back end operations to enable ‘Out Of Store’ initiatives
Improving cost structure & managing liquidity
1. Transforming cost structures & various cost savings initiatives 2. Managing cash flows by efficient working capital
Durable during tough times
1. Enhanced outreach to potential customers through social media platform 2. Being part of the community via hyper local
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Environment, Social and Governance
Waste Management
Company has stopped using single-use plastic
GHG Emissions
Installing solar panels in some of our stores
(E)
Ecological Impact
Increased usage of Electronic transactions vs physical paper based transactions
Energy Management
Installed energy efficient fittings, automatic lighting, water taps & air dryers RPSG House certified as “Green Building” Certification
(S)
Women Empowerment
~25% women workforce. Promoting women safety causes
Gender Equality
Company believes in providing equal opportunity to any individual without any discrimination
Employee Engagement
Certified the company as “Great Place to Work” two years in a row
Quality Products
High standard quality checking parameters for its private brand products
Code of conduct; with prescribed guidelines & processes for prevention of bribery & fraud; zero tolerance to unethical practices
Ethical Practices
50% of the Board of Directors are independent
Strong Internal Controls
(G)
Best Practices
Company follows best practices focusing on strengthening its legal, regulatory and compliance management framework
No Fraud or illegal activity
Company has whistleblower policy in place for directors /employees to report concerns about unethical & suspected fraud or violation
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ESG – Synonymous with Sustainability
Energy Efficient
Women Safety and Empowerment
Customer Feedback
Training Support in World Food Program for Kingdom of Bhutan
Say yes to cloth bags & #No To Plastic bags!
Our Corporate Office RPSG House is certified as Green Building by IGBC
Insider Trading Compliance Tool
Best in class practices followed
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Leadership Team
Shashwat Goenka Non – Executive Director
Alumni of The Wharton School of The
University of Pennsylvania
Heads Retail and FMCG business of RP-Sanjiv
Goenka group
Devendra Chawla Managing Director & CEO
BE, MBA and Alumni of Harvard Business School 23+ years of experience in Consumer industry Responsible for Growth & Management of the
Chairman - CII National Committee on Retail
company.
Rahul Nayak Whole Time Director
PGDBA in Marketing 22+ years of experience in Retail Industry Responsible for Supply Chain, Planning &
Network Expansion
Aniruddha Banerjee Sales & Operations Head
MDP and Management Diploma in Sales &
Marketing.
22+ years of experience in Food & Retail industry. Responsible for overall Sales & Operation of the
Business
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Thank You
About Spencer’s Retail Limited: Spencer’s Retail Limited, part of RP-Sanjiv Goenka Group, is a multi-format retailer providing a wide range of quality products across categories such as FMCG, fashion, food, staples, general merchandise, personal care, home essentials, electrical and electronics to its consumers. specialty sections such as Spencer’s Gourmet, Patisserie, Wine & Liquor and Epicuisine section are some of the key differentiators in our hypermarket stores and in Natures Basket Limited L’exclusif, healthy alternatives and Natures. The first ever hypermarket in India was launched by Spencer’s in Hyderabad in 2000. Today, Spencer’s (including Natures Basket) runs 190 stores with a total 14.70 Lacs Square Feet in over 41 cities in India. Spencer’s brand positioning – MAKES FINE LIVING affordable– embodies its philosophy of delighting shoppers with the best products and services that enable a fine living at reasonable prices, while providing them with a warm, friendly and educational retail environment. Natures Basket Limited is a one shop destination for all multi cuisine cooking needs, healthy food including international food products. ORIPL is an E-commerce company 100% owned Subsidiary of Spencer’s Retail Limited. It is an OMNI Channel platform for Food, Grocery, Fresh, Apparel, General Merchandise and Liquor.
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