Arvind Fashions Limited Q1 FY21 Performance Highlights Sep 2020 0 - PowerPoint PPT Presentation

Arvind Fashions Limited Q1 FY21 Performance Highlights Sep 2020 0

Q1 Performance Highlights Q1 Results Agenda Way Forward Strategy 1

Making AFL Stronger - Fit for Growth Strategy  Portfolio Rationalization Completed On Track – Accelerated during  Cost Optimization Covid On Track - Multiple Actions to  Working Capital Optimization Reduce Inventory & Debtors  Debt Reduction - Equity infusion of Rs 660 Crs completed Mar Jun Aug In Rs Crs. in July Debt 1210 1301 1019  Step Change in Digital Capabilities On Track 2

Making AFL Stronger & Fit for Growth - Q1 Highlights 70% / 77% 1 Restarted operations quickly post lockdown as allowed Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 3.5X 2 enabled sales 63% 3 Cost structure brought down significantly to minimize cash loss Rs 130 4 Drop in Gross Working Capital despite lockdown impacting operations Crs. Masks/ 5 Expanded into new product categories in line with current consumer requirements Comfortwear 3

Rs 660 Crs of Equity Infusion Rs 260 1 Flipkart investment in Flying Machine Crs. Rs 400 2 Successful Rights Issue – Oversubscribed 1.4 times Crs. 4

Making AFL Stronger & Fit for Growth - Q1 Highlights 70% / 77% 1 Restarted operations quickly post lockdown as allowed Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 3.5X 2 enabled sales 63% 3 Cost structure brought down significantly to minimize cash loss Rs 130 4 Drop in Gross Working Capital despite lockdown impacting operations Crs. Masks/ 5 Expanded into new product categories in line with current consumer requirements Comfortwear 5

Opening Up With Safety as #1 Priority Masks & sanitizers provided to employees • Safety Measures & Guidelines Periodic sanitization at offices and stores • at Office and Stores • Well laid out SOP & Guidelines Sanitizer disposal stands provided to partners • Supporting our partners • Supporting partners in liquidating unsold stock Smooth WHS operations post unlock with strong safety procedures in place • • Increased E-Commerce fulfilment capabilities by 4x Supply Chain Operations • 93% order fulfilment despite partial lockdown (post unlock till Aug) Initiated warehouse consolidation by exiting six warehouses. Potential • savings 35% of warehouse cost • Click and collect Ship from store • Innovative delivery models • Kerbside delivery & drive thru options Home delivery by store staff • • Marketplaces integration with stores and warehouses • Conversational commerce Digital push Digital store front with hyperlocal fulfilment • 6 • One view of customer

Post Lockdown Store Opening Store Universe # Stores Open 1250 963 963 963 904 895 887 871 865 855 841 816 730 409 347 273 131 96 Wk6 WK7 Wk8 Wk9 Wk10 Wk11 Wk12 Wk13 Wk14 Wk15 Wk16 Wk17 Wk18 Wk19 Wk20 Wk21 Wk22 (4 th – 10 th May) 24 th - 30 th Aug) MAY JUNE JULY AUG 7

Post Lockdown Sales Trend - Overall This year sales as % of last year same month sales Overall 46% 39% 26% 5% 0% Apr May Jun Jul Aug 8

Post Lockdown Sales Trend This year sales as % of last year same month sales Dept. Stores Stores 34% 50% 37% 19% 15% 20% 6% 3% 0% 0% Apr May Jun Jul Aug Apr May Jun Jul Aug Started slow, now picking up 9

Post Lockdown Revenue Trend – Online Channel Growth over last year same Key Drivers month  NNNOW.com Revenue • Search engine optimization led to improved organic traffic growth of 3X leading to 3.5X sales post unlock June’20 0.9X • 15-20% stores sales delivered through sales initiated through NNNOW improving store productivity despite low footfalls  Marketplaces July’20 1.2X • ‘One view of inventory’ through integration of stores and warehouse to online platforms – Myntra, Flipkart, Amazon, Tata Cliq and Ajio Aug’20 1.3X Fulfilment capacity  Scaled up to service 25K B2C orders/day • Setting up of e-commerce only warehouses in Bangalore, • Mumbai and Delhi 10

Channel Focus Online Focus channel for the year – Target double digit growth Malls currently  underperforming  Focus on high street  Improve sales through Exclusive stores Omni & Hyperlocal Brand Stores Small town expansion fulfilment  Parallely work on  additional cost efficiency Department  Leverage strong category play Stores &  Reduce operation cost MBOs 11

Making AFL Stronger & Fit for Growth - Q1 Highlights 70% / 77% 1 Restarted operations quickly post lockdown as allowed Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 3.5X 2 enabled sales 63% 3 Cost structure brought down significantly to minimize cash loss Rs 130 4 Drop in Gross Working Capital despite lockdown impacting operations Crs. Masks/ 5 Expanded into new product categories in line with current consumer requirements Comfortwear 12

Substantial Reduction in Costs Total (Rs Crs.) 392 338 -57% -63% 147 147 Q1’20 Q1’21 Q4’20 Q1’21 Employee Emoluments (Rs Crs.) Other Expenses (Rs Crs.) Rent Savings (Rs Crs.) Total: 70 101 77 291 261 -36% -51% 49 -63% -66% 49 Q1 Q2 Q3 Q4 98 98 41.3 18.0 8.5 2.5 Q1’20 Q1’21 Q4’20 Q1’21 Q1’20 Q1’21 Q4’20 Q1’21 13

Making AFL Stronger & Fit for Growth - Q1 Highlights 70% / 77% 1 Restarted operations quickly post lockdown as allowed Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 3.5X 2 enabled sales 63% 3 Cost structure brought down significantly to minimize cash loss Rs 130 4 Drop in Gross Working Capital despite lockdown impacting operations Crs. Masks/ 5 Expanded into new product categories in line with current consumer requirements Comfortwear 14

Working Capital Reduction of Rs 130 Crs. Inventory(Rs Crs.) Debtors (Rs Crs.) 1,367 781 - 45 -85 1,322 696 Mar-20 Jun-20 Mar-20 Jun-20 15

Making AFL Stronger & Fit for Growth - Q1 Highlights 70% / 77% 1 Restarted operations quickly post lockdown as allowed Store network open by Jun/Aug Early investment in technology paying rich dividends – Exponential growth in digitally 3.5X 2 enabled sales 63% 3 Cost structure brought down significantly to minimize cash loss Rs 130 4 Drop in Gross Working Capital despite lockdown impacting operations Crs. Masks/ 5 Expanded into new product categories in line with current consumer requirements Comfortwear 16

Strong Presence in Categories Recovering Faster Accelerated Casualization & Work from Home Innerwear/ DIY Beauty Kidswear T-Shirts Casual Footwear Comfortwear • Supported with • Strong demand for USPA, GAP, TH – Strong omni-push • • Product categories of • comfort wear launch kids clothing Preferred brands for for stores casual footwear and T-Shirts gaining open footwear being Recovery rate 95% Recovery rate 60% momentum Recovery rate 66% • preferred post Covid • • in Aug benefitting USPA in Aug in Aug Recovery rate 60% footwear which offers • the above range in Aug Recovery rate 100% • in Aug 17

Q1 Performance Highlights Q1 Results Agenda Way Forward Strategy 18

Q1 FY21 - Performance Snapshot IndAS 116 Q1 FY20 Q1 FY21 Growth Revenue from Operations 901 104 (88%) 65 - Other Income (Rent concessions) - Total Income 901 169 (81%) EBITDA (54) - 20 PBT (144) (201) - PAT (197) - (97) 19 All figures in Rs Crs.

Q1 FY21 – Performance Snapshot All Figures in Rs Cr. Q1 FY20 Q1 FY21 Q4 FY20 Revenue from Operations 901 104 710 Other Income (Rent concessions) - 65 Total income 901 169 710 Cost of Goods Sold 489 77 383 Employees' Emoluments 101 49 77 Other Expenses 291 98 261 EBIDTA 20 (54) (10) 20

Groupwise Performance Snapshot Sales (Rs Crs.) EBITDA (Rs Crs.) Q1 FY20 Q1 FY21 Growth Q1 FY20 Q1 FY21 Power 61 (35) 518 53 (90%) Brands Specialty 19 0 274 39 (86%) Retail Emerging 120 12 (90%) 8 (20) Brands Total 912 104 (89%) 88 (54) Total including 901 104 (88%) 20 (54) Discontinued Brands 21

Situation Update Q1 Performance Agenda Way Forward Strategy 22