Apparels & Accessories company Vaibhav Global declares Q4FY22 result: Q4 and FY22 revenue grew by 2.9% and 8.4% YoY respectively. Compared to same periods of FY20, revenue in Q4 and full year grew strongly by 37.6% and 38.6% respectively. Digital revenue mix continuously increasing, now at 37% of total retail revenue Industry leading gross margins at 60.0% and 62.3% for Q4 and FY22 respectively EBITDA margin in Q4 FY22, excluding Germany at 8.9% vs 12.8% in Q4 FY21. Margin momentarily impacted by accelerated investments in digital marketing, marketplaces, and increased airtime on OTA platforms PAT for Q4 and FY22 was Rs. 27 crores and Rs. 237 crores respectively vis-à-vis Rs. 56 crores and Rs. 272 crores for same period last year. Adjusted for loss in Germany, PAT for the quarter and full year would be Rs. 41 crores and Rs. 286 crores respectively. ROCE at 31% and ROE at 23% (on TTM basis), return ratios reflecting short-term impacts of conscious business investments but are still at very healthy levels and at par with normal precovid years Recommended final dividend of Rs 1.50 per share (face value Rs 2 each) making cumulative dividend of Rs. 6.00 per share for FY22 Commenting on the performance for Q4 FY22 Mr. Sunil Agrawal, Managing Director, Vaibhav Global Limited said We delivered revenue of Rs. 685 crores for fourth quarter, up by 2.9% YoY and closed the fiscal year with 8.4% revenue growth, which is in line with the guidance we set out in Q3. The revenue growth is more encouraging when we compare it with Q4 of FY20 and full year FY20 which is 37.6% and 38.6% respectively. We maintained our gross margins at 60.0% in Q4 and 62.3% for FY22, which is at par with FY21. Our industry leading margins are made possible because of high margin product mix, efficient price management, efficient planning, in-house manufacturing and wide sourcing base. FY22 was a year of investments for us wherein we made long-term investments in building our digital competencies, automation, channel upgrade and Geographical expansion. We continued with our planned investments in new OTA homes, elevated digital marketing spends on OTT’s, social media search and third-party marketplaces. We believe these investments to be necessary for future growth. We also invested in our tech infrastructure and upgraded our website in US and mobile & OTT apps in US & UK. In UK, our freeview channel upgradation to #22 from erstwhile channel 50 is yielding improved viewership and increased new customer acquisition. Implementation of robotic automation at our UK and US warehouses have started to yield positive results, with complete benefits accruing in coming quarters. Germany has also been faring well and its performance has been as per our plans. We continue with our guidance to achieve breakeven in Germany by H2 of FY24. During the quarter, Shop LC has finalised architect for its upcoming headquarters in Austin, Texas with expected completion by H2 of FY24. This investment is expected to provide cost optimization, functional integration, and resultant growth opportunities. VGL group has also completed acquisition of Encase Packaging Private Limited, this acquisition will further strengthen our supply chain network providing requisite flexibility and cost advantage. Result PDF
Conference Call with Vaibhav Global Management and Analysts on Q3FY22 Performance and Outlook. Listen to the full earnings transcript.
Retailing company Vaibhav Global declares Q3FY22 result: Creating Growth Opportunities Amidst Temporary Headwinds Declared interim dividend of Rs. 1.50 per share Q3 and 9M revenue grew by 3.5% and 10.3% YoY respectively. Compared to same periods of FY20, revenue in Q3 and 9M grew strongly by 33.2% and 38.9% respectively. Continued surge in in-person shopping induced by revenge outing along with omicron led uncertainties during later part of the quarter resulted in softer revenue growth. Besides these are on a very high growth of last year. Being temporary trends, we are confident of our business drivers with robust growth outlook in the medium to long run Digital revenue mix continuously increasing, now at 36% of total retail revenue Industry leading gross margins at 60.4% and 63.0% for Q3 and 9M respectively EBITDA margin in Q3 FY22, excluding Germany, was at 13.2% vs 17.4% in Q3 FY21. Margin momentarily impacted by elevated sea freight and planned investments on digital platforms PAT for Q3 and 9M was Rs. 69 crores and Rs. 210 crores respectively vis-à-vis Rs. 92 crores and Rs. 216 crores for same period last year ROCE at 38% and ROE at 26% (on TTM basis), return ratios reflecting short-term impacts of conscious business investments but are still at very healthy levels and at par with normal precovid years Declared interim dividend of Rs 1.50 per share (face value Rs 2 each) making cumulative interim dividend of Rs. 4.50 per share for FY22 Commenting on the performance for Q3 FY22 Mr. Sunil Agrawal, Managing Director, Vaibhav Global Limited said Revenue in Q3 grew by 3.5% YoY albeit on a higher base and strongly by 33.2% over Q3FY20. Our 9M revenue grew by 10.3% YoY and by 38.9% over 9MFY20. Post Q1, consumers went for revenge outings and vacations thus impacting demand. This phenomenon continued in Q3 leading to muted revenue growth across digital retail industry. Festive demand was encouraging, however demand tapered in later part of Q3, owing to omicron uncertainties. Gross margins have seen slight contraction mainly due to product mix, elevated shipping costs and demand-supply mismatch at product level owing to longer transit times. During the quarter, investments on new OTA homes, Digital Marketing, Market Places Marketing and OTT marketing continued. These investments are intended to support our growth ambitions for coming years. In USA, our revenue and unique customer counts on OTT have tripled YoY implying a clear opportunity in this market for us. Retail is rapidly moving digital. Hence, we recently finished upgrading our Tech Infrastructure on Salesforce Commerce Cloud. Our recent expansion in high potential German market is faring well and offers tremendous growth prospects on TV, Digital and marketplace platforms. There have been certain earlier than planned airtime tie-ups resulting in higher than planned upfront investments. However, we may now be breakeven by third quarter of FY24 in Germany, which is approx. one year earlier than projected. We believe in seeding investments for long-term growth. Recently, TJC UK announced Freeview Channel change to #22 from erstwhile Freeview Channel #50. The investment is expected to enhance the viewership of TJC’s proprietary TV channel substantially with corresponding increase in its market share, thus providing long-term growth opportunities. Similarly, Shop LC (USA) has decided to move its headquarters to an owned premise whose construction is expected to complete by Sep-2024. This move is expected to bring operational synergies and substantial savings in future. We have also acquired 60% stake in Encase Packaging Pvt Ltd., a packaging company. The acquisition will further consolidate our existing integrated supply chain and give substantial saving in packaging costs. We perceive that these investments might impact return ratios in the short-term, but it provides huge growth opportunities for the future. Result PDF
Conference Call with Vaibhav Global Management and Analysts on Q2FY22 Performance and Outlook. Listen to the full earnings transcript.
Highlights Resilient Performance, Expanding Digitally and Geographically Declared interim dividend of Rs. 1.5 per share Q2 and H1 revenue grew by 6.0% and 14.6% Y-o-Y respectively. Compared to same periods of FY20, revenue in Q2 and H1 grew strongly by 30.9% and 42.3% respectively Digital revenue mix continuously increasing, now at 36% of total retail revenue Strong Q2 gross margin at 63.9%, improvement of 100 bps Y-o-Y EBITDA margin in Q2 FY22, excluding Germany, was at 13.5% vs 16.5% in Q2 FY21. Margin momentarily impacted by elevated sea freight and sustained investment on digital platforms PAT for Q2 and H1 was Rs. 42 crores and Rs. 141 crores respectively vis-à-vis Rs. 71 crores and Rs. 123 crores for same period last year Strong return ratios with ROCE at 51% and ROE at 28% (TTM basis) Declared interim dividend of Rs 1.50 per share (face value Rs 2 each) making cumulative interim dividend of Rs. 3.00 per share Commenting on the performance for Q2 FY22 Mr. Sunil Agrawal, Managing Director, Vaibhav Global Limited said In Q2 we have seen our revenues at Rs. 635 crore an increase of 6% Y-o-Y and over Q2 FY20 we have seen a much stronger growth of 30.9%. With the vaccination in both US and UK reaching pivotal levels, severity of threat from Covid has largely reduced. As US and UK economies have more or less fully opened, we have seen consumer behavior moving to something we call revenge outings implying substantial increased in-person shopping in brick-and-mortar stores and people going out on holidays. This has led to lower in-house shopping for home retailers like us. Retail Revenues for us, grew by 3.3% Y-o-Y. After a massive jump last year, overall E-Commerce as a percentage of retail sales has dipped in both US and UK in recent months. We believe that these headwinds are transient and are well placed to continue our growth trajectory in coming years. We are committed to our original guidance of 16-18% constant currency revenue growth for current financial year. Gross margin continues to be strong, however, EBITDA margin were impacted due to several factors, including higher shipping costs owing to global supply chain constraints, initial operating costs in the recently launched German operations, increased airtime spend as we onboarded new TV channels and OTT platforms and stepped up our digital marketing investments. These investments have already given us 5.3% increased new customers in Q2 compared to pandemic induced high new customer count in Q2 FY21. When we adjust for customers who bought essentials, the increase would be 33.9% and compared to Q2 FY20, the increase would be substantially higher at 61.0%. We see both growth and margin pressures as transient, being linked to either strategic growth initiatives or near-term changes in the operating environment. Our recent launch of operations in Germany has got off to an encouraging start. We are available on bothTV and Digital Platforms in this significant market with a similar value proposition and customer profile as the US & UK. We are already seeing positive customer traction and our investments should create returns on capital over time. We remain confident to meet our target of breaking-even within three years of launch. Company continues with its investment in Products, Channels and enhancing its Digital Capabilities. We strengthened our warehouse operations digitally through investment in GEEK+ robots which would improve the picking productivity substantially. The Company launched ‘TAMSY’- a new fashion apparel brand for women in USA, UK and Germany. During the quarter, we also acquired worldwide online brand rights of ‘RACHEL GALLEY’- a UK based multiple-award winning jewelry brand. The 4R’s- widening Reach, new customer Registrations, customer Retention and Repeat purchases remains to be our key priorities for overall growth. Our vertically integrated model and a wider but robust supply chain network is the backbone of our business and a key differentiator vis-a-via peers. We are also a firm believer of being a ‘Responsible Corporate Citizen’. Well-being of all our employees, vendors and customers is at the core of our strategies. An interim dividend of Rs. 1.50 per share (face value of Rs. 2 per share) has been declared by the Board. The fundamental growth driver remains intact, attractive, and we continue to invest in products & channels to build a sustainable infrastructure for long-term growth & value creation of all stakeholders. Result PDF