Shoppers Stop Ltd — Investor Presentation 2020

Jan 31, 2020

SEC/98/2019-20

January 31, 2020

BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Fort, Bandra-Kurla Complex, Bandra (East), Mumbai 400 001. Mumbai 400 051. Stock Code : 532638 Stock Symbol : SHOPERSTOP

Dear Sir / Madam,

Sub: Investors’ presentation – Q3FY2019-20

Pursuant to the provisions of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with applicable Schedule thereto, please find enclosed herewith the investors’ presentation issued by the Company for Q3FY2019-20.

The same is also being made available on the website of the Company.

Kindly take the same on records.

Thank you.

Yours truly, For Shoppers Stop Limited           Bharat Sanghavi Company Secretary & Compliance Officer

Encl: A/a

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Quarterly Performance : Q3 FY20

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Company at a glance

1[st]

Department Store in India

~ 7.5K Employees

274 stores

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500+ Fashion and Beauty Brands

110M Customer visits

~ 14.3K Brand Associates

~4.5M retail space

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Growth Acceleration: 5 stores launched on a Single Day on 19[th] Dec

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Crowne Mall, Lucknow

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Utkal Bhubaneshwar
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Elpro, Pune
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Vegas Mall, Delhi & Utkal Bhubaneshwar

• During the year Opened 8 department stores and 20 beauty doors

• During the quarter added 6 department stores and 9 beauty doors

• Positive EBITDA from the first operating quarter

• Continue to accelerate our store openings. We expect to open 4 department stores, 11 beauty doors and 8 airport stores in Q4 FY20

• CAPEX is through our internal accruals

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Our Customer

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Our Core customer is a young family where the woman is the primary influence. These upwardly mobile, middle to high income family shops across our stores for the widest selection of brands.

We have a fast growing base of young consumers of 18-25 years of age. These customers are shopping for with us as premium products they build their future dreams and careers.

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First Citizen Program

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Strategic Pillars

Private Brands

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Personal Shopper Program

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Beauty

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First Citizen Loyalty Program

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6.8 M 84%

C O N T R I B U T I O N TO C O M PA N Y S A L E S

F I R S T C I T I Z E N LO YA LT Y P R O G R A M M E M B E R S

• Key Growth Engine for the Business

• Celebrating 25 years of our loyalty : First Citizen Program

• New enrollment in Q3: +0.3M, +32% YoY, exhibiting strong affinity towards our brand

• Revenue contribution: 84%, +5% YoY

• Repeat purchases: 69% +2% YoY

• First Citizen Black Card continues to gain momentum across all stores

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Personal Shopper Program

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• Exclusive Trial Rooms and Billings

• Personal Shopper @ Home

14%+ 2.8X C O N T R I BT U O N TO AV E R A G E T I C K E T S A L E S S I Z E + 5 % Yo Y

Providing a delightful shopping experience with our Personal Shopper Service.

Consistent Customer Satisfaction (CSAT) score average ~ +93%

CSAT score

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94%
93.7%
93.4%
93.0%
93% 92.5%
92%
91%
Apr May Jun Jul Aug Sep Oct Nov Dec
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• Invest 10,000+ hours every year in training

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PRIVATE BRANDS

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12%

CO NTRIBUTION TO TOTAL S ALES

• Continued dominance in Beauty segment across all channels.

• 9 New Stores in Q3: 3 Standalone & 6 Shop-in-Shop

• Launched 4 New Brands

BEAUTY 150+ 17%+

C O N T R I B U T I O N T O T OTA L S A L E S

B E A U T Y B R A N D S

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Digital Footprint : Omni Channel – Symbiotic Relationship of Clicks & Bricks

+18 M +25,000 VISITS PIN CODE COVERAGE

1.5% +8.4 M CONTRIBUTUON MOBILE APP TO SALES DOWNLOAD

• 1.2M App downloads in Q3

• Endless Aisle rolled out across all Shoppers Stop stores

• Card less First Citizen Program

• Buy Online and Collect from the Store (51 stores)

• 8 stores are live through EDI (Amazon)

New Department Store Additions Q3 FY20

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TAPASYA,GURUGRAM

65,987 SQ FT.

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LUCKNOW 36,375 SQ. FT.

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PUNE 35,000 SQ. FT.

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SEAWOODS, NERUL 19,394 SQ FT.

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BHUBHANESHWAR 37,500 SQ FT.

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MANISQUARE, KOLKATTA 18 36,763 SQ FT.

New MAC Store Additions Q3 FY20

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MANISQUARE SEAWOODS 36,763 SQ FT. 19,394 SQ FT.300+ BRANDS300+ BRANDS VEGAS MALL, DELHI 20

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MANISQUARE
SEAWOODS
19,394 SQ FT.
300+ BRANDS
LULUMALL, KOCHI
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BHUBHANESHWAR 22

Marketing Campaigns

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Technology

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Technology Investment to improve Customer Experience and underpin growth with agility

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• SAP ERP expected to go live on Q1 FY21

• New Loyalty First Citizen Program Technology Upgrade (Gravity by Juggernaut): Replacement of home-grown solution with advanced features in analytics and customer offerings

• SAP Hybris Upgrade implemented in Q3 on Shoppers Stop website and mobile APP

• POS upgrade : X Store by Oracle implemented to improve customer billing experience

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Financial Overview

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Operational Indicators – Q3-2019-20

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Conversion % ASP ( In Rs. )
0.4%
2.3%
23.3% 23.4%
1,175
1,155
Q3 18 Q3 19
Q3 18 Q3 19
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As we are in the process of transitioning from manual to automatic recording of Customer Entry the no’s are not comparable.

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Transaction Size ( In Rs.)
7.0%
3,686
3,445
Q3 18 Q3 19
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FINANCIAL OVERVIEW : SHOPPERS STOP LIMITED : Q3FY20

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-
Non GAAP Financials GAAP Financials
Q3-20 Q3-19 Gr% Q3-20 Q3-19 Gr%
Revenue 1,299.5 1,260.0 3.1% 994.1 999.1 -0.5%
Other Income 18.3 17.4 5.3% 6.6 2.9 131.5%
-
Total Revenue 1,317.8 1,277.4 3.2% 1,000.7 1,002.0 0.1%
Margin 431.2 417.3 3.3% 423.6 411.5 3.0%
Margin% 33.2% 33.1% 10 bps 42.6% 41.2% 140 bps
-
Operating Exp. 347.2 334.2 3.9% 226.2 314.3 28.0%
EBIDTA 102.2 100.5 1.7% 204.1 100.0 104.0%
EBIDTA % 7.9% 8.0% (10 bps) 20.5% 10.0% 1050 bps
Depreciation 30.0 27.8 93.4 27.8
Finance Cost 0.8 4.2 47.8 3.0
PBT A 71.5 68.5 4.4% B 62.9 69.2 -9.1%
PBT% 5.5% 5.4% 10 bps 6.3% 6.9% (60 bps)
FRL MTM & OCI 18.6 -17.3 207.6% 19.2 -17.3 210.7%
PBT(Aft. MTM & OCI) 52.8 85.8 -38.4% 43.7 86.5 -49.5%
Tax 22.1 24.6 68.0 24.6
PAT 30.7 61.2 -49.8% -24.3 61.9 -139.2%
-
PAT% 2.4% 4.9% (250bps) 2.4% 6.2% (860 bps)
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MARGIN

Adjustment in netprofit.	GAAP changes
PBT (as per Non–GAAP )-A	71.5
Lease Rent ( AS 116)	-95.6
Finance costs (AS 116)	46.6
Depreciation on ROU Assets (AS 116)	48.2
Acc. Depn owing to Lease period (AS 109)	11.2
Remeasurement of leaseslife	-1.5
Depreciation on ROU assets net of Interest	-0.4
PBT ( as per GAAP)-B	62.9

Tax provisions include: Current Tax Deferred Tax DT impact post corporate tax rate reduction of AS 116 reorganisation

Rs.22.1 Crs Rs.45.9 Crs.

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FINANCIAL OVERVIEW : SHOPPERS STOP LIMITED : YTD Dec FY20

Revenue Other Income Total Revenue Margin Margin% OperatingExp. EBIDTA	YTD Dec-20 YTD Dec-19 Gr% 3,469.3 3,383.8 2.5% 48.3 46.0 4.9% 3,517.6 3,429.8 2.6% 1,149.5 1,120.0 2.6% 33.1% 33.1% 998.1 965.7 3.4% 199.6 200.4 -0.4% Non -GAAP Financials	YTD Dec-20 YTD Dec-19 Gr% 3,469.3 3,383.8 2.5% 48.3 46.0 4.9% 3,517.6 3,429.8 2.6% 1,149.5 1,120.0 2.6% 33.1% 33.1% 998.1 965.7 3.4% 199.6 200.4 -0.4% Non -GAAP Financials	YTD Dec-20 YTD Dec-19 Gr% 3,469.3 3,383.8 2.5% 48.3 46.0 4.9% 3,517.6 3,429.8 2.6% 1,149.5 1,120.0 2.6% 33.1% 33.1% 998.1 965.7 3.4% 199.6 200.4 -0.4% Non -GAAP Financials		GAAP Financials	GAAP Financials	GAAP Financials
					YTD Dec-20	YTD Dec-19	Gr%
					2,671.8 27.1	2,690.2 12.6	-0.7% 115.9%
					2,698.9	2,702.8	-0.1%
					1,129.7 42.3% 656.9 500.0 18.7% 269.6 143.6	1,105.4 41.1% 911.1 206.8 7.7% 89.5 10.0	2.2% 120 bps -27.9% 141.8% 1100 bps		Adjustment in netprofit.	GAAP changes
									PBT (as per Non–GAAP )-A	106.0
									Lease Rent (AS 116)	-275.1
									Finance costs (AS 116)	138.4
									Depreciation ( AS 116)	136.3
EBIDTA % Depreciation Finance Cost	5.8% 89.7 4.0	5.9% 89.5 4.3	(10 bps)
									Acc Depn owing to Lease period (AS 109)	33.3
									Re measurement of leases life	-14.2
									Depreciation on ROU assets net of Interest	0.4
PBT PBT% FRL MTM & OCI PBT(Aft. MTM & OCI) Tax PAT	A 106.0 3.1% 53.0 53.0 30.2 22.8 A	106.5 3.1% 24.5 82.0 39.3 42.7	-0.5% 115.8% -35.4% -46.7%		B 86.8 B	107.3	-19.1%
									PBT (as per GAAP-B	86.8
					3.2% 54.6 32.2 94.6	4.0% 24.5 82.7 39.3	(80 bps) 122.3% -61.0%
					-62.3	43.4	-243.4%
PAT%	0.7%	1.3%	(60 bps)		-2.3%	1.6%	(390 bps)

Tax provisions include: Current Tax Deferred Tax DT impact post corporate tax rate reduction of AS 116 reorganisation

Rs.30.2 Crs Rs.64.4 Crs.

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FINANCIAL OVERVIEW : BALANCE SHEET

Particulars	Dec,19	Mar,19	Crossword Book Store Limited : Rs 54 Crs Future Retail Limited : Rs 161 Crs
Networth Loan Fund	993 11	978 40
Total Liabilities	1,004	1,018
Fixed Assets (WDV) Lease Deposit Investments in CBL & FRL Investment in Mutual Fund Inventory ROR Inventory Debtors , loans and Advances	681 205 215* 170 445 776 333	630 183 267 42 367 686 274
Total Current Assets	1,588	1,353
Trade Creditors ROR Creditors Other liabilities and provisions	595 776 253	388 686 194
Total Current Liability	1,856	1,458
Net Current Assets	-267	-104
Total Assets	1,004	1,018

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FINANCIAL OVERVIEW : CASH FLOW

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Particulars Dec-19 Dec-18
Cash Profit from Operations (after tax) 172 162
Increase in Creditors for Goods 207 925
Increase in Other Creditors and Liabilities 83 21
Increase in Inventories (78) (833)
Increase in Loans & Advances & Sundr Debtors 59 22
y ( )
Cash generated from Operations 325 297 + Rs 27.3 Crs
324.8 229.7
- -
Investments during the quarter Dec-19 Dec-18
Fixed Assets(including CWIP) & Deposits (172) (80)
Reduction in Creditors for Ca ex 18 12
p ( )
Net Cash inflow 171 205
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Investments in new stores are funded through internal accruals

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FINANCIAL OVERVIEW : KEY FINANCIAL RATIO

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Profitability and Efficieny Ratios
Year To March Q3-20 FY19 FY18 FY17 FY16
Inventory Days 153 142 120 116 138
Debtors Days 4 4 4 3 2
Creditors Days 62 44 50 45 51
Cash Conversion Ratio 91 98 70 71 87
Current Ratio 1 1 1 1 1
Gross Debt/Equity 0.0 0.0 0.1 0.8 0.8
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Valuation Parameters
Year To March FY19 FY18 FY17 FY16
Adj. Diluted EPS 9.0 1.4 -2.4 3.0
Y-o-Y Growth (%) 563.0% 156.5% -179.1% -38.2%
Adjusted Cash EPS 24.3 15.5 11.5 14.6
Diluted P / E (x) 52.7 390.1 365.0 120.3
P / B (x) 4.2 4.7 4.0 3.9
EV / Sales (x) 0.9 1.1 0.8 0.8
EV / EBIDTA (x) 16 20 15 14
Dividend Yield (%) 0.16 0.14 0.21 0.21
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Operating Ratios
Year To March Q3-20 FY19 FY18 FY17 FY16
Total Asset Turnover Ratio 4.6 4.3 3.5 3.0 2.8
Fixed Asset Turnover Ratio 7.1 6.8 6.3 6.2 5.9
Equity Turnover Ratio 4.7 4.6 4.9 5.3 4.9
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• Sustained improvement in efficiency ratios in last 2 years

• Company remains debt free

• Optimal utilization of assets, resulting to improved turnover ratio

Inventory Days for Q3-20 has been annualized. Marginal increase in days due to new stores. .*Q3-20 : Annualized

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Environment and Social Initiatives

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Initiatives taken during the year

• All plastic bags were replaced with paper bags across all the stores. This will reduce plastic consumption by 40 tons

• In NCR Region, transport to stores from Distribution Centre is through by CNG vehicles to reduce pollution

• Variable Frequency Distribution (VFD) were installed at 35 stores to reduce power consumption by 5,62,310 Kw/h ( carbon emission equivalent to 450 tons)

• LED installed at 82 stores leading to energy savings of Rs.0.4 Crs. Reduced carbon emission equivalent to 4500 tons

• Rain water harvesting at Hyderabad to save 60,000 litres p.a. and reduce carbon emission by ~52 tons

• Recycled more than 1 million cartons at DC’s

• Clothes recycling with NGO Goonj - 12.5 tons of cloths collected, recycled and distributed since the inception of program(1[st] April 2019)

• Reused and Recycled fitting and fixtures of closed stores for renovation/new stores

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DISCLAIMER

Certain statements in this release concerning our future growth prospects are forward-looking statements within the meaning of applicable securities laws and regulations, and which involve number of risks and uncertainties, beyond the control of the Company, that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition including those factors which may affect our cost advantage, wage increases, our ability to attract and retain highly skilled professionals, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Shopper’s Stop Ltd. may, from time to time, make additional written and oral forward looking statements, including our reports to shareholders. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company. The Company also expects the media to have access to all or parts of this release and the management's commentaries and opinions thereon, based on which the media may wish to comment and/or report on the same. Such comments and/or reporting maybe made only after taking due clearance and approval from the Company’s authorized personnel. The Company does not take any responsibility for any interpretations/ views/commentaries/reports which may be published or expressed by any media agency, without the prior authorization of the Company’s authorized personnel.

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In case of any clarifications please contact on investor@shoppersstop.com

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