Annual Results (FY 2009-10) Conference Call August 31, 2010 1 - PowerPoint PPT Presentation

Annual Results (FY 2009-10) Conference Call August 31, 2010 1

Cautionary Statement & Disclaimer The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of this information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Pantaloon Retail (India) Limited. This presentation may contain 'forward-looking statements' – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as 'expects,’ 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward – looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial markets and change in consumption patterns; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of an environmental, climatic, natural, political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. 2

Key Highlights  Consumption Story Intact  Refreshed optimism that consumer sentiments will remain buoyant  Visible trends on ground  Growth in product categories in modern retail environment  Private Final Consumption Expenditure (PFCE) estimated to reach $1 trillion and ~50% of GDP by 2020  Combination of consumption and investment driven growth will drive growth  Business Performance  Robust consolidated revenue growth of ~29% over past 3 years  Incremental revenue increase over lesser space expansion  SSG trends healthy with home showing revival signs  Essential retail productivity aspects addressed  Refreshed Balance Sheet  Purist retail based; Re-alignment activities addressed  Well capitalized to propel pure retail growth momentum  Working capital efficiencies addressed; 10% improvement in inventory turns  Moving towards longer maturity debt profile; enhanced to 3.9 years in FY10  Lesser gearing  Interest costs reduced by over 7.5% (as a % of sales) on a consolidated basis 3

Store Network And Retail Space Evolution Number of stores and selling space evolution (2010 vs. 2009) PRIL FVRL Selling space – mn. sq. ft. Selling space – mn. sq. ft. 2009-10 2008-09 2009-10 2008-09 1.24 48 132 6.88 Pantaloons Big Bazaar 45 1.18 6.20 116 2.18 25 Central & BF 1.72 17 53 0.47 Food Bazaar* 0.40 43 36 0.48 eZone 34 0.44 123 0.12 KB's FairPrice 0.09 90 0.96 10 Home Town 0.86 8 20 0.18 0.71 144 Others Others 0.10 15 0.70 114 4

Business Performance Footfalls (millions) 1 Retail Space (mn. Sq. ft.) Core Retail 2 PRIL 250 15 220 13.2 185 200 12 163 9.7 7.9 150 9 115 5.1 100 6 50 3 0 0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2007 FY 2008 FY 2009 FY 2010 Retail Sales Split Same Store Sales Growth Home Life Style Value Value Life Style Home 50% 100% 10% 15% 16% 16% 38.0% 30% 80% 21.1% 13.6% 27% 24% 24% 25% 10.3% 7.4% 12.0% 10% 60% 14.9% 9.5% 10.0% 6.0% -10% 40% 63% 60% 61% 59% 20% -30% -30.4% 0% -50% FY 2007 FY 2008 FY 2009 FY 2010 FY 2007 FY 2008 FY 2009 FY 2010 1 Data for PRIL and FVRL only and excludes HSRIL 2 Core Retail indicates summation of PRIL with demerged HSRIL and FVRL 5

Profitability Sales Evolution (Rs. Cr.) Interest Costs As a % Of Sales Core Retail 1 Core Retail 1 PRIL PRIL 6% 12,000 5.0% 8,926 4.4% 10,000 3.7% 4% 8,000 6,342 5,049 6,000 2% 4,000 2,000 0 0% FY 2008 FY 2009 FY 2010 FY 2008 FY 2009 FY 2010 EBITDA Evolution (Rs. Cr.) PAT (Rs. Cr.) and EPS Core Retail 1 Core Retail 1 PRIL PRIL 8.46 1,200 400 9 7.94 905 7.54 8 900 300 230 675 7 600 200 464 141 126 6 300 100 5 0 0 4 FY 2008 FY 2009 FY 2010 FY 2008 FY 2009 FY 2010 1 Core Retail indicates summation of PRIL with demerged HSRIL and FVRL 6

Balance Sheet Efficiencies Debt/Equity Ratio evolution ROCE * Debt Equity Core Retail 1 PRIL 24% 100% 20.6% 80% 40% 20.4% 44% 46% 21% 49% 67% 18.6% 60% 17.7% 18% 40% 60% 56% 54% 15% 51% 20% 33% 0% 12% FY 2007 FY 2008 FY 2009 FY 2010 FY 2008 FY 2009 P + H FVRL Core Retail * Excluding investments FY 2010 Working Capital Efficiency 2 PRIL Incremental Sales vs. incremental Cap. Empld. Incremental Sales: PRIL Core Retail 1 NWC Inventories Sales/NWC 3,000 6 Incremental Cap. Empld.: Core Retail 1 PRIL Incremental Sales/Incremental Cap. Empld. 2,403 2,371 5 2,500 3,000 5 2,232 2,584 1,991 4 2,500 4 2,000 1,788 4.0 4.2 1,430 1,812 3 2,000 3 1,647 1,500 2.7 2 2.5 1,500 1,293 2 1,084 1,000 1 1,000 1 620 1.1 1.2 500 0 500 0 2008 2009 2010 FY 2008 FY 2009 FY 2010 1 Core Retail indicates summation of PRIL with demerged HSRIL and FVRL 2 NWC = Net Working Capital 7

Reorganization And Increased Focus On Core Businesses Core Retail Allied Services Financial Services Value Lifestyle    Retail business is present in 4 Allied businesses in retail services Financial Services businesses are consumption categories in both the are mainly present in supply chain led through specialised subsidiaries and logistics, sourcing, retail media in consumer finance, life and non  Value segment :- Big Bazaar/ and digital commerce life insurance Food Bazaar and KB’s FairPrice  Lifestyle segment. :- Pantaloons/ Central/Home Town/eZone Volume & consumption play Value add businesses Intermediary play 8

Integration Of SCM & Logistics With Retail Operations A Fully Integrated Supply Chain To Create Efficiencies In Retail Operations Purchasing & Integrated DC Warehouse Optimal Efficient Store Sourcing Network Structure Efficiency Transportation Operations Network  Assortment  Optimization of DC  Implementation of  600 vehicles strong  Auto Replenishment rationalisation coverage & planning Warehouse fleet with over 1,000 Systems (ARS) Management System outsourced vehicles implemented  Partnerships with  ~3.5mn sq. ft. of (WMS) by INFOR suppliers warehouse space  GPS/VTS enabled  TP Linux for Front  India’s first Put -to- trucks to be rolled out end POS system  No. of DC’s;  Scale leverage Light (PTL) soon integration Apparel (5), GM  Category implementation using (8), Furniture (20)  Improved vehicle  Fill rates improved management ASAP & Electronics (26) capacity utilisation from ~70% levels to  Rationalisation  Delivering over 90% and plans to  Functionality  All distribution expected in the enhanced increase it further network points live no. of SKU’s in  Hub and Spoke efficiency at on TMS  Merchandising the system operations distribution centers  Category  Improved planning &  Right balance management order taking between operational  Control over efficiencies and movement & storage  Pricing/monitoring logistics costs  Reorder levels  Transaction processing  Inventory management 9

Snapshot Of Subsidiaries And JV’s JV’s & Other Partners Retail Related Financial Services  Online platform retailing Electronics,  Poised to become the single source  Business Segments Apparel and GM categories; plans to provider of all office products including include Sports Goods • Retail of Financial Services Technology, Supplies, Promotional  Will launch new initiatives such as SMS Gifting and Furniture products • Wholesale Credit & Corporate Lending short codes, teleshopping, mobile phone  Operating in two business segments, • Distribution & Transaction Services commerce and virtual shopping through “Retail” and “Delivery” manned kiosks.  Consol revenues of over Rs.250 cr. &  Current split 50:50 between Retail and  Integrated platform of all the businesses PAT of ~Rs59 cr FY10 Delivery, with share of Delivery business and formats, selling multiple products and expected to increase in the future brands.  Rs.143 cr. sales in FY10, est. to grow at  Turnover in excess of Rs.100 cr. FY10 CAGR of over 50% in 3 years  Present in over 9 cities in India  Offers relevant engagement through its  media properties – spaces, print, FY2010 premium earned was Rs 541 crs, registering 255% growth activation,TV etc.   Expects to earn fresh premium of Brand engagements with leading brands Rs 1,200 crs in FY2011 across consumption space   Aims to reach ~200 branches Est .revenues CAGR ~30% from from 91 by 2010-2011 FY10~Rs.36 cr over three years  EBITDA growth of ~170% est in three years from FY10 levels of ~Rs.1 cr 10