Aditya Birla Fashion and Retail Limited (ABFRL) reports results for the quarter ended 31 December 2015

12 February 2016

Aditya Birla Fashion and Retail Limited (“ABFRL”) is India’s largest pure-play fashion company. ABFRL has been formed by the consolidation of the branded apparel businesses of Aditya Birla Group comprising Aditya Birla Nuvo Limited's (“ABNL”) Madura Fashion Division and ABNL's subsidiaries Pantaloons Fashion &Retail (“PFRL”) and Madura Garments Lifestyle Retail Company through a Scheme of Arrangement.

The Scheme of Arrangement has been sanctioned by the Gujarat High Court at Ahmedabad and the Bombay High Court and the consolidation has become effective from 9 January 2016. Post the consolidation, PFRL was r;enamed ABFRL w.e.f. 12 January 2016 and new shares were issued pursuant to the de-merger. These were listed and traded with effect from 4 February 2016.

(Rs. crore)
Quarter 3				YTD Dec 2015
	2014-15 (Previous Year) Reported	2014-15 (Previous Year) Proforma2	2015-16 (Current Year)	Results	2014-15 (Previous Year) Reported	2014-15 (Previous Year) Proforma2	2015-16 (Current Year)
21%	450	1,349	1,627	Revenue	1,390	4,047	4,618	14%
	31	133	107	EBITDA	58	383	350
	-	-	5	Merger related adjustments 1	-	-	37
	31	133	102	EBITDA (Reported)	58	383	313
9%	(43)	11	12	Net Profit before merger related adjustments1	(164)	31	43	39%
	(43)	11	7	Net Profit (Reported)	(164)	31	6
Notes: (1) Adjustments include merger related cost of Rs. 5 crore and a sum of Rs. 32 crore towards elimination of profits on unsold inventory between the two divisions as on 1 April 2015 (2) Pursuant to the Scheme of Arrangement referred to above, PFRL was r;enamed ABFRL on 12 January 2016. Previous year reported figures represent figures for PFRL and are not comparable with current year. To make performance comparable, Proforma financials for the previous year comprising MF&;L and Pantaloons financial performance have been presented.

The Board of Directors of ABFRL at their meeting today has approved the third quarter results of the company, which are indeed robust. ABFRL has reported an impressive growth of 21 per cent in its revenue for the third quarter ended 31 December 2015, in an extremely competitive environment which witnessed a steep increase in discounting and promotion across channels. The company increased its advertising spends by 58 per cent during the quarter, in line with its strategy to further strengthen its brands. Increased promotional and advertising spends have resulted in an EBITDA of Rs.107 crore for the quarter, which is 19.5 per cent lower than the previous year.

Madura Fashion &Lifestyle
MF&;L recorded a 16 per cent revenue growth in Q3 across all channels, with same-store-growth of 5 per cent in its exclusive brand outlets. The division increased its advertising spends by ~64 per cent during the quarter (on YOY basis). Incremental provision for bonus (with retrospective impact for FY14-15) further impacted the profitability for the period resulting in an EBITDA of Rs.66 crore, which is 36 per cent lower than previous year.

Pantaloons
Pantaloons experienced one of its best quarters with revenue growth of 32 per cent and same-store-growth of 19 per cent across its network. This was aided by the spill-over of festive season from Q2 and early onset of End-Of-Season-Sale (EOSS) in Q3. The Division also opened 15 new stores in this quarter including its first ever franchisee store. EBITDA for the quarter grew by 17 per cent to Rs.36 crore despite the incremental impact of provision for bonus (with retrospective impact for FY14-15).

Going forward
The company will continue to leverage its market leadership through continued investments in brands, expansion of its distribution reach across multiple formats and channels and product enrichment through design and innovation. The company has also initiated a wide scale digital transformation through a comprehensive omni-channel program to c;reate a seamless consumer experience across its physical and digital presence in-line with the evolving consumer who is increasingly buying online.

Disclaimer : Certain statements in this “Press Release” may not be based on historical information or facts and may be “forward looking statements” within the meaning of applicable securities laws and regulations, including, but not limited to, those relating to general business plans &strategy of the company, its future outlook and growth prospects, future developments in its businesses, its competitive and regulatory environment and management's current views and assumptions which may not remain constant due to risks and uncertainties. Actual results could differ materially from those expressed or implied. The company assumes no responsibility to publicly amend, modify or revise any statement, on the basis of any subsequent development, information or events, or otherwise. This “Press Release” does not constitute a prospectus, offering circular or offering memorandum or an offer to acquire any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of the company’s shares. The financial figures in this “Press Release” have been rounded off to the nearest Rs. one crore. The financial results are consolidated financials unless otherwise specified.