NYKAA — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Questions and answers

Falguni Nayar

Thank you very much, Garima.

It's a true pleasure to be here today and speak to everybody on the call about Nykaa's fourth quarter results.

Also it's the end of the financial year and hence also the full year results for financial year 2024.

So, I think I'll start with the first page on the performance highlights.

So, the Q4 performance summary for the Consolidated business shows that our GMV has grown at 32% year on year growth and is currently at Rs 3,217 crores for the quarter.

That's fantastic growth, considering how the market has been in the fourth quarter.

So really, at Nykaa we are very happy about the growth that we've seen in the GMV for the entire business.

Revenue from operation is also grown pretty solid, and it's grown at 28% on a year-on-year basis, and for the quarter it has come out at Rs 1,668 crores.

This has resulted in a healthy growth of gross profit to Rs 710 crores for the quarter and the margins have come out at 42.6%.

What is very interesting is also below that line, EBITDA at Rs 93.3 crores for the quarter is a 32% year on year growth and the margins are at 5.6% and on an adjusted EBITDA basis, what we'd like to highlight is that adjusted EBITDA has come out to Rs 112.2 crores.

That's almost 56% year on year growth with the adjusted EBITDA margins at 6.7%.

I will explain little bit about what we mean by adjusted EBITDA.

The difference between Transcript FSN E-commerce Ventures Limited (Nykaa) Q4FY24 & FY24

System · Call Header

Earnings Conference Call done which again you will see in the next slide where we can see that overall Capex is significantly lower in FY24 versus what we have seen in FY23. Also, what we can see on this slide is that while the investment in office space and warehouses, etc. has come down significantly, we continue to invest in our retail expansion.

Also, we continue to invest in tech capabilities.

To sum up the financials, we have a summary of the balance sheet and cash flow.

You would see that the cash flows; Operating cash has improved significantly in the current year versus the previous year, and that's also resulting in an uptake and improvement in many of the balance sheet ratios.

Whether it is fixed assets turnover ratio, whether it's working capital turnover ratio with improvement in inventory days and resulting in overall working capital days improving, as also ROCE going up on one Nykaa consolidated basis driven by the fact that the beauty business continues to perform strongly, and continues to grow on a large base, while the newer businesses have also been scaling up smartly, while also improving on contribution profit.

Here I would like to just give an update in continuation of what we shared in the previous quarter.

We had shared about the transition of the owned brand business of Nykd and Atleisure from fashion onto the parent company, which is FSN e- commerce after successful completion of this phase the board has approved the next phase, which is transfer of the Western wear and accessories business of fashion, by way of slump sale to Nykaa fashion.

What this does is that it integrates the ownership of all owned brands, eventually into the parent company.

In terms of process, this would be similar to the first phase by way of a slump sale.

Also, as part of the overall streamlining activity, LBB, which is a content development company within the Nykaa fold is also being merged into Nykaa fashion so as to be able to draw synergies, whether it's on technology infrastructure as well as collaboration with brand partners.

Thank you.

With that, back to you, Garima.

Garima Mishra

Thank you, Ganesh.

We will now begin the question-and-answer session.

If you would like to ask the question, please raise your hand.

Before asking the question, please introduce yourself, providing your name and your organization name.

If possible, please switch on your video as well.

Please limit yourself to a maximum of 2 questions, so we can accommodate as many questions as possible.

We will wait for a moment while the question queue assembles.

Alright, we'll take our first question from the line of Kapil Singh.

Please introduce yourself and ask your question.

Kapil Singh

Hi!

Good evening.

I hope you can hear me.

Hi!

This is Kapil from Nomura.

Thanks for giving me the opportunity.

My first question is on the margins, you know, we talked about adjusted EBITDA margins.

If you could just help us understand whether these items that we are talking about; the ESOP expenses, and GCC business or other ex-corporate restructuring expenses, Are these non- recurring in nature and should we expect, they will not be there from next year, and also, how much is the revenue contribution from GCC right now?

Transcript FSN E-commerce Ventures Limited (Nykaa) Q4FY24 & FY24