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Vaibhav Global Ltd
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Ladies and gentlemen, good day, and welcome to the Vaibhav Global Limited's Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Mit Shah of CDR India. Thank you, and over to you, Mr. Shah.
Thank you. Good evening, everyone, and thank you for joining us on Vaibhav Global's Q1 FY '23 earnings call. Today we have with us Mr. Sunil Agrawal, Managing Director; Mr. Vineet Ganeriwala, Group CFO; and Mr. Prashant Saraswat, Head Investor Relations.
We will begin the call with a brief opening remarks by Mr. Sunil Agrawal on the business operations, key initiatives and a broad outlook. Followed by a discussion on the financial performance by Mr. Vineet Ganeriwala. Post which, the management will open the forum for a Q&A session.
Before we get started, I'd like to point out that certain statements made or discussed on today's call may be forward-looking in nature and must be viewed in conjunction with the risks and uncertainties we face. A detailed statement and explanation of these risks is included in the earnings presentation, which has been shared with you all earlier. The company does not undertake to update these forward-looking statements publicly.
I would like to invite Mr. Sunil Agrawal to make his opening remarks. Thank you, and over to you, sir.
Thank you, Mit. I welcome you all to Vaibhav Global's Q1 FY '23 earnings call. I hope all of you would have reviewed the results. Our presentation provides further details both on the business and on the environment we are operating in.
The quarter gone by reflects effects of 2 macro environments. First, the opening up of economies after 2 years of travel restrictions, we led people to go out for revenge outings. Impacting all digital dealers like VGL. Secondly, the high inflation in Western economies constrained consumer to spend on discretion items. Recent quarterly performance was softer over an otherwise elevated base of 2 years with revenue reaching at least INR 628 crores, this was 8% down Y-o-Y. However, this performance is encouraging versus a pre-COVID period of Q1 FY '20 with a growth of 47%.
Amidst all broader challenges, we see a visible improvement during last 3 months, with revenue trends improving month-over-month. We brief that this transitory phase will be behind us soon, and we will get back to our revenue and profitability growth again. It is worthy to note that despite this transient phase, the gross margin improved sequentially and was 62%, owing to our vertically integrated supply chain and better product mix.
EBITDA margin for the quarter was 7%. Excluding Germany, it is 9.1% Y-o-Y -- 9.1%. Y-o-Y comparison shows decline in EBITDA margin now due to operating deleverage. Continuing with our strategy of enhancing our digital capabilities, we continued investments on new OTA homes, digital marketing spend on OTT, social media and third-party marketplaces. Digital is the future with high growth potential, hence, we will continue to concentrate on the segment and build our strength there for some time to come.
This quarter, we have achieved the milestone of completing 25 years of public listing. We take this opportunity to thank our shareholders who share this great journey with us. All these years, our deep discounts and value positioning worked well in various kinds of economic cycles and delivered consistent results to our shareholders. During the quarter, VGL's German subsidiary, Shop LC GmbH expanded its presence by launching its proprietary TV channel on national OTA platform, Freenet TV. With this arrangement, Shop LC GmbH also marked its foray into OTA, the over-the-air platforms and increased its coverage by approximately 2.5 million households, thus providing further scope of scalability.
At Shop TJC Limited, were free channel upgradation has started yielding positive outcome in terms of new TV customer acquisition. In February '22, new TV customer acquisition rate was negative 17%, which today is positive 24%. We expect that the current trend will continue to benefit TJC with market-leading growth in the long run. Our vertically integrated supply chain network spanning 30 countries is the backbone of our business and a key differentiator. It is helping us with increased product availability, while many other retailers battle with supply chain constraints.
The low-cost manufacturing with value sourcing enables to serve value conscious customers in our addressable markets in U.S., U.K. and Germany, thus achieving industry-leading gross margins. Further, our 4Rs framework, widening reach, new customer registration, customer retention and repeat purchases remains to be our key levers for growth. The reach of our TV networks by end of Q1 FY '23 was approximately 127 million TV homes, which is 24% higher Y-o-Y. We reach TV homes through cable, satellite, telco networks and over-the-air antenna also called OTA platforms.
Our products are also available on digital channels, including proprietary website, smartphone apps, OTT platforms and marketplaces. Our sustained investments on OTAs and digital channels is yielding rare results in terms of increase in customer acquisition and sustained retention rates. Our unique customer base is at 0.5 million new registrations on TTM basis are at 3.2 lakhs. Similarly, new customer acquisition on TTM basis stands at 2.6 lakhs, which is higher by 12% Y-o-Y and significantly higher by 27% over Q1 FY '21.
On a sustainability aspect, we are pleased to announce the publication of our first integrated annual report and annual ESG report for VGL Group for the financial year '21-'22. We hold value creation and sustainability as complementary goals. These reports reflect our continued efforts towards value creation along with greater transparency, strong governance, and ethical business practices.
Further, we are glad to announce that 2 of our office buildings in U.S. has received LEED's Gold certification. This certification reaffirms our focus on efficient operations and recognizes our efforts towards sustainability. Another important aspect of sustainability effort is our mid-day meal program, Your Purchase Feeds. Recently, we crossed a milestone of 67 million meals with a run rate of 59,000 meals donated every single school day.
Towards the completion, the broader economic environment is a bit uncertain. Our outlook for the year and midterm remains intact. We expect to deliver mid single-digit growth in this fiscal year and mid-teens revenue growth next year and thereafter. We closely monitor our liquidity position and deploy funds accordingly, while maintaining overall profitability. The Board of Director of your company have declared an interim dividend of INR 1.5 share for the quarter, implying a firm belief in our business model and a strong performance going forward.
With this, I now hand over the call to Vineet to discuss financial performance. Over to you, Vineet.
Thank you, Sunil, and good evening, everyone. A warm welcome to Vaibhav Global's earnings conference call. While Sunil gave you some details on overall performance and business status, I will now take you through our financial performance for the quarter ended 30 June 2022 in detail.
Last few months have seen some level of uncertainty around inflation and resulting subdued of consumer behavior. Quarterly revenue of INR 628 crores is on the backdrop of the macroeconomic channel. It is also pertinent to note that Q1 of the last 2 fiscal years grew exceptionally higher going to COVID-supported tailwind. While the current quarter, Q1 growth looks subdued because of higher base, our 3 years compounded annual growth rate stands at 13%, with a robust growth of 43% over Q1 of FY '20.
The e-comm industry in U.S. and U.K., after a tailwind during COVID have been witnessing some headwinds with economy fully opening up and lower demand due to inflation-related queries. The sales mix of e-comm markets in U.S. and U.K. have fallen by 4.1% and 0.3%, respectively, versus December 2021 levels, as suggested by the macro data. Consequently, in local currency, Shop LC U.S. and Shop TJC U.K. had a softer revenue performance, but we are rapidly adjusting our offerings to changing consumer demand and the same is reflected in improving revenue numbers month-on-month.
We are pleased to report that the preview channel upgradation in Shop TJC to slot #22 from 50 has started yielding positive outcomes. Today, the rate of new customer -- new TV customers stands at 24%, which is a delta of 41% over February 2022. We perceive that this investment will further enhance the viewership of TJC, as we mentioned earlier, and thereby offering a huge future growth potential. Our TV revenue stands at INR 386 crores and digital revenue at INR 222 crores. The numbers are down by 9.6% and 9.2% year-on-year respectively. However, when compared against pre-COVID period of quarter one of FY '20, the growth is encouraging at 40.7% and 59.8%, respectively, in both the segments.
Our focused approach on expanding OTA households continued during the quarter. Sales mix between TV and digital is 64% and 36%, respectively. Additionally, our investments on expanding omnichannel distribution have resulted in 58% of new customer acquisition happening on digital platforms during the quarter. This omnichannel distribution model promotes and encourages customer to transact on both TV and digital platforms, which gives them a unique shopping experience and a cross-selling potential for us.
Omnichannel customers tends to be sticky, and have a significantly higher lifetime value than customers who buy only on TV or only on digital. We also provide hassle free shopping experience with our budget pay service, allowing customers to make purchases on EMI basis. Since its launch in FY '16, the service has been gaining good traction, and presently, it is contributing around 39% of the total retail sales.
Over the last many years, share of non-jewelry has increased multifold, indicating our ability to take higher wallet share out of the same household. Jewelry accounts for 72% of the total retail sales, while the rest 28% is comprised by lifestyle products, which includes apparels, home decor items, beauty and accessories. Our EBITDA margins dropped from 14.4% to 7% during the quarter Q1 FY '23. A large part of this is attributable to our investment into new Germany unit and our conscious investment on digital and broadcasting network, all of which are strong future revenue growth pillars.
We believe current EBITDA margins because of this investments are not true reflection of our business model, and we are confident of reverting back to our real level of mid-teens range in the medium-term, led by continued customer growth, improved productivity and cost optimizations. Profit after tax for the quarter is INR 20 crores as against INR 66 crores of last year adjusted for exceptional items. Operating cash flows and free cash flows were at INR 32 crores and INR 18 crores, respectively, reflecting impact of lower profitability. However, the cash generation has improved sequentially due to efficient capital allocation and focus on costs.
On a TTM basis, ROE and ROCE were at 14% and 22%, respectively. These return ratios, while continuing to be strong, suggests effect of conscious investments on affiliates, digital marketing and German operations. The Board of Directors of your company have declared an interim dividend of INR 1.50 per share for the quarter. Towards the end, we would like to reiterate that we have immense opportunity ahead, and we continue to invest to create long-term value while navigating through a volatile short-term market environment. For fiscal 2023, we reiterate our previously provided guidance of mid single-digit revenue growth, while maintaining mid-teens revenue growth in the long run and our guidance of operating leverage in the current year. Thank you.
[Operator Instructions] The first question is from the line of Abhilash Sharan, an individual investor.
Yes, sir. Sir, can you explain the investments that we are making in the OTA platform? You had alluded in the past that these OTA investments are much higher than the normal OTT platform. So what is the reason for that? And how are we looking at those investments?
OTA is over-the-air antenna platforms. While cable, there is a cord-cutting mechanism, OTA is increasing year-over-year by 6% to 7%. So that is expanding in U.S. In U.K., it is already quite large in the usual terms. But in the U.S., it is expanding. And that is where we are accelerating our investments for future growth potential, because that is growing year-over-year. And wherever we are getting opportunity, we are investing in that. But household revenue from those OTAs are higher than cable, because there are limited number of channels people see via antenna compared to cable. Cable have about 1,000 channels, whereas antenna has anywhere between 25 to 100 channels only. And it is broadcasted free of cost to consumers.
And sir, what will be the exact difference between the full power OTA and the low power OTA? You said that full power OTA are kind of much more expensive than the low power.
Yes, that is correct. Good observation. So low power OTA, we are already in about 16 million homes in U.S. out of about 22 million. Full power, we are just about 4 million homes out of 22 million. So full power is usually has a much higher signal and which is a broader area of the antenna tower. And whereas low power registered limited number of homes. And full power is usually also accelerated with national broadcasters like ABC and basically, CNN, whereas there is a large audience tied into those ABC, CBS and CNN.
And when we go to the digital channel that's called sub-digital 0.2 to 0.9. The audience that registered on the main channel for ABC CBS, those are flow over comprised channels as well. So full power has more value, it's more expensive also, but higher revenue per household as well.
Okay. Is it correct to then say that the full power OTA average household's income will be higher than the low power OTA households?
That is correct. Yes.
Could you give some broad numbers like what would be the average household incomes for full power OTA and the low power versus the normal cable, some just broad numbers?
Yes, I don't have it offhand with me. But the multiple between low power and high power is anywhere from 4x to 8x.
Okay. 4x to 8x on the household income front.
No. The revenue from full power OTA is about 5x to 8x of the low power OTA per home basis.
Okay. Sir, and you were also...
Sorry to interrupt you Mr. Abhilash, may I request you to please rejoin the queue. We have participants waiting for their turn.
Sure.
The next question is from the line of Sachin Kasera from Svan Invest.
My question was on the margin side, given the breakup of the impact on margins are very steady. So if you can first tell us about gross margins...
Sachin, you are not clear.
Is it better now sir?
Yes. We can try again.
Yes. I'm saying, this margin impact because of 2 or 3 various impacts you have given in the presentation. So if you could just tell us this gross margin 300 basis point impact, you can tell us a little bit more in detail. And when do you see this impact of gross margin going away?
So the gross margins, we have always guided for like 60% plus gross margins, and in this quarter, while year-on-year, the gross margins are lower from 65% of last year to 62%, but it remains well above our guardrails of 60% and have also sequentially improved. So while it's a challenging macroeconomic environment, but we are happy that we are able to maintain our guardrail of 60% plus gross margins even in this challenging quarter. Coming to EBITDA margins, I don't know whether your question was specifically directed towards gross...
So I had 2, 3 points on this EBITDA margin. One was on the gross margin. Second was on the investments in OTA in Germany that you mentioned. So when do now guide for Germany to breakeven and drag on Germany to go away? And the second was on the increase in the sense OTA and digital marketing initiatives. Is it like going to be continuous software, or is it also a onetime initiative? And over the next few quarters, the impact of the German margins will go away?
Sure. So Germany, we have already guided breakeven in H2 of FY '24, which is next year H2. So we are in line with that. We'll reiterate that guidance of breaking even in H2 of next year. So till that time, the losses will be there in Germany unit, as of now, it is impacting 2.2% on the EBITDA margin. Sequentially, it is lower from the March quarter. But yes, it will breakeven in H2 and we are like absolutely in line with that guidance.
On your point of accelerated investments in digital and broadcasting. So we're not shy away from investing in further OTA opportunities if we get that for future. So what one needs to understand is that it takes time to build up revenue from a new household, while the cost may hit from day one, the customer and their revenue buildup happens after a lag, but then it gives subsequent like a very high revenue as well as leverage opportunity for future.
So getting such opportunities in OTA households is not very easy and it comes from time to time. As of now, the visibility which we have, in overall rupee terms, it may not increase by more than, say, it will be very close to lower double-digit increase in the contingent broadcasting expenditure for the year versus last year. But if we get more opportunities in OTA, we'll not shy away, as it is a very strong growth pillar for our future business.
So instead of all these initiatives, sir, how confident are we to go back to the mid-teens EBITDA margin over the medium-term that we had before these various sectors of investments and some impact of inflation impacted our margins?
So we reiterated our guidance of reverting back to mid-teens level in the medium-term. So this year, there are a lot of macro challenges and our investments into these Germany unit as well as broadcasting coming up. But next year, when it starts to unlock, again, unlocking in H2 of next year and all these investments into broadcasting giving commensurate revenue in the next year, we guess, we will recoup a large part of this lost EBITDA margin within next year itself. So we have reiterated our confidence on reaching to mid-teens level in the medium-term going forward.
[Operator Instructions] The next question is from the line of Nilesh Shah from Envision Capital.
Yes. Vineet, just a bit more clarity on the margin side. You said this year, we've guided for a single-digit -- mid single-digit kind of revenue growth.
Sorry to interrupt Mr. Shah, may I request you to speak little louder?
Yes, sure. Vineet, we've kind of reiterated our guidance of this year revenue growth in mid-single-digit and the EBITDA margin to also…
Mr. Nilesh...
Nilesh, we can't hear you. Are you there?
Can you hear me now?
It is really low, sir.
Is it still low?
Now you can go ahead.
Yes. Sorry for that. Vineet, just a clarification in terms of the margin for this year. So we're guiding for a single-digit revenue growth and the EBITDA margin to be a function of the operating leverage. So does that mean that if our revenues grow at, say, 5% this year, we expect our EBITDA absolute number to also grow at 5%. Is that what we should really understand?
So, we have not given a number to our EBITDA margin guidance for the year. But what we've mentioned is, with a mid single-digit revenue growth, we will have operating leverage coming in. So profit will grow at 5% or greater than 5%. This is for the current year. And for the next year, what we have mentioned is reverting back to our mid-teens kind of a revenue growth in the medium and the long-term. And similarly, for mid-teens EBITDA margins in the medium and long-term.
Yes, surely. So if I just do the math, Vineet, it means that for the rest of the 3 quarters of this year, our EBITDA margin will have to be 11.2%, which is higher than what we have achieved even in FY '22. So I just thought, is that what we should understand? Because that's what the math suggests.
Yes. So I don't have the exact number of the last 3 quarters of FY '22, Nilesh. But yes, in the current quarter 3 years, what we have also mentioned is, sequentially, we will see improvement in EBITDA margins going forward. So the first quarter has a revenue de-growth over the last year for all the reasons explained about cost optimization initiatives, which we have started since last 3 months have started kicking in and giving benefits, as I explained in my commentary as well. So these 2 things -- now the revenue -- coming back to positive growth in the coming quarters and the cost initiatives giving full benefits, the EBITDA margins in the next 3 quarters will match the revenue growth for the full year.
And Nilesh, not to mention, Q3 is our peak season time, wherein we see a good amount of operating leverage flowing in, and we get a good benefit in the Q3 as well. So it will not be like a flat 11% in all the 3 quarters going forward, but it will see sequential improvement from here.
Okay. Just a follow-on question, our realizations on the web side have increased quite significantly. I'm not too sure, one of our realizations have increased quite significantly. What explains that spike in the realizations?
You are talking about the average selling price. Nilesh, is that the question?
Yes. That's right.
Okay. So average selling price, Nilesh, is a function of what the customers are pulling at that point of time. So like in the last year, there were a lot of essentials which were being sold and hence, the prices were low, volumes were significantly up. So this year, what we're seeing is the impact of all these economic uncertainties, people are resorting to gold as a like medium of investment as well. So we are seeing a huge spike in gold chains like unprecedented like, what we would have sold earlier. So which is why the volumes may be low, but the prices are higher.
So what I mean to say is the price and the volume are the function of what the customers are pulling at a particular point of time, we being vertically integrated supply chain are rightly poised to take advantage of any rapidly changing consumer scenario which comes our way. So I would urge not to look at price and volume quarter-by-quarter rather look at it in the long-term, because short-term, it may vary with respect to changing consumer needs.
The next question is from the line of Latika Jetha from Concept Investwell.
So I have a question. You have mentioned that we are gaining market share. So I just wanted to check how do we calculate this, whether we are gaining market share or losing market share? Any particular source or mechanism to notice?
Yes, I can take that Sunil. So the way we calculate market share for us is we look at similar players. So for example, say, there is Qurate in QVC in U.S. and Evine in U.S. and similar, they are multiple such operators in U.K. So we look at similar home shopping networks who sell-through TV and online as a medium of sales just like us. And we take only those companies in comparison, those numbers are publicly available for everyone to see. So when we compare ourselves from QVC say, for example, QVC, Qurate and Evine in U.S., we find that while our revenue growth might be a little muted in the last few quarters, but that is significantly above the competitors like we mentioned it, and we continue to grow market share quarter-by-quarter, year-after-year since last many years now.
Just to give a broad number, so Qurate, while we would have grown by very low single-digit in Q4, their Q1 numbers are yet to come. Qurate has degrown by double-digit in the last quarter Q4.
Okay. So the market share gain, which you have mentioned is not related to the Q1 quarter, it is for the past 6 months, right?
So we continue to gain market share quarter-by-quarter and year-by-year. The Q1 numbers are yet to come out. They will be coming out later this week and early next week. But looking at the trends of last many quarters now, what we mean to say that we have been continuously gaining market share. Consistently.
[Operator Instructions] The next question is from the line of Sameer Dalal from Natverlal & Sons Stockbrokers.
I just want to just refer to say, actually your presentation, Page 20, where you all are showing the recent trend improving month-over-month. So this 9.9% decline, 8.5% and 5.2%, that is sequentially slowing down growth or this is over the last year the same month? I'm not understood that chart. So if you could explain that.
Yes, it is over the same month of last year.
So even though we're seeing a slowdown in -- I mean, yes, even though you say that [Technical Difficulty] and they are low. So if I were to look at it actually month-on-month, say, can you kind of quantify what has taken the movement of sales over this period?
So this is a sales movement, month-over-month, same year, for example, April is 9.9% lower than April of last year.
So April to May to June how has the sales been? It's not month-on-month, but -- I mean, not over the previous year over the current year.
So you are saying, month of previous year. So April '22 over April '21, May '22 over May '21 and June '22 over June '21.
Understood that. What I'm saying is, can you give us some indication on how the sales have been April '22 to May '22 -- month-on-month, June '22, how they're moving sequentially?
I see. Yes. Let me see the data. There's a lot of seasonality month-over-month or the clearance mechanism that we run. So that may not give you best picture because same -- May be the last year or year before as well. So I would encourage you -- I can -- we can give you the data, but I'm crazy to look at year-over-year for the same period rather than month-over-month sequentially.
Okay. That's fine. Now my second question has to do with the fact that we have seen [Technical Difficulty]
Sameer, you are breaking up. Can you repeat the question?
Hello.
You are coming in and out. So if you can probably be just little closer to the mouthpiece and let me -- and try again.
Sure. Is it clear now?
Mr. Sameer, this is the operator. There is a lot of disturbance in your line. May I request to please rejoin the queue, sir?
Can I just try once again to ask this question before I -- because I think -- if you can give me...
Okay, please go ahead.
If it's clearer now.
Go ahead, Sameer.
So what we have seen is a big jump in the TV sales average selling price. And what you rightfully said is last year, there were a lot of your essential goods because of which the average selling price was lower. But what we are also seeing over last year, the gross margins have come down. So would it be fair to assume that those -- the gross margins for the essentials was higher than that of what we are selling normally?
Yes. So last year, essential also gave higher margin and the customer pool was there, so we could get our overall higher margin on our product. Customers at-home relatively home last 2 years actually, and we could gain that leverage to get margin. This year, the costs are slightly elevated due to shipping costs and all that. And the customer or eyeballs are lesser on TV as well as on the properties. So the leverage that you have to gain extra margin is also less. So there are 2 reasons for that.
No. So you're saying -- no, my question is, that if we remove the essentials, now that essentials may not sell to the same quantum what they did in the past, can we assume that the gross margins would be more around the range of 62 levels for the entire year going forward? Or do you think you can scale back up towards the 65%? That's the question I'm trying to address.
Yes. So we don't give the specific margin guidance, Sameer. We give the guidance, but we'll keep it at minimum 60%. Above that, we look at the opportunities and then take benefit of that. So from quarter-to-quarter, we don't give -- year-to-year we don't give gross margin specific guidance. But what I can say is, we'll be above 60%, and we'll have leverage of profitability over last year, this financial year we'll have leverage over last year.
Okay. And now one last question. If you look at your depreciation, that has seen quite a big jump actually. This has to do with some amount of the amortization also of the TV channels, I mean the upgrade of the TV channels or that has still not come into the whole -- over the 10 year period that you're going to amortize the cost?
Yes. It's already part of that.
It's already. So this would be the probably stable rate going forward right, now?
That is correct. So we moderated our CapEx for the time being. Only CapEx then will come from Q4 is our new headquarter construction that will start in Q4 this year. So that will come in, but that will last for about 2 years, it won't start to kick in. The amortization will start to kick in after it becomes operational in FY '24 -- FY '25, actually.
The next question is from the line of Sachin Kasera from Svan Invest.
Yes. Sir, in the presentation, you have mentioned 3 initiatives on the cost cutting and cost savings, which should yield between $5 million to $7 million yearly sales. So one, any benefit we have seen in the current quarter? And secondly, will we see the full benefit in financial year '23 or part benefit of this in '23 and part benefit in '24?
Yes, I can take that, Sunil. So some benefits have started coming in Q1, definitely. And the amount which we have given out there is for this financial year. So FY '23, the full benefit is in the range of that $6 million to $7 million, which we have guided out there. So all the 3 initiatives, so the call center, arbitrage, shipping and warehousing and the contract renewables have started kicking in from Q1 itself, but they will keep picking speed in the coming quarters and full year benefit of about $6 million to $7 million as stated there.
So that itself should add another around 150 basis points reported EBITDA margin, just to the match, isn't it?
Yes. So like we mentioned, so the mid single-digit revenue growth, along with this cost initiatives will more than offset the investments which we need to continue to do in Germany and in the broadcasting network. And we would see positive leverage this year as well. So this mid single-digit revenue growth and the cost exercise is what the guidance is based out of.
Sir, just one more question more from a medium to long-term, say, 3 to 5 years perspective. So you don't have periods of -- equity periods have very strong growth and then you need to hedge some investments for digital as well as getting into these geographies. So how should we model from a 5 year perspective? Is it that a mid-teen and -- mid-teen growth and mid-teen margin sustainable? Or is it that to sustain mid-teens growth, while we've periodically seen mid-teen margin, but the average for say, 3, 5 year period may be a little lower, maybe like low single-digits -- low double-digit, something like that. If you could comment on that. And are we looking at any more geographies to enter once the Germany stabilizes after other 6 to 8 program?
Yes. So for your 5 year plan, I think as we have demonstrated over our 25 year listed, we've -- we're over the period shown about 18% growth. So going forward, we are giving a guidance of mid-teens growth with leverage. Leverage will continue to decline as a percentage, but we are hoping to see the leverage as well. So if we go into next country that will have a larger base of 3 countries becoming profitable. And then absorbing of the initial losses of 3 years into a new country will be spread over the lower number.
And then our digital investment that we are making, multi-investments OTT. So they'll also start to kick in. So we feel fairly confident of mid-teens revenue growth with leverage coming in from next year onwards or foreseeable future.
If I see your numbers for the last at least 10, 12 years, which I have right now access to. From the period 2010 to 2018, '19, our margins -- EBITDA margin range used to be between 5% and 6% on the lower side to 10% to 11%. And this time despite the investment that we are doing, at least in the last 3, 4 years, the range looks more to be like between 10%, 11% on the low side at 14%, 15% on the higher side. Is that structurally the way company has now evolved? We will every 5 years keep moving to a little higher band in terms of -- so within a 5 year period, we'll see volatility in terms of margins, but that band will keep moving higher every 5 years because of the way the business is evolving that of 9%.
Yes. So I can't comment to those 5% for every 5 years. But we expect because of business model, as we leverage our sales up on the same asset base or get more wallet share of the customers, we will get the leverage. Now if some volatility comes like we are seeing now, we saw in '08-'09, so that is kind of unforeseen, but we believe in the long-term growth of the business, we designed the model in such a way that it will continue to see leverage for quite some time. At what time -- at what point of time it will plateau out at the growth -- top growth level. I cannot foresee at this time. But for the foreseeable future, we expect the leverage to continue to kick in.
And sir, are you looking at any major geographies once German stabilizes to enter directly 3 to 5 years?
Yes. So we have researched and our plan is to go into Japan, but not till the time, Germany is fully stable and very profitable. We won't go in while this business is still developing.
[Operator Instructions] The next question is from the line of Abhilash Sharan, an individual investor.
Yes. Sir, can you provide the cost for acquiring household for low OTA -- OTT -- low OTA, high power OTA in a normal cable?
Yes. So we don't publish those numbers, because we have a confidentiality agreement with those providers. But we can -- as I mentioned earlier, the low provider -- low power versus full power has 5x to 8x multiple on the revenue side. And from cost side, it is somewhere between 5x to 10x, sometimes 12x of those low power as well. We can't give specific numbers, because of the NDAs that we have signed.
Okay. So sir, can you explain the tenures of these agreements that you signed, like how long are these agreements? And what are the cost escalations broadly for the OTA and OTT agreements?
So OTT is different. So let me go with -- that's a good question. For OTA, the -- since the households are increasing in that space, the last 5 year growth rate has been almost 7%. So the cost escalation there is -- some of the agreements that we have done for 3 years have about 4% cost escalation built in. And some agreements are just for one year, and there is no cost escalation, because they are not longer-term. And some agreements are one year, but aggregates clause with 3 months' notice period. So there is no such cost escalation with them. But there is a leverage for us, if their households continue to increase by 6%, 7% and the cost increase is 4%, then there is continued leverage for us.
Okay. And sir, is there any clause which represents that if we achieve certain revenues from these existing households, then we have to also share any -- some kind of a revenue share or a royalty with these OTA providers? Or is it only specific to just a fixed cost kind of for household costs?
Yes. It's a fixed cost in OTA. And I forgot to add to your earlier question of OTT. So OTT, there are multiple different kinds of OTT, one is the smart televisions that is linear like AT&T now, Roku TV or YouTube TV. So those are linear TV where you broadcast through the online. And the third is the apps. Do we have apps on Fire TV or on Apple TV or on Roku and Samsung or Hisense. So those apps you advertise and people download the app. So there's no fixed cost with those apps. There is no fixed cost on the smart TV, but there is a fixed cost on streaming -- linear streaming on OTT. And there is no escalation built in with those folks yet.
Okay, sir. And sir, what -- can you share the percentage of multichannel customers in our FY '22 and quarter one FY '23?
Yes. So it's about 10% to 12% of our total customer base is omnichannel.
Right. So sir, like they have kind of bought from us during this quarter as well, right? Like this is -- these 10% to 12% customers have contributed to the revenue, right?
Yes. So we calculate all on trailing 12 months basis. The customers who bought in trailing 12 months also bought in previous trailing 12 months.
Right. And sir, you had mentioned in the past that the LTV of a multichannel customer is a very -- is kind of very high than our normal customer. So is it -- so what are the reasons for that, sir?
What are the what?
Sir, you had mentioned that the LTV of a multichannel customer is higher than the normal customer. So then what are the reasons for the LTV to be higher for a multichannel -- is it related to the disposable incomes being higher?
No. The reason is that the TV is push medium. The customer sits back and we suggest the product that they should own or they will look good and they will enjoy it for a long time to come. And that is pull medium. So what we discovered, if the customer buys from both medium, pull and push, their engagement is substantially higher than just the push or the pull. Just to give you an example, the -- just a TV customer, a customer who just buys from TV in U.S., latter there is about $340. The customer who only buys from one sliver of our -- the property called FPC, that's just a catalog, there's only $57.
But the customer who buys from FPC as well as TV, their lifetime value is about $2,700. This is trailing 12 months on just U.S. alone. Now customers who buys on web TV, within web, as well as FPC. So there's a live TV on web and the catalog, their lifetime value is about $1,000. So a customer who buys from only web TV is $70. So web TV and FPC, the $70 and $57. And if you can get the customer to buy from both they jump to $1,000, because it is push and pull. So we do not fully know why this behavior jumped so much. So we think the customer becomes more sticky and more engaged with us as they engage with us in push and pull.
And sir, what measures do we take to ensure that we convert this either a TV standalone or a web standalone customer to a multichannel customer? What are the measures that Vaibhav Global puts in place? So that the customer becomes a multichannel?
So we incentivize them. We promote on television. We promote our web properties and on web, we promote revision. Also we just recently starting to promote our incentivized customers from buying on port. There is just still a plan in place that will kick in, in a few weeks -- 2 or 3 weeks, and that plan would encourage customers to buy on both properties on the same day, and then we'll incentivize them with certain discounts. But that is not fully catered. We're seeing the lifetime value such as robust lifetime value. We are doing a lot of different initiatives to migrate them in different ways.
And sir, one last question. Sir, how much time does it take for a customer -- for a new customer to become the first customer who buys on the platform to reach the repeat purchases of whatever 25, 27 levels that we have, what is the time period through which he travels to become a repeat customer at that level?
Some customer buys the first day in multiple pieces, some customer takes 6 months. So there is no formula for that.
[Operator Instructions] As there are no further questions, I now hand the conference over to the management for closing comments.
So I want to thank all the participants for your time and great questions. And I also ask -- also thank you for your support in VGL past years. If you have any further questions, please free to reach Prashant Saraswat at VGL or Mit Shah at CDR India. And we'll be happy to answer your questions. Thank you once again.
Thank you. On behalf of Vaibhav Global Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.