Titan Company Limited · NSE:TITAN
Titan — Q2 FY21 Earnings Presentation
52 slides from Titan's earnings presentation, Oct 28, 2020
Slide 1: Exchange filing cover letter
♦ TITAN COMPANY SEC 75 / 2020-21 2gth October 2020 The General Manager, DCS - CRD The General Manager, DCS - CRD BSE Limited National Stock Exchange of India Ltd Corporate Relationship Department Exchange Plaza, 1st Floor, New Trading Ring Bandra-Kurla Complex, Rotunda Building, P J Towers Bandra (E
Slide 2: Earnings Presentation – Q2 FY'21 and H1 FY'21
Titan Company Limited Earnings Presentation – Q2 FY ’21 and H1 FY’21 (For quarter and half year, ended 30th September 2020) 28th October, 2020 1
Slide 3: Disclaimer
Disclaimer This document, which has been prepared by Titan Company Limited (the “Company”/”we”/”our”), are solely for information purpose and do not constitute any offer, invitation, recommendation, invitation to purchase or subscribe for any of the securities, and shall not form the basis of or be
Slide 4: The Journey
The Journey 1984 1992 1998 Conceived 1987 Timex JV 1996 2003 2005 2008 2010 PED * 2007 2009 Accessories 2011 2013 Perfumes 2016 2017 3 * PED was demerged to wholly-owned subsidiary as TEAL
Slide 5: Titan Today
Titan Today ~$2.8 bn ~$15 bn annual revenue market cap 1,832 * ~8 k stores with 2.4mn+ sq.ft. retail space employees on rolls *Note : Store count includes Caratlane stores also. 4
Slide 6: Our Strengths
Our Strengths Design and Development 800+ New time products every year reddot Award to 2 Edge watches Differentiated Jewellery Collections Customized lenses with 3D visual mapping Manufacturing 12 Manufacturing and assembly facilities State of the art Karigar Centres for Jewellery Components exporte
Slide 7: Our Brands
Our Brands Luxury Premium Mid Market Mass Market 6
Slide 8: Jewellery Division
Jewellery Division 7
Slide 9: Jewellery
Jewellery Brands TANISHQ: flagship brand ZOYA: luxury segment play MIA: Tanishq sub-brand for fashionable fine jewellery CARATLANE: a Tanishq partnership, omni-channel Manufacturing Studded jewellery manufactures mostly in-house Plain gold jewellery mostly outsourced 3 manufacturing facilities 4 sta
Slide 10: Jewellery manufacturing facilities
Jewellery Karigar Center, Hosur • Pantnagar • Sikkim Manufacturing Facilities/ Karigar Centers • Hosur 9
Slide 11: Jewellery - Stores
Jewellery - Stores 10
Slide 12: Tanishq Ekatvam collection
Lak & I TANISHG .§ Ekatvam The beauty of oneness
Slide 13: Watches & Wearables Division
Watches & Wearables Division 12
Slide 14: Watches & Wearables - Overview
Watches & Wearables - Overview Brands 6 major in-house brands & 7 international brands Manufacturing 5, state of the art, watch and component manufacturing/assembly plants Points of Sale EBO: World of Titan, Fastrack Stores OWN MBO: Helios MBO: present across 7k+ dealers/ MBOs LFS: Large format depa
Slide 15: Watches & Wearables - Manufacturing
Watches & Wearables - Manufacturing Watch factory, Hosur Pantnagar factory Roorkee Pantnagar • Sikkim Manufacturing/ Assembly • Hosur facilities • Coimbatore 14 Watch Assembly, Hosur
Slide 16: Watches & Wearables - Stores
Watches & Wearables - Stores ‘World of Titan’ Store 15
Slide 17: Titan Connected X and Titan Pay
WD TITAN CONNECTED Pr» SYNC WITH STYLE Introducing Connected X, a full-touch smartwatch by Titan Introducing W TITAN pay INDIA‘S FIRST PAYMENT WATCH POWERED BY YONO SBI
Slide 18: Eyewear Division
Eyewear Division 17
Slide 19: Eye Wear
Eye Wear Brands TITAN EYE PLUS: Retail brand TITAN: main in-house frames and lenses brand FASTRACK and GLARES: in-house sunglasses brand LICENSED BRANDS: for frames and lenses Manufacturing Integrated lens and Frame manufacturing facility in Chikkaballapur Points of Sale TITAN EYE PLUS: India’s larg
Slide 20: Eye Wear in-house brands and manufacturing
Eye Wear In-house brands Frames Sunglasses Lens Manufacturing Integrated Eyewear facility - Chikkaballapur Lens Labs 19
Slide 21: Titan Eye+ campaign
DON'T LET YOUR MASK Best quality —) spectacles @ Ls aT} Bes) | PROGRESSIVES 7 Designs | 9 Technologies Fn Yuri | VE FIT FRAMES “we ULTRAVIOLET-C STERILIZATION ~_ * Made Forni Faces» Avalabln YS-S-VHL ies aS we S> ass “Raga 55 > TITAN EYePIUS
Slide 22: Fragrances, Accessories & Indian Dress Wear (Taneira)
Fragrances, Accessories & Indian Dress Wear (Taneira) 21
Slide 23: Fragrances
Fragrances Brands SKINN by Titan Fine French perfumes at very attractive price points Manufacturing Crafted in France by celebrated perfumers, and distilled from the finest ingredients Manufactured in India Points of Sale Sold through World of Titan Channel, key departmental store chains and Ecommer
Slide 24: Taneira
Taneira • This youngest brand of Titan Company Ltd was launched as pilot in Feb 2017 with 2 stores in Bangalore. • Anchored in special occasion wear Sarees from across India. • Evolved as a natural extension of Titan’s proposition – self expression and design. • Large, unorganized, deeply Indian 5,0
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Slide 26: Taneira Tasvi collection
TITAN TANEIRA ATTATA PRODUCT Presents TASVL Weaves of grace capturing the oy beauty of the fal Pee “Ry divine. 71
Slide 27: Q2'21 Performance
Q2’21 Performance 26
Slide 28: Q2 Performance – Standalone
Q2 Performance – Standalone Company • The Company’s return to normalcy on the business front has been progressing well with month-on-month improvement in the sales across all the divisions, with Jewellery division reaching close to the full recovery. The company witnessed a recovery of 89% over same
Slide 29: Q2 Performance – Standalone
Q2 Performance – Standalone Company • Working capital management has been the priority of the Company since the inception of War on Waste program. Despite the higher requirement of inventory in the festival season and recent increase in Gold prices, the Jewellery division has maintained the inventor
Slide 30: Q2 Performance – Standalone: Jewellery
Q2 Performance – Standalone Jewellery • The division had a strong recovery rate of 98% (excluding sale of raw gold) in Q2, compared to the revenue of same quarter in last year. The base quarter was however subdued on weak consumer sentiments due to high gold prices. • The walk-ins have been improvin
Slide 31: Q2 Performance – Standalone: Watches & Wearables
Q2 Performance – Standalone Watches & Wearables • The division had a recovery rate of 55% in Q2, compared to the revenue of same quarter in last year. The recovery was much higher at ~70% in the month of September. • E-commerce is leading the recovery with absolute growth but the trade channel conti
Slide 32: Q2 Performance – Other businesses
Q2 Performance – Standalone Other business - Fragrances, Indian dress wear and Accessories • 'Taneira’ launched its first store in Chennai during the quarter gone by, taking the total store count for the business to thirteen covering six cities. Further, all existing stores of 'Taneira' re-opened po
Slide 33: Q2 Performance – Subsidiaries
Q2 Performance – Subsidiaries Titan Engineering and Automation Ltd (TEAL) - 100% owned Subsidiary • TEAL recorded a revenue decline of ~14% in Q2’21 but the company continued to be profitable and also grew over the previous year. • Automation business segment continued to do well in Q2 as it has cus
Slide 34: Retail Network
Retail Network Net Additions (in H1’21) As on 30th Sep’20 Stores Sq. Ft. Stores Towns Sq. Ft. Tanishq 14 60K 341 210 1.29mn Zoya 0 0 4 3 18K CaratLane 6 5K 97 36 83K Mia 0 0 38 19 13K WOT 7 2K 506 222 410K Fastrack (3) (2K) 180 89 89K Helios 4 3K 96 42 80K Titan Eye+ (27) (15K) 557 223 371K Taneira
Slide 35: Retail Growth – Q2'21 and H1'21
Retail Growth – Q2‘21 and H1’21 Q2’21 H1’21 Sales value growth Like-to-Like growth Sales value growth Like-to-Like growth Tanishq (4%) (9%) (39%) (42%) CaratLane 1% (27%) (41%) (60%) World of Titan (50%) (49%) (66%) (65%) Fastrack (50%) (47%) (67%) (65%) Helios (34%) (30%) (52%) (48%) LFS (for Watch
Slide 36: P&L – Q2'21 & H1'21 - Standalone
P&L – Q2’21 & H1’21 - Standalone in INR Crores Q2 '20 Q2 '21 YoY H1 '20 H1 '21 YoY Revenue from Operations - Sale of products/ services 4,371 3,892 -11% 9,256 5,143 -44% - Other operating revenue 64 426 118 1,037 Other Income 31 71 87 110 Total Income 4,466 4,389 -2% 9,461 6,290 -34% COGS 3,138 2,98
Slide 37: Total Income – Q2'21 & H1'21
Total Income – Q2’21 & H1’21 Total Income (1) Q2 '20 Q2 '21 YoY H1 '20 H1 '21 YoY Mix - H1'21 (in INR Crores) Jewellery 3,528 3,446 -2% 7,575 4,627 -39% 87% Watches 719 400 -44% 1,433 475 -67% 9% Eyewear 154 94 -39% 303 124 -59% 2% Others / Corporate (2) 65 59 -10% 150 72 -52% 1% Standalone (w/o bul
Slide 38: EBIT – Q2'21 & H1'21
EBIT – Q2’21 & H1’21 EBIT (in INR Crores) Q2 '20 Q2 '21 H1 '20 H1 '21 Jewellery 384 285 826 231 Watches 113 (4) 241 (168) Eyewear 2 9 (10) (22) Others/ Corporate (1) (29) (8) (34) (48) Standalone 470 282 1,023 (7) Caratlane (4) 1 (10) (13) TEAL 16 18 31 25 Others/ Consol. Adj. (2) (13) (34) (21) (47
Slide 39: Capital Employed - Standalone
Capital Employed - Standalone in INR Crores Segment Assets Segment Liabilities Capital Employed 31-Mar-20 30-Sep-20 31-Mar-20 30-Sep-20 31-Mar-20 30-Sep-20 Watches 2,143 2,048 775 635 1,368 1,413 Jewellery 8,225 8,068 4,449 5,366 3,775 2,702 Eyewear 495 457 234 197 261 260 Others 217 221 91 93 126 1
Slide 40: Balance Sheet - Standalone
Balance Sheet - Standalone in INR Crores 31-Mar-20 30-Sep-20 Change Fixed Assets 1,129 1,091 (38) Right of use asset 870 870 (0) Intangible Assets 68 63 (5) Investments 909 881 (28) Other non-current assets 677 737 60 Inventories 7,741 7,562 (179) Trade Receivables 214 271 56 Cash and Cash Equivalen
Slide 41: Performance Trends
Performance Trends 40
Slide 42: Quarterly Performance Trends
Quarterly Performance Trends Company: Revenue 7,000 60% 6,000 40% 5,000 20% 0% Rs Crores 4,000 -20% 3,000 -40% 2,000 -60% 1,000 -80% - -100% 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 Net sales 4,027 3,488 4,225 3,917 4,319 4,407 5,672 4,672 4,9
Slide 43: Quarterly Performance Trends
Quarterly Performance Trends Jewellery: Total Income 6,000 80.0% 5,000 60.0% 40.0% 4,000 20.0% Rs Crores 3,000 0.0% 2,000 -20.0% -40.0% 1,000 -60.0% - -80.0% 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 Net sales 3,381 2,788 3,576 3,292 3,572 3,58
Slide 44: Quarterly Performance Trends
Quarterly Performance Trends Watches & Wearables : Total Income 800 40.0% 700 20.0% 600 0.0% 500 Rs Crores -20.0% 400 -40.0% 300 200 -60.0% 100 -80.0% - -100.0% 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 Net sales 517 576 539 494 594 676 641 531
Slide 45: Quarterly Performance Trends
Quarterly Performance Trends Watches & Wearables : Volume growth 40% 20% 0% Growth (%) -20% -40% -60% -80% -100% 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 2QFY21 Volume Growth 5% 9% 11% -1% 10% 21% 16% 0% 13% -1% -10% -5% -93% -48% Jewellery: Gold pri
Slide 46: Annual Performance Trends - Standalone
Annual Performance Trends - Standalone 5-Yr CAGR: Company: Revenue 10.9% 25,000 20,010 20,000 19,070 15,656 15,000 (Rs Crores) 12,999 11,105 10,000 5,000 0 FY'16 FY'17 FY'18 FY'19 FY'20 5-Yr CAGR: 5-Yr CAGR: 12.2% Watches: Total Income 6.4% Jewellery: Total Income 3,000 18,000 16,738 2,615 16,030 2,
Slide 47: Annual Performance Trends - Standalone
Annual Performance Trends - Standalone 5-Yr CAGR: 5-Yr CAGR: 13.0% Company: PBT Company: PAT 14.8% 2,500 1,600 1,518 2,105 1,374 1,997 1,400 2,000 1,662 1,163 1,200 1,500 (Rs Crores) 1,000 (Rs Crores) 1,130 762 800 698 1,000 888 600 500 400 200 0 0 FY'16 FY'17 FY'18 FY'19 FY'20 FY'16 FY'17 FY'18 FY'
Slide 48: Annual Performance Trends – Standalone
Annual Performance Trends – Standalone Capital Employed 8,000 6,825 7,000 6,182 6,000 5,194 5,000 4,312 (Rs Crores) 4,000 3,551 3,000 2,000 1,000 0 FY'16 FY'17 FY'18 FY'19 FY'20 ROCE ROE 40% 30% 35.1% 35.2% 35% 32.4% 24.5% 24.2% 25% 23.3% 29.2% 21.1% 30% 25.8% 19.4% 20% 25% 20% 15% 15% 10% 10% 5% 5%
Slide 49: Dividend
Dividend 500 35% 450 30% 400 350 25% 300 20% (Rs Crores) 250 15% 200 150 10% 100 5% 50 0 0% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Dividend 111 155 186 186 204 195 231 333 444 355 Payout% 26% 26% 26% 25% 25% 28% 30% 29% 32% 23% Note : Above dividend payout ratio is excluding the Dividend
Slide 50: Market Capitalisation
Market Capitalisation 10 year CAGR: 28% 120,000 106,654 101,372 100,000 83,656 82,893 80,000 (Rs Crores) 60,000 41,082 40,000 34,801 30,078 22,772 23,300 20,295 20,000 16,916 8,172 0 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 30th Sep'20 49 Note: Based on NSE closing prices at
Slide 51: Sustainability @ Titan Q2'21
Sustainability @ Titan Q2’21 CSR focus at Titan will continue be driven by broad themes such as upliftment of the underprivileged girl child, Skill development for the under privileged and support for Indian Arts, Crafts and Heritage. We will also support local causes that are supportive of our neig
Slide 52: Thank You
Thank You For any queries, please email to investor-relations@titan.co.in