Titan Company Limited · NSE:TITAN
Titan — Q4 FY2019 Earnings Presentation
59 slides from Titan's earnings presentation, May 8, 2019
Slide 1: Fourth Quarter and Annual earnings presentation filing letter
TITAN COMP/\NY SEC 08 I 2019-20 8th May 2019 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 (East),
Slide 2: Earnings Presentation – Q4 FY'19 and FY'19
Titan Company Limited Delivering value by creating brands Earnings Presentation – Q4 FY ’19 and FY’19 (For quarter and 12 months ended 31tstMarch, 2019) 08th May, 2019 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
Slide 5: Titan Today
Titan Today 5th ~$15 bn largest watch market cap maker globally ~$2.8 bn 4 annual revenue times in Forbes Asia Fab Fifty ~1,600 ~8 k stores with 2mn+ sq.ft. retail space employees on rolls 11k+ mutli-brand outlets 4 that sells our watches Note: Above figures are on consolidated basis as on 31st Mar’
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: Our Retail Network
Our Retail Network Luxury (3) Premium (287) (76) (4) (486) Mid Market (537) (172) (50) (55) ~1,600 Exclusive Stores 281 Towns ~2.05 mn sq. ft. of retail space Note: 1. We also have a service network of 730 ‘Watch Care Centres’ 2. Helios is our own Multi Brand Outlet (MBO) and rest others are our Exc
Slide 9: Watches - Overview
Watches - Overview Brands 6 major in-house brands & 7 licensed brands Manufacturing 6, 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 11k+ dealers/ MBOs LFS: Large format departmental stores
Slide 10: Watches - Brands
Watches - Brands Nebula: A collection of Raga: Inspired by the watches crafted from solid Xylys: Swiss made gold modern woman who watches, Crafted for transcends roles with poise Connoisseurs and élan Titan Edge : the slimmest Titan We: watch in the universe - a Smarter. By far. Fastrack Reflex Acti
Slide 11: Watches - Manufacturing
Watches - Manufacturing Watch factory, Hosur Pantnagar factory Roorkee Pantnagar • Sikkim Manufacturing/ Assembly facilities • Hosur 10 Watch Assembly, Hosur • Coimbatore
Slide 12: Watches - International Presence
Watches - International Presence 31 Countries 2279 Outlets Russia- 50 USA (through Amazon) Kuwait - 57 Myanmar-10 Pakistan- 32 Nepal - 45 Qatar - 94 Philippines- 135 Bahrain - 70 Bangladesh - 135 Saudi Arabia - 700 Thailand- 68 Bhutan – 8 Vietnam- 82 Nigeria- 10 Egypt- 20 Malaysia- 158 Sri Lanka- 80
Slide 13: World of Titan
WORLD OF TITAN 486 showrooms 223 towns – 403k sq.ft. 12
Slide 14: Fastrack Stores
FASTRACK STORES 172 showrooms (Net 6 additions in FY ‘19) 83 towns – 90k sq.ft. 13
Slide 15: Helios Stores
HELIOS STORES 76 showrooms (Net 6 additions in FY‘19) 37 towns – 68k sq.ft. 14
Slide 16: 15
15
Slide 17: Sonata
| SONATA Thannambikkai Ullavangalukku Trendy watches for the super fan in you. ———— Get it today! ==
Slide 18: Jewellery
Jewellery Brands TANISHQ: flagship brand ZOYA: luxury segment play MIA: Tanishq sub-brand for faishonable fine jewellery CARATLANE: a Tanishq partnership, ecommerce brand Manufacturing Studded jewellery manufactures mostly in-house Plain gold jewellery mostly outsourced 3 manufacturing facilities 4
Slide 19: Jewellery
Jewellery a ¥ I TANISHQ HUM HAR SHAADI KE LIYE-= TAYAAR HAIN! b : eit er 8B ae aq & i\ g\stoe p79 F Be Coratlane NOUS LASESTONUNE ELEY STORE aft
Slide 20: Jewellery
Jewellery Karigar Center, Hosur • Pantnagar • Sikkim Manufacturing Facilities/ • Hosur Karigar Centers 19
Slide 21: Tanishq Stores
Tanishq Stores 287 showrooms of Tanishq (Net 34 added in FY’19). 178 towns – 1.09 mn sq.ft. of Tanishq (Net 87k sq.ft. added in FY‘19). 3 Zoya stores (~15K sq.ft.) 20
Slide 22: Mia Stores
Mia Stores 30 Standalone stores and 20 Shop-in-shops (~12k sq.ft.) 21
Slide 23: Carat Lane Stores
Carat Lane Stores 55 showrooms across 23 towns (~39k sq.ft.) 22
Slide 24: Follow us on
www.tanishg.co.in Follow us on: [fy (=) (©) You!
Slide 25: See, ee
See, ee KJ
Slide 26: Mia by Tanishq
A TATA PRODUCT miabytanishq.com xh Tanisug 552818SEGAAA22 Me In Action
Slide 27: 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 State of the art lens lab in Chikkaballapur Satellite lens labs in major cities to improve turn around time Fr
Slide 28: Eye Wear Frames
Eye Wear In-house brands Frames Sunglasses Manufacturing Integrated Eyewear facility - Chikaballapur Lens Labs 27
Slide 29: Titan Eye Plus Stores
Titan Eye Plus Stores 537 showrooms (Net 37 additions in FY ’19) 223 towns – 355k sq.ft. 28
Slide 30: Latest styles
Latest styles ab har budget ke liye! #GreatStylesGreatPrices P. Styles so affordable, gimme you wont stop at one. #GreatStylesGreatPrices
Slide 31: Fastrack sunglasses
fastrack SUNGLASSES
Slide 32: Fragrance
Fragrance Brands SKINN by Titan Fine French perfumes at very attractive price points Entry into body mist category in FY 18- Skinn Kissed Manufacturing Manufactured in France by celebrated perfumers, and distilled from the finest ingredients Bottled in France and India Points of Sale Sold through Wo
Slide 33: The New Colour of Class. Amalfi Bleu.
THE NEW COLOUR OF CLASS. AMALFI BLEU. — EAU DE TOILETTE ~ THE FRESH NEW FRAGRANCE FOR MEN AND WOMEN. SK | NAN z °Y TITAN Fine French Perfumes
Slide 34: Taneira
Taneira Who we are • 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
Slide 35: Our Stores
Our Stores 34
Slide 36: Titan Company Limited Q4 Performance
Titan Company Limited Q4 Performance 35
Slide 37: Q4 Performance – Standalone
Q4 Performance – Standalone Company • In Q4’19, revenue for the company grew by 19% and PBT (before exceptional items) up by 7%. • PBT for the quarter was impacted by the additional provision for investments in IL&FS, temporary inventory valuation hit in Jewellery (INR 37 crores) and ex gratia for e
Slide 38: Q4 Performance – Standalone (Jewellery)
Q4 Performance – Standalone Jewellery • The Jewellery division recorded strong revenue growth of 21%, on the back of each of the six pillars of the strategy fueling growth. • EBIT margin of Q4 was at 12.8%, leading to full year margin of 12.2%, an improvement of 30bps YoY. • Studded ratio was line w
Slide 39: Q4 Performance – Standalone (Watches, Eye Wear)
Q4 Performance – Standalone Watches • After recording strong revenue growth in first 3 quarters, Q4 had a modest growth of 7%. EBIT margin was at 5.5% impacted by lower gross margin due to product &channel mix and Ex gratia provisions made in Q4 for employees. • The division had a good year with a r
Slide 40: Q4 Performance – Fragrances & Taneira
Q4 Performance – Standalone Fragrances & Taneira • Skinn remained the best seller in its category in departmental chain stores. • Skinn crossed the 1 million unit sale landmark and INR 120 crores of sales (at consumer price) during the year. • Taneira ended the year with 4 stores. After two years of
Slide 41: Performance – Subsidiaries and JV
Performance – Subsidiaries and JV Titan Engineering and Automation Ltd (TEAL) - 100% owned Subsidiary • TEAL had an excellent year with the revenues growing by 42% YoY. Both the segments, Aerospace and defence (A&D) and Automation solution business grew strongly. • TEAL is witnessing a strong growth
Slide 42: Retail Growth – Q4'19 and FY'19
Retail Growth – Q4‘19 and FY’19 Q4’19 FY’19 Sales value Like-to-Like Sales value Like-to-Like growth growth growth growth Tanishq 20% 14% 22% 16% World of Titan 9% 7% 5% 3% Fastrack 8% 2% 6% 1% Helios 14% 6% 24% 6% LFS (for 20% 16% 23% 20% Watches) Titan Eye+ 21% 14% 20% 11% Note: 1. Above retail gr
Slide 43: Total Income: Performance – Q4'19 and FY'19
Total Income: Performance – Q4’19 and FY'19 Total Income (1) Q4'18 Q4'19 Growth % FY'18 FY'19 Growth % (in INR Crores) Watches 494 531 7% 2,126 2,441 15% Jewellery 3,292 3,986 21% 13,036 16,030 23% Eyewear 109 130 20% 415 511 23% Others / Corporate (2) 42 80 91% 165 267 62% Standalone 3,937 4,727 20
Slide 44: EBIT Performance – Q4'19 and FY'19
EBIT Performance – Q4’19 and FY'19 EBIT (in INR Crores) (1) Q4'18 Q4'19 Growth % FY'18 FY'19 Growth % Watches 39 29 -26% 272 316 16% Jewellery 453 512 13% 1,545 1,948 26% Eyewear 2 (2) 2 (2) Others/ Corporate (2) (50) (62) (110) (220) Standalone 445 477 7% 1,710 2,042 19% Caratlane (33) (14) (82) (3
Slide 45: P&L – Q4'19 and FY'19 – Standalone Company
P&L – Q4’19 and FY'19 – Standalone Company in INR Crores Q4'18 Q4'19 YoY FY'18 FY'19 YoY Revenue from operations 3,917 4,672 19% 15,656 19,070 22% Other Income 20 55 86 179 Total Income 3,937 4,727 20% 15,742 19,248 22% COGS 2,781 3,400 11,420 13,987 Gross Profit 1,156 1,327 15% 4,322 5,261 22% Empl
Slide 46: Balance Sheet – Standalone Company
Balance Sheet – Standalone Company in INR Crores 31-Mar-18 31-Mar-19 Fixed Assets 985 1,056 Intangible Assets 30 39 Investments 734 807 Other non-current assets 370 483 Inventories 5,749 6,719 Trade Receivables 193 358 Cash and Cash Equivalents 466 364 Other Bank Balances 146 637 Other Current Asset
Slide 47: Capital Employed - Standalone
Capital Employed - Standalone in INR Crores Segment Assets Segment Liabilities Capital Employed 31-Mar-18 31-Mar-19 31-Mar-18 31-Mar-19 31-Mar-18 31-Mar-19 Watches 1,354 1,502 448 453 906 1,049 Jewellery 5,611 6,742 3,536 4,570 2,076 2,172 Eyewear 287 394 81 127 206 267 Others 52 107 19 25 33 81 Cor
Slide 48: Quarterly Performance Trends
Quarterly Performance Trends Company: Net Income 6000 60% 5000 50% 4000 40% Rs Crores 30% 3000 20% 2000 10% 1000 0% 0 -10% 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 Net sales 2398 2,770 2,620 3,867 3,538 4,027 3,488 4,225 3,917 4,319 4,407 5,672 4,672
Slide 49: Quarterly Performance Trends
Quarterly Performance Trends Watches: Total Income 800 25.0% 700 20.0% 600 15.0% 500 10.0% Rs Crores 400 5.0% 300 0.0% 200 -5.0% 100 -10.0% - -15.0% 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 Net sales 449 500 524 508 503 517 576 539 494 594 676 641 53
Slide 50: Quarterly Performance Trends
Quarterly Performance Trends Jewellery: Total Income 6000 70.0% 5000 60.0% 4000 50.0% Rs Crores 40.0% 3000 30.0% 2000 20.0% 1000 10.0% 0 0.0% 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 Net sales 1847 2,151 1,988 3,255 2,913 3,381 2,788 3,576 3,292 3,57
Slide 51: Grammage Growth (%)
Quarterly Performance Trends Watches: Volume growth 25% 20% 15% 10% Growth (%) 5% 0% -5% -10% -15% -20% -25% 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 Volume Growth -19% 1% -9% 4% 10% 5% 9% 11% -1% 10% 21% 16% 0% Jewellery: Gold price (22kt) and Gramm
Slide 52: Annual Performance Trends - Standalone
Annual Performance Trends - Standalone CAGR: 12.5% Income from operations (net) 25,000 20,000 19,070 15,656 15,000 (Rs Crores) 12,999 11,903 11,105 10,000 5,000 0 2014-15 2015-16 2016-17 2017-18 2018-19 CAGR: CAGR: 14% Watches: Net Income 6% Jewellery: Net Income 3,000 18,000 16,030 2,441 16,000 2,5
Slide 53: Annual Performance Trends - Standalone
Annual Performance Trends - Standalone CAGR: PBT CAGR: PAT 14% 2,500 17% 1,600 1,374 1,997 1,400 2,000 1,163 1,662 1,200 1,500 1,000 (Rs Crores) (Rs Crores) 823 1,130 762 1,056 800 698 1,000 888 600 400 500 200 0 0 2014-15 2015-16 2016-17 2017-18 2018-19 2014-15 2015-16 2016-17 2017-18 2018-19 CAGR:
Slide 54: Annual Performance Trends – Standalone
Annual Performance Trends – Standalone Capital Employed 7,000 6,182 6,000 5,194 5,000 4,312 (Rs Crores) 4,000 3,551 3,172 3,000 2,000 1,000 0 2014-15 2015-16 2016-17 2017-18 2018-19 ROCE ROE 40% 35% 35.1% 35.2% 35% 32.6% 29.3% 30% 29.2% 25.4% 30% 24.5% 25.8% 25% 25% 21.1% 19.4% 20% 20% 15% 15% 10% 1
Slide 55: Dividend
Dividend 10 year CAGR: 26% 500 35.0% 450 30.0% 400 350 25.0% 300 20.0% (Rs Crores) 250 15.0% 200 150 10.0% 100 5.0% 50 0 0.0% 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Dividend 44 67 111 155 186 186 204 195 231 333 444 Payout Ratio 27.9% 26.6% 25.8% 25.9
Slide 56: Market Capitalisation
Market Capitalisation 10 year CAGR: 29% Stock Performance Vs Sensex (last 6 months) 120,000 101,372 100,000 83,656 80,000 (Rs Crores) Titan Sensex 60,000 41,082 40,000 34,801 30,078 22,772 23,300 20,295 20,000 16,916 8,172 3,462 0 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-
Slide 57: Awards and Recognitions
Awards and Recognitions • Titan wins in Pitch Top 50 Brands, 2018, in the ‘Evergreens Category’. • Fastrack wins at the Afaqs Foxglove awards 2018 for ‘Shut the Fake up’ campaign. • Sonata wins the ‘Best Brand Launch of the Year’ at the ‘Brand Equity Marketing Awards’. • Tanishq received the “RedDot
Slide 58: Sustainability @ Titan
Sustainability @ Titan Formally defined CSR Policy in line with the company’s vision The 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 wi
Slide 59: Thank You
Thank You 4 TITAN COMPANY