Titan Company Limited · NSE:TITAN
Titan — Q1 FY2021 Earnings Presentation
49 slides from Titan's earnings presentation, Aug 10, 2020
Slide 1: Titan Company exchange filing cover letter
♦ TITAN COMP/\NY SEC 40 / 2020-21 10th August 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 – Q1 FY '21
Titan Company Limited Earnings Presentation – Q1 FY ’21 (For quarter ended 30th June 2020) 10th August, 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
Slide 5: Titan Today
Titan Today 5th ~$13 bn largest watch market cap maker globally ~$2.8 bn 4 annual revenue times in Forbes Asia Fab Fifty 1,829 ~8 k stores with 2.4mn+ sq.ft. retail space employees on rolls 7k+ mutli-brand outlets 4 that sells our watches
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 faishonable 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/ • Hosur Karigar Centers 9
Slide 11: Jewellery - Stores
Jewellery - Stores 10
Slide 12: Slide 12
Slide 13: Watches Division
Watches Division 12
Slide 14: 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 7k+ dealers/ MBOs LFS: Large format departmental stores E
Slide 15: Watches - Manufacturing
Watches - Manufacturing Watch factory, Hosur Pantnagar factory Roorkee Pantnagar • Sikkim Manufacturing/ Assembly facilities • Hosur 14 Watch Assembly, Hosur • Coimbatore
Slide 16: Watches - Stores
Watches- Stores ‘World of Titan’ Store 15
Slide 17: Eyewear Division
Eyewear Division 16
Slide 18: 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 19: Eye Wear Frames
Eye Wear In-house brands Frames Sunglasses Manufacturing Integrated Eyewear facility - Chikkaballapur Lens Labs 18
Slide 20: #BeatTheBadBlue
#BeatTheBadBlue Protect from harmful digital light. Use Blue Filter Lenses.
Slide 21: Fragrances & Taneira
Fragrances & Taneira 20
Slide 22: Fragrances
Fragrances 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 W
Slide 23: Skinn 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 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
Slide 25: Taneira - Stores
Taneira - Stores 24
Slide 26: Q1 Performance
Q1 Performance 25
Slide 27: Q1 Performance – Standalone
Q1 Performance – Standalone Company • Revenue for the company declined by 74% in the quarter due to the complete loss of sales in April, limited number of stores that could be re-opened in May and June and the gradual recovery in footfall in reopened stores. Company sold INR 601 cr. of bullion (reco
Slide 28: Q1 Performance – Standalone: Jewellery
Q1 Performance – Standalone Jewellery • Revenue for the division declined by 71% (excluding bullion sales). Revenue growth in May & June month was at about 20% and 72% compared to the same months of previous year. • Lockdown led to zero sales in the month of April, a month which should have seen ver
Slide 29: Q1 Performance – Standalone: Watches & Eye Wear
Q1 Performance – Standalone Watches & Wearables • As Watches and Wearables are considered to be a distinctly discretionary category, the impact of the pandemic was severe for the division. The division also had a large share of mall stores, most of which were closed for the quarter. Trade channels a
Slide 30: Q1 Performance – Standalone: Other business
Q1 Performance – Standalone Other business - Fragrances, Indian dress wear and Accessories • Other business declined by 88% . • It has been a slow recovery particularly for the ‘Indian dress wear’ business with the recovery rate being around 40% in June. • Taneira launched Florelle collection, an ex
Slide 31: Q1 Performance – Subsidiaries and JV
Q1 Performance – Subsidiaries and JV Titan Engineering and Automation Ltd (TEAL) - 100% owned Subsidiary • TEAL did very well in the quarter with decent order bookings and recorded a revenue decline of only ~19% in Q1’21. The Company received orders for supplying components from ventilators and medi
Slide 32: Retail Network
Retail Network Net Additions (in Q1’21) As on 30th Jun’20 Stores Square Feet Stores Towns Sq. Ft. Tanishq 6 17K 333 207 1.25mn Zoya 0 0 4 3 18K CaratLane 0 0 92 33 76K Mia 1 0.3K 39 20 13K WOT 6 4K 505 221 411K Fastrack (1) (0.6K) 182 84 91K Helios 1 0.6K 93 42 78K Titan Eye+ (15) (8K) 569 223 378K
Slide 33: Retail Growth – June month
Retail Growth – June month June-month Sales value Like-to-Like growth growth Tanishq (23%) (18%) CaratLane (47%) (41%) World of Titan (59%) (51%) Fastrack (64%) (58%) Helios (51%) (29%) LFS (for (86%) (84%) Watches) Titan Eye+ (46%) (44%) 1. Above retail growth is based on secondary sales (at consum
Slide 34: P&L – Q1'21 - Standalone
P&L —Q1’21 - Standalone in INR Crores Qi'20 Qi'‘'21 YoY Revenue from Operations - Sale of products/ services 4,885 1,251 -74%| - Other operating revenue 54 611 Other Income 56 39 Total Income 4,996 1,901 cOGS 3,613 1,478 Gross Contribution 1,382 423 -69% Employee benefits expense 245 222 -10% Advert
Slide 35: Total Income – Q1'21
Total Income – Q1’21 Note: 1. Total Income also includes other income. 2. Others include Accessories, Fragrances and Taneira business 3. Others include Favre Leuba. 34
Slide 36: EBIT – Q1'21
EBIT – Q1’21 Note: 1. Others include Accessories, Fragrances and Taneira business 2. Others include TTPL (divested in June’18) and Favre Leuba. 35
Slide 37: Capital Employed - Standalone
Capital Employed - Standalone Note: 1. Others include Accessories, Fragrances and Taneira. • Assets of Jewellery division is lower due to the tighter inventory management and bullion sale in commodity exchange (MCX). • Capital employed of Corporate is higher due to increase in net cash. 36
Slide 38: Performance Trends
Performance Trends 37
Slide 39: Quarterly Performance Trends: Company
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 Net sales 4,027 3,488 4,225 3,917 4,319 4,407 5,672 4,672 4,940 4,43
Slide 40: Quarterly Performance Trends: Watches
Quarterly Performance Trends Watches: 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 Net sales 517 576 539 494 594 676 641 531 715 719 625 557 75
Slide 41: Quarterly Performance Trends: Jewellery
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 Net sales 3,381 2,788 3,576 3,292 3,572 3,582 4,890
Slide 42: Quarterly Performance Trends: Volume and Grammage Growth
Quarterly Performance Trends Watches: Volume growth 40% 20% 0% Growth (%) -20% -40% -60% -80% -100% 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21 Volume Growth 5% 9% 11% -1% 10% 21% 16% 0% 13% -1% -10% -5% -93% Jewellery: Gold price (22kt) and Grammage gr
Slide 43: 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 44: Annual Performance Trends - Standalone: PBT and PAT
Annual Performance Trends - Standalone 5-Yr CAGR: 13.0% Company: PBT 5-Yr CAGR: Company: PAT 2,500 14.8% 1,518 1,600 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 45: Annual Performance Trends – Capital Employed, ROCE, ROE
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 46: 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% 45 Note : Above dividend payout ratio is excluding the Divide
Slide 47: Market Capitalisation
Market Capitalisation 10 year 120,000 CAGR: 26% 101,372 100,000 83,656 82,893 84,326 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 Jun'20 46 Note: Based on NSE closing prices at
Slide 48: Sustainability @ Titan
Sustainability @ Titan 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 neighborho
Slide 49: Thank You
Thank You 4 TITAN COMPANY