Tribhovandas Bhimji Zaveri Limited · NSE:TBZ
Tribhovandas Bhimji Zaveri — Q3 FY16 Earnings Presentation
33 slides from Tribhovandas Bhimji Zaveri's earnings presentation, February 2016
Slide 1: Investor Presentation Q3 & 9M FY16 Results Update
INVESTOR PRESENTATION Q3 & 9M FY16 RESULTS UPDATE February, 2016
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Tribhovandas Bhimji Zaveri Limited (“TBZ”) for informational purposes only and does not constitute or form any part of any offer, invitation or recommendation to purchase or subscribe for any securities in any jurisdiction, and no part of it shall fo
Slide 3: Discussion Summary
DISCUSSION SUMMARY Q3 & 9M FY16 Results Update About Us Financial & Operational Summary Annexure
Slide 4: Q3 FY16 Results Update: Profit Analysis
Q3 FY16 RESULTS UPDATE PROFIT ANALYSIS (RS MN) 14.3% 13.2% 4.3% 1.1% 3.9% 0.7% 6,125 65 4,957 238 212 33 Q3 FY15 Q3 FY16 Q3 FY15 Q3 FY16 Q3 FY15 Q3 FY16 Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATIONAL EFFICIENCY (%) Q3 FY16 3.2% 4.0% 1.2% 1.2% Q3 FY15 2.4% 5.2% 1.0% 2.0% Salaries
Slide 5: Q3 FY16 Results Update: Revenue Analysis
Q3 FY16 RESULTS UPDATE REVENUE ANALYSIS (RS MN) 31.2% 27.3% 9.6% 9.5% 4,595 3,800 1,341 1,036 Q3 FY15 Q3 FY16 Gold Sales Diamond Sales Gold GM Diamond GM AVERAGE TICKET PRICE (RS)* Q3 FY16 Gold Diamond 1,44,033 % of Sales – Q3 FY16 76.7% 20.9% 1,35,356 % of Sales – Q3FY15 75.0% 21.9% 81,499 79,727 S
Slide 6: 9M FY16 Results Update: Profit Analysis
9M FY16 RESULTS UPDATE PROFIT ANALYSIS (RS MN) 13.6% 13.5% 3.6% 3.0% 0.5% -0.5% 14,712 527 76 13,496 403 -61 9M FY15 9M FY16 9M FY15 9M FY16 9M FY15 9M FY16 Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATIONAL EFFICIENCY (%) 9M FY16 3.6% 3.3% 1.4% 2.5% 9M FY15 3.0% 3.7% 1.2% 2.3% Salar
Slide 7: 9M FY16 Results Update: Revenue Analysis
9M FY16 RESULTS UPDATE REVENUE ANALYSIS (RS MN) 29.4% 29.6% 9.0% 9.3% 11,040 10,356 3,350 2,786 9M FY15 9M FY16 Gold Sales Diamond Sales Gold GM Diamond GM AVERAGE TICKET PRICE (RS)* 9M FY16 Gold Diamond 1,44,647 % of Sales – 9M FY16 76.7% 20.6% 1,31,304 % of Sales – 9M FY15 75.0% 22.8% 83,073 82,69
Slide 8: Balance Sheet Update
BALANCE SHEET UPDATE INVENTORY BREAKUP (%) 6.0% 6.7% 42.9% 42.0% 56.0% 63.0% 51.1% 51.3% 44.0% 37.0% FY15 Dec-15 FY15 Dec-15 Gold Diamond Others Own Gold Gold on Loan LEVERAGE (RS MN) 1.3 1.4 1.1 1.2 1.2 6,232 6,222 5,169 5,507 5,482 4,554 4,646 4,683 4,572 4,616 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 E
Slide 9: Business Scenario
BUSINESS SCENARIO The quarter witnessed lower consumer discretionary demand. The company launched its First Franchise & 30th TBZ-The Original Store in Dhanbad, Jharkhand in November 2015. Further, the company signed two more franchisee agreements for its upcoming stores in Ranchi, Jharkhand and
Slide 10: Key Result Takeaways
KEY RESULT TAKEAWAYS REVENUES: Q3 FY16 sales declined by 19.1% YoY – There was no contribution to sales from Kalpavruksha Scheme during Q3 FY16. Kalpavruksha Scheme accounted for 14% (₹ 853 mn) during Q3 FY15. 9M FY16 sales declined by 8.3% YoY – Kalpavruksha Scheme accounted for 15.5% (₹ 2,
Slide 11: Key Result Takeaways
KEY RESULT TAKEAWAYS BALANCE SHEET: The share of inventory on gold on loan increased from 56% as on Sep-15 to 63% as on Dec-15. The company’s endeavour is to further increase the share of gold on loan on an incremental basis. The inventory level was within control as on Dec-15. The new store in
Slide 12: Results Update – December 2015
RESULTS UPDATE – DECEMBER 2015 Q3 FY16 Q3 FY15 Q2 FY16 9M FY16 9M FY15 FY15 PARTICULARS (IN MN) YoY % QoQ % YoY % (₹) (₹) (₹) (₹) (₹) (₹) Revenues 4,957 6,125 -19.1% 4,380 13.2% 13,496 14,712 -8.3% 19,342 COGS 4,304 5,252 -18.0% 3,855 11.7% 11,674 12,708 -8.1% 16,701 Gross Profit 653 873 -25.3% 525
Slide 13: Results Update – December 2015
RESULTS UPDATE – DECEMBER 2015 PARTICULARS (IN MN) DEC-15 SEP-15 JUN-15 MAR-15 DEC-14 (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) (₹) Shareholders Funds 4,617 4,572 4,683 4,656 4,554 Loan Funds 5,882 6,525 6,545 5,832 5,614 Other Long Term Liabilities 30 28 56 26 49 Sources of Funds 10,529 11,125 11,284 1
Slide 14: Discussion Summary
DISCUSSION SUMMARY Q3 & 9M FY16 Results Update About Us Financial & Operational Summary Annexure
Slide 15: About Us: Why is TBZ Different?
ABOUT US: WHY IS TBZ DIFFERENT ? Pedigree Strong Brand Value 150 years in jewellery business High sales productivity - First jeweller to offer buyback ₹ 234 k per sq ft per annum (at guarantee in 1938 mature stores) Professional organisation High footfalls conversion - 79% spearheaded by 5
Slide 16: About Us: Key Milestones
ABOUT US: KEY MILESTONES STRONG LEGACY OF AROUND 150 YEARS BUILT ON TRUST Flagship store Introduced 100% Diamond facility Retail footprint crosses 84k sq ft First Franchise opened in Zaveri pre-hallmarked expansion - ~6k Store and 30th Bazaar, Mumbai jewellery to ~24k sq ft across 20 cities TBZ stor
Slide 17: About Us: Shareholding Structure
ABOUT US: SHAREHOLDING STRUCTURE SHAREHOLDING PATTERN – DEC 2015 PUBLIC, 12.4% INSTITUTIONS , 13.5% PROMOTER, 74.1% KEY INSTITUIONAL INVESTORS % HOLDING Smallcap World Fund INC 5.77% HSBC Global Investments 3.31% 17
Slide 18: About Us: Retail Presence
ABOUT US: RETAIL PRESENCE Present across 23 cities PAN-INDIA PRESENCE WITH 30 STORES in 10 states WITH A RETAIL SPACE OF ~98,200 SQ. FT. SPREAD ACROSS 23 CITIES IN 10 STATES. NUMBER OF STORES TILL DATE Large Format 24 Small Format 6 Tier I 17 Tier II 5 Metros 8 Dhanbad Total Stores 30 Total Area ~98
Slide 19: About Us: Retail Footprint Expansion
ABOUT US: RETAIL FOOTPRINT EXPANSION HIGH SALES PRODUCTIVITY (REVENUE / YEAR / SQ FT) 98,200 91,058 82,368 88,093 ₹ 301 ₹ 270 ₹ 255 ₹ 214 ₹ 216 ₹ 192 47,796 44,196 27 28 30 25 14 14 FY11 FY12 FY13 FY14 FY15 9M FY16 Carpet Area No. of Retail Outlets Revenue/average sqft * (₹ '000/sq ft) * Average of
Slide 20: Discussion Summary
DISCUSSION SUMMARY Q3 & 9M FY16 Results Update About Us Financial & Operational Summary Annexure
Slide 21: Financial Summary
FINANCIAL SUMMARY REVENUE (RS MN) EBITDA (RS MN) PAT (RS MN) CAGR – 13% 19,342 1,476 850 18,243 1,327 16,583 1,221 13,855 572 551 11,939 888 827 392 260 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 MARGINS (%) LEVERAGE & RETURN METRICS 45.1 42.9 29.8 18.8 34.7 17.5 16.9
Slide 22: Operational Summary
OPERATIONAL SUMMARY GOLD & DIAMOND VOLUMES GOLD & DIAMOND SALES MIX (%) 51,995 53,220 52,010 48,662 75% 77% 75% 43,808 72% 73% 4,706 4,361 4,110 3,710 3,654 22% 25% 23% 21% 22% FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Gold Sales (kgs) Diamond Sales (cts) Gold Diamond GOLD & DIAMOND MARGINS
Slide 23: Operational Summary
OPERATIONAL SUMMARY SSSG - TOTAL (%) SSSG - GOLD (%) SSSG - DIAMOND (%) 31.3 34.2 29.6 31.2 -5.1% excl. coins 11.2 13.0 9.0 4.0 3.5 1.3 -0.2 -9.9 -9.3 -8.6 -15.8 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 AVERAGE TICKET SIZE (RS ‘000) FOOTFALLS & CONVERSION 141 139 87
Slide 24: Thank You
THANKYOU Saurav Banerjee, CFO Nilesh Dalvi/Mandar Kapse Tribhovandas Bhimji Zaveri Limited Dickenson Seagull IR +91 022 30735000 +91 9819289131/+91 9867550004 saurav.banerjee@tbzoriginal.com nilesh.dalvi@dickensonir.com mandar.kapse@dickensonir.com
Slide 25: Annexure
ANNEXURE
Slide 26: Awards & Recognition
AWARDS & RECOGNITION “BEST NECKLACE DESIGN AWARD– 2016 ” JJS-IJ Jewellers’ Choice Design Award - 2016 “ASIA’S MOST POPULAR BRANDS – 2014 ” World Consulting & Research Corporation (WCRC) - 2014 “BEST JEWELLERY COMPANY AWARD” Gems & Jewellery Trade Council of India Excellence Awards - 2014 “BE
Slide 27: Business Model: Product
BUSINESS MODEL: PRODUCT WEDDING (65%) GOLD Gross Margins – 11% (75%) Stock Turns – 2.5x - 3x FASHION (35%) WEDDING (40%) DIAMONDS Gross Margins – 35% (25%) Stock Turns – 1x FASHION (60%) WEDDING SALES TO DRIVE STRONG VOLUMES WEDDING & FASHION SALES TO DRIVE FUTURE GROWTH 27
Slide 28: Business Model: Manufacturing (Gold)
BUSINESS MODEL: MANUFACTURING Gold PROCUREMENT Raw Material - Bullion Sources: Exchange & purchase of old jewellery Bullion dealers Banks - imported gold Banks - domestic gold (gold deposits) on loan Gold jewellery manufacturing is outsourced. Vast nation-wide network of 150 vendors
Slide 29: Business Model: Manufacturing (Diamond)
BUSINESS MODEL: MANUFACTURING DIAMOND PROCUREMENT Raw Material - Cut & polished diamonds (VVS grade) Sources: DTC site holders Other vendors In-house diamond jewellery manufacturing leading to exclusive designs, lower costs, and higher margins MANUFACTURING Manufacturing facility at Kandiv
Slide 30: Business Model: Retail
BUSINESS MODEL: RETAIL EFFICIENT INVENTORY MANAGEMENT HUB & SPOKE MODEL - ROI OPTIMISATION SMALL STORES 1,000 - 1,500 sq ft Across the city SMALL Smaller range STORE Lower price points (up to ₹ 500k) Inventory - ₹ 93 mn Gold : Diamond - 70 : 30 SMALL LARGE FORMAT SMALL LARGE STORES STORE S
Slide 31: Business Model: Economics
BUSINESS MODEL: ECONOMICS PARTICULARS LARGE FORMAT SMALL FORMAT Size sq ft Above 3,000 1,000 – 1,500 Average Sales per sq ft in Year 1 (₹) 250,000 250,000 Gold : Diamond 75:25 75:25 Gross Margin - Gold : Diamond 11% : 35% 11% : 35% Blended Gross Margins 17.2% 17.2% Store Costs: Advertising 2.5% 2.5%
Slide 32: Business Model: Scalability
BUSINESS MODEL: SCALABILITY TBZ has an expansion plan to increase its retail space from ~98,200 sq. ft. at present to around 150,000 sq. ft. by FY18. TBZ plans to carry out 75% of the expansion through the franchisee route and balance 25% through the addition of its own stores. All the prospec
Slide 33: Gold Metal Loan: Efficient Sourcing Channel
GOLD METAL LOAN: EFFICENT SOURCING CHANNEL GOLD METAL LOAN ORIGINATION GOLD METAL LOAN REPAYMENT TBZ takes 10 kg gold from a bank on lease on day 0. TBZ repays the gold daily based on actual sales of gold The contract for gold lease is 180 days. jewellery. TBZ provides a bank guarantee worth
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