Titan Company Limited · NSE:TITAN
Titan — Q2 FY2020 Earnings Presentation
65 slides from Titan's earnings presentation, Nov 5, 2019
Slide 1: Titan Company exchange filing cover letter
♦ TITAN COMP/\NY SEC 58 / 2019-20 5th November 2019 The General Manager, DCS - CRD The General Manager, DCS - CRD BSE Limited National Stock Exchange oflndia 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'20 and H1 FY'20
Titan Company Limited Earnings Presentation – Q2 FY ’20 and H1 FY’20 (For quarter and half year, ended 30th September 2019) 05th November, 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 ~$16 bn largest watch market cap maker globally ~$2.8 bn 4 annual revenue times in Forbes Asia Fab Fifty 1,739 ~8 k stores with 2.2mn+ sq.ft. retail space employees on rolls 11k+ 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: Our Retail Network
Our Retail Network Luxury (3) Premium (308) (86) (7) (489) Mid Market (561) (180) (34) (71) 1,739 Exclusive Stores 285 Towns ~2.2 mn sq. ft. of retail space Note: 1. We also have a service network of 653 ‘Watch Care Centres’ 2. Helios is our own Multi Brand Outlet (MBO) and rest others are our Exclu
Slide 9: Jewellery Division
Jewellery Division 8
Slide 10: 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 11: Jewellery
Jewellery a _ | + I TANISHQ HUM HAR SHAADI KE Liat TAYAAR HAIN! ‘ @ 6 a ae Pec k hint @Q, 9 0} \ Ole Bes eee Ee ‘ @ \ |} Colon
Slide 12: Jewellery manufacturing facilities
Jewellery Karigar Center, Hosur • Pantnagar • Sikkim Manufacturing Facilities/ • Hosur Karigar Centers 11
Slide 13: Tanishq Boutique
ais Tanishg Boutique 12
Slide 14: Zoya Boutique
Zoya Boutique 13
Slide 15: Mia Store
Mia Store 14
Slide 16: CaratLane Store
Pec im jewelled. A coming soon J CaratLane Store 15
Slide 17: Tanishq collection
: : = | www.tanishg.co.in ATATAPRODUCT — www.anishgeoin Inspired by Rivaaz and Royalty. 16
Slide 18: Tanishq
www.tanishq.co.in 27192AC TANISHQ PRESENTS ————/ A TATA PRODUCT 17
Slide 19: Celebrate every milestone in your life
Celebrate every tilestone in your life HlyfirstSolitaire be Me In Action ACELS This contemporary collection is designed to reflect the diverse facets that make you the person you are, The Facets Series allows you to express your every mood - happy, goofy, bored, flirty - which facet of yourself will
Slide 20: Watches Division
Watches Division 19
Slide 21: 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 22: Watches - Manufacturing
Watches - Manufacturing Watch factory, Hosur Pantnagar factory Roorkee Pantnagar • Sikkim Manufacturing/ Assembly facilities • Hosur 21 Watch Assembly, Hosur • Coimbatore
Slide 23: 'World of Titan' Store
‘World of Titan’ Store 22
Slide 24: Fastrack Store
fastrack BoA tet 23 Fastrack Store
Slide 25: Helios Store
> -_HSeni09s HE WATCH STORE BY TITAN Helios Store 24
Slide 26: Titan Maritime
W TITAN MARITIME
Slide 27: iy vy
iy vy yw Mini, : AN My My, VAN
Slide 28: Facets by Titan
by TITAN Facets #CelebrateEveryFacet
Slide 29: Mission Mangal
MISSION MANGAL € 0 £8 (¢teio N KHUD PAR YAKEEN FREE M/SSION MANGAL. BOOK MtY SHOW VOUCHERS (250) ON ALL ORDERS ON THE WEBSITE
Slide 30: Eyewear Division
Eyewear Division 29
Slide 31: 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 32: Eye Wear
Eye Wear In-house brands Frames Sunglasses Manufacturing Integrated Eyewear facility - Chikkaballapur Lens Labs 31
Slide 33: Titan EyePlus Store
Titan EyePlus Store 32
Slide 34: Titan Blue Tech Lenses
Block harmful blue light with 5 Titan Blue Tech Lenses ~ ! (TITAN #BluelsForEveryone ia eyeplus
Slide 35: Smart Audio Sunglass
SMART AUDIO SUNGLASS –Exclusively marketed by TITAN 34
Slide 36: Fragrances & Taneira
Fragrances & Taneira 35
Slide 37: 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 38: Skinn Amalfi Bleu
THE NEW COLOUR OF CLASS. AMALFI BLEU. - EAU DE TOILETTE ——— - 2 = ~ THE FRESH NEW FRAGRANCE FOR MEN AND WOMEN. SKI AN z 'Y TITAN, Fine French Perfumes
Slide 39: 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 40: Our Stores
Our Store as isp
Slide 41: Q2 Performance
Q2 Performance 40
Slide 42: Q2 Performance – Standalone
Q2 Performance – Standalone Company • Revenue for the company grew by only 0.6% in the quarter impacted substantially by the decline in the revenues of the jewellery division due to the sudden spike in gold prices in June 2019 • Flat top line and higher costs affect PBT growth and margin which, at 9
Slide 43: Q2 Performance – Standalone: Jewellery
Q2 Performance – Standalone Jewellery • Jewellery revenue declined by 1.5% in Q2. After a sudden surge in gold prices in mid-June, there was a considerable decline in sales in July. Higher level of promotion and schemes, led to strong growth in the months of August and September. • Retail growth of
Slide 44: Q2 Performance – Standalone: Watches and Eye Wear
Q2 Performance – Standalone Watches • The division witnessed moderation in growth due to weak consumer sentiments leading to revenue growth of 6.4% for the quarter and 12.9% for first half. • The trend of Multi brand outlets (MBO) growing at much faster clip compared to exclusive brand outlets conti
Slide 45: Q2 Performance – Subsidiaries and JV
Q2 Performance – Subsidiaries and JV Titan Engineering and Automation Ltd (TEAL) - 100% owned Subsidiary • TEAL had an overall growth of 9% for Q2 and the growth has been at 33% for the six months. Business outlook for Second half of FY’20 looks positive with large orders that are expected to be exe
Slide 46: Retail Network
Retail Network Net Additions (in H1’20) As on 30th Sep’19 Stores Square Feet Stores Towns Sq. Ft. Tanishq 21 67K 308 199 1.16mn Zoya 0 0 3 2 15K CaratLane 16 16K 71 27 55K Mia 4 2K 34 19 11K WOT 3 -1K 489 221 402K Fastrack 8 2K 180 90 93K Helios 10 5K 86 41 74K Titan Eye+ 24 16K 561 228 371K Note: 1
Slide 47: Retail Growth – Q2'20 and H1'20
Retail Growth – Q2‘20 and H1’20 Q2’20 H1’20 Sales value Like-to-Like Sales value Like-to-Like growth growth growth growth Tanishq 7% 2% 12% 6% CaratLane 87% 25% 86% 31% World of Titan -1% -3% 3% 3% Fastrack -7% -12% -1% -5% Helios 9% 1% 9% 3% LFS (for 6% 1% 11% 7% Watches) Titan Eye+ 35% 28% 27% 21%
Slide 48: Total Income – Q2'20 and H1'20
Total Income – Q2’20 and H1’20 Total Income (1) Q2'19 Q2'20 Growth % H1'19 H1'20 Growth % Mix - H2'20 (in INR Crores) Jewellery 3,582 3,528 -2% 7,154 7,575 6% 80% Watches 676 719 6% 1,269 1,433 13% 15% Eyewear 120 154 29% 252 303 20% 3% Others / Corporate (2) 56 65 16% 114 150 32% 2% Standalone 4,43
Slide 49: EBIT – Q2'20 and H1'20
EBIT – Q1’20 and H1’20 EBIT (in INR Crores) Q2'19 Q2'20 Growth % H1'19 H1'20 Growth % Jewellery 392 384 -2% 785 826 5% Watches 122 113 -7% 233 241 3% Eyewear (1) 2 1 (9) Others/ Corporate (1) (3) (56) (29) (67) (34) Standalone 456 470 3% 952 1,023 7% Caratlane (13) (4) (21) (10) TEAL 21 16 23 31 Oth
Slide 50: P&L - Q2'20 & H1'20
P&L - Q2’20 & H1’20 + TITAN COMPANY in INR Crores Q2'19. Q2'20 YoY H1'19 H1'20 YoY Revenue from Operations 4,407 4,435 0.6% 8,726 9,375 7.4% Other Income 27 31 62 87 Total Income 4,434 4,466 0.7% 8,788 9,461 7.7% COGS 3,180 3,138 6,339 6,751 Gross Contribution 1,253 1,328 6.0% 2,449 2,710 10.7% Empl
Slide 51: Capital Employed - Standalone
Capital Employed - Standalone in INR Crores Segment Assets Segment Liabilities Capital Employed 31-Mar-19 30-Sep-19 31-Mar-19 30-Sep-19 31-Mar-19 30-Sep-19 Watches 1,502 2,130 453 794 1,049 1,336 Jewellery 6,742 9,236 4,570 5,541 2,172 3,695 Eyewear 394 490 127 236 267 254 Others 107 190 25 83 81 10
Slide 52: Balance Sheet – Standalone Company
Balance Sheet – Standalone Company in INR Crores 31-Mar-19 30-Sep-19 Fixed Assets 1,056 1,106 Right of use asset - 797 Intangible Assets 39 50 Investments 807 870 Other non-current assets 483 708 Inventories 6,719 8,704 Trade Receivables 358 478 Cash and Cash Equivalents 364 108 Other Bank Balances
Slide 53: Performance Trends
Performance Trends 52
Slide 54: Quarterly Performance Trends: Company Revenue and PBT
Quarterly Performance Trends Company: Revenue 6,000 60% 5,000 50% 4,000 40% Rs Crores 30% 3,000 20% 2,000 10% 1,000 0% - -10% 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 Net sales 2,620 3,867 3,538 4,027 3,488 4,225 3,917 4,319 4,407 5,672 4,672 4,940 4
Slide 55: Quarterly Performance Trends: Watches
Quarterly Performance Trends Watches: Total Income 800 25.0% 700 20.0% 600 15.0% Rs Crores 500 10.0% 400 5.0% 300 200 0.0% 100 -5.0% - -10.0% 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 Net sales 524 508 503 517 576 539 494 594 676 641 531 715 719 Growt
Slide 56: Quarterly Performance Trends: Jewellery
Quarterly Performance Trends Jewellery: Total Income 6,000 70.0% 5,000 60.0% 50.0% 4,000 Rs Crores 40.0% 3,000 30.0% 2,000 20.0% 10.0% 1,000 0.0% - -10.0% 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 Net sales 1,988 3,255 2,913 3,381 2,788 3,576 3,292 3,
Slide 57: Quarterly Performance Trends: Volume and Gold Price
Quarterly Performance Trends Watches: Volume growth 25% 20% 15% Growth (%) 10% 5% 0% -5% -10% -15% 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 Volume Growth -9% 4% 10% 5% 9% 11% -1% 10% 21% 16% 0% 13% -1% Jewellery: Gold price (22kt) and Grammage growth
Slide 58: Annual Performance Trends - Standalone
Annual Performance Trends - Standalone CAGR: 12.5% Income from operations (net) 25,000 20,000 19,070 15,656 (Rs Crores) 15,000 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 59: Annual Performance Trends - PBT, PAT, EBIT
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 (Rs Crores) 1,500 1,000 (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 60: Annual Performance Trends – Capital Employed, ROCE, ROE
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 61: Dividend
Dividend 10 year CAGR: 25% 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 62: Market Capitalisation
Market Capitalisation 10 year CAGR: 40% Stock Performance Vs Sensex (last 6 months) 1,20,000 1,13,020 1,01,372 1,00,000 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 0 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Slide 63: Awards and Recognitions
Awards and Recognitions • Titan Company wins the R K Swamy High Performance Brand Award by AIMA • Titan Company accredited ‘Best Employer Award’ by Tamil Nadu Government under the category of ‘Employing most number of differently abled personnel.’ • Tanishq received the “RedDot: Best of the Best” aw
Slide 64: 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 65: Thank You
Thank You 4 TITAN COMPANY