Titan Company Limited · NSE:TITAN
Titan — Q1 FY2020 Earnings Presentation
58 slides from Titan's earnings presentation, Aug 6, 2019
Slide 1: Exchange filing cover letter
TITAN SEC 34 / 2019-20 COMPANY 6" August 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 – Q1 FY '20
Titan Company Limited Delivering value by creating brands Earnings Presentation – Q1 FY ’20 (For quarter ended 30th June, 2019) 06th August, 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 ~$14 bn largest watch market cap maker globally ~$2.8 bn 4 annual revenue times in Forbes Asia Fab Fifty ~1,700 ~8 k stores with 2.1mn+ 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 (299) (81) (5) (488) Mid Market (556) (175) (49) (63) ~1,700 Exclusive Stores 284 Towns ~2.1 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 Excl
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 488 showrooms (Net 2 additions in Q1’20) 221 towns – 402k sq.ft. 12
Slide 14: Fastrack Stores
FASTRACK STORES 175 showrooms (Net 3 additions in Q1’20) 82 towns – 91k sq.ft. 13
Slide 15: Helios Stores
HELIOS STORES 81 showrooms (Net 5 additions in Q1‘20) 39 towns – 70k sq.ft. 14
Slide 16: 15
15
Slide 17: Titan #OnTrend
Wb TITAN #OnTrend
Slide 18: Sonata
A TATA PRODUCT 38 NAVI SHURUAAT. YAKEEN KE SAATH BB SONATA
Slide 19: 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 20: 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 21: Jewellery manufacturing
Jewellery Karigar Center, Hosur • Pantnagar • Sikkim Manufacturing Facilities/ • Hosur Karigar Centers 20
Slide 22: Tanishq Stores
Tanishq Stores 299 showrooms of Tanishq (Net 12 added in Q1’20). 178 towns – 1.12 mn sq.ft. of Tanishq (Net 34k sq.ft. added in Q1‘20). 3 Zoya stores (~15K sq.ft.) 21
Slide 23: Mia Stores
Mia Stores 32 Standalone stores and 17 Shop-in-shops (~12k sq.ft.) 22
Slide 24: Carat Lane Stores
Carat Lane Stores 63 showrooms across 25 towns (~48k sq.ft.) 23
Slide 25: Titan
TITAN 24
Slide 26: Tanishq presents
TITAN avip os My - oer Ty ea . ; ; ie yee 2 ay 5 $4 °" <9 aX oi ‘ : © 3 x ¥ 2 @ om oe oa ; \ r z ot 7 J e ° e x > 2 TANTSHQ are PRESENTS ee ® oe "gee é a e CY 25
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 556 showrooms (Net 18 additions in Q1 ’20) 231 towns – 367k sq.ft. (Net 12k sq.ft. added in Q1‘20). 28
Slide 30: Latest styles
Latest styles ab har budget ke liye! #GreatStylesGreatPrices * Styles so affordable, a you wont stop at one. #GreatStylesGreatPrices
Slide 31: Powered Sunglasses
Powered Sunglasses. Clarity & Shade, all-in-one. euyeplus, 30
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 ——— - 2 = ~ THE FRESH NEW FRAGRANCE FOR MEN AND WOMEN. SKI AN 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 Store as isp
Slide 36: Titan Company Limited Q1 Performance
Titan Company Limited Q1 Performance 35
Slide 37: Q1 Performance – Standalone
Q1 Performance – Standalone Company • In Q1’20, revenue for the company grew by 14% and PBT up by 7%. • The biennial franchisee and dealer meets (Business Associate Meet) across all three divisions were held during the quarter and over 2,500 business associates participated in the same. ~INR 40 cr.
Slide 38: Q1 Performance – Standalone: Jewellery
Q1 Performance – Standalone Jewellery • The Jewellery division recorded revenue growth of 13%, below our internal expectation, as consumer demand fell in the month of June on sudden surge in gold prices and slowdown in consumption. • EBIT margin of Q1’20 was at 10.9%, compared to 11.0% in Q1’19. • S
Slide 39: Q1 Performance – Standalone: Watches and Eye Wear
Q1 Performance – Standalone Watches • Division recorded strong revenue growth at 20%, partly aided by part execution of a large institutional order from Tata Consultancy Services (TCS). The division had its semi-annual activation in both ‘Titan’ and ‘Fastrack’ brands. • EBIT margin was at 17.9%, com
Slide 40: Performance – Subsidiaries and JV
Performance – Subsidiaries and JV Titan Engineering and Automation Ltd (TEAL) - 100% owned Subsidiary • TEAL continued good revenue momentum and grew by 75% YoY. Both the segments, Aerospace and defence (A&D) and Automation solution business grew strongly. CaratLane (69.5% owned Subsidiary) • Caratl
Slide 41: Retail Growth – Q1'20
Retail Growth – Q1‘20 Q1’20 Sales value Like-to-Like growth growth Tanishq 16% 10% World of Titan 6% 6% Fastrack 4% 1% Helios 8% 5% LFS (for 16% 12% Watches) Titan Eye+ 20% 14% Note: 1. Above retail growth is based on secondary sales (at consumer prices) in Titan branded retail stores (including fra
Slide 42: Total Income: Performance – Q1'20
Total Income: Performance – Q1’20 Total Income (1) Q1'19 Q1'20 Growth % (in INR Crores) Watches 594 715 20% Jewellery 3,572 4,047 13% Eyewear 132 149 13% Others / Corporate (2) 58 85 47% Standalone 4,355 4,996 15% Caratlane 83 133 60% TEAL 54 95 75% Others/ Consol. Adj. (3) (5) (15) Consolidated 4,4
Slide 43: EBIT Performance – Q1'20
EBIT Performance – Q1’20 EBIT (in INR Crores) (1) Q1'19 Q1'20 Growth % Watches 111 128 15% Jewellery 393 442 12% Eyewear 2 (11) Others/ Corporate (2) (11) (5) Standalone 496 553 12% Caratlane (9) (5) TEAL 2 15 Others/ Consol. Adj. (3) (11) (9) Consolidated 478 554 16% EBIT Margin Q1'19 Q1'20 Watches
Slide 44: P&L – Q1'20
P&L – Q1’20 in INR Crores Q1'19 Q1'20 YoY Revenue from operations 4,319 4,940 14% Other Income 36 56 Total Income 4,355 4,996 15% COGS 3,159 3,613 Gross Profit 1,196 1,382 16% Employee benefits expense 207 245 19% Advertising 136 134 -2% Other expenses 322 381 18% EBITDA 531 621 17% Depreciation & A
Slide 45: Financial Statements
Financial Statements INDAS 116 (Accounting for leases) was mandated from 1st April 2019. The Accounting Standard essentially brings all the leases into the balance sheet as a “Right to use” and “Net Investment” assets with a corresponding “Lease obligation”. We have adopted the Modified Retrospe
Slide 46: Capital Employed - Standalone
Capital Employed - Standalone in INR Crores Segment Assets Segment Liabilities Capital Employed 31-Mar-19 30-Jun-19 31-Mar-19 30-Jun-19 31-Mar-19 30-Jun-19 Watches 1,502 1,817 453 720 1,049 1,096 Jewellery 6,742 7,096 4,570 5,738 2,172 1,358 Eyewear 394 501 127 255 267 246 Others 107 150 25 64 81 86
Slide 47: Quarterly Performance Trends
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% 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 Net sales 2,770 2,620 3,867 3,538 4,027 3,488 4,225 3,917 4,319 4,407 5,672 4,672 4
Slide 48: 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% 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 Net sales 500 524 508 503 517 576 539 494 594 676 641 531 715 Growt
Slide 49: Quarterly Performance Trends: Jewellery
Quarterly Performance Trends Jewellery: Total Income 6,000 70.0% 5,000 60.0% 4,000 50.0% Rs Crores 40.0% 3,000 30.0% 2,000 20.0% 1,000 10.0% - 0.0% 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 Net sales 2,151 1,988 3,255 2,913 3,381 2,788 3,576 3,292 3,5
Slide 50: Grammage Growth (%)
Quarterly Performance Trends Watches: Volume growth 25% 20% 15% Growth (%) 10% 5% 0% -5% -10% -15% 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 Volume Growth 1% -9% 4% 10% 5% 9% 11% -1% 10% 21% 16% 0% 13% Jewellery: Gold price (22kt) and Grammage growth
Slide 51: 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 52: 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 (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 53: 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 54: 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 55: Market Capitalisation
Market Capitalisation 10 year CAGR: 41% Stock Performance Vs Sensex (last 6 months) 1,40,000 1,18,493 1,20,000 1,01,372 1,00,000 Titan 83,656 (Rs Crores) Sensex 80,000 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 2015-1
Slide 56: 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 57: 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 58: Thank You
Thank You 4 TITAN COMPANY